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HomeMy WebLinkAboutBOARD MINUTES 01-20-98 16 MINUTES OF THE ADJOURNED REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON JANUARY 20, 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 20, 1998. 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 2. PUBLIC COMMENTS None 3. CONSENT CALENDAR Both Consent Calendar Items a. and b. were removed from the Consent Calendar for discussion. In response to a question from Member Menesini, Mr. Roger J. Dolan, General Manager- Chief Engineer, stated that there is a trace amount of cyanide present in the scrubber from the incinerators. Cyanide is an inhibitor for nitrification, which is required for some types of water reclamation. In response to a question from President Nejedly, Ms. Deborah Ratcliff, Controller, stated that Wells Fargo Bank, the banking institution used by the Contra Costa County Treasurer, requires the proposed resolution to open a bank account to be used to wire transfer direct deposit payroll. It will aid them in their reconciliation and monitoring of the separate accounts. It was moved by Member Menesini and seconded by Member Hockett, that Consent Calendar Items a. and b. be approved as recommended, and resolutions adopted as appropriate. a. The attendance of Mr. Randy Schmidt, Associate Engineer, was authorized at the "Advanced Water Pollution Control: Biological Wastewater Treatment" course in Austin, Texas, on February 23-27, 1998, at a cost not to exceed $2,000. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Hockett, Lucey, Boneysteele, Nejedly None None b. Resolution No. 98-005, Resolution to Open a Wells Fargo Bank Account in Order to Accommodate the Direct Deposit Wire Transfer of Payroll, was adopted. Motion unanimously approved on the following vote: 01 20 98 17 AYES: Members: Menesini, Hockett, Lucey, Boneysteele, Nejedly NOES: Members: None ABSENT: Members: None 4. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER Mr. Dolan, General Manager-Chief Engineer, requested that Item 6.a., Solid Waste, be taken out of order to accommodate interested persons in the audience. President Nejedly proceeded to Item 6.a. 6. SOLID WASTE a. CONSIDER ISSUES AND DECIDE ON DISPERSAL OPTION FOR ACME LITIGATION FUNDS Mr. Kenton L. Aim, Counsel for the District, stated that he represents both the Central Contra Costa Sanitary District and the Central Contra Costa Solid Waste Authority (CCCSWA). Mr. Aim stated that he believes there is no conflict of interest but to avoid any appearance of conflict he will step down and not participate in this matter. Member Boneysteele stated that there could be a need for legal advice on this matter. Member Boneysteele stated that the Board is considering whether to give a refund to Sewer Service Charge customers, solid waste customers, or possibly some third alternative. Member Boneysteele stated that he is not sure of the law in this regard. Mr. Aim stated that he can generally answer that question. Mr. Aim stated that he has looked at the issue of what happens in a similar situation such as a class action suit where there needs to be a return of a portion of money from a suit. Courts have approved a number of ways of doing that. One way is a rebate to specific individuals or concerns that overpaid in the first place. Courts have approved certain manners of dealing with that. In a class action it is not known for certain who purchased the item so a card is sent out asking if someone purchased the item. If the card is returned, the proceeds are apportioned to that affect. Mr. Aim stated that there is another method which is more similar to the present situation facing the District. The same Court indicated that under certain circumstances when there is not a division of class, it is acceptable to turn the funds over to a public agency that has a similar interest as the class. The public agency would then essentially act as a trustee to look at the interests of the class. Mr. Aim stated that either a rebate or turning the funds over to CCCSWA could be done without breaching the law. Mr. Aim stated that one of the other methods is a method by which the price on a commodity would essentially be reduced in the future assuming the same people would buy the commodity in the future as bought it in the past. That method would also be acceptable. Mr. Roger J. Dolan, General Manager-Chief Engineer, asked if it would be considered a gift if money were to be returned to someone who did not give it in the first place. Mr. Aim stated that it would depend on the details of how the listing was developed. That is a facts driven issue. Mr. Dolan stated that the Board may wish to direct staff to get legal review of anything over and above what has been discussed. In the discussion that followed, Member Hockett stated that dispersal of the funds has been discussed in great detail in terms of delineating the issues and the numbers. Member Hockett stated that she appreciated the information and detail presented in the position paper. It was moved by Member Hockett and seconded by Member Lucey, that Option 2, returning surplus Acme litigation funds in the amount of $1,265,405 to CCCSWA for use in offsetting future garbage rate increases for garbage franchise customers formerly franchised by the District, be approved. 01 20 98 18 Member Lucey seconded the motion to allow discussion to proceed. Member Lucey suggested that following discussion, any action by the Board be approved subject to review and approval by independent counsel if the Board thinks that is necessary. Member Menesini disagreed, stating that legal counsel is needed on all issues. The Board should proceed with good counsel and a fair understanding of the legal position. Mr. Dolan stated that he has sought legal counsel on this issue from Mr. Steve Lincoln, a member of the Sellar, Hazard, Snyder, Fitzgerald, McNeely & Aim firm. Mr. Lincoln has given staff a briefing on this issue. Mr. Dolan stated his understanding that Option 2 set forth in attachments to the position paper does not contain any legal complications, but having Board action conditioned on legal review would seem appropriate. Option 1 does contain some legal complications with regard to identifying who should receive the refund. A legal opinion on Option 1 would be required. Member Menesini stated that there are also other options not specified in the position paper that should be explored. Member Menesini stated that it is important to consider insurance policies and who paid for them. There is also the question of the Acme Landfill being a recipient of sludge in addition to solid waste. Member Menesini stated that it is important to look at whether the Sewer Service Charge rates were not a part of this matter. Member Menesini stated that both the solid waste customers and Sewer Service Charge customers must be considered and treated fairly. Member Hockett questioned whether the Sewer Service Charge customers should be brought into this discussion. The matter before the Board is the Acme Landfill, the garbage franchise agreement, and litigation fees collected to cover the cost of the Acme lawsuit. These monies are owed to the people who paid the bills, the garbage customers. The Sewer Service Charge customers did not pay this. Member Hockett stated that there is no point in bringing in the Sewer Service Charge customers, it is only diversionary. Member Hockett stated that the District has excess money which was channeled through CCCSWA from the people who paid the garbage bills and that is exactly where the surplus should be returned. Member Menesini stated that he does not believe it is just garbage that went into the landfill. The insurance policy was also to pay for sludge that went into the landfill. Sewer Service Charge customers paid for insurance policies well before CCCSWA came into existence and that must be considered. Member Lucey stated that the premiums paid for the insurance policies have already been considered. The cost was approximately $100,000. The Board directed that those premiums be allocated at present worth value of $294,600 and deducted from the net balance being considered for dispersal. Member Lucey stated that he has concerns about not returning the entire remaining amount to CCCSWA. The District asked CCCSWA for help in covering the litigation costs of the Acme lawsuit. CCCSWA did that. Member Lucey questioned how the District could now take a position not to return the surplus money to CCCSWA. Member Lucey stated that all the remaining funds, including the franchise fee and legal impound balance, should be returned to CCCSWA with the exception of the present worth value of the cost of insurance premiums which should be retained by the District. President Nejedly stated that he believes there are options for dispersal of the funds other than the two presented in the position paper. President Nejedly agreed with Member Lucey that CCCSWA has made a valiant effort to pay for litigation costs, and all of that money should go back to CCCSWA. President Nejedly agreed with Member Menesini that the insurance premiums were paid by Sewer Service Charges. President Nejedly also agreed that there should be legal review on this matter. In response to questions from Member Boneysteele, Mr. Dolan stated that CCCSWA and the District were working together to try to solve one problem by cooperative efforts with regard to administration of solid waste monopolies. Mr. Dolan stated that to the best of his knowledge, co-mingling of funds never occurred. When the competitive bidding process was completed and the total cost of solid waste services for Central County 01 20 98 19 citizens was known, CCCSWA entered into the rate setting process. In addition to the $12 million bids, there were sums of money allocated to manage the administration of solid waste. Mr. Dolan showed a view graph and described the solid waste rate setting process conducted with the CCCSWA members and the four Cities franchised by the District. Mr. Dolan stated that thanks to Mr. Aim's good litigation work, some tough staff work, and sound engineering work, the Acme closure and litigation costs were reduced significantly. Mr. Aim was the major force behind that very successful effort. In response to a question from Member Menesini, Mr. Dolan stated that a very complex set of discussions and options over the past months has been put into the position paper before the Board. At the last meeting, the Board made some preliminary decisions on how to deal with allocation of insurance premium costs. The insurance did not pay Acme, but rather it reimbursed the District for expenses associated with the Acme lawsuit. As Member Boneysteele mentioned, we never imagined that the District had an attendant liability for solid waste. With the passage of the Superfund law, the District was designated a "generator" as were the Cities. So during those years that the District regulated solid waste, no allocation of insurance costs was made because the District did not anticipate a risk there. Sewer Service Charge ratepayers paid the cost of the insurance. The District has enjoyed a relatively casualty-free history and has had very little payment on these policies. At the time the initial claims were filed against the insurance companies, the District had a $100 million exposure. It was not anticipated that there would be full recovery as one of the insurance companies had declared bankruptcy. However, the District did recover on that policy. Mr. Aim stated that the policy was issued in the mid-1970's. Premiums were paid for one or two years in the mid-1970's. The total premium paid was something in excess of $100,000. That included Workers' Compensation and general liability coverage. Mr. Dolan stated that none of the insurance recoveries were on policies that were paid for by solid waste ratepayers. At the January 8, 1998 Board Meeting, the Board gave direction to staff with regard to handling an allowance for premiums not billed by allocating the present worth value of the insurance premium cost to the Running Expense Fund, the fair amount of premiums if they had been apportioned to solid waste ratepayers as the years passed. That narrowed the focus and staff was asked to provide more detail at this time. Mr. Dolan stated that not only was garbage going into the landfill from the District's citizens, but also the District put sludge into the Acme Landfill. Early on an estimate of the amount of sludge from the District to Acme for those years was made. It was determined that approximately 15 percent of the liability exposure could be allocated to sludge and the expenses associated with the sludge was the District's responsibility and should be paid by Sewer Service Charge ratepayers. Municipal solid waste from the District's franchise area made up the remaining 85 percent. The costs and insurance recoveries associated with sludge disposal were not included in the information now before the Board. Those costs and insurance recoveries associated with sludge disposal have already been allocated to the Sewer Construction Fund. At this time, President Nejedly stated that the Board would receive comments from the audience. Mr. John Connors, Moraga City Councilmember and CCCSWA Board Member, addressed the Board. Mr. Connors stated that it seems that the basic problem the Board is considering is becoming more difficult than it needs to be. There are a number of instances like this that have come through the Court system. Utilities are many times ordered to make refunds to customers. They are ordered to make credits on the bills. This is a simple, easy way to get money back to the ratepayers. It is the best the Courts can do unless there is very good statistical data as to who is eligible to receive the monies. Mr. Connors stated that perhaps the issue is what is the most appropriate way to get the money back to solid waste ratepayers who paid the money. Insurance monies are a cost of doing business. Even if the Acme litigation had never happened and CCCSWA had never been formed, the District would still have had to pay the cost of insurance premiums. In closing, Mr. Connors asked that the Board please give careful 01 20 98 20 consideration to the fact that ultimately the bottom line is to get the money back to the people who gave it in the first place and that is the solid waste ratepayers who paid monthly. Ms. Kathy Hicks, Chair of CCCSWA and Walnut Creek City Councilmember, stated that many people have made an effort to come today and they appreciate the Board taking this matter out of order on the agenda. Ms. Hicks stated that the Contra Costa County Board of Supervisors has a Board Meeting today; therefore, County representatives could not attend this meeting. Ms. Hicks stated that the representative from the City of Orinda was here today but had to leave because of a prior commitment. Ms. Hicks stated that there has been a positive working relationship between the City of Walnut Creek, the four Cities franchised by the District, and the District. A good beginning was made in working together when CCCSWA was formed. CCCSWA has saved millions and millions of dollars for the ratepayers served by all of us. A great deal of credit is owed to the District, along with Walnut Creek, for starting CCCSWA which has done so much to reduce rates through economies of scale and competitive bidding. Ms. Hicks stated that the District assisted in the transition when the Cities were brought into CCCSWA. As part of that process, funds were provided for Acme litigation during rate setting. Ms. Hicks stated that the City of Walnut Creek had set aside funds for Acme and also received insurance recoveries. Ms. Hicks stated that the City of Walnut Creek, the District, and CCCSWA are of one mind as we move forward to use those excess funds to benefit ratepayers. We have always held in common our belief that we worked together to present the ratepayers with the lowest fees and best service. We continue to work towards those goals. Ms. Hicks stated that CCCSWA is now in its first rate setting. There are some rate increases built into the contracts. The position paper presented for the Board's consideration puts forth a good option to pay the money back to the ratepayers in the easiest, most cost effective way by going back through CCCSW A to help continue to keep rates down. Ms. Hicks stated that timing is very important to CCCSWA. Ms. Hicks asked that the Board keep the goals of the lowest possible rates and the best possible service for the ratepayers in mind. The money should go back where it came from, the ratepayers. Ms. Hicks urged the Board to support Option 2, stating that the Board owes it to the public and to the ratepayers to return the funds in the most cost efficient manner possible. Ms. Hicks thanked the Board for their consideration. Mr. Mike Shimansky, CCCSWA Board Member and Danville City Councilmember, stated that it is nice to consider how to get rid of a surplus. This money was generated by solid waste customers. It was intended for settlement of a solid waste lawsuit. Not all of the money was needed so there is a surplus. The District discontinued its role as a solid waste franchiser. Funds should be used to offset a rate increase by a credit on the solid waste bill naming the District as the source of the credit. Sewer and solid waste customers are basically the same customers. Mr. Shimansky stated that giving an increase on the one hand and a decrease on the other would be very confusing and would seem to indicate a lack of interagency cooperation, particularly when the surplus was generated by the solid waste customers. Mr. Shimansky stated that he supports Option 2 set forth in the attachments to the position paper. Ms. Susan McNulty Rainey, thanked the Board for the opportunity to be heard on this matter. Ms. Rainey stated that in the interest of time she will say that Ms. Kathy Hicks, as CCCSWA Chair, gave an excellent summary of the facts and history of CCCSWA and the District's role. Ms. Rainey stated that as a member of the District Board for 12 years, when she looks back on those 12 years, one highlight was the formation of CCCSWA; and by convincing the other jurisdictions to join, becoming a major player in reducing solid waste rates by 40 percent. That was a monumental accomplishment and one that we can all be proud of. That was achieved by being a team player. Ms. Rainey stated that she is proud that the Board is considering returning the excess funds to the ratepayers. It is the manner of dispersal that is important. It has been pointed out that the most economic, efficient, and equitable way to return the surplus is through an adjustment to the rate base through the rate setting to be done by CCCSWA, making the reduction or lack of rate increase in each jurisdiction the most equitable. Commercial and residential customers will both benefit. Ms. Rainey stated that the issue of Sewer Service Charge 01 20 98 21 ratepayers paying insurance premiums has been resolved by reimbursing the Sewer Construction Fund for the present worth value of the insurance premium costs. The solid waste customers, through their rates, paid $1.5 million. The present worth value of the insurance premium costs is being deducted from that amount. Ms. Rainey encouraged the Board to support Option 2. Only the four cities and the unincorporated areas that paid in will benefit. Ms. Rainey urged the Board to be efficient and economic, and support CCCSWA. Mr. Don Tatzin, Lafayette City Councilmember and CCCSWA Representative, stated that it is a pleasure to be here on one level to thank the District Board and staff for considering dispersal of excess funds to the ratepayers. Mr. Tatzin stated that after reading the staff report and listening to the discussion, while there are some legitimate questions as to whether solid waste customers paid for the insurance program, it has been pointed out they have been made whole. Solid waste customers in the areas franchised by the District paid specific fees to deal with the Acme litigation issue. Mr. Tatzin applauded the Board for saying that money should go back to the ratepayers in one form or another. Mr. Tatzin stated that he believes Option 2 is best. It gets the money back to those who paid it in the least confusing way. Credit can be given to the District on the solid waste bills. This option also has the best chance of getting the money back to the customers. In Lafayette, 25 percent of the residents live in rental units. They pay solid waste bills. If a credit is given to property owners, 25 percent of the residents of Lafayette would not get it. That would not be equitable. CCCSWA can allocate these funds by jurisdiction and ensure that the money is dispersed accordingly. Discussion followed with regard to rental units and the type of solid waste service they receive. Mr. Paul Morsen, Deputy General Manager, stated that research done at the time the solid waste contracts were bid, showed that most rentals in Lafayette were small apartment buildings or houses, and were on individual cans rather than bins. Mr. Dick Waldo, Mayor of the Town of Danville and CCCSWA Board Member, stated that he concurs with what his colleagues have said and he also supports Option 2. In reading the position paper, Mr. Waldo stated that he strongly concurs that the District invested substantial time and effort to support CCCSWA and to make it a success. Cooperating with CCCSWA would continue that tradition. CCCSWA benefited greatly from the support of the District Board and staff. In addition, the District helped facilitate the transition when the Cities took over solid waste franchise responsibilities. There is an excellent relationship between our agencies. Mr. Waldo stated further that the issue of customer confusion is a concern. If customers receive a check from the District, people will be confused. If this is followed by a rate increase, that will be even more confusing for the customers. Mr. Waldo urged the Board to return the surplus to CCCSWA for the benefit of the customers. After looking at the figures and hearing what has been said, Mr. Waldo stated that he believes that the District was made whole in terms of what was paid. The surplus should go back to the solid waste ratepayers to offset current and future rate increases. Ms. Janet Schneider, CCCSWA Executive Director, stated that the Board has heard from a majority of CCCSWA Board Members. Those individuals all expressed support for Option 2. Ms. Schneider stated that the Orinda City Councilmember who had to leave the meeting also expressed support for returning the funds through CCCSWA to the ratepayers because it is the most efficient and least expensive way, and is more likely to get to the right people. Ms. Schneider applauded the Board for giving the money back to the ratepayers. If the funds were returned to CCCSWA, they would be used to assure ratepayers will continue to have the service they have now. The District would receive recognition in the CCCSWA newsletter and the newsletters of the Cities in the service area. Member Boneysteele stated that insurance premiums were paid by the citizens in Martinez, Pleasant Hill, Pacheco, and Clyde. Member Boneysteele asked how much the people in those communities contributed to the overall settlement of the Acme litigation. Mr. Aim stated that Martinez defended itself and paid its own settlement costs and litigation expense. All of the municipalities paid based on the solid waste tons that went 01 20 98 22 into Acme Landfill. The District did not pay any extra money in the settlement for the sludge because the District struck a deal with Acme to continue to take its landfill gas. The municipal component was $2.6 million and that was allocated by percentage tonnage. Member Menesini asked if the City of Walnut Creek returned surplus funds and/or insurance recoveries to the ratepayers. Ms. Kathy Hicks, Walnut Creek City Councilmember, stated that the City of Walnut Creek will give back the excess monies over time through the rate setting process to keep rates down for Walnut Creek ratepayers. The City is working through that issue now so the outcome is not yet known, but there is a commitment to return those funds to the ratepayers just as the District is considering today. Ms. Hicks and other City representatives left the meeting at this time. Member Menesini suggested that further consideration of this item be carried over. Member Menesini stated that neither of the two options presented suit him, and he requested that other options be developed. Following discussion in which Ms. Schneider stated that on January 29, 1998 CCCSWA will be setting rates based on forecasted revenue requirements to go into affect March 1, 1998, it was agreed that an Adjourned Regular Board Meeting be scheduled for 7:00 p.m. on Tuesday, January 27, 1998. Member Hockett stated that the process has been clearly delineated. The facts are clear. Member Hockett stated that the surplus money should be returned to the solid waste ratepayers through CCCSW A. Member Menesini stated that there are other populations of people involved. The Board needs to look at all of the aspects. Member Menesini stated that he is in favor of putting this matter forward and looking at other options. President Nejedly called for a vote on the above motion to approve Option 2, returning surplus Acme litigation funds in the amount of $1,265,405 to CCCSWA for use in offsetting future garbage rate increases for garbage franchise customers formerly franchised by the District. Motion failed to pass on the following roll call vote: AYES: Members: Hockett, Lucey NOES: Members: Menesini, Boneysteele, Nejedly ABSENT: Members: None President Nejedly summarized the Board comments, stating that Members Hockett and Lucey favor Option 2 for dispersal of the funds. Members Menesini and Boneysteele would like to see other options because they feel there are other groups of people who contributed money. The Board has agreed to return of the monies, the question is how to do that equitably. The Board has also requested information on the premiums paid, who paid the premiums, and the dates the insurance policies were in effect. President Nejedly stated that the Board understands that time is of the essence, but there are concerns that must be addressed for the Board to make a decision. Member Menesini requested that this matter be reviewed by independent legal counsel. Mr. Dolan stated that at the last Board Meeting a range of options were narrowed down to the two options presented today for Board consideration. At this point, staff is not aware of any other options. Member Menesini stated that if in fact it can be demonstrated that CCCSWA contributed $639,288, return of those funds to CCCSWA could be an option. Mr. Dolan stated that the Board can take that action today. 01 20 98 23 Member Boneysteele stated that the Board is not recognizing the people in Martinez, Pleasant Hill, Pacheco, and Clyde. Member Boneysteele proposed an option that would consider those people. Mr. Dolan stated that the surplus funds in question did not come from those areas. It came from the customers of the solid waste companies regulated by the Board. Pleasant Hill, Martinez, Pacheco, and Clyde were independent of this. Member Boneysteele stated that the District paid for insurance premiums from the Sewer Service Charge on behalf of all of the people in the District. The settlement belongs to all of the people of the District. All of the people of the District can be benefited by applying the surplus to the Sewer Service Charge and lowering the Sewer Service Charge. Following discussion, it was moved by Member Hockett and seconded by Member Menesini, that $639,288, less the January and February 1998 payments if they have not yet been received, be returned to CCCSWA for the benefit of the solid waste ratepayers formerly franchised by the District. Motion unanimously approved on the following roll call vote: AYES: Members: Hockett, Menesini, Lucey, Boneysteele, Nejedly NOES: Members: None ABSENT: Members: None Member Menesini stated that the Board has agreed to return $639,288 to CCCSWA for the benefit of the ratepayers. Member Menesini stated that beyond that he needs more information and another option as to what to do with the remaining funds. Member Menesini stated that he does not want to send checks to the ratepayers, but he would favor a reduction in rates. Member Lucey requested that one of the options presented returns the remaining $592,282 in franchise fees and $419,488 legal impound balance to CCCSWA for the benefit of the ratepayers. President Nejedly stated that this matter will be considered again at an Adjourned Regular Board Meeting set for 7:00 p.m. on Tuesday, January 27, 1998. At 4:32 p.m., President Nejedly declared a recess, reconvening at the hour of 4:40 p.m., with all parties present as previously designated. President Nejedly stated that to clarify the discussion relating to dispersal of Acme litigation funds, the Board voted to return $639,288 to CCCSWA for payments they made to the District for Acme litigation and settlement expenses. Staff has been requested to present options for dispersal of the remaining amount at an Adjourned Regular Meeting on January 27, 1998. Member Hockett expressed support for return of the franchise fee of $592,282 and legal impound balance of $419,488 to CCCSWA. Member Lucey stated that he believes Member Menesini wants to see an option that would reduce the Sewer Service Charge. Member Menesini concurred, stating that he would like to see an option whereby all Sewer Service Charge ratepayers would benefit. Member Hockett requested that the cost for that option be provided. President Nejedly stated that he would like to see an option that would use the surplus to maintain the current Sewer Service Charge rate into the future until the surplus has been exhausted. 01 20 98 24 Member Menesini stated that the Household Hazardous Waste Facility is a very costly and important contribution to the whole District. That might be considered as another option. Member Menesini stated that there may be other options. Member Hockett asked that if any other options come forward that they be given to staff as soon as possible so there is sufficient time for distribution and review by the full Board. At this time, President Nejedly reverted to the order of the agenda. a. 5. REPORTS GENERAL MANAGER-CHIEF ENGINEER 1 ) Mr. Dolan, General Manager-Chief Engineer, stated that at the last Board Meeting a request was made to provide the Board with more information on the prevailing opinion of potential customers of the Lamorinda Recycled Water Project. Mr. Jim Coe, Associate Engineer, has researched the matter and prepared a report. Mr. Dolan distributed copies of the report to the Board and stated that the Board should ask to have this matter calendared on a future Board agenda if they wish to discuss it further. 2) Mr. Dolan, General Manager-Chief Engineer, announced that the District is advertising for the Cathodic Protection System Project for the M-6 Pipeline. The engineer's estimate for the work is $75,000. 3) Mr. Dolan, General Manager-Chief Engineer, announced that the District is advertising for a project to furnish and install strainers for condenser water pumps. The engineer's estimate for this project is $165,000. 4) Mr. Dolan, General Manager-Chief Engineer, announced that Contra Costa Water District (CCWD) is demolishing its sodium ion (Nax) exchange plant. 5) Mr. Dolan, General Manager-Chief Engineer, announced that he has been advised that Mr. Henry Clarke, General Manager of Public Employees Union Local 1, has asked Assemblyman Tom Torlakson to carry a bill specific to the District which would have District Board Members elected by ward rather than at large. b. COUNSEL FOR THE DISTRICT None c. SECRETARY OF THE DISTRICT None d. BOARD MEMBERS 01 1 ) President Nejedly distributed the Board Committee assignments for 1 998 as follows: STANDING COMMITTEES: Budget and Finance Committee *Parke L. Boneysteele James A. Nejedly Personnel Committee *Gerald R. Lucey Mario M. Menesini 2~J 98 25 Capital PrQjects Committee *Barbara D. Hockett Parke L. Boneysteele AD HOC COMMITTEES: Recycled Water Committee *Mario M. Menesini Barbara D. Hockett * First named Member will serve as Committee Chair. REPRESENTATIVES: Board Liaison to Cities and County Concord, Pacheco Danville, Alamo & San Ramon Lafayette, Walnut Creek Martinez, Contra Costa County & Pleasant Hill Orinda, Moraga James A. Nejedly Barbara D. Hockett Parke L. Boneysteele Mario M. Menesini Gerald R. Lucey California Special Districts Association Contra Costa County Chapter Mario M. Menesini Barbara D. Hockett - Alternate Friends of the San Francisco Estuary Mario M. Menesini Sanitation and Water Agencies of Contra Costa County Barbara D. Hockett Gerald R. Lucey - Alternate 2) Member Menesini reported that he will be attending the Contra Costa Special Districts Association Meeting on January 26, 1998. One of the topics of discussion at that meeting will be consideration of the procedures for election of the Special District Representative to the Local Agency Formation Commission (LAFCO). Mr. Dolan, General Manager-Chief Engineer, reported that the Independent Special Districts of Contra Costa County are organizing a committee to meet periodically with legislators regarding issues relevant to independent special districts. Following discussion, Member Menesini indicated that he would participate in his role as the District's Contra Costa Special Districts Association representative. Mr. Dolan, General Manager-Chief Engineer, stated that Special District Board Management Institute seminars and workshops were discussed by the Board some time ago. In the past Board Members have attended these sessions and found them to be informative. A current listing was provided with the agenda packet. If any Board Members are interested in attending any session, please advise staff. 3) Member Menesini announced that the Environmental Alliance will have a lecture on persistent toxic contaminants in birds. Dr. Jay Davis, from the 01 20 98 26 01 San Francisco Estuary Institute, will be the speaker. The lecture will be held at noon on Monday, January 26, 1998 at the John Muir Home in Martinez. Anyone interested is invited to attend. 6. SOLID WASTE a. CONSIDER ISSUES AND DECIDE ON DISPERSAL OPTION FOR THE ACME LITIGATION FUNDS This item was taken out of order earlier in the agenda. 7. ENGINEERING a. AUTHORIZE THE GENERAL MANAGER-CHIEF ENGINEER TO EXECUTE AN AGREEMENT WITH MONTGOMERY WATSON FOR FINAL DESIGN OF THE ASH HANDLING IMPROVEMENTS PROJECT. DP 7168 Mr. Dolan, General Manager-Chief Engineer, stated that this project was reviewed at the last Board Meeting because it had changed in scope from the Capital Improvement Budget document. At that time Member Lucey asked very insightful questions concerning spending money on ash handling improvements if regulations may change. An answer was provided at that time, but a more complete answer has been provided as an attachment to the position paper. Following discussion of ash handling equipment failures in recent years, it was moved by Member Hockett and seconded by Member Boneysteele, that the General Manager-Chief Engineer be authorized to execute an agreement for $65,500 with Montgomery Watson for final design of the Ash Handling Improvements Project, DP 7186. There being no objection, the motion was unanimously approved. b. AUTHORIZE SUBMITTAL OF AN APPLICATION FOR A HOUSEHOLD HAZARDOUS WASTE GRANT Following explanation, it was moved by Member Hockett and seconded by Member Boneysteele, that Resolution No. 98-006, a Resolution Authorizing Submittal of an Application to the California Integrated Waste Management Board for a Local Government Household Hazardous Waste Grant - Sixth Cycle, be adopted. The motion was unanimously approved on the following vote: AYES: Members: Hockett, Boneysteele, Lucey, Menesini, Nejedly NOES: Members: None ABSENT: Members: None 8. HUMAN RESOURCES a. CREATE AND ADD THE POSITIONS OF DIRECTOR OF ADMINISTRATION. DIRECTOR OF COLLECTION SYSTEM OPERATIONS. DIRECTOR OF ENGINEERING. AND DIRECTOR OF PLANT OPERATIONS: ADOPT THE CLASS DESCRIPTIONS: RECLASSIFY INCUMBENT DEPARTMENT MANAGERS TO NEW DIRECTOR POSITIONS: TRANSFER CHARGES W. BATTS TO DIRECTOR OF ENGINEERING: PROMOTE JAMES M. KELLY TO DIRECTOR OF PLANT OPERATIONS: TRANSFER DOUGLAS J. CRAIG TO PLANT OPERATIONS DIVISION MANAGER: AND CHANGE MANAGER VEHICLE USAGE BENEFIT Following a brief discussion, this matter was held pending discussion in closed session. 20 98 27 9. APPROVAL OF MINUTES a. MINUTES OF DECEMBER 18. 1997 It was moved by Member Menesini and seconded by President Nejedly, that the minutes of December 18, 1997, be approved with the following addition. In the first line of the fourth paragraph the words "Quitclaim sewer easement to James R. Coe and Patricia G. Coe, Job 1646, Parcel 2, Walnut Creek area" were added following the "Item c." There being no objection, the above motion was approved. 10. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED JANUARY 20. 1998 Following discussion of legal expenses, it was agreed that the litigation summary report prepared in the ordinary course of events will be provided to the Board and a closed session will be scheduled to discuss the status of litigation in the next two to three months. It was moved by President Nejedly and seconded by Member Boneysteele, that the Expenditure List dated January 20, 1998, including Self-Insurance Check Nos. 101395- 101402, Running Expense Check Nos. 107797-108183, and Sewer Construction Check Nos. 19327-19382, be approved as recommended. There being no objection, the motion ¡ was unanimously approved. 11. BUDGET AND FINANCE a. ADJOURN REGULAR BOARD MEETING AND CONVENE AS THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT FACILITIES FINANCING AUTHORITY TO CONDUCT ITS ANNUAL MEETING President Nejedly adjourned the meeting of the Central Contra Costa Sanitary District Board of Directors at the hour of 5:28 p.m. At 5:29 p.m., Member Boneysteele, President of the Central Contra Costa Sanitary District (CCCSD) Facilities Financing Authority, convened the annual meeting of the CCCSD Facilities Financing Authority. President Boneysteele requested that the Secretary call roll. PRESENT: Directors: Lucey, Menesini, Hockett, Nejedly, Boneysteele ABSENT: Directors: None President Boneysteele requested public comments, and noted that there were none. President Boneysteele stated that in accordance with the Bylaws of the Authority, it would be appropriate to elect officers at this time. It was moved by Director Nejedly and seconded by Director Lucey, that pursuant to Article III, Section 2 of the Bylaws, the following slate of officers be elected for 1998: 1 ) President of the Authority shall be Director Parke L. Boneysteele, Chair of the Budget and Finance Committee of the District Board of Directors; 2) Vice President of the Authority shall be Director James A. Nejedly, the remaining Member of the Budget and Finance Committee of the District Board of Directors; 01 20 98 28 3) Executive Director of the Authority shall be Mr. Roger J. Dolan, General Manager-Chief Engineer of the District; 4) Treasurer of the Authority shall be Ms. Deborah Ratcliff, Controller for the District; and 5) Secretary of the Authority shall be Ms. Joyce E. Murphy, Secretary of the District. There being no objection, the motion was unanimously approved. It was moved by Director Menesini and seconded by Director Nejedly, that the minutes of the CCCSD Facilities Financing Authority annual meeting of February 6, 1997, be approved as presented. There being no objection, the motion was unanimously approved. Ms. Deborah Ratcliff, Treasurer of the Authority, reported that in December 1994, the Authority issued 1994 Revenue Installment Certificates (Certificates of Participation) in the amount of $25 million for a term of 20 years. The reserve fund balance is currently $2,188,000. It is invested in a two-year Treasury note earning 6.875 percent interest. Ms. Ratcliff reviewed the list of capital projects supported from proceeds from the Certificates of Participation. The following projects have been completed: . . . . . . . . Aeration Basin Improvements Aeration Basin Selector Cogeneration Facility Ultraviolet (UV) Disinfection Facilities Improvements Headworks Facility Martinez Pumping Station Pleasant Hill Relief Interceptor - Phases 1, 2, and 3 Secondary Clarifier Improvements Ms. Ratcliff stated that the following are current projects: . . . Orinda/Moraga Pumping Station - Wet Weather Pumps Outfall Improvements Pleasant Hill Relief Interceptor - Phases 4 and 5 Ms. Ratcliff reviewed the payment schedule for the Certificates of Participation. Ms. Ratcliff noted that all payments are currently being made from the Sewer Construction Fund. When all projects supported by proceeds from the Certificates of Participation are substantially complete, payments will be made from the Running Expense Fund. President Boneysteele thanked Ms. Ratcliff for the report. There being no further business to come before the Board, President Boneysteele adjourned the annual meeting of the Central Contra Costa Sanitary District Facilities Financing Authority at the hour of 5:35 p.m. President Nejedly reconvened the adjourned regular meeting of the Central Contra Costa Sanitary District Board of Directors at the hour of 5:35 p.m. with all parties present as previously designated. None r... -" 01 2(~ 12. EMERGENCY SITUATIONS REQUIRING BOARD ACTION 98 29 13. ANNOUNCEMENTS/SUGGESTIONS FOR FUTURE AGENDA ITEMS In response to questions from President Nejedly, Mr. John A. Larson, Collection System Operations (CSO) Department Manager, reported that the collection system performed well in the January 18, 1998 storm. Minor flooding occurred in two houses on Laurel in Lafayette. The estimated cost of the damage is less than $10,000. Member Hockett suggested that the Board policy on standing committees of the District be revisited at a future Board Meeting. 14. CLOSED SESSION a. INSTRUCT LABOR NEGOTIATORS The closed session was held pursuant to Government Code Section 54957.6, to meet with designated representatives prior to and during consultations and discussions with the representatives of employee organizations regarding the salary, salary schedules or compensation paid in the form of fringe benefits of employees in order to review position and instruct designated representatives. The District's negotiator is Secretary of the District Joyce E. Murphy, and the pertinent employee organization is the Central Contra Costa Sanitary District Management Group and Paul Morsen, as an individual. At 5:40 p.m., President Nejedly declared the closed session to discuss labor negotiations as noted above. At 6: 1 0 p.m., President Nejedly concluded the closed session and reconvened the meeting into open session. 15. REPORT OF DISCUSSIONS IN CLOSED SESSION At this time, President Nejedly returned to Item 8.a., Human Resources. 8. HUMAN RESOURCES a. CREATE AND ADD THE POSITIONS OF DIRECTOR OF ADMINISTRATION. DIRECTOR OF COLLECTION SYSTEM OPERATIONS. DIRECTOR OF ENGINEERING. AND DIRECTOR OF PLANT OPERATIONS: ADOPT THE CLASS DESCRIPTIONS: RECLASSIFY INCUMBENT DEPARTMENT MANAGERS TO NEW DIRECTOR POSITIONS: TRANSFER CHARLES W. BATTS TO DIRECTOR OF ENGINEERING: PROMOTE JAMES M. KELLY TO DIRECTOR OF PLANT OPERATIONS: TRANSFER DOUGLAS J. CRAIG TO PLANT OPERATIONS DIVISION MANAGER: AND CHANGE MANAGER VEHICLE USAGE BENEFIT It was moved by Member Lucey and seconded by Member Hockett, that effective March 1, 1 998 the positions be created and classification desCriptions for Director of Administration, Director of Engineering, Director of Collection System Operations, and Director of Plant Operations be approved with minor editorial changes; that effective March 1, 1998 Charles W. Batts, Jr. be appointed as the Director of Engineering, M-20 ($7,922-$9,632, that L. Paul Morsen be appointed as the Director of Administration, M-20 ($7,922-$9,632), that James M. Kelly be appointed as the Director of Plant Operations, M-20 ($7,922-$9,632), and that John A. Larson be appointed as the Director of Collection System Operations, M-20 ($7,922 - $9,632); that effective Spring or early Summer 1998 Douglas J. Craig be appointed as the Plant Operations Division Manager; and that the use of District vehicles for commute purposes be eliminated as soon as possible but no later than June 30, 1998, and that each manager who voluntarily relinquishes the privilege be given a salary increase of $375 per month. The motion was approved with President Nejedly voting no. At this time, President Nejedly reverted to the order of the agenda. 01 20 98 30 OJ~ 16. 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 at 7:00 p.m. on Tuesday, January 27, 1998 for an Adjourned Regular Board Meeting. Pres.20T;,h~ BO~d O~~~ Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: u Sec ar of the Central Contr Costa Sani ary Dìstrict, County of C ntra Costa, State of California 2~J 6."-J" C'~ ~Õ