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HomeMy WebLinkAbout2012-06-21 - Board of Directors Meeting Minutes 2012-106 ' MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING June 21, 2012 1. CALL TO ORDER The June 21, 2012 special meeting of the Yorba Linda Water District Board of Directors was called to order by President Hawkins at 6:30 p.m. in the Board Room at the District's Administrative Building located at 1717 E Miraloma Avenue in Placentia, California 92870. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Phil Hawkins, President Ken Vecchiarelli, General Manager Gary T. Melton, Vice President Stephen Parker, Finance Manager Michael J. Beverage Art Vega, Interim IT Manager Ric Collett Cindy Botts, Management Analyst Robert R. Kiley Annie Alexander, Executive Secretary OTHER ATTENDEES Nancy Rikel, Councilmember, City of Yorba Linda Eddy Beltran, Senior Counsel, Kidman Law LLP 4. PUBLIC COMMENTS President Hawkins opened the meeting to public comments not related to the proposed water rate increase. No comments were provided at this time. 5. PUBLIC HEARING 5.1. Public Hearing to Consider Proposed Water Rate Increase A. President Opens Public Hearing President Hawkins opened the public hearing at 6:32 p.m. B. Secretary Provides Proof of Public Hearing Notification and Correspondence Mr. Vecchiarelli presented the Board with proof of the public hearing notification mailed to each District customer and reported that a total of 27 written protests had been received, two of which ' were formally retracted. 1 2012-107 Director Beverage requested staff to provide the Board with copies ' of the written protests that were received just prior to the opening of the public hearing. C. Report by General Manager and Finance Manager Mr. Parker provided a PowerPoint presentation summarizing the draft budget for FY 2012/13, projects included in the proposed Capital Improvement Plan for FY 2012/18, the District's current bond ratings, and rationale for the proposed water rate increase and restructuring of the fixed charge rate. This also included a comparison of the District's proposed water rates and meter types with those from other local agencies. D. Public Testimony Daniel Chaney, resident, addressed the Board and read aloud a prepared statement in opposition to the proposed water rate increase. Mr. Chaney commented on the following topics: the District's message regarding the proposed rate increase which was included on customer's bills; the number of written protests from affected property owners required to overturn the proposed rate increase; projected revenue figures contained in the District's 2012 Water Rate Study and budget for FY 2011/12; the restructuring of the fixed charge rate in proportion to meter size; the rationale for ' increasing the water rate contained in the 2012 Water Rate Study; and the District's projected operating expenses, employee salaries and benefits, variable water costs, and public outreach activities. Mr. Chaney concluded his comments by stating that he felt that the District should operate on a budget based on expected revenues verses desired expenses. Jim Brunette, resident, addressed the Board and read aloud a prepared statement in opposition to the proposed water rate increase. Mr. Brunette commented on the amount of water that could be purchased for one cent at the present time, following the proposed rate increase and in the past. Mr. Brunette then questioned the proportionality of the proposed meter capacity- based monthly service charges and the timing in which the District is collecting projected pass through costs. Mr. Brunette then stated that he would be preparing two initiatives. One to reduce the District's water rates and basic service charge by 10% and the other to impose term limits on Directors. Mr. Brunette concluded his comments by asking the Board to forgo the rate increase and reduce District expenses. 2 2012-108 ' Bill Guse, resident, addressed the Board and read aloud a prepared statement. Mr. Guse stated that he had been serving on the District's Citizens Advisory Committee for over 3 years and had received an extensive education regarding YLWD's operations and distribution system. Mr. Guse clarified that he was not speaking for the Committee but as a resident of the District and expressed his appreciation for the efforts of the Board and management. Mr. Guse then commented on the increasing cost of purchasing import water due to issues related to the Sacramento Delta and the Colorado River. Mr. Guse concluded his comments by stating that he was in favor of the proposed rate increase and encouraged those in attendance to continue their conservation efforts. Dennis Anderson, resident, addressed the Board and asked if there were any subsidized rates planned in the proposed rate structure and how are they were going to be paid. Mr. Parker responded to Mr. Anderson's question and stated that there were no subsidies included in the proposed rate structure with the exception of the meter capacity-based service charges. Mr. Parker further stated that the commodity rate is flat and would continue to remain as such. Mr. Vecchiarelli also responded to Mr. Anderson's question and reiterated that there were no subsidies. ' Ron Vanderberg addressed the Board and introduced himself as treasurer for the Grace Evangelical Lutheran Church. Mr. Vanderberg commented on the recession and its impact on religious institutions. He further explained that the proposed change to a meter capacity-based service charge would increase his church's water bill $500 a year. Mr. Vanderberg concluded his comments by asking the Board to consider the effect this change would have on other churches and businesses. Director Beverage asked Mr. Vanderberg what size meter the church currently had. Mr. Vanderberg responded that it was a 2" meter. Director Beverage requested staff to meet with Mr. Vanderberg to consider the possibility of replacing the church's current meter with a smaller one. E. President Closes Public Hearing President Hawkins closed the public hearing at 7:18 p.m. F. Discussion President Hawkins then invited each of the Directors to provide comments. 1 3 2012-109 Director Beverage explained that he had requested staff to create a ' spreadsheet that would demonstrate the effect of the proposed rate increase and restructuring on his most recent water bill. The spreadsheet was displayed on the overhead screen and Mr. Vecchiarelli and Mr. Parker provided an overview of Director Beverage's projected charges for the month of June over the next 3 years should the proposed rate increase be approved. The Board and staff then responded to questions from the audience regarding the results of the demonstration, District efforts to lower expenses, and projects included in the Capital Improvement Plan. Director Melton requested staff to explain the complexities of pumping water through the District's distribution system including associated energy costs. Mr. Vecchiarelli extended an invitation for anyone interested in this topic to attend the next YLWD Citizens Advisory Committee meeting where the Production Division would be providing a presentation regarding the District's distribution system. Mr. Vecchiarelli then provided an overview of the District's water sources, resources required to pump water to various pressure zones, and staff efforts to reduce related expenses while maintaining quality of service. Another resident (name unknown) addressed the Board and stated ' that while she was happy with the improvements the District was making on the water distribution system, she was concerned that the proposed water rate increase would be subsidizing improvements on the sewer collection system. Mr. Vecchiarelli explained that the proposed water rate increase did not include any subsidies for the sewer system. An extended discussion followed between the Board, staff, and members of the audience regarding the District's budget and projected revenues/expenses over the next 5 years. Mr. Parker also briefly demonstrated the District's financial model. Modesto Llanos, resident, commented on his experience serving on the District's Citizens Advisory Committee and his interest in the Capital Improvement Plan. Director Beverage then commented on the District's reserve policy. Mr. Chaney expressed his concern regarding the previous and proposed water rate increases. Director Beverage provided additional remarks regarding the ' history behind the preceding water rate increase, severe drought, and subsequent mandated conservation. 4 2012-110 ' Another resident (name unknown) addressed the Board and expressed her concern regarding the reliability and quality of Southern California's import water sources including the California Aqueduct and the Colorado River. Director Hawkins commented on the substantial time and conscientious effort involved in managing the District's finances. Director Beverage further commented on the proposed rate increase and unfunded mandates. 6. ACTION CALENDAR 6.1. Water Rate Increase and Fixed Charge Rate Restructuring Mr. Parker explained that the Board had held multiple workshops to discuss financial planning and the proposed water rate increase. Staff is recommended that the Board adopt Resolution No. 12-13 setting water rates effective July 1, 2012. Additional proposed rate increases will be acted upon at the time the budgets for FY 2013 through 2015 are considered. ' Director Beverage made a motion, seconded by Director Collett, to adopt Resolution No. 12-13 Setting Water Rates Effective July 1, 2012 and Rescinding Resolution Nos. 07-17, 08-02, 09-15 and 10-13. Motion carried 5-0 on a roll call vote. 7. ADJOURNMENT 7.1. The meeting was adjourned at 8:27 p.m. The next regular meeting of the Board of Directors will be held June 28, 2012 at 6:30 p.m. Ken eth R. Vecchiarelli Board Secretary 1 5