MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE SEMITROPIC, BUTTONWILLOW, POND-POSO, AND WILDLIFE IMPROVEMENT DISTRICTS OF SEMITROPIC WATER STORAGE DISTRICT Convened at 12:30 p.m. on Wednesday December 10, 2008 The regular meeting of the Board of Directors was called to order by President Wegis on Wednesday, December 10, 2008, at 12:30 p.m., at the offices of the District, 1101 Central Avenue, Wasco, California. Those in attendance included: Directors Present: Directors Absent: Others Present: Via Closed Session Conference call James A. Crettol, Ted Page, Phil Portwood, Todd Tracy, Dan Waterhouse and Fredrick Wegis; Jeff Fabbri; General Manager, Will Boschman; District Engineer, Paul Oshel; District Superintendent, John Lynch; District s Controller, John Wooner; District s Staff Engineer, Craig Wallace; District s Accountant, Judy Burns; District s Exec. Secretary, Marsha Payne; Districts Legal Counsel, Scott Kuney; District s Consulting Engineers, Bookman-Edmonston, GEI Consultants, Inc., represented by Dick Rhone; W.M. Lyles Representative, Rick Amigh; District Consultant, John Jones; Wells Fargo Representative, Michael Engelbrecht; District landowner, Mark Palla; ACDF, LLC representative, Devin Aviles; and Steve Gair, representing Wingate Realty. Legal Counsel, Ernest A. Conant. President Wegis led the flag salute, then introduced and welcomed all guests. Approval of Agenda It was noted that one new item came to the staff s attention after posting the agenda and needs action before the next meeting; Consider Land Leases. 1
On motion by Director Tracy, seconded by Director Waterhouse, the revised Agenda was unanimously approved. ACTION ITEMS Minutes On motion by Director Waterhouse, seconded by Director Crettol, the Minutes of the Regular Meeting on November 12, 2008 were approved as presented. Treasurer s Report On motion by Director Portwood, seconded by Director Page, the Treasurer s Report for Semitropic Water Storage District and Semitropic Improvement District for November 2008 was approved. Accounts Payable The Cash Disbursement List was presented for review and payment. Several items were discussed, including payments for marketing consultants, SWRU Arsenic Treatment Pilot Program expenses (which will be billed back to the Banking Partners), computer program support and expenses to refurbish the house at the drilling yard. On motion by Director Waterhouse, seconded by Director Tracy, the Board authorized payment of the Accounts Payable as listed on the December 10, 2008 Disbursement List for Semitropic Water Storage District and Semitropic Improvement District. A copy of the Disbursement List is attached hereto as "Exhibit A". Consider Resolution to Adopt Conflict of Interest Code District Exec. Secretary, Marsha Payne, reported that the District s Conflict of Interest Code was reviewed by legal counsel and determined that modifications were necessary. A Notice of Intent was posted providing a 45-day comment period. No comments were received by the District on this matter and therefore, it is proper for the Board to adopt a new Conflict of Interest Code. On motion by Director Waterhouse, seconded by Director Crettol, the Board adopted Resolution ST 08-10: RESOLUTION ANNOUNCING THE FINAL ADOPTION OF A CONFLICT OF INTEREST CODE 2
District staff will submit the Resolution, along with a copy of the adopted Conflict of Interest Code, to the County as required by Government Code Section 87302. A copy of the Conflict of Interest Code is attached hereto as Exhibit B. Consider Land Leases Manager Boschman stated that previously the Board terminated all leases on District land. However, on the recently acquired Vander Weerd property, the previous leasee, John Conda, has requested to continue farming a first year crop of alfalfa until after next year s harvest. John Wooner also reported on a conversation he had with Conda regarding recent farm activities. Discussion followed. On motion by Director Portwood, seconded by Director Waterhouse, the Board stated that in order to be consistent and fair to all those requesting a lease on District property that no leases would be renewed on District acquired lands. The Board wants to be clear that the purpose of purchasing land is to take it out of production to permanently limit the use of groundwater on that land, or other consistent purposes. Design/Build Team Construction Update W.M. Lyle s representative, Rick Amigh, reported on the design and budget development of SWRU Phase 2B of the Project. Hanson Pipe is producing 54-inch and 60-inch wet cast RCP at its Shafter plant and 36-inch pipe in Sacramento to gear up for startup of construction of SWRU Phase 2B. The manufacturing of 108-inch RCP will commence upon completion of the 54-inch pipe. The Raw Water Processing Plant facility operated until the end of November when it was shut down to accommodate the schedule of the District s winter shutdown. It was restarted on December 9 and is scheduled to run thru January 2009. INFORMATIONAL AND UP-DATE ITEMS Manager Boschman s written report on District Activity During November 2008 dated December 5, 2008 was accepted for filing. In addition, Manager Boschman presented the following: Water Supply Update Manager Boschman stated that speakers at the ACWA Conference reported a very grim outlook for 2009. The highest reservoir levels throughout the State was reported to be only 29% of capacity. At this time, the best we can expect is a 40% allocation from the State if there is significant precipitation. 3
Discussion followed on Winter Shutdown work and wells in each system that could be used for emergency situations during this time. Status of Delinquencies There were no Contract Water Delinquencies in November. Banking Project Manager Boschman reported on the Delta Wetlands Project. Western Development and Storage (WDS) has taken over the management of Delta Wetlands and is looking for a home for the water. Semitropic has volunteered to serve as the lead agency in an EIR to help obtain the required State Board permits for the Project and provide a storage facility. Several scoping meetings will be held at various locations throughout the State, including one meeting scheduled at the District. The Manager reported that staff and consultants are still working toward getting easements on the dairy properties for the SWRU Phase 2- facilities. So far, the dairies have not been very cooperative, expressing concern it might jeopardize their dairy permits; however, several meetings have been requested for discussion and hopefully resolution. Semitropic-Rosamond JPA Activities The Manager reported that a final contract is ready for signature for a banking agreement with Viejas Band of Kumeyaay Indians for 1,000 shares with an option for 2,000 more. There were various meetings at the ACWA Conference, one of which was Palmdale Water District who is very interested in an agreement with the JPA and possibly participation. Energy Activities Manager Boschman reported on an invitation received from Concentrix for the dedication of a new solar project in Germany. Semitropic representatives were invited to attend the dedication and demonstration of the new facilities which are similar to facilities Concentrix has proposed for Semitropic. Dick Rhone of GEI Consults reported on a solar energy project in the Mojave Desert that is looking for a reliable source of water. Discussions followed. Poso Creek IRWMP District Engineer, Paul Oshel, reported on a grant application being prepared by the Poso Creek Integrated Regional Water Management Plan Group for possible funding available for 4
water conservation plans. The IRWMP Group is for a resolution of support from members. On motion by Director Page, seconded by Director Waterhouse, the Board authorized the District Manager to sign a resolution of support for filing a grant application in the form of Resolution No. SID 08-9: IN SUPPORT OF FILING AN APPLICATION FOR A GRANT WITH THE BUREAU OF RECLAMATION FOR WATER FOR AMERICA: EXPAND, PROTECT, AND CONSERVE OUR NATION S WATER RESOURCES CHALLENGE GRANT PROGRAM: WATER MARKETING AND EFFICIENCY GRANTS FOR FISCAL YEAR 2009 Consultant s Reports District consultant, John Jones, reported on the well drilling operations, well developing, the right-of-way easements and land purchases for the SWRU Phase II project. Mr. Jones also reported on the cathodic testing on the pipelines by Far West Corrosion. After tests have been completed, an evaluation will be made to determine if further action is necessary to protect District pipelines. Consulting Engineer s Report Mr. Dick Rhone from Bookman-Edmonston, GEI Consultants, Inc. presented the Consulting Engineers Report on Projects for Semitropic Water Storage District for work during November 2008, which was accepted for filing. Mr. Rhone also reported on engineering activities related to various projects including the Crop Rotation Study, SWRU Engineering support, preparation of grant applications for the Poso Creek IRWMP and construction management of the P-565 Distribution System and 2008/2009 Winter Improvement Projects. Miscellaneous Discussion followed regarding the usefulness on various pumps, motors and equipment acquired through the recent purchases of various properties. Further discussion proceeded on the recent rate increase by the District on Ag power charges. The 2008 rate was 10 Kwh and was increased to 11 Kwh with the 2009 Budget. After further consideration, a motion by Director Page, seconded by Director Waterhouse, withdrew the previous power rate increase which automatically reverted the rate back to 10 Kwh. 5
Consider Wells Fargo_JPA Financing Michael Engelbrecht, Wells Fargo representative, reported an update to the Board of a plan for financing for facilities to fulfill the commitment on the San Diego agreement. Various scenarios were discussed, including new money proceeds and possible risks for the District on joint transactions thru the JPA. Director Crettol and Michael Engelbrecht left the meeting at 3:20 p.m. Closed Session At 3:20 p.m. the District s legal counsel, Scott Kuney, stated that a closed session was needed pursuant to the following: a. Conference with legal counsel to discuss pending litigation (Gov t Code Section 54956.9(a b. Conference with legal counsel to discuss anticipated litigation (Gov t Code Section 54956.9(b) c. Conference with Real Property Negotiators (Gov t Code Section 54956.8) Negotiators: Will Boschman and Rick Wegis Parties: Various landowners d. Personnel Matters (Gov t Code Section 54957) All visitors left the meeting except for Steve Gair who was invited to participate in property negotiation discussions. At 3:50 p.m. legal counsel Ernest Conant joined the closed session via conference call. Soon thereafter, Scott Kuney left the meeting. At 5:35 p.m. the Board reconvened to open session. President Wegis stated that several items were discussed, including land negotiations and construction contracts. On motion by Director Portwood, seconded by Director Waterhouse, the Board authorized staff to open an escrow account for a potential land purchase. On motion by Director Waterhouse, seconded by Director Tracy, the Board authorized payment of a change order on the Preston Pipeline contract. 6
At 5:40 p.m. the meeting was adjourned by President Wegis until Wednesday, December 24, 2008 at 12:30 p.m. at the District office to continue the business of the District. James A. Crettol, Secretary APPROVED: Fredrick A. Wegis, President 7