07-1210_CC_Minutes_Adjourned Regular MeetingMINUTES
SAN JUAN CAPISTRANO
DECEMBER 10, 2007
JOINT MEETING
CITY COUNCIL & WATER ADVISORY COMMISSION
Mayor pro tem Nielsen called the Adjourned Regular Joint Meeting of the San Juan
Capistrano City Council and Water Advisory Commission to order at 7:03 p.m. in the
City Council Chamber. Council Member Hribar led the Pledge of Allegiance.
ROLL CALL
COUNCIL MEMBERS PRESENT: Sam Allevato, Tom Hribar, Dr. Londres Uso, Mark
Nielsen, and Mayor Joe Soto (arrived 7:13 pm)
WATER ADVISORY COMMISSIONS PRESENT: Tom Lytle, Dan Merkle, Lee Goode,
Alan Freisleben, and Chairman Jack Zepp
STAFF PRESENT: Dave Adams, City Manager; Cynthia L. Russell, Assistant City
Manager; Meg Monahan, City Clerk; William Huber, City Consultant; Eric Bauman,
Water Engineering Manager; and Eric Joseph, Water Operations Manager
' ORAL COMMUNICATIONS
No communications were provided.
DISSUSSION ITEMS
CONSIDERATION OF FURTHER DIRECTION REGARDING POTENTIAL FOR
CONSOLIDATION OF WATER/SEWER OPERATIONS (City Council Priority
No. 23B) (1050.40)
Description: In February 2007 the City Council directed staff to investigate the
possibility of consolidation of the City's water and sewer operations with one of the three
neighboring districts; South Coast Water District (SCWD), Santa Margarita Water
District (SMWD), and Moulton Niguel Water District (MNWD). SCWD was the only
district to express an interest through response to a detailed Request for Information
(RIF) process. This report provides a summary of the SCWD response and compares
and contracts SCWD operations, staffing, rates, and financial information with the City's.
Staff recommendation as follows: The Council and Water Advisory Commission
Commission review and discuss the SCWD response to the RIF and provide further
direction to staff and consider the following possible actions: 1) Determine that further
' information is required; and a) direct staff to proceed with development of the financial
evaluation of assets and liabilities; acquisition balance; workforce and retirement -
integration plan; detailed governance plan; and return to Council for further review; and
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b) appoint two City Council members and two Water Advisory Commission member to —
serve with staff on the work plan committee; or 2) Determine, based on the information
provided, the City is not interested at this time in pursuing consolidation; and a) direct
staff to discontinue any further work on this City Council priority; and b) direct staff to
provide the City Council with information regarding an evaluation of the City's water and
sewer operations; or 3) Determine from the information provided that there is sufficient
reason to pursue consolidation with SCWD and appoint two City Council members and
two Water Advisory Commission members to serve on the consolidation negotiation
team.
Written Communications: Agenda Report and Supplementary Agenda Report prepared
by Cindy Russell, Assistant City Manager, dated December 10, 2007.
Presentations:
Cynthia L. Russell, Assistant City Manager, reviewed the City's efforts to assess the
interest and proposals of neighboring water districts in consolidating services and
provided a comparative analysis of the interest and proposal provided by SCWD.
Mike Dunbar, General Manager of SCWD, reviewed SCWD's proposed approach to
consolidation as well as his past experience with district consolidations. The approach
to consolidation included maintaining separate service rates and finances while
developing a plan for blending the agencies together over time. Additional approach
options needed to be further developed for unfunded liabilities and continuance of
governance during the blending process. He reported the SCWD plan for a new
administrative headquarters, increased challenges acquisition of water resources
supplies, biomass treatment, environmental challenges, and plans to join a regional
effort to construct an ocean water desalination plant.
Bill Huber, Wild Horse Group, consultant to the City, estimated the cost of consolidating
the City's water and sewer services with SCWD at $50,000 to $100,000
Public Comment:
John Perry, city resident, supported consolidation of the City's water services SCWD.
He felt SCWD was more knowledgeable in providing water and sewer services and he
supported their efforts to pursue ocean water desalination. He opposed the City's
pursuit of a recycled water program.
Ray Miller, city resident, former manager of SCWD, and former Water Advisory
Commissioner, offered to assist the City, on a pro-bono basis to study the potential of
consolidation with SCWD.
Discussion:
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' Water Advisory Commissioners discussed issues surrounding the potential advantages
and disadvantages of consolidation including potential advantages such as the
compatibility of the districts and efficiencies of services provided by a specialized
agency. Areas of concern discussed included potential impact to rate payers due to
differences in rate structure, change in governance, and differences in storage capacity
and facilities, among others. Chairman Zepp opposed consolidation as there is no
clear, compelling reason to consolidate.
City Council discussion focused on impacts to City rate payers, governance, facilities,
and personnel issues. Council members Allevato and Mayor Soto felt that consolidation
may provide opportunities and improved service, but further study is needed to develop
an approach to areas of concern. Mayor pro tem Nielsen felt that consolidation could
result in greater efficiency due to the focus and expert knowledge of SCWD. He also
felt the matter needed additional study to analyze the complex issues and concerns with
governance and potential impacts to rate payers.
Council Members Uso and Hribar opposed consolidation because significant
advantages to consolidation were not apparent; rate payers would be distanced from
their governing board; and potential rate increases to the City's residents due to
differences in rate structure and average lot size.
Dave Adams, City Manager, reported further study would require at least six to nine
' months and the on-going impact to employees is continued uncertainty and may
postpone hiring a department director.
Water Advisory Commission Action:
Moved by Commissioner Friesleben, seconded by Commissioner Merkle, and carried 4-
1, with Chairman Zepp in opposition, to recommend to the City Council to direct staff to
proceed with development of the financial evaluation of assets and liabilities, acquisition
balance, workforce and retirement integration plan, and detailed governance plan
related to a potential consolidation of the City's water and sewer services with the South
Coast Water District; and return to the City Council for consideration
ROLL CALL:
AYES: Commissioners Lytle, Merkle, Goode, and Friesleben.
NO: Chairman Zepp
ABSENT: None
Council Action:
Moved by Mayor Soto, seconded by Council Member Uso, and carried 3-2 with Council
' Members Uso and Hribar in opposition, to direct staff to proceed with development of
the financial evaluation of assets and liabilities, acquisition balance, workforce and
retirement integration plan, and detailed governance plan related to a potential
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consolidation of the City's water and sewer services with the South Coast Water District,
on an expedited basis; and return to the City Council for consideration; and b) in a
parallel effort, but not necessarily in conjunction with the staff direction, appointment of
two Council Members and two Water Advisory Commissioners to serve with staff on a
work plan committee.
ROLL CALL:
AYES:
Council Members Allevato, Nielsen, and Mayor Soto
NO:
Council Members Uso and Hribar
ABSENT:
None
ADJOURNMENT
There being no further business, Mayor Soto adjourned the City Council meeting at
10:12 p.m. Tuesday, December 18, 2007 at 5:30 p.m. for Closed Session and 6:30 p.m.
for the Public Business Session in the City Council Chamber.
Chairman Zepp adjourned the Water Advisory Commission meeting at 10:12 p.m. to
Tuesday, December 18, 2007 at 8:00 a.m. in the City Council Chamber
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