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02-07-08 \., (~;"O\J 'n'! SOUTH TAHOE PUBLIC UTILITY DISTRICT IIBasic Services for a Complex World" Richard Solbrii' General Mana~er . Mary Lou Mosbacher, President BOARD MEMBERS Paul ~Giuto,~ssistant Manawer Dale Rise, Vice President James R. Jones, Director Eric W. Schafer, Director Ernie Claudio, Director REGULAR MEETING OF THE BOARD OF DIRECTORS SOUTH TAHOE PUBLIC UTILITY DISTRICT FEBRUARY 7, 2008 MINUTES The Board of Directors of the South Tahoe Public Utility District met in a regular session, February 7, 2008, 2:00 P.M., District Office, 1275 Meadow Crest Drive, South Lake Tahoe, California. -., BOARD OF DIRECTORS: President Mosbacher, Directors Jones, Rise, Schafer, Claudio ROLL CALL STAFF: Solbrig, Sciuto, McFarlane, Whalen, Cocking, Coyner, Adams, W. Stanley, Hussmann, Brown, Swain, Frye M. Alsbury, C. Skelly, Bergsohn, Attorney Kvistad GUEST: Tom Pavletic /Municipal Financial Services, Adam Jensen/Tahoe Daily Tribune, John Runnels, John Cefalu Paul Sciuto led the pledge to the flag. PLEDGE OF ALLlGIANCE CONSENT CALENDAR Moved Schafer / Second Rise / Passed Unanimously to approve the Consent Calendar as submitted: a. NeoGov Recruitment System Software Program - Authorized staff to enter into an agreement with NeoGov to provide on-line application and recruit- ment program services, in the amount of $8,600; \. b. Carlson Water Main Extension - Adopted Resolution No. 2843-08 accepting the Carlson Water Main Extension; REGULAR BOARD MEETING MINUTES - FEBRUARY 7,2008 PAGE-2 \., c. Dump Truck: Five to Six Yard Capacity - Awarded bid to the lowest responsive, responsible bidder, Western Truck Parts and Equipment Co., in the amount of $70,006.25; d. Indian Creek Reservoir TMDL Mitigation Project - Approved proposal from Stephen R. McAdams, P.E., to assist District staff to relocate an oxygen generator from the Bakersfield site for use at Indian Creek Reservoir, in the amount not to exceed $11,000; e. South Upper Truckee Well No.3 Corrosion Control Treatment Facility - Approved Change Order No.4 to Thomas Haen Company, In., in the amount of $13,096; f. Arrowhead Well Arsenic Treatment Facility - Authorized staff to advertise for bids for the pre- purchase of a 1,000 gallon per minute iron-based adsorptive media water treatment system; g. Approved Regular Board Meeting Minutes: January 3, 2008. CONSENT CALENDAR (continued) ITEMS FOR BOARD ACTION 4.. Moved Schafer / Second Claudio / Passed Unanimously PA YMENT OF CLAIMS to approve payment in the amount of $1,879,805.80. Water & Wastewater Operation Committee: The committee met on February 4, 2008. Minutes of the meeting are available upon request. Finance Committee: The committee met on January 25, 2008, and January 31, 2008. Minutes of these meetings are available upon request. The committee also met on February 5 and 6, 2008, to review the draft proposed budget and the 1 O-year forecast, in preparation for the upcoming Board Budget Workshop. The budget process timeline is early this year and in compliance with Proposition 218 (Big Horn Bill). Executive Committee: The committee was to meet on February 8, 2008, however, this meeting has been cancelled and will be rescheduled. ~ The agency has not met since the last Board meeting, however, Directors Jones and Rise, and Richard Solbrig attended an orientation presentation held at the District for new Board members. The presentation, given by water agency staff was very informative. The agency's next regularly scheduled meeting is on February 13, 2008. BOARD MEMBER STANDING COMMITTEE REPORTS EL DORADO COUNTY WATER AGENCY PURVEYOR REPRESENTATIVE REPORT REGULAR BOARD MEETING MINUTES - FEBRUARY 7, 2008 PAGE-3 '-' Director Schafer reported he attended the recent CAS A Conference in Indian Wells, California, held on January 9-12, 2008. A summary of his conference notes were distributed to the Board members for their review. BOARD MEMBER REPORTS Director Claudio reported he attended the South Lake Tahoe City Council meeting and the Citizen's Alliance for Responsible Government meeting. General Manaqer: Richard Solbrig gave an update on the GENERAL MANAGER REPORT waterline funding grant process being pursued by the Lake Tahoe coalition. The initial write-up on the grant is due at the Congressional offices February 15, 2008, and the Senate offices on March 1, 2008. The grant is looking at short-term projects for the next four years with an emphasis on plan- ned capital projects to improve firefighting capabilities of utility agencies, surrounding the basin. The coalition level request is being pursued through the Tahoe Restoration Act, on a regional-wide basis, to maximize chances for further earmarks in Congress. 2:33 P.M. PUBLIC HEARING SEWER CAPACITY CHARGES ~ Note: Notices of this Public Hearing were published in the Tahoe Daily Tribune on January 30,2008, and February 7,2008. President Mosbacher opened the public hearing. Rhonda McFarlane, Chief Financial Officer, introduced Tom Pavletic, Municipal Financial Service, who prepared the current study. The last time sewer capacity charges were reviewed by the Board was in 1999. Typically the fees are revisited every fiye years. She reported that the original intention was to line up review of these fees to coincide with Pathway 2007 however that process is moving slowly. Staff, with the Board's approval decided to proceed with this study. The Finance Committee has met with Tom Pavletic and Marv Winer and has reviewed the details of the report. Mr. Pavletic proceeded with a PowerPoint presentation of the methodology of determining a sewer capacity fee that included: \., REGULAR BOARD MEETING MINUTES - FEBRUARY 7,2008 PAGE-4 \. . Setting Capacity Charges must: o Demonstrate a nexus between new develop- ment and the need to replace, expand or build facilities to accommodate it. o Not be arbitrary of discriminatory in its application to individuals or customer classes. o Meet the requirements of California Government Code Sections 66012-66014. . Most prominent requirement of the code is that the fee be reasonable. . Calculation Methodology Average Cost Method for Capacity Charge (replacement yalue, debt, capacity and demand.) . List of Sewer System Assets. . Sewer Units. . Current, Calculated and Recommended Unit Costs. . Unit Costs and Capacity Charges - 4% Inflation. . Projected Revenue from Capacity Charges (4% Infl.) \. Mr. Payletic ended his presentation and answered questions for the Board. Director Rise questioned whether these funds generated from the increase in sewer capacity charges are only used to improve the infrastructure of the District. Rhonda McFarlane confirmed this statement and also included that this is a law of the State of California that these fees are dedicated to infrastructure and cannot be used for anything else. Director Jones stated he felt implementing this increase would be the prudent thing to do. The District needs to replace thousands of feet of lines as they are reaching the end of their life expectancy. 4., Wanda Stanley addressed the Board with concerns regarding whether the public will be able to afford to build new homes or remodel their existing homes with these increases. Director Rise responded that the recom- mended increase for the first year, 2008, was not the full 16% increase, but reduced to 11 .8% to try to help the economy. SEWER CAPACITY CHARGES (continued) REGULAR BOARD MEETING MINUTES - FEBRUARY 7,2008 PAGE-5 f.. Director Claudio would like to see incentives built into the plan to distinguish whether it is a local resident or whether it is a second home. President Mosbacher informed him that making distinctions like that are not legal, and would be considered discrimination. SEWER CAPACITY CHARGES (continued) Rhonda McFarlane commented that District customers are receiving a tangible product when they pay fees. Waste- water is transported and processed. Potable water is delivered to their homes or businesses. Operating costs need to be collected either by initial connection to the system, in the form of a capacity fee, or passed on to the ratepayer. John Cefalu expressed his concerns regarding the high costs of fees for the public who wants to build or remodel residences and/or businesses who wish to come into the community or expand their existing businesses. He asked the Board to consider this increase carefully. He received clarification from the Board and Rhonda McFarlane regard- ing depreciation accounts saYings and why a consultant was hired on this project. \., Rhonda McFarlane pointed out that the consultant's recommendation is being phased in oyer a fiye year period with the first year increase taking effect in 60 days. Director Jones received clarification that the TRPA Mitigation Fee of 5% may be eliminated during negotia- tions. Any savings will be applied to the ratepayer. John Runnels addressed the Board. He attended the Finance Committee meetings that discussed this report and sees this fee increase as protecting the existing ratepayers. He also received clarification on how this meeting was advertised to the public. The Public Hearing was closed at 3:39 P.M. Motion Jones / Second Claudio I Passed Unanimously to Enact Ordinance No. 502-08 to update the charges. Increase to be effective April 7, 2008, and to escalate on a four year progression. \., Chief Financial Officer: Rhonda McFarlane gave a STAFF REPORTS report on the budget process, especially for the new Board members. On March 13, 2008, a Board workshop is scheduled regarding the draft proposed budget. She reminded the Board that during this period, the REGULAR BOARD MEETING MINUTES - FEBRUARY 7, 2008 PAGE-6 ~ documents are not legally public information and are considered "a work in progress" and should not be distributed to the public during this initial phase. On April 11, 2008, the "proposed budget" will be made available to the public. On May 15, 2008, a public meeting will be held. STAFF REPORTS (continued) 3:47 P.M. to 4:04 P.M. MEETING BREAK Manaqer of Customer Service: Lisa Coyner gave the Board a brief overview of the "Claims Reporting Process". She reported that staff receives annual training from CSRMA (California Sanitation Risk Management Authority). Network/Telecom Systems Administrator: Bill Frye reported on the District's internet security. He extended an invitation to the Board for a tour of the server room, and to contact him with any questions they may have regarding the District's system. Legal Counsel: Gary Kvistad updated the Board on the ongoing negotiations with Heavenly Resort. Heavenly would like to obtain more water for snowmaking ability in the upcoming years. 4.,. ACTION I REPORT ON ITEMS DISCUSSED DURING CLOSED SESSION No reportable Board action. Pursuant to Government Code Section 54956.9(a)/Conference with Legal Counsel - Existing Litigation re: Meyers Landfill Site: United States of America vs. EI Dorado County and City of South Lake Tahoe and Third Party Defendants, Civil Action No. S-01-1520 LKK GGH, U.S. District Court for the Eastern District of Ca. 5:08 P.M. ADJOURNMENT ATTEST: \w. \., () \ r (6 \., \.., Iii ~ c C) z - I- WI- Ww :Ew (/)::1: ~en O~ 1-- oz WC) ~- _en CI- LLen OW C:J ~C) <C o m >- 0::: ~ Z :::> ....J o >. C/)w -() Zz 0<( -0 ~z ::a:w o:::~ 0<( LLo::: ~o C/)LL IZ '-0 LLt= 0(5 Zz 00 -() '-W ~o::: 0..0.. ::a:<( 0.- Uo ..:-:Z ()C/) <(- zO ~Z O~ o:::~ mO w.- I<( '-0 IZ C<( ~::a: w'- uO ZZ <( o 0::: o U () <( Z "1' C. .l.') 1 '. '3 ~ =.:.::> \1\ 4- Z