The URL can be used to link to this page

Home My WebLink About06-05-19 Board Minutes 1 MINUTES OF THE BOARD OF DIRECTORS MEETINGS OF THE OTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY June 5, 2019 1. The meeting was called to order by President Thompson at 3:33 p.m. 2. ROLL CALL Directors Present: Croucher, Gastelum, Robak, Smith and Thompson Staff Present: General Manager Mark Watton, 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 Operations Jose Martinez, District Secretary Susan Cruz and others per attached list. 3. PLEDGE OF ALLEGIANCE Former Otay Water District director, Mr. Jose Lopez, led the meeting attendees in the pledge of allegiance to the United States flag. 4. APPROVAL OF AGENDA A motion was made by Director Gastelum, and seconded by President Thompson 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. 2019-2020 LEGISLATIVE SESSION UPDATE Ms. Rosanna Carvacho of Brownstein, Hyatt, Farber and Schreck, provided an update on legislation impacting the District and the water industry. She stated that the legislative session is at the halfway point and all bills must be heard by both the Assembly and the Senate by September 13, the day that the California legislature adjourns for the year. The legislature also takes a summer recess from July 12 to August 12, 2019. She stated after the legislature adjourns on September 13, the Governor has 30 days to sign or veto any bills that have been sent to him. She also indicated that the Legislature is working on the State budget and must pass a budget by June 15, 2019. The Governor is proposing a Safe and Affordable 2 Drinking Water fee for underrepresented areas. The Senate adopted language to continuously appropriate $150 million from the general fund as opposed to making it a tax. The Assembly set aside $4.9 million in their budget for the establishment of the Safe and Affordable Drinking Water Program. They, however, do not support a tax. They instead would like to implement the program through the policy process as opposed to the budget process. Ms. Carvacho reviewed additional assembly and senate bills presented for the 2019-2020 Legislative Session. There was discussion regarding AB 1180 (Friedman). The District’s interest in this bill is to allow the use of recycled water in lakes. The District has been prohibited from refilling the Eastlake lake with recycled water and would like language included in the bill that allows the District to do so. Ms. Carvacho indicated that she would take a closer look at the bill and make suggested amendments if needed. She also provided an update on the California WaterFix project (Delta Conveyance), Water Resiliency Portfolio, PG& E bankruptcy, wildfires, housing, etc. Ms. Carvacho responded to questions and comments from the board and general manager and the board requested that she keep abreast of what is occurring with direct potable reuse and the water tax issues. 6. APPROVE THE MINUTES OF THE REGULAR BOARD MEETINGS OF FEBRUARY 6 AND MARCH 6, 2019 A motion was made by Director Smith, and seconded by Director Croucher 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 meetings of February 6 and March 6, 2019. 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 Former Otay WD director, Mr. Jose Lopez, indicated that he was proud to announce that a former director of the District, Mr. Jaime Bonilla, has been elected governor of Baja, California. He stated that one of things Mr. Bonilla and he wished to do as directors was to put Otay WD on the map, especially at the local level in Mexico. He stated, not only is Otay WD recognized at the local level today, but it is also now recognized at the State level and possibly it could receive recognition at the Federal level. This recognition is all due to Mr. Bonilla. He indicated that Mr. Bonilla has always been a large proponent of the Otay WD and its accomplishments and he has always attributed his political awareness and growth to the Otay WD. He stated that the board should take full advantage of his position as governor. Mr. Lopez 3 noted that he is not attending today’s meeting on Mr. Bonilla’s behalf, but as a proud friend and citizen to share this good news. Mr. Barry Willis, newly sworn in member of LAFCO’s Commission as a Special District Representative, indicated that he is attending today’s meeting to let the District know he is the new representative on LAFCO’s Commission. He stated he wished to get to know the members of the District’s board and that he has known Director Robak for approximately 30 years. He indicated that he recognizes that the boards of special districts are constituents of LAFCO and that he feels there is no substitute for meeting people in person. He stated that he would like to hear from the District’s board on any issues they have interest or concerns with and shared his business card with each member 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: Director Gastelum requested that item 7c, ADOPT RESOLUTION NO. 4364 TO ESTABLISH THE TAX RATE FOR IMPROVEMENT DISTRICT NO. 27 FOR FISCAL YEAR 2019-2020, be pulled for discussion. A motion was made by Director Smith, and seconded by President Thompson 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) ADOPT RESOLUTION NO. 4366 FOR THE ANNEXATION OF THE PROPERTY OF THE CYNTHIA BONSIGNORE TRUST, 1655 GUAVA LANE, EL CAJON, CA 92020, APN 498-270-12-00, TO THE OTAY WATER DISTRICT AND TO IMPROVEMENT DISTRICT 18 b) ADOPT ORDINANCE NO. 571 AMENDING SECTION 38, SERVICE FOR FIRE PROTECTION SYSTEMS, OF THE OTAY WATER DISTRICT CODE OF ORDINANCES d) ADOPT RESOLUTION NO. 4365 TO CONTINUE WATER AND SEWER AVAILABILITY CHARGES FOR DISTRICT CUSTOMERS FOR FISCAL YEAR 2019-2020 TO BE COLLECTED THROUGH PROPERTY TAX BILLS President Thompson presented item 7c for discussion: c) ADOPT RESOLUTION NO. 4364 TO ESTABLISH THE TAX RATE FOR IMPROVEMENT DISTRICT NO. 27 FOR FISCAL YEAR 2019-2020 4 Assistant Chief of Finance indicated that this is a routine item that is presented to the board on an annual basis to authorize the County of San Diego to collect the taxes in ID 27 on behalf of the District. Please reference the Committee Action notes (Attachment A) attached to the staff report for the details of Mr. Keoppen’s presentation. Staff indicated in response to an inquiry from the board that the tax rate is being reduced from $0.004 to $0.00375 per $100 of assessed property valuation. A motion was made by Director Gastelum, 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 staffs’ recommendation. ACTION ITEMS 9. BOARD a) DISCUSSION OF 2019 BOARD MEETING CALENDAR There were no changes to the board meeting calendar. INFORMATIONAL ITEMS 10. THIS ITEM IS PROVIDED TO THE BOARD FOR INFORMATIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING AGENDA ITEM. a) THIRD QUARTER OF FISCAL YEAR 2019 CAPITAL IMPROVEMENT PROGRAM REPORT Assistant Chief of Engineering Dan Martin provided an update on the District’s third quarter of fiscal year 2019 Capital Improvement Program (CIP). Please reference the Committee Action notes (Attachment A) attached to the staff report for the details of Mr. Martin’s report. Mr. Martin responded to questions and comments from the board. Director Smith shared that Metropolitan Water District (MWD) presented their new CIP Quarterly Report which now includes the contract change order rate, similar to Otay WD’s presentation, as he requested. He stated that he also shared a copy of this CIP quarterly report with MWD’s chief of engineering as an example. He indicated that, once again, Otay WD is setting the standard. WORKSHOP 5 11. ADOPT RESOLUTION NO. 4367 TO APPROVE THE FY 2019-2020 OPERATING AND CAPITAL BUDGET; APPROVE FUND TRANSFERS FOR POTABLE, RECYCLED, AND SEWER; ADOPT THE SALARY SCHEDULE; APPROVE WATER AND SEWER RATES; ADOPT ORDINANCE NO. 575 AMENDING APPENDIX A WITH THE APPROVED WATER AND SEWER RATE CHANGES, EFFECTIVE JANUARY 1, 2020; AND DIRECT STAFF TO DRAFT AND MAIL WATER AND SEWER RATE INCREASE NOTICES TO CUSTOMERS Chief Financial Officer Beachem indicated that this is the third budget meeting where staff will cover the operating budget, staffing highlights, materials and maintenance costs, and administrative costs. He reviewed the objectives of the workshop which included: • Presentation of a $105.8 million Operating Budget and $17.2 million CIP Budget for approval • Request approval of the annual fund transfers • Request adoption of the Salary Schedule • Request approval of a 4.7% water rate increase and 8.9% sewer rate increase effective on all billings that begin January 1, 2020 • Adopt Ordinance 575 amending the Code of Ordinances, including Appendix A, with the proposed water rate changes to be effective January 1, 2020 • Direct staff to draft and mail water rate and fee increase notices • Direct staff to draft and mail water and sewer rate and fee increase notices Presentations were then provided by staff that included the proposed potable and recycled budget, the sewer budget, PERS and OPEB funding, and each of the Department Chiefs reviewed their department budgets for FY 2020 which was comprised of the Capital Improvement Project (CIP) budget for FY 2020, the CIP plan for the next six (6) years and the details of the operating budget. During the presentations there were questions asked by members of the board and responses were provided by staff. Director Croucher stepped off the dias at 4:51 p.m. and returned at 4:55 p.m. President Thompson requested that staff research with regard to the debt issuance (because the District has three years to utilize the bond funds), if the District could leave a portion of the $6 million debt funding with the Trustee to reinvest as they may be able to get a higher rate of return. Staff indicated that they would look at this possibility. This item was suspended at 5:51 p.m. as Director Croucher needed to leave at 6:00 p.m. and the board wished him to have an opportunity to provide his report on San Diego County Water Authority matters. REPORTS 12. SAN DIEGO COUNTY WATER AUTHORITY UPDATE 6 Director Croucher shared that CWA will be holding a special board meeting on Tuesday, June 11, 2019, to discuss the proposed bond debt issuance that was tabled at their regular board meeting held on, May 23, 2019, because CWA was given notice that two member agencies were pursuing the possibility of detaching from CWA. He also reported that CWA’s Administration and Finance Committee will be meeting to discuss CWA’s budget and that CWA’s Metropolitan Water District (MWD) settlement team, of which he is a member, met to discuss the lawsuit with MWD with the goal of resolving issues out of court. He stated the MWD settlement team is scheduled to meet again on June 24, 2019. He lastly shared with regard to the notice of the Twin Oaks Valley Water Treatment Plant malfunction (a copy of the notice was placed on the dias for each board member), that CWA is committed to focus on member agency communications to assure CWA is addressing their concerns and ideas. The meeting was recessed at 6:00 p.m. for a short break. Director Croucher left at 6:03 p.m. WORKSHOP 13. ADOPT RESOLUTION NO. 4367 TO APPROVE THE FY 2019-2020 OPERATING AND CAPITAL BUDGET; APPROVE FUND TRANSFERS FOR POTABLE, RECYCLED, AND SEWER; ADOPT THE SALARY SCHEDULE; APPROVE WATER AND SEWER RATES; ADOPT ORDINANCE NO. 575 AMENDING APPENDIX A WITH THE APPROVED WATER AND SEWER RATE CHANGES, EFFECTIVE JANUARY 1, 2020; AND DIRECT STAFF TO DRAFT AND MAIL WATER AND SEWER RATE INCREASE NOTICES TO CUSTOMERS President Thompson reconvened the meeting at 6:09 p.m. and resumed the discussion on the District’s FY 2020 budget. Assistant Chief of Finance Kevin Koeppen requested that the board: • Adopt Resolution No. 4367 to approve the FY 2019-2020 Operating and Capital Budget • Approve fund transfers for potable, recycled, and sewer • Approve the water rate changes and adopt Ordinance No. 575 to amend the Code of Ordinances, including Appendix A, with the proposed 4.7% water rate and proposed 8.9% sewer rate increase on all billings that begin in January 1, 2020 • Adopt the Salary Schedule pursuant to CA Code of Regulations 570.5 (CalPERS enforced) • Direct staff to draft and mail water and sewer rate increase notices and fee increase notices Director Robak inquired if staff utilized zero based budgeting to develop the FY 2020 budget. Staff indicated that they did. Director Robak also inquired if, when staff is making decisions, they make decisions with the mindset that they are spending their own money. Staff confirmed that they do. 7 A motion was made by Director Smith, and seconded by Director Gastelum and carried with the following vote: Ayes: Directors Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: Director Croucher to approve staffs’ recommendations. REPORTS 14. GENERAL MANAGER’S REPORT General Manager Watton presented information from his report which included an update on the District’s public records e-portal, mitigation of the vegetation at the Salt Creek property, the temporary lower Otay pump station redundancy, the City of San Diego pure water project, Campo Road sewer replacement, water sales and purchases. Staff responded to questions and comments from the board. 15. DIRECTORS' REPORTS/REQUESTS Director Gastelum reported that he attended ACWA’s Spring Conference last month. Director Robak indicated that he hopes that the new Governor elect of Baja, California, the Honorable Jaime Bonilla, will address the sewage issues at our Countries’ borders. He also shared that he attended the South County Albondigas meeting and the 16th Annual Innovation Education Awards where the Chula Vista Elementary School District received an award for their new career program that exposes students to career opportunities in the energy, water, etc. industries. 16. PRESIDENT’S REPORT President Thompson’s report is attached. He noted that he and General Manager Watton met with the City of San Diego Councilmember Vivian Moreno to welcome her as a councilmember and to discuss the recycled water matter. OTAY WATER DISTRICT FINANCING AUTHORITY 17. NO MATTERS TO DISCUSS There were no items scheduled for discussion for the Otay Water District Financing Authority board. 18. ADJOURNMENT 8 With no further business to come before the Board, President Thompson adjourned the meeting at 6:36 p.m. ___________________________________ President ATTEST: District Secretary 9 President’s Report Mitch Thompson June 5, 2019 Board Meeting # Date Meeting Purpose 1 2-May Special Board Meeting/Budget Workshop No. 1 Reviewed assumptions for the development of the FY 2020 Budget 2 11-May 50th Annual Chicano Federation Event Represented the District at the event 3 13-May Quarterly meeting with General Manager Watton Met w/ General Manager Watton to receive an update on projects or issues impacting Division 2 4 16-May Mexican American Business Professionals Association Monthly Meeting Represented the District at the monthly meeting 5 16-May California Special Districts Association Quarterly Meeting Discussed issues impacting special districts 6 17-May Albondigas Meeting Participated in a panel discussion regarding the biggest water issues facing San Diego 7 17-May Committee Agenda Briefing Met w/ General Manager Watton to review items that will be presented at the May committee meetings 8 18-May Water Agency Customer Appreciation Day Represented the District at the event 9 20-May Engineering Operations and Water Resources Committee Reviewed items that will be presented at the June board meeting 10 21-May Finance and Administration Committee Reviewed items that will be presented at the June board meeting 11 24-May TEDx Chula Vista Mixer Meet and Greet with 2019 TEDx Chula Vista Speakers 10 12 29-May Met with City of San Diego Councilmember Vivian Moreno Discussed Otay WD matters 13 30-May Met with Director Croucher, General Manager Watton & CWA representative Madaffer Discussed CWA matters 14 31-May Board Agenda Briefing Met with General Manager Watton and General Counsel Shinoff to review items that will be presented at the June Board Meeting