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Home My WebLink AboutBOARD MINUTES 04-10-08 MINUTES OF THE SPECIAL BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON APRIL 10, 2008 The District Board of the Central Contra Costa Sanitary District convened in a special meeting at its regular place of meeting at the District Offices at 5019 Imhoff Place, Martinez, County of Contra Costa, State of California, at 2:00 p.m. on April 10, 2008. President Lucey called the meeting to order and requested that the Acting Secretary call roll. 1. ROLL CALL PRESENT: Members: Hockett, McGill, Menesini, Nejedly, Lucey ABSENT: Members: None a. PLEDGE OF ALLEGIANCE TO THE FLAG Board and staff joined in the Pledge of Allegiance to the Flag. 2. PUBLIC COMMENTS None. 3. REPORTS AND ANNOUNCEMENTS a. One written announcement was distributed regarding the District Sale of Surplus Computers and Equipment to be held on April 12, 2008. 4. CAPITAL PROJECTS BOARD WORKSHOP a. OVERVIEW OF THE FISCAL YEAR 2008-2009 DRAFT CAPITAL IMPROVEMENT BUDGET AND DRAFT 2008 TEN-YEAR CAPITAL IMPROVEMENT PLAN General Manager James Kelly introduced Ms. Ann Farrell, Director of Engineering, stating that she will present an overview of the Fiscal Year 2008-2009 Draft Capital Improvement Budget (CIB) and the Draft 2008 Ten-Year Capital Improvement Plan (CIP). Ms. Farrell gave an overview of her presentation, stating that she will review the Board’s role in Capital planning and future challenges, review the planned 2008-09 Capital expenditures, review individual programs and selected 2008/09 projects, revisit future planning challenges, and review the next steps in the Capital budgeting process. Book 57 - Page 148 Minutes of April 10, 2008 Ms. Farrell stated that the Board’s primary role is to authorize the budgets for the various Capital Programs. She stated that total preliminary required authorization for the 2008-09 fiscal year is $62,249,000. The required authorization is estimated based on projections for the funds carried over from previous years. Twice last year staff had to request from the Board additional authorizations to the General Improvements Plan because the actual carryover was different from the estimate. It is proposed this year that staff come back to the Board in August when fiscal year 2007-08 actual expenditure data is available and request a new authorization that includes the actual carryover. This should minimize the need to authorize supplemental program funds during the fiscal year. Ms. Farrell stated that November 2008 will be a critical decision point for the Capital Program for a number of issues 1) If Ad Valorem tax is lost, how will this impact the Capital Program? 2) Should the Collection System Renovation Program be expanded or cut back? 3) Should the air emissions mercury removal project be constructed? 4) Should projects be added to reduce green house gas emissions? and 4) based on the Asset Management Plan, should the Treatment Plant Renovation Program be increased? COLLECTION SYSTEM PROGRAM Ms. Farrell reviewed the Collection System Program. The total Collection System Program expenditures are budgeted at $22,355,000. This represents approximately 57 percent of the total budgeted capital expenditures for this year. Because of the A-Line Project, about 56 percent of the Collection System Program expenditures are for expansion, which is not typical. This fiscal year the renovation program represents only 37 percent of the Collection System Program expenditures. Ms. Farrell gave an overview of the A-Line and Concord Joint Project and schedule. The estimated cost for this project is approximately $22 million, with $11.6 million being the City of Concord’s share of the cost. The schedule has been delayed because of a 6-month delay in receiving the tunneling machine. There will be a Board tour scheduled when the tunneling machine is on site. Ms. Farrell stated that approximately 50 percent of the Collection System Program Budget over the next 10 years is devoted to the Renovation Program. Over the last 20 years, the program has been gradually increasing and has doubled in size from approximately $4 million per year to $8 million per year. Extrapolation of TV results indicates that approximately 100 miles of 6, 8, and 10-inch sewer mains still need to be renovated. The plan is to renovate 46 miles in the next 10 years. This will leave 54 miles remaining after the next ten years unless the rate of renovation expenditures are increased or cost per mile decreases. Also, sewers will continue to deteriorate. Staff will be developing a report to the Board for the November 2008 CIB Workshop regarding “Right Sizing” of the Renovation Program. Book 57 - Page 149 Minutes of April 10, 2008 TREATMENT PLANT PROGRAM Ms. Farrell stated that the Treatment Plant Program focuses mainly on renovation. In the next ten years there is only one capacity project, which is the Primary Expansion Project. This is planned for years nine and ten. Treatment Plant Asset Management is a large project scheduled for this year to develop a more analytical approach to condition assessment and renovation of the treatment plant assets. Ms. Farrell reported on mercury removal, noting that this is still a potential regulatory challenge, although effluent limits are achievable for the short term. The dental amalgam program has been very effective in reducing mercury in the plant effluent. She stated that the final mercury effluent permit limit is now a monthly average of 66 ppt. CCCSD’s actual maximum monthly average mercury level in the effluent for this year was 24 ppt. There is also a calculated annual average effluent limit of 41 ppt based on mass. The mass limit gets lowered every 10 years. By the year 2028 that number will be cut in half to approximately 20 ppt annual average. CCCSD’s actual annual average for last year was 19 ppt. Thus, as we approach the year 2020, there may be a need for a project to reduce mercury in the effluent. There is also a concern that tightening air regulations may lead to a need to reduce mercury in the incinerator air emissions in the future. Staff is continuing the Incinerator Dry Scrubber Mercury Removal Project, at least through the pilot plant and predesign stage. In November 2008, when the pre-design is complete, the decision of whether or not to construct the Mercury Removal Project will need to be made. It is likely that the decision at that time will be to defer project construction until air or water regulations require it. The Ten-Year Treatment Plant Capital Improvement Program does not budget for projects to respond to climate change and the California Greenhouse Gas (GHG) Law, AB 32. The concept of the law is to reduce statewide the GHG emissions to 1990 levels by 2020, which is approximately a 25 percent reduction. The State is still working on the regulations. Reporting will be required in April 2009. The actual regulations will be in place and enforceable in January 2012 and there is a nine-year period to comply, until December 31, 2020. The District is trying to be proactive in projecting what might need to be done and also anticipating the GHG emissions of new projects. In order to reach the goal of 25 percent reduction, the District could reduce its energy use, use alternative forms of energy, and/or purchase carbon credits on the open market. The District has conducted two prior energy conservation studies (one in 1990 and one in 1996). Although the resulting recommended energy savings strategies have been implemented, there still may be more possible energy savings, and consequently the District is planning another energy conservation study. Book 57 - Page 150 Minutes of April 10, 2008 District staff completed an alternative energy study in February 2008, evaluating 15 different alternative energy technologies. There are four recommended options for additional study, these include: solar at plant, solar at remote sites, bio diesel, and purchase of green power. The issue is that our current co-generation system is a relatively inexpensive source of power compared to solar. Nonetheless, it may get to the point that the District would have to use solar instead of co-generation to reduce GHG emissions. A consultant will be reviewing the alternative energy analysis which was completed by staff. The next steps are to monitor AB 32 regulatory development; submit 2008 inventory to the California Air Resources Board in April 2009 per regulations; complete update of energy conservation study; develop potential scenarios for meeting the anticipated reductions; analyze GHG impacts of future projects in CIB; and follow development of carbon trading markets. RECYCLED WATER PROGRAM Ms. Farrell stated that there are limited funds budgeted this year for the Recycled Water Program, but money is being invested in studying industrial recycled water. Four potential industrial recycling concepts are currently being evaluated. These include: 1) CCCSD serving a power plant in East County through abandoned pipeline; 2) Contra Costa Water District (CCWD) serving a power plant in East County from raw water canal and CCCSD serving local refineries; 3) CCCSD serving a power plant on District site; and 4) CCWD transferring water to other user and CCCSD serving local refineries. GENERAL IMPROVEMENTS PROGRAM Ms. Farrell gave an update on the Collection System Operations Department Facility Improvements Project, stating that this is the largest part of the General Improvements Program. The property has successfully been consolidated into one parcel from multiple parcels at the request of the City of Walnut Creek. The Project is on schedule. b. REVIEW DRAFT INFORMATION TECHNOLOGY DEVELOPMENT BUDGET FOR 2008-2009 Information Technology Administrator Mark Greenawalt provided an overview of the Information Technology (IT) Development Budget which is broken into three sections – Current 2007-08 Budget; Proposed 2008-09 Budget; and Future Projects. Mr. Greenawalt stated that the 2007-08 budget was $668,000, and those funds have provided for the continuation of the personal computer and server replacement program; replacement and upgrades of engineering support hardware and software; upgrades to Collection System Operations Department data center; upgrades in network center; storage area network upgrades; and Microsoft office upgrade. Book 57 - Page 151 Minutes of April 10, 2008 Remaining 2007-08 projects include internet website development; Household Hazardous Waste Facility Visitor Management System; remote access security; source control inspection upgrade; permits document imaging backlog; Network Upgrades – Phase 1 (replacing network switches); and Laboratory e-reporting upgrade. The proposed 2008-09 Budget is $690,000 and will include PC, laptop and server replacement; Engineering Support hardware and software upgrades; Network Upgrades – Phase 2; IBM AS400 server replacement; Laboratory Information Management System e-reporting replacement; continue additions to storage area network; SCADA server replacement; and installation of network and telecom at the annex building. SUMMARY Ms. Farrell reviewed the expenditure recommendation for the year of $39 million which is higher than the historical average. Consequently, the District will not have adequate staff for inspection for this year’s construction season. It is estimated that five additional contract inspectors will be needed, one of which is District retiree Tom Trice. Ms. Farrell stated that this year revenues are very close to expenditures, mainly because a large portion of the A-Line Project is reimbursable by the City of Concord. Comparing revenue to expenditures, it is expected that the Sewer Construction Fund balance will be drawn down by less than $1 million. There is a chance that the current State budget crises could result the District losing part or all of the Ad Valorem Tax revenue, which represents a significant percentage of the Capital revenue. If the District did lose Ad Valorem Tax, the Sewer Construction Fund balance is adequate to fund the program for several years. Because the bid climate is excellent at this time and the bids for many needed projects are or will likely be coming in lower than estimated, staff recommends proceeding with planned Capital Program at this time and reviewing it again at the November 2008 Capital Budget and Plan Workshop. An authorization of $62,249,000 will be requested at the June 2008 Board Meeting. Staff plans to return to the Board in August 2008 to formally ask for a reauthorization using the actual carryovers. President Lucey inquired about the possibility of using District land for solar and/or wind power. Ms. Farrell stated that the District is hiring an energy consultant to review staff analysis of alternative energy opportunities. Member Menesini asked if we know how other Districts are handing the greenhouse gas issue and could this information assist the District? He also requested staff to stay up to date regarding potential future actions of the Regional Water Quality Control Board and other regulatory agencies and how these actions might affect the budget. Book 57 - Page 152 Minutes of Apri/1 0, 2008 5. ADJOURNMENT There being no further business to come before the Board, President Lucey adjourned the meeting at the hour of 2:59 p.m. ~;t~ Gerald R. Lucey President of the Board of Directors, Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: a&~ Elaine R. Boehme Secretary of the Central Contra Costa Sanitary District, County of Contra Costa, State of California Book 57 - Page 153