Loading...
HomeMy WebLinkAbout1971-05-13; Municipal Water District; MinutesMINUTES OF CITY OF CARLSBAD-CARLSBAD MUNICIPAL WATER DISTRICT JOINT COMMITTEE CONFERENCE HELD ON MAY 13, 1971, AT 8:30 A.M., AT DISTRIC^ ADMINISTRATION CENTER, 5780 EL CAMINO REAL, CARLSBAD, CALIFORNIA: The meeting was called to order at 8:53 A.M. by Chairman Carmichael with the following Committee Members in attendance: Glenn McComas - Vice Mayor William Carmichael, Director Robert Watson - Chairman of Water Paul S. Swirsky, Legal Counsel Improvement Committee James M. Gaiser - Auditor Jack Arnold - City Manager Jack Y. Kubota - General Manager Lewis Moe - City Attorney Wilda F. Simpson - Secretary After discussion, the minutes of the Committee meeting of March 18, 1971 were ordered filed for information purposes. 7 \ •' Review of Draft Committee Members reviewed in detail a draft Report on the 'Pro- of Proposed posed Operating Agreement Between the City of Carlsbad and the Operating Agreement Carlsbad Municioal Water District, dated Apnl 29 , 1971. The following points were brought up and discussed as foUov/s: City of Carlsbad Real Property City Manager Arnold inquired as to the status of the Calavera Lake property under the proposed agreement. Legal Counsel Swirsky pointed out that under Section I of the report there is excluded the responsiDi1Uy for the maintenance of, or the involvement with, the real property of the City V-ater Depart- ment that does not have a functional use with the Department as now ooerating. Mr. Arnold apprised the Committee of a proposed lease-option type of arrangement which the City currently has under consideration with the County of San Diego for the develop- ment of regional park facilities at the Calavera Lake property. The City's Oak Street office and water yard facilities also would not be affected by the proposed Operating Agreement as all of the field and operating functions the Department would become fully integrated with the District and the entire operation would be conducted at the District's Administration and Operation Center on El Camino Real Water Rate Schedule, The possibility of establishing d uniform water rate for City residentsImiT the retail consumer of the District was Drought uo and discussed at lenqth District Manager Kubota explained that the District's water rate structure is based on general obligation bonds, while the City of CaHsbad is on all revenue bonds The District's operation and bond programs are financed from both water reve- nues and tax levies whereas the City is reauired under their revenue bonds to set their water rates so that sufficient revenues can be derived to met-^t their operating costs and bond debt requirements. In analyzing the water rates the total cost to the consumer must be considered. The importance of findino a means and method ot resolv- ing the monetary problems of the City Water Department dnd bringing some re^ief to City ratepayers was stressed by City Committee Members. Operations and The observation was made by Robert Watson that mergers are normally mnJer^i^ done for economic pur-oses and he asked where the District feels thFsT savings might materialize. District Manager Kubota explained that the District s proposal is intended to say that with this acquisition the District will acquire the responsibility to pay to the City the funds to meet thei»- bonded indebtedness. From an operations standpoint the proposed merger would provide more efficiency, and after an optimum operating level is attained, there could be some economy, he pointed out. Robert Watson pointed out that the CMWD was brought into operetion by the cUizens of Carlsbad and its primary objective is to deliver water to the City of Carisoad and its future annexations and that the assets of the District are considered the assets of the citizens that created it. City Manaqer Arnold pointed out that there are two types of consumers involved within the District, the residential home owners, and the major land owners and in order to reconcile these two interests, a system must be developed which is fair to both groups with a balance of taxes and water revenues. Amortization of all of the City's outstanding revenue bonds might be possible in the future through the sale of, or revenues from, the real property of the City Water Department, District Manager Kubota informed the Committee. Under the District's proposal, any capital improvements would be financed by general obligation bonds, not revenue bonds. Robert Watson called attention to the fact that while the City is try- ing to get its construction program underway, there is still about 35% of the old sys- tem that has to be replaced, the cost for which could run as high as $500,000. He also discussed the need for rehabilitation of the pumping system in the San Luis Rey Valley Wellfields and District Manager Kubota pointed out that the City has no physi- cal capability to pump water out of the wellfields into their system on a sustained operation and yet there are plans to replace the line in the City's Water Improvement Project. Robert Watson stated that he does not see any particular relief in the City of Carlsbad's water structure to take care of these facilities and the City is facing a deficit this year in their water operation. Legal Counsel Swirsky offered the following suggested proposals for inclusion in the Agreement on the basis of the discuss-'ions: (1) Since the District has to take over all employees and equipment, it is impossible to ascertain at this time if these costs can be reduced or if additional revenues will be required. There could be included in the Agreement that there would be no increase in rates for the City without the City Council's approval. (2) Water District would also make a commitment that there would be no further capital improvements except by general obligation bonds. From the taxpayer's standpoint, the general obligation bonds would give them a lesser interest rate and would be included with their tax bill. This would also give them a two-thirds vote re- quirement for passage. (3) With regard to the water rate point, he explained that the only commitment the District could legally and practically make at this moment would be that if the revenue bond requirements are reduced, then the savings would be passed on to the consumer. Capital Improvements The question was brought up as to where the funds would be sought by the District under this proposal to bring the older part of the City's sys- tem to an operating condition. General Manager Kubota suggested that a solution might be found so that the City's revenue bonds could oe paid off and perhaps some type of improvement district could be formed. Under this type of bonding, considerable tax revenues would be derived from real property and Public Utility rroperty sucn as the San Diego Gas and Electric, Pacific Telephone and other large facilities who do not contribute to the Water Department operation under the revenue bond program The Dossibility of the sale of some of the Water Department property was also suggested as a means of paying off the bonds. Water Billing and District Auditor James Gaiser reported there appears to be no AccountTng Programs problems in the District taking over the billing and accounting functions. Since the City Finance Director feels there is enough need for the NCR 'iOO accounting machine within the City's other functions, this equipment would not be in- cluded in the operating agreement and some other type of billing progr-am would be in- stituted, he explained. Provisions for the billing and collection of the City's sewer charge will also need to be incorporated in the agreement, and also charges for the refuse operation if it is taken over by the City. A target date for take-over was discussed at length and it was decided on a tentative date of January 1, 1972. This would allow time to work out any problems and for pub- lic relations with the ratepayers and, further, would not interfere with the respect- ive budget programs. Preservation of Robert Watson pointed out that the City has certain obligations to Water Rights the San Luis Rey Valley wellfields in order to preserve the water rights held by the Water Department and these would have to be incorporated into the Agreement. District Manager Kubota in discussing the City's facilities in that area suggested that the most economical solution would be for the City of Carlsbad to make a deal with the City of Oceanside whereby Carlsbad would pump the water from the wells into the Oceanside system and pay them for treatment and transportation. Under this arrangement the need for the facility which Carlsbad has between the City and San Luis Rey would be completely eliminated. Proposed Tri-City The proposed Tri-City Pipeline which the District now has under Pipe!ine study was discussed and the District Manager explained that there will be three agencies involved, Vista Irrigation District, the City of Oceanside and the CMWD, sharing in a common facility to be used for transporting the filtered water supply coming into the area. After further discussion, it was decided that the District's Legal Counsel should work out a draft of a formal operating agreement, incorporating the points discussed here, and submit it to Committee Members for review. Legal Counsel Swirsky indicated that a draft could be worked out within a week, and awaiting the completion of this material, the next meeting date of the Committee was left open. The meeting was declared adjourned at 10:40 A.M. Respectfully submitted.