HomeMy WebLinkAbout2012-04-11 - Board of Directors Meeting Minutes 2012-053
' MINUTES OF THE
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS WORKSHOP MEETING
April 11, 2012
1. CALL TO ORDER
The April 11, 2012 Workshop Meeting of the Yorba Linda Water District Board of
Directors was called to order by President Hawkins at 4:02 p.m. The meeting
was held in the Board Room at the District's Administrative Building located at
1717 East Miraloma Avenue in Placentia, California 92870.
2. PLEDGE OF ALLEGIANCE
Director Hawkins led the pledge.
3. ROLL CALL
DIRECTORS PRESENT STAFF PRESENT
Phil Hawkins, President Ken Vecchiarelli, General Manager
Gary T. Melton, Vice President Steve Conklin, Engineering Manager
Michael J. Beverage Lee Cory, Operations Manager
' Ric Collett Gina Knight, Human Resources Manager
Robert R. Kiley Stephen Parker, Finance Manager
Art Vega, Interim IT Manager
Cindy Botts, Management Analyst
Annie Alexander, Executive Secretary
4. PUBLIC COMMENTS
None.
5. DISCUSSION ITEMS
5.1. Capital Improvement Program for FY's 2012/13 thru 2016/17
Mr. Conklin provided a PowerPoint presentation regarding the District's
proposed Capital Improvement Program (CIP). Mr. Conklin explained that
each of the projects in the CIP program had been categorized in order of
importance. Projects listed in Group A already have been or will be
completed by the end of the current fiscal year. Projects in Group B are
budgeted, funded, and in progress and staff is recommending that they be
completed. Projects listed in Group C are budgeted, funded, and are
needed to deliver groundwater throughout the District's service area.
Finally, projects in Group D have been determined to be prudent but may
be delayed depending on the District's cash flow needs. Mr. Conklin
' responded to questions from the Board regarding the impact of annexation
with OCWD on various CIP projects and provided an overview of the
District's groundwater delivery project and associated benefits. Mr.
Conklin then presented two options for completion of the CIP's, one with
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projects listed in Group D being completed in FY 2016/17 and the other '
with them being completed in FY 2017/18. Mr. Conklin expressed his
concerns regarding delaying these projects including the possibility of
increased main breaks, increased water losses and higher construction
costs. Mr. Vecchiarelli and Mr. Parker then responded to questions from
the Board regarding the District's bonds and reserves. Director Hawkins
asked if staff was requesting that the Board recommend one of the two
options so that Mr. Parker may incorporate it into the draft budget. Mr.
Vecchiarelli responded that that was the correct. Director Hawkins stated
that he was in favor of extending the District's Capital Improvement
Program through FY 2017/18 with the hope that annexation with OCWD
would be completed before that time.
5.2. Draft Budget for FY 2012/13
Mr. Parker provided a PowerPoint presentation regarding the draft budget
for FY 2012/13 and began with a detailed overview of the assumptions
and key expenses. Mr. Parker explained the District's bond ratings as well
as proposed changes to the reserve policy. Mr. Parker and Mr.
Vecchiarelli then responded to questions from the Board regarding
financing options available for CIP projects which included a discussion
regarding the possibility of obtaining a line of credit for $7M. Mr. Parker
subsequently presented four different rate and funding alternatives and
summarized the short and long term effects on District revenues and '
reserve levels in each scenario. Further discussion regarding funding
options, pass-through projections, and associated debt reserve coverage
followed. Mr. Parker then provided a detailed explanation of staffs
recommendation to implement a stepped water rate increase over a 3
year period on the fixed charge based on meter size (i.e. volumetric). Mr.
Parker also provided a comparison of water rates and fixed charges of
similar agencies and concluded his presentation requesting feedback and
direction from the Board. Mr. Parker then demonstrated various funding
alternatives as suggested by the Directors using the financial model.
Following further discussion, the Board recommended that staff move
forward with the following rate and funding scenario:
• The CIP project schedule would be extended through FY 2017/18.
• The variable water cost pass-through would occur on the
commodity charge for FY 2012/13.
• The fixed water charge would be based on meter size instead of a
flat rate and overall revenue would increase as follows:
1.5% in FY 2012/13
2.5% in FY 2013/14
2.5% in FY 2014/15
• The District would seek to obtain a line of credit in the amount of '
$7M.
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' The Board instructed staff to prepare a Proposition 218 notice explaining
the funding option described above for consideration at the next regular
Board meeting.
Director Collett suggested that this Board meeting be held in the evening
to encourage additional public participation. The Board agreed and the
meeting scheduled April 26, 2012 at 8:30 a.m. was rescheduled to 6:30
p.m. the same day.
The Board then instructed staff to prepare talking points regarding this
matter for distribution to the Citizens Advisory Committee as soon as
possible.
6. ADJOURNMENT
6.1. On a motion by Director Kiley, seconded by Director Collett, and
unanimously approved by the Board, the meeting was adjourned at 6:30
p.m.
' K neth R. Vecchiarelli
Board Secretary
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