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The first Community Services District board meeting of the year was a three-hour session that looked at the need for continued water conservation, additional costs for the new North Gate,  future use of recycled water, and a bond sale that finances a developer’s share of the expanded water treatment plant.

Conservation update

The reservoirs that store the community’s water are 82 percent full, said Paul Siebensohn, director of field operations, compared to 61 percent at this time last year, but diversions from the Cosumnes River have stopped. The CSD can divert water from the Cosumnes from November through May after flows reach 70 cubic feet per second.

More than seven inches of rain fell in December. “Based on historical rainfall events, the river should still be flowing above 70 cfs right now, and it’s not,” Siebensohn told the board. “We stopped diverting in early January because the river dropped below 70 cfs. ... With the December we had, in any other year it would have stayed flowing over 70 cfs, no problem.” The river flow at the time was 50 cubic feet per second, he said.

Siebensohn attributed the lower flows to the prolonged drought. “The ground completely dried up, and it’s continuing to absorb all the river flow water right now,” he said.

“The scary part will be when the river runs dry in February. ... Seemingly we’re headed there,” said Director Mark Pecotich.

Siebensohn’s conservation summary in the meeting packet notes that 2014 has been designated the hottest year on record for California and the drought is predicted to remain, but improve.

At the board meeting, held Jan. 21, Siebensohn said water treatment plant production in December was down about 20 percent from the average for the past five years and down 28.7 percent from December 2013. He characterized 2013 as “an exceptional year,” with little rainfall.

But despite below-normal rainfall, the CSD was able to fill Calero, Chesbro and Clementia reservoirs by the end of the 2014 diversion season.

It was construction of a new water treatment plant in the footprint of an existing facility that triggered conservation measures later in the year.  The CSD imposed mandatory water conservation in September, when the water treatment facility was shut down for the project. Residents are relying on the remaining facility, which has a maximum production capacity of 2 million gallons a day.

The conservation measures that are in effect limit watering to a maximum of two days a week.  For the North, watering days are Monday and Friday; for the South, Murieta Village and commercial customers, watering is permitted on Tuesday and Saturday. Water times are from midnight to 10 a.m. only.

Siebensohn said a timeline is being worked on for the start-up of the new plant. “You’re in deep trouble if it ain’t online in mid-June,” President Jerry Pasek remarked.  From the audience, development representative John Sullivan commented,  “May. Building permits to pull in June.”

Siebensohn responded, “I’ll have a schedule update soon. But right now, it’s looking like June might be pushing it.” He said getting the plant online is a process that involves the manufacturer of the filtration system and state agencies. A plan will be assembled as the summer months get closer  “if (construction managers) can’t rein the schedule in,” Siebensohn said.

North Gate costs

The board continued to debate the CSD share of costs for the Rancho Murieta Association’s North Gate project as directors reacted to an $8,003 request from RMA for survey work, electrical conduit routing and installing foundations for gate equipment the CSD is purchasing for the project.

A memo from Security Chief Greg Remson to the board notes there may be additional costs that are unknown at at this time.

“How did we get notified so late in the game that we’re being tagged to supply surveying and digging on somebody else’s property?” asked President Jerry Pasek.

Security Chief Greg Remson replied that plans for the gate show gate operation equipment -- gate operators, barcode readers, intercoms -- and he worked with RMA for their placement on the plans. The CSD expected its obligation to be met with the installation of the equipment. Instead, “we were responsible for everything,” Remson said.

“I think it’s a reach,” said Director Mike Martel, adding that he had talked with RMA officials. “I understand their point of view,” he said.

Director Paul Gumbinger commented,  “I have a hard time swallowing this, especially the surveying and the digging and so on. As far as I was concerned, when you looked at those drawings, one would say equipment is ‘by others,’ not physically locating this. ... I think it’s a real stretch.”

Director Betty Ferraro pointed out that the CSD is without representation on the RMA gate committee since Gumbinger says he serves on the committee in the capacity of an architect, not a CSD director, and Remson is staff.

Developer representative John Sullivan of Cosumnes River Land LLC entered into the discussion, saying the CSD made “significant requests” of RMA during the design process. He said the current charges were “small potatoes,” in his opinion.

“Shame on us for not getting a little bit more details. They had never invited us to the party,” Martel said.

The RMA’s design triples the number of gates to six, and also increases the number of barcode readers and cameras. The gate is owned by RMA and operated by CSD, which is responsible for maintaining and replacing the gate equipment.

In recent months, the CSD board has approved expenditures of more than $200,000 for cameras, gate arms and operators, a generator, conduit and other equipment for the new gate.

The bulk of the funding for the North Gate project comes from a development agreement between RMA and the Pension Trust Fund for Operating Engineers that was signed in 2003 and runs with the land. The PTF commitment of $1.4 million for the gate was triggered in 2004, but RMA didn’t move forward with the project until 2009. The PTF placed the funds in an escrow account in 2013 after the Mutual Benefit Agreement was amended to place control of the project with RMA.

A timeline and information about the North Gate project are available here.

The majority of the work in the $8,003 request  has been completed, according to Remson’s memo, and the amount does not reflect the total cost since RMA has agreed to share the cost with the district.

The expenditure was approved, with the sole vote against it cast by Ferraro. Funding will be borrowed from capital improvement fees, with a payback timeline of five to 10 years from future security impact fee payments related to new development or net income from the Security operating budget.

Following the vote on the additional expenses, the board reconsidered a $5,000 payment to RMA that was approved in December for the partial cost of relocating a water line for the North Gate project.  The January vote was the same as December’s, with a minority, Directors Jerry Pasek and Ferraro, voting against paying RMA.

Board looks at advertising inserts

For years the Rancho Murieta Women’s Club has relied on the CSD to help get the word out about the quarterly blood drive it sponsors for the community. In addition to banners at the gates, flyers, and notices in the media, an insert appears in the monthly CSD bill. “We’re very pleased to have this,” Sheryl Bray, co-chair of the drive, told the board.

While the CSD’s normal practice is to disallow advertising for non-CSD events or other entities, the blood drive has been the exception.  But the policy the board considered at the January meeting would end that exception.

The policy came about after the previous general manager allowed the Country Club to insert an ad for new members in the October bill. A director questioned the propriety of the advertising insertion, and CSD counsel Dick Shanahan said the district could open itself to First Amendment conflicts and protests by allowing some advertisements and not others, so he recommended allowing none.

At the request of the Communications & Technology Committee, staff developed a policy that, if adopted, would bar advertising for any non-CSD events or entities.

At the board meeting, President Jerry Pasek called the inserts “very effective” and said he would like to see an exception made for “public service type stuff.”

Shanahan explained, “It’s legal and appropriate for the district to allow community groups to use your billing statements to communicate messages to your ratepayers.  The danger is, under the First Amendment, you then can’t regulate the content of the speakers.” Directors may support the blood drive, but not the next group, he said, and they wouldn’t be able to pick and choose.

Director Paul Gumbinger suggested the CSD co-sponsor the blood drive, which Shanahan said would be appropriate for the district to do. Shanahan said the district can also make narrow exceptions in the policy, starting with non-profit corporations that are local, to address concerns about commercial use. Shanahan described these as “filters” that wouldn’t regulate the message.

Developer representative John Sullivan said the Country Club is a non-profit corporation, and Director Mike Martel said Summerfest, the group he founded with other community members,  also has non-profit status. Martel said he could think of 15 different non-profits with events every month -- “a lot of good causes.” Many groups have asked to use the CSD mailer as a way of “getting their message out,” Martel said, and he likened the issue to the Rancho Murieta Association’s  “religious signs on common property” issue, saying his view is “let it all come.”

Pasek asked Shanahan to work out the language of the policy with General Manager Darlene Gillum and the board will revisit the matter at its next meeting.

Explaining the master reclamation permit

A lengthy list of studies, policies and reports going back to 2007 resulted in the CSD being issued a master reclamation permit and wastewater discharge requirements.

“This is a huge undertaking,” explained Paul Siebensohn, director of field operations. “We are the sole controlling agency responsible for recycled water use in the district and all the approved areas identified in our report of waste discharge, and we have oversight by the Regional Board and of course the EPA overseeing them.”

Recycled water is “a very valuable resource” and the district is looking at utilizing it to offset potable water use in the future, Siebensohn said in a presentation to the board. The permit expands the use of recycled water in the district public landscape areas (parks, etc.), front and backyard landscape for future development, and expands the Van Vleck spray fields between development phases, he said.

At the present time, the CSD supplies all the recycled water it produces -- about 450 acre-feet -- to the Country Club for use on its golf courses. Since the courses use 550 acre-feet of water for irrigation, the club augments recycled water with river water, using the club’s riparian right to pump from the river, Siebensohn explained.

As the community grows, the recycled water supply will grow and infrastructure requirements and improvements are needed to utilize it.  At full build-out, it’s expected there will be about 300 acre-feet of excess recycled water.

The current regulatory environment requires expensive infrastructure to utilize non-potable recycled water -- separate “purple pipe” systems, additional storage basins and treatment facility upgrades.

But Siebensohn noted there is “a big, big push moving forward in California, everywhere throughout the world” for indirect potable reuse of recycled water. Although potable reuse is not allowed in the state’s current regulatory structure, Siebensohn said a water purification demonstration project in San Diego pumps advanced-treated recycled water into a reservoir where it mixes with raw water for potable reuse.

“That could be a viable option in the future and the costs would be just obscenely less than what it would cost to put in all the infrastructure for the other scenarios,” Siebensohn said. Instead of spending $17 million to $20 million for “purple pipe” recycled water use,  he estimated the cost for indirect potable reuse at under a million dollars.

Siebensohn’s presentation on the reclamation permit is here (1.3-MB PDF).

Community Facilities District funding

General Manager Darlene Gillum announced at the January board meeting that $6 million in bonds for Community Facilities District No. 2014-1 were priced that day and she expected proceeds from the bond sale the following week.

Eight days later, the CSD announced the close of the sale and the receipt of $4,358,245 for the community facilities district. The CSD’s next step would be “to draw (reimbursement) for expenditures to date,” according to the announcement.

The CSD is due about $1 million in reimbursement, Gillum said at the board meeting. Resident David Fields had questioned why the CSD was using ratepayer funds instead of drawing on the $4 million letter of credit the developer group represented by John Sullivan provided for its share of the treatment plant.

Gillum said the financing and services agreement with the Sullivan group allowed the CSD to draw against the letter of credit after mid-September. Since Gillum left the district in June and returned in late December as general manager, she said she didn’t know what agreements were made after September, and the funds were already spent. No provision was in place to charge interest, fees or penalties for the use of the CSD reserve funds, Gillum said.

Fields said CSD officials assured him no “homeowner funds” would be used to finance the Sullivan group, “yet you’re telling me tonight you used a million dollars. There’s a little disparity there. ... There is a perception that the board is owned by Sullivan.”

“It’s a million bucks today but that million bucks started in December,” President Jerry Pasek said. He said the district’s reserves get “a quarter-percent interest,” and estimated the cost to the district as “a few hundred bucks” in lost revenue.

Sullivan, who attended the meeting, told the board that he appreciated “the extra 19 days that CSD is waiting” for the bond funds, but added that the CSD is holding developer funds that it makes interest on “which will exceed the interest that might be $136 bucks for 19 days by roughly $6,700 bucks over the course of the next year.”

“I think I kind of implied that,” Pasek said.

The CSD committed to spending $4.3 million as its fair share of the $12.8 million plant cost. Developer funding provided the balance, secured by letters of credit from South developer Reynen & Bardis and developer interests represented by Sullivan.

Sullivan’s group worked with the CSD to establish the community facilities district and replace the developers’ $4 million letter of credit with bond proceeds.

The CSD board adopted an ordinance in September authorizing a special tax levy within the community facilities district formed for undeveloped property owned by Cosumnes River Land and Rancho Murieta Properties.  That levy area consists of the Murieta Gardens hotel and shopping center site, acreage by the CSD Building, and about 730 acres in Murieta North formerly owned by the Pension Trust Fund for Operating Engineers.

The annual tax will be levied only on the properties within that area, which comprises Community Facilities District 2014-1.

At its December meeting, the board was told that delays in developer funding for the water treatment plant meant the CSD was bearing the financial load. According to a summary in the December meeting packet, the district had expended about $3 million from reserves since July 1, the start of the fiscal year, bringing total reserves to about $5.8 million.

According to Gillum, money that’s been taken from CSD reserves for developer shares of the water treatment plant will be replaced by the bond revenue from Community Facilities District No. 2014-1  and a draw on the Reynen & Bardis letter of credit. Then the only money coming out of reserves for the plant will be the CSD portion, she said.

Funding sources for the CSD share are a $1.5 million rehab commitment, water replacement reserves, and $2 million borrowed from other CSD reserves that is being repaid with 2 percent interest by ratepayers over 10 years. Ratepayer costs for the plant appear as a flat charge of $6 on the monthly CSD bill.

In brief

  • John Sullivan of Cosumnes River Land LLC demanded stepped-up patrols of undeveloped areas in Murieta North. “We continue to have sensitive properties, cultural resources, wetlands damaged,” he told the board.  “... If any of these artifact areas are damaged to the point where there are any bones or skeletons exposed, there will be a major shutdown of the back area...” Sullivan declined to disclose locations where the problems are occurring.
  • General Manager Darlene Gillum was appointed district treasurer and Regional Water Authority board representative.
  • The CSD plans to put its augmentation well project out to bid again, pending the receipt of right-of-entry agreements from landowners for the well sites.
  • The board accepted water, drainage and sewer easements required for approval of the final map and improvement plans for the Retreats, a subdivision approved for Murieta North.

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