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HomeMy WebLinkAbout08-05-20 Board Minutes 1 MINUTES OF THE BOARD OF DIRECTORS MEETINGS OF THE OTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY August 5, 2020 1. The meeting was called to order by General Manager Martinez at 3:31 p.m. 2. ROLL CALL Directors Present: Croucher, Gastelum, Robak, Smith and Thompson Staff Present: General Manager Jose Martinez, General Counsel Dan Shinoff, General Counsel Jeanne Blumenfeld, Chief of Engineering Rod Posada, Chief Financial Officer Joe Beachem, Chief of Administration Adolfo Segura, Chief of Operations Pedro Porras, Asst. Chief of Finance Kevin Koeppen, District Secretary Susan Cruz and others per attached list. 3. PLEDGE OF ALLEGIANCE 4. APPROVAL OF AGENDA A motion was made by President Croucher, and seconded by Director Smith and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: to approve the agenda with the proposed amendment. 5. PRESENTATION OF THE WATERSMART LANDSCAPE CONTEST “BEST IN DISTRICT” AWARD TO PATRICIA WOOD Director Thompson presented the annual WaterSmart Landscape Contest’s Best in District award to Ms. Patricia Wood. Ms. Wood thanked the District for the honor in selecting her landscape as Best in District this year. She stated she was happy to have completed her landscape makeover and shared that she had attended a landscape class that gave her the confidence to design her own landscape, though, she had no gardening experience. She indicated that her daughter has a very rare genetic disease and spent much of her time indoors and now she able to enjoy the outdoors and her new waterwise garden. She added that it has been a wonderful and relaxing addition to her home and has improved their, especially her daughter’s, 2 quality of life. She is very grateful to have taken the class and her garden is better for the environment, saves water and saves her money as well. 6. APPROVE THE MINUTES OF THE SPECIAL BOARD MEETINGS OF APRIL 8, 2020, APRIL 15, 2020, AND JULY 9, 2020 A motion was made by President Croucher, and seconded by Director Smith and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None to approve the minutes of the special board meetings of April 8, 2020, April 15, 2020 and July 9, 2020. 7. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JURISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA Mr. Charley Wolk, a member of the board from Fallbrook PUD, indicated that his agency’s request to detach from the San Diego County Water Authority (CWA) is driven by their desire to acquire less expensive water for their ratepayers. He stated purchasing water from Eastern Municipal WD is approximately $500 less an acre foot than their current cost from CWA. He indicated that if Otay WD representatives have questions about their interest in detaching from CWA, he and the general manager of Fallbrook PUD were open to meeting and discussing their request. He stated they would like to work together to find common ground. President Croucher thanked Mr. Wolk for reaching out to the District in a positive manner and that he, as President of the Otay WD and Vice Chair of CWA, would be interested in meeting. He stated that he will work with the District’s staff to schedule a time for them to meet. CONSENT CALENDAR 8. ITEMS TO BE ACTED UPON WITHOUT DISCUSSION, UNLESS A REQUEST IS MADE BY A MEMBER OF THE BOARD OR THE PUBLIC TO DISCUSS A PARTICULAR ITEM: A motion was made by President Croucher, and seconded by Director Robak and carried with the following vote: Ayes: Directors Croucher, Robak, Smith and Thompson Noes: None Abstain: Director Gastelum Absent: None 3 to approve the following consent calendar items: a) AWARD TWO (2) PROFESSIONAL SERVICE CONTRACTS WITH RICK ENGINEERING COMPANY AND STC TRAFFIC, INC. FOR AS-NEEDED TRAFFIC ENGINEERING, EACH IN AN AMOUNT NOT-TO-EXCEED $175,000 FOR FISCAL YEARS 2021 THROUGH 2023. THE TOTAL AMOUNT OF THE TASKS UNDER THE TWO CONTRACTS WILL NOT EXCEED $175,000 b) AWARD A CONSTRUCTION CONTRACT TO KAY CONSTRUCTION COMPANY FOR THE OTAY MESA PIPELINE CATHODIC PROTECTION IMPROVEMENTS PROJECT IN AN AMOUNT NOT-TO-EXCEED $379,115 c) AWARD A CONSTRUCTION CONTRACT TO BURTECH PIPELINE, INC. FOR THE 14-INCH FORCE MAIN AIR-VAC REPLACEMENTS PROJECT IN AN AMOUNT NOT-TO-EXCEED $212,100 ACTION ITEMS 9. BOARD a) DISCUSS THE 2020 BOARD MEETING CALENDAR Director Croucher indicated that due to the increase in COVID-19 cases in the County, the District will continue virtual meetings through the end of the year. There were no changes to the board meeting calendar. INFORMATIONAL ITEMS 10. INFORMATIONAL UPDATE FOR THE ROSARITO DESALINATION PLANT AND THE OTAY MESA CONVEYANCE AND DISINFECTION SYSTEM PROJECTS Engineering Manager Bob Kennedy provided an update to the Board on the progress of the Rosarito Desalination Plant and the Otay Mesa Conveyance and Disinfection System Projects. Please reference Attachment A (Committee Action) to the staff report for the details of Mr. Kennedy’s presentation. Staff responded to questions and comments from the board. REPORTS 11. GENERAL MANAGER’S REPORT General Manager Martinez presented information from his report that included photos of changes to the District’s lobby to comply with State and County orders for social distancing, the State Water Resources Control Board proposed off-ramp for water loss performance standards and reporting requirements, collections and bad debt exposure; federal employer payroll tax credits, the financial reporting for June 4 30, 2020, the Hidden Mountain sewage pump station wet well renovation, Mexico’s request for treaty water deliveries, and the District’s utility maintenance staff providing assistance to Helix WD. Director Robak inquired if an update report could be provided to the Board on the Regional Conveyance System Study that was contracted by the member agencies. General Manager Martinez indicated that staff would provide a report at the next board meeting. Director Smith indicated that the Comparative Budget Summary chart of net revenues and expenses did not reflect the negative net revenues of $1,046,475 as the report indicates and noted that the demands list was not included with the General Manager’s report. Staff indicated they will review why the chart did not reflect the correct information and why the demands list was not included in the packet. Director Thompson inquired about the cost of recycled water and it was suggested that, because of the ongoing litigation on this matter, that the discussion be agendized for closed session at a future meeting. Staff responded to additional questions and comments from the board. 12. SAN DIEGO COUNTY WATER AUTHORITY UPDATE Director Smith reported that CWA discussed at its July board meeting their Climate Action Plan and some of the successes of the plan. CWA also sold a series of water revenues bonds which was timed right before the COVID increase. He stated this provided for CWA receiving very favorable rates which will save CWA approximately $64 million. He lastly shared that CWA completed an update to their Aqueduct Operating Plan and the District will be impacted by a shutdown from CWA this winter. President Croucher additionally shared that CWA is continuing to work to acquire storage in Lake Meade. He indicated that CWA representatives to MWD are working on the process to hire a new General Manager and they are collaborating well with the other board members at MWD. He stated it is good to see relations improving at MWD and they will continue to work on building those relationships. CWA’s board continues to discuss the reduced water sales and its impacts to the budget. He indicated with regard to the Regional Reconveyance System (RCS) that he would work with staff to coordinate a presentation for the Otay WD board. He stated that a decision is not yet being made on whether to move forward with the next phase of the RCS project. They are currently reviewing some last areas of the project and the potential for private/public partners and grants that might be available. He lastly recognized Mr. Jeff Kightlinger upon his retirement from MWD after 14 years of service and his passion for the water industry. 13. PRESIDENT’S REPORT 5 President Croucher reported that there has been some questions and discussion regarding Otay WD and that it had not tried to find ways to reduce its rates. He explained that staff had presented three options for the FY 2021 budget: the original planned increase (full rate increase), a half rate and no rate increase in response to the COVID-19 pandemic. The Board chose to implement a half rate increase in order to avoid the District from getting too far behind and prevent customers from being impacted by a significant rate increase in the next fiscal year. The District reduced its expenses and delayed some CIP projects to decrease costs. Some of the cost reductions included: • Reducing Property and Liability Insurance by approximately over $400,000 by moving to a new provider • Canceling unnecessary travel at a saving of approximately $105,000 • Reduced the Workers’ Compensation premium by approximately $100,000 • Implemented a hiring freeze which provided a saving of approximately $100,000 • Deferred purchases of equipment, furniture and fixtures at a savings of approximately $98,000 • Reduced consultant and outside services which saved approximately $58,000 • Reduced some employee program costs and supplies providing a savings of $34,000 • Reduced costs associated with social media, advertising, membership and dues, etc. President Croucher indicated that the above combined savings in operating and payroll expenses totaled almost $1 million. The District also reduced its CIP expenditures by adjusting the timing of the projects which provided an additional savings of about $5 million. He stated that he also wished to address Fallbrook PUD and Rainbow MWD’s claim that their agencies’ detachment from CWA would only cost each of the Otay WD customers $0.50 a month. President Croucher stated that the additional $0.50 equates to approximately $1 million increase in costs to our ratepayers. He stated that he wished the District to review the impacts of their detachment and have the facts confirmed prior to meetings with Fallbrook PUD and Rainbow MWD so we may have an educated discussion. 14. DIRECTORS' REPORTS/REQUESTS Directors Smith, Thompson, Gastelum and Robak reported that they have submitted their written reports to District Secretary Cruz and that their reports will be attached to the minutes for today’s meeting. Director Thompson additionally indicated that he and Director Robak have met in Ad Hoc to discuss Board of Directors’ Policy 8, Directors Compensation, Reimbursement of Expenses and Group Insurance Benefits, and it will be presented to the board with suggested amendments at an upcoming meeting for 6 consideration. He also indicated that he has been elected the Board President for the Water Conservation Garden Authority (WCG) this year and he worked with General Counsel Jeanne Blumenfeld to update their Conflict of Interest Code and thanked her for her assistance. He also shared that the WCG will be implementing a different fee structure and will be providing a discounted membership to families of member agencies and community college districts. He stated that he will share the information on the new fees when he receives it. Director Robak additionally reported that the study on the Regional Conveyance System commissioned by the member agencies is worth reading and asked General Manager Martinez to share the study with the board. He shared that he attended the WCG board meeting where they presented that the WCG closed out their FY 2020 budget in the black. He indicated that the City of San Diego Pure Water Project received a favorable ruling from the Court with regard to the project’s labor agreement. The issue, however, is not fully resolved as another ruling is expected in September 2020 on whether the Associated General Contractors will appeal the ruling. He lastly reported with regard to the bachelor’s degree that Cuyamaca College was proposing for their Center for Water Studies Program has been approved. The California State University and the University California systems have been opposing their efforts stating competition and impacts to the affordability of their programs and, thus, it was very tough to get State approval and he commended them for their work. Cuyamaca College will be working with National University to provide the final two (2) years of the degree. The program will start being offered at the beginning of next year. OTAY WATER DISTRICT FINANCING AUTHORITY 15. NO MATTERS TO DISCUSS There were no items scheduled for discussion for the Otay Water District Financing Authority board. 16. ADJOURNMENT With no further business to come before the Board, President Croucher adjourned the meeting at 4:56 p.m. ___________________________________ President ATTEST: District Secretary 7 Board of Directors Meetings Attended Form Director Name: Gary Croucher Period Covered: From: 7/1/20 To: 7/31/20 Item No. Date Meeting Attended Description 1. 7/1/20 OWD Board Meeting OWD Regular Board Meeting 2. 7/6/20 Meeting with GM & Gen Counsel Met with General Manager Martinez & General Counsels Shinoff and Blumenfeld to discuss District Matters 3. 7/7/20 Meeting with GM & Gen Counsel Met with GM Martinez & GCs Shinoff and Blumenfeld for a briefing on the July 9 Special Board Meeting 4. 7/9/20 Special Board Meeting OWD Special Board Meeting 5. 7/16/20 Committee Agenda Briefing Met w/ GM Martinez to review items that will be presented at the July committee meetings 6. 7/20/20 EO&WR Committee Reviewed and made recommendation on items that will be presented at the July board meeting 7. 7/21/20 CWA Matters Meeting Met with Dir Smith and GM Martinez to discuss CWA matters 8. 7/22/20 OWD Special Board Meeting OWD Special Board Meeting 9. 7/29/20 Board Agenda Briefing Met with GM Martinez and GCs Shinoff and Blumenfeld to review the July Board Meeting Agenda Board of Directors Meetings Attended Form Director Name: Tim Smith Period Covered: From: 7/1/20 To: 7/31/20 Item No. Date Meeting Attended Description 1. 7/1/20 OWD Regular Board Mtg. Monthly Board Meeting (video conf.) 2. 7/9/20 OWD Special Board Mtg. Special Board Meeting (video conf.) 3. 7/21/20 CWA Matters Meeting Discuss CWA Matters 4. 7/22/20 East County Caucus Meeting Discuss East County issues with agencies and CWA (video conf.) 5. 7/22/20 Special OWD Meeting Special Board Meeting (video conf.) 6. 7/24/20 Desalination Committee Mtg Desalination Committee update (video conf.) 7. 8. 9. 10. -Instructions on Reverse - Board of Directors Meetings Attended Form Director Name:Mitchell Thompson Period Covered: From: 7/1/20 To: 7/31/20 Item No. Date Meeting Attended Description 1.7/1/20 OWD Regular Board Mtg See agenda 2.7/6/20 LAFCO Board Meeting Review meeting regarding Rainbow Fallbrook De- annexation 3.7/7/20 So Co EDC Board Meeting Represent OWD 4.7/22/20 Special Board Meeting Agenda 5.7/23/20 Mtg With Counsel J. Blumfeld & Water Conserv Auth Secretary Agenda and Conflict of interest Code For Water Conservation Authority 6.7/24/20 Desalination Committee Meeting Agenda 7.7/27/20 Policy 8 Ad Hoc Committee Mtg Represent OWD at Meeting 8.7/28/20 Water Conservation Garden Authority Bd Mtg Agenda 9.7/29/20 CV Chamber Utility subcommittee meeting Represent OWD --Discuss issues related to utilities and infrastructure 10. 11. 7/29/20 7/9/20 Follow up Mtg w J. Blumenfeld, Counsel Special Board Meeting Finalize Conflict of Interest Code for Water Conservation Authority Agenda