MINUTES OF THE SPECIAL BOARD OF DIRECTORS' MEETING
January 8, 2009
Call to Order/ Roll call - determination of a Quorum
Chair Lewis called the meeting to order at 1:30 p.m. Secretary Wornham called
roll. Directors present were Arant, Barrett, Brammell, Bond, Bowersox, Croucher,
Dailey, Dion, Ferguson, Hilliker, Hogan, Johnson, Knutson, Lewinger, Lewis,
Linden, Martin, McMillan, Morrison, Muir, Parker, Petty, Pocklington, Price,
Saunders, Saxod, Smith, Steiner, Tu, Watton, H. Williams, and K. Williams and
Wornham. Director Thompson was absent as was Representative Slater-Price.
Staff present was General Manager Stapleton, General Counsel Hentschke, Deputy
General Managers Belock and Lanspery, Director of Finance/Treasurer Sandler,
and Director of Water Resources Weinberg.
Public comment
There were no members of the public that wished to speak.
Summary of recent Comprehensive Cost and Reliability Assessment Ad Hoc Committee
activities
Chair Lewis announced in September 2008 the Comprehensive Reliability
and Cost Assessment (CRACA) Committee reconvened to take a comprehensive look
at the challenges faced today. He further stated under the leadership of Director
Knutson, the committee had worked over the past several months looking at a
number of variables and would be sharing their work today.
Director Knutson provided an overview of the recent CRACA Committee planning
efforts. Mr. Weinberg provided a comprehensive explanation of key Water Authority
supply/demand forecast assumptions.
Mr. Sandler reviewed Metropolitan Water District (MWD) rates and charges. He
stated approximately 50% of MWD’s revenue requirements were related to
supply costs. He reviewed three major events that had an impact on costs, beginning
in 2003 MWD lost surplus Colorado River supplies, in 2007 the Wanger decision
cut the State Water Project supplies, and in 2008 MWD replaced lost State Water
Project supplies with even higher cost spot water transfer supplies. Mr. Sandler
then reviewed capacity charge revenues which peaked in 2006 at $33 million dollars
compared to the current rate of $10 million dollars. He stated significant increases
from MWD were expected through calendar year 2012 and capacity charge revenues
would follow the housing market trend.
Mr. Belock provided a review of construction materials costs escalation. He
stated costs in the past six months had begun to decrease due to the decrease
in global demand. He reviewed changes to the Capital Improvement Project schedules,
stating project rescheduling would mitigate bond market access risk and calendar
year 2010 rate increases.
Mr. Sandler concluded the presentation by reviewing the CRACA “Lite”
high/low rate forecast. He reviewed the projected monthly increase in a single-family
residence customer bill compared to the prior year.
Director Lewinger requested the CRACA committee and staff work on additional
scenarios and alternatives.
4. San Vicente Dam Raise Funding
Staff recommendation: Authorize the General Manager to re-prioritize the Capital
Improvements Program (CIP) to enable the San Vicente Dam Raise project to go
out to bid and delay other projects to mitigate changes in the overall CIP funding
requirements for FY2009 and FY2010.
Director Ferguson moved, Director Martin seconded and the motion carried at
100% of the vote.
Adjournment
There being no additional business to come before the Board, Chair Lewis adjourned
the meeting at 3:00 p.m.
______________________________
Claude A. Lewis, Chair
|
