Chapter 15.08 — DISCOVERY VALLEY UTILITY

As used herein the term:

(Ord. No. 2002-1142, 5-28-02)

(a)

Utility means the Discovery Valley Utility established pursuant to Section 15.08.020 of this chapter.

(b)

Board means the Board of Directors of the Utility referred to in Section 15.08.030, which shall be the governing body of the Utility.

(c)

Directors means the representatives of the Utility appointed to the Board pursuant to Section 15.08.030.

(d)

Executive Director means the Executive Director of the Utility appointed pursuant to Section 15.08.030.

(e)

Secretary means the Secretary of the Utility appointed pursuant to Section 15.08.040(e).

(f)

Treasurer means the Treasurer of the Utility appointed pursuant to Section 15.08.050(c).

There is hereby created a public entity to be known as the "Discovery Valley Utility" for the City of San Marcos, which shall be responsible for the planning, development, production, purchase and transmission of all electricity and natural gas and other utility- related services, by the City.

(Ord. No. 2004-1228, 5-25-04)

The Utility shall be administered by a Board of Directors consisting of five Directors, unless and until such number is changed by amendment of this Code. The members of the City Council of the City, as such members may change from time to time, shall constitute the Directors of the Utility. The Board shall be called the "Board of Directors of the Discovery Valley Utility." The Board shall have exclusive jurisdiction, control, and policy-making responsibility of the Utility. All voting power of the Utility shall reside in the Board. The Board shall have all powers and duties possessed by the City to construct, acquire, expand and operate the utility; and to do any and all acts or things that are necessary, convenient, or desirable in order to operate, maintain, enlarge, extend, preserve and promote an orderly, economic and business-like administration of the utility. The Board shall operate as a unit of City government, except as otherwise provided in this chapter. The Board may sue or be sued in its own name. All damage claims arising from the operations of the Board and Utility shall be the responsibility of and be liquidated by the Board from the appropriate funds of the respective utility systems of the Utility.

(Ord. No. 2002-1142, 5-28-02)

(Ord. No. 2002-1142, 5-28-02)

(a)

Regular Meetings. The Board shall establish a schedule of its regular meetings. The date, hour and place of the holding of regular meetings shall be fixed by resolution of the Board and a copy of such resolution shall be filed with the City of San Marcos.

(b)

Special Meetings. Special Meetings of the Board may be called in accordance with the provisions of Section 54956 of the California Government Code.

(c)

Call, Notice and Conduct of Meetings. All meetings of the Board, including without limitation, regular, adjourned regular and special meetings, shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act (Section 54950 et seq. of the California Government Code).

(d)

Minutes. The Secretary shall cause to be kept minutes of the meetings of the Board and shall, as soon as possible after each meeting, cause a copy of the minutes to be forwarded to each Director and the City.

(e)

Compensation. Directors shall be compensated for their service by an amount established from time to time by resolution of the City Council. Directors may be reimbursed for expenses incurred in carrying out their duties. The compensation level established by the City Council is exclusive of any amounts payable to each member of the Board as reimbursement for actual necessary expenses incurred in the performance of the official duties for the Utility.

(f)

Officers: Chairperson, Vice-Chairperson, Executive Director and Secretary. The Board by majority vote shall elect from among its members a Chairperson who shall preside over the meeting or the Board, and a Vice-Chairperson who shall act for the Chairperson during absences. Election of officers shall be held at the first regular meeting at which all members are present following the appointment of a new Board member, but not later than the second meeting following the appointment. At the first regular meeting of the Board on May 14, 2002, Director Rozmus was elected as Chairperson and Director Thibadeau was elected as Vice-Chairperson. The City Clerk of the City shall be the Secretary of the Board. The City Manager of the City shall be the Executive Director of the Utility. The officers shall perform the duties normal to said offices. The Chairperson or the Executive Director shall sign all contracts on behalf of the Utility, unless a resolution of the Board shall provide otherwise, and shall perform such other duties as may be imposed by the Board. The Vice-Chairperson shall perform all of the Chairperson's duties in the absence of the Chairperson. The Secretary shall countersign all contracts signed by the Chairperson or Executive Director on behalf of the Utility, unless a resolution of the Board shall provide otherwise, perform such other duties as may be imposed by the Board. The Executive Director shall administer the day-to-day operations of the Utility.

(g)

Voting. Each Director shall have one vote.

(h)

Quorum; Required Votes; Approvals. Directors holding a majority of the votes shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time. The affirmative votes of at least a majority of the Directors present at any meeting at which a quorum is present shall be required to take any action by the Board.

(i)

Public Access. Meetings and documents of the Board are open and available to the public. Where materials and/or discussions pertain to such issues as utility personnel, property acquisition or disposal, and potential and actual litigation, or to power supply proposals, negotiations, or contracts, executive sessions or privacy exclusions may be employed.

(j)

Errors and Omissions. The Utility shall hold harmless and indemnify its Directors, agents and employees to the full extent permitted by law, including, but not limited to, all liabilities, expenses, and losses incurred by its Directors, agents, and employees in connection with acts of error or omissions, other than willful violations of laws, expense, all related claims and suits.

(Ord. No. 2002-1142, 5-28-02)

(a)

Divisions. Within the Utility there may be separate divisions for the natural gas, electricity and other utility operations. Separate funds and accounts shall be kept for each division as required by the uniform systems of accounts for natural gas, electricity and other utilities, as promulgated by the Public Utilities Commission of the State or the Federal Energy Regulatory Commission.

(b)

Policy. The Board shall establish an annual budget and written policies governing utility operations to cover such areas as employees' duties, customer rates, service rules and termination procedures, expenditures or funds, long-range planning, and other appropriate activities.

(c)

Treasurer. The Treasurer of the City is hereby designated as the Treasurer of the Utility. The Treasurer shall be the depositary, shall have custody of all the accounts, funds and money of the Utility from whatever source, and shall assure that there shall be strict accountability of all funds and reporting of all receipts and disbursements of the Utility. As provided in Section 15.08.060(m), the Treasurer shall make arrangements with a certified public accountant or firm of certified public accountants for the annual audit of accounts and records of the Utility.

(d)

Officers in Charge of Records, Funds and Accounts. The Treasurer shall have charge of, handle and have access to all accounts, funds and money of the Utility and all records of the Utility relating thereto; and the Secretary shall have charge of, handle and have access to all other records of the Utility.

(e)

Board Attorney. The City Attorney shall be the Board Attorney of the Utility who shall perform such duties as may be prescribed by the Board. Such Board Attorney may be paid reasonable compensation for the services rendered.

(f)

Other Contracts. The Board shall have the power by resolution to employ such other consultants and independent contractors as may be necessary for the operation of the Utility upon receipt of recommendations by the Executive Director.

(g)

Surety Bonds. The Board may require surety bonds for any of the officers and employees of the Utility in such amounts as the Board deems necessary. The Utility shall pay the premiums for the bonds in the same manner as any other operating expense.

(Ord. No. 2002-1142, 5-28-02)

(a)

Real Estate and Contracts. The Board, in the efficient and economical operation of the Utility, both inside and outside City limits as State law permits, may:

(1)

Sell its products and services to public and private corporations and to other consumers;

(2) Construct and operate plants and operate transmission lines and other facilities;

(3) Purchase real estate and franchises; and

(4) Enter into all contracts, leases, and agreements in furtherance thereof.

(Ord. No. 2004-1228, 5-25-04)

(b)

Extensions of Services. The Board may adopt regulations governing extensions of service of the Utility both inside and outside City limits. The regulations shall provide the conditions under which the extensions shall be made to render them compensatory and shall provide that each extension project shall, when completed, become the property of the City whether on public or private property. The Board may provide for refunds where advances by the person benefited are necessary to make extensions compensatory.

(c)

Joint Operations With Others. The Board may enter into contracts and agreements with any public or private corporation or any individual, both inside and outside the boundaries of the City and State: (1) for the joint use of property belonging either to the Utility or to the other contracting party or jointly to both parties; and (2) for the joint acquisition of real and personal property, rights and franchises, and the joint financing, construction, and operation of plants, buildings, transmission lines, and other facilities.

(d)

Eminent Domain. The Board may enter upon any land or water for the purpose of making surveys and may exercise the right of eminent domain in like manner as the City and to the same extent as the City, when the Board determines that public necessity or convenience requires such action.

(e)

Use of Thoroughfares for Utility Installations. The Board may use the ground over, under, or along any road, railway, highway, street, sidewalk, thoroughfare, alley, or waterway in the operations of the Utility, but shall in all cases and subject to the applicable General regulations of the City and State cause the surface of the public way to be restored to its usual condition.

(f)

Rates. The Board shall fix rates to be charged for natural gas, electricity and other utility services rendered by the Utility. Rates shall be competitive, fair, reasonable, cost-based, compensatory, and with no undue preference or discrimination. The Board may require reasonable deposits as security for the payment of charges for utility services and may provide for the return of the deposits when satisfactory consumer credit has been established.

(g)

Authorization for Expenditures. No money shall be drawn from the funds of the Utility nor shall any obligation for the expenditure of money be incurred except in conformity with authorization by the Board. No claim against the Utility shall be paid unless evidenced by a voucher approved by the Executive Director or by some other employee to be designated by the Executive Director.

(h)

Use of Utility Funds. All utility revenue shall be directed to the provision of utility services and not applied to the General fund of the City, unless the transfer of revenues constitutes a payment in lieu of taxes. Any shared utility/City funds or services shall be accounted for directly and explicitly.

(i)

Bond Issues and Other Indebtedness. Subject to applicable State laws, the Board may authorize the issuance and sale of revenue bonds or other types of indebtedness necessary to finance the acquisition, construction, improvement, and extension of the utility facilities owned by the City or Utility, including facilities owned or operated jointly with others. Use of General Obligation bonds may entail approval by the City Council or the electorate.

(j)

Short-term Indebtedness. The Board may borrow money up to and not exceeding $25,000,000.00 for periods not to exceed five years and may issue negotiable notes, payable from the revenues of the Utility or a division thereof, as evidence of the indebtedness. The action of the Board may be by resolutions, which may be adopted at the same meetings at which the resolutions are introduced and shall take effect immediately upon adoption. The Board will limit short-term borrowing to capital expenditures, which have a measurable life/schedule of depreciation. The Board will not engage in short-term borrowing to fund utility operational expenses, except to address very brief and minor cash flow consideration.

(k)

Public Information Expenditures. The Board may authorize reasonable expenditures to acquaint the public with the policies, operations, programs, and plans of the Utility.

(l)

Investment of Surplus Funds. The Treasurer may invest surplus funds of the Utility in securities that are safe and authorized by bond resolution, by State investment regulations, or other specific action by the Board.

(m)

Accounting, Finance, Budget and Planning Reports. The Executive Director, in addition to the reports and accounting the Utility may otherwise be required by law to make, shall furnish to the Board and City Council its annual financial report which shall include a balance sheet and statement of operations, showing the financial condition of the Utility and each separate division, prepared according to Generally accepted public utility accounting principles. The funds and accounts of the Utility shall be audited annually by a certified public accountant, and shall be open to public inspection. The Executive Director shall also annually prepare a budget forecast for the ensuing year and furnish a copy to the Board and the Council. If the budget requires payments to or from the General fund of the City, it shall be submitted to the Council in a manner prescribed by the Charter for the use of such funds. The Executive Director will also submit to the Board and the City Council information concerning long-range power supply arrangements, capital improvement projects, and other programs that may have an impact on the City.

(Ord. No. 2002-1142, 5-28-02)

(a)

Enforcement by Utility. The Utility is hereby authorized to take any or all legal or equitable actions, including but not limited to, injunction and specific performance, necessary or permitted by law to enforce this chapter.

(b)

Severability. Should any part, term or provision of this chapter be decided by any court or competent jurisdiction to be illegal or in conflict with any law of the State, or otherwise be rendered unenforceable or ineffectual, the validity of the remaining portions or provisions shall not be affected thereby.

(c)

Effective Date of Chapter. For the purpose of the creation, appointment, qualification, and organization of the Board, and for all other purposes, this chapter shall take effect 30 days from and after its passage.