MINUTES OF THE FORMAL BOARD OF DIRECTORS' MEETING

August 24, 2006

LEGISLATION, CONSERVATION AND OUTREACH COMMITTEE
CALL TO ORDER/ROLL CALL
Chair Steiner called the Legislation, Conservation and Outreach Committee to order at 29:32 a :35 p.m. Committee members present were Chair Steiner, Vice Chairs Croucher and Irvin, and Directors Bond, Dailey, Ferguson, Lewanski, Lewis, Morrison, Price, Rhinerson, Thompson, Williams, and Wornham. Also present were Directors Bowersox, Brammell, Dixon, Johnson, Knutson, Lewinger, Linden, Loveland, Martin, Muir, Parker, Pocklington, Rogers, Saunders, and Tu. At that time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only committee members participated in the vote. Staff present was was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, and Director of Public Affairs Jacoby.

PUBLIC COMMENT
There were no members of the public who wished to address the Committee.

CHAIR’S REPORT
Chair Steiner announced that Mark Weston from the Helix Water District would give a report on the conservation summit. She also announced a legislative roundtable with Assembly Leader George Plescia on Friday, October 20, 2006, 7:30 a.m. to 9:00 a.m., at the Water Authority. She stated invitations would be going out via email and by mail.

DIRECTOR’S COMMENTS
There were no director’s comments.

I. CONSENT CALENDAR

1. Professional services contract extension with JLC Consultant Services for regional outreach to the Hispanic community.

Staff recommendation: Authorize the General Manager to execute an amendment increasing the current contract term of 18 months by one year for a total of two and one-half years through September 30, 2007; and increasing the current contract amount of $50,000 by $33,333 for a total not-to-exceed amount of $83,333. Staff to issue a request for proposals for services beyond that timeframe.

   Director Croucher moved this item be pulled for discussion. Director Croucher moved to extend the current contract by one year for a total of two and one-half years through September 30, 2007; and increasing the current contract amount of $50,000 by $33,333 for a total not-to-exceed amount of $83,333. Staff to issue a request for proposals for services beyond that timeframe. Director Irvin seconded. Director Croucher stated there was no issue with the consultant; but this action will be a better business practice. The motion carried unanimously.

2. Approve purchase of weather based irrigation controllers from Horizon.

Staff recommendation: Approve purchase of approximately 600 weather based irrigation controllers from Horizon for a total not-to-exceed amount of $110,000.

Director Croucher moved, Director Lewis seconded and the motion carried unanimously, to approve the purchase of approximately 600 weather based irrigation controllers from Horizon for a total not-to-exceed amount of $110,000.

II.   ACTION/DISCUSSION

1.   Legislative issues

1-A   Report by Carpi and Clay.

Legislative Advocate Ben Clay reported on issues in Sacramento and Legislative Advocate Ken Carpi reported on issues in Washington, D.C.

1-B   Adopt positions of: Support on S. 3639 (Feinstein); Support on H.R. 5768 (Napolitano); and Opposed on Proposition 90 – Government Acquisition, Regulation of Private Property Initiative.

Staff recommendation: Adopt positions of: Support on S. 3639 (Feinstein); Support on H.R. 5768 (Napolitano); and Oppose on Proposition 90 – Government Acquisition, Regulation of Private Property Initiative.

Director Bond moved, Director Croucher seconded, and the motion carried unanimously to adopt positions of Support on S. 3639 (Feinstein); Support on H.R. 5768 (Napolitano); and Oppose on Proposition 90 – Government Acquisition, Regulation of Private Property Initiative.

Director Lewis requested that Government Relations Manager Volberg put together a report as to the opposition on Proposition 90 and that this request be placed on the agenda for next month.

   2.   Conservation efforts.

2-A   Recommendation from the Board Conservation Ad Hoc Committee regarding corporate partnership at the Quail Botanical Gardens not to exceed$10,000.

Staff recommendation: Approve the Quail proposal to become a corporate partner at the $10,000 level.

Director Wornham moved, Director Croucher seconded and the motion carried unanimously to approve the Quail proposal to become a corporate partner at the $10,000 level.

2-B   Green Village.

Josh Knoefler, P.E. President, made a presentation on Green Village, including Knoefler enterprises; identified the project team; regional prospective; project location; vicinity activity; project description; project objectives and benefits; water and energy conservation; recycled water usage; context and environs; oblique view; at grade uses; site plan diagram; progress to date; next steps; sustainability vision; sustainability stakeholders; water agencies; conceptual MBR and distribution layout; SDG&E programs; governmental agencies; and requested actions. Vice Chair Irvin requested that all information needed to be put together by staff so the Board could make a decision. It was noted by Chair Steiner that this was an information item and if action was to be taken, it had to be placed on the agenda for a future meeting.

2-C   Water Conservation Summit update.

General Manager Mark Weston, Helix Water District, announced the first annual Water Conservation Summit for September 29, 2006, at the Joan Kroc Institute for Peace and Justice, University of San Diego.

III. INFORMATION

   The following items were received and filed:

1. Presentation on CIP and Operations & Maintenance outreach.  
2. Peak Treated Water Demand Management update.
3. Status report on legislation and legislative positions.
4. Water Conservation Garden report.
5. Outreach activities for the month of July.

IV.   ADJOURNMENT

   There being no further business to come before the Legislation, Conservation and Outreach Committee, Chair Steiner adjourned the meeting at 10:38 a.m.

   *Directors Johnson and Parker entered the meeting at 10:47 a.m.

ADDITIONS TO AGENDA
   There were no additions to the agenda.

PUBLIC COMMENT
There were no members of the public who wished to address the Committee.

CHAIR’S REPORT
Chair Dixon reported that the Administrative and Finance Committee conducted a meeting on August 10, 2006, concerning the Rate Model Work Group proposal to amend Water Authority financial policies regarding the Rate Stabilization Fund (RSF) and Debt Service Coverage Ratio (DSCR). Chair Dixon stated that the proposal was recommended by the Committee and would appear on the formal board agenda.

I.   CONSENT CALENDAR

1. Treasurer’s report.

Staff recommendation: Note and file monthly Treasurer’s report.

2. Adopt a resolution establishing the amount due from the city of San Diego    for the In-Lieu Charge as a condition of providing water service for fiscal    year 2006-2007.

Staff recommendation: Adopt Resolution No. 2006-____ establishing the    amount due from the city of San Diego for the In-Lieu Charge for fiscal year 2006-2007 of $580,364. This amount reflects an In-Lieu Charge    calculation based on property taxes less the monies shifted to the    Educational Revenue Augmentation Fund (“ERAF”).

3. Adopt Resolution setting the time and date for a Public Hearing to consider amendments to the San Diego County Water Authority Local Conflict of Interest Code.

Staff recommendation: Adopt Resolution No. 2006-___ setting the September regular meeting of the Administrative and Finance Committee    as the time and date of a public hearing to consider amendments to the San Diego County Water Authority Local Conflict of Interest Code.

Director Tu moved, Director Muir seconded, and the motion carried unanimously to approve the Consent Calendar.

II. ACTION/DISCUSSION
There were no items under Action/Discussion.

III.   INFORMATION
The following items were received and filed:

1. Report on the proposed issuance of $350 million (not-to-exceed amount) in commercial paper.
2. Report on Water Standby Availability Charge deferrals for fiscal year 2005-2006.
3. Controller’s report on monthly financial statements.
4. Report on Supreme Court decision in Bighorn-Desert View Water Agency v. Verjil, et al.
5. Board calendar.

IV.   ADJOURNMENT  

There being no further business to come before the Administrative and Finance Committee, Chair Dixon adjourned the meeting at 10:50 a.m.

ENGINEERING AND OPERATIONS COMMITTEE
CALL TO ORDER / ROLL CALL  

   Chair Knutson called the Engineering and Operations Committee to order at 10:55 a.m. Committee members present were Chair Knutson, Vice Chairs Ferguson and Johnson, Directors Arant, Brammell, Croucher, Lewanski, Lewinger, Loveland, Morrison, Rogers, Thompson and Tu. Director Sundram was absent. Other Board members present were Directors Bond, Bowersox, Dailey, Dixon, Irvin, Lewis, Linden, Martin, Muir, Parker, Pocklington, Price, Rhinerson, and Williams. At the time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only committee members participated in the vote. Staff present was General Manager Stapleton, General Counsel Hentschke, Assistant General Manager Cushman, Deputy General Manager Lanspery, Assistant Director of Engineering Stift, Director of Operations and Maintenance Eaton, Director of Right of Way Rose, Principal Engineer Garvey, Supervising Management Analyst Prus and Senior Engineer Galleher.

ADDITIONS TO AGENDA
There were no additions to the agenda.

PUBLIC COMMENT
There were no members of the public who wished to address the Committee.

CHAIR’S REPORT
There was no Chair's Report, nor any Directors' comments.

I.   CONSENT CALENDAR
Approve purchase of two replacement 36-inch plunger valves from VAG-Armaturen GmbH for $193,844.

Staff recommendation: Approve purchase of two replacement 36-inch plunger valves from VAG for $193,844. Water Authority staff will complete installation of the valves as part of the Valve and Venturi Meter Replacement Program.

2. Construction contract with CDM Construction, Inc. for the San Vicente construction management trailer complex relocation.

Staff recommendation: Award a construction contract to CDM Construction, Inc. for $785,277 for the San Vicente Construction Management Trailer Complex Relocation project.

3. Contract with Celerity Energy LLC licensing use for four standby generators.

Staff recommendation: Approve contract with Celerity Energy LLC (Celerity) allow Celerity to use, operate, improve, control and sell power of the four standby generators at Olivenhain Dam, in exchange for Celerity taking responsibility for the maintenance of the generators, subject to the Water Authority’s emergency requirements.

4. Notice of completion for the Mission Trails emergency pipeline repairs.

Staff recommendation: Accept the Mission Trails emergency pipeline repairs for project as complete, record the notice of completion, and release all funds held in retention to Vadnais Corporation, following expiration of notice of completion period.

Vice Chair Johnson moved, Vice Chair Ferguson seconded and the motion carried unanimously to adopt the consent calendar.

II.  ACTION/DISCUSSION

1.    Aqueduct System Operations

1-A    Aqueduct Operations decision support software.

A presentation was delivered by Mr. Eaton.

1-B   Professional services contract with Franklin G. DeFazio, Incorporated for hydraulic transient analysis support services.

Staff recommendation: Award a professional services contract to Franklin G. DeFazio, Incorporated in the amount of $686,800 for hydraulic transient analysis support for the design of water conveyance facilities for a period of three years.

A presentation was delivered by Mr. Garvey, followed by a brief discussion and questions from the Committee. Vice Chair Ferguson moved, Director Lewinger seconded, and the motion carried unanimously to award a professional services contract as stated in the staff recommendation.

2. Security and Emergency Services.

2-A   Resolution to adopt the National Incident Management System (NIMS).

Staff recommendationz: Adopt Resolution No. 2006-____ a Resolution of the Board of Directors of the San Diego County Water Authority adopting the National Incident Management System (NIMS).

2-B    Designations for Emergency Assistance and Relief.

Staff recommendation: Adopt Resolution No. 2006-____ a Resolution of the Board of Directors of the San Diego County Water Authority designating officers and employees authorized to execute certain disaster relief or emergency assistance documents.

A presentation was delivered by Ms. Prus. Director Lewinger moved, Director Croucher seconded and the motion carried unanimously to adopt the Resolutions as stated in the staff recommendations.

Chair Knutson moved Agenda Item III to take place before the Closed Session.

III. INFORMATION

1.    Presentation on fiscal year 2006 Aqueduct Protection Program shutdown activities.

A presentation was delivered by Mr. Galleher. Director Pocklington commented there was a program in place for the shutdown of Skinner for 11 days in November and the Mr. Eaton was working closely with Metropolitan as the other Agencies are and could ensure that Metropolitan was taking a close look at this and were hoping they could do it in less than 11 days, they will continue to talk with the staffs to ensure that we are all in agreement to do that. Chair Knutson agreed that we have had very close cooperation and that we should be right on track. Director Ferguson asked when the Board would be provided the specific dates of the shutdown. Mr. Galleher said he would provide the specific dates to the Board.

Chair Knutson moved the Committee into Closed Session.

3.    CLOSED SESSION:
Conference with Legal Counsel – Existing Litigation
Government Code §54956.9(a)
Name of Case: San Diego County Water Authority v.
Atlantica, et al.; SDSC Case No. 046976

The Committee moved out of Closed Session at 11:54 a.m.

IV. ADJOURNMENT
There being no further business to come before the Engineering and Operations Committee, Chair Knutson adjourned the meeting at 11:55 a.m.

WATER PLANNING COMMITTEE MEETING
CALL TO ORDER / ROLL CALL

Chair Saunders called meeting to order at 1:05 p.m. Committee members present were Vice Chair Lewinger, Directors Dixon, Irvin, Linden, Loveland, Martin, Pocklington, Quist, Rhinerson, and Rogers. Committee members Sundram and Watton was absent. Also present were Directors Arant, Bond, Bowersox, Brammell, Dailey, Ferguson, Johnson, Knutson, Lewanski, Lewis, Morrison, Muir, Parker, Price, Williams, and Wornham. At the time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only Committee members participated in the vote. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Assistant General Manager Cushman, Acting Director of Water Resources Yamada, Director of Right of Way Rose, Water Resources Manager Purcell, Principal Water Resources Specialist Friehauf, and Senior Water Resources Specialist Tegio.

ADDITIONS TO AGENDA
There were no additions to the agenda.

PUBLIC COMMENT

CHAIR’S REPORT
Chair Saunders commended the committee on its hard work and perseverance over the last several months. At the beginning of 2005, the committee laid out an ambitious set of goals and objectives that addressed such diverse topics as regional desalination, annexation policy, drought management, local supply development and environmental planning and mitigation. Over the past several months, the committee had been working hard to address those goals and objectives. The August agenda was a microcosm of the diverse topics that this committee oversaw.

On August 16, the Regional Water Quality Control Board granted a discharge permit to the Carlsbad/Poseidon local desalination project. The permit expires October of 2011.

Directors’ Comments
There were no Director comments at this time.

I. CONSENT CALENDAR
There were no items on the Consent Calendar.

II. ACTION/DISCUSSION
1. Adopt Resolution granting Lakeside Water District’s application to become a separate unit of the Water Authority and fixing terms and conditions.

Staff recommendation: Anticipating the San Diego Local Agency Formation Commission conditional approval in September 2006 of the detachment and consolidation of Lakeside and Riverview Water Districts into a single entity, staff is recommending that the Board adopt a resolution that:

a) Approves Lakeside Water District (Lakeside) and Riverview Water District (Riverview) applications to detach from Padre Dam Municipal Water District (Padre Dam) and for Lakeside to become a separate unit of the Water Authority;

b) Fixes the terms and conditions under which Lakeside and Padre Dam must comply in order for Lakeside to become a separate unit to the Water Authority; and

c) Authorizes the General Manager to verify compliance of the terms and conditions.

Director Irvin moved, Director Linden seconded. Chair Saunders suggested holding the motion in order to hear the staff presentation.

Ms. Friehauf presented to the Board a brief summary on actions taken by the Board from November 2003 to date. She also summarized the next steps prior to Board approval.

Director Irvin called for the question.

Chair Saunders called for the vote on the motion to a dopt Resolution granting Lakeside Water District’s application to become a separate unit of the Water Authority and fixing terms and conditions. Directors Dixon, Irvin, Linden, Loveland, Martin, Pocklington, Quist, Rhinerson, and Saunders voted yes. Directors Lewinger and Rogers voted no. The motion passed.

2-A Cooperation with Mission Trails Regional Park .

Staff recommendation : Provide policy direction to the General Manager by outlining "good neighbor" measures to incorporate into the design and construction of Water Authority projects within the Mission Trails Regional Park. These measures address revegetation at past and future projects, maintenance of existing and future facilities, joint wetland mitigation efforts with the city of San Diego, removal of existing vent structures, and easement acquisition as part of the Mission Trails Capital Improvement Project, and other miscellaneous issues.

Mr. Rose summarized the purpose, park oversight, recommended policies, CAC and task force support on the policies regarding facilities within Mission Trails Regional Park.

2-B Adopt Resolution Certifying the Final Environmental Impact Report for the Mission Trails Flow Regulatory Structure II, Pipeline Tunnel and Vent Demolition Project ; Adopting Environmental Findings of Fact and Statement of Overriding Considerations, and a Mitigation Monitoring and Reporting Program; Approving the Project; and Authorizing Filing of a Notice of Determination.

Staff recommendation: Adopt a Resolution that:

a) Certifies that the Final EIR has been completed in compliance with the California Environmental Quality Act (CEQA) and State CEQA Guidelines, and reflects the independent judgment of the Board;

b) Adopts Environmental Findings of Fact and Statement of Overriding Considerations, and a Mitigation Monitoring and Reporting Program;

c) Approves the project proposed in the Final EIR Project Description as the selected project; and

d) Authorizes the filing of a Notice of Determination.

Mr. Tegio gave a presentation to the Board summarizing the project objectives, administrative actions, and environmental impacts of the Mission Trails Flow Regulatory Structure II (FRS II), Pipeline Tunnel and Vent Demolition project.

Members of the public that addressed the Board were Sharma Hammon, San Diego; Alex Sachs, San Diego; and Judy McCarty, San Diego.

Director Pocklington moved, Director Rhinerson seconded and the motion passed unanimously to provide policy direction to the General Manager by outlining "good neighbor" measures to incorporate into the design and construction of Water Authority projects and adopt a Resolution Certifying the Final Environmental Impact Report.

III. INFORMATION

1. Report on the April 2005 Inter-Agency Agreement with the city of Carlsbad, Carlsbad Municipal Water District, Carlsbad Housing and Redevelopment Agency, regarding coordination and mitigation for a Regional Seawater Desalination Facility.

Mr. Yamada presented to the Board a brief overview on the Inter-Agency Agreement subsequent process and the terms that address the local project.

2. Notice of Preparation of a Supplemental Environmental Impact Report for the Emergency Storage Project, Lake Hodges Pump Station.

3. Status report on the Viejas, Sycuan, and Barona Indian Bands’ efforts to secure additional water supplies.

4. Water Resources report.

Notice of Preparation of a Supplemental Environmental Impact Report for the Emergency Storage Project, Lake Hodges Pump Station, the Status report on the Viejas, Sycuan, and Barona Indian Bands’ efforts to secure additional water supplies and the Water Resources report were all received and filed.

IV. ADJOURNMENT

There being no further business to come before the Water Resources Committee, Chair Saunders adjourned the meeting at 2:10 p.m.

IMPORTED WATER COMMITTEE
CALL TO ORDER / ROLL CALL
Chair Muir called the Imported Water Committee to order at 2:18 p.m. Committee members present were Vice Chairs Martin and Saunders and Directors Arant, Bond, Bowersox, Lewis, Linden, Parker, Pocklington, Quist, and Wornham. Representative Slater-Price was absent. Also present were Directors Brammell, Croucher, Dailey, Dixon, Ferguson, Irvin, Johnson, Knutson, Lewanski, Lewinger, Loveland, Morrison, Price, Rhinerson, Rogers, Steiner, Thompson, Tu, and Williams. At that time, there was a quorum of the full Board and the meeting was conducted as a meeting of the Board; however, only committee members participated in the vote. Staff present included General Manager Stapleton, General Counsel Hentschke, Assistant General Manager Cushman, Director of Imported Water Hess, and others.

ADDITIONS TO AGENDA
There were no additions to the agenda.

PUBLIC COMMENT
There were no members of the public who wished to address the Committee.

CHAIR’S REPORT
Chair Muir stated that the Committee’s agenda would be reordered.

4-A Director’s comments.

There were no comments from Directors.

II. ACTION/DISCUSSION
3. Quantification Settlement Agreement.

The Committee went into closed session at 2:22 p.m.

3-B CLOSED SESSION:
Conference with Legal Counsel – Potential Litigation
Government Code §54956.9(b) – Three Cases.

The Committee reconvened at 3:10 p.m. General Counsel Hentschke stated for the potential arbitration/litigation regarding canal costs, that the Board approved the retention of McKenna Long & Aldridge and the establishment of a contract amount of $250,000.

3-A Professional services contract with Economic Insights for water transfer tracking services.
Staff recommendation: Award a professional services contract to Economic Insights for a term of three years at a not-to-exceed amount of $76,220 to gather and analyze information and water transfer transaction data from calendar year 2003 through 2009 (contract years 1-7) to assist in determining whether the conditions to the commencement of a price redetermination under the Agreement for Transfer of Conserved Water by and between Imperial Irrigation District (IID) and the San Diego County Water Authority are satisfied. (Action)

Chairman Bond moved, Director Wornham seconded, and the motion passed unanimously to approve the staff recommendation.

2. Colorado River

2-A Status report on the United States Bureau of Reclamation development of Lower Colorado River Basin shortage guidelines and coordinated management strategies for Lake Powell and Lake Mead.

Mr. Hess discussed the proposed elements of the Bureau of Reclamation’s (BOR’s) efforts to address potential shortage conditions for the Lower Colorado River Basin, and five alternatives that would be considered in the environmental review. He also discussed some of the pros and cons of each alternative.

I. CONSENT CALENDAR
There were no items on the consent calendar.

II. ACTION/DISCUSSION
1. MWD Issues and Activities update.
1-A MWD Delegates report.

Director Lewis commented that MWD’s budget required the withdrawal of funds from the Water Rate Stabilization Fund to make up the budgeted gap between projected revenues and expenditures, which would make ratepayers refund unlikely.

1-B Metropolitan Water District’s Integrated Area Studies effort.
This item was tabled to the September meeting.
1-C Update on MWD’s Diamond Valley Lake Recreation Program.
This item was tabled to the September meeting.

III. INFORMATION
The following information item was noted and filed:

1. Imported Water Activities report.

IV. ADJOURNMENT
There being no further business to come before the Imported Water Committee, Chair Muir adjourned the meeting at 3:20 p.m.

FORMAL BOARD OF DIRECTORS’ MEETING OF AUGUST 24, 2006

1. CALL TO ORDER. Chairman Bond called the Formal Board of Directors’ meeting to order at 3:30 p.m.

2. SALUTE TO THE FLAG. Vice Chairman Loveland led the salute to the flag.

3. ROLL CALL, DETERMINATION OF QUORUM. Secretary Lewis called roll. Directors present were Arant, Bond, Bowersox, Brammell, Croucher, Dailey, Dixon, Ferguson, Johnson, Knutson, Lewanski, Lewinger, Lewis, Loveland, Martin, Morrison, Muir, Parker, Pocklington, Price, Quist, Rhinerson, Rogers, Saunders, Steiner, Thompson, Tu, Williams, and Wornham, Directors absent were Irvin, Linden (p), Sundram (p), Watton (p), and Representative Slater-Price.

3-A Report on proxies received.

Director Lewanski had the proxy vote for Director Linden. Director Lewinger had the proxy vote for Director Sundram. Director Croucher had the proxy vote for Director Watton.

4. ADDITIONS TO AGENDA. There were no additions to the agenda.

5. APPROVAL OF MINUTES. Director Muir moved, Director Croucher seconded and the motion carried for a total of 98.51% of the vote, to approve the minutes of the Formal Board of Directors’ meeting of July 27, 2006.

6. OPPORTUNITY FOR MEMBERS OF THE PUBLIC WHO WISH TO ADDRESS THE BOARD ON MATTERS WITHIN THE BOARD’S
JURISDICTION. Chairman Bond announced he had a speaker’s slip but stated it would be addressed when the item was reached on the consent calendar.

7. PRESENTATIONS AND PUBLIC HEARINGS
7-A Recognition of Baldemar “BT” Troche, employee of the 4 th quarter.
Baldemar “BT” Troche, Senior Management Analyst was recognized as employee of the 4 th Quarter.

8. REPORTS BY CHAIRS
Chairman’s Report – Chairman Bond . Chairman Bond reviewed the meetings that he had attended during the past month. He announced he met with Metropolitan Water District of Orange County; had interviewed a candidate for chairmanship of the Metropolitan Water District; met with Easter/Western Empire, attended board meetings of the Metropolitan Water District and Rainbow Municipal Water District; and participated in conference calls regarding IID and QSA negotiations.

8-A MWD delegate appointment . Confirm retirement of Claude A. “Bud” Lewis and appointment of James H. Bond as Metropolitan Water District delegate. Chairman Bond stated Director Lewis would remain as a delegate through December 31, 2006 and Chairman Bond has appointed himself to replace Director Lewis.

Director Qusit moved, Director Wornham seconded and the motion carried at 98.51% of the vote to name Chairman Bond as the replacement for Director Lewis as of December 31, 2006.

8-B Board Officer nomination process. Chairman Bond requested nominations be turned in to the Clerk of the Board by September 18, 2006.

Legislation, Conservation and Outreach Committee. Director Steiner announced the contract for the regional outreach to the Hispanic Community had been passed as amended, and all other items had passed in Committee.

Administrative and Finance Committee. Director Dixon announced all items had passed in Committee.

Engineering and Operations Committee. Director Knutson reviewed the committee meeting and announced all items had passed in Committee. He announced there was a closed session and the reportable action was approval of an agreement with Daley and Heft for $50,000 in legal services.

Water Planning Committee. Director Saunders reviewed the committee meeting and announced all items had passed in Committee.

Imported Water Committee. Director Muir announced the contract for water transfer tracking services had passed. The Committee went into closed session with the following reportable action: Potential arbitration/litigation regarding canal lining costs: approve retention of McKenna Long & Aldridge and establish a contract amount of $250,000.

9. CONSENT CALENDAR
Chairman Bond announced items 9-16 and 9-17 would be pulled from the Consent Calendar. Director Lewinger requested item 9-15 be pulled from the consent calendar. Abstentions and those voting no were listed under the item. Director Croucher moved, Director Ferguson seconded and the motion passed at 98.51% to approve the amended consent calendar.

Director Muir moved staff recommendation on items 9-16 and 9-17. Director Morrison seconded and the motion passed.

9-15 Adopt Resolution granting Lakeside Water District’s application to become a separate unit of the Water Authority and fixing terms and conditions.

The Board adopted Resolution No. 2006-26 a resolution that: Approves Lakeside Water District (Lakeside) and Riverview Water District (Riverview) applications to detach from Padre Dam Municipal Water District (Padre Dam) and for Lakeside to become a separate unit of the Water Authority; Fixes the terms and conditions under which Lakeside and Padre Dam must comply in order for Lakeside to become a separate unit to the Water Authority; and Authorizes the General Manager to verify compliance of the terms and conditions.

Director Lewinger asked questions of General Counsel Hentschke regarding this item. Mr. Hentschke reviewed the process before Lakeside could become an agency, and stated Lakeside must abide by the conditions of the agreement. Director Lewinger stated this reorganization was very different from other annexations being considered or would be considered by this organization in the future. This reorganization involved property that was within the Water Authority currently and was not creating any new demands on the Water Authority. He stated the Water Authority had no obligation to create a new board seat for any territory that requested to annex into this district. He requested this statement be placed into the record. Director Lewis expressed concern regarding the growth of the Board. He stated seven could do the job vs. 37 and stated he knew his opinion was in the minority. Director Brammell asked a question regarding LAFCO. Mr. Hentschke stated LAFCO’s approval was contingent upon compliance with our resolution. Director Rhinerson requested the board appoint an Ad Hoc Governance committee to do some strategic planning in the next year.

Director Dixon moved, Director Lewanski seconded and the motion passed at 88.17% of the vote. Directors Bond, Brammell, Croucher, Knutson, Muir, Rogers, and Watton (p) voted no.

10. ACTION / DISCUSSION

10-1. Adopt the Rate Model Work Group Financial Policy Proposal.

Administrative and Finance Committee recommendation: Adopt the Rate Model Work Group Proposal to amend financial policies regarding the Rate Stabilization Fund and Debt Service Coverage Ratio.

Director Knutson moved, Director Dixon seconded and the motion carried at 98.51% of the vote.

11. CLOSED SESSIONS:

Chairman Bond announced there was no need for the Closed Sessions.

12. SPECIAL REPORTS

12-A GENERAL MANAGER’S REPORT – No report was given.

12-B GENERAL COUNSEL’S REPORT – No report was given.

12-C ACWA-JPIA REPORT – No report was given.

12-D SANDAG REPORT – No report was given.

SANDAG Subcommittee: Borders/Regional Planning Committee –

No report was given.

12-E AB 1234 COMPLIANCE REPORTS – No reports were given.

13. OTHER COMMUNICATIONS – There were no other communications.

14. ADJOURNMENT

There being no further business to come before the Board, Chairman Bond adjourned the meeting at 4:45 p.m.

__________________________________
James H. Bond
Chairman

_______________________________
Claude A. Lewis
Secretary

________________________________
Doria F. Lore, Clerk of the Board

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