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HomeMy WebLinkAbout2007-03-15 - Board of Directors Meeting MinutesMINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING March 15, 2007 2007-45 The March 15, 2007 regular meeting of the Yorba Linda Water District Board of Directors was called to order by President Ric Collett at 8:37 a.m. The meeting was held at Richfield Plant Emergency Operation Center, 913 Richfield Road, Placentia. DIRECTORS PRESENT AT ROLL CALL Ric Collett, President John W. Summerfield, Vice President Paul R. Armstrong Michael J. Beverage William R. Mills STAFF PRESENT Michael A. Payne, General Manager Kenneth R. Vecchiarelli, Asst. G.M. Diane Cyganik, Finance Director John DeCriscio, Chief Plant Operator Amelia Cloonan, Exec Secretary INTRODUCTION OF VISITORS AND PUBLIC COMMENTS Paul Kaymark, Charles Z. Fedak & Company, Certified Public Accountants DISCUSSION ITEMS 1. Annual Board of Directors Workshop - 2007 General Manager Payne introduced Paul Kaymark of Charles Z. Fedak & Company, the District's auditors. Mr. Kaymark said he would speak about the District, historical values and the future. Mr. Kaymark noted a lot of construction is coming up, and the District's reserves will be going towards meeting costs of the projects. A trend chart was included in the agenda packet. Mr. Kaymark explained the information contained in the charts, which presented operating reserve ratios for other districts and for the Yorba Linda Water District. The District's numbers indicate it has the lowest reserves per customer in comparison to other agencies listed. Information about policies of other agencies was also included in the agenda, and Mr. Kaymark spoke about these policies. Mr. Kaymark suggested the District work with a bank for a $5 million line of credit so funds will be available in case of emergency. There was discussion about FEMA funds for districts and the timing of approval and availability of funds. Mr. Kaymark recommends a goal of 1:5 ratio and two years of operating reserves for sewers. Director Armstrong asked about commitments on current funds. General Manager Payne said the District has commitments for ID #1 and ID #2 projects for storage, pumping and transmission. The District issued Certificates of Participation (COPs) in 2003 for the administration building and Highland Reservoir replacement project. -1- 2UU/-46 General Manager Payne mentioned one of the recommendations today will be to develop a reserve policy. Is there a consensus that the District should have a written reserve policy? The Directors responded affirmatively. With respect to a rate stabilization policy: Director Armstrong stated it is a very good to have a policy in place, especially if you think there are going to be more regional problems, ex. drought. President Collett believes you are fooling the people if they are paying a rate that is not true. Director Beverage stated if you have your policy and set a reserve policy of $5 million, everything is laid out. Vice President Summerfield asked about a good number. Mr. Kaymark answered it is wherever you are able to get the best rate. Director Mills asked about reserves and a definition of what is actually a reserve. Vice President Summerfield stated you first need to determine why you are setting up reserves. Assistant General Manager Vecchiarelli stated catastrophic failure is a reason to use reserves. Director Beverage suggested a line of credit. President Collett added it should be combined with a reserve policy. Raising rates is no longer as simple as in the past. Rates for debt service on projects were discussed. Director Mills commented the District has no funds set aside for replacing facilities. Assistant General Manager Vecchiarelli replied that is a component of the District's water rate. Director Armstrong asked what the District does with the depreciated value. Assistant General Manager Vecchiarelli said a public agency depreciation it is a zero value. General Manager Payne summarized the discussions and confirmed there was a consensus to develop a written Reserve Policy and send it to the Finance- Accounting Committee for discussion. Additionally, staff will check with financial institutions for establishing lines of credit. The results and recommendations will be submitted to the Finance-Accounting Committee. A recess was declared at 10:05 a.m. Paul Kaymark left the meeting. The Board of Directors reconvened at 10:12 a.m. All Directors were present. 2. General Manager Payne presented the working agenda for the 2007 Board Goals Workshop. Construction Projects - Status Report Staff distributed a list of the Capital Projects for the Fiscal Budget 2005/06 and 2006/07. The Board reviewed the list. There were no changes. • Funding for Projects The Board reviewed developer funds, annexation fees, Improvement District funds (if appropriate), Certificates of Participation and Water rates The board concurred to consider issuing more COP's for Lakeview Reservoir & Booster Project - 12 mg, balance of Highland Reservoir -2- 2007-47 Replacement project, Transmission pipelines, etc. and to Review Water, Sewer & Customer/Dev Fees Annually. • Upcoming 2007/08 Budget Staff is proposing to use the same format as 2005/07 budget. Continue with fast track project plan. Staff is proposing the following changes: 1) Strive for Balanced Budget within two years; 2) Do away with negative numbers; and 3) Establish 24 month cash flow to coincide with budget immediately following adoption of Budget. • Cash Flows Staff has developed a 6 month cash flow program and is continuing to work towards a 24 month cash flow to coincide with the budget. • Revenues - other agencies - State, MWDOC Revenues from others, i.e. State, MWDOC, OCWD Weaning State funds from operating - put to reserves. This will be discussed further in the Finance-Accounting Committee. • Standing Committee Structure There are five standing committees. The Support Services Department was eliminated two years ago and replace with an Information Technology Department. Items pertaining to Information Technology items are not presented to a specific committee. General Manager Payne suggested IT be added to the Public Information Committee. Vice President Summerfield stated GIS interacts with the entire District. A consensus was reached by the Board of Directors. It was decided to rename the Public Information Committee to the Information Systems Committee. • Board of Directors issues Director Armstrong wants to be sure all items appearing in the Agenda have gone before a committee. Assistant General Manager Vecchiarelli asked for clarification. Did Director Armstrong want Consent Calendar Items to be presented to a committee before going to the Board? Director Armstrong wanted Discussion and Action Items to go to a committee and wanted a committee member to make the motion to approve the item. Director Mills commented it a matter for the General Manager to decide, and it is a matter of timing. President Collett asked about emailing agendas to the Board members. General Manager Payne said staff will develop a method to have the entire agenda made available to the general public and a complete agenda with reports will be sent electronically. If Agenda packets are delivered by hand, a phone call will be made to the Director before delivery. -3- 2007-48 Director Armstrong asked about the procedure for visitors to speak during a board meeting and about the procedure for Directors to recuse themselves from discussion and voting on an item. General Manager Payne stated the rules will be reviewed and brought back to the Executive Committee. Director Mills questioned staff about the District investigation of drilling a well near the Santa Ana River? Assistant General Manager Vecchiarelli stated this will come back to the Board in April. 3. Other Issues • Appraisal of Plumosa Office. Since the contract had been let on the new Administration, staff will begin the appraisal process for the Plumosa Office in July. • Water Conservation Rebates General Manager Payne asked if this Board wants to look into rebates for those who put in water conserving projects in their home, e.g. artificial turf. Director Armstrong said to leave it to regional capabilities. Director Mills felt MWDOC should do it. President Collett said the District should tag on to someone else's project. Vice President Summerfield said this would be too much for the District right now. Director Beverage wants to offer rebates for artificial turf. • Grant programs General Manager Payne asked if the Board was happy with the progress of the grant program and whether it should changed. Vice President Summerfield asked that it be considered whether the District was wasting time and money, because there are so many projects and only so much funding. Director Armstrong said it should be made into a 3-4 year plan. President Collett said to give it another budget cycle. Director Mills said it is too early to cut it off, but the District needs to set a limit. Director Beverage said the process takes time. • Other Issues There were no additional issues the Board members wanted to consider. ADJOURNMENT On a motion by Director Beverage, seconded by Vice President Summerfield, the Board of Directors voted to adjourn at 11:00 a.m. to a regular meeting of the Board of Directors scheduled for Thursday, March 22, 2007, at 8:30 a.m., at 4622 Plumosa Drive, Yorba Linda 92886. Ken eth R. Vecchiarelli Assistant Secretary -4-