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HomeMy WebLinkAboutBOARD MINUTES 04-16-92 75 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON APRIL 16, 1992 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 16, 1992. President Boneysteele called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Clausen, Starita, Rainey, Boneysteele ABSENT: Members: Dalton Member Dalton had advised staff he would be out of town and unable to attend this meeting. Member Dalton had requested that he be excused. 2. PUBLIC COMMENTS None 3. CONSENT CALENDAR Following discussion of encroachments over District easements and the associated Agreements relating to Real Property, it was moved by Member Starita and seconded by Member Rainey, that the Consent Calendar, consisting of Items a. through f., be approved as recommended, resolutions adopted as appropriate, and recordings duly authorized. a. Resolution No. 92-023 was adopted, confirming that publication of District Ordinance No. 179 amending the District's Source Control Ordinance, has been made. Motion approved on the following vote: AYES: Members: Starita, Rainey, Clausen, Boneysteele NOES: Members: None ABSENT: Members: Dalton b. The Agreement relating to Real Property with Steven J. Whitgob, et ux, Job 3295, Orinda area, was approved; the President of the Board of Directors and the Secretary of the District were authorized to execute and record said agreement; and Resolution No. 92-024 was adopted to that effect. Motion approved on the following vote: AYES: Members: Starita, Rainey, Clausen, Boneysteele NOES: Members: None ABSENT: Members: Dalton c. The Agreement relating to Real Property with Daniel J. Sevilla, et ux, Job 3449, Walnut Creek area, was approved; the President of the Board of Directors and the Secretary of the District were authorized to execute and record said agreement; and Resolution No. 92-025 was adopted that effect. 04 16 92 76 Motion approved on the following vote: AYES: Members: Starita, Rainey, Clausen, Boneysteele NOES: Members: None ABSENT: Members: Dalton d. The attendance of H. David Albinus, Operations Safety Specialist for the Plant Operations Department, the American Industrial Hygiene Association Conference in Boston, from May 30 to June 5, 1992, was authorized at a cost of $1,835. Motion approved on the following vote: AYES: Members: Starita, Rainey, Clausen, Boneysteele NOES: Members: None ABSENT: Members: Dalton e. The attendance of Gail Chesler, Associate Engineer for the Planning Division, at the April 30 to May 1, 1992, "Using Effluent Toxicity Evaluations" workshop in Berkeley, was authorized at a cost of $695. Motion approved on the following vote: AYES: Members: Starita, Rainey, Clausen, Boneysteele NOES: Members: None ABSENT: Members: Dalton f. The attendance of R. Wayne Griffiths, Engineering Assistant, at the Symantec Time Line Workshop in San Francisco, to be held from May 4 through 6, 1992, was authorized at a cost of $750. Motion approved on the following vote: AYES: Members: Starita, Rainey, Clausen, Boneysteele NOES: Members: None ABSENT: Members: Dalton 4. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER Mr. Roger J. Dolan, General Manager-Chief Engineer, requested that Item 12.a.1., Valley Waste Management Automated Collection Program, be taken out of order to accommodate interested persons in the audience. The Board agreed. President Boneysteele indicated that Item 14., Closed Session, would be taken out of order later in the meeting when the attorney representing the District on a matter relating to real property negotiations and potential litigation arrives. At this time, President Boneysteele proceeded to Item 12., Reports. 12. REPORTS a. GENERAL MANAGER-CHIEF ENGINEER 1 ) Mr. Dolan, General Manager-Chief Engineer, stated that during the refuse collection rate setting for 1992, Valley Waste Management raised concerns for the method the District has used for depreciation of capital, 04-16 92 77 compensation for capital, and sharing of savings. Valley has submitted a letter, which was provided to the Board, again raising those concerns and requesting resolution by the Board of Directors before Valley proceeds with purchase of equipment and implementation of the automated collection program. Mr. Walter N. Funasaki, Finance Officer, reported that Valley has proposed the following rate-setting modifications: a) Use of a five year depreciable life for the $3.3 million of capital equipment for automated collection instead of the eight year life previously used. b) Use of a different base rate for computing the Capital Use Charge and replacing the Two-Year Treasury Note yield with High Quality Corporate Cost of Funds Index, resulting in an increase of .91 percent. c) Providing the collector with 50 percent of the expense reduction realized from the separate yard waste disposal at the Hayward facility. Mr. Funasaki summarized the projected effect of these issues beginning in 1 992 with the partial year effect and the full year effect thereafter. With regard to the five year depreciable life, Mr. Funasaki stated that the issue is a quicker write off of the cost of equipment to coincide with the expiration of the franchise in 1996. Mr. Funasaki reviewed the alternative presented by District staff during the annual rate-setting process for the usual eight year depreciation of the equipment to Net Book Value at the February 29, 1996 date with recoupment of the loss to recovered over the two years 1994 and 1995. Mr. Dolan stated that staff recommends that the equipment be depreciated to Fair Market Value not zero. Mr. Funasaki reviewed the effect of a change in the Capital Use Charge index on the Profit Per Residential Customer Equivalent Unit, cost savings projected by the collector from separate disposal of yard waste including incremental hauling expenses, and the effect on the 1992 balancing account of the three requests of the collector. The collector has also requested that the District provide interest on the balancing account and that the District provide assurances that the collector will receive the full value of the balancing account at the expiration of the franchise. Discussion followed concerning establishment of the modification factor at 1.05 during the rate-setting process to recognize the savings generated by the collector, the appropriate number of years to recognize this savings if at all, and the impact of a shift to composting on this program. Mr. Ronald J. Proto, General Manager of Valley Waste Management, stated that the Waste Management Regional Office negotiated the contract with Wood Fiber Recovery in Hayward. A certain amount of yard waste is allowed at that facility based on a percentage of the wood that is brought into the facility. Valley Waste Management is consuming a percentage of the tonnage available to Oakland Scavenger Company. If the yard waste no longer goes to the facility and the savings stop, the sharing of savings would stop as well. Mr. Proto indicated that he does not understand the District staff proposal with regard to depreciation; and, therefore, cannot comment on it. Mr. Proto requested the calculations that were used in arriving at the change in Profit Per Residential Customer Equivalent Unit. In response to a question from President Boneysteele concerning Valley sharing in any loss, Mr. Proto stated that the collector is not paid enough to take risks. If Valley could dispose of the waste in their own landfill, Valley might take some risks with the exception of regulatory requirements. Mr. Proto stated that Valley has shown leadership in this area by finding an alternative means of disposing of yard waste at a savings over the Acme 04 16 92 ------ ------------.-- --------------- 78 Transfer Station fee. In response to a question from Member Rainey, Mr. Proto stated that Valley would propose that sharing of the savings continue as long as the alternate disposal opportunity is available. When it is no longer available, the sharing would stop. Discussion followed concerning the use of composting facilities currently being developed, expiration of the franchise, depreciable life of automated collection equipment, indices used in calculating the Capital Use Charge, and means of recognizing savings. Following discussion, it was the consensus of the Board, that a position paper be presented at the May 7, 1992 Board Meeting, including a draft letter from the District to Valley Waste Management changing the rate- setting methodology in future years to adjust to a five year depreciation schedule and calculation of the Capital Use Charge based on the High Quality Corporate Cost of Funds Index with the understanding that a carryover from the current year will be permitted as part of the balancing account. The cost of providing interest on the balancing account will be evaluated in the position paper. The Board indicated that they felt that the cost of service modification factor provided an adequate means of adjusting the franchisee's profits to recognize cost saving initiatives taken by the collector. At this time, President Boneysteele reverted to the order of the agenda. 5. BIDS AND AWARDS a. AUTHORIZE AWARD OF CONSTRUCTION CONTRACT FOR THE ORINDA/MORAGA PUMPING STATIONS IMPROVEMENTS-NEAR TERM PROJECT. DP 4667. TO PACIFIC MECHANICAL CORPORATION; CONSIDER RELIEF OF BID REQUEST FROM DALZELL CORPORATION Mr. Dolan, General Manager-Chief Engineer, introduced Mr. Tad Pilecki, Senior Engineer, who summarized the activities and schedule for the Pumping Stations Master Plan Improvement Program. The Orinda/Moraga Pumping Stations Improvements-Near Term Project is an early start piece of work from the Ten-Year Master Plan. Mr. Dolan stated that the Orinda/Moraga work is concentrated in the East Bay Municipal Utility District watershed. Staff recommends award of the construction contract to Pacific Mechanical Corporation, the lowest responsible bidder, and grant of relief of bid request from Dalzell Corporation. It was moved by Member Rainey and seconded by Member Clausen, that relief of bid request from Dalzell Corporation including return of the bid bond be granted; and that award of contract for construction of the Orinda/Moraga Pumping Stations Improvements- Near Term Project, DP 4667, be authorized in the amount of $409,800 to Pacific Mechanical Corporation as the lowest responsible bidder. Motion approved on the following roll call vote: AYES: Members: Rainey, Clausen, Starita, Boneysteele NOES: Members: None ABSENT: Members: Dalton 6. ENGINEERING a. AUTHORIZE EXECUTION OF AN AGREEMENT WITH J. M. MONTGOMERY CONSULTING ENGINEERS FOR DESIGN OF THE LOS ARABIS DRIVE SEWER REPLACEMENT PROJECT. DP 4785 Following explanation by Mr. Dolan, General Manager-Chief Engineer, it was moved by Member Starita and seconded by Member Clausen, that the General Manager-Chief Engineer be authorized to execute a cost reimbursement agreement with a cost ceiling of 04 16 92 79 $112,300 for design of the Los Arabis Sewer Replacement Project, DP 4785. There being no objection, the motion was approved with Member Dalton being absent. 7. PERSONNEL a. APPROVE PERSONNEL BUDGET REQUESTS FOR FISCAL YEAR 1992-1993 Following discussion of cost-of-living, longevity, and merit increases and the cost of furniture and equipment for new positions, Member Clausen requested that management carefully review filling vacant positions or positions that become vacant during the 1992- 1 993 fiscal year. Mr. Dolan, General Manager-Chief Engineer, stated that his management procedures require that filling vacant positions be approved by the General Manager-Chief Engineer prior to beginning the process to fill the positions. Due to the nature of the work at the District, many vacancies must be filled to keep the work going. It was moved by Member Starita and seconded by President Boneysteele, that the Personnel Budget to 1992-1993 identified as Items 1 through 9 in the position paper be approved for inclusion in the 1992-1993 District Budget. There being no objection, the motion was approved with Member Dalton being absent. Noting the presence of the attorney representing the District on real property negotiations and potential litigation matters, President Boneysteele departed from the order of the agenda to consider Item 14., Closed Session. 14. CLOSED SESSION a. REAL PROPERTY NEGOTIATIONS With respect to real property negotiations, the closed session was held pursuant to Government Code Section 54956.8. The real property which the negotiations may concern is the District property at 1250 Springbrook Road, Walnut Creek. The District's negotiators may negotiate with Mr. Richard J. Murphy and other representatives of Caltrans. b. SIGNIFICANT EXPOSURE TO LITIGATION Pursuant to Government Code Section 54956.9(b)' a point has been reached where in the opinion of the Board of Directors of the Central Contra Costa Sanitary District on the advice of its Counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the District. At 4:40 p.m., President Boneysteele declared the closed session to discuss real property negotiations pursuant to Government Code Section 54956.8 and litigation pursuant to Government Code Section 54956.9(bL At 5:20 p.m., President Boneysteele concluded the closed session and reconvened the meeting into open session. 1 5. ACTIONS RESULTING FROM DISCUSSIONS IN CLOSED SESSION None At this time, President Boneysteele reverted to the order of the agenda. 8. APPROVAL OF MINUTES a. MINUTES OF APRIL 2. 1992 It was moved by Member Clausen and seconded by Member Starita, that the minutes of April 2, 1992, be approved as presented. There being no objection, the motion was approved with Member Dalton being absent. 04 16 92 ------------------- ---- ---------- 80 9. APPROVAL OF EXPENDITURES EXPENDITURE LIST DATED APRIL 16. 1992 a. Member Starita, member of the Budget and Finance Committee, stated that he and Member Clausen reviewed the expenditures and found them to be satisfactory. It was moved by Member Starita and seconded by Member Clausen, that the Expenditure List dated April 16, 1992, including Self-Insurance Check Nos. 100594-100596, Running Expense Check Nos. 67031-67343, and Sewer Construction Check Nos. 10926-10973, be approved as recommended. There being no objection, the motion was approved with Member Dalton being absent. 10. BUDGET AND FINANCE a. RECEIVE THE 1992-1993 EQUIPMENT BUDGET FOR REVIEW President Boneysteele, member of the Capital Projects Committee, stated that he and Member Starita reviewed the Equipment Budget and would recommend its approval. Mr. Dolan, General Manager-Chief Engineer, briefly discussed the concept of setting aside equipment depreciation to fund equipment replacement. Following discussion, it was the consensus of the Board that the 1992-1993 Equipment Budget be received for review. b. REVIEW THE FINANCIAL STATUS OF THE SELF-INSURANCE FUND AND APPROVE OMITTING AN O&M BUDGET CONTRIBUTION FOR THE FISCAL YEAR 1992-1993 Mr. Dolan, General Manager-Chief Engineer, stated that since the Self-Insurance Fund was established in July 1986, the District has reaped the benefits of the program. During the past year, the District's loss experience has been quite good; therefore, staff would recommend that no contribution be made to the Self-Insurance Fund from the O&M Budget. It was moved by Member Starita and seconded by Member Rainey, that the seven-year financial history/projection for the Self-Insurance Fund was duly reviewed and that approval be given for omitting an increment for the Self-Insurance Fund from the O&M Budget in 1992-1993. There being no objection, the motion was approved with Member Dalton being absent. c. RECEIVE MARCH 1992 FINANCIAL STATEMENTS Mr. Walter N. Funasaki, Finance Officer, reviewed the results of operations and maintenance expenses for the month of March 1992, noting that actual O&M expenses were $254,000 less than budget, representing an 11.4 percent favorable variance. For the nine months ended March 31, 1992, actual O&M expenses were $1,006,000 less than budget, representing a 5.0 percent favorable variance. Mr. Funasaki presented the operations and maintenance revenue report for the nine months ended March 31, 1992, reporting that revenues were $ 617 ,000 underrealized. At the Six Month O&M Budget Review, staff indicated that O&M revenues were then projected to be underrealized by $545,000, and that expenses were projected to be underexpended by $613,000; as a result, a favorable net operating variance of $67,000 was projected at the end of the fiscal year. Mr. Funasaki stated that at this time, it is projected that O&M revenues will be underrealized by $613,000, which is $68,000 higher than projected at the six month point. Although it is projected revenues will be underrealized, it is projected there will be a further reduction in O&M expenses and that O&M expenses will be underrealized by $718,000. A favorable operating result for the fiscal year of approximately $100,000 is projected. Mr. Funasaki 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 4.397 percent to 8.542 percent. The latest interest rate at 04 16 92 81 March 1992, was 5.529 percent. The average yield for the LAIF account through March 31, 1992 was 5.68 percent. Following discussion of the timing of collection of Sewer Service Charge revenues, President Boneysteele declared that the March 1992 Financial Statements were duly received. None a. 11. EMERGENCY SITUATIONS REQUIRING BOARD ACTION 12. REPORTS GENERAL MANAGER-CHIEF ENGINEER 1 ) Consideration of issues and concerns raised by Valley Waste Management in connection with the full-scale implementation of the automated collection program was taken out of order earlier in the agenda. 2) Mr. Dolan, General Manager-Chief Engineer, stated that the status of the Martinez easements issue is summarized in the draft letter to the City of Martinez contained in the agenda packet. Martinez staff has indicated they do not intend to support a Sewer Service Charge override to fund the easement acquisition program until after the upcoming election although the override was originally proposed by the City. The District is now faced with the costs for the work. A revised draft letter and bill for those costs was provided for the Board's consideration. Following discussion, it was the consensus of the Board that the draft letter to the City of Martinez, billing the City for costs incurred by the District for acquisition of sanitary sewer easements in accordance with the terms of the 1967 agreement with the City, be approved as revised. 3) Mr. Dolan, General Manager-Chief Engineer, discussed ways of communicating with the District's ratepayers on wastewater issues such as pollution prevention and waste minimization as well as on solid waste issues. A newsletter on wastewater system activities, a diorama or video display at the Alexander Lindsay Museum, and a school program were discussed. It is planned that $50,000, the cost of printing and mailing one newsletter, will be included in the operating budget for the coming year. In the discussion that followed, Member Clausen stated that the editorial by Deputy Chief Engineer Robert Baker and Deputy General Manager Paul Morsen was very good. Editorials may be more effective in reaching a wider readership than a newsletter. Member Rainey endorsed a cooperative approach with the Alexander Lindsay Museum, indicating that a large number of people would be reached for a minimum cost by such a program. President Boneysteele agreed that the cooperative program with Alexander Lindsay Museum should be made the center of the public education program. Mr. Dolan thanked the Board for their guidance and indicated that $50,000 would be included in the 1992-1993 O&M Budget for use in communicating with the public. A newsletter may be used to communicate with the ratepayers should the Governor's proposal to shift property tax revenues from sanitary districts be successful. 4) Mr. Dolan announced that the recent California Water Pollution Control Association meeting in Sacramento was very productive. The following papers were presented by Central San employees: Senior Engineer Lynne Putnam - Chlorine and Ultraviolet Disinfection Plant Operations Division Manager Jim Kelly - Reclamation 04 16 92 82 b. c. d. None Associate Engineer Randy Schmidt - Air Quality Regulations Planning Assistant Jackie Zayac - Public Approval on Pipeline Construction Principal Engineer Curt Swanson and Assistant Engineer Paul Sciuto - Site Contamination Senior Engineer Tad Pilecki - Construction Standards Laboratory Superintendent Bhupinder Dhaliwal - Aquatic Toxicity Associate Engineer Randy Schmidt - Gas Transfer/Activated Sludge Principal Engineer Curt Swanson, Senior Engineer Henry Thom, and Assistant Engineer Paul Sciuto - Preconstruction Surveys Mr. Dolan stated that nine papers were given by ten District employees. Mr. Dolan indicated that he also made a number of presentations. 5) Mr. Dolan thanked Deputy Chief Engineer Robert Baker and Deputy General Manager Paul Morsen for the excellent editorial on the property tax revenue transfer proposed by Governor Wilson which appeared in the April 16, 1992 Contra Costa Times. Thanks also go to Public Information and Graphics Coordinator Colleen Camicia who helped write the article. 6) Mr. Dolan announced that the Notice of Intent to Adopt a Negative Declaration for the Proposed Collection System Operations Yard Relocation and Improvement Project will be published in the near future. Copies of the Negative Declaration were distributed to the Board of Directors. COUNSEL FOR THE DISTRICT None SECRETARY OF THE DISTRICT None BOARD MEMBERS 1 ) Member Rainey reported that the AB 939 Task Force met on April 15, 1992. At that meeting a report entitled County-wide Integrated Waste Management: Initial Considerations and Recommendations was presented. The report will be referred to the AB 939 Project Managers. 2) Member Rainey reported that at the May 6, 1992 Contra Costa Solid Waste Authority meeting, representatives from the Alameda County Joint Powers Authority will discuss the formation and evolution of that agency. 13. ANNOUNCEMENTS 14. CLOSED SESSION This item was taken out of order earlier in the agenda. 15. ACTIONS RESULTING FROM DISCUSSIONS IN CLOSED SESSION This item was taken out of order earlier in the agenda. 04 1'6 92 16. ADJOURNMENT There being no further business to come before the Board, President Boneysteele adjourned the meeting at the hour of 6:27 p.m. President of the Board of Director, Central Contra Costa Sanitary' trict, County of Contra Costa, State of California COUNTERSIGNED: 04 16, 83 92 .----- ------.----. . -.... .----..--.