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HomeMy WebLinkAboutBOARD MINUTES 02-21-02 78 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON FEBRUARY 21, 2002 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 February 21, 2002. President Menesini called the meeting to order and requested that the Secretary call roll. a. 1. ROLL CALL PRESENT: Members: Nejedly, Hockett, Lucey, Boneysteele, Menesini ABSENT: Members: None PLEDGE OF ALLEGIANCE TO THE FLAG Board and staff joined in the Pledge of Allegiance to the Flag. b. INTRODUCTIONS . INTRODUCE AMY HERNANDEZ. NEWLY HIRED ENGINEERING TECHNICIAN 11 . RECOGNIZE LERON PATTON ON HIS PROMOTION TO PLANT OPERATOR ill Ms. Amy Hernandez, Engineering Technician II, was introduced and welcomed to the District by President Menesini and the Board of Directors. President Menesini and the Board of Directors congratulated Mr. Leron Patton, Plant Operator III, on his recent promotion. None a. 02 21 2. PUBLIC COMMENTS 3. AWARDS AND COMMENDATIONS PRESENTATION OF CALIFORNIA WATER ENVIRONMENT ASSOCIATION (CWEAL SAN FRANCISCO BAY SECTION ANNUAL AWARDS FOR 2001 AWARD NOMINEES . ENGINEERING ACHIEVEMENT - PLEASANT HILL RELIEF INTERCEPTOR. PHASE 4 . LABORATORY ANALYST OF THE YEAR - TRI-HAI NGUYEN AWARD RECIPIENTS . PUBLIC EDUCATION - SEWER SCIENCE WASTEWATER LABORATORY - JOINT PROJECT WITH CENTRAL CONTRA COSTA SANITARY DISTRICT. SOUTH BAYSIDE SYSTEM AUTHORITY. AND PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT . MECHANICAL TECHNICIAN OF THE YEAR - RANDY COVEY . ELECTRICAL/INSTRUMENTATION PERSON OF THE YEAR - MARK CAVALLERO 02 79 Mr. Charles W. Batts, General Manager, stated that the District was nominated for an Engineering Achievement Award for the Pleasant Hill Relief Interceptor Phase 4 Project. The project used a variety of trenchless technologies, including microtunneling, conventional tunneling, directional drilling, and small diameter guided bores, to minimize impact on the residents. Two major accomplishments of the project were the installation of the interceptor under the lined portion of Grayson Creek and meeting the tight time constraints across the Sequoia School campus. Mr. Alex Rozul, Associate Engineer, is present representing the Engineering staff who worked on the project. Mr. Batts stated that Mr. Tri-Hai Nguyen, Chemist II, was nominated for the Laboratory Person of the Year Award. Mr. Nguyen did substantial research work related to organic testing involving Bay fish tissue samples for the Regional Monitoring Program so that the analysis would yield more reliable results. Mr. Nguyen also developed a gas chromatograph mass spectrometer (GCMS) analytical method for low-level detection of pesticides that have caused toxicity problems in treated effluent. His work on this analytical method was shared with the U.S. Environmental Protection Agency (EPA), which recommended this procedure to other laboratories. Mr. Nguyen's work was also used by the EPA in developing a revised risk assessment for chlorpyrifos which led to the EPA's decision to remove that particular pesticide from consumer products last year. Mr. Batts stated that the District, along with other agencies active in public education, South Bayside System Authority and the Palo Alto Regional Water Quality Control Plant, was awarded the CWEA San Francisco Bay Section 2001 Public Education Award for the Sewer Science Wastewater Laboratory program for high school students. Ms. Harriette Heibel, Community Affairs Manager, stated that this program is really a partnership program and this award means a great deal. Mr. Batts stated that employees are nominated by their peers and supervisors from treatment plants throughout the Bay Area. The employees who receive these awards are considered to be employees who have skill and ability, as well as contributing to the betterment of their profession. Mr. Randy Covey, Maintenance Technician III Mechanical, received the CWEA San Francisco Bay Section 2001 Mechanical Technician of the Year Award. Mr. Covey serves as a lead worker in the mechanical maintenance crew and was responsible for upgrading one of the sodium hypochlorite storage and delivery sites installed with the elimination of liquid chlorine. Mr. Covey did all of the design work, drew up the plans, ordered all of the parts, removed the existing piping, and acted as lead person for the crew that did the final installation work. The site contains 15,000 gallons of storage, with pump and valve facilities to serve six separate systems. Mr. Batts stated that Mr. Mark Cavallero, Electrical Technician, received the CWEA San Francisco Bay Section 2001 Electrical/Instrumentation Person of the Year Award. Mr. Cavallero is a skilled electrician and an outstanding troubleshooter, able to cover a broad spectrum of electrical, mechanical, instrumentation, and process computer control areas. Mr. Cavallero takes minimal time locating and solving difficult problems. His skill at troubleshooting the variable frequency drives at the treatment plant and pumping stations has saved the District a great deal of time and money by not using outside services. Mr. Batts stated that it is a pleasure to introduce and welcome Mr. Leo Gonzalez, President of CWEA, San Francisco Bay Section. Mr. Gonzalez stated that he is pleased to be here to recognize the nominees and award recipients for their hard work and the Central Contra Costa Sanitary District Board of Directors and staff for continuing support of CWEA. Mr. Gonzalez stated that it is an honor to present these awards. This is the opportunity for the San Francisco Bay Section to honor those who have achieved excellence and to be recognized by their peers. It is significant to be nominated for an award and even more significant to receive an award. Mr. Gonzalez stated that all of the award wi~ners will go on to the state competition and he wishes them luck. Mr. Gonzalez presented the CWEA San Francisco Bay Section 2001 Public Education Award for the Sewer Science Wastewater Laboratory Program to Ms. Harriette Heibel; the CWEA San Francisco Bay Section 2001 Mechanical Technician of the Year Award to Mr. Randy Covey; and the CWEA San Francisco Bay Section 2001 Electrical/Instrumentation Person of the Year Award to Mr. Mark Cavallero. Mr. Gonzalez 02 21 02 80 was joined by the Board and staff in congratulating all those who received nominations and awards on their outstanding efforts and this recognition from their peers. 4. CONSENT CALENDAR It was moved by Member Hockett and seconded by Member Boneysteele, that the Consent Calendar, consisting of Items a. though c., be approved as recommended. None a. The Board was advised of the close out of 11 capital improvement projects with a net underrun of $123,214, approximately 5 percent of the total authorized budgets. This item was presented for the Board's information. No action was taken. b. The Board was advised of the close out of the Lafayette Sewer Renovations Project, Phase 1, DP 5465. This item was presented for the Board's information. No action was taken. c. The attendance of Field Operations Superintendent Don Rhoads and Vehicle and Equipment Maintenance Supervisor Richard Boylan was authorized at the Vehicle Maintenance Management Conference and pre-conference workshops in Seattle, Washington, March 22 through 28, 2002. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Hockett, Boneysteele, Nejedly, Lucey, Menesini None None 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER 6. REPORTS a. GENERAL MANAGER 02 21 1 ) Mr. Batts, General Manager, introduced Mr. William E. Brennan, Capital Projects Division Manager, who provided an update on the Dougherty Tunnel and Trunk Sewer Project. Mr. Brennan stated that the contractor, Mountain Cascade, continues to put pressure on the tunneling subcontractor William C. Smith Company to perform. To date 1,164 feet of tunnel have been completed, approximately 25 percent. Average production has improved to about 65 feet per day. The best day so far was last Wednesday, when about 100 feet of tunnel was completed. Based on the average production of 65 feet per day, the tunnel should be completed by mid-May rather than mid-June as previously reported to the Board, because of the increased average daily production. The project will be finished on time if this continues. The tunneling machine had another problem yesterday and is now being repaired. Mr. Brennan stated that this is an ongoing problem, but his sense is that things seem to be getting better. Approval has not yet been received from the City of San Ramon for the west portal landscaping. As reported to the Board at the last Board Meeting, the City wishes to extend the landscaping about 400 feet forth from the west portal. The City has proposed that trees and ground cover be planted, that irrigation be installed, and that provision be made for maintenance. The developer does not want to pay for that additional landscaping, and efforts to work through the issue are basically at impasse. It was proposed that the landscaping be installed in the public right of way but it has been determined that there are various utilities in the public right 02 81 of way and it is not practical to install trees above these facilities. It may be possible to get an easement and agreement from the Royal Ridge Homeowners Associatióh to install the landscaping on their property, but that is a complication. City of San Ramon approval of the plans must be received by the end of March if the landscaping is to be installed as part of the contract. Discussion followed with regard to the additional landscaping requested by the City of San Ramon, and the fact that the District is in a somewhat peculiar position since the issue is between the developer and the City. In response to questions from the Board, Ms. Christa Freihofner, resident of San Ramon, stated that it was one of her recommendations that the landscaping be installed because she was concerned that the west portal is so large and the residents in the neighborhood are looking straight at it. Ms. Freihofner stated that she felt that additional landscaping would make it blend in better. Ms. Freihofner stated that she would like to see some alternative proposed that would not interfere with the underground utilities but would make the area look attractive. Member Nejedly agreed that we are trying to put in landscaping so the portal looks good, but it is very difficult when easements must be purchased and the landscaping must be maintained forever. The District is trying to do it right and then get out of the neighborhood. Mr. Brennan stated that as previously reported to the Board, there has been contact from the Dublin San Ramon Services District/East Bay Municipal Utility District Recycled Water Authority (DERWA) with regard to coordinating their recycled water project with the San Ramon Force Main Project. As directed by the Board, a letter was sent to the Mayor and City Council of the City of San Ramon laying out the District's desires based on Board comments at the last Board Meeting. The City of San Ramon desires that a joint project be done this construction season. DERWA has not yet done a design and must secure right of way from the County. In addition, time would be needed to notify people along the right of way and schools that wished to have construction done during summer months. In order to accomplish the District's original goal to do the project this summer, we must stick to the original bid schedule and bid in April 2002. Delaying a year would require modifying the settlement agreement between the City of San Ramon, the developers, and the District. District staff is meeting with the City of San Ramon, the County, DERWA and Parks to present information similar to what is being discussed with the Board and to ask them to request a delay if that is what they wish. Discussion followed concerning the need to be ready to proceed in order to comply with the settlement agreement unless the City of San Ramon wishes to delay the project one year to allow a joint project to minimize impacts on local residents and businesses. Mr. Brennan stated that there was a meeting on February 20, 2002 to discuss the San Ramon Pumping Station. District Board President Menesini and District staff, San Ramon staff, and a couple interested citizens attended. Discussion centered on the health and safety of the pumping station. Ms. Christa Freihofner, resident of San Ramon, stated that neighbors are happy with the way the pumping station looks. 2) Mr. Batts, General Manager, stated that at the last Board meeting, a concern was raised regarding staff authorization limits for extending contracts and expenditures under projects in the Capital Improvement Budget (CIB). The particular issue was the question of staff authority limits 02 21 02 82 02 21 for procuring professional services. Mr. Batts stated he has asked Director of Engineering Ann Farrell to review the current CIB staff authorization limits. A full review of staff authority limits will be presented to the Board in the near future and proposed revisions will be discussed. Ms. Ann E. Farrell, Director of Engineering, stated that in researching historical CIB authorization limits, staff reviewed minutes from past Board Meetings. In the past there has been some confusion between CIB and Operations and Maintenance (O&M) authorization limits. Director of Administration Randy Musgraves will be looking at both sides of the issue and coming back at a future Board Meeting with a report for the Board. The presentation today will focus on CIB authorization limits. Ms. Farrell stated that the Board adopted the first official CIB system and document in June 1987 and those limits are still in place. The system established the following staff authorization limits: . Up to $25,000 new projects . Up to $25,000 project overruns . Up to $50,000 consultant contracts . Budget revision up to staff authorization limits Before 1987, the limit for new projects and project overruns was $10,000. Individual project increases are limited and the total amount is also limited. The $50,000 authorization limit for CIB consultant contracts came up at the last Board Meeting. This authorization limit has not changed since 1987. The June 1987 project and consultant contract limits still apply. Since the original document was adopted, more detail was added in other areas such as: . Equipment budget contingency - staff authority was $3,500, that was increased to $5,000 in 2001; . At the same time, equipment contingency total was increased from $40,000 to $60,000; . Staff authorization limit for construction change orders is up to $ 50,000. In August 1996, an audit recommended increasing that limit from $50,000 to $100,000 but that was not initiated. Ms. Farrell displayed and described Table A-5, Capital Improvement Program Authorization Limit Table, Page A-19 of the CIB, describing the different types of authorizations and where these limits reside. Ms. Farrell reviewed an example of historical application of budget revisions up to authority limits as follows. The Board approves a consultant contract for $100,000. Staff may then authorize an amendment or series of amendments in an amount not to exceed $50,000. When total amendments exceed $50,000, it is taken back to the Board. Project managers must track individual amendments and note when they exceed $50,000. Some errors have been made. In February 2001 a contract that had been amended to $65,000 without Broad approval due to an error in tracking, was brought to the Board. Director of Administration Randy Musgraves is looking into this issue to see if there is some way to automatically track this limit to minimize the possibility of errors in the future. Ms. Farrell stated that possible authority limit alternatives for consultant contracts are being reviewed and other agencies are being contacted. If more control is the objective, the authority limit could be set not to exceed 15 percent or $50,000, whichever is lower. In this example, for a $50,000 contract, staff authority for an increase would be $7,500. If more flexibility 02 83 is the objective, the authority limit could be set not to exceed 1 5 percent or $50,000, whichever is higher. In this example, for a $1,000,000 contract, staff authority for an increase would be $150,000. Ms. Farrell stated that there are many alternatives that could be considered; but going forward staff would like to suggest that at this time we stay with the system that is currently in place until Mr. Musgraves has a chance to come back to the Board in approximately one month. In summary, Ms. Farrell stated that staff authorization limits are a Board policy decision with a balance of accountability to the Board and flexibility to get the work done. The future discussion will address the full range of staff authorization limits. Mr. Batts stated that the Board has a fiduciary responsibility but there is a need for some flexibility. Mr. Batts stated that he would hope that the procedure can be simplified so it is simple enough so everyone understands it and so we do not have problems in the future. As soon as the audit is completed and Mr. Musgraves puts together the information, this matter will be brought back to the Board. 3) Mr. Batts, General Manager, announced that on February 25 and 26, 2002, the District will be conducting in-house training for key personnel in responding to an emergency situation. All managers and required supervisors will be attending the two-day training program on the Emergency Incident Command System which puts the District in compliance with the state-wide Standard Emergency Management System (SEMS). Training will consist of understanding the Incident Command System and a table top exercise. 4) Mr. Batts, General Manager, announced that the District will have a booth at the Walnut Creek Chamber Business Trade Faire on Thursday, February 28, 2002 from 5:00 p.m. to 7:00 p.m. at Blake's at Boundary Oaks. The Trade Faire is being held in conjunction with a Teachers' Appreciation event. The District's booth will provide teachers with information on the District's student education programs. 5) Mr. Batts, General Manager, distributed the Final Environmental Impact Report (EIR) for Effluent Discharge Limit Increase. A public hearing has been set for March 7, 2002 to receive comments on the Final EIR and the proposed Effluent Discharge Limit Increase Project. 6) Mr. Batts, General Manager, reported that the District has received notice of a proposed fine in the amount of $750 from the Bay Area Air Quality Management District for a violation that occurred on July 9, 2001. The violation was for excessive emissions from the ash bag house as measured by visual observation of the emission by an Air Board inspector. Since the violation, the District has made improvements to the bag house and a dust alarm has been installed to warm of potential problems. 7) Mr. Batts, General Manager, stated that the Board is aware of the District's concerns about continued incineration of' sewage sludge. Various employees, most notably former Director of Engineering Robert Baker and now Senior Engineer Randy Schmidt, have worked with the Association of Metropolitan Sewerage Agencies (AM SA) on this issue. On February 12, 2002, the U.S. Environmental Protection Agency (EPA) formally removed Sewage Sludge Incinerators (SSI's) from the Title V list of industries targeted for regulations limiting emissions of hazardous air pollutants. This decision is not subject to judicial review. This single action will save publicly owned treatment works (POTW's) with sewage sludge incinerators from spending millions on additional testing and air pollution control equipment. The delisting of SSI's by the EPA happened because the EPA became convinced, as a result of sound information and analysis provided by groups such as AMSA, that SSl's should be delisted. 02 21 02 84 8) Mr. Batts, General Manager, announced that the District will be advertising for the Lafayette Sewer Renovation Project, Phase 3A. This project will replace six sewer pipe segments consisting of 900 feet that need renovation prior to storm drain and street work by the City of Lafayette. The engineer's estimate for this work is $125,000. b. COUNSEL FOR THE DISTRICT None c. SECRETARY OF THE DISTRICT None d. BOARD MEMBERS 1 ) The Board discussed difficulties in securing accommodations for the California Association of Sanitation Agencies (CASA) May meeting. Mr. Batts, General Manager, stated that he would carry this matter forward to the CAS A staff and Executive Board. 2) Participation in the Kennedy King Memorial College Scholarship Fund was raised and will be calendared for discussion at a future Board Meeting. 3) President Menesini announced that the February 25, 2002 Environmental Alliance Discussion Series will feature Mr. Tad Pilecki discussing Trenchless Pipeline Rehabilitation and Replacement Methods. The meeting will be held at noon at the John Muir Historic Site in Martinez. BREAK President Menesini declared a recess at the hour of 3:20 p.m., reconvening at the hour of 3:30 p.m., with all parties present as previously designated. 7. REAL PROPERTY a. AUTHORIZE THE GENERAL MANAGER TO EXECUTE A LEASE AGREEMENT MODIFICATION WITH CONTRA COSTA COUNTY FOR THE ANIMAL SERVICES FACILITY Mr. Batts, General Manager, stated that Contra Costa County Animal Services leases the District's property across Imhoff Place. The lease allows for significant increases in the monthly lease amount after November 2002 if the County is still occupying the property. The County has asked that the lease be extended at the current lease rate to November 2003 while their new facilities are being built. There are some very real advantages to the District if we agree to the extension. The County has offered to do an estimated $75,000 worth of demotion and removal work on the property to prepare it for the District. There are other long-term benefits of improving relationships with the County. Mr. Batts stated that as he has reported to the Board on several occasions, he has been meeting with the County Administrative Officer John Sweeten to discuss areas of mutual interest and concern. The District has an opportunity to improve cooperation between our agencies that could work to the benefit of the District and our ratepayers. Approving the lease extension would be an important step in fostering a closer, more cooperative relationship with the County. It also gives the District the benefit of having the County's contractor clear the property for future District use. Discussion followed with regard to the original lease rate structure designed to encourage the County to proceed with construction of new facilities and vacate the property in a reasonable time period, the fair market lease value of the property, and the stipulation that the County be made aware of some Board Members' concern that the County work cooperatively with the District in the future to address the needs of the citizens served by both agencies. 02 21 02 85 It was moved by Member Boneysteele and seconded by Member Hockett, that the General Manager be authorized to execute the proposed agreement modification providing Contra Costa County a one year extension at the current lease rate for the Animal Services Facility and providing for disposal and removal costs to be paid for by the County. There being no objection, the motion was unanimously approved on the following roll call vote: AYES: Members: NOES: Members: ABSENT: Members: Boneysteele, Hockett, Nejedly, Lucey, Menesini None None It was noted that Member Nejedly voted yes with the stipulation that the County be made aware of some Board Members' concern of the need for the County to work cooperatively with the District in the future to address the needs of the citizens served by both agencies. 8. CORRESPONDENCE a. NOTE RECEIPT OF LETTER DATED FEBRUARY 7. 2002 FROM THE 2001-2002 CONTRA COSTA COUNTY GRAND JURY REQUESTING INFORMATION FROM THE DISTRICT Receipt was noted of the letter dated February 7, 2002 from the 2001-2002 Contra Costa County Grand Jury requesting information from the District. It was noted that staff is gathering the information and will provide it to the Grand Jury. 9. APPROVAL OF MINUTES a. MINUTES OF JANUARY 24. 2002 b. MINUTES OF FEBRUARY 7. 2002 It was moved by Member Hockett and seconded by Member Boneysteele, that the minutes of January 24, 2002 and the minutes of February 7, 2002, be approved as presented. There being no objection, the motion was unanimously approved. 10. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED FEBRUARY 21 . 2002 Member Boneysteele, chair of the Budget and Finance Committee, announced that the Budget and Finance Committee will meet to review expenditures at 4: 15 p.m. on Mondays prior to Board Meetings in the Collection System Operations Division Conference Room at 1250 Springbrook Road in Walnut Creek. Member Boneysteele reported that because of the nation-wide concern over accounting ethics, the District auditors, Hood and Strong, had been requested to retain their work papers of District audits for their work indefinitely. Member Boneysteele distributed the reply from Hood and Strong, indicating their retention policy to retain audit working papers for a total of seven years whether or not the entity remains a client, after which time the records are destroyed. In the response Hood and Strong declined to change their records retention policy. Member Boneysteele stated that Hood and Strong has been the District auditors for five years and they were recently extended for an additional year. It is likely they will be candidates again. District Controller Debbie Ratcliff has assured the Budget and Finance Committee that Hood and Strong does not have any papers that have not been given to the District except their own audit notes. The auditors feel those are their notes and their property. When they give their opinion they do not want to share those notes with anyone or keep them more than their established retention schedule, which is seven years. The District has its own retention schedule adopted by resolution by the Board of Directors in 1987. That retention schedule is very detailed and establishes retention periods for District records. Member Boneysteele stated that he and Member 02 21 02 86 Hockett would recommend that no further action be taken on this matter at this time; and at the time the next audit engagement is to be finalized, the Board can decide if it wishes to make this a condition of the audit. Member Lucey agreed with the Budget and Finance Committee's recommendation, stating that Hood and Strong is a reputable firm and they have advised the District of their established records retention period. Member Lucey agreed that at this point the District should take no further action. It was the consensus of the Board to take no further action. Member Boneysteele stated that he and Member Hockett reviewed the expenditures and found them to be satisfactory. It was moved by Member Boneysteele and seconded by Member Hockett, that the Expenditure List dated February 21, 2002, including Self Insurance Check Nos. 101848- 101853, Running Expense Check Nos. 136761-137089, Sewer Construction Check Nos. 24253-24300, Payroll Manual Check Nos. 48816-48823, and Payroll Regular Check Nos. 53978-54012, be approved as recommended. There being no objection, the motion was unanimously approved. 11. BUDGET AND FINANCE a. APPROVE A BOARD RESOLUTION TO ADOPT THE REVISED SECTION 547 DEFERRED COMPENSATION PLAN DOCUMENT Mr. Batts, General Manager, stated that the Economic Growth and Tax Relief Reconciliation Act of 2001 affects, among other things, the District's 457 Deferred Compensation Plan. The position paper details the significant changes and asked the Board to approve a resolution adopting the revised 457 Plan document. Following discussion, it was moved by Member Lucey and seconded by Member Nejedly, that Resolution No. 2002-009 be adopted, approving the revised Section 457 Deferred Compensation Plan document. There being no objection, the motion was unanimously approved. b. RECEIVE THE 2001-2002 OPERATIONS AND MAINTENANCE (O&M) BUDGET REVIEW FOR THE SIX MONTHS ENDED DECEMBER 31. 2001 Mr. Batts, General Manager, introduced Ms. Deborah Ratcliff, Controller, who reviewed the financial position of the District for the first six months ending December 31, 2001, and the projections for the full year which were presented at the January Financial Planning and Policy Board Workshop and on which the Five Year Plan was based. Ms. Ratcliff reviewed the results of operations and maintenance for the six months ended December 31, 2001, reporting that revenues of $20,642,158 were basically on budget. Fox the six months ended December 31,2001, actual expenses were $17,390,877 or $1.6 million less than budget, representing an 8.6 percent favorable variance. At December 31, 2001, revenue over expense is $1,872,194. Ms. Ratcliff reported that for the full fiscal year, revenues are projected to be $41,205,800 or $214,200 greater than budget. Expenses are projected to be $39,148,433 or $1,060,872 less than budget, representing a 2.6 percent favorable variance. At June 30, 2002, revenue over expense results in a projected increase in O&M reserves of $2,057,367. Ms. Ratcliff noted, however, that on the Sewer Construction Fund side, it is projected that the District will be cutting into reserves by approximately $7 million. Ms. Ratcliff reviewed the significant expense variances projected at June 30, 2002, noting favorable variances in Salaries and Wages of approximately $100,000 due to unfilled positions resulting from retirements and in Utilities of approximately $1.2 million due to favorable long-term gas contracts secured by the District. Ms. Ratcliff stated that there are unfavorable variances in Repairs and Maintenance of approximately $46,000 due to greater than expected costs to repair the off-line furnace, in Outside Services of approximately $39,000 due to use of temporary help to fill vacant positions, and in 02 21 0.. ..'.~ 9.'. .. ~ 87 Materials and Supplies of approximately $60,000 due to increased expenditures for lamp ballasts and UV lamps. Ms. Ratcliff provided information on historical trends for the last four fiscal years, comparing six-month actual and budget to the full year actual and budget. Ms. Ratcliff stated that typically at the six-month point we are ahead of budget because of delayed billings and putting things off until the second half of the fiscal year, but we typically catch up to budget by the end of the fiscal year. Last fiscal year was an exception because of the energy crisis. President Menesini thanked Ms. Ratcliff for her report and declared that the 2001-2002 Operations and Maintenance Budget Review for the six months ended December 31,2001 and the projections for the full fiscal year were duly received. c. RECEIVE DECEMBER 2001 FINANCIAL STATEMENTS Ms. Ratcliff, Controller, reported that the District's temporary investments were held in Treasury bills and Treasury notes and the District's Local Agency Investment Fund (LAIF) account with interest rates ranging from 1.65 percent to 6.77 percent. The latest interest rate as of December 2001 was 1.9 percent. The average yield of the District's LAIF account through November 2001 was 3.5 percent. President Menesini declared that the December 2001 Financial Statements and report of temporary investments were duly received. d. 2001-2002 CAPITAL IMPROVEMENT BUDGET (CIB) MID YEAR STATUS REPORT Ms. Ann E. Farrell, Director of Engineering, presented the 2001-2002 Capital Improvement Budget (CIB) Mid Year Status Report. Ms. Farrell stated that approximately $27 million in capital expenditures (excluding Dougherty) was approved by the Board of Directors for 2001-2002. Staff has tried to defer projects because of the agreement to move forward the San Ramon projects. In addition, some projects were completed early. At June 30, 2002, CIB expenditures (excluding Dougherty) are projected to be approximately $22 million. Ms. Farrell summarized the four CIB program components and the major differences between what the Board approved and the year end projections, stating that at June 30, 2002, Treatment Plant Program expenditures are projected to be $5,633,000 or $378,000 less than budget; Collection System Program expenditures (excluding Dougherty) are projected to be $13,944,000 or $4,187,000 less than budget; General Improvements Program expenditures are projected to be $2,069,000 or $632,000 greater than budget; and Recycled Water Program expenditures are projected to be $424,000 or $1,295,000 less than budget. At 4:27 p.m., Mr. Kenton L. Aim, Counsel for the District, excused himself and left the meeting. Ms. Farrell reviewed the 2001-2002 Capital revenues. At June 30, 2002, interest earnings are projected to be $1.2 million or half of the budgeted amount and Facility Capacity Fees are projected to be $3.6 million also approximately half of the budgeted amount for a deficit in Capital revenues at year end of approximately $4 million. Capital revenues has been budgeted at $20.6 million but are projected to be approximately $16.2 million without the Dougherty Tunnel and Trunk reimbursement. Including the Dougherty Tunnel and Trunk reimbursement Capital revenues are projected to be $25.1 million and expenditures are projected to be approximately $32 million for a projected deficit of about $8 million by year end. The Sewer Construction Fund will decrease by approximately $7.8 million from $37.6 million at July 1, 2001 to $29.8 million projected Capital funds available at July 1, 2002. President Menesini thanked Ms. Farrell and declared that the 2001-2002 Capital Improvement Budget Mid Year Status Report was duly received. 02 21 02 88 12. EMERGENCY SITUATIONS REQUIRING BOARD ACTION None 13. ANNOUNCEMENTS/SUGGESTIONS FOR FUTURE AGENDA ITEMS Member Lucey requested that at a future meeting, District Counsel report on the legal issues associated with the City of Orinda's position regarding responsibility for various pipes. 14. ADJOURNMENT There being no further business to come before the Board, President Menesini adjourned the meeting at the hour of 4:32 p.m. ~4t-tO vft ~. President of the Board of Directors, Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: S cr ta of the Cent al Contr Costa S . ary District, County of Contra Costa, State of California 02 21 tf\.: (;j Uk;)