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12-15-11SOUTH TAHOE PUBLIC UTILITY DISTRICT Richard Solbrig, General Manager Paul Sciuto, Assistant General Manager Chris Cefalu, Director James R. Jones, Director BOARD MEMBERS Eric W. Schafer, Director Randy Vogelgesang, Director Kelly Sheehan, Director REGULAR MEETING OF THE BOARD OF DIRECTORS SOUTH TAHOE PUBLIC UTILITY DISTRICT DECEMBER 15, 2011 MINUTES The Board of Directors of the South Tahoe Public Utility District met in a regular session, December 15, 201 1, 2:00 p.m., at 1275 Meadow Crest Drive. BOARD OF DIRECTORS: ROLL CALL Directors Cefalu, Jones, Schafer, Vogelgesang, Sheehan STAFF: Solbrig, Sharp, Sciuto, Hughes, Cocking, Whalen, Hoggatt, P. Lavallee, Bird, Eddy, Bartlett, Curtis, Henderson, Rasmussen, R. Johnson, Ryan, Cullen, Bledsoe, Thiel, Attorney Kvistad GUESTS: Larry Mace/Grant Thornton, Brian Schwartz/Bob Dog Pizza, Mary Lou Mosbacher, Mary Kortge, John Runnels, Ernie Claudio, Cathy Vogelgesang Mary Lou Mosbacher led the pledge to the flag. The Clerk of the Board administered Oaths of Office to newly elected Board members: • Director Randy Vogelgesang - Seat 3 • Director Kelly Sheehan - Seat 4 Terms expire December 4, 2015. • Mary Lou Mosbacher congratulated Director Vogelgesang for being elected to the seat she used to hold, and congratu- lated Director Sheehan as well. PLEDGE OF ALLEGIANCE OATHS OF OFFICE COMMENTS FROM THE AUDIENCE REGULAR BOARD MEETING MINUTES - DECEMBER 15, 2011 PAGE - 2 • Mary Kortge congratulated the newly elected directors, and thanked everyone who provided assistance to her during her recent run for election. • Ernie Claudio stated the middle class is dying and after attend- ing seven Occupy movements, has determined the problems are due to elected officials. He said the Occupied Movement and the middle class has to protect itself. He warned Board members if rates go up, they will put themselves in a position where they are part of the problem and will have to be eliminated. He asked them to respectfully resign from office if they cannot keep rates frozen or even lower them. • Brian Schwartz, Bob Dog Pizza, reported he is trying to build a new restaurant, but fees for new commercial water hookups will increase by $18,000 from this year to next year. He requested the District work with him to develop a payment plan, or allow him to pay a deposit now in order to hold down the rates. Paul Hughes reported a Board Workshop was recently held and the Board directed staff to include the topic of fee increases for discussion at the January 5 Board meeting. The Board will decide at that time whether or not capacity charges would be increased. He encouraged the Schwartz's to attend that meeting. If it becomes necessary, the Board can direct a retroactive adjustment. COMMENTS FROM THE AUDIENCE (continued) ITEMS FOR BOARD ACTION Moved Jones /Second Cefalu / Passed Unanimously to elect Director Schafer as Board President for 2012 calendar year. Moved Schafer /Second Sheehan / Passed Unanimously to elect Director Jones as Board Vice President for 2012 calendar year. BB&H Benefits Design, Inc., performed an analysis of the plan and went out for proposal to a number of insurance carriers to determine stop loss renewal options and to determine the appropriate funding level to fund claims and fixed costs for the self-insured health plan. Claims to date were annualized and then increased by an average trend factor to estimate the 2012 claims. Although claims experience in 2011 was unusually high, the average claims over the past five years indicates that the current funding level per employee per month is sufficient to fund expected claims and fixed costs. COBRA rates for 2012 increased slightly due to 2011 claims. The Finance Committee reviewed this item and recommended approval. ELECTION OF OFFICERS: BOARD PRESIDENT ELECTION OF OFFICERS: BOARD VICE PRESIDENT HEALTH INSURANCE PLAN RENEWAL REGULAR BOARD MEETING MINUTES - DECEMBER 15, 2011 PAGE - 3 Moved Jones / Second Cefalu / Passed Unanimously to: (1) Authorize renewing stop loss coverage with QBE with an $85,000 specific deductible; (2) Approve funding level at $1,975 per employee per month; and (3) Establish COBRA rates at single dental $70, family dental $200; single medical $900, and family medical at $2,200. HEALTH INSURANCE PLAN RENEWAL (continued) The Board discussed whether the District should remain a member CALIFORNAI ASSOCIATION of CASA (California Association of Sanitation Agencies), and OF SANITATION AGENCIES reviewed the benefits derived from maintaining a membership. Moved Jones / Second Cefalu / Passed Unanimously to deter- mine that the District should remain a member of CASA; and to authorize payment of 2012 dues in the amount of $15,000. Moved Vogelgesang / Second Cefalu / Passed Unanimously PAYMENT OF CLAIMS to approve payment in the amount of $908,102.72. Moved Jones / Second Cefalu / Passed Unanimously CONSENT CALENDAR to approve the Consent Calendar as submitted: a. TRPA (Tahoe Regional Planning Agency) Mitigation Payment - Authorized payment to TRPA for 5% mitigation fee on new sewer connections in the amount of $16,760.75; b. Temporary Collection Help for Customer Service - Approved an increase to the contract with Blue Ribbon Personnel Ser- vices for the collections position, in the estimated amount of $4,400; c. ERB (Emergency Retention Basin) Replacement Project - Approved Change Order No. 2 to KG Walters Construction Company, Inc., in the amount of $26,982.08; d. Headworks Replacement Phase 2 Project - Approved Change Order No. 2 to GSE Construction Company, Inc., in the amount of $14,557.44; e. Diesel Particulate Filters - (1) Found that Cleaire Diesel Particulate Filter Systems is the only known unit installed on District vehicles to provide compliance with Air Board regulations; (2) Found that Ironman Co. is the recommended supplier and installer; (3) Waived bidding procedures, as outlined in the District's Purchasing Policy, for sole brand/sole source supplier; and (4) Authorized purchases of diesel particulate filter units in the amount not to exceed $75,000; REGULAR BOARD MEETING MINUTES - DECEMBER 15, 2011 PAGE - 4 f. Trailer Mounted Air Compressor: Underground Repair Water- CONSENT CALENDAR Authorized staff to advertise for bids; (continued) g. Snowshoe/Millich Slope and Bijou Sewer Relocates - Approved Change Order No. 6 for White Rock Construction, Inc., in the credit amount of <$11,705.88>; h. 2011 Grizzly Mountain Booster Station - Approved Change Order No. 4 to Thomas Haen Co. Inc., in the amount of $28,489; i. Approved Regular Board Meeting Minutes: November 3, 2011; j. Approved Regular Board Meeting Minutes: November 17, 2011. Larry Mace, Grant Thornton, reviewed the results of the 2011 PRESENTATION: REPORT ON financial audit, and stated it was a clean report. A single audit THE 2011 FISCAL YEAR of the federal funds (grants) was also performed which was FINANCIAL STATEMENT much more involved. He pointed out a small finding that was AUDIT made and stated that controls are now in place to prevent a reoccurrence. There are no material weaknesses in the internal control structure. Water and Wastewater Operations Committee: The committee STANDING COMMITTEE met December 12. Minutes of the meeting are available upon REPORTS request. Finance Committee: The committee met December 13 re: the 2011 financial statement audit results. A guest attended who had questions on the water rate study performed by HDR. CIP (Capital Improvement Program) Ad Hoc Committee: The AD HOC COMMITTEE committee met December 12 to continue the planning process REPORTS for future projects. Staff submitted a list of water and sewer pro- jects covering the next 20 years, which is subject to review every year due to continuously changing circumstances. The committee also spent time identifying opportunities for potential revenue sources. Director Jones reported on his attendance at the recent ACWA (Association of California Water Agencies) conference where he, along with Dennis Cocking, covered several sessions. They relayed to the Board the valuable functions that ACWA performs on behalf of most of the water suppliers in the state. BOARD MEMBER REPORTS REGULAR BOARD MEETING MINUTES - DECEMBER 15, 2011 PAGE - 5 President Schafer reported a memo was distributed to board BOARD MEMBER REPORTS members concerning committees, ad hoc committees and (continued) liaisons. He requested they look it over and indicate areas they are interested in. The Water Agency Board met December 14. Funding requests EL DORADO COUNTY submitted by the District were approved. The agency's executive WATER AGENCY REPORT director will travel to Washington D.C. for the ACWA delegation. They are also working with the Bureau of Reclamation on the Fazio water issue and will hopefully get them to move ahead. Legal Counsel: Gary Kvistad reported on the results of the small claims case that was heard on October 25. A bicyclist hit a depressed manhole and brought a suit against the District for a dangerous condition. The plaintiff did not present sufficient evidence that the District knew or should have known that a dangerous condition existed. As a result of that, the court found in favor of the District. STAFF REPORT Director Schafer commented that when Board members receive BOARD MEMBER REPORT their agenda packet, they should not wait to review it. He encour- aged them that if they have questions on any agenda item, to call the staff person who wrote the item directly, prior to the Board meeting. He does not like to bring consent items forward for questions when most of them can be asked ahead of the meeting. 3:05 - 3:15 P.M. ADJOURNMENT TO CLOSED SESSION AND RECONVENED TO OPEN SESSION ACTION / REPORT ON ITEM DISCUSSED DURING CLOSED SESSION No reportable Board action. 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 Virgina ex ret. John Hendrix v. J -M Manufacturing Company, Inc. and Formosa Plastics Corporation, U.S.A., Civil Action No. ED CV06-0055-GW, United States District Court for the Central District of California REGULAR BOARD MEETING MINUTES - DECEMBER 15, 2011 PAGE - 6 No reportable Board action. 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. 3:15 P.M. ADJOURNMENT ATTEST: Kathy Sharp, r of the Bdbrd South Tahoe ublic Utility District G lut Eric W. Schafe , B rd President South Tahoe Public Utility District DATE: BOARD OF DIRECTORS MEETING GUEST SIGN -IN SHEET 7A- )5- 0 IN ACCORDANCE WITH THE BROWN ACT: COMPLETION OF THIS INFORMATION IS VOLUNTARY, NOT MANDATORY, AND IS NOT A PRECONDITION FOR ATTENDANCE.