Loading...
HomeMy WebLinkAboutBOARD MINUTES 08-21-03 13 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON AUGUST 21,2003 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 2:00 p.m. on August 21, 2003. President Nejedly called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Menesini, Boneysteele, Lucey, Hockett, Nejedly 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. 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. Authorization was given for Proposed Annexation (P.A.) 03-03 (Alamo), P.A. 03- 04 (Martinez), P.A. 03-05 (Alamo), and P.A. 03-06 (Alamo) to be included in a future formal annexation to the District. Motion unanimously approved on the following vote: AYES: Members: Hockett, Menesini, Boneysteele, Lucey, Nejedly NOES: Members: None ABSENT: Members: None b. The contract work for the Rossmoor Sewer Improvements Project, Phase 8, DP 5638, was accepted and the filing of the Notice of Completion was authorized. Motion unanimously approved on the following vote: AYES: Members: Hockett, Menesini, Boneysteele, Lucey, Nejedly NOES: Members: None ABSENT: Members: None c. The Board was advised of the close out of the Dewatering Modifications and Upgrade Project, DP 6151, and the return of $36,000 to the Sewer Construction Fund Treatment Plant Program. This item was presented for the Board's information. No action was taken. 08 21 03 14 d. Resolution No. 2003-060 was adopted, confirming the publication of District Ordinance No. 226, amending District Code Chapter 9.08 to clarify responsibilities for installation and maintenance of backwater overflow prevention devices. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: None a. 0". C,,"""', "'~" .' (ÿ '"3 (~j Hockett, Menesini, Boneysteele, Lucey, Nejedly None None 4. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER 5. REPORTS GENERAL MANAGER 1) Mr. Charles W. Batts, General Manager, reported that while the State budget remains immersed in controversy, the impact on local government is still being measured. Recently Contra Costa County announced a $19 million shortfall in their budget that already had a 10 percent across-the- board cut. County Administrator John Sweeten is asking for help from the unions with this problem by postponing their scheduled increases, agreeing to mandatory time off, and paying higher health insurance co- pays. In addition, Mr. Sweeten has asked each County department to cut another 6 percent from their budgets. 2) 3) No retirement system update was presented. Mr. Batts, General Manager, stated that in June 2001, the Board approved a three-year Sewer Service Charge increase. On July 17, 2003, staff completed the annual calculations for the final year of these rate changes. The new Sewer Service Charge roll was submitted to the County Auditor- Controller's Office three weeks ahead of the deadline. Mr. Batts introduced Ms. Molly Mullin, Engineering Assistant III, to provide a recap of the District's 2003-2004 Sewer Service Charges. Ms. Mullin stated that total Sewer Service Charge revenue for 2003-2004 is $42,225,933 compared to total Sewer Service Charge revenue for 2002- 2003 of $38,124,377. In 2003-2004, the third year of the three-year rate increase was implemented, increasing the Sewer Service Charge by 9.68 percent from $248 per year to $272 per year. There were 1,107 new Sewer Service Charge parcels. These parcels were primarily residential and primarily in the southern portion of the District service area, but there were some septic tank conversions as well. Ms. Mullin stated that the District Sewer Service Charges are collected on the County tax roll. The 2003-2004 total Sewer Service Charge revenue of $42,225,933 is made up of 79.9 percent residential ($33,764,720), 18.5 percent commercial ($7,701,701) and industrial ($84,512), and 1.6 percent direct bill ($675,000 estimated). Ms. Mullin noted that direct bill customers are tax exempt parcels that are not collected on the County tax roll, such as churches and schools, or new customers added after the tax roll is submitted. The direct billing schedule mirrors the County tax roll. Ms. Mullin stated that there are 104,370 parcels, and 5,700 commercial and industrial customers. Ms. Mullin reported that the District Sewer Service Charge 2003-2004 tax levies include $41,451,768 in Sewer Service Charges; $99,165 in Capacity Use Program Charges; and $247,712 in Contractual Assessment District assessments. There were no delinquent charges this year. 1 ":i\ t\/~! ~._y 4) 15 President Nejedly thanked Ms. Mullin for her report. Mr. Batts, General Manager, introduced Mr. William E. Brennan, Capital Projects Division Manager, who reported that the long-awaited Cornell test pump has been installed at the Orinda Crossroads Pumping Station. The pump was started and tested yesterday. The pump passed the initial vibration test meeting the specification, and it appears that it will solve the problem at the Orinda Crossroads Pumping Station. Mr. Brennan stated that the near term plan is to run the Cornell pump through at least next week at Orinda Crossroads Pumping Station and conduct some follow up testing. Based on continued success, three Cornell pumps will be ordered for Orinda Crossroads. The Cornell test pump will then be moved to the Moraga Pumping Station for testing at that site; and if it is successful there, three more pumps will be ordered. Mr. Brennan stated that at the next Board Meeting, a position paper will be presented, requesting approval to purchase the pumps, making the purchase for Moraga contingent upon successful completion of the testing. Based on a 16- week fabrication and delivery schedule, the Orinda Crossroads pumps could be in place by January 2004. Pending successful testing at Moraga, and a 16-week fabrication and delivery schedule, pumps could be in place in Moraga by February 2004. Mr. Brennan showed photographs and described the Morris pump and motor and the Cornell pump and motor. President Nejedly and the Board of Directors thanked Mr. Brennan for the update. 5) Mr. Batts, General Manager, stated that at their July meeting the District Board Recycled Water Committee requested that staff draft a letter urging Contra Costa Water District to include recycled water in their water supply planning efforts for the expansion of the Los Vaqueros Reservoir. A draft letter was provided to the Board with the agenda. Mr. Batts requested comments from the Board. It was the consensus of the Board, that the letter to Contra Costa Water District be approved. 6) Mr. Batts, General Manager, announced that the District is advertising for the Happy Valley Sewer Replacement Project, DP 5692. The project will replace 2,300 feet of existing 10-inch diameter sewer with 15-inch diameter sewer along Happy Valley Road and Mount Diablo Boulevard in Lafayette. The engineer's estimate is $500,000. 7) Mr. Batts, General Manager, stated that the Lower Orinda Pumping Station is the District's oldest pumping station at over 50 years of age. As discussed previously with the Board, to improve reliability, the existing pumping station will be completely renovated in its existing location. The District is currently finishing the design for this project and is coordinating with the City of Orinda on permits, a zoning variance, tree removal, and creek setback variances. The District has already secured a permit from the Department of Fish and Game. Staff is also working with the Orinda Country Club. The expansion and renovation of the pumping station require purchasing additional property and obtaining temporary construction easements. The District is currently in the process of finalizing a Real Property Agreement with the Orinda Country Club. The current schedule is to bid the project in October 2003, with construction beginning in January 2004. Mr. Batts, General Manager, reported that the 2003 Cured-in-Place Pipe Project, DP 5246, will line one sewer in Orinda on Moraga Way and one sewer in Walnut Creek on Bancroft Road. The Moraga Way site is 700 feet of 8-inch sewer from Glorietta Boulevard to Buena Vista that has structural defects and root intrusion. Along with the sewer being lined, the ten laterals that connect to the sewer will also be lined for at least the first 8) 08 21 03 16 b. c. ()8 9) 10) 11 ) four feet up from the sewer sealing the first two joints. The Bancroft Road site is 570 feet of 30-inch sewer from Minert Road to the Walnut Creek Channel that is heavily corroded and has exposed rebar. The lining will add structural strength to the line and prevent further corrosion. This is the first project the District has done that will line the lateral for an internal reconnection with the lined sewer. All previous cured-in-place projects included open cut construction for the reconnection of the lateral. The work on Moraga Way will start the week of August 25, 2003. The contract allows for completion by the end of September. The work on Bancroft Road will start the week of September 1, 2003, and will be completed by mid October. Mr. Batts, General Manager, reported that the Contra Costa Boulevard Slip Lining Project, DP 5678, will install a 30-inch structural liner inside the existing 36-inch sewer from north of Viking Drive to north of Golf Club Road using segmental slip lining. The lining will add full structural strength to the sewer and prevent further corrosion. This is the first project the District has done using segmental slip lining. The work is scheduled to start the week of August 25, 2003. Installation of the slip line pipe is anticipated at the end of August and beginning of September. The contractor's schedule shows three days for the installation of the liner. District staff will keep the Board informed of the construction schedule should any Board Members wish to visit the site. Mr. Batts, General Manager, stated that since the August 7,2003 Board Meeting, the homeowners whose properties are affected by the St. Stephens slide have met with seven contractors and received proposals for the slide repair work. District staff is assisting the homeowners by reviewing the proposals and checking into licensing and insurance issues. The homeowners have also been informed of additional costs for construction management and inspection, and renovation of the storm drain upslope of the slide. Even with these additional costs, the project can be completed for the original estimate of $150,000 or less. Staff have reviewed the draft settlement agreement with the homeowners and recommended some changes. Staff also has assisted in completion of the Streambed Alteration Permit application, and the homeowners have submitted the permit application to the Department of Fish and Game. A closed session has been scheduled on this item later in the agenda. Mr. Batts, General Manager, announced that at the last Board Meeting, the Board was advised that nine Operations Department employees would be attending the annual California Water Environment Association (CWEA) Northern Conference. Mr. Batts stated that he was not aware that two Engineering Department Source Control Inspectors were also planning to attend that conference in order to obtain continuing education credits to maintain their certifications. Knowing the Board's concern, it is staff's opinion that this conference is the least expensive alternative to obtain those credits. COUNSEL FOR THE DISTRICT None SECRETARY OF THE DISTRICT None 21 Oili: Q~:~ " "" Ç)~J) d. 17 BOARD MEMBERS 1) Member Menesini, Chair of the Outreach Committee, stated that he and Member Boneysteele met with staff on August 20,2003 to review various outreach activities. Member Menesini distributed and reviewed notes from that meeting at which the main topic of discussion was review and selection of Pollution Prevention Award recipients. This year's recipients, San Ramon Marriott Hotel at Bishop Ranch, Jose's Auto Service #2, BMW Concord, Walnut Creek Baking Company, and Diablo Transmissions, will be honored at the September 18 Board Meeting and at a light buffet luncheon before the Board Meeting. 2) Member Menesini commended Senior Engineering Assistant Wesley Adams, Assistant Engineer Edgar Lopez, Community Affairs Representative Jackie Zayac, and Principal Engineer Tad Pilecki on project management and tours of the Lafayette Sewer Improvement Project and the Walnut Creek Sewer Improvement Project. Member Menesini stated that the District employees working in the field are the best outreach for the District. 3) Member Menesini and Director of Operations James Kelly reported on the August 13-16, 2003 California Association of Sanitation Agencies (CASA) Conference. The program highlighted emerging approaches to regulatory compliance, the first program by the CASA Communication Committee, agency finance options, and a presentation by Assemblyman Joseph Canciamilla on water issues, the State budget, and politics was featured. A highlight was Central Contra Costa Sanitary District winning the Public Outreach/Education Award. 6. ADMINISTRATIVE AUTHORIZE FINAL SETTLEMENT PAYMENT TO THE CONTRA COSTA COUNTY EMPLOYEES' RETIREMENT ASSOCIATION FOR THE LIABILITY GENERATED AS A RESULT OF THE PAULSON LAWSUIT a. Mr. Batts, General Manager, stated that it is recommended that the Board authorize final payment of $1 ,606,116 to the Contra Costa County Employees' Retirement Association (CCCERA) for the liability associated with the settlement agreement of the Paulson lawsuit. Mr. Batts introduced Mr. Randall M. Musgraves, Director of Administration, who stated that the Paulson lawsuit was filed in July 1996; and in May 1997, CCCERA cross-claimed against the District and other participating agencies. Each agency reported base compensation differently. The lawsuit demanded a standardized list of differentials. These differentials would be included in "final compensation" and retroactive increases were demanded. At approximately the same time, a suit was brought against Ventura County and its Retirement Board to have certain additional pay differentials considered a part of compensation for purposes of calculating retiree pensions. The Ventura County decision was made in August 1997, ruling that all earnings paid in cash are considered compensation, excluding overtime. The Walden lawsuit was filed in September 1997. The Walden lawsuit demanded recalculation of pensions to include all differentials per the Ventura decision, and demanded retroactive increases. Mr. Musgraves stated that in 1999 the Court approved the settlement agreement with CCCERA signed by all parties including the District, to settle the Paulson and Walden litigation. As part of the settlement agreement $90 million of excess earnings was allocated from the CCCERA Reserve Fund. Benefits were increased for retirees retired on or before September 30, 1997, recalculating differentials to include the Ventura County decision and providing a lump sum payment of three years of retroactive benefit increases from September 1994 through September 1997. As part of the settlement agreement, each employer was to pay actual costs of its own retirees' benefit increases. That calculation was just completed by CCCERA staff. The District's liability has been calculated to be $1,606,116. 08 21 O~i 18 Discussion followed with regard to the calculation and methodology, and the Pension Obligation Bonds obtained by Contra Costa County. Following discussion, it was moved by Member Hockett and seconded by President Nejedly, that full and final payment in the amount of $1 ,606,116 be authorized to Contra Costa County Employees' Retirement Association for the District's liability associated with the settlement agreement of the Paulson lawsuit. The motion was approved with Member Lucey voting no. 7. ENGINEERING a. AUTHORIZE THE GENERAL MANAGER TO EXECUTE A CONSTRUCTION CONTRACT CHANGE ORDER ON THE OUTFALL IMPROVEMENTS PROJECT. PHASE 5. DP 7197 Mr. Batts, General Manager, stated that the Outfall Improvements Project is progressing rapidly. Pipe joint testing has been completed. The results indicate a greater than expected number of joints have failed the leak test. Authorization is requested for a change order in an amount up to $250,000 to seal all failed joints during this project. The cost increase to the overall project is estimated to be $77,000 since the cost for installing additional seals will be partially offset by savings in a contract bid item for ground water control. Following discussion, it was moved by Member Hockett and seconded by Member Menesini, that the General Manager be authorized to execute a change order on the Outfall Improvements Project, Phase 5, DP 7197, in an amount not to exceed $250,000 for the installation of additional internal mechanical seals. There being no objection, the motion was unanimously approved. 8. CORRESPONDENCE a. NOTE RECEIPT OF LETTER DATED AUGUST 7.2003 FROM MR. PETER M. WIEBENS. REQUESTING THAT THE DISTRICT OPPOSE REDEVELOPMENT OF BUCHANAN FIELD AIRPORT Receipt was noted of the letter dated August 7,2003 from Mr. Peter M. Wiebens requesting that the District oppose redevelopment of Buchanan Field Airport. The Board of Directors did not take a position on this matter. b. NOTE RECEIPT OF E-MAIL DATED AUGUST 9.2003 FROM MR. JOHN KELSEY OF WALNUT CREEK. COMMENDING MR. WESLEY ADAMS. PROJECT ENGINEER. FOR HIS WORK AT THE KELSEY RESIDENCE Receipt was noted of the e-mail dated August 9, 2003 from Mr. John Kelsey of Walnut Creek, commending Mr. Wesley Adams, Project Engineer, for his work at the Kelsey residence. President Nejedly and the Board of Directors recognized Mr. Adams for his efforts. 9. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED AUGUST 7.2003 EXPENDITURE LIST DATED AUGUST 21. 2003 b. It was moved by Member Lucey and seconded by President Nejedly, that the Expenditure List dated August 7,2003 including Self Insurance Check Nos. 102029- 102036, Running Expense Check Nos. 145771-146061, and Sewer Construction Check Nos. 25802-25868; and the Expenditure List dated August 21, 2003 including Self Insurance Check Nos. 102037-102038, Running Expense Check Nos. 146062-146195, Sewer Construction Check Nos. 25869-25899, Payroll Manual Check Nos. 48914- 08 2..,., - ',' !~ ..&.. if 'It,"! V 19 48917, Payroll Regular Check Nos. 54696-54745, be approved as recommended. There being no objection, the motion was unanimously approved. 10. BUDGET AND FINANCE REPORT OF NEAR TERM SAVINGS a. Mr. Batts, General Manager, reported on the near term savings achieved over budget based on anticipated loss of ad valorem tax revenue. During the December 2002 State budget update, the Board expressed concern over District finances in light of the State budget deficit. The Board requested staff recommendations to control District budgeted costs. Staff instituted the "Near Term Budget Response" to reduce expenses during the current fiscal year (2002-2003). The Board received feedback through Board Committees and quarterly reports to the full Board. Staff had projected a $1 million to $1.5 million budget savings from the near term actions. Mr. Batts reported that the actual budget savings at fiscal year end is approximately $3 million. At the January 2003 Board Financial Workshop, $1 million savings per year was incorporated in Scenario Four, based on the Near Term Budget Response projections. The savings were projected into budget year 2005-2006. In addition, future Capital Improvement Budgets incorporated $14 million in deferred capital projects. Mr. Batts reviewed the near term actions as follows: Conditional Hiring Freeze Review Use of Temporary Employees Reduce Non-Critical Overtime Review Travel and Conferences Reduce Operating Costs Defer Major Maintenance Savings from Capital Project Deferrals Mr. Batts reviewed the District Operations and Maintenance (O&M) budgeting history from 1993-1994 through the present, comparing budget to actual. Mr. Batts stated that the District has a very good record of budgeting actual expenses with the exception of the energy crisis where the District underbudgeted in 2000-2001 and overbudgeted in 2001-2002. In all of the other years, actual expenses have been very close to O&M Budget every year. . . . . . . . The final audited results for fiscal year 2002-2003 will be presented in September. Accounts for all end-of-year adjustments, late billings, and so on will have been completed. The budgets reflect projections from the Board Financial Planning and Policy Workshop held in January. Mr. Batts reviewed the savings achieved through the near term actions implemented following discussion with the Board in January 2003. The conditional hiring freeze was to be implemented immediately. Management and the Board Personnel Committee were to work together on critical positions. Board concurrence was needed to hire. Mr. Batts reported that on January 9, 2003, there were 17 unfilled positions, for a savings with benefits of $1 million. At June 30,2003, there were 22 unfilled positions, for a savings as of June of $1.3 million or 7 percent. This savings is offset by an increase in benefit costs of $60,000 over budget for health care and retirement. With regard to review of the use of temporary and contract employees, the Personnel Committee was to approve any new temporary employees. The use of summer students and co-ops was to continue. Mr. Batts reported that at January 9, 2003, there were seven temporary positions and one contract employee. At June 30,2003, there were nine temporary positions for CSO clerical, Buyer, Construction Inspection, and Plant Maintenance. 08 21 03 20 With regard to reduction of non-critical overtime, overtime was to be limited to critical operations and customer service functions, and the General Manager was to report out on overtime usage to the Board. Mr. Batts reported that the budgeted overtime line item in the annual budget was $911,954. At year end, actual overtime expense was $741,000 for a reduction of $171,000 or approximately 20 percent savings. With regard to review of travel and conferences, the Department Directors were to oversee and reduce planned out-of-state travel, and the General Manager was to report savings to the Board. Mr. Batts reported that the travel and conferences budget line item is $254,491. Actual travel and conferences expense at June 30,2003, was $163,851 for a savings of $90,640, approximately 35 percent. With regard to reducing operating costs, the Department Directors were to re-evaluate budgeted expenses and purchases. It was felt that some savings could be realized but they would be a minor part of the budget. The General Manager was to report savings to the Board. Mr. Batts reported that the total non-labor annual O&M budget is $15 million, out of a total annual O&M Budget of $41 million. At June 30,2003, actual non- labor expenses were $13.6 million for a savings of $1.6 million. With regard to deferring major maintenance, the Operations management team was to identify and analyze possible deferrals with permit compliance, reliability, and safety being central issues. The General Manager was to report savings to the Board. Mr. Batts stated that budgeted repairs and maintenance accounts total $2.7 million. Mr. Batts reported that at June 30, 2003, there was a savings of $108,000 but it is noteworthy that more maintenance projects were done in the plant, a new sewer cleaning record was set by the Collection System Operations Division, and projects were implemented to deal with root intrusion. With regard to postponing capital projects, it was noted that the Capital Improvement Program is flexible in balancing cost and workload issues. Staff was to defer $4 million in capital projects in the 2002-2003 fiscal year and $14 million in future years. Mr. Batts reported that the actual savings was $6 million for the 2002-2003 fiscal year. In summary, Mr. Batts stated that the near term budget savings exceeded the $1 + million savings projection over fiscal year 2002-2003. Staff is working to produce future projections to be discussed at the January 2004 Board Financial Planning and Policy Workshop. Staffing issues versus savings and costs continue to be reviewed. Capital projects will bear the largest impact in cost reductions at the District. Staff remains focused on the District goals. However, there are future budgeting concerns on the revenue side in that loss of ad valorem tax revenue is still anticipated and there is concern about the speed of economic recovery. On the expense side, future budgeting concerns include the growing impact of employee benefit costs, future energy costs, and regulatory impacts to both O&M and Capital. Mr. Batts stated that staff will continue efforts to achieve additional savings, and staff will incorporate those savings into the budget process in the 10-Year Plan projections, and by including projected savings in budget projections where possible. The long-term goals will be outlined and discussed with the Board at the January 2004 Financial Planning and Policy Workshop. Mr. Batts stated that even with all out effort to achieve cost savings, focus remained on the District goals. Customer service is high and positive feedback continues to be received. The District has an outstanding regulatory compliance history in water, air, and all other programs. Focus remains on responsible rates, with District rates at the 50th percentile and no public/business concerns being raised. In closing, Mr. Batts stated that he is proud to say that the District organization continues to have the respect of our peers, the public, the community, and the regulators. President Nejedly thanked Mr. Batts for his report. Member Menesini commended staff on their outstanding cost saving efforts, pointing out that this was done with the approval of our constituency and recognition by of our peers. Mr. Batts stated the he knew the Board had concerns in these areas, and he appreciated the Board letting staff come back with recommendations where they thought savings could be achieved. 0, O.,~,' ""'11 V 21 (,:' ç, \JŸ €ij) 21 b. RECEIVE ADJUSTED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 2003 Ms. Deborah Ratcliff, Controller, presented a comparison of Operations and Maintenance (O&M) June 30, 2003 preliminary revenues and expenses compared to June 30, 2003 adjusted revenues and expenses. Preliminary total revenue was $41,222,000 compared to adjusted revenue of $41,521,000 for a favorable variance of $299,000. Preliminary total expense was $37,930,000 compared to adjusted expense of $38,594,000 for an unfavorable variance of $664,000. Preliminary revenue over expense was $3,292,000 compared to adjusted revenue over expense of $2,927,000 for an unfavorable variance of $365,000. Ms. Ratcliff noted that these figures could be adjusted further by the auditors. Ms. Ratcliff presented a comparison of actual and budgeted O&M results. Actual O&M revenue of $41,522,000 was $239,000 less than budget representing a 0.6 percent unfavorable variance. Actual O&M expense of $38,594,000 was $2,828,000 less than budget, representing a 7 percent favorable variance. As a result, the O&M Fund balance will be increased by $2,928,000 bringing the O&M Fund balance to $9,100,000 at June 30, 2003. Ms. Ratcliff reported on major expense categories under budget for a total savings of $2,827,000 as follows: . Labor - $1,276,000 Chemicals - $328,000 Utilities - $298,000 Repairs and Maintenance - $108,000 Hauling and Disposal - $316,000 Outside Services - $384,000 Other - $205,000 . . . . . . Member Lucey questioned whether Labor expense is typically $1 million under budget. Ms. Ratcliff stated that this year in particular there were many open positions that staff decided not to fill. Member Lucey asked that Ms. Ratcliff review the Labor expense line item for the last five years and report back to see if this expense has been typically $1 million under budget. Mr. Batts stated it is true that Labor expense has been under budget in past years, and that was the reason a vacancy factor was budgeted in the last two years. Ms. Ratcliff presented a comparison of Self Insurance Fund budget to actual results for the fiscal year ended June 30, 2003. Actual Self Insurance Fund revenue of $345,000 was $73,000 under budget for a 17.5 percent unfavorable variance primarily due to lower than budgeted interest income. Actual Self Insurance Fund expense of $632,000 was $343,000 less than budget, representing a 35 percent favorable variance primarily because losses were lower than anticipated and technical services were consequently lower as well. As a result at June 30, 2003, the Self Insurance Fund balance will be $4,299,000. Ms. Ratcliff noted that there will be a revenue adjustment for accrual of the participating cities' portion of Household Hazardous Waste Collection Facility insurance costs. President Nejedly thanked Ms. Ratcliff for her report. c. CAPITAL IMPROVEMENT BUDGET YEAR END STATUS REPORT Ms. Ann E. Farrell, Director of Engineering, presented the 2002-2003 Capital Improvement Budget (CIB) Year End Status Report. Ms. Farrell provided a variance explanation overview, noting that the San Ramon Force Main and Concord Industrial Projects were completed under budget, saving approximately $3 million; two projects, the SCADA and Turbine Projects, were delayed until next year saving approximately $1 million; other projects deferred saved approximately $4 million for total underspent of $8 million in 2002-2003. Ms. Farrell stated that there were other multi-year projects that were not over budget, but in the overspent category for the 2002-2003 fiscal year. The San Ramon Pumping Station Project was finished ahead of scheduled overspending 08 21 03 22 $1.7 million in the current fiscal year, and the Point Repairs Project was not originally budget and was added spending $0.3 million for a total overspent in 2002-2003 of $2 million. Ms. Farrell stated that the goal was to underspend $4 million in fiscal year 2002-2003, but the net total variance was actually $6 million underspent. Ms. Farrell presented a summary of major project expenditures by program, indicating that at year end the Treatment Plant Program was $1,927,484 underspent, the Collection System Program was $3,528,638 underspent ($5,610,842 including the Dougherty Tunnel and Trunk Project), the General Improvements Program was $639,545 underspent, and the Recycled Water Program was $93,874 underspent. Ms. Farrell reviewed 2002-2003 Capital revenues excluding Dougherty Tunnel and Trunk reimbursements, noting that actual revenues of $23,490,910 were $2,571,910 over the Capital Improvement Budget estimate. Interest earnings and the Concord reimbursement were under budget. Sewer Service Charge, Property Tax, Facility Capacity Fees, Pump Zone Fees, and Other were all over budget. Ms. Farrell stated that Capital revenues of $26,999,010 (including Dougherty Tunnel and Trunk) over expenditures of $25,429,255 (including Dougherty Tunnel and Trunk) resulted in a net increase to the Sewer Construction Fund of $817,066, bringing the Sewer Construction Fund balance to $50,552,066 at June 30, 2003. President Nejedly thanked Ms. Farrell for the update. 11. EMERGENCY SITUATIONS REQUIRING BOARD ACTION None 12. ANNOUNCEMENTS/SUGGESTIONS FOR FUTURE AGENDA ITEMS None BREAK President Nejedly declared a recess at the hour of 3:38 p.m., reconvening in closed session at 3:50 p.m. with all parties present as previously designated. 13. CLOSED SESSION a. SIGNIFICANT EXPOSURE TO LITIGATION Pursuant to Government Code Section 54956.9(b), a point has been reached where in the opinion of the Board of Directors of the Central Contra Costa Sanitary District, on the advice of its Counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the District. One potential matter is to be discussed. b. INITIATION OF LITIGATION Pursuant to Government Code Section 54956.9(c), on the advice of Counsel based on existing facts and circumstances, the Board of Directors of the Central Contra Costa Sanitary District has decided or is deciding whether to initiate litigation. One potential matter is to be discussed. At 3:50 p.m., President Nejedly declared the closed session to discuss litigation pursuant to Government Code Sections 54956.9(b) and (c) as noted above. At 3:58 p.m., President Nejedly concluded the closed session and reconvened the meeting into open session. 14. REPORT OF DISCUSSIONS IN CLOSED SESSION No decisions were made or votes taken in closed session which require reporting at this time. 08 2',1,J ........ At'." ~J 23 15. ADJOURNMENT There being no further business to come before the Board, President Nejedly adjourned the meeting at the hour of 3:58 p.m. ..... Presi of the Board of Dire rs, Cen ral Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: 08 21 03