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minutesRegular Meeting December 12, 2007 The Governing Board of Sweetwater Authority held a regular meeting on Wednesday, December 12, 2007, at the Sweetwater Authority Administrative Office, 505 Garrett Avenue, Chula Vista, California. Chair Beauchamp called the meeting to order at 6:03 p.m. • ROLL CALL Directors Present: Directors Absent: Others Present: Pocklington General Manager/Treasurer Bostad, Operations Manager Rogers, Legal Counsel
Cowett, Treasurer Delegatee Farrow, and Board Secretary Schoonderwoerd. Staff
members: Bill Olson, George Silva, Jim Smyth, Don Thomson and Tom Woodrum. Also
present from the public: Burton D. Maxwell and Ted Godshalk • PLEDGE OF ALLEGIANCE TO THE FLAG • OPPORTUNITY FOR PUBLIC COMMENT (Government Code Section (54954.3) • CHAIR’S PRESENTATION ACTION CALENDAR ITEMS 1. ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED IN THE AGENDA Director Doud made a motion, seconded by Director Alkire, that the Governing
Board add the ACWA Region 10 Activity Planning Meeting on January 15, 2008 as
item 10.E. on the agenda. The motion carried. 2. PUBLIC HEARING Director of Finance Farrow provided a brief presentation highlighting Sweetwater Authority’s budget process. She summarized the important items being dealt with regarding the 2007-08 budget. Ms. Farrow stated that one of the conditions the Authority is facing this year is the seriously low levels of both of its reservoirs, which will mean an increase in imported water requirements. The Authority’s water resources include 30 percent from local sources and 70 percent from its reservoirs when they are full; under this scenario the Authority can sustain with no cost of imported water. This year, however, that 70 percent normally from full reservoirs is now being purchased from imported sources. That net effect from budget years 2006-07 to 2007-08 is about $4 million. In 2006-07, water purchase costs were approximately $5 million; in 2007-08, they are projected to be $9 million. Ms. Farrow clarified that the water currently in the reservoirs represents the Authority’s emergency storage requirements and seasonal storage water purchased at imported rates. Due to the drought conditions, water sources, and the impact on the Authority’s budget, this is the first year that the Authority deferred some annual costs that would not normally be deferred. Staff identified $5.3 million in capital investments that could be deferred until adequate rainfall was received and the drought conditions improved. One of the items deferred was part of the Authority’s pipeline replacements, which is an ongoing annual maintenance program to renew the system’s pipelines according to the Master Plan. The vehicle replacement program was severely cut; out of seven vehicles set to be replaced, six were cut, and only one vehicle was replaced. Other projects postponed were the Loveland Dam stair repairs and coating repairs to the National City Wells and O.D. Arnold Tanks. Ms. Farrow noted that these projects, although deferred in this budget year, will need to be addressed in future years. She gave a summary of the Authority’s source of funds and use of funds. The sources of funds show $39.8 million in revenues (without any rate increases imposed) and a Board-authorized transfer from reserves of $2.9 million, bringing the total source of funds to approximately $42.7 million. Use of funds show operating expenses of $34.3 million, debt service (principal and interest) of $4.8 million, and capital investments, after the deferrals, of $4.5 million, bringing the total use of funds to approximately $43.7 million. This leaves a funding gap of approximately $990,000, which the Board proposes to cover with a 5.9 percent rate adjustment effective January 1, 2008. Chair Beauchamp asked for comments and questions from the Board. Director Welsh commented that she recognizes that the rate increase is necessary to pay for water. Director Doud requested clarification regarding who was responsible for the $600 fee noted in the Supplement to Rates and Rules for fire hydrant flow tests to complete fire sprinkler calculations or to determine available flow in a specific area. Mr. Bostad explained that it is dependent on who is requiring the work, but it is typically the contractor. Chair Beauchamp opened the Public Hearing at 6:13 p.m. to receive comments from the public. Burton D. Maxwell, 318 Roseview Place, Chula Vista, CA addressed the Board regarding the increase in water rates and charges. Mr. Maxwell stated that he was on a limited budget and that he had some questions to bring up that could be answered now or at a later time. He asked if the reason for the increase last year was for the exact same thing as this year. He asked what kind of work had been done this last year and requested a list of projects accomplished outlining how funds were spent. He asked about salaries and what officers were being paid. He questioned whether or not there is a cap on salaries and wanted a comparison of salaries last year versus five years ago. He said that, basically, he would like to know exactly how the money is being spent. General Manager Bostad responded to Mr. Maxwell’s requests and stated that
staff would be happy to share a copy of last year’s and this year’s budgets and
accomplishments in the service area. He clarified that new pipes are being added
in the Cities of Chula Vista and National City, and Bonita, with a total
population of approximately 180,000 people. The purpose is to maintain the
infrastructure in pipes and tanks in order to maintain the reliability of the
water system. The key cost impacts are related to the cost of water. When it
rains enough, there is a good local resource available to offset costs, and some
of these funds are then used to offset costs for maintaining and improving the
infrastructure. The Authority’s system is originally over 100 years old;
however, as a result of replacing the pipes, the average age of the distribution
pipeline network is now down to approximately 32 years. Unlike many other water
agencies and cities that are struggling often with leaks, the Authority is not
as a result of that investment. Speaking to the cost of water, Mr. Bostad said
that the imported water supply is also under duress and noted that the Colorado
River is in the eighth year of a drought. Another large source of imported
water, the San Francisco Bay-Delta and the Sacramento/San Joaquin River system,
is also under threat. There are endangered species issues and 25-30 percent of
the supply coming from those areas could be lost. Also, a lot of effort is being
put into promoting conservation to reduce the amount of water use. Sweetwater
Authority is also spending a lot of effort to develop local resources to add to
that reliability. These efforts include brackish groundwater supplies being
treated by reverse osmosis filters, as well as a recent agreement to purchase
seawater desalination product water from the Poseidon facility in Carlsbad. Each
of those sources adds reliability, but at some additional cost. He noted that
MWD is projecting a 10 percent increase in imported water supply costs in 2009
and another 9 percent in 2010. Unfortunately, there are less of the traditional
sources of water that have been utilized in the past at lower costs and it is
being challenged, forcing a look at other supplies that are more costly. The
cost of the water has become the most significant portion of the budget, in
addition to ensuring reliable service to the community through the maintenance
and updating of the system’s infrastructure. Mr. Bostad stated that Director of
Finance Farrow was available to meet Note: Director Morrison entered the meeting at 6:18 p.m. Operations Manager Rogers added that, when Sweetwater Authority took over the system in 1977, there were approximately 180 water main leaks a year. This past year there have been approximately 20, a direct result of investing money into the infrastructure and providing a reliable supply of water. He noted that this past year, for the first time, the main replacement program was cut back by almost $2 million. This and other additional cuts not made in previous years were made this year in order to keep the rate increase down to 5.9 percent. In response to Mr. Maxwell’s question regarding salaries, Mr. Rogers stated that approximately three years ago the Board directed staff to conduct a comparison of salaries with other water agencies in San Diego County. This was done specifically to address this question and to ensure that the Authority’s salaries were aligned with all other similar markets. The Authority falls right in the middle with similar agencies as far as compensation for all of its employees. Chair Beauchamp added that the Authority is in competition to keep qualified workers and management, as is any other industry. Director Welsh added that she was also uneasy about the increase, but understands that these are unavoidable expenses, especially in light of the looming 10 percent increase in imported water from MWD, and she agreed with Chair Beauchamp in the need to stay competitive in order to continue to provide excellent service. General Manager Bostad added that the classification and compensation survey and analysis was conducted by a professional consultant in that field. He encouraged Mr. Maxwell to contact Ms. Farrow if he needed more information. Director Thomas clarified that Board members do not receive a salary, rather a per diem for meetings attended, and that, as a retired teacher, she understands the issues of fixed incomes. She stated that Board members invest a lot of extra time in their role as directors. She expressed appreciation for the Authority’s staff and noted that they are proactive and preventive when it comes to the Authority’s operations. Chair Beauchamp closed the Public Hearing at 6:33 p.m. 3. Upon a motion made by Director Doud, seconded by Director Thomas, the
following resolution: RESOLUTION 07-14 RESOLUTION OF THE GOVERNING BOARD OF SWEETWATER AUTHORITY was passed and adopted by the following vote to wit: Ayes: Directors Alkire, Beauchamp, Doud, Morrison, Thomas, and Welsh 4. APPROVAL OF MINUTES Director Doud made a motion, seconded by Director Welsh, that the Governing Board approve the minutes of the November 13, 2007 special meeting. The motion carried with Director Morrison abstaining as he did not attend the meeting. Director Alkire made a motion, seconded by Director Doud, that the Governing
Board approve the minutes of the November 14, 2007 regular meeting. The motion
carried with Director Morrison abstaining as he did not attend the meeting. 5. APPROVAL OF DEMANDS AND WARRANTS Director Morrison made a motion, seconded by Director Alkire, that the Governing Board approve Warrants 112198 through 112553 including all voided checks. The motion carried. 6. FINANCE AND PERSONNEL COMMITTEE (Meeting of December 3, 2007) A. Director Welsh made a motion, seconded by Director Doud, that the Governing Board approve the FY 2007-08 membership renewal in the Urban Water Institute, Inc. and the payment of dues in the amount of $1,500. The motion carried. B. Director Welsh made a motion, seconded by Director Doud, that the Governing Board approve the 2008 membership renewal in the California Special Districts Association and the payment of dues in the amount of $676. The motion carried. C. Director Welsh made a motion, seconded by Director Thomas, that the Governing Board approve the 2008 membership renewal in the Association of California Water Agencies and the payment of dues in the amount of $15,720. The motion carried. D. Director Welsh made a motion, seconded by Director Alkire, that the Governing Board approve the 2008 membership renewal in the American Membrane Technology Association and the payment of dues in the amount of $675. The motion carried. E. Director Welsh made a motion, seconded by Director Doud, that the Governing Board award a sole-source contract in the amount of $22,000 to Malcolm Pirnie, Inc., 8001 Irvine Center Drive, Irvine, CA 92618 for engineering services relating to the 2008 Water Resources Master Plan Update. The motion carried. F. Upon a motion made by Director Thomas, seconded by Director Doud, the following resolution: RESOLUTION 07-15 RESOLUTION OF THE GOVERNING BOARD OF SWEETWATER AUTHORITY was passed and adopted by the following vote to wit: Ayes: Directors Alkire, Beauchamp, Doud, Morrison, Thomas, and Welsh Upon a motion made by Director Thomas, seconded by Director Alkire, the following resolution: RESOLUTION 07-16 RESOLUTION OF THE GOVERNING BOARD OF SWEETWATER AUTHORITY was passed and adopted by the following vote to wit: Ayes: Directors Alkire, Beauchamp, Doud, Morrison, Thomas, and Welsh Rita Schoonderwoerd was appointed as Secretary and Debra Farrow as Treasurer of Sweetwater Authority, for so long as she serves as Treasurer to the South Bay Irrigation District, to serve in said positions at the pleasure of the Governing Board. G. Closed Session. In compliance with Government Code Section 54957, the
Committee met in closed session to discuss the Public Employee Appointment of
the General Manager and Operations Manager. There was no reportable action. 7. REPORT OF SWEETWATER AUTHORITY DIRECTOR TO THE WATER CONSERVATION GARDEN
AUTHORITY Director Beauchamp attended today’s Garden Authority Board meeting and
reported on some of the issues that were discussed. A review of the Form 700 was
discussed due to the large area covered by directors. There is a new category
for partners in the Water Conservation Garden. Fees for Garden staff
presentations were discussed, as well as the philosophy for charging fees versus
asking for donations. Discussion of the replacement of the board secretary is
ongoing. The Rancho San Diego/Spring Valley Rotary gave a $5,000 donation to the
Garden. The Garden has been chosen to receive a $10,000 award from Rain Bird for
the Intelligent Use of Water Award. Videos will be coming out advertising the
Garden’s use as a venue. USA Today will be publishing a news article comparing
the droughts in the Southern California region and Georgia, and the Garden will
be featured. The Victory Garden video is in production. Director Beauchamp said
the Garden’s outreach program is expanding, and he credited much of that to the
hard work and efforts of Nora Jaeschke. 8. NEW BUSINESS 9. REPORT OF THE SOUTH BAY IRRIGATION DISTRICT REPRESENTATIVE AND THE CITY OF
NATIONAL CITY REPRESENTATIVE TO THE SAN DIEGO COUNTY WATER AUTHORITY Director Morrison reported that the November and December meetings were
combined, and the Board met on December 6th. He said that Director Pocklington
will be able to brief the South Bay Irrigation District Board next week, and
there will be more to report next month. He added that there was discussion of
the possibility of CWA switching from ACWA/JPIA insurance coverage in some
cost-cutting measures, but no decision was made and staff was directed to bring
more information back to the Board. 10. APPROVAL OF DIRECTORS’ ATTENDANCE AT MEETINGS AND FUTURE AGENDA A. Director Doud made a motion, seconded by Director Thomas, that the Governing Board approve per diem for Chair Beauchamp’s attendance at the Water Conservation Garden’s California Friendly Gardening Festival on November 10, 2007. Director Welsh expressed concern with the use of the term “festival” for this event and questioned its validity for per diem. Director Beauchamp stated that other Garden Authority Board members attended the event, and he attended as a representative of Sweetwater Authority. The motion carried. B. Director Doud made a motion, seconded by Director Thomas, that the Governing Board approve per diem for directors who attended the First Friday Meeting on December 7, 2007 – Program: State of the Chamber. Extensive discussion followed on this motion. Director Welsh questioned the validity of this meeting as a per diem event for directors other than the designated representative or alternate. Director Morrison agreed and reiterated that the Board’s original intention for attendance at designated community organization meetings was to be represented by one assigned Board member unless the meeting topic was specifically related to water issues. He restated his concern that continuing to approve all directors’ attendance and per diem for community organization meetings with topics not directly related to water issues is a dangerous practice. Director Thomas agreed, but added that there are legitimate reasons for all directors’ attendance when specific programs are legitimately a part of Sweetwater Authority’s realm, and she believes it is a necessary outreach. Director Morrison disagreed stating that all chamber of commerce meetings would fall into that category, and he believes that the rules in place for attendance should be followed or changed. No other directors attended the December 7th First Friday meeting. The motion was withdrawn. C. Council of Water Utilities, San Diego County Meeting, StoneRidge Country Club – Tuesday, December 18, 2007, 7:15 a.m. – Program: “San Diego County Wildfires and Fire Protection” presented by Keith Lewinger, Fallbrook PUD, Thomas Brammell, Ramona MWD, and Jeffery Pasek, City of San Diego. Directors wishing to attend this pre-approved event will contact the Secretary. No action was required by the Governing Board. D. California Special Districts Association – Board Member Training Workshop, January 24-25, 2008 in Emeryville, CA, February 7-8, 2008 in Manteca, CA, and March 6-7, 2008 in Long Beach, CA. No interest was expressed in attending this pre-approved event. No action was required by the Governing Board. E. ACWA Region 10 activity planning meeting for 2008-09, January 15, 2008.
Directors wishing to attend this pre-approved event will contact the Secretary.
No action was required by the Governing Board. 11. REPORTS BY DIRECTORS ON EVENTS ATTENDED Chair Beauchamp reported on the California Coastal Commission Meeting on November 15th. He stated that it was a good meeting, a good opportunity to network with a lot of water agency people, and a great opportunity to see local representatives fight for the needs of our region. The meeting resulted in a 9 to 3 vote in favor of moving forward with the permitting process for the Carlsbad Desal Plant, although with many conditions attached. Director Thomas agreed that the meeting was superb, and there were many diverse stakeholders in attendance. She added that, as an environmentalist herself, she supports this project. In addition to providing additional water to the region, it will also help the environment at Agua Hedionda Lagoon. Director Welsh attended the CSDA San Diego Chapter Quarterly Meeting on November 15th and reported that the program was a 2007-08 legislative review, but she thought it was poorly presented. She found it difficult to stay focused on the topic. Director Doud reported on the CSDA San Diego Chapter Scholarship Committee Meeting on November 20th. He stated that although Sweetwater Authority will no longer be involved, the CSDA program will continue. Director Morrison attended the National City Chamber of Commerce Meeting on November 21st and reported that the program included the presentation of the annual teacher awards. Also, Assembly Member Mary Salas spoke on the state of education in California and gave an overview of various legislative packages and the water bonds. Director Thomas reported on the ACWA Fall Conference on November 27th-30th and noted various programs of interest that she attended. She attended three subcommittee meetings and was impressed with attendance. Specific standards set up by public health were addressed. One committee dealt with desalination and one dealt with CEQA reviews that have more impacts because of current events within the State of California resulting from AB 32. She believes we will hear a lot more about this bill. The issue of environmental justice in the CEQA process as it related to greenhouse gases was raised. She believes an ongoing discussion of AB 32 needed to be conducted regionally as well as statewide. Director Morrison added that the Authority’s award for the burrowing owl habitat was a big hit. He said it was a good conference, and there was a lot of building upon old issues. He noted that the basics of AB 32 were still being ferreted out. Director Welsh added that there was validation and recognition of the Authority’s environmental efforts with respect to the owl project. She was glad to see that the Water Education Foundation was given some recognition for the work they are doing to educate the public. She has attended many of the Water Education Foundation tours and believes that ACWA has not given enough credit for education to the Foundation. ACWA has a huge budget for education, whereas the Water Education Foundation does not and they are doing a wonderful job. She was very interested in hearing representatives from various water districts speak to the problems with their water service. After hearing accounts surrounding the recent fires, she walked away with a totally different feel for the issues. She has followed the saga of the Salton Sea since childhood and it frustrates her to see it die. Director Doud attended the Federal Affairs Committee and they rehashed what he previously reported on at the NWRA Conference. He gave staff a CD presentation from Performance Meter, Inc. Director Beauchamp expressed his disappointment in the planning for the Salton Sea. He noted that there was a lot of glory for Sweetwater Authority on desalination and being a pioneer in setting a standard. Chair Beauchamp stated that the South County Economic Development Council meeting on December 4th was a Christmas party and he did not attend. Director Morrison reported that the Water Education Foundation Delta Vision Workshop on December 5th was interesting. Every panel had a good cross-section of various interest groups. They did not, however, allow time for questions at the end which was a disappointment. What local agencies could do to help take away the dependency of the Delta was one focus. He noted that, interestingly, desalination was never mentioned once during this discussion. Conservation was another focus; they discussed saving and water use versus creating water. Director Doud reported on the First Friday Meeting of December 7th. He noted that he sat next to Patty Davis who was doing very well. Charles Moore, President of the Chamber, recognized Sweetwater Authority’s commitment to the community. There was a briefing by the McMillin Company on the new major development, the eastern urban center, which they liken to 80 square blocks of downtown San Diego. He shared a brochure of the project. Director Thomas attended the Bonita Business and Professional Association holiday meeting. She believes that George Kost should receive an award for enthusiastically advocating for the community to save water. It was a very good meeting and it included closure with the old officers and introduction of the new ones. The new President of Southwestern College will speak at the next meeting. Director Alkire reported on the JPIA meetings at the ACWA Fall Conference.
JPIA now has 285 members and two new members were approved. He stated that CWA
is considerating withdrawing. The liability program for 2006 had losses totaling
$2.8 million compared to $6.7 million in 2005 and $10.1 million in 2004. This is
a good trend and should be reflected in rates. The Authority was listed from
October 1, 2003 to September 30, 2006 as having liability losses of $931,000.
The major issue at the Board of Directors’ meeting was paying for alcohol and
spouses’ expenses, which he thought had been taken care of previously. In
reality, the issue had just been turned over to the Executive Committee to clean
up, which they had not done. Merle Aleshire, who is now on the Executive
Committee, gave a long speech convicting how things have been run. After a
motion, several amendments, and points of order, something was finally
accomplished. 12. BUDGET REPORT – DIRECTOR OF FINANCE FARROW Ms. Farrow reported that Water Revenue for October was $1,008,000, or 6.97
percent, below target. Operating Expenses are doing better and are $672,000, or
5.6 percent, under budget. We are holding the line, and the net of water sales
with the operating budget is missing the budget by about $330,000. She informed
the Board that staff and management have succeeded in the implementation of
closing out work orders, per the auditor’s suggestion. A thorough review of the
Authority’s projects was conducted, and by the end of the fiscal year she
expects some positive reports from the auditors on compliance with their
requests. 13. MANAGEMENT REPORT A. Report of Operations Manager Rogers: Mr. Rogers stated that Principal Engineer Jack Adam attended the National Oceanic Atmospheric Administration meeting today to obtain an update. A La Nińa winter with overall below normal rainfall is expected. Rainfall is expected to be in the 65-80 percent of normal range, or about 5.5 to 9.4 inches, for coastal San Diego. The last two recent storms dropped about 2.5 inches at Loveland Reservoir and about two inches at Sweetwater Reservoir, resulting in about 270 acre-feet in Sweetwater and about 74 acre-feet in Loveland Reservoirs, which is not a lot due to the fact that the land around Sweetwater was very dry. This equates to about $180,000 in purchase water that does not have to be made. Mr. Rogers added that Sweetwater Authority received a check for $20,000 for its services to Ramona during the recent fires. B. Report of General Manager Bostad: Mr. Bostad shared a letter from ACWA
recognizing Sweetwater Authority for the donation it provided for ACWA’s public
education outreach effort on the problems confronting California’s water system.
He also advised the Board that the Chula Vista City Council requested that
Sweetwater Authority and Otay Water District provide a briefing to the Council
regarding the status of water supply conditions. This presentation is currently
scheduled to be given on January 15th. 14. DIRECTORS’ COMMENTS Director Doud informed the Board that he has been reappointed to the state CSDA Planning Committee and newly appointed to the Membership Committee as well. He also noted that it was indicated at the JPIA town hall meeting that there is a possibility that FEMA may pay for the water that was taken from the reservoirs to fight the recent fires, if we can estimate how much water was actually taken. Also, there may be some reimbursement available for the destruction of the habitat. Director Thomas stated that she had been added to CSDA’s Task Forces Committee and ACWA’s Water Quality Committee. She noted that there was another article in last Saturday’s Union-Tribune sports section regarding Sweetwater Authority’s lack of fishing by boat at its reservoirs. The article was written by the same individual as the previous article. She would like to meet him and have him invited to attend an environmental leader tour, so he would learn why the Authority prohibits this practice, especially in light of the quagga mussel issue and other budgetary constraints. Director Alkire commented that, after seeing what management and staff had to do to slim down the budget, he is very concerned about the future. The projected 10 and 9 percent increases in MWD’s rates are more than he had expected and he fears there will be some drastic cuts beside what has already been done this year that could affect our infrastructure. Director Morrison agreed with Director Alkire regarding the rising MWD rates and the necessary budget cuts that would affect the infrastructure in years to come. He stated that even with all the cuts, we will probably still have to increase rates, and the public is not going to understand that. He believes an education program should begin early, because it looks inevitable. Chair Beauchamp noted that Mr. Ted Godshalk, a local environmentalist who is very involved in National City, was in the audience. He then wished staff season’s greetings. At 7:48 p.m., Chair Beauchamp called a short recess prior to going into Closed Session. 15. CLOSED SESSION At 7:51 p.m., the Board recessed to convene in Closed Session to confer with legal counsel regarding the public employee appointment of the General Manager and Operations Manager, in compliance with Government Code Section 54957. All persons left the room with the exception of the Board, Legal Counsel, the Management team, and the Board Secretary. There were no minutes taken, and the session was not tape-recorded. At 8:03 p.m., Chair Beauchamp declared the meeting to be in open session. Legal Counsel Cowett reported that the Governing Board has reviewed the issue
of the succession of the General Manager and the Operations Manager. The Board
has voted not to go out to recruit a new General Manager or Operations Manager,
but to enter into negotiations with Mark Rogers as General Manager and Jim Smyth
as Operations Manager and would appoint them to their respective positions
subject to reaching an agreement before May 10, 2008 upon General Manager
Bostad’s retirement. 16. ADJOURNMENT With no further business before the Board, Chair Beauchamp adjourned the
meeting at 8:04 p.m. |
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