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HomeMy WebLinkAbout2007-12-13 - Board of Directors Meeting Minutes2007-195 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING December 13, 2007 The December 13, 2007 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 at District Headquarters, 4622 Plumosa Drive, Yorba Linda. DIRECTORS PRESENT AT ROLL CALL Ric Collett, President John W. Summerfield, Vice President Paul R. Armstrong Michael J. Beverage William R. Mills STAFF PRESENT Kenneth R. Vecchiarelli, Asst. G.M. Lee Cory, Operations Manager Gina Knights, Human Resources Mgr Stacy Bavol, Customer Service Sup Amelia Cloonan, Exec. Secretary Betsy Martyn, District Counsel INTRODUCTION OF VISITORS Thomas M. DeMars, Fieldman/Rolapp & Associates Joshua Lentz, Fieldman/Rolapp & Associates Kurt Yeager, Stradling, Yocca, Carlson & Rauth Paul Kaymark, Charles Z. Fedak & Company Dan Chaney, Placentia resident Paul Weddell, Yorba Linda resident Richard Manassero, Yorba Linda resident Ryan Oldham, representing Yorba Linda resident client INTRODUCTION OF VISITORS AND PUBLIC COMMENTS Assistant General Manager Vecchiarelli introduced Pat Grady, newly hired Information Technology Director. Arthur G. Kidman, General Counsel entered the meeting at 8:35 a.m. CONSENT CALENDAR (Items 1 through 5) On a motion by Director Armstrong, seconded by Vice President Summerfield, the Board of Directors voted 5-0 to approve the Consent Calendar. Minutes of the Regular Board of Directors meeting held November 21, 2007. Recommendation: Approve the minutes as presented. 2. Payment of bills, refunds, and wire transfers. Recommendation: Ratify and authorize disbursements in the amount of $1,213,890.71. -1- 2007-196 3. Terms and Conditions for Water and Sewer Service with Friendship Baptist Church, 17141 Bastanchury Road, Yorba Linda. Recommendation: That the Board of Directors approve terms and conditions for Water and Sewer Service with Friendship Baptist Church, Job No. 200712. 4. Progress Payment for the New Administration Building. Recommendation: Approve Progress Payment No. 9 in the net amount of $477,857.68 to J.E. Grant General Contractors for construction of the New Administration Building, Job No. 200313. 5. Investment Report for quarter ending September 30, 2007. Recommendation: Receive and file the investment report for the quarter ending September 30, 2007. ADJOURN TO CLOSED SESSION 6. None PUBLIC HEARING 7. Consider 2008 Water Rate Report a. President Collett opened the Public Hearing at 8:34 a.m. b. Assistant Secretary Vecchiarelli provided proof of public hearing notification, correspondence and/or petitions. Paul Kaymark, Charles Z. Fedak & Co., entered the meeting at 8:38 a.m. c. Testimony began with a report by Assistant General Manager Vecchiarelli. Assistant General Manager Vecchiarelli stated staff brought recommendations to the Finance Committee on several occasions. The notice to the public included the maximum rate increase staff would have proposed for a balanced budget. The budgeted revenue stream shortfall was calculated using the current water rate and current fixed charge. There is a higher than expected revenue stream from interest earned on investments. Assistant General Manager Vecchiarelli explained. Approximately $0.22 of the proposed increase is our projected expense for the debt service on the new debt. Staff is in agreement with the Finance Committee members that the District should not increase the base minimum charge proportionally for the debt service component of the water rate increase. Assistant General Manager Vecchiarelli went over the recommendation portion of the staff report. Staff's recommendation is to increase the unit charge from $1.71 to $1.89. Assistant General Manager Vecchiarelli said Item 3 was General Manager Payne's recommendation, which is to increase the commodity charge to $1.83 and the minimum monthly service charge to $8.35 per month. -2- 2007-197 Director Mills said the Finance Committee met numerous times. The committee recognizes there are items that are difficult to project. For this reason, the committee recommended the commodity rate be set at $1.79 and the service charge remain at the same rate of $7.92. Director Beverage stated the District is giving back $0.08 because of the return of funds from the State of California. So, the commodity charge should be $1.71, recommended by the committee, and the service charge base rate would go down from $7.92 to $7.88, because the District should not have raised the base rate by $0.04 when it issued the 2003 bonds. Assistant General Manager Vecchiarelli stated the District prepared a budget based on what it has to pay. Director Mills stated the committee ended at $1.79, because it felt there might be another $0.06 somewhere that the District might not spend. Both Director Beverage and Director Mills agreed that at $1.71, the District will be upside down. There was discussion about costs and budget processes. Assistant General Manager Vecchiarelli stated in the short term the District will have higher debt service, but in the long term, we will be able to maintain costs. This is a good service to our customers. Staff recommends $1.83 and $8.35. Cindy Mejia, Assistant Administrator, and Payam Khodadadi, Stradling, Yocca, Carlson & Rauth, entered the meeting a 8:55 a.m. General Counsel Kidman spoke on of the issues talked about at the ACWA Conference, which had to do with the headline of a $14 billion deficit coming next year. There is no absolute protection against a raid by the state on the District's $1.2 million in property tax revenue. Betsy Martyn, District Counsel, commented that the District must set its rates at a level that funds the service it is set to provide. There could be a legal problem if the District sets its rates lower than what is actually needed. Director Beverage stated if a raid by the State on property tax revenue does occur, the District will have another public hearing. Director Mills stated the Board approved the budget, which indicates a shortage. Director Armstrong said there is a problem with how to present the Information to the public. d. Testimony from the public commenced at 9:21 a.m. Dan Chaney, Placentia resident, stated the size of the increase indicates a 20% increase, and this is a substantial increase. He assumes a certain portion of what the customer pays goes to infrastructure and asked that a sheet be included in the billing with an explanation. Richard Manassero, Yorba Linda resident, stated he understands the need for increases. He commented it is a shame the agricultural rate has been eliminated. Assistant General Manager Vecchiarelli explained there is a supply crisis now with import water. Metropolitan Water District has cut back -3- 2007-198 on their interim agricultural water program, which was set up on surplus water. There are now so few agricultural customers that the administrative costs and reporting required costs more than the savings, and the costs are passed on to other customers. Met now requires more reporting, and that costs all the customers. Stacy Bavol, Customer Service Supervisor, stated Mr. Manassero's accounts are not currently part of the agricultural program. Paul Weddell, customer, commented on the numbers presented in the report. They are difficult to understand. He suggests a better presentation. Assistant General Manager Vecchiarelli stated the District is required to post the maximum rate that might be considered. The Water Rate Report is on the website and gives the details. Testimony from the public closed at 9:45 a.m. Dan Chaney, Richard Manassero and Ryan Oldham left the meeting. Vice President Summerfield commented that he does not want to base his decision on future numbers. He is concerned with the six cents anticipated income from interest. e. The President closed the public hearing at 9:45 a.m. Discussion. Director Mills moved to approve all recommendations of staff made in the report with the exception of Item 3 substituting a commodity rate of $1.79 and a service charge of $7.92. Director Beverage seconded for discussion. Director Mills adjusted the motion for the service charge to be set at 21% of the fixed supplies, services, salaries and benefits portion of the budget, which represents an increase to $8.35, plus approval of all other items. President Collett asked to adjust Item 8, eliminating the word "automatic" and substituting the word "consider". On a Roll Call vote, the Board of Directors voted 5-0 to adopt Resolution No. 07-17 adopting water rates as outlined in the 2008 Water Rate Report effective January 1, 2008 with the changes indicated and rescinding Resolution 04-07. Betsy Martyn and Paul Weddell left the meeting at 10:04 a.m. A recess was declared. The Board of Directors reconvened at 10:17 a.m. All Directors were present. ADJOURN TO THE PUBLIC FINANCING CORPORATION MEETING On a motion by President Collett, seconded by Director Armstrong, the Board of Directors voted 5-0 to adjourn to a meeting of the Yorba Linda Water District Public Financing Corporation at 10:18 a.m. -4- 2007-199 DIRECTORS PRESENT AT ROLL CALL Ric Collett, President John W. Summerfield, Vice President Paul R. Armstrong Michael J. Beverage William R. Mills INTRODUCTION OF VISITORS AND PUBLIC COMMENTS None ACTION ITEMS: 1. Reorganization of the Board of Directors to Select a President, Vice President and Appoint Corporate Officers for Calendar Year 2008. On a motion by Director Beverage, seconded by Director Mills, the Board of Directors voted 5-0 to nominate and elect John W. Summerfield as President and William R. Mills as Vice President; and 2) appointed the following Corporate Officers. a) Secretary - Michael A. Payne, General Manager b) Assistant Secretary - Kenneth R. Vecchiarelli, Assistant General Manager c) Auditor- Diane Cyganik, Finance Director 2. Consider Resolution of the Board of the Public Financing Corporation approving an Installment Purchase Agreement with the Yorba Linda Water District and certain other documents authorizing the sale and delivery of the Certificates of Participation. Assistant General Manager Vecchiarelli invited Tom DeMars and Kurt Yeager to speak to the issue. Mr. DeMars explained the history of the previous sale and delivery of the COPs. This is the second installment. Staff has requested one change given the credit market troubles. The not-to-exceed interest rate of 5.5% listed in Section 2 should be adjusted to 5.75% to avoid having to come back to the Board of Directors. Tom DeMars asked that the names and phone numbers of individuals wishing to participate be identified so they could be communicated to the winning bidders. The winning bidders will contact the interested parties. The minimum installment purchase amount is $5,000. Kurt Yeager stated the Board of Directors and staff members should not purchase any COPs without conferring with General Counsel. The rating of the District according to Tom DeMars could go triple A as it was in 2003, with insurance underwriting. He further explained the process. -5- 2007-200 On a motion by Director Collett, seconded by Vice President Mills, the Board of Directors voted 5-0 on a Roll Call to adopt PFC Resolution No. 07-01, a Resolution of the Board of Directors of the Yorba Linda Water District Public Financing Corporation approving an installment purchase agreement with Yorba Linda Water District and certain other documents, authorizing the preparation, sale and delivery by the trustee of not to exceed $40,000,000 certificates of participation, and authorizing certain actions in connection therewith, with recommended changes to Section 2, which shall state a not- to-exceed interest rate of 5.75%. ADJOURN TO THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING On a motion by Director Beverage, seconded by Director Collett, the Yorba Linda Water District Public Financing Corporation Board of Directors adjourned at 10:38 a.m. to the Yorba Linda Water District Board of Directors Regular meeting. ACTION CALENDAR 8. Consider an Installment Purchase Agreement with the Public Financing Corporation and certain other documents, authorizing the preparation, sale and delivery by the trustee of the Certificates of Participation and authorizing certain actions in connection therewith. On a motion by Director Beverage, seconded by President Collett, the Board of Directors voted 5-0 on a Roll Call vote to adopt Resolution No. 07-18, a Resolution of the Board of Directors of the Yorba Linda Water District approving an installment purchase agreement with Yorba Linda Water District Public Financing Corporation and certain other documents, authorizing the preparation, sale and delivery by the trustee of not to exceed $40,000,000 certificates of participation, and authorizing certain actions in connection therewith, with a recommended change to Section 3, which shall state a not to exceed interest rate of 5.75%. Assistant General Manager Vecchiarelli expressed the District's appreciation to Kurt Yeager and Tom DeMars and their staff for being extremely helpful during the process. Kurt Yeager, Tom DeMars, John Lentz and Payam Khodadadi left the meeting at 10:39 a. m. -6- 2007-201 9. Reorganization of the Board of Directors to Select a President, Vice President and Appoint Corporate Officers for Calendar Year 2008. On a motion by President Collett, seconded by Director Beverage, the Board of Directors voted 5-0 to nominate and elect John W. Summen`ield as President and William R. Mills as Vice President; and 2) appointed the following Corporate Officers: a) Secretary - Michael A. Payne, General Manager b) Assistant Secretary - Kenneth R. Vecchiarelli, Assistant General Manager c) Auditor- Diane Cyganik, Finance Director 10. Final Audited Financial Statements for the period ending June 30, 2007. Assistant General Manager Vecchiarelli stated the Finance Committee has reviewed the Audited Financial Statements. He introduced Paul Kaymark of Charles Z. Fedak & Co. who stated changes recommended by the Committee members indicating the health of the District had been made in the final document. On a motion by Director Collett, seconded by Director Armstrong, the Board of Directors voted 5-0 to receive and file the final audited financial statements for the period ending June 30, 2007. Paul Kaymark left the meeting at 10:44 a.m. 11. Consider disposition of MWDOC Tier 2 Contingency Fund & Capacity Charge Reserve Fund refund check. Customer Service Supervisor Bavol said there will be a message on the customers' bills regarding the refund. On a motion by Director Beverage, seconded by Vice President Mills, the Board of Directors voted 5-0 to direct the General Manager to issue a one time credit of $8.01 on all active water accounts as of January 1, 2008. A recess was declared at 10:47 a.m. The Board of Directors reconvened at 10:50 a.m. All Directors were present. DISCUSSION ITEMS 12. None REPORTS. INFORMATION ITEMS AND COMMENTS 13. a. President's Report President Summerfield thanked everyone for the Committee assignments will be prepared shortly. a particular committee should contact President some recommendations, b. Directors Reports None. opportunity to be President. Anyone with a preference for Summerfield. Staff will make -7- 2007-202 c. General Managers Report 1) Update on water pressure enhancement project. Assistant General Manager Vecchiarelli commented. The District is working with RBF updating the model and reanalyzing the runs already done. The District will be assessing a couple of projects. The information will be brought to the PEO Committee in January. d. General Counsel's Report 1) Final Report on 2007 Legislative Bills. General Counsel Kidman said the final legislative report was in the agenda. He addressed infrastructure financing, the big item for the year. Nothing has come out of the legislature, and it appears to be the biggest public policy failure in our life times. Two different measures will be on the ballot with respect to further restricting eminent domain. The Howard Jarvis group and landlords association is proposing one measure, and the League of Cities has a counter measure proposal. General Counsel Kidman stated under the Brown Act there was a court case that clarified the law on the type of things the would indicate a serial meeting. E-mail communication from staff to the board is currently OK. The law vetoed would have made it much more difficult. There needs to be care about lateral communication among Board members when talking to other Board members. Discussing how you are going to vote is a problem. General Counsel Kidman spoke about the agreement with the City of Placentia regarding street and storm drain improvements. At a previous Board meeting, Director Beverage and Director Collett excused themselves during discussion and left the meeting. The question was asked if they did need to absent themselves during discussion and voting. Contracts have special rules. General Counsel Kidman has written a report and will retain it in his files. In his opinion, neither Director Beverage nor Director Collett were required to excuse themselves, and the contract is valid, because the type of interest they had with the City of Placentia did not require their disqualification. This contract affects all the members of the public just the same as it affects Director Beverage. Director Collett has several layers in between himself and the contract. -8- 2007-203 COMMITTEE REPORTS 14. a. Executive-Administrative-Organizational Committee (Collett/Summerfield) Alternate: Armstrong 1) The Minutes of meeting held November 20 were reported on at the Board meeting held November 21. 2) Minutes of meeting held December 11 were discussed. Director Collett reported the Committee discussed YLWD/OCWD Annexation issues. The LAFCO meeting was postponed, and a meeting between OCWD and YLWD staff was held. From that discussion, staff has been given direction. 3) Meeting scheduled for December 18, 4:00 p.m. Cancelled b. Finance-Accounting Committee (Mills/Beverage) Alternate: Summerfield 1) Minutes of meeting held December 5. Vice President Mills reported. Paul Kaymark of Charles Z. Fedak Co. presented the audited financial statements and the management letter. Tom DeMars of Fieldman Rolapp & Associates was contacted to present information regarding coverage ratio for the bonds, ratings and water rate increases and insurance rates. The committee members received the Investment Report for the month ending October 31, 2007 and received and discussed the monthly report on investments ending November 30, 2007. c. Personnel-Risk Management Committee (Summerfield/Armstrong) Alternate: Mills 1) Minutes of meeting held December 10 were discussed. President Summerfield reported discussion included a status report on recruitments, an evaluation form to be used for the EOC facility use by others, a new facility added for use with the workers compensation program and a status report on risk management activities. 2) Meeting scheduled for Monday, January 14, 4:00 p.m. d. Planning-Engineering-Operations Committee (Armstrong/Mills) Alternate: Collett 2) The meeting of December 6 was rescheduled to December 14 at 4:00 p.m. 3) A meeting is scheduled for January 11, 2008, 4:00 p.m. -9- 2007-204 e. Public Information Committee (Collett/Beverage) Alternate: Armstrong 1) Minutes of meeting held December 4. Director Collett reported Cindy Mejia, Assistant Administrator, presented a status report on District information activities. A draft of the 10% water conservation resolution was presented. Pat Grady, IT Director, was introduced to the committee members. He gave an update on the GIS system and the anticipated conversion to the new system. 2) Meeting scheduled for January 4, 8:30 a.m. f. Building Ad Hoc Committee (Summerfield/Beverage) Alternate: Armstrong 1) Meeting scheduled for December 20, 4:00 p.m. 2) Meeting scheduled for January 17, 4:00 p.m. g. MWDOC Ad Hoc Committee (Beverage/Collett) Alternate: Mills 1) Meeting scheduled for December 17, 4:00 p.m. 2) Meeting scheduled for February 26, 4:00 p.m. h. City of Placentia Ad Hoc Committee (Beverage/Payne) 1) Minutes of meeting held December 7 were discussed. Director Beverage and General Manager Payne attended. Mayor Nelsen talked about synthetic turf for medians and discounts and rebates. Sewers were discussed. INTERGOVERNMENTAL MEETINGS 15. a. MWDOC Board, November 21 (Staff) No one attended. b. OCWD Board, November 21 (Staff) Cancelled c. ACWA/JPIA Fall Conference, November 26-November 30 Vice President Mills attended. At JPIA, the biggest issue has been expenses for executive meetings and president's meetings. A resolution was passed so they conform to law. At ACWA, Huell Howser spoke. Sunny McPeek and Lester Snow were other luncheon speakers. Sunny McPeek though dredging should commence immediately in the Delta. Vice President Mills attended a session on GASB 45. The District can go through JPIA but must hire an actuary. There was discussion about the Carlsbad desalter. -10- 2007-205 d. Yorba Linda Planning Commission, November 28 (Summerfield) Cancelled e. Yorba Linda City Council, December 4. No one attended. f. MWDOC/MWD Joint Workshop, December 5 (Staff) No one attended. g. OCWD Board, December 5 (Staff) No one attended. h. ISDOC Quarterly, December 6 No one attended. i. WACO, December 7 No one attended. j. YLWD/OCWD meeting at LAFCO, December 11 Meeting Cancelled. k. Yorba Linda Planning Commission, December 12 Director Armstrong attended. There was discussion about cell sites and alternative powered equipment and the widening of Lakeview. There were second story additions where the District noted there were water lines nearby. BOARD OF DIRECTORS ACTIVITY CALENDAR Authorization to attend meetings scheduled after December 13, 2007. Agenda is available in the District office prior to meeting. December 2007 Executive-Admin-Or anizational Committee, Dec 18, 4:00 .m. Collett/Summerfield Yorba Linda City Council, Dec 18, 6:30 p.m. Mills MWDOC Board, Dec 19, 8:30 a.m. Staff OCWD Board, Dec 19, 5:00 .m. Staff Building Ad Hoc Committee, Dec 20, 4:00 .m. Summerfield/Bevera e December 24 and December 25 - Holidays Offices Closed Yorba Linda Planning Commission, Dec 26, 6:30 p.m. Cancelled Summerfield 2007-206 Januarv 2008 New Year's Day, January 1, 2008, Offices Closed Yorba Linda City Council, Jan 2, 6:30 .m. Collett MWDOC/MWD Joint Workshop, Jan 2, 8:30 a.m. Staff OCWD Board, Jan 2, 5:00 .m. Staff WACO, Jan 4, 7:30 a.m. Mills Public Information Committee, Jan 4, 8:30 a.m. Collett/Beverage Finance-Accounting Committee, Jan 8, 4:00 .m. Mills/Beverage Yorba Linda Planning Commission, Jan 9, 6:30 p.m. Armstrong Plan nin -En ineerin -O erations Committee, Jan 11, 4:00 .m. Armstrong/Mills Personnel-Risk Management Committee, Jan 14, 4:00 p.m. Sum merfie Id/Arm strong Executive-Admin-Or anizational Committee, Jan 15, 4:00 .m. Collett/Summerfield Yorba Linda City Council, Jan 15, 6:30 p.m. Mills MWDOC Board, Jan 16, 8:30 a.m. Staff OCWD Board, Jan 16, 5:00 p.m. Staff Building Ad Hoc Committee, Jan 17, 4:00 p.m. Summerfield/Bevera e Yorba Linda Planning Commission, Jan 23, 6:30 .m. Summerfield CONFERENCES AND SEMINARS 16. Authorize attendance of Directors and such staff members of the District as approved by the General Manager to attend the following conferences and seminars. a. None ADJOURNMENT On a motion by Director Collett, seconded by Director Beverage, the Board of Directors voted to adjourn to a regular meeting of the Board of Directors scheduled for Thursday, December 27, 2007, at 8:30 a.m., at 4622 Plumosa Drive, Yorba Linda 92886. Kenneth R. Vecchiarelli Assistant Secretary -12-