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HomeMy WebLinkAboutBOARD MINUTES 12-01-94 217 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON DECEMBER 1, 1994 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 December 1, 1994. President Rainey called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Menesini, Dalton, Hockett, Rainey ABSENT: Members: None 2. PUBLIC COMMENTS None 3. CONSENT CALENDAR a. ACCEPT CONTRACT WORK FOR THE 1680/SR24 SEWER RELOCATIONS PROJECT. PHASE 3B (DP 4956) AND AUTHORIZE THE FILING OF THE NOTICE OF COMPLETION Mr. Roger J. Dolan, General Manager-Chief Engineer, stated that staff had believed that this project was ready for acceptance and filing of the Notice of Completion. However, the pipeline was televised, and it is now felt that the pipeline may have been placed on the wrong grade resulting in a substantial sag. Mr. Dolan requested that this item be pulled from the agenda to allow time for resolution of this issue. The Board concurred. 4. HEARINGS a. CONDUCT PUBLIC HEARING TO CONSIDER THE APPLICATION FOR REFUSE COLLECTION RATE INCREASE SUBMITTED BY ORINDA-MORAGA DISPOSE-ALL INC.. EFFECTIVE JANUARY 1. 1995 Mr. Dolan, General Manager-Chief Engineer, stated that on November 17, 1994, a workshop was conducted. Since that time Mr. Doug Lomow, of Orinda Moraga Dispose- All, Inc. (OMD), and District staff have tried to gather the information to respond to the questions raised at that workshop. Mr. Dolan noted that this rate adjustment is for a 14- month period to extend through the term of the current franchise agreement scheduled to expire February 29, 1996, with provision for an interim rate review for extraordinary circumstances if required. Mr. Dolan introduced Mr. Robert Hilton, of Hilton Farnkopf & Hobson (HFH), who stated that an extensive workshop was conducted on November 17, 1994. The following issues were raised and/or require further Board consideration: 1 ) Further analysis of post-franchise costs; 2) The issue of interest on negative cash flow was raised by OMD at the workshop; and 3) Subsequent to the workshop, it was determined that OMD failed to include certain costs (the AB 939 $.80 per ton surcharge applicable to all tonnage collected in Orinda), and that has been corrected in a memorandum that was included in the Board packet. Mr. Hilton reviewed the key issues remaining for Board consideration as follows: 12 01 94 218 . Acme Landfill closure lawsuit; . O.L.S. lawsuit; . Post-franchise activities; . Interest on negative cash flow; . AB 939 surcharge; and . Service modification factors. With respect to the Acme Landfill closure lawsuit, Mr. Hilton stated that the case has been set for trial in September 1995. Legal expenses related to the lawsuit in the amount of $112,000 for 1995 were included in the rate application. Mr. Hilton stated that the O.L.S. lawsuit was brought to the attention of the District on October 31, 1 994. OMD and its stockholders were sued for non-performance under an October 3, 1990 agreement with O.L.S. OMD estimates legal expenses of $50,000 to $100,000 related to that lawsuit. The District's legal counsel has determined that the O.L.S. case is unrelated to OMD's franchise obligations with the District. No expenses for this matter were included in the rate application or recommended for rate adjustment. Mr. Kenton L. Aim, Counsel for the District, reviewed the facts of the lawsuit as he knows them, stating that there has not been enough information provided to suggest that the legal expenses should be included the rate-setting prospectively. If extraordinary circumstances occur to suggest that this or any other issue require reconsideration, that could be done at a future time. Mr. Hilton stated that because post-franchise activities are not addressed in the franchise agreement, these expenses were not included in the recommended rates. The total request for post-franchise activities is now $181,600. On November 29, 1994, OMD submitted a contractor proposal in the amount of $70,400, $55,400 above the original estimate of $15,000, to demolish and cleanup the Moraga yard. A District engineer reviewed the clean up and demolition work and estimated the cost to be $43,400. Mr. Hilton stated that possible criteria for reasonableness of these expenses include continuing service to the ratepayers, closing out activities which have substantially benefited ratepayers, and costs that are not otherwise compensated (e.g., from sale of assets). At the November 17, 1994 workshop, OMD requested compensation for the interest expense related to negative cash flow resulting from variable disposal rates. The HFH analysis found that no negative cash flow will occur because of the balancing account due to the ratepayers. Mr. Hilton stated that on August 5, 1994, the District directed OMD to include an AB 939 surcharge of $0.80 per ton of waste collected in the City of Orinda. The Town of Moraga had requested no surcharge be collected. OMD did not include the AB 939 surcharge in the application. This additional surcharge expense of $15,600 reduces the Orinda rate reduction from 19.66 percent to 19.26 percent. With respect to the service modification factors, Mr. Hilton stated that profit for 1994 was calculated based on the Customer Equivalent Units methodology. The Board must determine the quality of service modification factor and the cost of service modification factor considering the quality of the service and the reasonableness of rates. Discussion followed with regard to the term of the disposal agreement with West Contra Costa Sanitary Landfill, Inc. (WCCSU. Mr. Aim stated that the agreement is for a term of nine years. Mr. Aim stated that he contacted a representative of the landfill company and was told that when the agreement was drawn up, it was indicated that Mr. Lomow and OMD would have a good opportunity to keep the franchise and so the disposal agreement is tied to the term of the next franchise to allow for the possibility that if OMD might be successful in the RFP process. Mr. Aim stressed that approval of the rates currently under consideration, should not be deemed a ratification of the agreement between OMD and WCCSL to take waste to a particular landfill. It should be clear that 12 01 94 219 the Board action today in no way ratifies the WCCSL contract or in any way involves the District in that contract particularly with regard to direction of the wastestream. Board action should not be deemed as ratifying or accepting that provision or any other provision of the contract. Mr. Aim stated that there may be additional contractual issues that require resolution in the future. Mr. Bill Bailey, of OMD, requested Board consideration of the following issues. 1 ) The request that estimated costs of $50,000 to $100,000 for legal defense of the D.loS. be included in the rate-setting adjustment. 2) OMD must borrow funds to finance the cash flow during the months of January, February, and March 1995. Estimated interest costs of $ 7 ,000 will be incurred for that loan. 3) OMD will face costs for post-franchise activities. OMD requests that a total of $135,000 be included in the rate-setting adjustment for post-franchise activities and that at least $50,000 to $60,000 be included for clean up and demolition of the Moraga yard. Discussion followed with respect to the balancing account of $327,000, and the O.L.S. lawsuit. At 4: 13 p.m., President Rainey opened the public hearing to receive public comments regarding the application for adjustments in refuse collection rates submitted by Orinda Moraga Dispose-All, Inc., and to establish refuse collection rates effective January 1, 1995. Mr. Paul Morsen, Deputy General Manager, stated that he attended the Moraga Town Council meeting at which this matter was discussed. The Moraga Town Council requested that the District Board of Directors lower the rates for the citizens of the Town of Moraga to the greatest extent possible. There being no further comments or written correspondence, the public hearing was closed at the hour of 4: 15 p.m. and the matter was returned to the Board for deliberation. The estimated costs for the Acme litigation defense were included in the rate adjustment. Disbursement of those funds will be considered atthe December 15, 1994 Board meeting. It was the consensus of the Board that no expenses be included in the rate adjustment for defense of the O.L.S. lawsuit. If circumstances change and consideration is warranted by the Board, that can be calendared in the future. It was the consensus of the Board that no expenses for post-franchise activities be included in the rate adjustment. With respect to the request for interest on negative cash flow, the HFH analysis found no negative cash flow will occur because of the balancing account due to the ratepayers. Thus, it was the consensus of the Board that no funds be included in the rate adjustment for interest on negative cash flow. It was the consensus of the Board that additional surcharge expense of $15,600 for AB 939 be included in the rate adjustment for the City of Orinda; but that no AB 939 surcharge be included in the rate adjustment for the Town of Moraga per their request. Following discussion, it was the consensus of the Board that the cost of service modification factor and the quality of service modification factor be set at 1.0. Based on the consensus positions noted above, it was moved by Member Menesini and seconded by Member Hockett, that Resolution No. 94-104 be adopted, establishing a 19.26 percent refuse collection rate decrease for the Orinda area (Zone 1) and a 19.66 percent rate decrease for the Moraga area (Zone 1A). Motion unanimously approved on the following vote: 12 01 94 220 AYES: Members: Menesini, Hockett, Dalton, Rainey NOES: Members: None ABSENT: Members: None 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER None a. 6. BIDS AND AWARDS AUTHORIZE AWARD OF A CONSTRUCTION CONTRACT TO KAWEAH CONSTRUCTION AND AUTHORIZE A CONSULTING AGREEMENT WITH G.S. DODSON AND ASSOCIATES ~EZ PUMPING STATIONS IMPROVEMENTS PROJECT, DP 4922 Mr. Dolan, General Manager-Chief Engineer, stated that very good bids approximately 25 percent under the engineer's estimate were received, and authorization to award the construction contract for the Martinez Pumping Stations Improvements Project is recommended. Following discussion of the project funding and cost breakdown, it was moved by Member Menesini and seconded by Member Dalton, that award of contract for construction of the Martinez Pumping Station Improvements Project, DP 4922, be authorized in the amount of $3,194,000 to Kaweah Construction Company as the lowest responsible bidder; and that the General Manager-Chief Engineer be authorized to execute a professional services agreement with a cost ceiling of $162,200 with G.S. Dodson and Associates. There being no objection, the motion was unanimously approved. b. AUTHORIZE AWARD OF A CONSTRUCTION CONTRACT TO KAWEAH CONSTRUCTION COMPANY AND AUTHORIZE A CONSULTANT AGREEMENT FOR CONSTRUCTION OF THE UV DISINFECTION FACILITIES PROJECT. DP 7100 Mr. Dolan, General Manager-Chief Engineer, introduced Mr. William E. Brennan, Plant Engineering Division Manager, who stated that staff is very pleased to bring the results of the bidding on the Ultraviolet (UV) Disinfection Facilities Project to the Board. This is the culmination of several years of work including pilot testing, predesign, and final design on this innovative project. Mr. Brennan reviewed the favorable bids received in this very competitive bidding environment. The low bidder, Kaweah Construction Company, was just awarded the Martinez Pumping Stations Improvements Project and is currently bringing the Secondary Clarifier Project to a close. Mr. Robert A. Baker, Deputy Chief Engineer, reported that a letter was received from Trojan Technologies Inc. Trojan had asked to have the equipment on the project sole sourced, but the District had decided to competitively bid it. Mr. Baker summarized the content of the Trojan letter, stating that Trojan is now proposing to work with Kaweah substituting their new style UV disinfection system instead of the one prequalified by the District. Because of the concerns to ensure the UV technology will work at the District, a $500,000 pilot study was conducted. Based on that study, it was concluded that UV would work but that there was some risk. As a result, a prequalification process was done. Mr. Baker stated that accepting Trojan's offer would involve: 1 ) 2) Reversing the decision previously made through the prequalification process; Requiring a change of suppliers; 3) A major change to the scope of the contract work; and 4) A potential impact to the fairness of the bidding process both to suppliers and to bidders. Mr. Baker stated that after discussion with legal counsel, it has been concluded that if the District were to entertain this proposal from Trojan, all bids must be rejected and the 12 01 94 221 bidding process begun again. Staff would recommend against that because of construction sequencing of the project to coincide with wet and dry weather seasons. Rejecting all bids would require a 12-month delay in the project and another pilot test of the new high intensity equipment would be needed to ensure that the equipment would work as well as the low pressure equipment previously pilot tested and specified. Mr. Baker stated that Trojan has provided guarantees that the high-intensity system will work; indicating that if it does not work satisfactorily, they will put in more lamps or install another system. Mr. Baker stated that an important issue is whether the equipment mechanisms will perform adequately. There are several aspects of the Trojan high- intensity system that are developmental. In addition, the Trojan high-intensity system uses more energy than the system specified. The final issue is the issue of disinfection. Even with the guarantees, a pilot test of the high-intensity system would be needed. Mr. Baker stated that the Trojan proposal is interesting and he wishes them success, but would recommend against the District accepting the proposal in this instance. Discussion followed with regard to the need for a pilot test or field experience, the degree of confidence in the system currently specified in terms of safety and byproducts, the quality and quantity of the affects on the environment, and the characteristics of the high- intensity system versus the low-pressure system. Mr. Baker stated that District staff has a high degree of confidence in the system specified because of the pilot testing conducted. In the pilot test of many and various conditions, it was concluded that any one of the three low-pressure systems included in the specifications would perform adequately and provide a degree of conservatism. Mr. George Condrashoff, of SECO Control Systems/Bailey Fisher & Porter, addressed the Board, stating that his company has worked on this project with the suppliers and consulting engineers particularly during prequalification, providing a great deal of information with respect to experience, sites in operation, field trips, and related issues. Kaweah Construction Company's bid is in compliance with the specifications, there are no exceptions, and the equipment is supplied at the lowest possible cost. Mr. Kenton L. Aim, Counsel for the District, stated that after reviewing the information presented, he has concluded that the law would not permit the District to sole source this equipment. Following discussion, it was moved by Member Hockett and seconded by Member Dalton, that award of a construction contract in the amount of $8,690,000 for construction of the UV Disinfection Facilities Project, DP 7100, be authorized to Kaweah Construction Company, the lowest responsible bidder; and that the General Manager-Chief Engineer be authorized to execute a professional services agreement not to exceed $550,000 with Montgomery Watson to provide services during construction of the UV Disinfection Facilities Project, DP 7100. There being no objection, the motion was unanimously approved. 7. ENGINEERING a. APPROVE THE LAKEWOOD SEWER IMPROVEMENT PROJECT. DP 4805 Mr. Dolan, General Manager-Chief Engineer, stated that the Lakewood Sewer Improvement Project involves rehabilitating and replacing 18,600 feet of main and trunk sewers, much of them located in difficult-to-access backyard easements. A community meeting has already been conducted by District staff and was attended by Member Menesini. At this time, approval of the project is recommended. Following discussion of the public participation component of the project, the suggestion that a community liaison be identified, and the need for particular safety precautions with regard to the staging area near a school, it was moved by Member Menesini and seconded by Member Hockett, that the Board finds that the Lakewood Sewer Improvement Project is exempt from California Environmental Quality Act (CEQA) under District CEQA Guideline Section 18.3 and Section 18.5; and that the Lakewood Sewer Improvement Project, DP 4805, be approved. There being no objection, the motion was unanimously approved. 12 01 94 222 a. 8. CORRESPONDENCE NOTE RECEIPT OF LETTER DATED NOVEMBER 16. 1994 FROM MR. PAUL CAMPOS. STAFF ATTORNEY FOR THE BUILDING INDUSTRY ASSOCIATION. REGARDING AB 1600. RELATING TO REPORTS ON USE OF DEVELOPERS' FUNDS FOR CAPITAL IMPROVEMENTS Mr. Dolan, General Manager-Chief Engineer, stated that when staff contacted the Building Industry Association (BIA), the attorney for BIA indicated that this letter was intended for cities rather than special districts. The letter has been withdrawn by BIA and no Board action is required. b. NOTE RECEIPT OF LETTER DATED NOVEMBER 21. 1994 FROM MR. ROBERT BEEBE. GENERAL MANAGER OF DUBLIN SAN RAMON SERVICES DISTRICT. RE ARDING THE RETIREMENT FROM OFFICE F D R D DIRECTOR MR. E COVELLO It was moved by Member Menesini and seconded by Member Hockett, that Resolution No. 94-103 be adopted, commending Mr. Joe Covello for his service as a Member of the Board of Directors of Dublin San Ramon Services District. There being no objection, the motion was unanimously approved. 9. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED DECEMBER 1. 1994 Member Menesini, Chair of the Budget and Finance Committee, stated that he and Member Dalton reviewed the expenditures and found them to be satisfactory. It was moved by Member Menesini and seconded by Member Dalton, that the Expenditure List dated December 1, 1 994, including Self-Insurance Check Nos. 100896-100897, Running Expense Check Nos. 85886-86016, and Sewer Construction Check Nos. 86017- 86043, be approved as recommended. There being no objection, the motion was unanimously approved. 10. EMERGENCY SITUATIONS REQUIRING BOARD ACTION None 11. REPORTS a. GENERAL MANAGER-CHIEF ENGINEER 1 ) Mr. Dolan, General Manager-Chief Engineer, stated that the District has been going through a difficult transition from the old ADDS Mentor centralized mini-computer to the new networked IBM-AS400/HTE system. Bringing the HTE software on line has been a real challenge requiring software changes, training, and staffing accommodation. There is still much to do but progress is being made through the dedicated efforts of employees throughout the District. Mr. Dolan introduced Ms. Deborah Ratcliff, Controller, who reviewed the history of the District information systems, the limitations of the outdated ADDS Mentor system, and the selection of the new AS400/HTE information system. Ms. Gail Chesler, Associate Engineer, discussed the information network schematic including cabling, the AS400/HTE financial applications, and the four major computer systems attached to the AS400. Mr. Doug Craig, Planning Division Manager, described the implementation problems encountered with the AS400/HTE system including: . Underestimation of the level of effort; 12 01 94 223 . The lack of "user friendliness" of the applications; . Limited availability of user time in addition to routine duties; and . Limited technical support to address user concerns. Mr. Craig reported that an HTE Task Force was formed in July 1994 to assist in the HTE implementation process. The HTE Task Force included representation from all departments in the District. To date, the HTE Task Force accomplishments include: . Establishing a broad communication structure; . Establishing a trained "help" group; . Developing a users' question and answer form; . Developing user manuals for each work station; and . Addressing hardware and software implementation issues. Mr. Craig stated that the current budget for the MIS Upgrade, DP 7082, is $1,811,000. To complete the project additional funding of $250,000 will be needed, bringing the total budget to $2,061,000. The additional funding will be used to cover the cost of staff resources, consultants, and hardware and software items including licenses, cabling, PCs, printers, panel projector, memory expansion for the AS400, and a Novell network. In conclusion, Mr. Craig stated that implementation of the new information system has been a difficult transition involving additional effort above normal routine duties. The new information system is used by many more staff members and the expanded computer knowledge requires considerable training and time commitment. However, the new information system will provide significantly more information with much broader access. Discussion followed in which it was suggested that staff investigate further enhancements to the information system to allow distance learning capability. Mr. Dolan stated that staff will be returning to the Board in the near future with additional computer related matters. 2) Mr. Dolan, General Manager-Chief Engineer, reviewed the draft agenda for the Central Contra Costa Solid Waste Authority meeting of December 8, 1994. 3) Mr. Dolan, General Manager-Chief Engineer, announced that Moody's has completed their rating analysis and has given the District the highest rating available for our type agency, AA. This rating can be raised to AAA by purchase of insurance by the primary bond buyer at the time of sale. Standard and Poor will conduct their review on December 2, 1994. 4) Mr. Dolan, General Manager-Chief Engineer, announced that the two force mains that are part of the link between the Fairview and Maltby Pumping Stations and the District serving the residents of Martinez, have suffered structural problems. A leak developed in the new M-4 Force Main. When. the flow was switched to the older line, it was discovered that Southern Pacific had recently cut that line in two places when installing a deep fiberoptic cable. District forces are working diligently to control overflows and repair the old pipe. To date the volume of sewage spilled is below the reportable limit. It is hoped that the line will be back in service in the near future. 5) Mr. Dolan, General Manager-Chief Engineer, distributed an invitation to the Coalition of Labor & Business (COLAB) reception honoring elected officials of Contra Costa County. The reception will be held on December 14, 1994. 12 94 01 224 b. COUNSEL FOR THE DISTRICT None c. SECRETARY OF THE DISTRICT None d. BOARD MEMBERS 1 ) President Rainey reported that the Local Agency Formation Commission (LAFCO) will not be meeting during the month of December. 2) Board Members reported on the November 16-17, 1994 California Association of Sanitation Agencies (CASA) meeting, commending Deputy Chief Engineer Robert Baker on his excellent presentation on the water quality plans. 12. ANNOUNCEMENTS None 13. ADJOURNMENT There being no further business to come before the Board, President Rainey adjourned the meeting at the hour of 6:32 p.m. 4Þ do~ President of the Board of Directors Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: 1 ( , -1 'tL [ . ( . 2-?u .. ~efreta y of the Central ~ntr CostC}' Sanitary District, Count~' of Contra Costa, State of California 12 01 94