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HomeMy WebLinkAbout2016-03-17 - Board of Directors Meeting Minutes 2016-037 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS WORKSHOP MEETING Thursday, March 17, 2016, 3:00 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The March 17, 2016 Yorba Linda Water District Board of Directors Workshop Meeting was called to order by President Collett at 3:00 p.m. The meeting was held in the Board Room at the District's Administration Building located at 1717 East Miraloma Avenue in Placentia, California 92870. 2. PLEDGE OF ALLEGIANCE President Collett led the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Ric Collett, President Marc Marcantonio, General Manager Michael J. Beverage, Vice President Steve Conklin, Engineering Manager Phil Hawkins John DeCriscio, Operations Manager Robert R. Kiley Delia Lugo, Finance Manager Gary T. Melton Art Vega, Information Technology Manager Damon Micalizzi, Public Information Manager Annie Alexander, Executive Secretary Cindy Botts, Water Cons Supvr/Mgmt Analyst Amelia Cloonan, Human Resources Analyst Malissa Tern, Public Affairs Representative OTHER ATTENDEES Brett Barbre, Director, MWDSC and MWDOC Andrew Gagen, Partner, Kidman Law LLP Kent Ebinger, Resident Ben Parker, Resident Christie Parker, Resident Julia Shultz, Resident Peggy Yamaguchi, Resident 4. PUBLIC COMMENTS Mr. Ben Parker, resident, commented on the status of several requests for records he had submitted to the District. Mr. Gagen responded. Minutes of the YLWD Board of Directors Workshop Meeting Held March 17,2016 at 3:00 p.m. 1 2016-038 Mrs. Christie Parker, resident, commented on the responses received related to Mr. Parker's requests. Mr. Gagen responded. Ms. Julia Shultz, resident, commented on her previous experience with requests for records. 5. DISCUSSION ITEMS 5.1. Staff Analysis of Assessed Administrative Penalties (Ordinance No. 15-01) Mrs. Lugo provided a brief overview of the purpose of the administrative penalties and noted that the emergency drought regulations had been extended through October 2016. Mrs. Botts began the presentation and provided some background information related to the implementation of administrative penalties and the methodology behind the associated structure. She explained that staff had been tasked with providing options for potentially altering the structure at a previous Board meeting. Mrs. Botts then reviewed the results of staff's analysis of the penalty structures for the District's residential, commercial, and irrigation customers. This included an overview of observed changes in behavior related to the average monthly consumption in each of these customer classes. Mrs. Botts reiterated that the District's assigned conservation mandate of 36% had been extended through October and reported that staff had submitted an application to the State Water Resources Control Board requesting up to an 8% downward adjustment. She then provided an overview of the revised calculations for the penalty structure using a potential conservation mandate of 28% which didn't result in a significant change. As such, staff set these calculations aside and examined 3 other options for potentially revising the structure with the exception of the irrigation class as SWRCB's focus is on eliminating outdoor water use. Mrs. Botts provided an overview of each of the options, the associated benefits to the residential and commercial classes, and the projected impact on penalty revenue. She also noted that any changes to Ordinance No. 15-01 would need to be made by adoption of a new ordinance. Mr. Marcantonio commended District customers' conservation efforts since the advent of the drought emergency. Mr. Marcantonio, Mr. Gagen and Mrs. Botts then responded to questions from the Board. President Collett then opened the meeting to public comment. Ms. Peggy Yamaguchi, resident, commented on the District's variable meter reading schedule and administrative penalties. Mrs. Lugo and Mr. Marcantonio responded. Minutes of the YLWD Board of Directors Workshop Meeting Held March 17,2016 at 3:00 p.m. 2 2016-039 Ms. Julia Shultz, resident, commented on issues related to public perception, information provided at the previous budget workshop, and customer notification of any revisions to the administrative penalty structure. Director Barbre commented on projected allocations from the State Water Project, the expected long-term continuation of the current conservation mandates, and the status of local water storage. Mr. Ben Parker, resident, commented on utilizing the District's newsletter to communicate with customers regarding any changes to the administrative penalty structure. Following discussion, it was the consensus of the Board that a new ordinance be drafted that would allow the flexible application of penalties based on customers' conservation efforts. Director Melton made a motion, seconded by Director Hawkins, instructing staff to draft a new flexible ordinance for consideration at a future Board meeting. Director Beverage requested to amend the motion to draft the ordinance so that it included an option to discontinue penalties in blocks 2 and 3 for all customer classes, including irrigation. Motion carried 5-0 as amended. 5.2. Status of Refunding Revenue Bonds Series 2016A Mrs. Lugo explained that in early January, the District was approached by Standard and Poors (S&P) to participate in a rating review. Later that same month, the District's financial advisors (Fieldman Rolapp) notified staff of an opportunity to refund (or refinance) the 2008 Certificates of Participation, and potentially the District's line of credit with Wells Fargo, which could result in a significant cash flow advantage. The Board discussed this matter at a meeting held January 21 , 2016 and instructed staff to move forward. The District was then notified in the latter part of February that its AA+ rating from S&P had been affirmed. Since that time, certain events have occurred that the Board will need to consider in relation to their impact on the refinancing process. One of those events is associated with pending litigation and the other with the Notices of Intent to Recall Directors Kiley and Melton. Both of these events must be disclosed in the Official Statement and could potentially impact investors' decisions. Additionally, Fieldman Rolapp and Citigroup are going to need to request a reaffirmation from S&P of the District's rating. It's possible that the rating could be downgraded which would affect the District's interest rate, pricing of the bonds, and overall cash savings. Staff is planning to present the bond documents at the next regular meeting at which the Board will need to determine if it wishes to move forward with Minutes of the YLWD Board of Directors Workshop Meeting Held March 17,2016 at 3:00 p.m. 3 2016-040 the refinancing process or reconsider at a later date. Mrs. Lugo then responded to questions from the Board. Mr. Ben Parker, resident, commented on the refinancing process and the water rates. Mr. Kent Ebinger, resident, commented on pending litigation and the referendum petition. Ms. Julia Shultz, resident, commented on the Prop 218 process, the referendum petition, and the water and sewer rate study. Director Barbre commented on the importance of disclosure and a recent fine handed down by the Securities and Exchange Commission to a water district in central California in relation to a previous bond offering. 6. ADJOURNMENT 6.1. The meeting was adjourned at 4:35 p.m. The next Regular Board of Directors Meeting will be held Thursday, March 24, 2016 at 8:30 a.m. Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Workshop Meeting Held March 17,2016 at 3:00 p.m. 4