April 5, 2010
VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, April 5, 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, Manager of IT Pilve and Pumps and Motors Supervisor Rutherford. Spectators present were: Messrs. Hilbig, Flynn, Lewis, MacLaggan and Laird.
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 March 15, 2010
▪ Audit demands 125177 through 125378
▪ Treasurer’s Report and Financial Statements for the period ended February 28, 2010
▪ Resolution No. 2010-16 adopting the 2010 revisions to the Local Guidelines for Implementing the California Environmental Quality Act
▪ Purchase Order No. 18117 to Bay City Electric Works for one 125 kw diesel generator and one 250 kw diesel generator for $96,530.85
ACTION AGENDA
2. Update on the State Revolving Fund (SRF) Loan Application for the Woods Valley Ranch Water Reclamation Facility Expansion Project:
District Engineer Grabbe provided an update on the Woods Valley Ranch Water Reclamation Facility Expansion Project explaining that the application to the State Water Resources Control Board for a State Revolving Fund (SRF) loan for the expansion project was submitted on February 12th. On March 2nd, District Engineer Grabbe and project proponents met with staff of the State Water Resources Control Board in which there was a favorable indication that a Project Facility Approval would be recommended by the Water Resources Control Board staff for the project. This action would be followed by a Preliminary Funding Commitment approval once all comments are addressed.
Once the Preliminary Funding Commitment approval is received, participants in the wastewater treatment plant’s expansion project would be identified, as well as design of project, solicitation of bids, and formation of an assessment district. Staff noted that the interest rate of the SRF loans is very favorable, currently between 2.5% and 3.5%.
An item needed for approval of the loan application is the District’s approval of a resolution declaring the District’s intent to reimburse capital costs for the project from proceeds of indebtedness. Resolution No. 2010-17 was presented for the Board’s adoption to meet the state’s requirement for such a declaration of intent. Director Aleshire voiced and the Board agreed that the language in the resolution (Section 1) should be revised to clarify that reimbursement of expenditures paid would be upon issuance of the obligations or the approval by the State of the project funds as follows: “The District hereby states its intention and reasonably expects to reimburse Expenditures paid prior to upon the issuance of the obligations or the approval by the State Water Board of the Project Funds”.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, the following resolution with the amendment to Section 1 as noted above, entitled:
RESOLUTION NO. 2010-17
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VALLEY CENTER MUNICIPAL WATER DISTRICT DECLARING
INTENT TO REIMBURSE CAPITAL EXPENDITURES FROM
PROCEEDS OF INDEBTEDNESS FOR THE WOODS VALLEY
RANCH WATER RECLAMATION FACILITY EXPANSION PROJECT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
Mr. Wayne Hilbig of Village Redevelopment LLC, proponent of the Woods Valley Water Reclamation Facility Expansion Project, addressed the Board and expressed his appreciation of the efforts being put forth by District staff to secure the SRF loan. Mr. Hilbig noted the expansion of the treatment plant is a community project that will enable property owners to make improvements to their properties that have not been feasible without a wastewater system. Mr. Hilbig stated that thus far the South Village property owners have expended $631,500 pursuing the proposed wastewater expansion project. He further stated that Bell Enterprises and Village Redevelopment, in addition to their share of the $631,500 expenditures, have advanced $144,411 for engineering, storage land acquisition, consultant fees, etc. Mr. Hilbig conveyed that he is optimistic that the state loan will be approved and the Woods Valley Water Reclamation Facility Expansion Project will be constructed.
Mr. Steve Flynn of Bell Enterprises stated the State Water Resources Control Board staff, in reviewing the application for the SRF loan for the wastewater treatment expansion project, indicated that if criteria for the loan are met it is very likely that it will be approved. Mr. Flynn noted other positive aspects for the proposed project upon securing the SRF loan will be the favorable interest rate that should result in the inclusion of additional South Village property owners, repayment of the loan through the property tax roll, the eligibility for reimbursement of previously expended funds, and the requirement for minimal up-front cash layout. Mr. Flynn reiterated he is optimistic that the proposed expansion of the Woods Valley Water Reclamation Facility will be completed.
3. Valley Center Vacqueros Proposal to Utilize the District’s Lilac Road Property:
Mr. Shannon Laird, President of the horse club Valley Center Vacqueros, explained that the club’s lease with the County for use of Aerie Park off of Betsworth Road will terminate effective April 30, 2010 due to a substantial fee hike. The District’s property on Lilac Road near Valley Center Road is considered a viable area to relocate the club’s horse facilities.
Mr. Laird stated that County Land Use personnel had indicated a Major Use Permit (MUP) would need to be obtained for the proposed use of the Lilac Road property, a process that would be prohibitively expensive for the club. However, the feasibility of changing the property’s designation to allow unlimited animal use (O designation) and, therefore, a variance of the MUP process, will be pursued. Mr. Laird clarified that a change in the designation for animal use does not change the zoning of the property.
General Manager Arant requested that the Valley Center Vacqueros submit a formal request to the District for its proposed use of the District’s Lilac Road property for evaluation and future consideration by the Board.
4. Status Report and Review of Water Purchase Agreement for the Carlsbad-Poseidon Seawater Desalination Project:
A Water Purchase Agreement with Poseidon Resources for up to 7,500 ac. ft. of desalted water from the Carlsbad-Poseidon Seawater Desalination Project had been executed in December 2005. The Water Purchase Agreements for the delivery of the desal. water to participating agencies are being finalized. Two changes of importance to the District are an allowance for a reduced delivery by 2 mgd for 30 days in any year or up to a maximum 100 days in a five-year period and a proposed amendment to the San Diego County Water Authority’s Local Water Supply Development agreement to provide that if the Authority takes action which results in a loss of Metropolitan’s Local Water Supply Development Program subsidy, then that funding will be replaced by the Authority.
The San Diego County Water Authority will be considering the following at its April and May Board meetings that are needed to finalize financing for the desal. project:
~ SDCWA Local Water Supply Development Program Funding – The Authority’s LWSD Program provides up to $200.00 per acre foot in support of local water resource development. The goal of the San Diego Desal. partners is to secure the full funding from the SDCWA’s LWSD Program.
~ Metropolitan Seawater Desal. Program Funding – Language has been proposed to insulate the contractors from the impact of the potential loss of Metropolitan’s Desal. Program subsidy, and an amendment will be pursued with the SDCWA for replacement of funding lost by the Authority’s action which invokes Metropolitan’s Rate Integrity provision.
~ Wheeling and Exchange Agreement – Will provide for the delivery of desal. water through the SDCWA’s aqueduct system. The provision for balancing between desal. water into the Authority’s system and water taken out for the desal. contractors will be addressed. The goal is to secure monthly mass balancing for the delivery reconciliation.
~ Connection Agreement – Governs how the desal. water delivery pipeline will physically connect to the Authority’s aqueduct.
Peter MacLaggan of Poseidon Resources stated that meetings have been conducted with the San Diego County Water Authority staff to finalize the above mentioned agreements which has been a constructive process. Also, the Mayor of San Diego has indicated support of the proposal to replace Metropolitan’s desal. subsidy if it is lost through action of the San Diego County Water Authority to modify MWD’s rate structure (rate integrity clause). The District’s Water Purchase Agreement with Poseidon Resources will be presented for adoption at the April 19th Board meeting that will establish the delivery charge and where and how the water will be delivered.
5. Approval of Change Orders for the West No. 1 Reservoir Interior and Exterior Recoating Project:
J. Colon Coatings, Inc. is under contract to repaint the exterior and interior of the West No. 1 Reservoir. Sandblasting of the reservoir for this project has revealed extensive metal corrosion; namely, on the earthquake straps, the rafter bolts that secure the outer rafters to the exterior wall, and on the inner rafters where they attach to the center ring of the reservoir. Supervisor Rutherford explained that District staff has changed-out the corroded earthquake straps and bolts. Approval of the following change orders to the contract with J. Colon Coatings for the repainting of the exterior and interior of West No. 1 Reservoir was recommended:
Change Order No. 1 - $3,000 (sandblast and primer the new earthquake straps and bolts)
Change Order No. 2 - $14,900 (construct a secondary halo ring and weld reinforcement/support beams to the ring)
Approval of Change Order Nos. 1 and 2 and a $2,100 contingency for a total change order request of $20,000 for the West No. 1 Reservoir Repainting project was requested.
Upon motion by Aleshire, seconded by Haskell and unanimously carried, Change Order Nos. 1 and 2 and a contingency for the West No. 1 Reservoir Interior and Exterior Repainting Project in the amount totaling $20,000 were approved.
6. Reschedule of the Date of the Public Hearing for the District-wide Water Availability Charge for Fiscal Year 2010-11:
Director of Finance Jeffrey stated that a resolution to set the hearing date for the District-wide water availability charge on June 7th had previously been adopted. Due to conflicting schedules, the rescheduling of this public hearing to the June 21st Board meeting was requested. The public hearing for the Woods Valley sewer service charge will also be deferred to June 21st.
Upon motion by Polito, seconded by Haskell and unanimously carried, the following resolution, entitled:
RESOLUTION NO. 2010-18
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 2010-2011, 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
GENERAL MANAGER’S AGENDA
7. Review of Miscellaneous Information Items:
▪ General Manager Arant reported that at the March 25th San Diego County Water Authority Board meeting, the Special Agricultural Water Rate (SAWR) was extended to December 31, 2012. SAWR customers must continue taking a minimum 13 percent cutback for the next two years. Beginning in 2013, the SAWR discount will not include the supply portion, but will be based on the participants not paying the commodity portion of the Emergency Storage Project and the Carry-over Storage Project. Currently, the total SAWR differential is $133.00/ac. ft. Due to increasing storage project costs, the SAWR pricing differential is estimated at $150-$160/ac. ft. in 2013.
▪ Final water allocation levels from DWR will be announced soon. The allocation level was recently raised to 20%. Department of Water Resources’ final allocation level and Metropolitan’s allocation level will determine the feasibility of allowing carry-over conservation credits for the District’s participants in the Interim Agricultural Water Program from the 2009 to the 2010 program.
DISTRICT GENERAL COUNSEL’S AGENDA
8. Update Regarding the Delta Litigation:
General Counsel de Sousa reported that in two trials seeking preliminary injunctions from enforcement of the pumping restrictions on the Bay-Delta pending the final trials on the Delta Smelt and Salmon, the validity of the biological opinions upon which the pumping restrictions are based is being questioned. Ms. de Sousa stated that the National Academy of Sciences released reports requested by Congress which seemed to question the biological opinions. Also, responses to questions of Judge Wenger’s environmental scientific experts were released, and they seemed to be in support of the State Contractors’ position that the biological opinions were not based on the best available science. It is hoped that the pumping restrictions on the Bay-Delta will be lifted to some degree.
CLOSED SESSION
9. A Closed Session was called by President Broomell at 3:28 p.m. pursuant to:
● Government Code §54956.9(b), Conference with Legal Counsel, Anticipated
Litigation
Number of potential cases: 1
RECONVENE
10. The Regular Board meeting was reconvened at 3:35 p.m. No action was reported.
ADJOURNMENT
11. Upon motion by Aleshire, seconded by Haskell and unanimously carried, the meeting was adjourned at 3:37 p.m.
ATTEST: ATTEST:
___________________________ ___________________________
President Secretary