PEBBLE
BEACH COMMUNITY SERVICES DISTRICT
BOARD OF
DIRECTORS
Regular
Meeting of October 28, 2005
MINUTES
A regular meeting of the Board of Directors of the Pebble
Beach Community Services District ("PBCSD") was held in the District
Boardroom on October 28, 2005. Board President Dr. Gary D. Hornbuckle called
the meeting to order at 9:33 a.m.
ROLL CALL
Present: Directors Gary D.
Hornbuckle, Ph.D., Leo M. Laska, Nancy D. McCullough, Richard Verbanec
Absent: Director Jeffrey Froke, Ph.D.
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
Sam
Mazza, Fire Chief, California Department of Forestry and Fire
Protection, San
Benito-Monterey Unit (“CDF”)
Jackie Scoggin, Operations Battalion
Chief, CDF
Dennis Carreiro, Fire Prevention Battalion Chief, CDF
June Stock, Director, Del Monte
Forest Properties Owners ("DMFPO")
John Fisher,
("PBCo")
John Tormey,
Gerald Verhasselt, Director, Del Monte Forest Property
Owners (“DMFPO”)
Al Budris, Director, Del Monte Forest Property Owners
(“DMFPO”)
Paul Nowinski, Outside Financial
Auditor, Kasavan & Pope Accountancy Corporation
Nancy Johnson, District Accountant
John Ryan,
Joyce Stevens, Carmel Area Wastewater District (“CAWD”)
Director
Barbara Buikema, CAWD Finance Officer
Spencer Thompson,
Cindy Williams, PBCSD Paramedic, American Medical Response
(“AMR”)
Moved by Director Laska, seconded by Director
Verbanec, and unanimously carried, to approve the minutes of the regular Board
meeting held September 30, 2005, as submitted.
Warrants Register
The Board received and reviewed the Statement of Receipts and Disbursements and the Warrants Register for September 2005.
Director Laska asked if California Public Employees Retirement System
(“CalPERS”) contribution amounts paid by the District are in keeping with the
amounts projected upon entering into the pension agreement. Mr. Kilic responded
that the rate set July 1, 2004 at the inception of the plan is locked-in for 2
years and therefore meets projections. In response to Director Laska’s further
question whether other agencies’ rates are increasing, Mr. Kilic responded that
he was informed at a CalPERS meeting he attended this week that rate
stabilization techniques are used by the agency, including amortizing
under-funded plan liabilities and over-funded assets over 15 years. He said some
local agencies had experienced rate increases, and that approximately 75% of
the increases are due to underperformance of the stock market beginning in the
year 2000. A smaller percentage of increases are due to extra retirement
benefits being added to plans during prosperous times in the late 1990s. Mr.
Kilic and Mr. Niccum responded to several additional questions from the Board
about various warrants.
Moved by Director Laska, seconded by Director Verbanec, and
unanimously carried, to approve the Warrants
Register for September 2005.
Annual Financial Statements and Independent Audit Report for
Fiscal Year ended June 30, 2005
Mr. Kilic presented to the Board
an overview of the Annual Financial Statements and Independent Audit Report for
Fiscal Year ended June 30, 2005. He said the California Government Code
requires an annual audit of all the financial statements of every special
district. The audited financial statements are filed with State Controller and
the
Mr. Kilic then introduced Mr. Paul
Nowinski, a principal representing the accounting firm of Kasavan & Pope,
who reviewed the MD&A and the financial statements for the Board. Mr.
Nowinski stated that the District is in excellent financial shape. The audit
found the District adheres to accepted management and accounting principles,
there were no reportable conditions found, and internal control procedures are
acceptable. No adjusting journal entries were needed. Mr. Kilic stated that
financial statements are produced from data entered into the District’s
financial accounting software; the MD&A changes year to year and is
manually intensive. Mr. Nowinski thanked District staff for its courtesy and
cooperation during the audit. The Board discussed its policy of not charging
clients for the full costs of sewer treatment and disposal services, which are
business type services, which may be financed in full by service charges. It was noted that under the policy deficits
incurred from low sewer service rates are being subsidized by property tax
revenue. Mr. Andrews pointed out the importance of the Board being fully
informed in this matter, and that there may come a point when the District is
faced with a loss of property taxes. At that time when customer rate increases
occur for wastewater collection due to revenue deficits, many residents may not
understand that taxes on currently owned property will not be adjusted, as the
property tax rates are established by State law. However, sewer service rates could increase,
possibly substantially, in order to make up for the loss of property taxes
diverted from the District by the State. Director McCullough inquired if District
reserve fund balances were subject to a limit. Mr. Andrews stated that there is
no legal limit, and that the level of reserve funds is a policy decision of the
District Board. He said that a concern
to keep in mind is that in the future, during times of State budgetary
problems, the Legislature might possibly grant authority to Boards of
Supervisors to reallocate property taxes among local agencies within
counties. If that were to occur, Mr.
Andrews said one factor the Board of Supervisors would probably consider is the
level of each district’s
reserve funding. Responding to a
question from the Board, Mr. Nowinski stated that it is generally accepted that
six months to one year of reserve revenues beyond budgeted expenses is a safe
measure to meet unforeseen operations and maintenance requirements.
Mr. Andrews suggested that the
Board keep in mind that the outside auditor is the primary independent
authority available to assist the Board in carrying out its fiduciary
responsibilities; and, the outside auditor works for the Board, not District
staff. President Hornbuckle commended Mr. Kilic for excellent preparation of
the audited materials. Moreover, Mr. Andrews commended Mr. Kilic and Ms.
Johnson, District Accountant, for their hard work in preparation of an
excellent product.
Moved by Director Laska, seconded by
Director McCullough, and unanimously carried, to accept the PBCSD Annual Financial Statements and
Independent Audit Report for the Fiscal Year ended June 30, 2005, as submitted.
Fire Chief’s Monthly Report
The Board received and reviewed the monthly fire department
operations report for September 2005. Operations Battalion Chief Scoggin
provided supplementary comments to the report, indicating that a 1:30 a.m.
medical aid call from Pebble Beach Lodge last week was not forwarded by the
Battalion Chief Scoggin also advised the Board of a
structural fire that occurred Sunday, October 23rd, on 17-mile Drive
at approximately 6:00 p.m. The fire caused about $150,000 damage to two rooms.
There were no injuries. Automatic aid was received from the City of
MAINTENANCE, ENGINEERING, AND CONSTRUCTION
Pipeline Televising
Vehicle
The Board received District
Engineer Niccum’s memorandum, which identified the lowest responsible bidder for
District purchase of a pipeline televising vehicle, including an alternative
mini-camera system. Mr. Niccum explained that the two submitted bids, were
reviewed thoroughly and District staff is satisfied that both met the bid
specifications. Mr. Niccum stated that the new equipment would be used
approximately one time per week. The old televising equipment would be declared
surplus then sold, put out to bid, or donated locally or nationally.
Moved by Director Verbanec, seconded
by Director Laska, and unanimously carried, to approve Resolution 05-23 declaring the bid of $135,632 from Weco Industries
LLC, as the lowest responsible bid and authorizing the purchase of a pipeline
televising vehicle including the alternative mini-camera system.
Wastewater collection, treatment and disposal system
The Board received and
reviewed the District Engineer’s Report of Utilities Operations and Maintenance
for 9/22/05 – 10/21/05. Mr. Niccum stated that the District is hopeful that
major modifications to the instrumentation equipment at the District flow
metering station located near Carmel Gate will improve reliability of flow rate
measurements. Preliminary indications
are the improvements will result in a possible reduction of recorded flow
rates.
The Board received District Engineer Niccum’s memorandum
regarding the status of the Forest Lake Reservoir Project. Mr. Niccum stated
that the most critical item related to the project becoming operative is the
installation of the gates that will control flow into the outlet tower. Fabrication of the gates requires a long lead
time and delivery to the field is scheduled just before Christmas. The project
completion schedule has slipped approximately one month, and the reservoir is
on schedule to be filled January 2006.
He said the treatment facility at the reservoir will be completed in
time for the upcoming irrigation season. The $240,000 change order executed by
the General Manager is primarily related to additional grading work. The total of all change orders executed to
date is just under $500,000 and is close to the 5% contingency limit. Additional changes have been identified,
which will result in additional costs and some credits. A full-time lining inspector has been very pleased
with the liner installation process. The existing 6-foot fencing will be
replaced with 8-foot fencing to keep deer out of the reservoir. Several weeks ago juveniles cut a portion of
the fence on Lookout Road near the north embankment, entered the reservoir
construction area, hot-wired a subcontractor’s pick-up truck parked on the
floor of the reservoir and drove around the dirt area on the interior of the
reservoir. No damage was done as the vehicle was not driven on the installed
liner.
PBCSD Capital Improvement Projects
District Engineer Niccum reviewed orally the District
Engineer's monthly status report on capital improvement projects. There were no
questions from the Board.
2005 Sewer Line
Replacement Project
The 2005-06 sewer main replacement project was completed
well ahead of schedule. A contract change order is proposed to add 22 lateral
reconnections required but not clearly identified in the construction
plans. Mr. Niccum also reported that a
credit was proposed for one manhole that was later determined not to be
required.
Moved by Director Laska, seconded by
Director Verbanec, and unanimously carried, to authorize the general manager to
execute an increase of $20,700 in the construction contract for the 2005 Sewer
Line Replacement Project resulting in a revised contract amount of $546,950.
Director Hornbuckle said
he had attended the Carmel Area Wastewater District Board meeting held October
20, 2005 and made an oral report to the PBCSD Board. He reminded directors that
PBCSD’s one-third cost share for CAWD expenses makes the meeting topics of
interest to PBCSD. The micro turbines
that were installed by CAWD to operate on methane gas, will reduce electricity
purchased from P.G.& E., and are projected to save approximately $50,000
per year. The Highlands Sewer Connection Project was projected to be complete
in November. The most recent estimate for the micro filtration / reverse osmosis system
is $18.5 million, close to what was estimated previously. The treatment plant
outfall to
CAWD Meeting Assignment
Director McCullough accepted the assignment to attend the
CAWD regular Board meeting on Thursday, November 17, 2005 at 1:30 p.m. in the
CAWD Boardroom at
Director
Laska reported orally regarding the meeting of the Monterey Regional Waste
Management District (“MRWMD”) held on October 21, 2005, and stated that there
were no significant events affecting PBCSD.
GENERAL GOVERNMENT
District Newsletter
The Board received the General
Manager’s Report recommending Board review and guidance to staff regarding
possible PBCSD News articles.
Director Hornbuckle found some of the draft articles overall to be too lengthy,
and suggested the community security survey article would be premature for the
initial publication. Mr. Andrews stated the target date for distribution of the
upcoming edition is mid-November, in time to include a reminder of the survey
results to be presented at the November 13th DMFPO semi-annual
meeting. Director McCullough suggested a “Letters to the Editor” column.
Director Laska requested that information presented be consistent with other
district-wide publications such as the
Current and/or potential state legislation affecting the
District
The Board reviewed the General Manager’s submitted
memorandum regarding the planning for compliance with Assembly Bill 1234, and
correspondence from Senator Kehoe to Director Hornbuckle thanking the Board for
support of Senate Bill 135, the revised Community
Services District Law, and a summary of the revisions. Regarding AB 1234,
Director Verbanec suggested that an effort be coordinated to invite
representatives of the California Special Districts Association to present
locally consolidated ethics training for all affected area agencies to meet
requirements of AB 1234. In addition, he
suggested that District staff coordinate with CSDA in the development of
locally required policies and procedures for Board cost reimbursements for
attending meetings, including travel, lodging and meals. Mr. Andrews stated
that per the last Monterey County Special Districts General Managers Group
meeting, agencies were indeed looking into making the training a joint event.
He said that under AB 1234, all directors seated as of January 1, 2006, require
ethics training within the year 2006.
Del Monte Forest
Property Owners (“DMFPO”) evaluation of supplemental security measure needs
Mr. Andrews reported that approximately 1,100 responses had
been received as of two days ago to the DMFPO Community Traffic and Safety
Survey. The results of the survey will be presented at the November 13th
DMFPO semi-annual meeting. The information will be presented to the DMFPO “Blue
Ribbon Committee” for recommendations back to the DMFPO Board, and then
ultimately presented to the PBCSD Board. Director Verbanec anticipated that the
DMFPO semi-annual meeting would be well attended in light of the recent survey
and recent radio and newspaper coverage of
Director Laska inquired if the enhanced value of the water
system improvements for fire protection undertaken by the District would accrue
to the California American Water Company (“Cal-Am”) depending on the outcome of
the upcoming ballot measure to study public purchase of Cal-Am facilities. Mr.
Andrews stated that it would be interesting to see how the value would be
established in such a public purchase. He said that from a California Public
Utilities Commission standpoint, Cal-Am cannot earn a profit from the
improvements that the District has made to the Cal-Am water system in
Oral reports from General Manager
Mr. Andrews
informed the Board of a topic from the latest Monterey County Special Districts
General Managers Group meeting relating to development of a public-private
housing trust program. The impetus for this type of program has come primarily
from the private sector; however several local government agencies are getting
involved and have put in seed money. The Trust seeks to develop an endowment to
assist with down payments for workers if the workers are willing to share in
the appreciation of the property value. The Transportation Agency of Monterey
County is currently looking into the idea to offer special benefits to
employees. The Transportation Agency is considering investing approximately
$250,000 of its unrestricted reserve funds in the Trust, and has been advised
by the Trust it may consider the Agency’s proposal if other public agencies
will deposit approximately $1 million of reserves into the Trust. Eligible
beneficiaries would be the employees of the participating public/private
agencies. Mr. Andrews said it is unknown at this point if the District has the
authority to participate in such a trust, although cities do have the authority
through redevelopment. The Trust has the potential to be self-sustaining if
there is enough interest and home purchase turnover.
Mr. Andrews reported that the
District is looking into the feasibility of a “Reverse 9-1-1” emergency
notification system. The overall cost, depending on the number of lines brought
in for the system, is approximately $40,000 to implement within the District,
with an ongoing cost of approximately $5,000 annually. Special areas and/or
phone numbers can be filtered for custom notification needs.
Questions from Directors or staff seeking clarification of
matters within the purview of the District
There were no questions from the
Board or staff.
Director Verbanec attended the Monterey County Special
Districts Association (“MCSDA”) meeting for the first time. Mr. Andrews stated
that in order for the MCSDA to be effective and its work to be meaningful, it
requires that directors collectively participate and encouraged the PBCSD
directors to do so. Part of the impetus for the formation of the MCSDA was to
establish communication between the Local Agency Formation Commission and
special districts by bringing together commissioners and managers and staff for
regular effective exchange of information.
Director McCullough stated she had occasion to call the
Monterey County Sheriff’s Office to respond to her residence for a
non-emergency situation; the responding deputy notified her that he could not
find her house, and that he was new on the beat.
Mr. Andrews announced that there would be a walking tour of Forest
Lake Reservoir immediately following the Board meeting for those interested in
participating.
CLOSED SESSION
President Hornbuckle announced the Board would not need to
meet in closed session.
ADJOURNMENT
There being no further business at 11:30 p.m. a motion was
made to adjourn.
MOTION
10-05-06
M/S/C (unanimous) to adjourn to the next regular Board
meeting to be held on Friday, December 9, 2005 at 9:30 a.m. in the District
Boardroom at Forest Lake and Lopez Roads.
Richard
Andrews,
Secretary