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HomeMy WebLinkAboutBOARD MINUTES 04-04-02 118 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON APRIL 4, 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 April 4, 2002. President Menesini called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Hockett, Lucey, Boneysteele, Menesini ABSENT: Members: Nejedly Member Nejedly had advised staff that he would be late for this meeting and requested that the meeting begin without him. a. PLEDGE OF ALLEGIANCE TO THE FLAG Board and staff joined in the Pledge of Allegiance to the Flag. b. INTRODUCTIONS President Menesini and the Board of Directors congratulated Collection System Inspector Supervisor Paul Kelly, and Maintenance Crew Leaders Penny Binder, Mark Goss, and Rick Hodge on their recent promotions. 2. PUBLIC COMMENTS None 3. CONSENT CALENDAR It was moved by Member Hockett and seconded by Member Lucey, that the Consent Calendar, consisting of Items a. and b., be approved as recommended. a. Authorization was given for P.A. 02-07 (Alamo), P.A. 02-08 (Alamo), P.A. 02-09 (Lafayette), P.A. 02-10 (Walnut Creek), and P.A. 02-11 (Lafayette) to be included in a future formal annexation to the District. Motion approved on the following vote: AYES: Members: Hockett, Lucey, Boneysteele, Menesini NOES: Members: None ABSENT: Members: Nejedly b. A one-year leave of absence was granted to Collection System Operations Division (CSOD) employee Robert Walker, Maintenance Crew Member II. Motion approved on the following vote: AYES: Members: Hockett, Lucey, Boneysteele, Menesini NOES: Members: None ABSENT: Members: Nejedly 04 04 0'.. ';).. ~ .. h:J 119 4. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER None 5. BIDS AND AWARDS a. AUTHORIZE AWARD OF A PURCHASE ORDER TO VARIAN. INC. FOR AN ATOMIC ABSORPTION SPECTROMETER FOR THE ENVIRONMENTAL LABORATORY Mr. Charles W. Batts, General Manager, stated that the District's current National Pollutant Discharge Elimination System (NPDES) permit requires the District to monitor influent and effluent for several metals such as copper, chromium, and lead. These metals are analyzed using an Atomic Absorption Spectrometer. The District's present Atomic Absorption Spectrometer is 15 years old and is near the end of its useful life. The model was discontinued some time ago. The unit has required several repairs in recent years and parts are no longer available. President Menesini showed a brochure picturing the new model and indicated that he would be pleased to have this fine piece of equipment in the District's new Environmental Laboratory. President Menesini and Mr. Batts commended Laboratory Superintendent Bhupinder Dhaliwal for his outstanding work with the U.S. Environmental Protection Agency and Regional Water Quality Control Board, and as Chair of the Bay Area Clean Water Agencies (BACWA) Laboratory Committee. It was moved by Member Hockett and seconded by Member Boneysteele, that award of a purchase order be authorized to Varian, Inc., the lowest responsible bidder, in the amount of $58,167.06 to provide one Atomic Absorption Spectrometer for the Treatment Plant's Environmental Laboratory. There being no objection, the motion was approved with Member Nejedly being absent. b. AUTHORIZE AWARD OF A PURCHASE ORDER TO LEEMAN LABS. INC. FOR ONE (1) EACH AUTOMATED FLUORESCENCE MERCURY ANALYZER SYSTEM. EPA METHOD 1631 FOR THE ENVIRONMENTAL LABORATORY Mr. Batts, General Manager, stated again that the District's National Pollutant Discharge Elimination System (NPDES) permit requires the District to analyze for mercury using the U.S. Environmental Protection Agency (EPA) Method 1631. The District's existing mercury analyzer does not comply with this requirement. It is over 10 years old and also at the end of its useful life. Mr. Batts stated that the position paper indicates that the cost of outside laboratory analyses will exceed the cost of this instrument in less than three years. That is a typographical error. It should read five years. Member Lucey stated that he will be voting for this purchase but he does not think the fact that it will take five years to pay for itself is the issue. Member Lucey stated that he would normally feel that it is somewhat questionable why the District needs this equipment now, but the District and other dischargers are in a difficult position with regard to mercury. It was moved by Member Lucey and seconded by Member Boneysteele, that award of a purchase order be authorized to Leeman Labs, Inc., the lowest responsible bidder, in the amount of $26,737.75 to provide one (1) each Automated Fluorescence Mercury Analyzer System, EPA Method 1631. There being no objection, the motion was approved with Member Nejedly being absent. c. AUTHORIZE AWARD OF CONSTRUCTION CONTRACT TO RANGER PIPELINES. INCORPORATED. FOR THE LAFAYETTE SEWER RENOVATION PROJECT. PHASE 3A. DP 5607 Mr. Batts, General Manager, stated that this project is part of the District's ongoing Collection System Renovation Project in Lafayette to systematically replace small diameter sewers to minimize overflows. This construction contract will install 1,500 feet of small diameter pipe at two sites in the Lafayette area that are in need of renovation, and where 04 04 02 120 construction must be completed in order to coordinate with pending paving work by the City of Lafayette. Following discussion, it was moved by Member Hockett and seconded by Member Boneysteele, that award of a construction contract in the amount of $168,350 for construction of the Lafayette Sewer Renovation Project, Phase 3A, DP 5607, be authorized to Ranger Pipelines, Incorporated, the lowest responsible bidder. There being no objection, the motion was approved with Member Nejedly being absent. 6. REPORTS a. GENERAL MANAGER 1 ) Mr. Batts, General Manager, introduced Mr. William E. Brennan, Capital Projects Division Manager, who reported that as of last night 3,540 feet (76 percent) of the Dougherty tunnel had been completed. The tunneling subcontractor William C. Smith Company has been doing in excess of 400 feet per week. At this rate the tunnel should be finished by the end of April. A 60-inch concrete pipe must then go inside the tunnel. Last week that pipe was inspected at the manufacturer. Mr. Brennan stated that the landscaping near the west portal of the tunnel has been approved and stamped approved plans should be received from the City of San Ramon Planning Commission today. This week the contractor will start installation of the stone that will cover concrete walls of the west portal. Mr. Brennan stated that final paving of Mangos and Estero should be completed by tomorrow, April 5, 2002. District field staff and the City inspector indicate that there have been no complaints so far. With regard to customer issues, Mr. Brennan stated that on March 27, 2002, inspections were conducted of the two homes where claims have been filed. District Safety and Risk Management representative Kim Greer, representatives from Mountain Cascade and Mountain Cascade's insurance carrier Traveler's, and a representative from SOHA Engineers, the firm that does pre- and post-construction inspection of homes, were present. We are waiting for the report before taking further action. Mr. Brennan reported on the March 26, 2002 San Ramon City Council meeting which he, Member Hockett, and Director of Engineering Ann Farrell attended. Discussion of coordination of the District's San Ramon Force Main Project, the Dublin San Ramon Services District/East Bay Municipal Utility District Recycled Water Authority (DERWA) Project, and the PG&E fiberoptic cable project was continued to the April 9, 2002 San Ramon City Council meeting. Mr. Brennan stated that at the April 9 meeting, the public hearing on the District's encroachment permit will be reopened. Mr. Brennan stated that negotiations on the permit have gone back and forth, but it is a reasonable permit and hopefully it will be approved. Mr. Brennan stated that the San Ramon Force Main job is out to bid now. In response to questions from Member Lucey, Mr. Brennan stated that he believes the engineer's estimate for the project is $4.4 million but he will confirm that. A meeting was held with Contra Costa County concerning the unresolved right of way issues. It was a productive meeting and the issue in terms of the alignment of the District force main was resolved to the mutual satisfaction of the District and the County. It was a very cordial meeting and moved quickly to resolution. The paperwork still needs to be completed with the help of District Counsel. Mr. Brennan stated that the San Ramon Pumping Station bids were received April 3, 2002. The apparent low bidder, Millard Tong Construction Company has requested relief of bid due to a clerical error. Millard Tong's bid was more than $1 million less than the second low bid. GSE 04 04 02 121 Construction Company is the second low bidder at $5,176,000. Staff is going forward with the bid evaluation and background check. President Menesini thanked Mr. Brennan for the update. 2) Mr. Batts, General Manager, stated that the issue of the current contract and purchasing authorization limits of the General Manager and management staff has come before the Board on several occasions, particularly with regard to professional services agreements. The Board has expressed some concern about the interpretation of incremental authority limits and other issues related to authorization limits and contracts. Based on the recent request of the Board of Directors, staff has reviewed these issues and also asked the District's internal auditor, an outside Certificated Public Accountant, to review the entire range of purchasing and contract authorization limits. Member Lucey stated that the former Budget and Finance Committee had asked that this matter be put before the full Board. Member Lucey stated that he and Member Nejedly, the former Budget and Finance Committee Members, were not aware of the $50,000 staff authority limit for contract amendments. Mr. Batts introduced Mr. Randall M. Musgraves, Director of Administration, who stated that the purpose of this review was to review the current purchasing authorization limits and address the incremental authority limits (the Board approves the contract, then the General Manager has a $50,000 authority limit for any changes or additions before the matter comes back to the Board), bias or favoritism to a vendor through multiple contracts, contract splitting, and multiple agreements or contracts; and to review the District's purchasing processes, procedures, administration, and effectiveness. The District's internal auditor, Rosemary Belland, reviewed agreements and contracts as well as interviewed staff. The District's Controller Debbie Ratcliff and Principal Buyer Cheri Arstani evaluated the District's agreements and contracts for the past eighteen months. Mr. Musgraves reviewed the District Authorization Limits chart and noted that authorization limits differ between Capital and Operations and Maintenance (O&M). The Board has granted the General Manager a $50,000 authority limit for agreements and contract with the exception of professional consulting agreements for O&M. These agreements are sometimes referred to as management agreements. The General Manager authority limit for these agreements is $25,000. Mr. Musgraves reviewed the current contract/agreement activity, excluding Capital Improvement Budget construction contracts, noting that most activity occurs within the authority limits. Mr. Musgraves stated that in all cases, he found that to be true. As the Board will recall, there were two items in the past year that were not within the authority limits; and in both cases, the Engineering Department came to the Board and corrected that. Mr. Musgraves reviewed a chart showing vendors with multiple agreements or contracts. Finally, other agencies were contacted to see what authorization limits were in place. A comparison of authorization limits was reviewed and Mr. Musgraves noted that none of the agencies surveyed, with the exception of the District, use the incremental concept; but the District's authorization limits are lower in comparison than some of the other agencies. Mr. Musgraves presented the findings of the staff and internal auditor review as follows: . No violations of authorization limits; . Did not see any strong bias or favoritism to a consultant or contractor; 04 04 02 122 . No contract splitting; . Need to simplify and clarify the process and Purchasing has been charged with this; and . Need to improve documentation and filing and Purchasing has been charged with this. Member Nejedly entered the meeting at the hour of 2:47 p.m., and apologized for being late. Mr. Musgraves reviewed the range of options for Board consideration, including keeping with the current practice, removing the incremental authorization limit, increasing authorization limits, or establishing a percentage scale (15 percent or $10,000 whichever is greater was discussed in the report provided to the Board). Mr. Musgraves presented the staff recommendation to accept the internal auditor's report and to retain the current authorization limits since no misuse or abuse was found and these authorization limits are comparable with the authorization limits of other agencies. Mr. Musgraves stated that staff will be developing a work plan and time line for implementation of the internal auditor's recommendations. Member Lucey stated that he has no problem with anything in the internal auditor's report; but he is uncomfortable with the idea that if the Board approves a $60,000 contract, staff can spend $50,000 more without the Board's knowledge. Member Lucey stated that he would support the percentage scale using 15 percent. Member Boneysteele stated that Member Lucey's concerns are legitimate and reasonable. The idea was for the Board not to be bothered by numerous small authorizations, but once that limit is exceeded the Board is brought in. Member Hockett stated that it is important for staff to have flexibility. In today's world $50,000 does not go far. However, Member Hockett stated that she would also be more comfortable having parameters of a dollar amount or a percentage. Discussion followed with regard to the time required to implement the internal auditor's recommendations and make necessary system modifications, steps to ensure that automated templates are not compromised, and improving the consistency of filing. Mr. Batts stated that implementing a staff authorization limit of 15 percent or $10,000 whichever is greater was one of the options presented for Board consideration. That is doable from a staff standpoint. Mr. Batts stressed that three things are very important. The Board's confidence in staff is of superior importance. No District policy should erode the confidence. Second, it is right that the Board is concerned about the way in which the ratepayers' money is spent. The proposed authorization limit would not interfere with the ability to conduct business. Third, feedback from the Accounting Office is needed with regard to expenditures at different stages of the project. It was the consensus of the Board that the current authorization limits, as stated in the staff report, be maintained; but that the incremental limit practice for revising agreements be modified to 15 percent or $10,000 whichever is greater. This revision applies to agreements that exceed the authorized staff limits. Mr. Batts stated that a position paper will be presented for Board consideration at the next Board Meeting. 04 04 02 123 3) Mr. Batts, General Manager, announced that early in 2000 the Board approved a multi-discipline engineering project consulting agreement for the treatment plant with NPG, floW WRMS. The contract called for a 12-month term or a maximum of $300,000 with the flexibility to extend the term for two more years at $300,000 per year. Staff notified the Board of the first extension in April 2001 and is now proposing to extend the contract for the second year. The Board discussed this briefly and voiced no objection to the proposed extension. 4) Mr. Batts, General Manager, reported that the District and its partners will sponsor a mobile household hazardous waste collection event in the San Ramon area on Saturday, April 20, 2002 from 9:00 a.m. to 3:00 p.m. The event will be held at the City of San Ramon Corporation Yard on Crow Canyon Road. A District staff person will be present before, during, and after the event to ensure that things run smoothly. Similar to the joint collection event held last fall in Lafayette, the Central Contra Costa Solid Waste Authority will be sponsoring CRT and electronic waste collection at the same time and location. Mr. Batts stated that as a cost saving measure, the District has reduced the number of mobile collection events from three to two per year. The next scheduled mobile collection event will be held in Lafayette in September or October. 5) Mr. Batts, General Manager, reported that there were two overflows in Walnut Creek on Saturday, March 23, 2002 due to heavy rain. One involved a home on Springbrook Road and one was an overflow to a swimming pool. The family on Springbrook Road was temporarily relocated to a hotel while cleanup and repairs are being done. The overflow to the swimming pool wasn't discovered until Tuesday, March 26. The pool has since been drained and cleaned. 6) Mr. Batts, General Manager, advised the Board of interim arrangements for covering the Safety and Risk Management areas upon the departure of former Safety and Risk Manager David Clovis. Director of Administration Randy Musgraves will take on responsibility for insurance matters, Safety and Risk Management Specialist Kim Greer will be handling overflows and will share the Risk Management workload with Mr. Musgraves, and the two Operations Safety Specialists will continue to handle safety and safety training for the plant, collection system, engineering and administrative employees. 7) Mr. Batts, General Manager, stated that the District has been working with the State Department of Toxic Substance Control (DTSC) for several years to develop a final closure plan for the contaminated soil in Basin A South. The State DTSC just completed the public comment period on the draft closure plan. There were no public comments so the final closure plan is approved. With this final approval, the final design and construction of the soil cover cap for the area can go forward. Construction is expected to start in Spring of 2003. 8) Mr. Batts, General Manager, stated that staff is preparing a time extension to the existing recycled water customer connection contract with D.R. Lemmings Construction. This blanket contract was publicly bid and awarded in February 2000. The original contract would expire on May 31, 2002. The initial contract was for $257,000 and only $190,000 has been spent. The extra time will be used to complete connections to the Sequoia School, Pleasant Hill City Hall, and Pleasant Hill Park. It is anticipated that the work can be completed with the money remaining in the contract. 9) Mr. Batts, General Manager, reported that Senior Engineer Jim Belcher has contacted the Public Utilities Commission (PUC) about filing an informal complaint against PG&E for the additional demand charge related to the February 24 power outage. While PUC staff seems helpful and believes that 04 04 02 124 b. 04 10) 11 ) 12) 13) the informal complaint process is the correct procedure, they hold out little hope of any recovery. Their advice was for the District to look to its insurance provider for recovery of the loss. Staff will advise the Board of any further developments. Mr. Batts, General Manager, announced that the Solids Conditioning Building Ventilation Project bid announced to the Board previously is being canceled. This project will be postponed for at least a year due to the need to spend approximately $2 million to repair and upgrade the aeration air turbine and control systems. Mr. Batts, General Manager, announced that Contra Costa County and all 19 cities in the County are implementing a comprehensive study to look at future growth and quality of life issues in Contra Costa County, and hopefully to plan for that growth so that the 225,000 new residents can be absorbed without degrading the quality of life. As a service agency required to serve such growth, the District has been asked to join in the effort. The information generated will be useful in the District's master planning efforts. The District's share of the cost would be $25,000. There are funds available in the Engineering Department Technical Services account. The Board voiced no objection to participating in the study, but wished to have it made clear that the District is not a land use planning agency. Mr. Batts, General Manager, announced that the District has been informed by the Association of Metropolitan Sewerage Agencies (AM SA) that the education program Sewer Science Wastewater Laboratory has been selected to received the AMSA 2002 National Environmental Achievement Award in Public Information and Education. The District, along with our partners in the program, South Bayside System Authority and the Palo Alto Regional Water Quality Control Plant, will be recognized at the AMSA Conference in Washington, D.C. on May 20, 2002. Mr. Batts asked that if any Board Member wishes to attend, they let him know. Mr. Batts, General Manager, announced that there will be a follow up public workshop to receive public comments on the final design of the San Ramon Force Main Project on April 8, 2002 at 7:00 p.m. at the San Ramon Community Center. COUNSEL FOR THE DISTRICT 1 ) Mr. Kenton L. Aim, Counsel for the District, stated that the issue of who is responsible for damage caused by storm drains is one that has been discussed before. This has been brought up in Orinda, but there have been similar issues in the past in Lafayette, Martinez, and the unincorporated areas of the County. This issue relates to the practices of cities and counties for maintaining storage and drainage facilities that may cause damage to District facilities and private property owners. Mr. Aim stated that cities and counties may have more responsibility than, for example, the City of Orinda has contended. That city won a lawsuit a few years ago. In that case the city had not accepted the storm water facility and did not own it or maintain it or build it or design it. Cities have relied on that case and that kind of thinking to suggest that they do not have responsibility for storm drains or other facilities where they do not have evidence that they have accepted or maintained the facilities. Mr. Aim stated that there was a more recent case three or four months ago where a different approach was used and the result of that case was just the opposite. The city was found to be potentially liable. An injunction was granted in favor of the homeowner, a downstream property, that was damaged. Mr. Aim stated that the short answer is that notwithstanding what cities and counties are saying, there are theories out there that say they may be responsible for stormwater damage that starts upstream on 04 02 c. d. 125 their properties and travels downhill. Mr. Aim stated that historically developers put in facilities, sewers and storm drains, and dedicate them to the public agencies, but just by virtue of having the offer does not mean these are accepted. In most cases in this county if the facilities are not under the roadway or in the right of way, they are either rejected or just not accepted. The facilities are not maintained, and the cities and county make sure they do nothing that would suggest that they have exercised dominion and control over the facilities. Most of the facilities the District is concerned with were put in 50 years ago or more. The useful life of corrugated storm drains is about 40 years. Few, if any, have been replaced. The cost to replace them would be monumental. The cities and county have done everything they could to distance themselves from this. The legal issue here is can the cities and/or the county be responsible for damage of not just the defective storm sewer but can they be responsible for damage from flows from their property. Who should be responsible for the collection of surface water on surface streets and the damage that may be caused from that since city and county facilities changed the configuration of the surface from what it would have been without streets, drop inlets, and so on. Mr. Aim stated that the basic position taken by cities and counties for the facilities they take over is that they approve them and accept them; but they are just shown on a map and they do not inspect them and that in itself does not buy them liability. Mr. Aim stated that in the more recent case, the San Anselmo case, the position was that there was a development on the top of a hill with city streets which caused storm water to flow downhill across properties to a drop basin. These were installed by the developer. The city did not take them over but did acknowledge them on the plans they approved. The city said it did not own the pipe or the intervening land and was not liable. The issue is one of reasonableness and goes back to a negligent standpoint of foreseeable harm to downstream property owners. The judge found the city could have foreseen that the water would run down onto the property and the plaintiff was correct in this case. In these circumstances, it is very much dependent on whether the actions of the uphill property owner are reasonable or could foreseeably cause harm. Mr. Aim stated that cities and counties are not immune to responsibility for surface water but must look at individual circumstances. SECRETARY OF THE DISTRICT None BOARD MEMBERS 1 ) Member Hockett reported on the March 28, 2002 Sanitation and Water Agencies of Contra Costa County meeting at which the main topic of discussion was privatization of the City of Richmond wastewater operation. President Menesini noted that the next Sanitation and Water Agencies meeting on May 23, 2002 will be held at the District and will feature a tour of the Environmental Laboratory. 2) President Menesini, chair of the Outreach Committee, reported that he and Member Nejedly met with staff on April 2, 2002 to discuss the various outreach activities of the District. A summary and handouts from that meeting were distributed. President Menesini stated that when any of us touch the public in any way, we are doing outreach for the District. It is important that we speak with a unified voice. Member Nejedly agreed, stating that the Outreach Committee is a good idea. Member Nejedly stated that while a wide range of issues were covered at the meeting, he has some concerns with the number of complaints received on construction projects, backlogs, and overflows. Member Nejedly stated that we must try to address these issues. President Menesini stated that the District is receiving awards and doing public education programs, but there is a need to think holistically in terms of outreach. Member Lucey questioned the reporting 04 04 02 126 responsibility of the Community Affairs Representative for construction projects and discussion followed with regard to the holistic approach of looking at all facets of public outreach throughout the District. President Menesini distributed the brochure, Protecting Public Health and the Environment, one of the public information pieces in the District public outreach program. 3) President Menesini announced that the April 15, 2002 Environmental Alliance Discussion Series will feature Mr. Mitch Avalon, Deputy Chief Engineer of the Contra Costa County Flood Control District, discussing the history and evolution of creeks and watersheds in Contra Costa County. BREAK At 4:12 p.m., President Menesini declared a recess, reconvening at the hour of 4:28 p.m., with all parties present as previously designated. 7. ENGINEERING a. ESTABLISH MAY 9. 2002 AS THE DATE FOR A PUBLIC HEARING TO RECEIVE COMMENTS ON A PROPOSED AMENDMENT TO DISTRICT CODE 6.38. RECYCLED WATER CHARGES Mr. Batts, General Manager, introduced Mr. Don Berger, Associate Engineer, who reviewed the background of the existing recycled water rate ordinance and the proposed amendment. Mr. Berger stated that in 1994 the Recycled Water General Agreement with Contra Costa Water District (CCWD) was executed, in 1995 the CCWD Project Specific Agreement for Zone 1 was adopted, and in 1998 the District Board adopted the original recycled water rate ordinance. There has been no change in recycled water rates since that time as the District was trying to keep rates low to encourage new customers to sign up for recycled water. Mr. Berger stated that there is a need to increase recycled water rates to help recover expenses. The original recycled water rates were based on operations and maintenance (O&M) costs and a portion of expended capital costs. The existing recycled water rate ordinance creates eight tiers. It is set up to be a declining block rate structure where customers pay less the more recycled water they use. In the beginning the District wanted people to use more recycled water but we need to consider sales revenue at this point. In addition, the existing rate structure is unnecessarily complex. Existing rates vary from $325/acre foot to $585/acre foot depending on the type of alternative water source (potable or raw water) and the volume of recycled water used. Current recycled water rates are approximately 50 percent to 75 percent of comparable CCWD rates. Other agencies with more mature recycled water programs are charging about 80 percent of comparable rates. Mr. Berger stated that the proposed ordinance would set all recycled water rates at 80 percent of comparable CCWD rates. It is proposed that the recycled water rate structure be simplified into two tiers: . $750/acre foot for previous potable water customers; and . $355/acre foot for previous canal/well water customers. The proposed ordinance includes an annual 3 percent increase in recycled water rates to cover District costs and inflation. Recycled water rates for existing customers are fixed by contract. The contracts allow a rate increase to 80 percent of CCWD rates but some of these customers are at about 50 percent of current CCWD rates so it is proposed to that the increase will not be more than 25 percent a year depending on the customer's current recycled water rate. The recycled water rates for current customers will then be raised over a four-year period to catch up. Mr. Berger reviewed and discussed the summary table of recycled water rate changes by customer. Mr. Berger highlighted issues relating to the cost of providing service. The proposed ordinance allows for cost/benefit analysis of new connections. The initial recycled water rates established for Zone 1 are unnecessarily complex and do not recover the costs of the service. Existing and future 04 04 0 C:) ¡ I"~ß 127 recycled water rates do not provide for 30 year payback because it was divided over other zones that have not come on line so all capital costs are allocated to Zone 1, a limited number of new cost-effective customers remain in Zone 1, and raw water customers are subsidized to a greater degree than potable water customers. Discussion followed with regard to the history of and funding for the District's water reclamation facility, recovery of capital costs, maximizing revenue, and looking at the marginal costs when considering connecting new customers. Mr. Berger stated that next steps include receiving Board input on the proposed ordinance, conducting a public hearing to receive public comments on May 9, 2002, adopting a new recycled water rate ordinance, implementing the new rate structure on July 1, 2002, and revisiting recycled water rates annually to assure maximum cost-effectiveness of the recycled water program. It was moved by Member Hockett and seconded by Member Nejedly, that 2:00 p.m. on May 9, 2002, be established as the time and date for a public hearing to receive comments on the proposed ordinance to amend District Code 6.38, Recycled Water Charges. There being no objection, the motion was unanimously approved. 8. APPROVAL OF MINUTES a. MINUTES OF MARCH 7. 2002 It was moved by Member Hockett and seconded by Member Boneysteele, that the minutes of March 7, 2002, be approved as presented. There being no objection, the motion was unanimously approved. 9. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED APRIL 4. 2002 Member Boneysteele, chair of the Budget and Finance Committee, stated that he and Member Hockett reviewed the expenditures and found no exceptions. It was moved by Member Boneysteele and seconded by Member Hockett, that the Expenditure List dated April 4, 2002, including Self Insurance Check Nos. 101859- 101863, Running Expense Check Nos. 137434-137677, and Sewer Construction Check Nos. 24365-24401, be approved as recommended. There being no objection, the motion was unanimously approved. 10. BUDGET AND FINANCE a. RECEIVE FEBRUARY 2002 FINANCIAL STATEMENTS Ms. Deborah Ratcliff, Controller, reviewed the results of operations and maintenance (O&M) for the month of February 2002, noting that expenditures were $369,000 less than budget, representing an 11.8 percent favorable variance. Year-to-date (O&M) expenditures were $2,184,000 less than budget, representing an 8.5 percent favorable variance. Year-to-date O&M revenues of $23,426,000 were $399,000 less than budget, representing a 1.7 percent unfavorable variance. Ms. Ratcliff reported that year-to-date Sewer Construction Fund expenditures were $21,893,000, and year-to-date Sewer Construction Fund revenues were $13,280,000, cutting into the Sewer Construction Fund balance by $8.6 million. Ms. Ratcliff reported that the District's temporary investments were held in Treasury bills and Treasury notes and the District's Local Agency Investment Fund account with interest rates ranging from 1.7 percent to 6.7 percent. The latest interest rate as of February 2002 was 1.7 percent. The average yield of the District's LAIF account through January 2002 was 3.07 percent. 04 04 02 128 President Menesini declared that the February 2002 Financial Statements and reports of Running Expense Fund, Sewer Construction Fund, and temporary investments were duly received. b. ADOPT AMENDMENT TO THE DISTRICT'S CAFETERIA PLAN DOCUMENT TO MEET NEW CHANGES IN INTERNAL REVENUE CODE Mr. Batts, General Manager, stated that annually District Controller Debbie Ratcliff works with the law firm of Trucker. Huss to determine if any changes in the Internal Revenue Service Code necessitate changes to the District's Cafeteria Plan. This year, an amendment incorporating minor changes in being presented for the Board's consideration. The changes center around plan participants being able to make changes in their disbursement elections if certain events take place. Following discussion, it was moved by Member Hockett and seconded by Member Lucey, that Amendment No.1 to the District's Cafeteria Plan document be adopted to meet new Internal Revenue Service requirements. There being no objection, the motion was unanimously approved. c. RECEIVE THE 2001 ANNUAL REPORT OF THE DEFERRED COMPENSATION PLAN ADVISORY COMMITTEE Mr. Batts, General Manager, introduced Ms. Deborah Ratcliff, Controller, who stated that the Deferred Compensation Plan Advisory Committee was established by the Board of Directors in 1982. Committee activities include establishing internal administrative procedures, educating participants regarding the Deferred Compensation Plan, reviewing emergency withdrawal requests, reviewing investment performance of the Plan, and submitting an annual report to the Board of Directors and Plan participants. The Committee includes a member from each department. Ms. Ratcliff introduced Ms. Thea Almendralejo, who is an Accountant at the District and a Certified Public Accountant. Ms. Almendralejo prepares the annual report. It was moved by Member Boneysteele and seconded by Member Lucey, that the Annual Report of the Deferred Compensation Plan Advisory Committee for 2001 be received. There being no objection, the motion was unanimously approved. 11. EMERGENCY SITUATIONS REQUIRING BOARD ACTION None 12. ANNOUNCEMENTS/SUGGESTIONS FOR FUTURE AGENDA ITEMS None 13. ADJOURNMENT There being no further business to come before the Board, President Menesini adjourned the meeting at the hour of 5:18 p.m. ~1~1'tð ~.!~/S~A' President of the Board of Directors, Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: 04 04 02