March 19 2012 Part II
Transcribing by the digital recorder/computer really slows things down but here’s the II installment of the last meeting. Yak with you later, Lew
[Continued discussion regarding insurance increases due to five year loss history]
Director Skoien confirmed that the insurance deductible was based on our loss ratio of 288% over a base line of 70% and commented that the report referred to the recent office fire as “fire-arson”. Skoien questioned whether that determination had been made. Financial Administrator/Board Secretary Charise Reeves and IGM Dan Tynan both stated they had not received any official statement regarding the status of the fire investigation.
Director Victor Afanasiev questioned a $20,926 claim in 2011-2012 to which IGM Tynan explained it was due to a major water main break which caused damage to the basement of a residence.
Wes Barton commented that most of the 10% insurance rate increase along with the increased deductible ($25,000) was due to matters that have yet to be resolved (employee lawsuits and recent fire) and there was a possibility that they could be reversed with a favorable outcome. Barton said some of the issues regarded members of the current board that were elected in November 2008, ie, $35,000 harassment and hostile work environment, a $17,000 claim and the recent fire. He said current difficulties as he understood them that were to be heard in Closed Session involved 5, 6, or 7 different employee complaints and there were a multitude of Grand Jury issues pending that still had to be resolved and theorized the rates for next year could be even be higher.
Board accepted and approved the SDRMA correspondence as read and filed.
The previously scheduled Personnel Meeting was postponed until later in the current meeting. Charise Reeves advised she had not yet received confirmation that the Finance Committee reviewing her Treasurer’s Report would satisfy the auditor’s questioning of the checks and balances of the Treasurer/Financial Administrator. VP Richardson stated he had understood that the auditor was the one who suggested such a remedy but Charise Reeves said she and Wes Barton had a difference of opinion as to what was supposed to be done. Reeves stated she has not been able to speak with the auditor about the situation due to the busy time of the year with taxes.
President Kinsella stated the Finance Committee had reviewed the Treasurer’s Report.
Public Relations: VP Richardson stated there was a draft letter in the board packet and it was a separate item to be discussed later with a request the letter be approved by the board. [Request that the LDPOA permit the LDPCSD to use the Discoverer to contact their customers.]
OFFICE FIRE UPDATE
Already discussed – there was no interruption of water service and the office is in the process of securing new equipment (currently leasing temporary equipment). Existing water line under the old building location is still an issue to be resolved before the new building can be installed. (Reposition new building or relocate 22 year old PVC pipe.)
A 3/17/12 staff report by Charise Reeves to the Board of Directors requested:
- 1. Approve staff to work with the insurance company to replace office equipment (example: computers, servers, printers) in an amount not to exceed $60,000 upon verbal authorization of the insurance company.
- 2. Approve staff to work with the insurance company to proceed with the demolition of the existing building and replace the physical building, not to include moving the building’s location, in an amount not to exceed $100,000 upon verbal authorization of the insurance company.
Estimated $40,000-$50,000 for new computers and server. $7,900 for a big printer (replaces four machines previously used) and a color printer ($2,000). Director Afanasiev questioned why the district needed a color printer to which Reeves responded for brochures and board packets that periodically require color printing. VP Richardson questioned why the insurance company would only provide verbal approval for replacement equipment instead of putting it in writing. Reeves stated Director Afanasiev also requested the approvals be in writing but that is not how the insurance replacement procedure works. VP Richardson suggested recording any such verbal approvals for equipment replacement.
An audience member asked why the insurance company didn’t just give a check for everything that was lost in the fire and covered or at least an estimate for everything. Charise Reeves advised they had basically come back and said our upper limits are of no concern and that another company was doing an itemized inventory of everything that would be forwarded to the insurance company with all receipts for things already paid for by the district. Insurance will replace “like and kind”.
Reeves stated the company contacted to replace the office building is working in conjunction with our engineer and insurance company. She stated the district would have to go to the county to obtain the appropriate permits but questioned why the original building was originally permitted in light of the water line location – did the county know the pipe was there?
Director Ross stated he didn’t think the district would need a permit because we were a public utility and the building is related to the treatment of water. Reeves advised that the district still needed a septic permit in the past. Director Ross wasn’t sure but thought the office might be exempt because it had more to do with the distribution of water. Director Skoien thought we would either have to move the pipes or get a narrower building. President Kinsella suggested waiting for the authorities to advise how to proceed. IGM Tynan also thought a narrower building might be the easiest and least expensive way to go.
Harry Alfier questioned the high expense of the equipment. Reeves advised 5 or 6 computers and 5 printers and scanners had been destroyed and the server alone was originally around $40,000.
Merlin Jones commented on contacting the County about the demolition first and thought the building department could probably clear up the matter about the pipe under the new structure with a telephone call.
Wes Barton stated the district’s systems are indeed very expensive and were initially purchased during the real estate building explosion (that stopped) with the understanding they could support 10,000 homes. Barton stated the engineer should be on site and determine how best to solve the pipe issue.
There was a question and discussion about the pier block foundation of the existing building and Ruth Smith asked if a used modular building had been considered and referenced how much Golden Lakes Charter School saved. Reeves advised the insurance was paying for the full replacement of what the district had.
On recommendation of the IGM the board ultimately decided to approve the $60,000 for office equipment purchase and $10,000 to remove the fire damaged building.
OUTSIDE PLACE OF USE RESOLUTION
VP Richardson advised the attorney had revised the resolution to address some of the questions by Directors Ross, Skoien and Afanasiev and questioned if all directors had received a confidential communication from the attorney sent to their address. (The letter was stamped confidential but was essentially a copy of an email sent previously marked confidential – attorney client privilege.) Director Ross questioned the confidential nature of the correspondence.
Director Afanasiev stated after reading Raymond’s accompanying letter he (Afanasiev) did some research and believed the attorney failed to address the issue of prescriptive water rights. Afanasiev stated if a person had property and requested water and was paying for that, they had a prescriptive right to water even though they might be outside the MID place of use. Afanasiev suggested the attorney look into prescriptive water rights. Afanasiev felt the District could be looking at a law suit if those properties Outside the legal use area were never-the-less paying an availability fee for future water, yet could not receive it now.
VP Richardson made the motion to accept OMIDPOU Resolution 2012-3 that the CSD attorney had prepared, President Kinsella made the second, board and public discussion ensued.
Director Ross questioned how many Outside MIDPOU properties were actually paying availability fees for future water service and mentioned the McDonough case (an owner who had recently withdrawn from district service after paying for many years) and others who have been paying availability fees. Ross also mentioned a 1968 agreement where 10 meters would be supplied in exchange for land to place the Sturtevant water tank. (Based on past records, this was evidently how Director Ross originally obtained his second OMIDPOU meter in 1993 but was subsequently challenged on that meter installation by the Sturtevant Ranch citing that Ross’s property was specifically excluded from a free meter under that agreement.) Director Ross also questioned why names were returned on the OMIDPOU report (as it had been for approximately 10 years) since MID does not specifically require such.
[NOTE: You will recall Director Ross himself stated he had complained about names being on the report for two years and advocated that it be changed. The reporting did in fact change however there was no record of a board vote to do so and Ross stated he had no idea how it had been done. The board recently decided to return to name reporting because it cleared up for the public the locations of large water use outside permitted areas under the water license. Entities such as the fire department, elementary school, waste water plant and goat and cattle ranches can now be identified for clarification and understanding.]
Director Ross advised he knew of at least one person whose property was Outside the MIDPOU who has been paying availability fees for future water. President Kinsella voiced the opinion that if OMIDPOU properties had been paying availability fees for years they should get water but Director Afanasiev stated the resolution does not provide for that.
VP Richardson argued the resolution did not preclude these properties from receiving water but an alternative source would have to be located and used because no Merced River water can legally be used for outside MIDPOU properties. Richardson stated the CSD has violated the license and agreement and felt approval of the Resolution would be a show of good faith to MID that the district was attempting to clean up their act and abide by the license regulations. He also voiced the fear that once MID was done with their hydroelectric project business with FERC (Federal Energy Regulatory Commission) in 2014 MID could set their sights on the CSD regarding compliance with regulations. VP Richardson also mentioned the possibility that the resolution could actually stimulate other alternatives in obtaining water. He believed there were very few of these properties, (OMIDPOU paying availability fees) many of which were planned projects that had since been abandoned. Richardson has been asking for the information for months without success. He stated neither McDonough or Clark, who Director Ross had mentioned earlier, wanted our water, in fact they were trying to get out of the district not in. Richardson said it was disingenuous to use those two examples as someone wanting water who was denied when they clearly wanted out of district service.
Director Afanasiev stated the water rights stay with the property not the owner. Afanasiev suggested a lawsuit could result. VP Richardson didn’t feel that was necessarily true. $180 a year for a number of years would be the worst case scenario if CSD had to payback availability fees to a property owner. Richardson stated if the property owner wanted to hang with us we might be able to supply the water in the future. Both Directors Afanasiev and Richardson agreed further ground water wells were not the way to go.
Director Ross asked if Richardson believed all the current connections outside the MIDPOU were legal. Richardson asked, you mean like yours? Ross replied yes. Richardson said they were so long as the Ranchito Well produced the water to those properties. Ross asked if the well water could be comingled with Lake McClure water to which Richardson responded, of course that’s the way it’s been done. Ross began talking about information posted on Richardson’s blog and an article in the Foothill Express but he was told it was not the issue at hand, Ross contended the blog was the issue. President Kinsella suggested staying on the issue. Richardson stated the issue is this resolution and Ross only muddied the waters by saying things like oh this resolution is going to make me a criminal. Richardson countered It’s not making anybody a criminal, it’s setting forth the rules which they have always been for over 12 years.
Ross stated by receiving money for future water and putting it on the tax rolls and then not providing water was fraud, and asked what do you think it is? President Kinsella humorously suggested it was more like theft. (laughter)
Richardson also pointed out that many of the properties never annexed properly and referenced the Poe matter where it was agreed the CSD would provide water if the OMIDPOU properties annexed. Water was supplied but the properties never annexed. President Kinsella stated you can sue anybody for anything, at any time, but are you going to win? I doubt it. Director Afanasiev disagreed.
VP Richardson reiterated the resolution was our attorney’s opinion and he is trained in water law – Director Afanasiev interrupted stating he disagreed with Raymond as he (Raymond) never cited cases. Richardson said he didn’t think you needed to cite cases when CSD had signed an agreement with MID to abide by the regulations. Director Afanasiev said the prior board violated those agreements to the detriment of their customers. Richardson questioned if the current board was going to override what our attorney suggests in these matters. Director Afanasiev stated Raymond should cite case law in his legal material. Afanasiev stated if these properties did not receive water their property values would go down drastically. Director Ross wanted to see a list of how many people have been paying availability for water to OMIDPOU properties. President Kinsella said he believed if someone had been paying availability for water and were Outside the MIDPOU they should still receive the water.
VP Richardson stated he didn’t know because the engineer’s report indicated the Ranchito Well was over taxed as it is right now – it said no more potential new sources. Director Ross questioned what the 1978 boundaries were to which Richardson responded it’s not the district boundary but the license boundary which is essentially the subdivision and the golf course. Richardson said the resolution put CSD in line with the contract so we do not breech it. It would be the first step in a water management program to keep CSD in line with past agreements but remedies would not occur overnight. Richardson advised things might be changed by the State Water Board but Director Afanasiev stated the courts controlled such issues.
Director Skoien said if someone whose been paying for water that is OMIDPOU and yet now can’t get it will not be happy having to wait a couple of years. VP Richardson asked if he knew of anybody in that situation because we’ve got people leaving the district right now and there weren’t people pounding on the door to come in. Director Skoien believed MID didn’t really care about how much really came out of the Ranchito Well. Richardson advised it would be a big deal to people like Director Ross if the well goes dry and the resolution was meant to prevent that.
Director Skoien asked how the resolution was meant to prevent the well from going dry. VP Richardson advised because the engineer reported the well was only at 50% of its sustainable yield but if you keep adding more connections to it that percentage is going to go lower, and lower until the well goes out. People that are dependent on the well are going to loose their water source such as Director Ross.
Richardson also questioned how many of the properties actually annexed as required by the water agreements such as in the Poe meter removal situation where their property and the other two were never annexed yet they were supplied water.
Director Afanasiev commented CSD had over 5,000 acre feet of water per year but VP Richardson reiterated that the CSD could not use Merced River water for outside MIDPOU properties. Director Afanasiev wanted MID to show us some case law regarding the matter. VP Richardson said “OK we keep piddling around like this and MID gets done with FERC (Federal Energy Relicensing Commission) they’re going to come down here and clean our clocks, they could put us down to 800 or 1,000 acre feet”
There was an audience question as to those OMIDPOU properties already receiving water, would they be cut off? No. The question was asked to whom did the resolution apply, answer, to OMIDPOU properties not currently receiving water, but the issue revolves around how many have paid availability with the understanding they would receive water in the future. VP Richardson stated he had been asking for that information for months and still has not received such. Apparently there are approximately 5-6 of those properties some involving huge projects that never got off the ground like a six story motel proposed at T Corners. Richardson stated he didn’t think that would be happening very soon. Director Ross says he knows someone who has been paying availability fees on an OMIDPOU property for years that wants to build a house.
There was some discussion about the South Shore project (2,010 acres) that was allotted (by the State Water Board) 772 acre feet of water a year, but nothing has been done on that for many years. Richardson also advised that that particular project pays the CSD nothing.
Harry Alfier questioned why, with so much water allotted from Lake McClure (5,160 acre feet), would MID be against CSD using it in the area? VP Richardson advised that has been the issue all along and at one time the State Water Board considered making changes while Bob Kent was still general manager, but after some sort of water audit or something it stopped. Richardson emphasized that it wasn’t necessarily MID, it was the license restrictions and any violations would come down on MID from the State Water Board. Richardson compared the water license to a driver’s license, you can drive a motor vehicle so long as you abide by the rules and regulations otherwise the license could be suspended or revoked. Harry Alfier asked about any possibility of talking with MID. Richardson said the MID didn’t make the decision the State Water Board would and it was an extremely expensive proposition. He said originally a change was attempted through an administrative remedy to make small adjustments to the place of use but it was abandoned with notice a full blown petition process would be required. Richardson stated if a full petition could be filed there would be protests from the Delta-Bay people screaming because they need the water there. Richardson suggested the CSD could keep a low profile for a while and then maybe try to approach them again otherwise the water could be taken away and used for other beneficial uses elsewhere.
Director Afanasiev also wants to know exactly how many OMIDPOU properties have been paying availability fees. VP Richardson again stated he had been asking that question for months but still thought that was a minor issue in comparison to passing the resolution and showing MID we were trying to do the right thing. Director Afanasiev believed they really didn’t care now because they had enough problems with their FERC relicensing. President Kinsella stopped the discussion stating it was the public’s opportunity to speak.
Another audience member questioned whether the state or MID recently approached the CSD and voiced concerns about our OMIDPOU operations and felt VP Richardson sees a problem. Richardson advised that our attorney felt the resolution was 12 years past due. [Reeves changes tape] The speaker felt Richardson was attempting to protect us from a worst case scenario but now learning his water (as an OMIDPOU customer) would not be affected he was much less concerned. The speaker thought having a map of the actual service area would be helpful and questioned why it would be so hard to find out where these properties were. Richardson advised his (the speaker’s) guess was as good as his (Richardson’s). The speaker thought knowing exactly how much money might have to be returned was important. Richardson believed that was less important than passing the resolution. IGM Tynan stated he would follow up on the matter immediately. The speaker also questioned Director Afanasiev about his prescriptive water rights statement but Director Ross interjected “prescriptive easements”. Afanasiev corrected Ross by saying “prescriptive water rights” which he stated run with the property.
VP Richardson mentioned that the speaker (an Outside MIDPOU customer) should also be concerned about how many connections are added to the Ranchito Well because it places his water use at risk. The audience member acknowledged that fact.
Another audience member asked if the resolution had anything to do with a request for water by a gentleman……President Kinsella interrupted asking the speaker to make her comments from the podium which she refused to do saying it wasn’t necessary, everyone could hear and if Bill didn’t want to hear what she had to say – that was fine. Kinsella explained it made it easier to hear what a speaker had to say. (A microphone is located at the podium.) The speaker reluctantly agreed to comment from the podium and asked if the resolution had anything to do with the gentleman who wanted to build a store at T corners because it seemed the issue came up right after that request. President Kinsella said it had nothing to do with that issue and added his understanding of that situation was that there was a “property war” going on between that person and CAL FIRE.
Board Secretary Charise Reeves then stepped from behind the board table to the podium to speak. Reeves stated it was her understanding that the way the resolution was written someone who had been paying availability for OMIDPOU water would be denied that service. Reeves acknowledged that there may be only a couple, but if only one came in for water and was subsequently denied there could be a problem. VP Richardson suggested the first question would be, did they annex to the district as required. Director Ross stated the rest of us didn’t have to (annex) because they (their OMIDPOU properties) were grandfathered in. Richardson stated that the resolution did not preclude allowing someone who has paid availability to connect with the Ranchito Well but it came down to people like Director Ross and his neighbor who were already connected along with everyone else which is why he (Richardson) originally had proposed a Special Benefit Zone which was dropped from the agenda.
Richardson felt it should be up to the people already dependent on the Ranchito Well to determine if more connections should be made because it will affect their water supply from the well. Richardson believed if the Ranchito Well went dry now the district would be obligated to pay the costs to continue the service but if the district continues to over tax the well with more connections there could be a big problem. He felt there was a big difference between a person wanting to build a home which the board could approve subsequent to the resolution and the many failed big development projects like South Shore that never went anywhere. Reeves stated she was referring to the individual. Richardson felt the resolution could actually stimulate the search for other alternatives but the current process of just hooking people up without annexation had to stop. He felt if this is something the attorney thinks is right and should have been done 12 years ago he didn’t know why – “oh well, it’s up to the board”.
Director Ross: “Email from me to Raymond what about people who are already paying availability who are outside place of use how does the resolution affect them? He says the moratorium will not allow them to get district water unless it was from some source other than the Merced River, well they’re going to be cut off, that’s the answer, they’re cut off, according to Raymond.”
VP Richardson: No, they could go on the Ranchito Well
Director Ross: No because this here says you can’t
VP Richardson: No, it says we cannot provide them Merced River water Emery
Director Ross: But Lew you’d be the first person to be screaming that it was a violation of the law
VP Richardson: I wouldn’t care
Director Ross: Yes you would
VP Richardson: … if you want more people on the Ranchito Well and risk your water delivery – hey that’s up to you.
Director Skoien asked if the Ranchito Well was maxed out to which Richardson (referring to the engineer’s report) – no it’s 50%. Richardson stated not only the attorney but the CSD’s engineer recommended no more Outside MIDPOU connections.
Director Ross agreed that the CSD shouldn’t be going out to look for people to hook up to the system but if people had faithfully been paying availability they should get the water. VP Richardson stated the board could always agree to add more connections (if availability had been paid) even after the resolution passed but it would not be fair to the customers already dependent upon that well’s production without their permission. Director Skoien asked what would happen if the Ranchito well went dry. Richardson responded that we would be in the ground well water business. Director Skoien disagreed thinking under such an emergency situation the state water board would give permission “in a heartbeat” to pump McClure water. Richardson characterized that as if someone were committing theft over a long period of time then committed a big theft the authorities would excuse the situation. Skoien said he did not mention theft only that if the well broke and CSD went to the state water board and said we have no other way to serve certain people in this community they would say just keep pumping the water. Richardson doubted they would violate their own rules but asked how the petition would come before the state water board in the first place because it would be a lot of money and CSD had many other things with which to deal. Director Ross stated we should be drilling another well just in case Ranchito goes dry. Charise Reeves suggested submitting that project to the IRWMP (Integrated Regional Water Management Program).
VOTE: Failed: Kinsella/Richardson aye, Ross, Skoien and Afanasiev, nay.
Director Afanasiev said he could not vote for it until knowing how many properties were involved.
Charise Reeves advised Syndie (Billing/Property/Customer Service Representative) may not be able to respond to the requests for information (about how many properties were involved) because the map she needed was being restored due to the office fire and didn’t know when it would be back.
– – – – – -E N D M E E T I N G – – – – – –
I’ll post my blog blah, blah, blahs later since there’s enough material to digest for now.
Beautiful day before the storm huh?
My best to you and yours, Lew