HomeMy WebLinkAbout04-29-20 Board Minutes 1
MINUTES OF THE
SPECIAL MEETING OF THE BOARD OF DIRECTORS OTAY WATER DISTRICT April 29, 2020
1. The meeting was called to order by General Manager Martinez at 12:01 p.m. 2. ROLL CALL
Directors Present: Croucher, Gastelum, Robak, Smith and Thompson
Staff Present: General Manager Jose Martinez, General Counsel Dan Shinoff, Chief Financial Officer Joe Beachem, Chief of Operations Pedro Porras, Chief of Engineering Rod Posada,
Chief of Administration and Information Technology Adolfo
Segura, 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 Gastelum, seconded by Director Smith and carried with the following vote:
Ayes: Directors Croucher, GasteIum, Robak, Smith and Thompson Noes: None Abstain: None Absent: None
to approve the agenda. 5. 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. 6. DISCUSS OTAY WATER DISTRICT’S CORONAVIRUS (COVID-19) RESPONSE
General Manager Jose Martinez provided an update on impacts COVID-19 may have on District operations. He shared that there were no known issues to water supplies, fuel or to the District’s suppliers. Status was also provided on impacts to CIP and developer construction projects, collections, and bad debt. Staff
responded to comments and questions from the board.
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WORKSHOP
7. DISCUSSION OF THE FISCAL YEAR 2021 BUDGET KEY FIGURES AND ASSUMPTIONS Chief Financial Officer Joe Beachem indicated that the board has received the
annual economic outlook presentation from economist, Mr. Alan Nevin, Director of
Economic and Market Research of Xpera Group, at the April 1, 2020 regular board meeting. He stated that staff is presenting a budget that has be reviewed and modified to include COVID-19 impacts, while still maintaining the District’s normal financial targets. Staff felt it was important to develop a budget that would
meaningfully respond to the District’s customers’ hardships during the pandemic,
but would not damage the District’s ability to provide water services. He indicated that this is the first of two workshops to discuss the fiscal year 2021 (FY 2021) budget with the second to be held during the June 3, 2020 regular board meeting. Mr. Beachem indicated at this workshop staff will be presenting:
• Political Initiatives, Challenges and Strengths
• Strategic Plan Initiatives
• Capital Improvement Budget
• Key Assumptions
• Financing Plan
He presented the District’s six-year rate model wherein staff enters, with reference to the District’s Strategic Plan, the year-end balances, operating budget, the six-year CIP budget, MWD/CWA and City of San Diego sewer rates, along with various assumptions that include interest rates, inflation, growth sales, etc., that then
determines the District’s required Operating and CIP budgets for the upcoming fiscal year and the water and sewer rates that would support that budget. Mr. Beachem indicated that due to the uncertainties that the pandemic presents to revenues and collections and to CWA’s rates, staff is presenting a:
• Two-step budget process o In June, multiple rate options will be presented to the Board o In the fall, when there is more certainty, staff will bring the budget back
to the Board with any needed revisions He reviewed the budget objectives:
• Appropriate response to COVID challenges
• Support the Strategic Plan Objectives
• Support the essential operations of the District
• Maintain reserves at or above minimum and return to target levels in the sixth year of the budget planning period
• Debt coverage target, excluding growth, of 150%, for both water and sewer
in the sixth year of the budget planning period
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• Fund the six-year capital budget
• Establish rates that are compliant with Proposition 218 He noted that CWA’s cost represents 50% of the District’s budget. Thus, for every 1% increase in cost to the District, it represents a 1% rate increase to the District’s
customers. He stated that in proposing rates for the upcoming fiscal year, staff’s strategy is to smooth the rate to avoid rate spikes, consider the customers’ monthly bills, and maintain the District’s reserve levels and low rate ranking compared to the other
District’s in the County. Presentations were then provided by staff that included political initiatives, challenges and strengths for the upcoming fiscal year, the Strategic Plan strategies and objectives, the key assumptions staff utilized to develop the budget, and the
development of the Capital Improvement Program for FY 2020 and for the next six (6) years. During the presentations there were questions asked by members of the board and responses were provided by staff. It was suggested that staff consider adding a new metric for response to
emergencies. Staff indicated that they would evaluate and propose a metric to be included in the discussion at the next Strategic Plan update for the Board. President Croucher requested that staff provide to the Board the list of shovel ready projects that was included with CWA’s list to the California legislature to request
grant funding. General Manager Martinez indicated that he would share the list with the members of the Board. Staff indicated that on June 3, 2020 they will be presenting the consolidated budget and multiple rate recommendations to the board for their consideration.
8. ADJOURNMENT With no further business to come before the Board, President Croucher adjourned the meeting at 2:35 p.m.
___________________________________ President
ATTEST:
District Secretary