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Home My WebLink About2011-04-06 Min - Board /^ REGULAR MEETING April 6, 2011 In accordance with District Code Section 2.08.010, the TDPUD minutes are action only minutes. All Board meetings are recorded on a digital format which is preserved perpetually and made available for listening to any interested party upon their request. The regular meeting of the Board of Directors of the Truckee Donner Public Utility District was called to order at 6:00 PM in the TDPUD Board room by President Bender. ROLL CALL: Directors Joe Aguera, Jeff Bender, Ron Hemig, John Hillstrom and Tony Laliotis were present. PLEDGE OF ALLEGIANCE Michael Holley led the Board and public in the Pledge of Allegiance. EMPLOYEES PRESENT: Rosana Matlock, Neil Kaufman, Kathy Neus, Steven Poncelet, Bob Mescher, Nancy Waters, Michael Holley and Barbara Cahill CONSULTANTS PRESENT: Sandra McDonald, Nichole Tallman, Richard Brandis, and Jeff ,•-- Land OTHERS PRESENT: Juanita Schneider, Dan Warren, Josh Susman, Pat Davison, Scott Parker, Jeff Ridgel, Rick Valentine and Kaitlin Backlund CHANGES TO THE AGENDA President Bender suggested moving Agenda Item No. 10 up to follow No. 7 Public Hearing, Update the Martis Valley Groundwater Management Plan. The items are related. PUBLIC INPUT Juanita Schneider complimented the PUD for the very small outages in our area during the winter storms considering the big ones around the country. DIRECTOR UPDATE Director Laliotis thanked Juanita for the compliment. The appreciation really goes to staff for the reliable electric system- hats off to staff. Director Hemig relayed that the Municipal Utility Financing Authority meeting has been delayed until May. We were going to meet in Utah at the New UAMPS headquarters, but we ,..,, could not get a quorum together. Director Hillstrom also thanked the staff for keeping the power on. 1 Minutes: April 6, 2011 PUBLIC HEARING At 6:00 PM or soon thereafter as possible, a public hearing will be held for receiving written and/or oral comments from members of the public regarding: THE DISTRICT'S INTENT TO UPDATE THE MARTIS VALLEY GROUNDWATER MANAGEMENT PLAN President Bender opened the public hearing at 6:04 PM. No written comments were received prior to the meeting. Kaitlin Backlund of Mountain Area Preservation Foundation wanted to express the foundations' interest in participating in a future stakeholder committee and appreciate learning about the project. The public hearing was closed at 6:08 PM. ACTION ITEM CONSIDERATION OF A RESOLUTION OF INTENT TO UPDATE THE MARTIS VALLEY GROUNDWATER MANAGEMENT PLAN This item involves the adoption of a Resolu- tion of Intent to update the Martis Valley Groundwater Management Plan. Director Laliotis moved, and Director Aguera seconded, that the Board adopt the resolution regarding the District's intent to update the Martis Valley Groundwater Management Plan and adopt a statement of public participation. ROLL CALL: All Directors aye, by voice vote. SO MOVED CONSENT CALENDAR CONSIDERATION OF THE AWARD OF A CONTRACT TO PURCHASE CFL'S This item involves awarding a contract to purchase the 'Big 6' Compact Fluorescent Lights. CONSIDERATION OF THE AWARD OF A CONTRACT FOR THE SCADA CONDUIT AND VAULT PROJECT This item concerns the possible award of a Contract for the SCADA Conduit and Vault Project. Director Hillstrom moved, and Director Laliotis seconded, that the Board approve the consent calendar. ROLL CALL: All Directors aye, by voice vote. SO MOVED ACTION ITEMS CONSIDERATION OF A RESOLUTION TO ADOPT A LOCAL PREFERENCE PROCU- REMENT POLICY This items involves a District policy regarding local procurements. Director Hemig moved, and Director Hillstrom seconded, that the Board adopt the resolution ... to amend District code to include a local preference procurement policy. ROLL CALL: All Directors aye, by voice vote. SO MOVED 2 Minutes: April 6, 2011 �^ REVIEW OF THE DRAFT 2010 URBAN WATER MANAGEMENT PLAN This involves a review of the 2010 Urban Water Management Plan and setting a public hearing date. Director Hemig moved, and Director Laliotis seconded, that the Board schedule the public hearing on the Urban Water Management Plan (UWMP)for May 4, 2011. ROLL CALL: All Directors aye, by voice vote. SO MOVED WORKSHOP DISCUSSION OF CALPERS SIDE-FUND REFUNDING This item involves discussion of proposed refunding (refinancing) of the District employees' pension side-fund with CaIPERS. Robert Mescher gave a presentation: • 2004 — District employees joined California Public Employees' Retirement System (CaIPERS) pooled pension plan • 2011 — Increased benefits at employees' cost • "Side-fund" is the obligation to pay an amount to catch up to the rest of the existing participants' contributions in the pension pool o Current obligation is $7.7 million o Amortized over eleven years, through June 2022 o 7.75% rate o Paid jointly by District and District employees • New Information o Brandis Tallman ■ Full service investment banking firm & broker/dealer located in San Francisco ■ Provides bond underwriting for public agencies throughout California ■ Contacted District and proposed refunding the CaIPERS side-fund o Sandra McDonald — McDonald Partners, Inc. ■ District's financial advisor since 2002 ■ Contacted other financial institutions ■ Brandis Tallman's proposed terms were most favorable • Available Options o Continue side-fund participation ■ The participants pay into the side-fund at an interest rate of 7.75% o Pay off side-fund obligation with cash ■ Participant use cash reserves to pay off their side-fund obligations o Pay offside-fund obligation with a new loan ("refunding") ■ Participant refinances their side-fund obligations by accessing the capital mar- ketplace • Access to Capital Markets o Commercial banks o Municipal bond market ■ Public offering — Sold to public at large — Credit rating required for optimal interest rate — Official statement required 3 Minutes: April 6, 2011 <^ — Trustee required — Continuing disclosure required — Current market conditions are not favorable ■ Private placement — Direct loan from institutional investor such as a bank — Bare bones version of public offering — No credit rating required — No official statement required — No continuing disclosure required — Trustee may be required • Summary- Private Placement Refunding Refunding Loan Option 1 Option 2 Cost of Issuance $7,683,000 $7,683,000 Par Amount $117,000 Paid Upfront Interest Rate $7,800,000 $77683,00 All-in True Interest Cost 5.00% 5.00% Total Debt Service 5.27% 5.00% New Refunding Loan $10,469.000 $10,317,000 Existing CaIPERS Side-Fund $111538,000 $11,5385000 Savings Over Eleven Years $1,069,000 $1,2211000 Average Fiscal Year Debt Service 2011/12 th ru 2021/22 New Refunding Loan $952,000 $9389000 Existing CalPERS Side-Fund $1,049,000 $1,0491000 Average Annual Savings $979000 $1119000 • Financing Structure o Electric Utility obligation o Liability on Electric Utility balance sheet ■ Electric Utility deferred pension expense ■ Paid by — Electric Utility budgeted pension expense — Water Utility budgeted pension expense — District employee payroll deductions ■ Collateral required on case by case basis depending on credit quality of issuer • Private Placement Refunding Timeline o Next week: Initiate formal discussions with financing team to discuss elements of the refunding o April and May: Create, review& revise documents; and discuss with bond council o June 1: Board adopts resolution and authorizes obligation o Before June 30: Close transaction • Fiscal Impact: proposed refunding would save about $100,000 per year for 11 years • Direct staff to o Pursue proposed Brandis Tallman refunding of District employees' CalPERS side- fund o Present final refunding terms for Board review and approval at June 1, 2011 meeting 4 Minutes: April 6, 2011 100"►, Public input: • What about the enhanced employee benefits approved in July 2010- need a better breakout of what the employees pay and what the District pays • Is there a savings to the employees because of the refinancing • District should pay the issuance cost up front-would save as a rate payer Board discussion: • Why did Brandis Tallman come to us • Did the 7.75% of CalPERS trigger this • Commit to 5% for 11 years • If CalPERS went below 5%, would we be stuck • What was the CalPERS interest rate a year ago or back to 2004 • There could be a risk that CalPERS will have a lower rate • Pay costs to refinance in advance • 1 like the 1 million savings over 11 years • Currently the side-fund does not show up on the financials (only as a note)- but with a refinancing, it would show up on the financial statements • The government may have required the internal side-fund to show up on the financials eventually • Was it assumed that the District's credit rating would qualify ,,..., • Do we qualify for an AA rating • The side-fund has existed since we joined CalPERS in 2004. The District had to catch up • In 2010, there was an increased benefit, paid fully by employees • Would like to see District pay issuance up front • May be easier to roll costs into the loan- what would be the ratio on who pays what- how would this work with the employees • Public financing may not work because there was the scare about municipalities • What is the breakout of responsibility for the side-fund between the District and employees • Staff has direction to pursue ROUTINE BUSINESS TREASURER REPORT: MARCH, 2011 Approval of disbursements: Director Aguera moved, and Director Hillstrom seconded, that the Board approve the March 2011 disbursements report. ROLL CALL: All Directors by a show of hands. SO MOVED APPROVAL OF MINUTES FOR MARCH 16, 2011 -- Director Hillstrom moved, and Director Aguera seconded, that the Board approve the minutes of March 16, 2011. ROLL CALL: All Directors by a show of hands. SO MOVED 5 Minutes: April 6, 2011 CLOSED SESSION Director Hemig recused himself as his firm has prospects of a real estate transition near this property and feels it is appropriate to recuse himself. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO SECTION 54956.8 OF THE GOVERNMENT CODE. PROPERTY 10750 BERMGARTEN RD, MCGLASHAN SPRINGS APN 18-010-10; DISTRICT NEGOTIATOR: GENERAL MANAGER; NEGOTIATING PARTY: TAHOE DONNER ASSOCIATION; UNDER NEGOTIATION: PRICE AND TERMS RETURN TO OPEN SESSION Report from Closed Session There was no reportable action. ADJOURNMENT There being no further business before the Board, the meeting was adjourned at 8:23 PM. TRUCKEE ""RIP R1 IC UTILITY DISTRICT Jeff keknder esident Pre ared b p Y Barbara Cahil VDeputy District Clerk 6 Minutes: April 6, 2011