CONTRA COSTA WATER DISTRICT

BOARD OF DIRECTORS

REGULAR MEETING

November 19, 2008

 

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

            Directors Absent:                       Karl L. Wandry

            General Manager:                       Walter J. Bishop

            Legal Counsel:                           Robert B. Maddow

            District Secretary:                      Sharon L. Burris

 

President Campbell advised that Director Wandry was absent and that he had previously notified the Board.

 

PLEDGE OF ALLEGIANCE

 

Assistant General Manager Engineering/Construction Steve Welch led the pledge of allegiance.

 

ADOPTION OF AGENDA

 

Mr. Bishop advised that there was a change to Item No. 14 – Conference with Legal Counsel – Existing Litigation under Government Code 54956.9(b) – Diablo Water District v. CCWD (Contra Costa Superior Court – Case No. MSC08-02790).  The correct citing should have been Government Code 54956.9(a). 

 

PUBLIC COMMENT

 

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

 

CONSENT CALENDAR

 

1.         Approve the following minutes:

            a.   October 1, 2008

            b.   November 5, 2008   

2.         Approve the warrant register dated November 20, 2008.

 

3.         Adopt Resolution No. 08-33 authorizing execution of the fourth amendment of lease and      options between Contra Costa Theaters, Inc. and Contra Costa Water District for one         additional year and four additional one-year terms.

 

4.         Adopt Resolution No. 08-34 authorizing execution of an Amendment to extend until             December 31, 2010 the term of the Memorandum of Understanding among the CALFED            and Bay Area Water Agencies regarding Studies on the Expansion of Los Vaqueros        Reservoir.

 

5.         Adopt Resolution No. 08-35 amending the Code of Regulations – Chapter 3.08, Conflict of   Interest.  

 

6.         Authorize execution of a contract for collection services with Professional Recovery             Systems at a fixed fee of 16.9% on actual collections for the period of December 1, 2008     through June 30, 2010; and the option to renew the contract for two additional one-year   periods at a fixed fee of 16.9% on actual collections. 

 

7.                   Authorize execution of a two-year technical services agreement with Ironman for installation of Diesel Particulate Filters on 22 District vehicles for amounts not too exceed $200,135 in FY09 and $200,136 in FY10.

 

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

 

ACTION

 

8.                   Accept the FY08 audited financial statements.

 

Mr. Bishop reported that the District’s auditor, Tim Krisch, of Maze and Associates, had presented the financial statements to the Finance Committee on November 14.  He advised that Mr. Krisch would be also be making a presentation to the full Board. 

 

Mr. Krisch began with a brief overview of the audit for fiscal year ending June 30, 2008.  He reported on the strong financial positions of the four audits:  Contra Costa Water District (District), Contra Costa Water Authority (CCWA), the District’s Retirement Plan, and Other Post-Employment Benefits Trust (OPEB).  A memorandum on internal control and required communications was also provided.  He also reported that no material weaknesses or significant deficiencies were found in the memorandum on internal control and required communications.  The District would receive an unqualified “clean” opinion, which was the highest rating possible. 

 

Mr. Krisch reviewed and reported on the financial highlights for FY08.  Implementation of OPEB during the fiscal year indicated that the District was pro-active and taking fiduciary responsibility seriously.  The debt service requirements were also met during the fiscal year, which was a positive accomplishment for the District. 

 

Mr. Krisch reported that the CCWA and Retirement Plan audits also received unqualified “clean” opinions.  The values of the investments for the past fiscal year were dramatically different than those of the previous year.  The funding progress in the audit indicated that the Retirement Plan was extremely well funded as of June 30, 2007, which was the latest actuarial report.  He cautioned that, with the market fluctuating, the returns would most likely be less positive during the next fiscal year. 

 

Discussion took place on the five-year smoothing of gains and losses used to measure the plan’s funded ratios.

 

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

 

Director Burgh complimented staff on the clear presentation of the audited financial statements.   

 

President Campbell concurred and thanked Mr. Krisch for his presentation.   

 

MOTION:  Boatmun/Burgh to accept the FY08 audited financial statements.  The motion carried by a unanimous voice vote. 

 

DISCUSSION AND INFORMATION

 

9.                   Review and concur with the assumptions for the 2009 rate analysis.

 

Mr. Bishop reported that the rate assumptions for 2009 would be unique, the rates would be bifurcated to a one-year rate analysis.  He also advised that Director of Finance Brice Bledsoe would be making a presentation. 

 

Mr. Bledsoe reported that the rate analysis was a key component of the District’s financial planning cycle.  He reiterated that the 2009 rate analysis would focus on the coming fiscal year.  The primary focus would be on inflation adjustments and adjustments to the District’s Facility Reserve Charges (FRCs). 

 

Addressing inflation, Mr. Bledsoe reported that inflation was currently at approximately 4.6%.  The District’s 2008 rate model assumed inflation at 3%.  He stated that it was in the District’s best interest to maintain purchasing power.  As an example of unanticipated cost increases, he noted that treatment chemicals had increased 22% in one year.  Proposition 218 notices would be mailed to customers notifying them of a public hearing on the proposed rate increase in January 2009.  The notices would indicate that the Board would be considering a 4.3% maximum rate increase.  This proposed increase met the Board’s Rate Setting Policy criteria of keeping rates at or below the rate of inflation. 

 

A review of the FRC’s indicated an increase to 95% of calculated value, phased in over two years, as approved by the Board in January 2008.  The first incremental adjustment was implemented in 2008 and the second would be implemented in 2009.  He explained that not all components of the FRC were subject to inflation.  The proposed increases equated to 1% in the untreated water FRC and a 5% increase in the treated water FRC.   

 

Mr. Bledsoe reviewed the schedule.  He advised that a public hearing and Board consideration of adoption of the proposed adjustments were scheduled for January 7, 2009.  Pending Board adoption, the adjustments would become effective February 1, 2009.  FRC adjustments would become effecting April 1, 2009. 

 

Discussion took place on the District’s contract with the United States Bureau of Reclamation, water allocations and strategies in the event of a water shortage. 

 

The Board concurred with the assumptions for the 2009 rate analysis. 

 

REPORTS FOR DISCUSSION

 

10.               Schedule Future Meeting Dates and Times

 

Mr. Bishop reminded the Board that the Board Study Session would be held on November 20, at 8:15 a.m., at 2411 Bisso Lane, Concord. 

 

REPORTS

 

11.        General Manager

 

Mr. Bishop did not have a report.

 

12.        Legal Counsel

 

Mr. Maddow reported briefly on an ongoing case concerning endangered Delta smelt and salmon.  Judge Oliver Wanger had issued a new decision earlier in the day regarding the case.  He advised that he would keep the Board informed when additional information was available.  He also complimented Assistant General Manager of Water Resources Greg Gartrell and Special Projects Manager Marguerite Naillon on their recent presentations to the Board of Directors of the Dublin San Ramon Services District concerning the Los Vaqueros Reservoir Expansion Project (LVE).

 

13.               Board Members

 

Director Boatmun also complimented Ms. Naillon on her presentation to the Contra Costa Council Water Task Force on November 18 concerning the LVE.

 

Vice President Anello did not have a report.

 

Director Burgh did not have a report.

 

President Campbell complimented and thanked Director of Construction Dan Owre for coordination of the bids for the Concord Main Replacement Project. 

CLOSED SESSION

 

14.        Conference with Legal Counsel – Existing Litigation under Government Code          54956.9(a) – Diablo Water District v. CCWD (Contra Costa Superior Court – Case No. MSC08-02790)

 

15.               Conference with Legal Counsel – Consideration of Initiating Litigation as allowed under Government Code Section 54956.9(c) – one case

 

At 7:13 p.m., President Campbell announced that the Board would move into closed session.  He stated that the two matters before the Board were regarding litigation and did not require the announcement of additional attendees.  

 

RECONVENE FROM CLOSED SESSION

 

16.               Report on closed session. 

 

At 8:12 p.m., President Campbell reconvened the meeting and announced that the Board did not take any action on the matters before it.

 

ADJOURNMENT

 

At 8:13 p.m., President Campbell adjourned the meeting to an adjourned regular meeting (Board Study Session) scheduled for November 20, 2008, at 8:15 a.m., in the Delta Conference Room, 2411 Bisso Lane, Concord. 

 

 

 

                                                                                                                                                        

                                                                                                Joseph L. Campbell, President

 

ATTEST:

 

                                               

Sharon L. Burris

District Secretary