minutes

Regular Meeting

Governing Board of Sweetwater Authority

August 24, 2005

The Governing Board of Sweetwater Authority held a regular meeting on Wednesday, August 24, 2005, at the Sweetwater Authority Administrative Office, 505 Garrett Avenue, Chula Vista, California. Chair Pocklington called the meeting to order at 3:30 p.m.

ROLL CALL

Directors Present: Alkire, Doud, Morrison, Pocklington, and Welsh.
Directors Absent: Beauchamp and Salas.
Others Present: General Manager Bostad, Operations Manager Rogers, Legal Counsel Cowett, and Board Secretary Farpón. Staff members Rick Alexander, Hank Gaus, George Silva, Jim Smyth, Don Thomson and Tom Woodrum.

PLEDGE OF ALLEGIANCE TO THE FLAG
Director Morrison 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.

ACTION CALENDAR ITEMS

ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED IN THE AGENDA

APPROVAL OF MINUTES

Director Welsh made a motion, seconded by Director Doud, that the Governing Board approve the minutes of August 10, 2005. The motion carried.

APPROVAL OF DEMANDS AND WARRANTS

Director Alkire made a motion, seconded by Director Welsh, that the Governing Board approve Warrants 101443 through 101650 including all voided checks. The motion carried.

FINANCE AND PERSONNEL COMMITTEE (Meeting of August 15, 2005)

Director Alkire made a motion, seconded by Director Doud, that the Governing Board approve the renewal of the fiscal year 2005-06 membership in the Western Coalition of Arid States (WESTCAS) and the payment of dues in the amount of $2,060. The motion carried.

Director Welsh made a motion, seconded by Director Alkire, that the Governing Board approve the suggested new language to Policy 511, “If conference or event expenses are prepaid by the Authority and a Director cancels or fails to attend the event or conference, the Director will notify the Board Secretary as soon as possible to ensure credit or reimbursement of costs,” and to not add CLE International to the list of organizations authorized for preapproved events. The motion carried.

Director Alkire made a motion, seconded by Director Welsh, that the Governing Board approve the appointment of the General Manager as the Treasurer for Sweetwater Authority and that he be authorized to delegate this duty to the Director of Finance. The motion carried.

Director Alkire made a motion, seconded by Director Doud, that the Governing Board approve the 2005-06 Budget as presented by the Director of Finance. The motion carried.

Director Salas enquired about Account 5622 – Travel and Meetings, which was almost double than last year’s budget. Director of Finance Gaus said he would find out and inform the Board at the next meeting. She also noticed an increase in the Temporary Help account. General Manager Bostad said some of those dollars are offset by regular hours while the temporary help is covering for vacancies of regular employees that have left for different reasons.

COMMUNICATIONS COMMITTEE (Meeting of August 22, 2005)

Director Welsh made a motion, seconded by Director Doud, that the Governing Board decline further support of the California Water Awareness Campaign. The motion carried.

Director Welsh made a motion, seconded by Director Doud, that the Governing Board authorize staff to develop the Sweetwater River watershed display as part of the Chula Vista Nature Center’s main exhibit hall renovation, approve funding in the amount of $35,000 for the project, and pursue partnering opportunities with the Regional Water Quality Control Board. The Director of the Nature Center, Mr. Beintema, briefly addressed the board to express his appreciation for the partnership with Sweetwater Authority for the last few years, and in particular for the $10,000 contribution to the Shark and Ray Experience, which has been a very useful tool in letting residents and students know that the actions that they take at home affect the health of the watershed and environmental communities downstream. The motion carried.

Discussion and review of upcoming community and special events. This was an information item and no action was required by the Governing Board.

Information Items: Recent ads and materials for community distribution. This was an information item and no action was required by the Governing Board.

NEW BUSINESS

Director Welsh made a motion, seconded by Director Pocklington, that the Governing Board approve the request from Olivenhain Municipal Water District to support the nomination of Susan J. Varty as ACWA Region 10 Board member. The motion carried.

Director Doud made a motion, seconded by Director Alkire, that the Governing Board approve the request from Walnut Valley Water District to concur in the nomination of Edward Layton as President of the ACWA/JPIA Board. The motion carried.

Director Welsh made a motion, seconded by Director Doud, that the Governing Board submit Counsel Cowett’s name for consideration to remain on the Legal Affairs Committee of ACWA for the 2006-2007 Term. The motion carried.

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

Chair Pocklington said that MWD had authorized $75,000 for the Paradise Creek Project in National City, and he asked Director Morrison to give some background information on this project. Director Morrison said that the Paradise Creek is an area that has been neglected for a long period of time and with this grant money it will be turned into not only a showcase but also an education project.

Chair Pocklington gave an extensive report on issues included in the CWA agenda for tomorrow’s Board Meeting. He reported that the Pomerado Pipeline IV Relining was completed. This was a $21 million project that took about 27,000 feet of 66 and 81 inch piping. He commented that this ought to remind us how important it is to maintain infrastructure. He also said that the CWA has reached a settlement on an eminent domain lawsuit brought by CalTrans regarding Route 125. Another issue is the recommendation by the Committee on Committees for changes to the Committee Operating Procedures. The procedures were changed so that the City of San Diego only gets to chair every third time, and the chairmanship of the committees are allocated depending on when the City of San Diego has the chair. Another change was the addition of two Vice Chairman to the committees in order to have a training structure. Another suggested change refers to when the Board reverses a recommendation by the Committee. Under the proposal, if there is clear disagreement by the Board with the committee’s recommendation, any director may move that the item be referred back to the committee for reevaluation in light of the board deliberation. Also, if the board takes an action that is materially different from the committee’s recommendation, the board action will be deemed a preliminary determination only and the matter will be referred back to the committee.

Assembly Bill 1234, the Salinas bill, was brought up. Legal Counsel Cowett said that it looks like the bill, which deals with compensation and ethics of board members of special districts, will pass. With respect to the ethics, it deals with what ethics should be taught, what kind of training, and who needs to take the training. It is rather detailed and complicated and he thinks there is going to have to be some clarification even after the bill passes as to what it actually means. His office is developing a curriculum to comply with whatever the bill provides and to provide that service to their clients.

Another item that Chair Pocklington commented on was a report on Lake Perris, a state reservoir. It was found that the seismic action could possibly cause a loss in the dam and therefore they are reducing the amount of water in the dam and investigating how much it will cost to repair or replace it. He also noted that there would be an update on the Encina Power Plant and the negotiations with Poseidon.

APPROVAL OF DIRECTOR’S ATTENDANCE AT MEETINGS AND FUTURE AGENDA ITEMS.

Director Doud made a motion, seconded by Director Alkire, that the Governing Board approve per diem for Directors who wish to attend the First Friday Breakfast Sponsored by Supervisor Greg Cox – Speaker: Dan McAllister, San Diego County Treasurer-Tax Collector. The motion carried with Director Salas opposing.

REPORT OF DEPUTY TREASURER

Deputy Treasurer Gaus said that the auditors informed him that this year’s audit would have a footnote regarding the GASB 40 for investments. The auditor told him that our investment report reflects everything that it is required by the GASB 40, and that we have been reporting for years much more detail than it was ever required in the past.

MANAGEMENT REPORT

Report of Operations Manager Rogers: Operations Manager Rogers said that General Manager Bostad and he had accompanied the National City Assistant City Manager, Lin Wurbs, and our new board member Ron Morrison on a tour of the system yesterday. They toured the Perdue Treatment Plant, the Reynolds Desalination Plant, and Loveland Reservoir. He noted that the reservoir has only dropped one percent in the last two months and that it is still ninety-nine percent full.

Report of General Manager Bostad: General Manager Bostad announced that Legal Counsel Cowett had reported that Sweetwater Authority would be receiving $81,423.54 as part of the Sweetwater Authority vs. Dynegy settlement. He asked Counsel Cowett to brief the board on the status of the suit.

Counsel Cowett distributed a spreadsheet summarizing what has been done. He said that about a week and a half ago, Reliant finally came to a comprehensive settlement with the state. Out of that settlement our districts received $933,000 and that is the basis upon which Sweetwater gets its share. He said that the Williams settlement had an attorneys’ fees provision where the attorneys’ fees up to that point in the litigation, about $430,000, were awarded. That money is sitting in their trust account because there has been an appeal challenging this award and it has been his judgment that it would be better not to pay it out until the appeal is resolved. The judge has approved the process to hear the attorney’s fees issue in the Duke settlement in the next couple of months. There are also attorneys’ fees in the Reliant Settlement. His goal is that, even if this case died tomorrow, which could happen, the attorneys will have received all their fees and it would not have cost the districts anything.

He added that San Diego Superior Court and Judge Joan Lewis, and the energy companies have filed a demurrer to the plaintiffs’ complaint in that case. The demurrer will be heard on September 9th. The demurrer is a document that says that the plaintiffs do not state a cause of action and they cannot go to court. The bottom line is that in the interim period, the Ninth Circuit Court of Appeals has issued several rulings that basically hold that the federal law preempts all state law and therefore we cannot state a cause of action under state law for anti-trust. There is a substantial chance that this case could die in Judge Lewis’ court, in which case we would be at the court of appeal. In addition, many of the energy companies filed for bankruptcy. We filed claims in the Enron bankruptcy case ands argued the case in New York City along with many California lawyers. The judge, once again, following the Ninth Circuit rulings, dismissed those claims. Judge Lewis will probably rule in October.

DIRECTOR’S COMMENTS

Director Doud said that, with the cost of gasoline so high, we must follow the advice of Stiger Wright: “Everywhere is within walking distance, if you have the time.”

CLOSED SESSION

There was no need for one.

ADJOURNMENT

With no further business before the Board, Chair Pocklington adjourned the meeting at 4:37 p.m., to the hour of 6:00 p.m. on September 14, 2005.