CONTRA COSTA WATER DISTRICT

BOARD OF DIRECTORS

REGULAR MEETING

September 5, 2007

 

MINUTES

 

 

CALL TO ORDER 

 

President Campbell called to order a regular meeting of the Board of Directors of the Contra Costa Water District at 6:32 p.m., at 1331 Concord Avenue, Concord, the regular meeting place of the Board.

 

ROLL CALL

 

            Directors Present:                      Joseph L. Campbell, President

                                                            Bette Boatmun

                                                            Karl L. Wandry

            Directors Absent:                       Elizabeth R. Anello, Vice President

                                                            John Burgh

            General Manager:                       Walter J. Bishop

            Legal Counsel:                           Robert B. Maddow

            District Secretary:                      Sharon L. Burris

 

President Campbell advised that Vice President Anello and Director Burgh were absent from the meeting and that they were excused absences. 

 

PLEDGE OF ALLEGIANCE

 

Senior Engineer Jeff Quimby led the Pledge of Allegiance. 

 

ADOPTION OF AGENDA

 

Mr. Bishop advised that there was a memo before the Board revising Agenda Item No. 1.a. - Future Services – September. 

 

PUBLIC COMMENT

 

President Campbell asked for public comments.  There were no public comments.

 

1.         Approve Directors’ Services/Business and Travel Expenses

            a.   Future Services – September

      b.   Expenses – August

      c.   Compensation – August

 

2.         Approve the following minutes:

a.   August 1, 2007

b.   August 15, 2007  

 

3.         Approve the warrant register dated September 6, 2007.

 

4.         Agreement with Richard Denton for Water Resources planning assistance

            a.   Determine that it is in the best interest of the District to engage a former employee, Dr. Richard A. Denton, to provide Water Resources planning assistance; and   

            b.   Authorize execution of an agreement in conformance with District Regulations Chapter 3.05 with Dr. Richard A. Denton for consulting services in an amount not to exceed $40,000.

 

5.         Authorize an agreement with Geomatrix to provide consultant services related to the Randall-Bold Groundwater Monitoring Project, for a total amount not to exceed $240,000.  Expenditure of costs beyond FY08 will depend on Board approval of the 2009-2010 Budget.

 

MOTION:  Boatmun/Wandry to approve the consent calendar.  The motion carried by a unanimous voice vote. 

 

ACTION

 

6.         Authorize execution of a Streambed Alteration Agreement with the California Department of Fish and Game for the Canal Replacement Project and issuance of Letters of Credit as required by the Agreement.

 

Mr. Bishop advised that Director of Planning Jerry Brown would be giving a presentation. 

 

Mr. Brown reported that the Department of Fish and Game (DFG) required the agreement for the Canal Replacement Project.  The long-term agreement permitted replacement of the entire four miles of unlined canal with a pipeline.  He advised that 145 acres of property at Holland Tract had been identified as mitigation for project impacts.  A separate contract with Wildlands, Inc. was being proposed to carry out the mitigation on Holland Tract. 

 

Mr. Brown reviewed the key terms of the agreement including the scope, mitigation, timeline and Letters of Credit.  He reported that the District’s responsibility for Holland Tract ended when the mitigation was accepted by DFG.  The mitigation ratio was 1:1 and was required prior to or concurrent with construction, with the exception of Phase 1.  DFG had agreed to proceed into construction with the understanding that Letters of Credit would be provided as a financial commitment that the mitigation would be provided in due time. 

 

Mr. Brown reported that four separate letters of credit would be provided and identified them as $114,000 for land acquisition, $67,000 for habitat construction, $37,462 interim site management, and $619,318 for long-term endowment.  The Letters of Credit would be released after meeting specified milestones.  The fiscal impact was $2.82 million, which was to be paid under contract with Wildlands, Inc.  The award of the construction contract for the initial phase of the Canal Replacement Project was scheduled for September 19 and the release of the Letters of Credit would occur in six to twenty-four months.     

 

Discussion took place on the Letters of Credit methodology.  Responding to a question from Director Boatmun concerning if the methodology was usual for this type of agreement, Mr. Bishop replied no.  Mr. Bishop commended Mr. Brown and Senior Planner Mark Seedall for their creativity in working on the agreement.   

Director Wandry also commended staff for their creativity on the agreement.  He commented that he had never seen a situation handled in this manner.  President Campbell also commented on the creativity of the plan, but expressed concern for the long term existence of Wildlands, Inc.  

 

Discussion took place on the expertise of Wildlands, Inc. in dealing with this type of mitigation. 

 

Director Wandry asked how staff arrived at 145 acres of property for four miles of canal.  Mr. Brown responded that it was computed by using the water surface and the width of the right-of-way beyond the water service on the levees.  Director Wandry asked if the District would own the entire right-of-way.  Mr. Brown responded, yes.  Responding to a question from Director Wandry concerning the lifetime of the long-term endowment, Mr. Bishop replied that it would be forever.   Director Wandry asked if the first contract was between DFG and the District.  Mr. Brown responded, yes.  Director Wandry then asked if the second contract would be between the District and Wildlands, Inc.  Mr. Brown responded, yes.  Mr. Bishop commented that the District’s responsibility would end at that time.  The DFG would be responsible for selecting the provider for the long-term maintenance.     

 

President Campbell asked if there were any public comments.  There were none.

 

MOTION:  Wandry/Boatmun to authorize execution of a Streambed Alteration Agreement with the California Department of Fish and Game for the Canal Replacement Project and issuance of Letters of Credit as required by the Agreement.  The motion carried by a unanimous voice vote. 

 

7.         Authorize execution of an agreement with Wildlands, Inc. for mitigation associated with the Canal Replacement Project, for an amount not to exceed $2,820,000. 

 

Mr. Bishop reported that Board approval of the agreement with Wildlands, Inc., which would provide the required mitigation for the Canal Replacement Project, was needed to proceed with construction of the project.  Wildlands, Inc. was identified as the only experienced operator of mitigation property that could meet the District’s schedule and had the recommendation of the regulatory agencies.

 

Mr. Bishop advised that the implementation of the mitigation would be phased.  The first phase would be completed in 2008 and all phases of mitigation were anticipated to be complete by 2012.

Mr. Bishop advised that Wildlands, Inc. would be paid through an escrow agreement, which would include development of the property through the specifications of the District’s permit with DFG. 

 

MOTION:  Wandry/Boatmun to authorize execution of an agreement with Wildlands, Inc. for mitigation associated with the Canal Replacement Project, for an amount not to exceed $2,820,000.   The motion carried by a unanimous voice vote. 

 

8.         Annual Reserve Policy Review and 2007 Fiscal Year-End Budget Report

a.   Authorize additional District funding in the amount of $5.4 million for the Alternative Intake Project;

b.   Authorize a $4.0 million deposit to the Retiree Health Insurance Reserve Fund to continue the funding required under Governmental Accounting Standards Board rule (GASB 45); and

c.   Adopt revision of the Reserve Policy to establish a Drought Contingency Reserve Fund in the amount of $3.5 million.

 

Mr. Bishop reported that the FY07 budget year-end results and reserve fund allocations were reviewed by the Finance Committee on August 21, 2007.  The $12.9 million net year-end results were attributed to savings by the Operations and Maintenance Department and higher revenues due to the warm weather.  

 

Mr. Bishop reviewed the proposed reserve allocations and the revision to the Reserve Policy, which was to establish a Drought Contingency Reserve Fund in the amount of $3.5 million.  The fund would mitigate the fiscal impacts of a continued drought. 

 

Director Boatmun asked if it was possible to increase the amount in the fund.  Mr. Bishop advised that by doing so, it would reduce reserves and it would need to be accounted for in subsequent years.  President Campbell advised that he would be willing to increase the fund if necessary at a future date. 

 

Discussion took place in increasing the amount in the fund.  Mr. Bishop noted that an analysis will be done after the Bureau completed the allocations in January 2008, and the Board would be advised at that time if there appeared to be net positive results.  He suggested that an increase in the Drought Fund allocation be reviewed at mid-year. 

 

President Campbell commented that given the unknowns he would like to revisit the item at a future date if there would be a net positive.

 

President Campbell asked for public comments.  There were none. 

 

Director Wandry expressed a concern that if there was a surplus on an ongoing basis without extraordinary circumstances that the Board would need to consider addressing this further.

 

MOTION: Wandry/ Boatmun to a) authorize additional District funding in the amount of $5.4 million for the Alternative Intake Project; b)                           Authorize a $4.0 million deposit to the Retiree Health Insurance Reserve Fund to continue the funding required under Governmental Accounting Standards Board rule (GASB 45); and c) adopt revision of the Reserve Policy to establish a Drought Contingency Reserve Fund in the amount of $3.5 million.  The motion carried by a unanimous voice vote. 

 

DISCUSSION AND INFORMATION

 

9.         Review report and comment on the District’s Facilities Reserve Charges.    

 

Mr. Bishop reported that Mr. Quimby would be making a presentation on the status of the District’s Facility Reserve Charge (FRC). 

 

Mr. Quimby explained that the FRC was a one-time fee intended to recover the cost of the facility required to serve new customers.  He reviewed the current method adopted by the Board in 1998 and explained that the fee was set at 90 percent of the calculated value.  The FRC was reviewed in 2003 and a policy was implemented to adjust the FRC annually by inflation.  The Treated Water Master Plan (TWMP) and the Future Water Supply Study (FWSS) form the basis for many of the assumptions in the FRC.  Mr. Quimby reported that continued use of the 90 percent of calculated value resulted in a significant subsidy by the District.   

 

Addressing a policy question, Mr. Quimby asked the Board if the District’s FRC should be based on the actual calculated fee, or some factor greater than 90 percent.  He used an example of fees using 95 percent of the calculated value.  He advised that the new fee could be phased to mitigate the impact.  He advised that if the Board were to consider changes to the FRC that they would be incorporated in the annual review of rates, fees and charges when they would be considered for Board adoption in January 2008.  

 

Mr. Bishop reminded the Board that the item was not for action but information.

 

President Campbell asked if the 90 percent fee was accurate.  Mr. Bishop replied that it was accurate based on the current methodology.  Director Boatmun asked if the 90 percent charge was decided at the time the fee was discussed with interested parties, and if there were indications from the District that the fee was subject to increase.  President Campbell recalled that the Board guaranteed the 90 percent charge for a reasonable amount of time.  The question he had was if a reasonable amount of time had passed.  The second thing they had originally agreed to was to phase the implementation. 

 

President Campbell asked for comments. 

 

Director Wandry clarified that the Board’s direction was to review the FRC and to revisit other options at a later date.  Mr. Bishop replied that other options could be presented.  Director Boatmun and President Campbell agreed with considering 95 percent and 100 percent options. 

 

President Campbell commented positively and commended Mr. Quimby on his presentation.

 

REPORTS FOR DISCUSSION

 

10.        Committee Report(s)

            a.   Board of Supervisors’ – Transportation, Water and Infrastructure Committee

                  Post-Meeting Report (8/13/07)

            b.   Finance Committee Post-Meeting Report (8/21/07)

 

President Campbell asked if there were any comments on the committee reports.  There were no comments. 

 

11.        Schedule Future Meeting Dates and Times

There were no future meeting dates and times to schedule. 

 

REPORTS

 

12.        General Manager

 

Mr. Bishop reported that the Association of California Water Agencies Region 5 election would be held on September 30, 2007.   He advised that the item could be agendized for a future meeting, or the Board could authorize the District’s ACWA Representative Director Boatmun to vote her conscience in the election, as they had done in the past.  It was the consensus of the Board not to agendize the item, and to have Director Boatmun vote her conscience. 

 

Mr. Bishop reported briefly on the water rights situation that was currently taking place in California.

 

13.        Legal Counsel

 

Mr. Maddow also reported briefly on the water rights situation and on supplemental complaints being filed by petitioners concerning a biological opinion. 

 

14.        Board Members

 

Director Wandry reported that he would be out of town and would not be attending the Board meeting on September 19. 

 

Director Boatmun did not have a report.

 

President Campbell commented on a thank you letter that the Board received from former Boardmember Ernest Lasell’s family and noted that he appreciated receiving it.  He also commented on Guy Bjerke’s recent appointment to the Concord City Council and extended his congratulations.   

 

President Campbell commented on the fact that three Boardmembers were planning to attend the California Special District Association Conference in October.  He appealed to the Boardmembers to reconsider whether that level of participation was needed at the conference considering that it conflicted with a scheduled Board meeting date. 

 

ADJOURNMENT

 

At 7:15 p.m., President Campbell adjourned the meeting to the next regular meeting of the Board of Directors scheduled for September 19, 2007 commencing at 6:30 p.m.

 

 

 

                                                                                                                                                        

                                                                                                Joseph L. Campbell, President

 

 

 

ATTEST:

 

                                               

Sharon L. Burris

District Secretary