CALL TO ORDER: The Board of Directors’ meeting of the Mid-Peninsula Water District was called to order by Vice President Linvill at 6:30 p.m.
A. ROLL CALL:
PRESENT: Directors Altscher, Linvill, Stuebing, Vella and Zucca.
ALSO PRESENT: General Manager Regan, General Counsel Belloli, Secretary Remeleh and Engineer Boscacci.
STAFF PRESENT: Henry Young, Brent Chester and Jeanette Kalabolas.
MEMBERS OF PUBLIC:
Joubin Pakpour from Pakpour Consulting and Alex Handlers from Bartle Wells.
PRESIDENT: President Vella presiding.
Whereupon the following proceedings were duly had:
B. PLEDGE OF ALLEGIANCE:
Director Stuebing led in the Pledge of Allegiance.
C. APPROVAL OF MINUTES:
The minutes of the Regular Board meeting of April 22, 2010 were unanimously approved as corrected, on a motion by Director Zucca and seconded by Director Altscher.
D. PUBLIC COMMENTS:
None.
E. PUBLIC HEARING:
President Vella opened the public hearing for the proposal of the Mid-Peninsula Water District rate increase.
Alex Handlers from Bartle Wells introduced himself and explained that his company offers an “independent outsider” look at the financials and rates of water districts, and offers recommendations after analysis. He also explained that the District’s proposed rate increase is set up so that it is a gradual increase over the next five years, rather than a large and sudden increase for the customers. He stated that the District is in a good financial position. The District relies solely on water from the San Francisco PUC, and because San Francisco is conducting a $4.3 billion seismic Capital Improvement Project on the Hetch Hetchy system, wholesale water rates will have to be raised. In order for the District to be able to take on the new wholesale water rates, the District’s water rates will have to be increased. He also explained that the wholesale water rates are projected to continue to rise significantly in the future. Another factor in the District’s need for water rate increases is that water sales have dropped. The cost of service has also played a factor in the rate increases. Alex also gave a break down of the recommended new fixed charges increase and the variable rate increase. The new rate structure will also restore equity between the commercial and residential rates. Every regional agency will be hit by the wholesale water rate increases and the District is proposing lower rate increases than most. He also believes that the District will continue to remain in the middle range compared to a lot of other regional agencies. Alex stated that the District is a step ahead of the game because of all of the work that the District has done replacing and repairing aging water mains.
President Vella thanked Alex for his detailed report and for all the work he and Bartle Wells preformed.
Director Altscher wanted to hear Alex’s take on the rates for the smaller user residential rates.
Alex explained that there is still a cost that the District incurs supplying water to the smaller users, but with the proposed rate structure the customers that use smaller amounts of water will continue to be given a break to help encourage water conservation.
Manager Regan commented that a big thing the District has been looking into is the budget. Staff is doing all that they can to find a way cut costs wherever possible. The customers are the District’s biggest concern, and he believes with cuts that have been made in the budget, and the recommendations made by Alex, this is where the District needs to be.
Lenore Griffin from the Belmont Chamber of Commerce expressed her concern with the proposed water rate increase. She had addressed the Board about a previous rate increase and the Board had stated that they were hoping the District not have to make huge water rate increases in the future. She is concerned that the proposed water rate increase of 9% a year for the next 5 years is too large. The reason she believes that water sales are down is not because of conservation, but because there is not enough business in Belmont and businesses are using less water. She is hoping that the District can look at other options besides rate increases. She would like to see the Board think about the businesses of Belmont while considering the rate increases.
A resident of Belmont inquired as to why Alex only went out five years in his projection.
Alex explained that it is hard to know what is going to happen what 5 or 10 years down-the-line with the current information that the District has. If changes were to happen (such as new requirements by the Department of Health, or if the District suffers damage to the system) the District needs to be sure that the rates are sufficient enough to cover costs. If the District it is stuck in a rate structure for many years, there may not sufficient funds to take care of those unexpected issues.
Alex explained that the commercial usage charges will be held flat for the first year.
President Vella asked Secretary Remeleh how the public was informed of the proposed water rate increases.
Secretary Remeleh explained that on April 12, 2009 letters were sent out to every District customers explaining the need, the reason and the purpose for the proposed rate increases, as per Prop. 218. Those notices were also posted on the District website and in the District office. The District has received letters for and against the rate increase.
Lenore would like the District to send information regarding the water rate increases to the Belmont Chamber of Commerce so they can help distribute the information.
The public hearing on the proposed water rate increases was closed, on a motion by Director Altscher seconded by Vice President Linvill.
Vice President Linvill realizes that this is a difficult decision for the Board to make being that the economy is so bad and that the Directors themselves are also residents of Belmont. She commended staff on all of the effort that they have put forth to cut back costs in the District. The District is in a difficult spot because it has no other option, but to take on the increases in cost set by the SFPUC. The District has made sure that the customers are supplied with high quality water efficiently, and this requires the District to continue to be sure that the water is delivered through a safe and well maintained system. She believes that the level increase will be easier for the customers to take on in the long run.
Director Zucca is pleased with the projected rate increase. With the increases proposed, the customers know what to expect for the next 5 years. He also believes that because the District is a pay-as-you-go District, rates are a little higher than they would be if the District financed things such as its capital projects, but in the long run this will be better for the District to have no debt and will be more beneficial to the customers.
Director Altscher commented that the District has been talking about rates and planning for several years. He believes the District is right on schedule with their planning and he is supportive of the increase. This is something that he does not want, but it is something that is necessary for the District.
Director Stuebing commented that he agrees with his fellow Directors and he also commends staff on cutting costs. This is a challenge that will not go away and he is confident that the Board and staff will continue to do their best to continue to cut costs throughout the District.
General Counsel Belloli commented that staff has done a great job on informing the public of the increase and has taken all of the necessary steps to move forward.
President Vella thanked staff and consultants for their work on this. It is a difficult thing for everybody including the District to raise rates. The thing that puts the District in a better place than other water Districts is that this District is a pay-as-you-go District. This allows the District to take on increases from the wholesaler and not worry about other costs. This increase is a painful step that the District must take.
The Mid-Peninsula Water District Water Service Ordinance No. 108 was unanimously approved by a roll call vote.
F. EXBOURNE TANK PROJECT:
Joubin Pakpour from Pakpour Consulting reported that the Exbourne Tank Project is 94% complete. In the last month the 8” line that feeds the tank was pressure tested. The contractor started work on the pump station. The electrical subcontractor started work on wiring within the pump station. Everything has been proceeding in a safe manner. On the offsite work, a 12” line has been tied in. The line now needs to be tested. On April 30th a letter was issued giving the contractor 27 additional days of work on this project. Half of the 27 days were for rain delays and the other half were for change orders on the project. June 18th is the projected completion date by the contractor. There was a request for a change order from the contractor for $92,000.00 for additional costs. This change order will be reviewed by the Board, Staff, District Counsel and the District Engineer. The progress payment for this month is for $114,217.78 for the work done in April and May. Joubin reviewed the pictures included in his report.
Director Zucca suggested that the Board review the amount per day on liquidated damages for future projects.
Director Altscher would like to have a group tour of the completed tank site.
Joubin explained that the Board members are always welcome to the site.
G. BELMONT COUNTY WATER DISTRICT EMPLOYEE ASSOCIATION’S REPORT:
Belmont County Water District Employee Association Vice President Jeanette Kalabolas thanked Directors Linvill and Altscher for meeting with the employees to discuss various topics, and told the Board that the employees appreciate the Board’s involvement efforts to encourage open District communication. She also reported that Association met once last month to discuss employee salary negotiations. She explained that June marked the end of their 4 year negotiation term and they met to review the recent Koff and Associates Salary Survey. The Association decided based on the present economy and the projected rate increases, that now is not the time to initiate talks.. The employees understand the many financial burdens of the District and its customers, and thereby voted unanimously not to act on the survey initiated at this time. However, this topic will remain as an open item on the Association’s agenda over the course of the next fiscal year. The Associations intent is to supply something in writing to the Board as well as Management within the next few months outlining components of the survey they hope to discuss in an open forum. She stated the employees look forward to working with the Board and Management as they move forward.
H. WATER CONSERVATION:
Jeanette Kalabolas reported that she has completed her Summer 2010 newsletter article on conservation. The District hosted a BAWSCA Landscape Water Efficiency class last Saturday which was very successful. Peggy Duvall taught the class and the District plans on inviting her back to teach a class in the fall. Jeanette gave an update on the pending Urban Water Management Plan that the District will need to prepare. BAWSCA will be offering a Urban Water Management Plan training on June 17, 2010 which she will be attending. Field Trips to the District will continue in the fall. All of the teachers that attended last year will be attending again in the fall along with teachers from new schools.
I. CHANGE IN NOVEMBER AND DECEMBER REGULAR BOARD MEETINGS:
The Board decided to hold the November Regular Board meeting on November 17, 2010 and the December Regular Board meeting will be on December 16, 2010 due to the holidays.
J. FOLGER PROPERTY UPDATE:
Manager Regan reported that the tenants have moved out of the Folger property. The property is clean. The next step will be to do a power transfer on the property. Superintendant Henry Young has been updated with what are the best purposes for the building and hopefully next month there will be a completed report from the realtors. Manager Regan will present to the Board with estimated costs on work that needs to be done to the property. Henry also explained that the report will include costs of improvements to the property and clearing of the property.
K. MID-PENINSULA WATER DISTRICT 2010/2011 PRELIMINARY BUDGET:
There will be a Special meeting to discuss the budget on Tuesday June 15, 2010 at the District office.
L. BAWSCA REPORT:
President Vella reported that the Water Main Improvement Project is still on time and budget. There was also discussion on the Washer Machine Rebate Program. BAWSCA has released a flyer regarding chloramines.
M. DIRECTORS’ REPORT:
Director Stuebing reported that he enjoyed his first ACWA conference.
Director Altscher reported that he attended a Special District Board meeting with Director Stuebing. He thanked the Board and staff for supporting him during his running for a position on the LAFCo Board. He also reported on a seminar that he attended at the ACWA conference. A message that he took away from the seminar was that in publications to the community it is important to tell customers what is in it for them when they purchase a product and he believes that this is something that District should continue to improve on. He also reported on his attendance with Director Linvill at the Directors/Employee meeting. He believed that it was very well set up and successful.
Vice President Linvill reported her attendance at the Directors/Employee meeting. She really enjoyed the meeting. She felt the employees were very welcoming and forthcoming. She also enjoyed the ACWA conference.
President Vella attended the ground breaking ceremony for the Belmont Bike Bridge held at the sports complex. It was very nicely done. He also reported on his attendance a meeting on the high speed rail that the City of Belmont organized. He reported that a very important topic at the ACWA conference was on the Water Bond.
Director’s Altscher, Linvill and Vella thanked Director Stuebing for driving to the conference.
N. MANAGER’S REPORT:
Manager Regan reported that the District had a workers compensation audit and passed.
The Manager’s Report was unanimously approved, on a motion by Director Altscher seconded by Director Stuebing.
O. FINANCIAL REPORT:
Manager Regan reported that the District is right on track with the general budget. There was a change to the capital expenditures report to make it easier to understand.
President Vella asked Manager Regan to explain an item on the balance sheet.
Vice President Linvill pointed out that there is a loss on net ordinary income and other incomes that are also down compared to last years numbers and that the District really needs to be careful with our budget.
The financial report was unanimously approved, on a motion by Director Zucca seconded by Vice President Linvill.
P. FUTURE NEW BUSINESS ITEMS-SUGGESTIONS BY THE BOARD MEMBERS:
Long Term Reliable Water Supply Strategy, Drought Implementation Plan (DRIP).
Q. COMMUNICATIONS:
Secretary Remeleh presented the Board with a letter from a teacher from the District field trip. She also reported that the one of the attendees at the BAWSCA Landscaping Class was the daughter in law of the very first President of the Board in 1929.
R. ADJOURNMENT:
President Vella adjourned the meeting at 8:25 p.m. The next regular meeting of the MPWD Board is scheduled for Thursday, June 24, 2010, at 6:30 p.m. in the District’s administrative offices at 3 Dairy Lane, Belmont CA 94002.
