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BOARD MEETING MINUTES

REGULAR MEETING
Saturday, May 18, 2013

A.    CALL TO ORDER/ROLL CALL

President Jim Zell called the Regular meeting of the Board of Directors of the Stinson Beach County Water District to order on Saturday, May 18, 2013, at 9:30 a.m., at the Stinson Beach County Water District office, located at 3785 Shoreline Highway, Stinson Beach, CA 94970.

Directors present:
Jim Zell, President
Barbara Boucke, Vice President
Lawrence Baskin, Director
Sandra Cross, Director
Morey Nelsen, Director

Treasurer absent:
Judy Stemen

General Manager present:
Ed Schmidt

Staff present:
Helma Schwendig - Administrative Assistant

B.    PUBLIC EXPRESSION

None.

C.    SETTING OF AGENDA

The agenda was unanimously adopted as set.

D.    PUBLIC HEARING

  1. Discussion and possible direction to staff to adopt the SBCWD Operations and Maintenance Budget for Fiscal Year 2013-2014 and SBCWD Capital Improvement Budget through Fiscal Year 2016/17.
    The General Manager stated that no significant changes are anticipated for next year's Operations and Maintenance Budget. No action on the budget can be taken at this meeting. The topic will be continued to the June 15 Board meeting for final discussion and approval.

    Total water revenue is estimated to go down slightly due to customers increasing their water conservation efforts. Employee expenses are estimated to increase by $30,000 based on increased health insurance premiums, PERS retirement, life insurance and Medicare, including an average 2% salary increase for staff. Board related costs are estimated to be down by $25,000 due to lower expected legal costs. Miscellaneous operating costs are estimated to be higher by approximately $11,000 due to higher electric bills, liability and property insurance, permit fees and treatment chemicals.
  2. Discussion and possible direction to staff re: a Draft Resolution Establishing an Employee Benefit Program for the Fiscal Year 2013 - 2014.
    The General Manager stated that no changes were made to the employee benefit program for fiscal year 2013-2014 as recommended by the Personnel and Finance Committees. The approval of the draft resolution will be continued to the June 15 Board meeting. The General Manager prepared a fairly detailed performance evaluation of each employee. Some of the employees are much lower than others in salary ranges, giving him more leeway in recommending salary increases.

    Director Cross inquired as to the status of the Employee Operations Manuals. The manuals are a work in progress and will take the employees several more months to complete.

E.    GENERAL BUSINESS

  1. Discussion and possible direction to staff re: a Proposal from The Weist Law Firm to refinance our outstanding long term tax-exempt debt obligation.
    The General Manager gave a brief background history of the refinancing proposal. He had first been contacted several months ago by Lloyd Hegenland, an attorney with The Weist Law Firm in Scotts Valley, CA regarding the possible refinancing of the District's 1998A and 1998B Revenue Bonds.

    At the April 10, 2013 Finance Committee meeting, attorney Cameron Weist participated by telephone to discuss his proposal to refinance the District's three outstanding long term tax- exempt debt obligations. It would be a Private Placement transaction by Southwest Securities, costing the District no more than $65,000. The District would save approximately $20,000 each year for the next 19 years. The proposal was discussed again at the May 8, 2013 Finance Committee meeting. The General Manager made several calls to water districts listed as references. These water districts stated that they were pleased with the results of the work performed by The Weist Law Firm and that it followed through on everything promised.

    The three revenue bonds are: (1) Series 1998A, outstanding principal balance $605,000, 5.30%, maturing October 1, 2021; (2) Series 1998B, outstanding principal balance $430,000, 5.125%, maturing October 1, 2028; and (3) Series 2002C, outstanding principal balance $1,085,000, 4.50%, maturing October 1, 2032.

    The yield projected for the Refunding Bonds is expected to be approximately 3.35%.

    The General Manager introduced Cameron Weist, who took several questions from the Board. Director Cross expressed concern about the phrase at the top of page 3, Agreement for Bond Counsel Services: "Bond Counsel's services do not include representation of the District.......in any litigation or other legal or administrative proceedings......." Perhaps the District's attorney should review these provisions. Mr. Weist responded that it is his standard, boiler plate language and he has an Error and Omission insurance policy.

    Director Cross inquired about the California Blue Sky Law [a state law that regulates the offering and sale of securities to protect the public from fraud]. Mr. Weist responded the Blue Sky Law did not apply in this situation.

    Director Baskin made two motions: (1) to approve Resolution No. _____[subsequently renumbered as No. GB-2013-03] to authorize commencement of proceeding in connection with the execution and delivery of the three refunding obligations, and (2) to direct the General Manager to engage The Weist Law Firm as bond counsel. Vice President Boucke seconded the motions. The motions passed unanimously.

    A Special Board of Directors Meeting will be held on Wednesday, May 29, 2013, at 5:00 p.m. to finalize the required documents. Mr. Weist will attend the meeting. He does not know at this time which bank will purchase the bonds, perhaps the Spanish Bank BVA.
  2. Discussion and possible direction to staff re: Government Accounting Standards Board (GASB) Statement 45 Rule.
    GASB Statement 45 requires the Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions on an accrual basis. This future liability is shown on the District's Annual Audited Financial Statements. The District's annual cost is about $17,000. Dennis Daugherty of the Nicolay Consulting Group prepared the draft Actuarial Valuation of the Stinson Beach County Water District Postemployment Medical Benefits as of July 1, 2012, using a 5% discount rate.

    Director Baskin moved to adopt the draft actuarial valuation and direct Maze & Associates to note the liability in the District's future Financial Statements. Director Cross seconded the motion. The motion passed unanimously.
  3. Water Budget for Village Green I and II.
    Richard Reasoner is assisting the District by preparing new water budgets for Village Green I and II and the School. The budgets were not ready to present at today's meeting.
  4. Discussion and possible direction to staff to initiate a logo design contest among Stinson Beach County Water District (SBCWD) customers for the design of a SBCWD logo.
    At the Water Operations Committee meeting on Wednesday, April 24, the committee decided to recommend a contest to choose a logo for the District vehicles, which would also be on the District website and District letterhead.

    After much back and forth discussion by the Board, it was decided to pursue Director Nelsen's suggestion that the egret logo shown on the0 address portion of the Water Quality/ Consumer Confidence Report might be a suitable candidate for the District's logo. Director Nelsen will prepare a sample logo, perhaps modifying its format somewhat.
  5. Discussion and possible revision of the District's Policy for Water Use Charge Reductions.
    The General Manager briefly described the background of the two different versions of draft Resolution No. GB-2013 ____ [subsequently renumbered as No. GB-2013-04], A Resolution Amending Resolution No. GB-2012-01 Establishing Policy for Water Use Charge Reductions. The versions which come before the Board today are labeled "Attachment A and Attachment B."

    At the Saturday, February 16, 2013, Board meeting, Director Nelsen had presented a proposed resolution to revise portions of the District's Water Use Charge/Leak Reduction policy, as he felt the current policy was subjective and punitive to the rate payers. The matter, including its impact on District revenue, was subsequently discussed at the Water Operations Committee Meeting on March 6 and the Finance Committee Meeting on March 13. At the Saturday, April 20, 2013, Board meeting, Director Baskin recommended retaining parts of the existing Resolution GB-2012-01 which spelled out circumstances within the customer's reasonable control. However, the Board tabled the matter for further discussion at the next Water Operations Committee Meeting on April 24, 2013.

    After discussion at the April 24, 2013 Water Operations Committee Meeting, Director Baskin proposed a redline version of the draft resolution which restored the language relating to the customer's reasonable control and added the words "per property" to paragraph No. 4. (Attachment A version).

    Discussion after the Wednesday, May 8, Finance Committee meeting (Directors Boucke/Nelsen), resulted in two modifications to Mr. Baskin's proposal. Their version would remove the following words from paragraph 1: "failure to turn off water supplies or provide for regular observation of the water system in the event of vacation or other absence" and the following words from paragraph 2: "failure to turn off water supplies or provide for regular observation of the water system in the event of vacation or other absence." (Attachment B version).

    At today's meeting, Director Nelsen distributed his original proposal to the Board, which he labeled "Exhibit C."

    Director Baskin stated that the complete language in Attachment A must remain, including "failure to turn off water supplies or provide for regular observation of the water system in the event of vacation or other absence." This phrase must be used as one of the determining factors of whether or not the loss was within the customer's reasonable control.

    At the conclusion of much back and forth discussion by the Board, Director Baskin made a motion to adopt the resolution language of the Attachment A version. President Zell seconded the motion. The motion passed 4-1, with Vice President Boucke voting "Nay." Ms. Boucke requested the revised leak reduction policy be mailed to customers in the next billing cycle.
  6. Discussion and possible direction to staff re: the 2012 Water Quality/Consumer Confidence Report.
    The Consumer Confidence Report (CCR) is the District's annual water quality report to its customers. It is an E.P.A. requirement to provide information on water sources and quality to customers of all water systems in the country that serve 25 people or more. Thanks to the District's diligent field staff, there are no water quality violations to report. Vice President Boucke suggested showing the District's physical address [3785 Shoreline Highway] as part of the District's return address. The Board directed staff to submit the report to the California Department of Public Health and distribute the report to its customers by July 1

F.    APPROVAL OF MINUTES

Director Nelsen moved to approve the Minutes of April 20, 2013. Director Baskin seconded the motion. The minutes were approved unanimously.

G.    APPROVAL OF DISBURSEMENTS

Director Nelsen moved to approve the disbursements of April 10 and April 24, 2013. Director Baskin seconded the motion. The disbursements were approved unanimously.

H.    FINANCIAL STATEMENTS

The Board reviewed the Operating Report for March 2013, the Balance Sheet Summary for March 2013 and the Cash Flow Report for Fiscal Year 2012 - 2013. The reports had previously been reviewed by the Finance Committee on May 8, 2013.

I.    MANAGER'S REPORT

The General Manager discussed his monthly report. The Total Trihalomethane (TTHMs) sample results have been received for the Steep Ravine Tank and sent to Peter Fiske of the Pax Corporation. The results are substantially below the maximum contaminant level.

The General Manager distributed to the Board photos of the Highlands #1 Tank Anchor Project, showing the rocks encountered by the auger when drilling the holes for the anchor rods. The subcontractor had blamed his broken drill bit on ground conditions. However, his claim was denied, as he should have used bolts to secure the drill bit.

Rich Souza, the District's Wastewater Engineer, is drafting proposed regulations for the possible installation of gray water systems in the District.

The Wastewater Committee has completed its annual review of Title IV, the District's Onsite Wastewater Management Code. No plans or applications have been received for the Chevalier property. President Zell requested that the GGNRA's plans for a new septic system be discussed at the next Wastewater Committee meeting.

Letters will be mailed to customers drawing water from creek flows. Vice President Boucke suggested attaching the graph showing the average flow rate of Fitzhenry Creek.

J.    COMMITTEE REPORTS

Director Nelsen reported that he attended a mosquito control meeting. The County placed chemicals in the septic tank at the library, which appears to have cured the mosquito problem at this site.

K.    CORRESPONDENCE

None.

L.    CLOSED DOOR SESSION

The motion to adjourn the meeting to Closed Session pursuant to California Government Code section 54957, Public Employee Performance Evaluation, Title: General Manager, was approved by unanimous vote at 11:40 a.m.

M.    OPEN DOOR SESSION

Returned to Open Door Session at 11:44 a.m. regarding Consideration of Amendment to Agreement with General Manager for Possible Modification to Salary and/or Benefits. The Board presented the General Manager with his performance appraisal and renewed his contract for another year, increasing his annual salary to $152,000 effective July 1, 2013 and retaining all benefits.

N.    ADJOURNMENT

The motion to adjourn the meeting was approved by unanimous vote. The meeting was adjourned at 11:46 a.m.

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