VALLEY CENTER MUNICIPAL WATER DISTRICT
Regular Board Meeting
Monday, March 1, 2004
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, Director of Operations Dacus, Project Engineer Grabbe, IT Specialist Rivard and Board Secretary Stetson. No spectators were present
CONSENT CALENDAR
1. Upon motion by Stone, seconded by Aleshire and unanimously carried, the following consent calendar items were approved:
• Minutes of the Board meeting held February 17, 2004
• Resolution No. 2004-07 adjusting the District’s authorized debt limits per Ordinance No. 171, effective as of January 1, 2004
• Audit demand check numbers 97725 through 97919
• Concept approval of the St. Stephens Church water main extension project consisting of approximately 380 feet of 8-inch water main, two 6-inch fire hydrants, one 2-1/2” water service, a fire detector check valve assembly, relocation of one 1-1/2” water service and other required appurtenances.
ACTION AGENDA
2. Request for Approval of the Reidy Creek Pipeline Replacement Project and Budget Appropriation:
Board approval of a new capital project, the Reidy Creek Pipeline Replacement, and appropriation of funds for this project were requested. Project Manager Williams explained that the 10-inch concrete mortar llned and tar wrapped steel distribution pipeline (constructed in 1956) located between North Broadway and Quail Road in North Escondido was identified as a Priority Code “A” for replacement in the District’s
2002 Water Master Plan. Funding for replacement of this pipeline had not been requested in the 2003-2004 budget, but the Escondido School District’s proposed school construction planned for this area provides an opportunity to coordinate construction and the cost sharing for a portion of the pipeline. A cost sharing agreement will be pursued with the school.
The proposed Reidy Creek Pipeline Replacement project consists of replacing approximately 1,700 linear feet of existing 10-inch concrete mortar lined and tar wrapped pipe with approximately 2,100 linear feet of 12-inch and 900 linear feet of 8-inch diameter PVC pipe. The new pipe will be located within Le Clair Lane, Monique Way and along the westerly property of the Escondido Union School District’s property. Several remote meters will be relocated to their respective service properties and valving will be installed to minimize service interruptions during future shutdowns.
Adoption of Resolution No. 2004-06 was requested to amend the 2003-04 budget with a transfer of $450,000 from the Master Plan Improvement Reserve Account into the new Reidy Creek Pipeline Replacement Project.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the Reidy Creek Pipeline Replacement Project was approved, and the following resolution, entitled:
RESOLUTION NO. 2004-06
RESOLUTION OF THE BOARD OF DIRECTORS OF
VALLEY CENTER MUNICIPAL WATER DISTRICT
AMENDING THE 2003-04 BUDGET BY TRANSFERRING
$450,000 FROM MASTER PLAN IMPROVEMENTS
RESERVE ACCOUNT INTO A NEW ACCOUNT,
REIDY CREEK PIPELINE REPLACEMENT PROJECT
was adopted by the following vote, to wit:
AYES: Directors Broomell, Polito, Aleshire, Stone and Haskell
NOES: None
ABSENT: None
3. Strategic Plan Update for 2004-05 and 2005-06:
General Manager Arant reported that staff reviewed the District’s two-year Strategic Plan that will end June 30, 2004, and feels that the majority of the Plan is still relevant today. As such, the following was proposed for an Update of the District’s Strategic Plan for Fiscal Years 2004-2005 and 2005-2006:
Mission Statement – Maintaining the wording of the Mission Statement as it describes the District’s purpose. The Mission Statement is: “Our Mission is to Ensure Customer Satisfaction Through Quality Service at the Lowest Possible Cost”.
Organizational Values – No changes were proposed to the Organizational Values, which are:
Customer Satisfaction Quality Service Safe Water
Safe Environment Professionalism Integrity
Friendliness Ethics Reliability
Efficient Use of Resources Conservation Leadership
Cost Consciousness Teamwork
Performance Measurement Standards – Amendments to the following Performance Measurement Standards were proposed:
• Operating Reserve: Equal to 6 months O&M expenses. Currently this performance measurement standard is that operating reserves shall be equal to 1 year’s O&M expenses. Staff noted that operating reserves equal to 1 year’s O&M expenses are approximately $8 million, which provides a significantly high level of security for the District’s operations, but these financial resources could be utilized for the District’s capital improvement program. It was felt that an Operating Reserve at 6 months of local O&M expenses (currently $4 million) would provide a sufficient operating reserve level and allow $4 million to be allocated for the District’s capital program. It was also pointed out that the Rate Stabilization Reserve (currently $2.5 million) in combination with a 6 month Operating Reserve results in $6.5 million in reserves for emergencies, or roughly 9 months of local O&M expenses.
• Commodity Rate for Local Operating and Maintenance Costs: To be Held as low as possible, but at no time will the local rate be more than 13% of total water commodity cost for M&I and 16% for Certified Agriculture. The proposed change establishes a proportional relationship between the District’s O&M costs and the overall cost of service rather than a fixed dollar amount under the current measurement standard which is that the District’s water operating and maintenance costs shall be held at $71.62 per ac. ft.
The remaining 8 Performance Measure Standards were proposed to remain unchanged, which are as follows:
• Customer Satisfaction: Greater than 95%,
• Water Loss: Less than 5% per calendar year.
• Pump Efficiency: Greater than 95% of design criteria.
• Project Actual Cost: ±10% of the Engineer’s estimate.
• Water Service Reliability: Greater than 99%.
• Compliance with All State and Federal Regulations.
• Lost-Time Accidents: Less than 1% of total hours worked.
• Return on Investments: Greater than the return on one-year Treasury Bills.
Specific Strategic Plan Goals – Of the 11 Specific Strategic Plan Goals, 4 have been or will be completed by the end of Fiscal Year 2003-04. They are:
• Lake Turner Recreational Use Options
• Organizational Structure Evaluation
• Energy Study Recommendations
• Ethics Policy
The Specific Strategic Plan Goals that remain to be completed were reviewed, which are:
• GIS System – Completion of the development and implementation of the GIS Master Planned tasks and features over the next two fiscal years.
• SCADA System – Pilot Study completed and move forward with the phased implementation over the next several fiscal years.
• Vulnerability Assessment – Implementation of the recommendations over the next two fiscal years.
• Corporate Facility Master Plan – Secure additional property to facilitate expansion options over the next two fiscal years.
• Long-Range Capital Financing Plan – Completion of the Plan expected by the end of FY 2003-04, with implementation in FY 2004-05.
• Employee Training and Development Program – Development and implementation of the program over the next two fiscal years.
• Regional Water Supply Alternatives – Continue efforts to ensure the San Diego County Water Authority selects the most secure and cost effective alternatives to meet regional water supply needs.
No new Specific Strategic Plan Goals were proposed considering the scope and significance of those pending and that attention and resources can be focused on accomplishing these current goals. Director Aleshire inquired as to modifying the District’s name; i.e. Valley Center Water District, which will be considered further.
Upon motion by Aleshire, seconded by Stone and unanimously carried, the Strategic Plan for Fiscal Years 2004-2005 and 2005-2006 was adopted as reviewed.
4. Landscape Irrigation Classes:
The Board was updated on the “Protector del Agua Education Program”, a series of 4 classes on landscape irrigation for the residential homeowner. These classes are sponsored by Metropolitan Water District and the topics covered are: Basic Landscape Design, Plants for Southern California, Landscape Sprinkler Systems and Landscape Watering and Fertilizing. The classes are taught by certified landscape and irrigation experts utilizing slides and hands-on demonstrations. The classes were held at the District on February 7th and 21st and the remaining two classes will be on March 6th and 13th. Limited space is available for these classes, so only customers in Cycle 1 billing received notification through an insert in their water bills. Sixty-five customers are participating in the series of 4 classes, and arrangements will be made to offer these classes to residential customers in the Cycle 2 billing next fiscal year when Metropolitan will again be offering the classes. Staff will research the cost of offering the classes through a direct arrangement with the consultant.
GENERAL MANAGER’S AGENDA
5. Review of Miscellaneous Information Items:
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PERS Rate Increase – General Manager Arant reported that he received a phone call from Mr. Meredith, Chief Consultant to the Assembly Committee on Public Employees Retirement, in response to the letter from the District regarding the substantial increase in the District’s PERS rate. Mr. Meredith stated that he and the Chief Consultant from the Senate Committee on Public Employee Retirement had met with PERS and discussed the District’s increase in its PERS rate from 24.4% to 36.2% of payroll. PERS is evaluating restructuring the charges to possibly extend the payback period. Any proposal will be evaluated by staff regarding its cost impact.
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Property Tax Shift (ERAF) – The shift of property tax revenue from special districts to the State’s General Fund proposed in the State’s budget is estimated at 23% of the District’s current shift in property taxes implemented in the early 1990s. Therefore, an additional cut of approximately $200,000 in property tax revenue may be approved by the Legislature in the budget due in June.
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Cougar
Pass
Easement – Mr. Braman, owner of property along Cougar Pass Road which is impacted by several easements, is questioning the validity of the District’s specific road easement over a portion of his property. However this is resolved, the District has a blanket easement and an easement over its pipeline. Further information is expected to be forthcoming from the San Diego County Water Authority regarding types of conditions pursuant to execution of a Joint Use Agreement with the Authority for its pipeline easement road.
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Governance Structure at the
Sa
n Diego County Water Authority – Delegates from the City of San Diego on the San Diego County Water Authority Board (10 representatives) voted 7-3 to oppose a change in governance at the Authority. Any change in the Authority’s Act requires legislative approval and there is strong support by Senators Hollingsworth and Ducheny to effect a change. If approval is not obtained from the San Diego County Water Authority Board members, legislative approval of a governance restructure at the Authority will be pursued to implement the SANDAG model which is a majority of the weighted vote and a majority of the member agencies voting.
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Corporate Facility Master Plan – Per the Strategic Plan, completion of the Corporate Facility Master Plan to secure additional land to accommodate future needs is being pursued. General Manager Arant reported that appraisals are underway on 4 separate parcels. They are: property east and adjacent to the District’s yard (approximately 2 acres), property off of Miller Road (13.42 acres), and 2 front parcels of the 32 acres on Lilac Road across from the Community Hall. In addition, an appraisal of the District’s property will be completed.
GENERAL COUNSEL’S AGENDA
6. Ruling on Proposition 218:
General Counsel Cowett reported that the State Supreme Court has ruled on a case involving Proposition 218. The court of appeal had clarified that water and sewer fee increases were not subject to the notification requirements of Proposition 218. The recent ruling is that capacity fees (developer fees) are exempt from Proposition 218, but includes language that water and sewer fee increases would be subject to Proposition 218. Reconsideration of the court’s language may be requested.
ADJOURNMENT
7. Upon motion by Aleshire, seconded by Polito and unanimously carried, the meeting was adjourned at
3:22 p.m.
ATTEST: ATTEST:
____________________________ _______________________________
President Secretary