minutes

Regular Meeting

Governing Board of Sweetwater Authority

March 8, 2006

The Governing Board of Sweetwater Authority held a regular meeting on Wednesday, March 8, 2006, at the Sweetwater Authority Administrative Office, 505 Garrett Avenue, Chula Vista, California. Chair Pocklington called the meeting to order at 6:02 p.m.

ROLL CALL

Directors Present: Alkire, Beauchamp, Doud, Pocklington, and Welsh.

Directors Absent: Morrison and Salas.

Others Present: General Manager Bostad, Operations Manager Rogers, Legal Counsel Cowett, and Board Secretary Schoonderwoerd. Staff members Rick Alexander, Debra Farrow, Bill Olson, George Silva, Jim Smyth, Don Thomson, and Tom Woodrum. Member of the public: Dan Cruz.

PLEDGE OF ALLEGIANCE TO THE FLAG
Chair Pocklington conducted the pledge of allegiance to the flag.

OPPORTUNITY FOR PUBLIC COMMENT (Government Code Section (54954.3)
There were no comments from the public present.

CHAIR’S PRESENTATION
There was none.

ACTION CALENDAR ITEMS

PRESENTATION BY SCOTT CRIDER, SAN DIEGO GAS & ELECTRIC
Sunrise Powerlink

General Manager Bostad introduced Jim Tripoli, who is the Authority’s account executive with SDG&E. He then introduced Scott Crider, Public Affairs Manager for SDG&E on the Sunrise Powerlink. Mr. Crider explained that the Powerlink was SDG&E’s new proposed electric transmission line, SDG&E’s new energy super highway to connect the Imperial Valley with San Diego. It will start at 500,000 volts at the Imperial Valley Substation southwest of the City of El Centro, and take it to central county, where a new 230,000 volt substation will be built that will connect to the transmission system serving the urban core of San Diego. It will be able to import about a 1,000 megawatts of electricity, enough for about 650,000 customers. The Sunrise Powerlink will help provide energy reliability for Southern California, provide access to renewable energy sources, and help to lower overall energy costs for SDG&E customers. It is the next step in SDG&E’s Long Term Energy Resource Plan and is in line with the state’s Energy Action Plan.

Mr. Crider said that they will first try to reduce the amount of energy consumed in the region, then aggressively pursue renewal energy resources here in San Diego County, build two new power plants, and add new transmission infrastructure. The Palomar Facility in Escondido, a natural gas fired, 540 megawatt power plant, is going to come on line in 2006. It will be the first power plant built in San Diego in almost 50 years. They have one major transmission line built back in 1983, the Southwest Powerlink, which runs along the Mexican border and connects to the state’s energy grids. They have not added new electric transmission infrastructures since that time. Of course, there has been considerable growth in the county since 1983, and the demand for energy has more than doubled. Mr. Crider said that the need for the Sunrise Powerlink is driven by reliability, renewables, and economics, and he will continue to refer to these key messages during his presentation. SDG&E needs to plan to be able to reliably serve every single customer during peak demand. Looking into their long-term energy forecast in 2010, there will be a 262 megawatt deficiency, and they will not be able to serve those needs without the Sunrise Powerlink. San Diego is served by only one 500,000 volt transmission line which sits at an energy cul-de-sac, with one connection to the east and a small connection to the north through San Onofre.

SDG&E needs to present the California Public Utilities Commission (PUC), using different scenario comparisons, with what is called a “need filing,” which is basically their case why the Sunrise Powerlink makes the most sense for the region. Their baseline planning scenario is the retirement slated for the South Bay Power Plant in Chula Vista in the year 2009 or 2010, even though there is discussion on repowering or rebuilding that major power plant, which is one of two currently serving the county. In 2010 there will be a 262 megawatt deficiency. There are also discussions of repowering or rebuilding Encina up in Carlsbad. Director Pocklington commented that it was his understanding that Duke had an agreement to replace the South Bay Power Plant by 2010. Mr. Crider said he understood that Duke has an obligation to make best efforts to repower that facility, they have an interest in doing that, and they are going through their planning process right now to determine the feasibility. Duke has actually sold that facility and many of their other California assets.

The second primary benefit of the Sunrise Power Link is access to renewable energy, an important issue to a lot of people including SDG&E. Utilities have direction from the state that 20 percent of their overall resource mix, such as solar, wind, geothermal, bio mass, and bio gas, has to come from renewable energy resources by the year 2010. Currently, they are at 5.6 percent and making progress, but still have a long way to go. They issued requests for offers in 2003, 2004, and 2005 to renewable energy developers in the county and have purchased almost all available cost-effective local renewable energy resources. There are not a lot in San Diego County, where land is very expensive. Manager Bostad inquired about the CWA’s pump storage project in Lake Hodges. Mr. Crider said he did not know if that counts towards renewal energy goals because it is pump storage. There are substantial amounts of renewable energy potential in the Imperial Valley, and there is a lot of competition for those renewables from the Los Angeles Department of Water and Power, Edison, and the Arizona Public Service. SDG&E is very proud of a contract it has with a company called Stirling Energy Systems to build a 900 megawatt solar energy facility, which will be one of the largest in the world. Also, there is approximately 2,000 megawatts of geothermal potential in Imperial Valley and 600 megawatts of wind potential in eastern San Diego County. But, they need to have the transmission infrastructure in place to be able to import that power from the Valley for use by SDG&E customers.

Mr. Crider said that economics is important to all of SDG&E’s customers. The Sunrise Powerlink is an expensive 120-mile long project that will cost between $1and $1.4 billion dollars. But, it will help to save SDG&E ratepayers over $100 million per year, provide access to lower cost power sources, and reduce reliance on older, local power plants. Because they have no options and no additional resources right now, SDG&E pays the South Bay and Encina plants about $200 million per year in subsidies and Reliability Must Run contract costs to keep those 50-year-old power plants alive, but idle, until they have to use what were once baseload facilities as peaking units. If they do nothing, those subsidies are going to be about $500 million per year by 2010. By having some alternative sources of energy, they can begin to reduce reliance on those older, less efficient, power plants that are more expensive to operate.

One issue that comes up repeatedly is that the Sunrise Power Link is not in line with the Regional Energy Strategy adopted by SANDAG. Mr. Crider said that goal #5 of that strategy is to “increase the transportation system capacity as necessary to maintain required reliability and to promote better access to renewable resources and low-cost supply,” and that is exactly what the Sunrise Powerlink does. He then went over some slides showing some of their implementation strategies. He said that the California Energy Commission has endorsed the Sunrise Powerlink, saying that it would provide significant near-term reliability benefits to California, reduce system congestion and congestion costs, and provide interconnection to renewable resources in the Imperial Valley. Because a large transmission line project like this comes with impacts to the communities, they have made the conscious decision to go out to the public early, before all of the engineering and EIR have been done. They have held about 15 public meetings throughout the county to go through the routing issues and identify the most appropriate place to site a transmission line and some mitigation measures that could be employed to reduce the impacts. He said they will be releasing the final route and some alternate segments on March 20th, hold a third set of public meetings, conduct a full EIR, then submit that to the PUC in probably mid-2006. He then displayed a series of maps showing the preliminary study corridors and potential route corridors. Mr. Crider concluded his presentation, held a brief question and answer period with the Board, and thanked them for the opportunity to speak today.

ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED IN THE AGENDA
There were none.

APPROVAL OF MINUTES

Director Beauchamp made a motion, seconded by Director Alkire, that the Governing Board approve the minutes of the February 22, 2006 meeting. The motion carried.

APPROVAL OF DEMANDS AND WARRANTS

Director Doud made a motion, seconded by Director Pocklington, that the Governing Board approve Warrants 104178 through 104394, including all voided checks. The motion carried.

COMMUNICATIONS COMMITTEE (Meeting of February 27, 2006)

Director Welsh made a motion, seconded by Director Doud, that the Governing Board approve funding from the Communications Special Projects Fund in the amount of $6,300 and the allocation of $8,700 from the Unallocated Reserve Fund, for a total of $15,000, for the preparation and hosting of the ASCE historic event at Sweetwater Dam on April 7, 2006. The motion carried.

Director Welsh made a motion, seconded by Director Beauchamp, that the Governing Board approve the selection and purchase of Sweetwater Authority blazers for use by Board members attending official events. The motion carried.

California Special Districts Association Annual Scholarship Competition – Meeting Schedule. This was an information item and no action was required by the Governing Board.

Discussion of Chula Vista Nature Center Project, 2006 Leader Tours, and Sweetwater Authority’s Website Redesign. This was an information item and no action was required by the Governing Board.

Calendar of Scheduled Events for 2006. This was an information item and no action was required by the Governing Board.

OPERATIONS COMMITTEE (Meeting of March 1, 2006)

Director Doud made a motion, seconded by Director Beauchamp, that the Governing Board approve the request to quitclaim the Kimball Brothers easement on the property at 424-428 “V” Avenue, National City, and that the owner be responsible for all costs associated with processing the quitclaim. The motion carried.

Director Doud made a motion, seconded by Director Beauchamp, that the Governing Board approve the request to quitclaim the Kimball Brothers easement on the Cypress Glen property, and that the owner be responsible for all costs associated with processing the quitclaim. The motion carried.

Discussion of San Diego County Water Authority Drought Management Plan. This was an information item and no action was required by the Governing Board.

FINANCE AND PERSONNEL COMMITTEE (Meeting of March 6, 2006)

Recommendation to Award Contract for Purchase of Vacuum Truck. The Committee determined there were still some issues to be resolved before the contract could be awarded, and that this item must come before the Committee again. This was an information item and no action was required by the Governing Board.

Director Alkire made a motion, seconded by Director Welsh, that the
Governing Board approve the 2006 membership renewal in the National Water Resources Association Municipal Caucus and the payment of dues in the amount of $350. The motion carried.

Proposed Water Resources Investment Fund Discussion. This was an information item and no action was required by the Governing Board.

COMMUNICATIONS COMMITTEE (Meeting of March 7, 2006)

Consideration of Scholarship Applications and Selection of Finalists and Winners.

Director Beauchamp, who was unavoidably detained by traffic and could not be present for this Committee meeting, submitted his evaluations to staff after the meeting for inclusion in the final tabulations. The Committee members present at the meeting considered the submitted scholarship applications and made their evaluations. The evaluation tabulations were submitted to the Governing Board for consideration at today’s meeting.

Director Doud made a motion, seconded by Director Alkire that the Governing Board award a $1,000 scholarship, formally named the Sweetwater Authority Wanda Avery Scholarship, to Veronica Jacobo and forward Veronica’s application as a finalist to represent Sweetwater Authority in the CSDA Scholarship competition; and to forward a recommendation to the South Bay Irrigation District Board of Directors to consider Matthew Goodsell for a $1,000 scholarship to be made in Wanda Avery’s name and forward his application as a finalist to represent South Bay Irrigation District in the CSDA competition. The motion carried.

ADOPTION OF RESOLUTIONS

Upon a motion made by Director Doud, seconded by Director Welsh, the following resolution:

RESOLUTION NO. 06-01

RESOLUTION OF THE GOVERNING BOARD OF SWEETWATER AUTHORITY
CONCURRING IN THE NOMINATION OF MELODY A. HENRIQUES-MCDONALD TO MAINTAIN HER SEAT ON THE ACWA/JPIA EXECUTIVE COMMITTEE

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

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

NEW BUSINESS

Director Alkire made a motion, seconded by Director Welsh, that the Governing Board approve the request from Helix Water District to concur in the nomination of Charles Muse to the ACWA/JPIA Executive Committee. A Resolution of Support will be prepared for adoption at the next Board meeting. The motion passed.

APPROVAL OF DIRECTORS’ ATTENDANCE AT MEETINGS AND FUTURE AGENDA ITEMS

Director Doud made a motion, seconded by Director Pocklington, that the Governing Board approve per diem for Directors who attended the First Friday Breakfast on March 3, 2006. The motion carried.

Council of Water Utilities, San Diego County Meeting at StoneRidge Country Club, Tuesday, March 21, 2006. All Directors present will attend this pre-approved event. No action was required by the Governing Board.

AWWA Public Officials Summit, Riverview Plaza Hotel, Mobile, Alabama, April 23-24, 2006 – “Hurricane Katrina: The Stories, The Heroes, and New Realities.” No directors will attend this conference. No action was taken by the Governing Board.

Association of California Water Agencies (ACWA) 2006 Spring Conference – May 9-12, 2006, Monterey, CA. All Directors present will attend this pre-approved event. No action was required by the Governing Board.

REPORTS BY DIRECTORS ON EVENTS ATTENDED

Director Pocklingon reported on attending the WESTCAS Winter Conference in Denver, Colorado on February 21-24. He said that the goals of WESTCAS are primarily tied to water quality and that several representatives from Washington D.C. talked about monitoring the budget. The budgets of the U.S. Army Corps of Engineers, Environmental Protection Agency, Department of Agriculture, Department of Commerce, Department of Interior, Fish and Wildlife Service, Bureau of Land Management, Bureau of Reclamation and the Geological Survey are very tight for 2006 and 2007. He said that some interesting facts were talked about, one being that in Colorado 80 percent of the water is west of the mountains, but 80 percent of the population is to the east.

Director Doud reported on attending the CLE Water Law Conference in San Diego on February 23-24. The subjects were growth, development, adequate water supplies, and that planning was a key component of the process.

Director Welsh reported that she attended the Bonita Business & Professional Association meeting. One subject discussed was the expansion of Southwestern College to its campuses in National City and San Ysidro. Notably, they will be expanding the nursing program to the San Ysidro campus.

Director Pocklington reported that the AB 1234 Ethics Training given by Best Best & Krieger on March 1st was an excellent two-hour program reviewing ethics, procedures, and common sense on how to do business.

Director Beauchamp reported that he completed an online interactive AB 1234 Ethics Training program and would be forwarding his completion certificate to the Board Secretary for filing. He said the program offered some valuable information.

Legal Counsel Cowett commented that reviews on the Best Best & Krieger Ethics Training have been favorable.

Director Doud reported on attending the First Friday Breakfast on March 3rd. Deputy Mayor McCann noted the population growth in Chula Vista at 220,000 and how the infrastructure is keeping up with this growth.

MANAGEMENT REPORT

Report of Operations Manager Rogers: Mr. Rogers reported that today’s Brown and Caldwell daily internet report on California Water News included a photo of Sweetwater Authority’s controlled water release from Loveland Reservoir to the Sweetwater Reservoir. He attributed this report to a submittal from Sue King of Sweetwater Authority’s Communications Section. He reported that we are in the driest year on record, but are expecting to receive a good rainfall this weekend. Fortunately, because of the analysis done by our water resources staff, the water transfer from Loveland to Sweetwater was completed at the right time. They evaluated the amount of runoff from the upper watersheds versus the middle watershed. Even though it looks like Sweetwater’s level is higher, if we get a lot of rain, it is very probable that Loveland will still spill before Sweetwater, and it is our intent not to lose the water from Sweetwater to the bay prior to filling Loveland.

Report of General Manager Bostad: General Manager directed the Board’s attention to a letter from Denise Moreno-Ducheny to Senator Feinstein supporting HR 1190. That bill went to the House this week and was passed this morning. It now moves to the Senate. Rick Alexander will be going to Washington, D.C. next week to seek support for six or seven fundraising efforts. Mr. Bostad said that the Board will be updated in the future on these efforts. He also pointed out a letter included in the Board packet which is part of the Prop 50 fund request for the proposed feasibility study for the Otay River Groundwater Desalination Facility. The letter shows a commitment to the study from Sweetwater Authority and Otay Water District. Also, Mr. Bostad noted a $10,000 grant that was received from MWD for helping to support the California Friendly Landscape Contest for do-it-yourselfers, in cooperation with the County Water Authority, San Diego, Helix, Otay, and Padre.

DIRECTORS’ COMMENTS

Director Doud read a quote from Robert Benchley, “In America there are two kinds of travel, first class and with children.”

Director Beauchamp commented that in navigating through the Authority’s website, he was looking for a higher level of information regarding ongoing projects and agendas and minutes. General Manager Bostad said that will be part of the process as the website is updated, new software with more capabilities is evaluated, and this will be taken through the Communications Committee.

Director Pocklington commented about the high cost of water. He flew to Houston last week to visit his ill sister-in-law. In the airport, he bought one 25-ounce bottle of water for $3.11. That is 12 cents per ounce, $15.36 a gallon, or over $5 million for an acre-foot. He said that is expensive water.

CLOSED SESSION

There was none.

ADJOURNMENT

With no further business before the Board, Chair Pocklington adjourned the meeting at 7:27 p.m., to the hour of 3:30 p.m. on March 22, 2006.