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Home My WebLink About2022-04-26 - Board of Directors Meeting Minutes 2022-052 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Tuesday, April 26, 2022, 4:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. PARTICIPATION INSTRUCTIONS Were included on the agenda. 2. CALL TO ORDER The meeting was called to order at 4:00 p.m. 3. PLEDGE OF ALLEGIANCE Vice President Jones led the pledge. 4. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, PhD, President Doug Davert, Asst General Mgr/ Interim General Mg. Brooke Jones, Vice President John DeCriscio, Operations Manager Trudi DesRoches Gina Knight, Human Resources and Risk Manager Phil Hawkins Delia Lugo, Finance Manager Tom Lindsey Rosanne Weston, Engineering Manager Alison Martin, Public Affairs Manager Annie Alexander, Board Secretary Paige Appel, Budget Analyst ALSO PRESENT Andrew Gagen, General Counsel, Kidman Gagen Law LLP 5. PUBLIC COMMENTS None. 6. DISCUSSION ITEMS 6.1. Summary of Draft Budget for Fiscal Year 2022-23, Updated Variable Expenses, Supplies and Services, and Salaries and Related Expenses Minutes of the YLWD Board of Directors Special Meeting Held April 24,2022 at 4:00 p.m. 1 2022-053 Staff began the presentation by summarizing topics covered during the previous budget workshop, topics to be covered during this budget workshop, and efforts made to decrease and/or capitalize certain expenses. Staff then provided a summary of the revised draft FY22-23 budget for supplies and services, including impactful variances in comparison to FY21- 22 projections. Discussion touched on increased expenses related to maintenance, bringing the PFAS Water Treatment Plant online, and raising District water valve cans and sewer manhole covers following street improvements made by the City of Yorba Linda and City of Placentia. Vice President Jones requested additional detail regarding increases in maintenance and materials expenses. Director Lindsey requested staff confirm that the City of Yorba Linda's paving schedule had been escalated. President Miller requested additional detail for expense categories increasing more than $50K and that staff prepare talking points for the Board regarding the budget once finalized. Discussion followed regarding updating the District's Water Master Plan (WMP). Al Nederhood, resident, shared his concerns about the necessity for updating the WMP. Director Hawkins suggested deferring the WMP update until after the summer months. Discussion followed regarding the draft FY22-23 budget for travel and conference attendance and requirements for certain employees to maintain job-related licenses and certifications. Staff then reviewed the revised draft FY22-23 budget for supplies and services as compared to the 2021 rate study assumptions and highlighted the off-trend expenses. Al Nederhood, resident, suggested accruing the projected partial reimbursement from OCWD for the operation and maintenance of the PFAS Water Treatment Plant in the FY22-23 budget. Director Hawkins left the meeting at 5:27 p.m. Staff provided an overview of the draft FY22-23 budget for salary-related expenses as compared to the rate study assumptions and noted that some labor expenses are capitalized. Discussion touched on projected employee merit increases in FY22-23 following which Vice President Jones requested more detailed information. Staff then reviewed historic, projected, and budgeted non-operating expenses as compared to the rate study. Discussion followed regarding current and projected interest rates, the potential issuance of bond debt in August, retirement of the line of credit, and projected debt coverage and reserve target reserve balances. President Miller requested a presentation from the District's municipal advisors regarding the proposed debt issuance as soon as possible. Minutes of the YLWD Board of Directors Special Meeting Held April 24,2022 at 4:00 p.m. 2 2022-054 Discussion continued regarding the debt coverage and reserve balance analysis, key financial assumptions including proposed rate adjustments and eligible pass-through expenses, and the effect on the average customer's monthly bill. Director Lindsey left the meeting at 6:07 p.m. Vice President Jones requested staff prepare a financial scenario with an approximate 9% sewer rate adjustment rather than 15%. President Miller declared a recess at 6:10 p.m. and reconvened the meeting at 6:18 p.m. 7. ACTION CALENDAR 7.1. Due Process Hearing Regarding Award of Construction Contract for the Hidden Hills Booster Pump Station Improvements Project President Miller opened the hearing at 6:19 p.m. General Counsel Gagen explained the purpose of the hearing and the District's statutory requirements and exemptions related to the competitive bid process. President Miller invited representatives from MMC, Inc. to address the Board. Jay Mehta, CEO of MMC, Inc., and his consultant presented testimony rebutting the unfavorable references provided to the District and against the recommendation to determine that MMC, Inc. is not a responsible bidder. Mr. Mehta and his consultant then responded to questions from the Board. Staff provided an overview of the District's procedures for requesting bid proposals for construction contracts and the bid evaluation and reference check process. Staff also cited a reference provided by the City of Huntington Beach, which was included in the agenda report. President Miller opened the floor to public comment for which there was none. President Miller then closed the hearing at 6:48 p.m. Minutes of the YLWD Board of Directors Special Meeting Held April 24,2022 at 4:00 p.m. 3 2022-055 Director Jones made a motion, seconded by Director DesRoches to determine that MMC, Inc., is not a responsible bidder, so it would not be in the District's best interest to award the project contract to low bidder, MMC, Inc. Instead, it is in the District's best interest to award the contract to second low bidder, Pacific Hydrotech, Corp. as discussed in Item No. 7.2. of this agenda. Motion carried 3-0-0-2 on a roll call vote with Directors Hawkins and Lindsey absent. 7.2. Award of Construction Contract for the Hidden Hills Booster Pump Station Improvements Project Director Jones made a motion, seconded by Director DesRoches, to award the Construction Contract for the Hidden Hills Booster Pump Station Improvements Project to Pacific Hydrotech Corporation for$2,443,910.00, Job Nos. J-2020-20 and J-2018-27. Motion carried 3-0-0-2 on a roll call vote with Directors Hawkins and Lindsey absent. 7.3. Fourth Amendment to the Water and Sewer Facilities Agreement Between the Yorba Linda Water District and North County, BRS, LLC (Now Lennar Homes of California LLC) for the Cielo Vista Development Project Director Jones made a motion, seconded by Director DesRoches, to approve the Fourth Amendment to the Cielo Vista Project Water and Sewer Facilities Agreement dated August 1, 2018, conditioned on the Property Owner's signature to the Fourth Amendment within 30 days of this approval. Motion carried 3-0-0-2 on a roll call vote with Directors Hawkins and Lindsey absent. 6. DISCUSSION ITEMS CONTINUED 6.1. Summary of Draft Budget for Fiscal Year 2022-23, Updated Variable Expenses, Supplies and Services, and Salaries and Related Expenses Staff presented revisions made to the draft budget since the last workshop meeting. President Miller requested staff prepare a financial scenario based on a 10% reduction in water revenue. Discussion touched on revisions made to projected revenue and variable water costs, the consolidated financial summary, and the impact of not funding depreciation. Staff then reviewed the effect of the proposed rate adjustments on the average customer's monthly bill with an option of including eligible pass- through expenses. Staff also presented options for the Board to consider excluding from the draft budget and the resulting impact. Director DesRoches suggested removing or decreasing the draft budget for travel and conference attendance. President Miller requested staff prepare a table identifying the effect of the proposed rate adjustments on a range of Minutes of the YLWD Board of Directors Special Meeting Held April 24,2022 at 4:00 p.m. 4 2022-056 customers' monthly bills whose water consumption was lower and higher than average. Staff then presented a summary sheet listing all the proposed rate adjustments in detail for both water and sewer services. Vice President Jones requested staff report on the number of customers participating in utility bill assistance programs. Discussion followed on the revised draft budget for the 5-year Capital Improvement Plan and the need for updating the WMP. Staff concluded the presentation by listing items requiring follow-up in preparation for the next budget workshop meeting. 8. ADJOURNMENT 8.1. Director DesRoches made a motion, seconded by Director Jones, to adjourn the meeting at 7:36 p.m. Motion carried 3-0-0-2 on a roll call vote with Directors Hawkins and Lindsey absent. Annie Alexander Board Secretary Minutes of the YLWD Board of Directors Special Meeting Held April 24,2022 at 4:00 p.m. 5