SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT _ 380 E. Vanderbilt Way, San Bernardino, CA 92408

REGULAR MEETING OF THE BOARD OF DIRECTORS

AGENDA

2:30 p.m. Tuesday, August 5, 2014

CALL TO ORDER/PLEDGE OF ALLEGIANCE/ROLL CALL

1. PUBLIC COMMENT Any person may address the Board on matters within its jurisdiction.

2. PUBLIC HEARING

A. Public Hearing and Consider Adoption of Resolution No. 1019 - Resolution to Adopt the One Water One Watershed 2.0 Santa Ana Watershed Integrated Regional Water Management Plan (Page 4)

3. APPROVAL OF MINUTES

A. July 15, 2014, Board Meeting (Page 10)

4. DISCUSSION AND POSSIBLE ACTION ITEMS

A. Consider Adoption of Resolution No. 1020 Determining the Amount of Money Needed to Make Annual Payments for Indebtedness Approved by the Voters Prior to July 1, 1978, and/or for Which a Tax Levy is Required Under Article 1, Section 10 ofthe United States Constitution and Making a Tax Levy Therefor (Page 16)

5. REPORTS (Discussion and Possible Action)

A. Association of San Bernardino County Special District's Dinner, July 21

B. Baseline Feeder Committee Workshop, July 28 (Page 24)

C. Debt Service Fund Budget Workshop, July 28 (Page 26)

D. San Bernardino Regional Water Resources Authority, July 29

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Meeting ofthe Board of Directors August 5, 2014 Page2

E. Basin Technical Advisory Committee, August 4

F. Directors Activities

6. ANNOUNCEMENTS

A. August 11, 2014- Board of Directors Workshop, 3:00p.m. at the District Office

B. August 13, 2014- Reservoir Committee, 11:30 a.m. at the District Office

C. August 14, 2014- Upper Santa Ana Water Resources Association, 9:30a.m. at San Bernardino Valley Water Conservation District

D. August 19,2014- SAWPA Commission Meeting, 9:30a.m. at SAWPA

E. August 19, 2014- Board ofDirectors Meeting, 2:30p.m. at the District Office

F. August 22, 2014- San Bernardino County Water Conference, Cal State San Bernardino

G. August 25, 2014- Baseline Feeder Committee Workshop, 3:00p.m. at the District Office

H. September 2, 2014- SAWPA Committee Meetings, 9:30a.m. at SAWPA

I. September 2, 2014- Board of Directors Meeting, 2:30p.m. at the District Office

J. September 4, 2014- Advisory Commission on Water Policy, 6:30p.m. at the District Office

K. September 8, 2014- Basin Technical Advisory Committee, 1:30 p.m. at the District Office

L. September 10, 2014 -Reservoir Committee Meeting, 11 :3 0 a.m. at the District Office

M. September 11, 2014- Upper Santa Ana Water Resources Association, 9:30a.m. at San Bernardino Valley Water Conservation District

7. CLOSED SESSION The Board may convene/meet in closed session to discuss the following items.

A. Conference with Real Property Negotiators - Pursuant to Government Code Section 54956.8(b) - Property No. APN 0140-143-28 - Owner: Maria G. Hernandez - Under Negotiation: Price and Terms of Payment - Agency Negotiator: Douglas Headrick- Negotiating Pmiies: Listed Above

B. Conference with Legal Counsel- Existing Litigation- Pursuant to Government Code Section 54956.9(a),(d)(1)- San Bernardino Valley Municipal Water District et al v. San Gabriel Valley Water Company et al- Case No. CIVDS1311085 (San Bernardino Superior Court

C. Conference with Legal Counsel - Existing Litigation - Pursuant to Government Code Section 54956.9(d)(1)- Bear Valley Mutual Water Co. et al v. Salazar, et al (91

h Cir. No. 12-57297)

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Meeting of the Board of Directors August 5, 2014 Page 3

8. ADJOURNMENT

PLEASE NOTE: Materials related to an item on this Agenda submitted to the Board after dish·ibution of the agenda packet are available for public inspection in the Dish·ict's office located at 380 E. Vanderbilt Way, San Bernardino, during normal business hours. Also, such documents are available on the Dish·ict' s website at www.sbvmwd.com subject to staffs ability to post the documents before the meeting. The Dish·ict recognizes its obligation to provide equal access to those individuals with disabilities. Please contact Lillian Hernandez at (909) 387-9214 two working days prior to the meeting with any special requests for reasonable accommodation.

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DATE: August 5, 2014

TO: Board of Directors

FROM: Bob Tincher, Manager of Water Resources

SUBJECT: Consider Adoption of the Santa Ana Watershed Project Authority One Water One Watershed (OWOW) 2.0 Plan

In 2012, Valley District received $1 million from Proposition 84, Round 2 for its

Enhanced Stormwater Capture and Recharge along the Santa Ana River project. The

Proposition 84, Round 2 grant application process for the Santa Ana Watershed is

being administered by the Santa Ana Watershed Project Authority (SAWPA). To help

simplify the submittal of the overall grant application to DWR, SAWPA has asked that

each of the agencies receiving funding, adopt the SAWPA Integrated Regional Water

Management Plan (IRWMP) One Water One Watershed (OWOW). Each time OWOW

is amended, it must be formally adopted. In February of last year the Board adopted

the original OWOW plan with the new 2.0 project portfolio by Resolution 1003. The

OWOW IRWMP was recently updated and adopted by the SAWPA Commission in

February of this year. The revised document has been titled OWOW 2.0. SAWPA is

now requesting that each agency receiving funding adopt OWOW 2.0. OWOW 2.0 is

consistent with the Upper Santa Ana River Watershed Integrated Regional Water

Management Plan which the Board adopted in 2007.

The public notice requirements for adoption of the OWOW 2.0 IRWMP (Government

Code 6066) have been met so that the Board can consider adoption of the plan today.

BACKGROUND

The San Bernardino Valley Municipal Water District took the lead in developing and

then adopted the Upper Santa Ana River Watershed Integrated Regional Water

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Management Plan (Plan). The Plan establishes the following water management

objectives:

1. Water Supply Reliability Improvement

2. Water Quality Protection

3. Ecosystem restoration and Environmental Improvement

Also included in the Plan are management strategies to achieve the water

management objectives.

The Santa Ana Watershed Project Authority (SAWPA) is a joint powers agency made

up of Eastern Municipal Water District, Inland Empire Utilities Agency, Orange County

Water District, Western Municipal Water District and San Bernardino Valley Municipal

Water District (Member Agencies). SAWPA, in conjunction with its Member Agencies,

stakeholders and partners throughout the Santa Ana River Watershed prepared the

"One Water One Watershed" (OWOW) Santa Ana River Watershed Integrated Regional

Water Management Plan (IRWMP). The OWOW IRWMP covers the entire watershed

while the Upper Santa Ana River Watershed Integrated Regional Water Management

Plan focuses on the upper watershed. The two documents are consistent with each

other.

Proposition 84, The Safe Drinking Water, Water Quality and Supply, Flood Control,

River and Coastal Protection Bond Act of 2006, authorized over $1.5 billion for water

supply and water quality projects (Chapter 2) throughout the State of California. The

funding was allocated by region with the Santa Ana [watershed] region being allocated

$114 million under Chapter 2. The State released $12 million of the funding during

Round 1 and, more recently, released another $16 million for Round 2. To be eligible

for Proposition 84 grant funding, each region had to submit an application through the

"Region Acceptance Process" (RAP). SAWPA submitted the RAP application on behalf

of the Santa Ana [watershed] region and has taken the lead in administering the

Proposition 84 grant funding selection process for the region.

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On November 29, 2012, the Department of Water Resources (DWR) released the final

guidelines for Round 2 of Proposition 84, Chapter 2 Integrated Regional Water

Management implementation grant program. In anticipation of receiving the funding for

this round, SAWPA conducted a call for projects and received 136 project applications

from throughout the watershed. Of this, 52 projects were selected to go through a more

rigorous review process.

On December 18, 2012, the SAWPA Commission finalized a list of projects for

submission, on behalf of the region, for Proposition 84, Round 2 funding. The list

includes 22 different projects proposed by 17 different agencies. Valley District

received $1 million for its Enhanced Stormwater Capture and Recharge along the Santa

Ana River project. To help simplify the submittal of the overall grant application to

DWR, SAWPA asked each of the 17 agencies to adopt the OWOW IRWMP including

the updated OWOW 2.0 Project Portfolio. In February 2013, the Board adopted the

OWOW plan with the 2.0 project portfolio in its Resolution 1003.

Each time an IRWMP is updated, it must be adopted. In February of this year, SAWPA

adopted the updated OWOW IRWMP titled OWOW 2.0. SAWPA is now asking all of

the agencies receiving grant funds to adopt the OWOW 2.0 Plan which is consistent

with the Upper Santa Ana River Watershed Integrated Regional Water Management

Plan which the Board adopted in 2007.

Staff Recommendation

Adopt Santa Ana Watershed Project Authority One Water One Watershed (OWOW) 2.0

Integrated Regional Water Management Plan for the Santa Ana River Watershed.

ATTACHMENTS

1. Public Notice

2. Draft Resolution of the Board of Directors of the San Bernardino Valley Municipal Water

District Adopting the "One Water One Watershed 2.0" Santa Ana Watershed Integrated

Regional Water Management Plan.

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NOTICE OF INTENTION OF THE SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT TO ADOPT

THE SANTA ANA WATERSHED INTEGRATED REGIONAL WATER MANAGEMENT PLAN, ONE

WATER ONE WATERSHED 2.0

NOTICE IS HEREBY GIVEN that the Board of Directors of the San Bernardino Valley Municipal Water District intend to adopt the Santa Ana Watershed Integrated Regional Watershed Management Plan, also known as the "One Water, One Watershed 2.0". The Board of Directors will hold a public hearing at their regularly scheduled Board meeting on August 5, 2014 at 2:30PM to receive public comments on whether the Plan should be adopted. The hearing will be held at:

San Bernardino Valley Municipal Water District 380 East Vanderbilt Way San Bernardino, CA 92408

Interested patties are encouraged to participate in this hearing. If you need a copy of the plan or would like to provide comments please contact:

Lillian Hernandez lillianh@sbvmwd.com (909) 387-9214

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RESOLUTION NO. 1019

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT ADOPTING THE "ONE WATER ONE WATERSHED 2.0" SANTA ANA WATERSHED INTEGRATED REGIONAL WATER MANAGEMENT PLAN

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WHEREAS, the Santa Ana Watershed Project Authority (SA WPA) is a joint powers

agency made up of Eastern Municipal Water District, Inland Empire Utilities Agency, Orange

County Water District, Western Municipal Water District and San Bernardino Valley Municipal

Water District (SAWPA Member Agencies); and,

WHEREAS, the San Bernardino Valley Municipal Water District has adopted the Upper

Santa Ana River Watershed Integrated Regional Water Management Plan; and,

WHEREAS, the Santa Ana Watershed Project Authority (SA WPA), working with

stakeholders and partners throughout the Santa Ana River Watershed prepared the "One Water

One Watershed 2.0" (OWOW 2.0) Santa Ana River Watershed Integrated Regional Water

Management Plan (IRWMP) which is consistent with the Upper Santa Ana River Watershed

Integrated Regional Water Management Plan; and,

WHEREAS, the OWOW 2.0 planning process was conducted in a fair and transparent

process, working closely with the SA WP A Member Agencies and with stakeholders in the

watershed in a bottom-up approach; and,

WHEREAS, on February 4, 2014, the SAWPA Commission adopted OWOW 2.0, and;

WHEREAS, to simplifY any grant applications submitted to the Department of Water

Resources on behalf of the SA WP A member agencies, SA WP A has asked the agencies to adopt

the OWOW 2.0 IRWMP; and,

WHEREAS, a Notice of Intention to adopt the OWOW 2.0 IRWMP was published in a

newspaper of general circulation in accordance with the requirements of Govemment Code

Section 6066.

NOW THEREFORE, BE IT RESOLVED by the Board of Directors of the San

Bemardino Valley Municipal Water District as follows:

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1. The District adopts the "One Water One Watershed 2.0" Santa Ana Watershed

Integrated Regional Water Management Plan.

2. This Resolution shall be effective as of the date of adoption.

ADOPTED, this 5th day of August 2014.

August 5, 2014

C. Patrick Milligan President

I HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution No. 1019 adopted by the Board of Directors of San Bernardino Valley Municipal Water District at its Regular Meeting held August 5, 2014.

Lillian Hernandez Recording Secretary

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MINUTES OF

THE REGULAR BOARD MEETING

SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT

July 15, 2014

Directors Present: Patrick Milligan, Mark Bulat, Steve Copelan, Ed Killgore, and Gil Navarro

Directors Absent: None.

Staff Present: Bob Tincher, Wen Huang, Cindy Saks, Brendan Brandt, and Lillian Hernandez

Registered Guests:

Alan Dyer, West Valley Water District

Benjamin G. Kelly, Western Heights Water Company

Greg Yanagihara, AECOM

Wayne Hendrix

Alva Sanchez, Valley College

Katie Heer, Inland Empire Resource Conservation District

Tom Holliman, East Valley Water District

Ben Coleman, East Valley Water District

Seth Zielke, Fontana Water Company

Tom Crowley, West Valley Water District

Melody McDonald, San Bernardino Valley Water Conservation District

Tom Gaede, Assembly Member Brown's Office

The regular meeting of the Board of Directors was called to order by President Milligan at 2:30p.m. at the District office, 380 E. Vanderbilt Way, San Bernardino. A quorum was noted present.

Agenda Item 1. Public Comments.

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President Milligan invited any members of the public to address the Board. Hearing none, the meeting proceeded with the published agenda items.

Agenda Item 2. Approval of Minutes of the July 1, 2014, Board Meeting.

Director Kilgore moved to approve the minutes of the July 1, 2014, Board meeting. Director Bulot seconded. The motion was unanimously adopted with Director Copelan being noted as absent.

Agenda Item 3. Discussion and Possible Action Items.

3 a) Consider State Water Project Exchange with Palmdale Water District. Bob Tincher stated that this item was discussed at a workshop on July 2nd. Palmdale Water District (PWD) is a state water contractor as is the District. Palmdale Water District is in need of supplemental supplies due to the drought. The District has worked with Palmdale Water District to affect an exchange of water. The District will transfer up to 2,500 acre-feet of water in 2014 and will receive the equivalent back in 2015. In addition, 1.25 times the initial amount will be provided to the District during 2016 to 2018 resulting in a 2.25 to 1 unbalanced exchange in favor of the District. Staff recommended approval of the agreement.

Director Bulot moved approval of staff's recommendation. Director Navarro seconded. The motion was unanimously adopted with Director Copelan being noted as absent.

3 b) Consider Contract to Finalize the Update of the Integrated Regional Water Management Plan. Bob Tincher stated that the agencies that adopted the Upper Santa Ana River Watershed Integrated Regional Water Management Plan (IRWMP) have decided to work with a consultant to finalize an update that they have collectively been working on and to obtain a peer review. The participants have selected the firm of RMC and are requesting that the District consider being the contracting agency for the project. The IRWMP has been a very successful document in pulling a variety of different agencies together to plan. Notable achievements of the IRWMP include creation of the Basin Technical Advisory Committee, production of an annual water management plan, and providing a forum to discuss technical issues. The IRWMP established goals and objectives such as water supply reliability, water quality, and ecosystem restoration. Eighteen agencies adopted the plan originally. Mr. Tincher stated that the City of Rialto will be joining in the update effort so the number of participating agencies could be higher than the original 18. A grant provided the funding for most of the cost of the original IRWMP with the remainder being divided equally among all the participants. The agencies are recommending the cost of the update be split equally among all the participants. If all 18 agencies participate, that would result in a $4,000 contribution for the District. Staff requested that the Board consider a budget of up to $5,000 in case there are any changes to the number of agencies agreeing to participate in the funding. Staff recommended that the Board authorize staff to enter into a contract with RMC for an amount of $69,237 and to share in the cost up to $5,000.

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Director Bulat moved approval of staff's recommendation. Director Killgore seconded. The motion was unanimously adopted with Director Copelan being noted as absent.

Director Copelan arrived at 2:43p.m.

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3 c) Consider Proposals for the Bunker Hill Basin Conjunctive Use Project. Wen Huang stated that conjunctive use in the Bunker Hill Basin has been contemplated for many years. The District took a leadership role in developing the Central Feeder which is the foundation for a conjunctive use program. The item was discussed in several workshops in 2013 and again on March 6, 2014. There are many interested parties that want to join with the District in the project. The project will be two well fields of four wells each located across the Santa Ana River at Orange and Alabama streets. Water will be delivered from the production facilities into a tank that the District bought the capacity from the City of Redlands. From that point, the District has a 50 cubic-feet-per-second pump station at the end of the Central Feeder that can deliver water directly into the Inland Feeder to the Metropolitan Water District of Southern California (MWDSC). The first phase of this project is estimated to increase dry year yield by 40,000 acre-feet which is the capacity of the eight wells. In addition, the District will have some capacity from the City of Redlands under an agreement that the District entered into with the City for access to any unused capacity that the City has within their system. On July 2nd staff presented proposals for conceptual design refinement, cost allocation methodology study, and associated groundwater modeling to the Board in a workshop. Staff was directed to forward the item to the full Board for consideration. Staff recommended that the Board authorize the general manager to enter into a contract with Kennedy/Jenks Consultants to conduct a cost allocation study and refine the design concept for a fee of $159,666 and contract with Geoscience Support Services Inc. to perform associated groundwater modeling for a fee of $157,920.

Director Bulat moved approval of authorizing the general manager to enter into a contract with Kennedy/Jenks Consultants to conduct a cost allocation study and refine the design concept for a fee of $159,666 and contract with Geoscience Support Services Inc. to perform associated groundwater modeling for a fee of $157,920. Director Copelan seconded. The motion was unanimously adopted

3 d) Consider Sponsorship of the 2014 Santa Ana River Watershed Conference. Lillian Hernandez stated that the Santa Ana Watershed Project Authority would be holding their annual conference on October 14, 2014, at the Riverside Convention Center. The Water Education Foundation is planning the conference and soliciting sponsorships. The Board met in a workshop setting on July 2, 2014, and requested that staff bring this item before the full Board for consideration and possible action. The Board members in attendance at the workshop suggested sponsoring the conference at the $5,000 level.

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Director Bulot moved approval of sponsoring the 2014 Santa Ana River Watershed Conference at the $5,000 level. Director Killgore seconded. The motion was unanimously adopted.

3 e) Consider Supporting Arundo Removal at Morrey Arroyo in Redlands. Bob Tincher stated that this item was discussed at the July 2nd workshop. At the workshop, staff presented a proposal from the Inland Empire Resource Conservation District (IERCD) for approximately $6,000 to remove Arundo from Morrey Arroyo in Redlands. Arundo is a giant reed similar to bamboo that uses approximately three times the water that native plants use. In addition, some construction debris would also be removed from Morrey Arroyo which is a tributary to the Santa Ana River. Board members in attendance at the workshop were generally supportive of the Arundo removal portion of the project and suggested that the District make a financial contribution to the IERCD rather than taking the lead on the project. Since the workshop, staff asked IERCD to provide the cost for the arundo removal portion of the project. IERCD estimates that the Arundo removal portion of the project of $2,600. IERCD has also offered to pay the remaining cost of the project. Brendan Brandt, District legal counsel, indicated that the District would need to be added as an additional insured on the project and perhaps develop an indemnity agreement based on the contribution which would cover the District against any liability.

Director Bulat moved approval of making a donation to the Inland Empire Resource Conservation District in the amount of $2,600 for Arundo removal from Morrey Arroyo in Redlands. Director Navarro seconded. The motion was unanimously adopted.

Agenda Item 4. Reports (Discussion and Possible Action).

4 a) Report on Basin Technical Advisory Committee Drought/Conservation Outreach Program. Bob Tincher updated the Board on the outreach program that they approved in May 2014 for drought and water conservation. The District along with 14 additional agencies embarked on a campaign to inform the public about the severity of the drought and the need for water conservation. Mr. Tincher was pleased to report that the consultant has undertaken numerous activities primarily in support of building the brand iEfficient.com that joins all of the agencies together, placing advertising, and scheduling a kick-off event. The kick-off event will be at the Inland Empire 66'ers game on July 22nd. Mr. Tincher directed the Board's attention to a handout showing print advertising and billboard advertising for the program. The consultant also developed ads on social media, digital marketing online, theater ads, and earned media.

4 b) Board of Directors Workshop, July 2, 2014. No report was given.

4 c) Basin Technical Advisory Committee, July 7, 2014. No report was given.

4 d) Reservoir Committee Workshop, July 9, 2014. No oral report was given as a written report was included in the Board packet.

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4 e) Upper Santa Ana Water Resources Association, July 10, 2014. No report was given.

4 f) SAWPA Committee Meetings, July 15, 2014. Director Bulot reported on the following SAWPA matters:

1) Authorized a notice for inviting bids for construction of the Inland Empire Brine Line (IEBL) Reach V Rehabilitation and Improvement Project.

2) Authorized a Request for Proposals for a classification and compensation study regarding SAWPA staff.

3) Authorized the final One Water One Watershed 2014 Emergency Drought Grant application for the Interregional Landscape Water Demand Reduction Program and adopted a resolution authorizing execution of a grant agreement with the Department of Water Resources.

4) Delayed and returned to staff the implementation plan for the prospective drought Round 3 grant.

5) Returned to staff a proposed resolution calling for increased water use efficiency.

6) Designated the SAWPA General Manager as the hearing officer for Pretreatment Ordinance enforcement proceedings in the matter of Repet, Inc.

7) Announcement of a reception for Randy Record on his appointment as Chairman at the Metropolitan Water District of Southern California.

4 g) Operations Reports. No oral report was given as a written report was included in the Board packet.

4 h) Treasurer's Report. Director Copelan moved approval of the following expenses for the month of June 2014. The State Water Contract Fund $5,960, 183.00, Devil Canyon/Castaic Fund $235,927.00, and General Fund $1 ,958,299.28. Director Bulot seconded. The motion was unanimously adopted.

Mike Burrows informed the Board that the Inland Valley Development Agency made a prepayment in the amount of $2.6 million on the repayment they owe to the District. Mr. Burrows thanked the Board and staff for all their cooperation and assistance.

4 i) Directors Activities. Director Navarro requested that the Board take action on AB 2443. Lillian Hernandez informed the Board that this item is scheduled to be discussed at the August 11, 2014, Board of Directors Workshop where Mr. Ken Munoz will be presenting on the item.

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Director Copelan stated that he attended a meeting on July 2nd with Yucaipa Valley Water District, Western Heights Water Company, and South Mesa Water Company to discuss AB 2443.

Director Killgore announced that West Valley Water District will be conducting an ethics class on July 24th.

Agenda Item 5. Announcements. None.

Agenda Item 6. Closed Session. None.

There being no further business, President Milligan adjourned the meeting at 3:41 p.m.

APPROVAL CERTIFICATION I hereby certify to approval of the foregoing Minutes of San Bernardino Valley Municipal Water District.

Secretary Date __________ _

Respectfully submitted,

Lillian Hernandez Board Secretary

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alleN BERNARDINO

MUNI CIPALY WATE R DISTRICT

DATE: August 5, 2014

TO: Board of Directors

FROM: Douglas Headrick, General Manager Cindy Saks, Finance Manager

SUBJECT: Consider Adoption of Resolution No. 1020 Setting a Tax Levy and Review Draft State Water Contract and Devil Canyon Castaic Debt Service Fund Budgets for Fiscal Year 2014-2015

Background

Annually the Board is required to set a property tax rate for the State Water Contract Debt

Service Fund for the new fiscal year. The monies generated from the debt service property tax

rate are restricted to pay for costs associated with the State Water Contract and Devil Canyon

Castaic Contract as calculated by the Department of Water Resources (DWR). DWR sends

invoices to the District for our share of current State Water Project costs and these invoices are

used to estimate expenses for the next year.

On July 28, 2014 the Valley District Board conducted a workshop to discuss the proposed Debt

Service Fund Budget. After considerable discussion, those Boardmembers present directed

Staff to prepare the budget based on a tax rate of $0.1625 per $100 of assessed valuation,

which is the same rate as the prior year and bring it to the full Board for consideration. Based

on the current assessed values of property within Valley District's boundary, approximately

$2.75 million is associated with each $0.01 of tax rate increase or decrease.

The property tax assessed valuations for the fiscal year 2014-2015 as calculated by the County

Assessor increased by net of 6.4% over the prior year assessed values . The 2014-2015 budget

includes Pass Through payments from Successor Agencies due to the Redevelopment Agency

(RDA) dissolution process. Staff included a reasonable estimate of $10,000,000 based on the

additional revenues received this year from the RDA dissolution process. Based on the

proposed tax rate of $0.1625 per $100 of assessed value, the total budgeted property tax

revenue is projected to be $48,073,558 for the fiscal year 2014-2015.

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Also shown on the attached spreadsheets are total estimated expenses of $50,245,458 derived

from DWR invoices; the total consists of $48,600,010 for the SWP Contract Fund and

$1 ,645,448 for the Devil Canyon I Castaic Fund. Further, all revenues attributable to the Debt

Service Funds, interest earnings, return of bond cover charges and successor agency pass

through payments total $62,073,759; the total consists of $60,298,535 for the SWP Contract

Fund and $1,775,224 for the Devil Canyon I Castaic Fund.

Through continued conservative spending, the District is projected to be able to increase its

reserves for Project Specific Rate Stabilization in the amount of $11,828,301. Based on

current estimated construction costs for East Branch Extension (EBX) Phase II, the District can

expect an increase in bond payments to the DWR in the next fiscal year in excess of $10

million. The Project Specific Rate Stabilization reserves are essential to ensure any tax rate

adjustments needed to pay for the costs of the EBX and Bay Delta Conservation Plan

improvements are minor.

Resolution 1020, setting the tax rate for 2014-15, is provided for the Board's consideration.

Staff Recommendation

Approve a Debt Service Fund tax rate, budget, and Resolution 1020 for Fiscal Year 2014-2015.

Attachments

1. Fiscal Year 2014-2015 Debt Service Fund Budget worksheets

2. Resolution 1020 Setting the Tax Rate for the Debt Service Fund

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San Bernardino Valley Municipal Water District

Fiscal Year 2014 ~ 2015

:State Water Contract I Devil Canyon Castaic Budgets

August 5, 2014

SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT ESTIMATED INCOME TO SBVMWD AS A RESULT OF THE DEBT SERVICE TAX RATE ESTABLISHED BY THE BOARD OF DIRECTORS

'\C:TU'\ L. FY 2013-2014 FY 2014-2015 FY 2014-15 FY 2014-15 STATE WATER DEVIL CANYON ASSESSED ASSESSED TAX RATE ESTIMATED CONTRACT FUND CASTAIC FUND

TAX TYPE VALUE VALUE %INCREASE PER $100 AV REVENUE NOTES ESTIMATED TAX ESTIMATED TAX l

UNSECURED RATE ESTABLISHED BY STATUTE TO BE EQUAL TO THE SECURED RATE FROM THE

Unsecured 1,047,890,267 1 ,025,163,963 -2.2% 0.1625 $ 1,665,891 PRIOR YEAR $ 1,604,382 $ 61,510 --ESTABLISHED BY BOARD OF DIRECTORS RESOLUTION

Secured 25,263,009,834 27,021,001,534 7.0% 0.1625 $ 43,909,127 FOR FOLLOWING YEAR $ 42,287,867 $ 1,621,260 --

DISTRICT'S SHARE OF PROPERTY TAXES FROM UTILITY COMPANYS WHICH ARE ASSESSED UNIFORMLY

Utility (Unitary) $ 1,700,000 COUNTYWIDE $ 1,637,231 $ 62,769 --

ESTABLISHED BY BOARD OF State Reimbursement DIRECTORS RESOLUTION (Homeowners)

. 502 ,1 94,11 9 491,408,793 -2.1% 0.1625 $ 798,539 FOR FOLLOWING YEAR $ 769,055 $ 29,485

-

Total 26,813,094,220 28,537,574,290 6.4% $ 48,073,558 $ 46,298,535 $ 1,775,024 - - - - - -

FY 14-15 FY 13-14 ACTUAL PROPOSED TAX

TAX RATE RATE

Devil Canyon/Castaic 0.0060 0.0060 -State Water Project 0.1565 0.1565

Total Tax Override Rate 0.1625 0.1625 -

SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT -

all '·'"· l• ll~ l>o; .\ 1\ L)II·:O SUMMARY OF STATE WATER CONTRACT EXPENSES FOR FY 2014-2015 - MUNti.':I/IY

WA1'riL1WOII:t\.T

-I CATEGORY 7/1/2014- 12/31/2014 1/1/2015-6/30/2015 TOTAL FOR FY

1 WATER SYSTEM REVENUE BOND & SURCHARGE 1,301,027 1,618,769 2,919,796 CAPITAL COST COMPONENT

2 DELTA WATER CHARGE 600,557 924,916 1,525,473 3 TRANSPORTATION CHARGE 1,785,847 2,290,998 4,076,845

MINIMUM OMP&R COMPONENT 4 DELTA WATER CHARGE 1 ,498,170 1,832,442 3,330,612 5 TRANSPORTATION CHARGE 4,400,442 8,185,884 12,586,326 6 OFF AQUEDUCT POWER FACILITIES 414,378 309,798 724,176 7 EAST BRANCH ENLARGEMENT-CAPITAL 8 MINIMUM OMP&R 28,620 87,672 116,292 9 EAST BRANCH EXTENSION 4,995,770 4,960,256 9,956,026

10 TEHACHAPI 2ND AFTERBAY 138,039 150,329 288,368 11 REPLACEMENT ACCOUNTING SYSTEM- CONSERVATION RAS 56,388 20,808 77,196 12 AUDIT FEES 20,000 20,000 40,000 13 BANK FEES 2,000 2,000 4,000 14 STATE WATER CONTRACTORS ASSOCIATION 275,000 - ' 275,000 15 LEGAL FEES 40,000 10,000 50,000 16 SBVMWD ADMIN FEE - 4,629,900 4,629,900 17 VARIABLE CHARGE FOR ENERGY 4,000,000 4,000,000 8,000,000

18 TOTAL 19,556,238 29,043,772 48,600,010

SUMMARY OF STATE WATER CONTRACT ESTIMATED REVENUE FOR FY 2014-2015

7/1/2014- 12/31/2014 1/1/2015-6/30/2015 TOTAL FOR FY

19 PROPERTY TAXES- SWC FUND- AT .16251$100 AV 23,149,267 23,149,267 46,298,535 20 INTEREST EARNINGS 500,000 500,000 1,000,000 21 RETURN OF BOND COVER/RESERVES 1,500,000 1,500,000 3,000,000 22 RDASUCCESSORAGENCYPASSTHROUGHAGREEMENTS 5,000,000 5,000,000 10,000,000

23 TOTAL 30,149,267 30,149,267 60,298,535

SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT - all\"' 101 t.; ~' 'l.l: l 1 1 t-:LI SUMMARY OF DEVIL CANYON/CASTAIC FUND CONTRACT EXPENSES FOR FY 2014-2015 - Ml.'NICI~IT

WA:HI'.hH i i.ICr

-

CATEGORY 7/1/2014- 12/31/2014 1/1/2015-6/30/2015 TOTAL

1 DEBT SERVICE 296,742 298,762 595,504 OMP&R (OPERATIONS, MAINTENANCE, POWER &

2 REPLACEMENT) 415,958 456,486 872,444 3 SBVMWD ADMINISTRATION - 177,500 177,500

4 TOTAL 712,700 932,748 1,645,448

I I

SUMMARY OF DEVIL CANYON- CASTAIC CONTRACT ESTIMATED REVENUE FOR FY 2014-2015

7/1/2014- 12/31/2014 1/1/2015-6/30/2015 TOTAL FOR FY

5 PROPERTY TAXES- DCC FUND 887,512 887,512 1,775,024 6 INTEREST EARNINGS 100 100 200

7 TOTAL 887,612 887,612 1,775,224

SUMMARY OF DEVIL CANYON- CASTAIC CONTRACT ESTIMATED CASH ON HAND FOR FY 2014-2015

6/30/2014 BALANCE AVAILABLE IN FY 2014-2015 1,520,000

FY 2014-2015 REVENUE 1,775,224

FY 2014-2015 EXPENSES (1 ,645,448)

6/30/2015 CASH BALANCE (ESTIMATED) 1,649,776

RESOLUTION NO. 1020

RESOLUTION OF THE BOARD OF DIRECTORS OF THE SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT DETERMINING THE AMOUNT OF MONEY NEEDED TO MAKE ANNUAL PAYMENTS FOR INDEBTEDNESS APPROVED BY THE VOTERS PRIOR TO JULY 1,1978, AND/OR FOR WHICH A TAX LEVY IS REQUIRED UNDER ARTICLE I, SECTION 10 OF THE UNITED STATES CONSTITUTION AND MAKING A TAX LEVY THEREFOR

WHEREAS, Section 72093 of the Water Code requires the Board of Directors of the San Bernardino Valley Municipal Water District to determine the amounts necessary to be raised by taxation during the fiscal year and to fix the rate or rates of tax to be levied therefore; and

WHEREAS, Section 11652 ofthe Water Code requires the Board to levy a tax sufficient to assure payment of sums due under the Contract Between the State of California Department of Water Resources and the San Bernardino Valley Municipal Water District for a Water Supply dated December 30, 1960, and the Devil Canyon/Castaic Contract dated June 23, 1972; and

WHEREAS, Section l(b) of Article XIIIA of the California Constitution and Section 93 of the Revenue and Taxation Code exempt ad valorem prope1iy tax levies to make payments upon indebtedness approved by the voters prior to July 1, 1978, from the limitations set forth in Section 1(a) of Article XIIIA and said Section 93, the District's Water Supply Contract, having been approved by vote of the people on November 8, 1960, and March 9, 1971, fall within such exemption; and

WHEREAS, the District's aforementioned contracts and the provisions of Section 11652 of the Water Code with respect thereto are protected against impairment under the provisions of Article I, Section 10 of the Constitution of the United States and A1iicle I, Section 9 of the California Constitution prohibiting the impairment of the obligation of contracts; and

WHEREAS, the Board, after reviewing and considering all the facts and information available, has determined that it is necessary to raise the amounts hereinafter specified by taxation and that it is not practicable to raise said sums from water rates or other sources;

NOW, THEREFORE, BE IT RESOLVED by the Board ofDirectors ofthe San Bernardino Valley Municipal Water District as follows:

1. That said Board of Directors has determined that the amounts necessary to be raised by taxation during the fiscal year beginning July 1, 2014, and ending June 30, 2015, to pay indebtedness approved by the voters prior to July 1, 1978, and/or for which a tax levy is required under Article I, Section 10 of the United States Constitution and Article I, Section 9 of the California Constitution is $46,299,000 for payments on the Contract Between the State of California Department of Water Resources and San Bernardino Valley Municipal Water District for a Water Supply dated December 30, 1960 and $1,775,000 for payments on the Devil

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Canyon/Castaic Contract dated June 23, 1972 and hereby fixes the rates of tax for such purposes as follows:

State Water Contract $ 0.1565 Devil Canyon/Castaic Contract $ 0.0060

Total Rate $ 0.1625

2. That the Board of Directors does hereby certify the rate so fixed, and as hereinbefore set forth, to the Boards of Supervisors of the Counties of San Bernardino and Riverside, State of California, and to the County Auditor Controller of said Counties, and does further certify that all legal requirements for the establishment of the said tax rates have been met and that the imposition of such levies complies with the provisions of A1iicle XIIIA, Section l(b) of the California Constitution and/or the requirements of Article I, Section 10 of the Constitution of the United States and Article I, Section 9 of the California constitution.

3. That pursuant to California Water Code Section 72093, the determination of the amounts necessary to be raised by taxation for such purposes during the fiscal year and the order fixing the rates of tax made herein shall constitute a valid assessment of the property within the District and a valid levy of the taxes so fixed.

4. That certified copies of this Resolution be transmitted to the County Auditor Controller Offices of the Counties of San Bernardino and Riverside, and that when so transmitted, said certified copies shall constitute the certification required in section 72094 of the California Water Code.

5. That funds received by the San Bernardino Valley Municipal Water District pursuant to the aforesaid tax levy shall be placed in separate funds identified for each of the indebtednesses set forth above.

ADOPTED this 5th day of August, 2014.

ATTEST:

Steve Copelan Treasurer

San Bernardino Valley Municipal Water District

By: -------------------------C. Patrick Milligan

President

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alleN BE RNARDINO

MUNICIPALY WATER DISTRICT

DATE: August 5, 2014

TO: Board of Directors

FROM: Wen Huang, Manager of Engineering

SUBJECT: Baseline Feeder Committee Report- July 28, 2014

The Baseline Feeder Committee met at 3:00 pm on Monday, July 28, 2014 in the conference

room at the offices of the San Bernardino Valley Municipal Water District. President Milligan

chaired the meeting. Directors Bulot, Copelan, and Navarro participated in the meeting. Tom

Crowley of West Valley Water District and Don Hough of Riverside Highland Water Company

also participated in the discussion.

The meeting agenda contained the following items for presentation and discussion:

2.A. Update on Operations of the New Baseline Feeder System:

Staff reported that the Baseline Feeder System has been running as designed. As of

June 30, WVWD received 2,355 acre feet (AF) and the City of Rialto received 1,028 AF,

for a total of 3,383 AF, from the new Baseline Feeder System. Overall the production for

the Baseline Feeder system tracked very well with the delivery goal.

Staff also provided a summary report for the items discussed at the July 21 Baseline

Feeder Quarterly Operations Meeting with the Stakeholders:

1. As of June 30, 2014, based on the total cost of $642,343 and 6,379 AF delivered

from July 2013 to June 2014, the unit operation & maintenance (O&M) cost was

$98.66 per AF for FY 2013/14, which is just under the projected cost of $1 00/AF.

Per the Amended Baseline Feeder Agreement, the overcharge of $8,546 will be

credited back to the parties based on the amount of water received. Due to the small

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amount, it was suggested a one-time adjustment be made in July 2014 rather than

spread it over a 12-month period.

2. Based on the projected O&M budget, it was recommended by WVWD and agreed by

all stakeholders that the unit cost for O&M will be kept at $100/AF for FY2014/15.

3. It was decided that Encanto water, if available, will be shared equally between the

agencies if more than one agency makes the request next year.

4. WVWD also reported the cost associated with O&M activities for the Baseline

Feeder. The total O&M expenditures of $13,011 for FY2013/14 will be allocated

among all agencies, including Valley District, based on their respective percentage of

ownership.

2.B. Update on Replacement of Antenna Mast at Rialto Willow Pump Station:

Staff reported that the mast and associated appurtenances that facilitated the

communications for the newly-installed flow control valve between the Rialto's Willow

Pump Station and the WVWD headquarter were severely damaged in a vehicle accident

over the Memorial Day Weekend and have since been satisfactorily replaced. While the

appurtenances were out of service for replacement, WVWD staff made necessary

adjustments on the flow control valve to accommodate continuous operation for the

Willow Pump Station. No major impact to the operation of the Baseline Feeder occurred

during the replacement.

The cost for the replacement work will be handled through the City's Risk Management

Department and will be no cost impact to the Baseline Feeder Stakeholders. · As

suggested by the Committee at the June 23 Meeting, four (4) protective bollards will be

installed around the mast shortly to minimize the chance of future damages to the mast

by traffic accidents.

Staff Recommendation: Receive and file.

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DATE: August 5, 2014

TO: Board of Directors

FROM: Douglas Headrick, General Manager Cindy Saks, Finance Manager

SUBJECT: Board of Directors Workshop- July 28, 2014

Background

The meeting was chaired by President Milligan and Directors Bulot, Copelan, Killgore and

Navarro participated in the workshop. Douglas Headrick and Cindy Saks of the District staff

participated in the meeting.

The agenda consisted of a review and discussion of the draft State Water Contract/Devil

Canyon Castaic Debt Service Fund Budget for Fiscal Year 2014-2015. Staff presented

information on projected revenues based on estimated assessed valuations and expenditures.

After detailed discussion on the Debt Service Budget, the Boardmembers present requested

that this item be presented at the August 5, 2014 meeting of the Board of Directors for

consideration. This topic is being covered under a separate agenda item at today's Board

meeting.

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