MINUTES. June 11, 2014

Transcription

1 NEVADA IRRIGATION DISTRICT BOARD OF DIRECTORS / JOINT POWERS AUTHORITY MINUTES June 11, 2014 The Board of Directors of the Nevada Irrigation District and the Nevada Irrigation District Joint Powers Authority convened in regular session at the District's main office located at 1036 W. Main Street, Grass Valley, on the 11th day of June 2014 at 9:00 a.m. Present were John H. Drew, President (Division II); W. Scott Miller, Vice-President (Division III); Nancy Weber (Division I), Jim Bachman (Division IV) and Nick Wilcox (Division V), Directors. Staff members present included Remleh Scherzinger, General Manager; Tim Crough, Assistant General Manager; Jim Malberg, Finance Manager/Treasurer; Gary King, Engineering Manager; Chip Close, Operations Manager; Peggy Davidson, Recreation Manager; Brian Powell, Maintenance Manager; Keane Sommers, Hydroelectric Manager; Jeff Meith, District Counsel; and Lisa Francis Tassone, Board Secretary. PUBLIC COMMENT Johansen Rich Johansen, Farmer, stated that these are interesting times. The drought in the Valley is so severe; it is ungodly severe. People are losing their wells left and right, and people are trying to buy water they cannot find. He recently read a survey that reported that 75 percent of the California population thinks that the drought is pretty serious. Additionally, 75 percent of the same population does not think the drought will affect them. He believes that these individuals have come to rely on water agencies, such as the Nevada Irrigation District to provide them with water. The District has done a tremendous job in the past and the present. This needs to be recognized. The District has always come through to do the heavy lifting during the times when it needed to be done. He provided the Board with letters in support of the District continuing a strong commitment to conservation and to explore and propose new ways of storage. EMPLOYEE RELATIONS New Employee Introduction, Walker Gary King, Engineering Manager, introduced Sarah Walker, Engineering Technician I. Ms. Walker resides in Cool, and enjoys hiking and going to the river. She will be in the 166

2 Drafting Section and was previously employed with Precision Design and Drafting. She is already very busy working on District projects. Ms. Walker thanked the Board for the opportunity to work with the District. The Board and Staff welcomed Ms. Walker to the District. EMPLOYEE RELATIONS New Employee Introduction, Robinson Nathan Wasley, Water Superintendent, introduced Joseph Robinson, Water Distribution Operator I. Mr. Robinson will be working in the Placer County area. He is a graduate of Bear River High School and was involved with the Future Farmers of America. He brings a Grade D1 Water Distribution Certificate to the District. Mr. Robinson has spent several years as a temporary employee in the District s Operations Department and the Recreation Department. Mr. Robinson was previously employed with Black Bart Welding and Rare Earth Landscape. The Board and Staff welcomed Mr. Robinson to the District. EMPLOYEE RELATIONS New Employee Introduction, Cameron Jim Malberg, Finance Manager/Treasurer, introduced Crystal Cameron, Finance Assistant. Ms. Cameron was born in Florida and as a daughter of a Navy man, has travelled all over the world. Ms. Cameron relocated from Sacramento County to Nevada County with her family eight years ago and was recently employed with The Union newspaper. She is married and has one son. The family enjoys scuba diving, free diving, fishing, boating, camping, motorcycle riding, and any other activity that keeps her family healthy and active. The Board and Staff welcomed Ms. Cameron to the District. EMPLOYEE RELATIONS Thorpe, Retirement Presentation (Res ) Jim Malberg, Finance Manager/Treasurer, recognized Patti Thorpe on her retirement after three years of service. Ms. Thorpe started with the District as an Accounting Assistant II, and that position later became a Finance Assistant II. Ms. Thorpe previously worked with Nevada County for 12 years in the Department of Public Works. She was born in San Francisco and has lived in Nevada County for the past 25 years. Mr. Malberg stated that he will miss Ms. Thorpe s attention to detail, her accuracy and positive attitude she brings to work every day. He will also miss her sense of humor and the bantering that is done during baseball season. She is married and has one daughter. Ms. Thorpe thanked everyone for the support she has received, and stated that it has been a pleasure serving the District. The Board applauded Ms. Thorpe for her three years of service. President Drew presented Ms. Thorpe with a Certificate of Appreciation (Res. No ). 167

3 EMPLOYEE RELATIONS Lauer, Retirement Presentation (Res ) Keane Sommers, Hydroelectric Manager, recognized Charles Lauer on his retirement. Mr. Lauer is currently the most senior employee at the District with 36 years of service. During this time frame, he has given his best to the District. Mr. Sommers was able to learn more about Mr. Lauer during a one and a half hour snow cat ride into Bowman about a year ago. What amazes Mr. Sommers is the breadth and depth of Mr. Lauer s knowledge on the District s operations in the high country. He is also very willing to share his knowledge. He has been absolutely critical in bringing new people up to speed in order to continue operations. He has gotten personnel and equipment in and out of Bowman safely over the years. Mr. Sommers wished Mr. Lauer well in retirement and thanked him for his years of service. Mr. Lauer stated that it is hard to leave when there is new and good management. The Board applauded Mr. Lauer for his 36 years of service. President Drew presented Mr. Lauer with a Certificate of Appreciation (Res. No ). EMPLOYEE RELATIONS Service Awards The following employees were recognized for their length of service with the District and were congratulated by their department manager or supervisor prior to being presented with recognition awards: Employee Title Hire Date 35 Years Jeffery Huey Jeffery S. Brady Maintenance Supervisor Maintenance Superintendent 03/09/79 03/26/79 30 Years Warren R. Hart Assistant Water Superintendent 06/25/84 20 Years Armon W. Close III Lawrence Lockwood Sr. Todd A. Newman 10 Years Lisa Francis Tassone Cheryl A. Harris Jerry A. Green Water Operations Manager Meter Reader II Maintenance Supervisor Board Secretary Senior Finance Assistant Hydroelectric Generation Supervisor 01/10/94 01/18/94 01/18/94 02/17/04 04/19/04 06/01/04 MINUTES May 28, 2014 Regular Meeting Approved the Minutes of the Board of Directors regular meeting of May 28, 2014 as submitted. M/S/C Weber/Wilcox, unanimously approved 168

4 WARRANTS Approved the following warrants: Yuba-Bear Revolving Fund Nos through 26482, inclusive; General Fund Revolving Account Nos through 65168, inclusive; Recreation Fund Nos through 4397, inclusive; and Payroll Direct Deposit and Warrant Nos through and Nos. V1107 through V1266, inclusive. M/S/C Weber/Wilcox, unanimously approved EMPLOYEE RELATIONS Peterson Retirement (Res. No ) Adopted Resolution (Resolution of Appreciation upon Retirement Jeffrey Peterson) after seven years of service to the District. M/S/C Weber/Wilcox, unanimously approved EMPLOYEE RELATIONS Petty Retirement (Res. No ) Adopted Resolution (Resolution of Appreciation upon Retirement Connie Petty) after 12 years of service to the District. M/S/C Weber/Wilcox, unanimously approved EMPLOYEE RELATIONS Kincheloe Retirement (Res. No ) Adopted Resolution (Resolution of Appreciation upon Retirement Cindy Kincheloe) after 14 years of service to the District. M/S/C Weber/Wilcox, unanimously approved EMPLOYEE RELATIONS Gobert Retirement (Res. No ) Adopted Resolution (Resolution of Appreciation upon Retirement Joseph Gobert) after 23 years of service to the District. M/S/C Weber/Wilcox, unanimously approved EMPLOYEE RELATIONS Hart Retirement (Res. No ) Adopted Resolution (Resolution of Appreciation upon Retirement Warren Hart) after 30 years of service to the District. M/S/C Weber/Wilcox, unanimously approved EMPLOYEE RELATIONS Bradley Retirement (Res. No ) Adopted Resolution (Resolution of Appreciation upon Retirement Tim Bradley) after 31 years of service to the District. M/S/C Weber/Wilcox, unanimously approved EMPLOYEE RELATIONS Chittock Retirement (Res. No ) Adopted Resolution (Resolution of Appreciation upon Retirement Charles Chittock) after 33 years of service to the District. M/S/C Weber/Wilcox, unanimously approved 169

5 EMPLOYEE RELATIONS Huey Retirement (Res. No ) Adopted Resolution (Resolution of Appreciation upon Retirement Jeffery Huey) after 35 years of service to the District. M/S/C Weber/Wilcox, unanimously approved IMPROVEMENT DISTRICTS ASSESSMENTS (Res and Res ) Adopted Resolutions upon motion made by Director Weber, seconded by Director Wilcox and passed with a unanimous roll call vote: No (Placing Starbright Acres Improvement District No. 19 Assessment on District Assessment Roll for Collection in Nevada County); and No (Placing Lake Vera Improvement District No. 20 Assessment on District Assessment Roll for Collection in Nevada County). ASSESSMENTS DELINQUENT ACCOUNTS (Res & Res ) Adopted Resolution No (Placing Delinquent Accounts on District s Assessment Roll for Collection County of Nevada) and Resolution No (Placing Delinquent Accounts on District s Assessment Roll for Collection County of Placer). M/S/C Weber/Wilcox ELECTIONS (Res and Res ) Adopted Resolution No (Calling General District Election, and Requesting the Board of Supervisors Consolidate with Any Other Election Called on Said Date and Requesting Election Services by the County Clerk County of Nevada). M/S/C Weber/Wilcox Adopted Resolution No (Calling General District Election, and Requesting the Board of Supervisors Consolidate with Other Election Called on Said Date and Requesting Election Services by the County Clerk County of Placer). M/S/C Weber/Wilcox FUND SIGNATURE AUTHORIZATION (Res. No ) Adopted Resolution No (Fund Signature Authorization District Bank and Investment Accounts). M/S/C Weber/Wilcox DISTRICT TRAINING/SEMINARS Principals of Land Acquisition Seminar Approved training request in the amount of $1, for a Senior Engineering Technician to attend the Principals of Land Acquisition Seminar in Riverside, CA. M/S/C Weber/Wilcox, unanimously approved 170

6 AGREEMENTS: PLACER COUNTY WATER AGENCY INTERTIE AGREEMENT Amendment No. 3 Approved Amendment No. 3 to the Intertie Agreement with Placer County Water Agency to include the Locksley Lane Intertie. M/S/C Weber/Wilcox, unanimously approved STATE WATER RESOURCES CONTROL BOARD Curtailment of District s Post-1914 Water Rights Rem Scherzinger, General Manager, stated that he has invited a number of the District s stakeholders to this meeting in order for them to participate in the discussion and hear information provided by District Counsel as it relates to actions taken by the State Water Resources Control Board (SWRCB). He will ask Dustin Cooper, District Counsel, to discuss the emergency orders from the SWRCB on three creeks in Tehama County, and to discuss the curtailment order the District received on May 27, 2014, and action that may occur on June 18, He will ask Jeff Meith to review what other entities are doing as a result of and in response to the curtailment orders. Mr. Scherzinger will speak to where the District is positioned and what the District plans on doing in the future. Dustin Cooper, District Counsel, stated that curtailment orders are not out of the ordinary. They occurred in the early 1990 s and during the drought of Curtailment orders are based on the theory of the State s water rights priority system. In times of shortage, water rights are curtailed in reverse order of priority. The difference this year is the process and the substance of the curtailment orders. On May 21, 2014, the first item on the SWRCB agenda was a discussion on curtailment orders. The second item of business was consideration of emergency regulations. The SWRCB proposed and ultimately adopted on May 21, 2014 curtailment orders for Mill Creek, Deer Creek and Antelope Creek in Tehama County that prohibit agricultural diversions under the theory that such diversions would be wasteful or unreasonable, if the diversions would result in the creek flow being reduced to a certain level. In other words, the regulations demanded a minimum instream flow of 50 cfs through June 30, 2014, and a minimum instream flow starting in October 2014 of 20 cfs. The regulations also require certain pulse flows in June The pulse flows are to be about 100 cfs or the full flow of the creek. The water right holders on these three creeks are primarily riparian. Those that are not riparian are pre-1914 water rights. The theory that the SWRCB would disregard the priority system is one problem he has with the regulations. The second problem he has is the process. The SWRCB is considering an agricultural use of water to be wasteful and unreasonable, and this is being done without any evidentiary hearing. The water right holders on those creeks did not have the opportunity to explain how these curtailments would affect them. And it affects them very dramatically. Because these creeks are spring fed, they have been very reliable in past droughts. Mr. Cooper stated that his firm has clients on these three creeks and he has opposed the regulations at the meeting on May 21, The SWRCB went ahead and adopted the regulations. The process for approving emergency regulations mandates that the 171

7 regulations be transmitted to the Office of Administrative Law which is another State agency. There is a very short statutory time period. The Office of Administrative Law has 10 days to approve or disapprove the regulations. He has filed objection statements with the Office. The Office of Administrative Law very clearly indicated that the State is in an emergency and the Office went ahead and approved the regulations. Earlier this year, there was emergency legislation to change the penalties for unauthorized diversion of water. The penalties are now $2,500 per acre foot per day plus $1,000 per day plus a premium of $500 if an emergency regulation is violated. There is a huge financial disincentive to ignore the regulations. It could literally bankrupt the water right holders. The other dynamic is the endangered species. The Federal and State fishery agencies are threatening Endangered Species Act violations for diverting water. The State has employed a strategy that Mr. Cooper finds extremely troubling. The State is pressuring the water right holders: on one hand the State will use financial penalties and emergency regulations, and on the other hand, the State will use the Endangered Species Act. This will force people to give up their water rights, and the State will utilize a process that is extremely quick (15 days). Director Wilcox stated that a water right is essentially a property right. The State is implementing through emergency procedures a taking of property. He can understand why the process needs to be accelerated because a drought emergency is immediate and requires an immediate response. There cannot be hearings that last for six months. He asked if water could be provided now and the property taking issue be compensated for at a later time. Mr. Cooper responded affirmatively. He urged the SWRCB to do so. The State does not need to go down the emergency rule making path. The State has existing legal authorities to address the emergency. One example is the power of eminent domain. The State could deposit money with the court, and implement the taking. What remains is deciding whether or not the compensation is just. Another example is that the three creeks in Tehama County are adjudicated. The Tehama County Superior Court has decided what is reasonable and beneficial in these particular streams and has decided the various priorities amongst the diverters. Since these creeks are adjudicated, the SWRCB should justify the emergency regulations before a Tehama County Superior Court judge. The judge has the power to modify the adjudication if the evidence is compelling. Mr. Cooper stated that in his opinion, the key point in both of the legal processes is that there is a level of due process that the SWRCB ignored. Director Wilcox asked if the adjudications took into account fishery flows. Many of the adjudications are quite old, and fishery flows were not a consideration. Mr. Cooper stated that this would be an argument with the SWRCB. Some of the adjudications pre-date Article 10, Section 2, which is the provision in the Constitution that requires reasonable and beneficial use of water. Jeff Meith, District Counsel, pointed out that since 1991 there have been agreements in place on Mill Creek with the fishery agencies to release a certain amount of flows. One 172

8 of the arguments made to the SWRCB is that there is no emergency because there are agreements in place with the National Marine Fisheries Service and the California Department of Fish and Game. The SWRCB imposed the regulations anyway, and placed the burden on the Mutual Water Company to justify that the existing agreements suffice under the new regulations. Mr. Cooper stated that a couple of weeks ago, the SWCRB curtailed all post-1914 water rights. It is felt that the system is dry enough to justify the curtailment orders. District Counsel has been working with Staff to complete the certification process that certifies that the District will commit to stopping diversions and indicated what alternate sources are available. Alternates sources would include diversions from storage that accrued before the effective date of the curtailment. Mr. Cooper stated that the third series of possible curtailments could be some of the pre-1914 water rights and possibly some riparian rights in the Bay Delta watershed, and this will be discussed at the SWRCB s meeting of June 18, Today, he is supposed to receive notice of the proposed emergency rule making that the SWRCB will consider at the June 18 meeting. The thought is that the SWRCB will start with a tiered approach. They may curtail pre-1914 water rights through a priority date of 1904 as a first a phase, and then move backwards in reverse order of priority until they reach Statehood. If necessary, they will begin curtailing riparian rights. Mr. Cooper stated that the process in and of itself is flawed. This should not be done with emergency rule making. There is also a substantial evidentiary problem when pre water rights are curtailed. The SWRCB does not have a data base of priority dates for pre-1914 rights. The SWRCB needs to explain how the rights will be treated that are pre-1914 in nature but do not have any specific priority date. Mr. Cooper stated that based on what he is hearing the SWRCB will not do anything with stored water. If the SWRCB approves the regulations on June 18, the draft regulations will be transmitted to the Office of Administrative Law, reviewed for a 10 day period, and approved or disapproved. Assuming the Office approves the regulations, the effective date would be early July. At that point in time, it is unlikely that the District will have natural flow in the watersheds. What he sees as a potential problem is how long the curtailment will last. Legally, the curtailment can last 270 days. The concern is that when and if the fall rains begin, how quickly the SWRCB will stop the curtailment so that the District can divert water to storage. Director Miller stated that the fish will not come up during droughts. They are triggered by wet years. The SWRCB s premise will harm the fish by luring them up during a dry year. This is nonsense. Mr. Cooper added that there is also a temperature impact. On Deer Creek, temperatures are over 80 degrees, and this is fatal to salmon. Mr. Cooper stated that as part of the curtailment process, the SWRCB has been discussing what Mr. Cooper calls a super priority for health and safety and for water for fish. This is a substantial departure from existing law, and this can cause major 173

9 problems in the future. The District should object to this element. The water right priority system worked well in the past droughts, and there should be no deviation. President Drew asked if there has been any discussion about increased predation from striped bass on species as a result of lower water levels. Mr. Cooper stated that there has been no discussion on that matter. Director Wilcox stated that he finds that the reshuffling of beneficial uses to place health and safety above others very interesting. The priority would be: 1) Fish and Wildlife 2) Municipal Users 3) Agriculture Users Director Wilcox stated that under the SWRCB s theory, large municipal users south of the Delta assume a priority greater than agriculture users in the area of origin which is in violation of the law. This is an invitation to World War III. This scenario is likely to occur again if climate change is what is expected. The SWRCB needs to commit to entering into an evidentiary hearing to create a plan to deal with this in the future, where all parties participate. This was proposed a number of years ago with the so called Phase 8 of the Bay Delta hearings. This never occurred. Mr. Cooper stated that point number one of his objections is that the process is flawed. The SWRCB is taking water away from small farms and ranches, and this water is their livelihood. They may be compensated, but this would occur after years of litigation. There is a health and safety component on both sides of the equation. This cannot be flushed out without an evidentiary hearing that would allow the various sides to put forth their evidence and to allow an impartial SWRCB to consider that evidence. There is an immediate concern with the regulations and a precedent setting concern. There are reasons that the District should object based on both concerns. Jeff Meith, District Counsel, stated that no one intends to dry the creeks up. The real issue is fundamental to having a fair opportunity to see what is intended by SWRCB, how they intend to impose, and what would be the alternatives. There is a public trust condition within the water rights regarding fishery. The point is that when restrictions are implemented, there should be an opportunity to be heard with a fair notice. He is encouraging the clients his firm works with to comment on the process. Mr. Meith stated that the SWRCB was using its emergency powers earlier this spring in connection with exports of water. The best that entities can do is purchase water and accumulate the damages so that a damages claim can be filed at a future date. Every diverter that he can think of has appeared at the SWRCB meeting and has objected to the process. It is very important that the industry protect the principles upon which the industry was built. He stated that assistance from the Legislature and the Association of California Water Agencies (ACWA) could be obtained. Primarily, his clients in Tehama 174

10 County are not in a position to enter into litigation. They are going to accumulate their damages and assess whether or not to file a claim. Mr. Meith stated that the SWRCB needs to begin collecting data on the pre-1914 water rights and the riparian rights. Having the SWRCB declare curtailment orders on an emergency basis, based on the drought is not appropriate. This drought might be unusual, but it is not unprecedented, and it was entirely predictable. Director Wilcox stated that part of the problem is that the SWRCB has no legal mandate or oversight over the pre-1914 water rights. A legislative approach may include providing the SWRCB some oversight over the pre-1914 rights so they can introduce logic into the system. He admits that this is heresy. Mr. Meith advised that it does not appear the SWRCB is staffed, prepared, nor does it have the expertise to take on such authority. Mr. Scherzinger stated that the thread starts with the Governor s initial order of drought emergency in January It is very clear to see that thread continue to a second order where the Governor stipulates a number of needs, one of which is to direct the SWRCB to look at opportunities for drought conservation. The emergency declaration is not a curtailment per se, as much as it an authority of the SWRCB to take for salmon. The other action is to begin the curtailment process. Both of these actions are clearly a threat to the District. With regard to legislative relief, ACWA has turned its cheek thus far. It would appear that the Legislature is focused on groundwater, and not surface water or storage. Mr. Scherzinger stated that it is important to recognize that the creation of the two super priorities over and above consumption constitutes a significant threat to the District. The fishery super priority is bigger than salmon. It is any of the endangered species. There are approximately 100 plus identified Endangered Species Act (ESA) species in the Bay Delta, and the priority is being driven by the National Marine Fisheries Service, as opposed to the Department of Fish and Wildlife. So, there is really no relief and it is bigger than it looks. The other area is the health and safety issue. Health and safety has not been defined. Frances Spivy-Weber, a member of the SWRCB, has indicated that health and safety could mean dust control in the Central Valley. Essentially, the water holders on the Sacramento and San Joaquin Rivers would cease diversions so that water can be provided for dust control in Central Valley. Also, the SWRCB believes that holding the salinity barrier in the Delta has some intrinsic health and safety benefit to those that divert off of the Delta. So, water is being provided to make sure that salt stays out of the Delta so that others can pump from the Delta. This is enormous. Mr. Scherzinger stated that the water rights framework has changed. The next steps for the District would include the following: - The foundation of the District is based on the water right priority system. Now that the priority system has changed, the Raw Water Master Plan needs to be reevaluated. 175

11 - There are four ways to deliver water: imported water, local supply, recycled water and conservation. The District does not have direct access to imported water. That leaves the District with three alternatives. Regarding local supply, the District has surface water, but no groundwater. The District is recycling some water by recapturing some of the wastewater treatment plant stream and putting it back into use for raw water customers. Any additional work is extraordinarily expensive. The District s conservation program is clearly more urban than it is rural. There are opportunities for conservation for raw water. The only way to deliver water is through surface water storage. Director Miller asked Mr. Scherzinger what Assemblyman Dahle s opinion is of the water right curtailments. Mr. Scherzinger stated that Mr. Dahle s office is not currently pursuing this matter. Director Wilcox stated that the future has a fairly clear path. If the District has a problem, it would be the District s mid elevation storage inventory. The inventory is insufficient for the District s projected needs. Director Weber stated that she attended the Mountain Counties Water Resources Association/Association of California Water Agencies meeting on June 6, The featured speakers were Mark Cowin, Director at the Department of Water Resources, Felicia Marcus, Chair of the SWRCB, and Randy Fiorini, Chair of the Delta Stewardship Council. There was not much content to what was said by these speakers. In the afternoon, there was a talk show format that was moderated by Tom Philip of the Metropolitan Water District. Director Weber spoke to the group and explained that water is the backbone of Nevada County s community. Water supports businesses, recreation tourism, agriculture, quality of life, property values, etc. Water has a profound effect on the community s economy. Ms. Marcus stated that Director Weber does not understand curtailment. Director Weber stated that she feels that she does understand curtailment. The District s community paid for the infrastructure for the dams and pipes that makes water available and the District needs to be reimbursed. The State is messing with our carry over storage. Mr. Fiorini stated that the issues are due to climate change. Everyone is suffering under climate change. Director Weber stated that these issues are going to require public pressure by thousands of people. Mr. Scherzinger stated that the District s water system is designed on snow capture, not on rain capture. The current climatologists are indicating that the southwest is going to have longer dry spells with very intense wet periods. There could be storms in excess of 100 year events and the District s systems are not designed to deal with these types of storms. Climate change exacerbates the curtailment matter. Meeting recessed at 10:22 a.m. and reconvened at 10:28 a.m. 176

12 Mr. Scherzinger reported that he has been told that the SWRCB has rescheduled the hearing of June 18 to July 1, Roger Ingram, University of California Cooperative Extension Farm Advisor, stated that the discussion on the priorities raises an important issue. Without irrigation water that has been available for local agriculture to use, the endangered species will be local farmers and ranchers because they will no longer be able to be economically viable. It would be a total devastation on the local food system if this is allowed to occur. The Cooperative Extension will be standing ready and available to assist the District in providing an understanding on this matter. It seems like there will be drastic consequences if the SWRCB is successful in their efforts. It will be extremely catastrophic for local agriculture. Rich Johansen, Farmer, stated that he thinks scheduling a Water Summit makes a lot of sense, and the sooner the better. Wayne Vineyard, Farmer in Placer County, thanked the District for their work in the 1960s for building storage. It may be time to look at additional storage facilities. Without water, agriculture is nothing. Linda Miller, agriculture customer, stated that people need to realize that the prices at the grocery store are high now. It will not only be the prices, but availability of (or lack of) food to eat. There is a need to be prudent and stomp our feet. Susan Hoek thanked the Board for having this meeting. She stated that everyone in the community needs to be united and come together for this Water Summit. She added that the District needs to add storage, and this will require educating the people. Jim Gates, Rancher, stated that he was born in Rough & Ready. On April 7, 1850, Rough & Ready got tired of big government and they got out. There is movement all over Northern California maybe it s time we gotta get out again. We need to take care of ourselves. Lily-Marie Mora thanked everyone for being on top of these water issues. She is speechless. She came to the District in January to work on water rate issues, and now there needs to be work on water. She reiterated the need to organize and work together on this issue. Mr. Scherzinger stated that the District s service area is generating approximately $98 million in agriculture, and this industry needs to be protected. In the State, water purchases are ranging between $1,700 per acre foot and $3,200 per acre foot. Chip Close, Operations Manager, provided an update on the District s storage. The District took proactive steps in October and November 2013 to try and capture every drop of water possible. The District is no longer gaining storage, and obviously now with the curtailment order, there is no possible way to gain storage under post

13 rights. Current storage totals are approximately 99 percent of average for this time of year. But with no additional run-off and with the curtailment of water rights, the storage levels will be dropping off. Total reservoir capacity is approximately 86 percent. Director Bachman asked how the rest of the season will look. Mr. Close explained that in April 2014, the District declared a Stage II drought emergency, and efforts continue regarding asking customers to conserve by 20 percent pursuant to the State s request. The District s carryover storage target was increased in order to set the District up for Customers to date have conserved approximately 19 percent Director Miller asked if the water will have to spill when the rains start in the fall. Mr. Close responded affirmatively. The District will not be able to capture water with regard to the water rights that are curtailed. Mr. Scherzinger pointed out that Staff is assessing the damage due to the curtailment of water rights to establish financial damage to the District and submit that information as part of a claim action that may occur. Director Weber asked if the Water Summit can be scheduled prior to the July 1, 2014 SWRCB hearing. Mr. Scherzinger stated that he will try to make this happen, but Staff needs some time to get the logistics in order. Linda Miller suggested using the Don Baggett Theater at Nevada Union High School. Director Weber stated that what she is hearing is that it really will not be effective to litigate. The SWRCB is operating under emergency order with power they have never experienced before. She suggested packing the chambers with informed individuals. Mr. Meith pointed out that his recommendation not to litigate applies to curtailment orders. If the SWRCB looks at storage, he would suggest litigation. Jan Blake, Nevada County Resource Conservation District (RCD), stated that the RCD began in 1944, and nobody knows who the RCD is. She suggested that a full page notice be placed in the newspaper to inform the public about what is happening with water rights and to discuss proposed new storage options. Mike Pasner, Farmer, stated that these are difficult issues to comprehend. Most people in the room are talking about increasing storage. It is not just about increasing storage. Mr. Scherzinger stated that the District will evaluate all opportunities to increase water supply. 178

14 Mr. Scherzinger stated that he will be scheduling a Water Summit in order to involve members of the communities the District serves. He stated that the meeting will be held in the evening to accommodate as many individuals as possible. OPERATIONS DEPARTMENT Reorganization Chip Close, Operations Manager, presented a recommendation from Staff, the Water and Hydroelectric Operations Committee and the Administrative Practices Committee to reorganize the Operations Department. With the large number of retirements the Operations Department is experiencing, there is an opportunity reevaluate staffing levels for efficiencies. The proposed changes are as follows: Currently, the Electrical Section reports to the Treated Water Superintendent; Mr. Close is proposing that the Electrical Section report to the Operations Manager. Currently, there are two Assistant Water Superintendents. Mr. Close is proposing to reduce the number of Superintendents to one, and to increase the Crew Supervisors from two to three. Currently, the Hydraulic Systems Technician reports to the Electrical Systems Supervisor; Mr. Close is proposing to have the position report to the Water Distribution Supervisor. Currently, the Department has an Operations Administrator position; Mr. Close is proposing to change the title to Water Resources Superintendent with added responsibilities. Currently, the Hydrographer in the Hydroelectric Department reports to the Hydroelectric Manager; Mr. Close is proposing to have the position report to the Water Resources Superintendent. Currently, the Water Efficiency Technician reports to the Operations Manager; Mr. Close is proposing that the position report to the Water Resources Superintendent. Mr. Close is proposing to add a Watershed Resources Planner as a new position, and this position would report to the Operations Manager. He concluded his presentation by pointing out that the cost savings, as a result of the proposed Operations Department reorganization, would be approximately $33,000. Adopted proposed reorganization of the Operations Department and approved amended job descriptions associated with the reorganization. M/S/C Miller/Bachman, unanimously approved Lily-Marie Mora thanked the Board for bringing costs down for the stakeholders. She suggested placing this kind of information on the District s website. PLACER COUNTY AGRICULTURE TOUR Rem Scherzinger, General Manager, reported that representatives of the District that attended the Placer County Agriculture included Director Bachman, Chip Close, Lesa Osterholm and himself. He would like to increase the District s footprint in Placer County. 179

15 Director Bachman was impressed with Placer County Water Agency s pump station on the American River which was included in the Tour. It is amazing what can be done with $74 million. CITY/COUNTY MEETING Rem Scherzinger, General Manager, reported that he attended the City/County meeting in Truckee on June 6. He was invited to speak about surface water storage and water management. BANNER MOUNTAIN HOMEOWNERS ASSOCIATION Rem Scherzinger, General Manager, reported that he attended the Banner Mountain Homeowners Association meeting on Saturday, June 7. There was an open dialogue about the drought and water storage. NEVADA COUNTY FARM BUREAU Rem Scherzinger, General Manager, reported that he attended the Nevada County Farm Bureau meeting to provide updates about the District. COSUMNES, AMERICAN, BEAR AND YUBA (CABY) INTEGRATED REGIONAL WATERSHED MANAGEMENT PROGRAM (IRWMP) Rem Scherzinger, General Manager, reported that the 2014 CABY IRWMP has been adopted. A Resolution will be presented to the District s Board of Directors for consideration at the next Board meeting. He added that CABY is in the process of filing for another grant for drought funds, etc. Director Weber stated that she attended the CABY celebration on May 30, and asked Tim Crough, Assistant General Manager, to provide an update. Mr. Crough stated that the celebration was for the great work that was done toward receiving a $5.5 million grant, and for CABY coming up with a new governance process. CABY remains valid. Of the $5.5 million, funds were predominantly granted to water agencies/districts. GRAND JURY REPORT - Update Rem Scherzinger, General Manager, reported that the District has been under Grand Jury investigation regarding the District s Proposition 218 water rate increase. This is the first Report that the District s General Manager does not have to respond to. He highlighted three of the seven findings made by the Grand Jury in the Report: NID followed the rules and regulations pursuant to Proposition 218. NID recognized that it was in fiscal trouble unless their business model changed. NID has made proactive fiscal decisions to control operating and maintenance costs and rebuild reserves. 180

16 Lily-Marie Mora suggested submitting information regarding the Grand Jury Report to the newspaper. Mr. Scherzinger stated that the Report has been posted on the Grand Jury s website, and the District will be issuing a press release about the Report. NEXT BOARD MEETING Director Miller s Status Director Miller reported that he will not be able to attend the next Board meeting. MASTER TAX SHARING AGREEMENT Placer County Director Bachman reported that due to Rem Scherzinger s assistance, the District is very close to executing a Master Tax Sharing Agreement with Placer County. This has been a goal of Director Bachman s since he started as a District Board member. FIRST ANNUAL KIDS TRIATHLON President Drew reported that he attended the first annual Kids Triathlon at Orchard Springs. There were 21 contestants between the ages of five and fifteen. He took video of each contestant crossing the finish line. The kids were so happy and so proud. The event was very positive. There were several District employees volunteering at the event on their own time. EDUCATION ON WATER ISSUES Lily-Marie Mora suggested that the District present water issues to local schools and Sierra College, so that teachers can come up with assignments and the students can learn early on how important water is to the community. CLOSED SESSION was declared at 11:30 a.m. pursuant to Government Code Section (b) to confer with Legal Counsel regarding anticipated litigation two cases. CLOSED SESSION was declared at 11:30 a.m. pursuant to Government Code Section to provide direction to the District s designated bargaining representatives Scherzinger and/or District Counsel regarding 2014 salary/benefit/working conditions. MEETING RECONVENED in regular session at 1:23 p.m. MEETING ADJOURNED at 1:23 p.m. to reconvene in regular session on June 25, 2014, at 9:00 a.m. at the District's main office located at 1036 W. Main Street, Grass Valley, California. 181

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