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HomeMy WebLinkAbout2017-05-23 - Board of Directors Meeting Minutes (B) 2017-102 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Tuesday, May 23, 2017, 6:30 p.m. 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER The meeting was called to order at 6:46 p.m. President Miller apologized for the late start due to the workshop meeting held immediately prior to this meeting. 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 Art Vega, Information Technology Manager DIRECTORS ABSENT Annie Alexander, Executive Assistant Andrew J. Hall, Director Cindy Botts, Management Analyst Bryan Hong, Water Quality Engineer Kelly McCann, Senior Accountant Malissa Muttaraid, Public Affairs Representative ALSO PRESENT Andrew Gagen, Partner, Kidman Law LLP Beth Haney, Councilmember, City of Yorba Linda 4. ADDITIONS/DELETIONS TO THE AGENDA None. 5. INTRODUCTIONS AND PRESENTATIONS 5.1. Elected Official Liaison Reports None. Minutes of the YLWD Board of Directors Regular Meeting Held May 23,2017 at 6:30 p.m. 2017-103 6. PUBLIC COMMENTS Mr. Ben Parker (resident) commented on a report issued by the OC Grand Jury referencing the District's reserves and requested a copy if available. Mr. Marcantonio indicated this report was accessible on the internet. Ms. Pat Nelson (resident) commented on information published in the newspaper and social media related to the Ad Hoc Citizens Advisory Committee's (AHCAC) recommendations. She also spoke against budget based rate structures and the issuance of a refund. President Miller noted that slides from a special briefing regarding implementation of Executive Order B-37-16 had been added to the digital version of the agenda packet (see Item No. 10.1.). 7. CONSENT CALENDAR Vice President Nederhood stated he had a question regarding a payment to Kidman Law listed on Item No. 7.3. Director Hawkins suggested this item be considered separately from the remainder of the Consent Calendar. Director Hawkins made a motion, seconded by Director Jones, to approve Item Nos. 7.1., 7.2., and 7.4. on the Consent Calendar. Motion carried 4-0-0-1 with Director Hall being absent. 7.1. Minutes of Board of Directors Special Meeting Held February 23, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.2. Minutes of Board of Directors Special Meeting Held March 1, 2017 Recommendation: That the Board of Directors approve the minutes as presented. 7.4. Directors and General Manager Fees and Expenses Report for Third Quarter FY 2017 Recommendation: That the Board of Directors receive and file the Directors and General Manager Fees and Expenses Report for Third Quarter FY 2017. Minutes of the YLWD Board of Directors Regular Meeting Held May 23,2017 at 6:30 p.m. 2 2017-104 ITEMS REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION 7.3. Payments of Bills, Refunds, and Wire Transfers Vice President Nederhood requested additional information regarding the amount listed for payment to Kidman Law. Mr. Kelly McCann and Mr. Marc Marcantonio explained that the District was incurring additional costs related to pending litigation. Pursuant to a fee sharing agreement for special counsel, these costs are being submitted to Kidman Law which are in turn billed to the District. A portion of the payment being made to Kidman Law represents multiple months of back billing for these services. Director Nederhood made a motion, seconded by Director Hawkins to ratify and authorize disbursements in the amount of $1,771,792.93. Motion carried 4-0-0-1 with Director Hall being absent. 8. ACTION CALENDAR 8.1. Proposed Budgeted Positions for Fiscal Year 2018 Ms. Gina Knight explained that the Board considers and approves funding for proposed positions as part of the annual budget process. The draft budget for FY18 includes funding for 80 regular, full time positions. This next year's list includes the addition of two new positions (Assistant General Manager (AGM) and Accountant) and the removal of four others (Water Conservation Supervisor, Water Conservation Representative (2), and Office Clerk). The position of Communications Manager would be unfunded. The Board and staff discussed the need for the new Accountant position and the duties to be performed. Discussion continued regarding the salary range for the AGM position, funding of the Communications Manager position, and the District's public relations needs. Ms. Pat Nelson (resident) commented on the proposed budgeted positions and the District's communications efforts and future needs. The Board voted 3-0-1-1 on a Roll Call with Director Hawkins voting No and Director Hall being absent to adopt Resolution No. 17-15 approving the budgeted positions for Fiscal Year 2018 and rescinding Resolution No. 16-20. Minutes of the YLWD Board of Directors Regular Meeting Held May 23,2017 at 6:30 p.m. 3 2017-105 8.2. District Investments Held with Safe Keeper/Custodial Agent Pershing LLC Mr. McCann explained that YLWD's non-trustee US Government sponsored agency securities and certificates of deposit were currently being held by Pershing LLC in the District's name. However, the safe keeper/custodial agreement is between First Empire Solutions and Pershing. While the District can choose to continue with this arrangement, a significant deficiency of internal control will be reported in future audits. Another option is to transfer the investments held at Pershing to another safe keeper/custodial agent. The Board and staff reviewed a list of potential safe keepers, the associated cost for service, and their level of compliance with auditing requirements. They also discussed the current rate of return, the disposition of CD's near maturation, and the ideal time for transferring investments to another safe keeper. The Board determined not to take action on this matter at this time. 8.3. Draft 2017 Water Quality Report Mr. Steve Conklin introduced Mr. Bryan Hong. Mr. Hong explained that state and federal regulations require the District to prepare an annual water quality report and make it available to its customers by July 1St of each year. This report covers water quality monitoring, testing and analysis conducted from the previous calendar year. Since 2013, water utility agencies have been allowed to deliver this report electronically resulting in cost savings. As such, the report will be published on the District's website and hard copies will be provided upon request. Staff will also include a notice on customer bills regarding availability of the report during June and July's billing cycles. Over 23,000 analyses were conducted in 2016 to ensure that the water provided by the District met all state and federal drinking standards. The District has never violated these standards and in some cases, went beyond what is legally required by providing additional monitoring for unregulated contaminants of concern. The Board and staff discussed various sections of the report, the District's water quality testing and analysis processes, and shared costs for design. Director Hawkins made a motion, seconded by Director Jones, to approve the 2017 Water Quality Report and authorize staff to make it available on the District's website pursuant to State and Federal law regarding electronic delivery. Motion carried 4-0-0-1 with Director Hall being absent. Minutes of the YLWD Board of Directors Regular Meeting Held May 23,2017 at 6:30 p.m. 4 2017-106 8.4. Change Order No. 4 for Richfield Road Water Main Project Mr. Conklin stated that this project was nearing completion. He explained that the contractor had requested an increase of $59,729.98 and 25 calendar day extension due to differing site conditions and unknown utilities. This includes the discovery of very fine sand which caused issues with shoring and an existing abandoned water pipeline and reinforced concrete encasement that needed to be removed. Director Hawkins made a motion, seconded by Director Nederhood, to approve Change Order No. 4 for $59,792.98 and 25 additional calendar days to TBU Construction Inc. for construction of the Richfield Road Water Main Project, Job No. 2014-23. Motion carried 4-0-0-1 with Director Hall being absent. 9. DISCUSSION ITEMS 9.1. Unaudited Financial Statements for Third Quarter FY 2017 Mr. McCann provided and overview of the statements including assets and liabilities, operating and non-operating revenues and expenses, and change in net position. The Board and staff discussed recent water consumption trends and water supply strategies for tying in the new water main. Ms. Pat Nelson (resident) commented on methods for notifying the public regarding the potential need for reduced consumption during the process of tying in the new water main. 9.2. Budget to Actual Statements for Month Ending April 30, 2017 Mr. McCann stated that the District's auditors had requested staff postpone modifying the format of these statements until they can confirm compliance with GAAP and GASB requirements. He noted that the format of the comprehensive annual financial reports would not change. Mr. McCann then reviewed the consolidated statement touching on revenues, expenses, and net position. 9.3. Cash and Investment Report for Period Ending April 30, 2017 The Board and staff discussed the impact of decreased water consumption on the District's water distribution system and the state's long-term framework for water conservation. Minutes of the YLWD Board of Directors Regular Meeting Held May 23,2017 at 6:30 p.m. 5 2017-107 Mr. McCann provided an overview of information contained in the reports related to yields, expenditures, reserve levels, fair value measurement, and capital reserves and expenses. Mr. McCann confirmed that the Board wanted to begin drawing funds from the 2017A revenue bonds as mentioned in the previous workshop meeting. 9.4. Online Accessibility and Format of Periodic Financial Reports Ms. Malissa Muttaraid reviewed various methods being utilized to engage and inform District customers, including YLWD's website and Constant Contact's e-marketing services. She also described improvements planned for the website and staff's efforts to notify customers of published financial reports. The Board and staff discussed efforts to obtain customers' e-mail addresses and features provided by the DropCountr mobile application. Vice President Nederhood commended Ms. Muttaraid for her work with the AHCAC. The Board and staff discussed presenting the District's financials in a pro forma format and the auditor's concerns. 10. REPORTS, INFORMATION ITEMS, AND COMMENTS 10.1. Directors' Reports The Directors reported on their attendance at the following event: ■ Special Briefing: Making Conservation a Way of Life — May 22, 2017 (Jones/Miller/Nederhood) Director Jones requested that a discussion item be placed on the agenda for the next regular meeting to discuss Item 7 of the AHCAC's recommendations to the Board. The Board and staff discussed the state's long-term framework for water conservation and potential variances the District may qualify for. Minutes of the YLWD Board of Directors Regular Meeting Held May 23,2017 at 6:30 p.m. 6 2017-108 10.2. General Manager's Report Mr. Marcantonio reported that staff was working on responding to multiple public records requests. He also reported on his progress to obtain proposals from public relations firms, a recent meeting he had with representatives from ProcureAmerica to discuss potential cost efficiencies, and a $200K grant awarded to MWDOC for leak detection equipment which will be shared amongst member agencies. He then asked each of the managers (or their designee) to report on activities within their respective departments. Mr. Conklin reported that the water audit was complete and would be conducted on an annual basis in the future. He also reported on the status of the Richfield Pipeline Replacement Project and Fairmont Booster Pump Station Upgrade Project. He noted that a meeting was scheduled with developers of the Esperanza Hills project. Mr. John DeCriscio reported on the status of repairs to Well No. 1, a recent water main break, and staff's fire prevention efforts at various District facilities following an inspection performed by OCFA. Mr. McCann reported that staff was preparing for the interim audit scheduled to begin the following week. Mr. Marcantonio noted the auditors may wish to interview one or more of the Directors. Mr. Art Vega reported on staff's efforts related to upgrading the District's accounting and billing software and protecting the agency's computer systems against malware. Ms. Knight reported on the number of public records requests received since January. Ms. Botts noted that representatives from Raftelis would be present at the budget workshop meeting scheduled June 19, 2017 to demonstrate the District's financial model. 10.3. General Counsel's Report None. 10.4. Future Agenda Items and Staff Tasks None other than Director Jones' earlier request. Minutes of the YLWD Board of Directors Regular Meeting Held May 23,2017 at 6:30 p.m. 7 2017-109 11. COMMITTEE REPORTS 11.1. Interagency Committee with MWDOC and OCWD (Miller/Nederhood) ■ Next meeting is scheduled May 25, 2017 at 4:00 p.m. 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. were included in the agenda packet. ■ Next meeting is scheduled June 12, 2017 at 4:00 p.m. at YL City Hall. 11.3. Interagency Committee with City of Placentia (Miller/Nederhood) ■ Next meeting is yet to be scheduled. 12. INTERGOVERNMENTAL MEETINGS The Directors reported on their attendance at the following meetings. 12.1 LAFCO — May 10, 2017 (Nederhood —As Needed) Vice President Nederhood commented on his efforts to examine a previous increase of the District's annual dues. 12.2 YL Planning Commission — May 10, 2017 (Hawkins —As Needed) Director Hawkins did not attend this meeting. 12.3. YL City Council — May 16, 2017 (Hall) Director Hall was not present to provide a report. 12.4. MWDOC — May 17, 2017 (Nederhood) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR 13.1. Meetings from May 24, 2017 — July 31, 2017 The Board reviewed the activity calendar and made no changes. Minutes of the YLWD Board of Directors Regular Meeting Held May 23, 2017 at 6:30 p.m. 8 2017-110 14. CONFERENCES, SEMINARS, AND SPECIAL EVENTS 14.1. Special Briefing: Making Conservation a Way of Life — May 22, 2017 CSDA Special District Leadership Academy Conference — July 9-12, 2017 UWI Annual Conference —August 16-18, 2017 Director Hawkins and President Miller discussed switching their attendance at future YL City Council meetings. The Board voted 4-0-0-1 with Director Hall being absent to approve and/or ratify Director attendance at these events if desired. 15. ADJOURNMENT 15.1. The meeting was adjourned at 10:12 p.m. Annie AlexancTer Assistant Board Secretary Minutes of the YLWD Board of Directors Regular Meeting Held May 23,2017 at 6:30 p.m. 9