March 25, 2008

An open meeting of the Administration and Finance Committee (AFC) of the San Antonio Water Company (SAWCo) was called to order at 1:30 p.m. on the above date at the Company office located at 139 N. Euclid Ave., Upland, California.  Committee Members present were Ken Willis, Tom Thomas, Mark Hill, and Dr. Fred Gattas.  General Manager Charles Moorrees and Office Manager/Accountant Teri Layton were also in attendance.  Mr. Willis presided.

1.      Recognitions and Presentations:  None.

2.      Additions / Deletions to the Agenda:  None.

3.      Public Comments:  None.

4.      Approval of Committee Meeting Minutes – Dr. Gattas moved and Mr. Hill seconded to approve the meeting minutes of January 28, 2008 as presented.  Motion carried. 

5.      Administrative and Financial Issues:

1. Cost of Living Adjustment – Mr. Moorrees reported that annually, cost of living adjustments are determined by the CPI Index and other employment factors within the metropolitan areas as researched by RSG Consultants.  According to the Bureau of Labor Statistics, the percent increase in the area from the years 2006 to 2007 was 3.3 percent.  Mr. Moorrees requested that the committee recommend to the Board adjusting the pay ranges for SAWCo staff to reflect that percent change.  It was suggested that the figure be rounded off to 3.0 percent.

Dr. Gattas moved and Mr. Hill seconded to approve recommending to the Board to adjust existing job position wage range by 3.0 percent in accordance with the Consumer Price Index for the greater metropolitan area.  Motion carried.

2. SAWCo’s Commodity Rate – Mr. Moorrees stated that he put the item on the agenda to initiate the discussion and to get different ideas on proposed rates.

Dr. Gattas presented information from SAWCo’s financial audit reports with regard to water delivery from years 2005, 2006, and 2007.  SAWCo’s water demand was down in 2005.  Mr. Moorrees explained that year 2005 was a “wet” year which resulted in less need for supplied water.  Power usage increased greatly in 2007 from previous years due to having the driest year on record which necessitated the use of groundwater well and boosters.  Mr. Moorrees explained that surface water from the rains in 2005 allowed SAWCo to provide water without having to use the wells as heavily in 2005 and 2006.  With 2007 being a very dry year, wells were used frequently. 

Dr. Gattas brought up questions about SAWCo’s agreement with the City of Upland and asked that it be clarified.  Dr. Gattas pointed out that in the domestic system, residents are using more water than their shares allot.  Ms. Layton stated that new AMR’s have been installed and are giving a more accurate read.  Dr. Gattas also stated that irrigators are using much less than their entitlement.  He brought attention to the fact that SAWCo’s legal fees had nearly doubled in the last year and the cost of electricity had increased notably. 

(Mr. Thomas left the meeting at 1:40 p.m.)

Dr. Gattas suggested an increase of 10 percent in the cost for supplemental water if needed and re-evaluate in six months.

Dr. Gattas inquired as to whether or not the water company was able to sell stored water in 2008.  Mr. Moorrees stated that he met with Anthony La with the City of Upland who was interested in purchasing from SAWCo from the Six Basins Account.  He also recently made an agreement with Monte Vista Water District (MVWD) for the sale of stored water.

Mr. Moorrees also advised that although SAWCo shows depreciation of assets in their financials, they do not fund asset depreciation and suggested that a “sinking fund” be established to fund assets when they fully depreciate.

Dr. Gattas recommended adding a separate account in the budget for replacement or maintenance of distribution lines.  Ms. Layton stated that the Capital Reserves Fund is set up to fund Master Plan Project and some of those projects are deteriorated assets.  A fund for replenishment would be redundant. 

No definitive recommendations were made at the time of the meeting.  It was decided that the committee would wait until the Master Plan was finished and the topic would be revisited.

6.      Status report on Staff & Committee items:

A.     Retirement Plan – Mr. Willis stated that SAWCo’s bill AB 1936 was met with no objections from the Policy Committee. 

Mr. Moorrees stated that the bill is going to the Appropriation Committee in two weeks for a vote.  The current language on the bill will be amended to affirm SAWCo’s compliance with the Brown Act.

B.     Conservation Update – Ms. Layton stated that the California Urban Water Conservation Council (CUWC) is looking at revising their Best Management Practices (BMP).  Also, AB 1881 was passed recently.  The bill puts timeline requirements on city’s to follow either the Department of Water Resources (DWR) newly developed model ordinace or develop and follow their own ordinance with regard to water conservation.  There is a hearing tomorrow at Inland Empire Utilities Agency (IEUA) with regard to DWR’s new model ordinance.  The Landscape Alliance Committee developed some ordinances as well.  There is a monthly regional conservation meeting scheduled for next week to discuss. 

7.          Closed Session: None.

8.          Committee Comments and Future Agenda Items – None. 

Adjournment: - There being no further business, the meeting was declared adjourned at 2:24 p.m.