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HomeMy WebLinkAbout2016-04-14 - Board of Directors Meeting Minutes 2016-051 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Thursday, April 14, 2016, 8:30 a.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The April 14, 2016 meeting of the Yorba Linda Water District Board of Directors was called to order by President Collett at 8:30 a.m. The meeting was held in the Board Room at the District's Administration Building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. PLEDGE OF ALLEGIANCE President Collett led the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Ric Collett, President Marc Marcantonio, Gen Mgr (Arrived at 10:15 a.m.) 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 Damon Micalizzi, Public Information Manager Art Vega, Information Technology Manager Annie Alexander, Executive Secretary Cindy Botts, Water Cons Supvr/Mgmt Analyst ALSO PRESENT Art Kidman, Partner, Kidman Law LLP Brett Barbre, Director, MWDSC and MWDOC Peggy Huang, Mayor Pro Tern, City of Yorba Linda Ben Parker, Resident 4. ADDITIONS/DELETIONS TO THE AGENDA None. Minutes of the YLWD Board of Directors Regular Meeting Held April 14, 2016 at 8:30 a.m. 1 2016-052 5. PUBLIC COMMENTS Director Barbre reported on action taken at a previous MWDSC Board meeting regarding rates, new litigation involving San Diego County Water Authority, water being released into the ocean in northern California, the status of proposed legislation, and a recent decision made by OC LAFCO to approve East Orange County Water District's application to provide sewer related services to Sewer Area 7. 6. CONSENT CALENDAR Director Kiley made a motion, seconded by Director Hawkins, to approve the Consent Calendar. Motion carried 5-0. 6.1. Minutes of the Board of Directors Regular Meeting held March 10, 2016 Recommendation: That the Board of Directors approve the minutes as presented. 6.2. Minutes of the Board of Directors Workshop Meeting held March 17, 2016 Recommendation: That the Board of Directors approve the minutes as presented. 6.3. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of$500,528.14. 7. ACTION CALENDAR 7.1. Proposed Modification to Administrative Penalty Structure Previously Established to Comply with State of California Mandate Mrs. Lugo explained that in response to Governor Brown's executive order and the subsequent emergency drought regulations adopted by the State Water Resources Control Board (SWRCB), the Board had previously adopted an ordinance imposing administrative penalties on District customers should their consumption exceed certain amounts. Recently, the SWRCB adopted an extended and revised emergency drought regulation continuing the conservation mandate through October 2016 while providing suppliers more flexibility in meeting their assigned percentage, including potential downward adjustments ranging from 2% to a maximum of 8%. Staff submitted an application requesting the maximum adjustment of 8% and feels optimistic that the District has satisfied all requirements in this regard. Additionally, the District and its customers have met the State's mandated 36% reduction in water usage as of March 1 , 2016. In recognition of these outstanding efforts, the Board Minutes of the YLWD Board of Directors Regular Meeting Held April 14,2016 at 8:30 a.m. 2 2016-053 has expressed a desire to repeal the current ordinance and replace it with another containing a more flexible penalty structure. Mrs. Lugo noted that funds collected pursuant to the ordinance would not be collected for the purpose of recovering the costs of providing water service and that they'd be segregated into a fund which wouldn't be used to pay the costs of providing water service. Director Melton stated he felt it was the Board's intention that the administrative penalties be temporary in nature. He also stated that due to the potential adjustment in the District's mandated conservation percentage as well as customers' exceptional conservation efforts, he felt it was the right time to adopt a more flexible administrative penalty structure. Director Beverage noted that this process began approximately 6 weeks ago. Directors Hawkins and Kiley stated that they agreed with Director Melton's comments. Mrs. Lugo then responded to questions from the Board regarding the proposed effective date of the new ordinance and the meter reading and billing schedules. Mr. Ben Parker, resident, commented on the "Use of Penalties" sections in the current and proposed ordinance, a Public Records Act request he had previously submitted, and asked when a report regarding the collection of administrative penalty revenue and associated expenditures would be made available. Mrs. Lugo briefly explained what activities and were supported by funds collected pursuant to the ordinance. She also stated that an associated financial report would be presented to the Board at a workshop meeting scheduled April 21, 2016. Mr. Parker also commented on the amount of administrative penalties collected. Mrs. Lugo provided a brief overview of the District's FY 2015/16 budget in relation to planning for potential penalties from the SWRCB. President Collett reiterated that a financial report regarding the collection of administrative penalties and associated expenditures would be discussed at the April 21, 2016 workshop meeting and encouraged Mr. Parker to attend. Mr. DeCriscio then responded to questions from the Board regarding the District's leak detection activities. Director Hawkins made a motion, seconded by Director Kiley, to adopt Ordinance No. 16-01 repealing Ordinance No. 15-01 and adopting a flexible water shortage administrative penalty structure. Motion carried 5-0 on a Roll Call vote. Minutes of the YLWD Board of Directors Regular Meeting Held April 14, 2016 at 8:30 a.m. 3 2016-054 Director Melton made a motion, seconded by Director Beverage, in support of setting the stage for Ordinance No. 16-01 at "Stage 1 (No Penalties)". Motion carried 5-0. Director Beverage made a motion, seconded by Director Hawkins, to enact Stage 1 of Ordinance No. 16-01 effective April 29, 2016 which will be reflected on all customer billings beginning the first billing cycle in June 2016. Motion carried 5-0. 7.2. Proposed Budgeted Positions for Fiscal Year 2016-2017 Mrs. Knight explained that the Board would soon be considering the FY 2016/17 budget, including funding for proposed positions for that same time period. Staff is recommending that the Board consider adopting a budget that would fund the following: eighty (80) regular full-time positions; two (2) limited-term full-time positions (from July 1 — October 31, 2016); and one (1) temporary part-time position (from July 1 — October 31, 2016). One of the limited-term full time positions would be an Office Clerk and the other a Water Conservation Representative. These positions would be replacing three (3) temporary part-time Water Conservation Representatives. Additionally, it is proposed that one (1) Maintenance Distribution Operator II position be reclassified to a Maintenance Distribution Operator III. Mrs. Knight further explained that staff was in the process of assessing the District's long-term staffing needs, including the organization structure, which would be discussed at a future strategic plan workshop. Mrs. Knight and Mrs. Lugo then responded to questions from the Board related to the limited term positions, the timing of presenting this resolution for consideration, and the process for making modifications to the budgeted positions if needed. Director Melton made a motion, seconded by Director Kiley, to adopt Resolution No. 16-01 approving the budgeted positions for Fiscal Year 2016-2017 and rescinding Resolution No. 15-15. Motion carried 5-0 on a Roll Call vote. 7.3. Requested Input Regarding MWDOC's Water Rate Study Mr. Conklin explained that historically, MWDOC's rates were originally tax- based and consisted of variable and fixed charges. The variable component was a fee based on the volume of water purchased by each member agency. The fixed component was based on the number of retail meters in each member agency's service area. The Settlement Agreement, which expires in June 2016, implemented a migration to a 100% fixed rate structure which was completed this fiscal year. As a result of this new structure, OCWD does not pay any fees being that it is a regional groundwater agency and has no retail meters. MWDOC has requested the Board's opinion regarding the equity of this situation as well Minutes of the YLWD Board of Directors Regular Meeting Held April 14,2016 at 8:30 a.m. 4 2016-055 as the method for the potential allocation of fees. The Board then discussed the situation with OCWD and the proposed rate structure options. Director Melton made a motion, seconded by Director Kiley, to direct staff to provide a written response to MWDOC indicating that the Board of Directors was in favor of Scenario 1B over Scenario 1A in relation to MWDOC's Water Rate Study and the allocation of costs to OCWD. Motion carried 5-0. 8. DISCUSSION ITEMS 8.1. Line of Credit Agreement Between Wells Fargo Bank and Yorba Linda Water District Mrs. Lugo explained that in 2012, the District had entered into an agreement with Wells Fargo for a line of credit (LOC) in the amount of $7M. Within the agreement is an option to extend the maturity date. In 2013, the District exercised this option and extended the maturity date to September 2016. To date, the LOC has been drawn down in the amount of $6.4M to fund capital projects and staff expects that the residual will be expended by the end of the current fiscal year. In light of recent events, staff is planning to bring a discussion item to the Board at the next workshop meeting regarding the possibility of extending the maturity date one additional year. This would afford the Board with an opportunity to bundle all or a portion of the balance in any future refunding process of the 2008 Certificates of Participation. Mr. Ben Parker, resident, commented on the potential benefits of extending the LOC. Mrs. Lugo then responded to questions from the Board regarding any potential penalties for extending the LOC and capital projects being funded using the LOC. 8.2. Safe Keeping Services by Pershing for Investments Held at First Empire Mrs. Lugo explained that same as last year, the District's current auditing firm would be performing a review of internal controls and the relative processes and procedures of and between staff and external relations. As part of this process, they will be requesting letters of confirmation from entities holding substantial funds (such as financial institutions) and vendors for which the District has significant expenditures during the preceding fiscal year. During the audit process last fiscal year, the District experienced an issue with obtaining a letter of confirmation from Pershing, the holder of District investments through First Empire (the broker-dealer). While a comment regarding this matter was included in the FY 2014/15 Minutes of the YLWD Board of Directors Regular Meeting Held April 14, 2016 at 8:30 a.m. 5 2016-056 audit documents, it has no effect on the auditors' opinion of the financial statements. Mrs. Lugo further explained that it was likely this comment would be included in the FY 2015/16 audit documents should the District's investments continue to be held in the same manner. Mrs. Lugo then read aloud the comment contained in the FY 2014/15 audit documents and clarified that the District's custodial agreement is with First Empire and not directly with Pershing. Additionally, the District does not pay safe keeping fees to Pershing for these services. Staff is bringing this matter to the Board's attention in order to obtain feedback regarding any desired action to be considered at a future meeting. Mrs. Lugo then responded to questions from the Board and noted that should the District determine to move its investments to another safe keeper, the estimated fees for doing so are $1,700 to $2,500 per month. She also stated that Pershing serves as the safe keeper for multiple municipalities using the same type of arrangement and that maintaining the status quo in this regard will have no bearing on the auditors' opinion of the District's financial statements. No action regarding this matter was requested by the Board at this time. 9. REPORTS, INFORMATION ITEMS, AND COMMENTS 9.1. President's Report None. 9.2. Directors' Reports • ISDOC — March 31, 0216 (Hawkins/Kiley) • MWDOC Elected Officials' Forum — April 7, 2016 (Beverage/Hawkins) Directors Hawkins, Beverage and Kiley reported on their attendance at the above listed events. 9.3. General Manager's Report In Mr. Marcantonio's absence, Mr. Conklin asked each of the managers to provide a report regarding activities within their respective departments. He then reported on the activities of the Engineering department. 9.4. General Counsel's Report Mr. Kidman reported that the recall petition filed against two of the Directors was formally in circulation. He stated that officially, the District has no position relative to the merits of the recall petition. However, the District does have a financial interest in the matter as there will be certain costs for which YLWD will be responsible associated with the qualification and recall election processes. Those costs will be substantially magnified should the petition not be qualified in enough time to be consolidated with the November election as a special election would need to be called. Minutes of the YLWD Board of Directors Regular Meeting Held April 14,2016 at 8:30 a.m. 6 2016-057 Mr. Kidman then instructed the Board that they must not request staff assistance in connection with the recall petition or the potential recall election. He also stated that the District could not prevent its employees from exercising their rights as citizens should they decide to participate in supporting or opposing a member of the Board. However, any such action performed while serving in their official capacity as a District employee should be subject to discipline in accordance with established policy. Additionally, any distribution of information related to the recall petition and potential recall election needs to come from the General Manager and the Public Information Manager in order to ensure compliance with the law. Mr. Kidman then reported that members of staff had been receiving some unpleasant mail from persons who are opposed to actions taken by the Board. Those that were threatening have been turned over to law enforcement. He explained that while citizens do have the right of free speech, there is a limit when it comes to threats of harm to other individuals. Some of the correspondence received has fallen into this category. In addition, some District employees have been subjected to harassment and threatening behavior from members of the public. Mr. Kidman advised that District staff should report any such encounters to their supervisors and in turn to appropriate authorities if necessary. Mr. Kidman then concluded his comments by saying that there was going to be a Closed Session to discuss pending litigation during which no discussion of the recall petition or potential recall election would take place. President Collett thanked Mr. Kidman and commented on the content of the letters sent to staff. 9.5. Future Agenda Items and Staff Tasks None. 10. COMMITTEE REPORTS 10.1. Interagency Committee with MWDOC and OCWD (Collett / Melton) • Minutes of the meeting held March 22, 2016 at 4:00 p.m. were provided in the agenda packet. • The next meeting is scheduled to be held May 24, 2016 at 4:00 p.m. Minutes of the YLWD Board of Directors Regular Meeting Held April 14,2016 at 8:30 a.m. 7 2016-058 10.2. Joint Agency Committee with City of Yorba Linda (Collett / Beverage) • Minutes of the meeting held March 21, 2016 at 9:00 a.m. were provided in the agenda packet. • The next meeting is scheduled to be held April 26, 2016 at 9:00 a.m. at YL City Hall. 10.3. Interagency Committee with City of Placentia and Golden State Water Co. (Collett / Kiley) • The next meeting is scheduled to be held May 9, 2016 at 3:00 p.m. at YLWD. 10.4. Citizens Advisory Committee (Melton) • Minutes of the meeting held March 28, 2016 at 8:30 a.m. were provided in the agenda packet. • The next meeting is scheduled to be held April 25, 2016 at 8:30 a.m. Director Melton stated that Director Beverage would be attending this meeting in this place. 11. INTERGOVERNMENTAL MEETINGS The Directors and staff reported on their attendance at the following meetings. 11.1. WACO —April 1, 2016 (Hawkins/Kiley) 11.2. YL City Council —April 5, 2016 (Beverage) 11.3. MWDOC Board —April 6, 2016 (Melton) 11.4. OCSD Operations Committee —April 6, 2016 (Kiley/Beverage) 11.5. OCWD Board —April 6, 2016 (Staff) 11.6. LAFCO —April 13, 2016 (Beverage —As Needed) 11.7. YL Planning Commission —April 13, 2016 (Melton) Minutes of the YLWD Board of Directors Regular Meeting Held April 14,2016 at 8:30 a.m. 8 2016-059 12. BOARD OF DIRECTORS ACTIVITY CALENDAR 12.1. Meetings from April 15, 2016 — May 31, 2016 The Board reviewed the activity calendar and made no changes. Mr. Marcantonio joined the meeting at this time and reported that he would be in Sacramento the following week to testify during SWRCB's meeting. Staff also sent a letter to SWRCB providing input regarding future potential modifications of the emergency regulations. 13. CLOSED SESSION The meeting was adjourned to Closed Session at 10:17 a.m. All Directors were present. Also present were Messrs. Kidman, Marcantonio, and Micalizzi. 13.1. Conference with Legal Counsel — Pending Litigation Pursuant to Subdivision (a) of Section 54956.9 of the California Government Code Name of Case: Kent Ebinger and Yorba Linda Taxpayers Association vs. Yorba Linda Water District (OC Superior Court — Case No. 00829548) The Board reconvened in Open Session at 10:55 a.m. No action was taken during Closed Session that was required to be reported under the Brown Act. 14. ADJOURNMENT 14.1. The meeting was adjourned at 10:56 a.m. A Board of Directors Workshop Meeting is scheduled on Thursday, April 21, 2016 at 10:00 a.m. The next Regular Board of Directors Meeting will be held Thursday, April 28, 2016 at 8:30 a.m. nnie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held April 14,2016 at 8:30 a.m. 9