AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Thursday, May 10, 2012, 8:30 AM 1717 E Miraloma Ave, Placentia CA 92870

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1 AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING Thursday, May 10, 2012, 8:30 AM 1717 E Miraloma Ave, Placentia CA CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL Phil Hawkins, President Gary T. Melton, Vice President Michael J. Beverage Ric Collett Robert R. Kiley 4. ADDITIONS/DELETIONS TO THE AGENDA 5. PUBLIC COMMENTS Any individual wishing to address the Board is requested to identify themselves and state the matter on which they wish to comment. If the matter is on the agenda, the Board will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on the agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to five minutes. 6. SPECIAL RECOGNITION 6.1. Recognize Doug Baker, Mechanic II, and Dave Barmer, Senior Maintenance Distribution Operator, for Completion of OSHA Trainer Course in Forklift Safety 6.2. Recognize Staff for Receipt of Distinguished Budget Presentation Award for FY 2011/12 from the Government Finance Officers Association 7. COMMITTEE REPORTS 7.1. Citizens Advisory Committee (Beverage) Minutes of meeting held April 23, 2012 at 8:30 a.m. Meeting scheduled May 29, 2012 at 8:30 a.m. 8. CONSENT CALENDAR All items listed on the consent calendar are considered to be routine matters, status reports, or documents covering previous Board instructions. The items listed on the consent calendar may be enacted by one motion. There will be no discussion on the items unless a member of the Board, staff, or public requests further consideration.

2 8.1. Minutes of the Board of Directors Regular Meeting Held April 26, 2012 Recommendation: That the Board of Directors approve the minutes as presented Payments of Bills, Refunds, and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $507, Investment Report for the Period Ending March 2012 Recommendation: That the Board of Directors receive and file the Investment Report for the Period Ending March ACTION CALENDAR This portion of the agenda is for items where staff presentations and Board discussions are needed prior to formal Board action Establishing a Line of Credit Recommendation: That the Board of Directors approve working with Kurt Yeager of Stradling Yocca Carlson & Rauth to pursue the next steps toward establishing a line of credit with Wells Fargo Award of Construction Contract for Pressure Regulating Stations Upgrade Project, Phase 1 Recommendation: That the Board of Directors award the contract to Vido Samarzich, Inc. in the amount of $597,020 for construction of the Pressure Regulating Stations Upgrade Project, Phase Potential Northeast Developments and Proposed District Planning Study Recommendation: That the Board of Directors authorize staff to proceed with final preparation of an RFP and solicit proposals for the Northeast Area Water Service Planning Study. 10. REPORTS, INFORMATION ITEMS, AND COMMENTS President's Report Directors' Report General Manager's Report Orange County Grand Jury Report - "Let There Be Light" Dragging Special Districts from the Shadows General Counsel's Report Future Agenda Items and Staff Tasks 11. COMMITTEE REPORTS CONTINUED Executive-Administrative-Organizational Committee (Hawkins/Melton) Minutes of meeting held May 9, 2012 at 4:00 p.m. (To be provided at the next regular Board meeting.)

3 Meeting scheduled June 18, 2012 at 4:00 p.m Finance-Accounting Committee (Kiley/Hawkins) Minutes of meeting held April 23, 2012 at 4:00 p.m. Meeting scheduled May 23, 2012 at 4:00 p.m Planning-Engineering-Operations Committee (Collett/Kiley) Minutes of meeting held May 3, 2012 at 4:00 p.m. (To be provided at the next regular Board meeting.) Meeting scheduled June 7, 2012 at 4:00 p.m Personnel-Risk Management Committee (Beverage/Collett) Minutes of meeting held May 8, 2012 at 4:00 p.m. (To be provided at the next regular Board meeting.) Meeting scheduled June 12, 2012 at 4:00 p.m Public Affairs-Communications-Technology Committee (Melton/Beverage) Meeting scheduled May 14, 2012 at 4:00 p.m YLWD-MWDOC-OCWD Joint Agency Committee (Hawkins/Beverage) Meeting scheduled May 22, 2012 at 4:00 p.m. 12. INTERGOVERNMENTAL MEETINGS YL City Council - May 1, 2012 (Hawkins) MWDOC/MWD Workshop - May 2, 2012 (Melton/Staff) OCWD Board - May 2, 2012 (Kiley/Staff) WACO - May 4, 2012 (Kiley) YL Planning Commission - May 9, 2012 (Kiley) 13. BOARD OF DIRECTORS ACTIVITY CALENDAR Meetings from May 11, June 30, CLOSED SESSION The Board may hold a closed session on items related to personnel, labor relations and/or litigation. The public is excused during these discussions Conference with Legal Counsel Pending Litigation Pursuant to Subdivision (a) of Section of the California Government Code Name of Case: Itani, et al vs. YLWD (OC Superior Court Case No ) Name of Case: Johnson, et al vs. YLWD, et al (OC Superior Court Case No.

4 ) Name of Case: State Farm General Insurance Company vs. YLWD (OC Superior Court Case No ) Name of Case: Weiss vs. YLWD (OC Superior Court - Case No ) Name of Case: Lindholm vs. YLWD, et al (OC Superior Court - Case No ) Name of Case: Travelers Commercial Insurance Company vs. YLWD (OC Superior Court - Case No ) Name of Case: Manista vs. YLWD, et al (OC Superior Court - Case No ) Name of Case: American Security Insurance Company, et al vs. YLWD (OC Superior Court - Case No ) Name of Case: Buc vs. YLWD (OC Superior Court Case No ) Name of Case: Interinsurance Exchange of the Automobile Club vs. YLWD (OC Superior Court - Case No ) Name of Case: ACWA/JPIA, et al vs. Insurance Company of the State of Pennsylvania, et al (OC Superior Court - Case No ) 15. ADJOURNMENT The next regular meeting of the Board of Directors will be held May 24, 2012 at 8:30 a.m. Items Distributed to the Board Less Than 72 Hours Prior to the Meeting Pursuant to Government Code section , non-exempt public records that relate to open session agenda items and are distributed to a majority of the Board less than seventy-two (72) hours prior to the meeting will be available for public inspection in the lobby of the District s business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870, during regular business hours. When practical, these public records will also be made available on the District s internet website accessible at Accommodations for the Disabled Any person may make a request for a disability-related modification or accommodation needed for that person to be able to participate in the public meeting by telephoning the Executive Secretary at , or writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA Requests must specify the nature of the disability and the type of accommodation requested. A telephone number or other contact information should be included so the District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should make the request with adequate time before the meeting for the District to provide the requested accommodation.

5 AGENDA REPORT ITEM NO. 7.1 Meeting Date: May 10, 2012 Subject: Citizens Advisory Committee (Beverage) ATTACHMENTS: Minutes of meeting held April 23, 2012 at 8:30 a.m. Meeting scheduled May 29, 2012 at 8:30 a.m. Name: Description: Type: _-_CAC_Minutes.docx CAC Mtg Minutes 04/23/12 Minutes

6 MINUTES OF THE YORBA LINDA WATER DISTRICT CITIZENS ADVISORY COMMITTEE MEETING April 23, 2012 CALL TO ORDER A meeting of the Citizens Advisory Committee was called to order at 8:30 a.m. by Chair Daniel Mole. The meeting was held at the District s Administrative Office at 1717 E Miraloma Ave, Placentia CA COMMITTEE MEMBERS PRESENT Daniel Mole Fred Hebein Greg Meyers Gus Bruner YLWD DIRECTORS PRESENT Michael J. Beverage, Director Joe Holdren Lindon Baker Modesto Llanos Rick Buck YLWD STAFF PRESENT Ken Vecchiarelli, General Manager Steve Conklin, Engineering Manager Stephen Parker, Finance Manager Cindy Botts, Management Analyst Cody Peterson, Public Affairs Intern OTHER VISITORS Mark Schock 1. PUBLIC COMMENTS Committee members brought up the fact that the Penny Signs are continuing to be misunderstood by members of the community. A Committee member also questioned if the Edison explosion affected the Water District. Mr. Vecchiarelli explained that with the exception of 3 pumps whose gasoline backup generators took over upon loss of power, the District was not affected. A data sheet was also presented to the Committee by Mr. Shock which detailed District reservoir water levels during Red Flag Warning Periods. Director Beverage informed the Committee that the issue had been presented before the Board and it has been moved to the PEO Committee for review in the coming months. The Committee also discussed clarifying the difference between Water and Sewer services provided by the District. 2. DISCUSSION ITEMS 2.1. Capital Improvement Program for FYs 2012/13 thru 2016/17 Mr. Conklin presented the proposed Capital Improvement Plan (CIP) to the Committee highlighting a project priority system for current and future projects. Updates were provided at Committee request on the status of said projects. Two upcoming projects are designed to further utilize Orange County Water District (OCWD) groundwater over MWD import 1

7 water in the event of annexation, during MWD shutdowns, interruptions in MWD service and to allow more operational flexibility. An image of the tentative location of Well 21 was shown to the Committee as part of the explanation of the District wide Groundwater Delivery Project. The project allows for pumping of groundwater to the higher zones and will save the district approximately $1 million per year if YLWD is able to have its entire service area annexed to OCWD. There will also be new improvements at the Fairmont Reservoir to include: replacement of 2 old pumps with 6 new ones, replacement of valves in the reservoir, pipeline improvements, and a new, larger pump building. This project, along with many other facets of the Capital Improvement Plan, accounts for future housing developments. Total cost for the project s various components is approximately $8.3 million over 3 years. Committee members were informed that the Board had decided to go with staff recommendation to postpone those projects perceived not to be immediately necessary. Mr. Vecchiarelli clarified they represent repair and replacement of portions of the system that are being regularly maintained, but are older and are working on borrowed time Draft Budget for FY 2012/13 Mr. Parker explained the Budget s assumptions to the Committee which included the increased percentage of OCWD groundwater allowance and the MWD rate increases for the next three fiscal years. Budget expenses were laid out before the Committee. These expenses detailed those services considered to be (1) Required for Operational Service, (2) Necessary for Adherence to the District s Strategic Plan, and (3) Falling into Neither of the Other Categories. The presentation also covered: new budget revenue allotments, variable water cost comparison in rates between MWD and OCWD, and Vehicle Equipment and Capital Outlay. The District s Fitch AA+ rating was explained to the Committee. Reserve Policy changes were reviewed and included changes in Operating Reserves and Maintenance Reserves. Director Beverage fielded questions over why MWD rates have skyrocketed over the last 4 years and Committee members expressed concerns about those increased rates now and into the future. Various graphs detailing the outcome of District rate increases were presented and illustrated the Board s decision for a 1.5%, 2.5%, and 2.5% rate increase over the next 3 years. It was further explained that the Board was not mandated to enact the increases but would have the option available to them. The benefits of using a line of credit to even out the effects of the rate increases was detailed along with the recommendation to change from a fixed rate to a volumetric rate and its pros and cons. A comparative rate chart between other water districts was presented to show the efficiency of the District. The Committee asked several questions related to the District s justification for the rate increase OC Water Summit Attendance Committee members were informed that seats were available for those who wished to attend. The Summit is Friday, May 18, 2012 at the Grand California Hotel in Anaheim. 2

8 2.4. Rescheduling May 2012 Meeting Date The Committee decided to move the May meeting to Tuesday, May 29, District Facilities Tour The Committee members were informed that the Board would be hosting a tour of District facilities on Thursday, May 31 st, which will be open to those CAC members who wish to attend Future Agenda Items 3. ADJOURNMENT District Public Affairs Efforts 3.1. The Committee adjourned at 10:30 a.m. The next regular meeting of the Citizens Advisory Committee will be held May 29, 2012 at 8:30 a.m. 3

9 AGENDA REPORT ITEM NO. 8.1 Meeting Date: May 10, 2012 Subject: Minutes of the Board of Directors Regular Meeting Held April 26, 2012 STAFF RECOMMENDATION: That the Board of Directors approve the minutes as presented. ATTACHMENTS: Name: Description: Type: _BOD_-_Minutes.doc BOD Mtg Minutes 04/26/12 Minutes Approved by the Board of Directors of the Yorba Linda Water District 5/10/2012 RK/RC 5-0

10 MINUTES OF THE YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS REGULAR MEETING April 26, CALL TO ORDER The April 26, 2012 Regular Meeting of the Yorba Linda Water District Board of Directors was called to order by President Hawkins at 6:31 p.m. The meeting was held in the Board Room at the District s Administrative Building located at 1717 East Miraloma Avenue in Placentia, California PLEDGE OF ALLEGIANCE Director Hawkins led the pledge. 3. ROLL CALL DIRECTORS PRESENT Phil Hawkins, President Gary T. Melton, Vice President Michael J. Beverage Ric Collett Robert R. Kiley STAFF PRESENT Ken Vecchiarelli, General Manager Steve Conklin, Engineering Manager Lee Cory, Operations Manager Gina Knight, Human Resources Manager Stephen Parker, Finance Manager Art Vega, Interim IT Manager Cindy Botts, Management Analyst Annie Alexander, Executive Secretary ALSO PRESENT Brett Barbre, Director, Municipal Water District of Orange County Art Kidman, Partner, Kidman Law LLP Eddy Beltran, Senior Counsel, Kidman Law LLP Modesto Llanos, Member, YLWD Citizens Advisory Committee 4. ADDITIONS/DELETIONS TO THE AGENDA None. 5. PUBLIC COMMENTS Director Barbre addressed the Board and commented on a report soon to be released from the Orange County Grand Jury regarding special districts, the upcoming LAFCO election, and the current water supply situation. 6. CONSENT CALENDAR Director Beverage made a motion, seconded by Director Collett, to approve the Consent Calendar. Motion carried 5-0. Director Collett abstained from voting on Check No on Item No as he has a financial interest with the vendor. 1

11 6.1. Minutes of the Board of Directors Workshop Meeting Held April 11, 2012 Recommendation: That the Board of Directors approve the minutes as presented Minutes of the Board of Directors Regular Meeting Held April 12, 2012 Recommendation: That the Board of Directors approve the minutes as presented Minutes of the Board of Directors Special Meeting Held April 19, 2012 Recommendation: That the Board of Directors approve the minutes as presented Payments of Bills, Refunds and Wire Transfers Recommendation: That the Board of Directors ratify and authorize disbursements in the amount of $1,145, Progress Payment No. 1 for Fairmont Reservoir Valve Replacement Project Recommendation: That the Board of Directors approve Progress Payment No. 1 in the net amount of $189, to Pascal & Ludwig Constructors for construction of Fairmont Reservoir Valve Replacement Project, Job No Progress Payment No. 6 for Well No. 20 Well Head Project Recommendation: That the Board of Directors approve Progress Payment No. 6 in the net amount of $109, to Pascal & Ludwig Constructors for construction of the Well No. 20 Well Head Equipping Project, Job No Progress Payment No. 15 for the Highland Booster Pump Station Project Recommendation: That the Board of Directors approve Progress Payment No. 15 in the net amount of $197, to Pacific Hydrotech Corporation for construction of the Highland Booster Pump Station Project, Job No Change Order No. 2 for Well No. 20 Wellhead Equipping Project Recommendation: That the Board of Directors approve Change Order No. 2 in the amount of $10, and 35 additional calendar days to Pascal and Ludwig Constructors for construction of the Well No. 20 Well Head Equipping Project, Job No

12 7. ACTION CALENDAR 7.1. Change Order No. 4 for Fairmont Reservoir Valve Replacement Project Mr. Conklin explained that the coating of existing pipe spools and flanges was not included in the original plans for this project as prepared by the District. Staff obtained a quote for $9,060 from the contractor to perform this additional task and determined that the amount and an 11 day time extension was appropriate for the work required. Director Hawkins asked if this issue had been reviewed by the Planning-Engineering-Operations (PEO) Committee. Mr. Conklin explained that due to the urgency of this project, this matter had been brought straight to the Board for consideration. Director Collett made a motion, seconded by Director Kiley, to approve Change Order No. 4 in the amount of $9, and an 11 calendar-day time extension to Pascal & Ludwig Constructors, Inc. for the Fairmont Reservoir Valve Replacement Project, Job No Motion carried Material Testing Services for Yorba Linda Blvd Pipeline & Booster Station Projects, 2010 Waterline Replacement Project and On-Call Geotechnical Services Mr. Conklin explained that staff had issued a Request for Proposal for material testing services for three construction projects and future on-call services in order to enhance efficiency and cost savings. Mr. Conklin and Mr. Vecchiarelli responded to questions from the Board regarding the reasons why this matter had not been reviewed by the PEO Committee before being presented to the Board. Mr. Conklin explained that there was a delay in the review process and due to time constraints, this issue was brought directly to the Board for consideration. Director Beverage suggested that staff consider notifying Committee chairs ahead of time should this same kind of situation happen again in the future. Director Collett made a motion, seconded by Director Kiley, to authorize execution of a Professional Services Agreement with Hushmand Associates, Inc. for a fee not to exceed $130,000, to provide material testing services for the Yorba Linda Blvd Pipeline & Booster Station Projects, 2010 Waterline Replacement Project and On-Call Geotechnical Services. Motion carried Election of Regular and Alternate LAFCO Commissioners Mr. Vecchiarelli explained that the Orange County Special District Selection Committee would be holding an election for the special district representative seat on LAFCO. LAFCO has requested that the Board designate one Director and an alternate to cast the Districts ballot for this election. The Board may also choose to nominate a candidate for this seat. Director Hawkins stated that he may have a conflict of interest if he was designated to cast the District s vote as he currently serves as Chair of the Orange County Special District Selection Committee. Brief discussion regarding Directors Hawkins concern followed. Director 3

13 Barbre addressed the Board and stated that he didn t think it would be a conflict of interest for Director Hawkins to serve in both capacities. Director Collett made a motion, seconded by Director Beverage, to designate Director Hawkins as the District s primary voting representative and Director Melton as the alternate voting representative in the Orange County Special District Selection Committee election. Motion carried 5-0. No Directors expressed an interest in making a nomination for a LAFCO candidate at this time ACWA Health Benefits Authority Transfer to ACWA/JPIA Mrs. Knight explained that to proceed with the transfer of ACWA HBA to ACWA/JPIA, the Board would need to adopt a resolution consenting to join the Employee Benefits Program of ACWA/JPIA and ratify the termination of ACWA HBA s Joint Powers Agreement. Failure to return an approved resolution by June 29, 2012 could result in loss of health insurance coverage for District employees. Director Beverage made a motion, seconded by Director Collett, to adopt Resolution No , consenting to join the health benefits program of ACWA/JPIA and ratifying the dissolution of the ACWA Health Benefits Authority Joint Powers Agreement. Motion carried 5-0 on a roll call vote Board Communications Reimbursement Policy Mr. Vecchiarelli explained that at the direction of the Executive- Administrative-Organizational Committee, staff had drafted a resolution and policy for the acquisition and reimbursement of communications devices for the Directors to receive digital copies of agenda packets and other documents. This would eliminate the need for staff to copy and deliver paper agenda packets resulting in increased savings for the District. The Board approved funds in the current budget to support this program and while participation would be voluntary, staff would discontinue the distribution of paper agenda packets beginning July 1, Mr. Vecchiarelli then responded to questions from the Board regarding the discontinuation of producing paper agenda packets and concerns related to the subpoenaing of information stored on electronic devices. Director Melton made a motion, seconded by Director Collett, to adopt and implement Resolution No Setting Board Communications Reimbursement Policy. Motion carried 3-2 with Directors Beverage and Collett voting No on a roll call vote. 4

14 7.6. Water Rate Study 2012 Mr. Parker explained that staff was requesting that the Board receive and file the water rate study. This document will provide additional information to District customers regarding the proposed water rate increase and change to the monthly meter charge. Director Collett made a motion, seconded by Director Beverage, to receive and file the Water Rate Study Motion passed 5-0. Brief discussion regarding comments provided by the Citizens Advisory Committee and the possibility of offering some residential customers the opportunity to downgrade to a smaller meter size followed. Mr. Vecchiarelli distributed a handout containing information on the number and type of customers with 1½ and 2 meters Notice of Proposed Water Rate Increase and Schedule of Public Hearing Mr. Parker explained that staff was requesting that the Board authorize staff to mail a notice of the proposed water rate increase to District customers as well as schedule a public hearing in June to consider the matter. Director Barbre addressed the Board and suggested that legal counsel look into the possibility of providing this notice electronically to those customers who currently receive their billing statements in this manner. Brief discussion regarding Directors Barbre s suggestion followed and the Board requested that staff consider looking into this notification option for a future notice. Director Beverage made a motion, seconded by Director Collett, to authorize staff to mail a Notice of Proposed Water Rate Increase to the District s customers notifying them of proposed changes to their water rate for the upcoming three fiscal years and schedule a Public Hearing on June 21, 2012 at 6:30 p.m. Motion passed REPORTS, INFORMATION ITEMS, AND COMMENTS 8.1. President s Report None Directors Reports None General Manager s Report SAWPA Commission Meeting April 17, 2012 Mr. Vecchiarelli reported that he attended this meeting along with a few other local water district representatives. At the meeting, Mr. Vecchiarelli submitted a letter to the SAWPA Chair requesting that the Commission consider revising Memorandums 8618 and 8622 to include all water rate structures endorsed by the California Urban Water Conservation Council which would enable the District to qualify for future OWOW funding. As a result, the OWOW Steering Committee will be discussing this request at a special meeting in 5

15 May after which the memorandums will be presented to the SAWPA Commission for consideration a second time. Staff plans to attend these two meetings and will report the results back to the Board. Mr. Vechiarelli further reported that he planned to attend a General Manager Leadership Summit being hosted by CSDA this July. The summit would provide him with 16 CEU credits which will be counted towards the District s participation in CSDA s District s of Distinction accreditation program. Mr. Vecchiarelli then confirmed that the Directors planned to attend the District facilities tour scheduled May 31, The Board suggested that staff invite elected officials from the City of Yorba Linda and City of Placentia to attend General Counsel s Report Mr. Kidman reported that his office had just completed its first report on bills for the 2012 legislative session, a copy of which will be provided to staff shortly. Mr. Kidman then commented on the status of the 2009 water bond package and pension reform. Mr. Kidman then stated that he would not be able to attend the next Board of Directors meeting as he would be attending the ACWA conference in Monterey Future Agenda Items and Staff Tasks None. 9. COMMITTEE REPORTS 9.1. Executive-Administrative-Organizational Committee (Hawkins/Melton) Minutes of the meeting held April 16, 2012 at 4:00 p.m. were provided in the agenda packet. Next meeting is scheduled May 9, 2012 at 4:00 p.m Finance-Accounting Committee (Kiley/Hawkins) Minutes of the meeting held April 23, 2012 at 4:00 p.m. will be provided at the next regular Board meeting. Next meeting is scheduled May 23, 2012 at 4:00 p.m Personnel-Risk Management Committee (Beverage/Collett) Minutes of the meeting held April 10, 2012 at 4:00 p.m. were provided in the agenda packet. Next meeting is scheduled May 8, 2012 at 4:00 p.m. 6

16 9.4. Planning-Engineering-Operations Committee (Collett/Kiley) Minutes of the meeting held April 9, 2012 at 4:00 p.m. were provided in the agenda packet. Next meeting is scheduled May 3, 2012 at 4:00 p.m Public Affairs-Communications-Technology Committee (Melton/Beverage) Minutes of the meeting held April 9, 2012 at 4:00 p.m. were provided in the agenda packet. Next meeting is scheduled May 7, 2012 at 4:00 p.m YLWD-MWDOC-OCWD Joint Agency Committee (Hawkins/Beverage) Minutes of the meeting held March 27, 2012 at 4:00 p.m. were provided in the agenda packet. Next meeting is scheduled May 22, 2012 at 4:00 p.m Citizens Advisory Committee (Beverage) Minutes of the meeting held April 23, 2012 at 8:30 a.m. will be provided at the next regular Board meeting. Next meeting is scheduled May 29, 2012 at 8:30 a.m. 10. INTERGOVERNMENTAL MEETINGS WACO April 13, 2012 (Hawkins/Kiley) Directors Kiley attended and commented on a presentation regarding the water supply conditions which was provided at the meeting YL City Council April 17, 2012 (Melton) Director Melton attended commented on a ground lease with the Yorba Linda Friends Church which was discussed during the meeting MWDOC Board April 18, 2012 (Melton/Staff) Director Melton attended but did not have any District related business to report OCWD Board April 18, 2012 (Kiley/Staff) Director Kiley attended and reported that the Replenishment Assessment and Basin Production Percentage for FY 2012/13 had been approved at the meeting. 7

17 11. BOARD OF DIRECTORS ACTIVITY CALENDAR Meetings from April 27, 2012 May 31, 2012 The Board reviewed the listed meetings and made no changes. 12. CLOSED SESSION The meeting was adjourned to Closed Session at 9:25 p.m. All Directors were present. Also present were Messrs. Vecchiarelli, Kidman and Beltrans, and Mrs. Knight Conference with Legal Counsel Pending Litigation Pursuant to Subdivision (a) of Section of the California Government Code Name of Case: Itani, et al vs. YLWD (OC Superior Court Case No ) Name of Case: Johnson, et al vs. YLWD, et al (OC Superior Court Case No ) Name of Case: State Farm General Insurance Company vs. YLWD (OC Superior Court Case No ) Name of Case: Name of Case: Name of Case: Name of Case: Name of Case: Name of Case: Name of Case: Name of Case: Weiss vs. YLWD (OC Superior Court - Case No ) Lindholm vs. YLWD, et al (OC Superior Court - Case No ) Travelers Commercial Insurance Company vs. YLWD (OC Superior Court - Case No ) Manista vs. YLWD, et al (OC Superior Court - Case No ) American Security Insurance Company, et al vs. YLWD (OC Superior Court - Case No ) Buc vs. YLWD (OC Superior Court Case No ) Interinsurance Exchange of the Automobile Club vs. YLWD (OC Superior Court - Case No ) ACWA/JPIA, et al vs. Insurance Company of the State of Pennsylvania, et al (OC Superior Court Case No ) 8

18 12.2. Conference with Legal Counsel Anticipated Litigation Pursuant to Subdivision (b) of Section of the California Government Code Number of Potential Cases: One (Fair Political Practices Commission Letter Dated July 15, 2011) The Board reconvened in Open Session at 7:47 p.m. President Hawkins announced that no action was taken during either Closed Session that was required to be reported under the Brown Act. 13. ADJOURNMENT The meeting was adjourned at 7:48 p.m. The next regular meeting of the Board of Directors will be held May 10, 2012 at 8:30 a.m. Kenneth R. Vecchiarelli Board Secretary 9

19 AGENDA REPORT ITEM NO. 8.2 Meeting Date: May 10, 2012 Budgeted: Yes To: Board of Directors Cost Estimate: $507, Funding Source: All Funds From: Ken Vecchiarelli, General Manager Presented By: Stephen Parker, Finance Manager Dept: Finance Prepared By: Maria Trujillo, Accounting Assistant I Subject: Payments of Bills, Refunds, and Wire Transfers SUMMARY: Section of the California Water Code says the District shall pay demands made against it when they have been approved by the Board of Directors. Pursuant to law, staff is hereby submitting the list of disbursements for Board of Directors' approval. STAFF RECOMMENDATION: That the Board of Directors ratify and authorize disbursements in the amount of $507, DISCUSSION: The wire on this disbursement list is as follows: A wire of $88, to ACWA-HBA for May 2012 health premium. The balance of $191, is routine invoices. The Accounts Payable check register total is $279,776.84; Payroll No. 9 total is $227,938.69; and, the disbursements of this agenda report are $507, A summary of the checks is attached. PRIOR RELEVANT BOARD ACTION(S): The Board of Directors approves bills, refunds and wire transfers semi-monthly. ATTACHMENTS: Name: Description: Type: CkReg51012_BOD.pdf Check Register Backup Material 12-CS_510.doc Cap Sheet Backup Material 12_CC_510.xls Credit Card Summary Backup Material Approved by the Board of Directors of the Yorba Linda Water District 5/10/2012 RK/RC 5-0

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22 . May 10, 2012 CHECK NUMBERS: Void Check $ (3,360.80) Manual Check $ 1, Computer Checks $ 191, $ 190, WIRES: W Southern Cal Edison $ 1, W ACWA-HBA $ 88, $ 89, TOTAL OF CHECKS $ 279, PAYROLL NO. 9: Void Check 5249 Employee Checks/ Direct Deposits $ 142, Third Party Checks 5265, $ 47, Payroll Taxes $ 38, TOTAL OF PAYROLL $ 227, DISBURSEMENT TOTAL: $ 507, ================================================================== APPROVED BY THE BOARD OF DIRECTORS MINUTE ORDER AT BOARD MEETING OF MAY 10, 2012 ==================================================================

23 Cash Rewards Credit Card Bank of America 4/13/2012-4/30/2012 Date Vendor Name Amount Description 16-Apr AWWA-CA/NV Wtr Treatment Review Course Sosa 25-Apr CISEC Inc Program Training Sosa 25-Apr CISEC Inc Program Training McCue TOTAL 1, Cal Card Credit Card U S Bank 4/12/2012-4/29/2012 Date Vendor Name Amount Description 10-Apr Amazon.com 6.40 Iphone perfect fit leather case 11-Apr OCWA Admin Professnl Day Lunch/KV,AA,CB 12-Apr Hach Company Colormeter Test Kit 12-Apr Action Wholesale Products Storage bins/whse 12-Apr LA Freightliner Manifold-Air brake 12-Apr Mancomm Forklift Training Manual 16-Apr OCWA Membership dues KRV 16-Apr Home Depot Mortar mix 16-Apr Draeger Calibration 17-Apr Light Bulbs Etc Light bulbs/admin bldg 18-Apr Home Depot Sod, Batteries etc 24-Apr Home Depot Sod 25-Apr Cal Spec District Assn CSDA Leadership Summit KRV 26-Apr Lamppost Pizza Meal/BOD mtg-staff Attendees 26-Apr Stater Bros Beverages/CFO meeting TOTAL 2,886.39

24 AGENDA REPORT ITEM NO. 8.3 Meeting Date: May 10, 2012 To: From: Board of Directors Ken Vecchiarelli, General Manager Presented By: Stephen Parker, Finance Manager Dept: Finance Prepared By: Delia Lugo, Senior Accountant Subject: Investment Report for the Period Ending March 2012 SUMMARY: Government Code Section 53607, et, seq., requires the person delegated to invest funds to make a quarterly report of the investments to the legislative body. STAFF RECOMMENDATION: That the Board of Directors receive and file the Investment Report for the Period Ending March COMMITTEE RECOMMENDATION: The Finance-Accounting Committee discussed this item at its meeting held April 23 and supports staff recommendation. DISCUSSION: Staff is submitting the Investment Report for the Period Ending March 2012 for your review and approval. This report ends the third quarter for FY 2011/12. The Investment Portfolio Report presents the market value and percent yield for all the District investments by institution. The Investment Report Summary includes budget and actual interest and average term portfolio information as well as market value broken out by reserve categories. The total average portfolio yield for the month of March 2012 was 0.95%. STRATEGIC PLAN: FR 3-C: Manage Cash Flow to Maximize Investment Income PRIOR RELEVANT BOARD ACTION(S): Investment reports are presented to the Board of Directors on a quarterly basis. The Investment Report for the Period Ending December 31, 2011, was received and filed by the Board of Directors on March 8, ATTACHMENTS: Name: Description: Type: Invst_Rpt_3-12.xlsx Investment Report for Period Ending March 2012 Backup Material Invst_Agenda_Backup_-_Mar_2012.xlsx Agenda Backup Backup Material Approved by the Board of Directors of the Yorba Linda Water District 5/10/2012 RK/RC 5-0

25 Yorba Linda Water District Investment Portfolio Report March 31, 2012 Market % Percent Value Cost of Total Institution Yield Checking Account: $ 80,757 $ 80,757 Wells Fargo Bank $ 80,757 $ 80, % Total 0.00% Money Market Accounts: $ 9,953 $ 9,953 Wells Fargo Money Market 0.05% 2,709 2,709 US Bank (2008 Bond Reserve) 0.04% $ 12,662 $ 12, % Total 0.05% Federal Home Loan Bank: $ 2,160,071 $ 2,144,397 US Bank (2008 Bond Reserve) 1.35% $ 2,160,071 $ 2,144, % 1.35% Pooled Investment Accounts: $ 3,921,075 $ 3,921,075 Local Agency Investment Fund 0.38% 1,200,288 1,200,313 CalTRUST Short Term 0.40% 18,484,818 18,427,668 CalTRUST Medium Term 1.07% $ 23,606,181 $ 23,549, % 0.92% $ 25,859,671 $ 25,786, % Total Investments 0.95% Per Government Code requirements, the Investment Report is in compliance with the Yorba Linda Water District's Investment Policy, and there are adequate funds available to meet budgeted and actual expenditures for the next six months. Delia Lugo, Senior Accountant 3/31/12

26 Investment Summary Report Below is a chart summarizing the yields as well as terms and maturities for the month of March 2012: Avg. Portfolio Avg. Portfolio # of Month Yield Without Yield With Days to of 2012 CalTRUST CalTRUST Maturity March 0.71% 0.95% 91 Below is are charts comparing operating fund interest for current and prior fiscal years. Actual Interest 3/31/2011 3/31/2012 Monthly - March $ 25,685 $ 20,424 Year-to-Date $ 181,740 $ 189,297 Budget 2010/ /2012 Interest Budget, March YTD $ 117,000 $ 142,500 Interest Budget, Annual $ 156,000 $ 190,000 Interest earned on investments is recorded in the fund that owns the investment. Investment Summary Comparison Between Current and Previous Month The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds is as follows: February 2012 % Alloc March 2012 % Alloc Fund Description Balance 2/29/2012 Balance 3/31/2012 Water Operating Reserve $ 2,546, % $ 3,232, % Water Emergency Reserve 1,006, % 1,006, % Water Capital Project Reserve 17,014, % 16,645, % Water Reserve for Debt Service 1,174, % 405, % COP Revenue Bond Reserve 2,161, % 2,160, % COP Revenue Bond , % 2, % Sewer Operating 227, % 201, % Sewer Emergency Reserve 1,005, % 1,005, % Sewer Capital Project Reserve 1,094, % 1,120, % $ 26,447, % $ 25,778, % Wells Fargo Bank Checking Water Operating 251,368 (39,274) Sewer Operating 114, , ,966 80,757 Totals $ 26,813,584 $ 25,859,671

27 AGENDA REPORT ITEM NO. 9.1 Meeting Date: May 10, 2012 Budgeted: No Total Budget: $0 To: Board of Directors Cost Estimate: $30,000 - $40,000 From: Ken Vecchiarelli, General Manager Account No: Presented By: Stephen Parker, Finance Manager Dept: Finance Prepared By: Stephen Parker, Finance Manager Subject: Establishing a Line of Credit STAFF RECOMMENDATION: That the Board of Directors approve working with Kurt Yeager of Stradling Yocca Carlson & Rauth to pursue the next steps toward establishing a line of credit with Wells Fargo. DISCUSSION: Preliminary discussions have taken place with Wells Fargo, the District's primary financial institution, for exploring the opportunity to establish a line of credit. During the April 11 Budget Workshop, staff presented the line of credit opportunity and the general terms of the discussions staff had to that point. The Board gave direction for staff to move forward with pursuit of the line of credit. The next step in the process would be to have bond counsel explore the terms discussed with Wells Fargo. After that, bond counsel would work with the bank's legal counsel to establish a legal document that would be the foundation for the terms of the line of credit. The District has a previous relationship with Kurt Yeager of Stradling Yocca Carlson & Rauth for all recent bond actions taken. Staff proposes continuing to utilize that relationship for the next steps of the process of establishing a line of credit. The preliminary cost estimate the District has received from Wells Fargo for legal costs related to the line of credit is $15,000. The District's bond counsel's cost estimate is $15,000 - $25,000. These amounts were not originally budgeted for the current year, but even with these additions, the professional services expenses should be under budget for the year. PRIOR RELEVANT BOARD ACTION(S): The Board of Directors considered the option of establishing a line of credit in discussions at their budget workshop on April 11. The Finance Committee also considered this option at their meeting on March 26 and recommended staff bring the discussion to the full Board in the Budget Workshop. Approved by the Board of Directors of the Yorba Linda Water District 5/10/2012 MB/RC 5-0

28 AGENDA REPORT ITEM NO. 9.2 Meeting Date: May 10, 2012 Budgeted: Yes Total Budget: $500,000 To: Board of Directors Cost Estimate: $784,000 From: Presented By: Prepared By: Subject: Ken Vecchiarelli, General Manager Steve Conklin, Engineering Manager Derek Nguyen, Water Quality Engineer Funding Source: All Water Funds Job No: Dept: Reviewed by Legal: CEQA Compliance: Engineering Pending Exempt Award of Construction Contract for Pressure Regulating Stations Upgrade Project, Phase 1 SUMMARY: The District's Capital Improvement Program for FY 2011/2012 includes funding for refurbishing and upgrading four pressure regulating stations in need of repair due to aging and deteriorating conditions. Six bids were received on May 1, Following review of the bids, staff recommends award to the low bidder Vido Samarzich, Inc. for $597,020. The Engineer's Estimate for construction was $538,000. STAFF RECOMMENDATION: That the Board of Directors award the contract to Vido Samarzich, Inc. in the amount of $597,020 for construction of the Pressure Regulating Stations Upgrade Project, Phase 1. COMMITTEE RECOMMENDATION: The Planning-Engineering-Operations Committee will consider this matter at its meeting being held May 3, Staff will report the Committee's recommendation at the Board meeting. DISCUSSION: The District has 41 existing pressure regulating stations (PRS), some of which are 30 to 40 years old. In some of the stations, excessive corrosion and deteriorating conditions have occurred. In addition to the aging conditions, some stations were not constructed with access and safety measures meeting current standards. The approved Capital Improvement Plan (CIP) includes budgets of $500,000 each in FY11/12 and 12/13 for refurbishing and upgrading of PRS determined as most in need. The FY11/12 work, identified as Phase 1, was to refurbish four stations identified by Operations and Engineering staff as most in need. The work was limited to four stations to keep the work to a

29 manageable level and schedule for implementation. In addition, staff was also trying to keep the project cost in the range of $500,000 budget, and estimated that four sites might be possible, based on other recent projects and the work required. After the design plans were completed, the design engineer prepared a detailed cost estimate and presented the Engineer's Estimate of construction of $538,000. In the last 2-3 years, construction bids have typically been 20% to 30% under the Engineer's Estimate. Unfortunately, this was not the case for this project, where the low bid was 11% over the Engineer's Estimate. This low bid ($597,020) appears to be realistic, as the three lowest bids, as shown below, are all within 5%. The total estimated cost of the Phase 1 PRS Upgrade Project is as follows: Engineering Design & Construction Services $95,000 City Permits & Inspection Costs $3,000 Material Testing $4,000 District Labor & Materials $25,000 Construction Cost (Including 10% Contingency) $657,000 TOTAL $784,000 As shown above, the total estimated cost of Phase 1 work will be significantly over the $500,000 budget. This $284,000 overage would leave an estimated $216,000 in the budget for Phase 2 work. With this in mind, staff recommendations are as follows: Proceed with construction of the Phase 1 PRS work at $597,020, and upgrade the four sites determined as most in need of work. Review the final cost of Phase 1 PRS work at the completion of construction. Monitor and review the cost of other CIP projects budgeted for completion by June 30, 2012 (FY11/12) and for completion by June 30, 2013 (FY12/13). Identify the next 3-4 PRS sites most in need of work. Using cost information from Phase 1 work, determine an estimated cost for design and construction for each site, and prioritize the sites based on cost versus benefit. Determine if there is budget available from other projects completed under cost. Using the above information, determine PRS sites for retrofit, estimate cost for each, and estimate budget for Phase 2 work. Present findings and make recommendations to PEO Committee and the Board for potential Phase 2 work. If, following review and discussion, the Board agrees with this approach, staff recommend that the Board award Phase 1 contract to Vido Samarzich, Inc. in the amount of $597,020 for the construction of the PRS Upgrade Project. As previously noted, six bids were received on May 1, 2012 with the following results: Company Bid Price Vido Samarzich, Inc. $597,020 Paulus Engineering, Inc. $611,000 Fleming Environmental, Inc. $627,479 Schuler Engineering Corporation $747,818 Mike Bubalo Construction Co, Inc. $832,000 Metro Builders & Engineers Group, Ltd. $1,060,000 The bid documents, state license, references and experience of the low-bid firm were reviewed and found to be acceptable. Therefore, staff recommends that the subject contract be awarded to Vido

30 Samarzich, Inc. for $597,020. STRATEGIC PLAN: SR 3-A: Complete Implementation of Five Year Capital Improvement Plan from FY with adopted amendments PRIOR RELEVANT BOARD ACTION(S): On October 13, 2011, the Board of Directors authorized execution of a Professional Services Agreement with Hall & Foreman, Inc. in the amount of $82,400 to prepare engineering design, bidding support, and construction management services for the Pressure Regulating Stations Upgrade project. Approved by the Board of Directors of the Yorba Linda Water District 5/10/2012 RC/RK 5-0

31 AGENDA REPORT ITEM NO. 9.3 Meeting Date: May 10, 2012 Budgeted: Yes Total Budget: $6 Million To: Board of Directors Cost Estimate: $125,000 From: Presented By: Prepared By: Subject: SUMMARY: Ken Vecchiarelli, General Manager Steve Conklin, Engineering Manager Steve Conklin, Engineering Manager Funding Source: Account No: Job No: B Dept: Reviewed by Legal: CEQA Compliance: District & Developer Funds Engineering N/A N/A Potential Northeast Developments and Proposed District Planning Study Based on several recent meetings with representatives for two potential residential development projects, identified as the Sage/Cielo Vista Project and the Yorba Linda Estates Project, these proposed developments may be moving forward through the planning and environmental analysis stages. Staff will provide an introduction and status report on these projects and their effects on the District's water and sewer system infrastructure. Staff recommends performing a planning study to assess various options for providing water service to these proposed developments, in a manner that will maximize service objectives to both the proposed developments and, in association with planned District improvements, to the surrounding existing service areas as well. STAFF RECOMMENDATION: That the Board of Directors authorize staff to proceed with final preparation of an RFP and solicit proposals for the Northeast Area Water Service Planning Study. COMMITTEE RECOMMENDATION: The Planning-Engineering-Operations Committee will consider this matter at its meeting being held May 3, Staff will report the Committee's recommendation at the Board meeting. DISCUSSION: Staff has held meetings over the past two years with representatives for potential residential development projects in the undeveloped areas of Improvement District 1. Two viable development projects have emerged that are identified as the Sage/Cielo Vista Project and the Yorba Linda Estates Project. The project sites are adjacent to each other, in unincorporated county territory, located between San Antonio Road and the Hidden Hills community. The discussions in recent months have centered around insuring that these potential projects work closely together to insure a

32 master planned water system infrastructure that integrates well with the District's existing systems. Based on information from project representatives, it appears that one or both of these projects may be moving forward. To provide water service for the developments, District staff considered existing facilities in the surrounding area and additional water supply, pumping and storage facilities that may be necessary to provide the District's approved level of service criteria. Included in these considerations are the Quarterhorse, Springview, Little Canyon, Chino Hills, Santiago and Hidden Hills reservoirs and associated pumping facilities. Also considered is the Fairmont Booster Station Project, for which replacement and expansion is planned, with proposed capabilities to pump groundwater into the 780-ft Zone and the 1000-ft Zone. District Engineering and Operations staff discussed the multiple issues and options concerning water service for these developments. In order to appropriately evaluate the issues and options, staff recommends that hydraulic modeling be performed. That is, to prepare a planning study based on computer-based hydraulic modeling to determine the various alternative means to serve the potential new residential developments as well as to meet the ultimate needs and goals of the District for this portion of the water service area. Included is a recommendation that the study include water quality analyses modeling. Over the last two years, the District, with the assistance of MWH Americas as its engineering consultant, has upgraded its computer-based hydraulic model of the water system to a GIS-based program. Two elements remain in order to complete the upgrade: to add the capability for waterquality modeling, and to calibrate the new model (i.e., fine tune it) with actual flow and pressure data. Staff recommends that these two elements be the initial task of the above-proposed planning study, the completed hydraulic model would be used in tasks to evaluate various facilities and scenarios. This would lead to additional tasks including cost analyses and recommendations for new facilities and upgrade of existing facilities, including the Fairmont Booster Pump Station, to serve the potential new residential developments and the ultimate needs of the service area. Given the estimated cost of this important planning study (in the range of $100,000 to $125,000), staff recommends soliciting multiple engineering firms for proposals to prepare the study. A draft RFP for the recommended planning study is in process. STRATEGIC PLAN: SR 3-B: Continue Planning for Long Term Capital Improvements and Replacements into the future ATTACHMENTS: Name: Description: Type: SKMBT_C pdf Backup Material Backup Material Approved by the Board of Directors of the Yorba Linda Water District 5/10/2012 MB/RC 5-0

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