CONTRA COSTA WATER
DISTRICT
BOARD OF DIRECTORS
ADJOURNED REGULAR MEETING
December
10, 2008
MINUTES
CALL TO ORDER
President
Campbell called to order an adjourned regular meeting of the Board of Directors
of the Contra Costa Water District at 6:35 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 (arrived at 7:14 p.m.)
Acting
General Manager: Kurt G.
Ladensack
Legal
Counsel: Robert
B. Maddow
District Secretary: Sharon L. Burris
President Campbell reported that Mr.
Bishop was attending a meeting in Sacramento
and would be arriving at the Board meeting late. Assistant
General Manager of Administration Kurt Ladensack would serve as Acting General
Manager until Mr. Bishop arrived.
PLEDGE OF ALLEGIANCE
Engineering Manager Rachel Lenci led the pledge of allegiance.
ADOPTION OF AGENDA
Mr. Ladensack reported that there were
no changes to the agenda.
ORGANIZATION OF BOARD OF DIRECTORS
1. Elect President of the
Board of Directors
President Campbell explained the nomination process and noted that a
second on a nomination was not required to elect a Boardmember for the office
of Board President and Vice President.
He then opened nominations for the office of President.
Director Burgh nominated President Campbell to serve another term as
Board President.
President Campbell asked if there were any other nominations for the
office of President. There were no other
nominations. President Campbell closed
the nominations and called for the vote.
The Board voted unanimously for President Campbell to serve as President
of the Board for the next term.
2.
Elect
Vice-President of the Board of Directors
President Campbell opened the nominations for the office of Vice
President. He commented that he had not
made a Board nomination for officers since serving on the Board. He then made his first and nominated Director
Wandry for the office of Vice President, elaborating on Director Wandry’s
qualifications for the office.
President Campbell asked if there were any other nominations for the
office of Vice President. There were no
other nominations. President Campbell
closed the nominations and called for the vote.
Director Wandry was voted as Vice President by the following vote of the
Board: Ayes: Anello, Boatmun, Burgh and Campbell.
Abstain: Wandry
PUBLIC COMMENT
President Campbell asked if there were any public
comments. There were no public
comments.
CONSENT CALENDAR
3. Approve
Directors’ Services/Business and Travel Expenses
a. Future
Services – December
b. Expenses
– October/November
c. Compensation
– November
4. Approve the warrant register dated December
11, 2008.
5. Adopt Resolution No. 08-36 authorizing execution
of a 10-year license to the Stradella Court Owner’s Association for an existing
bridge crossing and parking near Contra Costa Canal Mile Post 38.63 in Walnut Creek.
6. Adopt Resolution No. 08-37 authorizing
recommendation to the United States Bureau of Reclamation to grant a recycled
waterline easement to Delta Diablo Sanitation District.
7. Adopt Resolution No. 08-38 authorizing
execution of a lease agreement with Verizon Wireless for a cell site facility at
the Old River Pumping Plant.
8. Utility Relocation Agreement and
Resolution authorizing an easement agreement with Contra Costa
County for the relocation
of District pipelines at Jones Road,
Walnut Creek
a. Authorize
execution of the Utility Relocation Agreement with Contra Costa
County; and
b. Adopt Resolution No. 08-39 authorizing
acceptance of a non-exclusive water pipeline easement from Contra Costa
County.
9. Authorization
of legal services related to arbitration of Randall-Bold Water Treatment Plant
Capacity Issues
a. Authorize a budget transfer of $175,000 from
the General Manager’s FY09 Operating Contingency to the FY09 General District
Activities Legal Services budget;
b. Authorize an amendment in the amount of $115,000
to the contract with Duane Morris LLP for legal services, for a revised total
contract amount not to exceed $265,000; and
c. Authorize payment of Contra Costa Water
District’s share of arbitrator fees estimated to be $75,000.
10. Amendment
to agreement with Thomas J. Linville for specialized technical assistance
a. Confirm
that it is in the best interest of the District to retain a former employee to
provide specialized technical assistance, in conformance with District
Regulations Chapter 3.05; and
b. Authorize an amendment in the amount of
$20,000 to the consulting services agreement with Thomas J. Linville for a
revised total amount not to exceed $50,000.
11.
Authorize execution of a technical services agreement with
Alpha Omega Wireless for enhancement to the District’s video surveillance
system for a total not to exceed $237,000.
MOTION: Boatmun/Wandry to
approve the consent calendar. The motion
carried by a unanimous voice vote.
ACTION
12. California
Department of Fish and Game operating permit for the Alternative Intake Project
a. Authorize execution of the Department of Fish
and Game (DFG) operating permit for the Alternative Intake Project (AIP),
provided that final permit terms are substantially equivalent to the terms in
the current draft permit; and
b. Approve purchase of the mitigation habitat up
to $2,000,000 required by the permit or provision of a $700,000 letter of
credit to DFG if the mitigation habitat is not available by the start of AIP
operations.
Mr. Ladensack reported that the District had received a
draft operating permit for the Alternative Intake Project (AIP) from the Department
of Fish and Game (DFG). He advised that
Water Resources Manager Leah Orloff would be making a presentation.
Ms. Orloff reported that obtaining the draft operating permit
from DFG was unique. The permit was a
comprehensive and covered all species in the Delta currently listed under the
California Endangered Species Act, including longfin smelt. Operations at Los Vaqueros (LV) Reservoir and
all District intakes were covered under the operating permit.
Ms. Orloff reviewed the three key mitigation requirements
included in the permit. The first
requirement is enhanced monitoring. The
second requirement is that the District would provide 20 acres of water tidal
habitat for smelt mitigation. The
habitat is to be acquired before the new intake operations begin. A letter of credit will be substituted if the
habitat is not available at that time.
The third requirement is an additional extension of the existing no-fill
period for up to 15 days in February.
The number of additional no-fill days required would be adjusted based
on LV Reservoir storage levels.
Director Boatmun asked for clarification on filling
requirements. Ms. Orloff explained that
if on February 1 the reservoir was at 90,000 acre-feet (af) or above, then the
District would be required to have an additional no-fill period from February
15 until the end of February. If on February
1 LV was
between 80 and 90, af the District would be required to have 10 additional days
of no-fill period. Director Boatmun
thanked Ms. Orloff for the clarification.
Ms. Orloff reviewed the fiscal impacts for the enhanced
monitoring, habitat, and the extended no-fill period. She advised that funding was included in the
FY09 and FY10 budgets.
President Campbell commented positively on the ability to receive
the draft operating permit from DFG and congratulated Ms. Orloff and staff on
the accomplishment.
President Campbell asked if there were any questions for
the presenter.
Director Boatmun asked if land preserved by the Contra
Costa County Habitat Conservation Plan could be used as part of the required
mitigation habitat. Ms. Orloff responded
no, the mitigation needed to be 20 acres of open water tidal habitat.
Director Burgh asked if the habitat would be owned by DFG
after it was purchased. Ms. Orloff
replied, yes.
President Campbell asked if there were any other questions
for the presenter. There were none.
President Campbell asked if there were any public
comments. There were no public
comments.
MOTION: Wandry/Boatmun to a) authorize execution of
the Department of Fish and Game (DFG) operating permit for the Alternative
Intake Project (AIP), provided that final permit terms are substantially
equivalent to the terms in the current draft permit; and b) approve purchase of
the mitigation habitat up to $2,000,000 required by the permit or provision of
a $700,000 letter of credit to DFG if the mitigation habitat is not available
by the start of AIP operations. The
motion carried by a unanimous voice vote.
13. Award
of Contract – Bollman Ozone Generator Purchase and Installation Agreements
a. Authorize a transfer of $1,218,000 from the Construction
Department’s FY10 Budget to the Construction Department’s FY09 Water Treatment Plant
Improvement Program Capital Budget;
b. Authorize sole source purchase of ozone
generation equipment from Ozonia in the amount of $1,004,000 with a 5% change
order authority of $50,200 for a total amount not to exceed for $1,054,200; and
c. Authorize a change order in the amount of
$241,500 (based on $230,000 plus a 5% contingency of $11,500) to the contract
with Manito Construction for the Bollman Water Treatment Plant Ozone Quenching
Project, for a revised total contract amount not to exceed $1,521,624.
President Campbell reminded the Board that Mr. Bishop had made
them aware of this item at the November 19 Board meeting. He advised that members of the Operations and
Engineering Committee were contacted about this due to the urgency of the
matter and the time constraints.
Mr. Ladensack reported that the ozone generation equipment
had become increasingly unreliable and replacement of the equipment needed to
be accelerated. He advised that Director
of Engineering/Construction Steve Welch was available for a presentation.
It was the consensus of the Board that a presentation was
not necessary.
President Campbell asked if there were any public
comments. There were no public
comments.
MOTION: Boatmun/Burgh to
a) authorize a transfer of $1,218,000 from the Construction Department’s FY10
Budget to the Construction Department’s FY09 Water Treatment Plant Improvement
Program Capital Budget; b) authorize sole source purchase of ozone generation
equipment from Ozonia in the amount of $1,004,000 with a 5% change order
authority of $50,200 for a total amount not to exceed for $1,054,200; and c)
authorize a change order in the amount of $241,500 (based on $230,000 plus a 5%
contingency of $11,500) to the contract with Manito Construction for the
Bollman Water Treatment Plant Ozone Quenching Project, for a revised total
contract amount not to exceed $1,521,624.
The motion carried by a unanimous voice vote.
14. Authorize execution of a contract with
McGuire and Hester, for the construction of the Downtown Concord Main
Replacements Project in the amount of $1,299,634, with a change order authority
of $194,945, for a total amount not to exceed $1,494,579.
Mr. Ladensack reported that the item was placed on the
action calendar due to the amount of the contract. He advised that Director of Construction Dan
Owre was available for a presentation if the Board chose to have one. It was the consensus of the Board that a
presentation was not necessary.
President Campbell commented positively on the community
outreach for the project and the information available on the District’s
website. He advised that he had received
positive feedback from Councilmembers and downtown businesses. He requested that Public Affairs Director
Patty Friesen be made aware of the feedback.
President
Campbell asked if there were any public comments. There were none.
MOTION: Boatmun/Burgh to
authorize execution of a contract with McGuire and Hester, for the construction
of the Downtown Concord Main Replacements Project in the amount of $1,299,634,
with a change order authority of $194,945, for a total amount not to exceed
$1,494,579. The motion carried by a
unanimous voice vote.
15. 2008
Retirement Plan Actuarial Valuation Report
a. Accept the 2008 Retirement Plan Actuarial
Valuation Report and recommendations; and
b. Authorize an increase to the District
contribution rate from 6.24% to 8.0% effective the first payroll period
following January 1, 2009.
Mr. Ladensack reported that the Retirement Plan Committee reviewed
the report at its meeting on December 5 and recommended it to the Board for consideration
of adoption.
He reviewed the key messages and reported that the market
value of assets declined $9.5 million during FY08. The funded ratio decreased from 98.7% to
98.1%, which was buffered by a five year smoothing of gains and losses. The actuary recommended an increase to the
employer contribution rate from 6.24% to 7.27%. Staff’s recommendation was to increase the contribution
rate to 8%, acknowledging a substantial drop in market value during FY08 and
FY09 to date. The increase was
anticipated for at least the next two years.
Early funding would moderate the need for future increases and enable
liability to be reflected in the Ten-Year Financial Plan. He reviewed the net assets from June 30, 2007
to June 30, 2008. Using a table, he outlined
the actuary’s recommended contribution rates based on the June 30, 2008
payroll.
Mr. Ladensack reviewed the funding for the Retirement Plan,
as required by the Government Accounting Standards Board Statement 25 (GASB 25)
for the last ten years and reported that the funded ratio as of July 1, 2008 was
98.1%. A review of the 2008 actuarial
value of assets reflected an $18.1 million decrease as of November 24. The decrease was primarily from the equity
portfolios.
Mr. Ladensack noted that pending Board adoption, the
increase in the District’s contribution rate would become effective with the
first payroll following January 1, 2009.
President Campbell asked if there were any public
comments. There were no public comments.
President Campbell asked if the Board had questions for the
presenter.
Responding to a question from Director Boatmun concerning
Lehman Brothers, Mr. Ladensack replied the District’s Retirement Plan did not
have any holdings with Lehman Brothers.
Director Boatmun asked what rate of return would be used
for this year. Mr. Ladensack advised
that the actuarial assumed an 8% rate of return. Director Boatmun asked Mr. Ladensack if he was
aware of any other public entities that had assumed the rate of return at less
than 8%. Mr. Ladensack advised that he
was not aware of any.
MOTION: Boatmun/Wandry to a) accept the 2008 Retirement Plan
Actuarial Valuation Report and recommendations; and b) authorize an increase to
the District contribution rate from 6.24% to 8.0% effective the first payroll
period following January 1, 2009. The
motion carried by a unanimous voice vote.
16.
Adopt Resolution No. 08-40 authorizing execution of
Amendment No. 16 to the Restated Retirement Plan Trust Agreement amending
Article XXV to provide a 2.0% cost of living increase for retirees effective January
2009.
Mr. Ladensack reported that the Board annually considers a
cost of living adjustment (COLA) for retirees.
The Retirement Plan Committee met on December 5 and unanimously
recommended Board consideration of adoption of the proposed 2% retiree
COLA.
Mr. Ladensack reported that the retiree COLA was based on
the October-October Consumer Price Index (CPI).
The October 2007 to October 2008 CPI reflected a 3.8% increase. He advised that the market value of plan
assets had declined substantially and there was a negative outlook for
2009. He reviewed the retiree COLA rate
adjustments since 1993 and advised that the Board had approved COLAs for
retirees at approximately 43% compared to a cumulative CPI of 48.2%. The District had funded approximately 90% of
the CPI by COLA adjustments for retirees over the fifteen-year period.
President Campbell asked if there were any questions for
the presenter. There were no questions.
He then asked if there were any public comments. There were no public comments.
MOTION: Burgh/Boatmun to
adopt Resolution No. 08-40 authorizing execution of Amendment No. 16 to the
Restated Retirement Plan Trust Agreement amending Article XXV to provide a 2.0%
cost of living increase for retirees effective January 2009. The motion carried by a unanimous voice
vote.
DISCUSSION AND INFORMATION
17.
Review and accept the 2009 revenue requirements analysis.
Mr. Ladensack reported that Director of Finance Brice
Bledsoe would be making a presentation on the 2009 revenue assumptions.
Mr. Bledsoe reported that the revenue requirements
were determined using the rate assumptions accepted by the Board at their
meeting on November 19. He reminded the
Board that the 2009 revenue requirements would focus on only one year due to
the economic climate and the pending drought.
Mr. Bledsoe reviewed the key assumptions for 2009 and
reported that the inflation adjustment for the rate analysis period was based
on the August-August CPI. During this
period inflation was 4.6%. It was important
for the Board to consider annual inflation adjustments for the District to
maintain purchasing power. He provided
an example of unanticipated cost increases by noting that water treatment
chemical costs had increased 22% in one year.
The proposed rate increase for treated and untreated water was
4.3%.
Mr. Bledsoe reviewed the proposed treated and
untreated water Facility Reserve Charge (FRC) increases. He referenced the Board’s decision to
increase the FRC to 95% of the calculated value in January 2008 to reduce FRC
subsidy. The two-year phasing period
reflected a $126 increase in 2008 and 2009 for untreated water FRCs. Treated water FRCs increased by $443 in 2008
and 2009. The proposed increase to the untreated water
FRC was 1%. A 5% increase in treated
water FRCs was proposed. The inequity
was because not all components of FRCs are subject to inflation.
Mr. Bledsoe reviewed the fiscal impacts for treated and
untreated water revenues. Applying a
4.3% increase to treated and untreated water rates would generate approximately
$4.24 million in annual revenue. He
advised that a public hearing was scheduled for January 7 for Board
consideration of adoption of the rates, fees and charges. Pending Board adoption, the changes for
treated and untreated water would take effect on February 1, 2009. FRC adjustments would take effect on April 1,
2009.
President Campbell commented that he had received one
letter from the public and that it would be read into the record at the public
hearing.
President Campbell asked if there were questions for
the presenter. There were no
questions. He asked if anyone in the
public would like to comment. There were
no public comments.
President Campbell advised that the recommendation
was to review and comment on the item and due to the silence of the Board, he
advised staff to bring the item back to the Board for consideration at the
meeting on January 7, 2009.
REPORTS FOR DISCUSSION
18. Committee Report(s)
a. Bay
Area Water Forum Post Meeting Report (11/24/08)
President Campbell asked
if there were any comments on the committee report. Director Burgh commented positively on a grey
water presentation at the meeting.
19. Schedule Future Meeting Dates
and Times
Mr.
Ladensack reminded the Board that the Employee Holiday Luncheon would be held
on December 18, at Concord Centre.
REPORTS
20. General
Manager
Mr. Bishop joined the meeting and commented that the three re-elected
Boardmembers had taken the oath of office for their new terms. He congratulated them and welcomed them back
to the Board.
Mr. Bishop reported that he had just returned from a
meeting with the Executive Director of Department of Water Resources Lester
Snow and U.S. Bureau of Reclamation Commissioner Don Glaser concerning the Los
Vaqueros Expansion Project’s Environmental Impact Report.
21.
Legal Counsel
Mr. Maddow did not have a report.
22. Board Members
Director Burgh reported that he would be out of town
beginning December 18 and that he would not be able to attend the Employee Holiday
Luncheon. He also reported on the Association
of California Water Agencies (ACWA) Conference held December 2-5 in Long Beach. He commended President Campbell for his
participation on the panel discussion for the Statewide Issue Forum “The Peripheral
Canal: A Changed Debate or Same Old-Same
Old?” He congratulated Mr. Bishop on
receiving the Cleary Award from the American
Academy of Environmental
Engineers.
Director Boatmun commented that the ACWA Conference was very
informative. She also reported that she
attended the Contra Costa Council luncheon for Assemblyman Tom Torlakson
earlier in the day, where one of the topics of discussion was the state
budget.
Director Anello reported that she would be attending the
Employee Holiday Luncheon on December 18.
Vice President Wandry thanked President Campbell for his
earlier comment concerning his nomination for Vice President and the Board for
supporting his nomination. He also congratulated
Mr. Bishop on receiving the Cleary Award.
President Campbell reported that he attended the Concord
City Council meeting on December 8, where reorganization of the Council took
place. He commented on the ACWA
Conference and noted that he enjoyed participating in the panel
discussion. He also commented that one
of the highlights of the conference was Rachel Maddow, the speaker for the
general session and luncheon held on December 3.
CLOSED SESSION
22.
Conference
with Legal Counsel – Consideration of Initiating Litigation – Government Code
Section 59456.9(c) – one case
At 7:30 p.m.,
President Campbell announced that the Board would move into closed
session. There was one matter before the
Board regarding litigation and did not require the announcement of additional
attendees.
RECONVENE FROM CLOSED SESSION
23.
Report
on closed session.
At 7:40 p.m.,
President Campbell reconvened the meeting and announced that the Board did not take
any action on the matter before it.
ADJOURNMENT
At 7:41
p.m., President Campbell adjourned the meeting to the next regular meeting of
the Board of Directors scheduled for December 17, at 6:30 p.m.
Joseph
L. Campbell, President
ATTEST:
Sharon L. Burris
District Secretary
