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HomeMy WebLinkAbout09-05-18 Board Minutes 1 MINUTES OF THE BOARD OF DIRECTORS MEETING OF THE OTAY WATER DISTRICT AND OTAY WATER DISTRICT FINANCING AUTHORITY September 5, 2018 1. The meeting was called to order by President Smith at 3:35 p.m. 2. ROLL CALL Directors Present: Croucher, Gastelum, Robak, Smith and Thompson Directors Absent: None Staff Present: General Manager Mark Watton, General Counsel Dan Shinoff, Chief Financial Officer Joe Beachem, Chief of Engineering Rod Posada, Chief of Operations Pedro Porras, Chief of Administration Adolfo Segura, Asst. Chief of Finance Kevin Koeppen, 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 4. APPROVAL OF AGENDA A motion was made by Director Robak, 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 agenda. 5. APPROVE THE MINUTES OF THE SPECIAL BOARD MEETING OF MAY 21, 2018 A motion was made by Director Robak, seconded by Director Croucher and carried with the following vote: Ayes: Directors Croucher, Gastelum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None 2 to approve the minutes of the special board meeting of May 21, 2018. 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. CONSENT CALENDAR 7. 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 Thompson, 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 following consent calendar items: a) APPROVE AN INCREASE TO CIP P2573 BUDGET IN THE AMOUNT OF $130,000 AND CHANGE ORDER NO. 3 TO THE EXISTING CONTRACT WITH T.C. CONSTRUCTION COMPANY, INC. FOR THE HILLSDALE ROAD 12-INCH WATERLINE REPLACEMENT (CIP P2573) AND SEWER REPAIRS (CIP S2048) PROJECTS IN THE AMOUNT OF $151,193.08 b) APPROVE THE ISSUANCE OF A PURCHASE ORDER TO Nth GENERATION IN THE AMOUNT $52,478.84 FOR PURCHASES OF NEXT GENERATION PALO ALTO FIREWALLS AND ARUBA CLEARPASS POLICY MANAGEMENT SOLUTION; AND, APPROVE ANOTHER PURCHASE ORDER TO GROUPWARE TECHNOLOGY IN THE AMOUNT OF $47,138.00 FOR ENGINEERING, TRAINING, AND IMPLEMENTATION OF PALO ALTO FIREWALLS AND ARUBA CLEARPASS POLICY MANAGEMENT SOLUTION c) APPROVE THE ADDITION OF KAISER PERMANENTE AS A HEALTH BENEFIT PLAN ACTION ITEMS 8. FINANCE AND ADMINISTRATION 3 a) ADOPT RESOLUTION NO. 4350 APPROVING CERTAIN DOCUMENTS IN CONNECTION WITH THE ISSUANCE BY THE OTAY WATER DISTRICT FINANCING AUTHORITY OF ITS WATER REVENUE BONDS, SERIES 2018A IN AN AGGREGATE PRINCIPAL AMOUNT NOT-TO-EXCEED $29,000,000 AND CERTAIN AMENDMENTS WITH RESPECT TO THE DISTRICT’S 2013 AND 2016 WATER REVENUE REFUNDING BONDS Assistant Chief of Finance Kevin Koeppen indicated that staff is requesting that the board adopt Resolution No. 4350 approving certain documents in connection with the issuance by the Otay WD Financing Authority of its water revenue bonds, series 2018A in an aggregate principal amount not-to-exceed $29,000,000 and certain amendments with respect to the District’s 2013 and 2016 water revenue refunding bonds. Please reference the Committee Action notes (Attachment A) attached to the staff report for the details of Mr. Koeppen’s report. The board discussed the pros and cons of issuing debt. It was noted that if the District did not issue debt, it would cause rates to increase as the District would need to utilize cash to fund CIP projects. Additionally, if the District has funds that can be used to pay off debt at the close of a fiscal year, these monies would be best used on the CalPERS obligation as it carries a 7.5% interest rate versus this debt which will have an approximate interest rate of 3.5%. It was noted that the District’s existing debt, may not be callable for some years, depending on the terms of the debt. The debt issuance proposed today cannot be called for a period of 10 years. The board commended staff on the thoroughness of staffs’ report. A motion was made by Director Thompson, 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 staff’s recommendation. 9. RECESS OTAY WATER DISTRICT BOARD MEETING AND CONVENE OTAY WATER DISTRICT FINANCING AUTHORITY BOARD MEETING President Smith recessed the Otay Water District board meeting and convened the Otay Water District Financing Authority board meeting at 4:00 p.m. 10. ROLL CALL Directors Present: Croucher, Gastelum, Robak, Smith and Thompson 4 Directors Absent: None ACTION ITEMS 11. FINANCE a) OTAY WATER DISTRICT FINANCING AUTHORITY – ADOPT RESOLUTION NO. 2018-02 AUTHORIZING THE ISSUANCE NOT-TO- EXCEED $29,000,000 OF ITS WATER REVENUE BONDS, SERIES 2018A, AND APPROVE THE EXECUTION OF CERTAIN DOCUMENTS AND AUTHORIZING CERTAIN ACTS IN CONNECTION THEREWITH President Smith presented for the board’s adoption the Otay Water District Financing Authority Resolution No. 2018-02 authorizing the issuance not-to- exceed $29,000,000 of its water revenue bonds, series 2018A, and approve the execution of certain documents and authorizing certain acts in connection therewith. A motion was made by Director Thompson, 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 staff’s recommendation. 12. ADJOURN OTAY WATER DISTRICT FINANCING AUTHORITY BOARD MEETING AND RECONVENE OTAY WATER DISTRICT BOARD MEETING President Smith adjourned the Otay Water District Financing Authority Board meeting was reconvened the Otay Water District board meeting at 4:02 p.m. 13. GENERAL MANAGER a) ADOPT THE AMENDED AND RESTATED JOINT POWERS AGREEMENT CREATING THE WATER CONSERVATION AUTHORITY Communications Officer Tenille Otero requested that the board approve the Amended and Restated Joint Powers Agreement (JPA) creating the Water Conservation Authority Agreement (WCA Agreement). She indicated on August 12, 1992 the parties to the JPA created the Water Conservation Authority (WCA) to carry out the stated purposes of the JPA. A Governance Subcommittee of the JPA, which included Director Thompson, evaluated and made edits to the original WCA Agreement to reflect current operations of the WCA and to further clarify JPA’s members’ responsibilities and rights. The JPA board approved the proposed changes to the WCA Agreement at their meeting on August 13, 2018 5 and they have distributed copies of the proposed WCA Agreement to the JPA members’ respective boards for their review and approval. If approved by all JPA members, the Amended and Restated Joint Powers Agreement will replace the Joint Power Agreement creating the WCA dated August 12, 1992 and all of its subsequent amendments. It was discussed that the member agencies funding of the Water Conservation Garden (WCG) has decreased from 100% to 50% since its inception. The Otay WD will contribute $96,000 or 20% of the WCG budget for FY 2019 and in FY 2020 the District’s contribution will be reduced to $91,960. The JPA’s goal is to eventually make the WCG self-funded through private donations. The WCG is a demonstration garden showing how homeowner’s can transform their home landscapes into water conserving gardens and the District’s board is supportive of the efforts of the WCG and feels it is an important resource for the community. Director Thompson shared that the Executive Director of the WCG, Ms. Elyssa Robertson, is retiring and the JPA is searching for her replacement. She managed the WCG for approximately two years and made many positive changes. A motion was made by Director Robak, 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 staff’s recommendation. 14. BOARD a) DISCUSSION OF 2018 BOARD MEETING CALENDAR As there were no critical matters to discuss, the board canceled the December 2018 board meeting. Director Croucher indicated that he would not be able to attend the District’s October 3, 2018 board meeting as he will be in attendance of a CWA meeting. There were no other changes to the board meeting calendar. INFORMATIONAL ITEM 15. THE FOLLOWING ITEMS ARE PROVIDED TO THE BOARD FOR INFORMATIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING AGENDA ITEMS: 6 a) FOURTH QUARTER UPDATE ON THE FISCAL YEAR 2017 CAPITAL IMPROVEMENT PROGRAM Assistant Chief of Engineering Dan Martin provided an update on the 4th quarter of the District’s 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. In response to an inquiry from Director Robak, Mr. Martin indicated that the Campo Road Sewer Replacement Project began in July of 2017 and the portion of the project along highway 94 was in hiatus due to environmental regulations protecting the bird nesting season (the project was closed down at the end of February) and it has just reopened. Work is expected to start once again near the church area and later this month there will be a couple crews working during the night. Mr. Martin stated that the project is about halfway done and it was anticipated that the crews would need to demobilize in February and remobilize in September due to the environmental regulation. Mr. Martin indicated that the District met the fiscal year-end goal for CIP expenditures at 97% (target was 95% to 100%) and achieved a very low change order rate of just 1.3% (target is less than 5%). He indicated that these were accomplishments to celebrate. Director Smith indicated that he knows how hard it is to meet the CIP and change order targets and it is a tribute to the engineers, operations and everyone involved. He stated that these achievements equate to real money saved for the District’s ratepayers and thanked staff for their good work. It was indicated in response to an inquiry from Director Gastelum that by coordinating with the County on the paving for the Fuerte Drive Sewer Replacement Project, the District will save approximately $500,000 to a million in repaving costs as the District would have been required to repave over 4000 linear feet (approximately three quarters of a mile). b) INFORMATIONAL UPDATE ON WATER TAX AND THE WATER SHUTOFF SERVICE BILL, SENATE BILL 998 (DODD) Communications Officer Tenille Otero provided an update on Water Tax and Water Shutoff Service Bill SB 998 (Dodd). Please reference the Committee Action notes (Attachment A) attached to the staff report for the details of Ms. Otero’s report. She stated that when the board report was distributed, the Legislature was still in session until midnight, Friday, August 31, 2018. She indicated that SB 998 is a measure that will significantly restructure retail water agencies water service shutoff programs. The measure passed is the State Senate last week and has been forwarded to the Governor for final action. The San Diego County Water Authority (CWA) is working with member agencies to write a letter to the 7 Governor requesting that he veto the bill. The District is also, individually, drafting a letter to the Governor requesting that he veto the bill. Ms. Otero also shared that SB 844 and 845, related to the Water Tax Bill SB 623, have failed passage in the State Assembly. She stated that the Assembly Speaker, the Honorable Anthony Rendon, indicated that the Assembly is still committed to identifying sustainable funding source to ensure safe drinking water for all Californians and the issue will continue to be on the agenda for next year’s legislative session. The CWA has been invited by the Assembly’s Committee to participate in the discussions concerning safe water needs. President Smith indicated that there has been quite an effort by the Association of California Water Agencies (ACWA) to oppose the Water Tax legislation and one of the actions taken by the District’s board was to provide a contribution to ACWA to help educate the public on this issue. Director Croucher challenged the District’s board to get more involved in legislative issues that impact the District and its ratepayers. Director Croucher suggested, in response to Director Thompson’s comment on whether the District has thought through the best method for legislative advocacy to make the District as effective as it could be, that the District could invite CWA to provide an update on legislative issues. He indicated that CWA very much wishes to be involved in representing the agencies in all legislation whether they impact retail or wholesale agencies. This would assist the District in determining which legislation should be actively focused on and those that can receive less emphasis for both CWA and the agencies. c) INFORMATIONAL UPDATE ON THE FIVE-YEAR PUBLIC INFORMATION AND COMMUNICATION PLAN AND THE CURRENT COMMUNICATIONS AND OUTREACH PROGRAM Communications Officer Tenille Otero provided an update on the five-year public information and communication plan and the current communications and outreach program. Please reference the Committee Action notes (Attachment A) attached to the staff report for the details of Ms. Otero’s report. Director Robak stepped off the dias at 4:55 p.m. and returned at 4:56 p.m. President Smith noted that when he searched the District on Google, the District’s listing shows a 2.2 star rating. He suggested that the District monitor its presence on web search engines and research/address the ratings. Director Croucher stepped off the dias at 5:14 p.m. and returned to the dias at 5:17 p.m. The board inquired if the District had metrics on how many have listened to the live streaming of the District’s board meeting. Staff indicated that the metrics are available and that they would provide that information. 8 REPORTS 16. GENERAL MANAGER’S REPORT General Manager Watton presented information from his report which included an update on the health plan renewal, the water rate increase and sewer proposition 218 notices, the City of San Diego Pure Water Project, the Cal- American interconnect, water conservation and sales. 17. CWA REPORT Director Croucher reported that nominations for CWA’s officers for next year have closed. Mr. Jim Madaffer (City of San Diego) was elected Chair, Director Croucher (Otay Water District) was elected Vice Chair, and Ms. Christy Guerin (Olivenhain Municipal Water District) was elected Secretary. He stated that the CWA officers travelled to MWD last month to meet with MWD’s Los Angeles delegation where they discussed opportunities to work together. He shared that Director Smith is scheduled to be seated as a member of MWD’s board on September 11, 2018. He also indicated that the CWA officers met and will start to attend the General Manager/Member Agency meetings to receive their input as subject matter experts. Director Croucher indicated that he will attend with CWA’s officers the San Diego Regional trip to Washington, D.C. He stated that Mr. Vic Bianes, one of the City of San Diego’s ten representatives on CWA’s board, has retired. The City will be appointing a new representative. He reported with regard to the Orville Dam spillway repairs that the estimate is now exceeding $1 billion dollars which is much higher than the original estimate. He lastly shared some sad news that CWA’s legislative advocate, Mr. Eric Swendlund of Carpi and Clay, recently passed away at the age of 49. President Smith added that CWA’s board had its third of three discussions concerning the funding of CalPERS. They discussed the six alternatives suggested by their Audit Committee to fund CalPERS. The board narrowed the suggestions to one wherein CWA would budget funds annually to fund CalPERS. CWA’s CalPERS fund is approximately 69% funded and with CalPERS investment rate of return of 11.2% last year, it has increased CWA’s funding level to 72%. 18. DIRECTORS' REPORTS/REQUESTS Director Thompson reported that the Water Conservation Garden has started its search for a new Executive Director. He congratulated Directors Smith and Croucher for running unopposed and, thus, not having to run a campaign for their seats on the board. He also indicated that he enjoyed the tours of the City of San Diego’s South Bay Water Reclamation Plant and the International Boundary and Water Commission’s Water Treatment Plant. He stated that the tours were very informative. 9 Director Gastelum reported that that he toured the Twin Oaks Water Treatment Plant and the Lake Hodges storage facility. Director Robak commented that he noted quite a few of the people who attended CWA’s Water Academy are now running for office. He stated that it is nice to see that people are getting involved in the water industry because of the program. He shared that his father, Mr. Lawrence Robak, passed away the same day that Senator John McCain passed (August 25, 2018). He stated his father joined the Air Force after graduating from high school and moved his family to San Diego from Pittsburgh, Pennsylvania in 1967. He shared a story about his father related to water. He stated that the City of Pittsburgh fluoridated it drinking water and when his family moved to San Diego, drinking water was not fluoridated. Because of this, his father purchased PureFlo water for their drinking water as it was fluoridated. He stated that he and his three brothers did not have cavities growing up because of this. He also presented photos of his father. 19. PRESIDENT’S REPORT President Smith stated that his report regarding meetings he attended during the month of August 2018 will be attached to the minutes. He commented that he attended CWA’s Legislative roundtable with Senator Ben Hueso. The discussion emphasized that San Diego is an important part of the State for legislative issues. He also shared that his mother, Ms. Marie Smith, passed away on August 20, 2018. He stated she was 90 years old and lived a full life. He thanked everyone for their kind words. He also presented a photo of his mother from about 25 years ago. 20. CLOSED SESSION The board recessed to closed session at 5:41 p.m. to discuss the following matters: a) CONFERENCE WITH LEGAL COUNSEL – PENDING LITIGATION [GOVERNMENT CODE §54956.9] MARK COZIAHR, ET AL. vs. OTAY WATER DISTRICT, SAN DIEGO COUNTY WATER AUTHORITY, ET AL.; CASE NO. 37-2015-00023413 b) CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION [GOVERNMENT CODE §54956.9] OTAY WATER DISTRICT v. CITY OF SAN DIEGO; CASE NO. 37-2017- 00019348-CU-WM-CTL c) CONFERENCE WITH LABOR NEGOTIATORS [GOVERNMENT CODE §54957.6] 10 AGENCY DESIGNATED REPRESENTATIVES: BOARD AD HOC COMMITTEE MEMBERS EMPLOYEE ORGANIZATION: OTAY WATER DISTRICT EMPLOYEES’ ASSOCIATION AND ALL REPRESENTED AND UNREPRESENTED PERSONNEL INCLUDING MANAGEMENT AND CONFIDENTIAL EMPLOYEES The board reconvened from closed session at 7:09 p.m. General Counsel Dan Shinoff indicated that the board met in closed session and took no reportable actions. 21. ADJOURNMENT With no further business to come before the Board, President Smith adjourned the meeting at 7:09 p.m. ___________________________________ President ATTEST: District Secretary 11 President’s Report Tim Smith September 5, 2018 Board Meeting # Date Meeting Purpose 1 1-Aug CWA Legislative Roundtable Legislative Roundtable with Senator Ben Hueso 2 1-Aug OWD Regular Board Meeting Monthly Board Meeting 3 2-Aug Metro Commission Monthly Commission Meeting 4 6-Aug OWD Special Board Meeting OWD Special Board Meeting: Tour of the City of SD South Bay Water Reclamation Plant and IBWC Water Treatment Plant 5 7-Aug Committee Agenda Briefing Met w/ General Manager Watton to review items that will be presented at the August committee meetings. 6 22-Aug EO&WR Committee Reviewed items that will be presented at the September board meeting. 7 27-Aug Ad Hoc Employee Negotiations Committee Discussed employee negotiations matters. 8 30-Aug Board Agenda Briefing Reviewed items that will be presented at the September board meeting.