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05-19-11• SOUTH TAHOE PUBLIC UTILITY DISTRICT Richard Solbrig, General Manager Paul Sciuto, Assistant General Manager Dale Rise, President Chris Cefalu, Director BOARD MEMBERS Mary Lou Mosbacher, Vice President James R. Jones, Director Eric W. Schafer, Director REGULAR MEETING OF THE BOARD OF DIRECTORS SOUTH TAHOE PUBLIC UTILITY DISTRICT MAY 19, 2011 MINUTES BOARD OF DIRECTORS: ROLL CALL President Rise, Directors Cefalu, Jones, Mosbacher, Schafer TAH: (brig, Sharp, Sciuto, Hughes, Thiel, Bergsohn, Henderson, Johnson, Bledsoe, Curtis, C. Stanley, Cocking, Van Gorden, Thiel, Attorney Kvistad GUESTS: Adam Jensen/Tahoe Daily Tribune, Harold Singer/Lahontan Regional Water Quality Control Board, Tony Columbo, Ernie Claudio, Bob Olsen Debbie Henderson led the pledge to the flag. PLEDGE OF ALLEGIANCE PROPOSITION 218 MAJORITY PROTEST HEARING Pursuant to the requirement of Proposition 218, Paul Hughes reported that on March 28, 2011, notices were issued, and mailed to all property owners on March 30, 2011. The service rates illustrated in the notice included a proposed 3% sewer rate increase, no change to non -metered water rates, and a restructured water meter rate. In response, the District received 290 protests, with 275 4iieing valid, and of those, 238 protested both water and wer rates,16 protested water rates, and 21 protested sewer rates only. Valid protests received represented 1.5% of the customer accounts. Hughes reported this REGULAR BOARD MEETING MINUTES - MAY 19, 2011 PAGE - 2 earing is the final opportunity to receive protests and PROPOSITION 218 MAJORITY PROTEST vited anyone in the audience who did not send a written HEARING protest to voice their protest at this time. (continued) Tony Columbo voiced his opposition concerning water meters and requested Angora fire residents be refunded the purchase price of the meters that were required when they rebuilt their homes, or receive a credit on their bill. He urged the Board to raise the threshold on the meter to a larger consumption rate to allow for establishment of vegetation in the Angora burn area. (Note: Mr. Columbo sent a Proposition 218 notice previously.) Ernie Claudio requested his appearance be counted as a Proposition 218 protest to the water rates. J. R. Long submitted a letter to be counted as a Proposition 218 protest. In summary, 1.5% of the District's customers filed protests, which is significantly less than the 51% required to auto- atically disqualify any increase. The Majority Protest Hearing was closed at 2:20 p.m. Moved Schafer / Second Jones / Passed Unanimously to CONSENT CALENDAR approve the Consent Calendar as submitted: a. Engineering Student intern - Approved extension of contract with the Substitute Personnel for one part-time engineering student intern, not to exceed $32,000; b. Luther Pass Pump Station Standby Power Generation Facility - Approved Change Order No. 7 to Sierra Nevada Construction, Inc., in the amount of $15,280; c. Diamond Valley Ranch Irrigation Improvements: Environmental Permitting Assistance - Authorized an increase to Purchase Order No. P23335 for additional environmental permitting services, in the amount of $11,760; d. Consolidated Districts Election to be Held November 8, 2011 - Adopted Resolution No. 2892-11 for El Dorado County Declaring an Election be Held in its Jurisdiction, Con- solidation with other Districts, and Requesting Election Services; REGULAR BOARD MEETING MINUTES - MAY 19, 2011 PAGE - 3 Approved Regular Board Meeting Minutes: CONSENT CALENDAR Vir April 21, 2011; (continued) f. Approved Regular Board Meeting Minutes: May 5, 2011; g. Approved Public Budget Meeting Minutes: May 5, 2011. Following direction received from the May 5 Public Meet- PRESENTATION: Water Rate Presentation ing,consultant, Shawn Koorn, HDR Engineering, gave a Following Direction from May 5 Public PowerPoint presentation and reviewed three options for Meeting metered water rate designs. He pointed out that any change in rate structure that is more than what was proposed, would be subjected to a new Proposition 218 process. Mr. Koorn responded to comments, and answered questions posed by the Board, staff, and customers J.R. Long and Harold Singer. After lengthy discussions were held, it was the consensus of the Board to pursue Option 1, and requested a plan to work with the customers who show a high water use in the Od quarter billing. In review, Option 1: • Rate structure is only for residential customers, with a different rate structure for multi -family and commercial customers • Reflects cost of service results • Reflects "average" customer consumption on the system • Transitioning to ultimate rate structure - Larger meter charge - Tiered rate structure • Meets target revenue No Board action. Dennis Cocking reported on the status of grants the District STAFF REPORT is pursuing, and on the status of congressional funding for future grants. ITEMS FOR BOARD ACTION This project involves the drilling and sampling of test borings ALPINE COUNTY MONITORING WELLS lknd the construction of shallow groundwater monitoring INSTALLATION PROJECT ells at 14 sites in Alpine County. Consulting services are needed to assist with documentation, provide on-site REGULAR BOARD MEETING MINUTES - MAY 19, 2011 PAGE - 4 Wdirection, collect required soil and groundwater samples, ALPINE COUNTY MONITORING WELLS nd complete geologic records and project documen- INSTALLATION PROJECT tation requirements. (continued) Four submittals were received in response to the District's requests for proposals. Staff reviewed and ranked the proposals based on a set of pre -determined criteria, and selected Farr West Engineering. Moved Jones / Second Mosbacher / Passed Unanimously to accept proposal received from Farr West Engineering, in the estimated amount of $77,199. Staff was directed to include a 3% rate increase in the sewer enterprise fund, and no rate increase in the water enterprise fund. Proposition 218 notices were issued to all District account holders illustrating the proposed rates for fiscal year 2011/12, including the restructured water meter rates. SEWER RATE ORDINANCE The 3% sewer rate increase will generate approximately $298,000 and will help offset future debt service payments. The District is preparing to complete two large sewer projects *eluding the Headworks and Diamond Valley Ranch irrigation project. The District has budgeted to borrow approximately $11.6 million for these projects, creating an annual debt service of approximately $847,000. Moved Schafer / Second Cefalu / Jones and Mosbacher Voted No / Passed to enact Ordinance No. 530-11, an amendment to Ordinance No. 464, and superseding, in part, water and sewer rate Ordinance No. 523-10. Director Jones vote no and stated rates should be raised higher than 3%. Such a small increase means the District will have to forego work on 20% of the projects planned, and it is irresponsible to do so. Director Mosbacher voted no since she would prefer a smaller increase or none at all. The Fiscal Year 2011/12 proposed budget, in the amount of $33,020,104, is fully funded and includes a 3% increase in rates. *loved Schafer / Second Cefalu / Jones and Mosbacher oted No / Passed to adopt Resolution No. 2890-11, adopting the budget for the Sewer Enterprise Fund. FISCAL YEAR 2011/12 SEWER ENTERPRISE FUND BUDGET REGULAR BOARD MEETING MINUTES - MAY 19, 2011 PAGE - 5 Werector Jones voted no and stated $3.7 million in projects FISCAL YEAR 2011/12 SEWER ave been deferred, and not enough money was being ENTERPRISE FUND BUDGET budgeted for the next 10 years. Deferment of higher rate (continued) increases will cost more in the future. Director Mosbacher voted no since she would prefer a smaller increase or none at all. The Fiscal Year 2011/12 proposed budget, in the amount of $16,160,461, is fully funded and includes service charge revenue which is neutral to the current year. There is no change to the current non -metered rate, but the metered rate is being restructured in an attempt to create equity between metered and non -metered customers. Moved Cefalu / Second Rise / Jones Voted No / Passed to adopt Resolution No. 2891-11, adopting the budget for the water enterprise fund. FISCAL YEAR 2011/12 WATER ENTERPRISE FUND BUDGET Director Jones voted no since there was no rate increase, yet the District still must pay for implementation of the UWMP (Urban Water Management Plan), pipes in the gground, water meters, etc. Moved Cefalu / Second Schafer / Passed Unanimously PAYMENT OF CLAIMS to approve payment in the amount of $1,990,919.42. Water and Wastewater Operations Committee: The committee met on May 16. Minutes of the meeting are available upon request. Director Jones reminded the Board to think about the final dispensation of the old post office on Black Bart (that is currently being used as a staging area). Director Jones stated he will report on his attendance at the ACWA (Association of California Water Agencies) conference soon. He attended several sessions having to do with: the Sierra watershed, energy related issues, USFS improvements for health of meadows and forests, hydro- electric projects, wind and solar, water quality, water reuse, pesticide use, NPDES permits, federal affairs and bills before congress, waters of the U.S., and the effects of a tsunami on infrastructure, Director Schafer stated he will distribute a written report aovering his attendance at the CASA (California ssociation of Sanitation Agencies) conference. BOARD MEMBER STANDING COMMITTEE REPORTS BOARD MEMBER REPORTS REGULAR BOARD MEETING MINUTES - MAY 19, 2011 PAGE - 6 resident Rise described the makeup of the Douglas BOARD MEMBER REPORTS ounty Planning Commission, and problems they have (continued) with their discharge ponds being in violation of their NPDES permit. He also gave his input regarding the intertie they inquired about, Legal Counsel: Gary Kvistad reported on AB 392, that if passed, would require all staff reports to be posted on the District's web site 72 hours prior to a board meeting. This would change the procedure the District uses for bid openings. He also reported SB 34, a tax to be paid by each agency that will be put into a special fund run by the state. The state would receive 50% for projects, and 50% would be for regional projects, would not likely pass since there was little support for this bill, and plenty of opposition. Manager of Customer Service: Tim Bledsoe requested input as to whether the Board desired to provide meter pits to customers at no cost, as indicated at a previous Board meeting. Meters are already provided at the ‚istrict's expense. It was the consensus of the Board to irect staff to develop an ordinance for the Board's consideration to supply the meter pit to the customer, and the customer would be responsible for its installation. Assistant General Manager / Engineer: Paul Sciuto reported staff is working with Tahoe Keys Water Company on a wholesale water agreement. They will assume costs for all installations, and pay for metered water usage. The term of the agreement will be for one year, with an annual renewal option. STAFF REPORTS 6:10 — 6:15 P.M. ADJOURNMENT TO CLOSED SESSION AND RECONVENE TO OPEN SESSION 0 REGULAR BOARD MEETING MINUTES - MAY 19, 2011 PAGE - 7 ACTION / REPORT ON ITEMS DISCUSSED DURING CLOSED SESSION The Board voted unanimously to accept the proposed litigation budget for both of these cases. assistant General Manager / Engineer: Pau Sciuto reported that due to a potential conflict of interest, Shepard Mullin declined work with the District's Human Resources Depart- ment at this time, concerning the issue of medical marijuana use in the workplace. 6:20 p.m. ATTEST: ® Kathy Sharp, Clerk of the Board South Tahoe Public Utility District Pursuant to Government Code Section 54956.9(a)/Conference with Legal Counsel -Existing Litigation re: False Claims Act Case: United States, the States of California, Delaware, Florida, Nevada, and Tennessee and the Commonwealths of Massachusetts and Virginia ex rel. John Hendrix v. J -M Manufacturing Company, Inc., and Formosa Plastics Corporation, U.S.A., Civil Action ED CV06-0055-GW, United States District Court for the Central District of California Pursuant to Government Code Section 54956.9(a)/Conference with Legal Counsel - Existing Litigation re: Los Angeles County Superior Court Case No. BC459943, State of Nevada, et al. v. J -M Manufacturing, et al. STAFF REPORT ADJOURNMENT LP Dale Rise, Board President South Tahoe Public Utility District DATE: I i - I BOARD OF DIRECTORS MEETING GUEST SIGN -IN SHEET IN ACCORDANCE WITH THE BROWN ACT: COMPLETION OF THIS INFORMATION IS VOLUNTARY, NOT MANDATORY, AND IS NOT A PRECONDITION FOR ATTENDANCE.