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HomeMy WebLinkAboutBOARD MINUTES 04-12-99 67 MINUTES OF THE ADJOURNED REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON APRIL 12, 1999 The District Board of the Central Contra Costa Sanitary District convened in an adjourned regular session at 1250 Springbrook Road, Walnut Creek, County of Contra Costa, State of California, at 7:00 p.m. on April 12, 1999. Member Hockett, Chair of the Capital Projects Committee, called the meeting to order. The Secretary of the District noted the attendance of the following Board Members. 1. ATTENDANCE PRESENT: Members: Boneysteele, Lucey, Menesini, Hockett ABSENT: Members: Nejedly 2. PUBLIC COMMENTS None 3. CAPITAL PROJECTS COMMITTEE MEETING/BOARD WORKSHOP Mr. Charles W. Batts, General Manager, stated that this is the first year that a two-year Capital Improvement Budget (CIB) is being proposed. Mr. Batts stated that following review of the CIB and ten-year Capital Improvement Plan (CIP), there will be a discussion of how the CIB/CIP fits into the overall budget strategy. Mr. Batts introduced Mr. John Mercurio, Management Analyst, who stated that the 1999- 2001 CIB is represented by the first two years of the CIP. Mr. Mercurio stated that an estimated 1, 100 hours of staff time will be saved by doing a two-year CIB instead of a one-year Cia. Mr. Mercurio noted that the Board authorization of the CIB will still be requested on an annual basis. At the end of each fiscal year, staff will come back with a report to the Board. New projects may be introduced at that time. Mr. Mercurio stated that in previous years, the contingency accounts for each of the cia programs were established based on an annual budget. Staff would request that the contingency accounts be increased to reflect the new two-year budget cycle. Contingency is now set at 5 percent of the program budget. Staff would recommend that contingencies be set at a minimum of $100,000. Mr. Jarred Miyamoto-Mills, Principal Engineer, reviewed the goals of the Capital Improvement Plan as follows: . To protect the public health and environment; . To accommodate approved growth in the District's service area; and . To respond to issues of community concern by reducing costs, reducing odors, partnering with other public agencies, and recycling water. Mr. Miyamoto-Mills stated that planned capital expenditures for the ten-year period from 1999-2000 to 2008-2009 total $178.2 million. Of that amount, $47.2 million is planned to be expended on Treatment Plant Improvements, $115.8 million is planned to be expended on Collection System Improvements, $10.2 million is planned to be expended on General Improvements, and $5.0 million is planned to be expended on Recycled Water. Mr. Miyamoto-Mills reviewed the distribution of expenditures over the ten years, noting that expenditures are greater in the first two years and taper off towards the end of the ten-year planning horizon. Revenues are anticipated to be $223.8 million over the next ten years. The three largest components that make up almost 75 percent of the revenues are connection fees projected at $58.5 million or 25 percent, property taxes projected at 04 1 ,.,~) 1~3 9.. 9 _. 68 $ 53.3 million or 24 percent, and the capital component of Sewer Service Charges projected at $47.5 million or 22 percent. Mr. Miyamoto-Mills stated that in the 1991- 1992 fiscal year, the Board of Directors authorized $5 from the Sewer Service Charge revenue to be transferred to capital to fund the Equipment Budget. In 1992-1993 the State took a portion of the ad valorem tax revenue. In response to the State's action, the District reduced the amount of capital improvements and increased Sewer Service Charge revenue, transferring $31 to capital. Mr. Miyamoto-Mills reviewed the other CIP revenue components and the assumptions used in making the ten-year projections. Mr. Miyamoto- Mills reviewed the changes in Sewer Construction Fund balance and prudent reserve for the ten-year period. The prudent reserve is defined as 75 percent of the next year's capital expenditures and any debt retirement required during the fiscal year. Dr. Gail Chesler, Associate Engineer, reviewed the major project emphasis for the two- year CIB. Dr. Chesler briefly described the following nine projects which make up slightly more than 50 percent of the expenditures over the next two years. . Treatment Plant Seismic Upgrade . Laboratory Improvements . Outfall Improvements . Martinez Eastside Trunk Sewer . Orinda/Moraga Pumping Stations Reliability Improvements . Dougherty Tunnel and Trunks . Collection System Renovation Program . Martinez Transmission Sewer Rehabilitation . Contractual Assessment Districts Mr. Miyamoto-Mills summarized program expenditures for the two-year CIB, noting that $27.9 million is projected to be spent in 1999-2000 and $35.6 million is projected to be spent in 2000-2001. Revenues in 1999-2000 are projected to total $21.7 million and revenues in 2000-2001 are projected to total $33.8 million. Adoption of the CIB/CIP and authorization of additional funds for the various capital programs totaling $45,079,000 is scheduled for Board consideration June 1999. With this Board authorization, the Treatment Plant Program, Collection System Program, General Improvements Program, and Recycled Water Program are funded and the General Manager is authorized to approve funds for specific projects. Reports are made to the Board on a quarterly basis on the CIB. In addition, major projects come before the Board on several occasions as they move through the process. Next year staff will come to the Board to report the status of the CIB, to add needed projects, and to request the funding authorization for the second year. Mr. Miyamoto-Mills stated that as requested earlier in the presentation, the contingencies have been set at a minimum of $100,000 and those figures were included in the amounts presented to the Board for consideration. Discussion followed with regard to various components of the CIB/CIP including the Recycled Water Program, the Collection System Modeling Upgrade, and the Laboratory Improvements Project. It was noted that the Board will be receiving updates on the Collection System Modeling and Laboratory Improvements Projects in the next two to three months. 4. REPORTS/ANNOUNCEMENTS a. Mr. Batts, General Manager, stated that the two-year CIB did generate savings in staff time. It is hoped that it will also give the Board a better understanding of the projects staff is working on and a real feel for the visible horizon of projects. The CIB/CIP is well funded. Last year, the 1998- 1999 Operations and Maintenance 04 12 99 69 (O&M) Budget approved by the Board was underfunded and the use of reserves was budgeted. The Sewer Service Charge rate has remained flat at $188 since 1994. In accordance with the Memoranda of Understanding with the bargaining units, a 3.8 percent cost of living increase will be granted to all employees effective April 18, 1999. Health care costs are anticipated to increase by 16 percent. As the Board is aware, the District's retirement contribution will be affected by recent Court decisions. At this time, staff understands that the Retirement Fund will pick up some, if not all, of these increased costs from its record earnings. The second pass of the 1999-2000 O&M Budget shows a budget increase of $997,858 or 3.04 percent, over the 1998-1999 O&M Budget. The projected salary and benefits increases account for $962,996 of that total. Mr. Batts stated that staff has done a commendable job in keeping other expenses down. Mr. Batts stated that using these assumptions, in order to balance the 1999-2000 O&M Budget, O&M reserves will be reduced to 10 percent, the prudent reserve level. Next year the Board may wish to consider taking a portion of the $31 Sewer Service Charge Capital Improvement Budget allocation and returning it to the O&M Budget. The Board of Directors commended staff on their informative CIB/CIP presentations and the overview of the O&M Budget. b. Mr. Batts, General Manager, reported the status of AB 1549 (Torlakson) which mandates ward elections for the Central Contra Costa Sanitary District Board of Directors, and the District's efforts in that regard. 5. ADJOURNMENT There being no further business, Chair Hockett adjourned the meeting at the hour of 7:55 p.m. President of the Board Directors, Central Contra Cost anitary District, County of Contra Costa, State of California COUNTERSIGNED: U- Sec e r of the Central C ntr Costa Sam ry District, County of Contra Costa, State of California 04 12 99