April 29, 1998
7:30 p.m.
The Board of Directors of the San Benito County Water District convened in
regular session. All members of the Board were present together with District
Manager,
a. PLEDGE OF ALLEGIANCE:
President Swanson asked all to stand and recite the Pledge of Allegiance to the flag.
b. APPROVAL OF THE AGENDA:
Upon motion duly made, seconded and carried, approved the agenda as presented.
c. PUBLIC INPUT:
There was no public input at this time.
President Swanson stated that staff had incorporated a consent agenda and explained that unless discussion on an item was requested by any Board member, the consent agenda items could all be approved in one motion. He further explained that if there was discussion to be had, the Board member could request that the particular item be pulled from the consent agenda.
1.
APPROVAL OF MINUTES FOR
Upon motion duly
made, seconded and carried, approved the minutes for
2. ALLOWANCE OF CLAIMS:
Upon motion duly made, seconded and carried, approved the claims as presented.
3. CONSIDER RESOLUTION ESTABLISHING PERCOLATION POLICY FOR
1998/99 WATER CONTRACT YEAR:
Upon motion duly made, seconded and carried, adopted Resolution No. 98-7 and authorized the President to sign.
4. AUTHORIZE MANAGER TO EXECUTE WATER EXCHANGE AGREEMENT
BETWEEN SAN BENITO COUNTY WATER DISTRICT AND SANTA CLARA
VALLEY WATER DISTRICT:
Upon motion duly made, seconded and carried, authorized the Manager to execute the water exchange agreement with Santa Clara Valley Water District.
5. INVESTMENT COMMITTEE - 1ST QUARTER REPORT:
Director Buzzetta asked that item #5 be pulled from the consent agenda and considered with item #11.
Upon motion duly made, seconded and carried, pulled item #5 from the consent agenda and moved it to be considered with item #11.
6. CONSIDER ACCEPTANCE OF 1996/97 AUDIT:
Manager Gregg stated that the audit and recommendations and findings had been presented to the Audit & Budget Committee and the matter was being forwarded to the Board with the committee’s recommendation for acceptance. He noted that Mr. Grace was there to present the general findings and respond to questions.
Mr. Grace stated that he had met with District staff on April 16, 1998 to review the audit report and management letter. He added that the District had responded to comments in the management letter and the District was making strides to improve the internal accounting controls.
Upon motion duly made, seconded and carried, accepted the 1996/97 Audit report.
7. FLOOD CONTROL AND DRAINAGE:
President Swanson indicated that he and Director Perry had met with County
Supervisors Rodrigues and Scagliotti. He stated that there was good discussion
and that much of the focus was the current project in
Director Perry indicated that the County had expressed concern with a grading ordinance to be discussed in conjunction with the flood control and drainage issue. He stated that the county had requested that the District study it and come back to them with something that they think might work. He requested that the President form a committee along with the District Manager to come up with the issues to get back to the County with. He proposed that they respond to both the grading ordinance and the flood control at the same time.
President Swanson expressed concern with the grading ordinance with respect to the leveling of orchard ground being converted to row crop.
Manager Gregg stated that the meeting on the 13th or 14th would be to present the idea of the general project to the County Board of Supervisors committee and discuss with them the possibility and practicality of using certain county powers and authorities to create the funding mechanism for the project. He stated that a cooperative agreement would be presented for discussion at that time and then title and full responsibility would be turned over to the District as soon as construction was complete. He stated that it would be a vehicle to use more efficient powers that the county had and the District did not, to manage the funding. He indicated that a full report would be taken to the District Board at the May meeting.
Director Rupert asked if there was a report.
Manager Gregg stated that there would not be a report in a final form until they had identified a funding mechanism. He added that he could make a work in progress report.
President Swanson asked for an outline form of what had been done to date.
Manager Gregg stated that he could put that in his manager’s letter on the next Friday. He added that the challenge was to create areas that are not exempt.
President Swanson stated that Director Perry and himself were already on the committee. He added that if they were specifically talking about the San Juan Valley, Directors Perry and Gonzales needed to meet. He stated that either Director Gonzales or himself would go with Director Perry to the meeting.
8. CONSIDER DISTRICT POSITION REGARDING AB 1986, PAJARO RIVER
WATERSHED FLOOD PREVENTION AUTHORITY:
Manager Gregg explained the aspects of AB 1986. He spoke of the following two major issues that he looked at; should the state legislature dictate the form and membership of a joint powers authority, including San Benito County agencies without the formal consent of those agencies or the voters in San Benito County and should the state impose a joint powers authority that has as its purpose, optimizing certain environmental resources. He stated that the only substantive justification for this piece of legislation was that that there was nothing in evidence to demonstrate cooperation between the four counties or their agencies to solve flooding in Watsonville and Pajaro. He recommended that the Board oppose the piece of legislation and in fact oppose it actively and authorize staff and legal counsel to prepare letters for the President and Vice-President signature, to the state senator, assembly persons and appropriations committee, stating opposition. He further recommended if they would so direct, stating a willingness to sit down directly or in a facilitated or mediated meetings to define what the issues are that need cooperation and see if there aren’t opportunities to do that. He noted that the City of Hollister and County of San Benito had both taken positions of opposing the legislation.
Counsel Pipal stated that there was rumor that the bill would be heard this week but the rumor turned out to be not true and would perhaps be sometime the next week. He added that in some ways if the legislation was worded and set up properly it could in some instances be beneficial to this county from a financing standpoint because the District did not have financing in place in the District Act and therefore could be beneficial in that respect.
Upon motion duly made, seconded and carried, adopted a resolution in opposition of AB 1986 based upon the findings set forth in John Gregg’s policy statement.
Director Rupert expressed that he was pleased that the City of Hollister and the County of San Benito had opposed the ill conceived piece of legislation and it was incumbent upon the District to do the same.
President Swanson asked that the resolution be faxed to all board members after it was signed.
9. CONSIDER RESOLUTION ACCEPTING THE GROUNDWATER MANAGEMENT
PLAN FOR THE SAN BENITO COUNTY PORTION OF THE GILROY-HOLLISTER
GROUNDWATER BASIN:
Manager Gregg explained the resolution was to accept the plan and the recommended actions as actions appropriate to groundwater management in this county and basic support.
Director Perry stated that it was a real good effort and very beneficial to San Benito County to have it in place. He highly recommended acceptance of it.
Director Gonzales commented that it was a tool and a good start in the right direction.
Director Buzzetta expressed concern with the idea of it creating a super imposed association that they would have to fund and in turn undisclosed fees, adding that it was a good idea, but further expressed concern on how it would be done.
Manager Gregg stated that the intent was that the organization is not the implementing agency but rather an oversight group and may implement some public information or some other joint activities. He stated that it would not have public agency powers and was powerless.
Director Gonzales stated that originally it was an advisory group.
Manager Gregg stated that the intent was that it was not a joint powers authority by which implementation would occur.
Director Buzzetta read from the section of the plan regarding powers.
Manager Gregg stated that they could certainly look at the words more carefully.
Director Perry stated that the bottom line was that there was no in it.
Counsel Pipal advised that 2a on page 1 of the agreement needed to be changed as that was not a power of the organization as he understood it.
Manager Gregg stated that it was not intended to implement projects.
Counsel Pipal restated that it needed to be changed because it did indicate that the organization would have the power to implement water resources management actions identified in the plan.
Manager Gregg stated that they knew it needed more work and that it was there for discussion. He added that they were not approving the agreement at that time. He noted that there was a provision in the draft agreement that indicates that no member is obligated to pay anything for studies or projects, except that the member agrees. He added that basically anything other than operating expenses, every member has the opportunity not to pay its share.
Director Rupert concurred that if you read it literally, the language in the agreement needed to be softened
Manager Gregg stated that he would do that.
Director Buzzetta asked if there was a way to accept the plan without the plan implementation chapter.
Manager Gregg stated that the plan implementation chapter was the heart of it, so if that was on the table there was no sense in endorsing the rest of it. He suggested that on the last line of the last paragraph of the resolution that they remove the words refine and implement and substitute them with provide oversight and interagency coordination of the.
Upon motion duly made, seconded and carried, adopted Resolution No. 98-8 with the change as stated by Manager Gregg, and authorized the President to sign.
Director Rupert stated that he did not want to portray, in any way, that he was against the plan. He added that he was not completely 100% behind as he had concerns as did Director Buzzetta.
Jim Perrine, City of Hollister, reported that the Council of the City of Hollister looked forward to working with the establishment as the way it is outlined and were set to adopt a resolution of support at their next meeting.
10. CENTRAL VALLEY PROJECT (CVP) DEFECIT PAYMENTS:
Manager Gregg explained that with the passage of certain congressional acts in the late 1980’s, early 1990’s, Central Valley Project rate making was reduced to a contractor or a contract service area accounting basis. He stated that the concept of deficits and interest on those deficits was introduced, with interest being at a weighted U.S. Treasury borrowing rate. He stated that the contractor accounts were dynamic from the standpoint that the cost allocations are related to how different members, or contractors, have participated in the Central Valley Project and how much water they use. Manager Gregg indicated that there have been a number of issues about to what extent a particular contractor was benefiting before they were able to take full delivery of their water, any number of individual contractor issues. He noted that the Bureau has been going back reviewing those accounts, back to approximately 1967, under the current rate policy. He explained that there were two adjustments of substance. Manager Gregg stated that the deficit as determined for federal fiscal year 1992 and 1993, were the amounts shown on the worksheet, approximately $4,790 and $76, 520. He stated that they had the opportunity to pay those, and the check would have to be out by Friday, and those payments would be credited as having occurred in 1992 and 1993, so no interest would accumulate on those funds. He noted that they would be paying those dollars in the remainder of this fiscal year or the beginning of the next fiscal year as it had been board policy to pay those down. He stated that by paying now the district would save $4,000 to $5,000 in interest. He recommended that the Board authorized payment in the amount of $81,310.90 toward the M & I deficit which would result in a smaller obligation later in 1999.
President Swanson asked what would happen for 1994 through 1998.
Manager Gregg stated that in this batch there was no material adjustment in those years.
President Swanson asked if that meant there wasn’t going to be one.
Manager Gregg replied that it did not because the books were not closed.
President Swanson expressed concern with the fact that they came in after the fact and assessed the costs and the district was unable to recoup those costs during that time period. He asked how they could justify that.
Manager Gregg stated that for their purposes it was a part of accounting that they were authorized to do and it was a part of reviews, as a result of organizations such as the district and the San Luis Delta Mendota Authority, who want more detailed accounting. He stated that they were doing the accounting and these were the results. He noted that the Bureau was free to put the charges on the account and charge the treasury rate of 1992, which was about 8%. He stated that they were doing what they were authorized to do by Congress and the rate policy. He added that the district could always go back and seek an explanation or challenge the costs.
Upon motion duly made, seconded and carried, authorized payment toward the M & I deficit in the amount of $81,310.90.
11. COMMITTEE REPORTS:
Director Buzzetta referred to the summary he had submitted, which listed items
discussed and concerns. He also referred to agenda item #5 and stated that they were still looking into the compliance issue. He proceeded to go through his summary sheet.
Director Gonzales stated that staff had looked into what other agencies, such as Monterey County, Santa Clara County and San Benito County, were doing and their returns. He indicated that other agencies were averaging a return between 5.2% and 5.8% and the district was averaging 5.6%. He felt they were doing about as good as they could get and perhaps they could do a little better.
Upon motion duly made, seconded and carried, moved to accept the Investment Committee report with the deletion of the second paragraph.
12. DISTRICT MANAGER/ENGINEER’S REPORT:
* Administrative Services Officer left the meeting after item #9 due to illness. A tape recording was not made for items marked with the asterisk.
The vote of each member of the Board on preceding matters was as follows, unless otherwise stated:
AYES: DIRECTORS: Rupert, Gonzales, Buzzetta, Perry, Swanson
NOES: DIRECTORS: None
ABSENT: DIRECTORS: None
The Board adjourned to a regular meeting on May 27, 1998 at 7:30 p.m., 30 Mansfield Road, Hollister, California.
__________________________________________
Robert M. Swanson, President
ATTEST:________________________________________________
Denise R. Thome, Administrative Services Officer