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HomeMy WebLinkAboutBOARD MINUTES 06-04-92 102 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON JUNE 4, 1 992 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 June 4, 1992. President Boneysteele called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Clausen, Dalton, Starita, Boneysteele ABSENT: Members: Rainey Member Rainey entered the meeting at the hour of 3:05 p.m. 2. PUBLIC COMMENTS President Boneysteele announced that today is a very important day in our history, the 50th anniversary of the Battle of Midway. 3. CONSENT CALENDAR It was moved by Member Clausen and seconded by Member Dalton, that the Consent Calendar, consisting of Items a. through e., be approved as recommended, resolutions adopted as appropriate, and recordings duly authorized. a. Quitclaim Deed to Gerald V. Jackson, et ux, Job No. 2595, Alamo area, was approved, the President of the District Board of Directors and the Secretary of the District were authorized to execute and record said Quitclaim Deed, and Resolution No. 92-028 was adopted to that effect. Motion approved on the following vote: AYES: Members: Clausen, Dalton, Starita, Boneysteele NOES: Members: None ABSENT: Members: Rainey b. The Agreement Relating to Real Property with Donald R. Ward and Phyllis J. Ward, Job No. 1101, 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. 92-029 was adopted to that effect. Motion approved on the following vote: AYES: Members: Clausen, Dalton, Starita, Boneysteele NOES: Members: None ABSENT: Members: Rainey c. June 18, 1992, at 3:00 p.m., was established as the date and time for a public hearing to receive comments on a proposed ordinance to amend the District Code provisions for Facilities Capacity Fees. 06 04 92 103 Motion approved on the following vote: AYES: Members: Clausen, Dalton, Starita, Boneysteele NOES: Members: None ABSENT: Members: Rainey d. The request by Derhyl F. Houck, Maintenance Technician III, for an emergency withdrawal of $2,800 from the Deferred Compensation Plan, was approved as recommended by the Deferred Compensation Plan Advisory Committee. Motion approved on the following vote: AYES: Members: Clausen, Dalton, Starita, Boneysteele NOES: Members: None ABSENT: Members: Rainey e. Resolution No. 92-030 was adopted, establishing the Sewer Construction Fund appropriations limit in the amount of $13,574,899 for the 1991-1992 fiscal year, in accordance with Article XIII B of the California Constitution; the change in the local assessment roll due to local nonresidential construction, instead of the change in the California per capita personal income, was selected for use in computing the appropriations limit. Motion approved on the following vote: AYES: Members: Clausen, Dalton, Starita, Boneysteele NOES: Members: None ABSENT: Members: Rainey a. 4. HEARINGS CONDUCT A PUBLIC HEARING ON THE PROPOSED CHANGES TO THE CURRENT SCHEDULE OF RATES AND CHARGES AND ADOPT AN ORDINANCE APPROVING THE FEE SCHEDULE EFFECTIVE JULY 1. 1992 Mr. Roger J. Dolan, General Manager-Chief Engineer, stated by way of introduction, that the District's rates, charges, and fees can be broken into two categories: 1) the Sewer Service Charge that affects all customers; and 2) the Schedule of Rates and Charges for services the District provides to contractors, developers, and others. The first item before the Board today is the Schedule of Rates and Charges. The Schedule of Rates and Charges was last adjusted three years ago. One of the matters carried forward for Board consideration is the issue of District overhead. In the past, a charge for overhead has not been included in the rates and charges. Because of the current economic situation, staff is not recommending that overhead be added this year but that the issue of overhead be carried forward for consideration at a future time. Mr. Dolan introduced Mr. Steven A. Elsberry, Senior Accountant/Internal Auditor, who stated that the Schedule' of Rates and Charges is intended to reimburse the District for labor and operating expenses incurred in providing the services. The present rates and charges have been in place since July 1, 1989. Member Rainey entered the meeting at the hour of 3:05 p.m. Mr. Elsberry stated that in 1985, the Board decided not to implement an administrative overhead but directed staff to bring the matter back for further review during the next rate adjustment. In keeping with that direction, the rates and charges have been calculated both with and without overhead. The actual costs of providing each service 0.6 04 92 104 was reviewed and used in calculating the proposed changes to the current Schedule of Rates and Charges. Of the 34 fees in the Schedule of Rates and Charges, it is recommended that 27 fees be increased by 10.4 percent or less including nine fees with no change. This is the cumulative effect of District salary increases since 1985. Mr. Elsberry reviewed seven fees as described in detail in the position paper: the Manhole or Rodding Inlet Inspection Fee, the Residential Septic and Portable Toilet Waste Fee, the Restaurant Grease Waste Fee, and the Dye Test Fee which are recommended to increase more than 10.4 percent; the Building Plan Review Fee and Class III Permit Fee which are new fees; and the fee for Preparation and Processing of Agreements Relating to Real Property which is recommended to change from a fixed amount to actual expense. Discussion followed concerning the dye test, the Class III Permit Fee, engineering for private sewer projects, and including administrative overhead in the fees. At 3:22 p.m., President Boneysteele opened the public hearing on the proposed changes to the current Schedule of Rates and Charges. Mr. Lawrence E. Piatti, President of Industrial Management Consultants, addressed the Board both as a businessman in Contra Costa County and as a private citizen. Mr. Piatti spoke in opposition to including an administrative overhead component in the Schedule of Rates and Charges questioning where those costs are currently recovered. Mr. Dolan, General Manager-Chief Engineer, responded that when the fee is related to an operating expense of the District, the costs are part of the $151 Sewer Service Charge. The overhead component of fees for capital projects are paid from the Capital Budget. Mr. Piatti stated that there is potential for duplication of charges. Mr. Piatti requested that the hourly rate for the work performed be included in the Schedule of Rates and Charge. Mr. Piatti requested further that quarterly notices of the work being done be provided to the customers. Mr. Piatti questioned the depreciation of the equipment component of the fees. Mr. Piatti objected to the practice of billing permittees for the actual costs incurred by the District in dealing with compliance issues. Mr. Dolan indicated that the majority of permittees require little or no District labor on compliance. Occasionally, however, a permittee will have extensive compliance problems requiring a substantial expenditure of District time. If those costs were averaged, it would raise the costs for all of the customers that do not require the same degree of staff time. Quarterly reporting would require more staff time and would increase the costs even more. With regard to equipment costs, Mr. Dolan stated that the customers do not own the equipment; the District does. It is purchased through the Capital Budget. It is an open process. A public hearing is conducted and the public is invited to attend and comment if they wish. The cost of equipment used to perform the services included in the Schedule of Rates and Charges is included to the extent it is used for those purposes which is estimated to be approximately 50 percent of its use. Mr. Dolan stated that staff will be happy to give the rates of the individuals providing services; and as a matter of course, those rates will be used to calculate the annual permit fees. In referring back to the earlier Question of whether all District Costs were included in the computation of fees, Member Dalton indicated that earlier Boards had felt that some of the work done by the District for developers or commercial customers benefited the District as a whole and therefore it was not necessary to include all costs in the fee computation. Mr. Mike Daly, of Etch- Tek, stated that charging industries for meetings will discourage a working relationship between industries and the District. Mr. David R. Williams, Planning Division Manager, stated that the Schedule of Rates and Charges is based on the actual expenses of service for the prior year. On routine matters the District does not keep track of the costs, however, when District staff must deal with an industry on time consuming matters relating to enforcement and compliance issues, the industry is billed for the actual costs. There being no further comments, President Boneysteele closed the public hearing at the hour of 3:55 p.m. 06 04: 92' 105 Mr. Dolan recommended that the Board of Directors approve the proposed Schedule of Rates and Charges as presented. To alleviate the problem raised by Mr. Piatti, staff will advise the industrial permit customers of the impact of these rates and what they mean specifically in terms of dollars per hour. It was moved by Member Dalton, that the Schedule of Rate and Charges be approved as presented excluding administrative overhead, and that an ordinance implementing the new schedule be adopted effective July 1, 1992. Member Clausen stated that the general ratepayers should not be required to pay all of the administrative overhead for the services provided to developers, contractors and others. The general ratepayers should pay a percentage of the administrative overhead because some of the benefit for these services accrue to the general ratepayers; but the majority of the administrative overhead should be paid by those receiving the services. Member Rainey expressed concern with increasing fees to small business given the present state of the economy. Member Clausen proposed that 25 percent of the administrative overhead be added to the Schedule of Rates and Charges over the next three years and that the remaining 25 percent remain in the general District ratebase since a portion of the programs administered through the rates and charges may be considered of benefit to all the ratepayers. The above motion was amended by Member Dalton and seconded by Member Clausen, that the Schedule of Rates and Charges be approved as presented adding a 25 percent increment for the calculated administrative overhead on July 1, 1992, July 1, 1993, and July 1, 1994; and that Ordinance No.1 80 be adopted implementing the new schedule effective July 1, 1992. Following discussion, the motion was unanimously approved on the following roll call vote: AYES: Members: Dalton, Clausen, Starita, Rainey, Boneysteele NOES: Members: None ABSENT: Members: None b. CONDUCT PUBLIC HEARINGS TO RECEIVE PUBLIC COMMENT ON THE 1992- 1993 OPERATIONS AND MAINTENANCE BUDGET AND THE SELF-INSURANCE FUND BUDGET AND FOR THE ESTABLISHMENT OF THE 1992-1993 SEWER SERVICE CHARGE RATES. AND ON PLACING THE SEWER SERVICE CHARGES ON THE COUNTY TAX ROLL FOR COLLECTION Mr. Dolan, General Manager-Chief Engineer, stated that this work is the culmination of three months of effort and hundreds of hours of staff time. As discussed with the Board, the proposed Operations and Maintenance (O&M) Budget has been set on rigorous standards. There will be no net new positions or people hired. Some work budgeted in past years was not included in this year's budget as a way of controlling costs. The budget to budget increase is 2 percent, which is less than the increased costs. The District is also confronted with other problems. The Capital Improvement Budget shows over $200 million in work over the next decade and there is not enough money to pay all those capital costs. The District is looking at borrowing to pay some of those costs, although pay as you go is the best way to meet the needs of the District's customers and keep costs down. Therefore, the proposed O&M Budget will consider allocation of money from the Sewer Service Charge into the Sewer Construction Fund as a way of helping to pay for these mandated programs. This has been discussed in detail with the Board Committee and it was previewed by the Board at the workshop held at the last Board meeting. All options are available to the Board. Mr. Dolan introduced Mr. Walter N. Funasaki, Finance Officer, who reviewed the budgeted revenues, expenses, and reserves as presented in detail in the budget document previously distributed to the Board. Over the past six years, the District's reserves have been steadily reduced to the prudent reserve level. Fiscal year 1990-1 991 marked the year that reserves fell below the 10 percent prudent reserve level. A balanced budget 06',.04".92 106 concept was used for the 1991-1992 budget. In the proposed 1992-1993 O&M Budget, revenues are shown based on a $164 Sewer Service Charge representing an 8.6 percent increase over the current $151 Sewer Service Charge. Transfers of reserves to the Sewer Construction Fund in the amount of $609,000 are shown in the proposed budget. Mr. Funasaki reviewed the 1 991-1992 projected total revenues and expenses compared to budget, noting that revenues are projected to be $548,000 less than budget, or 2 percent underrealized. This shortfall was projected in the Six-Month Budget Review presented to the Board and department managers were directed to ensure that commensurate reductions in expenses were achieved. Total expenses are projected to be $575,000 less than budget, representing a 2.1 percent favorable variance. As the favorable variance exceeds the projected underrealization of revenues by $27,000, a surplus of $3,000 is projected compared to the budgeted deficit of $23,000. Mr. Funasaki presented a comparison of the 1992-1993 budgeted revenues to 1991-1 992 budgeted revenues and reviewed the reasons for changes in each category. In response to a question from President Boneysteele, Mr. Funasaki stated that the suggestion was made to investigate extending the maturities of the District's investments, particularly in the Self-Insurance Fund. Staff will pursue the suggestion. Mr. Funasaki presented a comparison of budgeted O&M expenses from 1991-1992 compared to 1992-1993. An increase of $537,000, representing 2 percent, is budgeted. Mr. Funasaki reviewed the departmental expenses which reflect these increases and the programs eliminated or deferred in the interest of meeting the guidelines for a nominal increase in the 1992-1993 O&M Budget. Mr. Funasaki reviewed the budgeted employee benefits expense increase of 10.3 percent compared to 1991-1992 and the reasons for the increase. Mr. Funasaki stated that in 1992-1993 transfer of $609,000 to the Sewer Construction Fund is being proposed for the Board's consideration. This would supplement the Capital Fund in the amount of $137,000 for the outlays anticipated in the next ten years and the need to use debt financing, and in the amount of $472,000 for an equipment depreciation allowance based on the annual depreciation on the District's furniture and equipment. Mr. Funasaki stated that at the end of the 1992-1993 fiscal year, the Self-Insurance Fund reserves are budgeted to be $6.2 million, slightly more than the $6 million targeted level set by Mr. David Warren the consultant who assisted in establishing the Self-Insurance Fund. In view of the sound state of the Self-Insurance Fund, the Board approved no transfer of monies from the O&M Fund to the Self-Insurance Fund. Mr. Funasaki reviewed the current Sewer Service Charge in comparison with neighboring sanitary districts as of May 1992, the Sewer Service Charge for the District from 1985 to the present and what the rates would have been if the rates in 1 985 had been incremented by the Consumer Price Index (CPt) for the Bay Area. Mr. Funasaki reviewed Sewer Service Charge alternatives of $166 (9.9 percent increase), $165 (9.3 percent increase), $164 (8.6 percent increase), and $163 (7.9 percent increase); the budgeted reserves with each of these alternatives; and the projected Sewer Service Charge increases for the next two years based on each alternative. Staff recommends that the Sewer Service Charge be increased by 9.9 percent to $166 per year. Mr. Dolan, General Manager-Chief Engineer, expressed caution with regard to the impact on the Sewer Service Charge if the District loses ad valorem tax revenue, which staff believes to be a real threat. Discussion followed concerning the public image projected by District employees and equipment, transferring funds exceeding the targeted level of $6 million from the Self- Insurance Fund to the O&M Fund, and additional costs budgeted in the 1992-1993 O&M Budget for compliance with new regulations. At 5: 15 p.m., President Boneysteele declared a recess, reconvening at the hour of 5:21 p.m. with all parties present as previously designated. At 5:21 p.m., President Boneysteele opened the public hearing to obtain public comment regarding approval of the 1992-1993 O&M Budget and Self-Insurance Fund Budget and 06^, 04: .92 107 establishment of the 1992-1993 Sewer Service Charge rates. There being no comments, President Boneysteele closed the public hearing and returned the matter to the Board for deliberation. Member Starita stated that having had the opportunity to participate in the committee meetings on this matter, he would like to give the benefit of his observations. Beginning in 1985, the ratepayers have benefited from the rebate of the substantial claim settlement received by the District and it is to the credit of the Board that they were able to do that for the ratepayers. However, the District cannot continue running a deficit. This problem is compounded by the fact that the District will probably lose ad valorem tax revenue. At that time, it will be necessary to increase rates by $70 or more. Based on these facts, Member Starita recommended that the Sewer Service Charge be increased to $166. In addition, Member Starita expressed concern that even at $166, the District will not achieve a 1 0 percent prudent reserve level. Member Clausen stated that he was not able to attend the Budget Committee meeting nor the last Board meeting, so he sent a memorandum to each Board Member and filed a public copy with the Secretary of the District so as not to violate the Brown Act. Member Clausen stated that the Sewer Service Charge must be increased to cover the cost of salary increases approved in the last Memoranda of Understanding with the various employee groups. It is appropriate to establish an equipment depreciation account funded from O&M charges, and recommended that such an account be established this year with a $2 charge against the O&M. Member Clausen expressed his appreciation to staff for their close scrutiny and hard work in reducing their budgets. Member Clausen stated that he could support a Sewer Service Charge increase of $12 to $163. Member Rainey concurred with Member Clausen, but recommended that the Sewer Service Charge be set at $162 transferring $110,000 from the Self-Insurance Fund to the O&M Fund. Member Dalton stressed the need for a 10 percent prudent reserve level, stating that a drought condition still exists. The District has suffered greatly in the past from losses due to storm damage. A prudent level of reserves is necessary to cover those and other problems that may arise. Member Dalton recommended that the Sewer Service Charge be set at $170, achieving a 10 percent prudent reserve level. President Boneysteele stated that reducing the scope of vehicle appearance activities by $10,000 is a false economy and a small item in the total budget. For overall morale, appearance, and public relations, President Boneysteele recommended that the scope of vehicle appearance activities not be reduced. In 1991-1992, the full cost of services was not passed through to the public on the Sewer Service Charge, and President Boneysteele expressed concern that that not be the case again this year. President Boneysteele stated that depreciation is a cost that must be met. The District has not depreciated its underground plant. It would be appropriate to consider doing so at this time since the District is largely built up. In the past, the District avoided depreciation of the underground plant because it had been paid for by the ratepayers when they purchased their new homes in the 1940's. Now, the District must address the fact that maintenance and depreciation have been deferred. President Boneysteele stated that it is necessary to build up a prudent reserve and he recommended that the Sewer Service Charge be set at $166. Member Rainey stated that she would have a difficult time building up reserves at this time, given the economy and the struggles of private industry and other public agencies. If the Board follows Member Clausen's recommendation, reserves will not be decreased and the $6 million Self-Insurance Fund will be maintained. Member Starita stated that the Self-Insurance Fund protects the District in lieu of another insurance company. A $6 million reserve in the Self-Insurance Fund is the minimum the District should have. When compared to others in the area, the District's Sewer Service Charge rates are very good. President Boneysteele stated that the District is the best operated, most efficiently managed sanitary district in the United States with very modest rates considering the demands associated with discharging into an estuary. 06 04 92 108 It was moved by Member Dalton that 1992-1993 O&M Budget and Self-Insurance Fund Budget be approved, that the 1992-1993 Sewer Service Charge be set at $170, and that the Sewer Service Charge Rate Schedule be established accordingly. The motion failed for lack of a second. It was moved by Member Starita and seconded by President Boneysteele, that the 1 992- 1993 O&M Budget and Self-Insurance Fund Budget be approved, that the 1992-1993 Sewer Service Charge be set at $166, and that the Sewer Service Charge Rate Schedule be established accordingly. The motion failed to pass on the following roll call vote: AYES: Members: Starita, Boneysteele NOES: Members: Clausen, Dalton, Rainey ABSENT: Members: None It was moved by Member Clausen and seconded by Member Rainey, that the 1992-1993 O&M Budget and Self-Insurance Fund Budget be approved, that the 1 992-1 993 Sewer Service Charge be set at $163, and that the Sewer Service Charge Rate Schedule be established accordingly. The motion failed to pass on the following roll call vote: AYES: Members: Clausen, Rainey NOES: Members: Dalton, Starita, Boneysteele ABSENT: Members: None Member Rainey stated that the arguments presented by the Board and staff convinced her that the $110,000 would be better served in the Self-Insurance Fund. For that reason, she supported the above motion to set the Sewer Service Charge at $163. Mr. Kenton L. Aim, Counsel for the District, advised that four votes are required for approval of the Sewer Service Charge. Following discussion, it was moved by Member Dalton and seconded by Member Starita, that the 1992-1993 O&M Budget and Self-Insurance Fund Budget be approved, that the 1992-1993 Sewer Service Charge be set at $167, and that the Sewer Service Charge Rate Schedule be established accordingly. The motion failed to pass on the following roll call vote: AYES: Members: Dalton, Starita NOES: Members: Clausen, Rainey, Boneysteele ABSENT: Members: None Following further discussion of the environmental demands facing the District, the need to build a prudent reserve level, and the need to fund very serious capital requirements, it was moved by Member Clausen that the 1992-1993 O&M Budget and Self-Insurance Fund Budget be approved, that the 1992-1993 Sewer Service Charge be set at $165, that the Sewer Service Charge Rate Schedule be established accordingly, and that the General Manager-Chief Engineer and each department head be given the goal to reduce expenditures by 3 percent. Following discussion, the above motion was amended by Member Clausen and seconded by Member Starita, that the 1992-1993 O&M Budget and Self-Insurance Fund Budget be approved, that the 1992-1993 Sewer Service Charge be set at $165, that the Sewer Service Charge Rate Schedule be established accordingly, and that the General Manager- Chief Engineer and each department head be given the goal to reduce expenditures by 2 percent. The motion failed to pass on the following roll call vote: 0-.6 04 :92 109 AYES: Members: Clausen, Starita, Boneysteele NOES: Members: Dalton, Rainey ABSENT: Members: None Following discussion, the above motion was remade by Member Clausen and seconded by Member Starita, that the 1992-1993 O&M Budget and Self-Insurance Fund Budget be approved, that the 1 992-1993 Sewer Service Charge be set at $165, that the Sewer Service Charge Rate Schedule be established as set forth in Ordinance No. 181, and that the General Manager-Chief Engineer and each department head be given the goal to reduce expenditures by 2 percent. The motion was approved on the following roll call vote: AYES: Members: Clausen, Starita, Dalton, Boneysteele NOES: Members: Rainey ABSENT: Members: None At 5:58 p.m., President Boneysteele opened the public hearing to obtain public comment regarding collection of the 1992-1993 Sewer Service Charges on the County tax roll. There being no comments, President Boneysteele closed the public hearing. It was moved by member Clausen and seconded by Member Dalton, that collection of the 1992-1993 Sewer Service Charges on the County tax roll be authorized. Motion unanimously approved on the following roll call vote: AYES: Members: Clausen, Dalton, Starita, Rainey, Boneysteele NOES: Members: None ABSENT: Members: None 5. BIDS AND AWARDS a. AUTHORIZE AWARD OF CONSTRUCTION CONTRACT. AUTHORIZE CONSULTANT AGREEMENTS. AND AUTHORIZE $23.063.000 FROM THE SEWER CONSTRUCTION FUND TO THE TREATMENT PLANT PROGRAM FOR CONSTRUCTION OF THE HEADWORKS FACILITIES EXPANSION PROJECT (DP 20069) Mr. Dolan, General Manager-Chief Engineer, introduced Mr. Douglas J. Craig, Senior Engineer, who stated that on May 23, 1991 bids for the Headworks Facilities Expansion Project were opened. The low bid was $27,849,000. The engineer's estimate was $24,670,000. Because the low bid exceeded budget and the funds available at that time, the Board directed staff to conduct a value engineering study. The value engineering study was done and a net savings of $6,000,000 was projected. All bids were rejected and redesign and rebid of the project was authorized. On May 19, 1992, the project was rebid. The engineer's estimate was $23,291,000. Six bids were received, ranging from $18,368,000 to $21,677,000. Mr. Craig recapped the projected cost savings of $10.6 million associated with the rebid. Mr. Craig stated that an evaluation of the bids has been conducted. The apparent low bidder is Humphrey Construction of Woodinville, Washington. Humphrey has good financial and technical references. Although Humphrey is non-union, they have indicated that they will utilize a mixture of non-union and union subcontractors. The majority of the work force is expected to be local. Two issues have been raised: 1) the use of plumbers versus laborers; and 2) failure to list an instrumentation and control subcontractor in the bid proposal. Mr. Craig briefly described the jurisdictional dispute among crafts and the omission by five of the six contractors to list an instrumentation and control subcontractor in the bid proposal. The use of plumbers versus laborers has no apparent impact on award of the contract. Prevailing wages will be monitored. With regard to the failure to list an instrumentation and control company, JWP Controls was prequalified as an 06 04 92 110 instrumentation company. Humphrey has indicated that JWP Controls will supply equipment and supervise installation but will not be used as a subcontractor. A letter of protest has been received from Monterey Mechanical as a result of Humphrey's not listing an instrumentation subcontractor. Copies of the letter have been distributed to the Board. Mr. Craig stated that the District has conducted an extensive review of the specifications, of Humphrey's position, and Monterey's protest. Confusion has been caused by ambiguity in the specifications regarding a classification of the instrumentation and control company. This explains why five of the six contractors did not list an instrumentation and control company, as one interpretation of the specification would have required. The District's desire is to have a prequalified instrumentation and control company provide a high quality instrumentation package and cQordinate its installation. Upon review, staff believes that Humphrey's failure to list an instrumentation and control subcontractor was a non-material variance and would not preclude the Board from considering Humphrey's bid as responsive and responsible. Humphrey's approach is acceptable. Mr. Craig stated the staff recommendation that award of the construction contract for the Headworks Facilities Improvement Project be made to Humphrey Construction of Woodinville, Washington. Mr. Milton C. Burleson, Executive Vice President of Monterey Mechanical Company, thanked the Board for the opportunity to speak on this matter. As the basis of the protest of Monterey Mechanical, Mr. Burleson referred to the contract documents which state that the contractor shall base its bid on a single prequalified subcontractor and list that subcontractor in the bid proposal. Five prequalified instrumentation subcontractors were listed in the same section of the bid. Mr. Burleson stated that when a subcontractor is properly named in the contract, its name becomes part of the legal contract. Mr. Burleson stated that Monterey Mechanical did not list a subcontractor at bid time. When the omission was realized, Monterey Mechanical immediately notified the District. Humphrey did not. Humphrey indicated that it was not their intention to have a subcontractor, but rather to have a vendor and supplier for the instrumentation work. Mr. Burleson stated that a vendor and supplier has a substantially different standing in the contract. Mr. Burleson stated that as the situation now stands, Humphrey has not provided a subcontractor listing. In not doing that, Humphrey would be entitled to select and negotiate with anyone of the five listed subcontractors, thus improving their profit margin. Monterey Mechanical does not have that opportunity. Mr. Burleson requested that the Board enforce the bidding documents. Mr. Dennis Cook, of Thierman, Cook, Brown & Prager, attorney for Humphrey Construction, addressed the Board. Mr. Cook stated that it was very clear from the specifications that the instrumentation could be bid as a supplier or a subcontractor. Five of the six bidders, bid it as a supplier. Humphrey Construction will use JWP Controls, from the prequalified list. JWP will perform the fabrication and manufacturing off site. Amelco, a listed subcontractor, or Humphrey forces will perform the installation. Mr. Gordon Bawden, Chief Estimator for Humphrey Construction, Inc., stated that he bid the job for Humphrey. Mr. Bawden stated that JWP was not listed as a subcontractor because the specifications seemed to give the option to have either the installation of the work or the supervision of the installation done by the prequalified instrument and control party. Humphrey chose to have the work supervised by JWP. Mr. Kenton L. Aim, Counsel for the District, stated that with all due respect to Monterey Mechanical, after considering this matter at some length, he has concluded that Humphrey's failure to list an instrumentation and control subcontractor was caused by ambiguity in the specifications and is a non-material variance which would not preclude the Board from considering Humphrey's bid as responsive and responsible. It was moved by Member Starita and seconded by Member Clausen, that the Board finds that the error in the bid proposal was not a material variance; and therefore, that award of construction contract be authorized to Humphrey Construction, Inc., as the lowest responsible bidder, in the amount of $18,368,000 for the construction of the Headworks Facilities Expansion Project (DP 20069). Motion unanimously approved on the following roll call vote: 66 04 92 111 AYES: Members: Starita, Clausen, Dalton, Rainey, Boneysteele NOES: Members: None ABSENT: Members: None Following discussion, it was moved by Member Dalton and seconded by Member Rainey, that the General Manager-Chief Engineer be authorized to execute the following Cost Reimbursement Agreements for consultant services during the construction of the Headworks Facilities Expansion Project: 1. Agreement with CH2M Hill for construction management services with a cost ceiling of $1,175,000; 2. Agreement with James M. Montgomery Engineers for engineering services during construction with a cost ceiling of $894,000; 3. Agreement with Dan Cortinovis for preparation of an O&M manual and operator training with a cost ceiling of $154,000; and 4. Agreement with Construction Materials Testing, Inc. for testing services during construction with a cost ceiling of $65,000. Motion unanimously approved on the following roll call vote: AYES: Members: Dalton, Rainey, Clausen, Starita, Boneysteele NOES: Members: None ABSENT: Members: None It was moved by Member Clausen and seconded by Member Starita, that $23,063,000 be authorized from the Sewer Construction Fund to the Treatment Plant Program Unallocated Authorization Account for construction of the Headworks Facilities Expansion Project (DP 20069), Motion unanimously approved on the following roll call vote: AYES: Members: Clausen, Starita, Dalton, Rainey, Boneysteele NOES: Members: None ABSENT: Members: None 6. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER President Boneysteele proceeded to Item 12.a.1) Orinda-Moraga Disposal Service, Inc. Request for Mid-Year Rate Increase, to accommodate interested persons in the audience. 12. REPORTS GENERAL MANAGER-CHIEF ENGINEER a. 1 ) Mr. Dolan, General Manager-Chief Engineer, reported that a request for mid- year rate increase has been received from Orinda-Moraga Disposal Service, Inc. Earlier, Mr. Dolan had indicated that rate adjustment requests relating solely to the disposal charge impact were expected from both Valley Waste Management and Orinda-Moraga Disposal. Valley Waste Management has not yet submitted a request. Staff will be contacting them. It is hoped that the rate-setting process will be completed by the end of July so the rates can be effective July 1, 1992. There is a complication in that the opening rate for Keller Canyon Landfill approved by the Board of Supervisors is an interim rate. The final 1992 rate is scheduled to be set in August. Staff recommends that only one adjustment be made to the 1992 rates for the District's franchisees based on the interim rates. Any further adjustment to the rates for the final rates to be set by the Board of Supervisors could be 06 04 92 112 carried over into the 1 993 rates through the balancing account. If it is a large adjustment, that would be impractical and so staff could recommend that the rates be considered again in October 1992. Mr. Paul Morsen, Deputy General Manager, reported that the County has scheduled a workshop on the proposed Keller Canyon Landfill rates in July 1992. Member Clausen requested a report from District staff as to the components of the rate to be considered by the Board of Supervisors. Mr. Morsen stated that staff will provide such a report to the extent possible. Mr. John Matheny, of Orinda-Moraga Disposal Service, Inc., agreed with Mr. Dolan's description of the County's rate-setting process, but indicated further that the County will be considering two rate applications. The first rate application is for Keller Canyon Landfill and the second rate application is for the Acme Transfer Station. Mr. Matheny stated that when the time comes, he hopes that Orinda-Moraga Disposal will be allowed to pass those rates through to the customers using those facilities. Following discussion, the Board directed District Counsel to request, in accordance with the provisions of the Public Records Act, the supporting information on which the rate analyses will be made for both the Keller Canyon Landfill and the Acme Transfer Station. Member Starita indicated that he would make a personal request as a citizen and a ratepayer. At this time, President Boneysteele reverted to the order of the agenda. 7. TREATMENT PLANT a. AUTHORIZE THE GENERAL MANAGER-CHIEF ENGINEER TO EXECUTE AN AGREEMENT WITH JOHN CAROLLO ENGINEERS FOR THE DESIGN OF THE COGENERATION PROJECT <DP 10069) It was moved by Member Starita and seconded by Member Rainey, that the General Manager-Chief Engineer be authorized to execute a cost plus fixed fee agreement not to exceed $539,182 with John Carollo Engineers/MSD, Inc. for final design of the Cogeneration Project, DP 10069. Motion unanimously approved on the following roll call vote: AYES: Members: Starita, Rainey, Clausen, Dalton, Boneysteele NOES: Members: None ABSENT: Members: None a. 8. CORRESPONDENCE NOTE RECEIPT OF LETTER FROM DONALD L. CHRISTEN. EXECUTIVE VICE PRESIDENT OF THE CONTRA COSTA TAXPAYERS ASSOCIATION. SUPPORTING A FEASIBILITY STUDY OF THE PROPOSED TRI-VALLEY WASTEWATER AUTHORITY (TWA) PROJECT Receipt of the letter from Donald L. Christen, Executive Vice President of the Contra Costa Taxpayers Association, supporting a feasibility study of the proposed TWA Project was noted. This item was presented for the Board's information. No action was taken. 9. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED JUNE 4, 1992 Member Clausen, member of the Budget and Finance Committee, stated that he and Member Starita reviewed the expenditures and found them to be satisfactory. It was moved by Member Clausen and seconded by Member Starita, that the Expenditure List dated June 4, 1992, including Self-Insurance Fund Check Nos. 100608-100610, 0.6 04 ,92 113 Running Expense Check Nos. 68056-68347, Sewer Construction Fund Check Nos. 11106-11152, and Payroll Check Nos. 27651-27941, be approved as recommended. There being no objection, the motion was unanimously approved. a. 10. BUDGET AND FINANCE CONSIDER REQUEST TO INCREASE THE CAPIT AUlA TION LIMIT FOR FURNITURE AND EQUIPMENT ACQUISITION FROM $250 TO $500 EFFECTIVE JULY 1. 1992 Following explanation by Mr. Dolan, General Manager-Chief Engineer, it was moved by Member Starita and seconded by Member Dalton, that authorization be given to increase the capitalization limit for furniture and equipment acquisition from $250 to $500 effective July 1, 1992. There being no objection, the motion was unanimously approved. None a. b. c. d. 11. EMERGENCY SITUATIONS REQUIRING BOARD ACTION 12. REPORTS GENERAL MANAGER-CHIEF ENGINEER 1 ) The Orinda-Moraga Disposal Service, Inc. request for mid-year rate increase was taken out of order earlier in the agenda. 2) Mr. Dolan, General Manager-Chief Engineer, announced that the District is advertising for a construction project to install a 1 5 ton crane in the Solids Conditioning Building. The engineer's estimate for the work is $265,000. 3) The District is advertising for a project for installation of laboratory hoods to comply with changed workers' health requirements. The engineer's estimate is $15,000. 4) Mr. Dolan announced that on June 4, 1992, he met with staff to the Central Contra Costa Solid Waste Authority Messrs. Herb Moniz, Don Blubaugh, Paul Morsen, and Kent Aim, to discuss the status of the Acme transfer station purchase, the County agreement for Acme Landfill closure, and future plans for central county solid waste franchise management. 5) Mr. Dolan announced that last week he met Mr. Claus Imhoff, son of Karl Imhoff for whom this street is named. COUNSEL FOR THE DISTRICT 1 ) Mr. Kenton L. Aim, Counsel for the District, discussed and distributed information concerning recent Supreme Court decisions relating to import and export of solid waste and imposition of mitigation fees. SECRETARY OF THE DISTRICT None BOARD MEMBERS 1 ) Member Clausen reported that the Central Contra Costa Solid Waste Authority met on May 28, 1992. The main topics of discussion were the Authority's response to the County policy document on solid waste management and problems encountered in siting a green waste composting facility. 13. ANNOUNCEMENTS The Board and staff congratulated Member Rainey on her fine showing in her bid for election to the Board of Supervisors in the June 2, 1992 primary election. 06 04 92 ....--.---. 114 14. CLOSED SESSION None 1 5. ACTIONS RESULTING FROM DISCUSSIONS IN CLOSED SESSION None 16. ADJOURNMENT There being no further business to come before the Board, President Boneysteele adjourned the meeting at the hour of 7: 17 p.m. £ President of the Board of Direct Central Contra Costa Sanitary 'strict, County of Contra Costa, State of California COUNTERSIGNED: .1 . .l. Se~re a - of the Central Contr J Co~t Sanitary District, County of Contra Costa, State of California 06 04 92