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HomeMy WebLinkAbout1987-06-15 Min - Board �^ REGULAR MEETING June 15, 1987 The regular meeting of the Board of Directors of the Truckee Donner Public Utility District was called to order by President Corbett at 7:02 P.M. in the Tahoe Truckee Unified School District Board Room. ROLL CALL: Directors Cooley, Maass, Sutton and Corbett were present. EMPLOYEES PRESENT: Debi Black, Tom. Buckhouse, Paul Colburn, Peter Holzmeister and Susan Macdonald. CONSULTANTS PRESENT: Architect Dale Cox, Consulting Engineers Haling and Sauers, and Counsel Jim Porter. OTHERS PRESENT: Among those present in the audience were Joseph R. Aguera, Richard Curran, Dan Horman, Bill Austin and C. R. VanLand Ingham. DISCUSSION AND POSSIBLE APPOINTMENT RELATIVE TO THE FILLING OF THE BOARD VACANCY CREATED BY THE RESIGNATION OF DIRECTOR JAMES HAMILTON Director Maass moved that discussion and possible appointment to fill the vacancy on the Board be taken off the table and placed for discussion; seconded by Director Sutton, All Directors, aye, by voice vote. SO MOVED. Counsel Porter noted that , technically, the Board has waived its deadline for submitting applications to fill the vacancy when they interviewed the candidate who filed after the date established. Notice of the vacancy was posted in three locations within the District in compliance with the Government Code. It was noted that one applicant , Ron White, has withdrawn his letter of interest in sitting on the Board, and the Directors expressed their regret. Director Maass stated he is in favor of appointing Joe Aguera because of his standing in the community, length of time in the area and experience on the Fire District Board, - He also mentioned his good showing in the election for City Cojincil members. He said he thinks he will make an excellent Director and thereafter moved that Joseph Aguera be appointed to fill the vacancy on the Board created by James Hamilton's resignation (Resolution No. 8727) . The motion was seconded by Director Cooley. Director Sutton noted that the Board was pleased with all the applicants. She said she thinks any one of thew could fill the seat; the Board agreed. ROLL CALL: all Directors, aye. SO RESOLVED, Mr. Holzmeister administered the Oath of Office to Joseph Aguera. Counsel Porter noted his opinion that it would be inappropriate for Mr. Aguera to take part in any decisions antil the Oath had been properly filed with the County Clerk, and it was ag re,--j-1 .:--hat he would not vote on any matter until such time. APPROVAL OF mIN©TES Director Maass moved, and Director Cooley seconded, that the minutes of May -Z- �..., 18, 1987 be approved as presented. Aguera abstained, all other Directors, aye , by voice vote. SO MOVED. Director Sutton requested several changes in the draft minutes of June I , 1987. 1) That "substitute" in 'substitute Counsel Jim Porter" be eliminated since it is the firm that represents the District, not any particular attorney associated with the firm. 2) That "The Board agreed and it was SO MOVED by consensus" on page 3 be changed to, "The Board agreed by consensus." 3) That the typographical error noted under discussion of the Statement of General Fund on page 3 be explained. 4) That discussion concerning certificates of deposit over $100,000, which exceed the FDIC limit at Truckee River Bank, be included on page 3. Consideration was put over to the next meeting in order that a second draft may be prepared. BILLS FOR APPROVAL Director Maass moved, and Director Cooley seconded, that the bills presented for consideration be approved for payment. Aguera abstained, all other Directors, aye , by voice vote. SO MOVED, Director Sutton requested that the Board be copied with the annual trust report for the defined benefit plan for which Wayne Richardson Company charged $2,030. She also asked whether, since the Board members are the fiduciaries on the plan, they should place the matter on an agenda and formally accept the report. The Manager indicated he would provide copies to the Directors. MANAGER'S REPORT - DISCUSSION AND POSSIBLE DIRECTION Water quality Manager Holzmeister referred to Ms. Black's memorandum which provided a summary on bacteriological water quality and historical data within the District system for the past eleven months. The last week of May a single tube from the sample taken at Sierra Meadows Booster went positive in the presumptive state of the test; it did not confirm. Normally, any tubes which go positive are cultured to identify the organism. Due to an oversight at the laboratory, this did not occur. Director Sutton stated she is concerned that the laboratory didn't handle the test the way they were supposed to, and Ms. Black noted that she spoke with the laboratory director and has been assured that all laboratory personnel will be reminded of the standing orders by the District regarding any positive tubes. Also, she has asked the water crew to resample the location. FzffA indenture conflict Three weeks ago, Mr. Holzmeister reported, he spoke with Sam Sperry (Bond Counsel) regarding the resolution he is revising to solve the District's conflict with the two Farmers Home Administration loan indentures. He offered to come to Truckee on June 15 and 16 and sit in the office until the resolution is ready. Mr. Holzmeister advised him that FmHA has offered -2- 100", the opportunity for the PUD to purchase the loan at a discount. If the Board does so, the FmHA indenture problem will be solved. This matter appears later on the agenda for discussion. Status of Beck authorization regarding SPPCo On November 3, 1987 the Board authorized R. W. Beck and Associates to assist in negotiating a contract with Sierra Pacific. Mr. Holzmeister noted he thinks he simply needs to clarify the matter with Beck, and that no action on the part of the Board is necessary. Building permit fees At the last Board meeting the question was raised as to whether the PUD should have paid various fees to the County for the new building. Counsel Porter advised that tEie sine of $23,000 paid to the County is outrageous , but appropriate and in accordance with the County ordinance and Government Code. He said the County may change the amount of the fees as long as those paid by public agencies do not exceed those paid by private agencies. In Nevada County, there is no distinction between fees paid by private and public agencies. He said County authority to charge fees does not extend to building of transmission, distribution or storage facilities. Director Sutton stated that Section 19132.9 of the Health and Safety Code exempts certain districts from paying fees , and indicated she thought the PUD may f_�t into this category. Counsel said that County Counsel disagrees; he says the Health and Safety Code simply limits the County's authority to amend and modify the rules. Note was wade that the telemetry equipment for the water distribution system is housed in the new complex, and Counsel agreed that this may change the County's opinion. The Board directed him to research the matter further. District investments Director Cooley questioned how, why and where the District's surplus funds are invested. The Manager advised that these funds are, for the most part, deposited in the Local Agency Investment Fund which is operated by the State Treasurer. It was set up as a way for small districts to pool money and be able to take advantage of interest earned by larger investments. He will request a report from the LAIF as to where the funds are invested and provide it to the Board. PUBLIC INPUT There was no public input. COMSPONDENCB SP1UD/SPPCo intertie Note was made of the letter .from Tom Suk regarding the SMUD/SPPCo high-voltage power line planned to go over Donner Summit. Mr. Suk is advising those who do not want the line the their backyard to write to the -3- . President of the California Public Utilities Commission asking that agency to assume jurisdiction over the project and hold public hearings. Through discussions with SPPCo concerning the new contract with the District,, Mr. Holzmeister said, it has become clear there is a problem in importing power to Sierra Pacific service territory (and the PUD). If the intertie can be completed it will resolve this problem and result in a savings to PUD customers. He said he doesn't think this message is getting through to District customers. Director Maass stated that, irrespective of the environmental concerns , he thinks the people of Truckee have a tremendous amount to gain by completion of the intertie. He moved that the Manager be directed to respond briefly to Mr. Suk's letter; seconded by Director Sutton. Aguera abstained from voting, all other Directors, aye, by voice vote. SO MOVED. COMMITTEE REPORTS Water C©�i ttee Director Sutton reported that the Water Committee met on June 10 to discuss Cemetery District matters, revision to Water Rule No. 12, budgeted capital improvements for 1987 , and a well located on the Wurst parcel near Cold Stream. Director Maass complimented Debi Black on the excellent Water committee meeting minutes she prepared. Director Sutton noted that amendment of the water rule appears later on the agenda, an item concerning capital improvements and endorsing recommendations made by staff will probably be presented to the Board at the next regular meeting. CONFLICT OF INTEREST CORE - POSSIBLE DIRECTION The Chairman put this item over to the next regular meeting. REVIEW OF MANAGER'S GOALS AND OBJECTIVES At the May 18 Board meeting during discussion of performance of the General Manager, Mr. Holzmeister was asked to prepare a draft statement of goals and objectives to guide his efforts during the next year. He noted that the issues listed are matters he views as being important and the dates by which he feels they will be concluded. A copy has been attached to these minutes for reference. Director Maass suggested pushing the public relations program to a higher priority. Mr. Holzmeister advised that he would like to prepare a program for review by the Board. This program would include a newsletter for the customers, going to community groups to speak, and letting the public know what the District to doing with respect to water quality. Director Sutton warned that the District should be careful concerning the manipulation of public information. She said she feels the District should cultivate good public relations through equitable rates and good employees; also, by -4- •-- asking the Sierra Sun to have a reporter at every meeting. There was a brief discussion about sending messages to customers on the back of their postcard bills, through special mailings, or by changing the billing to an envelope system and including messages. Director Sutton said she would like to see the cross-connection control project moved to a higher priority, and Mr. Holzmeister advised that funding will not be available until 19$8. Resolution of the Cemetery District problem was mentioned. Mr. Holzmeister noted that the PUD is now awaiting additional information from the Cemetery District. CONSIDERATION OF AMENDMENT TO WATER RULE NOe 12 RE BATES AND CHARGES (CLARIFICATION CONCERNING FACILITIES FEES) Director Sutton stated the Water Committee wanted to clearly state the District's policy regarding the provision of water service to a project or parcel which would require absolutely no fire protection. After discussing the matter, the Committee created a sub-section using all language previously submitted for the amendment and an additional statement to clarify the service with no fire protection which reads, "In the event that a customer requests water service for a use that does not involve a fireflow requirement, as determined by the Truckee Fire Protection District, the fire protection portion of the facilities fee may be adjusted or waived by action of the Board of Directors." Director Maass moved, and Director Sutton seconded, that the Board approve amended Water Rule No. 12 as recommended by the Water Committee. ROLL CALL: Aguera, abstained; all other Directors, aye. SO MOVED. CONSIDERATION OF BIDS ON HIRSCHDALE WELL, REVIEW OF RECOMMENDATIONS; POSSIBLE AWARD Manager Holzmeister reported that three bids were received on the Hirschdale well project. Consulting Engineer Cook has written and recommended awarding the contract to Aqua Drilling and Well Service, the low bidder. Mention was made that Aqua Drilling did not submit a bid bond or certified check with their bid. Discussion ensued. Greg Haling of Cook Associates, present in the audience, said that Aqua was called immediately after the bid opening; they advised that they neglected to include the certified check with their bid. The check, f o r 10% of the bid amount, was received the following day. Cook's office forwarded the bids to Laurie Silva of the Department of Water Resources for review. Mr. Haling said it is Mr. Cook's understanding from his conversation with Ms. Silva that they will not honor the grant if the District does not make the award to the low bidder. Director Sutton said the bid from Aqua should not have been accepted. Mr. Haling stated that the State was made aware of the circumstances and they saw no problem as long as the check for 10% of the bid was received before -5- • an award was made. Director Sutton noted this is contrary to Code and said she is surprised the State would do this; Director Cooley agreed. Director Sutton said she would like to see correspondence from the State to this effect. She went on to say she thinks the District should re-bid the job. Mr. Haling advised that the State disqualified the next lowest bidder, Humboldt Drilling, as they have not yet received their license number from the State of California. The purpose of bid, performance and payment bonds was discussed. Director Maass moved, and Director Cooley seconded, that the Board award the bid for the Hirschdale well project to Aqua Drilling in the amount of $33,998.86 as long as there is approval to do so from the Department of Water Resources (and the grant is assured). ROLL CALL: Aguera, abstained; Cooley, Maass and Corbett , aye; Sutton, no, stating that she is concerning about the validity of the bid received from Aqua Drilling. SO MOVED by majority vote. RESOLUTION APPROVING SPECIFICATIONS, AUTHORIZING THE FILING OF A NOTICE OF EXEMPTION, AND ISSUING A CALL FOR BIDS FOR PING THE TAHOE DONNER SUBSTATION District Engineer Buckhouse advised that plans and specifications for paving the Tahoe Donner Substation were originally prepared by R. W. Beck approximately two years ago. All bids received at that time were rejected, and the design has been slightly modified. The main purpose of the paving is to improve drainage and allow for snow removal without totally destroying the bed of the substation. Estimated cost is $35,000. It was clarified that this is not a repaving of the substation, and the resolution is to be corrected to read, "pave" instead of "repave." The Manager advised that funds have been budgeted for this project, and Director Maass moved that the Board adopt Resolution No. 8728 approving environmental documents , plans, specifications and bidding documents for the Tahoe Donner Substation paving project. The motion was seconded by Director Corbett. ROLL CALL: Aguera, abstained; Cooley , Maass and Corbett, aye; Sutton, no, stating her concern about the fact that the plans and specs, which she hasn't seen, apparently have not been prepared by a civil engineer and she doesn't know if certain requirements having to do with drainage and discharge of water have been met. SO MOVED. CONSIDERATION OF A REPORT FROM THE FINANCE SUPERVISOR Capitalization of new building The Finance Supervisor, Paul Colburn, reported that Arthur Andersen has proposed splitting all costs associated with the new building between electric and water based upon an 80/20 split. The 80/20 split was arrived at by analyzing various ratios which included labor dollars, number of employees , revenue and expenses. Mr. Colburn suggested capitalizing the building in the electric fund and -6- .,., charging the water fund an annual rental charge. This would simplify the accounting in that when capitalizing or retiring items associated with the building , it could be done in one fund rather than two. Also, the allocation may change over the years. The annual rental charge that would be charged by the electric fund to the water fund could be analyzed annually, looking at current conditions. Director Maass moved, and Director Cooley seconded, that the Board direct the Finance Supervisor to set up accounting to capitalize the building in the electric fund and charge the water fund an annual rental charge on the new building. ROLL CALL: Aguera abstained; all other Directors, aye. SO MOVED. ]REA request for internal control letter Mr. Colburn recommended that the District contact the Rural Electrification Administration and ask for an exemption from the requirement for a r'management letter" using the suggestions set forth in the April 7, 1987 Arthur Andersen letter. Mr. Holzmeister advised that this letter would require approximately $1 ,000 in additional fees above and beyond that previously arranged. This reflects the amount for the 1985 audit with a comparable amount that would be necessary to complete the letter for the current 1986 audit. Director Sutton stated that the District may have a need to construct a transmission line soon, and REA probably offers a better interest rate than the Bank of America or Truckee River Bank. Mr. Holzmeister said it is his understanding that as long as the District has a line extension policy requiring the customer to pay, it is not eligible for an REA loan. Director Sutton asked that the Board discuss this matter with the Auditors at the workshop meeting. After some discussion, it was decided that the workshop meeting would be scheduled for June 24. Director Maass asked the Manager to get some definitive information about whether or not the District is eligible for REA loans. Investment policy Mr. Colburn briefly explained Resolution No. 7911 which sets forth the PUD' s present investment authority. He noted the Board may wish to consider developing a more detailed policy in the near future. Director Sutton noted she thinks the Board needs to give direction regarding an investment program. She said she has already asked for an accounting of the District monies, where they are , how much, its purpose, and how much interest is being earned. Director Cooley stated he thinks the Board needs to direct that the money be invested safely and ethically at the highest rate, and that the Board should set certain guidelines. FjwHA loan repurchase lo^ The Farmers Home Administration has notified the District that it may purchase its outstanding loans from them at a discount. The amount of $534 ,430 is owed at the present time. Based on FmHA's preliminary -7- .,, estimates, the loans could be purchased for approximately $391 .000 (based upon an average discount rate of 7.75%). The actual pricing of the loan would be based on the Treasury rates being paid on July 10, 1987. The PUD presently has $332,000 available in restricted funds in accordance with the FmHA requirements. This could be used towards the purchase of the loans. At this time it is invested in the LAIF which is returning approximately 7.18%. In analyzing the purchase, it appears that the PUD should not purchase the loans if money can be invested at an average of greater than 7.75% over the next 30 years. In order to do this, Mr. Colburn said he believes the District would have to diversify its portfolio and invest in such higher yielding securities as GNMA's. If the Board decides that a purchase is in order, a letter stating an indication of interest and a payment of 5% of the outstanding loans must be sent to FmHA prior to July 10. The matter will be discussed with the Auditors at the June 24 workshop meeting. Allocation of overhead to electric and water funds At the present time the District is allocating joint costs on a basis of 85% electric and 15% water. Based on a recent analysis which considered revenues, expenditures, labor dollars and the number of customers, a more appropriate ratio may be 80% electric and 20% water. The Finance Supervisor noted that so as not to affect the 1987 budget analysis, it would be best to adopt any change in this allocation when the 1988 budget is developed. Director Maass moved, and Director Cooley seconded, that the 80% electric 20% water allocation be implemented with the 1988 budget. ROLL CALL: Aguera, abstained; all other Directors, aye. SO MOVED. NEW DISTRICT COMPLEX - STATUS OF CONSTRUCTION, FINANCING - CONSIDERATION OF A CHANGE ORDER -- CONSIDERATION AND POSSIBLE APPROVAL OF PAY REQUESTS - APPROVAL OF REQUEST FOR RELEASE OF FUNDS FROM BANK OF AMERICA Mr. Holzmeister reported that the new building is 90% complete. Carpet , tile, ceiling, lighting and doors are being installed. The building is being painted inside and out. Once things are moved out of the old warehouse, site work will begin. Dale Cox noted that, during the past few weeks, Nevada County has requested several changes. A change order has been prepared and includes upgrading the roof over the warehouse from a "C" to "B" classification; relocating the exit signs; creating a one hour fire wall separation between the hallway and office on the second floor; enclosing the stairwell to the second floor; installing a draft stop in the office area; installing thumb latches on doors with panic bars; installing smoke seals on doors; installing condensation drain; installing controls for boiler and fan coil units; eliminating two light poles in the parking lot; and elevator modifications as required by the State inspector. Total amount of the changes is $27 ,410. -8- .. Discussion ensued concerning the roof. Mr. Cox noted that the roof plans were submitted to the County during the review process and were approved as drawn and specified. He said the roof is up to specs; however it is not up to the code as interpreted by Nevada County. Counsel Porter noted the County has acknowledged this was an oversight on their part. There is an appeal process the District may follow, but the County has no designated employees or procedures to handle such an appeal. Mr. Cox suggested he and Mr. Holzmeister write to the County stating their opinion that the roof is safe. Counsel suggested getting an independent analysis of the situation and submitting it to the County. Director Aguera recommended the District also obtain an opinion from the Fire Protection District. Director Cooley moved, and Director Maass seconded, that the Board approve the change order with the exception of the roof upgrade, and direct Mr. Cox to write a letter to the County concerning resolution of the roof problem. ROLL CALL: Aguera, abstained; all other Directors, aye. SO MOVED. Director Sutton suggested the letter from Mr. Cox be directed to Perry Horton, the Chief Building Inspector. She asked that the Board be copied with the letter. The Board reviewed pay requests from Value Builders, Dale Cox and SEA. Thereafter, Director Maass moved that the Board authorize payment to Value in the amount of $117 657, to Dale Cox in the amount of $3,273.42, and to SEA in the amount of $195; seconded by Director Corbett. ROLL CALL: Aguera, abstained; all other Directors, aye. SO MOVED. Director Maass moved , and Director Corbett seconded , that the Board authorize submittal of a request for release of funds in the amount of $130,730 to Bank of America. ROLL CALL: Aguera, abstained; all other Directors, aye. SO MOVED. CLOSED SESSION At 9:52 P.M. the meeting was adjourned to closed session pursuant to Government Code Sections 54956.9(c) and 54957.6. RETURN TO PUBLIC SESSION At approximately 11:24 P.M. the Board returned to public session. There was no action taken or direction given. ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 11:25 P.M. by motion duly made, seconded and passed unanimously. TRUCKEE DONNER PUBLIC UTILITY DISTRICT 100� ICA 14 V &dt - - - - o . Corbett, President _g_ Prepared b -- M-� L Susan lac onald, Deputy District Clerk. s®/d5b.1b -10-