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HomeMy WebLinkAboutBOARD MINUTES 04-20-95 60 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON APRIL 20, 1995 The District Board of the Central Contra Costa Sanitary District convened in a regular session at its regular place of meeting, 5019 Imhoff Place, Martinez, County of Contra Costa, State of California, at 3:00 p.m. on April 20, 1995. President Hockett called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Dalton, Rainey, Boneysteele, Hockett ABSENT: Members: Menesini Member Menesini had previously advised staff that he would be out of town and unable to attend this meeting. 2. PUBLIC COMMENTS Mr. Rick Harrington, of Carpenters' Local 152, addressed the Board alleging that Humphrey Construction did not pay prevailing wages on the Headworks Facilities Improvement Program. Mr. Harrington stated that the State Labor Commissioner is investigating this matter and requested that the District hold the retention balance due to Humphrey pending the decision of the State Labor Commissioner. Mr. Harrington distributed information and affidavits from former employees of Humphrey and a copy of Laws and Reaulations Governina the Payment of Prevailina Waaes. Mr. Mel Sakata, of Central California District Council of Carpenters, addressed the Board reiterating the allegations made by Mr. Harrington, stating that if the monies held by the District are released to Humphrey, lawsuits against the District and/or Humphrey Construction could result. In the necessary absence of General Manager-Chief Engineer Roger J. Dolan, Mr. Paul Morsen, Deputy General Manager, stated that the Brown Act prohibits the Board from taking action on this matter since it was not calendared on the agenda. However, the matter can be referred to staff or calendared for discussion at a future Board Meeting. Mr. Kenton L. Aim, Counsel for the District, stated that new information may have been gathered by Messrs. Harrington and Sakata in the last few weeks that is different than what was presented previously to District staff. Staff has spent a great deal of time listening to the allegations and providing information. Staff will take appropriate actions to carry out the law. This is an issue that the Engineering Department is very mindful of and has been careful to abide by the law. Staff is trying to evaluate both sides and carry forward under the letter of the law. Mr. Robert A. Baker, Deputy Chief Engineer, stated that staff will do further research and report back to the Board at the May 4, 1995 Board Meeting. 3. CONSENT CALENDAR It was moved by Member Rainey and seconded by Member Dalton, that the Consent Calendar, consisting of Items a. and b., be approved and resolutions adoPted as appropriate. a. Resolution No. 95-030 was adopted, revising the District Board Meeting agenda format. The motion was approved on the following vote: 04 20 95 61 AYES: Members: Rainey, Dalton, Boneysteele, Hockett NOES: Members: None ABSENT: Members: Menesini b. Authorization was given for notice of a public hearing on May 4, 1995 at 3:00 p.m. to consider a proposed revised schedule of rates and charges. The motion was approved on the following vote: AYES: Members: Rainey, Dalton, Boneysteele, Hockett NOES: Members: None ABSENT: Members: Menesini 4. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER Mr. Morsen, Deputy General Manager, requested that Item 11.a.1) Proposed changes to the District's Self-Insurance Program, be taken out of order to accommodate interested persons in the audience. There being no objection, President Hockett proceeded to Item 11.a. 1). a. 11. REPORTS GENERAL MANAGER-CHIEF ENGINEER 1 ) Mr. Morsen, Deputy General Manager, introduced Ms. Bonnie Allen, Risk Manager, who reviewed the history of the District's Self-Insurance Fund (SIF) which was established July 1, 1986 because of the unfavorable insurance market. The SIF has operated effectively for the past nine years. The current balance of the fund is approximately $5.4 million. Ms. Allen stated that changes are proposed to the SIF to ensure compliance with Governmental Accounting Standards Board Statement No.1 0 (GASB 10), and to take advantage of the more favorable insurance market that now exists. GASB 10 requires that self-insurance funds for some risks be actuarially based and financially sound. An actuarial study for general liability and automobile liability was performed by Wyatt Company to estimate the District's total liability for potential losses as of December 31, 1994 and June 30, 1995. Funding is recommended based on the total liability adjusted for future investment income and a risk margin. Losses that will be incurred in the upcoming two fiscal years were also projected and funding for those losses is recommended as well. Ms. Allen noted that self-insurance does not result in the transfer of risk similar to what happens with an insurance policy. The District should then have sufficient financial capacity to withstand fluctuations. Excess insurance is usually considered an integral part of a self-insurance program. Ms. Allen stated that a risk and insurance review was conducted by Ms. Erin Oberly. Ms. Allen described the scope of the work and coordination with the actuarial study as follows: . Review and recommend changes in current insurance coverages and policy limits to improve protection and cost effectiveness; . Coordinate with the District's actuary to analyze options for financing tort liability risks including self-insurance, commercial insurance or membership in public agency pools; . Review existing guidelines for the Self-Insurance Fund and offer recommendations regarding the nature of losses and related expenses charged to the Fund in compliance with GASB 10; and . Develop methods for establishing the amounts retained in the Fund. 04 95 20 -----~~~.._-------_._-----~. -~~-~~~._-~~........_..._..._..~.. 62 Ms. Allen stated that three major recommendations came out of this work: 1 ) That an excess liability policy in the amount of $10,000,000 excess of $500,000 self-insured retention be purchased at a cost of $174,958 annual premium; 2) That the Self-Insurance Fund be restructured to form three sub-funds: . Establish Sub-Fund A in the amount of $500,000 for GASB 10 actuarialy based risks for general liability and automobile lia bility; . Establish Sub-Fund B in the amount of $2,450,000 for GASB 10 non actuarially based risks such as employment related risks and pollution risks; and . Establish Sub-Fund C in the amount of $2,450,000 for non GASB 10 risks, insurance premiums and costs of initiating claims/lawsuits against others; and 3) That the $150,000 expense be included in the Operations and Maintenance (O&M) Budget to cover the annual cost of self- insurance. Ms. Allen stated that the annual premium of $174,958 for the recommended purchase of excess insurance and the transfer of $150,000 to the SIF will impact on the 1995-1996 Self-Insurance Fund Budget and O&M Budget. This information is presented to the Board in preparation for the O&M and Self-Insurance Budget presentations. Mr. Morsen, Deputy General Manager, stated that every two years the District will perform an actuarial study. Discussion followed with regard to the actuarial study, review of annual premiums for excess insurance, and deductibles. Member Boneysteele requested a more detailed presentation of GASB 10. Ms. Erin Oberly, the consultant who conducted the risk management and insurance review, stated thatthe Governmental Accounting Standards Board (GAS B) promulgates accounting rules for public agencies. In the last decade many public agencies have been forced out of the insurance market and as a result have become self-insured. GASB recognizes the need for rules for accounting standards for self-insured risks. GASB 10 gives a very clear statement about the risks to which it applies and how public agencies must go about accounting for these risks. Where possible there must be actuarial projections for the accounting in the fund. Ms. Oberly stated that she had reviewed the District's Self-Insurance Program overall and has written a report. Ms. Oberly stated that she found the District's Self-Insurance Program to be in very sound order. The changes that are being proposed are very minor fine tuning of the existing program, mainly breaking the existing SIF into three sub-funds and purchasing excess liability insurance. In response to a question from Member Boneysteele, Ms. Oberly stated that dividing the existing SIF into three sub-funds is simply for accounting management. The District would have complete flexibility to move monies between the funds. President Hockett thanked Ms. Allen and Ms. Oberly for their presentations and reverted to the order of the agenda. 5. ENGINEERING a. CONFIRM AND AUTHORIZE THE EXECUTION OF AMENDMENTS TO AGREEMENT WITH THE MARK GROUP. INC. FOR REMEDIATION OF CONTAMINATED SITE AT 3411 NORTH MAIN STREET. PLEASANT HILL. DP 4782 04 20 95 63 Following explanation by Mr. Morsen, Deputy General Manager, it was moved by Member Dalton and seconded by Member Boneysteele, that the amendments to a cost reimbursement agreement with a cost ceiling of $65,000 with the MARK Group, Inc. for additional environmental consultation services related to the 1-680/SR-24 Sewer Relocations Project, Phase iliA, DP 4782, be confirmed and execution authorized. There being no objection, the motion was approved with Member Menesini being absent. b. APPROVE RECYCLED WATER BUSINESS PLAN FOR ZONE 1 AND AUTHORIZE DISTRIBUTION OF BUSINESS PLAN TO CONTRA COSTA WATER DISTRICT BOARD OF DIRECTORS Mr. Morsen, Deputy General Manager, introduced Associate Engineer Jim Coe who stated that the Recycled Water Business Plan for Zone 1 was discussed in detail with the Board of Directors at a workshop on March 7, 1995. Mr. Coe stated that this Business Plan was prepared in accordance with the General Agreement for Recycled Water between Contra Costa Water District (CCWD) and Central Contra Costa Sanitary District (CCCSD) approved in October 1994. Board approval and submittal of the Business Plan to the CCWD Board of Directors is now requested. If CCWD decides to join CCCSD, the joint project would require approval by both the CCWD and CCCSD Boards. If CCWD declines to participate, CCCSD would proceed with the project alone. At the March 7, 1995 workshop, the Board asked staff to contact CCWD staff to get their concurrence that the joint project proposal, which would allow CCCSD and CCWD to equally share in capital and O&M costs, was a reasonable proposal. CCWD staff has agreed that the proposal is reasonable and that the Business Plan meets the terms of the General Agreement. Discussion followed with regard to pumping the recycled water, responsibility for billing, potential customers, expectations of the CCWD participation in the proposed project, and the favorable press coverage that has been received. It was moved by Member Dalton and seconded by Member Rainey, that the Recycled Water Business Plan for Zone 1 be approved with minor editorial revisions, and that its submission to the CCWD Board of Directors be authorized. There being no objection, the motion was approved with Member Menesini being absent. 6. PERSONNEL a. APPROVE PERSONNEL REQUESTS FOR FISCAL YEAR 1995-1996 It was moved by Member Rainey and seconded by Member Dalton, that 1995-1996 Personnel Budget, identified as items 1-13 in the position paper, be approved for inclusion in the 1995-1996 District Budget. There being no objection, the motion was approved with Member Menesini being absent. Member Rainey commended staff on the good job they have done in adding positions only where necessary and effectively utilizing the talent and expertise of current employees. 7. APPROVAL OF MINUTES a. MINUTES OF APRIL 6. 1995 It was moved by Member Rainey and seconded by Member Boneysteele, that the minutes of April 6, 1995 be approved as presented. There being no objection, the motion was approved with Member Menesini being absent. 8. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED APRIL 20. 1995 Member Boneysteele, Member of the Budget and Finance Committee, stated that in the absence of Member Menesini, he reviewed the expenditures and found them to be in order. It was moved by Member Boneysteele and seconded by Member Rainey, that the Expenditure List dated April 20, 1995, including Self-Insurance Check Nos. 100952- 100956, Running Expense Check Nos. 88641-88888, and Sewer Construction Check 04 20 95 ----------------------- - - ----------------------------------------- ------------- ------- 64 Nos. 15520-15573 be approved as recommended. There being no objection, the motion was approved with Member Menesini being absent. 9. BUDGET AND FINANCE RECEIVE THE 1995-1996 EQUIPMENT BUDGET FOR REVIEW a. Mr. Morsen, Deputy General Manager, stated that the proposed 1995-1996 Equipment Budget was reviewed in detail by the Board's Capital Projects Committee. The Capital Projects Committee recommended that the storage capacity of a computer requested for the Public Information Section be upgraded from 350 MB to 500 MB. In addition, more detailed information is now available and has been provided on the forklift and 4-inch diesel driven, trailer mounted pump requested by the Plant Operations Department. The proposed Equipment Budget is now presented to the full Board for consideration. Member Rainey suggested that staff investigate the possibility of joining together with other public agencies for group purchase of some of the more common pieces of equipment. Following discussion, Mr. Morsen indicated that staff will look into this. Member Boneysteele stated that he and Members Menesini and Hockett attended the Board Committee Meeting/Workshop to review the proposed Equipment Budget. This is a bare bones Equipment Budget and all requests were justified. Member Boneysteele stated that expenditures for equipment and maintenance are necessary. Many times putting off needed purchases or maintenance is more costly. There being no further comments, President Hockett declared that the 1995-1996 Equipment Budget was received for review. b. RECEIVE MARCH 1995 FINANCIAL STATEMENTS Ms. Deborah Ratcliff, Controller, reviewed the results of operations and maintenance expenditures for the month of March 1995, noting that expenditures were $149,000 less than budget, representing a 6.2 percent favorable variance. For the nine months ended March 1995, expenditures were $1.4 million less than budget, representing a 6.8 percent favorable variance. Operations and maintenance revenues for the nine months ended March 1995 were $15,182,000 or 0.3 percent below budget. 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 3.7 percent to 6.8 percent. The latest interest rate as of March 1995 was 6.183 percent. The average yield of the LAIF account through February 1995 was 5.77 percent. Mr. Robert A. Baker, Deputy Chief Engineer, stated that various utility industries have been taking a hard look at the reliability of systems after an earthquake. It is not practical to make the Plant earthquake proof, but it is appropriate to look at ways of hardening up the facilities. Mr. Baker introduced Mr. Ba Than, Associate Engineer, who stated that in the last 12 years, like other agencies and industries in California, the District has taken steps to respond to the threat of earthquakes. The District first looked at protection of life and safety. The Treatment Plant Seismic Upgrade Project, DP 7144, is now looking at ways of strengthening the facilities and bringing the Plant back on line as soon as possible after an earthquake. Mr. Than stated that the seismic hazard most critical to the District is an earthquake magnitude of 6.5 or greater with peak ground acceleration of 0.5 g on the Concord fault half mile east of the plant. Ground shaking is the major hazard. The existing Plant is on firm ground but settlement is possible outside the central plant area. Mr. Than reviewed possible damage should such an earthquake occur. A three stage project is recommended to upgrade and strengthen the District facilities. Phase I objectives are to: . Address remaining life and safety issues; . Maintain flow through the Plant with disinfection; . Minimize post-earthquake reconstruction costs; and 04 20 95 65 . Prepare post-earthquake responses and training. Phase II objectives are to: . Maintain primary and secondary treatment; and . Strengthen sludge dewatering facilities. The object of Phase III is to: . Fully restore the Plant back to normal operation. Mr. Than stated that the total project cost is less than $6 million and will take about five years to complete. With the combination of strengthening the facilities and purchasing equipment, damage to the Plant will be minimized and it will be possible to bring the Plant back on line as soon as possible after an earthquake. Discussion followed with regard to seismic safety of the ultraviolet disinfection facilities and the pumping stations. President Hockett thanked Ms. Ratcliff and Mr. Than for their presentations and declared that the March 1995 Financial Statements were duly received. None a. 10. EMERGENCY SITUATIONS REQUIRING BOARD ACTION 11. REPORTS GENERAL MANAGER-CHIEF ENGINEER 1 ) Review of the proposed changes to the District's Self-Insurance Program was taken out of order earlier in the agenda. 2) Mr. Morsen, Deputy General Manager, introduced Mr. Tim Potter, Supervising Source Control Inspector, who provided an overview of the staff proposal to provide more equitable funding of the Pollution Prevention Program. Mr. Potter stated that the emphasis of the District's Pollution Prevention Program is shifting from permitted industries to residential and commercial sources. This shift is consistent with study results identifying the source of toxic pollutants. The District's Pollution Prevention Program targets specific business types and residential pollutants, includes public education, advertisements, inspections of commercial facilities, and enforcement when necessary. Two issues are of concern: 1) the commercial/residential shift in the program has created an unbalanced fee system; and 2) the City of Concord is being underbilled for the Pollution Prevention Program. This funding proposal is a revenue shift, not a revenue generating proposal. It is proposed that the commercial Sewer Service Charge be increased by 4.9 percent each year for two years to cover expenses associated with controlling commercial sources of pollutants. Approximately $180,000 per year in revenue will be generated. The average increase per commercial account is $41. This will result in a residential Sewer Service Charge offset of approximately $2.10 per household. This information is presented for the Board's consideration prior to more formal discussions of the matter in conjunction with the Sewer Service Charge rate-setting process. Discussion followed concerning the impact on small businesses. The Board requested, and staff agreed to provide, more detailed information on the range of the proposed increase, a breakdown of the proposed increase by classes, and a summary of the activities that will be funded. Mr. Potter reviewed the proposed change in the Concord billing, stating that with the shift in program orientation over the last several years, it would be appropriate to adjust the billing system. It is proposed that the Concord 04 95 20 66 04 20 3) 4) 5) 6) 7) 8) 9) . <. billing be increased from $20,000 in 1994 to approximately $130,000 for Fiscal Year 1995-1996 to reflect the shift in the emphasis of the pollution prevention program. Overall, the Concord sewer service billing may not increase because of other offsetting decreases. No change would be required in the contract or Memorandum of Understanding between the District and the City of Concord. Mr. Robert A. Baker, Deputy Chief Engineer, reported that the District is currently bidding Phase 3 of the Pleasant Hill Relief Interceptor Project. Work is proceeding on securing the necessary easements for that project. One of the last easements required is from Contra Costa County Flood Control District. The Flood Control District wishes to trade services, rather than accept full payment for the easements. District staff has worked out an agreement with the Flood Control District to help stabilize the foundation for the Pacheco Town Center. This item will be bid separately and the District will receive a credit toward the easement cost in lieu of direct payment. Mr. Morsen, Deputy General Manager, reported that the proposals received in response to the Central Contra Costa Solid Waste Authority's (CCCSWA) Request for Proposals for Solid Waste and Recycling Services - Post 1996 have been evaluated by Hilton Farnkopf & Hobson. A summary of the evaluation will be presented attheApril27, 1995 CCCSWA Board Meeting. Mr. Morsen reported that Contra Costa County has billed the refuse collectors $1/ton for Local Enforcement Agency (LEA) fees. Although the solid waste collected by Valley Waste Management has been going out of County, Valley was billed $1/ton. Valley will be working with the County to determine whether it is appropriate to pay the $1/ton LEA fees for solid waste going out of County, and whether $1/ton is the appropriate rate. Mr. Morsen reported that on Monday, April 24, 1995, at 1 :30 p.m. the Contra Costa County Community Development Department will conduct a public hearing to receive comments on the Draft Environmental Impact Report (EIR) for Tosco's proposed closure of Solano Way. Included in the EIR is an alternative which involves construction of the Waterbird Way extension through the west side of the District's Treatment Plant property. Planning Assistant Russ Leavitt will represent the District at this hearing and reiterate the District's long-held opposition tothe extension of Waterbird Way. Mr. Leavitt will report back to the Board at the next Board Meeting on May 4, 1995. Mr. Morsen announced that Plant Operations Division Manager James M. Kelly will travel to Sochi Russia from June 1-12, 1 995 as a representative of the Center for Citizen Initiatives Exchange Program to work with representatives of the Environmental Center of Sochi and Sochi water officials to assess and assist in improving water and wastewater treatment facilities. The Board was advised of this trip in the 1994-1995 training budget. No funds were budgeted. A grant has been secured for this effort. Mr. Kelly proposes to use $1,200 of his Management Education allowance as matching funds for the grant. The Board concurred. Mr. Morsen announced that the District is currently advertising for the 1994-1995 Line Replacement Project at various locations in Martinez, Walnut Creek, and Contra Còsta County. The engineer's estimate for the work is $1 million. Mr. Morsen announced that Associate Engineer Randy Grieb was budgeted to attend a Programmable Controllers' Conference in Detroit, Michigan, on May 8-11, 1 995. If the Board does not object, Mr. Grieb will also meet with Modicon representatives in North Andover, Massachusetts, to look at new equipment and discuss Modicon's future developments. There will be an additional cost of $160. The Board voiced no objection. 95 67 b. COUNSEL FOR THE DISTRICT None c. SECRETARY OF THE DISTRICT None d. BOARD MEMBERS 1 ) Member Rainey reported that the Central Contra Costa Solid Waste Authority will meet on April 27, 1995 as previously noted. 2) Member Rainey reported on planning for the upcoming California Local Agency Formation Commission (Cal LAFCO) Conference. One of the major topics of discussion was whether to have the subject of special district consolidation on the program. 3) Following a brief discussion, it was moved by Member Boneysteele and seconded by Member Rainey, that Resolution No. 95-031 be adopted, setting forth procedures for appointment and compensation for Board Committees. There being no objection, the motion was approved with Member Menesini being absent. 12. ANNOUNCEMENTS None 13. CLOSED SESSION a. EXISTING LITIGATION The closed session was held to discuss existing litigation pursuant to Government Code Section 54956.9(a). The title of the litigation discussed was Acme Landfill Corp. v. Althin CD Medical, Inc., CCCSD, et ai, U.S. District Court No. C91-4268 SBA. At 5:52 p.m., President Hockett declared the closed session to discuss litigation pursuant to Government Code Section 54956.9(a). At 6:28 p.m., President Hockett concluded the closed session and reconvened the meeting into open session. 14. ACTIONS RESULTING FROM DISCUSSIONS IN CLOSED SESSION Mr. Kenton L. Aim, Counsel for the District, stated that no votes were taken and nothing is required to be reported at this time. 15. ADJOURNMENT There being no further business to come before the Board, President Hockett adjourned the meeting at the hour of 6:28 p.m. ø lJ. dE/hi > President of the Board of Directors, Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: 04 20 95 ,..,------"----'--'-- -.-,- -----,-------,.