MINUTES OF THE SPECIAL BOARD OF DIRECTORS' MEETING
March 8, 2007
Call to Order/ Roll call – determination of a Quorum
Chair Steiner called the meeting to order at 1:30 p.m. Directors present were Arant, Barrett, Bowersox, Brammell, Dailey, Ferguson, Hilliker, Hogan, Johnson, Knutson, Lewinger, Lewis, Linden, Martin, Morrison, Parker, Petty, Pocklington, Price, Saunders, Smith, Steiner, Thompson, Watton, Williams and Wornham. Directors absent were Bond, Croucher, McMillan, Muir, Quist, Rogers, Tu and Representative Slater-
Price. Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy General Manager Lanspery, Director of Water Resources Weinberg, Director of Finance/Treasurer Brust and others.
Public comment
There were no members of the public that wished to speak.
Where are we in the funnel?
Mr. Lanspery began the meeting and reviewed the agenda. Director Knutson reviewed the reliability and cost assessment process, and what potential the Board had to influence the assumptions.
Committee approach and review of key data
- Relative impact of assumptions on M&I rates
- System connectivity
Ms. Brust reviewed the water sales forecast that had been revised downward, the impact of new financial management policies, MWD’s rate forecast that had increased, new Capital Improvement Project data reflecting recosting and the removal of desalination, and how the new assumptions affect rates.
Mr. Weinberg reviewed anticipated impact on rates and reliability of CIP completed or under construction projects, and CIP projects in the planning or design phase.
The Directors asked questions and made comments regarding demand forecast, local supply risk, the San Vicente Dam raise, and the MWD rate increase.
Discussion of current board policy scenario ( #1 revised baseline scenario)
Review of other scenarios evaluated
- Scenario #2 – Supersize San Vicente Dam fill extended
- Scenario #3 – ESP San Vicente Dam raising and fill
- Scenario #4 – No desal
- Scenario #5 – Mid-point MWD rate increases
- Scenario #6 – Regional desal (Encina Plant)
Mr. Weinberg reviewed the six scenarios the Committee evaluated and what assumptions had changed from the mid-term budget assumptions to the revised baseline – scenario #1. He covered the variables that affect reliability, demand, supply availability, and delivery capacity. Reduction in water demand forecast had delayed the need for facilities and supplies. He discussed how the reliability model works running hundreds of potential scenarios simulating the system’s physical capability to store, treat, and deliver water to member agencies. The inputs include 100+ years of historic weather patterns and surface water runoff, differing amounts of local supply implementation, MWD estimates on available imported supplies, pipeline, treatment plant and reservoir capacities.
Conclusions / Next Steps
Director Knutson reviewed the conclusions of the Comprehensive Reliability and Cost Assessment Ad Hoc Committee. He discussed projections represent likely outcomes using the best information available, foundational assumptions made during the Master Planning process continue to provide a sound basis for reliability planning, and local supply development, including desalination, is a critical piece of the reliability pie. He stated the Board’s future focus on CIP and MWD cost containment is where the largest impact on rates would be made. Future rate smoothing opportunities include debt restructuring and the Board’s review of the 2008 Long Range Financial Plan. He stated Scenario #1, the revised Baseline, is the recommended alternative for development for the FY 2007-2008 and 2008-2009 Budget.
The next steps were covered including an Ad Hoc Committee meeting on March 20, 2007. A Special Board meeting was scheduled for April 12, 2007 to discuss selection of a preferred alternative for development of the budget, and rates and charges. At the May 24, 2007 Board meeting there will be a Public Hearing set for rates for the supply and delivery of water and an overview of the General Manager’s Recommended Two-Year Budget. On June 7, 2007 and June 14, 2007, there are two Special meetings of the A&F Committee. The June 28, 2007 Board meeting would include the Board considering adoption of the FY 2007-2008 and 2008-2009 Budget, Public Hearing for rates for the supply and delivery of water, and Board action.
Adjournment
There being no additional business to come before the Board, Chair Steiner adjourned the meeting at 3:05 p.m.
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Fern M. Steiner, Chair
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