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minutesRegular Meeting The Governing Board of Sweetwater Authority held a regular meeting on Wednesday, October 12, 2005, at the Sweetwater Authority Administrative Office, 505 Garrett Avenue, Chula Vista, California. Chair Pocklington called the meeting to order at 6:00 p.m. ROLL CALL Directors Present: Alkire, Beauchamp, Doud, Morrison, Pocklington, and Welsh. Directors Absent: Salas. Others Present: General Manager Bostad, Operations Manager Rogers, Legal Counsel Cowett, and Board Secretary Farpón. Staff members: Rick Alexander, Debra Farrow, Hank Gaus, Scott McClelland, Bill Olson, George Silva, Jim Smyth, and Tom Woodrum. PLEDGE OF ALLEGIANCE TO THE FLAG OPPORTUNITY FOR PUBLIC COMMENT (Government Code Section (54954.3) CHAIR ’S PRESENTATION ACTION CALENDAR ITEMS ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED IN THE AGENDA APPROVAL OF MINUTES Director Doud made a motion, seconded by Director Beauchamp, that the Governing Board approve the minutes of September 14, 2005. The motion carried. APPROVAL OF DEMANDS AND WARRANTS Director Doud made a motion, seconded by Director Alkire, that the Governing Board approve Warrants 101951 through 102371 including all voided checks. The motion carried. FINANCE & PERSONNEL COMMITTEE (Meeting of October 3, 2005) Discussion of audited Financial Statements for the Years June 30, 2005 and 2004: General Manager Bostad introduced Mr. Mario Ortega from Ortega and Konrad, LLP to the Board. Mr. Ortega reported that he would be reviewing the Financial Statements, the auditor’s report, management’s discussion analysis, the balance sheet, income statement, and a quick overview of PERS. He said that the audit was conducted in accordance with generally accepted audit standards and, because the Authority received federal funding in excess of $500,000 this year, government auditing standards had to be applied as well. In addition to reviewing the internal controls of the financial reports, the Auditors are required to review the internal controls in place with regards to compliance with certain laws and regulations on contracts and grants. Mr. Ortega reported that net assets increased by $3.1 million dollars or 2.19 percent. The operating income decreased by $100,000. The debt-service coverage ratio for 2005 was 1.71, and a minimum of 1.25 was needed. The Surface Storage Operating Agreement resulted in Sweetwater consuming 9,102 acre-feet at a savings discount of $568,000. As a result of the PERS plan modification in June 2004, there was an increase in Sweetwater’s contributions from 2.781 to 12 percent, and the employees’ portion went from 7 to 8 percent. The cost of the Shoreline Fishing Program to date is $1.4 million, and total grants to date to support it are $1.4 million, with more to come. There were two grants of about $250,000 each from the EPA. The big item this year was the Water Revenue Bonds of $37 million of which $30 million was put into refund of the year 2002 Water Revenue Bonds. The net assets increased by $3.1 million. The operating revenue was slightly lower than the previous year, $31.6 million versus $31.8 million and that was due to the rain received during the year, which lowered water sales. Despite the fact that consumption was down by 4.4 percent, the actual dollar change did not go down that much because of a 5.9 percent rate increase in January of 2005, which offset the loss of consumption during the year. Mr. Ortega then reported on the Capital Assets, which increased by $4.1 million. The major increase was in the source of supply, about $8.6 million. Some of the major additions in the capital assets included metallic water mains and plant improvements for about $2.1 million, $654,000 for several water monitoring studies, $644,700 for security upgrades, about $200,000 for Shoreline Fishing, and $193,200 for vehicle and equipment replacements. The net long-term debt at the end of the year was $50.4 million. Mr. Ortega also talked about the funded status of PERS and said that over the last years they were over-funded but as of June 30, 2003, they were 80 percent funded and that is why there has been an increase in the contributions. Based on PERS actuarial studies, they will eventually go back to being 100 percent funded. Director Alkire made a motion, seconded by Director Beauchamp, that the Governing Board approve the Financial Statements for the years ended June 30, 2005 and 2004 as presented by Ortega & Konrad LLP. The motion carried. Update on federal grant funding status. This was an information item and no action was required by the Governing Board. Director Alkire made a motion, seconded by Director Morrison, that the Governing Board approve the proposed changes to the Adjustment to Customer Water Bills Policy as submitted, with a modification to Section F. (Authority) to give the General Manager the authority to approve adjustments up to a maximum amount of $1,500 on a case-by-case basis. The motion carried. Director Alkire made a motion, seconded by Director Doud, that the Governing Board award the following 2005 vehicle purchase contracts for a total price of $143,202.10: Villa Ford – one 3/4-ton regular cab HD pick-up 4 x 4, one 4-door sedan, and one Ford Explorer; and Fairway Ford – two ¾-ton regular cab HD pick-ups and one 1-ton extended cab HD pick-up. The motion carried. Director Alkire made a motion, seconded by Director Doud, that the Governing Board approve at-will status for Department and Section Heads for future appointments, and that the transition for existing Department and Section Heads be a voluntary decision. In answer to several questions posed by Board members, Counsel Cowett clarified the differences between the provisions of at-will status and the current employment status for Department and Section Heads. The motion carried. OPERATIONS COMMITTEE (Meeting of October 5, 2005) Director Doud made a motion, seconded by Director Welsh, that the Governing Board award a contract to Zenon Environmental Services, Inc., for the purchase of the membranes, authorize staff to negotiate a final contract in accordance with the Request for Proposal, and bring the negotiation results back to the Committee prior to formal approval of the contract. If negotiations with Zenon are unsuccessful, it is understood that staff will then proceed to negotiate with U.S. Filter. The motion carried. Failed stair section at Loveland Dam. This was an information item and no action was required by the Governing Board. Director Doud made a motion, seconded by Director Welsh, that the Governing Board award a sole-source contract in the amount of $12,950 to Pacific Titan, 11671 Sterling Avenue, Suite H, Riverside, CA 92503, for the Robinhood Hydropneumatic Tank coating repairs. The motion carried. Director Doud made a motion, seconded by Director Welsh, that the Governing Board award a contract in the amount of $73,042 to ENAQUA, 2446 Cades Way, Vista, CA 92081, for the project to increase membrane system capacity. The motion carried. Director Doud made a motion, seconded by Director Alkire, that the Governing Board approve a policy not to waive fishing fees for groups and organizations. The motion carried. APPROVAL OF RESOLUTIONS Upon a motion made by Director Doud, seconded by Director Beauchamp, the following resolution: RESOLUTION 05-14 RESOLUTION OF THE GOVERNING BOARD OF SWEETWATER AUTHORITY was passed and adopted by the following vote to wit: Ayes: Directors Alkire, Beauchamp, Doud, Morrison, Pocklington , and Welsh APPROVAL OF DIRECTOR’S ATTENDANCE AT MEETINGS AND FUTURE AGENDA ITEMS. Council of Water Utilities, San Diego County Meeting at StoneRidge Country Club – Tuesday, October 18, 2005 – 7:15 – 8:45 a.m. All directors except Salas will attend this pre-approved event. No action was required by the Governing Board. WateReuse Association San Diego Chapter Meeting sponsored by Boyle Engineering – October 19, 2005 – 10:30 a.m. – 12 p.m. Reuben H. Fleet Science Center. Directors Alkire and Doud will attend this pre-approved event. No action was required by the Governing Board. Water Agencies Association of San Diego County Quarterly Dinner Meeting –
Thursday, October 20, 2005 at Pala Casino Resort with Wes Bannister as the
keynote speaker. All directors except Morrison and Salas will attend this
pre-approved event. No action was required by the Governing Board. Otay Water District – Reclaiming our Future – South Bay Water Reclamation Plant – Dairymart Road - October 24, 2005 – 11:00 a.m. Director Alkire made a motion, seconded by Director Beauchamp, that the Governing Board approve per diem for directors who wish to attend this event. The motion carried. Chula Vista City Council Meeting – ACWA presentation – No Time to Waste – A Blueprint for California Water – October 11, 2005. Director Welsh made a motion, seconded by Director Pocklington, that the Governing Board approve per diem for directors who attended this event. The motion carried. BUDGET REPORT – DIRECTOR OF FINANCE GAUS Mr. Gaus said that, as of two months into the fiscal year, Water Sales are slightly above what was anticipated by approximately $400,000, and Other Income is over budget by about $17,000. Interest Income was over budget by approximately $102,000, and Operating Expenses were under budget by only $26,000. Collectively, we have about $500,000 over what was budgeted. MANAGEMENT REPORT Report of Operations Manager Rogers: Mr. Rogers recalled his report at the last meeting in which he informed the Board that the plant in Alabama that supplies the polymer used by the Authority for coagulation was damaged during last month’s hurricanes. At that time, we were informed that the company could not meet our demand for polymer supplies for several months. Staff received word last week that the plant was now able to produce the amount of polymer we need. Staff tested several other types of polymers so that, in the event of another shortage, there will be options. Mr. Rogers showed slides of last month’s Bonita Fest and the Health and Safety Fair held at the Perdue Treatment Plant, which was well attended by both employees and vendors. The “Big Al” safety award went to the Water Quality Department, and the Rubey winners were Brian Goodrich and Charlie Watters of the Distribution Department, who came up with an inventive way to make taps on PVC pipe. The slides included exhibits displayed by the Authority’s various departments featuring their particular functions. Report of General Manager Bostad: General Manager Bostad pointed out the fact sheet produced by the Communications Section and the Water Quality Department explaining submerged membrane water treatment. This fact sheet is available to the public. He thanked Director Salas for introducing his presentation the night before to the Chula Vista City Council on ACWA’s Blueprint for California Water. The Council approved a resolution of support for the blueprint. Mr. Bostad then introduced Debra Farrow, the former Finance Administrator, who had been selected as the Authority’s new Director of Finance. Ms. Farrow successfully competed with two strong external candidates in a rigorous selection process. DIRECTOR’S COMMENTS Director Welsh said she would share information with board members that did not attend the CSDA conference in Long Beach. There was a very good presentation from the North Tahoe Water District on how they dealt with the sewer spill. Another excellent presentation was the Changing Face of Local Service Delivery. The best of all was a presentation regarding the manager of a Sacramento district that was in the radar screen of Senator Ortiz. They talked about the improvements they had made to make the district more transparent. She read one slide that said, “Increasing the scope of the annual audit was a recommendation to increase transparency. Only the board or an audit committee should engage outside auditors. The audit report should be presented at a public meeting. Findings and representatives should be discussed orally with the Board in public in layman’s terms. Require that auditors increase their audit scope to include a sampling of payroll, reimbursements, cash, capital and operating expenses, etc. Sample all transactions regardless of materiality level.” She then gave the three pieces of information to the Secretary and recommended that directors read them. Director Doud said he had attended the ACWA Regions 8, 9, and 10 event at Dana Point on September 15th titled “Desal – Fact or Fantasy.” The key speaker was Bob Yamada from the CWA, who gave an excellent presentation. The City of Los Angeles has a desalination plant and they are building a 12 million gallon a day plant that will serve 75,000 people. The construction will go on for the next 10 years. West Basin Municipal Water District is doing the same, as well as Carlsbad and Huntington Beach represented by Poseidon. He also attended the CSDA conference in Long Beach and said that it was very good. He said that the San Diego Chapter had an exhibit table that displayed a banner of the San Diego Chapter. There were four exhibit tables from other counties but only three of the chapters attended. It was very well received. The Awards Ceremony was good. They had a mandatory sexual harassment training for supervisors and he received his certificate. He added that Harry Ehrlich had given a fine presentation on the changing face of local service delivery, the Knox Ortiz Hertsberger Act of 2000. He ended his comment by quoting Mark Twain, “I never let my schooling interfere with my education.” Director Beauchamp said he had also attended the ACWA Region conference in
Dana Point and the CSDA conference in Long Beach. He noted that the most
important thing for him was the sexual harassment training, because it goes
beyond sexual harassment. It addresses hostile work environment and he thinks it
is nowadays dangerous to be an employer because of the court decisions that are
going on. Director Pocklington said that he received an email last night notifying him that Paul Christensen, with whom he served on the CWA Board, recently passed away as a result of a heart attack. Earlier this afternoon he attended a briefing at the CWA on AB 1234. The General Manager and Board Secretary were also there. It was an interesting discussion. The Ad Hoc Committee will be working on the issue and he thinks that it will be finalized before the end of the year because it is effective January 1, 2006. He does not think that there will be major changes to our policies. CLOSED SESSION At 7:19 p.m., in compliance with Government Code Section 54956.9, the Board recessed to convene in Closed Session to conference with Legal Counsel Cowett regarding an anticipated litigation. There were no minutes taken, and the session was not tape-recorded. At 7:33 p.m., Chair Pocklington declared the meeting to be in open session. Director Pocklington made a motion, seconded by Director Morrison, that a Merit Rejection letter be sent to claimant Mark Brody. The motion carried. ADJOURNMENT With no further business before the Board, Chair Pocklington adjourned the
meeting at 7:33 p.m., to the hour of 3:30 p.m. on October 26, 2005. |
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