PEBBLE BEACH COMMUNITY SERVICES DISTRICT

BOARD OF DIRECTORS

Regular Meeting of September 30, 2005

MINUTES

CALL TO ORDER

A regular meeting of the Board of Directors of the Pebble Beach Community Services District ("PBCSD") was held in the District Boardroom on September 30, 2005. Board President Gary D. Hornbuckle called the meeting to order at 9:33 a.m.

ROLL CALL

Present: Directors Jeffrey Froke, Gary D. Hornbuckle, Leo M. Laska, Nancy D. McCullough, Richard Verbanec

Absent: None

Others Present

Richard Andrews, General Manager/Board Secretary

Laura Paxton, Board Clerk, Paxton Ad Hoc

Robert Wellington, Legal Counsel

Suha Kilic, Finance Officer

Michael Niccum, District Engineer

Jackie Scoggin, Operations Battalion Chief, CDF

George Haines, Assistant PBCSD Fire Chief / Asst. Unit Chief, CDF, San Benito-Monterey Counties Unit

Rob Jimenez, PBCSD Paramedic, American Medical Response (“AMR”)

Cindy Williams, PBCSD Paramedic, American Medical Response (“AMR”)

June Stock, Director, Del Monte Forest Properties Owners ("DMFPO")

John Fisher, Pacific Grove resident

Mark Verbonich, Vice President, Community Affairs, Pebble Beach Company ("PBCo")

Vinod Badani, Vice President, E2 Consulting Engineers

Robert Kohn, Board President, Carmel Area Wastewater District (“CAWD”)

Ray von Dohren, General Manager, CAWD

John Tormey, Pebble Beach resident

Gerald Verhasselt, Director, Del Monte Forest Property Owners (“DMFPO”)

Spencer Thompson, Pebble Beach resident

Rick Kernoll, Pebble Beach resident

APPEARANCES AND ORDER OF BUSINESS

There were no additions or changes to the Agenda.

MINUTES

MOTION 09-05-01

Moved by Director Laska, seconded by Director McCullough, and unanimously carried, to approve the minutes of the regular Board meeting held August 26, 2005.

FINANCIAL MATTERS

Statement of Receipts and Disbursements Warrants Register

The Board received and reviewed the Statement of Receipts and Disbursements and the Warrants Register for August 2005. All board members acknowledged receipt of the replacement Warrants Register sent to them last Wednesday. There were no questions or comments from the Board or staff.

MOTION 09-05-02

Moved by Director Verbanec, seconded by Director McCullough, and unanimously carried, to approve the Warrants Register for August 2005.

Custom Investment Portfolio

Finance Officer Kilic reviewed orally the submitted Finance Officer’s Report recommending the Board consider adopting Resolution No. 05-22 rescinding Resolution No. 99-28 and authorizing development of a custom portfolio which would utilize up to $7.0 million of District funds, and would be maintained by the County Treasurer outside the regular County investment pool. In response to Director Verbanec’s question, Mr. Kilic explained that there are approximately $710 million in the County portfolio, and as the manager of the portfolio, the County Treasurer will decide whether to use available cash or liquidate any existing investments to establish the proposed $7.0 million custom portfolio for the District. Mr. Kilic reported that the proposed resolution would allow District staff to take action, when and if it is determined that a custom portfolio would likely provide a better return than the regular County portfolio mix of 70% investment to 30% cash. Mr. Andrews related his understanding that the County Treasurer has to maintain a larger portion of the pooled assets in cash within the regular portfolio than the District would be required to maintain in a custom portfolio. As the District would not have to maintain the same level of liquidity it could, for example, invest in longer term notes for possibly higher yields.

In response to President Hornbuckle’s question, Mr. Kilic stated that the example of a two-year note was used in the $35,000 additional interest earnings estimate on a $7.0 million portfolio. However, the proposed resolution would not limit the investment period to two years. In response to Director Laska’s question, Mr. Kilic stated that in 1999 the Board adopted a resolution approving a custom portfolio with authority to invest up to $3.5 million and that there were approximately $6.0 million in reserve funds at that time. The portfolio created pursuant to that authorization earned $45,000 in additional interest income for the District in comparison to the County’s regular portfolio over the following two-year period.

Mr. Kilic said the District has not created a custom portfolio since 2002, because: a) the District wished to maintain liquidity in the event the Forest Lake Reservoir Project required temporary financing, b) it would not be beneficial to buy longer-term fixed income investments in the rising interest rate environment which prevailed during the preceding one-year period. Director Laska asked if basically the same steps are being taken with the proposed resolution as were taken in 1999. Mr. Kilic affirmed, explaining that the new resolution would establish additional security measures and expanded guidelines for investment decisions. District staff would follow the investment market and instruct the County Treasurer as to desired custom investments when deemed appropriate. “Laddering” or investing the authorized amount in two or three installments is the District’s intent. Mr. Kilic related a scenario: The Federal Reserve continues to raise interest rates in the next 2-3 months; when these increases are anticipated by District staff as less likely at some future point, a decision would be made at that time to stay in cash or to purchase treasury notes or agency obligations to lock in the higher interest rate. The principal investment would not be at any more risk than remaining on the regular County portfolio; the only small risk involved would be that the regular County portfolio might perform better than custom investments. In response to Director Froke’s question, Mr. Kilic said the proposed 3-year limit on the weighted average for custom investments is a self-imposed District requirement under the new resolution.

In response to Director Verbanec’s question, Mr. Kilic said the District has sufficient reserves to create a custom portfolio, and most other participants of the regular County pool are not in a position to request the same from the County Treasurer. Mr. Kilic and Board members responded to questions from the public for clarification of risk factors and any implications to the District budget revenues and reserves stemming from such investments. Regarding the qualifications of District staff, it was indicated that Mr. Kilic has been a member of the Monterey County Treasury Oversight Committee for a number of years and has significant knowledge of governmental investments. Moreover, the County Treasurer has full-time staff to provide expertise on various types of financial instruments that are appropriate, and no investments would be made other than those allowed by the County investment policy and the State law. There is no extra fee for this service. Director Froke expressed the view that the custom portfolio would be a fairly conservative program, seeking the best return on a specified portion of the District’s investments under established criteria and leadership. In response to questions and comments form resident, Spencer Thompson, it was agreed that staff will supply a copy of the budget, the investment supporting material, and the Finance Officer’s Report to him for his information.

MOTION 09-05-03

Moved by Director Laska, seconded by Director Froke, and unanimously carried, to rescind Resolution No. 99-28 and adopt Resolution No. 05-22 authorizing the General Manager in coordination with the County Treasurer to develop, under specified circumstances, a custom investment portfolio not to exceed $7.0 million outside of the County Pool.

FIRE PROTECTION

Fire Chief’s Monthly Report

The Board received and reviewed the monthly fire department operations report for August 2005. Operations Battalion Chief Scoggin responded to questions from the Board.

Quick Response Vehicle (“QRV”) Advanced Life Support (“ALS”) Services

PBCSD QRV Paramedics, Rob Jimenez and Cindy Williams, American Medical Response, presented an informational report supplemented with slides and video content regarding the types and impact of ALS services they provide for the District. During and following their presentation they responded to questions and comments from directors and visitors.

Performance Analysis of the PBCSD QRV Program

Assistant Fire Chief, George Haines reviewed the submitted Staff Report regarding the Paramedic “Quick Response Vehicle” Program Status Report Update. The report included alternative recommendations for Board consideration to continue, discontinue or suspend the QRV program. A correction was noted to page 2, “Patient Care Given”: the second ”bullet”, which indicated 209 incidents of basic life support should have indicated these incidents were 41% of the total incidents of patient care given, not 33%. Assistant Chief Haines noted that QRV response times are equal to or quite often ahead of the fire department apparatus response. He pointed out that, per the County emergency ambulance service contract, if PBCSD continues the QRV program, a 12-minute emergency ambulance response 90% of the time would be the County response requirement. However, if the PBCSD QRV program is discontinued, the ambulance company would be required to respond within 8 minutes 90% of the time. He noted, also, that the County will levy financial fines against the ambulance company for exceeding required response times. If the PBCSD QRV program were to be discontinued, emergency ambulance and associated personnel would be out of service within Pebble Beach while transporting a patient to the hospital. With the PBCSD QRV program in place, QRV paramedics transfer patient care to ambulance personnel, making the QRV available for simultaneous or consecutive response calls.

Assistant Chief Haines commended the AMR paramedics assigned to the QRV for assimilating fire department first responder protocols and coordinating with Fire Department staff on emergency medical system (“EMS”) calls. Director Laska inquired whether paramedic skills begin to diminish when staff is continuously assigned to a low volume call area where the number and variety of medical emergency calls handled are limited. Paramedic Williams responded that, yes, skill levels can diminish if not regularly and frequently utilized, but she said that paramedics assigned to the PBCSD QRV program also typically work extra duty assignments in high-call areas outside of Monterey County, which keeps their skills honed. Moreover, Paramedic Jimenez noted that he has been teaching EMS for a number of years and the current QRV staff has a combined 41 years of EMS experience. It was also noted that it appears QRV staff will be retained by Westmed, as its contract with the County encourages the retention of qualified AMR employees. Battalion Chief Scoggin, in response to Director Laska’s inquiry, stated that the quality of QRV program services has been commendable and if the program is discontinued, ALS services provided by Westmed would not be on a par due primarily to not being able to get to the incident as quickly as PBCSD’s QRV personnel.

In response to President Hornbuckle’s question regarding the type of action necessary for the Board to consider, Mr. Andrews advised directors that at some point prior to the new county emergency ambulance service contract commencing on January 1, 2006, the Board should make a decision on retention or discontinuation of the PBCSD QRV program. Director Froke made a motion to maintain the current QRV program with Director McCullough seconding the motion. Director Laska expressed concern that if PBCSD retains the QRV program, the County ambulance response time requirement within the Forest will increase from 8 minutes to 12 minutes, creating a potential to delay transport times for patients. Assistant Chief Haines pointed out that because the positioning of the Westmed ambulance vehicles would remain primarily the same as AMR positioning in the past, Westmed has indicated that it believes it can meet the 8-minute standard most of the time. He said the primary reason Westmed was able to offer the District a significant reduction in costs for QRV staffing is that it will experience fewer monetary fines for exceeding the 12-minute standard than it would experience if the 8-minute standard is in place. He said some of these savings were proposed to be passed along by Westmed to PBCSD if the District continues its QRV program. Director Verbanec said that based on the Board’s discussion he was not convinced that the low cost QRV alternative included in the motion would be the Board’s best choice, but that he would reluctantly support it if the Board was not going to further discuss all of the recommended program options included in the staff report prior to voting. Director McCullough expressed the view that the information presented in the staff report indicated that no other option would provide the level of ALS service that the current QRV program provides. The question on the motion was called and there was no further discussion of other program options listed in the report.

MOTION 09-05-04

It was moved by Director Froke, seconded by Director McCullough, and carried, with Director Laska voting no, that: the Board finds that the PBCSD Quick Response Vehicle Program has improved the response times for providing advanced life support services to residents, has improved overall emergency medical system services to the Pebble Beach area, and in order for PBCSD to continue to provide an enhanced level of advanced life support first-responder emergency medical services the Board approves continuing the Quick Response Vehicle Program through the Monterey County paramedic ambulance “exclusive franchise” contract awarded to Westmed Ambulance, Inc., beginning January 1, 2006; all in accordance with Westmed’s proposal to provide such service to PBCSD at an annual cost of $260,000, as identified in Alternative 3 of the Fire Chief’s Report.

Director Verbanec expressed his disappointment that there had been no further discussion of the other program options and as a result questioned whether his was a fully informed yes vote. Director Laska stated that program evaluation is a key consideration in determining the appropriate level of service, and suggested an ongoing effort to explore opportunities to upgrade the service generally within the costs presented.

Emergency Response Planning

Assistant Chief Haines briefly reviewed his submitted Staff Report concerning the status of PBCSD disaster/emergency preparedness planning and responded to questions and comments from the Board. Director McCullough stated that PBCSD is responsible for District residents in the event of an emergency and suggested that a network of neighborhood representatives be established within the planning process to assist at the resident level. Director Verbanec commented that the primary responsibility for emergency response coordination lies with the County Office of Emergency Services. He noted that there is a County-wide coordinated emergency response plan within which the District has certain responsibilities. As an example, Assistant Chief Haines stated that the Monterey County Sheriff’s Office has the responsibility for implementing evacuation procedures. He said in the event of a major emergency that agency most likely will be over-extended and the Fire Department will enlist resources to aid the Sheriff’s Office with evacuation efforts. Jurisdictionally, the District is responsible for fire protection and first responder EMS. Director Verbanec agreed with Director McCullough that neighborhood coordination efforts in the event of an emergency are helpful when services are overwhelmed, but cautioned against assuming that responsibility of emergency response efforts lies solely with the District. Mr. Andrews commented that the issue for the Board boils down to how much service in addition to the District’s basic responsibilities is to be provided residents, taking into consideration the County’s role in a declared disaster is to serve as the primary lead agency with assistance from other agencies. It is a policy question for the Board to decide as to how many additional services and what service levels the Board desires to provide. Director McCullough inquired, for example, as to where residents would be evacuated. Assistant Chief Haines pointed out that in the event of a fire emergency, a rescue effort, as opposed to an evacuation, would be carried out by the Fire Department. Assistant Chief Haines submitted to the Board a “Time” magazine article regarding the lessons learned from hurricane Katrina and Rita, some of which involved individuals and communities assuming more responsibilities to meet their basic survival needs until outside resources are available. Director Verbanec asked if there is an off-site record retention plan for the District, and if there is a formal coordinated protocol between CAWD and PBCSD in the event the CAWD plant is damaged. Mr. Andrews stated that no doubt more planning could be done with regard to Director Verbanec’s concerns and further identification of ways that the District can provide services and help people help themselves. President Hornbuckle requested District staff continue to provide the Board reports at future meetings regarding various aspects of the District’s preparedness in the event of an emergency. Mr. Andrews expressed the view that because of the recent gulf coast area disasters, it is a good time to think in-depth regarding major disaster issues and District preparedness. As an example, he said a reverse 9-1-1 system is being explored by District staff for use by the District to provide for the rapid dissemination of information to residents during emergencies. Director Laska inquired as to the level of involvement by Pebble Beach Company (“PBCo”) in emergency response plan development. Mark Verbonich, Vice President, Community Affairs, PBCo, stated that PBCo safety and security personnel have been involved in the recent tsunami preparedness planning with the District. PBCo has also been involved over a number of years in the County emergency plan, coastal incidents, fallen trees, drainage issues, fire incident road control, and storm response. PBCo Security is to be called if a tree falls on a residence as well as 9-1-1 if other risks are involved. Director McCullough noted that the City of Pacific Grove is developing an emergency response plan and, being landlocked, has requested access to Pebble Beach for evacuation purposes. Mr. Verbonich stated that the gates have been opened to local traffic several times in the past for accident incidents. The City of Pacific Grove has contacted the military as well in their plan development. In that regard, Mr. Andrews said Pacific Grove would be contacted for more information. Moreover, District staff needs to brainstorm the worst case issues, identify what other agencies need to address, and present a report to the Board in the future.

MAINTENANCE, ENGINEERING, AND CONSTRUCTION

Wastewater collection, treatment and disposal system

The Board received and reviewed the District Engineer’s Report of Utilities Operations and Maintenance for 8/18/05 – 9/21/05. District Engineer Niccum had nothing to add to the report and there were no questions from the Board.

Forest Lake Reservoir

The Board received District Engineer Niccum’s memorandum regarding the Forest Lake Reservoir Project. Mr. Niccum stated that County authorization was obtained for weekend work by the reservoir liner installation contractor. Mr. Andrews expressed appreciation to Director Froke for pro bono professional environmental consultation services he had provided to District staff regarding the type of fencing that would be most effective in keeping deer out of the reservoir area and also for his recommendations concerning specifications for natural grass seeds to restore disturbed areas of the reservoir site. He said Director Froke’s contributions saved the District time and money.

PBCSD Capital Improvement Projects

District Engineer Niccum reviewed orally his monthly status report on capital improvement projects. There were no questions or comments from the Board.

CAWD Board Meeting

Director Laska attended the Carmel Area Wastewater District Board meeting held September 15, 2005. He said the most important matter of interest to PBCSD was CAWD’s planning for new advanced treatment facilities to be constructed, along with Forest Lake Reservoir, as part of the Expanded Reclamation Project improvements. He noted that a schedule of improvements had been committed to, utilizing a design/build procurement approach. Director Laska said the schedule included reaching the 30% design stage by December 30^th; locking in a firm construction cost, and even though the design has not been completed at that point, authorizing a design-build contractor to commence construction and complete the design as construction progresses. He said CAWD is hopeful the facilities can be ready for use in the 2007 irrigation season.

CAWD Meeting Assignment

Director Hornbuckle accepted the assignment to attend the CAWD regular Board meeting on Thursday, October 20, 2005 at 1:30 p.m. in the CAWD Boardroom at 3945 Rio Road, Carmel.

Wastewater Reclamation Management Committee Meeting

The Board received and reviewed Director Verbanec’s notes and first advanced treatment facilities project schedule from the Reclamation Management Committee meeting held September 16, 2005. The next scheduled meeting is November 11, 2005, which is a holiday. Mr. Andrews will e-mail participants with a rescheduled date for the meeting. Director Verbanec also attended an engineering workshop hosted by CAWD earlier in the week regarding a water balance model for production and storage of recycled water, and engineering work involved in the process. CAWD engineers are using the water balance model to assist in determining the optimum size of the CAWD advanced treatment facilities. Director Verbanec said the only possible issue he identified in the process related to the reliability of the inferred risk assessment. He said engineers concluded a one in fifteen years chance that the design would allow the reservoir to run dry, based on selected sampling to substantiate the inference.

SOLID WASTE MANAGEMENT

Director Laska submitted a written report regarding the meeting of the Monterey Regional Waste Management District (“MRWMD”) held on September 16, 2005, and summarized the highlights of the meeting. There were no questions or comments from directors.

GENERAL GOVERNMENT

Policy Regarding Disaster Relief Contribution

The Board received the General Manager’s Report recommending discussion and, if believed appropriate, consideration of guidelines to District staff regarding possible in-kind and/or cash contributions by the District for disaster relief to individuals or organizations outside of the jurisdiction of PBCSD. Director McCullough suggested offering surplus District equipment that might still be useful to infrastructure agencies in affected gulf coast areas and New Orleans. Mr. Andrews stated that options for assistance, as per the submitted Association of California Water Agencies (“ACWA”) Communications Outreach Advisory, may follow from Bay Area water and wastewater agencies staff sent to gulf port area communities to assist with rebuilding infrastructure. It may be that these agencies will identify and advise the District as to appropriate assistance needs.

Current and/or potential state legislation affecting the District

The Board received copies of email correspondence sent to the General Manager from Peter Detwiler, Staff Director of the California Senate Local Government Committee advising that Governor Schwarzenegger had signed Senator Kehoe’s Senate Bill 135 comprehensively revising the Community Services District Law. In addition, the email included a summary of SB-135. There were no comments or questions from the Board.

Del Monte Forest Property Owners (“DMFPO”) Community Survey on Traffic and Safety

The Board reviewed the submitted third draft of the DMFPO Community Survey on Traffic and Safety. A DMFPO-appointed “Blue Ribbon Committee” assisted professional research consultant, Dr. Jan Roehl, to develop the survey form. The Committee has been asked to review the conclusions and findings to be presented by the researcher after review of all of the survey responses. Whatever recommendations the committee has will be presented to the DMFPO Board for consideration and ultimately a report will come back to the PBCSD Board and may or may not include recommendations for supplemental law enforcement services. Mr. Andrew’s personal observation was that there was a good cross section of opinions represented among members of the Blue Ribbon Committee, and that was reflected in the objective tone of the survey questionnaire.

MISCELLANEOUS INFORMATION AND COMMUNICATIONS

Oral reports from General Manager

There were no oral reports from the General Manager.

Questions from Directors or staff seeking clarification of matters within the purview of the District

There were no questions from the Board or staff.

Oral reports or announcements from Board President, directors or staff

Director Verbanec announced plans to attend the California Special District Association meeting in Sacramento on December 14, 2005, covering district electronic compliance issues in the 21^st century.

CLOSED SESSION

President Hornbuckle announced the Board would not need to meet in closed session.

ADJOURNMENT

There being no further business at 12:37 p.m. a motion was made to adjourn. 

MOTION 09-05-05

M/S/C (unanimous) to adjourn to the next regular Board meeting to be held on Friday, October 28, 2005 at 9:30 a.m. in the District Boardroom at Forest Lake and Lopez Roads.

(s) RiRichard Andrews, Secretary