HERITAGE RANCH COMMUNITY SERVICES DISTRICT
BOARD OF DIRECTORS MEETING
MINUTES OF JULY 19, 2007
Directors present: John Mott, Karen Cummings, Harlan Bell, Ralph Allison, Marilyn Breland
Directors absent:
Staff present: John D’Ornellas, Manager – Debbie Fransen, Administrative Assistant
OPEN SESSION 4:00 PM
Vice President Cummings called meeting to order. Announced President Mott would be arriving later.
PUBLIC COMMENT
Stan Heyne questioned the District’s participation in the Heritage Ranch Owner’s Association’s election, specifically the distribution of ballots. D’Ornellas explained the District office is simply a place for property owners to pick up a ballot in the case where one was not received for whatever reason. He said District staff is only required to have the requesting party sign their name on a roster provided by the Association and it is up to the Association to verify signatures and validity of ballots.
CONSENT ITEMS
3A. Regular Meeting Minutes of June 21, 2007. Vice President Cummings asked if there were any questions regarding the minutes of June 21, 2007. Director Allison commented on the minutes contents and written format. There were no other comments or questions. Director Allison made the motion to approve the minutes as presented. Director Breland seconded the motion. The motion carried, all ayes.
3B. Warrant Register June 2007: Vice President Cummings asked if there were any questions about the warrant register as prepared for June 2007. There were no questions or comments. Director Breland made the motion to accept the warrant register as presented. Director Allison seconded the motion and the motion carried all ayes.
3C. Treasurer’s Report for June 2007: D’Ornellas presented the Treasurer’s Report for the month of June 2007. D’Ornellas reviewed the revenue and expenses for the month. Director Breland said the amount of late fees collected doesn’t seem that much lower even now with the option to pay by credit card. D’Ornellas said he believes overall, the late fees have been reduced, and this month was high for some reason. Director Allison asked how much is a late fee. D’Ornellas explained it is 10% of the unpaid balance of the customer’s account. D’Ornellas told the Board about the card reader on the gas station shutting down and further explained how gas was sold by using a pre-payment of cash or check while the card reader was down. There were no other questions or comments, and the Treasurer’s Report was received and filed.
3D. Manager’s Report: D’Ornellas presented his report for June 2007. He said he attended a pre-application meeting at the Planning Department in San Luis Obispo regarding the proposed development plans for the Weyrich Certificated Parcels along with District Engineer, Kari Wagner. D’Ornellas said Weyrich was represented by RRM Design Group. County staff spoke in regards to development guidelines and procedures of their respective departments. D’Ornellas stated the applicant indicated a desire to receive water and sewer services from the District for the proposed 375 residential/commercial units, and this process requires an application to LAFCO for annexation into the District’s service area. Director Breland said at the Owner’s Association meeting she understood them to say it was 350 units. There was discussion which concluded the number of units has been anywhere from 300 to 375, and is not yet determined. D’Ornellas said there seems to be many obstacles that must be overcome to make this project a reality.
D’Ornellas said the District approved a temporary water will serve for Richardson Properties for a real estate trailer at the Tract 1990 commercial site. D’Ornellas said the trailer will be used for leasing space in the commercial center, sale of lots in Tract 1990 and the new Tract 720 condominiums. Director Bell asked for the exact location of Tract 720 and D’Ornellas explained it is the new “brown” condominiums.
D’Ornellas reported that the 2006 State Department of Health Services “Consumer Confidence Report” for water was published as required for all agencies that supply water to permanent communities. D’Ornellas said there were no contaminants exceeding state imposed primary or secondary drinking water limits, nor any violations of any treatment or monitoring and reporting requirements during the 2006 year.
D’Ornellas said he and the Operations Supervisor toured the water and sewer operations of the Vandenberg Village Community Services District. He said the fees imposed for water and sewer are much higher than Heritage Ranch charges for the same services. He said the monthly sewer bill there is double our bi-monthly bill for sewer fees.
D’Ornellas concluded his report by stating as directed by the Board, he asked our legal counsel about any liability issues regarding the Lift Station 10 Reimbursement Ordinance. He said Counsel concluded that Tract 1990 LLC would need to keep the District advised regarding its legal status through the term of the Ordinance. There were no questions or comments, and the Manager’s Report for June 2007 was received and filed.
3E. Staff Reports: Fransen presented the Office Report for the month of June. She reported the computer used by Jolin crashed again on June 12th, this time staff was not able to salvage the unit as they did in May. A new work station was ordered from INCODE and during the down time, staff used the back-up computer for the water treatment plant. Fransen said the new work station is now operational.
Fransen said the test card used at the gas station finally wore out on May 1st and a lot of time was spent trying to obtain a new one. Fransen said she worked with B&T Contractors personnel and Gas Boy personnel in securing the numbers necessary to make a new test card. Fransen said she found a file from 2000 that had the coding numbers. She added to the story about the gas station card reader being down and the fact that $390 worth of fuel purchases were processed manually.
Fransen concluded her report by saying the Annual Green Waste Clean-Up day was successful. She said people were lined up waiting for the dumpster as early as 7:30 AM. She said a follow-up phone call to San Miguel Garbage on Monday concurred there were no issues as there had been in the past whereby customers were trying to dump appliances and garbage.
There were no questions or comments. The Office Report was received and filed for June 2007.
Director Allison asked about the Operation’s Supervisor regarding the report of the water treatment plant major repairs. He wanted to know how the $5,000 to $6,000 cost of repair was going to be paid. D’Ornellas said the VFD (Variable Frequency Drive) has been put on the Capital Budget for FY 2007-08 and the repair of the static mixer and pipe at five or six thousand dollars will be funded through maintenance, fixed equipment.
3F. SDRMA Amendment: D’Ornellas presented the background information for the proposed amendments to the Special District Risk Management Authority Joint Powers Agreement. He said the Special District Risk Management Authority (SDRMA) is an insurance pool and the District is a member and also a member of the California Special District’s Association (CSDA). D’Ornellas said since SDRMA’s inception, there has been a provision in the Joint Powers Agreement (JPA) that specifies SDRMA pay a one percent annual administrative fee to CSDA.
D’Ornellas said the proposed change to the JPA eliminates the requirement for SDRMA to pay the annual administrative fee to CSDA and creates financial equity between the members of SDRMA and CSDA who do not participate in SDRMA’s programs. D’Ornellas said the changes do not materially affect or change membership requirements or modify the terms of the current JPA. He said the amendment is in the best interest of the membership of both organizations.
Director Breland made the motion to adopt Resolution 07-08 approving amendments to the Special District Risk Management Authority Joint Powers Agreement. Director Bell seconded the motion and the motion carried, all ayes.
President Mott arrived at 4:30 PM.
DISCUSSION ITEMS
4A. Final Budget 2007/08: D’Ornellas began the 2007/08 budget discussion for the Public Hearing. D’Ornellas said there were several minor adjustments to the Final Budget as a result of expense and revenue updates from the Preliminary Budget. He said adjustments totaled a decrease of $30,300 in revenues and an increase of $8,188 in expenses. Director Bell questioned the $30K decrease in interest. D’Ornellas explained the timing of the LAIF interest; the interest for quarter ending June 30th is not available until July15th and therefore it is received in the new fiscal year and posted to the Bank Of America account in July and recorded on the budget in July.
D’Ornellas said the 2007/08 operating budget represents a 7% growth in operating expenses. The new Tract 1990 is scheduled for completion this fiscal year end and will include five new lift stations and a water booster station to service 221 residential lots.
Director Bell inquired about the copper remediation project. D’Ornellas explained the process of a chemical product at the water treatment plant. There was discussion regarding the injection and application rate and why the product has not been implemented in the past to aid in cooper reduction. D’Ornellas explained the California Toxics Rule.
President Mott opened the Public Hearing for questions or comments from the public regarding the budget. Stan Heyne asked if fencing will be installed at the lift station by the condominiums. D’Ornellas relied no. He explained that the size of the easement that the lift station occupies is not known and there is no legal description. Once lift stations one and three are fenced, a better understanding of the easement size will be known and lift station two could be done in a future fiscal year.
There were no other questions or comments and President Mott declared the public hearing closed. Director Bell asked what would happen if there was a major cost increase on an item on the capital budget. D’Ornellas said for anything over $1K, he would have to come to the board for prior approval to use more from the reserves. There was no other discussion or questions from the board members. Director Allison made the motion to adopt Resolution 07-09 approving the fiscal year 2007/08 operating and capital budgets. Director Bell seconded the motion. The roll call vote was; Director Bell, yes. Director Allison, yes. Director Mott, yes. Director Cummings, yes. Director Breland, yes. Resolution 07-09 was adopted.
4B. Solid Waste Franchise Agreement: D’Ornellas presented information for the Solid Waste Franchise Agreement. He said the Joint Meeting between the District and the Heritage Ranch Owner’s Association on June 21st provided an opportunity to focus on new proposed solid waste service levels. D’Ornellas said the Operations & Engineering Committee met on February 13 and May 31, 2007 with the owners of the San Miguel Garbage Company (SMGC) and discussed the proposed new service levels, term of agreement and rates in the new agreement. The Committee members are John Mott and Harlan Bell. D’Ornellas said he prepared and published a draft of the Franchise Agreement for review and discussion on a on a variety of contractual issues. D’Ornellas said the new agreement is comprehensive and details roles and responsibilities for both the CSD and SMGC. The new agreement is much easier to interpret because it does not have as many exhibits and amendments.
D’Ornellas said no decisions on any of the terms and conditions have been reached by the Committee, and it is requested by the Committee that the Board add input on the three big items of the agreement. The length of the term of the agreement, the rates and the rate adjustment process were reviewed and details of each was given to the Board. D’Ornellas used a visual aid with the proposed rates. He said the Board has basically three choices; (1) accept the costs as proposed and sign a new agreement, (2) negotiate with SMGC on the costs submitted or (3) start new and have SMGC substantiate all of their costs for services.
There was discussion regarding the SMGC proposal to Heritage Ranch dated 5/31/07. It was the consensus of the Board that the 11% for franchise fee for SMGC’s commercial users was not fair, as this seems to be subsidizing curbside customers. President Mott stated an 8% franchise fee should apply to all users. President Mott said he believes SMGC is not losing revenue for the service at Heritage Ranch or they would have demanded an increase.
Discussion among the Board and Manager was held. D’Ornellas reminded the Board that the current agreement has a ten year term ending August 1, 2009. SMGC has indicated the desire for another ten year term, however D’Ornellas said a six year agreement with two one year extension is proposed by the Committee. The current franchise fee is .20 which is actually less than 1% because it was calculated on the cost of garbage service only and not diversion. He said both of these cost factors are now combined and the actual franchise fee equals .08%.
D’Ornellas said the Finance Committee asked SMGC for financial information about the cost of providing garbage service in 2003 before consideration of a rate increase. SMGC was not able to produce an audited financial statement and therefore they were not able to substantiate the current rate and dropped their request for a CPI increase. D’Ornellas said in February 2004, SMGC indicated the rates could be reduced by .40/month because of a cost decrease in recycling, and this rate decrease was approved by the Board.
After the Board’s discussion, it was their consensus to direct the Operations & Engineering Committee to ask SMGC to substantiate their costs of solid waste removal from Heritage Ranch in order to establish a base rate. President Mott said detailed information such as hourly labor rates and gasoline is not necessary, as these costs will increase over time. D’Ornellas suggested a third party financial statement for general items would suffice. D’Ornellas said a Committee meeting would be scheduled in the new few weeks with SMGC. There was no other discussion or questions from the public.
BOARD- STAFF GENERAL DISCUSSION
5. Directors/Manager Comments: Director Breland said NRWMAC will be holding a public meeting at the District office on July 20th at 7:00. The meeting is intended for public comments and everyone is encouraged to attend as this group has not met in quite some time.
ADJOURNMENT
Director Allison mad the motion to adjourn the meeting at 5:40 PM and Director Cummings seconded the motion. The motion carried, all ayes.
The next Board of Directors meeting will be held on Thursday, August 16, 2007 at 4:00 PM
Approved:
John Mott, President Board of Directors
Attest:
Debbie Fransen, Secretary to the Board