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HomeMy WebLinkAbout2017-09-26 - Board of Directors Meeting Minutes (B) 2017-193 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, September 26, 2017, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 6:40 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Brett Barbre, Assistant General Manager Al Nederhood, Vice President John DeCriscio, Operations Manager Andrew J. Hall, Director Gina Knight, HR/Risk and Safety Manager Phil Hawkins, Director Art Vega, Information Technology Manager Brooke Jones, Director Annie Alexander, Executive Assistant Bryan Hong, Water Quality Engineer Anthony Manzano, Senior Project Manager Kelly McCann, Senior Accountant ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP 4. ADDITIONS/DELETIONS TO THE AGENDA None. 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports None. 6. PUBLIC COMMENTS Jon Hansen (resident) spoke in support of the new Board and against the hiring of an Assistant General Manager. Minutes of the YLWD Board of Directors Regular Meeting Held September 26,2017 at 6:30 p.m. 1 2017-194 Jay Grewal (resident) commented on reserves and spoke against the District's use of consultants and in favor of refunding surplus revenue. 7. CONSENT CALENDAR Director Hall made a motion, seconded by Director Hawkins, to approve the Consent Calendar. Motion carried 5-0. 7.1. Minutes of the Board of Directors Regular Meeting Held July 25, 2017 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$1,673,851.15. 7.3. Claim for Damages Filed by Wailea Property Partners, LLC Recommendation: That the Board of Directors reject the claim filed by Wailea Property Partners, LLC and refer it to ACWA/JPIA for further handling. 7.4. Reschedule Regular Board Meeting in December Recommendation: That the Board of Directors reschedule the regular meeting on Tuesday, December 26, 2017 to Wednesday, December 27, 2017 at 8:30 a.m. 8. ACTION CALENDAR 8.1. Approval of Change Order Number 1 for the Fairmont Booster Pump Station Upgrade Project Staff reviewed the reasons for and costs associated with the requested Change Order including delays caused by inclement weather, differing site conditions, and unknown utilities. Discussion followed regarding the origin of the excess groundwater, average percentage of construction cost increases due to change orders, results of the geological survey in relation to the necessary excavation, and the contractors request for a no-cost 40 calendar day extension. Minutes of the YLWD Board of Directors Regular Meeting Held September 26, 2017 at 6:30 p.m. 2 2017-195 Rick Nelson (resident) commented on the coating recommended for the roof hatch frames which was not included in the District's specifications. Kent Ebinger (resident) commented on the benefits of plotting easements in relation to identifying the location of utilities. Director Hawkins made a motion, seconded by Director Jones, to approve Change Order No. 1 for $220,647.28 and 40 additional calendar days to Pacific Hydrotech Corporation for construction of the Fairmont Booster Pump Station Upgrade Project, Job No. 2010-11B. Motion carried 5-0. Director Jones requested that consideration of Item No. 8.2. be moved following Item No. 8.5. The Board agreed. 8.3. Management of District's Other Postemployment Benefit (OPEB) Liabilities Staff reviewed a three, five, and seven-year pay down schedule for funding the District's OPEB Section 115 trust at a level of 90%. Staff suggested the Board consider paying down the District's OPEB liability in the amount of$557,515.30 per year for a period of three years. Discussion ensued regarding the purpose of the trust, associated service costs and interest, benefits paid on the behalf of retirees, annual deposits already being made, changes in the assumption rate and the District's Net OPEB Liability, and the estimated minimum annual deposits needed to cover future benefits and service costs. Pat Nelson (resident) spoke in favor of paying down the District's OPEB liability as quickly as possible. Jon Hansen (resident) commended a Board member on their examination of this matter. Jay Grewal (resident) spoke in favor of controlling costs in addition to paying down the District's liabilities. Discussion regarding interest costs and the pay down schedule options followed. Staff was instructed to bring back a revised schedule to include a ten-year pay down option, associated savings in interest costs for each option, and deposit amounts already being paid. Jon Hansen (resident) commented on interest costs associated with the pay down schedule options. Minutes of the YLWD Board of Directors Regular Meeting Held September 26,2017 at 6:30 p.m. 3 2017-196 Staff was also instructed to obtain and include additional clarification regarding interest costs. No action was taken on this matter. 8.4. Management of District's Pension Liabilities Staff provided an overview of the District's three tiers of employees as pertaining to participation in the California Public Employees' Retirement System (PERS). Staff reviewed a five, ten, fifteen, and twenty-year pay down schedule for future funding of the District's PERS liability in a Section 115 trust with the Public Agency Retirement Services (PARS) at a level of 90%. Staff recommended the Board consider opening a trust account with PARS and select a pay down schedule option with the deposit scheduled in July 2018. Staff then reviewed the estimated savings in interest costs for each option as compared to a thirty-year pay down. Pat Nelson (resident) spoke in favor of paying down the District's PERS liability as soon as possible. Jon Hansen (resident) spoke in favor of the ten-year pay down option. Following discussion of the funding percentages for each tier, staff was instructed to bring back a revised schedule to include associated savings in interest costs and an amortization schedule for each option. Director Nederhood made a motion to open a Section 115 trust account with PARS. Motion failed for lack of second. Staff was also instructed to obtain information from PARS regarding the specifics of opening and managing a Section 115 trust. No action was taken on this matter. 8.5. Disposition of Positive Net Position as of June 30, 2017 Staff explained that during discussion at a previous meeting, it was determined that approximately $1,347,599 was available for discretionary spending possibilities by the Board. Options discussed were issuing a customer refund or paying down a portion the District's PERS liability. Discussion followed regarding statements contained in a press release issued by Fitch in April 2017 regarding the District's AA rating. Minutes of the YLWD Board of Directors Regular Meeting Held September 26,2017 at 6:30 p.m. 4 2017-197 Pat Nelson (resident) spoke in favor of utilizing the aforementioned funds to pay off the District's long term debt and against the issuance of a customer refund. Terry Harris (resident) commented on associated recommendations provided by the Ad Hoc Citizens Advisory Committee (AHCAC) and spoke in favor of a customer refund. Julia Schultz (resident) spoke in favor of paying down the District's liabilities and against the issuance of a customer refund. Greg Shultz (resident) commented on the potential impact of forthcoming state mandates and educating District customers regarding the reasons for future rate increases. Kent Ebinger (resident) commented on information contained in a District newsletter regarding the previous rate increase and recommendations provided by the AHCAC associated with a customer refund. Jon Hansen (resident) commented on the AHCAC's recommendations and spoke in favor of a customer refund. Susan Decker (resident) commented on the payoff of the District's line of credit with Wells Fargo and spoke in favor of a customer refund. Rick Nelson (resident) spoke against the issuance of a customer refund and in favor of utilizing the funds for a water efficiency rebate program. Jeff Decker (resident) commented on the District's historical net income, water rates, and cost of service. He also spoke in favor of a customer refund. Jay Grewal (resident) commented on Fitch's ratings in relation to the risk of default, management of rates, and the issuance of a customer refund. A lengthy discussion regarding the options presented ensued, including the possibility of refunding $1.1 M and applying the remainder to the District's OPEB liability pending Fitch's reaffirmation of the District's AA rating. Also discussed was the need for revising the District's reserves policy and establishing a policy for paying down the District's PERS and OPEB liabilities. Director Hall made a motion, seconded by Director Nederhood, that any refund voted upon by the Board of Directors during this meeting would be subject to reaffirmation of the District's AA rating by Fitch. Motion carried 5-0. Minutes of the YLWD Board of Directors Regular Meeting Held September 26, 2017 at 6:30 p.m. 5 2017-198 Director Nederhood made a motion, seconded by Director Hawkins, to pay down the District's OPEB liability in the amount of $247,599 from the District's Positive Net Position as of June 30, 2017. Motion carried 5-0. Director Jones made a motion, seconded by Director Nederhood, to issue a refund from the District's remaining Positive Net Position as of June 30, 2017 in the amount of$1, 100,000 to be divided equally by the number of current customers as of September 26, 2017. Motion carried 3-2 with Directors Hall and Miller voting No. 8.6. ACWA Region 10 Election of Officers and Board Members for 2018-2019 Term Staff briefly reviewed the election procedures and suggested the Board consider voting for the Nominating Committee's recommended slate of candidates. Director Hall made a motion, seconded by Director Hawkins, to vote for the Nominating Committee's recommended slate of candidates in the ACWA Region 10 Board Election. Motion carried 5-0. 8.2. Financial Reserves Policy for the Remainder of Fiscal Year 2018 Discussion focused on revising the policy to clarify the minimum, maximum, and target funding levels for the unrestricted reserve types. Also discussed were future revisions to language for the Capital Replacement Reserve and revising Section B for the Rate Stabilization Reserve to include an option for funding at a lower level. Jeff Decker (resident) spoke against the establishment of a rate stabilization reserve and commented on the District's historical revenue. Jon Hansen (resident) spoke in favor of issuing a customer refund and spoke against the establishment of a rate stabilization fund. Kent Ebinger (resident) provided suggestions for interfacing with Fitch. Discussion followed regarding revising the minimum funding level for the Rate Stabilization Fund to 0% instead of 5%. Director Hall made a motion to approve Resolution No. 17-31 adopting a Financial Reserves Policy for the remainder of Fiscal Year 2018 with the following amendments.- Clarify mendments:Clarify the language describing the minimum, maximum and target funding levels for each reserve type and include an option for funding the Rate Stabilization Reserve at a lower level. Minutes of the YLWD Board of Directors Regular Meeting Held September 26,2017 at 6:30 p.m. 6 2017-199 ■ Include the reserve values for the current fiscal year as an attachment. Director Hawkins seconded the motion which carried 5-0 on a Roll Call vote. Director Hall made a motion, seconded by Director Nederhood, to adjourn the meeting and postpone consideration of the remaining items on the agenda to the next regular meeting. Motion carried 5-0. Consideration of the following items was postponed to the next regular meeting. e DISCUSSION ITEMS 9.1. Budget to Actual Reports for the Month Ending August 31, 2017 9.2. Cash and Investment Report for Period Ending August 31, 2017 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports 10.2. General Manager's Report 10.3. General Counsel's Report 10.4. Future Agenda Items and Staff Tasks 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) Eq Next meeting is scheduled September 28, 2017 at 4:00 p.m. 11.2. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) ■ Minutes of the meeting held September 18, 2017 at 4:00 p.m. will be provided when available. ■ Next meeting is scheduled December 18, 2017 at 4:00 p.m. at YL City Hall. Minutes of the YLWD Board of Directors Regular Meeting Held September 26,2017 at 6:30 p.m. 7 2017-200 11.3. Joint Agency Committee with City of Placentia (Miller/Nederhood) a Next meeting yet to be scheduled. 12. INTERGOVERNMENTAL MEETINGS 12.1 YL Planning Commission — September 13, 2017 (Hawkins — As Needed) 12.2 YL Mayor's Prayer Breakfast— September 14, 2017 (Jones/Miller/Nederhood) 12.3. ACWA Region 5 Tour— September 17, 2017 (Jones) 12.4. YL City Council — September 19, 2017 (Hall) 12.5. MWDOC — September 20, 2017 (Nederhood) 12.6. SDLA Governance Foundations Workshop — September 25, 2017 (Hall) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from September 27 — November 30, 2017 14. ADJOURNMENT 14.1. The meeting was adjourned at 9:42 p.m. A—nnie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held September 26,2017 at 6:30 p.m. 8