CONTRA COSTA WATER DISTRICT

BOARD OF DIRECTORS

REGULAR MEETING

December 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 6:30 p.m., at 1331 Concord Avenue, Concord, the regular meeting place of the Board.

 

ROLL CALL

 

            Directors Present:                      Joseph L. Campbell, President

                                                            Elizabeth R. Anello, Vice President

                                                            John A. Burgh

                                                            Bette Boatmun

                                                            Karl L. Wandry

            General Manager:                       Walter J. Bishop

            Legal Counsel:                           Carl P.A. Nelson

            District Secretary:                      Sharon L. Burris

 

PLEDGE OF ALLEGIANCE

 

Assistant General Manager of Engineering Tom Linville led the Pledge of Allegiance. 

 

ADOPTION OF AGENDA

 

Mr. Bishop advised that information was received since the posting of the agenda that made it necessary for the Board to consider adding an item to the agenda. He advised that under Government Code 54954.2(b) four affirmative votes from the Board were required to determine that immediate action was necessary.  He reported that the Assistant General Manager of Engineering Tom Linville would be retiring before the next Board meeting scheduled for December 19, 2007.  He advised that if the Board chose to approve a resolution for Mr. Linville, this would be the last meeting where the Board could take such action prior to Mr. Linville’s retirement.  

 

President Campbell noted that if the motion passed this item would be agendized as Item No. 9.b.

 

MOTION:  Burgh/Boatmun to add an item to the agenda honoring the Assistant General Manager of Engineering Thomas J. Linville.  The motion carried by a unanimous voice vote. 

 

PUBLIC COMMENT

 

President Campbell asked if there were any public comments.  There were no public comments.

CONSENT

 

1.         Approve Directors’ Services/Business and Travel Expenses

            a.   Future Services – December

      b.   Expenses – October/November

      c.   Compensation – November

 

2.         Approve the minutes of November 2, 2007. 

           

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

 

4.         Accept the 2007 Treated Water Master Plan Update Report.

 

5.         Authorize execution of an agreement with HDR for consulting services to evaluate on-site Solids Handling Alternatives for the Bollman Water Treatment Plant in an amount not to exceed $200,000.

 

6.         Authorize execution of a contract with Carbon Activated for the procurement and installation of granular activated carbon in the Bollman Water Treatment Plant Filter Media Project in the amount of $397,592, with a 10% change order authority of $39,759, for a total amount not to exceed $437,351. 

 

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

 

ACTION

 

7.         Authorize the establishment of three new classifications (Assistant General Manager – Engineering/Construction, Assistant General Manager – Planning/Operations and Maintenance, and Engineering Manager) with associated pay ranges to implement the District reorganization, effective January 1, 2008.

 

Mr. Bishop reported that the District reorganization was prompted by the retirement of Mr. Linville.  The restructuring did not increase the number of District employees and resulted in an annual salary cost savings of approximately $130,000.  The positions not being filled as part of the reorganization were identified as the Director of Planning and the Director of Engineering.  He reported that three new positions would be created.  The first position was the Assistant General Manager – Engineering/Construction.  The second position was the Assistant General Manager – Planning/Operations and Maintenance, and the third position was the Engineering Manager.

 

Director Boatmun commented on the qualifications and the requirement to lift 15 pounds and asked how the District arrived at this number.  Human Resources and Risk Manager Elia Bamberger responded that a job task analysis was done on various positions throughout the District.  The analysis involved expertise in this area regarding workers’ compensation and potential risk exposure, and was specific to the responsibility of the classification. 

 

President Campbell asked if there were any other questions for clarity.  There were none. 

 

Director Burgh commended Mr. Bishop and staff for progressive thinking in managing the District. 

 

Director Wandry echoed Director Burgh’s comments.  He noted that the promotions were well deserved for the personnel involved. 

 

President Campbell congratulated the employees involved.      

 

MOTION:  Boatmun/Anello to authorize the establishment of three new classifications (Assistant General Manager – Engineering/Construction, Assistant General Manager – Planning/Operations and Maintenance, and Engineering Manager) with associated pay ranges to implement the District reorganization, effective January 1, 2008.   The motion carried by a unanimous voice vote. 

 

8.         2007 Retirement Plan Actuarial Valuation Report

            a.   Accept the 2007 Retirement Plan Actuarial Valuation Report and recommendations; and

            b.   Authorize a decrease to the District contribution rate from 7.56% to 6.24% effective the first payroll period following January 1, 2008. 

 

Mr. Bishop advised that the Assistant General Manager of Administration Kurt Ladensack would be making a presentation.  He reminded the Board that Mr. Ladensack is the Board’s Designated Trustee for the District’s retirement system.        

 

Mr. Ladensack reported that during the year ending June 30, 2007 assets increased by $17.6 million.  He advised that the increase was due largely to a 17.4% market rate of return for the 12-month period.  The funded ratio of long-term liabilities increased to 98.7%.  He advised that no changes were recommended by the actuary on the assumptions.  He also advised that the actuary recommended a reduction in the employer contribution from the current 7.56% of payroll to 6.24% effective the first payroll period in January 2008.  This contribution rate used a funding methodology which ensured that the unfunded actuarial accrued liability would be paid off over 15 years, which provided greater stability in contribution rates and the ability to forecast fiscal impacts. 

 

President Campbell asked if there were any questions for the presenter.  There were no questions. 

 

Director Burgh commented positively on the management of the retirement fund. 

 

Director Wandry asked if the change in the District’s contribution kept the funding level at 98%.  Mr. Ladensack responded, yes. 

 

Responding to a question from Director Boatmun concerning the annual percentage paid to the consultant, Mr. Ladensack advised that it was approximately .2%. 

 

Responding to a question from Director Boatmun concerning an actuarial assumption dealing with the age of the retiree and whether or not that assumption had changed, Mr. Ladensack reported that none of the assumptions had changed this year.  He advised that assumptions for age of retirement had remained static for the last few years.  The last time a minor adjustment was made was when the Board authorized the increase in the benefit formula from 2% at 55 to 2.25% at 55.  The average age of retirement at that time was 59 and it was changed to 58 ½.  Acknowledging that with the higher benefit formula there would be trending towards retiring at an earlier age. 

 

President Campbell referenced a question that he had received concerning the funding of District’s retirement system.  He commented that he was able to respond that the District was over 90% funded and currently addressing the Government Accounting Standards Board (GASB) 45 requirements.  He complimented staff on an excellent job funding of the retirement system. 

 

President Campbell asked if there were any public comments.  There were no public comments. 

 

MOTION:  Burgh/Wandry to a) accept the 2007 Retirement Plan Actuarial Valuation Report and recommendations; and b) authorize a decrease to the District contribution rate from 7.56% to 6.24% effective the first payroll period following January 1, 2008.  The motion carried by a unanimous voice vote.

 

9.a.       Adopt Resolution No. 07-31 authorizing execution of Amendment No. 13 to the Restated Retirement Plan Trust Agreement amending Article XXV to provide a 3.0% cost of living increase for retirees effective January 2008.

 

Mr. Bishop reported that the Retirement Committee met on November 30, 2007 and unanimously recommended a 3% cost of living increase for retirees effective January 1, 2008. 

 

President Campbell asked if there were any public comments.  There were no public comments.

 

MOTION:  Boatmun/Wandry to adopt Resolution No. 07-31 authorizing execution of Amendment No. 13 to the Restated Retirement Plan Trust Agreement amending Article XXV to provide a 3.0% cost of living increase for retirees effective January 2008.   The motion carried by a unanimous voice vote. 

 

9.b.       Resolution Honoring Assistant General Manager of Engineering Thomas J. Linville. 

 

Mr. Bishop reported that the action for the Board to consider was to authorize a resolution that would commend and thank Mr. Linville for his years of service.  He explained that this would be the last Board meeting before Mr. Linville retired.

 

MOTION:  Boatmun/Anello to adopt a resolution honoring Assistant General Manager of Engineering Thomas J. Linville.   The motion carried by a unanimous voice vote.  

 

DISCUSSION AND INFORMATION

 

10.        Review and accept the 2008 revenue requirements analysis. 

 

Mr. Bishop reported that consistent with Proposition 218 requirements, notices had been sent to ratepayers advising them of the proposed water rate, fee, and charge adjustments.  He stated that Director of Finance Brice Bledsoe would be making a presentation on the revenue requirements analysis. 

 

Mr. Bledsoe reported that the assumptions were determined using the rate assumptions approved by the Board on November 14, 2007.  The revenue analysis indicated that the untreated water revenues should be increased by 3% in 2008.  This increase was consistent with the current adopted 2008-2017 Ten-Year Capital Improvement Program (CIP).  The District was also proposing a 2.5% increase in the treated water revenues. 

 

Mr. Bledsoe reported that 2008 would begin the first year of the two-year phase in-period for adjusting the Facility Reserve Charges (FRCs).   FRCs would be adjusted to 95% of the calculated amount, which would reduce the current FRC subsidy.  Staff proposed that the untreated water FRCs be adjusted upward to $126 in 2008 and the treated water FRCs be adjusted upward by $443.  There was no proposed inflation adjustment in 2008. 

 

Mr. Bledsoe reviewed the changes compared to the 2008-2017 CIP.  In addition to the FRC adjustment, the investment earnings assumption had been increased from 4% to 5% based on recent actual results.  The FY08 consumption was slightly lower than projected.  The current analysis included $2.7 million of debt service savings from the Series O Bond refunding, which was completed in June 2007.  In addition, beginning reserve balances were $6.4 million higher than previously estimated and the 2008 inflation had been reduced from 4% to 3%.

 

Using a table, Mr. Bledsoe reviewed the untreated and treated water revenue increases.  The table showed a comparison between the 2008 rate analysis and the 2008-2017 CIP for both treated and untreated water.  Mr. Bledsoe advised that the rate analysis for untreated water was consistently 3% over the next 10 years.   He reported that for FY08 and FY09 the treated water rate would be 2.75% compared to the CIP projection of 3.0%.  He advised that this was due to the positive FY07 financial results. 

 

Mr. Bledsoe reviewed and reported on the treated water and untreated water reserves.  He advised that the Board’s Rate Policy required that the District to draw down to the established minimum level of six months of project operating expenses by the end of the end of the ten-year rate analysis. 

 

President Campbell asked when the Los Vaqueros Reservoir debt would end.  Mr. Bledsoe advised that the Los Vaqueros Reservoir debt drops off significantly in 2019. 

 

A review of the fiscal impact indicated that the revenue increases for untreated and treated water for 2008 would be approximately $2.76 million.  This equated to approximately $1.1 million for untreated water revenue and $1.7 million for treated water revenue.

 

Mr. Bledsoe reviewed the schedule and advised that a public hearing and consideration of adoption of the rates, fees and charges was scheduled for January 16.   Adopted water rate changes would be effective February 1, 2008 and FRC adjustments could become effective April 1, 2008.  

 

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

 

Director Boatmun commented on an assumption that Central Valley Project water costs would rise 7% and asked what it was based on.  Mr. Bledsoe advised that it was an historical assumption.

 

President Campbell complimented Mr. Bledsoe on the presentation.  He asked if anyone would like to comment on the item.  There were no comments.

 

President Campbell advised that the recommendation was to review and accept the 2008 revenue requirements analysis.  It was the consensus of the Board to move forward with the public hearing on January 16, 2008. 

 

REPORTS FOR DISCUSSION

 

11.        Schedule Future Meeting Dates and Times

 

Mr. Bishop reminded the Board that the Employee Holiday Luncheon would be held on December 12 at Centre Concord.  He also advised that a holiday reception would follow the December 19 Board meeting. 

 

REPORTS

 

12.        General Manager

 

Mr. Bishop advised that Mr. Linville had requested time to address the Board. 

 

Mr. Linville thanked the Board for their unwavering support during his 12 years of service with the District. He expressed his appreciation to the Board for the strong policies they had set which were very beneficial in moving the District forward.  He commented positively on the challenges he had encountered during his career with the District and thanked the Board for the opportunity to meet those challenges. 

 

President Campbell expressed his appreciation to Mr. Linville for his years of service to the District.  He also commented on the level of trust that he had with Mr. Linville and the District. 

 

Director Boatmun expressed her appreciation to Mr. Linville.  She also commented that he was very highly recognized by other agencies.  She thanked Mr. Linville for the great job he had done.

 

Director Burgh congratulated Mr. Linville on a wonderful career and the admiration he had throughout the profession.  He commended Mr. Linville on the stature he was regarded with among all of his colleagues. 

 

Vice President Anello commented on Mr. Linville’s professionalism.  She thanked him for his years of service to the District.

 

Director Wandry thanked Mr. Linville for his years of service to the District and commented that it had been a pleasure to work with him over the past few years. 

 

After Mr. Linville left the podium, Mr. Bishop advised that the congressional luncheon would be taking place on December 7 in Washington, D.C.  

 

13.        Legal Counsel

 

Mr. Nelson commented on litigation concerning the Environmental Impact Report (EIR) for the expansion of the Sacramento Regional Wastewater Treatment Plant  He advised that the court found that the EIR was deficient.   

 

14.        Board Members

 

Director Burgh advised that he would be attending the WateReuse Northern California Chapter meeting on December 7 in San Francisco.  He also advised that he would not be attending the Employee Holiday Luncheon due to being out of town. 

 

Director Boatmun commented positively on Sunne McPeak’s presentation at the Association of California Water Agencies (ACWA) Conference held November 27-30, in Indian Wells.   She also reported on a meeting that she attended addressing the Colorado River, the Delta, and federal funding, where the speaker was United States Bureau of Reclamation Commissioner Bob Johnson. 

 

Director Boatmun reported on the ACWA’s Health Benefit Authority and the possibility of considering the health progress of employees who volunteer to address wellness.  She advised that she would be attending the Employee Holiday Luncheon on December 12 and the Industrial Association meeting on the same day. 

 

Director Boatmun asked about a possible ruling concerning forbidding the use of liquid chlorine.  Mr. Bishop advised that it was not a ruling, but a risk assessment.  He explained how this had evolved through risk assessments made after 9/11.   

 

Vice President Anello advised that she would be attending Employee Holiday Luncheon on December 12.  She also advised that she would attend Sexual Harassment Prevention training on December 14.

 

Director Wandry noted that he would also be attending the Employee Holiday Luncheon.  He advised that he attended an interesting Watershed Symposium on November 15 in Walnut Creek. 

 

President Campbell reported on the ACWA 2008 Fall Conference and the discussion of a comprehensive water plan. 

 

ADJOURNMENT

 

At 7:44 p.m., President Campbell adjourned the meeting to the next regular meeting of the Board of Directors scheduled for December 19, 2007, commencing at 6:30 p.m.

 

 

 

 

                                                                                                                                                        

                                                                                                Joseph L. Campbell, President

 

 

ATTEST:

 

                                               

Sharon L. Burris

District Secretary