Loading...
HomeMy WebLinkAbout05-21-25 F&A Committee Packet 1 OTAY WATER DISTRICT FINANCE AND ADMINISTRATION COMMITTEE MEETING and SPECIAL MEETING OF THE BOARD OF DIRECTORS 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA BOARDROOM WEDNESDAY MAY 21, 2025 12:00 P.M. This is a District Committee meeting. This meeting is being posted as a special meeting in order to comply with the Brown Act (Government Code Section §54954.2) in the event that a quorum of the Board is present. Items will be deliberated, however, no formal board actions will be taken at this meeting. The committee makes recommendations to the full board for its consideration and formal action. AGENDA 1. ROLL CALL 2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD’S JURISDICTION INCLUDING AN ITEM ON TODAY’S AGENDA DISCUSSION ITEMS 3. ADOPT RESOLUTION NO. 4457 TO CONTINUE WATER AND SEWER AVAILA- BILITY CHARGES FOR DISTRICT CUSTOMERS FOR FISCAL YEAR 2025-2026 TO BE COLLECTED THROUGH PROPERTY TAX BILLS (ANDREA CAREY) [5 MINUTES] 4. AWARD A CONTRACT TO RJ NICHOLS CONSTRUCTION, INC. TO PERFORM THE DATA CENTER REDUCTION AND IT OFFICE TENANT IMPROVEMENT IN THE AMOUNT OF $106,745 (KENT PAYNE) [5 MINUTES] 5. ADJOURNMENT BOARD MEMBERS ATTENDING: Gary Croucher, Chair Jose Lopez 2 All items appearing on this agenda, whether or not expressly listed for action, may be de- liberated and may be subject to action by the Board. The agenda, and any attachments containing written information, are available at the Dis- trict’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the agenda and attachments are also available by contacting the District Secretary at (619) 670-2253. If you have any disability which would require accommodations to enable you to participate in this meeting, please call the District Secretary at 670-2253 at least 24 hours prior to the meeting. Certification of Posting I certify that on May 16, 2025, I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time being at least 24 hours in advance of the meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on May 16, 2025. /s/ Tita Ramos-Krogman, District Secretary STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: June 04, 2025 SUBMITTED BY: Andrea Carey, Customer Service Manager PROJECT: DIV. NO.All APPROVED BY: Kevin Koeppen, Assistant Chief of Finance Joseph R. Beachem, Chief Financial Officer Jose Martinez, General Manager SUBJECT: Adopt Resolution No. 4457 to Continue Water and Sewer Availability Charges for District Customers for Fiscal Year 2025-2026 to be Collected Through Property Tax Bills GENERAL MANAGER’S RECOMMENDATION: That the Board adopt Resolution No. 4457 to continue water and sewer availability charges for District customers for fiscal year 2025-2026 to be collected through property tax bills. COMMITTEE ACTION: See Attachment A. PURPOSE: That the Board consider the adoption of Resolution No. 4457 to continue water and sewer availability charges for District customers for fiscal year 2025-2026 to be collected through property tax bills. ANALYSIS: The District levies availability charges each year on property in both developed and undeveloped areas. State Water Code Section 71630- 71637 authorizes the District to assess such availability charges. To place these charges on the tax roll, the County of San Diego (the AGENDA ITEM 3 2 County) requires the District to provide a resolution authorizing the charges. In late July of each year, the District provides a resolution along with the listing of charges by parcel to the County’s property tax services department. For a parcel to be assessed a sewer availability charge, it must be annexed into the District’s sewer Improvement District No. 18. Sewer availability charges are either a fixed fee of $10 for parcels one acre or less or $30 per acre for parcels greater than one acre. Unlike sewer, water availability charges are assessed on all parcels within the District’s boundaries and do not require annexation into an improvement district. For most parcels, water availability charges are the same as those shown for sewer availability above; however, there are some exceptions. Parcels greater than one mile from a District pipeline, identified as an agricultural preserve, in a floodplain, or have a 30% slope are charged $3 per acre. Parcels identified as open space are charged 50% of the normal assessment fees ($5 for those one acre or less or $15 per acre for those greater than an acre). Current legislation provides that any amount up to $10 per parcel (one acre or less) is for general use and any amount over $10 per parcel ($30 per acre for parcels over one acre) is restricted, to be expended in and for that improvement district. The District uses amounts over $10 per parcel to develop water and sewer systems within the Improvement Districts where the funds are collected. In accordance with legislation, the District places amounts up to $10 per parcel in the General Fund. FISCAL IMPACT: Joseph R. Beachem, Chief Financial Officer The availability charges, as budgeted, will generate approximately $1.2 million in revenue. STRATEGIC GOAL: This revenue source will help the District meet its fiscal responsibility to its ratepayers. LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Attachment B – Resolution No. 4457 ATTACHMENT A SUBJECT/PROJECT: Adopt Resolution No. 4457 to Continue Water and Sewer Availability Charges for District Customers for Fiscal Year 2025-2026 to be Collected Through Property Tax Bills COMMITTEE ACTION: 1 RESOLUTION NO. 4457 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY WATER DISTRICT CONTINUING PREVIOUSLY ESTABLISHED WATER AND SEWER AVAILABILITY CHARGES FOR FISCAL YEAR 2025-2026; REQUESTING THE COUNTY TO COLLECT SUCH AVAILABILITY CHARGES ON THE 2025-2026 SECURED TAX ROLL AND TAKING OTHER RELATED ACTIONS WHEREAS, the Otay Water District (herein "District") is a member of the San Diego County Water Authority and the Metropolitan Water District of Southern California and, as a member, the District is entitled to purchase water for distribution within the District and water so purchased is available to property in the District that is also within the San Diego County Water Authority and the Metropolitan Water District of Southern California, without further need for annexation to any agency; and WHEREAS, Improvement District No. 18 has been formed within the Otay Water District (herein "District") and sanitary sewers have been constructed and sewer service is available to land within the said District; and WHEREAS, in consideration of the benefit that water availability confers upon property within the District, and in further consideration of the need for revenue to pay the cost of water storage and transmission facilities which directly and specifically benefit property within the District, the District has previously determined that water availability charges be fixed and established under applicable provisions of law; and Attachment B 2 WHEREAS, in consideration of the benefit which sewer availability confers upon property within Improvement District No. 18, and in further consideration of the need to pay the cost of sanitary sewers which directly and specifically benefit those properties, the District has previously determined that sewer availability charges be fixed and established for Improvement District No. 18 as provided under applicable provisions of law; and WHEREAS, the District desires to continue the collection of such water and sewer availability charges without increases or revisions in methodology or application. NOW, THEREFORE, the Board of Directors of the Otay Water District resolves, determines and orders as follows: 1. SCHEDULE OF WATER CHARGES (A) The water availability charges previously fixed and established are hereby continued for Fiscal Year 2025-2026 at the existing rates, as follows: (1) In Improvement District No. 22 the charge shall be $30.00 per acre of land and $10.00 per parcel of land less than one acre. (2) For land located outside an improvement district and within one mile of a District water line, the charge shall be $10.00 per acre of land and $10.00 for each parcel less than one acre. (3) For land located outside an improvement district and greater than one mile from District facilities, the 3 charge shall be $3.00 per acre of land and $3.00 for each parcel less than one acre. (B) Modifications The charges provided for in subparagraphs (1) through (3) in (A) above shall be modified upon petition by the property owner where the property does not receive water from the District as follows: (1) where a parcel of land or a portion thereof is within an open space easement approved by San Diego County, the charge for such parcel or portion thereof shall be fifty percent (50%) of the charge determined pursuant to paragraph (A), provided the owner files with the District proof, satisfactory to the District, that said parcel of land or portion thereof is within such a designated permanent open space area; (2) where a parcel of land or portion thereof is in an agricultural reserve under a Land Conservation Contract with the County of San Diego, pursuant to the Land Conservation Act of 1965 as amended, the charge for such parcel shall be $3.00 per acre, provided the owner files with the District proof, satisfactory to the District, that said parcel of land or portion thereof is within such an agricultural preserve; (3) where a parcel of land or a portion thereof is within an area designated as a floodplain by the County of San Diego, the charge for such a parcel or portion 4 thereof shall be $3.00 per acre, provided the owner files with the District proof, satisfactory to the District, that said parcel of land or portion thereof is within such designated floodplain; and (4) where a parcel of land or portion thereof exceeds a 30% slope, and where such is not within a legal subdivision, lot-split or planned residential development, the charge for the slope portion shall be $3.00 per acre, or if such a parcel is less than one acre and more than one-half of the area exceeds 30% slope, $3.00 for the parcel, provided the owner files with the District proof, satisfactory to the District, that said parcel of land or portion thereof meets or exceeds the slope. (C) Exceptions The charges provided for in (A) and (B) above shall not apply, upon petition by the property owner, to the following: (1) land located within an area designated as a floodway by the County of San Diego; (2) land designated as a vernal pool area by a govern- mental agency authorized to make such a designation and which designation prohibits use of such area for any purpose; (3) land owned by non-profit, tax-exempt conservation organizations specializing in identifying and protecting the natural habitat of rare species; or 5 (4) land that is located within the boundaries of the Otay Water District but not within the boundaries of the Metropolitan Water District of Southern California and the San Diego County Water Authority. 2. SCHEDULE OF SEWER CHARGES (A) Sewer standby assessment or availability charges are hereby fixed and established for Fiscal Year 2025-2026 as follows: (1) In Improvement District No. 18 the charges shall be $30.00 per acre of land and $10.00 per parcel of land less than one acre. The preceding charges shall not apply, upon petition by the property owner, to the following: (a) any portion of a parcel which is undeveloped and maintained in its natural state within an Open Space Area as a requirement under the San Diego County General Plan, provided the owner of such parcel files proof, satisfactory to the District, of such designed Open Space Area; (b) any portion of a parcel located within an area designated by the County of San Diego as a floodway or floodplain; or (c) any portion of a parcel of land which exceeds a slope of 30% and which is not within a legal subdivision, lot split or planned lot split or planned residential development. 6 3. DEFERRALS (A) Deferral of Charge, Purpose Situations may arise when an owner of a parcel of land does not use and has no present intention of using water and/or sewer provided by the District on a parcel of land, as defined in Section 4. The purpose of this section is to permit an evaluation by the District, on a case-by- case basis, of the circumstances which pertain to such situations to determine whether a deferral of charges should be approved according to the terms and conditions herein provided. Any owner of a parcel of land who believes that the amount of the water and/or sewer availability charges fixed against such parcel should be deferred may file an application with the District for deferral of the charge, as follows: (1) Application The application shall include a statement describing the circumstances and factual elements which support the request for deferral. (2) The General Manager shall consider the request within sixty (60) days after the filing of a completed application. If the application for deferral meets the established criteria, the General Manager may decide whether to approve the request and order the charge deferred accordingly. If the request is denied, the applicant shall be notified in writing stating the reasons for the denial. (B) Appeal to Board of Directors If the General Manager denies a request, the owner may file an appeal with the Board of Directors within sixty (60) days after such denial. No new 7 application for deferral need be considered by the General Manager until expiration of twelve (12) months from the date of a denial, unless differently directed by the Board of Directors. (C) Deferred Charges on Restricted Parcels, Criteria The levy of the charge may be deferred annually as to any parcel of land which meets each of the following criteria: (1) The owner of such parcel makes a timely application requesting deferral of the charge. (2) The parcel, which is the subject of the request, will become subject to enforceable restrictions which prohibits the connection to the District sewer system or use of water on the parcel, except by means of natural precipitation or runoff; provided, however, if considered appropriate by the General Manager, local water may be used for limited domestic stock watering and irrigation uses. (3) The owner executed a recordable agreement which includes provisions that: (a) set forth the enforceable restrictions pertinent to the subject parcel; (b) the agreement may be terminated upon written request by the owner and payment of all deferred water and/or sewer availability charges, plus interest thereon, compounded annually, and accruing at the legal rate from the date such charges would have been otherwise due and payable; 8 (c) no water and/or sewer service from the District shall be provided to such parcel for a period of ten (10) years after the total amount due for the charges deferred, plus annually compounded interest, is paid in full to the District, unless a surcharge penalty as described below is paid to the District prior to connection of any water and/or sewer service; (d) if the surcharge is not paid, during the ten (10) year period, while water and/or sewer service is not available to the subject land, the owner shall pay all annual water or availability charges as fixed; and (e) contains such other provisions considered by the General Manager to be appropriate. (D) Surcharge Upon termination of the deferral agreement, an owner may elect to receive water and/or sewer service prior to the expiration of the ten (10) year penalty period upon payment of a surcharge. The surcharge shall be equal to the amount of the annual water and/or sewer availability charges fixed for the parcel(s) of land in the year of election to receive water and/or sewer service multiplied by the number of years remaining of the ten (10) year penalty period. This surcharge shall also apply if a property owner develops a parcel that is subject to a deferral agreement without termination of said agreement. 9 (E) Enforcement Procedures In order to insure that terms and conditions of the recordable agreement are being met, the General Manager shall: (1) Maintain a record of all parcels approved for deferral of the water assessments or availability charges. (2) Report to the Board of Directors any instances where the terms of the agreement are being violated. (3) Take such other actions or procedures considered appropriate. 4. DEFINITION OF PARCEL The term "parcel" as used herein shall mean a parcel of land as shown on the assessment rolls of the County Assessor of San Diego County as of March, 2025. 5. NOTICE AND REQUEST TO THE BOARD OF SUPERVISORS AND AUDITOR As provided in Sections 71634 to 71637, on or before the third Monday in August, 2025, the Secretary of this District shall furnish, in writing to the Board of Supervisors of San Diego County and to the County Auditor, a description of the land within the District upon which availability charges are to be levied and collected for Fiscal Year 2025-2026 together with the amount of the assessments or charges. At the time and in the manner required by law for the levying of taxes for county purposes, the Board of Supervisors of San Diego County shall levy, in addition to taxes it levies, water and/or sewer availability charges in the amounts fixed by this Resolution for the respective parcels of land described in Section 1 of this Resolution. All county officers charged with the duty of collecting taxes shall collect 10 the charges with the regular property tax payments in the same form and manner as county taxes are collected. Such availability charges are a lien on the property with respect to which they are fixed. Collection of the charges may be enforced by the same means as provided for the enforcement of liens for state and county taxes. 6. CERTIFICATION TO COUNTY BOARD OF SUPERVISORS The District certifies that this Resolution complies with the provisions of Article XIIID of the California Constitution in that the availability charges are existing charges first set by the Board of Directors of the District prior to November 6, 1996. At the time the availability charges were initially established, the District followed the applicable provisions of law then in effect, and the District has continued to comply with such provisions, including any requirements for notices or hearings, as from time to time in effect. Therefore, pursuant to Section 71632 and Section 71638 of the California Water Code, as currently in effect, the District may continue the availability charges in successive years at the same rate. The District further certifies that the charge is not increased hereby and the methodology for the rate is the same as in previous years. The charge is imposed exclusively to finance the capital costs, maintenance, and operating expenses of the water or sewer system of the District, as applicable. 7. CERTIFIED COPIES The Secretary of this District shall deliver certified copies of this Resolution to the Board of 11 Supervisors and to the Auditor of San Diego County with the list of charges described in Section 4 above. 8. CORRECTIONS; OTHER ACTIONS The General Manager of the District is hereby authorized to correct any clerical error made in any assessment or charge pursuant to this Resolution and to make an appropriate adjustment in any assessment or charge made in error. Furthermore, the General Manager and the Secretary of this District are hereby directed to take any further actions and deliver such documents and certificates as necessary to carry out the purpose of this Resolution. PASSED, APPROVED AND ADOPTED by the Board of Directors of the Otay Water District at a regular meeting duly held this 4th day of June, 2025. Ayes: Noes: Abstain: Absent: President ATTEST: Secretary 12 I HEREBY CERTIFY that the foregoing Resolution No. 4457 was duly adopted by the BOARD OF DIRECTORS of the OTAY WATER DISTRICT at a regular meeting thereof held on the 4th day of June, 2025 by the following vote: Ayes: Noes: Abstain: Absent: District Secretary 1 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: June 4, 2025 PROJECT: Various DIV. NO.ALL SUBMITTED BY: Kent Payne Purchasing and Facilities Manager APPROVED BY: Adolfo Segura, Chief, Administrative Services Jose Martinez, General Manager SUBJECT: AWARD A CONTRACT TO RJ NICHOLS CONSTRUCTION, INC. FOR THE DATA CENTER REDUCTION AND IT OFFICE TENANT IMPROVEMENT IN THE AMOUNT OF $106,745.00 GENERAL MANAGER’S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) award a contract to RJ Nichols Construction, Inc. (RJ Nichols) to perform the Data Center Reduction and IT Office Tenant Improvement in the amount of $106,745. COMMITTEE ACTION: See “Attachment A”. PURPOSE: To obtain Board authorization for the General Manager to execute an agreement with RJ Nichols to perform the Tenant Improvement project to reduce the District's Data Center footprint and create additional IT office space. ANALYSIS: The existing Data Center at the Administration Building was originally designed to support extensive on-premises IT infrastructure. The original footprint included five (5) server racks supported by a bank of water-chilled heat extractors, two (2) rooftop air conditioning units, and a dedicated humidification system to maintain optimum AGENDA ITEM 4 2 operating conditions due to the significant amount of heat generated by on-site equipment. With the District’s transition to cloud-based services, much of this infrastructure is now obsolete. The current system has been reduced to two (2) highly efficient server racks operating at approximately 75% capacity, supported by a single rooftop air conditioning unit, with the second unit retained for standby redundancy. This downsizing not only frees up substantial space for reconfiguration but also provides significant energy savings and long- term operational efficiencies. Based on reduced cooling requirements, the elimination of support systems, and the consolidation from five (5) legacy server racks to two (2) modern high-efficiency units, staff has calculated and verified annual energy cost savings in the range of $40,000 to $50,000, which are currently being realized under the downsized configuration. Concurrently, the IT and Network Engineering staff have been operating within an adjoining space that is inadequate to fully support District staff’s technical needs and equipment staging, necessitating reconfiguration and expansion of usable office space. This reconfiguration efficiently repurposes the surplus area of the Data Center and consolidates IT operations within a contiguous footprint. The Tenant Improvement project includes selective demolition, construction of new partition walls, ceiling and flooring updates, electrical rework, HVAC modifications, and other interior improvements necessary to convert surplus Data Center space into functional IT office space (see Attachment “B”). The expanded office will provide dedicated areas for preparing and deploying new equipment, addressing day-to-day technology issues, and facilitating collaborative troubleshooting among IT personnel. This upgrade is intended to enhance service delivery, reduce response times, and align IT operations with the District’s evolving technology needs. The District issued a solicitation for bids through its online PlanetBids portal in accordance with the California Uniform Public Construction Cost Accounting Act (CUPCCAA) informal bidding procedures. A mandatory pre-bid meeting and site walk were conducted at the project location. The District received four (4) bids. One (1) bidder, JNH Construction, Inc. (JNH), was initially considered in the evaluation but was ultimately deemed non-responsive based on the following findings: 3 • Reference Requirements: JNH initially submitted a blank reference form. Although JNH promptly provided a completed form when given an opportunity to cure, the projects listed were materially dissimilar to the scope contemplated under this solicitation. • Licensing Requirements: The project scope includes electrical and lighting work requiring a C-10 Electrical Contractor license. JNH does not hold a C-10 license, nor did they designate a licensed subcontractor, rendering the bid non-responsive under California law (Business & Professions Code §§ 7057, 7059, and 7028). After notice of non-responsiveness was issued, JNH filed a formal protest asserting that RJ Nichols subcontracted more than 49% of their bid, alleging non-compliance with public works standards. Following review in consultation with District General Counsel, it was determined that: • The District's solicitation did not incorporate the Standard Specifications for Public Works Construction (Greenbook) as cited in the protest. • Neither the solicitation nor CUPCCAA imposes a minimum self- performance requirement for general contractors. Based on these findings, the protest was denied, and RJ Nichols remains the lowest responsive and responsible bidder. Bid Summary: Bidder Bid Amount Notes RJ Nichols Construction, Inc. $106,745 Lowest responsive bidder Telliard Construction $110,821 Grace Builders Inc. $116,650 JNH Construction, Inc. $89,250 Non-responsive As part of staff’s due diligence, RJ Nichols' licensing and registration were verified through the California Contractors State License Board (CSLB) and the Department of Industrial Relations (DIR). RJ Nichols holds an active Class B General Building Contractor license and maintains current DIR registration. All listed subcontractors similarly hold active licenses and DIR registrations. Staff reviewed RJ Nichols’ safety performance, background questionnaire, and project references, and conducted independent internet checks. No legal or regulatory issues 4 were identified. References provided by RJ Nichols confirmed satisfactory performance on similar projects. Based on this review, staff determined that RJ Nichols is qualified to perform the work and therefore recommends awarding the contract to RJ Nichols Construction, Inc. As a separate but related effort, staff has coordinated with Cultura, the District’s authorized Haworth furniture dealer, to furnish the reconfigured IT office space. Cultura has provided a quote in the amount of $13,901.98 under a cooperative purchasing agreement through Omnia Partners, a national public sector cooperative offering competitively solicited and publicly awarded contracts for goods and services. In accordance with Section 6.2.3 of the District’s Purchasing Manual, the Purchasing and Facilities Manager is authorized to utilize cooperative or “piggyback” contracts awarded by other public agencies without additional competitive solicitation. The furnishing purchase will be handled independently of the RJ Nichols contract but is included in the overall project budget for transparency. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The total budget for CIP P2695 ("Relocation of Data Center"), as approved in the FY 2025 budget, is $250,000. Total expenditures and outstanding commitments, including the contract award to RJ Nichols in the amount of $106,745 and the office furnishings procurement through Cultura in the amount of $13,901.98, are anticipated to remain within the approved project budget. Based on a review of the financial budget, the Project Manager anticipates that the budget for CIP P2695 is sufficient to support the project. The Finance Department has determined that, under the current rate model, 100% of the funding is available from the Replacement Fund. STRATEGIC GOAL: Supports the District’s Strategy to modernize infrastructure, enhance operational efficiency, optimize facilities, and deliver responsive internal services that align with the District’s long-term organizational goals. 5 LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report Attachment B – Project Layouts and Office Furniture Conceptual Rendering ATTACHMENT A SUBJECT/PROJECT: AWARD A CONTRACT TO RJ NICHOLS CONSTRUCTION, INC. FOR THE DATA CENTER REDUCTION AND IT OFFICE TENANT IMPROVEMENT IN THE AMOUNT OF $106,745.00 COMMITTEE ACTION: The Finance, Administration, and Communications Committee reviewed this item at a meeting held on May 21, 2025. The Committee supports presentation to the full Board for their consideration. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for Board approval. This report will be sent to the Board as a Committee approved item, or modified to reflect any discussion or changes as directed from the Committee prior to presentation to the full Board. 7 ATTACHMENT B Project Layouts and Office Furniture Conceptual Rendering The following figures illustrate the existing and proposed layouts for the IT Office and adjoining Data Center space, along with a conceptual 3D view of the planned office furnishings to support reconfigured operations. Figure 1 — Existing IT Office and Data Center Layout 8 Figure 2 — Proposed Reconfigured IT Office Layout 9 Figure 3 — Conceptual 3D View of IT Office Furnishings