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HomeMy WebLinkAboutBOARD MINUTES 09-02-04 34 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON SEPTEMBER 2, 2004 The District Board of the Central Contra Costa $anitary District convened in a regular session at its regular place of meeting, 5019 Imhoff Place, Martinez, County of Contra Costa, State of California, at 2:00 p.m. on September 2, 2004. President Lucey called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Menesini, Nejedly, Hockett, Lucey ABSENT: Members: Boneysteele Member Boneysteele had advised staff that he would be unavoidably detained. a. PLEDGE OF ALLEGIANCE Board and staff joined in the Pledge of Allegiance to the Flag. President Lucey noted that there were a number of members of the public present in the audience, presumably to comment on the Alhambra Valley item. He stated that this item would be moved up on the agenda to immediately follow the Consent Calendar. President Lucey asked that those who wished to speak fill out a speaker card and limit their remarks to three minutes. b. INTRODUCTIONS . RECOGNIZE DON BOTELLI ON HIS PROMOTION TO MAINTENANCE TECHNICIAN III. MECHANICAL . RECOGNIZE AMY HERNANDEZ ON HER PROMOTION TO ENGINEERING ASSISTANT III. INSPECTION RECOGNIZE GREG PALMER ON HIS PROMOTION TO PUMPING STATIONS OPERATOR I . President Lucey and the Board of Directors congratulated Maintenance Technician III Don Botelli on his recent promotion. Ms. Hernandez and Mr. Palmer were unable to attend this meeting and will be recognized at a future meeting. . INTRODUCE JANET WEEKS. NEWLY HIRED ACCOUNTING TECHNICIAN I Ms. Janet Weeks, Accounting Technician I, was introduced and welcomed to the District by President Lucey and the Board of Directors. 2. PUBLIC COMMENTS None 3. AWARDS AND COMMENDATIONS a. RECEIVE THE ASSOCIATION OF METROPOLITAN SEWERAGE AGENCIES ffiMSA) GOLD AWARD FOR 2003 FOR 100 PE~T COMPLlA~CE WITH. NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM (NPDES) PERMIT REQUIREMENTS 9-2-04 I I I 35 I Mr. Charles W. Batts, General Manager, stated that the District recently received the Association of Metropolitan Sewerage Agencies, or AMSA, Gold Award for 100 percent permit compliance for calendar year 2003. Last year, the District received AMSA's Platinum Award for five consecutive years of compliance, and the 2003 Gold Award is the start of another five years, making 2003 the sixth consecutive year of full compliance with the NPDES permit. Mr. Batts introduced Mr. Douglas J. Craig, Plant Operations Division Manager. Mr. Craig stated that, in 2003, the treatment plant processed 16.3 billion gallons of wastewater, produced 5,439 tons of ash, completed 39,600 laboratory analyses, and had zero permit violations. Mr. Craig presented statistics on the number of agencies who have qualified for Silver, Gold, and Platinum awards. Mr. Craig thanked the Board for their support and thanked District employees for their contributions toward another successful year. Mr. Igor Skaredoff of 411 Isabel Drive in Martinez congratulated the District on the award and presented a map of the Alhambra Creek Watershed to the Board. On behalf of the Board of Directors, President Lucey accepted the AMSA Gold Award. President Lucey and members of the Board commended and thanked District staff for the achievement. 4. CONSENT CALENDAR It was moved by Member Hockett and seconded by Member Menesini that the Consent Calendar, consisting of Items a. through d., be approved as recommended, resolutions adopted as appropriate, and recordings duly authorized. a. Resolution No. 2004-053 accepting an Offer of Dedication for an easement at no cost to the District from Daniel Fivey (30 Alamo Lane, Alamo) and Resolution No. 2004-054 authorizing the President of the Board of Directors and the Secretary of the District to execute a Quitclaim Deed to Daniel Fivey were adopted; and staff was authorized to record the deed with the Contra Costa County Recorder. I Motion unanimously approved on the following vote: AYES: Members: Lucey, Menesini, Nejedly, Hockett NOES: Members: None ABSENT: Members: Boneysteele b. . A Grant of Easement was accepted from the City of Martinez (DP 5569, Parcel 2); a Quitclaim Deed to the City of Martinez (DP X1800, Parcel 1) was approved; the President of the Board of Directors and the Secretary of the District were authorized to execute said Quitclaim Deed; staff was authorized to record the Quitclaim Deed with the Contra Costa County Recorder; and Resolution Nos. 2004-055 and 2004-056 were adopted to that effect. Motion unanimously approved on the following vote: AYES: Members: Lucey, Menesini, Nejedly, Hockett I NOES: Members: None ABSENT: Members: Boneysteele c. Appeal of Union on behalf of Accounting Technician III David Rolley was denied and the arbitrator's recommendation to uphold the suspension was approved. Motion unanimously approved on the following vote: 9-2-04 36 AYES: Members: Lucey, Menesini, Nejedly, Hockett NOES: Members: None ABSENT: Members: BoneysteeJe d. Resolution 2004-057 amending Exhibit A, Designated Positions and Disclosure Categories of the District Conflict of Interest Code was adopted and the Secretary of the District was authorized to submit a copy of the code amendment to the Contra Costa County Board of Supervisors for approval. Motion unanimously approved on the following vote: AYES: Members: Lucey, Menesini, Nejedly, Hockett NOES: Members: None ABSENT: Members: Boneysteele 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER: President Lucey stated that item7.a., Engineering, would be taken out of order becaus~ there were many members of the public present who wished to speak. ~.. 7. ENGINEERING: a. AUTHORIZE THE INCLUSION OF THE DESIGN OF A NEW TRUNK LINE IN THE FY 2004-05 CAPITAL IMPROVEMENT BUDGET (CIB) AS AN EXPANSION OF THE SCOPE OF DP 5919. ALHAMBRA VALLEY SEWERING Mr. Batts, General Manager, stated that there is growing interest in extending the public sewer into the Alhambra Valley. The District recently received 98 petitions from property owners in favor of studying the sewer extension. Twelve petitions were received against a sewer study. In addition, a developer has requested public sewer service for a proposed 23-home subdivision in the valley. The developer has offered to contribute $400,000 toward construction of a sewer to serve the valley. If this project does not go forward, the development would probably be served by a temporary pumping station. At the last meeting, the Board reviewed options for providing and financing such a project. District funds and the developer's contribution could be used to finance construction of the trunk sewer. The District would be reimbursed when property owners choose to connect to the sewer system. Mr. Batts introduced Mr. Curt Swanson, Environmental Services Division Manager, to give a brief presentation about extending sewer service to the Alhambra Valley. Mr. Swanson gave a summary of the various possible options that staff has looked at over the past couple of years for sewering the Alhambra Valley and a recent evaluation of how the project could be financed. The District has also received a letter from Mr. Ken Stuart of Contra Costa County Environmental Health noting that agency's support for providing sewer service to the valley. Mr. Stuart indicated he would send Mr. Sherm Quinlan of his agency to represent the County at the Board Meeting. In addition, Mr. Swanson received an email from a resident of the Alhambra Valley who was unable to attend the meeting. Mr. Swanson said that there are approximately 170 homes on septic tanks in the valley north of the intersection of Alhambra Valley and Reliez Valley roads, or a total of approximately 250 homes or properties in the valley. Public interest in extending the sewer system to the valley has ebbed and flowed over the years, and this interest has been heightened recently with the proposed development by Security Owners Corporation. The current schedule calls for homes to be ready for connecting to the 9-2-04 ..-- ------------.---...--...-.-----..-----.-.----.----..---.----- ----...----.. I I I I I I 37 sewer system in 2006. Because of the growing interest, staff prepared a Facilities Plan for the valley in October 2003 and presented it to the Board. There are two alternatives for sewering the valley: a temporary pumping station and force main, which would cost about $750,000 initially; and a permanent gravity sewer system which would start at Gilbert Lane and extend south to the intersection of Alhambra Valley and Reliez Valley roads. Staff believes that the permanent gravity sewer is the most beneficial long term alternative to serve the valley. The developer is willing to contribute toward the cost. The District has the financial ability to construct and finance the initial portion of the trunk sewer and has the legal authority to do so. Construction cannot proceed until the environmental review process is completed, however, the District should begin design work now in order to be prepared to take advantage of the developer's contribution. Mr. Swanson indicated the location of the proposed trunk sewer on a map. In summary, the engineering design work should begin now in order to obtain the needed rights of way. If the County approves the Environmental Impact Report, the District could take the lead on constructing the initial portion of the trunk sewer, with the developer contributing toward the construction costs. Properties would reimburse the District upon connection to the system. The estimated cost range per home is $23,000 to $26,000, including the property owner's share of trunk sewer construction, capacity fees, and private costs of extending a lateral and abandoning the septic tank. Staff is also asking the Board to approve including design of the trunk sewer in the 2004-05 Capital Improvement Budget and authorizing an additional $200,000 in the CIB so the Engineering Department can proceed with the design of the trunk sewer. Mr. Swanson presented a breakdown of the $200,000 cost. President Lucey called for comments from the public on the proposed project. Ms. Marie Olson of 22 Wanda Way asked Mr. Batts if he was assuming that 98 petitions received in favor of the sewer indicated overwhelming approval of it. Mr. Batts stated that he did not assume this and that the District sent letters to all the homeowners inviting them to attend this meeting to express their views. Ms. Olson asked if "the train was ready to pull out of the station", and President Lucey responded "No". The purpose of the letter sent to homeowners was to give everyone a chance to respond. The District is in the formative steps of deciding whether it should proceed further. Mr. Batts added that, whatever alternative was eventually chosen, the District would have to conduct an Environmental Impact Review. Ms. Olson asked if the rates she has paid over the years on her property in Concord have been contributing toward the District's cost of constructing the Alhambra Valley sewer. President Lucey responded that Concord is not part of the District but is served under contract. Ms. Olson asked a question about some language related to annexation in the Facilities Wastewater Plan. Mr. Kenton Aim, District Counsel, responded that the District could apply to the Local Agencies Formation Commission, or LAFCO, to annex Alhambra Valley properties into the District's service area, but that this would not mean the properties would necessarily be annexed into the City of Martinez. Mr. Matt Parkinen of 26 Wanda Way asked if he would be compelled to connect his properties to the sewer. Mr. Sherm Quinlan, Supervising Environmental Health Specialist for Contra Costa County stated that, if the property has a functioning septic system, the County has no interest in requiring the property to be connected to the sewer system. Mr. Parkinen asked if there was pending legislation that would affect this. Mr. Quinlan stated that AB8085 would not require a sewer connection but could include monitoring requirements for septic tanks. President Lucey stated that it is not this Board's intent to require anyone to hook up to the system. Mr. Parkinen asked if the rates paid on his property would be put toward the construction cost, and President Lucey said that they would, if the project goes through. Member Nejedly added that the ratepayers of Central San will fund the project, and as individual properties connect, they will pay their portion of the cost back to the District, so ultimately, the cost of construction is paid by the property owners who connect to the system. Mr. Ron Dalton of 30 Wanda Way asked how people were notified of this meeting. . President Lucey said that letters were mailed to 225 residents approximately two weeks ago. Several members of the audience offered copies of the letter. President Lucey 9-2-04 38 asked Mr. Dalton to give his name and address to Mr. Swanson so he could be added to the mailing list. Mr. Dalton said that people in the Alhambra Valley don't want the sewer and urged the District to conduct a survey to determine how many people wanted - to have the sewer. Mr. Dalton asked how the sewer would cross the creek near his property. Mr. Swanson responded that this issue would be included in the design process but that the most traditional approach would be for the pipe to daylight across the creek at a depth of four or five feet. No decisions have been made. Mr. Dalton expressed concern that the pipe would block the flow of water in the creek. President Lucey stated that it is impossible to say at this point, before there has been a preliminary study, how the pipe would cross the creek. Every attempt will be made to build the project, if approved, in a way that is not detrimental to properties, and that property owners will have opportunities to comment. I Mr. Mike Weymouth of 180 Gordon Way expressed opposition to the sewer system. He asked why the District was giving it further consideration since there had not been enough favorable petitions received. Mr. Batts explained that the favorable petitions received were insufficient to form a Local Improvement District as a funding mechanism but other alternatives are being considered. Mr. Ray Trebino of 2644 Reliez Valley Road spoke in favor of the sewer system. He believes it is an improvement over the current conditions. Mr. Ken Fivella of Briones Road spoke against the sewer system. He said ttfere is clearly not a majority in favor of the sewer system and he does not understand why the District is considering going forward with it. He questioned the cost information that had been presented and questioned why the District wanted to go forward with the project Mr. Bob Sparacino of 16 Wanda Way spoke in favor of the sewer system. He stated that the septic system limitations can cause problems with showers and flushing the toilet. Those who are against development should take up this issue with the County Planning Department, not the sanitary district. I President Lucey said that Paul and Cheryl Harbaugh of 175 Gordon Way did not want to speak but wanted to be on record as opposing sewers. Mr. Art Peterson of 5075 Alhambra Valley Road spoke in opposition to the sewer system. He said he does not have any problem with showers in his house and wondered why this issue keeps coming up every two years. He added that the developer will make millions of dollars. Ms. Laura Hurd of 157 Millthwait Drive spoke in opposition to development in the Alhambra Valley. There are too many people, too many cars, and too much stuff on the roads. Ms. Elaine Frank of 14 Millthwait Drive spoke in favor of the sewer system. She said there are problems with the septic system that cannot be fixed because the leach field is saturated, and there are adverse environmental and human health consequences. Ms. Gabriela Tigges of 156 Gordon Way spoke in favor of the sewer system. There are great benefits to be had, and it is inevitable that sewers will come to the Alhambra Valley. Mr. George Freschi of 132 Gordon Way spoke in favor of the sewer system. He has conducted two previous surveys of residents in the Alhambra Valley and said that, unfortunately, there was not enough support at the time. He asked the Board to consider extending the system to the homes on Gordon Way and Millthwait Drive. I Member Boneysteele entered the meeting at the hour of 2:57 p.m. Ms. Carlin Gill of 10 Wanda Way spoke in favor of the sewer system. Her septic system is currently working fine but it will eventually fail and she would rather hook up to the sanitary sewer than put in a new septic system. 9-2-04 I I I 39 Mr. Ronald Gill of 10 Wanda Way spoke in favor of the sewer system. Mr. Ben Peterson of 41 Millthwait Drive spoke in favor of the sewer system. He said he has no problems with his septic system at all except in the months of November through April. He cannot modify his property because of the limitations imposed by being on a septic system. He asked the Board to consider including Gordon Way and Millthwait Drive in the system. Ms. Kim Feragi (sp) of Wanda Way spoke in favor of the sewer system. She asked if the $400,000 to be contributed by the Busbys would include the connection fee for properties in the Security Owners development. President Lucey said it did not include the connection fee. Mr. Randy Ciampi of 5065 Alhambra Valley Road said the real issue is growth. He would hate to see growth in the Alhambra Valley. Mr. John Sparacino, a former mayor of the City of Martinez, spoke in favor of the sewer system. He encouraged the residents to take advantage of the opportunity to do their families a favor by connecting to the sewer system and adding value to their homes. Ms. Petal Turner of 114 Quail Hollow asked if people with functioning septic systems would be required to hook up to the sewer system if they sell their homes. President Lucey said they would not. Ms. Turner asked what the definition of "septic tank failure" was. President Lucey said the District does not deal with septic tanks and it is up to the Health Department to define septic tank failure. Mr. Bob Hadager (sp) of Martinez spoke in favor of the sewer system. He is holding off on building a home on his property on Quail Lane and hoping the sewer will go through. He said that Alhambra Creek smells of raw sewage after the rain. Ms. Diane Howell of 14 Millthwait Drive spoke in favor of the sewer system. She said it will improve the quality of life. She does not allow her guests to flush and does not have parties in her home because people can't flush. Mr. Bob Sharman spoke in favor of the sewer system, He has worried for years about his septic system. Ms. Janie Oldenfield (sp) expressed concern that promises would be made but not honored. She is in favor of the sewer but is concerned about traffic on Alhambra Valley Road and about the quality of life. Mr. Hal Olson, President of the Alhambra Valley Improvement Association said that a majority of people in the Alhambra Valley are not in favor of the sewer system and questioned why the District was considering the project. He suggested the District conduct a proper survey of residents to see if they wanted the sewer. President Lucey asked for a non-binding show of hands of those in favor of proceeding or opposed to proceeding. Member Boneysteele asked for an estimate of the results of the show of hands. President Lucey said it was about 50/50. Member Menesini said that his family had lived in Martinez for many years. He has studied the creek in the Alhambra Valley and there is contamination of the creek. He said that the District is here to serve the public and he thanked everyone for attending the meeting, stating that, in the future, sewers are inevitable in the Alhambra Valley. Member Hockett stated that this issue was emotionally charged. One of the purposes of this meeting is for the public to communicate their views. The decision made here today will not make everyone happy. The District Board has to protect the public health and the environment. Member Hockett stated that she respects all opinions and intends to vote for the sewer because it is for the overall public good. 9-2-04 .~-----.-_._.__.__..._-_._---_._...._._-_...._....._..-... 40 Member Boneysteele apologized for arriving late. He missed some of the comments. He recounted his history with the District and referred to a time when there was a controversial proposal to annex the City of Martinez to the District. Member Boneysteele stated he feels the sewer is inevitable in the Alhambra Valley, as is growth. The District must accommodate that growth. Member Boneysteele stated he maintains an open mind on the issue but is leaning toward voting in favor of it. President Lucey stated that he insisted staff send the letter to all residents inviting them to this meeting, stating the comments made today helped him make a decision. Homeowners having the option of connecting or not connecting makes this a simple decision. President Lucey stated he is very sympathetic to people who can't flush in their homes, and he is concerned about pollution in the creek. People who are against development in the Alhambra Valley should fight growth in the proper forums. People who do not want to hook up to the sewer system do not have to. President Lucey read from a letter written by Ken Stuart of the Environmental Health Department which states that a sewer system is the best option for the Alhambra Valley. President Lucey stated he intends to vote in favor of proceeding with the preliminary design. Member Nejedly said that he grew up in a house with a septic system and there was constant concern about doing laundry and flushing. He now lives in a house on the sewer system and appreciates the improvement. Boards such as Central San's have to make decisions like this that will upset some people. Member Nejedly stated that he i~ not pro-development. This is a tough decision for him because he sympathizes with. people who don't want to see growth. The only other alternative is a pumping station, and the District's policy is to avoid pumping stations where possible. All septic systems in the Alhambra Valley will eventually fail. If the option is to put in a new septic tank and there are no environmental problems then that's fine, but many of the houses do not have that option. With sewers, people can flush and do what's right. Member Hockett referred to houses on Gordon Way and asked staff to take a look at options to serve that area. It was moved by Member Hockett and seconded by Member Menesini that the inclusion of funds for design of an Alhambra Valley gravity trunk sewer from the terminus of the existing sewer at Gilbert Lane to the Alhambra Valley Road/Reliez Valley Road intersection in the CCCSD FY 2004-05 Capital Improvement Budget, as an expansion of the scope of DP 5919, be authorized, and that staff be authorized to proceed with trunk sewer design. There being no objection, the motion was unanimously approved. BREAK At 3:46 p.m., President Lucey declared a recess, reconvening at the hour of 3:56 p.m. with all parties present as previously designated. At this time, President Lucey reverted to the order of the agenda. 6. REPORTS a. GENERAL MANAGER 1) Mr. Batts, General Manager, reported that very little was happening in Sacramento with the State budget. The last difficulties with the budget are being resolved and the Governor's reorganization plan is being studied. Special districts are awaiting the final allocation calculation for ad valorem tax revenue. In this year's budget it was estimated the District would lose 50 percent of its ad valorem tax revenue. That estimate is still pretty good. The actual allocation formula is 40 percent, but enterprise special districts will be making up any shortfall in the special district total. 2) Residents and businesses were notified of the 2004-05 Sewer Service Charge last spring via mass mailings and the Pipeline article. Billing information was recently submitted to the County Auditor-Controller to be 9-2-04 I I I I I I 41 placed on the County tax rolls. The revenue collected is $43,208,132. Over 105,000 parcels are being billed, and of this number, only 8 parcels required corrections or edits. The system is working very well. Staff has worked hard to ensure the accuracy and timeliness of the data submitted to the County. Mr. Batts introduced Engineering Assistant III Molly Mullin and asked her to give the Board a brief synopsis of the top customers. Ms. Molly Mullin, Engineering Assistant III, stated that this was a very routine year. As forecast with the 3 percent budget increase, everything is going along very well. There is not much change in billings to the top customers. The item of real interest is the rate change. The residential Sewer Service Charge is now $280 per living unit. The minimum for commercial property is $292, the difference being the pollution prevention surcharge. There was a 3 percent rate increase and properties are increasing mainly because of growth in the Dougherty Valley. Staff is seeing those connections come into the Permit Counter. A fourth water company now reports data for the Sewer Service Charge, the Dublin San Ramon Services District. Those are the big changes for the year; otherwise, it is a very routine year. Out of 105,000 properties only eight required corrections. With our contractual assessment district rolls, there were no corrections. Member Menesini requested a copy of Ms. Mullin's data. He said he did not see Shadelands on the list of big customers. Ms. Mullin stated they are not one of the biggest customers. Member Boneysteele asked if Kaiser Shadelands was included in the Shadelands data. Ms. Mullin said they were. Member Hockett asked about properties that change from one type of business to another and how the District is informed of this. Ms. Mullin said the District has a variety of ways of finding out about it including reverse directories, other public agencies, and data from water companies. 3) The San Francisco Bay Regional Water Quality Control Board plans to adopt the long-awaited Mercury Total Maximum Daily Load (TMDL) Basin Plan amendment on September 15th. This and a subsequent amendment to our NPDES Permit will govern mercury discharges to the Bay and will mandate some ongoing studies by all local contributors of mercury to the Bay. Mr. Batts introduced Mr. James Kelly, Director of Operations, and ~ asked him to provide a brief update on the TMDL and how it will affect the District. Mr. James Kelly, Director of Operations, stated that he would give a brief summary and offered to meet with any member of the Board who would like more details. The Regional Board is looking at the Mercury TMDL report for the third time and will consider the plan for adoption on September 15th. Mr. Kelly stated that he has been involved in a lot of discussions in the last four months with the Regional Board, stormwater agencies, and environmentalists to work out something that will be acceptable while protecting the environment. The problem is that the Water Quality Objectives are being exceeded. Links between fish tissue concentrations and water quality objectives are questionable. There are legacy sources such as gold mining and there is concern about cross- media impacts from the air. The Office of Environmental Health Hazard Assessment has issued an advisory on fish consumption. Mr. Kelly offered to have a separate discussion on this topic. 9-2-04 42 5) 6) 9-2-04 They would like to address this issue by limiting mercury loads to the Bay. Mr. Kelly described how different sources are treated in the allocation process. Individual treatment plants that exceed their allocation would be. subject to enforcement action. The District's allocation is 2.23 kg/year. There are concentration triggers as well, and the District would .have to look at how the plant was functioning if a trigger was exceeded. It looks as if the District can grow almost to build-out with the allocation. This is very good news. With regard to concentration triggers, it appears that the District could occasionally have a one-day event that reaches the concentration trigger. If the District surpasses both the mass allocation and the concentration trigger, the causes of the exceedance would have to be evaluated, as would the effectiveness of existing control measures, and the feasibility and effectiveness of improving plant performance. . I The Basin Plan also requires the District to continue to control mercury sources, improve the measures already being taken, and contribute toward the Regional Monitoring Program. The Basin Plan would also require the District to take a look at local effects, or the chemical makeup of our mercury emissions. In conclusion, the District should be able to meet the requiremênts.: It will require ongoing control of sources, the dental program, and the household hazardous waste program. This is a long-term program and it will change. The District is getting some recognition for the household hazardous waste program, which is important when considering sources of mercury to the plant. At some point, air emissions may come under consideration, not because of air limits but because of concerns over bioaccumulation. The District is removing a lot of mercury from the environment at the household hazardous waste facility. It is a reasonable program and does not put the District into compliance jeopardy. Mr. Kelly answered questions. Mr. Batts added that this is really good news for treatment plants and that Mr. Kelly has been very active in working on this issue. I 4) Mr. Batts, General Manager, announced that, one of the options forthe Solids Handling Plan is to take excess sludge to the East Bay Municipal Utility District. On Wednesday, September 25th the District took a tanker truck of sludge to EBMUD where it was unloaded and put into their digesters for treatment. From there it would go to either land application or to a landfill. Mr. Swanson added that the load was transported by Phillips Services. Member Menesini asked how much sludge EBMUD could take. Ms. Ann Farrell, Director of Engineering, said the District only needs them to take ten to twenty percent. Staff has also asked EBMUD if they can take the entire sludge production in the event of a furnace shutdown. Staff is still studying the issue and will probably do another test load. EBMUD will charge by the gallon and that cost Will be compared to other alternatives. Member Menesini asked where the sludge was loaded. Ms. Farrell stated that it was loaded at the centrifuge after dewatering. Mr. Batts, General Manager, announced that from September 4 to September 24 he will be on vacation. Director of Operations James Kelly and Director of Engineering Ann Farrell will be standing in for him and Mr. Kelly will conduct the September 16 Board meeting. I Mr. Batts, General Manager, announced that next year, CASA plans to hold its second Washington D.C. conference on April 4 through 6, 2005. They are encouraging at least one Board member from every agency to attend. ----.---.---.. -.----....---- . I I I 43 7) Mr. Batts, General Manager, announced that all major construction activity on Happy Valley Road will be finished today. Ranger Pipeline is doing the final paving, and will come back to do the striping. This was a difficult project where the District had to go from pipe bursting to open cut, with some significant impacts on both residents and traffic in the area. b. Mr. Batts, General Manager, announced that the burner tip price for natural gas has climbed over the last year from $4.90 to $6.65 per decatherm. The District purchased 60 percent of the required natural gas for this fiscal year last year and budgeted $5.20 per decatherm. Natural gas prices have been pacing crude oil prices and it appears they will not be dropping although they traditionally drop at this time of year. Staff will be following prices closely and looking for an opportunity to buy in the next two months at the best possible price. The District will probably pay at least $6.00 per decatherm and will probably exceed budget for natural gas by about $150,000. COUNSEL FOR THE DISTRICT 8) None c. SECRETARY OF THE DISTRICT 1) Ms. Joyce E. Murphy, Secretary of the District, announced that she would be on vacation from September 4 to September 24. Ms. Julie Lopez, Administrative Assistant, will attend the September 16 Board Meeting. Ms. Murphy recognized Executive Assistant Earlene Millier for her assistance in taking minutes at the September 2, 2004 Board Meeting using the newly installed digital recording system. d. BOARD MEMBERS 1) Member Menesini provided input on the candidates for the California Special Districts Association Board of Directors 2004 election and recommended that the District's vote be cast for Ms. Sherry Sterrett, of the Pleasant Hill Recreation and Park District. She has attended all the meetings and is very involved in Association business. There was no objection to this recommendation. 2) Member Menesini, Chair of the Outreach Committee, reported on the August 26,2004 meeting. Nominees for the District's Pollution Prevention Awards were presented and reviewed by Members Menesini and Nejedly, and based upon information presented by staff, winners were selected. The September 16 Board Meeting will recess to a reception for the award recipients. The Committee reviewed the Outreach Report for April through June, 2004, and decided to make a $500 contribution to the Contra Costa County Teacher of the Year award program. 3) Member Boneysteele, Chair of the Budget and Finance Committee, reported that he and Member Menesini reviewed the expenditures and found them to be reasonable. The Committee also received the internal audit report. It was moved by Member Boneysteele and seconded by Member Menesini that the Expenditure List dated September 2, 2004, including Self Insurance Check Nos. 102134 to 102142, Running Expense Check Nos. 151431 to 151843, Sewer Construction Check Nos. 26914 to 26999, Payroll Manual Check Nos. 48985 to 48989, and Payroll Regular Check Nos. 55107 to 55158, be approved as recommended. There being no objection, the motion was unanimously approved. 9-2-04 44 President Lucey requested that Mr. Swanson send him a map of the Alhambra Valley area showing Gordon Way and Millthwait Drive. 7. ENGINEERING a. AUTHORIZE THE INCLUSION OF THE DESIGN OF A NEW TRUNK LINE IN THE FY 2004-05 CAPITAL IMPROVEMENT BUDGET CIB AS AN EXPANSION OF THE SCOPE OF DP 5919, ALHAMBRA VALLEY SEWERING b. AUTHORIZE SUPPLEMENTAL AUTHORIZATION OF 150000 FROM THE SEWER CONSTRUCTION FUND TO THE 2004-05 GENERAL IMPROVEMENTS CONTINGENCY ACCOUNT AND AUTHORIZE THE GENERAL MANAGER TO ALLOCATE 150000 FROM THE GENERAL IMPROVEMENTS CONTINGENCY ACCOUNT TO THE KIEWIT PROPERTY DEVELOPMENT PROJECT. DP 8210 I This item was taken out of order earlier in the agenda. President Lucey stated that this project, at the moment, includes conducting a study of filling the property and no additional work beyond that. Mr. Batts, General Manager, stated that the Board approved the concept of filling in th!3 Kiewit parcel with clean fill to raise the parcel's elevation to street level. This ~ . . authorization would allocate the $150,000 needed to study and design the project and obtain required permits. It is believed the filling of the parcel would generate income and prepare the parcel for possible future tenant use. Both the bidding of the project and any future tenant use would come back to the Board. Since this project was not included in the 2004-05 Capital I mprovement Budget, a contingency authorization is needed. Staff recommends that the Board approve an authorization of $150,000 from the Sewer Construction Fund to complete the study. President Lucey added that there have already been two unsolicited offers for filling the property and so an RFP will be put out to see if there are additional parties interested. I It was moved by President Lucey and seconded by Member Menesini to authorize a supplemental authorization of $150,000 from the Sewer Construction Fund to the 2004- 05 General Improvements Contingency Account and to authorize the General Manager to allocate $150,000 from the General Improvements Contingency Account to the Kiewit Property Development Project, DP 8210. There being no objection, the motion was unanimously approved. 8. BUDGET AND FINANCE a. REVIEW AND APPROVE THE STATEMENT OF INVESTMENT POLICY Mr. Batts, General Manager, stated that California Government Code Section 53646 requires an annual rendering of a statement of investment policy to the governing Board for review and approval. Controller Debbie Ratcliff and District Counsel Kent Aim reviewed the 2004 legislative amendments and found no required changes needed for the District's investment policy, so staff is asking for Board approval. It was moved by President Lucey and seconded by Member Boneysteele that the Statement of Investment Policy be approved. There being no objection, the motion was unanimously approved. I Member Menesini said he would like the Board to review the District's investment policy. After discussion, President Lucey suggested the Budget and Finance Committee review the investment policy. b. ADOPT A RESOLUTION ESTABLISHING THE 2004-05 APPROPRIATIONS LIMIT IN ACCORDANCE WITH ARTICLE XIIIB OF THE CALIFORNIA CONSTITUTION 9-2-04 --------- -.-.-- ---------.--.-----. ... I I I 45 Mr. Batts, General Manager, stated that the District is required to establish its appropriations limit in accordance with Article XIIIB of the California Constitution. This limit is increased annually by a factor comprised of the change in population combined with either the change in California per capita personal income, or the percentage change in the local assessment roll due to local nonresidential construction. The Board must select which factor to use. It is recommended that the Board choose the local assessment roll due to nonresidential construction for use in this calculation and adopt a resolution establishing the appropriations limit to be $58,924,299 for fiscal year 2004- 2005. It was moved by Member Menesini and seconded by Member Boneysteele that Resolution No. 2004-058 be adopted, establishing the Sewer Construction Fund appropriations limit in the amount of $58,924,299 for the 2004-05 fiscal year, in accordance with Article XIII B of the California Constitution; select the change in the local assessment roll due to local nonresidential construction, for use in computing the appropriations limit. There being no objection, the motion was unanimously approved. President Lucey suggested that Item 11., Closed Session, be taken out of order as Member Nejedly has advised that he must leave the meeting early. Hearing no objection, President Lucey proceeded to Item 11., Closed Session. 11. CLOSED SESSION a. EXISTING LITIGATION Conference with Legal Counsel on existing litigation pursuant to Subdivision (a) Section 54956.9 of the Government Code - William H. Dickerson, Jr. and Marjorie Dickerson v. Terry and Kathleen McGee, Central Contra Costa Sanitary District, et al- Contra Costa County Superior Court Consolidated Case No. C-03-02918 b. SIGNIFICANT EXPOSURE TO LITIGATION Conference with Legal Counsel on anticipated litigation - Significant exposure to litigation pursuant to Subdivision (b) Section 54956.9 of the Government Code . One potential matter At 4:47 p.m., President Lucey declared the closed session to discuss litigation pursuant to Government Code Sections 54956.9(a) and (b) as noted above. At 5:12 p.m., President Lucey concluded the closed session and reconvened the meeting into open session. ~ Having previously requested to be excused, Member Nejedly left the meeting at the hour of 5:13 p.m. 12. REPORT OF DISCUSSIONS IN CLOSED SESSION No decisions were made or votes taken in Closed Session that require reporting at this time. At this time, President Lucey reverted to the order of the agenda. c. NEAR TERM SAVINGS REPORT Mr. Batts, General Manager, stated that the next three items relate to the final fiscal year audited accounts. Mr. Batts will report on the Near Term Budget Savings achieved by staff in anticipation of the loss of ad valorem revenue. Then Controller Debbie Ratcliff will present the Adjusted Financial Statements for the fiscal year ended June 30, 2004. The Board reviewed the preliminary year-end financial statements at the last Board meeting. These are adjustments such as booking depreciation and processing late-arriving invoices. Director of Engineering Ann Farrell will then present a year-end status report on the capital program. She will focus on total expenditures and revenue 9-2-04 --------.------------.--.--------..-....-----.....-.-.---'...---. ..--. 46 as well as discuss some of the larger projects completed during the year. Her presentation will provide the Board with a summary of how capital funds were spent in fiscal year 2003-04. Ms. Farrell will also address an update to the Capital Improvement . Budget for the current fiscal year that is needed to reflect the carryover of funds from the previous year's authorizations. Mr. Batts stated that near term savings are the savings over budget achieved to address the anticipated loss of ad valorem tax revenue. During the 2002 State budget crisis, staff made recommendations to the Board for ways to control costs and periodically reports on the savings. Staff endeavored to save $1,000,000 to $1,500,000 by controlling costs in various areas. The District retained the ad valorem revenue, and the cost controls have put the District in a good financial position. The District saved over $3,000,000 in 2002-03, and another $1 ,600,000 in 2003-04 in addition to paying $1,600,000 on the Paulson settlement, which was not budgeted. The District also saved money in the Capital Improvement Program by deferring projects. Mr. Batts gave a summary of where the savings have been realized, including unfilled positions, temporary employees, overtime, travel and conferences, energy costs, and chemicals. On the capital side, savings have been realized by deferring projects and by re-evaluating projects to see if there was a more cost effective way to do them. Due to the retention of ad valorem tax revenue and new connections in the Dougherty:. . Valley, revenue was higher than budgeted in 2003-04. Because of higher revenues and the O&M and capital savings, reserves have increased from $41 million in 2001 to $62 million in 2004. President Lucey said that it appeared the District did not need a rate increase this year after all. Mr. Batts said that cost saving measures anticipated losing the ad valorem tax, and this could still happen. Also, savings at this level cannot be sustained. Energy costs will have a large impact on the budget. Maintenance costs will continue to rise, particularly at CSO, due to the regulatory program on sanitary sewer overflows. Near term savings are anticipated to end in 2005-06. An economic slowdown and inflation will also have an effect. The District has an unfunded liability in the retirement system of $26 million. The cost of retiree medical benefits will rise. The District also has $34 million in outstanding debt. Mr. Batts said that the January budget workshop would continue to focus on costs, areas'for future savings, and future liabilities. The capital plan will also analyze future anticipated costs and revenue potential. d. RECEIVE ADJUSTED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 2004 Ms. Deborah Ratcliff, Controller, presented a comparison of Operations and Maintenance (O&M) June 30, 2004 preliminary revenues and expenses compared to June 30, 2004 adjusted revenues and expenses. Preliminary total revenue was $44,327,990 compared to adjusted revenue of $44,357,857 for a favorable variance of $29,867. Preliminary total expense was $41,989,326 compared to adjusted expense of $42,426,805 for an unfavorable variance of $437,479. Preliminary revenue over expense was $2,338,664 compared to adjusted revenue over expense of $1 ,931 ,052 for an unfavorable variance of $407,612. Ms. Ratcliff noted that there were no audit adjustments to these figures. Ms. Ratcliff presented a comparison of actual and budgeted O&M results. Actual O&M revenue of $44,357,857 was $1,372,357 more than budget representing a 3.2 percent favorable variance. Actual O&M expense of $42,426,805 was $1,606,592 less than budget, representing a 3.6 percent favorable variance. As a result, the O&M Fund balance will be increased by approximately $1.9 million, bringing the O&M Fund balance to $10.9 million at June 30,2004. Ms. Ratcliff reported on major expense categories over or under budget as follows: . Labor - $571,662 Chemicals - $304,639 . 9-2-04 I I I I I I 47 . Utilities - $244,540 Hauling and Disposal - $300,115 Outside Services - $284,283 Other - $216,280 Repairs and Maintenance - (over budget) $378,848 . . . . At 5:33 p.m., President Lucey turned the meeting over to President Pro Tem Hockett and left the meeting. CAPITAL IMPROVEMENT BUDGET YEAR END REPORT e. Ms. Ann Farrell, Director of Engineering, stated that the District originally planned to spend about $26 million for capital projects in fiscal year 2003-04. Because of the anticipated loss of ad valorem revenue, $8 million worth of projects were deferred. In January of 2004, the District learned that it would not lose the revenue this year and tried to ramp up spending on projects with a goal of $20 million. The final expenditure number for 2003-04 was just under $20 million. Ms. Farrell reviewed the major capital projects for the year, and reviewed major projects that were deferred in order to save money. President Pro tem Hockett stated that it was important to recognize that project deferrals were one of the reasons for the increase in reserves. Mr. Batts stated that a public agency's reserve amount is subject to interpretation. The District currently has more money in reserves than it did at one time, but reserves are still in a prudent range. President Pro Tem Hockett stated that it would be good to inform the Board, when speaking of the reserve amount, that a significant portion of that money is for projects that were deferred to future years and is still needed. Member Menesini stated that he is concerned that oversight agencies might view the District's reserve amount as excessive. Mr. Batts said that staff, with the Board's input, will look at spending down reserves through implementation of deferred projects to forestall this. Ms. Farrell reviewed the revenue side of the capital program. Almost $12 million of capital revenue more than budgeted was received, primarily due to the receipt of approximately $8 million in unbudgeted ad valorem tax revenue. The District started with $48.6 million of capital funds available and added $7.7 million for a total of $56 million. Projects that were slowed down last year are being accelerated this year, and the District is trying to spend about $22 million to $23 million on needed projects, in an effort to spend down the reserves. f. -APP~OVE UPDATE TO THE CAPITAL IMPROVEMENT BUDGET SUMMARY (TABLE 1) FOR FISCA!- YEAR 2004-2005 TO R~ ACTUAL CARRYOVER FROM FISCAL YEAR 2003-2004 AND AUTHORIZE RESULTANT CHANGE IN CAPITAL IMPROVEMENT BUDGET FOR FISCAL YEAR 2004-2005. Ms. Farrell stated that, when the Capital Improvement Budget is developed each year, an estimate is made of funds to be carried over to the next fiscal year. This year the carryover was underestimated and must be revised in order to fund the planned projects. The Board is being asked to approve an update to Table 1 of the Capital Improvement Budget that reflects the increased carryover. It was moved by Member Boneysteele and seconded by President Pro Tem Hockett that the update to the Capital Improvement Budget Summary (Table 1) for Fiscal Year 2004-05 to reflect actual carryover from Fiscal Year 2003-04 be approved and the resultant increase to the total proposed authorization in the Capital Improvement Budget for Fiscal Year 2004-05 be authorized. There being no objection, the motion was approved with President Lucey and Member Nejedly being absent. 9. EMERGENCY SITUATIONS REQUIRING BOARD ACTION None 9-2-04 48 10. ANNOUNCEMENTS/SUGGESTIONS FOR FUTURE AGENDA ITEMS None 11. CLOSED SESSION a. EXISTING LITIGATION This item was taken out of order earlier in the agenda. b. SIGNIFICANT EXPOSURE TO LITIGATION I This item was taken out of order earlier in the agenda. 12. REPORT OF DISCUSSIONS IN CLOSED SESSION This item was taken out of order earlier in the agenda. 13. ADJOURNMENT There being no further business to come before the Board, President Pro Tem Hockett adjourned the meeting at the hour of 5:45 p.m. . President of the oard of Direct rs, Central Contra Costa Sanitary istrict, County of Contra Costa, State of California COUNTERSIGNED: I I 9-2-04