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HomeMy WebLinkAbout2016-11-21 - Board of Directors Meeting Minutes 2016-213 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Monday, November 21, 2016, 8:30 a.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The November 21, 2016 Regular Meeting of the Yorba Linda Water District Board of Directors was called to order by President Collett at 8:31 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 Vice President Beverage led the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Ric Collett, President Marc Marcantonio, General Manager Mike Beverage, Vice President Steve Conklin, Engineering Manager Phil Hawkins, Director Gina Knight, HR/Risk and Safety Manager Bob Kiley, Director Delia Lugo, Finance Manager Gary Melton, Director Damon Micalizzi, Public Information Manager Art Vega, Information Technology Manager Annie Alexander, Executive Secretary Cindy Botts, Water Consv Sup/Mgmt Analyst Cat Erbacher, Water Conservation Rep Javier Martinez, Water Production Supt Laurie McAllaster, Records Mgmt Admin Kelly McCann, Senior Accountant Ken Mendum, Water Maintenance Supt Malissa Muttaraid, Public Affairs Representative Rachel Padilla, Customer Service Supervisor ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP Gene Hernandez, Councilmember, City of Yorba Linda 4. ADDITIONS/DELETIONS TO THE AGENDA None. Minutes of the YLWD Board of Directors Regular Meeting Held November 21, 2016 at 8:30 a.m 1 2016-214 5. INTRODUCTIONS AND PRESENTATIONS 5.1. MWDSC/MWDOC Director's Report None. 6. PUBLIC COMMENTS Mr. John Farley, resident, commented on when the new Directors would take office, his personal water conservation efforts, the water rate increase, the price increase of the EpiPen, and the District's reserves. Mr. Jon Hansen, resident, commented on the impact of the water rate increase on low-income customers, the District's annual financial statements, and a meeting he'd participated in with another resident and District representatives. He also commented on the recent election and the proposed amendment to the General Manager's employment contract. Ms. Linda Patterson, resident, commented on her personal salary, the proposed amendment to the General Manager's employment agreement, and the recent election. Ms. Debbie Cozort, resident, suggested that consideration of the proposed amendment to the General Manager's employment agreement be deferred to the new Board. She also commented on the water rate increase and the District's financial statements. Dr. Jeff Decker, resident, commented on the timing of the proposed amendment to the General Manager's employment agreement, previous meetings he'd attended with representatives of the District and City Council, the water rate increase, and the recent election. Ms. Celia Pilkington, resident, commented on her mothers work in the community and the impact of the water rate increase on low-income residents. Ms. Eileen Oldenburg, resident, wished everyone a happy Thanksgiving and thanked the Board for their years of service. She also commented on an article in the Yorba Linda Star regarding the General Manger's salary, her personal income as a retiree, and the impact of the water rate increase on residents with fixed incomes. Mr. Tony Osburn, resident, thanked the Board for their service and suggested that the proposed amendments to the General Manager's employment agreement be reconsidered. Minutes of the YLWD Board of Directors Regular Meeting Held November 21,2016 at 8:30 a.m. 2 2016-215 Ms. Judy DesJardin, resident, suggested that previously collected administrative penalties be refunded. Mr. Greg Schultz, resident, read a letter on his wife's behalf regarding the District's response to the drought and associated state regulations and the community's response to the water rate increase. 7. CONSENT CALENDAR Director Beverage made a motion, seconded by Director Kiley, to approve the Consent Calendar. Motion carried 5-0. 7.1. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of$1,314,849.30. 7.2. Budget to Actual Statements for the Month Ending October 31, 2016 Recommendation: That the Board of Directors receive and file the Budget to Actual Statements for the Month Ending October 31, 2016. 7.3. Cash and Investment Report for Month Ending October 31 , 2016 Recommendation: That the Board of Directors receive and file the Investment Reports for the Month Ending October 31, 2016. 7.4. Unaudited Financial Statements for 1St Quarter of FY 2016/17 Recommendation: That the Board of Directors receive and file the Unaudited Financial Statements and the Debt Service Ratio Calculation for the Period Ending September 30, 2016. 7.5. Award of Paving Repair Work Recommendation: That the Board of Directors authorize the General Manager to approve a Purchase Order to Sanders Paving in the amount of $27,800.15 for Permanent Asphalt Repair at various locations throughout the District. 7.6. Change Order No. 3 for 2015 Waterline Replacement Project Recommendation: That the Board of Directors approve Change Order No. 3 in the amount of$17,312.34 and no additional calendar days to GCI Construction, Inc. for construction of the 2015 Waterline Replacement Project, Job No. J2014-12. Minutes of the YLWD Board of Directors Regular Meeting Held November 21,2016 at 8:30 a.m. 3 2016-216 8. ACTION CALENDAR 8.1. Second Amendment to Employment Agreement for Position of General Manager Mrs. Knight explained that the Board had previously authorized the Board President to negotiate the General Manager's (GM) salary and benefits which would then be presented at a future meeting for consideration. As a result of the Board's evaluation of the GM's work performance, and in the interest of maintaining the employment relationship, it was proposed that the GM's annual salary be increased to $216,900 effective September 2, 2016. It was also proposed that the following benefits be amended with the same effective date: term of employment extended to September 1, 2020; 3% deferred compensation match; vacation accrual increase to 6.154 hours per pay period; and a 6-month severance. She noted that the proposed salary was still below the median for comparable water agencies. President Collett explained that the Board was responsible for reviewing the GM's performance on a periodic basis. The most recent review process began on September 2, 2016, however completion was delayed due to the declining health and unfortunate loss of two of President Collett's family members. President Collett noted that it would be difficult for the new Board to evaluate the GM's past performance and that the proposed salary was still the fourth lowest amongst comparative agencies. Mr. Brooke Jones, Director-Elect, commented on the proposed extension of the term of the GM's agreement and suggested that consideration of this matter be deferred within a few months of the current contract's expiration. He also suggested that the current Board educate the public and new Board members on the GM's merits and accomplishments. President Collett clarified that the GM's salary was last adjusted in March 2015. Mr. Kent Ebinger, resident, commented on the role of the District's ratepayers and suggested that the GM's contract be extended for one year rather than three. Mrs. Susan Decker, resident, extended her sympathy to President Collett for his loss and commented on the proposed terms of the GM's employment agreement. She also suggested that the District implement additional cost saving measures. Minutes of the YLWD Board of Directors Regular Meeting Held November 21, 2016 at&30 a.m. 4 2016-217 Mr. Dick Paquette, resident, commented on his personal work experience and the proposed terms of the GM's contract. He suggested that this matter be deferred for a few weeks until after the new Board members took office. An unknown resident commented on the proposed increase in the GM's salary, the water rate increase, recent election, and the District's relations with the community. Mr. Rob Simpson, resident, commented on the proposed terms of the GM's employment agreement and the salaries utilized in the comparative survey. Mr. Al Nederhood, Director-Elect, offered his condolences to President Collett and suggested that due to the unusual circumstances, consideration of this matter be deferred. He also commented on MWDOC's benefit package for its GM and other management employees, and language in YLWD's Board's Policies and Procedures Manual related to the establishment of goals, objectives and measurement criteria for the GM's performance. Dr. Wayne Miller, Director-Elect, extended his sympathy to President Collett and commented on the process, timing and proposed terms of the GM's employment agreement. He also suggested that consideration of this matter be deferred to the new Board. Mrs. Cristy Parker, resident, commented on the importance of transparency, the staff report related to this matter, costs associated with public records requests, and the proposed terms of the GM's contract. Director Hawkins suggested that the Board consider voting on the proposed extension of the GM's employment agreement and salary increase separately. Director Kiley commented on the amount of time it took to recruit the current GM and Mr. Marcantonio's efforts related to the State's emergency water conservation regulations. He also commented on the tenor of the recent election and threats made against District staff. Director Melton agreed with Director Hawkins' suggestion. Vice President Beverage asked for clarification regarding Director Hawkins' suggestion. Director Hawkins explained he was proposing that the Board consider adjusting the GM's salary separately from the other terms in the proposed employment agreement. Minutes of the YLWD Board of Directors Regular Meeting Held November 21, 2016 at 8:30 a.m. 5 2016-218 Directors Beverage and Collett then commented on the performance evaluation process for the GM. Director Hawkins made a motion, seconded by Director Beverage, to consider adjusting the General Manager's salary based on his past performance separately from the other terms in the proposed employment agreement. President Collett repeated the motion for the audience. Motion carried 5-0. Director Hawkins commented on the salary survey and Mr. Marcantonio's past performance. President Collett commented on the length of time it took to fill the GM's position, the difficulties the Board experienced during the recruitment process due to the lower salary range, and Mr. Marcantonio's past performance. Director Hawkins made a motion, seconded by Director Beverage, to increase the General Manager's annual salary to $216,900 effective September 2, 2016. Motion carried 4-1 with Director Melton voting No. Director Hawkins suggested that consideration of the other terms in the proposed employment agreement be deferred to the new Board. Vice President Beverage suggested that the length of the GM's employment agreement be extended for one year as it was set to expire in September 2017 and that consideration of all other terms be deferred to the new Board. Director Hawkins stated that he thought the new Board would be able to begin working on consideration of the remaining terms in the proposed employment agreement right away and that extending the length of the contract might not be necessary at this time. Directors Melton and Collett agreed with Director Hawkins' statement. Director Hawkins made a motion, seconded by Director Beverage, to defer consideration of the remaining terms in the proposed employment agreement to the new Board. Minutes of the YLWD Board of Directors Regular Meeting Held November 21,2016 at&30 a.m. 6 2016-219 President Collet repeated the motion and clarified that the remaining terms to be considered were: extending the length of the employment agreement; a 3% deferred compensation match; an increase in vacation accrual; and a 6-month severance. Director Hawkins stated that essentially the terms of the existing contract would remain the same with the exception of the approved salary increase. Motion carried 4-1 with Director Collett voting No. President Collett declared a recess at 9:31 a.m. The meeting was reconvened at 9:41 a.m. 8.2. Revised Budgeted Positions for the Remainder of FY 2016/17 Mrs. Knight explained that the Human Resources Department had received requests from multiple managers to reclassify specific positions so they were more reflective of their present duties. Following an internal assessment, staff is proposing to reclassify the present job titles for the Public Information Manager and Executive Secretary be changed to Communications Manager and Executive Assistant respectively. Additionally, staff is proposing that the present job title for the vacant position of SCADA Administrator be revised to Chief Water Systems Operator with a new salary range of 29 instead of 30 (representing a 5% decrease). She noted that there was no financial impact associated with reclassifying the first two positions and responded to questions from the Board. Director Beverage made a motion, seconded by Director Hawkins, to adopt Resolution No. 16-20 Approving the Revised Budgeted Positions for the Remainder of Fiscal Year 2016/17 and Rescinding Resolution No. 16- 04. Motion carried 5-0 on a Roll Call vote. 8.3. Employee Travel Expense Reimbursement Policy Mrs. Lugo explained that following review of the Board of Directors' Policies and Procedures Manual in July 2016, the Board determined to adopt some minor revisions to the travel expense reimbursement section in order to enhance clarification and cover certain topics such as the process for reimbursement of miscellaneous gratuities. As no one employee class is to receive a greater benefit than the other, staff has updated the Employee Travel Expense Reimbursement Policy to mirror the Board of Directors. In addition to being reviewed by legal counsel, the Minutes of the YLWD Board of Directors Regular Meeting Held November 21,2016 at 8:30 a.m. 7 2016-220 revised police has been reviewed and approved by the Yorba Linda Water District Employee Association Board as part of the meet and confer process. Mrs. Lugo provided a brief overview of the proposed revisions related to meal reimbursement, lodging, and transportation. She also responded to questions from the Board regarding meal reimbursement amounts. Director Beverage made a motion, seconded by Director Hawkins, to adopt Resolution No. 16-21 Setting Forth an Employee Travel Expense Reimbursement Policy and Rescinding Resolution No. 12-04. Motion carried 5-0 on a Roll Call vote. 9. DISCUSSION ITEMS 9.1. Status of Advanced Refunding of 2008 Certificates of Participation Mrs. Lugo explained that in January 2016 the Board was presented with an opportunity to refinance the District's 2008 Certificates of Participation (COPs). Due to events occurring over the past year, the Board was advised on two separate occasions to defer this action. As there has been a recent change in the members of the Board, the District's Bond Counsel and Financial Advisors are recommending that this process be postponed once again. Arrangements are being made to provide a presentation at the regular meeting scheduled December 22, 2016 so the new Board has an opportunity to consider reaffirming moving forward with the refinancing process. The projected annual cash flow savings in January 2016 was $322K. This amount has since been reduced to $244K due to current market conditions. Total cash flow savings was originally projected to be $7.4M for the remaining 21 years of the bond which is now estimated to be $5.1M. 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. President's Report President Collett thanked District staff for their work during his tenure, particularly during the recent drought. 10.2. Directors' Reports Director Melton commented on the current Board's efforts over the years. Director Hawkins stated that it had been a pleasure to serve with the other members of the Board. Director Kiley thanked District staff and the General Manager for their efforts and commented on the difficulties experienced during the last year. Minutes of the YLWD Board of Directors Regular Meeting Held November 21, 2016 at 8:30 a.m. 8 2016-221 Vice President Beverage commented on his lengthy service in the community both at the District and the City of Yorba Linda. He also thanked staff for their dedication and commended Mr. Marcantonio for his work during the recent drought. 10.3. General Manager's Report Mr. Marcantonio thanked the Board for their comments and service to the community. He then asked each of the managers (or their designee) to report on activities with then their respective departments. Mr. Conklin thanked the Board for their service and commented on the various challenges the District experienced over the past several years. He then reported on the status of various construction projects and responded to questions from the Board on the Fairmont Booster Pump Station Project. Mrs. Lugo thanked the Board for their leadership and commented on the challenges with shifting the District's business model. She also welcomed the new Board members and wished everyone a happy Thanksgiving. Mrs. Lugo then reported on staff's planned attendance at seminars regarding new federal/state tax law and GASB rulings. Staff is also working with IT to potentially upgrade the District's financial system and preparing an RFP for audit services. Mr. Mendum thanked the Board for their service and commended Mr. Marcantonio for his leadership. He then provided an overview of staff's preventative maintenance and leak detection/repair activities during the calendar year and responded to related questions from the Board. Mr. Vega thanked for the Board for their service to the community. He wished everyone a happy Thanksgiving and stated that he was looking forward to working with the new Board. Mr. Vega then reported on staff's mitigation efforts related to an issue with the District's main phone line and the number of blocked threats during the previous and current month. Mr. Micalizzi stated that it was an honor to work with the Board and thanked them for their leadership. He commented on various challenges facing the District and Mr. Marcantonio's efforts to address them. He also reported on recent activities of the State Water Resources Control Board, (SWRCB) and the status of Proposition 53. Mrs. Knight thanked the Board for their service and leadership and wished everyone a happy Thanksgiving. Minutes of the YLWD Board of Directors Regular Meeting Held November 21,2016 at 830 a.m. 9 2016-222 Mr. Marcantonio reported that he'd been invited to participate in a focus group organized by the Public Policy Institute of California (PPIC) to interpret data collected in a survey of water agencies throughout the state. The survey was conducted at the request of the Governor and focused on urban drought response. It was apparent that all water agencies, regardless of their assigned conservation mandate, had been impacted by the drought emergency regulations. Those agencies with higher conservation percentages experienced severe financial consequences and backlash from the public. Agencies in southern California were required to implement water rationing practices even though their communities had made significant investments in water infrastructure and storage. The Governor's drought emergency declaration is scheduled to expire in January unless it is extended and SWRCB is in the process of developing permanent conservation regulations. Mr. Marcantonio then wished everyone a happy Thanksgiving. 10.4. General Counsel's Report Mr. Gagen noted that there was a need for Closed Session. 10.5. Future Agenda Items and Staff Tasks None. 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Collett / Melton) ■ Meeting scheduled November 22, 2016 at 4:00 p.m. was cancelled. ■ Next meeting is scheduled January 24, 2017 at 4:00 p.m. 11.2. Joint Agency Committee with City of Yorba Linda (Collett / Beverage) ■ Meeting scheduled November 22, 2016 at 9:00 a.m. was cancelled. ■ Next meeting is yet to be scheduled. 11.3. Interagency Committee with City of Placentia and Golden State Water Company (Collett / Kiley) ■ Next meeting is yet to be scheduled. Minutes of the YLWD Board of Directors Regular Meeting Held November 21, 2016 at 8:30 a.m. 10 2016-223 11.4. Citizens Advisory Committee (Melton) ■ Meetings scheduled November 28, 2016 and December 26, 2016 were cancelled. ■ Next meeting is scheduled January 23, 2017 at 8:30 a.m. 12. INTERGOVERNMENTAL MEETINGS, The Directors reported on their attendance at the following meetings. 12.1. YL City Council — November 15, 2016 (Beverage) 12.2. MWDOC Board — November 16, 2016 (Melton) 12.3. OCWD Board — November 16, 2016 (Kiley) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from November 22, 2016 — December 31, 2016 The Board reviewed the activity calendar and made no changes. 14. CLOSED SESSION The meeting was adjourned to Closed Session at 10:23 a.m. All Directors in attendance were present. Also present were Mrs. Knight and Messrs. Gagen, Marcantonio and Micalizzi. 14.1. Conference with Legal Counsel — Existing Litigation Pursuant to Paragraph (1) of Subdivision (d) of Section 54956.9 of the California Government Code Name of Case: Julie Lonsdale vs. Yorba Linda Water District (OC Superior Court — Case No. 00808246) 14.2. Conference with Legal Counsel — Existing Litigation Pursuant to Paragraph (1) of Subdivision (d) 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) The Board reconvened in Open Session at 10:48 a.m. No action was taken during Closed Session that was required to be reported under the Brown Act. Minutes of the YLWD Board of Directors Regular Meeting Held November 21,2016 at 8:30 a.m. 11 2016-224 15. ADJOURNMENT 15.1. The meeting was adjourned at 10:49 a.m. The next Regular Board of Directors Meeting will be held Thursday, December 8, 2016 at 8:30 a.m. Annie Alexander ✓ Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held November 21, 2016 at 8:30 a.m. 12