May 16, 2011
VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, May 16, 2011
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, Aleshire, and Stone. Staff members present were: General Manager Arant, General Counsel de Sousa, District Engineer Grabbe, Director of Finance Jeffrey, Director of Operations Hoyle, Board Secretary Johnson, Manager of IT Pilve, Manager of Accounting Pugh, GIS/Engineering Services Supervisor Garcia, Engineering Technician II DeManriquez, and Meter Services Supervisor LoPresti. Spectators present were Dave Ross, Roadrunner Newspaper, Wendy Heredia, Principal of Valley Center Elementary School, Shannon Hargrave, Principal of Lilac Elementary School, and the Valley Center Fourth Grade poster contest winners and family members.
CONSENT CALENDAR
1. Upon motion by Aleshire, seconded by Stone and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held May 2, 2011
• Audit demand check numbers 128783 through 128956 for April 15 through May 5, 2011 and wire disbursements for April 2011
• Treasurer’s Report and Financial Statements for period ended March 31, 2011
• Board of Director’s request for reimbursement of expenses and report of expenses
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 Elementary School was held as part of the District’s Water Education/Water Conservation Program. Trish Garcia, Conservation Coordinator, explained that the theme of the contest was “Water is Life”. Approximately 250 posters were received from the 4th grade students of both the Valley Center Elementary and Lilac Elementary that illustrated the importance of water, how it affects their lives, ways to conserve or recycle water for future use, and the need to use water wisely. From the entries received, 3 were selected for top awards and 9 received Honorable Mention recognition, as follows:
1st Place: Giancarlo Pinamonti, V.C. Elementary
2nd Place: Audrey Banner, V.C. Elementary
3rd Place: Maddison Clark, Lilac Elementary
Honorable Mentions:
Maria Alvarado, V.C. Elementary
Bridget Bernet, Lilac Elementary
Skylar Gavin, Lilac Elementary
Kayla Nunez, V.C. Elementary
Yahaira Ochoa, Lilac Elementary
Mateo Sinohui, V.C. Elementary
Jaretzy Solis, Lilac Elementary
John Stolec, V.C. Elementary
Amanda Yates, V.C. Elementary
In addition to award certificates, conservation materials and goodie bags that were given to all 12 top award winners, 1st place received a family four-pack to the San Diego Zoo/Safari Park, 2nd placed received a family four-pack to the San Diego County Fair, and 3rd place received a family four-pack to Regal Cinemas. The District’s top 3 posters will be included in the North County Water Agencies’ 2012 calendar. The students, teachers, parents and principals Heredia and Hargrove were thanked for their support of the District’s water education/conservation programs.
ACTION AGENDA
3. Review of Revenue and Expense Projections for the Proposed Fiscal Year 2011-2012 Budget:
An overview of the District’s preliminary revenue and expense projections and proposed capital projects for the Fiscal Year 2011-12 budget was presented by Accounting Manager Pugh as outlined below:
The total combined budget shows a surplus of $532,640 as follows:
Water Operations: $622,256
Water Capital: (492,193)
Moosa Capital: 315,113
Woods Valley Ranch Capital: 87,464
Total: $532,640
The water capital reflects a deficit because the District will utilize $1.1M of property tax revenues normally used to fund capital projects to fund operations.
Revenues
• Water sales for 2010-11 are estimated at 25,490 AF, 15% below the budget estimate. Water sales for 2011-12 are estimated at 25,260 AF.
• A pass-through of MWD/SDCWA wholesale water rate increases are estimated at – domestic 13.8%, IAWP 17.4%, and SAWR 13.9%
• An increase in the local water rate component by +13.8% ($18.91/AF or $0.0434/HCF) is recommended to generate additional revenue in 2012.
• An increase in the water meter monthly service charge of $3.00 for a ¾ inch and $4.00 for a 1-inch is recommended. This 12% increase would generate approximately $400,000 over 12 months. Combined with the water rate increase on our local share, the water revenue would increase about $875,000 annually to begin funding operations solely from operating revenue.
• There are no new water meter installations anticipated in FY 2011-12.
• Other revenues include approximately $135,000 from a 1% return on investments; property taxes of $1.785 million, a 10% reduction from the current year based on reduced assessed property valuations in the District; and $591,000 in water service availability charges.
• An increase of $2.25 in the Lower Moosa Canyon monthly wastewater service charge to $48.75 is recommended, as well as a $1.85 increase in the low pressure maintenance fee. The total rate increase at Moosa would be 4.8% to be effective January 1, 2012.
• The Woods Valley Ranch wastewater collection fee is unchanged at $98.60 per month and is collected on the property tax rolls.
Capital Projects
• A total funding request of $971,500 is budgeted for water projects and $85,000 for wastewater projects consisting of the following:
Pump & Motor Replacements $170,000
Emergency Power Generation Equip. 75,000
Reservoir Mixing System 75,000
VC-7 Chlorine Residual Analyzer 17,000
SCADA 500,000
Water Loss Reduction Program 105,000
Admin. Facility Improvements 20,000
Equipment 9,500
Total: $971,500
Lower Moosa Canyon WRF
Centrifuge Upgrade $50,000
Aeration system Upgrades 35,000
Total: $85,000
Operation & Maintenance Expenses
• General & Administrative budget for 2011-12 is essentially the same as current year and includes $20,000 for an election division reapportionment study.
• Finance budget is $94,612 lower than the current budget.
• Engineering budget is $170,192 lower than the current budget.
• Field Operations is $179,192 higher than the current budget due to increased labor, maintenance, chemical and SCADA expenses.
• Budgeted staff positions are down from 74½ full-time positions to 69¼.
• Moosa operating budget is $15,125 lower than the current budget.
• Woods Valley Ranch WRF operating budget is $11,075 higher than current budget mainly due to increased labor allocations.
• Source of supply – decrease of $2,024,162 from current budget due to lower demand offset by MWD/SDCWA wholesale rate increase of 12.1%.
There is no new debt included in the 2011-12 budget. The District is investigating participation in the State loan program but is not far enough along to include it in this budget.
Reserve balances at the end of fiscal year 2011-12 are expected to fall within the three-month minimum to six-month maximum operating budget requirements. These reserve balances are projected as follows:
Operating Reserve $3.9 million
Pumping Rate Stabilization 1.4
Agricultural Rebate .2
Benefit Plan Liability .6
Continuing Projects 1.5
Capacity Charges .2
Capital Improvements 3.1
Wastewater Reserves 1.9
Total Reserves $12.8 million
Budget books for FY 2011-12 will be delivered for review in the next week. Approval of the proposed budget will be requested at the June 6, 2011 board meeting.
4. CAL FIRE Conservation Camp Labor Service Agreement
Meter Services Supervisor LoPresti presented a request to enter into a labor service agreement with CAL FIRE to utilize the Puerta La Cruz Conservation Honor Camp for clearing of remote transmission line easements. The work crews consist of 12 to 18 female workers who are incarcerated, non-violent convicts, and one to three CAL FIRE Captains/crew leaders. The cost of a work crew is $200 per day plus a 12.7% administration fee.
The Puerta La Cruz Honor Camp is located in Warner Springs. Their work day begins when they check out of the camp in the morning and ends at a specified check-in time for their return. This allows for approximately 5 to 5½ actual work hours.
Mr. LoPresti explained that the District has identified a number of remote easements in need of clearing for leak detection and routine surveillance measures. A recent leak on the 42 inch line off Betsworth required 5 staff members a full days work to clear the easement at a cost of about $3,000. An Honor Camp work crew could clear the full length of the easement in 2 to 3 days at a cost of approximately $600.
CAL FIRE has provided labor service agreements with the City of Poway, Ramona MWD, Vista Irrigation, San Dieguito River Park and the U.S. Forest Service. Mr. LoPresti reported that comments from the agencies contacted were all positive.
As clearing of our easements is an important element in leak detection and utilizing the Honor Camp labor is a very economical way to clear our remote easements, staff recommends entering into a labor service agreement with CAL FIRE.
Upon motion from Aleshire, seconded by Stone and unanimously carried, staff was directed to enter into a labor service agreement with CAL FIRE to utilize the Puerta La Cruz Conservation Honor Camp for clearing remote transmission line easements.
GENERAL MANAGER’S AGENDA:
5. San Diego County Water Authority’s Board of Directors’ Meeting:
General Manager Arant reported on the following items from the April 28, 2011 SDCWA Board of Directors’ meeting:
• All water supply restrictions were lifted.
• The Board adopted positions on various state bills. SB 34, the Simitian Bill, is a proposed public goods charge which will be imposed on retail water agencies. The money collected would go to the State of California for some loosely defined water related purposes. This Bill is strongly opposed by the water community and will be one to watch.
6. San Pasqual Band of Diegueño Mission Indians Water Service Agreement Extension:
General Manager Arant reported that the current agreement with the San Pasual Band of Mission Indians (Band) to serve water to lands outside the District boundary expired on September 30, 2010. Written notice was given to the Band of the pending expiration in July 2010. Notice was also given to Metropolitan, as permission would have to be granted by MWD to extend the delivery of imported water outside the MWD boundary. Even though the agreement expired, the District continued to provide service pending an extension of the agreement.
The District received written confirmation that the Band wishes to extend the agreement from Chairman Allen E. Lawson in a letter dated March 1, 2011. Staff also received confirmation that MWD consents to extending the agreement through September 30, 2011 in a letter from Jeff Kightlinger, MWD General Manger. A request to MWD to consider an extension to September 2012 was declined, citing existing water pricing disputes with the San Luis Rey Settlement Group of Indian Bands.
Staff recommended adopting Resolution No. 2011-19, extending the Water Service Agreement with the San Pasqual Band of Diegueño Mission Indians to September 30, 2011, and advise them to start the process to extend the agreement further in the near future.
Upon motion from Stone, seconded by Aleshire and unanimously carried, the following Resolution, entitled:
RESOLUTION NO. 2011-19
RESOLUTION OF THE BOARD OF DIRECTORS OF
THE VALLEY CENTER MUNICIPAL WATER DISTRICT
APPROVING A SECOND ONE-YEAR EXTENSION TO THE
THIRD AGREEMENT BETWEEN THE DISTRICT AND
SAN PASQUAL BAND OF MISSION INDIANS
REGARDING WATER SUPPLY
Was adopted by the following vote, to wit:
AYES: Directors Broomell, Aleshire and Stone
NOES: None
ABSENT: Directors Polito and Haskell
7. Functional Consolidation Project Update:
General Manager Arant provided a status report on discussions among local agricultural water agencies concerning functional consolidations. These discussions have been motivated by the fact that agricultural agencies have been impacted by rising costs and declining sales. The Districts also realize that there is a limit to how far internal cost cutting can be taken before the ability to safely and effectively operate their respective water and wastewater systems is seriously impaired.
The discussions have been positive with a number of areas identified where the four agencies (VCMWD, Fallbrook, Rainbow and Yuima) could potentially combine or maximize existing resources, increase efficiencies and reduce costs. Each agency will be presenting this concept to their respective Board this month. If appropriate, the next step would be to expand the conceptual framework into a more complete and detailed document for formal consideration and adoption.
Mr. Arant suggested that one way to accomplish the consolidation would be to form a Joint Powers Authority (JPA) between the agencies. The JPA would have a governing board made up of representatives from each agency and could provide services directly or hire its own employees, if necessary. Agreements between the individual agencies for sharing resources could be done under the umbrella of the JPA. A preliminary concept of the JPA services agreement was provided for review.
Director Aleshire questioned the need for a JPA and reasoned that the agencies could have agreements between themselves without creating a new entity. He suggested not forming a JPA until absolutely necessary. Mr. Arant explained that a JPA could prove beneficial in hiring outside services but was not necessary for trading resources between agencies. General Counsel de Sousa stated that JPAs are typically created to shield the member agencies from any liability and protect their assets.
After each of the four respective Boards has reviewed the concept, the group will reconvene to discuss how to proceed.
8. Miscellaneous Information Items:
General Manager Arant reported that long time employee Armond Martineau, who retired in 1998, passed away after a long illness. He was a much beloved and respected employee and member of the community.
BOARD OF DIRECTOR’S AGENDA
9. ACWA 2011 Spring Conference:
Director Aleshire reported that he attended the ACWA spring conference in Sacramento. He thanked the Board and staff for approving and sending out the letter of opposition to the Executive Committee’s proposed changes to their bylaws regarding business entertainment which was to be voted on at the conference. The letter from Valley Center Water District was the main topic of discussion. The JPIA Directors voted overwhelmingly to leave the alcohol restrictions in place and not give authority back to the Chief Executive Officer in regards to business entertainment expenses. All members of the Executive Committee voted to change the alcohol restrictions in direct opposition to the membership.
Director Aleshire serves on the Board of the JPIA Health Benefits Authority. The HBA needs to move out of the ACWA building and Dr. Aleshire has been tasked with looking at properties. He hopes to make a recommendation in August.
Karen Ross, Secretary of Food and Agriculture, was a keynote speaker at the conference. She reported that there is renewed interest in food production and food security. Mr. Arant commented that the Urban Rural Roundtable’s focus is on agriculture and is part of the movement to raise awareness that we are losing our food production; and along with that we will lose security and economics. Currently, the group’s top priority is on water availability and price. The group will be seeking price considerations for agriculture from MWD and the Water Authority.
The finance session was looking at eliminating the development agency’s funding and charging fees of all sorts.
As part of their plan to revamp government, Cal-Forward, a privately financed public policy interest group, is seeking to consolidate special districts.
A Draft Bay-Delta Conservation Plan is scheduled to come out in March 2012. It will take two to three years to complete and have the EIR approved then ten to twenty years before anything is constructed to improve the Delta. Mr. Arant reported that the most discouraging thing heard at the meeting was that the Delta County Coalition will likely stand in the way of progress unless their list of demands is met; this includes new roads, infrastructure, and a guarantee for economic impacts.
ADJOURNMENT
10. Upon motion by Aleshire, seconded by Stone and unanimously carried, the meeting was adjourned at 4:10 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary