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minutesRegular Meeting December 27, 2006 The Governing Board of Sweetwater Authority held a regular meeting on Wednesday, December 27, 2006, 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, Beauchamp, Doud, Morrison, Pocklington, and Thomas Directors Absent: Welsh Others Present: General Manager/Treasurer Bostad, Operations Manager Rogers, Legal Counsel de Sousa, Treasurer Delegatee Farrow, and Board Secretary Schoonderwoerd. Staff members: Rick Alexander, Michael Garrod, Kevin Kasner, Bill Olson, George Silva, Jim Smyth, Don Thomson, and Tom Woodrum. Also present: Peter MacLaggan, Poseidon Resources Corporation, Vanessa Beauchamp, and Robert Martin. • 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 ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED IN THE AGENDA Director Doud made a motion, seconded by Director Beauchamp, that the First Friday Meeting of January 5, 2007 be added to the agenda as Item 11.E. The motion carried. 2. PUBLIC HEARING Chair Pocklington announced that the Governing Board of Sweetwater Authority was holding a public hearing regarding a proposal to increase water rates and charges and to reaffirm past water rates and charges. Notice of this public hearing was given no less than 45 days prior to the public hearing to each property owner and customer within the Authority’s service area. Chair Pocklington requested a report from staff. Director of Finance Farrow gave a PowerPoint presentation to the Board outlining the history of the proposed 6.1 percent rate increase. Ms. Farrow noted that the public hearing notice stated that the Authority’s ratepayers have supported critical investments in a water system that was recently identified by the San Diego County Water Authority as the most reliable in San Diego County. Significant dates leading up to today’s public hearing included: on May 23rd a preliminary budget was proposed to the Board; on August 23rd the Board approved a balanced budget for 2006-07 subject to a proposed overall 6.1 percent water rate increase to become effective January 1, 2007; and in compliance with Proposition 218 requirements, a Notice of Public Hearing was mailed on November 10th announcing the public hearing to be held on December 27th at 3:30 p.m. Ms. Farrow presented a brief background on the proposed Operating Budget for FY 2006-07. Total Revenue without a rate increase is $37.3 million. The proposed 6.1 percent rate increase would produce an additional $939,000 in revenue bringing the total to $38.3 million. Operating Expenses (water purchase; power, chemical and fuel; salaries; benefits; and other operating expenses) total $29 million. The Net Operating Budget before debt service is $9 million. The annual debt service is $4.7 million, which leaves funds available for Capital Investments of $4.2 million. The net Capital Investment Budget for the fiscal year, including reimbursements of $1.3 million from federal grants and shared projects, totals $10 million. A $6 million transfer from Reserves is proposed to balance the budget. On July 24, 2006, in the case of Bighorn-Desert View Water Agency v. Verjil, the California Supreme Court ruled that a public agency’s water rates and charges for ongoing water delivery are subject to the initiative provisions of Article XIII C, Section 3 and are property-related fees and charges subject to the provisions of Article XIII D, Section 6, of the California Constitution. Proposition 218 requires notification to affected property owners by mail at least 45 days prior to the public hearing to include the amount of the fee or charge; how it was calculated; the reason for the fee or charge; and the date, time and location of the public hearing on the proposed fee or charge. All protests against the proposed fee or charge shall be considered; and if written protests are presented by a majority of owners of the identified parcels, the agency shall not impose the fee or charge. Ms. Farrow then reviewed highlights of the example rate tables included in the public notice. With a 6.1 percent rate increase, the average ratepayer will realize an increase of $5.41 based on a bimonthly residential water bill with a 29-unit consumption, which includes pass-through charges imposed by the San Diego County Water Authority (CWA). In addition, all rate adjustments from 1999 to date will be reaffirmed in the proposed resolution. The Authority mailed out 70,663 notices to all postal customers, as well as notices to property owners with mailing addresses outside the service area. Two written comments, one walk-in customer comment, and 12 requests for Spanish translation were received. Ms. Farrow extended high recognition to the Authority’s Communications Section, who did an outstanding job of putting together the public notice. Ms. Farrow showed a table of rate comparisons among CWA member agencies dated December 11th, which placed Sweetwater Authority approximately in the mid-range of those rates. General Manager Bostad noted a recent newspaper article on water pipe failures in the City of San Diego and the City’s plan to ask the Council to approve a series of water rate increases totaling nearly 28 percent over the next four years to handle cast-iron pipe replacements. He noted that the Authority is years ahead of the City in rebuilding its infrastructure based on authorized funding by the Board, which speaks to its reliability. Chair Pocklington asked for comments and questions from the Directors. Director Doud requested clarification on the CWA pass-through Customer Service Charge calculations, charges for encroachment permits, and collection of easement quitclaim charges. Director Thomas questioned the $42 illegal connection fee and that it seemed too low. Ms. Farrow said this fee covered the Authority’s cost to go out to turn the water off, and any other damage costs involved are charged to the consumer. Director Thomas also asked for some history and background on the increase in capacity fees, which was addressed in a public hearing held on August 9, 2006. Chair Pocklington noted that the January 1 date for the proposed increase coincides with the Authority’s wholesalers’ (CWA and MWD) increases. Chair Pocklington opened the Public Hearing at 3:58 p.m. to receive comments from the public. There were no members of the public present to offer comments. Chair Pocklington closed the public hearing. There were no further comments from the Directors. 3. Upon a motion made by Director Doud, seconded by Director Alkire, the following resolution: RESOLUTION 06-22 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 Thomas 4. APPROVAL OF MINUTES Director Alkire made a motion, seconded by Director Doud, that the Governing Board approve the minutes of the November 22, 2006 meeting. The motion carried with Director Thomas abstaining as she was not present at the meeting. 5. APPROVAL OF DEMANDS AND WARRANTS Director Doud made a motion, seconded by Director Beauchamp, that the Governing Board approve Warrants 107885 through 108291including all voided checks. The motion carried. 6. COMMUNICATIONS COMMITTEE (Meeting of November 27, 2006) A. Report on 2006 Leader Tours and plans and schedule for 2007. This was an information item and no action was required by the Governing Board. B. Report on planned activities and goals for 2007. This was an information item and no action was required by the Governing Board. C. Report on past advertising campaigns and discussion on advertising strategy and themes for 2007. This was an information item and no action was required by the Governing Board. D. Discussion regarding plan to develop follow-up notification to residents for emergency service interruptions. This was an information item and no action was required by the Governing Board. 7. FINANCE AND PERSONNEL COMMITTEE (Meeting of December 18, 2006) A. Director Alkire made a motion, seconded by Director Morrison, that the Governing Board approve the 2007 membership renewal in the California Special Districts Association and the payment of dues in the amount of $600. The motion carried. B. Director Alkire made a motion, seconded by Director Thomas, that the Governing Board approve the 2007 membership renewal in the Foundation for Cross-Connection Control and Hydraulic Research and the payment of dues in the amount of $1,000. The motion carried. C. Public Hearing to consider adoption of a 6.1 percent water rate increase. This item was reported as Item 2 in the minutes. 8. OPERATIONS COMMITTEE (Meeting of December 20, 2006) A. Director Doud made a motion, seconded by Director Beauchamp, that the Governing Board authorize Management to finalize an agreement, including execution with Poseidon Resources Corporation, for the purchase of 2,400 acre-feet of water supply per year. It is understood that Legal Counsel and staff may make minor corrections to the agreement due to final review. The motion carried. Chair Pocklington invited Peter MacLaggan of Poseidon Resources Corporation to give a brief update to the Board on this project. Mr. MacLaggan thanked the Board for its consideration on the water purchase agreement and welcomed the Authority into the partnership. He said that the successful implementation of the Carlsbad Desalination Project will increase Sweetwater Authority’s reliability. The only remaining permit to be obtained is the Coastal Development Permit, and it is hoped that the application will be complete by spring of 2007 and hopefully an appearance before the Coastal Commission by summer for a review and vote. They hope to be in construction by the end of 2007 and operating by the end of 2009. Chair Pocklington said that today’s vote was an indication that the Board wishes to see the project become successful. Director Beauchamp suggested that the Authority would be available to speak on the project’s behalf before the Coastal Commission as one of the purchasing entities. General Manager Bostad stated that 10 percent of the water supply over the next 30 years will be coming from desalination of sea water, and this is an important project for the county. B. Closed Session C. Director Doud made a motion, seconded by Director Thomas, that the Governing Board reject all bids received for the grading for the proposed Robert A. Perdue Water Treatment Plant Improvements and have the project brought to the January 17, 2007 Operations Committee meeting for further discussion. Chair Pocklington invited Mr. Robert Martin of Paul Hansen Equipment, Inc. to speak to the Board on this item. Mr. Martin asked the Board to consider moving ahead with the grading because rising fuel costs will likely increase that portion of the project. Director Beauchamp apologized for the need to reject the bids. It was noted that further evaluation of available options was necessary before the project is continued. The motion carried. D. Update on the Goodrich property hazardous material cleanup. The Board agreed that this was an important issue to stay abreast of. Director Thomas requested that a report on the cleanup be given to the Board by Goodrich, and Chair Pocklington directed her to staff to provide her with an update. This was an information item and no action was required of the Governing Board. E. Director Doud made a motion, seconded by Director Beauchamp, that the Governing Board approve funding from the Repair and Replacement Reserve Fund in the amount of $6,500 for the Moss Street sewer improvements. The motion carried. 9. NEW BUSINESS A. Upon a motion made by Director Pocklington, seconded by Director Beauchamp, the following resolution: RESOLUTION 06-23 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 Thomas B. Upon a motion made by Director Pocklington, seconded by Director Thomas, the following resolution: RESOLUTION 06-24 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 Thomas The officers appointed were Director Beauchamp as Chair and Director Alkire as Vice Chair. 10. 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 there was no CWA Board meeting in December due to the holiday. 11. APPROVAL OF DIRECTORS’ ATTENDANCE AT MEETINGS AND FUTURE AGENDA ITEMS A. Director Beauchamp made a motion, seconded by Director Thomas, that the Governing Board approve per diem for Director Doud’s attendance at the Northwest Civic Association General Meeting on the Chula Vista Bayfront Master Plan Draft EIR on December 11, 2006. The motion carried. B. Director Pocklington made a motion, seconded by Director Beauchamp, that the Governing Board approve per diem for Director Thomas’s attendance at the Chula Vista Chamber of Commerce State of the Chamber on December 14, 2006. The motion carried. C. National Water Resources Association Leadership Forum, 110th Congress Planning and Strategy Meeting, January 4-5, 2007, at the Kona Kai Hotel, San Diego. Directors wishing to attend this pre-approved event will contact the Secretary. No action is required by the Governing Board. D. Water Agencies Association of San Diego County Quarterly Meeting, January 18, 2007, at the California Center for the Arts, Escondido, CA – Program: “New Developments in Conservation Programs and Rates” by Mary Ann Dickinson, Executive Director of the California Urban Water Conservation Council. Directors wishing to attend this pre-approved event will contact the Secretary. No action is required by the Governing Board. E. Director Doud made a motion, seconded by Director Thomas, that the Governing Board approve per diem for Directors who wish to attend the First Friday Meeting, January 5, 2007, 7:30 a.m. – Program: “An Update on Regional Security” by Harold Tuck, Deputy Chief Administrative Officer, Public Safety Group, County of San Diego County. The motion carried with Directors Morrison and Beauchamp opposing. 12. REPORTS BY DIRECTORS ON EVENTS ATTENDED Director Doud attended the NWRA Annual Conference on November 29th to December 1st, where the theme was “managing for excellence and aging infrastructure.” The Bureau of Reclamation plans to do more outsourcing, staffing, retiring and build more partnering involvement with customers. A bill is currently pending, SB 895, for major repairs for aging infrastructure. The Commissioner is open to invitations for his staff to visit local agencies, and Director Doud suggested that a tour of the Authority’s facilities be offered. All Directors attended the recent ACWA Fall Conference. Director Doud attended the Federal Affairs Committee meeting and reported on several bills. The House Transportation and Infrastructure Committee approved two dam safety bills, HR 4981and HR 1105, on September 20th. HR 4981 reauthorizes the dam safety act for the next five years, which is administered by FEMA. ACWA is still supporting HR 1190, which was passed by the House in February 2006. He said the Region 10 meeting was a follow-up on the water bonds and on AB 19 (urban runoff), which may have funds available to the Authority. Director Morrison expressed concern over the lack of clear threads targeted for policy makers at ACWA conferences, even though they make up half of the attendance. However, he noticed clear threads throughout the agenda geared for finance and legal. He also found it interesting that there were no surveys asking for comments. Director Pocklington suggested that Director Morrison could attend the next Region 10 meeting to voice this concern. Director Alkire reported on the energy and electricity sessions, which addressed water as one of the high energy users in the state. One interesting statistic was that water leaks account for 14 or 15 percent of water use. Coachella is conducting a 2-3 year pilot study using remotely read “time of use” meters, which will have the ability to tell when customers are watering lawns, using a washing machine, etc. In his report on JPIA meetings, he noted that they will be looking at opening up JPIA membership to California independent special districts whose sole or major operation is the collection and/or treatment of wastewater. There was concern expressed regarding possibly liability on the levies. Current law holds the state responsible for levy failure damages, but effort is underway in the legislature to have this changed, which could affect JPIA members. Director Thomas said she appreciated the opportunity to attend the conference just a few days after being sworn in and remarked on how presentations were made in a novel way through debates. The “Ask the Experts” sessions integrated issues with policies that both do and do not work. She found the workshop on the State of the State Water Project Workshop to be excellent with many ideas that could be used during the Board’s decision making process. She attended the Ethics Workshop, and found the conference exhibits to be very interesting and educational. The “Finding a Common Ground” theme encompassed stakeholders from agriculture, health and human services, water districts, and brought out strategic ways of decision making. Kevin Starr’s presentation on the past, present and future of the water industry was also very interesting. Director Pocklington remarked that the Friday morning meeting with politicians was very interesting and brought out the changes in campaigning that absentee balloting is creating. Director Beauchamp added that one session on global competition highlighted reasons for the increased rate in facilities construction because of competition from China and India. Director Alkire added that JPIA conducted a session on interview and selection of management and senior staff, and that there is a CD available from JPIA for management’s review and use. Chair Pocklington reported on the Council of Water Utilities meeting of December 19th and said that MWD Chairman Tim Brick gave a tremendous presentation. He is working closely with Mr. Brick on his ad hoc committee to help fix the education program. Director Doud attended the Northwest Civic Association meeting on the Chula Vista Bayfront Master Plan Draft EIR on December 11th. This association’s mission is to empower the diverse residents of northwest Chula Vista to enhance, protect, and preserve the unique character, quality, and heritage of this area through education and group action. There was an interesting PowerPoint presentation given on the Draft EIR, and the noted question was how many 17 and 25 story buildings will be allowed. Director Thomas attended the Chula Vista Chamber of Commerce State of the Chamber meeting on December 14th, with keynote speaker Lowell Billings, head of the Chula Vista Elementary School District. Jerry Rindone facilitated a live communication with a Hilltop High School sister school in China featuring audio as well as video feeds. Director Thomas said perhaps the Authority could benefit from this technology in the future when holding group meetings. She said the overall outlook for the Chamber was very positive. The deadline for listings in the new Chamber booklet is January 3rd. Director Morrision attended the National City Chamber of Commerce meeting on December 20th. He said the National City Chamber’s State of the Chamber event will be held on the first Saturday in February, but he will be unable to attend as he will be in Washington, D.C. 13. BUDGET REPORT – DIRECTOR OF FINANCE FARROW Director of Finance Farrow directed the Board’s attention to the Budget Report as of November 30, 2006 in the agenda package. There were no questions from the Board. She noted that the Directors had received the final FY 2005-06 audit presented by Bartlett, Pringle, and Wolfe. She added that she was very pleased with the quality of their services, and staff enjoyed working with them throughout the audit process. 14. MANAGEMENT REPORT A. Report of Operations Manager Rogers: Operations Manager Rogers showed a photo of a burrowing owl on the video screen. There has not been a colony at Sweetwater Reservoir in 15 years. As part of an agreement with the USGS and the Fish and Game Service, on December 6th Environmental and Governmental Services (EGS) staff assembled artificial wooden underground burrows for installation in reservoir areas not being used for storage or conveyance of water. Five days after they were installed, three groups of owls had already been sighted in the project area. EGS Director Rick Alexander said that it is amazing to have such success so quickly. This agreement was entered into because this species has suffered from decline, particularly in the coastal area, because of the loss of the larger animals that created the burrows. The burrowing owl is one of the species for which coverage is being sought through the NCCP, and this proactive approach should help in that effort. Mr. Rogers also reported that every six months, JPIA distributes awards for safety ideas submitted by member agencies. Sweetwater Authority’s Safety Section submitted a number of suggestions from its employees, and out of $7,000 or $8,000 available, Authority employees or crews received awards totaling $1,350. Awards were received by the following employees: Pat Bryant, Mark Grohman, Maury Hill, Bob Johnson, Nathan Golder, Johnny Rodriguez, Rudy Sevilla (two awards), Steve Terry, Dave Voigt, and the Hazardous Waste Emergency Response Team. It is notable that one agency out of 100 received about one-sixth of the total awards. Director Thomas requested a list of the winning safety suggestions submitted. B. Report of General Manager Bostad: Mr. Bostad reiterated the importance of today’s Board approval of the exchange agreement with Poseidon Resources Corporation. Chair Pocklington and Mr. Bostad agreed that once other agencies see that Sweetwater Authority has signed an agreement, more will join the effort. It is a benefit for the entire county because it offsets 56,000 acre-feet of water that was imported. 15. DIRECTORS’ COMMENTS Director Doud read some interesting facts he learned 10 years ago when visiting the Washington office of then Bureau of Reclamation Commissioner Martinez. For example, there are 54,000 water agencies in the United States, and Sweetwater Authority is the 174th largest. There are 16,000 wastewater systems, and 187 of these discharge into the Colorado River prior to reaching San Diego County. Director Alkire commented that he ran into Mary Salas last week, who said she missed her Board meeting only because she thought it was a 6:00 p.m. meeting and arrived after the meeting ended. Director Pocklington commented that this is his last meeting as Board Chair, and that it has been a pleasure the last two years to have the Board’s cooperation in resolving problems. He looks forward to the same cooperation with the new Chair and Vice Chair, because Sweetwater Authority has a great Board and staff. 16. CLOSED SESSION At 5:02 p.m., in compliance with Government Code Section 54956.9(a), the Board recessed to convene in Closed Session to confer with Legal Counsel regarding pending litigation on California Department of Transportation v. Sweetwater Authority, Case No. GIC 838118-1(C/W: GIC 838119-1 and GIC 329120-1). All persons left the room with the exception of the Governing Board, Management Team, Legal Counsel, Director of Engineering, and Board Secretary. There were no minutes taken, and the session was not tape-recorded. At 5:16 p.m., Chair Pocklington declared the meeting to be in open session, and there was no reportable action. 17. ADJOURNMENT With no further business before the Board, Chair Pocklington adjourned the
meeting at 5:16 p.m., to the hour of 6:00 p.m. on January 10, 2007.
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