Board of Directors Agenda
1. Call to Order of the Regular Meeting of the Board of Directors
The Board Chair will call the meeting to order if a quorum is present. Announcements by the Board Chair or Executive Director may be made at this time. Board members may make announcements at this time as well.
2. Public Comments
Opportunity for members of the public to address the Conservancy’s Board of Directors.
3. Approval of the minutes
The Board Chair will request approval of the minutes and consent items of the Board of Directors meeting June 3, 2015.
4. Review of Corporate Funds policy
At its June 3, 2015 meeting, the Finance Committee accepted proposed updates to the Board’s Corporate Funds Investment Policy. The Committee recommends that the Board approve and adopt these changes.
5. Review of Endowment Funds policy
At its June 3, 2015 meeting, the Finance Committee accepted proposed updates to the Board’s Endowment Operations and Maintenance Fund and Supplemental Endowment Fund Investment Policy. The Committee recommends that the Board approve and adopt these changes.
6. Conservancy web site update
Consistent with the 2015 Budget discussions and inclusion of budgeted funds, $15,000.00 is requested for updating of the Conservancy’s web site. Board members will recall that earlier, the Conservancy’s web site was on a DotNetNuke platform, but with Board approval, was moved to a WordPress platform in order to reduce costs and improve response times as well as to facilitate the anticipated Board agenda packet hosting. After a testing period, Conservancy staff is pleased with the new WordPress facility, and now will proceed with necessary updating as budgeted and planned, provided the Board authorizes the expenditure.
7. Property tax matter
The Conservancy received a letter from the State of California’s Board of Equalization (BOE), which responded to a request for guidance on the matter of the Conservancy’s contention that certain of its landholdings were being improperly assessed by the County of Sutter Assessor. The BOE letter confirmed that the Conservancy’s position was correct. Moreover, the BOE letter extended its position to other land uses the Conservancy puts its landholdings to.
The Conservancy expects the Sutter County Assessor to revise its methodology of property value assessment and assess the Conservancy’s properties at significantly lower values. With guidance from experts, the Conservancy believes it is entitled to back tax reimbursements going back eight (8) years.
Conservancy consultant Vince Minto, former County Assessor of Glenn County, will return to the Board to detail the matter and review with the Board the BOE letter.
This item requests that the Board authorize expenditure up to $20,000.00 for consulting services to detail for the Sutter County Assessor the necessary information to adjust assessment procedures and file for back tax reimbursement. Contractors are the same the Board has heard from previously on the matter including, Vince Minto (see referenced above) and New Economics and Advisory, LLC, represented by Isabel Domeyko.
8. Audit RFP
At the request of the Conservancy’s Audit Committee, a Request for Proposals (RFP) has been developed for year-end financial audits. If approved for release, the RFP solicits proposals from qualified auditors to conduct the annual audit of the Conservancy’s year-end financial statements for fiscal years 2015 through 2019. An annual audit is required each year in the 2003 NBHCP and under the California Non-profit Integrity Act of 2004.
|TNBC Board approves RFP for release||August 5|
|Release and distribution 2015 of RFP||August 10|
|Responses due, 4:00 pm||September 10|
|TNBC Board reviews proposals; selects||October 7|
|Agreements signed by both parties (on or about)||December 1|
*Subject to change
9. Lucich North tract groundwater well renovation
The Conservancy’s Board of Directors authorized staff to move forward with participation in the Groundwater Exchange Program (GWEP) through the Natomas Central Mutual Water Company (NCMWC) this year. Staff noted in its presentation to the Board at the time that there were certain to be surprises in participating in the program, as the Conservancy’s wells had not been as substantially tested as they were likely to be tested in this year’s GWEP. However, well maintenance and repair surprises have turned out to be far fewer than expected, even though a lot of staff time has been necessary to guide the program and keep up with maintenance, regulatory and contract compliance demands.
Subject well. One well in the GWEP has been a challenge. That is the Lucich North well. Historically, this well has been used to irrigate the largest of the Conservancy managed marsh complexes, the Lucich North marsh. Lucich North is actively populated with Giant garter snakes (GGS).
Recent history. The Conservancy engaged Water Well Services, Inc. to conduct a wellbore video report as was required for participation in the GWEP. With NCMWC, Bureau of Reclamation and Conservancy officials on site, it was found that the well did not meet DWR standards due to it not being screened from approximately 123 feet below grade to the required minimum of 150 feet below grade. (In order to qualify for participation in the GWEP, wells need to be solidly lined from the surface to at least 150 feet.) Because the estimate for the work necessary exceeded the Executive Director’s spending limit, and because a check-in with Board officers determined that the Board’s action authorizing participation in the GWEP likely did not include well renovations (as opposed to repair), the Conservancy instructed the contractor (Odell’s Pump and Motor Service) to leave the well and pump removed until a determination could be made as to next steps.
Therefore, in order for the Lucich North well to be included in the GWEP, at a minimum, a liner needs to be placed from the 123-foot depth to the 150-foot depth. A “mild steel patch” is recommended (casing diameter and pump size largely necessitates a limited-gauge slip liner to seal off mesh portions of the well).
Inspection findings. Additionally, the video inspection revealed that the screens on the groundwater well were 90-percent blocked. Therefore, this has become not only a matter of whether the Conservancy could make the well eligible to participate in the GWEP, but also a matter of continued functionality for providing customary off-season water to the large Lucich North marsh complex.
Expert advisors. The Conservancy has called on a number of advisors to guide its assessment on the well. These include the following:
- Water Well Service (videotaping of well and recommendations for repair and compliance with DWR requirements)
- Odell’s Pump Service (pulling of pump and preservation of equipment)
- Sopwith Farms (logistics)
- Natomas Central Mutual Water Company (coordination of inspections and guidance on meeting groundwater exchange program criteria)
- U.S. Bureau of Reclamation (on-site monitoring of video inspection and program participation matters
Conservancy proposal for renovation. Conservancy staff has developed a plan to renovate the well in order to accomplish two objectives:
- qualify it for participation in the GWEP for future years, and
- repair the well such that it is more productive and energy efficient in order to reduce costs and increase reliability for off-season marsh watering.
The estimated cost of the work the Conservancy proposes is $39,050.00.
Alternatives explored. Among the alternatives explored to repair and renovation include placing an alternative well at the site. In the process of this inquiry, staff was advised that an estimated cost of such a new well would be approximately $89,000.00. This does not include the cost of extending electrical service to the new well location, welding required for the two valves that distribute water to the two marsh cells, permitting and other incidentals.
When asked about additional cost to have a State-licensed contractor conduct well destruction activities and file a well destruction permit (for the existing well), the Conservancy was advised not to close the Lucich North well. The reason given for this recommendation is that the existing Lucich North well is a screened, “gravel-packed” well, and is “far less likely to be a problem in the future.” (The Conservancy has learned that the NCMWC has explored installing a similarly structured high quality well sufficient to generate approximately 3,000 gpm. Its engineer’s estimates have come in at the $400,000.00 range. Please note that this proposed well would generate 50 percent to 100 percent more water than the Conservancy’s Lucich North well.)
Therefore, based on this information, the replacement alternative is not recommended.
Action requested. This item requests the Board of Directors authorize the Conservancy’s Executive Director to execute and deliver an agreement with Odell’s Pump Service and any other necessary contractors or subcontractors to renovate the Lucich North groundwater well so that it is eligible for participation in future groundwater exchange programs and also for necessary repairs for the well’s service in providing the only source of water during those times when surface water is not available. The amount of the item requested is $39,050.00.
10. Mid-year budget revision
There have been a number of events that have caused the Conservancy to present and recommend a mid-year budget revision for the Board to consider.
Background. When the 2015 Budget was proposed by staff in late 2014, Board and staff shared that there were a number of variables in the 2015 budget, and should any of these or other events be realized, a mid-year budget revision would be proposed. Significant developments have taken place since that time, and these developments portend to significantly alter the year-end financial statement. Since the Conservancy’s auditors check year-end financials against budget as a measure of financial discipline and control, it is important to maintain Board oversight of the budget (budget approval and oversight is one of the three primary functions and duties of a Board member).
The proposed mid-year budget revision is enclosed with this agenda packet. It reflects staff’s best current knowledge as to the most significant changes in financial condition through the end of 2015.
The key issues necessitating a budget revision include:
- additional revenue attributable to the 2015 groundwater exchange program, and
- an increase in revenue from HCP fees from the City of Sacramento, and
- a payment by PG&E for a pipeline easement, and
- expense associated with the 2015 groundwater exchange program, especially well maintenance and power costs, and
- property tax re-appraisal project costs, and
- legal expenses in excess of approved budget.
Staff advises that as per contract, the groundwater exchange program (see item #1 immediately above) could end abruptly should the counterparty (San Luis and Delta-Mendota Water Authority) determine it no longer needs additional water. Since the Natomas Central Mutual Water Company (NCMWC) holds the contract on behalf of all of its shareholders (including the Conservancy), the Conservancy is unable to make precise determinations about expected revenue and expenses necessary to support those expenses. The amount used in the budget revision recommendations is an estimate provided to the Conservancy by the NCMWC.
Staff recommends that the 2015 budget revision be adopted by the Board of Directors.
11. City of Sacramento
Report from the City of Sacramento regarding HCP-related activity and other topics.
12. Financial statement review
A financial statement will be provided for the period ended June 30, 2015 (unaudited). Additional financial information will be provided.
13. Insurance review
A presentation by the Conservancy’s insurance broker, Tom Higgins of Wells Fargo Insurance, will discuss with the Board of Directors the Conservancy’s insurance policies for 2015-2016, including its directors and officers liability coverage, crime coverage, workers’ compensation, employment practices liability, general liability and umbrella policies.
14. NCMWC ground water transfer program
Staff will provide an overall update on the Conservancy’s participation in the 2015 Groundwater Exchange Program.
15. Social media initiative
Previous discussions at Board of Directors meetings have included the desire for the Conservancy to do more outreach. Over the past several months, the Conservancy has beta-tested a social media initiative. Conservancy staff will introduce the effort to the Conservancy’s Board for its review and counsel.
16. Board of Directors agenda packet update
Staff will brief the Board on efforts to improve functionality and reduce costs with regard to Board of Directors agenda packets.
17. Proposal to change the salary level for “exempt” employees
Staff will update the Board on the Obama Administration proposal to adopt regulations that substantially increase the compensation level at which white collar employees are determined to move from “non-exempt” to “exempt.” Staff believes that by the time the new regulations take effect, the Conservancy will be in total compliance and there are unlikely to be any impacts on how the Conservancy conducts business in this regard.
18. Conservancy compliance with SB1094 (GCS 65967) regarding eligibility to hold mitigation lands
Conservancy staff briefed the Board in a previous meeting about the extensive staff effort to secure authority to hold mitigation lands under the new SB1094 legislation. The Conservancy submitted the extensive application and received its authorization letter on June 17, 2015. The authorization is good through June 4, 2020.
19. Authorization to grant the Natomas Central Mutual Water Company to install land subsidence monitoring equipment on Conservancy land
In order to protect Conservancy mitigation land, the Conservancy volunteered to have the Natomas Central Mutual Water Company’s ground subsidence measurement monuments on Conservancy land. Staff will brief the Board on this matter.
20. Natomas Farms Marsh Recapture Pipe Project
Conservancy staff will update the Board on the SAFCA-directed project to install a below-grade 18-inch pipe on the Conservancy’s Natomas Farms marsh in order to facilitate greater management options to optimize the new NLIP-build water features to benefit the Giant garter snake.
21. Installation of piezometers on the newly-granted easement in favor of PG&E
The Board authorized executing an easement with PG&E for its underground high-pressure gas pipeline project through the Natomas Basin. The legal instruments behind that transaction have been recently executed and payment has been made by PG&E to the Conservancy. Recently, PG&E has requested that piezometers be placed on Conservancy land associated with the pipeline construction project. Staff will update the Board on this portion of the project.
22. Enterprise risk management exercise
In order to focus staff on risk to the Conservancy and the impact such risk events could bring, the Conservancy periodically updates its Enterprise Risk Management graphic. The graphic will be shared with the Board and comments about the graphic will be sought.
23. Public comments
Opportunity for members of the public to address the Conservancy’s Board of Directors.
24. Executive Session
Executive Session for real estate is scheduled.
Executive Director’s Report
Various matters for Board members’ general information will be presented by the Conservancy’s Executive Director.
Official adjournment of the meeting.