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HomeMy WebLinkAbout2016-05-26 - Board of Directors Meeting Minutes 2016-078 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Thursday, May 26, 2016, 8:30 a.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The May 26, 2016 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 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 asked Mr. Marc Marcantonio to lead the pledge. 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT Ric Collett, President Marc Marcantonio, General Manager Mike Beverage, Vice President Steve Conklin, Engineering Manager Bob Kiley John DeCriscio, Operations Manager Gary Melton Gina Knight, Human Resources/Risk Manager Delia Lugo, Finance Manager DIRECTORS ABSENT Damon Micalizzi, Public Information Manager Phil Hawkins Annie Alexander, Executive Secretary Cindy Botts, Water Conservation Supervisor ALSO PRESENT Mike Kiddie, Senior Fleet Mechanic Andrew Gagen, Partner, Kidman Law Freddie Ojeda, Plant Operator II Jeff Decker, Resident Jeremy Smith, Safety and Training Technician Susan Decker, Resident Ron Talbert, Mechanic III Eddy Jackson, Resident Alex Thomas, Water Quality Engineer Ben Parker, Resident Rick Walkemeyer, Information Systems Admin 4. ADDITIONS/DELETIONS TO THE AGENDA Mr. Marcantonio requested to remove Item Nos. 5.2. and 7.1. from the agenda as Director Brett Barbre was not able to be in attendance and the minutes for the April 21, 2016 Board meeting had already been approved by the Board. The Board agreed. Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 1 2016-079 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Recognize Staff Members for Receiving H.R. LaBounty Safety Award Mrs. Gina Knight provided a brief summary of the program and two awards received by Mr. Jeremy Smith for safety related improvements he implemented at the District. Mr. John DeCriscio then provided an overview of the awards received by Messrs. Mike Kiddie, Ron Talbert and Freddie Ojeda for various safety related improvements they implemented at the District. 5.2. MVVDSGiM VVDQG DiFeGtOF's-Refit (This item was removed from the agenda.) 6. PUBLIC COMMENTS Mr. Eddy Jackson, resident, commented on the recent water rate increase, the 8% credit towards the District's 36% conservation mandate, reevaluation of the current water rate, and the District's projected versus actual net income for FY 2015/16 as of March 2016. He also commented on construction of water infrastructure improvements for the proposed Esperanza Hills and Cielo Vista housing developments, plans to upgrade the Fairmont Booster Pump Station, language contained in the District's Northeast Area Planning Study and other documents, and developer responsibility for bearing a fair share of the costs for construction of water infrastructure improvements associated with the aforementioned developments. Mr. Jeff Decker, resident, commented on content contained in a previous District newsletter related to the financial impact of the State's conservation mandate, revenue from the recent water rate increase, topics discusses during a previous meeting he attended with two Board members, and topics discussed during a previous Citizens Advisory Committee meeting. He also commented on the need for lowering the current water rate, the recall petition, plans for and the purpose of upgrading the Fairmont Booster Pump Station, and e-mail correspondence between staff at the City of Yorba Linda and the District related to construction of water infrastructure improvements for the proposed Esperanza Hills and Cielo Vista housing developments. 7. CONSENT CALENDAR Director Beverage made a motion, seconded by Director Kiley, to approve the Consent Calendar with the exception of Item No. 7.1. Motion carried 4-0-0-1 with Director Hawkins being absent. Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 2 2016-080 7.1. Minutes of the-BeaFd ef-iFectters �n�-�Fkshep Meet'R9 held April 21,206 Re'GommeR'datien.-, That 89arid of Di eGtM appFGVFe-the Minutes n[• n ren re°wry sen—d (This item was removed from the agenda.) 7.2. Minutes of the Board of Directors Regular Meeting held April 28, 2016 Recommendation: That the Board of Directors approve the minutes as presented. 7.3. Minutes of the Board of Directors Regular Meeting held May 12, 2016 Recommendation: That the Board of Directors approve the minutes as presented. 7.4. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of$1,097,371.94. 7.5. Claim Filed by the Law Offices of Belgum & Fry on Behalf of Brian Wooldridge Recommendation: That the Board of Directors reject the claim submitted on behalf of Brian Wooldridge and refer it to ACWA/JPIA. 8. ACTION CALENDAR 8.1. Amendment to Previously Budgeted Positions for Fiscal Year 2016-2017 Mrs. Knight explained that due to the extension of the emergency water conservation regulations through January 2017, minor revisions were needed to the previously budgeted positions for the next fiscal year. She then provided a brief overview of the suggested amendments. Mr. Marcantonio responded to related questions from the Board. Mrs. Susan Decker, resident, commented on the hiring of water conservation staff following the Governor's emergency drought declaration and the salary of their department manager. She also commented on the high conservation percentages achieved by District customers, the discontinuation of certain salaries, and the District's budget. President Collett explained the purpose of the water conservation staff. Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 3 2016-081 Mr. Jeff Decker, resident, commented on the purpose of the water conservation staff, analysis of their efforts, and his opinion of the Board's treatment of District customers. Director Melton disagreed with Mr. Decker's comments regarding the Board's treatment of District customers. Director Beverage made a motion, seconded by Director Kiley, to adopt Resolution No. 16-04 approving the budgeted positions for Fiscal Year 2016-2017 and rescinding Resolution No. 16-01. Motion carried 4-0-0-1 on a Roll Call vote with Director Hawkins being absent. 8.2. Draft 2016 Water Quality Report Mr. Steve Conklin explained that the report included water quality testing data from January through December 2015. This year's report is being presented in a new format in order to improve readability. He then introduced Mr. Alex Thomas who provided an overview of key information contained in the report. He noted that the District had not exceeded any federal or state drinking water standards. As the report will be distributed digitally this year, staff is planning to include messaging in the June and July customer billings indicating that it will made be available on the District's website and that hard copies can be obtained at YLWD's headquarters. This same messaging will be provided on the front page of the District's website and in the next edition of the newsletter. Mr. Thomas then responded to related questions from the Board. Vice President Beverage commented on the cost savings associated with distributing the report electronically. Mr. Thomas then responded to additional questions from the Board and provided an overview of the District's water quality monitoring program. Mr. Marcantonio commented on the importance of having qualified and responsible staff to perform the necessary work associated with monitoring and maintaining the District's water quality. Mr. Ben Parker, resident, commented on the importance of having multiple water sources and his personal comparison of other water districts and their use of recycled water. He suggested that the District look into implementing a recycled water program and commented on the historically low visibility of the District's operations. Director Collett explained that the District's wastewater was recycled indirectly through the Orange County Groundwater Replenishment System (GWRS). One of the conditions contained in the District's annexation agreements with the Orange County Water District (OCWD), is that YLWD deliver its wastewater to the Orange County Sanitation District for preliminary treatment before being transferred to OCWD for secondary treatment and reuse. Mr. Marcantonio noted that the District was Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 4 2016-082 contractually prohibited from implementing a "purple pipe" system in its service area. Director Beverage made a motion, seconded by Director Kiley, to approve the 2016 Water Quality Report and authorize staff to make this report available on the District's website pursuant to the new State and Federal law regarding electronic deliver. Motion carried 4-0-0-1 with Director Hawkins being absent. 8.3. Change Order No. 1 for the 2016 Sewer Main CIPP Rehabilitation Project Mr. Conklin explained that the original budget for this project was $250K. Following the bidding process the contract was awarded for $189K. Since that time, District staff identified additional areas that needed to be rehabilitated now rather than later in order to avoid potential leaks. As such, staff is suggesting that this additional work be added to the current contract through a Change Order in the amount of $58K. The total combined expense will still remain less than the original budgeted amount. Mr. Marcantonio commented on the cost savings associated with these types of opportunities as the contractor won't need to remobilize. Director Melton made a motion, seconded by Director Kiley, to approve Change Order No. 1 in the amount of $58,330.01 and seven additional days to Burtech Pipeline, Inc. for construction of the 2016 Sewer Main CIPP Rehabilitation Project, Job No. 2015-10S. Motion carried 4-0-0-1 with Director Hawkins being absent. 9. DISCUSSION ITEMS 9.1. Financial Impact of SWRCB Emergency Regulation for Statewide Urban Water Conservation Adopted May 18, 2016 Mr. Marcantonio explained that the State Water Resources Control Board (SWRCB) had adjusted the emergency water conservation regulations to allow local water suppliers to set their own conservation goal and self- certify their analysis. Suppliers can choose to continue using the SWRCB's assigned conservation percentage or proceed with the State's certification process for consideration of a new goal. Suppliers seeking a new goal must ensure that a 3-year water supply will be available should drought conditions continue. Staff is in the process of obtaining data from MWDOC and OCWD for analysis in order to prepare an application for self-certification. Any modification of the current conservation goal will impact the District's revenues. As such, staff is presenting this information to the Board for discussion as there may be an opportunity to adjust the water rate. Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 5 2016-083 Mr. Damon Micalizzi explained that there is no guarantee that an agency's self-certification goal will be accepted by the SWRCB. It's also possible that SWRCB could revert back to mandating specific conservation percentages in January 2017. MWD recently moved to Condition 2 water supply alert which correlates with Stage 1 of the District's water conservation ordinance allowing customers to water 3 days per week. Moving to Stage 1, should the Board make that determination, would still provide some level of water conservation. However, it will be very difficult for staff to project how much consumption may increase or "bounce back". Mr. Micalizzi then summarized the results of a recent drought related survey, reported on projected weather patterns, and responded to questions from the Board. Mr. Marcantonio noted that the District's rates need to cover the cost of service. When the cost of service increases or decreases, the District has to make adjustments to the rates. This process requires the performance of in depth analysis and collaboration with the District's financial advisors. Vice President Beverage commented on the District's original 5-year financial plan, the impact of the State's emergency conservation regulations on this plan, and taking extra time to complete the budget process for next fiscal year if necessary. He also commented on the need for reviewing the District's water conservation ordinance. Mr. Marcantonio explained that prior to the State's emergency conservation regulations, the Board was working on a 5-year financial plan that would shift the District's business model in modest increments so it wasn't as reliant on high volume consumption. Unfortunately, the new regulations made it necessary to compress the 5-year plan into 1 year. Mr. Marcantonio stated that with the recent change in the State's regulations, he expected the District may be able to "decompress" the plan given there was sufficient revenue to cover YLWD's cost of service, debt covenant requirements, and to continue building reserves to responsible levels as recommended in the rate study. Evaluating this change will require additional financial analysis. Staff has been in contact with Raftelis who indicated they would try to make themselves available to assist the District with this process. President Collett and Vice President Beverage both commented on the timing for adoption of the final budget, other agencies decision to go back to no required conservation, revising the District's water conservation ordinance and potentially changing the current stage. Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 6 2016-084 Mr. Micalizzi commented on the potential impact of changing the District's water conservation stage and the probability of some measure of mandated conservation continuing even after the drought. Similar to what happened following the previous drought, customer consumption will likely never return to the same levels due to permanent lifestyle and landscaping changes. He also stated that he didn't believe there would be any danger in allowing customers to water 3 days per week given that several other agencies had reverted back to no required conservation. MWDSC is still planning to roll out a robust public awareness program encouraging customers to continue being responsible stewards in regards to their water usage. President Collett suggested the Board provide guidance to staff as to what stage of the conservation ordinance they'd like to consider moving to. Vice President Beverage suggested that the 15 minute limit on watering duration per station per day in the permanent restrictions be revised to recommend watering 5 minutes per station twice daily. Mr. Micalizzi noted that a workshop meeting could be scheduled to discuss revising the conservation ordinance. Directors Beverage, Melton and Kiley indicated that they were in favor of moving to Stage 1 of the conservation ordinance. Director Kiley stated that he would like to discuss the section related to hardship variances in more detail. Mr. Micalizzi stated that the language in the conservation ordinance was primarily based off a template provided by MWDSC. He noted that MWDSC was in the process of updating this template. Mrs. Lugo asked for clarification regarding the stage the Board was desiring to move to and the consumption data to be used as a baseline in order to prepare for the next budget workshop. She also commented on the difficulty of projecting customer consumption for the next fiscal year and confirmed that the Board desired staff to work with Raftelis. Mrs. Lugo noted that staff's goal was to provide some in-house financial scenarios to the Board at the next workshop meeting. 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. President's Report President Collett reported on his attendance at the OC Water Summit. 10.2. Directors' Reports • OC Water Summit— May 20, 2016 (Collett/Hawkins/Kiley/Melton) Directors Kiley and Melton reported on their attendance at this event. Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 7 2016-085 10.3. General Manager's Report Mr. Marcantonio asked each of the managers (or their designee) to provide a report regarding activities within their respective departments. Mr. Conklin reported on the status of the Well 21 and Richfield Road Pipeline Projects, the 2015 Waterline Replacement Project, 2016 Sewer Main CIPP Rehabilitation Project, and the Fairmont Booster Pump Station (BPS) Upgrade Project. He noted that the Fairmont BPS had been in place for over 40 years and needed to be replaced. The planned upgrade will increase the District's ability to deliver low-cost groundwater to 100% of the YLWD's service area in addition to other unique opportunities. Mrs. Lugo reported that staff was preparing for the interim field audit, working on extending the maturity date of the District's line of credit from September 30, 2016 to December 30, 2017, and preparing the draft budget for FY 2016/17. Mr. DeCriscio stated that pursuant to the District's purchasing policy, staff was formally notifying the Board that funds were being transferred from the emergency maintenance fund to repair the portable pumps at the Fairmont BPS which were installed to produce additional groundwater. An engine broke down on one of the pumps, and the casing blew off on another pump. The District would not have been able to produce the same amount of groundwater this year without the installation of these pumps. The initial repair estimate from John Deere was $34K to rebuild the engine. The District's mechanics felt the estimate was high and that they could perform the work themselves and have the pump returned into service in the next month using $5K for parts. The District's total cost, including the work performed for the original estimate, is approximately $10K. Mr. Marcantonio noted that the gross savings associated with utilizing these pumps to produce additional groundwater this year was approximately $800K. When the Fairmont BPS upgrade project is complete, the enhanced production capabilities currently provided by the portable pumps will be available all the time. Mrs. Lugo explained that the District has a $250K target level maintenance reserve to be used for unforeseen capital costs. Utilization of these funds requires notification of the General Manager and the Board of Directors as specified in the District's purchasing policy. Mr. Rick Walkemeyer did not have anything to report on Mr. Art Vega's behalf. Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 8 2016-086 Mr. Micalizzi reported on recent activity associated with the Governor's draft budget. He noted that he was planning to attend a Public Listening Session with the Depart of Water Resources, SWRCB, and the Department of Food and Agriculture on June 6, 2016, and that the SWRCB was proposing to increase its annual charges. Staff is working on the next edition of the newsletter and providing information to the OC Register for an upcoming article regarding local government reserve levels. Mrs. Knight stated that due to the length of the meeting, she would save her report until the next regular Board meeting. Mr. Marcantonio noted that he would be out of the office but available by phone/e-mail during the next week. Mr. Ben Parker, resident, shared his opinion of some negative commentary he'd observed, and encouraged all parties to treat each other respectfully. Director Kiley commented on the number of recalls that had been initiated in the community over the past several years. Mr. Parker stated that recalls were part of the legislative process and encouraged everyone to be courteous. 10.4. General Counsel's Report Mr. Andrew Gagen stated that he had nothing to report and that there was a need for the Closed Session. 10.5. Future Agenda Items and Staff Tasks Vice President Beverage requested that additional workshops be scheduled to review the District's water conservation and administrative penalty ordinances. President Collett suggested that these workshops be scheduled to occur sometime in July. 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Collett / Melton) ■ Next meeting is scheduled to be held May 24, 2016 at 4:00 p.m. President Collett and Director Melton reported on the topics discussed during this meeting. Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 9 2016-087 11.2. Joint Agency Committee with City of Yorba Linda (Collett / Beverage) • Minutes of the meeting held April 26, 2016 at 9:00 a.m. were provided in the agenda packet. • The next meeting is scheduled to be held May 31, 2016 at 9:00 a.m. at YL City Hall. 11.3. Interagency Committee with City of Placentia and Golden State Water Co. (Collett / Kiley) • Minutes of the meeting held May 9, 2016 at 3:00 p.m. will be provided when available. • The next meeting is yet to be scheduled. 11.4. Citizens Advisory Committee (Melton) • Minutes of the meeting held May 23, 2016 at 8:30 a.m. will be provided when available. Directors Melton and Beverage reported on the topics discussed during the meeting. • The next meeting is scheduled to be held June 27, 2016 at 8:30 a.m. 12. INTERGOVERNMENTAL MEETINGS The Directors present reported on their attendance at the following meetings. 12.1. WACO — May 13, 2016 (Kiley) 12.2. YL City Council — May 17, 2016 (Collett) 12.3. MWDOC Board — May 18, 2016 (Melton) 12.4. OCWD Board — May 18, 2016 (Kiley) 12.5. OCSD Board — May 25, 2016 (Kiley/Beverage) 12.6. YL Planning Commission — May 25, 2016 (Hawkins) Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 10 2016-088 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from May 27, 2016 — June 30, 2016 The Board reviewed the activity calendar and made no changes. 14. CONFERENCES, SEMINARS, AND SPECIAL EVENTS 14.1. UWI Conference —August 24-26, 2016 Director Kiley commented on the purpose of the conference and the benefits of Director attendance. No motion was made to approve Director attendance at this event. 15. CLOSED SESSION The meeting was adjourned to Closed Session at 10:25 a.m. All Directors in attendance were present. Also present were Messrs. Gagen, Marcantonio, and Micalizzi and Mrs. Knight, 15.1. Conference with Legal Counsel — Pending Litigation Pursuant to Subdivision (a) of Section 54956.9 of the California Government Code Name of Case: Kent Ebinger and Yorba Linda Taxpayers Association vs. Yorba Linda Water District (OC Superior Court — Case No. 00829548) The Board reconvened in Open Session at 11:20 a.m. No action was taken during Closed Session that was required to be reported under the Brown Act. 16. ADJOURNMENT 16.1. The meeting was adjourned at 11:21 a.m. A Board of Directors Workshop Meeting has been scheduled on Monday, June 6, 2016 at 8:30 a.m. The next Regular Board of Directors Meeting will be held Thursday, June 9, 2016 at 8:30 a.m. Annie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held May 26,2016 at 8:30 a.m. 11