HomeMy WebLinkAbout1955-06-08; Municipal Water District; Minutes576
-There was some discussion of the subject, Mr. Trygg suggesting
that it would be desirable if the Mutual Directors would
receive copies of the Municipal's Engineering Report in order
that they might have the chance to study it.
e Director Director Anthony then left the meeting. Anthony
Meeting President Ingels stated that he felt the Adjourned to June 8th Directors should get together again on June
8th after they have had time to study the
Municipal's Engineering Report, The meeting was therefore
adjourned until June 8, 1955 at 9:OO A. M. p& :7+;/T/
7 L.' 7 e/
ecretary
MINUTES OF THE ADJOURNED SPECIAL MEETING of the
of. the BOARD OF DIRECTORS
CARLSBAD MUTUAL WATER COMPANY
Adjourned The adjourned special meeting of the Board of Special Meeting * Directors of the Carlsbad Mutual Water Comp3ny June 8, 1955 was held in the office of the Company in the
City of Carlsbad, County of San Diego, State of California,
on Wednesday, June 8, 1955 at 9:OO A. M.
Directors C. H. Ingels R. R. Robinson Present W. W. Rogers + C. A. Anthony Arnold Brilhart
Also present were C. E, Trygg, Secretary-Manager and Maribee
Balcom, stenographer.
President Ingels called the meeting to order
at 9:05, stating that this was the adjournment of the ;Special
Meeting of May 27th.
?!
Letter from Assemblyman Sheridan H Hegland re Correspondencc bills in Legislation
Letter from Fallbrook Public Utility District stating no diversion from San Luis Rey for the month of April.
Letter from Carlsbad Union School District dated May 20, asking an extension of time over the due date of water bills and that the penalty be waived, due to the time required in processing warrants,
Director Rogers moved, seconded by Director Anthony and
carried unanimously:
BE IT ORDERED that the penalty be 55 - 87 waived on all water bills €or public or quasi-public organizations that pay bills by warrant, providing payment is received within a reasonable Length sf time,
Letter from Escondido Mutual Water Company regarding rate increases
Letter from LaMesa, Lemon Grove 8, Spring Valley Irr. District regarding increases in electric rates,
The Manager presented the laboratory reports of Laboratory Reports Dr. Carl Wilson and stated that the reports indicate
insufficient chlorine in parts of the system. It is impossible,
with the present facilities, to provide sufficient chlorination
at these points,
The Manager stated that we h.av e had a standard Meters and Services price for water meters which was established in 1953,
The price of meters has been increased two or three times
since then and our prices no longer cover the cost of the meter
and the cost of its installation,
Director Rogers said he does; not think the rates should be
raised until we start to use some of the new meters, The Manager
stated that the new subdivisions and also new individual dwell-
ings would require new 5/8" meters. The Directors then instructed
the Manager to work out a new sc:hedule of meter charges and present
it to the Board at the next meeting.
Pr.3 if k
Finances The Manager read letters from Occidental Life
Insurance Company and Percy H. Goodwin Company,
the latter containing forms to be filled out.
T. Bruce Smith then entered the meeting.
Finances 3 The Manager reported that he had gone to Los Continued Angeles on June 1st for consultation with
Wagenseller & Durst. He talked to their Mr. Field, who thought
he could definitely find someone that is interested in the water
company to the extent of a $500,000 loan. He..wants several
statements from us which are standard. He is thinking in terms
of 5% interest and a finders' fee of 2% total, plus necessary
legal fees, The report by Mr, Browning is sufficient for them
as far as the engineering report is concerned.
They are definitely concerned, however, as to what is going
to happen to the Mutual. Is it going to stay as it is, is it
going to be taken over by the Municipal, or is it going to merge
with Terramar? He has received our financial statements for the
past four or five years. Under present conditions, they would
favor an expanded Mutual because a Mutual can assess to make up
any deficit in operating expenses, His fee of 2" applies only
if the loan is successful. If there is no loan, there is no
finders' fee,
The Manager also presented a Letter from Lindley, Lazar &
Scales, attorney for Security Trust i3 Savings Bank of San Diego.
The Security Bank will make a loan of $75,000 or $80,000',, provided
they are given a complete chattel mortgage on the Company.
Director Robinson said that-he could not see much value in
such a loan,
Director Anthony stated that he could not see paying 5%
!
on money when you can get it by assessment,
Director Rogers said that i:F the Directors wanted to "kill"
the bond issue, to just go ahead and put out -an assessment.
When Director Robinson suggested that from what comments he
had heard, the bond issue might *.be difficult to pass, Director
Rogers said that it was a question of education for the public.
Director Robinson then said that to face the situation fron;
a realistic standpoint, we have a political consideration of
which we must be aware. It is a definite problem and one of
the pressing things in it is whether this Company is going to
continue to exist, If we are going to sell it out to somebody
else, we wouldn't have to have a heavy loan. Obviously the bond
issue is not going to carry unless the people who fought for
the Municipal Water District are going to be willing to go out
and hustle for the bond issue.
Director Anthony stated tha.t it made no difference to him
who owns this Company; it is going to cost money to put it on
its feet, no matter who owns it;.
Director Rogers said that from the standpoint of the
Municipal, if the Municipal takes it over at all it would have
to be done as an Improvement District. That Improvement District
would have to be financed, whatever is going to be done.
Director Robinson stated that he is fairly well convinced
in his mind that water should be operated by only one concern,
He thinks the Municipal should 'buy out the Mutual, so there
will be only one organization. But-the Board of Directors has a
problem now of trying to opera-te this Company and they cannot do
it unless they come to some decision about what its future is to be.
'F; c -J Q $!<
Director Rogers said that he thought the Board would admit
that the Mutual does not have enough water under its own right
to serve the Community, The first question is how we are going
to get the water to serve the Community, There is no other reason-
able suggestion than the bond issue., He thinks he can prove to
any reasonable person that there is no alternative. When the bond
is passed, the Board would be in a better position to decide what
to do about the Mutual. He also said that if the bond issue is
defeated, it will be more serious to the Mutual area than to the
outside, The parties outside have enough assessed valuation so
they can build their own line, and then what is Carlsbad going to
do? Director Rogers said he is sure with the proper presentation
of the problem to the people, they will see the light.
Director Anthony stated that he wanted Colorado River water
here for a longer time than most people, but he does want to see
the Mutual on its feet until such time as it is taken over,
Director Rogers said he thinks the Board should go ahea.d and
get the loan from the Security until they see what is going; to
happen. There is no way to get water other than to build the
pipeline ,
Director Robinson inquired about connecting on the Oceanside-
Fallbrook lateral.
Director Rogers replied that he had asked the Water Authority
for definite information as to what would happen if we requested
permission to connect with that line. That is, if we do connect,
whether the line would also be available to other agencies such
as Vista, Rainbow.and other proposed districts, If the water in
that line is divided, there will not be enough for anybody., He
further stated that Oceanside certainly would not sign any contract
with US if we-were planning to take water out of their line.
The Manager said that the water consumption was Water Consumption down about one third in May, The revenue was almost
identical with April, due to the rate increase.
!< .
Oirector Robinson said that he felt this loan Finances, Continued should be given some business consideration, Is it
better to make a loan on what would be considered poor business
judgment, or make an assessment? Getting water is the most vital
matter we have, But how can we get the money and still justify
our position, both as to business and also for the best interests
sf the people and of the political ang:Le? If an'assessment is
really going to hinder the passage of the bond issue, it should
not be made,
Director Rogers said that the Municipal will make a final
decision at their meeting on July 7th and call an election. The
decision will be upon the amount and the date of the election.
The Municipal Board has voted unanimously to build the pipeline.
They voted four to one to ask for funds for the reservoir. If
The Municipal builds this pipeline, they will sell water to any-
body that wants it until the District needs the entire capacity
for itself,
Director Brilhart stated that it is not going to do any good
to borrow $75,000 from the Security Bank. We need at least
$100,000 if we are going to get an interim loan, He said he
did not think it good business to pay 5% and give the Bank a-chattel
mortgage.
Director Rogers said he claims it is not right to ask the
shareholders to support the Mutual,
Director Brilhart stated that he would rather have an assess-
!y?" 4 "3
ment than to pay 5% for the loan, The Bank has security when
they lend money to a Mutual Water Company because the shareholders
may be assessed, Director Brilhart said he does not think that
the suggested Security Bank plan is a good deal for the organiz-
ation, There should be at least $100,000, and he certainly
would not transfer all of our assets to the Bank for a laan even
of that amount,
Director Robinson said that if we are endangering the rights
of the Mutual Water Company, we should certainly do something
about it right now.
Director Rogers said he thought the Board should say that we
are willing to sell this Company at a price and request that an
Improvement District be included in the proposed bond election
to raise the necessary funds to buy the Mutual, At the election,
we would have two propositions:
1st: Shall we build a pipeline at a cost of $2,000,000.00?
2nd: Shall an Improvement District be formed north of Hedionda
Lagoon to buy the assets of the Mutual?
The next two questions are:
1st: What will it cost?
2nd: Who will operate it?
The Mutual could continue to be operated under some sort of a
lease arrangement as the Improvement District is not an operating
agency. The big advantage is that YOU would immediately get off
the tax rolls and would be able to get money at 3% instead of
5% *
Director Rogers continued, saying that he would go along with
a recommendation to the Municipal that this Board favoTs an
Improvement District to buy out the Mutual and perform the
necessary rehabilitation of the facilities, to be operated as
later decided. He said one of the things that should be done
first is that steps should be taken now to determine a price
at which the Mutual might be purchased, Probably the best
organization to get that price would be the Public Utility
Commission.
Director Rogers moved, seconded by Director Robinson and
carried unanimously:
BE If ORDERED that Attorney T, Bruce Smith be 55-E8 requested to take immediate steps to find out whether the Public Utility Commission would under- take a valuation survey of the Carlsbad Mutual Water Company and what the cost would be,
President Ingels said that a lot of people felt that we
should get the water-first and then determine what to do with
the Mutual. He asked what would happen if we did not get the
bond issueo saying also that if too many things were put into
the bond issue, it would defeat it,
Director Rogers said he would like to see the Board go
ahead with this Security loan and would also like to have the
Board suggest to the Municipal. that we would consider selling
it if an Improvement District is formed, If we put it in this
bond issue, the decision would have to be made by the 7th of
July. It will take at least a year to hold the bond election
and complete the engineering and building of the pipeline,
Director Brilhart said he does not think the Board should
go ahead with this loan. He said he would not care to accept
a loan of $75,000 at 576 because it doesn't do anything for the
5 9 tr) ci. &..$
Company, He feels we could get lower interest on a secured
loan. Also the security should be either fixed assets or
current assets, but not both.
Director Rogers moved, seconded by Director Robinson and
carried unanimously:
55 "0 89 BE IT ORDERED that the Security Bank be asked to prepare a proposal for a loan of $80,000; and BE IT FURTHER ORDERED that they be asked for a lower rate of interest, preferably no higher than 4% in view of the fact that it will be a secured loan; and also that they include no personal property as security; and BE IT ALSO ORDERED that the formal approval of the Board of Directors be obtained before any loan is consummated,
Director Robinson moved, seconded by Director Anthony and
carried unanimously:
55-90 BE IT ORDERED that Attorney T, Bruce Smith be
requested to write a letter in answer to the letter of February 26, 1955 from the Carlsbad Municipal Water District, stating that we are asking the Public Utility Commission whether they will make a valuation study of the Carlsbad Mutual Water Company and what such study would cost; and BE IT FURTHER ORDERED that the letter also request that the Municipal consider an Improve- ment District to provide funds to purchase and rehabilitate the Mutual, subject to the approval of the shareholders, this being in line with the recommendations of the Citizens Water Problems Committee,-which was instigated by the Mutual Water Company.
Director Rogers suggested that letters be written to the
loaning agencies which we have contacted, stating that in view
of decisions now being reached as to Construction of Pipelines,
that we propose to delay action On financing for approximately
sixty days.
The Manager reported on the delinquent assess- Delinquent
Assessments ments that there would probably be only two left unpaid
by the 17th of June. Director Eiogers moved, seconded by Director
Robinson and carried unanimously:
BE IT ORDERED that on June 17, 1955, 53-91 all deli nquent stock on which the assessments have not been paid be sold in the regilar manner,
The Manager reported that the pump in the South San Luis Rey
Yard well had been pulled and we had Sound 67 or 68 feet
of sand in it, which was baled out. tVe checked the East
River well and .found that we could not switch the pumps. In
the meantime, the water from San Luis Rey contains about 230 ppm
of chlorides at the present.
The Manager stated that we have a Letter from Aka New Well
Thiele stating that he will check the ground water re-
sources we have in Section 18 for approximately $2500, plus
traveling and other expenses. The DLrectors recommended no
action on the new well at this time.
Attorney Smith reported on the conversion of sea Sea 'dlbater
Conversion water. He talked with Mr. Noble of the Sari Diego Gas
& Electric Company about the fact that our region might offer
a desirable location. Mr . Noble indicated, but not officially,
that the Gas Company would be very happy to allow a Conversion
Plant on their property and that it might be possible to secure
a lease at no cost on the necessary property. A proposal would
have to be made to the Gas Company in order that they might take
official action upon it.
Mr. Buzz Garland of the Carlsbad Journal then entered the meeting.
5 p f3 G ",r
New Director Rogers inquired whether the Board is Proposed Pipeline going along on building the pipeline to bring
Colorado River water to the Carlsbad Municipal
Water District.
Director Robinson said he thought the Board is definitely
going to have to act on this with a firm motion and resolution
to do something about it, but he thought we should wait until
the Municipal produces a firm figure on what they are going to do.
Contract The Directors disc.ussed the furnishing of water to with Terramar . Terramar and Mr. Cannon's objection to paying
$19.00 per acre foot for transmission. Mr. Trygg
said that Mr. Cannon had said he would he present at this I3oard
Meeting, but he did not come.
Director Rogers said that he thought the Mutual should write
the Municipal a letter stating that we propose to renew the
contract to Terramar at $19.00.
Director Robinson moved, seconded by Director Brilhart and
carried unanimously:
&q c\7 ./"7.- BE iT ORDERED that the Comp.any write a letter I to Mr. Cannon of Terramar Water Company, te:Lling him that we would like to discuss the mattelo with him; and
BE IT FURTHER ORDERED that 'the Company will continue to serve Terramar at the old rate after the expiration of the existing contract, until August 1, 1955, in order that we may negotiate suitable terms for the new contract.
Director Anthony then left the meeting,
Chlorinators The Manager reported on the need for three new
chlorinators to chlorinate our water satisfactori1.y
in view of the new contract with Oceanside which sets forth
a definite limit on the chlorine content,
Director Robinson said on the matter of the chlorinators
that we shpuld ., do as s,oon as possible what is necessary to take
care of the minimum requirements of the system, After some
further discussion, Director Robinson moved, seconded by
Director Rogers and carried unanimously:
BE IT ORDERED that the Manager is 33-93 hereby directed and instructed to purchase and ins,tall one new chlorin- ator; and
BE IT FURTHER OF,DERED that the Manager is hereby authorized to expend an additional $5,000 in addition to those funds previously authorized for the replacement of pipelines.
F-
There being no further business to come before the Board,
upon proper motion, duly seconded, the meeting was adjourned
at fl:50 A. M.
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