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MINUTES
BROOKTRAILS TOWNSHIP COMMUNITY SERVICES DISTRICT
BOARD OF DIRECTORS
BROOKTRAILS COMMUNITY CENTER
24850 Birch Street, Willits, CA 95490
November 11, 2003 |
The Board of Directors of Brooktrails Township Community Services District met in regular session on November 11, 2003 at 7:05 p.m. in Brooktrails Community Center.
A. PLEDGE OF ALLEGIANCE
B. ROLL CALL
Roll call showed the following Directors present: Pohlson, Horrick, Orth and Skezas. Also present were General Manager Chapman and District Counsel Neary. Director Venturi was absent.
REPORT ON CLOSED SESSION
District Counsel Neary reported that the Board had met in closed session, approved an agreement to purchase the grove property, and gave direction to Counsel regarding potential litigation.
C. ADDITIONS/ ADJUSTMENTS TO THE AGENDA
None
D. MINUTES OF PREVIOUS MEETINGS
October 14, 2003
General Manager Chapman pointed out that the sentence "General Manager Chapman commented that he would contact Oscar Larson and Associates to determine if there would be an increase in their cost to evaluate the deposit sites." had been added to the fourth paragraph of Item 3 under Action Agenda, on page 3404.
Director Orth asked that, in the fourth paragraph of the same item, the phrase "an appropriate deposit site" be struck and replaced with "both sides of Willits Creek as possible deposit sites." He also asked that in the last sentence, "evaluate the deposit sites" be changed to "evaluate each side of Willits Creek as deposit sites." He then made a motion to approve the minutes of October 14, 2003, as modified. The motion was seconded by Director Horrick, and passed unanimously by the members present.
October 28, 2003
Director Pohlson made a motion to approve the minutes of October 28, 2003 as written. The motion was seconded by Director Orth, and passed unanimously by the members present.
E. SPECIAL PRESENTATION
None
F. PUBLIC HEARING
2. HEARING ON ORDINANCE NO. 122
General Manager Chapman made note that the Board had been working on the Water Conservation program for approximately six months.
President Skezas opened the public hearing at 7:08 p.m.
Dorothy Ramming, resident of Iris Terrace, came to the podium. She voiced concern about the application of the penalty based upon the tier system, as she was the owner of a 16 acre parcel with two homes on one meter. General Manager Chapman explained that he had scheduled her specific issue for the December 9th Board meeting.
Hearing no other comments, President Skezas closed the public hearing at 7:12 p.m.
Director Orth made a motion to waive further reading and adopt Ordinance No. 122, an Ordinance amending Ordinance No. 76 to add Chapter V, Water Conservation. The motion was seconded by Director Horrick, and the vote was taken as follows:
AYES: Directors: Pohlson, Horrick, Orth, Skezas
NOES: Directors: None
ABSENT: Directors: Venturi
Ordinance No. 122 Adopted.
3. HEARING ON ORDINANCE NO. 123
General Manager Chapman explained that Ordinance No. 123 would provide additional time for applicants to pay connection fees to the District after receiving approval from DHS for a water service connection.
President Skezas opened the public hearing at 7:14 p.m. Hearing no comments, he closed the public hearing at 7:15 p.m
Director Orth made a motion to waive further reading and adopt Ordinance No. 123, an Ordinance amending Ordinance No. 76 to revise Chapter IV, Article 3, Section 4-303. The motion was seconded by Director Pohlson, and the vote was taken as follows:
AYES: Directors: Pohlson, Horrick, Orth, Skezas
NOES: Directors: None
ABSENT: Directors: Venturi
Ordinance No. 123 Adopted.
G. PUBLIC COMMENTS
Director Orth congratulated Director-elect Mary Ziady who was present in the audience, on her recent election to the Board.
H. CONSENT CALENDAR
4. REVIEW OF ACCOUNTS PAYABLE REPORT AND AUTHORIZATION TO ISSUE CHECKS
General Manager Chapman provided additional information on the check to Steve's Auto Care that was questioned at the October 28th meeting. He also requested permission to issue checks on November 21st, with approval by the Board President, followed by a written report to be reviewed by the Board at the December 9th meeting.
Director Orth asked for additional information on the purchase of streambed wash-rock. He moved to approve the report, and to authorize issuance of checks, including the November 21st check run. The motion was seconded by Director Horrick and passed unanimously by the members present.
I. ACTION AGENDA
5. ROBERT HUBIK, CPA - PRESENTATION OF THE ANNUAL AUDIT FOR THE FISCAL YEAR ENDED JUNE 30, 2003 AND THE RELATED MANAGEMENT LETTER
Utilizing the overhead projector, General Manager Chapman reviewed the Fund Balance Sheets for the Fiscal Year, indicating improvements in the all of the funds, with the exception of the Golf Fund. In particular, he pointed out that the General Fund had increased its balance from $51,000 to $148,000. He then introduced Robert Hubik, CPA, the District's Auditor.
Mr. Hubik came forward. In reviewing the list of assets, Director Orth asked if the value of assets such as land, plant, structures and improvements took into account the increase in property values over the last several years. Mr. Hubik explained that such assets are valued based upon historical cost. Director Horrick suggested that the District could have property appraised if necessary, for lending purposes. Under Liabilities and Equity, Mr. Hubik pointed out the increase in accrued sewage treatment expense.
Moving on to the Revenues and Expenditures, Mr. Hubik pointed out the increase in revenues in the General and Fire Funds, noting the Grant Revenue received by the fire department. General Manager Chapman commented that the increase in repairs and maintenance included the replacement of the engine in one of the fire trucks. Mr. Hubik attributed much of the increase in combined expenditures from $364,000 to $452,000 to an increase in capital outlay.
Director Orth pointed out the increase in Worker's Compensation Insurance. Mr. Hubik explained that the District's carrier levied a special assessment to all Districts based on the number of years that they have been involved in the JPA. This amounted to a little over $30,000, spread over ten years, shown as an expense and a long term liability.
Mr. Hubik next reviewed the comparison of budget to actual expenditures. He briefly commented on the new rules regarding budgets that would come into play during the next fiscal year.
Moving on to the combined statement for the Enterprise Funds, he pointed out that Operating Revenues had increased by about $77,000, and Operating Expenses had increased by about $244,000. He then related th importance of the Non-Operating Revenues, such as Capital Facility Fees (Connection Fees) that brought in $396,000. After these Non-Operating Revenues and Expenses are considered, Net Income went from $85,000 to $235,000, a positive trend. However, Net Operating Income went from a $36,000 loss in the previous year to a $202,000 loss in the current year, which included $409,000 in Depreciation. Director Horrick pointed out the increase in sewage treatment expense from $216,000 to $300,000. Mr. Hubik commented that sewage treatment expense would continue to increase in the future.
District Counsel Neary commented on the reporting of capital expenditures as operating expenses. Mr. Hubik explained that, based upon its agreement with the City of Willits, the District's share of the capital expenditures is classified as an "annual service fee" as the District has no ownership rights. He made the suggestion that the agreement be changed to allow the District to capitalize the expenditures. District Counsel Neary suggested characterizing the District's interest in the sewage treatment plant as an "easement interest."
For the benefit of the audience, General Manager Chapman explained that the City of Willits will achieve the benefit of placing the $10 million sewage treatment plant as an asset on their books, whereas the District may have to write off its 37% share as an operating expense. Mr. Hubik further commented that the District may have to borrow money in the form of an operating loan to cover its portion of the cost, which would result in interest expense not shown as sewage treatment expense, but as interest expense over and above the cost of sewage treatment.
Mr. Hubik briefly reviewed the Combining Balance Sheet for the individual funds, pointing out that the Golf Fund's contributed capital over the years was a positive $616,000, although operating income had turned from a positive to a negative. Moving on to the Combining Statement of Revenues, Expenses and Changes in Accumulated Deficit, Mr. Hubik pointed out the Net Operating Income (Loss) in the Sewer and Golf Funds.
General Manager Chapman pointed out that adjustments had been made to Depreciation Expense in the Golf Fund which caused it to increase to $26,000. Mr Hubik concurred, and commented that the expense for the next fiscal year should be closer to $15,000.
General Manager Chapman called attention to the list of Interfund Receivables and Payables, noting the obligations from the Golf Fund to the Water and Sewer Funds. Mr. Hubik explained the obligations as defacto loans that result from working capital shortages which are covered by the other funds.
Going back to page 7, Mr. Hubik reviewed the Cash Flow Statement, pointing out that overall there was an increase in cash of $664,000 for the year, as opposed to $432,000 the previous year, a positive developemnt. He then reviewed the Combining Statement of Cash Flows on page 35, noting that the Golf Fund had a loss of approximately $7,500. However, money did come in from other sources resulting in an ending cash balance of $3,200 as opposed to $200 in the previous year. As far as operations, cash-wise, he commented that Water and Sewer looked healthy, but he urged the Board to address necessary deferred maintenance.
Director Pohlson voiced concern about rates keeping pace with depreciation. Mr. Hubik provided an explanation of how capitalized projects affect depreciation.
Mr. Hubik reviewed the activity for the year on the restricted cash funds, which was summarized in the Notes to Financial Statements.
He then commented briefly on each item listed in the Management Letter. He urged the Board to continue its efforts to eliminate cash shortfalls, especially in the Golf Fund, and stressed the importance of accurately allocating payroll to the various funds. He also reviewed the items which he considered to be reportable conditions, including the accounting of uncollectible accounts and the use of the account titled "Contingency Reserve."
Moving on to the comments regarding sewage flow reports, Mr. Hubik noted the variance between the meter readings taken by the City of Willits and the District. Discussion ensued regarding the meter readings used to calculate the annual sewage treatment expense. Both District Counsel Neary and Mr. Hubik agreed that the issue of the variance should be addressed.
Mr. Hubik made recommendations regarding the District's chart of accounts. He also recommended developing policies which would strengthen internal control.
Director Orth made a motion to accept the audit, seconded by Director Horrick. The motion passed unanimously by the members present.
The Directors thanked Mr. Hubik for attending.
A break was called to change the tape.
BREAK at 8:52 p.m. - RECONVENE at 8:56 p.m.
6. REVIEW OF COMMENTS FROM THE COUNTY OF MENDOCINO, DEPARTMENT OF PLANNING AND BUILDING, TO THE FIVE-YEAR REVIEW OF THE BROOKTRAILS SPECIFIC PLAN
General Manager Chapman explained that in January, 2003 the Board had provided the five year update of the Specific Plan to the County for review. After a meeting with representatives from the Department of Planning and Building, written comments had been received. He pointed out the County's concerns regarding the 16% driveway slope, and asked the Board to review and comment for preparation of a formal response for consideration at the December meeting.
Director Pohlson voiced concern about the amount of earth that may have to be disturbed to obtain the 16% slope, and the necessity for retaining walls.
Director Orth commented that the new committee can address issues such as off-street parking and the hillside ordinance.
General Manager Chapman commented that the driveway slope issue is County-wide. He reported that the County Department of Transportation has a driveway standard of 20%, and CDF has a standard of 16% plus 2% on a case-by case basis.
Director Pohlson suggested that the District's standard conform with the County's. She asked that on page 10-37, in item A, 0 - 10%, the phrase "except for single-family dwellings" be deleted. The other Board members voiced agreement with her suggestions.
7. CONSIDERATION OF A RESOLUTION AUTHORIZING THE APPLICATION FOR GRANT FUNDS FOR THE RECREATION TRAILS PROGRAM.
General Manager Chapman explained that the State Department of Parks and Recreation had requested additional information regarding the grant application, and that if the grant were approved, it would require a 20% match, or a total of $30,715. He suggested that the Board may want to curtail the project back from five bridges to some other number.
Janice Gendreau, Chairman of the Recreation, Greenbelt, Conservation Committee, and grant writer, confirmed that the State had asked specifically, how much of a match the District is willing to make. She recommended amending the application to one bridge. Director Orth suggested one bridge per year. Ms. Gendreau confirmed that the program is done on an annual basis. She also pointed out that there is $4,500 available from the first $30,000 Per Capita grant that could be used as part of the match.
Mike Aplet, Recreation Committee member and member of the Wild Turkey Trail Club, reported that there had been approximately $13 million in grant applications received, and approximately $2 1/2 million expected to be available. He felt that the first two bridges would be ideal to provide emergency access, but commented that he would be happy with one. He provided detailed information on the length and width of the proposed bridges.
Director Pohlson asked the Board to consider obligating matching funds for the first two bridges, less the $4,500 available from the Per Capita grant.
Director Orth made a motion to adopt the proposed resolution authorizing the application for grant funds for the recreation trails program for two bridges. Director Horrick suggested authorizing up to $15,000 in matching funds. Director Orth amended his motion accordingly. The motion was seconded by Director Pohlson, and the vote was taken as follows:
AYES: Directors: Pohlson, Horrick, Orth, Skezas
NOES: Directors: None
ABSENT: Directors: Venturi
Resolution No. 2003-40 Adopted.
8. APPROVE AGREEMENT WITH OSCAR LARSON AND ASSOCIATES FOR PROJECT DESCRIPTION FOR EIR FOR DREDGING LAKE EMILY, INCLUDING SOIL DEPOSIT SITE
Director Orth made a motion to approve an agreement with Oscar Larson and Associates to develop a Project Description for an EIR for dredging Lake Emily, including the soil deposit sites, not to exceed $15,000. The motion was seconded by Director Pohlson and passed unanimously by the members present.
9. APPROVE ALLOCATION OF $40,000 TO COMMENCE ENVIRONMENTAL TASK PHASE OF CLEARWELL AND BACKWASH POND PROJECT
General Manager Chapman explained that in January of 2003, the Board approved increasing the size of the clarifier from 35,000 gallons to 100,000 gallons, to meet the requirements of the Department of Health Services. He reported that recently an engineer from USDA Rural Development had recommended increasing the size to 160,000 gallons, which could be done for an additional estimated $50,000, to provide additional capacity for future growth.
Using a diagram of the water treatment plant displayed on the overhead projector, he explained how the existing tank could be moved, and used as a back-up unit, and the new tank could be placed by cutting away a portion of the hillside.
He also displayed a chart indicating the difference in cost between the two tank sizes, increasing from $315,000 to $365,000. He also recommended adding $35,000, the cost of refurbishing the existing 35,000 gallon tank, and the $290,000 for the backwash ponds to the proposed financing, for a total loan request of approximately $690,000.
He asked the Board to approve the expenditure of $40,000 for Oscar Larson and Associates to proceed with the next task, the environmental review of the clearwell and backwash projects, which would be reimbursable through the loan.
Director Orth made a motion to authorize the General Manager to proceed with Oscar Larson and Associates for $40,000 to perform Task #2, the environmental review of the clearwell and backwash pond projects; project to include a 160,000 gallon clearwell and refurbishing of the existing 35,000 gallon clearwell for an additional $35,000 cost estimate, to be added to the project.
The motion was seconded by Director Horrick.
Director Pohlson spoke in favor of the proposal, as it would bring the capacity of the water treatment plant up to the point that it would not have to be upgraded to meet the goals of the Specific Plan.
General Manager Chapman pointed out that two-thirds of the cost of the clearwell project could be funded by the Water Capacity Fund.
President Skezas called for a vote on the motion, which passed unanimously by the members present.
J. SPECIAL REPORTS - GENERAL MANAGER
Upon review of warrants for October, Director Orth noted that the amount charged by the CA Department of Health Services for Water System Fees was increasing every year, and asked that it be tracked. He also asked about a check in the amount of $400 for highway encroachment on Tulip Place. General Manager Chapman explained that it was because of a cut in the road which was required to install a water connection. Director Pohlson felt that those costs should be anticipated, and suggested that they be charged back to the customer in the future. Director Orth also asked about the check to Five Star Electric for telemetrics. General Manager Chapman confirmed that it was related to the new telemetric system.
General Manager Chapman reported that the dredging project had once again been turned down by the State Revolving Fund. USDA Rural Development was considering the project, although they would charge a higher interest rate.
He also reported that District staff had completed a major cleanup of the area behind the golf maintenance shop. He publically thanked Richard Estabrook for his help installing the measuring marker devices at Lake Emily.
Director Pohlson asked for clarification regarding the source of federal funds through USDA. District Counsel Neary explained that the money is provided through the Department of Agriculture, and allocated on a pro-rata basis.
K. PUBLIC COMMENTS
Janice Gendreau voiced concern about fire hazard abatement of private lots. She suggested implementing a drive-by review and letter writing program. Director Pohlson suggested sending abatement program information to each lot owner with the annual tax notice mailing in the Spring every year.
Mike Aplet suggested non-compliant lot owners be issued a citation. He felt that mowing of tall grass should begin prior to July. He also commented on the problem of dead trees in the greenbelt.
Ms. Gendreau suggested withholding permits as a means of enforcement.
Claudia Reed, resident of Primrose Terrace, commented that some of the material burned by hazard abatement crews could be better utilized as firewood. She also voiced concern about leaves piled in the streets by the County road crews.
L. ADJOURNMENT
Director Orth moved to adjourn and President Skezas declared the meeting of November 11, 2003 closed at 9:38 p.m.
MICHAEL V. CHAPMAN
Secretary to the Board of Directors
GEORGE SKEZAS,
President |
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