HomeMy WebLinkAbout04-01-20 Board Minutes 1
MINUTES OF THE
BOARD OF DIRECTORS MEETINGS OF THE OTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY April 1, 2020
1. The meeting was called to order by General Manager Martinez at 3:30 p.m. 2. ROLL CALL
Directors Present: Croucher, Gastelum, Robak, Smith and Thompson
Staff Present: General Manager Jose Martinez, General Counsel Dan Shinoff, Chief of Engineering Rod Posada, Chief Financial Officer Joe Beachem, Chief of Administration Adolfo Segura,
Chief of Operations Pedro Porras, Asst. Chief of Engineering
Dan Martin, 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 Director Thompson, and seconded by President Croucher and carried with the following vote:
Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None
to approve the agenda. 5. APPROVE THE MINUTES OF THE REGULAR BOARD MEETING OF NOVEMBER 6, 2019 AND THE EMERGENCY MEETING OF MARCH 16, 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 regular board meeting of November 6, 2019 and the
emergency meeting of March 16, 2020.
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6. 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 No one wished to be heard.
INFORMATIONAL ITEM
7. PRESENTATION OF 2020 ECONOMIC OUTLOOK UPDATE FOR SAN DIEGO COUNTY
Mr. Alan Nevin, Director of Economic and Market Research of Xpera Group,
provided an overview of the economic outlook for the United States, California, and San Diego County. He stated that the State of California is the fifth (5th) largest economy in the world and he believes the State will remain so for some time. He stated with regard to the County of San Diego that it has many economic drivers
which insulates it from recessions and has allowed it to add 34,800 new jobs in the past year. Housing construction, however, has been dropping over the years with only 3,023 new single-family homes and 5,059 new multi-family units (townhomes, condominiums and apartments) built in the County in 2019.
Mr. Niven indicated the City of Chula Vista had a very robust residential construction year in 2018, but it slowed greatly in 2019 with a total of only 282 single-family and 839 multi-family units built. He stated the reason is developers did not have enough land prepared for construction. It is anticipated residential construction will increase in 2020 with an estimated 1,108 residential units (215
single-family and 893 multi-family) projected for construction. He stated that there is currently little inventory, but homes are selling as buyer wish to take advantage of low interest rates. He stated that the largest planned commercial development in Otay WD’s service
area in the next year is Amazon’s 3.4 million square foot distribution center in the Otay Mesa area that will include 1800 parking spaces. It is expected that Amazon’s facility will generate business growth as Amazon suppliers will locate offices close to the facility. The facility will employ approximately 4,000 to 5,000 people.
Mr. Nevin added that he is concerned with COVID-19’s impact on the construction start date of Amazon’s development because of the current requirement to social distance and to telecommute employees. He stated it is also not certain what COVID-19’s impact will be on the office market and we will have to wait and observe over time. He stated that the industrial market, however, is continuing to
do well and the hotel sector he felt, will begin to recover by the 3rd quarter (fall timeframe). He also indicated that the recession triggered by COVID-19 has been compared to the great depression. It, however, is not similar as in 1929, 39% of the jobs were in
manufacturing and when manufacturing plummeted, the economy plummeted.
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Today, our nation does not have the same overall weakness in the economy with
only 7% of jobs are in manufacturing. In San Diego County, fifty percent (50%) of
the jobs are termed “safe” jobs like government, military, healthcare, support jobs (food, drug/pharmacy, construction etc.), etc. He stated that he is hoping with people now taking the situation more seriously and there is increased social distancing, that we will see a rapid recovery in the economy once states return to
normalcy.
The board appreciated Mr. Nevin’s prediction for a rapid recovery and suggested that the District should hope for the best, but be prepared for the worst. Mr. Nevin and staff responded to additional comments and questions from members of the
board.
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 Director Smith, and seconded by Director Robak and carried with the following vote:
Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None
to approve the following consent calendar items: a) APPROVE AN INCREASE TO THE CIP P2561 BUDGET IN THE AMOUNT OF $150,000 (FROM $2,300,000 TO $2,450,000) AND APPROVE CHANGE ORDER NO. 1 TO THE EXISTING CONSTRUCTION CONTRACT WITH
LAYFIELD USA CORPORATION IN AN AMOUNT NOT-TO-EXCEED $105,535.48 FOR THE RESERVOIR 711-3 FLOATING COVER AND LINER REPLACEMENT PROJECT b) APPROVE CHANGE ORDER NO. 4 TO THE EXISTING CONSTRUCTION
CONTRACT WITH CASS CONSTRUCTION, INC. dba CASS ARRIETA IN AN AMOUNT NOT-TO-EXCEED $1,880 FOR THE VISTA VEREDA AND HIDDEN MESA ROAD WATER LINE REPLACEMENT PROJECT c) APPROVE CHANGE ORDER NO. 6 TO THE EXISTING CONSTRUCTION
CONTRACT WITH PACIFIC HYDROTECH CORPORATION IN THE AMOUNT OF $40,125.89 FOR THE 870-2 PUMP STATION REPLACEMENT PROJECT
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d) ADOPT RESOLUTION NO. 4378 DESIGNATING SPECIFIC STAFF
POSITIONS TO BE AUTHORIZED AS AGENTS TO DEAL WITH THE
STATE OF CALIFORNIA, OFFICE OF EMERGENCY SERVICES, ON THE DISTRICT’S BEHALF IN ALL MATTERS PERTAINING TO DISASTER ASSISTANCE
ACTION ITEMS
9. FINANCE AND ADMINISTRATION a) APPROVE THE IMPLEMENTATION OF A 90-DAY MORATORIUM ON ANY
CHANGES TO ALL DISTRICT CAPACITY AND ANNEXATION FEES
Assistant Chief of Finance Kevin Koeppen stated that staff is requesting that the board approve the implementation of a 90-day moratorium on any changes to all District capacity and annexation fees. Mr. Koeppen indicated that due to the
COVID-19 pandemic, it is not clear what impacts it will have on the District. Staff
proposes that the District allow the current situation to develop to help provide clarity and any time before the close of the proposed 90-day moratorium, this issue could be brought back to the board for further discussion. Staff responded to comments and questions from the board.
A motion was made by Director Thompson , and seconded by President Croucher and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson
Noes: None
Abstain: None Absent: None to approve staffs’ recommendation:
10. BOARD a) DISCUSS OF 2020 BOARD MEETING CALENDAR
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 move the May regular board meeting back to Wednesday, May 6, 2020, at 3:30 p.m.
INFORMATIONAL ITEMS
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11. THE FOLLOWING ITEMS ARE PROVIDED TO THE BOARD FOR
INFORMATIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING AGENDA ITEMS: a) DISCUSS OTAY WATER DISTRICT’S CORONAVIRUS (COVID-19)
RESPONSE
General Manager Martinez provided an update on any impacts to the District from the COVID-19 pandemic. He noted there are no potential or known impacts to water supply, operations and services.
Director Smith requested a summary sheet for active CIPs stating any impacts to the project (completion delays, if a project will continue to be on schedule, and expenditure changes). He stated that he is interested in the information as it impacts CIP spending and the budget which staff is currently developing. Staff
indicated that they would provide a document with such information.
b) UPDATE THE BOARD ON BUDGET CONSIDERATIONS RELATED TO THE COVID-19 EMERGENCY
Assistant Chief of Finance Koeppen updated the board on budget considerations
related to the COVID-19 pandemic. He reviewed items that staff is monitoring closely as the pandemic continues which included, water sales volume, collections, property tax revenues from potential changes in property valuations, operating expenses, etc. [please reference the attached staff report for additional details).
These impacts will be continually monitored as the FY 2021 budget is developed
and staff will present a detailed and quantified evaluation of financial impacts to the board in upcoming weeks as the situation and any impacts unfold. President Croucher stated that Standard & Poors published a report that indicated
that more government and public agencies will receive a rating downgrade than
upgrade this year due to impacts from the pandemic. He asked General Manager Martinez to forward a copy of the report to the Board. Staff responded to additional questions and comments from the board.
REPORTS
12. GENERAL MANAGER’S REPORT General Manager Martinez presented information from his report which included an update on new hires, promotions and recruitments; on America’s Water
Infrastructure Act of 2018; the SDRMA insurance renewal; the graph for sewage flows to the Metro Commission versus planned capacity; and an air-vac leak repair. Staff responded to questions and comments from the board. 13. SAN DIEGO COUNTY WATER AUTHORITY UPDATE
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President Croucher reported that CWA is similarly responding to the impacts from
the COVID-19 pandemic on their services and operations. They are down to
essential staff and are working to keep the water flowing. They have isolated their operations staff to protect them from contact and to keep them healthy. CWA has also contacted their retirees to make arrangements for their return to work at CWA, if they are needed, to assist with operations. He lastly indicated that he would
provide a written report that would better update the board on CWA matters.
Director Smith additionally reported that CWA’s General Manager Sandy Kerl provided an update on the impacts of COVID-19 on CWA’s operations. CWA’s and MWD’s boards also discussed water revenue bonds and refunding bonds and the
risks from variable rate bonds. He stated that both boards took action on their
variable rate bonds. He shared with regard to the repair of Pipeline 5 that CWA will be performing an emergency shutdown around April 6, 2020 to install two (2) carbon fiber bulkhead replacements. He lastly shared that MWD had provided a series of helpful public relations related videos and slides related to COVID-19 to
help the public better understand how water agencies are being affected. It was
indicated that the link to the materials would be forwarded to District Secretary Cruz who would share it with the full board. Director Smith indicated that if the District found any of the materials useful, MWD is open to having the links shared on agencies’ websites.
14. DIRECTORS' REPORTS/REQUESTS Director Smith reported that he has submitted a written report to District Secretary Cruz, which will be attached to the minutes of today’s meeting.
Director Thompson indicated that he apologizes to the board, but he did not prepare his written report for the meetings he attended and would provide his report verbally quickly. He reported that he attended the following meetings:
• March 11, 2020, OWD Regular Board Meeting
• March 3, 2020, South County Economic Development Council Board Meeting
• March 12, 2020, CWA Board Meeting regarding the Regional Conveyance Project
• March 16, 2020, Otay WD Finance and Administration Committee
• March 16, 18, 20, 23 & 25, 2020, Otay WD Special Board Meetings to discuss COVID-19 Impacts to District
• March 30, 2020, ACWA Webinar regarding Communications During COVID-19
Director Gastelum indicated he will forward his report to District Secretary Cruz. He reported that he attended all the District’s special board meetings (as listed above in Director Thompson’s report); the CWA Board meeting regarding the Regional Conveyance Project (also listed above), and two CSDA webinars which earned the
District credit towards premium discounts from SDRMA, the District’s liability insurance provider.
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Director Robak stated that District Secretary Cruz has his report which will be
attached to the minutes of this meeting. 15. PRESIDENT’S REPORT
President Croucher’s report is attached. He indicated that he wished to remind
everyone that during stressful times, you don’t know what stresses others are dealing with and to please be patient with each other during this challenging time. He thanked everyone for their efforts.
16. CLOSED SESSION
The board recessed to closed session at 5:24 p.m. to discuss the following matters: a) DISCUSSION RELATING TO CORONAVIRUS (COVID-19) AND PUBLIC
SERVICES [GOVERNMENT CODE §54957]
b) CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION [GOVERNMENT CODE §54956.9]
OTAY WATER DISTRICT vs. RAINBOW MUNICIPAL WATER DISTRICT;
CASE NO. 37-2020-00001510-CU-WM-CTL c) CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION [GOVERNMENT CODE §54956.9]
OTAY WATER DISTRICT vs. FALLBROOK PUBLIC UTILITY DISTRICT; CASE NO. 37-2017-00019348-CU-WM-CTL 17. REPORT ON ANY ACTIONS TAKEN IN CLOSED SESSION. THE BOARD MAY
ALSO TAKE ACTION ON ANY ITEMS POSTED IN CLOSED SESSION
The board reconvened from closed session at 6:03 p.m. and General Counsel Dan Shinoff reported that the board took action on item ‘b’ above on a motion by President Croucher, 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 ratify an agreement that has been entered into between Otay WD and Rainbow MWD which effectively dismiss the pending litigation. The stipulation, agreement and attachments are subject to the California Public Record Act to those who have interest.
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The board also took action on item ‘c’ above on a motion by Director Smith,
seconded by Director Gastelum and carried with the following vote:
Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None
Absent: None
to ratify an agreement that has been entered into between Otay WD and Fallbrook PUD to effectively dismiss the pending litigation. The stipulation, agreement and attachments are subject to the California Public Record Act to those who have
interest.
The board took no other reportable actions in closed session. OTAY WATER DISTRICT FINANCING AUTHORITY
18. NO MATTERS TO DISCUSS There were no items scheduled for discussion for the Otay Water District Financing Authority board.
19. ADJOURNMENT With no further business to come before the Board, President Croucher adjourned the meeting at 6:06 p.m.
___________________________________
President
ATTEST:
District Secretary
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Board of Directors Meetings Attended Form
Director Name: Gary Croucher Period Covered:
From: 3/1/20 To: 3/31/20
Item No. Date Meeting Attended Description
1.
3/9/20 Board Agenda Review Meeting Met with General Managers Watton and Martinez and General Counsels Shinoff and Blumenfeld to review the March Board Meeting Agenda
2.
3/11/20 OWD Board Meeting OWD Regular Board Meeting
3.
3/16/20 Emergency Board Mtg Discuss impacts of COVID-19 to District operations
4.
3/17/20 EO&WR Committee Reviewed and made recommendation on items that will be presented at the April 2020 board meeting.
5.
3/18/20 Special Board Meeting Update on impacts of COVID-19 to District operations
6.
3/20/20 Special Board Meeting Update on impacts of COVID-19 to District operations
7.
3/23/20 Special Board Meeting Update on impacts of COVID-19 to District operations
8.
3/25/20 Special Board Meeting Update on impacts of COVID-19 to District operations
9.
3/27/20 Board Agenda Review Meeting Met with General Manager Martinez and General Counsels Shinoff and Blumenfeld to review the April Board Meeting Agenda