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HomeMy WebLinkAboutBOARD MINUTES 10-16-03 65 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON OCTOBER 16, 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 October 16, 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. AWARDS AND COMMENDATIONS a. ADOPT RESOLUTION COMMENDING LORETTA BARSAMIAN FOR HER SERVICE AS EXECUTIVE OFFICER OF THE SAN FRANCISCO BAY REGIONAL WATER QUALITY CONTROL BOARD Following discussion of the collaborative and cooperative relationship between the District and the Regional Board under Ms. Barsamian's direction, it was moved by Member Menesini and seconded by Member Boneysteele, that Resolution No. 2003- 072 be adopted, commending Loretta Barsamian for her service as Executive Officer of the San Francisco Bay Regional Water Quality Control Board. There being no objection, the motion was unanimously approved. b. ADOPT RESOLUTION COMMENDING MICHAEL D. VOGAN UPON HIS RETIREMENT AS DIRECTOR OF PUBLIC WORKS - MAINTENANCE SERVICES OF THE CITY OF CONCORD It was moved by Member Hockett and seconded by President Nejedly, that Resolution No. 2003-073 be adopted, commending Michael D. Vogan upon his retirement as Director of Public Works - Maintenance Services of the City of Concord. There being no objection, the motion was unanimously approved. 4. CONSENT CALENDAR It was moved by Member Hockett and seconded by Member Menesini, that Consent Calendar Item a. be approved as recommended, resolution adopted, and recording authorized. a. Public sewer improvements and an Offer of Dedication was accepted at no cost to the District from Mardel LLC (Delco Builders), Job 5533, Parcel 1, Pleasant Hill area; recording of the easement acceptance with the Contra Costa County Recorder was authorized; and Resolution No. 2003-074 was adopted to that effect. Motion unanimously approved on the following vote: 10 16 03 66 AYES: Members: NOES: Members: ABSENT: Members: Hockett, Menesini, Boneysteele, Lucey, Nejedly None None 5. MATTERS OF PUBLIC INTEREST a. PRESENTATION BY JOE CAMPBELL. PRESIDENT OF THE CONTRA COSTA WATER DISTRICT BOARD OF DIRECTORS. ON THE PROPOSED LOS VAQUEROS EXPANSION Mr. Charles W. Batts, General Manager, introduced Mr. Joe Campbell, President of the Contra Costa Water District (CCWD), who was present to provide an overview of the Los Vaqueros Reservoir Expansion Studies. Mr. Joe Campbell, President of the CCWD Board of Directors, stated that the mission of the Contra Costa Water District is to strategically provide a reliable supply of high- quality water at the lowest cost possible, in an environmentally responsible manner. CCWD achieves its mission by providing fiscal responsibility, adequate supplies of high- quality water, and investment in infrastructure for a sustainable future. CCWD has 42 treated water storage reservoirs in Central Contra Costa County and 778 miles of pipelines. The reservoirs are in the hills, some are above ground and others are below parks and golf courses. CCWD has two water treatment plants. The Bollman Water Treatment Plant in Concord serves Central County; uses conventional, mixed media and ozone disinfection treatment; and has a capacity of 75 million gallons per day (mgd). The Randall Bold Water Treatment Plant in Oakley serves Oakley and parts of Antioch and Brentwood; uses direct filtration, mixed media and ozone disinfection treatment; and has a capacity of 40 mgd. Using a map, Mr. Campbell described the CCWD gravity fed water distribution system and its 48 miles of canal. CCWD takes water from the Delta at the Old River Intake built in 1994-1997 on Old River near Discovery Bay. Water is pumped to Los Vaqueros Reservoir or the Contra Costa Canal. Mr. Campbell stated that the 100,000 acre-foot Los Vaqueros Reservoir was built at a cost of $450 million to improve water quality for CCWD's 450,000 customers. It provides a three to six month supply of emergency water storage. There is also an Interpretive Center, electric boating, fishing, hiking, horseback riding, and cycling. Mr. Campbell stated that the ratepayers' funds have been protected. Rate increases have been held below the rate of inflation from 1998 through the present. Mr. Campbell stated that CCWD has a contract for 195,000 acre feet of water per year. There is a 10,000 acre-foot shortfall over time and recycled water is identified in the Environmental Impact Report (EIR) as the source of water to make up that shortfall. Mr. Campbell stated that there is a proposal to expand Los Vaqueros Reservoir. Los Vaqueros was originally planned to be 1 million acre feet, but it was scaled back to 100,000 acre feet because of the lack of partners in the project. Now there are CALFED members who are proposing to be partners in the expansion. CCWD will have a public vote. This will be an advisory vote and is not required; but the CCWD Board thinks it is good policy. Mr. Campbell stated that there are threats to the Delta. The State will have 60 million residents by 2040 and there will be more competition for water in drought years. The planned Central Valley development threatens water quality and will result in less freshwater inflow to the Delta and more urban runoff and wastewater flowing to the Delta. There will be more stringent drinking water regulations, and the need for new, costly treatment. Continued regulations to protect the Delta environment will put restrictions on water diversions. There are potential alternatives to maintain drought supply, water quality, and the Delta environment. Water transfers to provide supplies needed during a drought, advanced treatment technology to provide improvements in water quality, a new Central Delta intake to improve water quality and operational flexibility, and water quality improvements near CCWD intakes could cost CCWD $170 million. Another alternative is expansion of Los Vaqueros Reservoir with partnering agencies, which could result in CCWD getting paid up to $200 million. Mr. Campbell 10 16 tn\ ¡¡':f) \;t ~J) 67 stated that the Los Vaqueros Reservoir expansion can improve drought supplies and drinking water quality for CCWD and Bay Area water agencies, enhance the Delta environment, and help CCWD continue costoontainment and rate control. Mr. Campbell stated that CALFED is studying five different sites and they will only select one site. CCWD has developed the following Principles for Participation if Los Vaqueros is selected: . The project improves water quality and reliability for CCWD. The project enhances the Delta environment. The project protects and enhances the fisheries and terrestrial species benefits provided by the existing Los Vaqueros Project. The project preserves and increases the recreational opportunities of the Los Vaqueros Project. The project protects and reimburses the financial investment made by the CCWD customers who financed the existing $450 million Los Vaqueros Project. The proposal would be placed before the voters of the Contra Costa Water District. . . . . . Mr. Campbell reviewed the language from the advisory ballot measure that will appear on the March 2,2004 ballot. Discussion followed with regard to the source and quality of CCWD water. Member Menesini stated that he maintains that providing recycled water to nearby industries would be a good use and would help satisfy CCWD's water needs. Mr. Campbell agreed, stating that recycled water is the future. The Los Vaqueros Expansion Project is not about quantity of water, it is about the fish. CALFED is going to spend $2 billion on recycled water, but this expansion is not about developing a water supply. It is about high quality and an environment for the fish. Member Boneysteele stated that an employee of CCWD was a big proponent of recycled water and got the grant that built the recycled water facility, but now there are no customers. The Service Duplication Act is a problem and we have not been able to get over the hurdles to supply people right on our doorstep. Mr. Campbell stated that he supports the Central Contra Costa Sanitary District's recycled water efforts. In response to comments from Member Lucey, Mr. Campbell stated that there are no pipelines associated with this project, and the law prohibits the export of water. Member Hockett questioned the efforts proposed to mitigate issues that have resulted in low quality water, such as farms, dairies, and the like. Mr. Campbell stated that he has asked the same questions. CCWD was a friend of the court on a lawsuit that prohibited the San Luis Drain. President Nejedly thanked Mr. Campbell for his presentation 6. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER None 7. BIDS AND AWARDS a. AUTHORIZE AWARD OF A CONSTRUCTION CONTRACT TO PARADISO MECHANICAL. INC. FOR THE CSOD FUEL SYSTEM MODIFICATIONS, DP 8201 Mr. Batts, General Manager, stated that this project will replace the existing fuel system at the Collection System Operations Division (CSOD) with one that complies with all current and anticipated regulations. Two bids were received. Paradiso Mechanical is 10 16 02 68 the lowest responsive and responsible bidder in the amount of $304,673. During modifications, CSOD will have to use alternative fueling stations, including the County fueling station, the City of Walnut Creek corporation yard, and commercial gas stations. The work is expected to take approximately 75 calendar days. District staff will perform construction management and daily inspection. In response to questions from Member Menesini, Mr. Ba Than, Senior Engineer, stated that in 1989 one fuel tank was replaced at CSOD and there was no sign of any contamination. Monitoring equipment was put in at that time and no leakage was found in the ground. It was moved by Member Menesini and seconded by Member Boneysteele, that award of a construction contract in the amount of $304,673 for the CSOD Fuel System Modifications, DP 8201, be authorized to Paradiso Mechanical, Inc., the lowest responsive and responsible bidder. Discussion followed with regard to new regulations that will be in effect January 1, 2004. President Nejedly expressed concern with the timing of the bids that put the District at the end of the construction year and the deadline for compliance with the new regulations, stating that the bids are $60,000 over the engineer's estimate. President Nejedly stated that the project should be delayed until after the first of the year and staff should contact the appropriate agencies and request an extension of time to comply. Member Hockett suggested that this item be held for two weeks to allow time to determine what fines and regulatory issues might be involved in delaying the project, a possible construction schedule, and the amount of anticipated savings that could result from rebidding the project in the spring. Following discussion, Member Boneysteele withdrew his second of the above motion. The motion died for lack of a second. Discussion followed with regard to the number of current CSOD projects. Mr. Batts stated that there are a number of CSOD projects in the planning, bidding, and construction stages. Several of these were discussed briefly at the CSOD workshop in September. Staff will come back to the Board to discuss these projects. With regard to the fact that the bids were $60,000 over the engineer's estimate, Mr. Batts noted that fuel system modifications are not an area of expertise of District staff. The bid was approximately 15 percent higher than the engineer's estimate, within the plus or minus 20 percent of the engineer's estimate guideline. Further discussion followed in which Member Menesini expressed concern about delaying the project. Following discussion, it was moved by Member Menesini and seconded by President Nejedly, that award of the construction contract for the CSOD Fuel System Modifications, DP 8201, be continued to November 6, 2003, to allow staff to provide the information requested by the Board. There being no objection, the motion was unanimously approved. 8. ITEMS HELD OVER FROM PREVIOUS BOARD MEETINGS a. ADOPT PURCHASING POLICIES GOVERNING THE PROCUREMENT OF GOODS AND SERVICES FOR THE CENTRAL CONTRA COSTA SANITARY DISTRICT Mr. Batts, General Manager, stated that a presentation on the proposed Purchasing Policies was made at the last Board Meeting. The updated District Purchasing Policies and Procedures Manual was provided to the Board for information and review. The Board Budget and Finance Committee has completed their review of the material and is not proposing any substantive changes. Member Lucey, Chair of the Budget and Finance Committee, stated that he and President Nejedly reviewed the proposed Purchasing Policies thoroughly with staff, and recommends approval. 10 16 0.', ç;:"J¡ \; ,Ji ~"f) ,~" ~, 69 It was moved by Member Lucey and seconded by President Nejedly, that Resolution No. 2003-075 be adopted, adopting the Central Contra Costa Sanitary District Purchasing Policies as set forth in Attachment" to the position paper. Motion unanimously approved on the following vote: AYES: Members: Lucey, Nejedly, Menesini, Boneysteele, Hockett NOES: Members: None ABSENT: Members: None Member Menesini stated that the Purchasing Policies and Procedures Manual is an excellent piece of documentation. It is very well written, clear, and concise. 9. REPORTS GENERAL MANAGER a. 1 ) Mr. Batts, General Manager, stated that the District has just completed another very successful year at the Household Hazardous Waste Collection Facility (HHWCF). Copies of the 2002-2003 HHWCF Annual Report were provided to the Board. During the last fiscal year, the HHWCF served over 3,000 more cars than the year before; and at the same time, the operating costs have decreased from $66 per car to $62 per car. Mr. Batts stated that on Tuesday, October 14, 2003 at approximately 11: 15 a.m., there was another incident at the HHWCF. A Walnut Creek resident was cleaning out an old storage shed and brought in a number of old laboratory chemical containers. One pint-sized, unlabeled, rusted metal can resembled an ether container. Contra Costa County HazMat was called for assistance. They confirmed the observation. The HHWCF was closed until the containers could be removed. The HHWCF reopened at about 2:45 p.m. Approximately 35 customers were turned away during the shutdown. Mr. Batts stated that everyone again did an outstanding job working to prevent a potential problem. Mr. Batts introduced Mr. Henry Thom, Senior Engineer, who provided the 2002-2003 HHWCF operations status report. Mr. Thom reviewed the residential participation by jurisdiction, noting that the City of San Ramon participation at the HHWCF was 3.7 percent, below the 4 percent program goal. By including participation at temporary collection events, the City of San Ramon participation is 6.1 percent. All the other jurisdictions exceeded the 4 percent goal. The highest participation was the City of Lafayette at 20.1 percent. Mr. Thom reviewed the HHW participation, disposal, and operating cost statistics for 2002-2003. The operating cost per car is down from $93 in 1997-1998 to $62 in 2002-2003. Approximately 62,052 items or 124,104 pounds were taken from the reuse room, saving $115,417 that would have been spent for disposal of those items. Mr. Thom provided a summary of the Small Business Program. In 2002-2003 there were 226 appointments, an estimated 38,046 pounds of waste was processed, and $15,561 in revenue was collected. Mr. Thom presented a summary of HHW mobile collection event participation, indicating that there were a total of 2,506 in the three HHW mobile collection events in 2002-2003. Mr. Thom stated that in looking to the future, trends are that program wide participation continues to increase (an average of 12.5 percent over the past five years), participation at HHW mobile collection events increased by more than 41 percent collectively, electronic waste was included in all mobile collection events, outreach to small businesses is continuing, the 10 16 (); 70 10 mercury thermometer exchange program is continuing, and continuous improvement review is ongoing to improve efficiency and cost effectiveness of operations. In closing, Mr. Thom stated that the permanent HHWCF program continues to be a success. President Nejedly and the Board thanked Mr. Thom for the presentation and commended Senior HHW Technician David Wyatt on the outstanding quality of the HHW Collection Facility Annual Report and the graphics used in the presentation. 2) Mr. Batts, General Manager, stated that during geotechnical studies for the Headworks Bypass Pipeline Project in 1990, the District detected high levels of petroleum hydrocarbon compounds and lead at several locations at the treatment plant site. A majority of the contamination was in Holding Basin A South and the surcharge fill area to the west. Remediation to contain the contamination was required by the California Department of Toxic Substances Control (DTSC). The Treatment Plant Soil Remediation Project, DP 7113, provides for the placement of a compacted soil cap over Basin A South and the surcharge fill to a minimum depth of 12 inches. Work also includes grading the soil cover to drain, addition of access roads and ramps, and upgrading of existing access roads. The Board of Directors authorized the award of a construction contract for this work in the amount of $404,500 to Bay Cities Paving and Grading, Inc. on March 20,2003. Mr. Batts introduced Mr. Ba Than, Senior Engineer, who stated that in 1965 petroleum by-products from Shell Oil Company were deposited at the District treatment plant site and used to stabilize the marshy soils and control erosion along the holding basin levees. An estimated 350,000 cubic yards of contaminated material is consolidated in the area east of the aeration basins. In 1991, the remediation cost estimates ranged from $10 million to $90 million. In 1994, DTSC revised the quantity to 50,000 cubic yards and the law changed allowing on-site consolidation. The District entered into a Voluntary Agreement with DTSC in 1996 and the Final Action Plan to cap the material was approved by DTSC in March 2002. Mr. Than reported that construction is essentially complete. Staff is working with DTSC on future uses of this project which will probably include some deed restriction. Mr. Than showed photographs before, during, and after construction. All those entering or working in the construction area were required to go through hazardous materials training, wear protective suits, and go through detoxification. The air was monitored during the process and staff was trained. President Nejedly thanked Mr. Than for the update and indicated that he was told that District staff was very tough but diligent on this project, but the consultant was not. Mr. Than thanked President Nejedly and stated that he is working with the consultant. 3) Mr. Batts, General Manager, reported that the Cornell pump at the Moraga Pumping Station is performing very close to the District specifications even with a temporary installation and the larger Morris pump motor. Further testing by Pretech indicates that the minor vibration issues are probably related to the electric motor and not the pump. Staff will be recommending purchase of the Cornell pumps and testing of the approved installation at a later date. 4) Mr. Batts, General Manager, announced that the St. Stephens slide repair has been completed by the homeowners' contractor. The District portion of the cost has been paid. The easement to the City of Orinda must be completed, and the City's portion of the storm drain repair is still to be paid. Mr. Batts distributed photographs of the completed construction. 16 (' ^~, !,\ \j;i') U~) b. c. d. 71 COUNSEL FOR THE DISTRICT 1) Mr. Kenton lo AIm, Counsel for the District, reported that he has sent a letter requesting that the California Supreme Court depublish the appellate court decision in the lawsuit out of the Cities of Los Angeles and Burbank dealing with National Pollutant Discharge Elimination System (NPDES) permit conditions imposed by the Regional Water Quality Control Board. Mr. Aim stated that in his judgment in discussions with Director of Operations James Kelly and General Manager Charles Batts, the most significant issues raised that are potentially harmful to the District relate to the evaluation of various factors including economic factors required by the Porter Cologne Act. This particular opinion indicates that those evaluations are not to be done on the permit but at a separate time when the Basin Plans are created. In addition, the use of narrative objectives makes it impossible for an effective evaluation to be done. SECRETARY OF THE DISTRICT 1) Ms. Joyce E. Murphy, Secretary of the District, distributed and reviewed the draft Board Meeting Calendar for 2004, requesting guidance from the Board on meeting dates and schedule conflicts. Following discussion, it was the consensus of the Board that because of conflicts with the California Association of Sanitation Agencies (CASA) meetings in January and August 2004, that a regular District Board Meeting will be held on January 15 and a Financial Planning Workshop will be held on January 28; and that the regular District Board Meeting dates in August 2004 will be changed to July 29 and August 12. Ms. Murphy stated that the final calendar will be prepared and distributed to the Board. 2) Ms. Murphy, Secretary of the District, distributed a survey relating to the California Special Districts Association (CSDA) Governance Academy, a ground breaking continuing education program that recognizes the necessity for the Board and General Manager to work closely toward a common goal. Even if Board Members are not interested in attending the Governance Academy, CSDA asks that the Board complete the survey. Member Menesini is the District Board's representative to the Contra Costa Chapter of CSDA and he will be attending their October 20 meeting where this item will be discussed. BOARD MEMBERS 1 ) Member Boneysteele reported on the recent meeting held by Assemblyman Joe Canciamilla that he and Board Members Hockett and Menesini attended. Discussion at that meeting indicated that the State would likely take reserves and ad valorem tax revenue from special districts. Member Hockett stated that she also asked if Assemblyman Canciamilla would support legislation that would require CalTrans to use recycled water for their projects if they are close to a recycled water source. 2) Member Menesini announced that the State of the Estuary Conference will be held October 21-23,2003. Member Menesini stated that a number of good presentations will be made. 3) Member Menesini announced that Mr. Steve Wrightson, of Raines, Melton, and Carella, Inc., will discuss the Coyote Watershed Project: Expedited Urban Floor Protection in Santa Clara County, at the October 20,2003 Environmental Alliance Discussion Series. 4) Member Hockett reported on the Water Environment Federation Technical Exhibition and Conference at which the District received the U.S. Environmental Protection Agency 2003 National Operations and 10 16 01 ", ç;,'. ~""¥,, , "i~ 72 Maintenance Award. Member Hockett stated that the technical exhibition was excellent, and she visited the Cornell Pump booth. 5) Member Lucey stated that draft layouts of an advertisement thanking and commending District staff for their outstanding efforts were provided to the Board. Discussion followed with regard to the various layouts and including Board Members' names. Mr. Kenton lo Aim, Counsel for the District, stated that Board Members' names can be used, but the phrase "signed by" should be deleted. Member Boneysteele suggested that the type size used for Board Members' names be made smaller. President Nejedly stated that the words "the District" should be used instead of "our" when referring to employees. Ms. Harriette Heibel, Community Affairs Manager, agreed with the proposed changes and indicated that other minor modifications will be made. It was moved by Member Hockett and seconded by Member Boneysteele, that Draft C layout with the minor modifications noted above, be selected for the advertisement to appear in the Contra Costa Times commending and thanking District employees for their outstanding efforts which have resulted in the District achieving national, state, and local awards and recognition. The motion was approved with President Nejedly voting no. 6) Member Lucey, Chair of the Household Hazardous Waste Committee, reported that he and Member Hockett met with staff on October 7,2003. Major topics of discussion included the Household Hazardous Waste (HHW) Collection Facility Annual Report, implementation of a $20 Administrative Fee/Drop Off Fee for Conditionally Exempt Small Quantity Generators (Small Business), HHW mobile collection events, and HHW Collection Facility insurance coverage. Copies of the notes from that meeting were distributed. 7) Member Menesini, Chair of the Personnel Committee, reported and he and President Nejedly met with staff on October 15, 2003. At that meeting, the Personnel Committee endorsed filling the vacant Departmental Information Systems Analyst position and underfilling the vacant Construction Inspector/Designer position with an Engineering Assistant I. Reclassification of Wesley Adams from Senior Engineering Assistant (G72) to Assistant Engineering (S72) was also endorsed, and a position paper will be presented to the Board at a future Board Meeting. Copies of the notes from the meeting were distributed. BREAK President Nejedly declared a recess at the hour of 4:13 p.m., reconvening at the hour of 4:27 p.m., with all parties present as previously designated. a. 10. ADMINISTRATIVE CONSIDER RENEWAL OF CONTRACT FOR LEGAL SERVICES WITH KENTON lo ALM AND MEYERS. NAVE, RIBACK. SILVER & WILSON FOR THE PERIOD FROM OCTOBER 1. 2003 THROUGH SEPTEMBER 30. 2007 AND AUTHORIZE THE BOARD PRESIDENT TO EXECUTE THE CONTRACT Mr. Kenton lo Aim, Counsel for the District, excused himself during discussion of this item and moved to the audience. Mr. Batts, General Manager, stated that the District has been receiving general legal services from Mr. Kenton lo Aim since 1985 under a contractual agreement which has now expired. The term of the proposed contract renewal is for four years, October 1, 2003 through September 30,2007, with an ability to extend for an additional two years for a total of six years. The proposed contract renewal is very similar to the current contract. Hourly rates have been modified to be consistent with Mr. Aim's new law 10 _6 1 I' r' \.' { 73 firm's rates. A slight increase of approximately 2.5 percent is reflected for the Senior Principal, Mr. Aim. The retainer rate was decreased approximately 7 percent, with total hours increasing from 40 hours to 56 hours per month. Staff would recommend approval of the proposed contract renewal. Discussion followed with regard to the 90-day written notice provision for termination of the contract by either party. Member Menesini requested a copy of the proposed contract renewal, and information on the monthly costs for legal expenses for Mr. Aim's contract and for the District's labor firm's contract. Member Menesini stated that the contract renewal should be for two years at most. Member Menesini stated that he has no problem with the legal services that have been provided, but at some point the District may want to have in-house legal counsel. Member Menesini requested that this matter be tabled until the requested information is provided. It was moved by Member Lucey and seconded by Member Hockett, that the contract with Kenton lo Aim and Meyers, Nave, Riback, Silver & Wilson for legal services be approved, and that the Board President be authorized to execute the contract. Further discussion followed in which Member Boneysteele stated that something as extremely important as the contract for District Counsel legal services should be put over until the next meeting so the comprehensive information requested, including copies of the proposed contract, can be submitted to the Board. Member Boneysteele stated further that the relationship between the Board of Directors and legal counsel is more or less a personal relationship and the contract is secondary. President Nejedly stated that Mr. Aim has done an excellent job. As a courtesy to Board Members Menesini and Boneysteele, President Nejedly agreed that this item should be held over. Following discussion, Member Hockett withdrew the second on the above motion. The motion died for lack of a second. It was moved by Member Menesini and seconded by Member Boneysteele, that consideration of renewal of contract for legal services with Kenton L. Aim and Meyers, Nave, Riback, Silver & Wilson be continued to November 6, 2003, to allow staff to provide the information requested by the Board. Motion approved with Members Lucey and Hockett voting no. Mr. Aim, Counsel for the District, returned to his seat. a. 11. CORRESPONDENCE RECEIVE LETTER DATED OCTOBER 6,2003 FROM MR. KEN IVANETICH ENDORSING SEWER SERVICE FOR ALHAMBRA VALLEY: CONSIDER DRAFT RESPONSE Mr. Batts, General Manager, stated that this is the eighth letter the District has received from residents in the Alhambra Valley expressing interest in a public sewer extension. The other seven letters were distributed to the Board at the last Board Meeting. A draft response to these letters has been prepared and provided to the Board. In response to questions from Member Lucey with regard to the statement in the draft letter that the District believes the best long-term alternative is the gravity alternative, Ms. Ann E. Farrell, Director of Engineering, stated that the District's policy has been that in general the gravity solution is preferred, all other things being equal. It was the consensus of the Board that the letter be modified to reflect Ms. Farrell's statement that the District's preference is gravity, all other things being equal. President Nejedly stated that he would sign the letters as soon as they are ready. 10 16 0, ("'iiI ::,:'~ 74 b. RECEIVE LETTER DATED OCTOBER 7. 2003 FROM CONTRA COSTA COUNTY REQUESTING EXTENSION OF LEASE FOR ANIMAL SERVICES FACILITY: PROVIDE DIRECTION TO STAFF Mr. Batts, General Manager, stated that a letter has been received from Contra Costa County General Services Director Barton Gilbert, requesting that the lease for the Animal Services Facility be extended to April 1 ,2004. Staff would propose to meet with County staff and work out the details of such an extension for approval by the Board. 12. APPROVAL OF MINUTES MINUTES OF SEPTEMBER 18.2003 a. It was moved by Member Menesini and seconded by Member Boneysteele, that the minutes of September 18, 2003 be approved as presented. There being no objection, the motion was unanimously approved. 13. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED OCTOBER 16. 2003 Member Lucey, Chair of the Budget and Finance Committee, stated that he and President Nejedly reviewed the expenditures and would recommend approval. It was moved by Member Lucey and seconded by President Nejedly, that the Expenditure List dated October 16, 2003, including Self Insurance Check Nos. 102049- 102051, Running Expense Check Nos. 146801-147128, Sewer Construction Check Nos. 26067-26111, Payroll Manual Check Nos. 48933-48937, and Payroll Regular Check Nos. 54780-54810, be approved as recommended. There being no objection, the motion was unanimously approved. 14. BUDGET AND FINANCE a. ADOPT AMENDED AND RESTATED SECTION 125 CAFETERIA PLAN DOCUMENTS TO MEET NEW CHANGES IN INTERNAL REVENUE SERVICE CODE Mr. Batts, General Manager, stated that Controller Debbie Ratcliff works with Trucker- Huss, benefit counsel, to update the District Cafeteria Plan for any changes in federal laws governing such plans. This year the Internal Revenue Service passed a ruling that allows for reimbursement of non-prescription drugs through the Health Flex Spending account. This provision has been included in the District's Cafeteria Plan. Also, language was added to indicate that the additional $50 negotiated with the bargaining units this year, effective January 2004, must be used for an option in the plan other than cash. Following discussion, it was moved by Member Hockett and seconded by Member Menesini, that amendments to the District Cafeteria Plan documents be adopted to meet new Internal Revenue Service Code requirements and to reflect recently negotiated contracts with the District bargaining units. There being no objection, the motion was unanimously approved. b. AUTHORIZE AMENDMENT TO THE FICA-SUBSTITUTE DEFERRED COMPENSATION PLAN AGREEMENT WITH NATIONAL DEFERRED Mr. Batts, General Manager, stated that an additional investment option is being recommended by the Deferred Compensation Plan Advisory Committee for the FICA- Substitute Plan. This plan is required for all part-time, temporary, and seasonal employees, and Board Members. The plan requires that a minimum of 7.5 percent of earnings be deposited monthly. This additional investment option, the Nationwide Fixed Contract, is currently paying an approximate 4.0 percent return compared to the Liquid Savings Account that is paying about 0.25 percent. 10 j-~ 6',', ¿',', " .r\-, . }J 75 Following discussion, it was moved by Member Menesini and seconded by Member Hockett, that the amendment to the FICA-Substitute Deferred Compensation Plan Agreement with National Deferred be approved, adding the Nationwide Fixed Contract as an additional investment option. There being no objection, the motion was unanimously approved. c. RECEIVE THE AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30. 2003 Mr. Batts, General Manager, introduced Ms. Deborah Ratcliff, Controller, who reported that the firm of Vavrinek, Trine, Day and Company has completed its review of the District financial statements for the fiscal year ended June 30, 2003. Mr. A. J. Majors, a Principal in the firm, met with the Board Budget and Finance Committee in September to review the results in detail. Ms. Ratcliff reported that the District received an unqualified opinion, a clean audit with no management letter. Ms. Ratcliff stated that a management letter is sent when an auditor finds a problem with internal controls. Ms. Ratcliff stated that she is very pleased with these results. It means that the District has sound financial controls in place and is following them. Also, Vavrinek, Trine, Day and Company had no audit adjustments to recommend. However, District staff did recommend an audit adjustment for late invoices of approximately $100,000. The auditors concurred with that recommendation, and the adjustment was made. Ms. Ratcliff reported that Government Accounting Standards Board (GAS B) 34 was implemented in 2002-2003 as required. GASB 34 established standards for external financial reporting for all state and local government entities. Staff authored a Management Discussion and Analysis section providing an analysis of the District's overall financial position and results of operations. That becomes part of the financial statements. GASB 34 also requires changes to the financial presentation. The equity section has been modified. Contributed Capital and Retained Earnings were changed to Net Assets which include Net Assets Invested in Capital, Restricted Assets that Cover Debt Service, and Unrestricted Assets. Member Hockett left the meeting at the hour of 5:03 p.m. Ms. Ratcliff reviewed the audited financial results, stating that the 2002-2003 actual Running Expense Fund total revenue of $41 ,522,000 compared to budgeted revenue of $41,761,000 resulted in an unfavorable variance of $239,000 or 0.6 percent. Actual Running Expense Fund total expenses of $38,694,000 compared to budgeted expenses of $41 ,422,000 resulted in a favorable variance of $2,728,000 or 6.6 percent. The Running Expense Fund balance at June 30, 2003 was $9,000,000. Ms. Ratcliff reported that 2002-2003 Sewer Construction Fund actual total revenue of $23,491,000 compared to budgeted revenue of $20,918,000 resulted in a favorable variance of $2,573,000. Sewer Construction Fund actual total expenditures of $22,764,000 compared to budgeted expenditures of $28,954,000 resulted in a favorable variance of $6,190,000. These figures are net of Dougherty Valley expenditures and reimbursements. Sewer Construction Funds available at June 30, 2003 were $50,552,000. Mr. Batts stated that these favorable yearend variances were the result of a concerted effort on the part of staff in light of the state budget crisis and possible loss of ad valorem tax revenue, to save money and meet the goals agreed to with the Board in January. President Nejedly declared that the Audited Financial Statements for the Fiscal Year ended June 30,2003 were duly received. d. REPORT ON ARBITRAGE REBATE Mr. Batts, General Manager, introduced Ms. Deborah Ratcliff, Controller, who stated that the Internal Revenue Service requires that public agencies do an arbitrage 10 16 03 76 calculation on outstanding debt every five years. The purpose of this calculation is to ensure that agencies are not borrowing money and reinvesting at higher rates for the specific purpose of producing a profit. The firm of MuniFinancial, a specialist in this area, was engaged to do this calculation. All construction payments, debt service payments, interest earned as bond funds are spent down, and interest on the reserve account were reviewed. The interest income from investments was compared to interest expense the District is paying out. The District received an average interest rate of 4.48 percent on bond proceeds compared to an average interest expense of 4.26 percent on bond payments. Ninety (90) percent of the difference, $18,378, must be rebated back. Ms. Ratcliff noted that the Reserve account earned approximately $500,000 over the last five years. Member Lucey left the meeting at the hour of 5: 12 p.m. 15. EMERGENCY SITUATIONS REQUIRING BOARD ACTION None 16. ANNOUNCEMENTS/SUGGESTIONS FOR FUTURE AGENDA ITEMS None 17. CLOSED SESSION INITIATION OF LITIGATION a. 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 5:13 p.m., President Nejedly declared the closed session to discuss initiation of litigation pursuant to Government Code Section 54956.9(c) as noted above. At 5:20 p.m., President Nejedly concluded the closed session and reconvened the meeting into open session. 18. REPORT OF DISCUSSIONS IN CLOSED SESSION Mr. Kenton lo Aim, Counsel for the District, announced that the Board authorized filing a quiet title action with regard to Mr. Dickerson concerning access rights to the Lower Orinda Pumping Station. 19. ADJOURNMENT There being no further business to come before the Board, President Nejedly adjourned the meeting at the hour of 5:22 p.m., to reconvene on October 30,2003 at 2:00 p.m. for a Capital Improvement Budget Planning Workshop in the Second Floor Conference Room. COUNTERSIGNED: Pre ident of the Board of Dir tors, Central Contra Costa Sanita District, County of Contra Costa, State of California 1 (j) "1 [" -8- (}) ¡(t" Ç?¡ L" ," ~i ¿í)