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HomeMy WebLinkAboutBOARD MINUTES 01-08-98 1 MINUTES OF THE ADJOURNED REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON JANUARY 8, 1998 The District Board of the Central Contra Costa Sanitary District convened in an adjourned regular session at its regular place of meeting, 5019 Imhoff Place, Martinez, County of Contra Costa, State of California, at 2:00 p.m. on January 8, 1998. Member Menesini stated that it has been a pleasure to serve as the President of the Board of Directors for the past two years. During that time there have been a number of significant accomplishments including progress on the District's Recycled Water Program, completion of the Ultraviolet (UV) Disinfection Project, opening of the Household Hazardous Waste Collection Facility, further computerization of the facilities, completion of the Headworks Facilities Improvements Project, extensive microtunneling in Orinda, and plans for a joint project with the City of Martinez for sewer replacement and street paving. Member Menesini thanked the staff and all of those people who made these things a reality, particularly the Board for voting for them and finding the money to fund them. Member Menesini stated that today is a transition to youth, a younger man in the role of District Board President. This man is an action oriented individual and will bring experience from his business. This all comes in a very natural way to Member Nejedly. Former Senator John Nejedly provided the genes and helped with his education in providing knowledge and experience. Member Menesini was joined by the Board and staff in congratulating Member Nejedly on his election as District Board President for 1998. President Nejedly thanked Member Menesini for his comments. President Nejedly called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Lucey, Menesini, Hockett, Boneysteele, Nejedly ABSENT: Members: None Member Menesini stated that because of a death in the family he will have to leave the meeting at 2:30 p.m. 2. PUBLIC COMMENTS There were no public comments at this time, but this matter was taken out of order later in the agenda. 3. AWARDS AND COMMENDATIONS a. RESOLUTION OF THE CENTRAL CONTRA COSTA SOLID WASTE AUTHORITY (CCCSWA) RECOGNIZING THE CENTRAL CONTRA COSTA SANITARY DISTRICT'S CONTRIBUTIONS TO CCCSWA Mr. Roger J. Dolan, General Manager-Chief Engineer, stated that at the most recent meeting of the Central Contra Costa Solid Waste Authority (CCCSWA) the District was presented with a resolution and plaque symbolic of the contributions of the District to CCCSWA through the years. Ms. Susan McNulty Rainey, former District Board Member and CCCSWA Board Member, presented the plaque and resolution to President Nejedly and Member Hockett, the District's representatives to CCCSWA. Ms. Rainey stated that CCCSWA would not have been formed without the efforts of the District Board and staff. It was through the District's hard work that CCCSWA was formed and garbage rates were lowered. Member Hockett indicated that she appreciated the experience and stated that serving on the CCCSWA Board of Directors was an opportunity to make a great contribution to the Central County citizens. 01 08 98 - -.------- ----------.-------- 2 4. CONSENT CALENDAR Member Menesini requested that Item c. be removed from the Consent Calendar for discussion. It was moved by Member Hockett and seconded by Member Lucey, that the Consent Calendar consisting of Items a. through e. excluding Item c., be approved as recommended, resolutions adopted as appropriate, and recordings duly authorized. Resolution No. 98-001 accepting an easement at no cost to the District from David A. Tenenberg, Job 4800, Parcel 5, Alamo area, was adopted and recording was authorized. a. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: b. Hockett, Lucey, Menesini, Boneysteele, Nejedly None None Resolution No. 98-002 accepting work and Offers of Dedication from John P. Karleskind, Jr. and Patricia J. Karleskind, Job 51 92, Parcel 2, EI Pintado Road, Danville area, was adopted and recording was authorized. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Hockett, Lucey, Menesini, Boneysteele, Nejedly None None c. This item was removed from the Consent Calendar for discussion. d. The contract work for the Headworks Facilities Enhancements Project, DP 7177, was accepted and filing of the Notice of Completion was authorized. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Hockett, Lucey, Menesini, Boneysteele, Nejedly None None e. Resolution No. 98-004 was adopted, confirming the publication of District Ordinance No. 203, which repeals Title 8, Garbage, of the District Code. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Hockett, Lucey, Menesini, Boneysteele, Nejedly None None At this time, President Nejedly proceeded to Consent Calendar Item c., quitclaim sewer easements located within Subdivision 6547 to the present property owners, Job 5211, Parcels 3 and 4, San Ramon. In response to questions from Member Menesini, Mr. Jay S. McCoy, Infrastructure Division Manager, stated that about a year ago the Board was 01 98 08 3 advised of the potential condemnation of easements through the Canyon Lakes Country Club. That matter was resolved through negotiation. It was moved by Member Menesini and seconded by Member Hockett, that Quitclaim Deeds were approved to California Kosaido, Inc., a California Corporation, doing business as Canyon Lakes Country Club and Canyon Green Homeowners Association, Job 5211, Parcels 3 and 4; the President of the District Board of Directors and the Secretary of the District were authorized to execute and record said Quitclaim Deeds; and Resolution No. 98-003 was adopted to that effect. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Hockett, Lucey, Boneysteele, Nejedly None None At this time, President Nejedly returned to Item 2., Public Comments. 2. PUBLIC COMMENTS Mr. Ray Davis, 20 Zander Drive, Orinda, addressed the Board relative to the East Bay Municipal Utility District (EBMUD)/Central Contra Costa Sanitary District (CCCSD) Lamorinda Recycled Water Project. Mr. Davis stated that there is a united front by the school districts, cities, and agencies in the area in opposition to this project as it is presently proposed. Mr. Davis stated that there are misunderstandings and a lack of information on the project. Mr. Davis stated that the basic position of the cities, school districts, and citizens is that the health, safety, and welfare of the children and citizens must come first. Mr. Davis stated that he does not think that the attitude of EBMUD, the purveyor of this product, is appropriate. EBMUD has empowered itself to force any resident of its service area to take this product whether or not they wish to take it. Mr. Davis stated further that he has toured the CCCSD facility and he believes that there is only a 32 percent removal of pesticides in the secondary treated effluent discharged. Mr. Davis stated that this should not be sprayed on school yards. Mr. Davis stated that he does not think CCCSD is upholding its charge to protect the public; and that he thinks that the Lamorinda Recycled Water Project does not serve the public interest. Mr. Davis stated that he challenged any EBMUD Board Member to a public debate on this subject. Mr. Davis issued the same challenge to Member Menesini. Mr. Davis thanked the Board for their time. President Nejedly thanked Mr. Davis for his comments. At this time, President Nejedly reverted to the order of the agenda. 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER Mr. Dolan, General Manager-Chief Engineer, requested that Item 6.a.5) Acme Costs and Revenues, be taken out of order to accommodate interested persons in the audience. The Board voiced no objection. 6. REPORTS a. GENERAL MANAGER-CHIEF ENGINEER 5) Mr. Dolan, General Manager-Chief Engineer, stated that there was no way this situation the District now finds itself in could have been predicted when the District was sued for over $100 million to close Acme Landfill. The District received substantial insurance recoveries that pay approximately the full cost of the defense and settlement. The District also received substantial contributions from the solid waste customers. The District is now in a very favorable position. There are now monies surplus to the needs of the District for solid waste management and the Acme Landfill 01 08 98 4 01 08 litigation. The District does not anticipate future solid waste expenses. It is now appropriate for the Board to consider disposition of this surplus. Mr. Dolan stated that Mr. Kenton L. Aim, Counsel for the District, deserves the lion's share of the credit for managing the municipal defense. As a result of negotiation skill and the skillful use of experts to lower cost estimates, he was able to bring the Board a settlement proposal that the Board could accept. Ms. Colette Curtis-Brown, Accounting Supervisor, has done an exceptional job of accounting to produce the figures the Board is about to see. Ms. Harriette Heibel, Community Affairs Manager, has done a significant amount of work with regard to options for dispersal of the funds. Member Menesini stated that he had indicated previously that he must leave the meeting at 2:30 p.m. because of a death in the family. Before leaving, Member Menesini stated that he is fully aware of the problems associated with the District dispersing the funds. Member Menesini stated further that he is fully aware of the fact that the District must, as a Board, receive the credit because the District was the major player in these negotiations. The District deserves the recognition and the funds should be dispersed directly from the District to its customers. Member Menesini requested to be excused and left the meeting at the hour of 2:30 p.m. Ms. Collette Curtis-Brown, Accounting Supervisor, stated that the calculation of income and expense account balances for the Acme Landfill litigation and the legal impound account includes consideration of legal and settlement costs, insurance recoveries, sources of customer contributions, the legal impound account, and allocation of insurance premium cost. Ms. Curtis-Brown stated that the District's sewer customers, rather than solid waste customers, paid the insurance premiums; therefore, it would be appropriate for the Board to consider allocation of insurance premium cost. Mr. Kenton L. Aim, Counsel for the District, provided background on the legal impound account. When the District was sued for closure of Acme Landfill, each of the Cities for whom the District was providing franchise services was sued individually and each of the collectors was sued also. There were essentially two sets of legal bills, one for representation of the Cities and the District and one for representation of the collectors (Valley Waste Management, Orinda-Moraga Disposal Service, and Pleasant Hill Bayshore Disposal). The collectors claimed that these legal expenses were ordinary costs of doing business as a collector and should be recoverable through the garbage rates. There was a substantial concern by the District Board and staff. We considered a Public Utilities Commission (PUC) model that allowed some of those costs to be appropriately borne by the ratepayers and some to be borne by the companies. Therefore, the Board chose to put the anticipated amount of legal fees that the companies would incur in the rates but required that the companies send the money to the District to be held in an impound account where after accounting for their own insurance recoveries, funds would be disbursed to the companies based on a formula which allowed for reimbursement of 75 percent of the companies' reasonable payments less insurance recoveries. Mr. Aim stated that has taken place but there is a balance left in that account. Ms. Curtis-Brown reviewed the calculation of account balances for the Acme Landfill litigation and impound account as set forth on the handouts provided. Total expenses including legal costs, Acme settlement costs, and an estimate of future costs through February 1 998 are estimated to be $1,658,887. Insurance recoveries total $1,567,824. Solid waste customer contributions from the Central Contra Costa Solid Waste Authority (CCCSWA), the Acme portion of franchise fees, and the legal impound account total $1,651,058, leaving a gross balance of $1,560,005. The 98 5 District's internal auditor, Ms. Rosemary Belland, CPA, has reviewed these figures through August 1997 and will return to complete the review. Ms. Curtis-Brown stated that it would be appropriate to consider allocation of insurance premium cost paid by the District sewer customers. Ms. Curtis-Brown reviewed two options for allocation of insurance premium cost, one at cost and one at present value. The net balance would be $1,445,655 If insurance premium cost is allocated at cost, or $1,265,405 if insurance premium cost is allocated at prevent value. Options for disposition of these surplus funds include: retaining the funds to offset future Sewer Service Charge increases; dispersing some portion of the net balance; or dispersing all of the net balance. Ms. Harriette Heibel, Community Affairs Manager, reviewed options for dispersal of the funds as follows: . Solid Waste Billing . Direct Mail (in-house) . Direct Mail (out-source) . Property Tax Billing . Central Contra Costa Solid Waste Authority (CCCSWA) Ms. Heibel reviewed advantages and disadvantages of each of these options. Possible language that could be put on the solid waste billing was presented to the Board. Discussion followed with regard to the difficulty in getting the list of garbage customers from the garbage company, and whether Concord or other areas contributed to the cost of insurance premiums. Member Boneysteele suggested that an alternative to using the garbage company's customer list would be to use the District's Sewer Service Charge ratepayers in the garbage company service area. Member Boneysteele stated that this alternative could be justified in part by the fact that part of the money came from the Sewer Service Charge. Further discussion followed with regard to additional temporary staff which may be needed to answer incoming customer calls concerning the dispersal, the impossibility of securing a completely accurate list of solid waste customers who contributed these funds, and whether or not commercial customers should be included. Discussion proceeded to the decision points. Member Hockett stated that she favored dispersal of the funds to the known solid waste customers in the area formerly franchised by the District. Member Hockett stated that this could be done through an insert in the billing system now in place with a line item description and/or a letter of explanation. Ms. Susan McNulty Rainey, former District Board Member and current CCCSWA Board Member, addressed the Board. Ms. Rainey thanked the Board for the opportunity to speak and indicated it was a pleasure to see all of the Board Members again. Ms. Rainey stated that she was pleased to hear from the discussion that there is some thought of dispersal of the funds. Ms. Rainey stated that if she were still on the Board she would support the option with allocation of the insurance premium cost at present value, resulting in a net balance of $1,265,405. Ms. Rainey stated that CCCSWA is currently in the process of rate setting. There have been two years of service under the current contract. Ms. 01 08 98 6 01 Rainey stated that, thanks to the Board and the District, the Central County solid waste franchises went to bid and significant reductions in rates were achieved. Two years ago when rates were set there were various components for contingency. The cost of service in the Lamorinda area, because of terrain and the services they required, was more expensive than their rates so they went into their contingency funds. The Walnut Creek service area has excess contingency funds. Contra Costa County set the unincorporated area rate $2 more than anyone else so they have excess contingency funds. The Lamorinda and Danville areas have a shortfall going into year three. Ms. Rainey stated that since the District has funds to disperse, she would strongly urge the Board to forward those funds to CCCSWA so the funds can be used during rate setting in the Lamorinda and Danville areas, formerly franchised by the District, to offset increases in future rates. Ms. Rainey stated that CCCSWA is trying to create stability and credibility in the rates. Dispersal of the funds to CCCSWA would be a wonderful gesture on the part of the District and the District would receive as much publicity as possible. Ms. Rainey stated that it would create confusion if there was a credit given on the bill and then an increase required to make up a deficit. Mr. Aim stated that he is in an awkward position because he is counsel both for the District and for CCCSWA. However, when the rates were set, the Lamorinda jurisdictions were told by CCCSWA (then the City of Walnut Creek and the District) the total amount of money needed. The cities were then allowed to decide how to divide that money up. The amount of money set by the jurisdictions in various areas turned out differently. That is why a contingency was included in the rates. Member Hockett expressed preference for allocation of the insurance premium cost at present value. Member Hockett stated that the District did an excellent job in managing the Acme litigation and pursuing insurance recoveries, and the District now has a surplus to pass on to the ratepayers. Member Hockett stated that she would feel badly if the District was not able to pass the surplus on to the ratepayers after having done such great work in retrieving the funds. Member Hockett stated that having said that and having sat on the CCCSWA Board, in her opinion the best thing to do is to help CCCSWA maintain the contracts with the collectors and help stabilize rates for the solid waste customers. Mr. Dolan stated that from a management perspective, getting the funds to CCCSWA is a better way of getting the money to the people who paid it whether they have one, two, three or more cans. Member Lucey expressed support for the present value option for allocating insurance premiums cost. Member Lucey stated that he favors dispersing the funds to CCCSWA to benefit solid waste customers formerly franchised by the District with appropriate caveats. Although the District Board may not agree with how the funds are spent; it is no longer the District's problem, it is CCCSWA's. Member Lucey stated that the suggested language describing the District's return of the funds to the ratepayers could be improved. Member Lucey stated that he would like somehow to accommodate Member Menesini's position, but is uncertain how to do that because Member Menesini is not present. Member Lucey stated that he does not want to vote on this matter today because Member Menesini is not present. President Nejedly agreed with the present value allocation of insurance premium cost and dispersal of the net balance. President Nejedly asked if the funds were to go to CCCSW A would the money be used to keep rates lower, and would the garbage companies benefit from it? 08 98 7 Ms. Rainey stated that the garbage companies compensation is set by the contract so the funds would be used to achieve that number because there have been some adjustments for hard-to-serve customers and addition of 3,000 customers in the Orinda-Moraga area. Ms. Rainey stated that this money would not be a benefit to the garbage companies but rather a benefit to the ratepayers. This money would be used to offset increases that would otherwise be needed to meet contract demands. Any monies returned from the District would be returned to the customers in the various cities in the same proportion in which they were paid. Member Boneysteele stated that as he understands this, in the past the District bought various insurance policies. After a diligent search of the records, the District was able to recover $1,567,824 which would not be available otherwise. If the customer contributions are subtracted from expenses, the balance is $1.5 million, approximately the same as the amount as insurance recoveries so this could be considered the money paid in on behalf of all of the ratepayers for unknown risks facing the District. Member Boneysteele stated that as a result of the District's foresight and also the efforts of staff that found these policies and collected on them, the District has $1,560,005. It could be said that the people of the District should be made whole for the policies. If the District had not paid premiums, the Sewer Construction Fund balance would have been $294,600 higher than it is so that amount could be returned to the people. Member Boneysteele stated that the policies were paid on behalf of all of the people of the District. The residents of Orinda, Moraga, Lafayette, and Danville collected on them. Member Boneysteele recommended that the $1,265,404 be refunded on a per capita basis using the direct mail out- source option. Member Boneysteele recommended that the District convey its regrets to CCCSWA but say this is the simplest way of dispersing the funds. The District is now out of the solid waste business. This came from the general fund of the District and therefore it is being refunded back to the general customers in those areas. Mr. Dolan stated that the difference between the payers of the District Sewer Service Charge and the garbage customers is that very often it is the tenant that pays the garbage bill and not the owner. Member Boneysteele's suggestions could be carried out using the tax bill. Member Boneysteele agreed to that modification. Member Hockett stated that it is the garbage customers, not the Sewer Service Charge customers, that should receive the refund. The only equitable way to disperse this money is to give it back to CCCSWA. President Nejedly suggested that a decision on this matter be delayed until the next meeting when Member Menesini can be present. Discussion followed with regard to information required for consideration by the Board at the next Board Meeting. Mr. Dolan summarized the direction provided by the Board as followed: . Disperse the funds . Disperse funds reduced by insurance premiums allocated at present value for a net balance to be dispersed of $1,265,405 . Disperse this net balance: 1 ) By direct payment to the solid waste customers or ratepayers (approximately 42,000) with a letter of explanation; or 01 08 98 8 2) To CCCSWA for equal distribution to solid waste customers formerly franchised by the District. At this time, Member Boneysteele withdrew his previous recommendation that the funds be dispersed to the Sewer Service Charge customers because there was no support for that option from other Board Members. BREAK At 4:11 p.m., President Nejedly declared a recess, reconvening at the hour of 4:20 p.m. President Nejedly reverted to the order of the agenda. a. 01 08 6. REPORTS GENERAL MANAGER-CHIEF ENGINEER 1 ) Mr. Dolan, General Manager-Chief Engineer, stated that last spring the Board approved the Capital Improvement Budget which covered many projects. One of the items in that Budget was a project to improve the worn-out Incinerator Ash Handling System. Since that time the project has received considerable thought; and as a result, has changed significantly. Mr. Dolan introduced Mr. Don Berger, Associate Engineer, who stated that the Ash Handling System is used to remove the ash from the furnace from com busting sewage sludge. The system was designed in the 1960's, put into operation in the 1980's, and has run continuously since that time. If the system is down too long, sludge must be hauled offsite. In 1995, the Furnace Continuous Improvement Team (CIT) was formed as part of the District's Work Redesign effort. One of the key findings was that the Ash Handling System was one of the main deficiencies affecting furnace operation. In 1996, the Furnace CIT developed conceptual recommendations for improving the Ash Handling System; and in May 1 997, Montgomery Watson completed the predesign study and cost estimates for the work were developed. Mr. Berger showed a schematic and described how the Ash Handling System works. Mr. Berger stated that the Furnace CIT and Montgomery Watson identified the following key deficiencies: . Compliance problems . Health and safety issues . Plugging of ash piping . Difficulty maintaining filters . Aging and difficult-to-operate control system The following improvements to the Ash Handling System are recommended: . Install new filters . Eliminate cyclonic dust separators . Modify ash piping and valving to prevent plugging . Install higher capacity vacuum blowers . Update control system Mr. Berger stated that the estimated bid price for the project is $750,000 with a total estimated project cost of $1.1 million. This is different than the Capital Improvement Budget which included a estimated project cost of 98 9 $165,000. This estimate was done before the entire scope of the improvements were known. Member Lucey asked if it is judicious for the District to spend $1 million on the incinerators at this time. When Environmental Protection Agency (EPA) regulations are approved, the District may no longer be able to burn sludge. Perhaps the $1 million could be better spent coming into compliance with the proposed regulations. Mr. Dolan stated that it is not known what course the EPA will finally take with regard to emission control regulations. However, the EPA's handling of toxic effluent regulations might be a comparable situation. It took five years for the regulations to come out and another five years for them to be implemented. Mr. Dolan stated that he does not believe that the EPA is considering categorically eliminating incineration. The risk is that expensive clean-up equipment may someday render the incinerators economically unfeasible. Mr. Berger stated that other agencies, such as Palo Alto, have also considered the proposed regulations and decided to spend approximately $10 million improving their furnaces. Palo Alto determined that it would be better to put the money into improving their furnaces rather than changing to digesters or some other technology. 2) Mr. Dolan, General Manager-Chief Engineer, stated that last September the Board approved a specific plan for sewering the Dougherty Valley. One of the unusual features of the specific plan is a tunnel through the San Ramon Valley hills to be paid for by the developers and built by the District. At the time the Board considered the specific plan, it was indicated that staff would return with an analysis of the rates and revenues from the project to form the basis of rate adjustments. Member Menesini was concerned about this issue and staff will make a special contact with him on this matter. Mr. Dolan introduced Mr. Jarred Miyamoto-Mills, Principal Engineer, who stated that Member Menesini's question was whether the development of this area will be subsidized by favorable sewer rates and charges or will developer money cover the actual cost? Mr. Miyamoto-Mills listed the items on which money must be spent to provide wastewater utility service to this area and the way those costs will be covered for providing that service: . On-site sewers - built and paid for by developer from house sales . Tunnel and trunks - built by District/Paid for by developers either out of pocket accompanied by a bond or included in assessments . Pumping station buy-in and expansion - Pumped Zone Fee . Interceptors/Treatment Plant/Outfall - Facilities Capacity Fee . Buy-in to other capital assets - Facilities Capacity Fee . Facilities upgrade/replacement - Ad Valorem Taxes and Sewer Service Charge Increment . Operations and maintenance cost - Sewer Service Charge Mr. Miyamoto-Mills stated that 12,637 residential units are planned to be built over a 20-year period. Mr. Miyamoto-Mills reviewed the present value of the capital revenue stream, the proportional cost of facilities needed to provide wastewater utility service to this area, the additional cost of operations and maintenance versus the Sewer Service Charge revenue stream, the property tax revenue stream, and economies-of-scale rate 01 98 08 .... ....................... -. .........., .......,. ......,. .10 01 08 3) 4) stabilization opportunities related to the Dougherty Valley Development as set forth in the handout provided to the Board. In summary, Mr. Miyamoto- Mills stated that there is sufficient money in the current rate stream to pay all of the costs associated with the Dougherty Valley with the additional income stream to provide $10 to $12 per year rate relief to other Sewer Service Charge customers at build-out. This would be equal to about a 3 percent rate of inflation over the next 20 years. Following discussion of the proposed landscaping improvements at the Larwin Pumping Station, President Nejedly thanked Mr. Miyamoto-Mills for his report. . Mr. Dolan, General Manager-Chief Engineer, reported that the District successfully completed work on 12 storm damage projects. Overall, the projects cost $495,000. Of that, $137,000 was recovered from the Federal Emergency Management Agency (FEMA). Property owners contributed $11,000 to the projects, leaving a District balance of $347,000. Mr. Dolan thanked Ms. Brenda Wener, Sewer Service Charge Technician, and Mr. Curt Swanson, Principal Engineer, for processing the FEMA grant, and the Infrastructurè Division and the Collection System Operations (CSO) Department for their excellent work on the storm damage repair projects. Mr. Dolan, General Manager-Chief Engineer, stated that last October Deputy Chief Engineer Robert Baker announced his retirement. This triggered a substantial internal recruitment effort. The District employs two remaining Department Managers and seven Division Managers who meet the qualifications for the Engineering Department Manager position. Each of these individuals provided an excellent essay on future directions for the District and engaged in several meetings and interviews with the General Manager-Chief Engineer. Mr. Dolan stated that the Board Personnel Committee provided much appreciated guidance and support. As an outcome of this undertaking and unless the Board strongly objects, Mr. Dolan stated that he plans to prepare a position paper for consideration by the Board at the January 20, 1998 Board Meeting. That position paper will make the following recommendations as set forth in a memorandum to all employees dated today, Ja'nuary 8, 1998, a copy of which was distributed to the Board. . Appointment of Plant Operations Department Manager Charles W. Batts as the new head of the. Engineering Department effective March 1, 1998 . Appointment of Plant Operations Division Manager James M. Kelly as the new head of the Plant Operations Department effective March 1, 1998 . Reorganization of the Engineering Department from three divisions to two with Mr. Batts and the current three Engineering Division Managers taking the lead on the reorganization; input will be welcomed from all sources . . Appointment of Planning Division Manager Douglas J. Craig to the position of Plant Operations Division Manager effective when the planning for reorganization of the Engineering Department from three divisions to two is more developed this spring or early summer . Adjustment of department head salary ranges and titles to put all departments on an equal standing to eliminate the differences between departments; taking the entry salary of the lowest of the three current ranges and combining that with the highest of the three current ranges for one new range for all department heads, and renaming the Deputy and Department Manager positions to one title . 98 11 such as Director of Administration, Director of Engineering, and so on or some other appropriate title Member Lucey, Chair of the Personnel Committee, stated that he and Member Menesini reviewed the essays submitted in this recruitment process and found the quality and thought that went into them to be excellent. Member Lucey stated that he has an enhanced view of the District's Managers and he supports the recommendations presented by the General Manager-Chief Engineer. Following discussion, the Board agreed to the proposed title of Director to apply to all department managers. Mr. Dolan stated that for a variety of reasons including liability, public acceptability, internal human relations, and economics, it would be desirable to eliminate the long-standing practice of home garage privileges for Department Managers. Mr. Dolan proposed an optional salary adjustment of $375 for those Department Managers who relinquish their privilege of commuting in a District automobile. That figure would be incremental salary for any Manager who relinquishes home garage privileges. Mr. Dolan stated that if the Board agrees, that would leave three management positions (the Infrastructure Division Manager, the Secretary of the District, and the General Manager-Chief Engineer) that must be dealt with at the time of retirement or at some other time. Following discussion, there was a consensus of the majority of Board Members present that the proposal for elimination of home garage privileges apply to all seven management positions at this time and that the proposal be phased in as soon as possible. Mr. Dolan thanked the Board for their frankness and support on this matter. 5) Discussion of Acme costs and revenues was taken out of order earlier in the agenda. 6) Mr. Dolan, General Manager-Chief Engineer, announced that the District is advertising for bids for the PDC Environmental Control Project, a project to cool the power distribution system for the Ultraviolet (UV) Disinfection System electrical cabinets. This will prolong the life of the equipment and reduce the propensity of hot day power failures. The engineer's estimate for this work is $250,000. 7) Mr. Dolan, General Manager-Chief Engineer, announced that the District is working with East Bay Municipal Utility District (EBMUD), Contra Costa County, and the City of Orinda on a study of septic tank runoff contamination in the EI Toyonal area. The principal issue is contamination , of the San Pablo Reservoir watershed, and EBMUD is the driving force. Contra Costa County Clean Water funds will be used to pay consultant costs. The Board expressed concern about involvement in this study and was advised that the District is keeping a low profile. 8) Mr. Dolan, General Manager-Chief Engineer, announced that Laboratory Superintendent Bhupinder Dhaliwal, Chemist II Jonalea Ostlund, and Plant Operations Department Manager Charles Batts have written an article on . method detection level for chemical laboratory tests which has been published by the Water Environment' Federation. 9) Mr. Dolan, General Manager-Chief Engineer, announced that Mr. William Brennan, Plant Engineering Division Manager, will be traveling to Seattle, Washington to meet with a committee on benchmarking of capital costs and project management. Others participating in this effort include the Portland, 01 08 98 12 10) 11 ) 12) Orange County, Sacramento, Los Angeles, and East Bay Municipal Utility District. Mr. Dolan, General Manager-Chief Engineer, announced that there has been a third break-in at the Martinez Pumping Station. Plant Operations Department staff is taking further steps to increase security. Mr. Dolan, General Manager-Chief Engineer, announced that he will be unable to attend the California Association of Sanitation Agencies (CASA) Conference due to scheduling conflicts. Mr. Dolan, General Manager-Chief Engineer, announced that the District is applying for a Household Hazardous Waste grant. A position paper and resolution will be presented for Board consideration at the January 20, .1998 Board Meeting. The grant funds could be as much as $120,000, and would be used for equipment to help recycle paint and oil. b. COUNSEL FOR THE DISTRICT None c. SECRETARY OF THE DISTRICT None d. BOARD MEMBERS 1 ) Member Lucey announced that the South Orinda Sewer Improvements Project appears to be going remarkably well. Member Lucey stated that he is impressed with the efficient use of small spaces for equipment. 7. BREAK This item was taken out of order earlier in the agenda. 8. ADMINISTRATIVE CONSIDER APPROVAL OF CONTRACT FOR LABOR AND EMPLOYMENT-RELATED LEGAL SERVICES WITH W. DANIEL CLINTON AND HANSON. BRIDGETT. MARCUS. VLAHOS & RUDY. LLP FOR THE PERIOD OF JANUARY 1. 1998 THROUGH DECEMBER 31. 2000. AND AUTHORIZE THE BOARD PRESIDENT TO EXECUTE THE CONTRACT . a. Member Lucey stated that he reviewed the position paper and contract and thought it was too loose in terms of protecting the District. Member Lucey proposed the following changes: 1) 30-day termination clause rather than 90 days; 2) use of other firms for special matters; and 3) modification of the indemnification language. Mr. Kenton L. Aim, Counsel for the District, distributed a revised contract incorporating the suggestions made by Member Lucey. Mr. Aim stated that he has reviewed the proposed changes with Mr. Clinton and Mr. Clinton does not have a problem with the proposed changes. Ms. Joyce E. Murphy, Secretary of the District, stated that Member Menesini asked that she convey his questions and concerns. Member Menesini felt that a 90-day termination was too long and 30 days would suffice. Member Menesini also questioned who sets the rate agenda for this contract and at what level. Mr. Aim stated that if the Board approves the proposed contract, the rates would be approved as part of that action. Member Menesini expressed concern that a list of names without job descriptions is meaningless to the Board. Mr. Paul Morsen, Deputy General Manager, stated that the individuals listed on Appendix Ato the contract are all attorneys with the exception of the last one, Naissa .01 08 98 13 H. Foster, who is a paralegal. The first four names listed are partners and shareholders in the firm. In response to a question from Member Boneysteele, Mr. Aim explained the Bar Association rules with regard to potential conflicts of interest. Discussion followed with regard to the Indemnification and Insurance Articles which has been revised in the draft distributed by Mr. Aim. It was moved by Member Lucey and seconded by Member Hockett, that the contract for District labor and employment-related legal services by W. Daniel Clinton and Hanson, Bridgett, Marcus, Vlahos & Rudy, LLP for the period from January 1, 1 998 through December 31, 2000, be approved as revised, and that the President of the Board of Directors and the Secretary of the District be authorized to execute said contract. There being no objection, the motion was approved with Member Menesini being absent. 9. ENGINEERING a. AUTHORIZE THE GENERAL MANAGER-CHIEF ENGINEER TO EXECUTE AN AGREEMENT WITH BROWN AND CALDWELL. AND AGREEMENT AMENDMENTS WITH MONTGOMERY WATSON. AND TALAVERA AND RICHARDSON FOR PROFESSIONAL ENGINEERING SERVICES RELATED TO THE COLLECTION SYSTEM PLANNING Mr. Dolan, General Manager-Chief Engineer, stated that when this matter was discussed at the last Board Meeting, there was some discussion on Environmental Protection Agency (EPA) and State regulations that would affect this effort. Mr. Dolan stated that the District has spent $240 million over the last ten years pursuant to a highly effective and productive planning effort done in the mid-1980's. That work and money was spent on enabling the District to handle wet weather problems. That work has nearly been completed. There is another $125 million to $200 million of work projected for the decade to come that has not been completely justified. Part of the planning effort would be to comprehensively evaluate the state and federal laws and regulations. Ms. Murphy, Secretary of the District, stated that Member Menesini asked her to relay his questions on this matter. Member Menesini questioned the EPA policy that is the driving force for this District's Master Plan for trunk sewers, pumps and force mains, renovation, and Walnut Creek downtown projects. Mr. Jarred Miyamoto-Mills, Principal Engineer, stated that the EPA National Policy on Sanitary Sewer Overflows is the driving force. The Collection System Planning Program is being done to prioritize projects to meet the District's performance and reliability goals. Mr. Miyamoto-Mills stated that the EPA policy puts this issue in a national context. In response to Member Menesini's question concerning the process and results of the panel (team) rankings of consultants, Mr. Miyamoto-Mills stated that a Request for Proposals (RFP) was issued last summer. Four firms provided written proposals which were reviewed by a panel made up of Collection System Operations (CSO) Department Manager John Larson, Associate Engineer Tom Godsey from CSO, Principal Engineer Curt Swanson from the Infrastructure Division, and Associate Engineer Jack Case and Principal Engineer Jarred Miyamoto-Mills from the Planning Division. Interviews were conducted in October 1 997. The panel ranked both the written proposals and interviews for each of the four pieces of work. Montgomery Watson was judged to be best for the Collection System Master Plan. CH2M Hill received a smaller contract for the sewer renovation work. Brown and Caldwell was judged to be the best for the Walnut Creek Facilities Plan. In response to Member Menesini's question concerning how the GIS, Maintenance Records, Sewer Service Charge, and CSO Mapping and Hydraulics data bases would be generated and used by the consultant, it was indicated that staff will contact Member Menesini and respond to his questions in detail. In response to Member Menesini's question concerning the protocols and processes for the Board interacting with the consultants, it was indicated that a report will be made to 01 08 98 14 the Board when the final report is produced. The Board was requested to advise staff if they wished more input with the consultants. In response to Member Menesini's question concerning the budget for this work, Mr. Miyamoto-Mills stated that each of these contracts has a cost ceiling. The District's project manager has management control over the budget and tracks it on both a weekly and monthly basis. In addition, major milestones are tracked and authority limits applied. It was moved by Member Hockett and seconded by Member Boneysteele, that the General Manager-Chief Engineer be authorized to execute a professional engineering services agreement with Brown and Caldwell with a cost ceiling of $171,000 for work related to the Downtown Walnut Creek Facilities Plan (DP 5908), and agreement amendments with Montgomery Watson with a cost ceiling of $140,000, and with Talavera and Richardson with a cost ceiling of $70,000 for work related to the Collection System Master Plan Update (DP 4983). There being no objection, the motion was approved with Member Menesini being absent. Noting the time, it was moved by Member Lucey and seconded by President Nejedly, that the adjournment time of the meeting be extended to 6:30 p.m. There being no objection, the motion was approved with Member Menesini being absent. 10. TREATMENT PLANT a. CREATE AND ADD THE POSITION OF ELECTRICIAN (G-65. $3.689-$4.471) AND ADOPT THE JOB CLASS DESCRIPTION. ADOPT REVISED JOB CLASS DESCRIPTIONS FOR THE POSITIONS OF ELECTRICAL TECHNICIAN (G-69. $4.064- $4.913) AND ELECTRICAL SHOP SUPERVISOR (S-74. $4.597-$5.569), AND ADOPT THE ELECTRICAL SHOP DEMONSTRATION TRAINING ENHANCEMENT PROGRAM Member Lucey, Chair of the Personnel Committee, stated that he and Member Menesini have reviewed this item and recommend its approval. It was moved by Member Lucey and seconded by Member Hockett, that the positions of Electrician (G-65, $3,689-$4,471) and Electrical Technician (G-69, $4,064-$4,913) be created; that the electrical Shop Demonstration Training Enhancement Program be adopted; that promotion of program participants be authorized; and that class descriptions, including the Electrical Shop Supervisor (S-74, $4,597-$5,569) be adopted. There being no objection, the motion was approved with Member Menesini being absent. 11. HUMAN RESOURCES a. DIRECT STAFF TO SECURE THE SERVICES OF AN ARBITRATOR IN ACCORDANCE WITH STEP FOUR OF THE GRIEVANCE PROCEDURE RELATIVE TO THE DISTRICT'S DECISION TO RELOCATE THE INSTRUMENT SHOP TO A NEW SHOP IN THE FORMER PRIMARY BUILDING Consideration of this matter was held at the request of Mr. Rudy Jenkins, Business Agent of Public Employees Union, Local One. 12. APPROVAL OF MINUTES a. MINUTES OF DECEMBER 4. 1997 It was moved by Member Hockett and seconded by Member Boneysteele, that the minutes of December 4, 1997 be approved as presented. There being no objection, the minutes were approved with Member Menesini being absent. 01 08 98 15 APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED JANUARY 8. 1998 It was moved by President Nejedly and seconded by Member Boneysteele, that the Expenditure List dated January 8, 1998, including Self-Insurance Check Nos. 101391- 101394, Running Expense Check Nos. 107553-107796, Sewer Construction Check Nos. 19270-19326, and Payroll Check Nos. 47479-47750, be approved as recommended. There being no objection, the motion was approved with Member Menesini being absent. 14. BUDGET AND FINANCE a. RECEIVE NOVEMBER 1997 FINANCIAL STATEMENTS Ms. Deborah Ratcliff, Controller, reviewed the results of operations and maintenance expenses for the month of November 1997, noting that expenditures were $63,000 less than budget, representing a 2.7 percent favorable variance. Year to date expenses were $1.1 million less than budget, representing a 9.3 percent favorable variance. Ms. Ratcliff reported that the District's temporary investments were held in Treasury bills and Treasury notes and the District's Local Agency Investment Fund (LAIF) account with interest rates ranging from 5.16 percent to 6.45 percent. The latest interest rate as of November 1997 was 5.2 percent. The average yield of the LAIF account through October 1997 was 5.7 percent. President Nejedly declared that the November 1997 Financial Statements were duly received. 15. EMERGENCY SITUATIONS REQUIRING BOARD ACTION None 16. ANNOUNCEMENTS/SUGGESTIONS FOR FUTURE AGENDA ITEMS Member Boneysteele requested an update regarding potential customers for the Lamorinda Recycled Water Project. 17. ADJOURNMENT There being no further business to come before the Board, President Nejedly adjourned the meeting at the hour of 6:12 p.m., to reconvene in Adjourned Regular Session at 2:00 p.m. on Tuesday, January 20, 1998. fiJ~ 7/%, ~<.a:C~ . Pre' ent of the B rd of Diretétors, Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: 01 08 98