HomeMy WebLinkAbout05-02-19 Board Minutes 1
MINUTES OF THE SPECIAL MEETING OF THE BOARD OF DIRECTORS
OTAY WATER DISTRICT May 2, 2019 1. The meeting was called to order by President Thompson at 3:05 p.m.
2. ROLL CALL Directors Present: Croucher, Gastelum, Robak (arrived at 3:09 p.m.), Smith and Thompson
Staff Present: General Manager Mark Watton, Attorney Jeanne Blumenfeld, 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, 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 Smith, seconded by Director Gastelum and carried
with the following vote:
Ayes: Directors Croucher, GasteIum, Smith and Thompson Noes: None Abstain: None
Absent: Director Robak
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.
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WORKSHOP 6. DISCUSSION OF THE FISCAL YEAR 2020 BUDGET KEY FIGURES AND
ASSUMPTIONS
Chief Financial Officer Joe Beachem indicated that the board has received the economic outlook presentation from economist, Mr. Gary London of the London Group, at yesterday’s, May 1, 2019, regular board meeting. He stated that today’s
workshop is the first of two workshops to discuss the fiscal year 2020 (FY 2020)
budget with the second to be held during the June 5, 2019 regular board meeting. Mr. Beachem indicated at this workshop staff will be presenting:
• Challenges and Strengths
• Strategic Plan Initiatives
• Key Assumptions
• Capital Improvement Budget 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 presented the budget objectives:
• Support the Strategic Plan Objectives
• Support the operations of the District
• Maintain reserves at or above Target
• Meet the debt coverage target of 150%, excluding growth, for both water and
sewer
• Fund the six-year capital budget
• Establish rates that are compliant with Proposition 218
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 look to maintain the District’s rate ranking compared to the other District’s in the County.
Presentations were then provided by staff that included 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.
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It was discussed that the liability insurance premium increase is mainly due to water main breaks. President Thompson inquired how staff allocated the increase and if it was more allocated to the water rate. Staff indicated that the allocation is based
more on overhead which is partially driven by labor and various cost allocations.
President Thompson indicated that he felt the cost should be placed more on the water rate rather than the sewer rate. Staff further explained that there are various components to insurance cost. There is a portion for property, liability, board fiduciary, etc. Staff indicated they would review how the cost for liability insurance
is being allocated.
Director Croucher suggested that a bullet be added to the Strategic Plan presentation that the “District’s rates are based on the actual cost to provide water and sewer services”. Staff indicated that they would add a bullet stating this.
Director Croucher stepped out at 3:58 p.m. and returned at 4:01 p.m. He was scheduled to attend another meeting and left the special board meeting at 4:03 p.m. Staff indicated that on June 5, 2019 they will be presenting the consolidated budget
and rate recommendations to the board for their consideration.
7. ADJOURNMENT With no further business to come before the Board, President Smith adjourned the
meeting at 5:17 p.m.
___________________________________
President
ATTEST:
District Secretary