Carmel Area Wastewater
District/Pebble Beach Community Services District
Pebble Beach Company
WASTEWATER RECLAMATION
PROJECT
MANAGEMENT COMMITTEE
MINUTES
Meeting of November 10,
2005
Pebble Beach Community
Services District Boardroom
3101 Forest Lake Road,
Pebble Beach, CA
1. Call to Order
Richard Andrews, PBCSD General Manager,
serving as facilitator, called the meeting to order at 1:40 p.m. Members present were: Joyce S. Stevens and
Charlotte F. Townsend, Carmel Area Wastewater District Board of Directors
(“CAWD”); Richard D. Verbanec, Pebble Beach Community Services District Board
of Directors (“PBCSD”); and Mark Stilwell, Executive Vice President, Pebble
Beach Company (“PBCo”). Member Gary D.
Hornbuckle, PBCSD Board of Directors, was absent on vacation.
Others in attendance:
George Thacher, Associate Legal Counsel, CAWD/PBCSD
Ray von Dohren, General Manager, CAWD
Barbara Buikema, Accountant/Controller, CAWD
Michael Niccum, P.E., District Engineer, PBCSD
Brent Reitz, P.E., Project Engineer, PBCo
Vinod Badani, Western Region Manager, E2 Consulting
Engineers
Andrew Bell, District Engineer, Monterey
Peninsula Water Management
District
(“MPWMD”)
Thomas Peterson, Operations Superintendent,
California-American
Water
(“Cal-Am”)
Michael Magretto, Operations Supervisor,
Cal-Am
Vega Roecker, Certified Public Accountant,
Hutchinson and Bloodgood
Certified
Public Accountants and Consultants, LLP
John Ryan, Pebble Beach resident
2. Visitors, public comment and/or changes
to the agenda:
There were no comments
from visitors, and no changes to the agenda were requested.
3. Minutes:
PBCSD General Manager,
Richard Andrews reviewed several non-substantive corrections that he believed
should be made to the draft version of the minutes that had been previously
submitted to the Committee. There were
no other comments or changes suggested from members of the Committee.
It
was moved by Joyce Stevens, seconded by Charlotte Townsend and unanimously
carried, to approve the minutes of the Reclamation Management Committee meeting held on September
16, 2005, as submitted, with the non-substantive corrections noted by
Mr.Andrews.
4. Annual
Independent Financial Audit
The Committee received
and reviewed the Annual Financial
Statements and Independent Audit Report of the Reclamation Project for the
fiscal year ended June 30, 2005. CAWD
Accountant/Controller, Barbara Buikema, introduced Vega Roecker, CPA, a
representative of the firm of Hutchinson and Bloodgood, who had prepared the
audit report. Ms. Roecker said the audit
report included an unqualified opinion that the financial statements prepared
by CAWD present fairly, in all material respects, the financial position of the
Reclamation Project for fiscal year 2004 – 2005. She indicated that the CAWD financial
statements included a new section which includes CAWD management’s discussion
and analysis, which is intended to provide a summary of the project financial
position consistent with the new standard 34 of the General Accounting
Standards Board now applicable to local government audits. Ms. Roecker noted that no significant
adjustments to project financial records were identified as being necessary
during the course of the independent audit.
She said the opinion of auditors is that the reclamation project is
operating efficiently and has sufficient financial oversight from the participating
agencies. Ms. Roecker then briefly
reviewed each section of the audit report and answered questions from Committee
members. In response to Ms. Steven’s
question, Ms. Roecker clarified that $2.5 million of expenditures incurred for
the Expanded Reclamation Project (previously referred to as “Phase II”) are
identified in the Statement of Cash Flows on page 11 of the audit report. She said the cash expended for this purpose
was derived from the sale of PBCo potable water rights within the Forest. Andrew Bell, MPWMD, noted that the referenced
water “rights” should more precisely be described as water “entitlements”
awarded to the PBCo by the MPWMD in return for PBCo serving as the financial
guarantor of reclamation project financing.
Ms. Roecker concurred with Mr. Bell, and indicated that the use of the
term “water right” was intended in a generic and not a legal way.
It was the consensus of the Committee that the CAWD/PBCSD
Wastewater Reclamation Project Annual Financial Statements and Independent
Audit Report for the fiscal year ended
June 30, 2005 prepared by the firm of Hutchinson and Youngblood be accepted as
meeting project requirements for an
annual independent financial audit.
Operations &
Maintenance of the Project:
5-A. Treatment Plant Operations & Maintenance (“O&M”)
The Committee received a written report from CAWD Treatment Plant
Superintendent, Mark Scheiter, dated November 7, 2005 regarding treatment plant
operations for the period of September and October 2005. No unusual maintenance requirements were noted. Mr. von Dohren said that he did not have any
comments to supplement the written report.
Ms. Stevens asked Mr. von Dohren to clarify how many times surplus
tertiary water had been discharged to the Carmel River to mitigate Carmel River
Lagoon conditions. He responded that
tertiary water had been discharged to the Carmel River twice during the report
period: first, during the golf courses potable water flushing cycle over a
five-day period and, the second time, when maintenance was being performed on
the diffusers of the ocean discharge line.
He said the tertiary water was discharged to the river on the north side
of the treatment plant. Also, in
response to Ms. Stevens’ question, Mr. von Dohren said that Cal-Am has agreed
to fund up to about $75,000 of improvements at the CAWD treatment plant to
automate discharge of surplus tertiary water to the river to assist in
improving the quality of water in the Carmel River Lagoon. He indicated that a memorandum of understanding
was being drafted between Cal-Am and CAWD for presentation to the CAWD Board of
Directors at its December 2005 meeting.
Mr. von Dohren said the facilities will be constructed on the south side
of the treatment plant and the tertiary water will be discharged into riparian
habitat, and not directly into the river.
He indicated that related financial understandings with the PBCo and
MPWMD has not yet been developed. He
said MPWMD staff plans to ask the District’s Board of Directors if it is
willing to participate in the funding and may also try to secure a grant from
another source for that purpose. CAWD
proposes to provide in-kind labor, but believes the remaining electrical and
chemical costs should be provided by another agency. Mr. von Dohren recommended the project be
viewed as a “water supply” project and not a “wastewater” project.
The written report regarding Treatment Plant O & M
for September and October 2005 was received for information purposes and no
action was required or taken by the
Committee.
5-B. Distribution System O&M
PBCSD District Engineer,
Michael Niccum, reviewed his written Distribution System Operations Report,
dated November 10, 2005. There were no
questions or comments from Committee members.
The
Distribution System O & M Report for July and August 2005 was received for information
and no action was required or taken by the Committee.
5-C. Operation and Maintenance Financial Reports
Mr. Andrews advised the
Committee that due to constraints on MPWMD’s staff and accounting software resources
CAWD had not been provided with reports of current revenue derived from
operations. He said this did not allow
the CAWD staff to prepare the usual financial statements that had previously
been provided to the Committee. Instead,
a limited budget report of project expenses under CAWD’s control and a report
of deposits and expenditures from the Expanded Reclamation Project Escrow
Account were prepared and distributed to the Committee at the beginning of its
meeting. Ms. Buikema then reviewed her submitted
budget report of operations and maintenance and capital improvement expenses
for the period July through September 2005.
She indicated that even though MPWMD had not provided a current revenue
report it had allocated sufficient operating funds to CAWD to meet on-going
project O&M expenses. Ms. Buikema
responded to questions from Committee members.
By consensus, the Committee requested the Technical Advisory Committee to review the MPWMD’s financial system resources
available for Reclamation Project
accounting and report back to the RMC with any conclusions and/or
recommendations the TAC may have to help keep project accounting more complete and current.
6. Status
reports concerning Phase II (Expanded) Reclamation Project:
6-A. Advanced treatment facilities:
Mr. von Dohren presented
an oral progress report to the Committee regarding engineering plans for the
advanced treatment component of the Expanded Reclamation Project. He said current efforts are focused on three
areas of planning:
the project environmental review, engineering design and the National Pollution
Discharge Elimination System (“NPDES”) permit.
With regard to the environmental review, he said the Monterey County
Water Resources Agency is evaluating the location of the proposed advanced
treatment system improvements relative to the 100-year flood plain. Another environmental consideration raised by
County planning staff is the timing of construction to avoid the raptor season,
which runs roughly from March 1 through August.
Mr. Stilwell questioned whether this would be an appropriate
consideration in the environmental report, as CAWD already has a fully
developed and operational treatment plant, and the micro-filtration/desalination
units will merely be improvements to the existing facility. In response to the Committee’s question
whether a biologist could stop construction of the advanced treatment
facilities, Mr. von Dohren said that would be possible but that he did not
believe it would occur.
Mr. von Dohren reported
that several days before the Committee’s meeting the PBCo had given approval to
CAWD to proceed through design of the project.
He said another matter that CAWD is in the process of resolving is
whether to seek modification of CAWD’s NPDES permit before construction of
advanced treatment facilities or wait to revise the permit when it is due to be
renewed in the future. He said an
inappropriate requirement is in the NPDES permit, which requires tertiary
effluent quality meet a radon limitation level in the drinking water
standard. Mr. von Dohren said that
standard was inadvertently included in the existing NPDES permit, and the
Regional Water Quality Control Board staff agrees it is not applicable to
wastewater and that it should be deleted from the NPDES Permit. The Regional Board staff has suggested to Mr.
von Dohren that the issue can be resolved with a clarifying letter, but has not
said how the condition would be specifically modified. Mr. von Dohren commented that he would rather
leave the NPDES Permit conditions as-is until it is time to renew the permit,
because CAWD has a good working relationship with the Regional Board, and if
the condition becomes an issue he is confident the Regional Board staff can
clarify the matter at that time.
Mr. Stilwell requested
CAWD staff research the discharge standards that are included in the NPDES
permits for the cities of Watsonville and Santa Cruz, in order for the
Management Committee to be able to anticipate what standards may be applicable
to the CAWD Treatment Plant when the NPDES Permit is renewed.
Ms. Stevens asked Mr.
von Dohren to clarify what, if any, residue will remain after the tertiary
treated effluent is processed through the micro-filtration / desalination
facilities. Mr. von Dohren said the only
residue will be created by the micro-filters, and it will be diverted to the
treatment plant headworks for reprocessing.
He said that process is basically the same as the current reprocessing
of sand filter residue which is sent to the digesters . The only difference is the effluent residue
from the reverse osmosis units that will be discharged via the ocean
outfall. The quantity of material in the
discharge will remain the same, but since less water will be in the discharge
the concentration will be greater than a normal discharge of effluent. He said effluent that will be required to be
discharged through the ocean outfall, the discharge from the RO units, will have been treated to the tertiary level when it
passed through the micro filters, basically the same quality of water that is
now being applied on the golf courses.
There
were no further questions, comments or action taken by the Committee.
6-B. Forest Lake Reservoir:
The Committee received
and reviewed a written report dated November 10, 2005 from PBCSD District
Engineer, Michael Niccum, regarding the status of construction of the Forest
Lake Reservoir component of the Expanded Reclamation Project. Mr. Niccum orally reviewed his report and
also narrated slides that depicted various stages of construction. He reported that Anderson Pacific Engineering
Construction had made much progress since the Committee’s last meeting in
September. He said installation of the
reservoir liner has been completed and that final testing of the liner will be
conducted soon. Mr. Niccum also reviewed
the latest construction change orders, noting that they totaled $497,809, which
represents 4 ½ % of the original $10,936,000 contract. He indicated that the Construction and Operating Agreement for the Expanded Reclamation
Project authorizes a 5% construction contingency, which is about $550,000. It was noted also that much of the change
order value relates to unanticipated changes during construction, which were
ordered by the Division of Safety of Dams.
There were no further questions, comments or action taken by the
Committee.
6-C. Implementing of Financial Plan
Mr. Stilwell provided an oral progress report regarding implementation of
the financing plan for the Expanded Reclamation Project improvements. He said there had been a few more sales of
potable water entitlements since the Committee met in September. However, he noted that interest in purchasing
potable water now appears to be limited to those who are acquiring, selling or
renovating residential property. He
indicated that a total of about 105 acre-feet of water entitlements has been
sold to date. Mr. Stilwell expressed the
opinion that interest in further water sales might come from outside of the Del
Monte Forest. In that case, however, he
said the initiative for authorizing such sales would have to come from another
agency as the PBCo does not think that would be an appropriate role for it to
assume.
There were no
questions, comments or action taken by the Committee.
7. Miscellaneous Information or
Announcements from Members, Staff or Visitors:
The
Committee did not receive any miscellaneous information or announcements from
its members, staff or visitors.
8. Closed
Session
The Committee did not meet in a closed session.
9. Adjournment
& Next Meeting Date:
There being no further business at 3:05 p.m., it was
moved by Charlotte Townsend, seconded by Joyce Stevens, and unanimously carried
to adjourn to Friday, January 13, 2006 at 9:30 a.m. in the PBCSD Boardroom at 3101
Forest Lake Road, Pebble Beach.
Respectfully
submitted:
Richard
Andrews
Secretary
to the Committee