MWD Director Update for Fullerton Water Ratepayers

Thomas S. Babcock

Director to the Metropolitan Water District

Representing the City of Fullerton, California

August 1, 2013

To: Mayor Bruce Whitaker
Mayor Pro Tem Doug Chaffee
Council Member Greg Sebourn
Council Member Jennifer Fitzgerald
Council Member Jan Flory

Report on MWD Director activities

August 2013 Events:
• August 13, 2013 - MWD Meeting MWD HQ
• August 15, 2013 – OC Caucus meeting
• August 17, 2013 – MWD “Sustainability” Inspection Trip
• August 19, 20, 2013 – MWD Committee meetings and Board of Directors Meeting
• August 23, 2013 – Meeting with Jennifer Medina, Fullerton Engineering Dept
• August 26, 2013 – Meeting with California Avocado Commission Representatives
• August 27, 2013 – Other MWD Committee Meetings
• August 27, 2013 – Attend Mayor’s “Talk around town” to discuss MWD CRA trip in October

I have also included the August summary report of Board meetings.
Planned September 2013 Events:
• September 3, 2013 - MWD CRA Planning Meeting
• September 4, 2013 – MWDOC Joint Board Meeting
• September 5, 2013 – Orange County Caucus Meeting
• September 9, 10, 2013 – MWD Committee meetings and Board of Directors Meeting
• September 24, 2013 – Other MWD Committee Meetings

Summary Report for

The Metropolitan Water District of Southern California

Board Meetings

August 20, 2013

PUBLIC HEARING
Held a public hearing on the standby charge levy supporting Annexation No. 97 to Calleguas Municipal Water District and Metropolitan.

INDUCTION OF NEW DIRECTOR
Director Michael T. Hogan, was inducted to the Board of Directors representing the San Diego County Water Authority. DEFERRED TO SEPTEMBER (Agenda Item 5C)

COMMITTEE ASSIGNMENTS
None. (Agenda Item 5E)

TAX LEVY FOR FISCAL YEAR 2013/14
Received report on list of certified assessed valuations for fiscal year 2013/14 and tabulation of assessed valuations, percentage participation, and vote entitlement of member public agencies as of August 15, 2013. (Agenda Item 5G-1)

Adopted resolution maintaining the tax rate for fiscal year 2013/14. (Agenda Item 5G-2)

WATER PLANNING AND STEWARDSHIP COMMITTEE
Adopted the CEQA determination that the project is categorically exempt and authorized the General Manager to enter into an agreement with the San Gabriel Valley Municipal Water District consistent with the terms in Attachment 1 of the Board letter. REMOVED FROM CONSENT CALENDAR (Agenda Item 7-3)

AUDIT AND ETHICS COMMITTEE
Adopted the CEQA determination that the proposed actions are not subject to CEQA and adopted the policy principles in Attachment 1 of the Board letter; adopted the investigations procedures in Attachment 2 of the Board letter; and authorized $245,000 increase to the Ethics Department fiscal year 2013/14 budget. (Agenda Item 8-1)

FINANCE AND INSURANCE COMMITTEE
Adopted the CEQA determination that the project is not subject to CEQA and authorized the General Manager, with approval of the General Counsel, to execute a contract with CERBT to administer and invest Metropolitan’s pre-funding of OPEB benefits. (Agenda Item 8-2)

Adopted the CEQA determination that the proposed action is not subject to CEQA and authorized the General Manager to sign a nonbinding Memorandum of Understanding stating Metropolitan’s intention to pay its proportionate share of the Hoover Dam Visitors Center and the Hoover Dam Air Slots debt obligations, as approved by the General Manager and General Counsel; and authorized the General Manager to provide approximately $26 million of available cash funding from the Water Rate Stabilization Fund to repay Metropolitan’s proportionate share of the Hoover Dam Visitors Center and the Hoover Dam Air Slots debt obligations. The exact amount will be determined at the time of the repayment. (Agenda Item 8-5)

ENGINEERING AND OPERATIONS COMMITTEE
Adopted the CEQA determination that the proposed action is categorically exempt and appropriated $19.3 million; and awarded $11.11 million contract to Southern Contracting Company to construct the Stage 2 electrical upgrades at the Diemer plant. (Approp. 15380) (Agenda Item 8-3)

Adopted the CEQA determination that the proposed action has been previously addressed in the certified EIR and that no further environmental analysis or documentation is required and appropriated $5.65 million; and awarded $3,801,758 million contract to J. F. Shea Construction, Inc. for seismic upgrades to the Weymouth filter buildings. (Approp. 15369) (Agenda Item 8-4)

Adopted the CEQA determination that the action is not subject to CEQA, and adopted a Board resolution authorizing the General Manager to apply for Safe Drinking Water State Revolving Fund financing for two projects, with separate applications for: (a) the Palos Verdes Reservoir floating cover replacement, and (b) enhanced bromate control, coagulation, and filter biomass control at the Weymouth plant. (Agenda Item 8-6)

COMMUNICATIONS AND LEGISLATION COMMITTEE
Adopted the CEQA determination that the proposed action is not subject to CEQA and is categorically
exempt and authorized the General Manager to express Metropolitan’s opposition to SB 731 unless
amended as described in the Board letter. (Agenda Item 8-7)

Adopted the CEQA determination that the proposed action is not subject to CEQA and is categorically
exempt and authorized the General Manager to express Metropolitan’s opposition to AB 52 unless
amended as described in the Board letter. (Agenda Item 8-8)

CONSENT CALENDAR
In other action, the Board:
Adopted the CEQA determination that the proposed action is categorically exempt and authorized the General Manager to grant a permanent easement to San Diego Gas and Electric Company in San Diego County. (Agenda Item 7-1)

Reviewed and considered information provided in the adopted Mitigated Negative Declaration and adopted the Lead Agency’s findings related to the proposed actions and adopted resolution granting Calleguas’ request for approval of Annexation No. 97 concurrently to Calleguas and Metropolitan; established Metropolitan’s terms and conditions for the annexation in Attachment 2 of the Board letter, conditioned upon approval by Ventura Local Agency Formation Commission, and upon receipt of annexation fee of $8,149.28; and adopted resolution to impose water standby charge at a rate of $9.58 per acre, or per parcel of less than one acre, within the proposed annexation area in Attachment 3 of the Board letter. (Agenda Item 7-2)

Adopted the CEQA determination that the proposed action is categorically exempt and appropriated $610,000; authorized final design to replace the heating, ventilating, and air conditioning equipment system at Metropolitan’s Water Quality Laboratory; and authorized procurement and installation of a new chiller unit. (Approp. 15391) (Agenda Item 7-4)

Adopted the CEQA determinations that the proposed action is categorically exempt and appropriated $350,000; authorized installation of pavement at Temescal Power Plant; and authorized preliminary design of pavement repairs at the Skinner area facilities. (Approp. 15441) (Agenda Item 7-5)

Adopted the CEQA determination that the proposed action is categorically exempt and appropriated $175,000; authorized preliminary design to upgrade the surge tank system at the OC-88 Pumping Plant; and authorized preliminary design to replace a sectionalizing valve on the Santiago Lateral. (Approp. 15441) (Agenda Item 7-6)

Adopted the CEQA determination that the proposed action is not subject to CEQA and authorized agreements with AECOM, Black & Veatch, HDR Engineering, and MWH Americas, in an amount not to exceed $2 million per year each for a maximum period of five years, to provide engineering services. (Agenda Item 7-7)

OTHER MATTERS
Director Larry Dick, representing the Municipal Water District of Orange County received a 10-year
service pin. (Agenda Item 5D)

THIS INFORMATION SHOULD NOT BE CONSIDERED THE OFFICIAL MINUTES OF THE MEETING.

Board letters related to the items in this summary are generally posted in the Board Letter Archive
approximately one week after the board meeting. In order to view them and their attachments, please
copy and paste the following into your browser http://edmsidm.mwdh2o.com/idmweb/home.asp

Water Rate Study Ad Hoc Committee Update

The new conference center at the Main Branch Library was full of City Council candidates.  Also in the back row was Councilman Don Bankhead, who I am running to replace should voters recall him on June 5.  

Thank you to everyone who took time out of their lives to join me at the meeting.  The discussion was lively and comments were appreciated.

There seems to be two camps brewing, though it may still be too early to know.  One position is that any rent-back of City-owned property to the City is illogical and amounts to a double tax.  The other position is that some rent-back is justified.  

I'm of the opinion that we (taxpayers and ratepayers) have already paid for these facilities and that renting them back to the City is wrong and amounts to a double tax.  

With so much material to review and interesting comments by all, no action was taken by the committee.  The transfer study will be further discussed in a couple of weeks along with possible recommendations to the City Council on what to do with the surplus cash from overcharges to ratepayers.

Also, I asked that we place on the agenda discussion and, possibly, a vote on recommending that the City completely forgo any transfers to the General Fund until an audit of the fund is complete.   Speaking of audits, the transfer study was not an audit by any stretch of the imagination.  Therefore, an audit of the General Fund is necessary. 

Stay tuned for more information in coming days...

Water Rate Hike Hearing...Will you be heard?

Tonight the Fullerton City Council will take up, among many issues, water rate hikes.

I oppose the so-called "pass-through" rate increase for a few reasons.

First, the pass-through is supposed to pass along rate increases imposed on Fullerton by the Metropolitan Water District (MWD) and the Orange County Water District (OCWD).  Fullerton passes the increase to YOU 6 MONTHS BEFORE MWD or OCWD actually increase their rates.  If it isn't illegal, it should be.  At the very least, it is unethical.

Second, the MWD is neck deep in a law suit by the San Diego County Water Authority which is alleging that MWD staff together with some of the staff of MWD's member agencies (like Fullerton) have created a "Secret Society" that meets behind closed doors to develop policies and manipulate water rate increases.  

Third, the MWD is raising their rates to help cover $6,000 bonuses for ALL employees, raises that will amount to nearly 6%, and two new pay grades.  And for those who will think I'm picking on the poor defenseless public employee, let me remind you that all public employees work for ratepayers/taxpayers.  These bonuses and raises are being pushed onto water consumers without their input or approval.  The increases are coming in the midst of the worst economic disaster since the Great Depression.

Water is not like any other commodity.  We have no choice which water agency hooks up to our water meters.  It is of the greatest importance that those services which have monopolies over taxpayers are regulated sufficiently to ensure that they are free of corruption and malfeasance.  Taxpayers must be assured that they are receiving the highest level of service at a reasonable and sustainable rate.

Please attend the City Council meeting at 6:30PM at City Hall.  

MARK YOUR CALENDAR - Water Rate Ad Hoc Meeting March 19 at 6PM

Fullerton's Water Rate Study Ad Hoc Committee will be receiving the Water Fund to General Fund Transfer Study prepared by the same consultant that prepared the initial water rate study in 2011, Municipal & Financial Services Group, Inc.  

The public meeting will be held at Fullerton's Main Branch Library and will begin at 6PM.  Anyone wishing to speak on water related issues, will be given an opportunity to do so.  

This is the same group that reported the "Franchise Charge" as being 11%, or $2.49-million, of the total water sales on their May 23, 2011 presentation.  

Contact the City Clerk's Office if you need any special accommodations. 

(714) 738-6350 or CityClerk'sOffice@ci.fullerton.ca.us  

$6,000 Bonuses Part of Fullerton Water Rate Hike

As the Fullerton City Council prepares to hike water rates as "pass-through increases" I thought it would be good to share the sweet deal MWD employees get on April 1, 2012 (no, its not a joke) and see just what is being passed through to us.

Come April 1st the employees of MWD get a $6,000 bonus as part of their contract.

9.3 Effective the first day of the pay period that includes April 1, 2012, each employee in the bargaining unit shall receive a one-time only payment of $6,000 which shall not be considered part of the employee‘s regular pay.

If that wasn't bad enough, July 1, 2013 MWD employees will get a 0.25% raise.  And if you think 0.25% isn't much of a raise, consider what else gets slipped in.  How about creating "higher steps" for employees who have hit the salary ceiling and giving them raises as well?

9.4 Effective the first day of the pay period that includes July 1, 2013, there shall be an across-the-board salary increase of 0.25%. In addition, all bargaining unit classifications shall be moved two (2) salary grades higher (approximately 2.75% for each grade), and placed at the equivalent salary step in the new grade (e.g. an employee at step 11 on June 30, 2013 would be placed at step 9 of his new salary grade).

All bargaining unit employees will be place on the same evaluation date, and will receive a performance evaluation for the period ending July 1, 2013. Employees will be eligible for a merit increase pursuant to ARTICLE 65—MERIT INCREASES.

These generous employee benefits are being passed along to Fullerton water customers in the form of "pass-through" rate increases.  When the City Council pushes for a rate hike this year, be sure to speak up in opposition.  The City Council will be happy to pass the buck so long as we sit quietly and let them.

You can read the MWD employee agreement here.

Self-Policing Water Board Directors? Are you kidding?

A recent blog post by the Surf City Voice showcases a proposal from Municipal Water District of OC  (MWDOC) Board member Brett Barbre to self-police directors and employees of the agency as a means of preventing (or limiting legal exposure?) another Foley folly.

Barbre's may be good, to keep everyone on the straight and narrow, but not likely to protect ratepayers from corrupt public employees and elected leaders.

Barbre’s proposal would have the MWDOC (Municipal Water District of Orange County) board certify that to the best of its knowledge no conflicts of interest exist for its elected directors or for representatives that it appoints to the Metropolitan Water District of Southern California (MWD). The certification would also apply to all MWDOC employees who are required to report under state disclosure regulations.

Self-policing does not work, especially when it comes to political corruption or legal ignorance.

The best way ratepayers can protect themselves is to get involved and become watchdogs over their local government. 

Stay tuned for more on MWD...

Water Rate Meeting TODAY at 4:30PM

Public parking will be available in the small parking lot accessed from Commonwealth as well as the large employee parking lot accessible from Basque. 

Water Rate Meeting - MARK YOUR CALENDAR!

Public parking will be available in the small parking lot accessed from Commonwealth as well as the large employee parking lot accessible from Basque. 

Tinkering with Water Rates

Water ratepayers in San Juan Capistrano are in for a rude awakening.  A new audit of the water system's financial mismanagement predates the 2003 merger of the Capistrano Valley Water District and the City of San Juan Capistrano by six years. 

You read that correctly.  For six straight years the Capistrano Valley Water District was consistently underfunded because of the rate structure.

The dirty laundry is being aired on the pages of the OC Register and after several massive rate hikes (22% in February and 18% more in July) which the audit says aren't sufficient to cover the deficit.

According to  the Register, the audit states that the utility "also used one-time revenue from property taxes and developer fees as a stopgap funding measure, which had the effect of hiding structural funding problems."

The report indicates "poor financial communication" may have been part of the problem.

Let's head up Interstate-5 to Fullerton and look at the similarities.

Fullerton hasn't had an audit but it did have a rate study.  The rate study appears to have been nothing more than a report to justify nearly doubling water rates.  When pressed for hard data and answers on the water system's "in-lieu franchise fee" (an illegal 10% tax on the Water Fund), staff came up empty-handed.

Fullerton has been under-funding the water system since the 1960s.  Some might rightfully ask how that is possible and why.  Good questions, to be sure.  It was in the 1960s that the "in-lieu franchise fee" was put in place by a city council that actually predates Don Bankhead's tenure on the dais.  Since then, 10% of every dollar paid into the Water Fund has been skimmed and deposited into the City's General Operating Fund like a 3-year old grabbing at a cookie. 

That may not seem like a big deal but with every rate hike, the City's General Fund wins big.  Not to mention nearly 80% of the General Fund covers the benefits and salaries of employees not associated with operating or managing the water system.  It also helps to shore up the growing deficit and pension shortfall.  How is that fair?  How is that even legal?  It's not legal.  This January you'll begin to see a more vigorous campaign headed by City staff to raise rates and justify the continued skimming of the Water Fund.

The illegal "water tax" imposed on the Water Fund has reinforced the policy and subsequent affect on our infrastructure with ZERO investment.  Now, after 50 years of ignoring the problem, pillaging the coffers, and looking the other way, rate payers will be forced to pick up the tab.

Maybe I can blame my parents.  Perhaps Mom and Dad should have been banging on the doors at City Hall in the 1960s and '70s telling the City Council and City Manager to invest in the water system.  But they didn't protest City Hall, probably because they were busy raising five kids, paying a mortgage, and worried about their kids heading off to fight questionable wars in far away places.

No, I can't blame them. Like most people, they relied on their elected representatives to do the right thing.

To those who were voters in the 1960s, '70s, '80s, and '90s...here I am holding the bag.  How much is it going to cost, you ask, to make up for years of mismanagement and neglect? 

About $300-million... 

The Science of Irrigation: Efficiency vs. Uniformity

By Melissa Baum-Haley, Ph.D., MWDOC Water Use Efficiency Programs Specialist

When is the last time you observed your sprinkler system running? Observing your sprinkler system in action can help you save water by improving both the irrigation system efficiency and uniformity. This article will explain the difference between efficient irrigation and uniform irrigation – and what you can do to achieve both when you water your lawn and plants.

The terms efficiency and uniformity are often confused when discussing irrigation. It is a common mistake to use them synonymously. Efficiency refers to how much of the water applied to the plants is ultimately used by them, while uniformity refers to how evenly the water is applied. Uniformity is increased with proper landscape coverage. And while an irrigation system can have sufficiently good uniformity, this does not mean that the actual irrigation event is necessarily efficient.

Here’s a little game to test your knowledge. The following illustrations depict four irrigation water application scenarios in the soil. Within the root zone of the plants, indicated as the area below the ground surface and above the line, the water is used beneficially. Below the root zone, below the white line, the water is lost to deep percolation (drainage). Can you tell the difference between the efficient and uniform irrigation?

A) The irrigation water applied is both uniform and efficient (the goal).

B)While efficient in terms of conservative water use, the irrigation was not uniform. Under-watering areas in the root zone will result in plant quality decline (leading to pest and weed invasion, or "dry spots").

C) The common cure the "dry spots" is watering longer. This leads to non-uniformity and inefficiency due to over watering some areas.

D) Uniform but inefficient due to overwatering, resulting in drainage below the root zone (which, with time, can result in plant loss as well as the transport of excess nutrients, fertilizers and pesticides that harm the environment).

So, how does your irrigation system compare? Here’s a simple way to evaluate the uniformity of the irrigation distribution in your own yard. You will need:

• 16-24 empty tuna cans, pet food cans, ramekins, or similar containers for water catchment (note: all catchment containers must be the same size)
• A ruler
• A pad and pen

What to do:
• Evenly distribute the catchment containers around the turfgrass area.
• Draw a map of the catchment container locations.
• Irrigate the turfgrass area as usual.
• Measure and record the depth of water collected in each container.

Results:
• If there is more than a ¼ inch variation of water collected within a certain area of the test site, the distribution of applied irrigation is not uniform.

Want to know more? What you have just measured is the uniformity of how you water your lawn during your regular watering cycle. The lack of even distribution (uniformity) can result from either 1) how the timer is set, or 2) the sprinkler equipment. Let’s dig a little deeper.

• Manually turn on the irrigation system, zone by zone.

• Determine which zone(s) are watering the turfgrass area.

• Note whether the zone(s) are using spray heads, rotor heads, or other.

• Observe the sprinklers as they run.

Spray Head

Rotor Head

Drip Irrigator

Q: Is the area irrigated by more than one type of sprinkler head?

A: Different types of sprinkler heads will apply different amounts of water (referred to as the application rate).

Q: Is the test area irrigated by one, two, or more zones?

A: If the test area is irrigated by multiple zones, the scheduled run time for each zone must be matched. If the zones both have the same equipment type (sprinkler head), try retesting so each zone is set to run for the same length of time (for example, 15 min). If the zones water the area with different types of sprinklers, use this rule of thumb for rerunning the test, set the spray head zone to run for half of the time as the rotor head zone.

Q: Are there any geysers, leaks, or ponding?

A: Broken equipment can result in variations in water pressure within the system. Changes in water pressure will affect the water distribution pattern and system uniformity.

Issues like these reflect both the uniformity of distribution and overall efficiency of the system. Good uniformity combined with proper irrigation scheduling will result in reduced pest and weed invasion and fewer "dry spots".

Remember, even the smartest of irrigation controllers cannot correct for inefficient irrigation design, improper installation, or lack of maintenance. The potential of water savings that result from efficient watering practices must take the irrigation system, landscape design, and maintenance each into consideration. The three fundamental roadblocks for fully achieving the watering efficiency potential when considering the use of irrigation technologies are: (1) how to use the equipment, (2) when and how long to water, and (3) system uniformity. This requires a holistic approach, to realize true water use efficiency potential.

So, we’ve now completed the second lesson in our Science of Irrigation series. In the next installment, we will examine irrigation controllers and explain just what makes a "smart" controller so smart.

For more information about irrigation uniformity and efficiency, please contact Melissa Baum-Haley at (714) 593-5016.

MWD: Do as I say, not as I do

Metropolitan Water District of Southern California adopted a new “Long-Term Conservation Plan to help improve water use efficiency and reduce regional per capita water use 20 percent by 2020.”

The plan is pretty simple: use 20% less and pay 200% more.  Yes, 200% MORE!  OK, 200% is MY BEST GUESS based on MWD's own data and budget.

MWD’s rates are always increasing to cover their overhead, most of which addresses increased costs of benefits and salaries.  Let’s not forget that this same agency has the Ethics Office which costs ratepayers $571,000 per year to help train District employees about sexual harassment and ethics.

It’s ironic that the agency promoting water conservation is so wasteful with our money.

Despite MWD’s business practices, it is important that we conserve water and recognize the actual cost of managing our water system.    

It is equally important that government agencies recognize their role in supplying residents with water the residents already own.  I know that sounds odd but think about it.  The MWD is a public agency, not a private for-profit corporation.  And all of the Agency’s property and commodities belong to the shareholders (not to be confused with the stakeholders) which are the District’s residents.  Therefore, MWD Directors need to remember who they serve and why they serve us.

I suggest the MWD swallow their own pill and demonstrate greater fiscal responsibility before saddling consumers with the cost of their waste.

Water District CEO Speaks His Mind

Wednesday I had the opportunity to listen to retired U.S. Army Colonel and MWD CEO Jack Foley speak to engineers and land surveyors at the monthly meeting for the Orange County Chapter of the American Council of Engineering Companies.  Foley has an amazing and long resume that is impressive even to those not usually impressed by meaningless wallpaper.

Foley spoke for more than an hour focusing his attention on MWD and our water infrastructure.  One of Foley's admirable traits is his plain English.  He doesn't get caught up in a the absurd political correctness that I'm used to hearing at from public speakers.  Instead, Foley spoke from the heart and was crystal clear and it was appreciated. 

The environment was a large part of the retired colonel's sermon.  Unlike most CEOs who wring their hands and are "sensitive to the issue", Foley stands his ground unabashed.