minutes

Regular Meeting

Governing Board of Sweetwater Authority

January 28, 2004

The Governing Board of Sweetwater Authority held a regular meeting on Wednesday, January 28, 2004, at the Sweetwater Authority Administrative Office, 505 Garrett Avenue, Chula Vista, California. Chair Doud called the meeting to order at 3:30 p.m.

· ROLL CALL

Directors Present: Alkire, Beauchamp, Doud, Pocklington, Reynolds, and Welsh.
Directors Absent: Inzunza.
Others Present: General Manager Bostad, Operations Manager Rogers, Legal Counsel Cowett, Treasurer Avery, and Board Secretary Farpón-Friedman. Staff members: Mary Ann Mann, Leslie Filippi, George Silva, Jim Smyth, and Tom Woodrum.

· PLEDGE OF ALLEGIANCE TO THE FLAG
Director Alkire conducted the pledge of allegiance to the flag.

· OPPORTUNITY FOR PUBLIC COMMENT (Government Code Section (54954.3)
There were no members of the public present for comment.

· CHAIR 'S PRESENTATION
There was none.

· ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED IN THE AGENDA
Operations Manager Rogers said that Counsel Cowett would like to make a brief presentation under Directors' Comments regarding the status of the lawsuit against the electrical companies. Director Doud made a motion, seconded by Director Pocklington, that the Governing Board approve the addition of Counsel Cowett's report under Director's Comments. The motion carried.

1. APPROVAL OF MINUTES

Director Pocklington made a motion, seconded by Director Alkire, that the Board approve the minutes of the regular meeting of January 14, 2004. The motion carried.

2. APPROVAL OF DEMANDS AND WARRANTS

Director Pocklington made a motion, seconded by Director Beauchamp, that the Board approve Warrants 92549 through 92794 including all voided checks. The motion carried.

CONSENT CALENDAR ITEMS

3. RECREATION COMMITTEE (Meeting of January 19, 2004)

CONSENT ITEMS

Director Reynolds reported that only information items were discussed.

A. Status of Sweetwater Reservoir Shoreline Fishing Program. This was an information item and no action was required by the Governing Board.

B. Status of proposed loop trail at Sweetwater Reservoir. This was an information item and no action was required by the Governing Board.

ACTION CALENDAR ITEMS

4. OPERATIONS COMMITTEE (Meeting of January 23, 2004)

A. Sweetwater Reservoir Fencing - Recommendation to Award Contract. Director Beauchamp made a motion, seconded by Director Welsh, that the Governing Board award a contract to Horizon Fence Company, Inc., 10755-F Scripps Poway Parkway, San Diego, California, in the amount of $39,920. Fencing at the east end of the reservoir will be reevaluated and budgeted in the future. The motion carried.

NOTE: Director Inzunza entered the meeting at 3:34 p.m.

B. Urban Runoff Diversion System Phase II, Pumpback Pipeline - Recommendation to Award two contracts. Director Beauchamp made a motion, seconded by Director Welsh, that the Governing Board approve awarding contracts to: 1) U.S. Filter, 11484 Fuerte Farms Road, El Cajon, California, in the amount of $179,637 for the GAC units; and 2) Cass Construction, 1100 Wagner Drive, El Cajon, California, in the amount of $183,645 for the pipeline. The Committee also recommended that $66,000 be made available from the Unallocated Reserve Fund to cover the projected deficit.

C. Service to County of San Diego's Animal Shelter for Otay Water District. This was an information item and no action was required by the Governing Board.

5. COMMUNICATIONS COMMITTEE (Meeting of January 26, 2004)

A. Further consideration of formal customer survey report presented by San Diego State University Social Science Research Lab. This was an information item and no action was required by the Governing Board.

ACTION ITEMS

B. Consideration of new concept and design for consumer publication. Director Pocklington made a motion, seconded by Director Beauchamp, that the Governing Board approve the new concept and design for consumer publication The motion carried.

C. Consideration of amending advertising policy to include special "South Bay" publication editions and support of neighboring agencies. Director Pocklington made a motion, seconded by Director Beauchamp, that the Governing Board make no changes to the existing policy. The motion carried.

D. Discussion of Authority's public response to projects considered by other San Diego Regional retail water agencies (Water recycling and Ocean desalination). Director Pocklington made a motion, seconded by Director Beauchamp, that the Governing Board authorize staff to prepare an outreach letter to the Port of San Diego regarding further action on a South Bay Desalination Plant, and that Representative Pocklington be authorized to provide input on CWA outreach regarding water recycling. The motion carried.

E. Establishment of Scholarship Selection Committee and meeting date. Director Pocklington made a motion, seconded by Director Beauchamp, that the Governing Board authorize its Communications Committee to stand as its Scholarship Selection Committee, to meet at a date no later than April 14, 2004, at a time and date to be determined by vote of the Committee. The motion carried.

F. Information items; press releases, other items prepared for the public information distribution, update on major projects. No action was required by the Governing Board.

6. NEW BUSINESS

A. Upon a motion made by Director Pocklington, seconded by Director Welsh, the following Resolution:

RESOLUTION 04-01
HONORING CARY F. WRIGHT FOR HIS SERVICE AS A DIRECTOR

was passed and Adopted by the following vote, to wit:

Ayes: Directors Alkire, Beauchamp, Doud, Inzunza, Pocklington, Reynolds and Welsh
Noes: None
Absent: None
Abstain: None

B. Upon a motion made by Director Welsh, seconded by Director Pocklington, the following Resolution:

RESOLUTION 04-02
AUTHORIZING AN AMENDMENT TO THE CONTRACT WITH THE BOARD OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM

was passed and Adopted by the following vote, to wit:

Ayes: Directors Alkire, Beauchamp, Doud, Inzunza, Pocklington, Reynolds and Welsh
Noes: None
Absent: None
Abstain: None

C. Request from Valley Center Municipal Water District for concurrence in the nomination of Merle Aleshire for the ACWA/JPIA Executive Committee: Upon a motion made by Director Pocklington, seconded by Director Welsh, the following Resolution:

RESOLUTION 04-03
CONCURRING IN THE NOMINATION OF MERLE J. ALESHIRE TO THE EXECUTIVE COMMITTEE OF THE ASSOCIATION OF CALIFORNIA WATER AGENCIES JOINT POWERS INSURANCE AUTHORITY ("ACWA/JPIA")

was passed and Adopted by the following vote, to wit:

Ayes: Directors Alkire, Beauchamp, Doud, Inzunza, Pocklington, Reynolds and Welsh
Noes: None
Absent: None
Abstain: None

D. California Special Districts Association, San Diego Chapter - Ballots for the positions of 2nd Vice President, Secretary and Treasurer: Director Welsh made a motion, seconded by Director Beauchamp, that the Board vote for Martin Marugg from the Alpine Fire Protection District for the position of 2nd Vice President, Trish Hannan from Vallecitos Water District for the position of Secretary, and Richard Hyde for the position of Treasurer of the San Diego Chapter of California Special Districts Association. The motion carried.

7. REPORT OF THE SOUTH BAY IRRIGATION DISTRICT REPRESENTATIVE AND THE CITY OF NATIONAL CITY REPRESENTATIVE TO THE SAN DIEGO COUNTY WATER AUTHORITY

Director Pocklington reported that National City Representative Valderrama had other commitments and would be unable to attend this meeting. He provided the schedule for tomorrow's Board meeting at the CWA. He informed the Board that MWD have a surplus of funds of $36.3 million, and that Sweetwater Authority would get $381,109.

Director Pocklington briefed the Board on some of the items of interest to Sweetwater Authority that would be considered at tomorrow's Board Meeting. One was the request from Rainbow MWD for waiver of delinquency charge for late payment; he noted that the CWA has never granted a waiver. He also referred to the 25-year power purchase agreement with San Diego Gas and Electric for electrical capacity for the Olivenhain/Hodges pump storage station. Also discussed by the Board will be actions necessary to implement the Quantification Settlement Agreement, including authorizing the General Manager to serve as the CWA's representative to the QSA Joint Powers Authority (JPA) Commission. The Carlsbad Desalination plant issue would be discussed under closed session, and he noted that the Coastal Commission has come out very strongly against private ownership of power and desalination plants on the coast.

He also talked about the Governance situation at the CWA. He noted that he is on the Ad Hoc Committee and they have not been able to come to an agreement. He discussed some of the background on the issue and distributed a letter from Senators Ducheny and Hollingsworth addressed to Bernie Rhinerson, Ben Haddad, Gregory Quist, and Dale Mason, spelling out the agreement points. An extensive discussion followed regarding the governance issue and the voting structure.

8. APPROVAL OF DIRECTORS' ATTENDANCE AT MEETINGS AND FUTURE AGENDA ITEMS

A. State of the County Address - Wednesday, February 4, 2004, 6:00 p.m., at the West Hills High School, Santee. None of the directors will attend this event. No action was necessary by the Governing Board.

B. CSDA, San Diego Chapter Quarterly Dinner - Doubletree Hotel of San Diego, 1515 Hotel Circle South, San Diego - Thursday, February 19, 2004, 6:00 p.m. - 9:00 p.m. Directors Inzunza, Pocklington, and Welsh will be attending this pre-approved event. No action was required by the Governing Board.

9. REPORT OF TREASURER - WANDA AVERY

Ms. Avery reported that there is no change in interest rates.

10. BUDGET REPORT - DIRECTOR OF FINANCE GAUS

Director of Finance Gaus reported that Water Sales are $648,000 below what was anticipated; Other Income is $5,728 under budget; Interest Income is $21,368 above the budget; and the Operating Expenses are $195,687 below the projections. The good news is that we received $279,000 from the CWA in January, and we will be receiving $381,000 from MWD, which gives us an income of $660,000 that we had not anticipated.

Director of Finance Gaus then reported on the Capital Expenditures by department. Overall, we had estimated spending 39 percent for capital projects at this time, and we have spent 22 percent.

11. MANAGEMENT REPORT

A. Report of Rainfall and Reservoir Levels - Operations Manager Rogers: Operations Manager Rogers informed the Board that a TV reporter from Channel 8 had been asking questions regarding how often we flush the mains and do maintenance on the hydrants, as well as general questions about the operation of the Authority's system. He displayed a slide showing all the hydrants in the system that have been turned on and operated since 2000. He said that this report is a cooperative effort from the Distribution and the Information Systems Departments, and that we are prepared to provide information on how we maintain the system in a matter of minutes. He added that the average time to maintain the hydrants is 1.8 years.

Mr. Rogers reported on the system capacity being 37 percent at Sweetwater Reservoir and 28 percent at Loveland Reservoir. The 28 percent capacity at Loveland has been consistent for about a year and a half because the rain and runoff received offsets the amount of evaporation. The 37 percent at Sweetwater Reservoir is reflective of the water that we are importing. We have taken about 3,500 acre-feet and will take an additional 7,500 acre-feet for a total of 11,000 acre feet of purchased water going into Sweetwater Reservoir this year.

The 100-year average rainfall at Sweetwater Reservoir is 5.63 acre-feet, and the total rainfall year to date is 2.33 acre-feet. The rainfall at Loveland has stayed on target for the average. We received about 1/5th of an inch in Sweetwater Reservoir over the last week and about 1/10th of an inch in Loveland. He also reported that about five percent of our customers are making automatic payments through their banks.

B. Report of General Manager Bostad: General Manager Bostad was in Washington.

12. DIRECTORS' COMMENTS

By motion, the Board had authorized Legal Counsel to report on the wholesale electricity settlement. Mr. Cowett referred to the letter that he had distributed to Board Members regarding this issue. He noted that the portion of the case with the Williams Companies was settled in December of 2002. This settlement called for three annual payments totaling about $5 million to the nine districts involved in the lawsuit. Everyone received a check last January and another check has been received this January, of which Sweetwater Authority's share is approximately $140,000. The third check will be received next year. The second part of the settlement is that the Williams Company agreed to pay $15 million to the plaintiffs for attorney's fees and litigation expenses. The judge has a hearing on February 20th to approve that portion of the settlement. Subsequent to that approval, the litigants will sit down to allocate the money and figure out exactly where it should go. He understands that Best Best & Krieger should get all their fees paid out of this money and will be able to reimburse the districts for all the fees incurred from the time that the case started.

Mr. Cowett also talked about additional negotiations with a couple of the energy companies, one of which is Duke. He anticipates there is a good chance for some settlement with Duke in the near future. It will not be anywhere close to the size of the William's settlement but it will be substantial.

Director Beauchamp said that he had attended an economic conference in the Imperial Valley today and an interesting theme came up a couple of times. The people in the valley are concerned with having to use recycled or reclaimed water for domestic use in the future. He was amazed at the growth in Imperial Valley. He used to work there as a consultant and had not been there in any high level of involvement for about five years. Now they are wearing suits and ties. The old farmers are still there but not out in front as much. There are many investors and a major mall going in south of Holtville. The State Route 7 bid just went out. They are thinking of switching to SANDAG to become a part of San Diego and are worried about their water.

Director Doud said that he attended a Salton Sea Conference in Sacramento last Tuesday. Only 40 people had signed up but by the time the conference was in session, they had over 100 people in attendance. Senator Ducheny was on the 3:00 p.m. panel but he had to leave before that time because he had an early return flight. He picked up a copy of a book from the Department of Water Resources on Salton Sea references and statutes and he passed it on to other members of the Board.

13. CLOSED SESSION

There was no need for one.

14. ADJOURNMENT

With no further business before the Board, Chair Doud adjourned the meeting at 4:37 p.m., to the hour of 6:00 p.m. on February 11, 2004.