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Home My WebLink AboutBOARD MINUTES 04-13-98 93 MINUTES OF THE ADJOURNED REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON APRIL 13, 1998 The District Board of the Central Contra Costa Sanitary District convened in an adjourned regular session at 1250 Springbrook Road, Walnut Creek, County of Contra Costa, State of California, at 7:00 p.m. on April 13, 1998. Member Hockett, Chair of the Capital Projects Committee, called the meeting to order. The Secretary of the District noted the attendance of the following Board Members. 1. ATTENDANCE PRESENT: Members: Boneysteele, Menesini, Hockett ABSENT: Members: Lucey, Nejedly Members Lucey and Nejedly had advised staff they would be unable to attend this meeting and had requested to the excused. 2. PUBLIC COMMENTS None 3. CAPITAL PROJECTS COMMITTEE MEETING/BOARD WORKSHOP a. REVIEW DRAFT 1998-1999 CAPITAL IMPROVEMENT BUDGET/1998 TEN-YEAR CAPITAL IMPROVEMENT PLAN Mr. Roger J. Dolan, General Manager-Chief Engineer, provided an overview of the Capital Improvement Plan and Budget process. The money allocated in a particular year's budget is the money associated with the projects being approved in that year although they may run on for several years until the projects are completed. In most of the years in the past, allocations have exceeded expenditures. That is not the case in the 1998':1999 fiscal year. Approval of the 1998-1999 Capital Improvement Budget/1998 Capital Improvement Plan (CIB/CIP) will result in an additional authorization of $25,951,000. Expenditures in the 1998-1999 CIB are budgeted at $30 million. Mr. Dolan stated that more money is included in the plan for collection system improvements than plant improvements. A treatment plant capacity study is currently underway which may have some bearing on the timing and magnitude of the next plant expansion. This CIP is based on an anticipated favorable outcome of that study. It is expected that it will be found that there is some excess capacity in the plant and only minor expenditures are needed at this time. At some point in the future, a large plant expansion project will be required. That will result in a significant change in the CIP. Mr. Doug Craig, Planning Division Manager, reviewed the capital planning process which begins with setting goals, undertaking master planning and facilities planning to set priorities for projects, then proceeding to design and construction, and finally operation and maintenance. Mr. Craig stated that the goals of the Capital Improvement Program are: . To protect the public health and the environment; . To accommodate approved growth in the District's service area; and . To respond to issues of community concern by reducing costs, reducing odors, partnering with other public agencies, and recycling water. Mr. Craig stated that capital expenditures for the period 1987-1988 to 1996-1997 total $231.4 million. Of that amount, $95.2 million was expended on treatment plant 04 _. Iii'}) ~&. . t.J 9R 94 improvements, $112.2 million was expended on collection system improvements, and $24.0 million was expended on general improvements. Coincidently, it is projected that $231.4 million will be expended during the next ten years. Sixty percent of that will be spent on collection system improvements, 28 percent will be spent on treatment plant improvements, six percent will be spent to repay the Certificates of Participation (Revenue Installment Certificates) principal, three percent will be spent on recycled water improvements, and three percent will be spent on general improvements. Revenues are projected to be $221.9 million over the next ten years. Dr. Gail Chesler, Associate Engineer, reviewed the Treatment Plant Program components at a projected costs of $55.4 million and the Recycled Water Program components at a projected cost of $6.3 million as detailed in the CIB/CIP. Mr. Jarred Miyamoto-Mills, Principal Engineer, reviewed the goals for the Collection System Program as follows: . To upgrade the system by 2005 to eliminate overflows during a five-year rainfall event; . To upgrade the system by 2015 to eliminate overflows during a 20-year rainfall event; and . To improve reliability of pumping stations. Mr. Miyamoto-Mills reviewed the 1998 Capital Improvement Plan Collection System Program components at a projected cost of $120.0 million. This is one of the principal areas in which the District has discretion in adjusting the amount of expenditures in the next ten years. Mr. Miyamoto-Mills reviewed the General Improvements Program which has been projected at $6.8 million. Some provision has been made in the Capital Improvement Plan for parturient projects, projects that may be required if regulations or some other unpredictable factors change. Mr. Miyamoto-Mills reviewed a plot of the Sewer Construction Fund balance over the next ten years. The prudent reserve level is set at 75 percent of the next year's expenditures plus any debt service. At June 30, 1998, the Sewer Construction Fund balance is projected to be $49 million. At the end of the ten-year period, the Sewer Construction Fund balance is projected to be about $39 million, $10 million less than the current balance. Mr. Dolan stated that for the first time some of the property tax revenue is proposed to be diverted into the Operations and Maintenance (O&M) Budget. When the Certificates of Participation (Revenue Installment Certificates) were issued, the appropriate accounting procedure was to capitalize the interest and principal payments during the course of construction of the projects for which those funds were earmarked. When the construction is over, it becomes appropriate for the District to make interest payments from the O&M Budget rather than the Capital Improvement Budget. Construction of those projects has been completed. The proposal to the Bo&rd is that the principal remain a capital expenditure in the Capital Improvement Budget and that the interest payments be transferred to the Running Expense Fund (O&M Budget) along with a portion of what has historically been capital revenue (ad valorem tax) sufficient to pay the interest payments. In this way, there would not be an increase in the O&M Budget to cover this expense. Mr. Miyamoto-Mills stated that 1998-1999 Capital Improvement Budget expenditures total $29,868,000. Approval of the Capital Improvement Plan and Budget is scheduled for May 21, 1998. Adoption of the Capital Improvement Budget and authorization of additional funds for the various programs totaling $25,951,000 will be requested on June 18, 1998. Once the Board has approved the budget and authorized the funds, the General Manager- Chief Engineer is authorized to allocate those funds for the projects included in the budget. The General Manager-Chief Engineer can also allocate up to $25,000 for a new project not included in the budget and up to a 1 5 percent overrun for a project that is included in the budget. ") ;/' Æ..' . ¿f..'...J I:.{ . J': l' Q Ù 98 95 Discussion followed concerning the current carryover line item included in each project budget, the opportunities at key decision points for the Board to receive more information on particular projects, and the potential for diverting some of the $31 portion of the Sewer Service Charge currently allocated to the Capital Improvement Budget back to the O&M Budget as operating expenses continue to go up. Mr. Dolan stated that in the coming fiscal year it is proposed that approximately $1.5 million be taken from the operating reserve to balance the O&M Budget. Mr. Dolan stated that this is just the right thing to do as operating reserves have increased in recent years. In the following fiscal year as well it may also be possible to balance the O&M Budget with operating reserves. At some point in the future when faced with a rate increase the Board may wish to consider taking a portion of the $31 Sewer Service Charge Capital Improvement Budget allocation and return it to the O&M Budget. Mr. Dolan and Director of Engineering Charles W. Batts offered to answer questions or provide additional information on any project at any time. There being no further questions, Members Hockett and Menesini thanked staff for the informative presentations. 4. REPORTS/ANNOUNCEMENTS None 5. ADJOURNMENT There being no further business, Chair Hockett adjourned the meeting at the hour of 8: 1 2 p.m. /~J~~~ LA '-r/ ;t -,~L Pr~nt of the Board of Di ctors, Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: 04 13 98