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Home My WebLink About2014-06-23 - Citizens Advisory Committee Meeting Agenda PacketYorba Linda Hater District AGENDA YORBA LINDA WATER DISTRICT CITIZENS ADVISORY COMMITTEE MEETING Monday, June 23, 2014, 8:30 AM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. ROLL CALL COMMITTEE MEMBERS Daniel Mole, Chair Rick Buck, Vice Chair Lindon Baker Carl Boznanski Oscar Bugarini, Bill Guse Fred Hebein Joe Holdren Modesto Llanos Sr. Cheryl Spencer- Borden 3. PUBLIC COMMENTS Any individual wishing to address the committee is requested to identify themselves and state the matter on which they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on this agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to five minutes. 4. PRESENTATIONS 4.1. Turf Removal and Smart Timer Programs - Presented by Cindy Botts, Management Analyst 4.2. Water Agency Liability for Fire Flow Failure: The Yorba Linda Water District Experience - Presented by Steve Conklin, Acting General Manager, and Art Kidman, General Counsel 5. DISCUSSION ITEMS This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Committee members. This portion of the agenda may also include items for information only. 5.1. President's Report 5.2. Future Agenda Items 6. ADJOURNMENT 6.1. The next Citizens Advisory Committee meeting is scheduled to be held Monday, July 28, 2014 at 8:30 a.m. Items Distributed to the Committee Less Than 72 Hours Prior to the Meeting Pursuant to Government Code section 54957.5, non - exempt public records that relate to open session agenda items and are distributed to a majority of the Committee less than seventy -two (72) hours prior to the meeting will be available for public inspection in the lobby of the District's business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870, during regular business hours. When practical, these public records will also be made available on the District's internet website accessible at http: / /www.ylwd.com /. Accommodations for the Disabled Any person may make a request for a disability - related modification or accommodation needed for that person to be able to participate in the public meeting by telephoning the Executive Secretary at 714 - 701 -3020, or writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA 92885 -0309. Requests must specify the nature of the disability and the type of accommodation requested. A telephone number or other contact information should be included so the District staff may discuss appropriate arrangements. Persons requesting a disability - related accommodation should make the request with adequate time before the meeting for the District to provide the requested accommodation. ITEM NO. 4.2 AGENDA REPORT Meeting Date: June 23, 2014 Subject: Water Agency Liability for Fire Flow Failure: The Yorba Linda Water District Experience - Presented by Steve Conklin, Acting General Manager, and Art Kidman, General Counsel ATTACHMENTS: Description: Water Agency Liability for Fire Flow Failure.pdf Backup Material Type: Backup Material Water Agency Liability for Fire Flow I Failure The Yorba Linda Water District Experience Presented by: Steve Conklin, Acting General Manager Art Kidman, General Counsel ®Yorba Linda Water District YLWD PRODUCTION OPERATOR OVERVIEW ¢later H — GI"'— I I P_ �e. J— T-- uiw mtn'i L • '''yyy Vdev view + i a....e iJ Lakcriaw X.—Z, ijL zamz.� z.amza 6-15' Lsk— ..e.� 510' PAm Highlantl �� Lakeview u u 11 . ws wa wnz Clew His L the Canyon L �+ t t00tl tuber Ridge �rrg v w 7fm' F.ma-I Fannon[ 9ev r �3_ Hidden Hills 1±90' CsmHw AE Brya 1M, 5sndago 1000' � Moinrat F6dden Fis Box Carron I T®' r 1P, 6ryant Ranch FIRS System at a Glance • Two system sources • Nine Ground Water Wells • Four MWD connections • Total source capacity: 36,000 gpm • Fourteen Reservoirs (54mg) • Twelve Booster Pump Stations (38,000 gpm) 3 Area Affected by the Fire FREEWPV COMPLSJ( � CAORC 025224 i �PMAOEIRSR NOVELRER 20, 20, "DO o-- ~ co S �'1 .Wien � CORONA YLWD Service A Illp m Burn Area • e Freeway Complex Fire ■30,305 Acres Burned ■90% Chino Hills State Park ■314 Residences Damaged or Destroyed ■ 112 Homes Destroyed in Yorba Linda 5 YLWD Water System Deliveries on November 15-16,2008 ■Average Day: 20 MGD ■Delivery Rate During Fire: 45 MGD Our Response - (ONLY AT OC 66) Water Supply Increase During Fire 14336 GPM (3:30 pm) 12096 GPM (1:45 pm) 16 GPM (11 am) t 5376 GPM (9 am) H November 2009:Litigation Commenced I Against Yorba Linda Water District ■Plaintiffs: Home Owners and Insurance Companies Concerning: ■ 19 Homes in Hidden Hills ■ 7 in Lower Hidden Hills ■ 12 in Upper Hidden Hills ■Seeking Unspecified Damages ($100 million range) 7 ■ Complaints allege liability for: ■Negligence ■ Inverse Condemnation ■YLWD Demurrers to Complaints ■Demurrer: A pretrial motion that says the Complaints are "bogus" YLWD Demurrers: Negligence I Negligence: accident, avoidable if defendant had been careful Firefighter's Immunity: Defense against negligence ■ Government Code Sec. 850.2. "Neither a public entity that has undertaken to provide fire protection service, nor an employee of such a public entity, is liable for any injury resulting -from the failure to provide or maintain sufficient personnel, equipment or other fire protection, facilities." Negligence Dismissed: END OF CASE? �i YLWD Demurrers: I Inverse Condemnation ■Based on constitutional protection against government seizure of property without payment of just compensation ■Condemnation aka: Eminent Domain ■ Legal action initiated by government entity ■Inverse Condemnation aka: "Takings" ■ Legal action initiated by property owner Inverse Condemnation: ■Advantageous for plaintiffs ■ No statutory immunities apply ■ No fault: strict liability ■Attorney's fees: recoverable ■One drawback: not applicable to personal injury ■Must prove government action caused the "taking" WO Inverse Condemnation: Two Types I Deliberate Takings • Raising flood gates on a dam VS. Unintended Takings ■ Water main break damages property Common element: rVAA KyM11 Wj Government action: "Released the Beast" Spring /Summer 2010 ■OC Superior Court overruled YLWD demurrer and allowed inverse condemnation theory to go to trial ■ Even though YLWD did not cause the fire... ■ Judge states: Flood agencies held liable in inverse cases... "Did not cause the rain." LIABILITY FOR FAILURE TO PROTECT!!! 11 Interim "Appeal" of Pretrial Order I ■Ordinarily, order overruling a demurrer is not appealable ■Petitions for Writ of Mandate to: ■First, Court of Appeal ■Then, Supreme Court ■ Writs sought to overturn OC Superior Court's ruling against YLWD's demurrer vs. inverse condemnation Petitions for Writ of Mandate ■Tremendous support for YLWD from water agencies, locally and statewide ■More than 100 AC briefs /letters in support of YLWD's writ petitions 12 Writ Petitions Not Accepted ■ What did that mean? ■No precedent set: • Denial of writ petition merely leaves trial court ruling standing • Trial court decisions are NOT precedential ■Cases allowed to proceed to trial ■Appeal remained available after trial Case moved into pretrial discovery and case development ACWA TPIA coverage: ■$1 million ooled Self Insured Retention (SIR) per occurrence (includes cost of defense) acts as "primary" insurance ■Backed by $59 million in excess liability insurance policies ■ "Stacked" policies: $10 million $10 million $20 million $19 million $ 1 million 13 ACWA TPIA: Inverse Coverage ■ ACWA JPIA provides inverse condemnation coverage ■ "Policy" Language: ■ Covers unintended takings ■ Excludes deliberate takings ■ Exclusion R: "Liability arising out of or in connection with ...inverse condemnation ...to the extent that such liabilitU is alleged to, or does, result from deliberate, decision - making conduct by the governing body" Moment of Truth: Tune 26, 2011 1 ■All hands Mandatory Settlement Conference - including excess insurance carriers ■ACWA JPIA $1 million SIR exhausted on cost of defense ■ Excess carriers refuse coverage of unintended inverse claims 14 Reality Check for YLWD: e ■ Long, expensive and uncertain trial and appeal ahead to vindicate "no liability" position ■ Potentially catastrophic liability upwards of $100 million ■ POTENTIALLY SELF - INSURED!!! ■ YLWD needed to protect its rate payers!!! ACWA JPIA: ABOVE &BEYOND ■YLWD and ACWA JPIA commenced litigation against excess insurance carriers seeking defense costs and liability indemnification ■ACWA JPIA continued to defend YLWD past its SIR limits and took the lead in the fight against the excess carriers 15 ■Pre -trial battles now raged on two fronts: ■ "fire liability case" ■ "coverage case" Estill... YLWD needed to protect its rate pa, e May 2012 "Global Agreement" I Settles Fire Liability Case ■YLWD and ACWA JPIA pay (slit 50 -50) $10 million to fire plaintiffs ■YLWD assigns rights of recovery a ainst excess carriers to fire plaintiffs ■Fire plaintiffs release YLWD from all additional fire related claims 16 "Global Agreement" (Con't): ■YLWD and ACWA JPIA retain right to $10 million from first recoveries against excess carriers ■All parties present mini trial to retired Court of Appeal justice ■No collusion ■ As to liability ■As to damages ■ "Trotter judgment:" Tune 2012 ■YLWD liable under inverse condemnation theory ■ Only as to12 homes in Upper Hidden Hills ■ 7 homes in Lower Hidden Hills dismissed ■WHY? 17 ,I& "Trotter .figment" Won't) I ■Wire burned by fire caused Santiago Booster Pump Station to fail ■Ruled to be unintended inverse condemnation ■Award: $69 million against YLWD for damages, court costs, prejudgment interest and attorneys fees ■Fire Plaintiffs Joined the I "Coverage Litigation" Against the Excess Insurance Carriers ■Main Issue: Deliberate or Unintentional Inverse Condemnation ■ Exclusion R: "Liability arising out of or in connection with ... inverse condemnation ... to the extent that such liability is alleged to, or does, result from deliberate, decision - making conduct by�the governing body" IM July 2013 to October 2013 ■Discovery Battles Continue ■ Cross - motions for Summary Judgment ■ Federal mediator working on settlement in the background October /November 2013 Federal I Court Rulings: ■The Good News: Summary Judgment rulings against excess carries undermine their defenses. ■Mediation efforts begin to result in serious settlement negotiations. ■The Bad News: Trial date anticipated for early 2014 was set for late summer. GLOOM!!! ■Mediation continues quietly 20 May 2014: Mediation Pays Off I ■Coverage Litigation Settled: ■ YLWD and ACWA JPIA recover $10 million from excess insurance companies ■ And conclude participation in the litigation ■ Fire plaintiffs recover $59 million (including original $10 million from YLWD and ACWA JPIA) from 3 of 4 excess carriers ■ Litigation continues between fire plaintiffs and 4th excess carrier Outcomes: ■YLWD found liable for $69 million in fire losses to 12 homes ■ Excess insurance providers paid to cover YLWD liability ■YLWD and ACWA JPIA reimbursed for $10 million paid to facilitate resolution of fire case and avoid catastrophic liability 21 Outcomes (con't): ■ "Failure to Protect" type "takings" NOT established as binding legal precedent ■ "Firefighters' Immunity" shown C D to be vulnerable ■ "Blood is in the Water" Plaintiffs and their lawyers had a good outcome. Expect more cases. Lessons Learned ■Don't compromise water system standards in development process ■In the next fire case, engage expert inverse condemnation lawyers as co- counsel the moment an inverse complaint is filed ■Check insurance coverage to make sure unintentional takings are covered 22 QUESTIONS? Slide show available at: www.kidmanlaw.com Click: "Presentations" 23