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HomeMy WebLinkAbout2016-08-25 - Board of Directors Meeting Minutes 2016-162 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Thursday, August 25, 2016, 8:30 a.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The August 25, 2016 Regular 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 Steve Conklin, Engineering Manager Mike Beverage, Vice President John DeCriscio, Operations Manager Phil Hawkins Gina Knight, Human.Resources/Risk Manager Gary Melton Delia Lugo, Finance Manager Annie Alexander, Executive Secretary DIRECTORS ABSENT Cindy Botts, Water Cons Supvr/Mgmt Analyst Bob Kiley Laurie McAllaster, Records Mgmt Admin Malissa Muttaraid, Public Affairs Rep Rick Walkemeyer, Info Systems Admin ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP Gene Hernandez, Councilmember, City of Yorba Linda Robert Porr, Senior Vice President, Fieldman Rolapp & Associates 4. ADDITIONS/DELETIONS TO THE AGENDA 4.1. Pay Off of Line of Credit with Wells Fargo Bank Mr. Conklin requested to add this matter to the agenda as Item No. 7.A. as relevant information came to the District's attention subsequent to posting the agenda which required immediate action. Minutes of the YLWD Board of Directors Regular Meeting Held August 25,2016 at 8:30 a.m. 1 2016-163 Director Beverage made a motion, seconded by Director Hawkins, to add this matter to the agenda as Item No. 7.A. as relevant information came to the District's attention subsequent to posting the agenda which requires immediate action. Motion carried 4-0-0-1 with Director Kiley being absent. 5. INTRODUCTIONS AND PRESENTATIONS 5.1. MWDSC/MWDOC Director's Report None. 6. PUBLIC COMMENTS None. 7. CONSENT CALENDAR Director Beverage made a motion, seconded by Director Hawkins, to approve the Consent Calendar. Motion carried 4-0-0-1 with Director Kiley being absent. 7.1. Minutes of the Board of Directors Special Meeting held June 14, 2016 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of$1,262,552.16. 7. ACTION CALENDAR 7.A. Pay Off of Line of Credit with Wells Fargo Bank Mrs. Lugo explained that she had received correspondence from Wells Fargo requesting that the District pay off the line of credit (LOC) or proceed with its request to extend the maturity date. She further explained that in September 2012, the District had entered into a $7M LOC with Wells Fargo. The LOC agreement states that borrowings are due and payable within 3 years, with the option of two single year extensions of the maturity date. During FY 2014/15, the District exercised its first option to extend the maturity date to September 30, 2016. In conjunction with the budget process for FY 2016/17, staff contacted Wells Fargo and expressed an interest in exercising the second option to extend the maturity date to September 24, 2017. In August, staff received a quote from Wells Fargo stating that the cost of extending the LOC's maturity date was estimated to be up to $25K. Additionally, Wells Fargo requested that the District pay down the principal amount by $3.45M and Minutes of the YLWD Board of Directors Regular Meeting Held August 25,2016 at 8:30 a.m. 2 2016-164 make monthly payments in the amount of $200K for the next year, followed up with a balloon payment of remaining principal on the new maturity date. Staff performed an analysis of the projected fees and interest expense involved with extending the maturity date versus forgoing the request and paying off the outstanding principal by September 30, 2016. Staff also contacted Mr. Robert`Porr, the District's financial advisor from Fieldman Rolapp, to discuss the cost/benefit analysis in relation to YLWD's future review by Fitch Ratings and the potential advance refunding of the 2008 Certificates of Participation (COP). Either option will require the District to draw down funds from the Water Capital Projects Reserve, effecting YLWD's overall projected average daily cash on hand for budgeted operating and capital expenses, as well as annual debt service principal and interest payments. Based on analysis performed by and discussions with Mr. Porr, the option with the greatest benefit to the District would be to pay off the full principal amount due on the LOC by the end of September. Mr. Porr then responded to questions from the Board regarding the impact on the District's reserves and debt ratio. Mrs. Lugo noted that the District would still have enough days of cash on hand for the next 2 fiscal years in order to maintain its current ratings with Fitch and Standard & Poors. Mr. Ben Parker, resident, asked for clarification regarding the relevant information which came to the District's attention subsequent to posting of the agenda. Mrs. Lugo explained that due to timing issues, Wells Fargo needed the Board to make a decision by the end of the month. Mr. Parker then commented on the financial analysis included with the staff report and suggested that the Board consider using the $7M to pay off a portion of the District's bond debt rather than paying off the LOC. Mr. Poor provided an overview of the process, costs and analysis associated with Mr. Parker's suggestion and why Fieldman Rolapp was recommending that the District pay off the LOC. The Board and staff discussed consideration of obtaining another line of credit or short term loans during the strategic planning process in early 2017. Mr. Parker then commented on the terms of the agreement with Wells Fargo and previous efforts to refinance the 2008 COP. He also suggested that the Board consider acquiring bonds to pay off the LOC. Minutes of the YLWD Board of Directors Regular Meeting Held August 25,2016 at 8:30 a.m. 3 2016-165 Director Hawkins made motion, seconded by Director Beverage, to authorize staff to pay off the outstanding $7 million principal, accrued interest, and affiliated fees pertaining to the 2012 Line of Credit Agreement between Yorba Linda Water District and Wells Fargo Bank which is due and payable on September 30, 2016. The Board requested that at a future meeting, staff utilize the financial model to demonstrate various financial scenarios including one or more of the following factors: pay off of the LOC; $9 reduction from the current water rate for 1" meters; pay off of the 2012A COP; and reducing reserves by $5M. Motion carried 4-0-0-1 with Director Kiley being absent. 8. REPORTS, INFORMATION ITEMS, AND COMMENTS 8.1. President's Report None. 8.2. Directors' Reports Directors Hawkins and Melton reported on their attendance at the following events. Director Kiley was not present to provide his report. • Gun Club Road Linear Park Ribbon Cutting Ceremony —August 13, 2016 • OCWD/OCSD Community Open House —August 13, 2016 8.3. General Manager's Report Mr. Conklin expressed appreciation for the City of Yorba's cooperative efforts associated with the Yorba Linda Blvd Pump Station which needed to be constructed in advance of Gun Club Road Linear Park. He then asked each of the managers or their designees to provide a report regarding activities within their respective departments. Mr. DeCriscio reported on water demands during the previous month. Mrs. Lugo reported that the District's auditors were on site conducting field work for the FY 2015/16 audit. Following this meeting, staff will be contacting Wells Fargo regarding next steps for paying off the LOC. Mr. Walkemeyer reported that IT had fixed an issue with the District's mail server over the weekend. Minutes of the YLWD Board of Directors Regular Meeting Held August 25,2016 at 8:30 a.m. 4 2016-166 Mrs. Knight reported on the status of an injured employee. She noted that ACWA/JPIA would be reimbursing the District approximately $10K for the damaged vehicle. - Mrs. Botts reported on the status of legislative affairs. She stated that staff was continuing to analyze the District's fuel modification zone areas. This will allow the District to apply for credits from the State Water Resources Control Board (SWRCB) in the event that water rationing is imposed. She also reported that the website update would be live soon, that staff was receiving positive comments on the latest edition of the newsletter, and that SWRCB had approved the District's self-certification application for a 0% conservation mandate. Mr. Conklin reported on the status of various construction projects and noted that the District's lease agreement for the Well 22 site would be considered at OCWD's Property Management Committee meeting ,the next day. 8.4. General Counsel's Report None. 8.5. Future Agenda Items and Staff Tasks None. 9. COMMITTEE REPORTS 9.1. Interagency Committee with MWDOC and OCWD (Collett / Melton) • Next meeting is scheduled September 27, 2016 at 4:00 p.m. 9.2. Joint Agency Committee with City of Yorba Linda (Collett / Beverage) • Minutes of the meeting held August 23, 2016 at 11:00 a.m. will be provided when available. Director Beverage provided a brief report regarding matters discussed during the meeting including approval of the Districts self-certification application, options for use of administrative penalties, and water conservation programs and incentives for District customers. • Next meeting is scheduled September 20, 2016 at 10:00 a.m. Minutes of the YLWD Board of Directors Regular Meeting Held August 25, 2016 at 8:30 a.m. - 5 2016-167 9.3. Interagency Committee with City of Placentia and Golden State Water Company (Collett / Kiley) • Minutes of the meeting held August 9, 2016 at 4:00 p.m. were provided in the agenda packet. ■ Next meeting is yet to be scheduled. 9.4. Citizens Advisory Committee (Melton) ■ Next meeting is scheduled August 29, 2016 at 8:30 a.m. 10. INTERGOVERNMENTAL MEETINGS 10.1. MWDOC Board —August 17, 2016 (Staff) Staff did not attend this meeting. 10.2. OCSD Board —August 24, 2016 (Kiley/Beverage) Director Kiley was not present to provide a report on this meeting. 11. BOARD OF DIRECTORS ACTIVITY CALENDAR 11.1. Meetings from August 26, 2016 — September 30, 2016 The Board reviewed the activity calendar and made no changes. 12. CLOSED SESSION The meeting was adjourned to Closed Session at 9:07 a.m. All Directors in attendance were present. Also present was Mr. Gagen and Mrs. Knight. 12.1. 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) 12.2. Conference with Legal Counsel — Pending Litigation Pursuant to Subdivision (a) of Section 54956.9 of the California Government Code Name of Case: Irvine Ranch Water District vs. Orange County Water District (OC Superior Court — Case No. 00858584) Minutes of the YLWD Board of Directors Regular Meeting Held August 25, 2016 at 8:30 a.m. 6 2016-168 12.3. Public Employee Performance Evaluation Pursuant to Section 54957 of the California Government Code . Title: General Manager The Board reconvened in Open Session at 9:40 a.m. No action was taken during Closed Session that was required to be reported under the Brown Act. 13. ADJOURNMENT 13.1. The meeting was adjourned at 9:41 a.m. The next Regular Board of Directors Meeting will be held Thursday, September 8, 2016 at 8:30 a.m. Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held August 25,2016 at 8:30 a.m. 7