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HomeMy WebLinkAboutAgenda Packet - EVWD Board of Directors - 03/22/2011East Valley Water District 3654 HIGHLAND AVE., SUITE 412, HIGHLAND, CA BOARD MEETING March 22, 2011 3:00 P.M. AGENDA --------------------------------------------------------------------- "In order to comply with legal requirements for posting of agenda, only those items filed with the District Secretary by 12:00 p.m. on Tuesday prior to the following Tuesday meeting not requiring departmental investigation, will be considered by the Board of Directors ". -------------------------------------- -------- ----- --- ------ -- -- - ---- CALL TO ORDER PLEDGE OF ALLEGIANCE ---------------------------------------------------------------------- 1. Public Comments 2. Approval of Agenda CONSENT CALENDAR 3. Approval of Board meeting minutes for February 8, 2011 4. Accounts Payable Disbursements: Accounts Payable Checks # 227762 through # 227962 which were distributed during the period of March 2, 2011 through March 14, 2011, in the amount of $1,171,044.70. Payroll and benefit contributions for the period ended March 14, 2011 and included checks and direct deposits, in the amount of $273,707.22. Total Disbursement for the period $1,444,751.92. 5. General Managers Expenses NEW BUSINESS 6. Discussion and possible action regarding the 2011 -12 Legislative report presented by Bob Reeb 7. Discussion and possible action regarding the OPEB Actuarial Valuation 8. Discussion and possible action regarding the San Bernardino Valley Water Conservation District's groundwater extraction fees 9. Review and accept financial statements for the month ended January 31, 2011 REPORTS 10. General Manager / Staff Reports 11. Consultant Reports 12. Committee Reports • Legislative (Standing) • Community Affairs (Standing) • Policy Committee ( Standing) • Labor Negotiating Committee (Ad -Hoc) • Succession Planning Committee (Ad -Hoc) 13. Oral comments from Board of Directors CLOSED SESSION 14. PUBLIC EMPLOYEE PERFORMANCE EVALUATION [Government Code Section 54957] Title: General Manager 15. CONFERENCE WITH LABOR NEGOTIATOR [Government Code Section 54957.6(a)] District Negotiator: To be determined Employee Organization: S.B.P.E.A. 16. CONFERENCE WITH LEGAL COUNSEL — ANTICPATF.D LITIGATION Initiation of litigation pursuant to Government Code Section 5,1956.9(c) One (1) Potential Case ANNOUNCEMENT OF CLOSED SESSION ACTIONS ADJOURN ---------------------------------------------------------------------------- Pursuant to Government Code Section 54954.2(a), any request f�)r a disability- related modification or accommodation, including auxiliary aids or services, that is sough! in order to participate in the above - agendized public meeting should be directed to the District's Adtniristrative Manager at (909) 885 -4900 at least 72 hours prior to said meeting. 2 Subject to approval EAST VALLEY WATER DISTRICT February 8, 2011 REGULAR BOARD MEETING MINUTES The meeting was called to order at 3:03 p.m. by President Wilson. Mr. Kennedy led the flag salute. PRESENT: Directors: LeVesque, Malmberg, Morales, Sturgeon, Wilson ABSENT: None STAFF: Robert Martin, General Manager; Brian Tompkins, Chief Financial Officer; Ron Buchwald, District Engineer; Justine Hendricksen, Administrative Manager; Becky Kasten, Accounting Supervisor; Eileen Bateman, Executive Assistant LEGAL COUNSEL: Steve Kennedy GUEST (S): Charles Roberts (Highland Community News), Cara Van Dijk (CV Strategies), Ron Coats, Dr. Bill Mathis (Mathis Consulting Group) PUBLIC COMMENTS President Wilson declared the public participation section of the meeting open at 3:04 pm. There being no verbal or written comments the public participation section was closed. APPROVAL OF AGENDA M /S /C (Malmberg- Sturgeon) that the February 8, 2011 agenda be approved as amended. President Wilson recommended to move Item #9 after Item # 5. Director Morales requested to recuse himself from Item #27 as he has not received clarification if there is a conflict of interest. APPROVAL OF BOARD MEETING MINUTES FOR JANUARY 25, 2011 M/S /C (Malmberg- Sturgeon) that the January 25, 2010 minutes be approved with the correction stated by Director Morales. Director Morales stated that a correction to the minutes on page three, paragraph four should read as follows: Director Morales stated that the JPA committee had reviewed the agreement with the City of San Bernardino. Minutes 02/08/11 etb DISBURSEMENTS M /S /C (Malmberg- Levesque) that the General fund Disbursements 4227136 through #227302 which were distributed during the period of January 5. 'C: 1 through January 12, 2011, in the amount of $1,143,094.82 and Payroll and Benefit cow irutions for the period ended January 12, 2011 and included checks and direct deposits, in the -mount of $185,207.95 totaling $1,328,032.77 be approved. GENERAL MANAGERS EXPENSES M /S /C (Malmberg - Sturgeon) to approve the General Managers expenses as submitted. DISCUSSION AND POSSIBLE ACTION REGARDING THE DISTRICT'S STRATEGIC PLANNING PROCESS Dr. Mathis discussed the District's strategic planning process and reviewed the business plans. No action taken. RESOLUTION 2011.02 — A RESOLUTION OF EAST VALLEY WATER DISTRICT AUTHORIZING THE GENERAL MANAGER TO SIGN FUNDING AGREEMENT, CERTIFICATIONS, AND AMENDMENTS FOR FUNDING UNDER THE SAFE DRINKING WATER STATE REVOLVING FUND, AUTHORIZING THE GENERAL MANAGER TO APPROVE CLAIMS FOR REIMBURSEMENT; AUTHORIZING THE GENERAL MANAGER TO EXECUTE BUDGET AND EXPENDITURE SUMMARY; AUTHORIZING THE GENERAL MANAGER TO SIGN THE CONTRACTOR'S RELEASE FORM; AND DEDICATING REVENUES FROM WATER RATES AS THE SOURCE OF REVENUE TO REPAY SAID LOAN M /S /C ( LeVesque- Malmberg) to approve Resolution 201 1.02. RESOLUTION 2011.01 — A RESOLUTION OF THE BOARD OF DIRECTORS OF THE EAST VALLEY WATER DISTRICT ESTABLISHING POLICIES FOR ITS COMPENSATION, REIMBURSEMENT, ETHICS AND SEXUAL HARASSMENT TRAINING, AND INSURANCE COVERAGE M/S (Wilson - Sturgeon) m approve Resolution 2011.01 Director Morales reviewed the document and recommended that the Board consider a decrease in Directors compensation; that this item be on the next agenda for further discussion and update of Resolution 2011.01. M /S /C (Wilson- Sturgeon) to amend motion to reflect the recommendations to cut compensation and expenses by 25 %. ORDINANCE 378 — AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE EAST VALLEY WATER DISTRICT ESTABLISHING GUIDELINES FOR THE CONDUCT OF ITS PUBLIC MEETING AND ACTIVITIES Minutes 02/08/11 etb Legal Counsel reviewed the ordinance and recommended that in the Ordinance section to include "as may be amended" in section 1, paragraph 1 relating to Exhibit "A" (Board Norms and procedures) M /S /C (Levesque- Malmberg) to approve Ordinance 378 with the recommended changes by Legal Counsel. DISCUSSION AND POSSIBLE ACTION REGARDING THE DISPOSAL OF THE DISTRICT'S OUTDATED MRE'S M /S /C (Levesque- Malmberg) to direct staff to dispose of the District's outdated MRE's. DISCUSSION AND POSSIBLE ACTION REGARDING THE NOTIFICATION OF NOMINATIONS FOR THE SPECIAL DISTRICT RISK MANAGEMENT AUTHORITY (SDRMA) BOARD OF DIRECTORS ELECTIONS FOR 2011 Information only. REVIEW AND APPROVE THE DISTRICT'S FLEXIBLE SPENDING ACCOUNT PLAN DOCUMENTS Mr. Tompkins reviewed the Flexible Spending Account plan with the Board; that it is recommended for the Board to adopt the plan on an annual basis. Director Morales addressed a format issue with page I of the document. Director Sturgeon stated that the Board approve the plan for 2011 and direct to the policy committee for review for 2012. M /S /C ( LeVesque- Morales) to approve the District's Flexible Spending Account plan documents for 2011. DISCUSSION AND POSSIBLE ACTION REGARDING THE DISTRICT'S BILLING PROVISIONS The General Manager stated that he and Director Sturgeon had discussed possible changes to customer billing; that a level pay plan be discussed on the next agenda. Director Sturgeon would like to see all customers have identical sewer charges and not the $2.00 surcharge; to have a single line item on bills for the treatment/collection charge; to also see the water usage in gallons and not cubic feet as well as have a pie chart for usage. No action taken. REVIEW AND ACCEPT FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 2010 The Chief Financial Officer gave a detailed overview of the Financial Statement for period ended December 31, 2010. 3 Minutes 02/08/11 etb M/S /C (Sturgeon - Malmberg) to accept the Financial Ststcruents for the period ended December 31, 2010. DIRECTORS' FEES AND EXPENSES FOR JANUAR17 2011 M /S /C (Malmberg - Levesque) to approve the Directors' gees and Expenses for January 2011. REVIEW AND ACCEPT THE INVESTMENT REPORT FOR THE QUARTER ENDED DECEMBER 31, 2010 M/S /C (Sturgeon - LeVesque) to accept the Investment Report for the quarter ended December 31, 2010. GENERAL MANAGER /STAFF REPORTS The General Manager stated that high -flow testing at the Seven Oaks Dam is scheduled for February 17th; that a limited number of vehicles will be granted access; that Board members who want to attend to coordinate with Administration so that the p -oper notice can be posted to comply with the Board policy: that ARkSTORM will be discussed on February 18th at the Yucaipa Community Center; Mr. Sturdivan has been working ,vitl L'SGS and CalEMA for this event. Director Malmberg and Wilson stated their interest in attending *.he .1RkSTORM event. Mr. Buchwald stated that the pipe bursting for the sewer replacement project went very well; that the next pipe bursting will take place at the end of the week; that well 24B will be flushed again in the near future; that plant 134 is under way. Director LeVesque is interested in viewing the pipe bursting. CONSULTANT REPORTS Ms Van Dijk gave a brief update on Community affairs:. that the customer survey is getting positive response; that a message regarding the on -line survey will be placed on the customer bills and posted at the offices. COMMITTEE REPORTS a. Legislative (Standing) — A meeting is scheduled for February 10, 2011. Director Morales stated that the Committee will be reviewing it te Santa Ana Sucker strategies; that AB262 redraws boundaries for the Santa Ana 2egional Water Quality Control Board. b. Community Affairs (Standing) — Next meeting is scheduled for February 24, 2011. No comments at this tme. c. Policy (Ad -Hoc) — No comments at this time. The Board President wants to appoint Director Malmberg and !director LeVesque to the new MOU Negotiation Committee. 4 Minutes 02/08/1) etb ORAL COMMENTS FROM BOARD OF DIRECTORS Director Morales stated that he had an article from Elsinore Valley regarding a new program that provides low flow showerheads, aerators and "Stealth" toilets; that the cost of the program is approximately SImillion; that he ran in to June Yamamoto and she had requested give -a -ways for the Highland Chamber fundraiser; that staff had given him a bag full of items for the event; he also expressed his appreciation to the Board for allowing the District to subscribe to the Capitol Track; that he sat on a state -wide panel that worked on a brochure for financial management for elected officials Director Malmberg stated that he had received a door -hanger regarding a water leak on his property. Director Sturgeon clarified his statement from a prior Board meeting regarding "lazy idiots "; was regarding the Board and not staff; that he apologizes to anyone who may have taken offense. President Wilson stated that he will be attending the ACWA Leg Symposium. LETTER TO THE DISTRICT FROM THE SAN BERNARDINO VALLEY WATER CONSERVATION DISTRICT REGARDING THE STATUS REPORT ON WASH PLAN ACTIVITIES Information only. LETTER OF APPRECIATION TO THE DISTRICT FROM CWO DANIEL "MORGAN" DYER, USMC (RET), REGARDING DISTRICT EMPLOYEE Information only. WATER EDUCATION FOUNDATION'S "2011 WATER TOURS ", VARIOUS DATES AND LOCATIONS Information only. ACWA'S 2011 WASHINGTON, D.C. CONFERENCE, MARCH 1-3,2011 Information only. WATER EDUCATION FOUNDATION'S "LOWER COLORADO RIVER TOUR ", LAS VEGAS, MARCH 16-18,2011 Information only. SPECIAL DISTRICT AND LOCAL GOVERNMENT INSTITUTE "ADVANCED STUDIES, THE EXCEPTIONAL AGENCY ", INDIAN WELLS, APRIL 28-29,2011 Information only. The Board took a break at 5:00 pm 5 Minutes 02/08/11 etb The Board returned to session 5 :05 pm CLOSED SESSION The Board entered into Closed Session at 5:05 p.m. as provided in the California Open Meeting Law. Government Code Section '�4945.9(a), to discuss those items l fisted on the agenda. ANNOUNCEMENT OF CLOSED SESSION ACTIONS The Board returned to regular session at 5:31 p.m. The items listed >n the agenda were discussed in closed session with no reportable action. ADJOURN The meeting was adjourned at 5'31 p.m. until the next regularly scheduled Board Meeting. George WiISc n. President Robert E. Martin, Secretary Minutes 02/08/11 etb East Val ley Water District Board Memorandum From: Brian W. Tompkins / Chief Financial Officer Subject : Disbursements. Recommandation: Approve the attached list of accounts payable checks and payroll issued during the period March 2, 2011 through March 14, 2011. Background: Date MARCH 22, 2011 Accounts payable checks are shown on the attached listing and include numbers 227762 to 227962 for A total of $1,171,044.70. The source of funds for this amount is as follows: Unrestricted Funds $834,516.40 Bond Financing $173,778.30 State Financing $162,175.00 Payroll and benefit contributions paid for this period totaled $273,707.22. Total disbursements $1,444,751.92. = w _ U r n N N M M N N o 0 Q E N N N N N N N N M M M M O N N N N t m _ ov. 8 E U` v o d K U Y L V A oy �MD (0 N 3d Y N (0 W 0 N U m � > m q � O i v ll n � � C J O U N w m m� 00 NN r — N 00 NN (O N m (O 00 0 0 N N M M .- m 00 0 0 M) M 00 N (n ((J co w r N m W cV 6 6 (V Ci oi r r w GD (D (D MM M N N rr rr Mo N rr c O U N N U u U Z w n Y a IL O Qa Z U LU H O Q C7 OU = W z z o U Q ( W W fw_- ¢ z (n }}n F- o L Z 0 O Z Z U Q Z D Q U o] LEI > U ? Z. 0UU aJ w U � LL w (n U 0 w z z ¢ w Z a c i LU w O g W 1 c ¢ Q � 2 o W O .. 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Tompkins / Chief Financial Officer Subject: General Manager's Expenses. Recommendation: Approve the attached list of payments and reimbursements for General Manager expenses during the period March 2, 2011 through March 14, 2011. Background: Date: MARCH 22, 2011 Business and Travel expenses incurred by the General Manager and paid during the reporting period stipulated above totaled $488.16. A summary of theses expenses by authorized payment methods follows: American Express — R Martin 371.40 American Express — J Hendricksen CalCard — R Martin 76.76 CalCard — J Hendricksen CalCard — E Bateman / C Contreras Direct Reimbursement Total 488.16 East Valley Water District 2011 -12 Session, First Year All 19 (Fong D) Building standards: water meters: multiunit structures. Introduced: 12 /6/2010 Status: 1/24/2011- Referred to Corns. on W., P. & W. and H. & C.D. Is Urgency: N Is Fiscal: Y Location: 1/24/2011 -A. W.,P. & W. Calendar: 3/22/2011 9 a.m. - State Capitol, Room 437 ASSEMBLY WATER, PARKS AND WILDLIFE, HUFFMAN, Chair Summary: The Water Measurement Law requires every water purveyor to require, as a condition of new water service on and after January 1, 1992, the installation of a water meter to measure water service. That law also requires urban water suppliers to install water meters on specified service connections, and to charge water users based on the actual volume of deliveries as measured by those water meters in accordance with a certain timetable. This bill would require a water purveyor that provides water service to a multiunit residential structure or mixed -use residential and commercial structure that is subject to specified building standards, to either adopt a general policy to require the installation of either a water meter, as defined, or a submeter, as defined, to measure water supplied to each individual dwelling unit, or to inform, on an individual basis, an applicant for new water service as to whether a water meter or submeter is required to be installed for each individual dwelling unit. The bill would require the owner of the structure to ensure that a water submeter installed for these purposes complies with laws and regulations governing installation, approval of meter type, maintenance, reading, billing, and testing of water submeters. This bill contains other related provisions and other existing laws. Laws: An act to add Section 17922.14 to the Health and Safety Code, and to add Chapter 8.5 (commencing with Section 537) to Division 1 of the Water Code, relating to water. Notes 1: AB 19 is the re- introduction of AB 1975 (Fong) from last year which was held on the Senate Appropriations Committee Suspense File. The Sierra Club is the sponsor of the legislation. The bill would require a water purveyor to do either of the following: (1) Adopt a general policy to determine when the installation of either a water meter or submeter to measure water supplied to each individual dwelling unit shall be required. The water purveyor shall inform all local building departments within its service area of the policy; or (2) On an individual basis, and upon receipt of an application for new water service to the structure, inform the applicant, and the appropriate local building department, as to whether a water meter or submeter is required to be installed to measure water supplied to each individual dwelling unit in the structure. proposed Water Code y 537(c), which forbids water purveyors from collecting any fee or charge for the building owner's installation, use, etc. of a submeter. Currently we do charge owners to approve the location and inspect the installation of submeters, because our oversight is necessary to protect the integrity of our system The water purveyor community, including the Association of California Water Agencies and California Municipal Utilities Association, was a bit dubious of the legislation last year as the provisions of the bill changed often to reflect concerns of competing interests - -water purveyors, apartment owners, tenant rights groups. Water purveyor concerns with the bill included ownership of submeters, maintenance and billing responsibilities, building standard requirements. EVWD was In support of AB 1975 as introduced, however, opposed the legislation by the end of the legislative session. The key issue with AB 19 is that it places the onus of policy setting on a local water purveyor, who has no direct interest in whether a multi -unit residential property owner chooses to bill tenants for water on a metered basis. There is unlikely much water savings to be gained (indirect interest) from the installation of submeters given the improved efficiency of indoor appliances, water closets and low -flow showerheads and faucets. It is unclear whether the cost of water in comparison to total other costs for rent and other expenditures for a typical renter would result in full dishwasher loads and shorter showers. I suppose a purveyor could adopt a policy that no submeters would be required within its service area and satisfy the requirement in the legislation. The second option - -to make a determination on a case -by -case basis - -seems a bit arbitrary and likely would come at a time in the development approval process that building plans have been long ago completed. All said, the District may wish to consider whether attempting to fix this legislation is worth the effort- - whether it is a high priority or legislation that is best left to ACWA and others to fix. Current Position: Not Yet Considered Recommended Position: Not Favor AS 5 4 (Solorio D) Drinking water. Introduced: 12 /6/2010 Status: 1/24/2011- Referred to Cams. on L. GOV. and E.S. & 7.M Is Urgency: N Is Fiscal: Y Location: 1/24/2011 -A. L. GOV. Summary: Existing law, the California Safe Drinking Water Act. requires the State Department of Public Health to administer provisions relating to the regulatior of drinking water to protect public health, including, but not limited to, conducting research, studies, and demonstration programs relating to the provision of a dependable, safe supply of drnking water, enforcing the federal Safe Drinking Water Act, adoption of enforcement regulations, and Dnducting studies and investigations to assess the quality of water in domestic water supplies. This oili would allow the department to issue a letter of no prejudice, as defined, to a public water system t` a-, is a lead applicant for a project that may be funded by the Safe Drinking Water Revolving Fund and would make expenditures related to the project reimbursable in specified circumstances. This bil 2ontains other related provisions and other existing laws. Laws: An act to amend Sections 56375 and 56430 of the Government Code, and to add Section 116760.65 to the Health and Safety Code, relating to drinkirg vater. Notes 1: The California Safe Drinking Water Act requires the Department of Public Health (DPH) to regulate drinking water to protect public health. This bill would allow DPII to issue a "letter of no prejudice' to a public water system that is a lead applicant for a project that may be funded by the Safe Drinking Water Revolving Fund. Under the Cortese - Knox - Hertzberg Local Government Reorgan;zation Act of 2000, each local agency formation commission ( LAFCO) is required to develop a sphere of influence for each local governmental agency within the county. In order to update spheres of influence, each LAFCO is required to conduct periodic municipal service reviews (MSR). This bill would authorize a LAFCO to review and approve the consolidation of territory within the jurisdiction of a mutual water company into the jurisdiction of a city as a special district that operates a public water system, with the consent of the respective city and mutual water company. The bill would also authorize a LAFCO to include in a MSR, a review of whether the available drinking water sources within the area of review comply with safe drinking water standards. According to the author, this bill is aimed at small mutual water companies. The author intends to make it easier for mutual water companies to gain access to DPH Safe Drinking Water Act funds through the "no prejudice letter' process. A "letter of no prejudice" is an agreement between a public water system and DPH that qualifies certain expenditures for re!mbursement from the Safe Drinking Water Revolving Fund. The timing and final amount of the reimoursement is dependent on the terms of the agreement and availability of funds. The bill as currently drafted presents a number of issues. F -st, it is unlikely that a public entity; i.e., a local agency formation commission, may take actions that affect a private corporation; i.e., a mutual water company. Even assuming that a mutual water company could acquiesce to its territory being subsumed by a city, cities do not always own and operate a public water system. In fact, it is unclear as to what solutions or changes would occur by virtue of the enactment of this provision in the legislation Second, the bill would authorize a LAFCO is opine as to whether drinking water sources within the area subject to a municipal service review comply with safe drinking water standards. It is not the sources that must comply, but the water purveyed to consumers. As the regulation and enforcement of the Safe Drinking Water Act is under the purview of the CDPH, it would not be appropriate to add a requirement for a LAFCO to make determinations related to safe drinking water. ACWA has approved an 'oppose unless amended" position on this legislation. The issues raised by this legislation are not likely to directly impact the District, it might be better to remain neutral on the bill at this time and allow ACWA to take the lead in killing or amending the legislation. By watching the legislation, I can monitor future amendments and work wit> District staff and the board to determine whether a more active position is warranted. Current Position: Not Yet Considered Recommended Position: Watch AB 148 (Smyth R) Local government: ethics training: disclosure. Introduced: 1 /14/2011 Last Amend: 3/2/2011 Status: 3/3/2011 -Re- referred to Com. on L. GOV. Is Urgency: N Is Fiscal: Y Location: 3/3/2011 -A. L. GOV. Calendar: 4/27/2011 1:30 p.m. - State Capitol, Room 447 ASSEMBLY LOCAL GOVERNMENT, SMYTH, Chair Summary: Existing law, for purposes of ethics training for officers and employees of a local government, defines the term ethics laws to include, among others, laws relating to government transparency. This bill would additionally define the term ethics laws to include compensation setting guidelines as established by specified organizations. This bill contains other related provisions and other existing laws. Laws: An act to amend Sections 53234 and 53235.2 of, and to add Section 53232.5 to, the Government Code, relating to local government. Notes 1: Existing law, for purposes of ethics training for officers and employees of a local government, defines the term "ethics laws" to include laws relating to government transparency. Existing law requires local agency officials to receive ethics training, if the local agency provides any type of compensation, salary, or stipend to a member of a legislative body, or provides reimbursement for actual and necessary expenses incurred by a member of a legislative body in the performance of official duties. Existing law authorizes a local agency to pay compensation to members of a legislative body for attendance at specified occurrences. Existing law authorizes a local agency to pay compensation for attendance at other occurrences if the governing body has adopted, in a public meeting, a written policy specifying other types of occasions that constitute the performance of official duties. Existing law authorizes a local agency to reimburse members of a legislative body for actual and necessary expenses incurred in the performance of official duties, if the governing body has adopted a written policy, in a public meeting, specifying the types of occurrences that qualify a member of the legislative body to receive reimbursement of specified actual and necessary expenses. This bill would expand the definition of the term "ethics laws" to include compensation- setting guidelines as developed by the California State Association of Counties, League of California Cities, California Special Districts Association, and the California City Management Foundation. This bill would require the local agency to post the ethics training record on the local agency's Internet Web site, if any, and to submit a copy of the record to the Attorney General within 15 days of receiving the record. This bill would require a local agency that has adopted a written attendance compensation policy or written reimbursement policy to post the policy on the local agency's Internet Web site, if any, and to submit a copy of the policy to the Controller. The bill would, if a local agency does not comply with these requirements, require the Controller to withhold any funds to which the local agency is otherwise entitled, as specified. Enactment of this bill would result in minor cost impacts to local agencies due to expanded reporting requirements; e.g., posting information on the agency website and provide information to the State Controller's office. Ethics training sessions would have to be modified to cover additional information. The requirement to submit ethics training records to the Attorney General seems to be an unnecessary burden and would increase state as well as local costs. The information will be postE!d on the local agency web site, if there is one, and the Attorney General could easily access that information based on a complaint. Current Position: Not Yet Considered Recommended Position: Favor if amended AR 157 (Jeffries R) Safe, Clean, and Reliable Drinking Water Supply Act of 2012. Introduced: 1/19/2011 Status: 2/24/2011- Referred to Corns. on W., P. & W. and E.S. & T.M. Is Urgency: N Is Fiscal: Y Location: 1/19/2011 -A. W.,P. & W. Summary: Existing law creates the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, which, if approved by the voters at the November 6, 2012, statewide election, would authorize the issuance of bonds in the amount of $11,140,000,000 pursuant to the State General Obligation Bond Law to finance a safe drinking water and water supply reliability program. This bill would reduce by 25% the total amount of bonds authorized to be issued pursuant to the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, and would make conforming reductions to amounts specified to be allocated from these bond funds for certain purposes. This bill contains other related provisions. Laws: An act to amend Sections 79720, 79720.1, 79720.2, 79720.3, 79720.4, 79720.6, 79721, 79722, 79723, 79731, 79740, 79750, 79755, 79756, 79757, 79758, 79759, 79759.5, 79760, 79760.5, 79770, 79780, 79781, 79784, 79810, and 79824 of the Water Code, and to amend Section 8 of Chapter 126 of the Statutes of 2010, relating to the Safe, Clean, and Reliable Drinking Water Supply Act of 2012. Notes 1: The November 6, 2012, water bond would authorize the issuance of bonds in the amount of $11.14 billion to finance a safe drinking water and water supply reliability program. The proposed bond includes a state cost -share for new surface storage projects, as well as over $2 billion for Delta ecosystem restoration projects, which will be a critical compcnr_nt of the Delta Plan. The proposed bond also includes signi`icant funding available for state cost s-aring for regional water projects, conservation projects and water recycling projects, among others. This bill would reduce by 25% the total amount of bonds authorized to be issued, and would make conforming reductions to amounts specified to be allocated from these bond funds for certain purposes. The 25% cut is across - the - board, impacting each of tle specific funding categories. ACWA opposed any efforts to change the 2012 water bond. Most of the policy concessions made in November 2009; e.g., more stringent urban water management planning requirements and urban water conservation goals were based in part on state cost- she-ing. ACWA claims there is no polling data to show that voters are unwilling to pass the water bond in its current form, let alone polling that demonstrates an $8.355 hil:,on bond would fare much better. Current Position: Not Yet Considered Recommended Position: Oppose AB 246 (Wieckowski D) Water quality: enforcement. introduced: 2/3/2011 Status: 3/3/2011- Referred to Coms. on IUD. and E.S. & T.M. Is Urgency: N Is Fiscal: Y Location: 3/3 /2011 -A. IUD. Calendar: 3/22/2011 9 a.m. - State Capitol, Room 4202 ASSEMBLY JUDICIARY, FEUER, Chair Summary: The Porter - Cologne Water Quality Act authorizes each California regional water quality control board to delegate certain powers to its executive officer. That authorization, except as specified, excludes the delegation to its executive officer of -he power of application to the Attorney General for judicial enforcement. This bill would delete that exclusion, and, instead, specifically authorize a regional board, commencing January 1, 2012, to delegate to its executive officer the authority to apply for judicial enforcement to the Attorney General, a district attorney, a city attorney of a city with a population that exceeds 750,000, or a city attorney for a city and county. This bill contains other related provisions and other existing laws. Laws: An act to amend Sections 13223, 13350, 13361, 13385, and 13386 of the Water Code, relating to water quality. Notes 1: This bill would make it easier to prosecute alleged violators of the State's water quality law- - The Porter - Cologne Water Quality Control Act. First, it would authorize a regional board to delegate the authority to seek judicial action to the regional board executive officer. Second, it would authorize a county district attorney or a city attorney to pursue legal arton. The balance a citizen -board brings to important decisions regarding the initiation of judicial proceedings is an important balance to maintain. Giving authority to prosecutors outside of the regicnal board could easily politicize the enforcement process. Finally, providing such authority without the procedural protections and due process afforded under Porter - Cologne, as well abandoning _he experience and expertise of the regional board and regional board staff to the courts, would no- likely produce beneficial outcomes for the regulated community. Current Position: Not Yet Considered Recommended Position Oppose AB 392 (ALeyQ D) Ralph M. Brown Act: posting agendas. Introduced: 2 /14/2011 Status: 3/3/2011- Referred to Coms. on L. GOV. and G.O. Is Urgency: N Is Fiscal: Y Location: 3/3/2011 -A. L. GOV. Calendar: 4/6/2011 1:30 p.m. - State Capitol, Room 447 ASSEMBLY LOCAL GOVERNMENT, SMYTH, Chair Summary: Existing law, the Ralph M. Brown Act, requires the meetings of the legislative body of a local agency to be conducted openly and publicly, with speci°ie:d exceptions. Existing law requires that the legislative body of a local agency post an agenda, as specified, at least 72 hours before a regular meeting of that body, and prohibits the legislative body from acting on or discussing any item not appearing on the agenda, except as provided. This bill would additionally require the legislative body of the local agency, at least 72 hours before a regular meeting of that body, to post the writings that relate to an agenda item for the open session of that regula, meeting. This bill would require the legislative body to post the agenda and the writings on its Internet Web site, if any, as specified. The bill would repeal the procedure for the disclosure of any writirgs that are distributed less than 72 hours prior to the meet ng and would instead prohibit the legislative body from acting on or discussing an item on the agenda `or which a related writing was not 3-operly disclosed at least 72 hours prior to the meeting, except as provided. By expanding the duties of local agencies, this bill would impose a state - mandated local program. This bill contains other related provisions and other existing laws. Laws: An act to amend Sections 54954.2 and 54957.5 of the Government Code, relating to public: meetings. Notes 1: As written, this bill will greatly burden local agencies and impede the proper conduct of their business without providing any substantial benefits to the public. First, it will upset long- established and well- accepted Brown Act procedures regarding the posting of agendas. Second, It will promote bad decision - making by creating an incentive for agencies not to generate additional written information for an agenda item once the agenda and agenda packet have been released. It may also have the unintended consequence of allowing anyone to force the continuance of an agenda item by submitting a "related paper" less than 72 hours before the item is to be heard. Most public agencies satisfy the agenda posting requirement by posting the agenda on a bulletin board outside the entrance to their headquarters building. Nowadays, most public agencies also post the agenda (and the entire agenda packet as it exists at the time of release) on their internet website. Agenda packets are very typically in excess of 100 pages. When there is an EIR, master plan, or some other lengthy document under consideration, agenda packets can be many hundreds of pages long. This bill would require the entire packet - not just the agenda - to be posted "in a location that is freely accessible to members of the public." It is obviously infeasible to have a bulletin board that large, but if the agency moves everything to a table inside its lobby, which is open only during business hours, is that "a location that is freely accessible to members of the public "? So how, exactly, can an agency be sure it is complying with this law. Further, this exhaustive posting requirement is completely counter to the long- established requirement (in the same Government Code section and subdivision) that the agenda itself provide only a "brief general description" of each agenda item that "generally need not exceed 20 words." Also, it is common practice today for local agencies to have websites, and for them to post not only the agenda but the complete agenda packet on the website as soon as it is released. The public therefore gains little additional benefit from requiring every agency post a hard copy, as well. Second issue: In response to legitimate concerns, the Brown Act was amended in 2007 (SB 343) to provide for special disclosure of documents generated or received less than 72 hours before a meeting. After only four years, this bill now wants to do away with that reasonable procedure entirely, in favor of an ironclad rule that the addition of any "related writing" for an agenda item that was not disclosed and posted at least 72 hours prior to the meeting triggers a ban on the consideration of that item at the meeting (except in narrowly defined urgency situations, upon a super- majority vote). This sets up a dilemma for local agencies: there is a document, say a new piece of correspondence or a supplemental staff report, that will shed additional light on an item pending before the legislative body for decision. But if staff gives the elected officials the document, it will delay consideration of the item until the next meeting - a week, or two weeks, or a month later. Alternatively, staff can withhold the document entirely from the decision - makers in the interests of getting prompt (but less well - informed) action. The balance is likely to tip in favor of depriving the decision- makers of relevant information. So public policy- making will suffer because of an inflexible Brown Act requirement. Finally, this bill sets up an unintended consequence as one person opposed to a pending legislative action could submit a "related writing" within 72 hours of the meeting, and thereby trigger the ban on considering the item at that meeting. The "related writing" can be completely useless, and interposed solely for the purpose of delay, but the Brown Act will preclude the local agency from acting. And when the item is placed on the next meeting's agenda, you can do it again, and again, ad infinitum. In effect, this bill would give project opponents a means to indefinitely delay action on any project they oppose; e.g., a proposed rate increase subject to Proposition 218 procedural and voting /protest requirements. Current Position: Not Yet Considered Recommended Position: Oppose AB 403 (Campo D) Public drinking water standards: hexavalent chromium. Introduced: 2/14/2011 Status: 2/24/2011- Referred to Com. on E.S. & T.M. Is Urgency: N Is Fiscal: Y Location: 2/24/2011 -A. E.S. &T.M. Summary: The Calderon -Sher Safe Drinking Water Act of 1996 requires the State Department of Public Health to, among other things, adopt regulations relating to primary and secondary drinking water standards for contaminants in drinking water. Existing law requires the department to establish a primary drinking water standard for hexavalent chromium on or before January 1, 2004. Violation of certain provisions relating to public water systems is a crime. This bill would require the department to establish a primary drinking water standard for hexavalent chromium on or before January 1, 2013, and would, if a standard is not adopted by that date, make the public health goal set by the Office= of Environmental Health Hazard Assessment as of January 1, 2C 1:, the applicable standard. By expanding the definition of a crime, this bill would impose a stare- mandated local program. This bill contains other related provisions and other existing laws. Laws: An act to amend Section 116365.5 of the Health and Safety Code, relating to drinking water standards. Notes 1: This bill requires that the California Department of Public Health (CDPH) set a standard for hexavalent chromium, also known as chrome 6, by January 1, 2013. The bill also states that if the department fails to comply, the standard in effect will become tl*e Public Health Goal (PHG) developed by the Office of Environmental Health Hazard Assessment (OFHIIA). According to the National Toxicology Program of the Department. of Health and Human Services, chromium is a metal that can take various forms, including hexavalent chromium', which is created when the metal is heatec. It is widely used in metal fabrication, chrome finishing and plating, and was used as a preservative to reduce corrosion. It is also found naturally in some geological deposits. In 1990, the International Agency for Research on Cancer, declared that chrome 6 was known to cause cancer in people when imaled. Moreover, in 1991, the Environmental Protection Agency (EPA) established a tap water standard for total chromium at 100 parts per billion. In 2010, a draft toxicological review of chrome 6 by the EPA found that the zcntaminant in tap water is "likely to be carcinogenic to humans' and cited significant cancer concerns and other health effects from animal studies, including anemia and damage to the gastrointesbra; tract, lymph nodes, and liver. In 2001, Senator Deborah Ortiz introduced SB 351, Ch 602, which required DPH to adopt a primary drinking water standard for hexavalent chromium by January 1. 2004, however DPH never complied due to the lack of a public Health Goal. DPH is tasked to provide a Maximum Contaminant Level (MCL) based primarily on the Public Health Goal and other regulatory and feasibility processes. Water agencies test for total chromium which has a limit of 50 parrs per billion in California. However, there is no standard in place for chromium 6, which is the most harmful Cf its forms. Testing for chromium 6 is required in California, but without a standard, the testing does not necessarily benefit consumers. The California Safe Drinking Water Act establishes a process for establishing both public health goals and primary drinking water standards. The process is based on pest scientific information available and peer review. The process does not include the Legislature setting deadlines and establishing standards by statutory enactment. Current Position: Not Yet Considered Recommended Position: Oppose AS 457 ( Wagner R) Public works contracts: relief for bidders. Introduced: 2/15/2011 Status: 3/3/2011- Referred to Com. on B., P. & C.P. Is Urgency: N Is Fiscal: Y Location: 2/15/2011 -A. B., P. & C.P. Calendar: 3/22/2011 10 a.m. - State Capitol, Room 447 ASSEMBLY BUSINESS, PROFESSIONS AND CONSUMER PROTECTION, HAYASHI, chair Summary: Existing law sets forth the procedures governing the bidding, awarding, and payment of public works contracts by public entities, and the relief due Licders and contractors under those contracts. This bill would entitle a bidder who successfully challenges the award of a contract determined to be invalid due to errors or omissions of the public entity to recover costs and attorney's fees incurred in pursuing the challenge. Laws: An act to add Section 5111 to the Public Contract Code, elating to public contracts. Notes 1: The Engineering Contractors Association and other contractor organizations are the sponsors of this legislation. The sponsors point to a court decision titled Great West Contractors, Inc. v. Irvine Unified School District that was decided on August 31, 2010 and claim that a better remedy is required to rectify violations of the competitive bidding laws by public agencies than just recovery of bidding expenses by the contractor who is illegally denied the ;ontract. Sponsors of the legislation wish to force public agencies "to think more seriously about ::omplying with existing bidding laws." If approved, attorney fees would be awarded if a contractor :5-evails in a court of law against the public agency. Current law provides that a contractor who prevails against a public agency can only receive their costs for bidding on the project. Sponsors argue that there is therefore little incentive for a contractor to pay an attorney to challenge a public agency since the resulting legal costs are paid for by the contractor and nothing is gained. Sponsors argue that public agencies know that there are insignificant repercussions for violating competitive bidding law::, thus they continue to violate such laws with impunity. Existing law requires a public agency to make a good faith determination that a low bid is responsive and the bidder is responsible, and then a contract can be awarded. The second [or other] low bidder may challenge the bid award, but existing law provides that the contract may be entered into and performance begun while the challenge is pending. Under this legislation, if the challenging bidder is successful and the contract is ruled invalid due to defects in the bidding process, the public entity would then face a claim for attorney's fees and costs by the challenging bidder. The legislation would not require the challenger to show intent, just that there is a "defect" in the process. The practical outcome is that public agencies might be unwilling to proceed with a contract if the award is challenged, so as to avoid the prospect of having to pay the challenger's fees and costs. An agency would simply await the outcome of the challenge. Projects would likely be held up unnecessarily due to the challenge, which could in turn increase the cost due to bids going stale. Even though §5107 gives such actions priority "over all other civil actions," the delay would still likely be months. The current legal "remedy" for a violation of Section 5110 is a directive to the public agency to reconsider its decision and to comply with the legal requirements. Pursuant to Section 5110, any party not awarded the contract can challenge the process. Thus, as written, the legislation would encourage a multitude of allegedly aggrieved parties to file suit, hoping to at least get their attorneys' fees (a form of punishment to the public agency), as they also hope to revive their bids. That is not a wise or cost- appropriate approach, particularly when it might encourage frivolous claims. Finally, the award of attorneys' fees is the exception, not the norm. The legislation would contravene Government Code Section 815.6, which limits a right to damages for breach of a mandatory duty (which is the basis for this type of claim), and bars claims for attorneys' fees in such circumstances. This legislation also would impose such an award without a finding of negligence or other active misconduct by the public agency, which again is contrary to the limitations imposed by Section 815.6. The Association of California Water Agencies, California Association of Sanitation Agencies, California Special Districts Association, League of California Cities and other local government associations and individual entities will likely oppose this legislation. Current Position: Not Yet Considered Recommended Position: Oppose AS 527 (Hernandez. Roger D) Public officials: financial interests. Introduced: 2/15/2011 Status: 3/3/2011- Referred to Com. on L. GOV. Is Urgency: N Is Fiscal: Y Location: 3/3/2011 -A. L. GOV. Calendar: 4/27/2011 1:30 p.m. - State Capitol, Room 447 ASSEMBLY LOCAL GOVERNMENT, SMYTH, Chair Summary: Existing law prohibits Members of the Legislature, and state, county, district, judicial district, and city officers or employees from being financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Existing law defines what is a remote interest in a contract that does not present a prohibited conflict of interest under these provisions. Existing law authorizes a body or board to make a contract that involves a remote interest of a member of the body if, among other things, the remote interest is disclosed to the body or board and noted in its official records, and thereafter the body or board authorizes, approves, or ratifies the contract in good faith by a vote of its membership sufficient for the purpose without counting the vote or votes of the officer or member with the remote interest. Violation of these provisions is a crime. This bill would additionally require that the remote Interest be disclosed at a public meeting of that body or board and would require the counsel or other legal advisor of the body or board to identify a statutory basis for classifying the interest as a remote interest. By increasing the scope of actions that constitute a crime, this bill would impose a state - mandated local program. This bill contains other related provisions and other existing laws. Laws: An act to amend Sections 1090 and 1091 of, and to add Section 1096.5 to, the Government Code, relating to public officials. Notes 1: This legislation raises two concerns. First, it expands the reach of Government Code Section 1090 by making it applicable to any expenditure of a public agency, whether or not a contract is involved, as to which a member of the governing body has a financial interest. Government Code Section 1090 is a very old statute whose purpose has largely been superseded by the Political Reform Act's conflict -of- interest provisions. Second, the proposed requirement that the governing body's counsel identify publicly the statutory basis for determining a members financial interest to be "remote" under Section 1091 would create a conflict of interest for the public agency attorney and blur the lines of representation. Legally and ethically, the public attorney's duty is to represent the agency and its governing body as a whole; not to represent the interests of the individual member with the potential conflict -of- interest. Making the legal determination and public announcement AB 527 would require creates a conflict for the attorney if the interests of the individual member do not align (as they often would not) between the individual member and the governing body or local agency. Current Position: Not Yet Considered Recommended Position: Oppose AB 531 (Olsen R) Groundwater. Introduced: 2/15/2011 Status: 2/16 /2011 -From printer. May be heard in committee '+larch 18. Is Urgency: N Is Fiscal: N Location: 2/15 /2011 -A. PRINT Summary: Existing law relating to groundwater management ueclares the intent of the Legislature to encourage local agencies to work cooperatively to manage grc.rndwater resources within their jurisdictions, and makes_ related legislative findings and declarations. This bill would make technical, nonsubstantive changes to those legislative findings and declarations. Laws: An act to amend Section 10750 of the Water Code, relating to groundwater. Notes 1: This is a spot bill introduced by the author as a placeholder for potential legislation. The subject matter argues fo- the District to watch the bill closely f: r subsequent amendments that might affect the District's interests. Current Position: Not Yet Considered Recommended Position: Watch AB 550 (Huber D) Sacramento -San Joaquin Delta: peripheral canal. Introduced: 2/16/2011 Status: 2/17 /2011 -From printer. May be heard in committee March 19. Is Urgency: N Is Fiscal: N Location: 2/16 /2011 -A. PRINT Summary: Existing law requires various state agencies to administer programs relating to water supply, water quality, and flood management in the Sacramento -San Joaquin Delta. This bill would prohibit the construction of a peripheral canal, as defined, that conveys water from a diversion point in the Sacramento River to a location south of the Sacramento -San Joaquin Delta, unless expressly authorized by the Legislature. The bill would require the Legisla-ive Analyst's Office to complete an economic feasibility analysis prior to the enactment of a statute authorizing the construction of a peripheral canal. The bill would prohibit the construction and operation of a peripheral canal from diminishing or negatively affecting the water supplies, wate., rights, or quality of water for water users within the Sacramento -San Joaquin Delta watershed, or Imposing any new burdens on infrastructure within, or financial burdens on persons residing in, the Delta or the Delta watershed. Laws: An act to add Chapter 1.5 (commencing with Sectior 115) to Division 1 of the Water Code, relating to the Sacramento -San Joaquin Delta. Notes 1: This legislation, which has no sponsor, is the same : egislation as AB 1594 by Assemblymember Huber from 2010. The District joined a broad coalition in opposition to the latter bill. This bill would prohibit the construction of a peripheral cana :, as defined, that conveys water from a diversion point in the Sacramento River to a location south of the Sacramento -San Joaquin Delta, unless expressly authorized by the Legislature. The bill would require the Legislative Analyst's Office (LAO) to complete an economic feasibility analysis prior to the enactment of a statute authorizing the construction of a peripheral canal. The bill would prohibit the construction and operation of a peripheral canal fro in diminishing or negatively affecting the water supplies, water rights, or quality of water for ware, users within the Sacramento -San Joaquin Delta watershec, or imposing any new burdens on • nfrastructure within, or financial burdens on persons residing in, the Delta or the Delta watershed. AB 550 seeks to reopen a delicately crafted compromise reached in negotiations over the November 2009 Delta water package. The legislation would interject the legislature into the intricacies of designing a new conveyance system in the Delta. The Legisature has no expertise in designing roadways, electrical conveyance or other vital pieces of state in- rastructure and it would be an unwelcome precedent to involve the Legislature in water infrast-ucture design. The many layers of protections for the Delta contained in the November 2009 leeislative package will help guide future conveyance decisions to achieve the co -equal goals. The Bay Delta Conservation Plan (BDCP) is currently analyzing conveyance alternatives as part of a comprehensive 50 -year strategy of Delta ecosystem and water system improvements. This planning process will include a sophisticated risk analysis of conveyance alternatives. The legislative package also Included numerous new requirements for the alternatives analysis process, such as a mandate to review a full range of conveyance alternatives. The BDCP can only automatically qualify under the new Delta Plan being developed by the Delta Stewardship Council if it complies with the highest environmental standard in California, the Natural Communities Conservation Planning Act. Prior to authorizing a change in place of use for the new conveyance system, the State Water Resources Control Board must consider appropriate flow criteria for operation of the facility based on a science - based adaptive management program. The future conveyance improvements adopted by BDCP will have undergone one of most exhaustive and rigorous processes for any infrastructure project in the nation, including an analysis of local economic impacts as mandated under the California Environmental Quality Act. Mandating a redundant review by the Legislative Analyst's Office would be redundant, to say the least. Current Position: Not Yet Considered Recommended Position: Oppose AB 576 (Dickinson D) Delta Stewardship Council: planning and administration: fee. Introduced: 2/16/2011 Status: 3/3/2011- Referred to Com. on W., P. & W. Is Urgency: N Is Fiscal: Y Location: 2/16/2011 -A. W.,P. & W. Summary: The Sacramento -San Joaquin Delta Reform Act of 2009 establishes the Delta Stewardship Council, and requires the council, on or before January 1, 2012, to develop, adopt, and commence implementation of a comprehensive management plan for the Sacramento -San Joaquin Delta (Delta Plan), meeting specified requirements. This bill would require the council, by March 31, 2012, to adopt a fee on water supply contractors of the State Water Project and the federal Central Valley Project to fund a portion of the planning and administrative costs of the council. Laws: An act to add Section 85215 to the Water Code, relating to the Sacramento -San Joaquin Delta. Notes 1: This legislation is similar to AB 2092 (2010) by Assemblymember Huffman. The provisions of this legislation were included in Section 1 of AB 2092, which were amended out of the bill by Mr. Huffman prior to hearing the bill in the Assembly Water, Parks & Wildlife Committee. The Delta Stewardship Council was created by the Legislature as part of the November 2009 Delta Water package to represent a new governance approach for implementing co -equal goals of improving water supply reliability and restoring ecosystem health. Funds previously appropriated to the CALFED Bay - Delta Authority were shifted to pay for the first -year costs of the Council. The Legislature should now fund the administrative costs for the Council out of the State General Fund. It is inappropriate to require the two export water systems to pay these costs as public trust resources will benefit from the activities of the Council and there are other known stressors in the Delta ecosystem, which are not identified for purposes of paying the administrative costs of the Council. Current Position: Not Yet Considered Recommended Position: Oppose AB 582 (EW D) Open meetings: local agencies. Introduced: 2 /16/2011 Status: 3/7/2011- Referred to Com. on L. GOV. Is Urgency. N Is Fiscal: Y Location: 3/7/2011 -A. L. GOV. Calendar: 4/27/2011 1:30 p.m. - State Capitol, Room 447 ASSEMBLY LOCAL GOVERNMENT, SMYTH, Chair Summary: The Ralph M. Brown Act authorizes a legislative body of a local agency to hold closed sessions with the agency's designated representatives regarding the salary and compensation of represented and unrepresented employees. This bill would require that proposed compensation increases for unrepresented employees be publicly noticed, as prescribed. By adding to the duties of local officials, this bill would impose a state - mandated local program. This bill contains other related provisions and other existing laws. Laws: An act to amend Section 54957.6 of the Government Code, relating to public meetings. Notes 1: The State Controller is the sponsor of this legislation, which would require two open meeting agenda items before any unrepresented employee could be awarded an increase in compensation. The first item would be for the purpose of notifying the public and discussion. The second time would be for purposes of a vote, no less than 12 days after the first notice. This requirement would apply to step increases, which are not typically acted on by a governing body on a individual basis. This legislation is one of a number of bills introduced in response to the City of Bell scandal. The clause "if the compensation increase is deemed necessary" seems vague and ambiguous, according to ACWA staff The legislation seems to suggest that a determination of necessity must be made on the record for every unrepresented employee in orcer to receive an increase. Further, it is unclear as to whether each and every unrepresented emp',ovee's increase has to be noticed separately. Depending on the size of the agency and the nimber of employees, this could constitute a time- consuming exercise in staff resources and board time to consider compensation issues and take action. If no one was paying attention in the City of Bell, why does the State Controller believe someone would pay attention if compensation actions were nc,iced twice? Current Position: Not Yet Considered Recommended Position Oppose AB 627 (Berrvhill. Bill R) State Water Resources Development System: annual report. Introduced: 2 /16/2011 Status: 2/17 /2011 -From printer. May be heard in committee Ma ch 19. Is Urgency: N Is Fiscal: N Location: 2/16 /2011 -A. PRINT Summary: Existing law requires the Department of Water Resources to prepare, and submit to the fiscal committees of the Legislature, an annual report relating to the budget for the State Water Resources Development System, and prescribes the information to be included in the annual report This bill would make technical, nonsubstantive changes to th s , equirement. Laws: An act to amend Section 147 of the Water Code, -elatirg to the State Water Resources Development System. Notes 1: This legislation is a spot bill introduced by the author as a placeholder for subsequent amendments. The District should watch the legislation for subsequent amendments given the subject matter. Current Position: Not Yet Considered Recommended Position: Watch AB 646 (Atkins D) Local public employee organizations: impasse procedures. Introduced: 2/16/2011 Status: 3/7/2011- Referred to Com. on P.E., R. & S.S. Is Urgency: N Is Fiscal: Y Location: 2/16/2011 -A. P.E.,R. & S.S. Summary: The Meyers- Milias -Brown Act contains various provisions that govern collective bargaining of local represented employees, and delegates jurisdiction to the Public Employment Relations Board to resolve disputes and enforce the statutory duties and rights of local public agency employers and employees. The act requires the governing body of a public agency to meet and confer in good faith regarding wages, hours, and other terms and conditions of employment with representatives of recognized employee organizations. Under the act, if the representatives of the public agency and the employee organization fail to reach an agreement, they may mutually agree on the appointment of a mediator and equally share the cost. If the parties reach an m:)asse, the act provides that a public agency may unilaterally implement its last, best, and final offer This bill would delete the authorization for the public agency to implement its last, best, and final offer n the event of an impasse. The bill would instead provide that if the parties fail to reach an agreement, either party may request that the board appoint a mediator, and would require the board, if it determines that an impasse exists, to appoint a mediator at the board's expense. This bill contains other related provisions. Laws: An act to amend Sections 3505 and 3505.2 of, to add Section 3505.5 to, and to repeal and add Section 3505.4 of, the Government Code, relating to local public employee organizations. Notes 1: The American Federation of State, County, and Muricipal Employees (AFSCME)is the sponsor of this bill. Current law does not require public agency employers and employee organizations to engage in impasse procedures where efforts to negotiate a collective bargaining agreement have failed. The public agency employer may implement its last, best and final offer. AFSCME argues that "without impasse procedures, negotiations may not be fully effective, and bargaining may break down before all avenues for agreement are explored. The creaticr of mandatory impasse procedures is likely to increase the effectiveness of the collective bargaining process by enabling the parties to employ mediation and fact- finding in order to assist them in resolves cq differences that remain after negotiations have been unsuccessful. Under this bill, where parties to collective bargaining are unable to reach agreement after reasonable efforts at negotiations, they may demand that the other party participate in impasse procedures. The impasse procedures provided for by the bill are similar to these set forth under the Educational Employment Relations Act, at Government Code Section 35zi1, et seq. They would allow either party to request that the Public Employment Relations Board appoint a mediator for the purpose of assisting the parties in reconciling differences. If mediation is unsuccessful to resolve remaining disagreements, the bill allows either party to request that a fact - finding panel investigate the issues, make factual findings, and make advisory recommendations as to the terms of settlement. The legislation, should it become law, could significantly draw out the labor negotiations process and significantly erode the position of the local agency governing body, which has a fiduciary responsibility for the financial health of the agency and is accountable to the voters (customers, taxpayers) of the agency. Current Position: Not Yet Considered Recommended Position: Oppose AB 685 (EM D) State water policy. Introduced: 2/17/2011 Status: 3/3/2011- Referred to Com. on W., P. & W. Is Urgency: N Is Fiscal: Y Location: 2/17/2011 -A. W.,P. & W. Summary: Existing law establishes various state water policies, including the policy that the use of water for domestic purposes is the highest use of water. This bill would declare that it is the established policy of the state that every human being has the right to clean, affordable, and accessible water for human consumption, cooking, and sanitary purposes, that is adequate for the health and well -being of the individual and family. The bill would require all relevant state agencies, including the Department of Water Resources, State Water Resources Control Board, and State Department of Public Health, to employ all reasonable means to implement this state policy. Those state agencies would be required to revise, adopt, or establish policies, regulations, and grant criteria to further this state policy, to the extent that those actions do not affect eligibility for federal funds. Laws: An act to add Section 106.3 to the Water Code, relating to water. Notes 1: This legislation is similar to AB 1242 (Ruskin) from 2009. ACWA officially opposed AB 1242, and the bill was ultimately vetoed by Governor Schwarzenegger. When he vetoed AB 1242, Governor Schwarzenegger highlighted the unnecessary duplication of provisions already contained in California law, and cited the potential for "costly and constant litigation." Existing law states that the highest use of water in the State of California is for domestic purposes. ACWA researched materials from the sponsors websites and prior fact sheet and concluded that one goal of this legislation would be to preclude water agencies from turning off a connection when a customer does not pay their bill. The sponsors note that more than 150,000 California residents lack safe water for drinking, bathing, and washing dishes. Even more have water service disconnected because they cannot afford to pay their water bill. This legislation will establish the right of every human to have access to clean water for basic human needs as a State policy and instruct State agencies to conform their practices and programs to this policy. "Adding a provision to the Water Code explicitly stating that access to an amount of clean water necessary for basic human needs is a "right" of every Californian and instructing State agencies, dealing with water resources, to conform their programs and practices to this policy will pave the way to ensure that every Californian will someday be able to confidently fill a glass of water from their tap and serve it to their families," state the sponsors. The California Department of Public Health and county environmental management departments for very small water systems enforce California drinking water standards. Some rural households, however, rely on contaminated groundwater wells for their water supply. Other Californians are served by mutual water companies that do not have the managerial expertise, technological capability or financial wherewithal to operate a modern water system that complies with safe drinking water standards. The enactment of this legislation could have significant financial ramifications if individual wells and small water systems must be brought into compliance by the State of California or a neighboring public water system. Current Position: Not Yet Considered Recommended Position: Oppose AD = (V. Manuel PEre z D) Public water systems. Introduced: 2/18/2011 Status: 3/10/2011- Referred to Coms. on E.S. & T.M. and W., P. & W. Is Urgency: N Is Fiscal: Y Location: 3/10/2011 -A. E.S. &T.M. Summary: Existing law, the California Safe Drinking Water Act, requires the State Department of Public Health to administer provisions relating to the regulation of drinking water to protect public health, including, but not limited to, conducting research, studies, and demonstration programs relating to the provision of a dependable, safe supply of drinkirg water, enforcing the federal Safe Drinking Water Act, adoption of enforcement regulations, anc conducting studies and investigations to assess the quality of wa_er in domestic water supplies. This till would add environmental documentation to the costs of a single project that the department is required to determine by an assessment of affordability. This bill contains other related provisions and other existing laws. Laws: An act to amend Sections 116450 and 116761.23 of the Health and Safety Code, relating to drinking water. Notes 1: The California Rural Legal Assistance Foundation, Environmental Justice Coalition for Water and others are the sponsors of this legislation, which is similar to AB 2669 from last year by the same author. The District joined ACWA, California Special Districts Association, California Municipal Utilities Association and others in opposition to that legisltion. This bill would require, ccmmencing July 1, 2012, that written public notice given by a public water system pursuant to provisions relating to public notices for drinking water quality violations be in English, Spanish, and in ".he language spoken by prescribed numbers of residents of the community served, and that the notice contain prescribed public water system contact information. The bill would also require nonwritten notice be provided to persons served it the appropriate language or languages in a manner approved by the department in the public water system's emergency notification plan. A public water system is subject to a $1,000 / day fine for failure to give sufficient notice. This bill sets forth the following criteria for written notices: f 1) 'The notices shall be provided in English, Spanish, and in the language spoken by any non - English - speaking group that exceeds 10% of persons served by the public water system; (2) The notice shat contain a telephone number or address where residents may contact the public water system for assistance; (3) For each group that speaks a language othe- than English or Spanish and that exceeds 1,000 residents but is less than 10% of the persons served by the public water system, the not ce must contain in the appropriate language: (a) Information regarding the importance of the notice; (b) A telephone number or address where those residents may contact the public water system to obtain a translated copy of the notice, or assistance in the appropriate language; and (c) Non - written notification shall be provided to persons served in the appropriate language. The bill sets up two different thresholds. If 10% of a population speaks another language besides English or Spanish, they must receive a notice written completely in their language. The lower threshold applies to foreign language groups larger than 1,000 people, but less than 10 %. Their notice would have to include a boilerplate notice regarding ti^e importance of the notice, along with a phone number where they could get assistance in their language. The provisions of this bill are overly burdensome and may in fact: violate Article 3, Section 6 of the California Constitution, which states in part that "English is the common language of the people of the United States of America and the State of California. This section is intended to preserve, protect and strengthen the English language, and not to supersede ary of .he rights guaranteed to the people by this Constitution. English as the Official Language of California. English is the official language of the State of California. The Legislature shall enforce this section by appropriate legislation. The Legislature and officials of the State of California shall take all steps necessary to insure that the role of English as the common language of the State of California is preserveo and enhanced. The Legislature shall make no law which diminishes or ignores the role of English as the common language of the State of California." The author has stated that it is his intention to work with stakeholders to come to a consensus on the language. The California Municipal Utilities Association is leading the coalition to propose amendments to AB 938. Some alternatives being explored include (1) English and Spanish only [It is clear that the author will not compromise on a complete Spanish language translation of these water quality notices]; (2) English, Spanish, and the four other languages contained in section 1632 of the Civil Code (Chinese, Tagalog, Vietnamese and Korean); (3) Boilerplate language for all of the identified languages that meet the 1,000 resident threshold -- someth rig [o the effect of "Your water is dangerous. Please find someone to help you understand this notice." The bill could require DHS to make a "preferred prov der" list of translation services available; and (4) A "don't drink this water' universal symbol. Current Position: Not Yet Considered Recommended Position: Oppose unless amended AB 977 (Harkey R) Water. introduced: 2/18/2011 Status: 2/20 /2011 -From printer. May be heard in committee March 22. Is Urgency: N Is Fiscal: N Location: 2/18/2011-A. PRINT Summary: Existing law requires there to be incorporated in the planning and construction of any physical structure to provide for the conservation, storage, regulation, transportation, or use of water, constructed by the state itself or by the state In cooperation with the United States, features, including, additional storage capacity, that the Department of Water Resources determines necessary or desirable for the preservation of fish and wildlife, and necessary or desirable to permit, on a year - round basis, full utilization of the project for the enhancement of fish and wildlife and for recreational purposes to the extent that those features are consistent with other uses of the project, if any. In making this determination, existing law requires the department to give full consideration to any recommendations that may be made by the Department of Fish and Game, the Department of Parks and Recreation, the Department of Boating and Waterways, any federal agency, and any local governmental agency with jurisdiction over the area involved. This bill would make technical, nonsubstantive changes in this provision. Laws: An act to amend Section 11910 of the Water Code, relating to water. Notes 1: This legislation is a spot bill introduced by the author as a placeholder for subsequent amendments. The District should watch the legislation for subsequent amendments given the subject matter. Current Position: Not Yet Considered Recommended Position: Watch AS 1354 (Huber D) Public works: payments: retention. Introduced: 2/18/2011 Status: 2/20 /2011 -From printer. May be heard In committee March 22. Is Urgency: N Is Fiscal: N Location: 2/18 /2011 -A. PRINT Summary: Existing law authorizes the Department of General Services, or any other department with authority to enter into contracts, to contract with suppliers for goods and services and for public works. Existing law provides that a contract entered into no or after January 1, 1999, relating to the construction of a public work of improvement between the original contractor and a subcontractor or between any subcontractors thereunder, the percentage of retention proceeds withheld cannot exceed the percentage specified in the contract between the public entity and the original contractor. Existing law also prohibits the Department of General Services from making payments upon such contracts in excess of 95% of the percentage of actual work completed plus a like percentage of the value of material delivered, as specified, and requires the department to withhold not less than 5% of the contract price until final completion and acceptance of the project. This bill would delete the prohibition against payments being made in excess of 95% of the work completed and the requirement that the department withhold not less than 5% of the contract price until final completion and acceptance of the project, and would instead prohibit the retention of any amount with respect to all contracts entered into on or after January 1, 2012, between a public entity and an original contractor, between an original contractor and a subcontractor, and between all subcontractors thereunder, relating to the construction of any public work of improvement, as specified. Laws: An act to amend Section 10261 of, and to add Section 7201 to, the Public Contract Code, relating to public works. Notes 1: The Association of Subcontractors is the sponsor of this legislation. This legislation, for public works contracts entered into on or after January 1, 2012, would eliminate the authority for a public agency to withhold retention amounts from payments to a contractor. Similar legislation has been introduced in the California Legislature multiple times over the past 15 years and often reaches the desk of the governor. Both Governor Gray Davis, a Democrat, and Governor Arnold Schwarzenegger, a Republican, have vetoed similar legislation. The purpose of competitive bidding laws are to protect the taxpayers and ratepayers of public agencies against nonperformance by a contractor and to secure the lowest responsible bid possible. Elimination of retention would remove an important performance enforcement mechanism from public agencies and subject agencies to project delays due to projects not being completed correctly and in a timely manner. Current Position: Not Yet Considered Recommended Position: Oppose ACAXS 1 (Portantino D) State finance reform. Introduced: 12 /6/2010 Status: 12/7 /2010 -From printer. Is Urgency: N Is Fiscal: Y Location: 12/6 /2010 -A. PRINT Summary: Existing provisions of the California Constitutior provide that the electors may propose statutes or amendments to the California Constitution by initiatve and approve or reject statutes by referendum. The California Constitution also provides that the - egislature may propose both amendments and revisions to the California Constitution to the electors, and may enact statutes by passing bills. This measure would, until January 1, 2020, prohibit an initiative measure from being submitted to the electors or from having any effect if the iritiative measure appropriates state funds for any purpose in an amount exceeding the amount appropriated for that purpose for the 2004 -05 fiscal year by more than $250,000 unless the measure provides for additional state revenue or offsetting savings in a total amount that is not less than the amount of the appropriation. This bill contains other related provisions. Laws: A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by adding and repealing Section 8.c o' Article II thereof, by adding and repealing Section 8.5 of Article IV thereof, and by adding arc repealing Section 1.2 of Article XVI thereof, relating to state finance. Notes 1: ACA1x1 as introduced in the 1st Extraordinary Session would require legislation, initiatives and bonds issued by the State Treasurer's Office to identifv a revenue source or savings to be implemented. The ACA would be effective until January 1, 2020. Specifically, ACA1X 1 provides: 1. No legislative bill may be enacted that spends more than $250,000 unless it also specifies savings or new funding in an amount necessary to pay for the measure. 2. No initiative that spends more than $250,000 can be placed on the ballot or take effect unless it also specifies savings or new funding in an amount necessary to pay for the proposed expenditures. 3. The treasurer is prohibited from offering for sale or issuing bonds unless the measure authorizing the sale or issuance also identifies savings or additional revenue in an amount necessary to repay the bond. According to the author: "During the current economic recession, California has experienced a dramatic decline in revenues that has forced severe cutbacks in spend ng by the state government on services and programs. The state now faces a shortage of $25.4 billion, a figure that reflects budget shortages from 2010 -2011 through the 2011 -2012 fiscal year. State services have been funded in past budgets through gimmicks and borrowing, a process that has served only to exacerbate our state government fiscal crisis. "In addition, state borrowing through bond indebtedness has steadily increased over the past six years. California bond borrowing has reached the point where the debt load on the General Fund could, in the future, easily exceed 10 percent of the annual state budget. These fiscal practices are not sustainable and will lead only to further economic and fiscal c-ises." The State of California has a commitment to pay for certain elements of flood protection and to provide cost- sharing for local flood control projects. The ban against the enactment of new initiative statutes, like the 2010 water bond and the issuance of bonds from Proposition 84 threatens funding for a range of water projects, including projects funded through integrated regional water management plans. The percentage of General Fund payments for debt service is small compared to education, health and welfare programs and state prisons. Investment in infrastructure projects creates jobs and generates direct and indirect economic activity - -both of which lead to greater income and sales tax receipts for the State of California. Halting state investment in infrastructure projects through the issuance of G.O. bonds for eight years would not be wise, particularly given tFe current economic recession and high unemployment in the state. Further, in recognition of the current state General Fund deficit, the State Treasurer has canceled the usual spring bond sale. This is a more appropriate course of action that banning the issuance of such bonds through 2020. Current Position: Not Yet Considered Recommended Position: Oppose SR 34 (Simitian D) Water infrastructure projects: fees. Introduced: 12 /6/2010 Status: 1/20/2011 -Referred to Com.on RLS. Is Urgency: N Is Fiscal: N Location: 1 /20/2011 -S. RLS. Summary: Under existing law, various water infrastructure projects are undertaken by federal, state, and local public agencies in the Sacramento -San Joaquin Delta and in other parts of the state. This bill would declare the intent of the Legislature to enact legislation to develop a fee -based system to pay for costs associated with updating and modernizing water rfrastructure projects in the state. The bill would express legislative intent with respect to the imposition of the fees and use of the fee revenues. Laws: An act to add Part 10 (commencing with Section 12995) _o Division 6 of the Water Code, relating to water. Notes 1: This legislation would create a California Water Resources Investment Program and a California Water Resources investment Fund supported by a fee designed to strategically invest in five broad public- purpose activities. The 5 categories are: - planning and efficient management of the statewide water system - broadening access to necessary water services - ecosystem improvements - management of water - related risks and major public emergencies -water system changes to improve recreation opportunities Under existing law, various water infrastructure projects are undertaken by federal, state, and local public agencies in the Sacramento -San Joaquin Delta and in other parts of the state. This bill would declare the intent of the Legislature to enact legislation to develop a fee -based system to pay for costs associated with updating and modernizing water infrastructure projects in the state. The bill would express legislative intent with respect to the imposition of the fees and use of the fee revenues. The concept of a public goods charge on water consumers is not new. The District opposed that last attempt to impose such a charge in 2006 as part of former Governor Schwarzenegger's government reorganization plan.The mandatory state - driven fee known as the Water Resources Investment Fee would be imposed by local water suppliers and collected from their customers for payment into a state fund. Money generated by the fee - estimated in regard to earlier proposals to be about $5 billion over ten years - would have been evenly split between a statewide and regional investment accounts. The regional accounts would help fund integrated regional water management programs that met specific requirements. At that time it raised red flags for water agencies and ACWA members voiced concerns about the potential for funds generated by the fee to be redirected for other purposes; potential problems associated with collecting the fee under Proposition 218; and the proposed method by which the California Water Commission could raise the fee. ACWA took an "OPPOSE" position on the proposed General Obligation water bond bills that contained this WRIF language in February of 2006: AB 1839 (Laird) and SB 1166 (Aanestad). The WRIF idea was scrapped by the administration after it was widely panned for its substantial water user fees on customers and the placement of the administrative burden of collecting the fees onto water agencies throughout the state among other issues. At the time it was a concept floated by the administration to help fund Governor Schwarzenegger's "Strategic Growth Plan" which was a ten year, $222 billion infrastructure improvement plan. It was just as quickly pulled back by that same administration for widespread lack of support. Normally, the District would approve a "Watch" position on a spot bill. The intent of the author in this case and prior District action regarding the imposition of a state fee on its customers that would take money out of Its service area to spread across the state should be sufficient in the instant case to take an active position. Current Position: Not Yet Considered Recommended Position: Oppose 5B 46 (Correa D) Local government: compensation disclosure. Introduced: 12 /9/2010 Last Amend: 3/7/2011 Status: 3/7 /2011 -From committee with author's amendments. Read second time and amended. Re- referred to Com. on Gov. & F. Is Urgency: Y Is Fiscal: Y Location: 3/7/2011 -5. G. & F. Calendar: 3/16/2011 9:30 a.m. - Room 112 SENATE GOVERNANCE AND FINANCE, WOLK, Chair Summary: Existing law provides for the compensation of local government officers and employees, as specified. This bill would, until January 1, 2019, require each public official, defined to mean a public official required to file a statement of economic interest pursuant to the Political Reform Act of 1974, to annually file a compensation disclosure form that provides compensation information for the preceding calendar year, as specified. The bill would specify that compensation disclosure forms are open to public inspection, as specified. This bill contains other related provisions and other existing laws. Laws: An act to add and repeal Article 2.5 (commencing with Section 1050) of Chapter 1 of Division 4 of Title 1 of the Government Code, relating to local government, and declaring the urgency thereof, to take effect immediately. Notes 1: Existing law provides for the compensation of local government officers and employees, as specified. This bill would require certain local government officers and employees to annually file a compensation disclosure form. The Secretary of State would develop the form which would provide for the disclosure of, among other things, salaries and stipends, automobile and equipment allowances, and incentive and bonus payments. This bill would also require local government agencies that maintain a web site to post the information contained on the filed form on their wet site. Any local agency employee who is required to file a Statemert of Economic Interest pursuant to Government Code Section 87200 (FPPC Form 700) will be subje =t to the provisions of this bill. Member of local government legislative bodies and designated staff are generally required to file Form 700, and thus would need to file the form and make the disclosures required in this bill. This is a reintroduction of SB 501 from 2010 (8/20/10 version). SB 501 failed to pass out of the Senate toward the tail end of last session. ACWA staff worked closely with the author and stakeholders last year to address concerns and negotiated fixes that narrowec t-e scope of the prior bill. ACWA staff has not obtained information on whether the author will move :his bill as is, or if he has other plans in mind. Current Position: Not Yet Considered Recommended Position: Watch 5B 115 (Strickland R) Public employees: pensions: forfeiture. Introduced: 1/19/2011 Status: 2/10/2011- Referred to Com. on P.E. & R. Is Urgency: N Is Fiscal: Y Location: 2/10/2011 -S. P.E. & R. Summary: Existing law provides that any elected public officer who takes public office, or is reelected to public office, on or after January 1, 2006, who is convicted of any specified felony arising directly out of his or her official duties, forfeits all rights and benefits under, and membership in, any public retirement system in which he or she is a member, effective on the date of final conviction, as specified. This bill would additionally require a public officer or employee who is convicted of any felony for conduct arising directly out of his or her official duties on or after January 1, 2012, to forfeit all rights and benefits under, and membership in, any public retirement system in which he or she is a member, effective on the date of final conviction. That public officer or employee would forfeit only that portion of his or her rights and benefits that accrued on or after January 1, 2012. The bill would require any contributions made by that public officer or public: employee to the public retirement system that arose directly from or accrued solely as a result of his or her forfeited service would be returned to the public officer or public employee without interest. Laws: An act to add Section 1244 to the Government Code, elating to public employees. Notes 1: Existing law provides that any elected public officer who takes public office, or is reelected to public office, on or after January 1, 2006, who is convicted of a ^.y specified felony arising directly out of his or her official duties, forfeits all rights and benefits under, and membership in, any public retirement system in which he or she is a member, effective on the date of final conviction. This bill would additionally require a public officer or employee who is convicted of any felony for conduct arising directly out of his or her official duties on or after January 1, 2012, to forfeit all rights and benefits under, and membership in, any public retirement system in which he or she is a member, effective on the date of final conviction. That public officer or employee would forfeit only that portion of his or her rights and benefits that accrued on or after January 1, 2012. The bill would require any contributions made by that public officer or public employee `.o :he public retirement system that arose directly from or accrued solely as a result of his or her forfeited service would be returned to the public officer or public employee without interest. SB 115 is in response to the City of Bell scandal. ACWA supported AB 1044 (Aghazarian) in 2005 which addressed the specific crimes of bribe, embezzlement of public money, extortion or theft of public money (Government Code section 1243). In 2004, then Assemblymember Dutton introduced a similar bill, AB 2692. ACWA favored AB 2692, based on the premise -hat holding elected office is a public trust and persons convicted of crimes in that office should not benefit from those crimes. AB 2692 failed passage because of concerns regarding, among other things. community property rights of an innocent spouse. AB 1044 allowed the local agency to retalr discretion over whether the pension benefits accrue in whole or in part. SB 115 does not provice -he same limitations. SB 115 would require the forfeiture of retirement benefits for any felony conviction. It is unclear as to what additional felonies might be covered under this legislation. ACWA recently approved an 'oppose unless amended" position on this legislation in an effort to limit the application of the bill to crimes similar to those added by the 2005 legislation, which was s cried into law. Current Position: Not Yet Considered Recommended Position: Watch SB 186 (Kehoe D) The Controller. Introduced: 2/7/2011 Last Amend: 3/10/2011 Status: 3/16/2011- Action From G. & F.: Do pass as amended.TO APPR.. Is Urgency: N Is Fiscal: Y Location: 3 /16/2011 -5. APPR. Calendar: 3/16/2011 9:30 a.m. - Room 112 SENATE GOVERNANCE AND FINANCE, WOLK, Chair Summary: Existing law authorizes the Controller to appoint a qualified accountant to make an investigation and to obtain the information required for the annual report of financial transactions. This bill would authorize the Controller to exercise discretionary authority to perform an audit or investigation of any county, city, special district, joint powers authority, or redevelopment agency, if necessary, to ensure compliance with the financial requirements in state law, grant agreements, or local ordinances . This bill would require the Controller to prepare a report of the results of the audit or investigation and to file a copy with the local legislative body. This bill would also provide that specified costs incurred by the Controller shall be borne by the county, city, special district, joint powers authority, or redevelopment agency and state that reimbursements collected, upon appropriation to the Controller, be available to offset costs of enforcing this provision. Laws: An act to amend Section 12464 of the Government Code, relating to the Controller. Notes 1: This legislation is another in a series of bills introduced in response to the City of Bell scandal. This bill authorizes the State Controller, at his or her discretion, to perform an audit or investigation of any county, city, special district, or redevelopment agency, if deemed necessary, to ensure compliance with state law, grant agreements, local ordinances, and to determine fiscal viability. The Controller shall prepare a report of the results of the audit or investigation, and a copy shall be filed with the legislative body of the county, city, special district, or redevelopment agency, the accounts of which were audited or investigated. The audit or investigation will be designed to provide reasonable assurance on compliance with laws and regulations that are significant to the audit or investigation objectives. Any indication, illegal acts, or fraud will be communicated to appropriate authorities, including the county grand jury. This legislation provides broad authority for the State Controller to conduct an audit if in his or her sole discretion an audit is necessary to ensure compliance with state laws and local ordinances, as well as to determine fiscal viability. It is difficult to argue against a state interest in compliance with state law and grant agreements, but less so in terms of compliance with a local agencies own ordinances (regulations? policies ?) or fiscal viability. The provisions of the bill could require, for example, the State Controller to review local agency independent audits prior to initiating its own audit. A local agency can control the costs of its annual independent financial audit, but will not be able to do so in terms of an audit performed by the State Controller. Also, rather than granting the State Controller sole discretion to initiate an audit, the bill could be amended to require a finding that an illegal act or fraud is indicated. Current Position: Not Yet Considered Recommended Position: Oppose unless amended SB 200 (Wol D) State water facilities: Sacramento -San Joaquin Delta: Delta conveyance facility. Introduced: 2/8/2011 Status: 2/17/2011- Referred to Corns. on N.R. & W. and E.Q. Is Urgency: N Is Fiscal: Y Location: 2/17/2011 -5. N.R. & W. Summary: The United States Bureau of Reclamation operates the federal Central Valley Project and the Department of Water Resources operates the State Water Resources Development System, known as the State Water Project, to supply water to persons and entities in the state. This bill would prohibit the construction of a new Delta conveyance facility, as defined, unless specified conditions are met, including (A) the adoption of an agreement by the Department of Water Resources and the Department of Fish and Game that specifies the stages of construction of the new Delta conveyance facility and (B) the establishment plans and agreements for the construction of specified water facilities and implementation of specified water programs meeting prescribed conditions as part of the state Central Valley Project. The bill would prohibit the transportation of water for the federal Central Valley Project through state project facilities, with specified exceptions, unless certain conditions are met. This bill contains other related provisions and other existing laws. Laws: An act to amend Section 11460 of, to add Sections 11108, 11109, 11110, 11111, 11456, 11457, 11458, and 11915.2 to, and to add Article 9.4 (commencing with Section 11259) to Chapter 2 of Part 3 of Division 6 of, the Water Code, relating to water. Notes 1: This bill creates a series of new and likely Insurmountable obstacles for the Department of Water Resources (DWR) to construct "the new Delta conveyance facility' by requiring the completion of numerous actions, many of which are not wholly within DWR 's control and that are unlikely to be completed. The bill is inconsistent with existing legislative authority and the Delta Reform Act of 2009. The bill's basic premise is that "construction of a new Delta conveyance facility shall not commence until all of the following conditions are met." Those conditions include: • Department of Fish and Game (DFG) and DWR must adopt a "final agreement" specifying staging of the construction of the conveyance facility, with the first stage oeing new fish screens. No further construction could begin until the screens have been completed and tested for at least two years to determine the adequacy of the screens and operational crite,ia. No further construction is allowed unless DFG determines that the screens and operational crterla will adequately protect fish populations. • No Delta conveyance facilities shall be constructed unless DWR enters into an agreement with DFG "for the protection and enhancement of fish and wildlife" thal: ( L) restores adult populations of "fish and wildlife" in San Francisco Bay and Suisun Marsh to "the ave-age annual abundance from 1922 through 1967." This requires the projects alone to atone for all of the impacts, man -made or natural, related to project operations or not, on fish and wildlife, and the number of species that must be returned to 1922 -67 levels is unlimited. The agreement must include "limitations on exports and diversions to storage that are necessary to restoring and maintaining those levels" and (2) "the realization of the potential of the project for increasing resOUrc-�!s" above those levels, consistent with contracts for water delivery. "Plans and agreements to protect the beneficial uses of the Delta are in place." There is no detail on who must make these plans; who the parties are to any agreements; or who determines that a sufficient number of plans or agreements exist or that they are sufficient to "protect beneficial uses of the Delta." Such plans and agreements are potentially unlimited, but the bill does specifically mention some dozen examples that must be included. Much has changed since this bill first appeared in 1981 -82. The pending development and adoption of the Delta Plan and the Bay Delta Conservation Plan, which hopefully pave the way for the construction of delta conveyance improvements, are now recognized as the path forward to addressing water supply reliability and ecosystem restoration goals in the Delta. Current Position: Not Yet Considered Recommended Position: Oppose SB 496 (Fuller R) State Water Resources Development System. Introduced: 2/17/2011 Status: 3/3/2011- Referred to Com. on RLS. Is Urgency: N Is Fiscal: N Location: 3/3/2011 -5. RLS. Summary: The Department of Water Resources operates the State Water Resources Development System, commonly referred to as the State Water Project, in accordance with the California Water Resources Development Bond Act. This bill would make technical, nonsubstantive changes to a provision that authorizes the issuance of bond funds in the amount of $1,750,000,000 for the purposes of that bond act. Laws: An act to amend Section 12935 of the Water Code, relating to water resources. Notes 1: This legislation is a spot bill introduced by the author as a placeholder for subsequent amendments. The District should watch the legislation for subsequent amendments given the subject matter. Current Position: Not Yet Considered Recommended Position: Watch SB 571 (Wolk D) California Water Commission: master plan for financing and developing water resources: state- funded projects and programs. Introduced: 2/17/2011 Status: 3/3 /2011- Referred to Com. on N.R. & W. Is Urgency: N Is Fiscal: Y Location: 3/3/2011 -5. N.R. & W. Summary: Existing law establishes the California Water Commission in the Department of Water Resources and requires the commission to conduct an annual review of the progress and operation of the State Water Project and to carry out various other related functions. This bill would require the commission on or before January 1, 2013, to develop a master plan for financing and developing water resources in the state, Including specified assessments and recommendations. The bill would require the commission to update the master plan every 5 years. The bill would require the commission to annually review and audit the award of state funds for water resources projects and programs; to develop, consistent with the master plan, a prioritized list of projects and programs relating to water supply, water quality, water conservation, water use efficiency, ecosystem and watershed restoration, and integrated regional water management planning and Implementation, for purposes of awarding state financial assistance for those projects and programs; and to establish guidelines for the award of state financial assistance allocated for integrated regional water management plans, as specified. The bill would also declare legislative intent that the commission be given authority to allocate specified state funds for water resources projects and programs. Laws: An act to amend Section 10546 of, and to add Sections 167 and 168 to, the Water Code, relating to the California Water Commission. Notes 1: This legislation seeks to implement a number of recommendations by the Little Hoover Commission relating the state financing of water infrastructure projects. The legislation would require the California Water Commission to prepare a master plan that shall include all of the following: (a) An assessment of the state's capital outlay and ongoing maintenance needs for water resources through 2050. In making this assessment, the commission may use the most recent update of the California Water Plan, if the commission determines that it is sufficient to meet the requirements of this subdivision. (b) Recommended guidelines for the Legislature and the Governor to set and maintain investment priorities. The guidelines should allow policymakers to adapt priorities to changing circumstances, when necessary, without abandoning overall planning objectives. (c) A determination of state, federal, and local public funds likely to be available through 2050, and the size of any funding shortfall that may remain. (d) Recommendations to the Legislature regarding a financing framework that, on an ongoing basis, fully integrates water resources needs, including capital investments, and ongoing operational expenses with the state budget process. The financing framework should include a recommended mix of state funding sources to pay for water infrastructure financing and ongoing operational needs, including General Fund, revenue bonds, and user fees. (e) An evaluation of the feasibility and applicability of alternative financing sources to meet the state's water resources needs and reduce reliance on General Fund expenditures. Alternatives to be evaluated shall include, but shall not be limited to, all of the following: (1) Private financing. (2) User fees. (3) Revenue bonds. (4) Fee - backed general obligation bonds. (5) Revolving loan programs. (f) An evaluation of the feasibility of meeting water resources needs through alternatives to capital outlay. Examples of these alternatives may include, but are not limited to, savings through life cycle financing and reducing the need for new infrastructure through greater efficiency. (g) Establishment of a means to measure the rate of return on water resources projects and mechanisms to finance the most cost - effective projects and the highest priority projects. (h) A timetable for capital outlay and ongoing expenditures. The legislation would express legislative intent that the California Water Commission should be given authority to allocate state general obligation bond revenues and other state funds for water resources projects and programs consistent with the master plan, including projects funded through integrated regional water management plans (IRWMP). The bill would seem to take away authority granted to the Department of Water Resources under Proposition 50 and Proposition 84, as well as the proposed November 2012 water bond as it relates to IRWMP funding. The bill also expands California Water Commission responsibilities beyond state financing to include the consideration of user fees to pay for state -level investment in water resources infrastructure. The bill would both direct the Commission to develop a finance framework that includes the General Fund, while also requiring the investigation of alternative financing sources that would reduce reliance on the General Fund. Current Position: Not Yet Considered Recommended Position: Not Favor unless amended SE 710 (La Malfa R) State Water Project. Introduced: 2/18/2011 Status: 3/3/2011- Referred to Com. on RLS. Is Urgency: N Is Fiscal: N Location: 3/3/2011 -S. RLS. Summary: Under existing law, the Department of Water Resources operates the State Water Project and exercises other functions relating to the state's water resources. Existing law authorizes the department to enter into contracts and agreements in connection with the State Water Project. This bill would state the intent of the Legislature to enact legislat o- that would address costs to local governments caused by State Water Project operators. Laws: An act relating td water. Notes 1: This legislation is a spot bill introduced by the author as a placeholder for subsequent amendments. The District should watch the legislation for subsequent amendments given the subject matter. Current Position: Not Yet Considered Recommended Position: Watch SB 834 (Wolk D) Integrated regional water management plans: contents. Introduced: 2/18/2011 Status: 3/10 /2011 - Referred to Com. on N.R. & W. Is Urgency: N Is Fiscal: N Location: 3/10/2011 -5. N.R. & W. Summary: The Integrated Regional Water Management Planning Act of 2002 authorizes a regional water management group, as defined, to prepare and adopt an integrated regional water management plan. The act requires an integrated regional water management plan to address specified water quality and water supply matters. This bill wculd additionally require an integrated regional water management plan to demonstrate the marine- in which the plan complies with a specified state policy concerning reducing reliance on the Sacramento -San Joaquin Delta for water supply and improving regional self - reliance for water, if the region covered by the plan receives water supply that originates it the Sacramento-San Joaquin Delta as defined. Laws: An act to amend Section 10540 of the Water Code, elating to water. Notes 1: Every year the Legislature introduces and often enacts legislation that changes the Integrated Regional Water Management Planning Act, which creates confusion and new burdens on local agencies that go through great expense and time to produce a plan worthy of securing state funds to assist in implementation of the plan. This bill would add a new requirement that if a region covered by a plan receives water supply originating in the Sacramento -San Joaquin Delta, the plan shall demonstrate the manner in which it complies with Section 85021 (it is the policy of the state that such regions shall reduce their reliance on the Delta for water supply). The word "complies" may be too strong. The use of the term "furthers" may be more appropriate. Also, the requirement imposed by this legislation should not apply to existing plans, but to plars adopted after January 1, 2012. Current Position: Not Yet Considered Recommended Position: Oppose unless amended Total Measures: 29 Total Tracking Forms: 29 �EastValley Water District Board Memorandum No. B -11 -2011 From: Brian Tompkins, Chief Financial Officer Subject: OPEB Actuarial Valuation Date: March 22, 2011 Recommendation: Approve the attached actuarial valuation prepared by the Epler Company, subject to changes in assumptions proposed by the Board. Background: In May 2009 the District contracted with Epler Company, an actuarial firm, to conduct a GASB 45 valuation of unfunded liabilities for retiree health benefits. The valuation determined that the amount of the District's liability related to past services of all current and retired employees is $1,290,086, and that the present value of all future contributions projected to be paid is $2,169,212. Using a discount rate of 5 %, the valuation found that the District should be recognizing an Annual Required Contribution (ARC) related to retiree health benefits of approximately $170 thousand. Two years of the recommended ARC have been accrued on the District's balance sheet in accordance with GASB 45, however, to date no contributions have been paid into an irrevocable trust. It has been staff's contention that the assumptions used in the original valuation were too conservative resulting in an unnecessarily high liability and annual cost. Specifically, the valuation assumed 100% participation in the benefit by all eligible retirees, and also assumed an annual increase in the benefit of $50. Staff is currently working with the Epler Company to prepare an update for the District's GASB 45 valuation (a draft of the updated valuation is attached). In doing so, we have refined some of the assumptions used in the calculation. First, participation in the plan has been reduced to 70% of eligible retirees, based on historical participation levels, and the amount of the annual increase to the benefit has been reduced from $50 to $25. By incorporating these changes and staying with a discount rate of 5 %, the updated valuation shows an Actuarial Liability of $1,561,797 and an Annual Required Contribution of $126,067. The ARC can further be reduced, to $101,313, if the District uses the California Employer's Retiree Benefit Trust (CERBT) which uses a discount rate of 7.75 %. Staff requests board guidance on the increase in benefit assumption, i.e., $25 annually, $25 bi- annually, zero increases, or otherwise to be used in the finalized valuation. Staff also requests authorization to contract with the CERBT, sponsored by CalPERS, and to begin sending deposits to the CERBT equal to the Annual Required Contribution as determined by the valuation — currently $101,313. The 2010 -11 budget makes provision for an ARC of $172,000. DRAFT East Valley Water District Actuarial Valuation Retiree Health Program As of July 1, 2010 Prepared by: The Epler Company 450 "B" Street, Suite 750 San Diego, CA 92101 (619) 239 -0831 March 2011 DRAFT East Valley Water District Actuarial Valuation Retiree Health Program As of July 1, 2011 Table of Contents Pase Section 1. Executive Summary. ................................................. .......................................... 1 Section II. Financial Resul ts ................................................................. ............................... 5 Section III. Projected Cash Flows .......................................................... ............................... 9 Section IV. Funding Analysis ........................................................... ............................... Section V. Benefit Plan Provisions ....................................................... ............................... 12 SectionVI. Valuation Data ...................................................................... ............................... 14 Section VII. Actuarial Assumptions and Methods ................................... ............................... 15 Section VIII. Actuarial Certification ......................................................... ............................... 20 C: Documents and Settings\BR IAN. EV WD�Local Settings \Temporary Internet Flles'COm6r4 ( )utlook \CH4GPOPC \EV WD Actuarial Valuation Report 2010 DRAFT.doc DRAFT Section 1. Executive Summary Background East Valley Water District (the District) selected The Epler Company to perform an actuarial valuation of its retiree health program. The purpose of the actuarial valuation is to measure the District's liability for retiree health benefits and to determine the District's accounting requirements for other post - employment benefits (OPEB) under Govermnental Accounting Standards Board Statements No. 43 & 45 (GASB 43 and GASB 45). GASB 45 requires accrual accounting for the expensing of OPEB. The expense is generally accrued over the working career of employees, rather than on a pay -as- you -go basis. GASB 43 requires additional financial disclosure for funded OPEB Plans. The District currently provides medical coverage to 65 active employees and 5 retired employees through the CaIPERS Health Program. At retirement, the District provides a contribution for the continuation of medical coverage for eligible retirees. Eligibility for a District contribution requires retirement from the District and from PERS with at least 5 years of service. The District's provides the CalPERS minimum required contribution for employees ($101 in 2009 and indexed to medical inflation) meeting this eligibility requirement. In addition, employees retiring with at least 20 years of service received an additional monthly maximum dollar amount. The additional monthly dollar amount is currently $550. This additional contribution is provided through the retiree's attainment of Medicare eligibility age. Section V of the report details the plan provisions and current premium costs that were included in the valuation. Results of the Retiree Health Valuation The amount of the actuarial liability for the District's retiree health benefits program as of July 1, 2010 is $1,561,797. This amount is based on a discount rate of 5% which assumes the District continues to maintain the retiree health benefits program as an unfunded plan. The amount represents the present value of all contributions for retiree health benefits projected to be paid by the District for current and future retirees. If the District were to place this amount in a fund earning interest at the rate of 5% per year, and all other actuarial assumptions were exactly met, the fund would have exactly enough to pay all expected contributions for retiree health benefits. This includes contributions for retiree health benefits for the current retirees as well as 1 C: \Documents and Settings\BRIAN.EVWD \Local Settings \Temporary Internet Files \Content.Outlook \CH4GPOPC \EV WD Actuarial Valuation Report 2010 DRAFT.doc DRAFT the current active employees expected to retire in the future. The valuation does not consider employees not yet hired as of the % aluation date. If the amount of the actuarial liability is apportioned into east service, current service and future service components; the past service component (actuarial accrued liability) is $1,019,483, the current service component (normal cost) is 954,892 and the future service component (not yet accrued liability) is $487,422. Changes from Prior Valuation The results of the valuation reflect a change in the participation assumptions and a change in the expected future increase in the District contribution. ]n addition, the valuation incorporates the updated demographic assumptions from the recently published Ca1PERS experience study. A reconciliation of the change in the liability from the prior valuation is provided below: July 1, 2008 Valuation Increases due to passage of time $ 2.169 Million $ 0.158 Million Net experience gain (primarily District contribution ($ 0.255Million) remaining constant in 2010 and 2011) Increases due to change in demographic assumptions $ 0.268 Million Decrease due to change in participation assumptions ($ 0.644 Million) Decrease due to change in future District contribution ($ 0.134 Million) increases from $50 to $25 July 1, 2010 Valuation Annual Required Contribution $1.562 Million The District's annual required contribution (accrual expense) for the 2010/2011 fiscal year is $126,067. The annual required contribution is comprised of the present value of benefits accruing in the current fiscal year (normal cost with interest) plus a 28 -year amortization (on a level- dollar basis) of the unfunded actuarial accrued liability. Thus, it represents a means to expense the plan's liabilities in an orderly manner. The change in the net OPEB obligation/(asset) at the end of the fiscal year wilt reflect any actual contributions made by the District during the period for retiree health benefits including any pre - funding amounts. The expected retiree health payment amount for the 2010/11 fiscal year is $27,701 (net of required retiree contributions). 2 C:\Documents and Settings\BRIAN.EVWD Local Settings \Temporary Internet F Isa Content .Out1ook \CH4GPOPC\EVWD Actuarial Valuation Report 2010 DRAT T.doc DRAFT Fundin The District has not informed us of any funds eligible as plan assets under GASB 45. Under GASB 45, assets cannot be considered as employer contributions or plan assets unless they are segregated for exclusive use for retiree health benefit payments and secured from creditors of the District. The valuation provides alternative results assuming the District were to adopt pre - funding through the California Employers' Retiree Benefit Trust ( CERBT), a GASB eligible trust. The CERBT has an investment policy with an expected long -term rate of return equal to 7.75% for employers pre - funding the annual required contribution each year. The results using a 7.75% discount rate are provided in the financial results section of the report and a comparison of the valuation results using a 7.75% versus a 5% discount rate on the liabilities and annual required contribution are provided in the following table. The results assuming the District partially pre - funds for retiree health benefits have also been provided in Section II of the report. 5% Discount Rate 7.75 % Discount Rate Actuarial Liability: $1,561,797 $1,014,667 Actuarial Accrued (Past Service) Liability: $1,019,483 $727,256 Unfunded Actuarial Accrued Liability: $1,019,483 $727,256 Annual Required Contribution: $126,067 $101,313 Expected District Contributions: $27,701 $101,313 There are multiple ways to approach the funding of a retiree health plan. The annual required contribution (accrual expense) is one method, of many, that could be used to pre -fund benefits. Section IV of the report provides other funding alternatives for the District. Actuarial Basis The actuarial valuation is based on the assumptions and methods outlined in Section VII of the report. To the extent that a single or a combination of assumptions is not met the future liability may fluctuate significantly from its current measurement. As an example, the healthcare cost increase anticipates that the ]minimum required contribution will increase 5% per year. In addition, the valuation is based on the assumption that the District's additional monthly contribution for employees with at least 20 years of service will increase in future years by $25 each year. If the minimum required contribution increases are an 3 C:\Documents and Settings\BRIAN.EV WD\Local Settings \Temporary Internet Fil es \Content.outlook \CH4GPOPC\EVIA'D Actuarial Valuation Report 2010 DRAFT.doc DRAFT additional 1% each year and the additional monthly contribution increases $50 each year, the annual required contribution would increase by 20 %. If the additional contribution remains at $550 for all future years the annual required contribution would decrease by 8 %. Another key assumption used in the valuation is the diicount rate which is based on the expected rate of return of plan assets. The valuation is based oil a discount rate of 5 %. A 1% decrease in the discount (interest) rate would increase the annual required contribution by 11 %. A 1% increase in the discount (interest) rate would decrease the annual required contribution by 9 %. GASB 45 requires that implicit rate subsidies be considered in the valuation of medical costs. An implicit rate subsidy occurs when the rates for retirees are the same as for active employees. Since pre- Medicare retirees are typically much older than active employees, their actual medical costs are almost always higher than for active employees. It is our understanding that the District participates in community -rated health plans and is exempt from valuing this rate subsidy. Typically, inclusion of the rate subsidy will result in significantly larger liabilities and expensing requirements. 4 C:\Documents and Settings\BRIAN.EVWD'I _ ocal Settings \Temporary Internet File,( onten1.Outlook \CH4GPOPC\EVWD Actuarial Valuation Report 2010 DRAFT.doc Section II. Financial Results A. Valuation Results DRAFT The table below presents the employer liabilities associated with the District's retiree health benefits program detennined in accordance with GASB 43 & 45. The actuarial liability (AL) is the present value of all the District's contributions projected to be paid under the program. The actuarial accrued liability (AAL) reflects the amount attributable to the past service of current employees and retirees. The normal cost reflects the accrual attributable for the current period. The results were detennined using the 5% discount rate which reflects the District maintaining its current funding policy. Total 1. Actuarial Liability (AL) Actives $1,371,031 Retirees 190,766 Total AL $1,561,797 2. Actuarial Accrued Liability (AAL) Actives $ 828,717 Retirees 190,766 Total AAL $1,019,48.3 3. Normal Cost at July 1, 2010 $ 54,892 No. of Active Employees* 65 Average Age 44.4 Average Past Service 13.1 Estimated Payroll $4,507,000 No. of Retired Employees 5 Average Age 64.0 Average Retirement Age 57.9 *Employee statistics exclude 1 Director who is also eligible for a District contribution towards health benefits at retirement. s C:\Documents and Settings\BRIAN.EVWD \Local Settings \Temporary Internet Files \Content.Outlook \CH4GPOPC\EVWD Actuarial Valuation Report 2010 DRAFT.doc DRAFT B. Development of Unfunded Actuarial Accrued Liability The table below presents the development of the unfunded actuarial accrued liability (UAAL). The unfunded actuarial accrued liability is the excess of the actuarial accrued liability (AAL) over the actuarial value of eligible plan assets'. Eligible assets under GASB 45 must be segregated and secured for the exclusive purpose of paying for (he retiree health benefits. Total 1. Actuarial Accrued Liability (AAL) $1,019,483 2. Actuarial Value of Assets' 0 3. Unfunded AAL (UAAL) $1,019,483 C. Amortization of Unfunded Actuarial Accrued Liabilitv The amortization of the UAAL component of the annual required contribution (ARC) is being amortized over an amortization period of 28 years on a level- dollar basis. Total 1. Unfunded AAL (UAAL) $1,019,483 2. Amortization Factor 14.89813 3. Amortization of UAAL $ 68,430 D. Annual Required Contribution (ARC) The table below shows the development of the annual required contribution (ARC) under GASB 45 for the District's 2010,2011 fiscal year and provides the estimated ARC for the District's 2011/2012 and 2012 /2013 fiscal year. 1. Normal Cost at End of Year 2. Amortization of UAA L. at End of Year 3. Annual Required Contribution (ARC) 4. Estimated Payroll 5. ARC as Percentage of Payroll Fiscal Year 2010201 1 5.537 68.430 S126.067 2.8°% Fiscal Year 2011/2012 $ 60,518 68.430 Mall UOR, Fiscal Year 2012/2013 $ 63,544 68.430 $131,974 $4,653,000 $4,805,000 2.8% 2.7% 'The District has not reported any eligible plan assets under GASB 45 as of July 1.:010. 6 C:\Documents and Settings\BRIAN.EVWD -Local Settings \Temporary Internet Hes Content.Outlook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAFT.doc Annual Required Contribution (ARC) FY201O /2011 1. Normal Cost at End of Year DRAFT E. Results - Alternative Discount Rate $ 36,996 2. The District also requested the measurement of the liability and annual required contribution using a discount rate to reflect pre - funding the retiree health benefits through the California Employers' Retiree Benefit Trust (CERBT). $ 126,067 $ 115,104 The 7.75% comparable financial results in the following table reflect a policy to fully - fund the annual required contribution through CERBT. The 6.0% comparable financial results reflect a policy to partially -fund (50 %) the annual required contribution through CERBT. Liabilities 5.0% 6.0% 7.75'/0 1. Actuarial Liability (AL) 2.8% 2.6% Actives $1,371,031 $1,140,858 $ 855,722 Retirees 190,766 177,616 158,945 Total AL $1,561,797 $1,318,474 $1,014,667 2. Actuarial Accrued Liability (AAL) Actives $ 828,717 $ 715,580 $ 568,311 Retirees 190,766 177,616 158,945 Total AAL $1,019,483 $ 893,196 $ 727,256 3. Actuarial Value of Assets 0 0 0 4. Unfunded AAL (UAAL) $1,019,483 $ 893,196 $ 727,256 5. Amortization Factor 14.89813 13.40616 11.307294 6. Amortization of UAAL $ 68,430 $ 66,626 $ 64,317 Annual Required Contribution (ARC) FY201O /2011 1. Normal Cost at End of Year $ 57,637 $ 48,478 $ 36,996 2. Amortization of UAAL at End of Year* 68,430 66,626 64,317 3. Annual Required Contribution (ARC) $ 126,067 $ 115,104 $ 101,313 4. Estimated Payroll $4,507,000 $4,507,000 $4,507,000 5. ARC as % of Payroll 2.8% 2.6% 2.2% Estimated Fiscal Year 2011/2012 ARC 1. Normal Cost at End of Year $ 60,518 $ 51,387 $ 39,863 2. Amortization of UAAL at End of Year 68,430 66.626 64.317 3. Annual Required Contribution (ARC) $ 128,948 $ 118,013 $ 104,180 4. Estimated Payroll $4,653,000 $4,653,000 $4,653,000 5. ARC as % of Payroll 2.8% 2.5% 2.2;% *Amortized based on a level - dollar basis over 28 years CMocuments and Settings\BRIAN.EVWD\Local Settings \Temporary Internet Files \Content.Outlook \CH4GPOPC\EVWD Actuarial Valuation Report 2010 DRAFT.doc DRAFT F. Sensitivity Analysis: 1. The impact of a 1% increase /decrease in the discount (interest) rate on the District's actuarial liability, actuarial accrued liability, unfunded actuarial accrued liability and the annual required contribution is provided below: Dollar 1% Decrease in Discount Rate M Increase - Actuarial Liability $319,174 - Actuarial Accrued Liability $159,035 - Unfunded Actuarial Accrued Liability $159,035 - Annual Required Contribution (Expense) $ 14,254 Dollar I% Jncrease in Discount Rate W Decrease - Actuarial Liability ($243,323) - Actuarial Accrued Liability ($126,287) - Unfunded Actuarial Accrued Liability ($126,287) - Annual Required Contribution (Expense) ($ 10,963) Percentage M) Increase 20% 16% 16% 11% Percentage ( %) Decrease (16 %) (12 %) (12 %) (9 %) 2. The impact of a 1% increase in the healthcare trend rates applicable to the minimum required contribution and an additional $25 increase in the additional contribution on the District's actuarial liability, actuarial accrued liability, unfunded actuarial accrued liability and the annual required contribution is provided below: - Actuarial Liability - Actuarial Accrued Liability - Unfunded Actuarial Accrued Liability - Annual Required Contribution (Expense) Dollar ($)Increase $357,924 $167,254 $167,254 $ 25,427 Percentage M) Increase 23% 16% 16% 20% 8 C:\Documents and Settings\BRIAN.EVNN'D Local Settings \Temporary Internet F iie� Content.Outlook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAFT.doc DRAFT Section III. Projected Cash Flows The valuation process includes the projection of the expected benefits and /or contributions to be paid by the District under its retiree health benefits program. This expected cash flow takes into account the likelihood of each employee reaching age for eligibility to retire and receive health benefits. The projection is performed by applying the turnover assumption to each active employee for the period between the valuation date and the expected retirement date. Once the employees reach their retirement date, a certain percent are assumed to enter the retiree group each year. Employees already over the latest assumed retirement age as of the valuation date are assumed to retire innnediately or at first eligibility, if later. The per capita cost as of the valuation date is projected to increase at the applicable healthcare trend rates both before and after the employee's assumed retirement. The projected per capita costs are multiplied by the number of expected future retirees in a given future year to arrive at the cash flow for that year. Also, a certain number of retirees will leave the group each year due to expected deaths and this group will cease to be included in the cash flow from that point forward. Because this is a closed -group valuation, the number of retirees dying each year will eventually exceed the number of new retirees, and the size of the cash flow will begin to decrease and eventually go to zero. The expected employer cash flows for selected future years are provided in the following table: 9 C: \Documents and Settings\BRIAN.EVWD \Local Settings \Temporary Internet Files \Content.Outlook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAFT.doc ONs_ Projected Employer Cash Flows Fiscal Future Retired Year Retirees Employees Total 2010/11 $ 5.170 $ 22,531 $ 27,701 2011/12 $ 16.094 $ 22,673 $ 38,767 2012/13 $ 27.294 $ 22,892 $ 50,186 2013/14 $ 35.957 $ 23,121 $ 59,078 2014/15 $ 43.704 $ 23,346 $ 67,050 2015/16 $ 55.491 $ 18,180 $ 73,671 2016/17 $ 63.394 $ 18,397 $ 81,791 2017/18 $ 71,120 $ 6,092 $ 77,212 2018/19 $ 75,549 $ 5,901 $ 81,450 2019/20 $ 81.443 $ 6,029 $ 87,472 2020/21 $ 8 1,53 6 $ 5,850 $ 87,386 2021/22 $ 82,495 $ 5,927 $ 88,422 2022/23 $ 85,560 $ 5,986 $ 91,546 2023/24 $ 84,045 $ 6,027 $ 90,072 2024/25 $ 72,547 $ 6,050 $ 78,597 2025/26 $ 77,525 $ 6,056 $ 83,581 2026/27 $ 77,018 $ 6,043 $ 83,061 2027/28 $ 84,7785 $ 6,013 $ 90,798 2028/29 $ 92,168 $ 5,967 $ 98,135 2029/30 $ 98,272 $ 5,906 $ 104,178 2030/31 $ 100,769 $ 5,83; $ 106,602 2031/32 $ 90,773 $ 5,747 $ 96,520 2032/33 $ 102.501 $ 5,643 $ 108,144 2033/34 $ 110,390 $ 5,519 $ 115,909 2034/35 $ 117,845 $ 5,369 $ 123,214 2035/36 $ 119,364 $ 5,194 $ 124,558 2036/37 $ 123.684 $ 4,995 $ 128,679 2037/38 $ 119,410 $ 4,773 $ 124,183 2038/39 $ 123,124 $ 4,533 $ 127,657 2039/40 $ 122,687 $ 4,272 $ 126,959 2040/41 $ 119,543 $ 3,990 $ 123,533 2050/51 $ 71.084 $ 880 $ 71,964 2060/61 $ 49,567 $ 0 $ 49,575 2070/71 $ 23,289 $ 0 $ 23,289 2080/81 $ 3,994 $ 0 $ 3,994 2090/91 $ 0 $ 0 $ 0 2100/01 $ 0 $ 0 $ 0 2110/11 $ 0 $ 0 $ 0 All Years $4,561.474 $309.308 $4,870,782 to C:\Documents and Settings\BRIAN.EVWD'Local Settings \Temporary Internet rile- Content.Outlook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAFT doc DRAFT Section IV. Funding Analysis There are multiple ways to approach the funding of a retiree health plan. The annual required contribution (ARC) is one method, of many, that could be used to pre -fund benefits. The ARC amount will fluctuate from year to year based on the asset performance and as the population matures. Presented below are other alternatives to pre -fund the District obligation (the present value of projected benefits — actuarial liability) for its current active employees and retirees using both level - dollar and level - percentage of pay methods. 5% Discount Rate Fund Actuarial Liability ($1,562,000): Level - Dollar Equivalent 20 Years 25 Years 30 Years $125,000 $111,000 $105,000 Level - Percentage of Pay* 20 Years 25 Years 30 Years 2.1% 7.75% Discount Rate Fund Actuarial Liability ($1,015,000): $101,000 $93,000 $88,000 1.8% *Benefit eligible employees; assumes 3.25% increase in aggregate pay -roll 1.8% 1.5% 1.5% 1.4% We have listed below some financial advantages that may be achieved by pre - funding retiree health benefits. Of course, pre - funding will have to be weighed against alternative uses of the contribution amounts. • The earlier contributions are made, the less contributions in aggregate will have to be made to fulfill the District's obligations. • Depending on the investment strategy for funds, a higher discount rate may be used for the actuarial valuation resulting in lower OPEB liabilities. • Pre - funding can mitigate any resulting adverse impact on credit rating that could result from disclosure of OPEB liabilities. • Pre - funding may provide additional benefit security to current and future retirees. 11 C:\Documents and Settings\BRIAN.EVWD \Local Settings \Temporary Internet Files \Content.Outlook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAFT.doc DRAFT Section V. Benefit Plan Provisions This study analyzes the postretirement health benefit plain provided by the District. The District contributes to the retiree health coverage of eligible retirees and eligible surviving spouses. The Districts financial obligation is as follows: The District provides the minimum required employer contribution under the CaIPERS Health Program for eligible retirees and surviving spouses it; receipt of a pension benefit from CalPERS. An employee is eligible for this employer contribution provided they are vested in their CaIPERS pension benefit and commence payment of their pension benefit within 120 days of retirement with the District. Vesting requires at least 5 years of service. The surviving spouse of an eligible retiree who elected spouse coverage under CalPFRS is eligible for the employer contribution upon the death of the retiree. Employees retiring with at least 20 years of District service will receive an additional District contribution through attainment of Medicare eligibility age. The District contribution is based on the negotiated dollar amount at retirement (currently $550 per month for new retirements). The surviving spouse of an eligible retiree is eligible for the District's contribution upon the death of the retiree through the spouse's attainment ol"Oedicare eligibility age. Directors who were first elected to office on or after July 1, 1994 shall be eligible to continue to receive health benefits upon termination on a self -pay basis. There is one Director in office prior to July 1, 1994 who is eligible for District paid health benefits for himself and any covered spouse or dependents. The benefits are payable for hip lifetime and for the lifetime of any covered surviving spouse. 12 C:\Documents and Settings\BRIAN.EVNN 1) Local Settings \Temporary Internet Files Content.Outlook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAFT:9oc DRAFT Premium Rates The District participates in the Ca1PERS Health Program, a community -rated program, for its medical coverage. The tables below summarize the 2010 and 2011 monthly medical premiums for the primary medical plans in which the retirees are enrolled. All premiums are effective for the calendar year. Retiree Only $413.17 $427.58 $424.69 $496.15 $368.06 $636.97 $772.05 $452.41 $993.86 $422.35 $579.58 Retiree Plus $826.34 Spouse $849.38 $736.12 $1,544.10 $904.82 $844.70 $282.30 $1,159.16 Spouse $433.66 $375.88 $375.88 $375.88 Medicare Retiree Plus Retiree Only- $298.36 $867.32 $299.53 $751.76 $299.53 Spouse - Medicare $410.60 $356.09 $356.09 $356.09 Medicare Retiree Plus $716.30 $834.81 $765.46 $1,220.90 $872.03 $809.75 $1,012.85 Spouse- Mixed Retiree Plus $596.72 $599.06 $599.06 $821.20 $712.18 $712.18 $712.18 Spouse - Medicare Retiree Plus $711.53 $724.22 $667.59 $1,182.65 $808.50 $778.44 $935.67 Spouse - Mixed Retiree Only $434.00 $496.93 $427.58 $787.24 $496.15 $433.87 $636.97 Retiree Plus $868.00 $993.86 $855.16 $1,574.48 $992.30 $867.74 $1,273.94 Spouse Retiree Only- $282.30 $337.88 $337.88 $433.66 $375.88 $375.88 $375.88 Medicare Retiree Plus $564.60 $675,76 $675,76 $867.32 $751.76 $751.76 $751.76 Spouse - Medicare Retiree Plus $716.30 $834.81 $765.46 $1,220.90 $872.03 $809.75 $1,012.85 Spouse- Mixed Note: Above rates retlect the early retirement rate subsidies that apply to the 2011 rates for early retirees. Continuation of the rate subsidy is dependent on available federal funding through 2014. OOS = Out -of -State 13 C:\Documents and Settings\BRIAN.EVWD\Local Settings \Temporary Internet Fil es \Content.Outlook \CH4GPOPC\EVWF> Actuarial Valuation Report 2010 DRAFT.doc DRAFT Section VI. Valuation Data The valuation was based on the census furnished to us by the District. The following tables display the age distribution for retirees and the age'service distribution for active employees as of the Measurement Date. Age Distribution of Eligible Retired Participants & Beneficiaries X55 0 55 -59 2 60 -64 1 65 -69 1 70 -74 0 '75 -79 1 80+ 0 Total: 5 Average Age: 64.0 Avera e Retirement Age: 57.9 Age /Service Distribution of Active Participants SerN ice 20 -24 1 1 25 -29 4 2 6 30 -34 4 5 1 10 35 -39 4 2 2 8 40 -44 3 2 1 1 1 8 45 -49 0 2 2 1 2 7 50 -54 1 0 2 1 4 2 2 12 55 -59 1 1 2 1 1 2 2 10 60 -64 0 0 0 1 0 1 1 0 3 65+ 0 0 0 0 0 0 0 0 0 0 Total: 18 14 10 5 8 5 5 0 0 65 Average Age: 44.4 Average Service: 13.1 Estimated Payroll: $4,507,000 *Employee statistics exclude 1 Director who is also eligible for a District contributio t towards health benefits at retirement. 14 C:\Documents and Settings\BRIAN.EV\N'D Local Settings \Temporary Internet i d-,s(-ontent .Outlook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAT Ldoc 0;: Section VII. Actuarial Assumptions and Methods The liabilities set forth in this report are based on the actuarial assumptions described in this section. Fiscal Year: July 1st to June 30th Measurement Date: July 1, 2010 Discount Rate: Results using discount rates associated with alternative funding policy are presented in the valuation report as follows: 5.0% per annum. This discount rate assumes the District continues to fund for its retiree health benefits on as pay -as- you -go basis. 7.75% per annum. This discount rate assumes the District pre -funds 100% of the annual required contribution within the California Employers' Retiree Benefit Trust (CERBT), a GASB eligible trust. 6.0% per annurn. Provided for comparison purpose. Salary Increases: 3.25% per annum, in aggregate Pre - retirement Turnover: According to the termination rates under the CalPERS pension plan updated to reflect the 2009 experience study. Sample rates for Miscellaneous employees are as follows: 15 C Documents and Settings\BRIAN.EVWD \Local Settings \Temporary Internet Files \Content.Outlook \CH4GPOPC\EVWD Actuarial Valuation Report 2010 DRAFT.doc DRAFT Pre - retirement Mortality: According to the pre - retirement mortality rates under the Ca1PERS pension plan updated to reflect the '1009 experience study. Sample deaths per 1,000 employees applicable to Miscellaneous employees are as follows: 25 0.5 0.3 30 0.5 0.4 35 0.7 0.5 40 0.9 0.7 45 1.2 0.9 50 1.8 1.3 55 2.6 1.8 60 1 4.0 2.7 Post - retirement Mortality: According to the post - retirement mortality rates under the Ca1PERS pension plan updated to reflect the 2009 experience study. Sample deaths per 1,000 employees applicable to non - disabled retirees are as follows: 55 4.7 2.4 60 7.2 4.3 65 10.7 7.8 70 16.8 12.4 75 30.8 20.7 80 52.7 37.5 85 97.8 70.1 90 167.5 124_0 16 C:\Documents and Seuings\BRIAN.EVFVD.Local Settings \Temporary Internet F ilex Content.Outlook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAFT.doc DRAFT Retirement Rates: According to the retirement rates under the Ca1PERS pension plan updated to reflect the 2009 experience study. Sample retirement rates for Miscellaneous employees are as follows: 50 4.25% 5.00% 5.75% 6.50% 7.250/o 51 3.40% 4.00% 4.60% 5.20% 5.800/o 52 3.40% 4.00% 4.60% 5.20% 5.80°/ 53 4.25% 5.00% 5.75% 6.50% 7.25°/ 54 6.80% 8.00% 9.20% 10.40% 11.600/lo 55 14.03% 16.50% 18.98% 21.45% 23.93 00 56 9.35% 11.00% 12.65% 14.30% 15.95 0/o 57 9.78% 11.50% 13.23% 14.95% 16.68 0i0 58 11.48% 13.50% 15.53% 17.55% 19.580/0 59 12.75% 15.00% 17.25% 19.50% 21.75 00 60 13.60% 16.00% 18.40% 20.80% 23.20 0o 61 13.18% 15.50% 17.83% 20.15% 22.480io 62 19.13% 22.50% 25.88% 29.25% 32.630io 63 16.58% 19.50% 22.43% 25.35% 28.28 0NO 64 16.58% 19.50% 22.43% 25.35% 28.280NO 65 22.53% 26.50% 30.48% 34.45% 38.430NO 66 16.58% 19.50% 22.43% 25.35% 28.28 0NO 67 16.58% 19.50% 22.43% 25.35% 28.28 0NO 68 16.58% 19.50% 22.43% 25.35% 28.280No 69 16.58% 19.50% 22.43% 25.35% 28.28 0NO 70 -74 19.90% 23.40% 26.92% 30.42% 33.94°io 75 100.0% 100.0% 100.0% 100.0% 100.00/10 The percentage refers to the probability that an active employee who has reached the stated age will retire within the following year. 17 C:\Documents and Settings\BRIAN.EVWD \Local Settings \Temporary Internet Files \Content.Outlook \CH4GPOPC \EVWE Actuarial Valuation Report 2010 DRAFT.doc DRAFT Participation Rates: 70% active employees eligible for benefits are assumed to elect medical coverage at retirement if retiring prior to reaching Medicare eligibility age (age 65). 35% of acii-e employees eligible for benefits are assumed to elect medical coverage at retirement if retiring on or after reaching Medicare eligibility age. In addition, the valuation assumes that the 70% rate for earl,. retirees will drop to 35% upon reaching Medicare eligibility age. [Prior valuation assumed that 100',�, of active employees eligible for benefits elected medical coverage at retirement if retiring prior to reaching Medicare eligibility age. hn addition, the prior valuation assumed that 50% of these would drop coverage upon reaching Medicare eligibility or if retiring after reaching Medicare eligibility age. ] Plan Participation Rates: Of those electing coverage, 50°-i, of those electing coverage are assumed to elect HMO coverage and the remaining 50% are assumed to elect PPO coverage. Actual plan coverage is used for current retirees. Spouse Coverage: 50% of future retirees are assumed to elect coverage for their spouse. Male spouses are assumed to be ; years older than female spouses. Actual spouse coverage and spouse ages are used for current retirees. Dependent Coverage: Not explicitly valued. Claim Cost Development: The valuation claim costs are based on the premiums paid for medical insurance coverage. The District participates in the CalPERS Health Plan, a colmnunity rated plan. The valuation assumes the District is exempt from the valuation of any medical plan rate subsidy. IA C:\Documents and Settings\BRIAN.EVWD Local Settings \Temporary Internet Files Content.Outlook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAFT dnc DRAFT Medical Trend Rates: Medical costs are adjusted in future years by the following trends: 2010 9.0% 8.5% 2011 8.5% 8.0% 2012 8.0% 7.5% 2013 7.5% 7.0% 2014 7.0% 6.5% 2015 6.5% 6.0% 2016 6.0% 5.5% 2017 5.5% 5.0% 2018+ 5.0% 5.0% District Contribution: The Ca1PERS minimum required contribution is assumed to increase 5% per year; the District's additional monthly contribution for employees with at least 20 years of service at retirement is assumed to increase $25 each contract year. Actuarial Cost Method: The actuarial cost method used is the Projected Unit Credit with service prorate. Under this method, the Actuarial Accrued Liability is the present value of projected benefits multiplied by the ratio of benefit service as of the valuation date to the projected benefit service at retirement, termination, disability or death. The Normal Cost for a plan year is the expected increase in the Accrued Liability during the plan year. All employees eligible as of the measurement date in accordance with the provisions of the plan listed in the data provided by the District were included in the valuation. Actuarial Value of Assets: Any GASB eligible assets of the plan will be valued on a market value basis. As of the valuation date there were no reported assets. Amortization of UAAL: The unfunded actuarial accrued liability is being amortized over an initial 30 years using a level - dollar amortization method. The outstanding unfunded liability at July 1, 2010 is amortized over 28 years. 19 C: \Documents and Settings\BRIAN.EVWD\Local Settings \Temporary Internet Fil es \Content.Outlook \CH4GPOPC\EVWD Actuarial Valuation Report 2010 DRAFT.doc DRAFT I Section VIII. Actuarial Certification I The results set forth in this report are based on the actuarial valuation of the retiree health benefits program of East Valley Water District (the "District') as of July 1, 2010 The valuation was performed in accordance with generally accepted actuarial principles and practices and in accordance with GASB Statements No. 43 & 45. We relied on census data for active employees and retirees provided to us by the District. We also made use of plan information, premium information, and enrollment information provided to us by the District. The assumptions used in performing the valuation, as surunarized in this report, and the results based thereupon, represent our best estimate of anticipated experience and actuarial cost of the retiree health benefits program. I am a member of the American Academy of Actuaries and believe I meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. Certified by: Marilyn K. Jones, ASA, EA, MA,A V FCCA Date: Vice President and Actuary 20 00ocuments and Settings\BRIAN.EVWD Local Settings \Temporary Internet Piles C'ontent.OutIook \CH4GPOPC \EVWD Actuarial Valuation Report 2010 DRAFT.doc jEF OO NSERVATIpN O 1 pUR NAME IS OUR MISS% March 10, 2011 Mr. Bob Martin SAN BERNARDINO VALLEY WATER CONSERVATION DISTRICT 1630 West Redlands Boulevard, Suite A Redlands, CA 92373 -8032 (909) 793 -2503 Fax: (909) 793 -0188 East Valley Water District P.O. Box 3427 San Bernardino, CA 92413 Dear Mr. Martin: Estabbshed 1932 RO. Box 1839 Redlands, CA 92373 -0581 IAi ? L it : The San Bernardino Valley Water Conservation District (Conservation District) has completed its 2009 -2010 Engineering Investigation of the Bunker Hill Basin. This report is required in connection with the Board of Directors' consideration of a groundwater charge on groundwater production within the Conservation District's boundaries. Article 1, Section 75560 of the California Water Code, requires that a water conservation district that proposes to levy or continue a groundwater extraction fee "...shall annually cause to be made an engineering investigation and report upon groundwater conditions of the District." A copy of the Conservation District's 2009 -2010 report is available for review online at the District's website at http: / /www.sbvwcd.dst.ca.us /reports- data/documents /2011 Engineeringlnvestigation.pdf or at the District's office at 1630 West Redlands Blvd., Suite A, Redlands, CA. You are being provided a copy of this notice because you are the owner or operator of a groundwater producing well in the District's jurisdictional boundaries. District staff is recommending to the District's Board of Directors to raise the groundwater rate of $2.18 per acre -foot for groundwater production for direct agricultural production to $2.73 per acre foot, and from $7.85 per acre -foot for groundwater production for non - agricultural purposes to $9.81 per acre -foot. These proposed rates will pertain to agricultural and non - agri cultural groundwater production from July 1, 2011 -June 30, 2012. California Water Code 75594 dictates that the rate for non - agricultural groundwater production must be between three and five times the rate for agricultural use. The groundwater charge is not imposed on a property basis, but rather is a per acre -foot charge, which relates directly to the amount of groundwater produced from wells overlying the groundwater basin within the Conservation District's boundaries. Consequently, the ultimate amount of groundwater charge to be paid by you cannot be precisely identified now, because it will depend directly upon the amount of groundwater you produce in the basin from July 1, 2011 to June 30, 2012. The total revenue estimated to be collected from both agricultural and non- agricultural production for the 2011 -2012 water year is $569,220.00 based on 2010-2011 water production. The groundwater charge is to be collected on a semi - annual basis, based on production statements you submit for your groundwater production. The District uses the proceeds of the groundwater charge to fund ongoing groundwater replenishment of the basin, including direct water recharge, facil.t% operations repairs and maintenance, and related costs. A public meeting and public hearing on the proposed groundwater charge will be held in the Conservation District's Board Room at 1630 West Redlands BIB d.. Suite A, Redlands, CA 92373. The date and time for the public meeting will be April 1 3. 2010, at 1:30 pm. The date and time of the public hearing will be held on April 27, 2010, at t :30 pm. You are invited to attend the public meeting and public hearing, and may submit evidence concerning groundwater conditions, water supplies of the Conservation District, or any matter relating to the proposed groundwater charge. In addition, any party wishing to protest the groundwater charge, may mail a protest to the Conservation District ; office, and/or present such protest at the public meeting or public hearing. Further inquiries regarding the report or the groundwater charge. or -equests for further information, may be directed to Daniel B. Cozad at 1630 West Redlands Blvd., Suite A, Redlm%s, CA 92373, or by telephone at (909) 793 -2503. General tovater stYalley District Board Memorandum No. B -12 -2011 From: Brian Tompkins, Chief Financial Officer Subject: Financial Statements for the month ended January 31, 2011 Recommendation: Adopt and file the attached financial report Background: Date: March 22, 2011 Total Assets increased by $315,367 in January due to continued construction activity. CIP did increase by $476,350 as several jobs had activity in January — see further discussion under Capital Projects below. Compared to December, Current Assets increased by $36,652 and Current / Total Liabilities increased by $21,066. These slight fluctuations in current assets and current liabilities resulted in the current ratio (current assets to current liabilities) remaining flat at 1.35:1, and the liquidity indicator of Unrestricted Cash and Investments compared to Current Liabilities to remain at 92% coverage. Budget Amendments Budget amendments approved as part of the mid -year budget review have been input and are reflected in the attached Revenue & Expense statement. Changes were allocated over the 12 months of the fiscal year, applied to the month(s), as much as possible, in which variances did, or will, actually occur. Revenue & Expenses Statement (this discussion has not been changed — comparison to the amended budget will begin with February statements) Operating Revenue Water sales in January were $118,467 under budget. In terms of volume, sales were down 9.7% from December to 444,726 HCF, and are down 71,079 HCF, or 13.8 %, compared to January 2010. Compared to two years ago, sales are down 102,208 HCF or 19.2 %. 1,500,000 1,000,000 v x 500,000 Sales Volume by Month July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun — 2008 -09 — 2009 -10 — 2010 -11 (Feb -Jun est.) Year -to -date, sales are down 507,752 HCF or 8.7% compared to the first seven months in fiscal year 2009 -10. Staff projects that February through June sales will finish 3.3% below (original) budget. Other District operating revenues were $8,439 under budget in .)anuary, and Sewer Treatment revenue, which is passed through to the City of SB, was $13,472 under budget. Both sewer system and sewer treatment charges are affected by the decrease in water consumption by commercial customers, which was 10,185 HCF lower in 01/2011 than in 01/2010 Collection charges were again over budget ($7,052) as a result of the new $5 final notice charge (pink tag) that went into effect in October Year to date, operating revenues are $661,213 under budget. Operating Expenses Operating Expenses were approximately $201 thousand under budget 'n January. In the Source of Supply cost center, the invoice for July — December groundwater production from the Conservation District (pump tax) was lower than budgeted due to lower than expected sales. Pumping costs were almost $30,000 under budget as maintenance expenditures were far lower than budgeted, though projects have been identified which will use this budget through the end of the year. Water Treatment costs were over budget for the first time this year, by $4,328, due to a take -or -pay payment of $87,481 made to Envirogen to satisfy contract requirements to pay a reduced rate for the deficit between water treated and the minimum volume of water treatment stipulated in our contracts with Envirogen. This payment covered both the 2009 and 2010 calendar years. Transmission and Distribution, and Customer Account costs were close to budget, but Wastewater Collection costs were significantly under budget as no spot repairs were ordered. In General and Administrative expenses — • Salaries are under budget in January, in part, because of the open Engineering position • Benefits are tracking under budget due to the fact that no furds have yet been deposited with a trust for OPEB benefits, • January rents were paid in February and are not shown in the current month. Total operating expenses are under budget $758,055 year to date, and although operating revenue is also under budget by $661,213, Operating Income for the July through January is $96,842 over projections at $3,062,873. Budgeted operating income for the 2010 -1' fiscal year is $4,430,105 Capital Projects Capital expenditures during January included purchase of a scanner and projector, continuing work on leasehold improvements to Suite 30, and rehab work on well 125. There was also $423,990 spent on the CIP during January, consisting primarily of construction at plant 134, work on the Conejo sewer main, and clean -up work at plants affected by the flooding in late December, which is reimbursable by FEMA. East Valley Water District Balance Sheet - Unaudited January 31, 2011 ASSETS UTILITY PLANT - at cost: Utility Plant in Service - water department $125,137,507 Utility Plant in Service - sewer department 30,804,603 155,942,110 Less: Accumulated Depreciation (48,381,429) 107,560,681 Construction in Progress 7,136,247 114,696,928 RESTRICTED ASSETS: Customer / Construction Deposits 1,856,821 Capacity Fees 57,837 Construction Funds 15,679,180 Debt Service Funds - Trust Accts 1,130,426 18,666,427 CURRENT ASSETS: Cash and Investments 24,575,450 Less: Restricted Cash and Investments 18,666,427 5,909,023 Accounts Receivable (net of allowance) 1,172,621 Other Receivables (net of allowance) 305,023 Inventory 1,005,034 Prepaid Expenses 208,461 8,600,162 OTHER ASSETS AND DEFERRED COSTS (Net of Amortization): Bond discount and incidental bond expenses 318,759 Deferred financing charges 420,645 739,404 TOTAL ASSETS 142,702,921 Balance Sheet Page 1 East Valley Water District Balance Sheet - Unaudited January 31, 2011 LIABILITIES AND EQUITY LONG -TERM DEBT: 2010 Revenue Bonds $32,490,000 Premium on 2010 Revenue Bonds 2,213,063 DWR Loan 131,861 Less: Deferred amount on refunding of COPS (457,686) 34,377,238 CURRENT LIABILITIES: Accounts payable 2,092,031 Accrued payroll and benefits 1,339,080 Customer service deposits 1,614,420 Construction deposits 242,401 Accrued interest payable 193,428 Long Term Debt - amounts due within one year 1,071,307 6,552,667 TOTAL LIABILITIES 40,929,905 EQUITY: Contributed Capital: Restricted Developer Fees 57,837 Invested in Utility Plant 39,193,724 Other Contributed Capital 3,699,778 Retained Earnings: Reserved for water bond funds 6,475 Reserved for emergencies 2,170,000 Reserved for Unemployment Insurance 16,450 Unreserved 53,949,999 Net Income for current year 2,678,753 TOTAL EQUITY 101,773,016 TOTAL LIABILITIES AND EQUITY 142,702,921 Balance Sheet Page 2 I ! d) d C 1 U � F � N v O c C' N Q y M C A W 7 � � A C � d Q W � C d d M fn 0000000010 000000 0 0 000000 0 0 m Q O O m O N m m N A m A fmMN i(II N MmV O�O�ppNON N �NOmCfm 06 � O N m Q m N m " v- N N N O O O O O O nnooNO mm Q � on m r low m m m � O N O N N 0Q W�AA N mNmQ N O N N N N N m m '10 Q N M r N N M N 000000000 00000000 o O O o O O N O i 0 0o0� 000 N 0000000o O 0 o0000 rn N N O O O O O ;, O0000oo N O O O O O O 0 m OmOmNMt� pi Oi000NON m �m�ppOONON O 1'1N m'pQmA O MN A m(O m Nm0000iDON N NNE -NOmO m� N NO � N OmOmNMt� N MM n On O 1'1N m'pQmA O MN A m(O m �Q,OmMr�O m m OoOOOOpoO O O O O N Q o N O O O r N O MON m0)(p m ! m m Q ^mON O[[�70m m O N n m O m m O n N (O m �r rQ 0 oNO�000 m � N(NOOOON 1R tm0 M 18�1 VVmON00 m mOmO)ONO m M N<p 0)N Nor M Q �NQNmm�O W Q NQ�O�Nm rm �°ow °o °o iNimo 12 ro o °v000Noo°1 �) 7 m aOnO .m- tm0 M 18�1 VVmON00 MO1N A NMOOOO�ON Q �- " M U I'd MOB N m N N m mN OtNpmN m r n OI (pMMQ n N OI PL U L Q d z m— >W W INU`moo Q V o m o o a V E L LL 0, 0 0 yygg��u uLL= mt0mmo�`w a33<nW0wL)2a 0 N QmNnNm(O1 0000000lo 00000N N omomor N m m N m N M m M(p NOS M 1� rmmmN�nOf � NCO -O>O Nr O ion °o °o °o °o °o �°n° °o m T m m m m N r N- N m m N O O m Q m n a� of ci of v �N 000000so 0 N00000 0 mN O�oor m ONe -VI�OM O6 O f yyyy im�pp 0)Q mNmm m IDN�mOmOmn r r � C E N N N a W O N CL T rn m a �. 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O � W h O d� � Npmoi l� 4ro U � Q I� Q C� W Q � M � N c Q Q M v4 v 'W � > i 0� LyJ 0 o o of M ao J C o o M N M 0(00 00 ap W +moo mm n m Ln aC7 in f� � Nc'is�:; � W vmi M w Lu O •) mmorn� oaoo" N oNOOOMOWO °m N m a d I.; m M N 7 m m m M Q l h O M N Q vWi Q A M N 4) Q m a E N d VJ C 0I CL W d C a d U o F w T E E U c Lu �> �wsEo N :Z, 2 d U' n . oa H u o m E G�yLL� °E'E m 7 a �d Z C W N W , V U V c N G C a 0 Z N=- G_ W E = j� U LLI > Z w Z X W Q E°'E4 Ud`Cd v°',� dD 1F aEm Rt U.W W �OO�JO x WOov`m woy "Q d U. 9L �W O W WsumA a p_ cN N 0 OI JU E -_ F, J �UW S d ms W+i - U d o d `2c on o° N U) �'av ac,��m� Fti a`ry Et c+°n'c [.= a m =;; Q E NUJ W u Z Z> �o a omm`0 >o_°iQSC j m Q�_o�U w W�.o._U_ �c`�3oU ? >"c� ° °¢ w Z U W Z m a E N d VJ C 0I CL W d C EAST VALLEY WATER DISTRICT CAPITAL IMPROVEMENT PROGRAM INCLUDING CAPITAL BUDGET FOR FISCAL YEAR 2010 -2011 Updated through January 2011 Page 1 EAST VALLEY WATER DISTRICT Capital Improvement Program Updated through January 2011 Page 2 Prior Current (Memo) Projects - By Type Years Year 2010 -11 2011 -12 Actual Actual Budget Year Source of Supply Plant 150 Wells - Lower Zone Wells (2) - - Plant 24 Drain Line - - 12,000 340,000 Sunrise Ranch Wells (4) - - Total Source of Supply Projects - - 12,000 340,000 Treatment Facilities Plant 134 - Upgrade Technology 1,758,011 721;812 3,245,892 6,645,079 Plant 134 - Membrane Replacement Plant 150 - Lower Zn Perch Treat. PI - Phase 1 1,825,125 34,612 605,000 650,000 Plant 150 - Lower Zn Perch Treat. P - Phase 2 - - - - Plant 152 - Inter. Zone Perch Treat. Plant - - - - Total Treatment Projects 3,583,136 756,424 31850,892 7,295,079 Pumping Facilities Plant 9 - Rehab Forebay and Booster Station - - 50,000 Plant 40 - Inter to Upper Zone Transfer 2,096 125 400,000 Plant 127 - Lower to Inter Zone Transfer - - - Plant 12 - Replace Boosters / Well - Plant 134 - Upper to Canal Zone Transfer - Plant 39 - Inter to Upper Zone Transfer - Plant 25 - Inter to Upper Zone Transfer - Plant 143 - Inter to Upper Zone Transfer - - - Total Pumping Projects 2,096 125 - 450,000 Wastewater Collection System Sewer System Studies / Planning 142,662 7,370 50,000 250,000 Sewer Main Lining - 100,000 450,000 Conejo Main Replacement 112,889 50,762 560,000 - Total Wastewater Collection Projects 255,551 58,132 710,000 700,000 Page 2 Page 3 2012 -13 2013 -14 2014 -15 2015 -16 Beyond Project Year 3 Year 4 Year 5 Year 6 Year 6 Totals 1,925,000 1,925,000 3,300,000 3,300,000 - 352,000 4,400,000 4,400,000 9,625,000 9,977,000 1,253,895 - 10,378,797 16,990,000 1,025,000 - - - 20,524,737 - - 5,050,000 2,850,000 - 7,900,000 - - - - 19,160,000 19,160,000 18,243,895 1,025,000 5,050,000 2,850,000 19,160,000 57,963,534 250,000 - - - 300,000 - - 200,000 200,000 802,221 - 300,000 - - 300,000 500,000 500,000 - - 1,000,000 520,000 - 780,000 - - 1,300,000 - 2,200,000 - 2,200,000 400,000 - 400,000 - - - - 2,900,000 2,900,000 1,270,000 1 800,000 1 980,0001 2,800,000 2,900,000 9,202,221 - - - - 400,032 450,000 450,000 450,000 450,000 1,800,000 4,050,000 - 163,651 450,000 450,000 450,000 450,000 1,800,000 4,613,683 Page 3 EAST VALLEY WATER DISTRICT Capital Improvement Program Updated through January 2011 Page 4 Prior Current (Memo) Projects - By Type Years Year 2010 -11 2011 -12 Actual Actual Budget Year 2 Transmission & Distribution System 6th St 20" Pipeline - Plants 11 & 12 to 150 - - - 510,000 Live Oak Main Replacement 9,943 '9'7136 200,000 - Harlan Lane Main Replacement 7,957 - - 90,000 Cunningham / Hillview / Crest / Bruce - 33(,946 450,000 - 6th St 30" Pipeline - Plant 151 to Plant 40 - 32,062 120,000 3,837,000 6th St 30" Pipeline - PI 40 to PI 143 - - - 9th St 12" Pipeline - Del Rosa to Sterling - - - - AMR Meter Replacement Program - 41,526 60,000 300,000 Plant 59 Recoating - - - 300,000 Plant 143 - 10mg Inter Zone Storage - 23,818 200,000 900,000 Reservoir- Greenspot Rd S Curve - - - - Reservoir -Seven Oaks Dam Rd - - - - Relocation of Facilities for Other Agencies 54,733 15.315 100,000 - Eastwood Farms Assessment District 112,529 E'.877 2,211,399 - Baseline Gardens 94 Total Trans & Distribution Projects 185,162 X00.774 3,341,399 5,937,000 General Projects GIS Implementation 457,752 121664 160,000 100,000 Headquarters Building - - - - Total General Projects 457,752 120,664 160,000 100,000 Miscellaneous / Developer Projects Developer Water Facilities (Reimt by Fees) 226,444 (1,818) Developer Sewer Facilities (Reimb by Fees) (17,590) 5,628 Regional Treatment Plant 24,246 Seven Oaks Dam (SAR) Discharge 206,057 2010 Flood Clean Up - Highland (4,023) 2010 Flood Clean Up - EVWD Facilities 37,927 Page 4 x vw 4d -- 2012 -13 2013 -14 2014 -15 2015 -16 Beyond Project Year 3 Year 4 Year 5 Year 6 Year 6 Totals 510,000 207,079 70,000 167,957 - 336,946 2,060,000 - - 5,931,062 1,300,000 1,000,000 - 5,400,000 7,700,000 - - 700,000 - 700,000 300,000 300,000 - 941,526 - - - 300,000 550,000 - 10,700,000 12,173,818 - - 10,700,000 10,700,000 - 10,700,000 10,700,000 - 70,048 - - - - 164,407 4,280,000 1,300,000 700,000 37,500,000 50,602,842 - - - 678,416 10,000,000 10, 000,000 10,000,000 10,678,416 224,626 (11,962) 24,246 III immim��MIIII Rol I IN MEMO Page 5