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07-07-99 SpecialSOUTH TAHOE PUBLIC UTILITY DISTRICT "Basic Services for a Complex World" Robert Baer General Manaoer Richard Sol.b~d~c~.Assistant Manager James Jones, President BOARD MEMBERS Christopher Strohm, Vice President Duane Wallace, Director Ma~ Lou Mosbacher, Director Pembroke Gochnauer, Director SPECIAL BOARD MEETING OF THE BOARD OF DIRECTORS SOUTH TAHOE PUBLIC UTILITY DISTRICT JULY 7, 1999 MINUTES The Board of Directors of the South Tahoe Public Utility District met in a Special Session on July 7, 1999, 1:00 p.m., at the District Office, 1275 Meadow Crest Drive, South Lake Tahoe, Cahfornia. BOARD OF DIRECTORS: President Jones, Directors Strohm, Wallace, Mosbacher, Gochnauer. ROLL CALL STAFF: Baer, Solbrig, Sharp, Hydrick, Hoggatt, McFarlane, Attorney Kvistad. GUESTS: Juan Palma, Colin West, and Anjeanette Kellog/ USDA Forest Service LTBMU; Tara Plimpton and Scott Brooke/Brooke & Shaw (representing Camp Richardson Resort); Danny Lukins/Lukins Brothers Water Co. Inc.; Deborah Palmer (representing Lukins Brothers Water Co.), ITEM FOR BOARD ACTION I DISCUSSION (The USFS came before the Board on July 1 re: their request for water service. A decision was deferred until the full Board could participate in the decision making process. The Board members who were absent from the July 1 Board Meeting were provided tapes and a summary of the discus- sion so they have full understanding of this issue.) USDA FOREST SERVICE, LAKE TAHOE BASIN LAND MANAGEMENT UNIT REQUEST FOR WATER SERVICE ST057754 SPECIAL BOARD MEETING MINUTES - JULY 7, 1999 Colin West, USFS, reported the USFS has amend- ed their original request for water service. Since the July 1 Board meeting, Camp Richardson and Lukins Brother Water Co. came to an agreement to extend the current temporary water service until September 30, 1999. They requested the District provide tempor- ary water supply to the South Shore recreation area after September 30, 1999, and continuing until June 1, 2000, in the amount of 65,000 gallons per day. The water supply would be for domestic use only. Water from a surface source would be used to provide their irrigation needs. Scoff Brooke, representing Camp Richardson Resort, confirmed an agreement was reached to provide continued service to the entire USFS property, in- cluding Camp Richardson, through September 30. This provides water through the high summer usage and gives time for the development of the contract for an interim connection with the District, if the Board chooses to do so. There is currently in place a parallel track operation to develop a well on USFS property which may commence in early August. Mr. Brooke expects the District will have information on the well, in terms of quality and quantity, sometime this fall. He believes there will be plenty of time before the end of next May to complete and equip the well, and to provide for further agreements on a permanent source. He requested, on behalf of Camp Richardson Resort, a discrete amount of water, for a discrete period of time, from September 1999 through June, 2000 to allow that to occur. Rick Hydrick reported on water demand and produc- tion capacity over the 4th of July holiday for District and USFS demand. He compared 1999 usage to 1998 and determined if the District were to provide domestic water supply, it would equal less than 1% of production capacity. Several questions were raised by Board members and clarified by staff. Discussion was held regarding if the USFS would need a contract or agreement. Director Wallace questioned the need for an interim agreement. There were strong sentiments among Board mem- bers that the USFS should be treated consistently PAGE - 2 USDA FOREST SERVICE, LAKE TAHOE BASIN LAND MANAGEMENT UNIT REQUEST FOR WATER SERVICE (continued) ST057755 SPECIAL BOARD MEETING MINUTES - JULY 7, 1999 with all other customers of the District. Baer stated that the capacity of the new well is still unknown and cannot commit to delivering a maximum de- mand of 240,000 gallons per day to the USFS on a permanent basis, and this is why an interim agree- ment is necessary. Another reason why an interim agreement is needed is that there needs to be a connection with the District's existing system to the USFS system by September 30. If the well is suc- cessful, the water system would have to be recon- figured by June 30. (An interim agreement covers the District until the production of the new well is known.) Baer added the USFS demand must be determined since a new customer pays the connec- tion fee based on usage, this will give the USFS a chance to determine their irrigation needs so a better estimate on usage can be made and what their costs will be. PAGE - 3 USDA FOREST SERVICE, LAKE TAHOE BASIN LAND MANAGEMENT UNIT REQUEST FOR WATER SERVICE (continued) Additional water rights owned by the USFS were discussed. They have surface water rights to Taylor Creek, Fallen Leaf Lake, and Lake Tahoe. The Clean Water Act requires expensive filtering, infrastructure, and monitoring in order to utilize surface water rights. Richard Solbrig outlined the schedule for the new Gardner Mountain well. Drilling will begin in August; water quality will be known by the end of August; and quantity can be determined by the second week of September. If the well is a producer, then the neces- sary piping to connect from the well site to the equipment storage structure, across the highway, to connect to the 10" line will be ordered. Well equip- ment would be purchased over the winter and the well could be in service by early next year. The well's pro- duction will be limited by the capacity of the 10" line. The interim agreement is needed because a line can't be put into service with water from the well by Sep- tember 30; therefore, the water needed to serve the USFS would have to come out of the District's existing system from the Gardner Mountain zone. Since there is no guarantee the new well will be a producer, an interim agreement is needed as a safety mechanism for the District. ST057756 SPECIAL BOARD MEETING_.MINUTES - JULY 7, 1999 Juan Palma clarified the difference between "contract" and "Special Use Permit." He stated it is the hope of the USFS that in the long-term, once the well is drilled, and if it is a producer, the USFS would grant a Special Use Permit to operate the well to the District; the District could then sell the water back to the USFS and provide any excess water to District customers. The USFS would get water from the deal, while the District would have a Special Use Permit, which could extend up to 40 years (depending on the amortized investment over a period of years). The USFS intends to utilize the period between now and September I to work on the terms of an interim agreement. Strohm noted an interim agreement would contain special condi- tions, however, a long-term commitment would be the same for the USFS as it is for all other District customers. PAGE - 4 USDA FOREST SERVICE, LAKE TAHOE BASIN LAND MANAGEMENT UNIT REQUEST FOR WATER SERVICE (continued) A draft interim agreement has been developed for review and comment. Attorney Kvistad will work with the USFS contracts officer in finalizing the agreement. Ownership of the well and facilities were discussed. Colin West and Juan Palma confirmed the constructed facilities, infrastructure, and water pumped from the well will be owned by the District; the USFS owns the land and the hole in the ground that the well is con- tained in. The USFS permits the land with the District's investment on it. The annual cost of the Special Use Permit is based on the percentage of the land value. The USFS will provide a sketch for the physical con- nection and disconnection that will be reviewed by the District and Lukins Brother Water Co. so the necessary components can be ordered. Scott Brooke noted that the USFS has no agreement with Lukins Brother Water Co. The water service through September 30 will be through Camp Richardson Resort. The interim agreement thereafter will be between the District and the USFS. Camp Richardson Resort has requested they be included in the negotiations for long-term water service after the production of the new well is determined. ST057757 SPECIAL BOARD MEETING MINUTES - JULY 7, 19._99 Deborah Palmer stated Lukins Brother Water Co. and Camp Richardson Resort have an agreement with an understanding that Camp Richardson will provide water to the USFS until September 30, not directly from Lukins Brother Water Co. Rhonda McFarlane insisted that the commitment for long-term water service should be governed by Dis- trict ordinances. There should be no need for an agreement, and no need to negotiate, as the long- term water service will be provided on the same basis as any other customer of the District. A Special Use Permit is what will actually be negotiated and put into place. Scott Brooke stated that Camp Richardson Resort, as a significantly affected party, has requested an interim service contract for the period of September 1999 through May, 2000. As part of that, there is an understanding that a well will be investigated; de- pending on the outcome of the well, there will be another potential long-term relationship negotiated and entered into. It was the consensus of the Board to direct staff to pursue an interim agreement with the USFS, and possibly Camp Richardson Resort if appropriate, to be brought back to the Board for approval. The agreement should protect the District from any undue liabilities and/or significant loss of water due to their being supplied. USDA FOREST SERVICE, LAKE TAHOE BASIN LAND MANAGEMENT UNIT REQUEST FOR WATER SERVICE (continued) No Board action. 2:10 P.M. ADJOURNMEN_T sR~. J?onr~',~O-ard President h Tahoe Public Utility District ATTEST: ,:~,.-~L~ F'~~ .. Katl'{y Sha~, Clerk of Bo~d South Tahoe Public Utility District ST057758