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HomeMy WebLinkAbout2015-09-17 - Board of Directors Meeting Minutes 2015-156 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Thursday, September 17, 2015, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The September 17, 2015 Yorba Linda Water District Board of Directors Special Meeting was called to order by President Collett at 6:31 p.m. The meeting was held in the Board/Training Room at the District's Administration building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. PLEDGE OF ALLEGIANCE Director Beverage led the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Ric Collett, President Marc Marcantonio, General Manager Michael J. Beverage, Vice President Steve Conklin, Engineering Manager Phil Hawkins John DeCriscio, Operations Manager Robert R. Kiley Gina Knight, Human Resources/Risk Manager Gary T. Melton Delia Lugo, Finance Manager (Arrived at 9:39 p.m.) Damon Micalizzi, Public Information Manager Annie Alexander, Executive Secretary OTHER ATTENDEES Art Kidman, Partner, Kidman Law LLP Sanjay Gaur, Vice President, Raftelis Financial Consultants 4. PUBLIC COMMENTS President Collett briefly explained the process for providing public comments during the Public Hearing. No public comments were provided at this time. 5. PUBLIC HEARING 5.1. Opening of Hearing by Presiding Officer President Collett opened the Public Hearing at 6:33 a.m. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17,2015 at 6:30 p.m. 1 2015-157 5.2. Verification of Notice of Hearing Provided by Board Secretary Mr. Marc Marcantonio presented the Board with verification that a Notice of Public Hearing was mailed on July 31, 2015. The notice was sent to the property owners of all parcels (a total of 27,366) within the District's service area as identified by the Orange County Auditor-Controller Property Tax Unit. A copy of this verification will be retained in the District's records in accordance with established policy. 5.3. Reports by General Manager, Staff and/or Consultant Mr. Marcantonio asked Mr. John DeCriscio to provide the audience with instructions in the event of an emergency. Mr. Marcantonio then provided the Board with a PowerPoint presentation regarding the proposed rate change. He touched on the legal responsibilities of the Board related to the collection of sufficient rates and charges as well as the District's funding requirements and current business model. Mr. Marcantonio then provided an overview of the District's plan to gradually modify its business model prior to the Governor's declaration of a drought emergency. He also described the subsequent regulations established by the State Water Resources Control Board (SWRCB) and their impact on the District. He further explained that the State's regulations forced the District to consider changing its business model more quickly than expected. Following this determination, the District hired a financial consultant to conduct a water and wastewater rate study and provide recommendations to the Board. Mr. Marcantonio stated that the results from this rate study would be presented by the consultant separately. He then provided information regarding Board/employee compensation and benefits, recent cost saving measures, future outlook regarding the State's drought emergency regulations, and various awards received by the District. Mr. Marcantonio introduced Mr. Sanjay Gaur, Vice President of Raftelis Financial Consultants, who provided a PowerPoint presentation to the Board regarding the water and wastewater rate study report. Mr. Gaur reviewed the financial challenges impacting the District due to the drought and water conservation mandates implemented by the SWRCB. Mr. Gaur then provided an overview of industry standard financial policies as related to reserve balances and debt coverage ratios, as well as projected water sales through FY 2020. He also reviewed the District's projected financial condition with pass-through costs and no revenue adjustment, and described the associated consequences. Mr. Gaur then reviewed the proposed financial plans, including a revenue adjustment which would cover the cost of service, recommended reserve balances, and debt coverage ratios. He also provided an overview of the proposed water and sewer rates and the financial impact on various types of customers. Mr. Gaur then responded to questions from the Board. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17,2015 at 6:30 p.m. 2 2015-158 5.4. Comments from the Public Speaking In Favor of and/or Against the Issue The following individuals addressed the Board: Mr. David Ramocinski, resident, spoke against the proposed rate change and commented on a previous article published in the Orange County Register and events related to the Freeway Complex Fire. Mr. Randy Holbrook, resident, spoke against the proposed rate change and its impact on residents and local government agencies. Ms. Samantha Pepin, resident, spoke regarding the process for obtaining rebates for rain barrels, educating residents and local government agencies regarding the use of these barrels, and the District's water conservation representatives. Mr. Peter J. Ford, resident, spoke regarding the proposed rate change, the District's 36% conservation mandate and the proposed change in the District's business model. Ms. Judith Harris, resident, spoke regarding the importance of water storage and the presentation provided at the beginning of the meeting. Mr. Noel Incley, resident, spoke regarding the proposed rate change, tiered rate structures and reports he previously submitted regarding water waste. Mr. Bill Guse, resident, spoke regarding his experience serving on the District's Citizens Advisory Committee and in favor of the proposed rate change. Dr. Jeff Decker, resident, spoke regarding the water and wastewater rate study report, the District's reserves, and against the proposed rate change. Mr. Bruce Anderson, resident, spoke against the proposed rate change and commented on his personal conservation efforts and the District's budget. Mr. Jon Hansen, resident, spoke against the proposed rate change. He also commented on the District's budget, employee salaries and historical water sales. Mr. Ed Rakochy, resident, spoke against the proposed rate change. He also commented on the time of the regularly scheduled Board meetings and the minutes and audio/video recordings of these same meetings. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17,2015 at 6:30 p.m. 3 2015-159 Ms. Linda Patterson, resident, spoke against the proposed rate change and commented on District employee salaries. Mr. Fred Yarak, resident, spoke against the proposed rate change and commented on rates at other water districts. Mr. Dan Chaney, resident, spoke against the proposed rate change and commented on previous rate hearings, the current drought, and the District's budget Mr. Bob Wren, resident, spoke regarding his personal conservation efforts and public service. He also commented on the District's fixed costs and the proposed rate change. Mr. Mike Benz, resident, demonstrated against the proposed rate change. Mr. Bob LeVay, resident, spoke against the propose rate change. He also commented on his previous water bills, potential cost cutting measures, and the impact on residents with fixed incomes. Mr. Robert Schiffmacher, resident, commented on the District's website, the proposed rate change and potential cost cutting measures. Mr. Art Basehart, resident, commented on the proposed rate change and community outreach efforts. Mr. Dennis Fitzpatrick, resident, commented on car wash water recovery systems, his personal conservation efforts, and the recycling of grey water. Mr. Ron Ricks, resident, spoke against the proposed rate change and commented on an alternate rate structure. Mr. Eddy Jackson, resident, spoke against the proposed rate change. He also commented on the District's budget, the water and wastewater rate study, and the protest letters submitted against the proposed rate change. Ms. Kristine Dane, resident, spoke regarding employee benefit liabilities, revenue stability, and potential cost cutting measures. Mr. Rob Hunter, General Manager for Municipal Water District of Orange County, spoke regarding the state's conservation mandate and its financial impact on local water agencies. He also spoke regarding the differences between operating a water utility versus a commercial business. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17,2015 at 6:30 p.m. 4 2015-160 Mr. Al Nederhood, resident, spoke regarding transparency, the District's budget workshop meetings, Citizens Advisory Committee, employee benefits and turnover, and the cost for sewer services. Mr. Frank Gruder, resident, spoke regarding potential cost cutting measures, the water and wastewater rate study, community outreach and education, and the Citizens Advisory Committee. Ms. Courtney Hayes, resident, spoke regarding low water users and a tiered rate structure. Another resident, (name unknown), spoke against the proposed rate change. She also commented on her personal conservation efforts, the purpose of the rate change, and the Freeway Complex Fire. Mr. Ben Otten, resident, spoke regarding the conservation mandate and the resulting reduction in water sales, new construction in the community, and long term planning for recurring drought conditions. Mr. Ed Gunderson, resident, spoke regarding the proposed rate change. He also commented on the budget, an organization he belongs to, and the protest letters submitted against the proposed rate change. Mr. Charles Tavia, resident, spoke regarding the District's Capital Improvement Program and potential cost cutting measures. Ms. Kathy Otten, resident, spoke regarding her personal conservation efforts and the conservation mandate. Given that no other individuals wished to speak, President Collett closed public comments regarding this matter at 9:10 p.m. 5.5. Receipt of Written Communications by the Public President Collett indicated that any additional written communications or protests against the proposed rate change would need to be submitted at this time. No other communications were received. 5.6. Closing of Hearing by Presiding Officer President Collett closed the public hearing at 9:11 p.m. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17,2015 at 6:30 p.m. 5 2015-161 6. RECESS 6.1. Recess and Staff Validation/Tabulation of Written Protests Received Prior to Closing of the Public Hearing A recess was declared at 9:12 p.m. The meeting was reconvened at 9:39 p.m. President Collett stated that Mrs. Delia Lugo would provide a statement regarding the validation/tabulation of written protests. Mrs. Lugo then read a declaration summarized as follows: Pursuant to and in compliance with Proposition 218 (California Constitution Art. XIII D), the District on July 31, 2015 mailed a notice of water and sewer rate increase to all property owners within the District's service area which included the proposed water and sewer rates for FY 2015/16, FY 2016/17, FY 2017/18, FY 2018/19, and FY 2019/20. As required by Prop 218, notices were sent to the property owners at their addresses that appear on the last equalized property assessment roll of the County of Orange as provided by the Orange County Auditor- Controller Property Tax Unit. According to the Orange County Auditor- Controller Property Tax Unit the total number of parcels in the District's service area is 27,366. Prop 218 prohibits the increase if a majority protest exists (protests received from property owners representing 13,684 parcels). As of September 17, 2015 at 3:30 p.m., there were 1,715 valid protests. After 3:30 p.m. on September 17, 2015 and before the close of the public hearing, approximately 6,100 letters were received. These letters have not been validated as protests. Even if the approximately 6,100 letters are counted as valid protests, the total amount of protests would total approximately 7,815, which would not constitute a majority protest. A copy of the declaration in its entirety will be retained in the District's records in accordance with established policy. President Collett stated that the process of counting the letters received after 3:30 p.m. was videotaped and witnessed by the District's legal counsel. Minutes of the YLWD Board of Directors Special Meeting Held Thursday, September 17,2015 at 6:30 p.m. 6 2015-162 7. ACTION CALENDAR 7.1. Board Discussion and Action Regarding Proposed Water and Sewer Rate Increase President Collett invited the Board to comment regarding this matter. Director Hawkins commented on District employee salaries, tiered rate structures, the modification of the District's business model, and changes in the water utility industry. Director Kiley commented on the time of the regularly scheduled Board meetings, the state's conservation mandate, and the purpose of hiring a consultant to conduct the water and wastewater rate study. Director Melton commented on the process of determining the proposed rate changes, the purpose of hiring a consultant to conduct the water and the wastewater rate study. Director Beverage commented on the state's conservation mandate and drought emergency regulations, and the impact on the District's budgetary process. President Collett commented on the District's participation in Orange County Water District's grey water recycling program, the state's water storage situation, and the complexities of managing a water utility. Director Collett made a motion, seconded by Director Beverage, to (1) adopt Resolution No. 15-22 Setting Water Rates Effective October 1, 2015 and Rescinding Resolution No. 14-07; and (2) adopt Resolution No. 15-23 Setting Sewer Rates Effective October 1, 2015 and Rescinding Resolution Nos. 07-13 and 11-17. Motion carried 5-0 on a Roll Call vote. 8. ADJOURNMENT 8.1. The meeting was adjourned at 10:05 p.m. The next Regular Board of Directors Meeting will be held Thursday, September 24, 2015 at 8:30 a.m. , Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Special Meeting Held Thursday,September 17,2015 at 6:30 p.m. 7