HomeMy WebLinkAboutBOARD MINUTES 04-22-04
213
MINUTES OF THE ADJOURNED REGULAR BOARD MEETING
OF THE DISTRICT BOARD OF THE
CENTRAL CONTRA COSTA SANITARY DISTRICT
HELD ON APRIL 22, 2004
The District Board of the Central Contra Costa Sanitary District convened in an
adjourned regular session in the Multipurpose Room at the District Offices at 5019
Imhoff Place, Martinez, County of Contra Costa, State of California, at 2:02 p.m. on April
22, 2004.
President Lucey called the meeting to order and requested that the Secretary call roll.
1. ROLL CALL
PRESENT: Members:
Menesini, Boneysteele, Hockett, Nejedly, Lucey
ABSENT:
Members:
None
2. PUBLIC COMMENTS
None
CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER
President Lucey proceeded to Item 5., Closed Session, at this time.
5. 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.
At 2:05 p.m., President Lucey declared the closed session to discuss significant
exposure to litigation pursuant to Government Code Section 54956.9(b) as noted
above. At 2:13 p.m., President Lucey concluded the closed session and reconvened
the meeting into open session.
6. 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.
3. REPORTS~NNOUNCEMENTS
Mr. Charles W. Batts, General Manager, stated that the spring issue of the CCCSD
Pipeline newsletter contains a message about the proposed Sewer Service Charge rate
increase. Copies of the draft newsletter were provided to the Board prior to the Board
Meeting. Mr. Batts introduced Ms. Harriette Heibel, Communication Services Manager,
who requested comments from the Board on the draft newsletter. Ms. Heibel stated
that any comments will be incorporated into the newsletter prior to mailing in the next
two weeks. Ms. Heibel briefly reviewed the articles in the draft newsletter.
Member Nejedly stated that the newsletter is very well done. All the articles are tied
together and describe the services the District provides to the public.
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In response to comments from Member Boneysteele, it was agreed that the wording will
be amended relating to driving time from Sun Valley Mall to the Household Hazardous
Waste Collection Facility, and the amount of mercury discarded in the trash.
Ms. Heibel thanked the Board for their input.
4. CAPITAL PROJECTS COMMITTEE MEETING/BOARD WORKSHOP
a.
PROVIDE OVERVIEW OF THE FISCAL YEAR 2004-2005 DRAFT CAPITAL
IMPROVEMENT BUDGET AND DRAFT 2004 TEN-YEAR CAPITAL
IMPROVEMENT PLAN
Mr. Batts, General Manager, stated that this is the third Board Workshop that has
focused on the District's Capital Improvement Budget (CIB) and Plan. The October
2003 workshop laid out the preliminary Capital Improvement Budget and associated
costs. The January Board Financial Planning and Policy Workshop used the
preliminary CIB and Operations and Maintenance (O&M) projections to develop a rate
strategy. The workshop today is to finalize the 2004-2005 Capital Improvement Budget
(CIB) and 2004 Ten-Year Capital Improvement Plan (CIP). Director of Engineering Ann
E. Farrell will give some insights into value engineering some of the capital projects, and
Management Information Systems (MIS) Administrator Mark Greenawalt will review the
Information Technology Development Plan for future years.
Mr. Batts introduced Ms. Ann E. Farrell, Director of Engineering, who acknowledged all
those who helped in the preparation of the Draft 2004-2005 Capital Improvement
Budget and Draft 2004 Ten-Year Capital Improvement Plan: John Mercurio, Tad
Pilecki, Gail Chesler, Ba Than, Randy Schmidt, Don Berger, and Curt Swanson.
Engineering staff worked with the operating departments to stay within the dollar goals
and still meet the District's needs.
In response to questions from Member Menesini, Ms. Farrell stated that each project
will have a spreadsheet showing how much will be spent each year. These spread
sheets will be included in the final CIB/CIP document.
Ms. Farrell reviewed the agenda for the workshop and reviewed historical Capital
Program activity, noting that actual 1999-2000 total expenditures without Dougherty
Valley were $21.3 million and total revenue was $21.6 million for a positive variance of
$300,000. In 2000-2001 actual expenditures without Dougherty Valley were $28 million
and total revenue was $18.9 million for a deficit of $9.4 million. In 2001-2002 actual
expenditures without Dougherty Valley were $20.5 million and total revenue was $17
million for a deficit of $3.5 million. Ms. Farrell noted that in 2001-2002 the District
issued bonds and received bond proceeds of $15 million. In 2002-2003 actual
expenditures without Dougherty Valley were $22.4 million and total revenue was $23.5
million for a favorable variance of $1.1 million. Because of the anticipated loss of ad
valorem tax revenue in 2003-2004 staff conscientiously tried to defer projects, and
expenditures are projected to be $20.0 million. The District did not lose ad valorem tax
revenue and total revenue is projected to be $24.0 million for a favorable variance of
$4.0 million and a projected Sewer Construction Fund balance at June 30, 2004 of
$53.0 million. Ms. Farrell stated that as discussed at the October 2003 Capital
Improvement Budget (CIB) workshop, because the Sewer Construction Fund balance
has grown, staff tried to do a full CIB this year even through the District may lose ad
valorem tax revenue. The 2004-2005 CIB expenditure recommendations are
$19,166,000 for the Collection System Program, $6,010,000 for the Treatment Plant
Program, $2,255,000 for the General Improvements Program, and $665,000 for the
Recycled Water Program, for total expenditures of $28,096,000. Ms. Farrell stated that
at a 90 percent accomplishment rate plus 5 percent for contingencies, the
recommended expenditures equal the October 2003 workshop recommended
expenditures of $26,600,000. Ms. Farrell stated that the 2004-2005 revenues are
estimated to be $22,354,000 assuming an increase going to the Capital Program from
the Sewer Service Charge and a reduction in property tax revenue. This is slightly
different than the revenue estimates presented at the October 2003 CIB workshop.
Total expenditures are projected to be $28,096,000 for a deficit of $5,742,000 bringing
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the projected Sewer Construction Fund balance at June 30,2005 to $47 million. If the
historical accomplishment rates apply, expenditures will be less than projected by 5 to
10 percent, and should approximate the'$26¡~600ìOOO from the October 2003 CIB
workshop resulting in a smaller deficit and increased Sewer Construction Fund balance.
Ms. Farrell provided a summary of debt service for 2004-2005, indicating that total debt
service for the year will be $3,902,000 accrued to finance the Capital Improvement
Program. This total is made up of principal and interest on the Recycled Water loan,
the 1994/1998 Revenue Bond refunding, and the 2002 Revenue Bond. Ms. Farrell
stated that in 2005-2006 debt service will transition to a separate Debt Fund. Property
tax revenues will be preferentially allocated to pay debt. Sewer Service Charge will
then be allocated to pay debt first, if necessary, Operations and Maintenance (O&M)
expenses second, and Capital expenses third. Debt service will stay at about $3.5 to $4
million per year or $23 to $26 on the Sewer Service Charge rate until some of the debt
is paid off in the future.
Ms. Farrell briefly described the Collection System Program projects and funding levels
totaling $19,166,000 as follows:
.
Lower Orinda Pumping Station Renovation - $3,316,000
.
Pleasant Hill Relief Interceptor, Phase 5 - $3,300,000
.
Pleasant Hill Road East Trunk - $2,346,000
.
Concrete Corrosion Contra Costa Boulevard, Phase 2 - $2,000,000
.
Walnut Creek Renovations, Phase 2 - $1,225,000
.
Vessing Road Renovation - $1,123,000
.
TV Inspection Program - $1,000,000
Developer Sewers - $750,000
.
.
Cured-In-Place Pipe, Phase 2 - $720,000
.
Happy Valley Road Sewer Renovation - $515,000
.
Total Collection System Projects < $500,000 - $2,871,000
Ms. Farrell used a map to describe the overflow crescent discussed with the Board at
previous meetings. This overflow crescent is the focus of the renovation program. Ms.
Farrell reviewed the projected Collection System Renovation Program expenditures for
2004-2005 by location, noting that the majority of the funds will be spent in the Cities of
Pleasant Hill and Walnut Creek, and in the concrete pipe renovation program. Ms.
Farrell reviewed a chart showing program expenditures for the next ten years from
2004-2005 through 2013-2014, indicating that the largest portion of the Collection
System Renovation Program funds will be spent in the Cities of Orinda and Walnut
Creek, and the concrete pipe renovation program. The average cost per year for the
next ten years is $7.7 million. Showing a chart of Collection System Renovation
Program expenditures for the past 15 years from 1989-1990 to 2003-2004, Ms. Farrell
indicated that the largest portion of the funds were spent in the Cities of Lafayette,
Martinez, Orinda, and Walnut Creek and Rossmoor. The average cost per year for the
last 15 years was $3,160,000. This demonstrates that the District is significantly
increasing its financial commitment to the renovation program. Ms. Farrell reviewed a
chart ranking Collection System Renovation Program expenditures by city for the entire
25-year period from 1989-1990 through 2013-2014, totaling $124,487,000 to
demonstrate that the highest expenditures are concentrated in the areas in the most
overflows.
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Ms. Farrell stated that she would like to talk to the Board about how staff analyzes
projects from an engineering perspective to ensure that the funds are spent in the best
way possible. An example is the M4A Force Main Replacement Project. During design
staff considered whether the force main should be replaced at a deeper location to
reduce power usage for pumping costs. The power cost savings are proportional to
depth at an average flow of 1,675 gallons per minute/20 feet depth/$0.17kwh equaled
$12,500 per year. The construction cost increase due to depth equaled $300,000 for a
simple payback of 24 years. The conclusion was that power cost savings did not justify
the increased depth.
Ms. Farrell stated that the Treatment Plant was put into service during the 1970's.
Much of the Treatment Plant is in need of renovation after 30 years of use. If renovation
is not done, potential for failures is increased. Ms. Farrell briefly described the
Treatment Plant Program projects and funding levels totaling $6,010,000 as follows:
.
Treatment Plant Electric Cable Replacement - $1 ,500,000
.
Treatment Plant Protective Coating, Phase 2 - $1,500,000
.
Piping Renovations and Replacement, Phase 2 - $600,000
.
Scrubber Pumps Renovation - $516,000
.
Plant Control System Improvements - $304,000
.
Total Treatment Plant Projects < $300,000 - $1,590,000
Ms. Farrell reviewed an example of value engineering in the Treatment Plant Program.
During design of the Service Air Compressor Replacement Project, the question of
whether major maintenance should be performed to extend the life of the units or
whether the compressors should be replaced was considered. A seven-year analysis
was done. In the major maintenance alternative, the cost of major maintenance was
$43,000 per unit for a total of $86,000 plus $172,000 ($86,000 each) for the cost of
purchasing two new compressors in the seventh year for a total of $258,000. In the
replacement now alternative, the cost was $86,000 each for two new compressors for a
cost of $172,000 less energy savings of $147,000 ($21,000 per year for seven years)
for a net cost total of $25,000. In a ten-year analysis, major maintenance at a cost of
$86,000 ($43,000 per unit for two compressors) is performed in the tenth year, less
energy savings of $63,000 ($21,000 per year for three years) results in a net ten-year
cost total of $48,000. Thus, in either the seven year or the ten year analysis, it is
significantly more cost effective to replace the service air compressors with new
compressors now to avoid the major maintenance cost.
Ms. Farrell stated that in the Plant Control System Improvements Project, the issue is
procurement. Normally the District wants to bid projects to get the best prices; but on
this project, there is a need to get the most reliable software so it would be beneficial to
do a Request for Proposals (RFP) for software and bid the non-proprietary hardware.
Configuration, testing, and startup services will be obtained through the RFP process.
The control room modifications will then be bid as a separate project.
Ms. Farrell reviewed proposed expenditures for the Recycled Water Program for 2004-
2005 totaling $665,000 as follows:
Recycled Water - Pleasant Hill, Phase 1 B - $630,000
.
.
Total remaining Recycled Water Projects - $35,000
Ms. Farrell stated that funds in the Recycled Water Program are basically designated
for adding new users, but there is a need to look at what renovations and improvements
need to be made to keep the District's existing 26 recycled water customers in service
for the next ten years. For that reason, there may be a change in the focus of the
Recycled Water Program for the next CIB/CIP.
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Ms. Farrell briefly reviewed the 2004-2005 General Improvements Program
expenditures totaling $2,225,000 as follows~'
.
Equipment Budget - $603,000
.
Management Information Systems (MIS) Plan - $442,000
.
Headquarters Office Building HVAC and Roof Improvements - $295,000
.
Collection System Operations (CSO) Division Facility Improvements-
$234,000
.
Headquarters Office Building Electrical Improvements - $100,000
.
Total General Improvements Projects < $100,000 - $581,000
Ms. Farrell stated that there will be an opportunity at the end of the meeting, to discuss
any project in greater detail that the Board may wish to discuss.
b.
REVIEW DRAFT MIS/INFORMATION TECHNOLOGY DEVELOPMENT
BUDGET FOR 2004-2005
Mr. Mark Greenawalt, MIS Administrator, provided an overview of the Information
Technology (IT) Development Budget. Mr. Greenawalt stated that 2001-2002 was the
first formal capital budget period for IT Development. Mr. Greenawalt briefly
summarized accomplishments from previous years including the PC Replacement
Program, Network Infrastructure, MIS Network Center and Staff Offices, District Internet
Access, Underground Service Alert System, Microsoft Office 2000 Applications, AS/400
Hardware, Human Resources Information System, Centralized Backup System,
Records Management Software Upgrade, Risk Management Claims System, Sewer
Maintenance Management Software, and Document Imaging System. Mr. Greenawalt
stated that the 2003-2004 budget approved by the Board was $448,000. It is projected
that $370,000 of that will be spent. To date $285,000 has been expended on the
following 2003-2004 budget components:
PC Replacement Program - $78,000
.
.
.
PC Management Software - $6,000
.
Permit Counter Display Terminals - $4,000
.
HTE Software Upgrade - $37,000 (a 50 percent discount was secured,
saving approximately $35,000)
Engineering Survey Software - $36,000
Discussion followed in which Member Boneysteele expressed interest in seeing the
survey equipment.
.
.
.
.
Bar Code System - $17,000
Internet Content Management Software - $55,000
Board Room Presentation System - $29,000
Miscellaneous Hardware and Software - $23,000
The following 2003-2004 items are pending and should be completed by the end of the
current fiscal year including the addition of the Board Room Audio Recording System
and the Purchasing Contract Management System:
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.
GroupWise Email Software Upgrade - $25,000
.
Broad Room Audio Recording System - $15,000
.
Purchasing Contract Management System - $35,000
.
Miscellaneous - $10,000
In addition, $72,000 of the $109,000 budgeted for the Document Imaging System,
Project No. 8200, will be spent in the current fiscal year. The HTE interface has not yet
been completed by HTE so staff has been unable to do the work in the Permits area.
Mr. Greenawalt stated that the proposed 2004-2005 budget is $442,000 including
contingency of $50,000, and is comprised of the following items:
.
PC Replacement Program - $100,000
.
Central Network Storage - $75,000
Network Server Replacement - $30,000
.
.
Laboratory Information Management System (LlMS) Upgrade - $50,000
.
Network Expansion for Plant - $25,000
.
Multipurpose Room Presentation System - $25,000
.
Email Spamming Software - $7,000
.
Wireless Network Access - $10,000
.
Network Equipment Upgrades - $10,000
.
Systems Management Server - $10,000
.
Project Management Services - $15,000
.
Intranet Development - $10,000
.
Network Center Uninterrupted Power Source (UPS) - $25,000
Mr. Greenawalt noted that the Network Center Upgrade - Fire Protection and Air
Conditioning, Mainsaver Software Upgrade, TV Video Database, and Network
Operations Server have been delayed from previous years. Funds for these projects
were budgeted in previous Capital Improvement Budget periods.
President Lucey requested that staff come back to the Board before doing anything on
the proposed Multipurpose Room Presentation System, stating that the Board may not
want to spend additional funds on that room. Further discussion followed concerning
email spamming software and wireless network access.
Member Nejedly had previously requested to be excused, and left the meeting at the
hour of 3:12 p.m.
Mr. Greenawalt provided a summary of future projects including TelephoneNoicemail
System Upgrades, On-Line Permit System, Global Position System, Vendors Bid List
Server, Sewer Billing Software Upgrade, Human Resources On-Line Applications, E-
Commerce, Wireless Technology, and Document Imaging System Enhancements.
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Member Menesini stated that this overview has been very helpful. Member Menesini
requested information on the locations and responsibilities of MIS staff members. Mr.
Greenawalt stated that he would be happy to provide that information.
c.
SUMMARY
Ms. Farrell stated that the purpose of this workshop is to ask for Board authorization of
funds for the coming fiscal year. Ms. Farrell presented the Capital Improvement Budget
(CIB) summary for fiscal year 2004-2005. Ms. Farrell reviewed estimated program
expenditures for 2004-2005 of $28,096,000, carryover from the previous fiscal year is
estimated to be $21,222,000, and the estimated additional allocation needed for 2004-
2005 is $20,754,000, for a total proposed authorization of $41 ,976,000. Ms. Farrell
stated that the amount authorized is always larger than what is spent because the
Board authorizes the total project budget and projects usually take more than one year
to complete. Assuming a 90 percent accomplishment rate plus 5 percent contingency,
expenditures should approximate the $26,600,000 target from the October 2003 Capital
Planning Workshop.
In response to questions from Member Hockett concerning projects that will be brought
forward, Ms. Farrell stated that the Lower Orinda Pumping Station Renovation Project
and the Pleasant Hill Relief Interceptor Phase 5 Project were deferred for a number of
years, but they have now been brought forward because there is a risk in not doing
them and staff now feels that there are adequate funds in the Sewer Construction Fund
to complete these large projects even in the event of the loss of ad valorem tax.
In response to a question from President Lucey, Ms. Farrell stated that if the Board
approves the $42 million authorization, the projects contained in the CIB are not
automatically approved. Specific additional Board approval is required for consultant
agreements over $50,000, for award of construction contracts over $15,000, and for
project overruns in excess of 15 percent of the final project budget established at the
time of construction contract award.
In closing, Ms. Farrell reviewed the future revenue structure for capital projects, stating
that the District had the benefit of $15 million in bond proceeds added to the Sewer
Construction Fund in 2002-2003. Anticipating the loss of ad valorem tax revenue in
2003-2004, Capital spending was deferred. Retention of ad valorem tax revenue
results in a $4 million positive variance for fiscal year 2003-2004. Through a series of
conscientious efforts, the Sewer Construction Fund balance at July 1, 2004 is projected
to be $53 million. Staff recommends going forward with some of the larger deferred
projects and spending down some of the reserves. Ms. Farrell stated that increases in
the Sewer Service Charge capital component will continue to be needed to soften the
impact of ad valorem tax revenue loss and spending down reserves.
President Lucey thanked staff for their presentations.
BREAK
President Lucey declared a recess at the hour of 3:34 p.m. President Lucey requested
to be excused and left the meeting. At 3:47 p.m., President Pro Tem Hockett
reconvened the meeting with Members Menesini, Boneysteele, and Hockett being
present.
5. CLOSED SESSION
SIGNIFICANT EXPOSURE TO LITIGATION
a.
This item was taken out of order earlier in the agenda.
6. REPORT OF DISCUSSIONS IN CLOSED SESSION
This item was taken out of order earlier in the agenda.
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7. REPORTSMNNOUNCEMENTS
a.
PROVIDE DETAILED PROJECT DISCUSSION IF REQUESTED BY BOARD
No additional information was requested.
8. ADJOURNMENT
There being no further business to come before the Board, President Pro Tem Hockett
adjourned the meeting at the hour of 3:48 p.m.
COUNTERSIGNED:
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