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HomeMy WebLinkAbout2017-03-14 - Board of Directors Meeting Minutes 2017-047 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, March 14, 2017, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER President Miller called the meeting to order at 6:31 p.m. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL DIRECTORS PRESENT STAFF PRESENT J. Wayne Miller, President Marc Marcantonio, General Manager Al Nederhood, Vice President Steve Conklin, Engineering Manager Phil Hawkins, Director John DeCriscio, Operations Manager Brooke Jones, Director Gina Knight, HR/Risk and Safety Manager Delia Lugo, Finance Manager DIRECTORS ABSENT Art Vega, Information Technology Manager Andrew J. Hall, Director Annie Alexander, Executive Assistant Cindy Botts, Water Consv Sup/Mgmt Analyst Marcus Millen, Records Mgmt Specialist Malissa Muttaraid, Public Affairs Representative ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP Beth Haney, Councilmember, City of Yorba Linda Tom Lindsay, Councilmember, City of Yorba Linda Melody McDonald, Director, San Bernardino Valley Water Conservation District Paul Dorey, Director, Vista Irrigation District Bill Knutson, Executive Committee Member, ACWA/JPIA Andy Sells, Chief Executive Officer, ACWA/JPIA 4. ADDITIONS/DELETIONS TO THE AGENDA None. Minutes of the YLWD Board of Directors Regular Meeting Held March 14, 2017 at 6:30 p.m. 1 2017-048 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Refund from ACWA/JPIA's Rate Stabilization Fund Mr. Andy Sells provided a brief overview of ACWA/JPIA's insurance services, the purpose of the agency's rate stabilization fund, training programs available to the District, and the Executive Committee's role and responsibilities. He then presented the Board with a refund check in the approximate amount of $81,000. 5.2. Elected Official Liaison Reports Councilmember Beth Haney reported on various upcoming activities scheduled to commemorate the City of Yorba Linda's 501h anniversary. 6. PUBLIC COMMENTS Ms. Claudia Lynch (resident) commented on benefits provided to board members, the recent election, Director attendance at City Council meetings, the Fairmount Booster Pump Station Upgrade Project, and a recent newspaper column. Mr. Ben Parker (resident) commented on a public records request he'd previously submitted for the District's financial model which had been denied based on certain exemptions. He asked that the District reconsider its position on this matter and provide him with an electronic copy of the model and the name(s) of the employee(s) who reviewed his original request. Mr. Andrew Gagen stated that the District's position on this matter had not changed and reviewed the exemptions cited in the response to Mr. Parker's request. Mr. Kent Ebinger (resident) commented on the District's previous distribution of draft documents. Mr. Marc Marcantonio explained that the financial model was considered a software program. While reports generated from the model may be considered public record, the software program itself is not. Ms. Cristy Parker (resident) commented on the deliberative process, weighing the public interest served by disclosure of records versus nondisclosure, and preliminary drafts as related to Mr. Parker's request. Minutes of the YLWD Board of Directors Regular Meeting Held March 14, 2017 at 6:30 p.m. 2 2017-049 President Miller suggested that Mr. Parker's new request as stated during the meeting be referred to legal counsel. Ms. Cristy Parker (resident) stated that the financial model was a spreadsheet which should be made available to the public and commented on associated case law. Mr. Gagen noted that the model contained formulas which had been developed for the District by Mr. Sanjay Gaur of Raftelis. Ms. Delia Lugo stated she had put in a call to Mr. Gaur who was out of the office regarding the proprietary status of the model. Ms. Cristy Parker (resident) stated that Mr. Raftelis had indicated the model was non-proprietary during a previous workshop meeting. 7. CONSENT CALENDAR Director Hawkins made a motion, seconded by Director Jones, to approve the Consent Calendar. Motion carried 4-0-0-1 with Director Hall being absent. 7.1. Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of$485,001.16. 7.2. Terms and Conditions for Water and Sewer Service with Thomas Tonelli, 6011 Grandview Avenue, Yorba Linda Recommendation: That the Board of Directors approve the Terms and Conditions for Water and Sewer Service with Thomas Tonelli, Job No. 2017-10S. 8. ACTION CALENDAR 8.1. Requests for Concurring Nomination Resolutions for the ACWA/JPIA 2017 Executive Committee Election Ms. Gina Knight explained that at the previous Board meeting, staff had been instructed to invite each of the candidates requesting nomination to speak at this meeting. Due to schedule conflicts, only two individuals were able to attend. Minutes of the YLWD Board of Directors Regular Meeting Held March 14, 2017 at 6:30 p.m. 3 2017-050 Director Melody McDonald, of the San Bernardino Valley Water Conservation District, commented on her service as an elected official and on various ACWA/JPIA committees. She then asked that the Board consider nominating and voting for her in ACWA/JPIA's upcoming Executive Committee Election. Director Paul Dorey, of the Vista Irrigation District, commented on professional work experience and his service as an elected official and on ACWA/JPIA's Liability Committee. Director Hawkins made a motion, seconded by Director Miller, to adopt Resolution No. 17-04 concurring in the nomination of David A. Drake of Rincon del Diablo MWD to the Executive Committee of ACWA/JPIA. Motion carried 4-0-0-1 on a Roll Call vote with Director Hall being absent. Director Hawkins made a motion, seconded by Director Jones, to adopt Resolution No. 17-05 concurring in the nomination of Thomas A. Cuquet of South Sutter Water District to the Executive Committee of ACWA/JPIA. Motion carried 3-1-0-1 on a Roll Call vote with Director Nederhood voting No and Director Hall being absent. Director Hawkins made a motion, seconded by Director Jones, to adopt Resolution No. 17-06 concurring in the nomination of Paul E. Dorey of Vista Irrigation District to the Executive Committee of ACWA/JPIA. Motion carried 4-0-0-1 on a Roll Call vote with Director Hall being absent. Director Miller made a motion, seconded by Director Hawkins, to adopt Resolution No. 17-07 concurring in the nomination of Kathleen, J. Tiegs of Cucamonga Valley Water District to the Executive Committee of ACWA/JPIA. Motion carried 4-0-0-1 on a Roll Call vote with Director Hall being absent. Director Hawkins made a motion, seconded by Director Jones, to adopt Resolution No. 17-08 concurring in the nomination of Melody A. McDonald of San Bernardino Valley Water Conservation District to the Executive Committee of ACWA/JPIA. Motion carried 4-0-0-1 on a Roll Call with Director Hall being absent. 8.2. Increasing Issuance Amount of Refunding Revenue Bonds, Series 2017A to Fund Capital Improvements Ms. Delia Lugo explained that the Board previously authorized the issuance of refunding revenue bonds in an amount not to exceed $28,000,000. Since that time, there was discussion of potentially issuing bonds to fund the remaining construction costs of the Fairmont Booster Minutes of the YLWD Board of Directors Regular Meeting Held March 14,2017 at 6:30 p.m. 4 2017-051 Pump Station Upgrade Project in the approximate amount of $6,000,000. Including these bonds with the current refunding opportunity rather than issuing them separately would save the District approximately $300,000. In order to move forward with this option, the legal documents would need to be amended and a new resolution adopted. She then reviewed Fieldman Rolapp's 5-year projections for the District's debt service coverage ratio and days of cash on hand under this new bond issuance scenario. Mr. Kent Ebinger (resident) commented on potential prepayment penalties and interest rates associated with the refunding opportunity. Mr. Ben Parker (resident) commented on the 2008 Certificates of Participation and interest rates associated with the refunding opportunity. The Board then discussed letting the refunding opportunity remain as is versus restructuring it to include additional funding. Director Hawkins made a motion, seconded by Director Jones, to restructure the advance refunding opportunity and request additional funding to complete construction of the Fairmont Booster Pump Station Upgrade Project. Motion carried 4-0-0-1 with Director Hall being absent. 8.3. Independent Audit Services Contract Ms. Lugo explained that staff had solicited proposals for independent audit services for the District through fiscal year 2019 with the option of extending the contract for two subsequent one-year terms. Five out of seven firms responded. Following evaluation and ranking of the proposals, the review team recommended the contract be awarded to White Nelson Diehl Evans (WNDE). The Board and staff then discussed WNDE's previous work for the District, the length of time some of the auditing firms had worked for a single agency, and the benefits of changing auditing firms. Ms. Lugo noted that representatives from the successful firm would be in attendance at future Board meetings to present an overview of the audit process and the results of each annual audit. She clarified that the initial contract was for three years and the District would have the option to extend the contract up to two years thereafter. The Board and staff then discussed WNDE's proposed annual fees for future auditing services and new audit reporting requirements. Minutes of the YLWD Board of Directors Regular Meeting Held March 14. 2017 at 6:30 p.m. 5 2017-052 Mr. Ben Parker (resident) commented on the benefits of having a different firm or a different partner at the same firm conduct future audits. Mrs. Lugo explained that the successful firm could focus on specific areas as requested by the Board including the assignment of a new partner if necessary. Director Hawkins made a motion, seconded by Director Jones, to (1) authorize the General Manager to execute a Professional Services Agreement with White Nelson Diehl Evans, LLP for a three-year contract with two subsequent one-year options for a fee not to exceed $112,586; and (2) require the firm assign a new partner to perform the auditing services. Motion carried 4-0-0-1 with Director Hall being absent. 8.4. Clarification of Roles, Responsibilities and Procedures for Ad Hoc Citizens Advisory Committee (AHCAC) and Potential Revision of Contract for Meeting Facilitation Services Ms. Cindy Botts explained that during their first meeting, the AHCAC members were unable to come to a consensus on what specific topics the committee was to examine and provide recommendations thereon. The committee discussed multiple topics for consideration including the rate structure, capital projects, reserves, cost of service, and budgets for FYS 2015/18. Ms. Botts further explained that should the Board desire the committee to address more than one topic, the meeting facilitator requested that his contract be amended as additional meetings would be needed over a longer period of time. Ms. Botts also informed the Board that one of the committee members had resigned and suggested that the vacancy be filled with the next lowest ranking applicant. She then requested that the Board (1) clarify that the committee's purpose was to provide input on the establishment of a financially sufficient rate or rate structure, or both; (2) determine a process for filling vacancies on the committee; and (3) consider amending the contract for meeting facilitation services. President Miller noted that discussions regarding the District's reserves, capital projects, and staffing would take place during budget workshop meetings scheduled over the next few months. Mr. Tom Lynch (resident) commented on the purpose of the committee and listed topics the members may desire to examine. Minutes of the YLWD Board of Directors Regular Meeting Held March 14,2017 at 630 p.m. 6 2017-053 Mr. Terry Harris (resident and AHCAC member) commented on the timeframe given to the committee for providing recommendations and topics to be considered. He also suggested that the District's financial model be made available for the committee's use. Mr. Ben Parker (resident) commented on his observations of the first AHCAC meeting and suggested that the meeting facilitator's services be discontinued. Mr. Kent Ebinger (resident and AHCAC member) commented on the purpose of the committee, topics to be considered, the meeting facilitator's services, and impartiality of the committee chair as described in the recommended roles, responsibilities and procedures for the AHCAC. Ms. Cristy Parker (resident and AHCAC member) commented on the purpose of the committee, topics to be considered, the committees experience with the meeting facilitator, and suggested that the committee chair be considered an active participant rather than required to be impartial. Mr. Greg Schultz (resident) commented on the need for clarification as to the purpose of the committee, the state's recommended daily water consumption amount per person, and suggested that the video or audio recording of the January 31, 2017 Board meeting be provided to the AHCAC members. He also remarked on tiered rate structures and status of the District's financial model. President Miller stated that feedback had been provided to the meeting facilitator and that a Director may be in attendance at the next AHCAC meeting in order to answer questions. Mr. Gagen noted that the AHCAC was subject to the Brown Act and offered to provide a brief overview of the related requirements at the next AHCAC meeting. Ms. Claudia Lynch (resident) suggested that the meeting facilitator's services be discontinued and a committee chair be appointed. Vice President Nederhood offered his apologies to the public and AHCAC members for the rough start. He then commented on the purpose of the committee as indicated in recommended roles, responsibilities and procedures document, the timeline for the District's budget process, and suggested a process for requesting staff support. He also asked Mr. Marcantonio to share what had been discussed in regards to making the District's financial model available to the committee. Minutes of the YLWD Board of Directors Regular Meeting Held March 14, 2017 at 6:30 p.m. 7 2017-054 Mr. Marcantonio explained that staff could demonstrate the model at a future committee meeting during which members could provide inputs for evaluation. Any resulting reports could then be made available to the committee and interested members of the public. He also noted the model would be utilized during a future budget workshop meeting. Vice President Nederhood further commented on the committees recommended roles, responsibilities and procedures and potentially discontinuing the services of the meeting facilitator. President Miller indicated that the Board would be reviewing the District's reserves and his views on the purpose of the committee. Director Hawkins stated he felt the committee should be able to decide whether or not to elect a chairperson and suggested that the roles, responsibilities, and procedures document be revised to allow the chair to act as a voting member. Ms. Botts clarified that the language in the document did not preclude the committee chair from voting, just that the individual should not seek to influence the Committee. Director Jones suggested that the AHCAC members be encouraged to attend the upcoming budget workshop meetings and that the committee should be allowed to vote on the need for a meeting facilitator and/or the appointment of a participating chairperson. He also suggested that the committee consider appointing a secretary to transcribe summary minutes of the meetings. He then commented on the proposed demonstration of the financial model at a future AHCAC meeting. Ms. Lugo described some of the input fields that could be manipulated in the District's financial model. Director Jones suggested that information regarding other local District's rate studies and rate structures be provided to the committee for reference. Mr. Ben Parker (resident) commented on the formulas and data contained in the financial model and the utilization of such model at a previous Board meeting. He also suggested that the model be made available to the AHCAC. The Board discussed the District's financial model and allowing the committee to vote on whether or not to continue utilizing the meeting facilitator's services. Minutes of the YLWD Board of Directors Regular Meeting Held March 14,2017 at 6:30 p.m. 8 2017-055 Mr. Kent Ebinger (resident and AHCAC member) commented on the cost of the facilitator's travel and suggested that the vote regarding continuation of his services be conducted by via e-mail. Director Nederhood made a motion to reaffirm the recommended roles, responsibilities, and procedures for the AHCAC and remove "or" in the word "and/or"in the first sentence describing the committee's purpose. The Board then discussed the process for filling vacancies on the AHCAC committee and whether or not all three matters being considered at this time should be considered by separate motions. Mr. Gagen stated that the Board could consider each matter by separate motion and that there should be an odd number of members on the committee. Director Nederhood restated his motion which was seconded by Director Jones and carried 4-0-0-1 with Director Hall being absent. Director Nederhood made a motion to appoint the next applicant in the ranking to fill the vacant seat on the AHCAC. Director Hawkins and Nederhood discussed their individual preferences for the total number of committee members. Director Nederhood amended his motion to specify that any future vacancies on the AHCAC would be left unfilled. Director Miller seconded the motion which carried 4-0-0-1 with Director Hall being absent. Director Nederhood made a motion that an item be placed at the beginning of the next AHCAC meeting agenda for the committee to consider whether or not the facilitator's services should be continued. The Board discussed the possibility of asking the facilitator to be on standby should the committee determine that his services were necessary later on. Ms. Botts stated that this option could be discussed with the facilitator. The Board then discussed assigning one or two directors available to attend or contact during future AHCAC meetings should the committee desire. Mr. Gagen advised that only two directors be assigned to attend the AHCAC meetings in order to avoid potential issues with the Brown Act. He also advised that Directors input providing input during AHCAC meetings would be representing themselves as an individual and not the full Board. Minutes of the YLWD Board of Directors Regular Meeting Held March 14. 2017 at&30 p.m. 9 2017-056 The Board then discussed the level of Director involvement during AHCAC meetings and whether or not the facilitator should be in attendance at the next committee meeting. The motion was amended to specify that the item be placed first on the next AHCAC meeting agenda followed by consideration of appointing a committee chairperson. Director Jones seconded the motion which carried 4-0-0-1 with Director Hall being absent. 9. DISCUSSION ITEMS 9.1. Annual Review of Financial Reserves Policy Ms. Lugo presented a proposed draft of the District's financial reserve policy for the 2018 fiscal year. The primary change from the current policy would be to eliminate the Debt Service Reserve and establish a Rate Stabilization Reserve and an Administrative Reserve. The purpose of the Rate Stabilization Reserve would be to assist in smoothing out future water rate increases and the maximum target level would be set at 20% of the budgeted water sales for the current fiscal year. The purpose of the Administrative Reserve would be to partially or fully fund certain general administrative projects on a pay-as-you-go basis. The maximum target level for this reserve is suggested to be set at $200K. Other recommended changes to the policy include changing the minimum and maximum target levels of both the water and sewer funds for the Operating, Emergency and Capital Replacement reserves. Additionally, it is suggested to reclassify the Conservation Reserve as a contractually restricted reserve rather than a Board designated reserve. She noted that additional information would be presented for discussion at the next budget workshop meeting. The Board and staff then discussed the purpose, proposed target levels, and replenishment process for various reserves. Mr. Ben Parker (resident) commented on utilizing a line of credit for emergencies. 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports Vice President Nederhood and Director Jones reported on their attendance at CSDA's Special District Leadership Academy Conference. Minutes of the YLWD Board of Directors Regular Meeting Held March 14, 2017 at 6:30 p.m. 10 2017-057 10.2. General Manager's Report Mr. Marcantonio reported on the status of the Oroville Dam and current legislative matters. He noted that the Governor's emergency drought declaration had been extended and commented on the decline in water consumption due to recent rainstorms. He also reported on staff's efforts related to an unfunded state mandate to provide lead sampling services for K-12 schools and the status of the Esperanza Hills development project. He then asked each of the managers to report on activities within their respective departments. Mr. Steve Conklin reported on the status of various construction projects and MET's water storage efforts. Mr. John DeCriscio stated that two of his staff members had recently completed ACWA/JPIA's operations certification program. He also reported on historical water consumption trends, staff efforts to utilize additional groundwater and departmental maintenance activities. Ms. Lugo reported on staff efforts related to the budget and bond issuance processes. Mr. Art Vega reported on staff efforts related to the budget process and upgrading the District's billing software. Ms. Gina Knight reported on recent employee performance evaluation training provided to managers and supervisors. 10.3. General Counsel's Report Mr. Gagen stated that he or another representative from his office was scheduled to provide a presentation on the CA Supreme Court's decision regarding the application of the Public Records Act to personal devices at the next regular meeting. 10.4. Future Agenda Items and Staff Tasks None. 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) ■ Next meeting is scheduled March 23, 2017 at 4:00 p.m. Minutes of the YLWD Board of Directors Regular Meeting Held March 14, 2017 at&30 p.m. 11 2017-058 11.2. Joint Agency Committee with City of Yorba Linda (Miller/Hawkins) ■ Minutes of the meeting held March 13, 2017 at 4:00 p.m. will be provided when available. ■ Next meeting is yet to be scheduled. 11.3. Interagency Committee with City of Placentia and Golden State Water Company (Miller/Nederhood) ■ Next meeting is yet to be scheduled. 12. INTERGOVERNMENTAL MEETINGS The Directors reported on their attendance at the following meetings. 12.1 WACO — March 3, 2017 (Jones/Miller) 12.2 YL City Council — March 7, 2017 (Jones) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from March 15, 2017 — June 30, 2017 Director Hawkins made a motion, seconded by Director Jones, to accept the activity calendar as presented. Motion carried 4-0-01 with Director Hall being absent. 14. ADJOURNMENT 14.1. The meeting was adjourned at 10:11 p.m. nnie Alexander Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held March 14, 2017 at 630 p.m. 12