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HomeMy WebLinkAbout2017-05-09 - Board of Directors Meeting Minutes 2017-089 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, May 9, 2017, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 6:30 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Marc Marcantonio, General Manager Al Nederhood, Vice President Steve Conklin, Engineering Manager Andrew J. Hall, Director John DeCriscio, Operations Manager Phil Hawkins, Director Gina Knight, HR/Risk and Safety Manager Brooke Jones, Director Art Vega, Information Technology Manager Annie Alexander, Executive Assistant Cindy Botts, Management Analyst Kelly McCann, Senior Accountant Malissa Muttaraid, Public Affairs Representative ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP Brett Barbre, Director, MWDSC and MWDOC Tom Lindsey, Councilmember, City of Yorba Linda Daphne Munoz, Audit Partner, White Nelson Diehl Evans 4. ADDITIONS/DELETIONS TO THE AGENDA Mr. Marc Marcantonio indicated that additional backup material related to Item No. 9.2. had been distributed. 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports Director Brett Barbre reported on State Water Project allocations, Metropolitan's water storage efforts, status of the Oroville Dam, and the need for construction of additional water storage facilities. Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 1 2017-090 Councilmember Tom Lindsey reported on the status of the City's median renovation project, upcoming Proposition 218 hearings for Landscaping Zones L1 B and L5A, and the Esperanza Hills development project. 5.2. Overview of Services Provided by White Nelson Diehl Evans (WNDE) Mr. Kelly McCann introduced Ms. Daphne Munoz from WNDE. He explained that Ms. Munoz would be acting as the District's engagement partner for the upcoming audit and provided an overview of her professional work experience. Ms. Munoz then summarized the auditors' responsibilities and overall audit the process. 6. PUBLIC COMMENTS Ms. Pat Nelson (resident) commented on topics discussed during Ad Hoc Citizens Advisory Committee (AHCAC) meetings, staff's time spent supporting committee efforts, and the cost of the meeting facilitator. 7. CONSENT CALENDAR Director Hawkins made a motion, seconded by Director Hall, to approve the Consent Calendar. Motion carried 5-0. 7.1. Minutes of the Board of Directors Workshop Meeting Held January 31, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of the Board of Directors Special Meeting Held February 13, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Minutes of the Board of Directors Regular Meeting Held February 13, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.4. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of$516,429.31. Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 2 2017-091 7.5. Declaration of Restrictive Covenants with Eric and Eileen Change, 18721 Windy Knoll Drive, Yorba Linda Recommendation: That the Board of Directors authorize the President and Secretary to execute the Declaration of Restrictive Covenants with Eric and Eileen Change. 7.6. Terms and Conditions for Sewer Service with Kurt Metcalf, 5041 Eureka Avenue, Yorba Linda Recommendation That the Board of Directors approve the Terms and Conditions for Sewer Service with Kurt Metcalf, 5041 Eureka Avenue, Job No. 201714S. 8. ACTION CALENDAR 8.1. District Investments Held with Safe Keeper/Custodial Agent Pershing LLC Mr. McCann explained that the custodial agreement for District investments held at Pershing was between First Empire Securities and Pershing and not directly between YLWD and Pershing. As a result, a significant deficiency in internal control was brought to the Board's attention during the previous audit. The Board can choose to keep the current arrangement, however, the deficiency would remain. An alternative option would be to transfer these investments to Bank of the West through which the custodial agreement can be made directly. This would prevent any further comments regarding this matter in future audits while maintaining the safekeeping and third party relationship prescribed in the District's investment policy. The Board and staff discussed the potential benefit of transferring the investments after they matured, the reasons for recommending Bank of the West, and exploring services provided by other local and national banking institutions including the County's investment pool. Director Barbre commented on the investment services provided by the County. Following discussion, the Board requested staff expand their research of potential custodial agents and present this information in matrix form at a future meeting. Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 3 2017-092 8.2. Rules and Regulations for Sewer Service Mr. Steve Conklin explained that staff had recently reviewed the rules and regulations for sewer service and identified some needed revisions related to connecting to the public sewer system. He noted that approximately 700 homeowners in the District's service area were still reliant on septic tanks. The Board and staff then discussed the benefits of connecting to the public sewer system, assisting homeowners with obtaining funding for sewer connection fees, the potential for illegal connections to the sewer system, and sewer rules and regulations of comparative agencies. Mr. Dennis Anderson (resident) suggested forming small assessment districts in order to assist homeowners with obtaining funding for sewer connection fees. The Board voted 5-0 on a Roll Call to approve Resolution No. 17-14 adopting Rules and Regulations for Sewer Service, and rescinding Resolution No. 16-16. 9. DISCUSSION ITEMS 9.1. Ad Hoc Citizens Advisory Committee Recommendations to the Board of Directors Mr. Terry Harris (AHCAC Chair) provided a brief overview of the committee's purpose and intentions. He then reviewed each of the committee's recommendations including: exploring a budget-based rate structure with a suggested timeline for implementation; conducting an annual cost of service review; not making any immediate changes to the existing rate structure; reviewing and reconciling rate revenue with cost of service annually; issuing a refund and public statement associated with reconciliation of the FY16 budget; establishing a water efficiency education program; amending the administrative penalty ordinance; enhancing reports of expenditures and progress on capital and repair/replacement (R&R) projects; updating the Asset Management Plan; enhancing reporting of balances and expenditures in reserve categories; not increasing overall reserve balances; improving accessibility of financial reports on District's website; providing additional monthly financial reports; updating the strategic plan; exploring low/fixed-income rates; developing benchmarks and metrics; reviewing the District's staffing needs and organizational structure; and exploring options for reducing costs for professional services. Mr. Harris thanked the committee members for their efforts related to this endeavor. He also thanked staff for their support and the Board for establishing the committee. Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 4 2017-093 The Board thanked the committee members for their time and thoroughness. Dr. Jeff Decker (AHCAC member) commented on the committee's recommendation to issue a refund and various aspects of the District's finances. Mr. Dennis Anderson (AHCAC member) noted that the committee had unanimously approved the recommendations provided to the Board. Mr. Kent Ebinger (AHCAC member) commented on the District's reserves and recent bond offering, and the committee's recommendations related to issuance of a refund and public engagement. Mr. Ben Parker (AHCAC member) commented on public involvement in the committee's meetings, budget-based rate structures, the committee's recommendation to issue a refund, and using metrics to perform analysis of District operations. Ms. Pat Nelson (resident) commented on the committee's purpose and recommendations, including the proposed refund and budget-based rate structures. Ms. Susan Decker (resident) commented on budget-based rate structures, rebate programs for installation of drought tolerant landscaping, and the proposed refund. Mr. Rick Nelson (resident) commented on budget-based rate structures. Mr. Ron Ricks (resident) commented on the committee's efforts and various types of rate structures, including the District's current structure. Ms. Cristy Parker (AHCAC member) commented on the District's current rate structure and the committee's recommendations. Mr. Harris commented on the public's participation in committee meetings, the reasons for the committee's recommendation regarding implementation of a budget-based rate structure, and the budget process and handling of net income at the end of the fiscal year. He then responded to questions from the Board regarding the types of rate structures considered by the committee. Dr. Decker commented on a presentation provided to the committee regarding Irvine Ranch Water District's (IRWD) rate structure. Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 5 2017-094 Mr. Harris continued responding to questions from the Board regarding budget-based rate structures, the state's long-term framework for water conservation, the process for reviewing variance requests for increased water allocations, and the time and resources required to implement a budget-based rate structure. Mr. Anderson commented on resources available, including grants, to assist with the process of converting to a budget-based rate structure. Discussion continued regarding various aspects of IRWD's rate structure, the state's provisional conservation standard for indoor residential water use, the committee's recommendations related to reserves and refunds, establishment and funding of a rate stabilization reserve, and development of a public education program as part of the process of transitioning to a budget-based rate structure. Mr. Ebinger suggested improvements to the District's website. Mr. Harris, Dr. Decker and Mr. Parker then provided additional feedback regarding the committee's recommendations related to reserves. Ms. Pat Nelson (resident) commented on the purpose of reserves, the District's reserve levels, and the importance of R&R. Mr. Harris then responded to questions from the Board regarding the committee's recommendations related to metrics and benchmarks. Further discussion regarding the time and resources associated with the committee's recommendations followed. The Board thanked the committee members once again for their service. Mr. Harris stated that the committee recognized the challenges facing the Board and that its members were willing to provide continued assistance. 9.2. Current Water Conservation Legislation Mr. Marcantonio explained that this item had been placed on the agenda at the request of Vice President Nederhood. Vice President Nederhood provided an overview of Trailer Bill Language 810 and key water conservation legislation being put forth by Assembly Members Friedman and Rubio. In short, the bills being sponsored by Friedman would unnecessarily place local water management decisions in the State's hands, whereas the bills being sponsored by Rubio would improve urban water use efficiency in cooperation with local water agencies. Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 6 2017-095 Mr. Marcantonio noted that this legislation had been discussed in detail during MWDOC's Elected Officials' Forum and a recent event hosted by ACWA. He also reported that the District had signed on to multiple coalition letters in addition to submitting its own in support of Rubio's bills, and that Townsend Public Affairs (TPA) would be testifying on YLWD's behalf at future Senate committee meetings. Other agencies and associations, including the League of California Cities, have expressed their support of Rubio's bills as well. The Board and staff then discussed the impacts to the District should Friedman's bills pass. Director Hawkins asked if TPA could provide a report to the Board. Mr. Marcantonio indicated that a representative from TPA would do so at the next regular meeting. Mr. Kent Ebinger (resident) suggested that an e-mail be sent to District customers notifying them of the impact of these competing bills and encouraging them to contact their state legislators. The Board briefly discussed this suggestion following which Mr. Andrew Gagen indicated he would check into any associated legalities. Director Hall commented on the different philosophies between the northern and southern areas of the state in regards to water storage. Ms. Pat Nelson (resident) inquired as to how this legislation would impact sanitation districts and the Senate's timeline for consideration. Mr. Ebinger also suggested that staff encourage other local water districts to send out a similar notification to their customers. Mr. Terry Harris (resident) stated that a budget-based rate structure could accommodate both Friedman and Rubio's sponsored legislation. 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports Director Hawkins reported that he'd discussed water related issues with Assembly Member Chen during a dinner meeting in Sacramento the previous week. Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 7 2017-096 10.2. General Manager's Report Mr. Marcantonio reported the bond issuance process was near completion and that a press release would be disseminated following closing. He then asked each of the managers (or their designee) to report on activities within their respective departments. Mr. Conklin reported that the Esperanza Hills development project had been approved by the OC Board of Supervisors. Mr. John DeCriscio reported that Well No. 15 was back in service and Well No. 1 was out of service due to a shaft break. Staff will be performing maintenance on fire hydrants located in wildland-urban interface areas in preparation for the summer season. Thanks to Production staff's efforts, the District achieved 70% groundwater production over the previous 10 months. Mr. Kelly McCann reported that staff was working on the previous months financial and investment reports which will be presented at the next regular meeting. Staff is also preparing documentation for the management audit scheduled at the end of the month. The Board and staff discussed historical financial reporting for capital and R&R projects. Mr. Conklin noted that $100K had been included in the draft FY18 budget to update the District's Asset Management Plan. Mr. Art Vega reported on staff's efforts related to upgrading the District's accounting and billing software. Ms. Gina Knight reviewed the capabilities of NEOGOV's human resources software and the District's recent implementation of the performance evaluation and onboarding components. She also reported on the status of staff's efforts to explore outsourcing payroll and summarized the District's previous experience using ADP. 10.3. General Counsel's Report None. 10.4. Future Agenda Items and Staff Tasks None. Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 8 2017-097 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) ■ Next meeting is scheduled May 25, 2017 at 4:00 p.m. 11.2. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) ■ Minutes of the meeting held March 13, 2017 at 4:00 p.m. will be provided when available. ■ Next meeting is scheduled June 12, 2017 at 4:00 p.m. at YL City Hall. 11.3. Interagency Committee with City of Placentia and Golden State Water Company (Miller/Nederhood) ■ Next meeting is yet to be scheduled. 11.4. Ad Hoc Citizens Advisory Committee ■ Minutes of the meetings held April 20 and April 27, 2017 at 6:00 p.m. were provided in the agenda packet. ■ Minutes of the meeting held May 4, 2017 at 6:00 p.m. will be provided when available. 12. INTERGOVERNMENTAL MEETINGS The Directors reported on their attendance at the following meetings. 12.1 MWDOC Elected Officials' Forum —April 26, 2017 (Miller/Nederhood) 12.2 OCSD Board —April 26, 2017 (Hawkins) 12.3. Meet ACWA's President Event—April 27, 2017 (Nederhood) 12.4. YL City Council — May 2, 2017 (Hawkins) 12.5. MWDOC Board — May 3, 2017 (Nederhood) 12.6. OCSD Operations Committee — May 3, 2017 (Hawkins) Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 9 2017-098 12.7. OCWD — May 3, 2017 (Jones) 12.8. WACO — May 5, 2017 (Miller/Nederhood) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from May 10, 2017 —July 31, 2017 The Board reviewed the activity calendar. President Miller and Director Hawkins noted they both had conflicts with attendance at a future YL City Council meeting. 14. CONFERENCES, SEMINARS, AND SPECIAL EVENTS 14.1. OC Water Summit—June 16, 2017 Director Hall made a motion, seconded by Director Hawkins, to approve Director attendance at this event if desired. Motion carried 5-0. 15. ADJOURNMENT 15.1. The meeting was adjourned at 10:05 p.m. Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held May 9,2017 at 6:30 p.m. 10