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12-16-99SOUTH TAHOE PUBLIC UTILITY DISTRICT "Basic Services for a Complex World" James Jones, President BOARD MEMBERS Christopher Strohm, Vice President REGULAR MEETING OF THE BOARD OF DIRECTORS SOUTH TAHOE PUBLIC UTILITY DISTRICT December 16, 1999 MINUTES The Board of Directors of the South Tahoe Public Utility District met in a regular session December 16, 1999, 2:00 P.M., City Council Chambers, 1900 Lake Tahoe Boulevard, South Lake Tahoe, California. BOARD OF DIRECTORS: President Jones, Directors Wallace, Strohm, Gochnauer Mosbacher. ROLL CALL STAFF: Baer, Solbrig, Sharp, Taylor, Noble, Hussmann, Swain, Hydrick, Hoggatt, Johnson, Bird, W. Stanley, Schroeder, Hrbacek, Cocking, Garcia, Rieger, Schrempp, Schrauben Ellis, Attorney Kvistad, Vic Sher/Miller, Sher and Sawyer. GUESTS: Judy Brown/City Council Liaison, Herman Zellmer/Alpine County Liaison, Lon N. Craig and Randy Anderson/L.N. Craig Construction, John Busby/Attorney for Valley Eng. and Mtn. Cascade, Daniel Walsh/Terra Thermal Power, Kevin Walsh/VValsh & Walsh, Max Jones/Energy Source Roy Hampson, Joyce Blackstone, Gall Burns, David Kelly, Barney Mosbacher, Bob Mason, Jerry Eames. Kathy Sharp, Clerk of the Board, Administered the Oaths of Office to Director Mosbacher, Seat 3; and Director Wallace, Seat 4. OATHS OF OFFICE SI07 ,.388 REGULAR BOARD MEETING MINUTES - DECEMBER 16, 1999 PAGE - 2 Kyle Schrauben, who recently filled the Inspector for Customer Service position, was introduced to the Board. INTRODUCTION Roy Hampson commented on El Dorado County Court of Appeals, Regional Board appointments, and MTBE issues. He left two newspaper articles for the Board to review. COMMENTS FROM THE AUDIENCE Judy Brown stated she will continue as City Council Liaison to the Board for 2000. Moved Mosbacher/Second Gochnauer/Passed Unanimously to approve Consent Calendar as submitted: CONSENT CALENDAR Authorized implementation of the two-week discon- nection procedures for delinquent sewer and/or water accounts; TRPA Mitigation Payment - Authorized payment to TRPA in the amount of $43,900; Statement of Investment Policy - Adopted Resolution No. 2703-99 authorizing adoption of the policy; Independent Audit Services - Authorized staff to seek request for proposals for audit services; so Restoration and Erosion Control Projects - A) Approved project Closeout Agreement and Release of Claims for R & K Lawn/Garden; and B) Authorized staff to file Notice of Completion with the El Dorado County Clerk; Lower Shop Paving - A) Approved project Closeout Agreement and Release of Claims for Granite Con- struction Company; and B) Authorized staff to file a Notice of Completion with the El Dorado County Clerk; Approved Regular Board Meeting Minutes: November 18, 1999. Ross Johnson introduced Daniel Walsh, Terra Thermal PRESENTATION: Export Line Power. Mr. Walsh made and oral and visual presentation Hydro-Electric Proiect summarizing his concept of the private development of a hydroelectric facility utilizing the District's export line (C-Line). The presentation outlined his view of the proposed project, including: the project background, hydro plant considerations, electrical power transmission lines, power purchase agree- ment, facility ownership and management, project develop- ment, possible hurdles, and possible location sites. ST074389 REGULAR BOARD MEETING MINUTES - DECEMBER 16, 1999 PAGE - 3 Max Jones, Energy Source, reported on the need to upgrade transmission lines and to work with Sierra Pacific Power in a cooperative effort. PRESENTATION: Export Line Hydro-Electric Project (continued) Hal Bird reported the agreement with Alpine County specifies hydroelectric facilities on the C-Line will be done in a joint venture with Alpine County. Herman Zellmer, Alpine County Supervisor, shared his interest in the project. Carol Swain read aloud the District's extra staffing and precautions that will be in place on New Year's eve. Swain also reviewed the five stages to Y2K readiness, which consisted of: awareness, assessment and impact analysis, renovation, testing, and preserving compliance. PRESENTATION: Y2K Readiness ITEMS FOR BOARD ACTION Moved Gochnauer/Second Wallace/Passed Unanimousb/ to elect Director Strohm to the office of President of the Board. (President Strohm requested that Director Jones chair the remainder of the meeting.) ELECTION OF BOARD OFFICERS Moved Strohm/Second Wallace/Passed Unanimousb/to elect Director Gochnauer to the office of Vice President of the Board. Rick Hydrick reported treatment for MTBE at the wellhead is a significant, and perhaps primary, alternative to pro- viding reliable clean water to South Lake Tahoe and to remediate the groundwater in order to address the impact of the MTBE contamination to the water supply. These pilot plant studies will allow Boyle Engineering to compare the cost effectiveness of at least two treatment technologies using groundwater. This work will be done in support of the "Interim Water Supply Master Plan in Response to MTBE Contamination". Boyle will facilitate the studies and make recommendation. District staff will manage the vendor reserve, install, operate, and dismantle the pilot plants. PILOT PLANT STUDIES FOR MTBE REMOVAL Staff recommended Lukins Well No. 3 as the best location for the pilot plant. The well is contaminated with MTBE and does not currently have a remediation system in place. Lukins Brothers Water Company is willing to enter into a licenced agreement and allow access. Total cost is estimated at ,$100,000, including staff time. This cost was not anticipated, and will be funded from the capital outlay reserve. ST074390 REGULAR BOARD MEETING MINUTES - DECEMBER 16, 1999 PAGE - 4 Roy Hampson relayed his skepticism regarding the effectiveness of the project. Joyce Blackstone suggested holding the oil companies responsible for financing MTBE related projects. Moved Strohm/Second Gochnauer/Passed Unanimously to: A) Authorize Task Order No. 17 to Boyle Engineering Corporation in the amount of $41,490; and B) Authorize vendor and other costs in the estimated amount of $41,605. It was noted that this action may cost up to $18,000 in increased costs to WWTP to process the treated water. Richard Solbrig reported construction on this project is scheduled to begin May 1,2000. District staff opened bids on November 16, 1999. Six bids were received for DIP, four bids were received for the steel pipe. The Iow bid received was from L.N. Craig Construction, for ductile iron pipe, for a total price of $2,299,222. This bid contained no irregularities, and L.N. Craig's contractor's license is in good standing with the State of California. Per the Specifications, L.N. Craig submitted after the bid their documentation of "Good Faith Effort" to obtain MBE and WBE participation in subcontracts and suppliers. District staff has received this documentation, and has deemed it satisfactory. The District has received a written bid protest from Valley Engineers (fourth bid for DIP, third bid for steel), claiming that L.N. Craig's bid was based upon steel pipe for the horizontal directional drilling portion of the project that did not meet the requirements of the specifications (for inside diameter and coating system). L.N. Craig has assured District staff that they will provide pipe that meets the requirements of the specifications for the bid price. District staff has responded to Valley Engineers and denied the protest. Staff recommends awarding the bid to L.N. Craig Construction. John Busby, Attorney representing Valley Engineers and Mountain Cascade, stated awarding the contract to L.N. Craig would be giving that contractor a competitive bidding advantage, and could subject the District to a lawsuit. He requested the Board either reject all bids, or award to the next lowest responsive, responsible bidder. PILOT PLANT STUDIES FOR MTBE REMOVAL (continued) A-LINE REPLACEMENT PHASE III ST074391 REGULAR BOARD MEETING MINUTES - DECEMBER 16, t999 PAGE - 5 Andy Anderson, of L.N. Craig Construction, stated that it would supply the specified pipe at the same bid price but from another supplier. L.N. Craig had already requested approval from the District for the change. Staff advised L.N. Craig that the District could not act on the request until after the award. Mr. Anderson stated he was unaware that the pipe was different from the Specifications until the bids were opened. Referencing the "Buy America" clause in the contract, Mr. Anderson reported the pipe he intends to use is domes- tically manufactured in the United States, whereas the pipe proposed by Valley Engineers and Mountain Cascade is made in Japan. Attorney Kvistad requested a Closed Session be added to the agenda to discuss the merits of the threatened litiga- tion made by Mr. Busby prior to, and during the meeting. This threat of litigation was made after posting of the agenda and must be discussed immediately. Moved Gochnauer/Second Strohm/Passed Unanimously to add a Closed Session to the agenda and adjourn to closed session to discuss the A-Line Replacement Phase III Bid Award. Mr. Busby stated that he would be filing a writ of mandate to prohibit the District from proceeding with the project as approved by the Board. He requested minutes of this meeting be forwarded to him. 4:10 P.M. 4:15 P.M. 4:55 P.M. A-LINE REPLACEMENT PHASE III (continued) MEETING BREAK MEETING RESUMED AND ADJOURNED TO EXECUTIVE SESSION RECONVENED TO REGULAR SESSION ACTION I REPORT ON ITEMS DISCUSSED DURING EXECUTIVE SESSION Moved Wallace/Second Gochnauer/Passed Unanimously to award the bid to the lowest responsive, responsible bidder, L.N. Craig Construction, in the amount of $2,299,222; and to the extent, if at all, there is any informality, irregularity, or nonconformity in L.N. Craig Pursuant of Section 54956.9 (b) of California Government Code/Con- ference with Legal Counsel - Anticipated Litigation (one case) ST074392 PAGE - 6 REGULAR BOARD MEETING MINUTES - DECEMBER 16, 1999 Construction's listing of the pipe supplier, the District waives that informality, irregularity, or nonconformity since it is deemed best for the public good and did not provide L.N. Craig Construction any competitive or economic advantage over the other bidders. Moved Mosbacher/Second GochnaueflPassed ~ to approve payment in the amount of $1,048,215.04. Water & Wastewater Operations Committee: The committee met December 13. Minutes of th~ meeting are available upon request. County Water A~enc¥ / EDWPA / LAFCO Committee.'. Director Strohm reported he attended a December 13 El Dorado County Purveyors meeting. The decision regarding restructuring the governance of the County Water Agency was postponed. Director Mosbacher reported she was working with staff re: USFS Humboldt-Toiyabe National Forest "roadless" issues. Director Mosbacher. reported on USFS Humboldt-Toiyabe National Forest "roadless" issues. She encouraged staff to monitor the progress because the "roadless" issue may impact the District in the future. Director Gochnauer reported that he met with Attorney Kvistad regarding the routing of the pipeline for the Gardner Mountain well. He was concerned he may have a possible conflict of interest along that route pertaining to business contacts who may benefit from fire protection in that area. Attorney Kvistad assured Director Gochnauer that there was no conflict of interest. Director Strohm reported on his attendance at the American Ski Shareholders meeting. It was reported that 75% of the quarter shares must be sold before the Park Avenue Re- development project can break ground. They are at 43%. Director Jones reported on the ACWA Conference he and Director Gochnauer attended. Water quality and radon were major topics of discussion. Pursuant of Section 54956.9 (b) of California Government Code/Con- ference with Legal Counsel - Anticipated Liti_oation (one case), (continued) PAYMENT OF CLAIMS BOARD MEMBER STANDING COMMITTEE REPORTS BOARD MEMBER STANDING COMMITTEE REPORTS .. (continued) BOARD MEMBER REPORTS ST074393 PAGE - 7 REGULAR BOARD MEETING MINUTES - DECEMBER 16, t999 General Manager: Bob Baer reported that the Governor's order requiring MTBE labeling at the gasoline pumps went into effect today. Manager of Water Operations:. Rick Hydrick reported that TRPA has developed a Source Water Assurance and Assessment ordinance that provides for review of new projects to verify they do not pose a risk to groundwater and surface water supplies. District Information Officer: Dennis Cocking reported on his attendance at a recent California Air Resources Board hearing regarding reformulated gasoline. Land Application Mana_~er: Hal Bird reported on the December 15 meeting with Alpine County representatives. He also met with Nevada EPA. Lahontan has plans to re- evaluate the ranchers permits in Alpine County. Lahontan will also be deciding on the TMDL's (Total Maximum Daily Loads) levels for Indian Creek Reservoir. He discussed water rights with Lahontan staff. 5:30 P.M. STAFF REPORTS ADJOURNED TO CLOSED SESSION 6:45 P.M. RECONVENED TO REGULAR SESSION ACTION I REPORT ON ITEMS DISCUSSED DURING EXECUTIVE SESSION Legal counsel and staff updated the Board regarding this item. No Board action. Pursuant to Section 54956.9(a) of California Government Code/Con- ference with Legal Counsel Existing litigation - STPUD v. ARCO, et al, San Francisco County Superior Court Case No. 999128 This item was not discussed. No Board action. Pursuant to Section 54956.9(a) of California Government Code/Con- ference with Legal Counsel Existing Litigation: Schwake v. STPUD, Federal Case No. CV-N-93-851-DWH ST074394 PAGE- 8 REGULAR BOARD MEETING MINUTES - DECEMBER 16, 1999 Staff updated the Board regarding this item. No Board action:, Pursuant to Section 54956.8 of California Government Code/Con- ference re: Real Property Negotiations - Negotiating Parties: District staff, Board of Directors; Under Negotiation: Property Terms Property Identification: APN 19-081-09 Legal counsel and staff updated the Board regarding this item. No Board action._ The Board directed the agency negotiator regarding this item. No Board action. Pursuant to Section 54956.9(c) of California Government Code/Con- ference with Legal Counsel-Antici- pated Liticlation (One Case) Pursuant to Section 54957.6 of California Government Code/Con- ference with Labor Negotiator - Agency Negotiator: General Manager; Unrepresented Employee Position: Human Resources Director 6:45 P.M. ADJOURNMENT Kat~-sharp//(~l~-~ (~f the Board South Taho[~Public Utility District REGULAR 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, ST074395