minutes

South Bay Irrigation District

January 19, 2004

The Board of Directors of South Bay Irrigation District held a regular meeting on Monday, January 19, 2004, at the Sweetwater Authority Administrative Office, 505 Garrett Avenue, Chula Vista, California. President Welsh called the meeting to order at 3:30 p.m.

· ROLL CALL

Directors Present: Alkire, Doud, Pocklington, Reynolds, and Welsh.
Directors Absent: None.
Others Present: General Manager Bostad, Operations Manager Rogers, Legal Counsel Strand, and Board Secretary Farpón-Friedman. Sweetwater Authority Deputy Chief Engineer Martinez.

· PLEDGE OF ALLEGIANCE TO THE FLAG
President Welsh conducted the pledge of allegiance to the flag.

· OPPORTUNITY FOR PUBLIC COMMENT (Government Code Section (54954.3)
There was no comment from the public.

· PRESIDENT'S PRESENTATION

ACTION AGENDA

1. PRESENTATION BY PEGGY STRAND AND MRUNAL MEHTA, BEST BEST & KRIEGER
Proposition 50 and Labor Compliance Programs

Peggy Strand said that as a result of Proposition 47, School districts have been receiving monies due to the sale of bonds. Those monies require school districts that are doing public works projects to put in place, administer, and implement a Labor Compliance Program in order to get the assistance of the labor community.

With regard to Proposition 50, water districts face the same sort of issue. Proposition 50 is the Water Security Clean Drinking Water Coastal and Beach Protection Act of 2002. The monies from Proposition 50 can be applicable to desalination, groundwater, etc., projects, and for some of those projects the Districts will be required to provide matching funds. There is a bond measure that provides $3.44 billion for various water resources. These funds can be used for water security ($50 million); drinking water systems ($435 million); water pollution prevention ($100 million); and coastal protection ($100 million). Some of these require matching funds on behalf of the district applying for the Proposition 50 funds.

The districts get the funds by submitting the grant program package to the Department of Water Resources. The packages were available in the fall of 2003. MWD submitted a host of projects on behalf of their member agencies and so did CWA. There was an allocation by the legislature in the 2003/2004 budget. SB 278 was the bill that implemented Labor Compliance Programs and it required the Department of Industrial Relations to put regulations in place that would assist with the implementation of these programs. Legislation became effective January 1, 2003 and to this date Ms. Strand does not know of a single water district that has put together a Labor Compliance Program (LCP).

The LCP is the public agency's written program that will require the payment of prevailing wage on projects receiving Proposition 50 funds. The program itself has to be approved by the Department of Industrial Relations for a 12-month initial period. At the end of 12 months, the public agency can return and ask for permanent approval of its LCP.

SB 278 was effective the beginning of last year. Before then, the contractor had to pay prevailing wage for any project over $1,000. After SB 278, the districts will have to do more than paying prevailing wage for projects for which Proposition 50 funds are being used. Labor Code Section 1771.5 now requires that all bid invitation and contracts have to include whether this project is funded by Proposition 50 funds and is subject to a labor compliance program. If the district wishes to utilize Proposition 50 funds, there has to be a pre-job conference with all of the contractors to talk about the labor compliance program and what role the contractors will have to play in that program. It will require the submission of certified weekly payroll records. Currently the district requires certified payroll records to be maintained by the contractor and, upon a request, they need to be provided within ten working days. Now, certified weekly payroll records will have to be not just held but reviewed and audited. If, as a result of the district's review and audit, a discrepancy is found in the payroll records, there will be a withholding of contract payments. The district will be reviewing not only the certified payroll records and the prevailing wage as determined by the Director of Industrial Relations, but also irregularities such as if someone who is being billed as a laborer is actually doing perhaps more refined work on the project.

Approaching Labor Compliance programs boils down to five easy pieces: Education, Monitor and Reviewing, Audit and Investigation, Enforcement, and Annual Report. Under piece one, Education, the Competitive Bidding documents have to state that the project is subject to a Labor Compliance Program as a result of being funded in part by Proposition 50 monies. Those conditions have to be placed also in the contract documents. There has to be a pre-conference meeting with all contractors to explain to them what a Labor Compliance Program is about and inform them that they will have to submit certified payroll records and they will be audited and reviewed.
Piece two is monitoring and reviewing. The first task would be reviewing certified payroll records, and task two is to provide site monitoring. Visits have to be made to each site looking at all of the various logs and sign-in sheets to make sure that we are able to see the particular time that a contractor is delivering cement and is going to be pouring cement, etc. Task three is the receipt of complaints and claims. The District will have to go out and talk to a couple of laborers in the field to make sure they are being paid minimum wage. Nine out of ten times this will be legitimate and the contractor will not be trying to circumvent the prevailing wage rules, but you never know.

The third piece is the audit and investigation. The district will have to investigate irregularities or claims. For instance, a contractor working as a laborer but who is really a heavy equipment driver being billed as a common laborer. That would be an irregularity.

The fourth piece is enforcement. This will require the public entity to withhold contract payments if irregularities are found, and have hearings in conjunction with the Department of Industrialization (DIR). Prior to SB 278, these problems were handled by the DIR. Now, this responsibility is being turned over to the public agency that is accepting Proposition 50 funds. The fifth piece requires two annual reports, one to DIR and one to the Public Agency. The same report can suffice for both.

Some of the other issues involved in a Labor Compliance Program are drafting a program that is in compliance with Section 1771 of the Labor Code. There are also staffing issues. Most districts don't have the staff that can take time to review certified payroll records, go out to a work site, do the investigation, resolve any outstanding issues, etc., but there is the ability to use consultants instead of staff. The DIR has promulgated new regulations that will require consultants to have certain qualifications. Those regulations have been put on hold after January because of the switch in Governors. At this point, we are operating within the confines of the old Labor Compliance Programs.

Ms. Strand talked about the new legislation, SB 21, which provides guidelines and funding awarded on a statewide competitive basis for terrorist protection. Ms. Strand said that these regulations have been put on hold during the new Governor's initial tenure.

In response to a question from Director Alkire, Ms. Strand talked about the vulnerability assessment required by EPA. Director Reynolds asked her about possible sanctions that would come down on the water district if it did not comply with this, either knowingly or unknowingly. She said that if water districts do not actively and aggressively enforce labor compliance program, they may have to pay not only the grant monies back but may be fined by the DIR as well.

2. ITEMS TO BE ADDED, WITHDRAWN OR REORDERED TO THE AGENDA
(Government Code Section 54956.5)

There were none.
3. APPROVAL OF MINUTES

Director Pocklington made a motion, seconded by Director Reynolds, that the Board approve the minutes of the regular meeting of December 15, 2003. The motion carried.

4. APPROVAL OF DEMANDS AND WARRANTS

Director Doud made a motion, seconded by Director Pocklington, that warrant numbers 10075 through 10083 be approved. The motion carried.

5. OLD AND UNFINISHED BUSINESS

A. Director Pocklington made a motion, seconded by Director Reynolds, that the Board approve membership renewal with CSDA at State level and the payment of the 2004 dues of $285. The motion carried.

B. Director Pocklington made a motion, seconded by Director Doud, that the Board approve the Draft Scholarship Program Policy as presented by staff. The motion carried.

6. NEW BUSINESS

California Special Districts Association, San Diego Chapter - Ballots for the positions of 2nd Vice President, Secretary and Treasurer.

Director Doud made a motion, seconded by Director Alkire, that the Board vote for Martin Marugg from the Alpine Fire Protection District for the position of 2nd Vice President for the San Diego Chapter of California Special Districts Association. The motion carried.

Director Doud made a motion, seconded by Director Pocklington, that the Governing Board vote for Trish Hannan from Vallecitos Water District for the position of Secretary of the San Diego Chapter of California Special Districts Association. The motion carried.

Director Doud made a motion, seconded by Director Pocklington, that the Governing Board vote to reelect Richard Hyde for the Treasurer position of the San Diego Chapter of California Special Districts Association. The motion carried.

7. REPORT OF TREASURER

Ms. Avery reported that she would transfer $100,000 from the Local Agency Investment Fund to the San Diego National Bank for 15 months at two percent interest.
8. REPORT OF LAFCO SPECIAL DISTRICTS REGULAR MEMBER

Director Pocklington reported that there was no meeting this month. He announced that there would be a joint meeting between the LAFCO Commissioners, the Municipal Service Review Working Group, and the Special District Advisory Committee on Monday, February 2nd at 9:30 a.m. The final draft report of the Southern San Diego County Water and Sewer Municipal Service Review will be presented and LAFCO Chief of Policy Research Shirley Anderson will provide an overview of the final draft report. There should be some conclusions and recommendations with regard to Otay, but he does not have any information as to what the final recommendations will be. The Tiajuana Valley County Water District issue will be discussed in March.

9. REPORT OF SAN DIEGO COUNTY WATER AUTHORITY REPRESENTATIVE

Director Pocklington briefed the Board on issues discussed at the Special meeting on Thursday. The Board approved by unanimous vote the final Environmental Impact Report on the San Vicente to Second Aqueduct Pipeline Project. The Board also discussed an issue regarding encroachments of the CWA pipelines that go through 136 miles within San Diego County. He discussed some of the problems that the CWA has had over the last 20 years in order to protect those easements. The CWA Board is considering taking a different approach and even going to court if necessary. The Board has asked staff to come back with recommendations on the most difficult easements.

Director Pocklington reported that on Wednesday the Board would have an Ad Hoc committee meeting on Governance. The background is that Senators Denise Ducheny and Dennis Hollingsworth have come up with an idea on how the CWA can do better governance, and they decided that governance would be shared among the City of San Diego, the North County agencies, and the South County agencies. Each group would have the governance for two years. Director Pocklington said that one of the districts included in the South County group is San Dieguito, and that Jim Bond would be taking over as Chairman in 2005 representing the South County group. He noted that several member agencies from the South and East County have agreed to pursue the effort of having a south group monthly meeting, and the first one has been scheduled for January 26th.

Director Pocklington talked about the voting structure. It would still be 55 percent majority, and the board must pass an item with an affirmative vote of the City of San Diego and ten additional members. The Chair of the Board shall rotate so that every third term it shall be a representative from the City of San Diego. During the intervening terms, the Chair will rotate between the north and south member agencies. Northern agencies are Carlsbad, City of Escondido, Fallbrook, Oceanside, Camp Pendleton, Rainbow, Rincon, Santa Fe, Vallecitos, Valley Center, Vista and Yuima. The southern agencies are the City of Del Mar, Helix, National City, Olivenhain, Otay, Padre, Poway, Ramona, San Dieguito, and South Bay Irrigation District. Representatives of the City of San Diego shall include at least one third but no more than one half the Committee Chairs, and they will be selected by the Board Chairman.

10. DIRECTORS' COMMENTS

There were no comments from Directors. However, Counsel Strand commented that a couple of years ago some folks put on the Proposition 218 ballot that we could no longer raise fees, charges, assessments, and special taxes that were property related. As a result of that, BB&K did an extensive letter to all of their districts and went through the analysis saying that they did not believe water rates were subject to Proposition 218. On January 13, 2004, they received a definitive published opinion from the 4th Appellate District that water rates are not subject to Proposition 218, which she knew all the time. She also commented on a recent Attorney General opinion, which says that a district's representative to a larger regional agency, like the County Water Authority, cannot disclose information that he or she has received in closed session.

11. CLOSED SESSION

There was none.

12. ADJOURNMENT

With no further business before the Board, President Welsh adjourned the meeting at 4:26 p.m., to the hour of 3:30 p.m., on February 16, 2004.