Minutes | April 04, 2019 @ 8:30 am
El Centro City Council Chambers | 1275 Main Street, El Centro, CA 92243
1. Roll Call
2. Pledge of Allegiance
3. Approval of Consent Items:
a. Minutes from January 24, 2019
b. Project Report update
Motion by Commissioner Jackson to approve Item 3A.
AYES: Jackson, Castillo, West
Motion by Commissioner Jackson to approve Item 3B.
AYES: Froelich, Jackson, Castillo, West
4. Public Comments
No public comments were made.
a. Announcements by the Commissioners
Commissioner Froelich stated she is attending an ICTC (Imperial County Transportation Commission) meeting. She also became a member of IVCCC (Imperial Valley Continuum of Care Community.) She is an executive board member and there is a lot of funding coming in for the homeless.
Commissioner Jackson stated President Trump will be flying in tomorrow around 11am and he will be taking part in the events in Calexico and he hopes it goes well.
b. Announcements by the Executive Office
1. CALAFCO Structure
2. Extension of Services
Mr. Heuberger stated he will discuss the CALAFCO structure when discussing Item 9 for the budget. Commissioner Kelley and Commissioner West both serve on the CALAFCO board. CALAFCO held their strategic planning session last month in Irvine and the main topic of discussion was the CALAFCO budget. The potential outcome of the board’s discussion and the Southern Regions discussion relates more to the budget.
Mr. Heuberger stated the extension of services topic has been discussed and is an ongoing topic. There have been a number of discussions about cities and special districts providing water outside of their boundaries. The most recent discussion was with the City of Holtville and the City of Brawley. It’s settling down and is one of the educational items that needs to be pursued.
Mr. Heuberger stated in the Commissioners package is a calendar of events for the year. As a reminder the annual conference is being held in October in Sacramento. Sometime in June or July staff will be getting a count of who will be attending to plan the travel arrangements. The location is easier to get to this year.
6. Discussion/Action/Direction regarding adopting a position on proposed Assembly Bill 854
Mr. Heuberger stated most of the Commission is aware of the proposed Assembly Bill 854. Mr. Antonio Ortega from the Imperial Irrigation District is present today. A letter has been drafted and the draft was sent to Mr. Ortega for review and comment. The Commission is being asked to take a position and of course there is a choice to take no action. A copy of the proposed bill along with the draft letter that would be sent to Assembly Member Mayes has been included in the packet. The draft letter states that LAFCO does not support the bill for several reasons. This is consistent with IID’s position, along with the County and also the cities, most recently the City of El Centro.
IID Government Affairs Mr. Antonio Ortega stated as of last week, every city in Imperial County as well as the County Board of Supervisors have taken an opposed position on the proposed bill. The League of Cities and the California Special Districts Association took a similar position this past week. There’s a list of 25 agencies that have taken an opposed position, not just local but statewide. The Western Growers of California have taken an opposed position because of the water rights issue. Instead of giving a presentation today, he thinks the draft letter that is included in the packet does an excellent job of highlighting the seven-page letter that IID sent to Mr. Mayes. That letter went into a lot of detail about the history between the Imperial Valley and the Coachella Valley Water District. The summary points in LAFCO’s letter are spot on and the request is that the Commission take action on this item. The proposed bill will be heard at the Local Government Committee on April 24th and the IID is requesting the letter also be sent to Assembly Member Cecilia Aguiar-Curry, Chair to the Committee with a copy to Assembly Member Mayes. The request is for the letter to also be sent to Senator Ben Hueso, Senator Stone, and Assembly Member Eduardo Garcia.
Mr. Heuberger asked Mr. Ortega to send an e-mail after the meeting with all the contact information.
Commissioner Froelich asked if the IID has searched what would happen if the legislation passes and is there a way that the IID could file an injunction.
Mr. Ortega replied that this bill was introduced two days before the last day of the bill introduction deadline. On March 1st the IID Board had this item on the agenda at a special meeting and the board took a strong opposed position. Two weeks later the IID had a board meeting in La Quinta. They have quarterly meetings in the Coachella Valley. At that meeting, the board directed the general manager and general counsel to retain experts in the utility sector, both legal and financial analysts to take a look at the contractual agreement between IID and CVWD and to provide the board with a comprehensive analysis of not just the options of today under the agreement but also the options if the bill were to pass and before the contract with CVWD ends in 14 years. It fast forwarded what was already going to be contentious negotiations with CVWD. It’s been peace for the last 85 years. 2033 is the deadline that IID is working backwards from and this bill has made the IID take a look at everything that’s on the table.
Commissioner Froelich asked if the Commission should prepare and get a head start of a potential separation of the IID water and electricity.
Mr. Ortega replied that might be a question for the Commission.
Mr. Heuberger replied that it would send the wrong signal.
Mr. Ortega stated IID has hired a team of attorneys and a firm from Los Angeles that are looking into those issues. It’s dependent upon how much work there is, and those recommendations would be made public by the IID Board through meetings and public workshops in the community. It not only affects the rate payers in the Coachella Valley but Imperial Valley as well. The author of the bill keeps talking about the people in Riverside County. Mr. Ortega feels that the will of the people in Imperial County that also receive IID services are being ignored. It’s not as simple as saying we are going to break up the IID. The author is now talking about amending the bill. The IID met with him at their La Quinta office and he invited several stakeholders. He brought up the idea of breaking up the IID as two agencies. They are now hearing that he may consider that as an amendment to his bill. It doesn’t change IID’s position but strengthens their position. Now state legislatures are talking about breaking up local government. IID is in irrigation district, a special district and it gets more complicated when the state is trying to impose top down policy like that.
Mr. Heuberger stated it would also conflict with LAFCO law which was intended to avoid those types of political moves.
Mr. Ortega stated this dates back to last year when Riverside County at the behest of a for-profit enterprise adopted an ordinance. IID had advised that there are other ways for the concerns to be addressed. Riverside County didn’t listen, and they went to court and IID was granted an injunction for that ordinance. Some of that has now been reported in the press and the same sponsors of that ordinance are the same sponsors of this bill. This is motivated by those local politics in that valley. We can’t sit here and act like that’s not motivating this. The IID is concerned about this, not only for the public policy implications but who the political forces are behind this and what their agenda is.
Commissioner Jackson asked if our state legislators and assembly members have taken a position.
Mr. Ortega replied that neither of them are in the Committee where this bill will be heard. They haven’t had to take a position. The position they have told us in meetings and publicly reported in various articles in the media is they support the protection of Imperial Valley water rights, but they also state that a conversation with the IID energy customers and the political boundaries of those customers should be discussed. According to their staff, they’ve both suggested to Mr. Mayes that he have a meeting in Imperial County and hear from the folks down here. IID sent Mayes a letter two days ago saying the IID board room is open for a public meeting and they are waiting to hear back from him.
Mr. Heuberger stated since we are talking about potentially changing the boundaries or services within another county by the IID, conversely the CVWD serving areas within Imperial County, has CVWD stated a position.
Mr. Ortega replied that CVWD has been quiet on this issue. Part of the agreement with them requires IID to pay 8% of the annual net energy proceeds which to date has been approximately $45 million. The next 14 years when the full term of the contract has been met an additional $21 million will be paid to CVWD. In the meeting with Mr. Mayes, it’s the first time that CVWD has said more than two words on this issue. They brought their attorney and he essentially agreed with IID’s position which is that the contract expires in 2033 and an arbitration process was built into that agreement that has a process where both the IID and CVWD will need to discuss what the IID’s future is in the Coachella Valley and what does CVWD get in return. CVWD stated they will wait until the dust settles, and that’s not comforting. It’s a joint partnership and when the partner isn’t helping address the concern or at a minimum what they could say to Mr. Mayes is that we are aware of the concern but let us look at this internally and have these tough discussions behind closed doors and at some point, we can engage you. Instead, Mr. Mayes didn’t inform the IID that he would introduce this bill until an hour before it was introduced. Mayes then said he wanted to have a meeting with IID to see who we are and what we do. Mayes knew what he was doing, he wanted to introduce the bill to force the discussions and that’s what he did.
Commissioner Jackson asked if the committee has been polled for the hearing on the 24th.
Mr. Ortega replied yes, IID started meeting with them and will be flying to Sacramento along with IID’s Board President to meet with the committee chair and others.
Commissioner Jackson asked if there are any indications of where the alliances may be.
Mr. Ortega replied that the bill has 3 cities supporting and he’s sure that the for-profit enterprise will weigh in. The opposition compared to the support is substantial. Until a bill analysis is in front of us, most of the members of the committee will not give a hard answer. IID has shared enough information with them and they have a lot of questions for Mr. Mayes.
Commissioner Jackson stated his biggest concern is that Mr. Mayes is a republican and the state is run by democrats. Mr. Mayes has crossed over on many bills and a lot of people don’t consider him truly republican because of the gas tax and the cap and trade deals that he made with the caucus. With this bill he will depend on the democratic votes, not the republican votes. He must have polled some of his colleagues from the other side. Are there any indications as far as how many people on the committee or the assembly might be supporting.
Mr. Ortega replied that he doesn’t have that crystal ball in front of him. The bill had not been set for hearing and this is the first policy committee hearing. As of Monday, Mr. Mayes hadn’t made up his mind. He could still pull the bill depending on the questions and the issues that the committee raises. That will give a better sense of where the bill will go. He’s is a moderate within his caucus and has also carried bills that have been supported by the democratic majority on environmental issues, water bond issues, and a water tax proposed by Assembly Member Eduardo Garcia that Mr. Mayes may be voting for. There is some trading going back and forth. IID’s strategy is to get ahead as best as we can. At the end of the day this is an issue about public policy and we have to fight our fight in front of the committee and make our points. We are equally concerned about the political side.
Commissioner Jackson stated it’s concerning that our two legislators haven’t taken a firm position.
Commissioner Castillo asked how the public utility districts are dealing with it, it sets a precedent.
Mr. Ortega replied they are opposing. We have the California Municipal Utility Association which represents all the public utility districts in California and it’s also water not just on the energy side. Southern California Public Power Authority is opposed. The investor owned utilities normally don’t weight in on matters of public power and he doesn’t expect they will jump in.
Motion by Commissioner West approving Option #1 of the Executive Officers report, opposing AB 854, directing the EO to send a letter in opposition of AB 854 to Assembly Member Mayes and any other contacts as the EO directs.
AYES: Froelich, Jackson, Castillo, West
7. Discussion/Action/Direction regarding the transition of the Niland Sanitary District and the Winterhaven Fire District by the County
Mr. Heuberger stated the WFD (Winterhaven Fire District) and the NSD (Niland Sanitary District) are both districts this Commission has dissolved within the past couple of years. It would be a good idea to get an update from the County. I.C. Public Works Director Mr. John Gay got stuck with these issues. The Commission didn’t have much of a choice other than to dissolve both districts. It transferred not only responsibilities but potential problems to Mr. Gays office, who represents the County.
I.C. Public Works Director Mr. John Gay stated it’s been seven months now since we’ve made this transition to the new Niland County Sanitation District. Through that period of time we’ve pivoted now to our compliance project the RWQCB (Regional Water Quality Control Board) required to remedy the problems from the past district. At that point when we transitioned we were concerned about the funding for the compliance project. The project in and of itself is about $6 million dollars and at the time of the transition the USDA (United States Department of Agriculture) had a grant for a little less than half that amount. That grant is still available, and we’ve been working with USDA to secure that funding. We’ve traveled to Sacramento and have met with the SWQCB (State Water Quality Control Board) to begin the process to submit for grant funding for the remaining portion. The application was submitted last week. We are working with two consultants, Mr. Chris Westlake and The Holt Group. We have been operating the district with our private operator and are keeping it in compliance at this time. For a process moving forward it’s basically securing the funding. We’ve talked to our state legislator’s office both Senator Ben Hueso and Assembly Member Eduardo Garcia and have advised them of the importance of the support and the need to operate the district and the need for grant funding. Those are the priorities of the district. We are dealing with some past issues as well, this is tax season and the W-2’s from NSD were not able to be sent out and so the employees have come to the County and unfortunately the County cannot provide those since we didn’t issue those paychecks. We do have information for the employees to help them piece together their wages for the year and they can deal with their respective agencies to get their particular W-2’s. There is pending litigation as well based upon other employee issues that we received recently that we will work on moving forward with as well.
Commissioner Froelich stated she was contacted by the former NSD Secretary and was told that the employees never got a form of severance. She think’s that LAFCO talked about it, but it wasn’t voted on.
Mr. Heuberger stated that severance was talked about but it’s outside of our authority. It was potentially a contractual agreement that the employees may or may not have had with their board. We were asked by their board at one time about severance packages. He was told that their board was even offering a severance package of up to a year. We made it clear that those are way beyond reasonable severance packages unless they had a previously contracted person. For example, in a lot of cases a city manager or a county executive officer, as part of their hiring and as part of a contractual agreement if they get terminated, will have a lengthy severance package which is very unusual for general employees. We did discuss it at the hearing but there isn’t any way this LAFCO could impose any mandate other than the normal two-week type of severance.
Commissioner Froelich stated we were worried about the potential displacement of employees.
Mr. Heuberger stated your Commission talked about the potential for the new district to hire those employees provided they were qualified. The contractor that was hired made an effort.
Mr. Gay stated that PERC did reach out to former employees and one employee was retained.
Commissioner West stated we have no authority to approve or insist upon that.
Commissioner Froelich stated Commissioner Kelley isn’t present today but does the Commission remember talking about this.
Commissioner West stated we cannot mandate, and we never did.
Commissioner Froelich stated there is one employee that is good and frustrated because she said we never fulfilled.
Commissioner West stated we never agreed to nor do we have the authority.
Commissioner Jackson stated it came down to the fact that we don’t have the authority. We can’t mandate a public agency to do a severance package. If it was volunteered or if it was a compensation package with the new contracting firm that’s beyond what we have control over.
Commissioner Froelich stated since LAFCO was controlling the spending, it would have been approved through this Commission.
Mr. Heuberger stated in conjunction with Mr. Gays office we oversaw any spending because of the imminent dissolution pending we didn’t want the district to suddenly spend funds and put them in a worse situation. We were asked about these severance packages and discussed about a month to up to a year and we made it very clear that for standard employees a two week and possible one month but no more than that could be offered by the then existing district. That was beyond LAFCOs authority and we were never given a request by the district to ever approve a severance package.
Mr. Gay confirmed.
Commissioner Froelich stated she wanted it on record, so it’s not thrown back in our face.
Commissioner West stated when something like that happens he would direct them to the Executive Officer. As one Commissioner we don’t have the authority.
Commissioner Froelich stated she has, she spoke to Mr. Heuberger and she also directed the former secretary to talk to Mr. Gay. It seems like there are some hard feelings in the fact that LAFCO didn’t fulfill our end and that’s why I’m bringing it up right now so that we as a full Commission can bring it to some clarification.
Commissioner Castillo stated it’s not our obligation or we can’t be obligated.
The Commission thanked Mr. Gay for the update.
Former NSD Board President and Office Manager Ms. Debbie Salas stated during the transition we tried to e-mail Mr. Gay and Ms. Guerrero asking what to expect and for some guidance. We really didn’t get any guidance and now when Mr. Heuberger said the board was supposed to talk about severance, if she knew that she would have placed it on the agenda. For the W-2’s, it’s already April and we haven’t received them. The County says they can’t issue them because they say they didn’t issue the checks, but they did.
Mr. Hueberger asked Ms. Salas if she is involved in any current litigation. We have to be cautious that we don’t get involved in any discussions when there is pending litigation.
Ms. Salas replied no, that it’s done, my lawyer said no because I was only asking for my $500 pay for mileage.
Mr. Gay stated we were served with a notice last week. I will not speak on any issues regarding Ms. Salas but will talk generally about W-2’s because it does affect employees. Our office has met with our auditor multiple times. Our auditor is not able to issue W-2’s because we aren’t in the process of taking the withholdings out or authorizing what to withhold. We were paying the invoices that were received from the previous district. It would have been the previous district that would have created the W-2’s. Under the dissolution we have information to show what was paid out to each employee but that’s all we can provide. At the end of the day it’s the auditor that has to say if they are comfortable with issuing a W-2 and they are not because they weren’t involved during the entire year. The employees have information they can use to estimate their taxes, and there’s a process through the IRS to create the W-2. Our office can’t provide that other than in terms of the checks that have been paid but we were taking information from the previous district and passing it through.
Commissioner West asked if the County shows the withholdings.
Mr. Gay replied we have the checks to show what they were authorized to pay.
Commissioner Castillo stated a substitute W-2 could be filled out but they would need to know the information on the withholdings.
Mr. Gay stated we have the checks and the background information that we could provide but we can’t provide W-2’s. We have letters that I’ve had staff prepare. They can come in and talk to us and we can provide the background information.
Commissioner Castillo stated they can visit the local IRS office and they’ll give them a substitute W-2 form as long as they have the information to fill it in.
Ms. Salas asked if she needs to tell the former employees to visit Mr. Gay.
Mr. Gay replied yes, and I’ve directed staff to solicit the former employees and board members with the information, so they can use it to their benefit.
Commissioner Jackson asked if the former district had a firm that processed their paychecks.
Mr. Gay replied the NSD had their own firm they used. Six weeks prior to dissolution the district had issues with the firm that they were using. We had to have our auditor step in and handle it for one pay period but after that they didn’t want to handle it because it’s not their responsibility.
Ms. Salas stated that Garcia and Peerce were with the NSD for years and in January 2018 they notified us that they were no longer going to do the work. We notified the County that we needed someone else to take over and we never got help. They are the ones that did the taxes.
Mr. Gay stated we did what we could do for a period of time but the NSD would have needed to hire another payroll firm.
Commissioner Jackson asked if there was a legal obligation from that company. When you change employment, whoever is responsible for those checks for a period of time has to send a W-2. If a company buys out another company, which happened to me at one point, the first company provided a W-2 and the second company also provided a W-2. Isn’t there a legal obligation for the company up until the time they stopped handling their books.
Mr. Gay replied you would think so.
Ms. Salas stated she would direct former employees and board members to Mr. Gay.
Mr. Heuberger stated he’s been working with the County CEO Mr. Tony Rouhotas regarding the WFD (Winterhaven Fire District). We are close to having everything settled, there are still issues including the building and how the County will settle because that affects how they may settle with some individuals.
Commissioner Jackson asked what the status with the tower issue is.
Mr. Heuberger replied that he doesn’t know. That’s one of the issues that the legal and planning departments at the county were working on. I will try to get some updates on that.
No action taken on this item.
8. Discussion/Action/Direction regarding County Center No.2
Mr. Heuberger stated we are currently in the process of an annexation of the Imperial County Office of Education for roughly 80 acres on the west side of the county owned property called County Center 2. Early on there were discussions and an actual joint application that was filed with the County and ICOE. Those efforts ceased about a year ago and ICOE decided to go on its own. They’ve been going through the process with the City of El Centro to obtain the various land use entitlements and I believe the last item between the County and the City is the tax sharing agreement. We are getting close to presenting this annexation. We have a meeting with ICOE next Monday for some transactional issues. I wanted to bring this up to your Commission because there was a belief by the City that this annexation would include the county property, that’s not the case. I’ve had discussions with Mr. Gay and Mr. Rouhotas and it’s my understanding that the county is working on pursuing the annexation of County Center 2. I wanted to provide an update as we can’t bring this annexation to your Commission until the city resolutions and tax agreements are complete. I expect this item would come up in June.
Commissioner West asked if the land is still being farmed.
Mr. Heuberger replied yes. ICOE wants to build only on a portion of the 80 acres and there were discussions with the city to build a sports complex.
Commissioner West stated LAFCO is responsible for keeping a reasonable amount of farm grounds. What is considered a reasonable amount.
Mr. Heuberger replied this annexation will remove farm ground but is an area designated for urban area development.
No action taken on this item.
9. Discussion/Action/Adoption of the Draft LAFCO Budget for FY 2019-2020
Mr. Heuberger stated first and foremost we are not asking for any increase in the contributions from the cities or the county, which is usually one of the topics that the member agencies question. The bottom line for the contribution request is it will remain as it has been for the last couple of years. Several months ago, the CALAFCO Executive Director Ms. Pamela Miller notified all the LAFCOs that CALAFCO is $69,000 in the deficit. The board appointed a committee to decide how to tackle the shortfall. There were some suggestions made and one suggestion was a percentage increase to all members. That didn’t sit well with the Southern Region. The Southern Region pays almost 50% of the total CALAFCO budget. They felt that the burden of any increase would again fall on our region. We had several meetings that Commissioner West also attended. As a whole we felt that we were once again in a position of being the bad guys for bringing up an objection to CALAFCO. As you recall the Southern Region were the ones that instigated the move that resulted in the four regional concepts to have better representation on the CALAFCO board. We now have two Imperial County representatives on that board. Rather than the Southern Region just objecting to what was being proposed, we offered some solutions. This was a result of various meetings and conference calls. The proposal is that there be a further split as to how the memberships are allocated. Right now, we have the urban, rural, and suburban categories and within that there’s a small breakdown. Los Angeles is in the urban category and they pay $15,000 per year. We suggested that the membership is broken up to roughly 12 categories recognizing there are a couple of counties like Mono or Lake that any significant increase could result in them pulling out as members. There’s a lot of discussion if we should worry about that. As a rule, we shouldn’t take a position that just says too bad you’re out, all the counties should be represented. Our proposal is to increase the membership dues but based more on a larger category so that the smaller LAFCO’s would still face some increase but not a substantial amount. The net result of that is Los Angeles, San Diego, Orange, Riverside, and Imperial will still get the largest dollar increases. We aren’t going to save money, but we felt it was a more equitable solution. A letter with the approval of the Southern Region was sent to the committee and that discussion will take place at the annual conference. Our net increase as a result will be substantial but it’s still within our budget. The one policy issue that’s related to this is that we have sponsored the last two annual conferences and contributed $1,500 per each conference. We felt it was important to support the CALAFCO efforts. It was sort of looked at that we can sponsor the CALAFCO conference because we don’t have the staff like San Diego or Riverside that contribute to the presentations at the conferences.
Commissioner Froelich asked what the sponsorship amount is.
Mr. Heuberger replied the sponsorship amount per conference is $1,500. The CALAFCO budget is one of the big issues that will be discussed at the conference. It has caused somewhat of an issue between some of the CALAFCO board members in my view again because the Southern Region brought it up. If you look at it objectively, the resulting increases will still leave the Southern LAFCOs with the biggest slice of the budget which is in the 50% percentile. There was the usual talk about if we don’t get this done then we should look at not being pro CALAFCO. We did get beyond that. The other reminder is last year we budgeted for a roof replacement for the building we own. We weren’t able to get that done so we are carrying that amount forward. One of the problems we faced were finding contractors that were willing to do the work because of the way that roof was done it’s been difficult other than an extremely expensive alternative. The prior owners put a foam roof on an existing metal roof and whoever did it did a poor job and so someone would have to come in and take that off. There’s a slight increase in our budget, however we are again proposing to utilize approximately $88,000 of our reserves to avoid any increases to the memberships. As you recall we’ve established two funds and as a reminder we still have those. One is $150,000 for emergency repairs and $40,000 for potential litigation and we haven’t had to touch that yet. Those are funds that we have should something come up. We are projecting some carryforward although we don’t have that amount yet. I will note that four years ago when I met with the city managers we talked about trying to keep our budget at or near what we had at the time. They indicated at that time that they preferred the budget not change dramatically one way or the other, so they could budget their system more reasonably.
Commissioner West stated we need to keep the sponsorship in the budget. It helps with having two Commissioners from Imperial County that serve on CALAFCO. When you’re there you wear a sponsorship hat. People ask where we are from and they know we are a small population compared to other counties. Internally CALAFCO wants to save money and one of the discussions was to reduce the Executive Director Ms. Pamela Millers time and cut down on some legislation that protects LAFCOs and the state. The Southern division is saying we want CALAFCO to take a far look 15 years out and let’s be realistic about what it’s going to take. It’s more than just complaining about the money, it’s about where LAFCOs will be. The Southern division is willing to contribute their fair share, but we want to see responsibility and don’t want to lose the ability of going to the state legislator about bills and we don’t want it reduced. That’s where it might go if the budget is hammered down. We don’t want the legislators to go in and take away some of the rules and regulations and try to override LAFCOs in certain areas. Not trying to be arbitrary and not pay the fair share, but we want to make sure we get what we need and the whole state and the LAFCOs are being treated fair.
Motion by Commissioner Froelich to approve the Draft Budget for FY 19/20 as presented.
AYES: Froelich, Jackson, Castillo, West