regular board meeting september 22, 2020 · 2020. 9. 17. · september 22, 2020 . this page...

REGULAR BOARD MEETING

SEPTEMBER 22, 2020

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Board Meeting – 09/15/20 1

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THE REGULAR MEETING OF THE BOARD OF DIRECTORS

OF STOCKTON EAST WATER DISTRICT WAS HELD AT THE DISTRICT OFFICE

6767 EAST MAIN STREET, STOCKTON, CA

ON TUESDAY, SEPTEMBER 15, 2020 AT 12:00 NOON

A. PLEDGE OF ALLEGIANCE AND ROLL CALL

Vice President Watkins called the regular meeting to order at 12:31 p.m. and Director McGaughey

led the Pledge of Allegiance.

Present at roll call at the District were Directors Atkins, Cortopassi, Sanguinetti and Watkins.

Also present were Manager Moody, Assistant Manager Hopkins, Finance Director Vega,

Administrative Services Manager Carido, Administrative Assistant Curtis and Consultant Barkett.

Present at roll call via teleconference were Directors McGaughey and McGurk. Also present via

teleconference was Legal Counsel Zolezzi. Director Panizza joined the teleconference at 12:33

p.m.

B. CONSENT CALENDAR (None)

C. PUBLIC COMMENT (None)

D. SCHEDULED PRESENTATIONS AND AGENDA ITEMS

1. Minutes 09/08/20 Regular Meeting

A motion was moved and seconded to approve the September 8, 2020 Regular Meeting

Minutes, as presented.

Roll Call:

Ayes: Atkins, Cortopassi, McGaughey, McGurk, Panizza, Sanguinetti, Watkins

Nayes: None

Abstain: None

Absent: None

2. Warrants

a. Fund 56 – Construction Fund

b. Fund 67 – Agricultural Fund

c. Fund 68 – Municipal & Industrial Groundwater Fund

d. Fund 70 – Administration Fund

e. Fund 71 – Water Supply Fund

f. Fund 89 – Fish Passage Improvements Fund

g. Fund 91 – Vehicle Fund

h. Fund 94 – Municipal & Industrial Fund

i. Payroll

j. Summary

k. Short Names/Acronym List

l. SEWD Vehicles & Heavy Equipment

Director McGurk inquired on the expense on page 15, line item 22 for Yriarte Sheep Company

for UFC livestock grazing service in the amount of $19,000. Manager Moody replied the DRAFT

Agenda Item: D-1 Date: 09/22/20

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District was billed per acre of grazing and the acreage was underestimated by 9.7 acres,

causing this cost to be just over the approve contract amount.

Director McGurk inquired on the expense on page 21, line item 4 for Burlingame Engineers,

Inc. for Centrac pump service/repair kit for Chemical Feed pumps in the amount of $1,002.30.

Manager Moody replied there were 6 repair kits purchased, this does not include service.

Director Cortopassi inquired on the expenses on page 11, line items 1 & 2 for SEWD-Bank

of Stockton Checking of Prin North site property qrt ending Oct 2020 in the amount of

$34,497.50 and Intr North site property qrt ending Oct 2020 in the amount of $25,468.85.

Manager Moody replied these costs are relative to the North Site property.

Director Cortopassi inquired on the expense on page 21, line item 20 for Hach Company for

annual service of Hach equipment at WTP in the amount of $22,236.20. Manager Moody

replied the District has several Hach items onsite that are tested, calibrated and cleaned.

Assistant Manager Hopkins added this cost was for the analyzer equipment that is used for

water quality needs.

A motion was moved and seconded to approve the September 15, 2020 Warrants, as presented.

Roll Call:

Ayes: Atkins, Cortopassi, McGaughey, McGurk, Panizza, Sanguinetti, Watkins

Nayes: None

Abstain: None

Absent: None

Manager Moody reported on a follow-up from a previous Board Meeting regarding the cost

of the District’s Waste Management services. Manager Moody reported that the District is

being billed in an open market plan and will be switching over to government pricing.

3. Stockton East Water District – County Costs and Alternative Options Memo, 08/13/20

a. Resolution No. 20-21-06 – Approving The Banking Services From Farmers & Merchants

Bank Of Central California And The Payroll Services From Automatic Data Processing,

Inc. (ADP)

Manager Moody reported this memo is the same that was presented to the Board at the

August 25th Regular Board Meeting. Staff has worked through the Board questions that

arose during that meeting.

Manager Moody reported that Finance Director Vega created a spreadsheet with all

information showing a side-by-side view, which makes the information easier to read

through.

Manager Moody reported overall, the best proposal the District received was from F&M

Bank to house operating funds; utilizing a Local Agency Investment Fund (LAIF) account

for operating and reserve funds; utilizing ADP for payroll processing and keeping the

collections portion with the County.

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Manager Moody reported there was also discussion on the District being able to begin

processing credit cards for customer payments, as staff frequently receives requests for

credit card use.

Director McGurk inquired what an ACH process is. Finance Director Vega reported ACH

stands for automatic clearing house and in essence is like a bank transfer or wire. CalPERS

no longer takes checks and only accepts ACH transfers.

Director McGurk inquired on the insurance that F&M offers regarding guarantee on

returns. Manager Moody replied F&M Bank self-insures and is able to match 100% of the

funds they are holding. Finance Director Vega reported when the District began this

process, a requirement staff had was that banks hold at least 100% collateral of what they

are holding for the District. Manager Moody added that from the amount staff proposes to

move from the County, the majority of those funds will be going into a LAIF account, and

only a few million will be housed at F&M Bank.

Director McGurk inquired if the District suggestion of using credit cards should be

included in the resolution. Finance Director Vega replied it was not included as it is an

optional service. If the Board agrees to it, it will be brought back in its own resolution.

Director Cortopassi inquired if staff is content with the County’s payroll processing.

Finance Director Vega replied for the most part the County does a fair job, however, staff

does run across issues, such as; running reports as the County is unable to expedite certain

reports when needed or send reports via e-mail; additionally, District staff does not have

permission to run certain reports themselves in the County system.

Director Watkins inquired if ADP will be responsible for W-2s and direct deposit. Finance

Director Vega replied yes. Currently, the County runs W-2s through ADP, which is the

service staff is proposing to use. Based on the proposal, ADP would be responsible for tax

submittals, direct deposit, etc., and they take full liability.

Director Watkins inquired if the County can transfer straight to a LAIF account. Finance

Director Vega replied yes, there is that ability.

Director Watkins advised that the Resolution needs to directly spell out what the District’s

plans are for moving funds and what exactly will be moved to be as transparent as possible.

Director Sanguinetti concurred.

Director Sanguinetti advised that staff would need to request reports from the County prior

to moving funds to have a written number of how much money will be transferred to insure

that all money transferred from the County to another entity remains at the same amount.

Director Sanguinetti inquired if it would be more advantageous to switch over to ADP at

the beginning of next year to ensure there are no issues with W-2s. Finance Director Vega

replied the agreement can be signed now and can take effect January 1, 2021.

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Director Sanguinetti suggested bringing this Resolution back to the Board for further

consideration after it has been edited to specifically outline what steps will be taken

regarding money transfer.

Director Watkins suggested staff research further into the payment processing systems

through Bank of the West as they are the cheapest bank for this process. Director

Sanguinetti agreed, adding a small percentage surcharge could make a big difference on

customers with larger accounts.

Director Watkins inquired on petty cash and other checking accounts. Finance Director

Vega reported the District has an emergency account through Financial Center Credit

Union. Director Watkins inquired if these funds will be transferred over to F&M Bank

too. Finance Director Vega replied that was not part of the analysis presented.

President Panizza inquired if staff can bring this item back for the Board’s consideration

at the September 29th Regular Board Meeting. Manager Moody replied staff will work on

this item to try and have it prepared by then.

4. Draft 2020/2021 Fall/Winter Newsletter

Manager Moody provided the Board with a draft of the District’s 2020 Fall/Winter Newsletter.

Manager Moody reported Director McGurk inquired on a deadline for correcting the

sustainability issue. Manager Moody advised he will wordsmith that section, along with a few

grammatical errors prior to sending to print.

Manager Moody requested the Board submit any suggested edits to staff within the next day

so the newsletter can be sent to print.

Director Cortopassi inquired if there are projects in the pipeline and that is why staff is

recommending ending the irrigation season by October 4th. Manager Moody replied the permit

requires that dams are removed by October 10th for Bellota. And, there are projects that staff

needs to get done by the end of the year and that requires the system to be dry first.

5. Stockton East Water District – Establishing Program and Incentives for Encouraging the Use

of Surface Water Discussion

Manager Moody reported the District has received its first applicant this year under the new

Program that the Board approved at the July 23, 2019 Regular Board Meeting.

Manager Moody reported this Program had been suspended for a few years, until staff was

able to re-write the language as appropriate. The major change to the language included that

those who participate in this Program will be charged the groundwater rate, up to a maximum

of 7-years. Landowners cannot recoup more money than what they expended and they cannot

pay the groundwater rate for more than 7-years.

Manager Moody reminded the Board that as was discussed with them and Legal Counsel, the

Board is not part of the approval process for Surface Water Incentive Plan applications as

these are discretionary actions and could be viewed as preferential. Legal Counsel Zolezzi

added it would be a conflict of interest. The Board concurred that staff approve applications

submitted for the Surface Water Incentive Plan.

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Director Cortopassi inquired if this new applicant is a straight conversion from groundwater

to surface water. Manager Moody replied yes.

Manager Moody reported that with this particular applicant, the District will own the weir and

the Landowner will own the diversion. The District will place the weir in the spot that will

benefit more water users than just this one particular applicant. This item was for information

only.

E. COMMITTEE REPORTS

1. Eastern San Joaquin Groundwater Authority Steering Committee Meeting, 09/09/20

Director Watkins and Manager Moody attended the September 9, 2020 Eastern San Joaquin

Groundwater Authority Steering Committee Meeting. Director Watkins reported approved at

this meeting were both the previous meeting minutes and a resolution authorizing the

Secretary of the GWA to approve expenditures within the approved budget. Director Watkins

reported there was discussion on the DWR grant proposal package for Proposition 68 for

disadvantaged communities. There was discussion on the memo released by the County on

September 11th regarding GSAs working through pitfalls and coming up with grant proposals

for the 2021 deadline. Director Watkins reported there was discussion on groundwater

management and safe drinking water in San Joaquin Valley. Manager Moody added the

discussion focused on the different entities that are dealing with issues and the determination

that GSAs should stay out of the conversation. Director Watkins reported that all GSAs are

up to date with payments. The next meeting is scheduled for October 14, 2020.

2. San Joaquin County & Delta Water Quality Coalition Meeting, 09/14/20

Director Atkins attended the virtual September 14, 2020 San Joaquin County & Delta Water

Quality Coalition Meeting. Director Atkins reported the financial report was mailed after the

meeting as there was an initial misprint on the Grower Self-Certification section. There was

discussion on the Nitrate Report that was due in April and there are ~120 people on the

outstanding list. Director Atkins reported there was discussion on pyrethroid hits at multiple

locations. Union Island was 44 times over the threshold. There was discussion on algae

toxicity that has been detected. Director Atkins reported the membership portal has been

upgraded and there is a section where members can view where exceedance levels have been

detected. Director Atkins inquired at the meeting if this information would be available to the

public. He was advised that it is only available for those who have a portal. The Coalition is

brainstorming ideas on how to host the grower outreach meetings in the future. Director

McGaughey inquired if there was discussion under CV Salts. Director Atkins replied there

was not much discussion at this meeting.

F. REPORT OF GENERAL MANAGER

1. Water Supply Report as of 09/14/20

Manager Moody provided a handout of the Water Supply Report for information only that

included storage, release, and production data collected from various sources as of midnight

last night.

There is 145,399 AF in storage at New Hogan Reservoir. Current releases are set at 153 cfs.

There is 1,546,525 AF in storage at New Melones Reservoir. Current release at Goodwin Dam

to Stanislaus River are set at 203 cfs and release to all water users are set at 1,402 cfs. There

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are 5 irrigator(s) on New Hogan, 3 irrigator(s) on New Melones and 2 Out-of-District

irrigator(s). The water treatment plant is currently processing 32 mgd. The City of Stockton

is currently processing 18 mgd.

2. Information Items:

Manager Moody noted items: F2a-1, F2a-2, F2a-3 and F2a-4.

Director McGurk inquired on F2a-1 and if the Water Management Plan requirements will take

precedence over SGMA law. Manager Moody replied no, the actual law will take precedence

over any plan submitted to the government.

3. Report on General Manager Activities

a. Water Infrastructure for the Nation (WIIN) Act Call, 09/09/20

Manager Moody and Finance Director Vega attended the September 9, 2020 Water

Infrastructure for the Nation (WIIN) Act Call. Manager Moody reported discussion

focused on how the District would pay their costs. Manager Moody advised the USBR

that the Board plans to pay both M&I and Ag charges upfront. The USBR will be sending

final contract documents for signature. Once they are signed, the USBR will sign the

documents and send the District fully executed copies. There was discussion about the

RRA process. Manager Moody reported Reid Roberts, CSJWCD was on the call as well.

He was unsure of how CSJWCD would pay their portion for their contract conversion.

b. Stockton East Water District Activities Update

Manager Moody reported the Habitat Conservation Plan (HCP) is now finalized and was

on the federal register as of Monday, September 14th. The press release is also on the

ACWA website. Manager Moody commended Legal Counsel for their long-term efforts

in working to complete this Plan. President Panizza added this is good news to see how

far this Plan has come as it has been ongoing for many years.

G. DIRECTOR REPORTS (None)

H. COMMUNICATIONS 1. Stockton East Water District – Whittle Ranch Crossings of Hoods Creek Project Letter,

09/09/20

Manager Moody provided the Board with correspondence regarding the Whittle Ranch

Crossings of Hoods Creek Project that was sent on September 9, 2020. Director Watkins

inquired how much the box culverts went up in price and if it was part of a bid. Manager

Moody advised the price increased because the design changed.

I. AGENDA PLANNING/UPCOMING EVENTS

1. Cancelled – San Joaquin County Flood Control and Water Conservation District Advisory

Water Commission Meeting, 1:00 p.m., 09/16/20

2. Greater San Joaquin County Regional Water Coordinating Committee Meeting, 3:00 p.m.,

09/16/20

3. Central Valley Project Water Association – Executive & Financial Affairs Committee, 10:00

a.m., 09/18/20

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J. REPORT OF THE COUNSEL

1. Closed Session - Existing Litigation

Stockton East Water District vs. City of Stockton, et al.

Government Code 54956.9 (a)

2. Closed Session - Potential Litigation

Government Code 54956.9 (c) – one case

President Panizza adjourned the meeting to closed session at 1:33 p.m. to discuss closed session

agenda items. The regular meeting reconvened at 1:49 p.m., with no reportable action.

K. ADJOURNMENT

President Panizza adjourned the meeting at 1:50 p.m.

Respectfully submitted,

Scot A. Moody

Secretary of the Board

tbc

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Agenda Item: D-3a Date: 09/22/20

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Agenda Item: D-3b Date: 09/22/20

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STOCKTON EAST WATER DISTRICT

FINANCIAL STATEMENTS AND

INDEPENDENT AUDITOR’S REPORT

MARCH 31, 2020 AND 2019

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STOCKTON EAST WATER DISTRICT

Table of Contents

Independent Auditor’s Report on Financial Statements ................................................................................ 1 Management’s Discussion and Analysis ....................................................................................................... 3 Basic Financial Statements Statements of Net Position .......................................................................................................................... 11 Statements of Revenues, Expenses, and Changes in Net Position .............................................................. 12 Statements of Cash Flows ........................................................................................................................... 13 Notes to Financial Statements ..................................................................................................................... 15 Supplementary Information Combining Financial Statements ................................................................................................................. 41

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JWT and Associates, LLP Certified Public Accountants 1111 East Herndon, Suite 211, Fresno, CA 93720

Voice: (559) 431-7708 Fax: (559) 431-7685

Independent Auditor’s Report To the Board of Directors Stockton East Water District We have audited the accompanying financial statements of the business-type activities of Stockton East Water District (the District), as of and for the years ended March 31, 2020 and 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Basis for Qualified Opinion As more fully described in Note 1 to the financial statements, District management has not evaluated water assessments receivable from the City of Stockton included in other assets as of March 31, 2020 and 2019 for doubtful accounts. In our opinion, accounting principles generally accepted in the United States of America require that an allowance for doubtful accounts be provided based on historical experience and management’s evaluation of outstanding receivables. The effect of this departure from accounting principles generally accepted in the United States of America on the accompanying financial statements of the business-type activities has not been determined. Qualified Opinion In our opinion, except for the effects of the matters discussed in the Basis for Qualified Opinion paragraph, the financial statements referred to in the first paragraph present fairly, in all material respects, the respective financial position of the business-type activities of Stockton East Water District, as of March 31, 2020 and 2019 and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplemental Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the supplemental information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

JWT & Associates, LLP Fresno, California September 8, 2020

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Weekly Water Report As of: Sept. 14, 2020

As of: Sept. 21, 2020

New Hogan (NHG) TOC 317,100 AF Storage: 145,399 AF Net Storage Change: -2,568 AF Inflow: 20 CFS Release: 153 CFS

New Melones (NML) Allocation 75,000 AF Storage: 1,546,525 AF Net Storage change: -14,818 AF Inflow: 347 CFS Release: 883 CFS

Source: CDEC Daily Reports

Goodwin Diversion (GDW) Inflow (Tulloch Dam): 837 CFS

Release to Stanislaus River (S-98): 203 CFS Release to OID (JT Main): 737 CFS Release to SSJID (SO Main): 310 CFS Release to SEWD: 152 CFS Total Release 1,402 CFS

Source: Tri-Dam Operations Daily Report

Farmington Dam (FRM) Diverted to SEWD: N/A CFS Diverted to CSJWCD: 0 CFS

Source: USACE WCDS Hourly Report

Surface Water Used Irrigators on New Hogan: 5 Irrigators on New Melones: 3 Out-Of-District Irrigators: 2 DJWWTP Production: 32 MGD

North Stockton: 0 MGD South Stockton: 7 MGD Cal Water: 25 MGD

City of Stockton DWSP Production: 18 MGD

District Ground Water Extraction 74-01 0 GPM 74-02 0 GPM North 0 GPM South 0 GPM Extraction Well # 1 0 GPM Total Well Water Extraction 0 GPM

Note: All flow data reported here is preliminary and subject to revision.

Agenda Item: F-1 Date: 09/22/20

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GREATER SAN JOAQUIN COUNTY REGIONAL WATER COORDINATING COMMITTEE

September 16, 2020, 3:00 p.m.

Via-Teleconference: MS Teams, 415-915-2800, Conference ID: 579 704 887#

AGENDA - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

A. Discussion/Action Items:1. Governance (Chair, County, W&C)

• [ACTION] Accept meeting minutes from August 19,2020

2. 2020 IRWM Addendum (GEI, County)

3. IRWMP Plan Projects Update (GEI, County)

B. Public Comment: Please limit comments to three minutes

C. Comments from the Chair:

D. Adjournment:

Next Regular Meeting October 21, 2020, 3:00 p.m.

Via-Teleconference

If you need disability-related modification or accommodation in order to participate in this meeting, please contact the Water Resources Staff at (209) 468-3089 at least 48 hours prior to the start of the meeting. Any materials related to items on this agenda distributed to the Commissioners

less than 72 hours before the public meeting are available for public inspection at Public Works Dept. Offices located at the following address: 1810East Hazelton Ave., Stockton, CA 95205. Upon request these materials may be made available in an alternative format to persons with disabilities.

Agenda Item: F-3a Date: 09/22/20

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Agenda Item: F-3b Date: 09/22/20

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Analise Feliciano

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Analise Feliciano

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Analise Feliciano

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Agenda Item: F-3c Date: 09/22/20

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regular board meeting september 22, 2020 · 2020. 9. 17. · september 22, 2020 . this page...

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