minutes

South Bay Irrigation District

September 15, 2003

The Board of Directors of South Bay Irrigation District held a regular meeting on Monday, September 15, 2003, at the Sweetwater Authority Administrative Office, 505 Garrett Avenue, Chula Vista, California. President Pocklington called the meeting to order at 3:30 p.m.

ROLL CALL

Directors Present: Doud, Pocklington, Reynolds, Welsh, and Wright
Directors Absent: None
Others Present: General Manager Bostad, Operations Manager Mark Rogers, Legal Counsel Akins, and Board Secretary Marisa Farpón-Friedman. Sweetwater Authority staff Paula Roberts and Don Thomson.

PLEDGE OF ALLEGIANCE TO THE FLAG
Director Wright 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
There was no presentation.

ACTION AGENDA

1. PRESENTATION BY SWEETWATER AUTHORITY CHIEF ENGINEER SMYTH
Robert A. Perdue Water Treatment Plant Upgrades

General Manager Bostad introduced Chief Engineer Smyth as the project manager for the plant upgrades. He said that the team consists of Chief Engineer Smyth, Water Quality Superintendent Don Thomson, Director of Water Quality Mann, who was not present due to illness, and Management. The team is working to develop strategies in order to perform the adequate improvements in the treatment plant to address the first layer of drinking water regulations coming within three years and preparing for subsequent regulations.

Chief Engineer Smyth said that he would give an overview of the project. He showed slides of the Sweetwater Reservoir and Dam and the intake tower, as well as the chemical storage area and the Administration building. He explained that the plant began operating in 1961 as a direct filtration treatment plant only. In 1985, flocculation/ sedimentation basins were added for treatment, and in 1991 the raw water pump station was modified to allow for pumping a minimum of 39 million gallons per day at low lake level. Before then we could only pump at high lake level. Now we can pump in excess of 40 million gallons per day at both low and high levels.

Regarding the objectives of the project, Mr. Smyth noted that Stage 2 Disinfection by-products and long-term Enhanced Surface Water Treatment Rules have to be met. Phase I must be implemented by July 2007 and Phase II by 2010. THM's have to be reduced and disinfection improved. These are the basic requirements that are becoming more stringent, and alternatives for the plant have to be developed in order to meet the regulations.

The facilities under consideration are upgrading or modifying existing processes such as flocculation, sedimentation, filtration, converting to sodium hypochlorite dinsinfection, and replacing the clearwell that was part of the original construction. The new processes being reviewed are ultra violet light, chlorine dioxide, chlorine contact basin, and solids or residual handling.

Montgomery Watson Harza were selected to complete the preliminary design. They are considering different treatment processes, sizing of capital, operation and maintenance costs, and layout alternatives for 30, 40, and 50 million gallons a day (MGD). Our plant today produces 30 MGD, which is all we need because we have the demineralization facility and the National City Wells. Another important area is the treatment of local and imported water. Peer-group workshops with CH2Mhill and Water Quality Treatment Solutions, two experts in this field, have been held to discuss different types of treatment processes. The preliminary conclusion was that we would modify flocculation/ sedimentation and we would add chlorine dioxide as a pre-oxidant. The membrane treatment, used at the Olivenhain plant now, will not reduce total organic carbon, which is something we would have in very high levels under local water conditions. It would not reduce THM's either, therefore we would not meet any of the objectives of the proposed regulation. Ozone is not being considered in the Phase I construction because of the potential to create bromate (disinfection by-product).

Mr. Smyth displayed a site layout with an aerial picture that showed the clearwell, the filters, flocculation/sedimentation, the buildings, and the dam. He also showed a preliminary site layout for the proposed improvements, which he explained in detail. Regarding the clearwell, Bay 1 will be built initially, and Bay 2 will be built by 2007/2010. That way the existing clearwell does not have to be taken out of service while the new one is being built. A fifth filter would have to be added for the 40 MGD alternative and, if we went to 50 MGD, we would have to add a sixth filter. To meet the new regulation we would likely need to build new flocculation/sedimentation basins, which would be almost twice as long as the existing.

Mr. Smyth reviewed the plant expansion concepts. He noted that our demand in the wintertime is less than 30 million gallons per day. Our goal is to maximize the use of the Treatment Plant and Sweetwater Reservoir, and he noted that we could use the reservoir for storage of water for neighboring agencies. Sweetwater Authority customers would not subsidize any neighboring agency because we would be selling services, treatment and storage of imported water, but not ownership or water supply. The cost components being evaluated include operations and maintenance along with capital as it pertains to reservoir storage, raw water pumping, distribution system pumping, mark up, and future facility changes to address regulations. Sweetwater Authority is considering a 20-year contract and guaranteeing Otay five million gallons per day minimum, with a variable supply to 15 MGD maximum.

Mr. Smyth referred to the San Diego County Water Authority imported raw water pipeline No. 3. We take water directly into the reservoir and we also take water directly into the plant. When the water goes into the reservoir, it goes through the intake tower to the raw water pump station, followed by treatment and distribution. With the new concept of selling water to Otay Water District, if they order raw water from CWA to be treated at our plant, they would pay the capital cost for plant production, chemicals, etc., as well as 100 percent of the cost to build and operate the distribution pump station. If they order water and put it into storage in our reservoir, there would be additional cost components to storage and raw water pumping.

There were questions by some members of the Board as to whether this kind of transaction would jeopardize Sweetwater Authority's stability. Mr. Smyth said that staff is looking at other agreements that have been developed in the County and General Counsel will work on this issue. General Manager Bostad said that we are also reviewing these concepts with the City of Chula Vista as they are interested in improving the reliability of water supply to the whole community. Some of the initial costs are between $600 and $700 per acre-foot, which is cheaper than desalination. The value that this would provide to Otay is significant. It can provide emergency storage and supply from a second aqueduct, which is very valuable as it would increase Otay's service reliability. It is a good opportunity to make use of unused capacity in the treatment plant and reservoir.

General Manager Bostad advised the Board that we are not planning to sell water to Otay. We are planning on selling treatment service, distribution system pumping, reservoir storage, and raw water pumping services. Each one of these services has operational, maintenance, and capitalization costs. We would negotiate these issues with Otay, at which time we would work with the Finance and Operations Committees. He also pointed out that Otay would have to work with CWA to make sure that there is adequate raw water delivered to Sweetwater Reservoir for storage and treatment.

Mr. Smyth then reviewed the costs. He said we would need almost $37 million for 30 M.G.D., with $18 million for Phase I and $19 million for Phase II. For 40 M.G.D. we would need almost $40 million. For Phase I in 2007, it appears that we could keep it at $22 million.

Mr. Smyth concluded saying that the preliminary design would be confirmed this month. It will be presented to the Operations and Finance Committees in November, when the three months chlorine dioxide test should start. The final design of Phase I will be completed in October 2004. The bid process will take place in November 2004 and construction will start in March 2005 and will be completed in December 2006. Operation of the new plant will start in January 2007. Throughout construction it is our goal to operate without shutting down the plant.

General Manager Bostad said that Sweetwater Authority would be providing this presentation at the next Chula Vista Interagency meeting . He said that this will help inform the City and Otay the costs associated with providing local supply reliability.

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

There were none.

3. APPROVAL OF MINUTES

Director Wright made a motion, seconded by Director Doud, that the Board approve the minutes of the regular meeting of August 19, 2003. The motion carried.

4. APPROVAL OF DEMANDS AND WARRANTS

Director Wright made a motion, seconded by Director Welsh, that warrant numbers 10029 through 10039 be approved. The motion carried.

5. APPROVAL OF DIRECTORS' ATTENDANCE AT MEETINGS & FUTURE AGENDA ITEMS

Director Welsh made a motion, seconded by Director Doud, that the Governing Board approve per diem for directors who attended the SR-125 Groundbreaking Ceremony on Friday, September 12, 2003, at 2:00 p.m.

6. NEW BUSINESS

A. Director Welsh made a motion, seconded by Director Doud, that the Governing Board approved the proposed amendment to Policy 107 - Vacancies on the Board of Directors. The motion carried.

B. Director Welsh made a motion, seconded by Director Doud, that the Governing Board approve the proposed amendment to Policy 118 - Attendance at meetings. The motion carried.

C. Director Pocklington made a motion, seconded by Director Doud, that the Governing Board approve the proposed amendment to Policy 205 - Minutes of Board meetings. The motion carried.

7. REPORT OF TREASURER

Ms. Avery said that interest rates at the Local Agency Investment Fund were 1.61 percent.

8. REPORT OF LAFCO SPECIAL DISTRICTS REGULAR MEMBER

President Pocklington said that last week's meeting lasted three and one-half hours, and they had over 300 people. He referred to three of the items that were discussed at the meeting. The first item dealt with Olivenhain's involvement in a transfer of sewer service to include 21 acres of land where nine homes would be built. There was a problem with the volunteer fire department signing a contract with the developer and owner of the property. Under LAFCO's policy, they cannot make policy with a private company and the fire department was a private enterprise.

Also discussed was an amendment to the Sphere of Influence for Lakeside Sanitation District dealing with the Blossom Valley Middle School. The residents in the area did not believe that Lakeside could provide the sewage capability for the school. After a thorough analysis, LAFCO determined that the district could handle the growth for another 27 years.

The third item was the Municipal Service Review/Sphere of Influence update proposed for the City of Escondido, Valley Center Municipal Water District, and Rincon Del Diablo Municipal Water District.

President Pocklington said that next month they would review the Otay Water District. On October 6th there will be a joint meeting with the San Diego LAFCO, the Special District Advisory Committee, and the Municipal Service Review Working Group.

9. REPORT OF SAN DIEGO COUNTY WATER AUTHORITY REPRESENTATIVE

President Pocklington said that a meeting was held last week on Thursday, with a morning meeting with the General Managers, and another meeting in the afternoon to deal with how to pay for the treated water and for desalination. They did not get to it because they spent almost 3 hours in closed session on the QSA. IID will hold a public hearing on the 23rd of September. Its board meets on the 7th of October and the deadline to reach an agreement is scheduled for the 12th of October.

President Pocklington then talked about the Binational Pipeline. It seems that the Mexican government is moving forward to building its own pipeline. They are looking at a 36" line that would parallel the one that they have now. They hope to build it within the next two years and it would be good for another four to five years. The private developer that was working with them is looking at building a third pipeline that would provide 200,000 acre-feet, for which they would use private money. The water would be coming from Colorado and from the Mexican farmers. They also discussed that a number of power companies are looking at Baja for power plant sites, and there has been talk about possibly selling power and desalination to this country through that situation.

President Pocklington announced that there would be a public hearing at the CWA on Wednesday evening at 6:30 p.m., regarding the environmental impact report for the San Vicente Pipeline project.

10. DIRECTORS' COMMENTS

Director Welsh welcomed new board member Reynolds on his first full meeting. She said she had attended the Celebrate Chula Vista event and she had a very hard time finding anybody that she thought showed any serious interest to give a pen or pencil. She went to the Chula Vista Public Library booth and gave them pencils and pens as well as the San Diego Union Tribune. She did not feel the event was that well attended and she is wondering if Chula Vista is perhaps over committing to these celebrations with the Lemon Festival, the Cinco De Mayo, etc. She was very glad that we did not commit to some staff person sitting in a booth because it would have been a colossal waste. She said she would discuss this with the Communications Director.

Director Pocklington referred to a letter from the California Special Districts Association dealing with the ballot issue. It is about the cost of government and how you pay for it and how you put the breaks on the state from taking your money. He recommended that directors read it because it is something that will come up in November 2004.

11. CLOSED SESSION
There was no need for a closed session.

12. ADJOURNMENT
With no further business before the Board, President Pocklington adjourned the meeting at 4:50 p.m., to the hour of 3:30 p.m., on October 20, 2003.