March 2, 2009
VALLEY CENTER WATER DISTRICT
Regular Board Meeting
Monday, March 2, 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, Aleshire, Stone and Haskell. 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. No spectator was present.
CONSENT CALENDAR
1. Upon motion by Stone, seconded by Polito and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held February 17, 2009
• Resolution No. 2009-11 adjusting the District’s authorized debt limits per Ordinance No. 171, effective as of January 1, 2009, to $2,061,084 per project and $3,091,635 for the acquisition and installation of water reservoirs
• Resolution Nos. 2009-13, 2009-14 and 2009-15 concurring in the nominations to the ACWA/JPIA Executive Committee for Charles W. Muse (Helix Water District), Paul E. Dorey (Vista Irrigation District), and E.G. “Jerry” Gladbach (Castaic Lake Water Agency), respectively
• Audit demand check numbers 121491 through 121624
• Treasurer’s Report and Financial Statements for the period ended January 31, 2009
ACTION AGENDA
2. Approval of Second Amendment to the Water Purchase Agreement with Poseidon Resources:
In December 2005, an agreement was executed with Poseidon Resources to purchase up to 7,500 ac ft. of desalted seawater. Due to delays in the approval process for the desalination plant, certain performance time frames in the agreement
were extended to April 1, 2009 (first amendment to the contract approved October 6, 2008). A public hearing concerning the final regulatory approval from the State Regional Water Quality Control Board for this project will be held April 8, 2009 and Metropolitan Water District’s contract financing is being pursued. Board approval of a second amendment to the water purchase agreement to extend the performance time frames to July 1, 2009, was requested.
Upon motion by Polito, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2009-12
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE VALLEY CENTER MUNICIPAL WATER DISTRICT
APPROVING THE SECOND AMENDMENT TO THE WATER
PURCHASE AGREEMENT WITH POSEIDON RESOURCES
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
3. Resolution to Set the Hearing Date and Schedule of Assessments for a Public Hearing to Consider the Levy of the District-Wide Water Availability Charge for Fiscal Year 2009-10:
Resolution No. 2009-09 was presented for the Board’s consideration to set June 1, 2009, at 2:00 p.m. as the date and time for the public hearing to consider levying the proposed Fiscal Year 2009-10 District-wide water availability charge. The proposed $10.00/acre, $10.00/parcel minimum water availability charge, which has been levied since 1995-96, is expected to be used for:
Revenue Debt Service $100,929
Ongoing Capital Requirements 490,071
Total Water Availability Charge $591,000
A Notice of the Public Hearing on the proposed District-wide water availability charge will be published in the newspaper and property owners who changed ownership since the levy of the availability charge for 2008-09 will receive written notification.
Director of Finance Jeffrey noted that a public hearing will also be conducted at the June 1st Board meeting on the assessment of the Woods Valley Sewer Service Charge which is collected on the tax roll. A Notice of this public hearing will be published in the newspaper.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2009-09
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT SETTING
FORTH
A SCHEDULE OF WATER AVAILABILITY CHARGES
PROPOSED TO BE ESTABLISHED FOR ALL PROPERTY
WITHIN THE DISTRICT FOR 2009-10, FIXING THE TIME
AND PLACE OF HEARING AND GIVING NOTICE OF HEARING
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
4. Annual Review of the District’s Investment Policy and A Renewal of the Authority Delegated to the Treasurer:
The District’s Administrative Code Section 50.1 requires that the Board review the District’s investment policy to confirm its appropriateness to the District’s operation. Primary goals of the District’s investment policy are: preservation of capital followed by maintaining liquidity and then yield on investments. The Board concurred with the current investment practice of purchasing mostly short-term investments for cash availability for the District’s operating and capital needs due to lower water sales.
The question of the District investing funds in assessment district bonds issued by the District; i.e. South Village Water Reclamation Facility Expansion Project, was discussed. It was unanimously agreed that, due to capital project needs of the District and limited unrestricted reserves, it would not be prudent to invest funds in the South Village Water Reclamation Facility Expansion Project’s assessment district bonds as had been proposed by the proponents.
Also, Government Code Section 53607 requires that the Board annually confirm the delegation of investment authority by the Board. The Board has delegated the
authority to invest and reinvest District funds to the Treasurer of the District, who is Bill Jeffrey, Director of Finance. Per Director Aleshire’s recommendation, the District’s Treasurer will be appointed along with the appointment of other Board officers in the future.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2009-10
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
TO APPROVE THE STATEMENT OF INVESTMENT
POLICY AND TO RENEW THE DELEGATION OF INVEST-
MENT AUTHORITY TO THE TREASURER OF THE DISTRICT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
5. Approval to Enter Into Agreement with the Valley Center Fire Protection District for Fire Hydrant Testing and Maintenance:
General Manager Arant explained that the Valley Center Fire Protection District had approached the District to implement a fire hydrant inspection, testing and maintenance program in an effort to improve the Insurance Standards Office (ISO) rating for its service area. A draft agreement between the District and the Valley Center Fire Protection District was prepared for the Board’s consideration for the District to perform the fire hydrant testing and maintenance within the VCFPD’s service area. VCFPD will reimburse the District $22.50 per fire hydrant for testing and maintenance for the initial term of the agreement through to June 30, 2010 with a 3% annual increase beginning July 1, 2010.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the Board authorized the General Manager to execute the Agreement for Fire Hydrant Testing and Maintenance with the Valley Center Fire Protection District contingent upon General Counsel’s approval.
GENERAL MANAGER’S AGENDA
6. Review of Miscellaneous Informational Items:
• A presentation on the state’s water supply conditions as of February 26th was provided. The water equivalent precipitation for the State Water Project’s watershed is 29 inches which is an improvement with the recent storms. The snow water equivalents statewide are 76% of normal. Department of Water Resources has announced that the State Water Project allocation will remain at 15% and, for the Central Valley Project, deliveries were stopped on March 1st but will be reassessed in mid-March.
Metropolitan Water District’s five-year supply outlook, assuming an interim Delta fix by 2012, estimates a State Water Project allocation of: 15% in 2009, 20% in 2010, 30% in 2011 and 40% in 2012 and 2013. Assumptions in this five-year supply outlook also included 800,000 ac. ft. from the Colorado River Aqueduct, Water Storage Demand Management (WSDM) limitation imposed, resource options, IAWP opt-out volume in 2009 of 73,300 ac. ft., and IID water transfers ramping up from 132,427 ac ft. in 2009 to 180,200 ac. ft. in 2013, and dry-year transfers. The five-year supply outlook also includes projected surface water, groundwater and brackish groundwater supplies, as well as seawater desalination of 56,000 ac. ft. per year by 2012. These projections of water supply assumptions before dry-year transfers indicate that there will be an 18% shortfall of water supplies in 2009 which reduces in subsequent years with increased projected supplies from the IID transfers. An estimated water shortfall of 6% is predicted in 2013 which accounts for the projected supply from the Carlsbad seawater desalination project. Utilizing the dry-year transfer supplies contracted by the San Diego County Water Authority, the water supply shortfall decreases to 16% in 2009 and to 4% in 2013. At the San Diego County Water Authority’s March 26th Board meeting, a Level 2 drought response is expected to be declared that will be contingent upon the Metropolitan Water District’s declaration in April 2009. Water allocations to member agencies of the San Diego County Water Authority would commence as of July 1, 2009.
CLOSED SESSION
7. A Closed Session was called by President Broomell at 3:13 p.m. pursuant to:
• Government Code §54956.9(b)&(c) – Conference with Legal Counsel,
Anticipated Litigation
Number of potential cases: 1
RECONVENE
8. The Regular Board meeting was reconvened at 4:21 p.m. No action was reported.
ADJOURNMENT
9. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the meeting was adjourned at 4:22 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President
Secretary