HomeMy WebLinkAbout1957-10-02; Municipal Water District; MinutesIJrrWTES OF A RXGULAR PEETIXG OF %E SOAPJ OF DI?&CTORS OF TI3 CARLS2A.D 'NJI?TICIPAL XAmR
DISTRICT HELD AT '7:3 P.M., OCTOBER 2, 1957, AT 2%0 PI0 PIC0 DRIVE, CA_;ILSBAD, CALIFOXKC,
The meeting was called to order by President Fry, Directors present: Ewald, Fry, Kelly
Fiogers, Greek; &sent: none. Also present were Attorney ,Swirsky, Engineers Short, Clay
ton and Kuk& (Boyle Engineering) Dick Carboneau (3lade-Tribune) , Joe Heredia (Carlsbad
Journal) , John C. Lyman, Donald B. Ayers, Carroll Kelly, Mrs. iqalter F. Schuyler, D. II.
Wiegand, Stewart White, P. A. Horton, Col. Harry Price, L. V. Hastings, Executive Sec-
retary A. Stephens iawrie, et 61.
The hearing on the proposed Improvement District No. 2 as set for this time (7:g P.M.)
was declared open by President Fry. Resolution 80. 64 declaring intention to change
the boundaries of said proposed improvernent District and fixing the time and place for
hearing was read by Executive Secretary -4. Stephens Lowrie.
Secretary Ewald stated that the maps on display had been on file and available for exam-
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ination. On display were Xxhibits flA-lll, 77A-2" and rrA-31f (as presented at the hearing
held on September 4, 1957) which the Secretary stslted had been on file since July 31, 19
and a map indicating Exception 130. 1 as ordered by the Eoard of Directors on September 4 1957: this map, the Secretary stated, had been on file and available for inspection
since September 16, 1957; said nap was marked Zxhibit "Gf'.
The Secretary then stated that the revised legal description, marked Exhibit llIitl had
been on file and available for inspection since September 16, 1957.
An affidavit of publication of Resolution No. 64 in the Carlsbad Journal on September 19 1957 was presented and marked Zxhibit 7T.
An affidavit of posting of Eesolution No. 64 (in six public places within the proposed
Iqrovement District) on Septeinber 19, 1957 by Secretary Ewald and Executive Secretary
Lowrie was presented an^ marked Exhibit !'P.
Secretary Ewald then administered the oath to Engineers Donald Short and Les Clayton. I Engineer Short stated the follotring:
Engineers He outlined the background of the movement to secure water within the pro-
Statement posed Improvement District stating that at least two years ago the land
him for assistance. They had also employed t'ne firm of Jennings, Engstrmd &: Henrickson
Attorneys, for legal advice. Several meetings of the land owners involved were held
during which various solutions were considered. A number of alternatives were discussed
After months of study it was agreed that an IEprovement District would best serve the
interests of all areas within CXdD. Other methods which had been considered and re-
owners of this area were seeking a solution to the problem ad h2d come to
jected were: formation of a Phixal or private water company and three other types of
public agencies as follows: County Water District, Community Services District; and
because a private agency would suffer from the relatively high level of taxation tJhich " annexatioE to the City of Carlsbad. The bprovement District was selected over these
would not have to be borne by a public agency. A privete utility would require provi-
sion for profit and for franchise taxes, etc.,as well as costs of supervision by the
Public Utilities Commission.
Sh.ort pointed out that in the event the impovement District is not formed, the owners
of land within the proposed District would have to reconsider the other alternatives.
He noted that of the pu.blic agencies, the first considered was the County Water District,
This he said has the advantaqe of being 2ble to ~"11pd~ waCm service and can also fwrnisl sewer and fire protection services. The disadvmtage lies in the fact that it would
create another separate agency with a separate governing board within the boundaries
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- I of the CMLJD.
The next type considered was the Corn-nity Services District which is virtually the same
as the County ?dater District except that it has the disadvantage of boDding limitations
b~ assessed valuation. Its advantage is that it can provide &y type of Gicipal ser-
vice and would virtually constitute a city without incorporation.
The last alternative -- annexation to the city of Carlsbad -- was rejected bewuse the
property owners felt that the remoteness fronthe currently developed area would create a
space problem with resultant problems regzrding the providing of services. $ch a solu-
tion, it was felt, should logically wait until development had reached a more advanced
state .
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Short stated tnat the individxals in\-olved realize they must pay all of the cost. He
seid that they feel that by maintaining service in this area under the direct super-
vision of the Cbrm Ebard a greater degree of munity will be achieved and better regu-
lation and planning would result.
Engineer I Clayton recapped the action taken aTter the property owners of the proposed
district requested the Board of CWil to consider formation of an Improvement District.
He stated that his firm (Boyle Engineering) had been enployed by the Board to submit a
report on the feasibility of water distribution in this area of approximately 8,500
acres. Representatives of his firm consulted with a comztttee of the property owners
of the area and evolved a plan for F distribu+ion syskern to Cover the ultimate needs o:
the area. The initial storage ctlpacity provided for in the pl~m is on the order of
(Exhibit 'r'A-.3r7) is designed to reach as my of the individual properties as possible
and conforms in general to the Ifaster Flan adopted by the C"D insofar as development
of water transmission facilities are concerned. The cost, based on present day prices
is estimated at $726,100 .OO . The assessed valuation is approximately $300,000 .OO .
With that in mind a step system was evolved. The first step as outlined by the map
mked Exhibit "A-1" would be the main distribution line traversing the center of tb
proposed district. The cost of this step, based cpon present day prices, is estimated
to be $332,430 plus an added contingency factor of $17,600. Clayton noted th&t the
contingency item is not ear-mrked at the ncment but could be used to pay the first
year's interest on the bond issue.
The second step as outlined on the map marked Exhibit lTA-2", Clayton said, involves
the extension lines from the main distribution spine at an overall estimated cost,
at present day prices, of $591,600.00 with a contingency factor of $108,400. This
step of which involves an additional $350,000.00 at the tine it is built.
The third and final step bringing the total estimated cost to $'726,lt30.00 1srith a
contingency -factor of $173,900 -00 or an ovsrall bond issue of $90,000 wodd cost
$230,000 .OO. Clayton said that in cutting the system, the pipe lengths had. been re-
duced but not the pipe cayacity. He said thzt he believes the system as designed is
adequate for the ultimate needs of t'ne area as it is seen today and. that it would
benefit the entire area.
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/ one-half the ultimate storage needs. The system as proposed and outlined by the map
would represent the total bonded debt for completion of steps one and two, the second
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Director Rogers asked Engineer Short what experience he has had with ccnstruction of
similar systems. Short replied that he has had experience with the Foway 14~~~ wh.ich
financed an Improvement District System about l$- yems ago which cost $155,000.00 to
serve an area then' assessed at $9,000 .OO. ' The current assessed valuation, he pointed
out, is 2bout $l50,000.00. To date, he said, the project has been very successful
and there is a bond reserve fund sufficient to pay next year's bond amortization costs
Short added that he htis had experience in engineering and the financial matters in-
volved with a number of zgencies in Sa Diego md Riverside Counties; he nmed the
Eastern "I (Hemet) as an exaL:Dle,
Director Bwald asked Short if he Is privately eraployed by anyone in the area involved.
Short stated that he is not e:z$oyed by zny individual or group of individuals from
tFis arez. ifirector Ehald then asked when the Foway bonds were sold, Short said they
had been sold in April of 1956. Zwald then a&ed if the bonds were sold readily.
Short stated that they had not because of the low assessed valuation and tbat a nego-
tiated sale had become necessary, Ewald asked if the same could be done in the case
of the currently pro2osed district. Short stated t'ne opinion that it could adding
that this, of course, is no guarantee.
In response to a question by Director Rogers, Short said he is the mager for the
Poway MEl. Rogers then asked what effect the formation of the improvement District
had had on the land values. Short said he is not acquainted with the details of land
values but said he hew of one instance in which a seventeen acre undeveloped, steep
and rocky site with one buildhg had been sold at an announced price or" $Q,OOO a
month after it had been placed on the market. Iie added that he bel-ieves there is no
to be expected and an even greater increase in the assessed valuation 8s soon 2s water
is made available.
Director C&ld asked about the present tax rate in the Poway District. Shor-ii said he
believes it is $1.48 per $100.00 for the entire II),€DO acres. 3e said the tax rate
the first ixo years YZS $1.00 and a deficit had a.ccumulated. The third year the tax
question that in %n Diego Couslty there is a tremendous increase in red estate vdues
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rate was set a% $2.48 which erased the deficit and provided a small operating surplus
which enabled the District to reduce the tax this year.
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Short then reported that he had conferred, as authorized by this Board, with Pfr. %ffe:
of Schwabcher & Co. , and that Mr. Rzfferty h2d said he would be unable to attend this
meeting. lSafferty had stated that he would submit a letter to this Board with his re-
commendations.
The letter from Schwabcher & Company, signed by James W. Guerin, was ordered read. It
stated that "over a period of years, lands witlnin Improvement District No. 2 will be
substantially imporved both residentially and agriculturally so that the bonds issued
to bring t~zter into the area will eventually be good grgde, readily rmdcetable see- urities .
"At this stage it is ow considered opinion that the geRera.1 bond market ... cannot be
expected to provide funds for the $?30,000 proposed total improvement nor for the
initial stage of development estimated roughly at one-third thereof.
Vonsequently, financing such a program at this time probably can be accomplished only
of yow local investors . . . are willing to pvrchzse all of the bonds in expectation of
being able to liquidate them in the general bood narket when the assessed valuation of
the Improvernent District Eo. 2 has been substantially increased."
The lettbr, under date of September 27, 1957, was marked Exhibit *W.
Director Rogers asked who had purchased the Poway bonds. Engineer Short said they had
been purchased 'by individual imestors and that the fact that bids are not received
does not mean the bo~.ds are not saleable. Ee said that in the Foway case the sub-
scribers put up about one-third of the noney. Director Ewald Said thst in h3.s talk
wi+h Mr. €?a.fferty he had been told that probably the only way to sell the bonds would
5e to those vitally concerned with t'ne project.
I A letter from P. A. Xorton, under date of September 14, 1957, requesting exclusion of
certain territory from the proposed District as illustrzted 3y an accompanying map was
presented. The Letter was designated as Exhibit trLlll; the ,map as Sxhibit r1L2t'.
Mr. Horton was icvited to give an oral statement. He stated that his situation is
different from thzt of myone else in the proposed District in that his property
adjoins the City of Carlsbad and also the Tnddstrial- Development property of C, D.
McClellan which is to be arlnexed to t3e City. IIe said it is expcted that the source c
water for the Indvlstkial r)evelopnent would be available to him also and that the
CNNil as a whole would benefit if bLs larrd were excluded from the proposed Iraprovernent
District since it is ready for development right now if water is brought to the proper4
President Fry asked if 1%. Horton had known of the first hearing. Horton said he had
not received word of it in tine to be present, The Zxecutive Secretary checked the records which indicated that, although not requlred '03- law, notification had been sent to the Horton home, and all property owners withia %he proposed improvement district,
well in advance of the first hearing.
Director Zogers asked KT. Horton what other arrangements had been made to obtain water,
Horton said -toat in addition to usea'ole water on the land, arrangeEents were being
made witn the City of Cmlsbad with the understm-ding that he (Eorton) would finance
tie project.
Engineer Short pointed out that because his land iJoUld be in the Iaprovement District
he woad not 5e stopped fron partieipating in some other progrm as well. iiorton state
that he is not interested in paying twice for his water.
President Fry called for oral comunications. Carroll Kelly said the five members of
his advisory connittee wished to continue the project as soon as possible. Director
Ewald asked if the gr0d-p is ready to finance the sale of the bonds. Kelly said that
they wished to place the bonds on the mket first and if that fails they would try
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to negotiate a sale,
Nr. Apes stated that the comxittee has given much thought to the problem and that it
is unders'cood that with the market as it is today there will be difficulty il selling
the bonds, but 'the assessed valuation is never going to rise appreciably uti1 water
is on the land. He questioned the colicern of the City of Carlsbad as long as those
involved are willing to pay their vzy.
Director Ewald said his concern has no connection with the City and that his action is as a member of the Clb%JD Board. He said he feels it is the duty of Boerd members to @e Sure 'its Ir_on-jes are snent. nrnner7v 2nd 3s A Rnsr? mnmham ;f ha CPD~ nnn.*.nen+.qn
difficulty he is obliged ko point out the fact.
The Horton -, ..-, , request -... __ was reviewed and each Board member stated his position with regard
thereto:
Director %ald stated that in view of the fact that the Board had already excluded the
area adjacent to that of Nr. Horton because it had mde other arrangements for water
there is no logical reason to deny Mr. FIorton's request.
Director Kelly said he feels that the hearing was advertised su-fficiently in advance
and tlie fact that lire Eorton did not get to the first hearing is not this Board's
fault. He said further that he does not see how tkis can actually hurt ?Ir. Horton's
interest since Horton does not actually how he has a source of water from anywhere
except that which exists on his own land. If this is allowed, Kelly said, similar
requests could hold up the proceedings indefinitely.
Director Rogers announced that he is opposed to granting the exclusion because it would
delay the proceedings. He reminded Mr. Horton that this Board had turned down a reques-1
for exclusion of 1,000 acres at its last hearing.
Director Greek reiterated his forner stand that such exclusions should not be permitted.
Director Fry pointed out again that Mr. Horton had had ample time to protest at the
earlier he wing .
No action was taken on the Horton request.
On motion of Director Rogers, seconded by Director Ewald, and unanimously carried, the
sary bonding counsel and -to draw the Resolutions forming the Improvement District and
calling for an election, said Resolutions to be Fresented on the 16th day of October, 1957, at 7:30 P.M. to wsch d8te and time this hearing was to be zdjourned.
Director Ewald, wishing to clarify his stand, said that in view of the circ-xnstances
he felt it was justifiable to look over t'ne plms carefully in advance. Ee said his
only interest was to be sure that all are aware of what they are getting into and what
costs are involved. He szid that nany times after a tax bill is received there is
dissatisfaction and it is,the responsibility of the Eowd to see to it that these
things we made clear in advance.
President Fry then stated the public 'nearing on the proposed Improvement District
adjourned to 7:30 P.M., October 16, 1957 at Calsbad City Hall.
President Fry declared a five minute recess.
The Ea rd reconvened Et 9:O 5 P.M. and roll ea11 showed t'ne following Directors present:
Ewald, Pry, Kelly, Rogers, Greek. Absent: none.
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Attorney was authorized to negotiate with the firm of O?lelveny & Myers Tom, the neces-
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A discussion regarding the release of publicity ensued and the President asked that
the Publicity Cofiaittee, headed by Director Ewald, neet to discuss policy with regard
to news releases,
The minutes of September 4, 1957 and September 16, 1957 were held pending study by the
bonding attorneys before final approval.
CORmSPONDEMCE :
1. California TIJater Council - Pmouncement of l4th annual meeting to be held in fiesno Oct. 18. I 2. Irrigation Districts Association, 9-26-57 -- Announcement of Long Beach Convention,
Decenber 11-13, 1957. On motion or" Director l%gers, seconded by Director Ewald, such
Directors as are, able to attend and the Executive Secretary wsre authorized to attend
this convention,
3. Don't Waste Water Comzittee, %a-57 -- Water consumption data for the first 8 nonth
(1956-57), and conparative lwater use data for the City of Xan Diego.
4. Binbow E, ?-1?-57 -- Acknowledging CMND'S letter of 8-23-57 re loa of surplus
water.
5. Stop Notices frm Einer Brothers, received 9-21-57 (Hallmark -^-I & Nutual Pipeline).
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The attorney reported that the stop notices were in order. The Executive Secretary
stated th.at in accordance with thg advise of the engineer (Short) and attorney,
monies had been withheld to cover the claims indicated by the notices md that in
addition, $5,000.00 had been xithheld from the final payment to HalLiark Construction
Company because certain work has not yet been completeci. Engineer Short steted that
the system is operating satisfactorily from a hydraulic standpoint. He said there
has been some diff0iculty vith the autopatic control equipment and that the manu- facturer bas encountered difficulties in mother instzllation also but assures the
District that the system will be maintained at no expense to the District until the
problems are all worked act.
6. Courty of Sm Diego , Qr17-57 -- Asking for the outline of projects planned for
tbe 1957-58 fiscal gear which would reqcire excava%ion within County roads or streets.
Director Ewald suggksted that the Couniy be nctified about Improvement District Eo. 2
and. that the Airport easemeEts be checked wlr,ere they cross the road. On rgotion of
Director Rogers, seconded by Director Kelly, the englneer was instructed to answer
the letter.
7. Frank B. ,Wth, 9-30-57 -- Answering CIJD1s letter of Qra-57 and asking further
clarification. Director Rogers, chairman of the water problems conettee agreed to work out an answer to the letter.
8. San Diego Com.ty liater Authority: a, 9-20-57 -- Announcing meeting of 926-57 to discuss methods by which the
quantity of water delivered for agricultural ilses rnigh.t be detern-Lned.
Secretary was instructed to thank Xr. Wood for having participated in that Iceeting
and the report was ordered turned over to the Water Problems Con-xiittee.
c. 9-30-57 -- Re distribution Gf surplus water to deficient agencies and
asking for expression from CMKD Board. On motion of Director Rogers, seconded by
Director Greek, it was agreed that the Board should concur in the recommendations
of the Authority an to so notify the ku.thority.
b. 2eport of W. Dennis Mood who attended the aforementioned meeting. The
I Itinton The Attorney anrzomced that the Eoard has until Cktober 23, 1957 to answer
Damsite the protestants against the building of a dm at t'ne Isinton site. Director
' meet with said Protestants on Xonday October Uth, at 3:OO P.M. with a view to ironing.
out amy misunderstandings. The Secretary was instructed to send notices to all parties
concerned.
Ilogers announced that the Water Problem ComLttee would be available to
Attorney The payment of :dm. Dennis in full to d.ate of notification of terdnation
Dennis of his services was ordered.
Eoyle Engineer Short announced that there would be a refund to the District for
Refund over-payment on services in comection with Improvement District No. 1
in view of the fact that some of the costs had been less than estimated.
Treasurer's The Treasurer's report indicating adjusted balances, as of September 3,
rZeport 1957, of $16,@1.02 in the General Fund, and $47,059.32 in the Improve-
seconded by Director Greek, with the notation that the known outstanding bills against
Improvement District No. 1 actually reduce that balance to $31, 950.57.
Bills Checks go. 1948-1986 were approved on motion of Director Ewald, seconded
Approved by Director Rogers with approval also being granted for issuance of checks
ment District No. 1 Fund, was approved on motion of Director Rogers,
#1%7 (Carlsbad Jourmal) , and 1988 (San Marcos County Water District).
Director Rogers requested copies of the krilling to the ktual Wa.ter Company.
Director Rogers agreed to discuss with W. Dennis Wood the possibility of an early meet-
ing of the Advisory Committee for Improvement District go, 1,
On motion of Erector Rogers, seconded by Director Greek, the meeting wzs adjourned to
7:30 P.M. , October 16, 1957.
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JqpAJ,,<
President of e Board o irectors
CARLSAD IEJ~ IPaL WATE DISTRICT
ATTEST: Ti,
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