Loading...
HomeMy WebLinkAbout11-07-18 Board Minutes 1 MINUTES OF THE BOARD OF DIRECTORS MEETINGS OF THE OTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY November 7, 2018 1. The meeting was called to order by President Smith at 3:35 p.m. 2. ROLL CALL Directors Present: Croucher, Gastelum (arrived at 3:43 p.m.), 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 Finance Kevin Koeppen, Asst. Chief of Operations Jose Martinez, District Secretary Susan Cruz and others per attached list. 3. PLEDGE OF ALLEGIANCE 4. APPROVAL OF AGENDA A motion was made by Director Robak, and seconded by Director Croucher and carried with the following vote: Ayes: Directors Croucher, Robak, Smith and Thompson Noes: None Abstain: None Absent: Director Gastelum to approve the agenda. 5. PRESENTATION OF THE CHULA VISTA ELEMENTARY SCHOOL DISTRICT’S HYDROSTATION AND PARTNERSHIP WITH THE OTAY WATER DISTRICT AND SWEETWATER AUTtoday, March 22today, March 22HORITY (ASSISTANT SUPERINTENDENT MATTHEW R. TESSIER, ED.D. AND INNOVATION AND INSTRUCTION RESOURCE TEACHER MICHAEL BRUDER) Assistant Superintendent Matthew Tessier presented the Chula Vista Elementary School District’s Hydrostation program in partnership with the Otay Water District and Sweetwater Authority. The program’s goal is to expose approximately 4,000 fifth grade students each year to the blue economy or recession proof careers in the water industry. The Hydrostation will provide students with a full day of hands-on experience with the various careers available in the water industry and for students to connect their strengths, interests and values with careers in the water industry. 2 Innovation and Instruction Resource Teacher Michael Bruder presented the details of the program where students participate in six different activities that are relevant to the water industry careers. This determines which water careers are best suited to their interests. The students are then provided information about the career that is best suited to their interest from expected growth in the field to the level of education required. Mr. Bruder indicated that they are grateful for the Otay Water District’s support in bringing this program and experience to their students. Mssrs. Tessier and Bruder responded to questions and comments from the members of the District’s board. 6. PRESENTATION OF CONTRIBUTION TO THE CHULA VISTA ELEMENTARY SCHOOL DISTRICT FOR THE HYDROSTATION PARTNERSHIP WITH THE OTAY WATER DISTRICT President Smith presented the District’s $10,000 contribution to the Chula Vista Elementary School District’s Hydrostation Program Project. He stated that the District is proud to support the program and shared that the program has also received a $10,000 contribution from Sweetwater Authority and was awarded a grant from the Hans and Margaret Doe Charitable Trust. He congratulated them on the work they have accomplished so far and indicated that the District is looking forward to seeing the metrics on the achievements of the program. 7. APPROVE THE MINUTES OF THE REGULAR BOARD MEETING OF JULY 11, 2018 AND SPECIAL MEETING OF JULY 30, 2018 A motion was made by Director Robak, and 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 approve the minutes of the regular meeting of July 11, 2018 and special board meeting of July 30, 2018. 8. 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. CONSENT CALENDAR 9. 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: 3 A motion was made by Director Croucher, and seconded by Director 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) AWARD A CONTRACT TO ERS INDUSTRIAL SERVICES, INC. FOR THE RALPH W. CHAPMAN WATER RECLAMATION FACILITY FILTER MEDIA AND NOZZLES REPLACEMENT PROJECT (CIP R2145) IN AN AMOUNT NOT-TO-EXCEED $115,765.58 b) APPROVE A $25,000 (FROM $150,000 TO $175,000) INCREASE TO THE CIP R2118 BUDGET AND AWARD A CONSTRUCTION CONTRACT TO THARSOS, INC. FOR THE RALPH W. CHAPMAN WATER RECLAMATION FACILITY HEADWORKS IMPROVEMENTS (CIP S2051) AND STEELE BRIDGE SEWAGE PUMP STATION WET WELL IMPROVEMENTS (CIP R2118) PROJECT IN AN AMOUNT NOT-TO-EXCEED $223,490 c) APPROVE DECREASING THE CIP P2574 BUDGET IN THE AMOUNT OF $360,000 (FROM $2,000,000 TO $1,640,000), INCREASING THE CIP P2625 BUDGET IN THE AMOUNT OF $710,000 (FROM $1,500,000 TO $2,210,000), AND AWARD A CONSTRUCTION CONTRACT TO CASS ARRIETA FOR THE VISTA VEREDA (CIP P2574) AND HIDDEN MESA ROAD (CIP P2625) WATER LINE REPLACEMENT PROJECT IN AN AMOUNT NOT-TO-EXCEED $2,848,364 d) APPROVE INCREASING THE OVERALL BUDGET FOR CIP S2024, CAMPO ROAD SEWER REPLACEMENT PROJECT, IN THE AMOUNT OF $230,000 (FROM $10,300,000 TO $10,530,000) AND APPROVE CHANGE ORDER NO. 3 TO THE PROJECT’S EXISTING CONSTRUCTION CONTRACT WITH WIER CONSTRUCTION CORPORATION IN THE AMOUNT OF $156,192.12 e) APPROVE INCREASING THE CIP P2565 BUDGET IN THE AMOUNT OF $200,000 (FROM $1,000,000 TO $1,200,000) AND AWARD A CONSTRUCTION CONTRACT TO ADVANCED INDUSTRIAL SERVICES, INC. FOR THE 803-2 RESERVOIR INTERIOR/EXTERIOR COATINGS AND UPGRADES PROJECT IN AN AMOUNT NOT-TO-EXCEED $951,690 f) APPROVE THE PURCHASE OF SEVEN (7) FLEET VEHICLES BY ISSUING PURCHASE ORDERS TO: ENCINITAS FORD IN THE AMOUNT OF $102,045.42 FOR THE PURCHASE OF THREE (3) F150 HALF TON TRUCKS; SUNROAD AUTO, LLC, IN THE AMOUNT OF $145,566.71 FOR THE PURCHASE OF TWO (2) ONE TON TRUCKS AND ONE (1) F550 CLASS 5 DUMP TRUCK; AND THEODORE ROBBINS FORD IN THE 4 AMOUNT OF $39,009.94 FOR THE PURCHASE OF ONE (1) F250 THREE QUARTER TON TRUCK. THE TOTAL COST FOR SEVEN (7) FLEET VEHICLES IS $286,622.07 g) APPROVE THE ISSUANCE OF A PURCHASE ORDER TO RDO EQUIPMENT COMPANY IN THE AMOUNT OF $304,182.30 FOR THE PURCHASE OF ONE (1) MINI EXCAVATOR AND ONE (1) RUBBER TIRE LOADER, AND DECLARE UNITS 742, 269, 1503, 3247 AND 3460 AS SURPLUS ACTION ITEMS 10. ADMINISTRATION AND FINANCE a) APPROVE THE AUDITED FINANCIAL STATEMENTS, INCLUDING THE INDEPENDENT AUDITORS’ UNQUALIFIED OPINION, FOR THE FISCAL YEAR ENDED JUNE 30, 2018 Senior Accountant Marissa Dychitan presented the District’s audited financial statements, including the independent auditors’ unqualified opinion, for the fiscal year ended June 30, 2018. Please reference the Committee Action notes (Attachment A) attached to the staff report for the details of Ms. Dichitan’s and Mr. Rich Teaman’s, Teaman Ramirez and and Smith, reports. Staff indicated in response to an inquiry from Director Smith that the District’s Other Post Employee Benefits (OPEB) is approximately 86 to 87% funded and it is expected to be fully funded in 2021. It was further indicated that because these funds are invested for a long time period, they can be invested in different investments than the District’s operating revenues. The projected rate of return on the OPEB fund is 7%, similar to CalPERS projection. A motion was made by Director Thompson, 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 staff’s recommendation. b) CONSIDERATION OF PROPOSAL FOR AUDIT SERVICES FOR FISCAL YEAR 2019 Finance Manager Eid Fakhouri indicated that this item is presented to select the District’s auditing firm for the FY 2019 audit. He stated that the District’s Finance and Administration Committee had discussed two proposals they wished the full board to consider. Please reference the Committee Action notes (Attachment A) 5 attached to the staff report for the details of the proposals and Mr. Fakhouri’s presentation. It was discussed that Teaman Ramirez and Smith, LLP’s (TRS) five-year contract is ending. It was indicated that their firm had also provided auditing services to the District 10-years ago and that another auditing firm had provided the services between TRS’s engagement dates. Director Thompson indicated that the proposal to extend the TRS contract was driven by the language in the staff report that was presented to the Finance and Administration Committee regarding the GFOA procurement best practices for audit procurement which indicates that “Government entities should enter into multi-year agreements of at least five years in duration when obtaining the services of independent auditors as it allows for continuity”. The District’s practice has been to change its auditors every five years. However, there is no policy that requires the District to change its auditors every five year. He stated for efficiency and continuity purposes, also due to the fact the District will be managing the possible disposition of the Salt Creek Golf Couse, he felt that it would make sense to extend the auditing contract another year for continuity. Additionally, he indicated that TRS is a good firm and their fee is very competitive. It was discussed if the TRS contract was extended for one year, with an option for one additional year for a total of two years, the District would request that the partner in charge be rotated to another partner of the firm to provide for a fresh perspective on the District’s audit. Mr. Joshua Calhoun will serve as the partner in charge of the District’s FY 2019 audit. He has been with TRS for ten years and he would be working with a different Manager in-Charge of the audit who has 18 years of experience and a new audit team from TRS. The new team has not worked on the District’s audit. Director Thompson indicated that he wished to note that he has not had any conversations with the staff of TRS and his recommendation to extend the TRS contract was made after he reviewed the staff report. He stated staff’s report was the only reason he made the suggestion. It was discussed that CWA rotates auditing services every three to five years. Director Croucher suggested that the Audit Committee/Finance and Administration Committee meet with TRS prior or during the audit to discuss any areas of particular interests they wished reviewed as part of the audit. A motion was made by President Smith, and seconded by Director Thompson and carried with the following vote: Ayes: Directors Croucher, Robak, Smith and Thompson Noes: Director Gastelum Abstain: None Absent: None to extend TRS’ contract for one year with an option for an additional year for a total of two years and that a new partner from TRS be assigned to oversee the District’s audit. 6 c) ADOPT RESOLUTION NO. 4353 TO APPROVE THE 2019–2024 MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN THE OTAY WATER DISTRICT AND THE OTAY WATER DISTRICT EMPLOYEES’ ASSOCIATION (OWDEA) AND RELATED ACTIONS Human Resources Manager Kelli Williamson requested that the board consider adopting Resolution No. 4353 to approve the Memorandum of Understanding (MOU) between the Otay Water District and the Otay Water District Employees’ Association (OWDEA) effective July 1, 2019 through June 30, 2024 (with some provisions going into effect immediately upon Board approval), for the Field and Administrative Employees’ Bargaining Units and approve extending the same cost- pf-living adjustments and related benefits for management, confidential, and executive employees. She reviewed the changes proposed to the MOU as listed in staff’s report (attached) which also includes updates in the law. She noted that the OWDEA met on October 24, 208 to conduct a ratification meeting for represented employees. The Association ratified the tentative agreement with 83% of the members voting and of those that voted, 87% recommending acceptance of the agreement. Director Thompson thanked the Board of Directors Ad Hoc Employee Negotiations Committee for the good work they did in representing the members of the board. He commended the committee for keeping costs at a reasonable level and for keeping a positive relationship with employees whose work they appreciate. He stated that members of the board are also able to indicate to the District’s ratepayers that they have done their job. Director Robak added that he has been on both sides of these type of negotiations and the desire is to be able to compensate staff for what their skills are worth and to also have productivity and efficiency. He stated there is a nexus between paying for employee benefits and achieving productivity and efficiency and he felt that they have achieved a balance between the two. Database Administrator Bill Poulin, a member of the OWDEA, thanked the board for extending the opportunity for employees to continue to do what they are doing. He stated that he joined Otay WD because he noted in an employee position advertisement that the District utilized newer technology, Sequel Server Reporting Services. He stated that public agencies did not utilize such technology and it caught his attention. He stated that other agencies respect the work the District is doing and it is a good feeling. A motion was made by Director Robak, and seconded by Director Gastelum and carried with the following vote: Ayes: Directors Croucher, Robak, Smith and Thompson Noes: Director Gastelum Abstain: None Absent: None to approve staff’s recommendation. 7 Director Gastelum indicated that he expressed in an Op Ed, which was not printed by the publisher, that the Otay Water District was a top notch organization. He stated that it is a team effort and the District has excellent employees. He shared that he voted no because there were some things negotiated that he liked and there were things he did not like. His stated his vote is not an absolute no, but his conscience said to vote no. He wanted employees to know that he brags about Otay WD and the wonderful work that the employees accomplish and he is appreciative of their efforts. 11. BOARD a) DISCUSSION OF 2018 - 2019 BOARD MEETING CALENDAR President Smith noted that the December 5, 2018 board meeting has been canceled. District Secretary Susan Cruz noted that staff will be utilizing the first week in December to schedule committee meetings. INFORMATIONAL ITEMS 12. THIS ITEM IS PROVIDED TO THE BOARD FOR INFORMATIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING AGENDA ITEM. a) UPDATE ON RECENT CONSTRUCTION BIDS THE DISTRICT HAS RECEIVED, GRANT FUNDING AVAILABLE ON DISTRICT PROJECTS, AND UTILIZATION OF AS-NEEDED CONSTRUCTION MANAGEMENT SERVICES Assistant Chief of Engineering Dan Martin indicated that his presentation will cover three areas: 1) impact of Federal tariffs to construction market cost trends that have impacted recent construction bids, 2) Funding opportunities to support the District’s projects; and 3) Utilization of as-needed construction management services. Please reference the Committee Action notes (Attachment A) attached to the staff report for the details of Mr. Martin’s report. There was discussion that because of the escalating cost of construction materials, staff estimates that the construction budget will increase between 15% and 20%. It was noted that there will be some variability in the engineer’s estimate versus the bids because of fluctuating material costs. Director Croucher left the dias at 5:14 p.m. and returned at 5:18 p.m. Staff manages the Construction Manager (CM) on project specific task orders under an awarded “as needed” construction management contract. Under the contract for FYs 2019 and 2020, the combined average hourly loaded rate for as-needed CM services is estimated to be $154.50 per hour. CM work handled internally cost $138 per hour fully loaded as the District’s cost does not include profit (the District is revenue neutral). It is estimated that the level of effort under the as-needed CM and 8 inspection contracts for FY 2019 and FY 2020 will be .60 FTE and .93 FTE respectively. REPORTS 13. GENERAL MANAGER’S REPORT General Manager Watton reviewed handouts that were provided on the dias for each member of the board (see attached). He also presented information from his report which included an update on drone software and image collection, the employee holiday dinner, the San Diego Contracting Opportunities Center workshop on doing business with Otay WD, the Fire Marshal’s annual inspection, the Campo Road Sewer Replacement, Mexico’s request for water deliveries, CalOSHA’s citation dismissal, water sales and purchases. 14. SAN DIEGO COUNTY WATER AUTHORITY UPDATE Director Croucher shared that ACWA’s September 21, 2018 Newsletter announced President Smith as one of three new directors seated at MWD. He indicated that ACWA’s October 2018 Newsletter published photos of CWA’s new officers which included Director Croucher. He also reported that Chair Jim Madaffer had sent a letter to MWD concerning the legal settlement and the relationship between the two agencies. The letter received positive feedback from the board members of both agencies. Chair Madaffer also spoke to MWD’s Legal Claims Committee offering an “olive branch” towards trying to solve the decade long legal battles between the two agencies through compromise. His speech set the tone towards his goal that he wishes to accomplish during his tenure which would allow the two agencies to work towards regional solutions that benefit all water users in Southern California. CWA was also successful in working with other MWD member agencies in supporting MWD representative Gloria Gray and her election as Chair of MWD’s board of directors. Director Croucher indicated that he gives a lot of credit to new CWA Chairman Madaffer for his leadership in the progress towards change in the relations with MWD. President Smith added with regard to CWA’s CalPERS funding level that they had followed Otay WD’s lead and now CWA’s CalPERS benefit is 72% funded. CWA plans to contribute $1 million annually to the benefit with a goal of having it 75% to 85% funded within 20 years which will save CWA $35 million. He also indicated several years ago he had presented a graph comparing the District’s revenue budget with actual revenues and the variance between the budget and actual revenues. He stated that he introduced the comparative graph to CWA and after several months, they added the graph to their dashboard. He noted that MWD already utilizes the graph and it is reported within their general manager’s report. He lastly reported on a disinfection station that was approved by CWA’s board which will disinfect pipeline in Mission Trails. 15. DIRECTORS' REPORTS/REQUESTS 9 Director Gastelum reported that he attended a tour of MWD’s FE Weymouth Treatment Plant on October 4, 2018. He stated that he also attended JamulFest and the Casa de Oro Fall Festival. He lastly shared that he attended ACWA’s Region 10 Program discussing, “Removing Barriers to Innovation in Water” on October 18, 2018. Director Robak reported that he attended the City of Chula Vista’s First Friday breakfast on November 2, 2018. He noted that Mr. Steve Casteneda was reelected to Sweetwater Authority’s board, Mr. Hector Martinez was newly elected to their board and Mr. Dan McMillan was reelected to the Helix Water District board. He also shared that Mr. Mark Muir was not reelected to the City of Encinitas’ Council. 16. PRESIDENT’S REPORT President Smith’s report is attached. He noted that Helix WD will be hosting a meeting with the water agencies’ Board Presidents and General Managers that are located in the southern portion of the County of San Diego to share information between the agencies and discuss things that we can improve upon. 17. CLOSED SESSION The board recessed to closed session at 5:50 p.m. to discuss the following matter: a) PUBLIC EMPLOYEE PERFORMANCE EVALUATION: PERIODIC AND CUSTOMARY REVIEW IN DUE COURSE [GOVERNMENT CODE §54957.6] TITLE: GENERAL COUNSEL The board reconvened at 6:27 p.m. and Attorney Jeanne Blumenfeld indicated that the board took no reportable actions in closed session. 18. ADJOURNMENT With no further business to come before the Board, President Smith adjourned the meeting at 6:28 p.m. ___________________________________ President ATTEST: District Secretary 10 President’s Report Tim Smith November 7, 2018 Board Meeting # Date Meeting Purpose 1 2-Oct Ad Hoc Employee Negotiations Committee Discussed employee negotiations matters. 2 3-Oct OWD Regular Board Meeting Monthly Board Meeting 3 12-Oct Committee Agenda Briefing Met w/ General Manager Watton to review items that will be presented at the October committee meetings. 4 16-Oct EO&WR Committee Reviewed items that will be presented at the November board meeting. 5 24-Oct East County Caucus Discuss CWA issues 6 26-Oct Sign Bond Documents at OWD Execute documents for the issuance of water bonds. 7 30-Oct Colorado River Briefing Discuss issues related to the Colorado River.