HomeMy WebLinkAboutBOARD MINUTES 04-23-02
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MINUTES OF THE ADJOURNED REGULAR BOARD MEETING
OF THE DISTRICT BOARD OF THE
CENTRAL CONTRA COSTA SANITARY DISTRICT
HELD ON APRIL 23, 2002
The District Board of the Central Contra Costa Sanitary District convened in an adjourned
regular session in the Second Floor Conference Room, 5019 Imhoff Place, Martinez,
County of Contra Costa, State of California, at 2:00 p.m. on April 23, 2002.
President Menesini called the meeting to order and requested that the Secretary call roll.
ROLL CALL
PRESENT:
Members:
Nejedly, Lucey, Boneysteele, Menesini
ABSENT:
Members:
Hockett
Member Hockett had advised that she would be unable to attend this meeting and had
requested to be excused.
2. PUBLIC COMMENTS
None
3. CAPITAL PROJECTS COMMITTEE MEETING/BOARD WORKSHOP
a.
REVIEW THE DRAFT FISCAL YEARS 2001-2002 AND 2002-2003 CAPITAL
IMPROVEMENT BUDGET ADDENDUM
Mr. Charles W. Batts, General Manager, stated that every effort begins with a focus on
the District goals:
.
Complete regulatory compliance
.
Exceptional customer service
.
Responsible rates
.
High performance organization
Mr. Batts stated that the issue we face in obtaining these goals, and the area where the
Board's oversight is essential, is in allocation of resources. For the District, conserving
resources is balancing revenue and cost. Capital spending is 30 to 40 percent of the total
District budget, and on the Operations and Maintenance (O&M) side over half the cost is
staffing-related. Focusing on the Capital side, Mr. Batts stated that there is a process to
prioritize and control cash flow in the Capital Improvement Program. The process starts
with planning. The District does long range planning based on perceived need and future
regulation. This process usually begins with a Master Planning effort which outlines
future projects and needs. The master planning has been done for several areas such as
treatment plant and sewer system capacity. Results of the Master Plan efforts then lead
into the Ten Year Capital Improvement Plan (CIP), a document that looks ten years into
the future and estimates the required timing and cost involved in reaching the goal. The
actual work projected for the immediate future is the District's Capital Improvement
Budget (CIB), a two-year document outlining capital spending and revenue. The large
document approved by the Board last year was the 2001-2002 and 2002-2003 CIB and
the 2001 Ten Year CIP. This is the second year of the current CIB and an addendum is
being presented for the Board's consideration. In the past there has been some
dysfunction between the CIP and the CIB. While the CIP took a financially conservative
model, most of the work was forced into the first two years. Over the course of the CIP,
the individual budget years added up to greater than the whole as the cost of individual
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projects often exceeded the initial budget. A pay-as-you-go philosophy was used and
many times expenditures were made on the basis that "we must fix it now." This de-
emphasized the importance of setting priorities.
Mr. Batts stated that Director of Engineering Ann Farrell has done a great job of closing
this "credibility gap" with the CIB/CIP and what we are actually doing. Our cash flow
issues have required a realistic view of actual Treatment Plant and Collection System
capacity and other needs, to revise the CIP to a level that is more realistic in light of both
revenue and the Sewer Construction Fund balance. The District's Master Plan overflow
goal was lowered from a 1 O-year storm to a 5-year storm. A category called parturient
projects was created but not budgeted for regulatory issues that would likely take years
to impact the District directly. Large capacity related projects, such as the A-Line
extension and new primary clarifiers, were extended out in time both because of their
costs and the fact that there was no immediate need. Mr. Batts stated that this approach
is similar to the soft landing approach taken with the O&M Budget. The goal of both
approaches is to ensure that the "funds needed" are available to meet District needs and
goals. As Ms. Farrell discusses the CIB and CIP, the Board will note that there are issues,
particularly in the collection system, that will likely impact the amount of future capital
budgets.
Mr. Batts, stated that he has previously advised the Board of his concern about the future
loss of ad valorem tax revenue, the rapid drop in interest income, and the decrease in
connection fee revenue as the District approaches build out. The next two years calls for
allocation of a growing portion of the Sewer Service Charge towards capital requirements.
Mr. Batts introduced Ms. Ann E. Farrell, Director of Engineering, to discuss the details of
the CIB, revenue projections for the coming years, and future concerns relating to
replacement of District collection system and treatment plant assets. Ms. Farrell stated
that she will be talking about three documents: the 2001-2002 and 2002-2003 CIB, the
San Ramon Addendum adding all the San Ramon projects and the increased authorization
levels for those projects approved by the Board last summer, and the CIB Addendum
distributed to the Board last week. Ms. Farrell stated that there was a lot of cooperation
among staff from all departments in trying to maintain the expenditure limits. Ms. Farrell
acknowledged Capital Projects Division Manager William E. Brennan and Environmental
Services Division Manager Curtis W. Swanson for their efforts.
Ms. Farrell provided an overview of revenue and expenditures for 2001-2002, 2002-
2003, and 2003-2004, noting that in 2001-2002 the projected deficit is $6,178,000; in
2002-2003 with the proposed $15 million bond proceeds a positive balance of
$5,089,000 is projected; and in 2003-2004 the projected deficit is $1,118,000. A
comparison of 2002-2003 CIB and Addendum expenditures was presented. Ms. Farrell
stated that she is proud that staff has reduced spending from the budgeted $27 million
to approximately $21 million. This was a concerted effort to reduce spending to
accommodate moving the San Ramon projects forward without borrowing more money
than necessary. To accomplish this, some projects were completed early and some
projects were deferred. Staff has been fairly successful in maintaining expenditures at
the projected level discussed with the Board last year. A comparison of CIB and
Addendum revenues for 2002-2003 shows that with the infusion of $15 million in bond
proceeds, the projected deficit of $7,474,000 is now projected to be a positive
$5,089,000. If the District does not borrow the proposed $15 million, the deficit is
projected to be approximately $10 million in 2002-2003. Lower interest income and
much lower capacity fees because of fewer connections are the primary reasons for the
projected deficit, but a portion of the deficit has been offset by deferring projects.
Ms. Farrell reviewed the 2002-2003 Capital Improvement Program expenditures of $33.7
million by program and briefly described the following Collection System Program projects:
.
San Ramon Pumping Station Renovations ($3,525,000)
.
Collection System Renovation Program ($2,090,000)
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.
Pumping Station Supervisory Control and Data Acquisition (SCADA) and
Power Management ($1,735,000)
Concord Industrial Force Main ($1,376,000)
.
.
Collection System Urgent Projects ($750,000)
.
TV Inspection Program ($700,000)
.
Development Projects Sewerage ($600,000)
.
Contractual Assessment Districts ($600,000)
.
A-Line Easement Acquisition ($540,000)
.
Rossmoor Sewer Improvements ($472,000)
Ms. Farrell noted that this list goes down to projects that are $400,000 or more but the
Addendum only went down to projects of $700,000 or more so more of the smaller
projects have been picked up in this listing.
Ms. Farrell reviewed a coordination model showing how Collection System Operations and
the Engineering Department work together. She indicated that in the past Collection
System Operations (CSO) and Engineering interaction on the work done by CSO was
driven by time and event. This was a reactive model where issues were identified by the
SIMMS/SUSSEX system, outside public input, CSO TV inspection, and emergency
situations. Now, some programs (TV Inspection Program, easement walks, manhole
inspection, special studies, regulations, source control/grease) have been incorporated to
gather information on the condition of the collection system. Through these proactive
programs, projects are added. Ms. Farrell noted that if we look for collection system
problems, we will find them. An example! is the Contra Costa Boulevard pipe corrosion.
The Contra Costa Boulevard pipe is a 36-inch pipe installed in 1947. It is about 11,500
feet long. A TV inspection of a portion of the pipe has been done and exposed rebar was
visible in all the sections televised. To replace the entire pipe would be very difficult
because of where it is located and it would be very costly. It is estimated that it would
cost about $400 per foot to replace the pipe and about $200 per foot to line the pipe but
that would require pumping around. The challenge is to gather and evaluate this type of
information and prioritize it to determine how the District should spend the money
available.
Ms. Farrell reviewed the 2002-2003 Treatment Plant Program expenditures and briefly
highlighted the following projects:
.
Aeration Blowers Reconditioning ($2,000,000)
.
Influent Pump #5 Pipe Modifications ($570,000)
.
Treatment Plant Soil Remediation - Basin A ($446,000)
.
Aeration Air Leaks Damage Assessment ($421,000)
Ms. Farrell reviewed the 2002-2003 General Improvements Program expenditures, noting
the following:
.
Equipment Budget ($600,000)
.
Management Information System (MIS) Plan ($500,000)
Other General Improvement Program projects include the Headquarters Office Building
Roofing and HV AC Replacement Project, fuel tanks at CSO, and site work at CSO.
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At this time Ms. Farrell introduced Mr. Mark Greenawalt, MIS Administrator, who provided
an overview of the Management Information System (MIS) 5-Year Master Plan. The MIS
5-Year Master Plan was created based on input from an MIS survey of all employees,
focus groups, and project lists. The MIS Master Plan is a work in progress. It is flexible
and is revisited each year. The MIS Master Plan meets the District's four strategic goals
of regulatory compliance, exceptional customer service, responsible rates, and high
performance organization. The effort was to centralize the District's MIS activities to
improve communication, support and reliability; standardize hardware and software so the
District's gets the most for its money and employees are well trained; integrate systems
and data; and provide District wide solutions. Projects in the MIS Master Plan are
prioritized to meet District staff needs, improve performance, and tools to increase staff
productivity. In addition, a cost/benefit analysis is done to ensure the District is getting
a return on its investment.
Discussion followed with regard to upgrading the office system. In response to questions
from Member Lucey, Mr. Greenawalt stated that one focus of the MIS Master Plan was
centralization of District MIS activities; however, there are specialized software in some
of the departments. MIS reviews all hardware and software purchases throughout the
District. The issue is what operating system and platform is used. That is always
discussed to ensure that the whole District is going in the same direction.
Mr. Greenawalt stated that the MIS Master Plan was used to develop the Information
Technology Development Capital Improvement Budget. In the first year, 2001-2002, the
Board approved $587,000. Mr. Greenawalt reviewed the first year accomplishments as
follows:
.
PC Replacement Program ($100,000) - A five-year life cycle has been set
for PC's. Approximately 40 PC's and accessories are purchased each year.
.
Network Infrastructure Upgrade ($437,000) - The entire network was
rebuilt. The token ring network was replaced completely by an Ethernet.
This is a great foundation for the various programs.
.
Internet Access Upgrade ($3,000) - Internet access was upgraded to a T-1
line through the central office of the telephone company.
.
Remote Access for PC's ($2,000)
.
FTP Server Installation ($0) - GroupWise was used to dump large data files
on the server rather than sending them through email. Funds budgeted for
this purpose were saved since GroupWise was used rather than purchasing
additional software.
.
MIS Offices and Network Center ($20,000) - A portion of the former
Laboratory was used to form the new central hub for the network and the
MIS Offices. It is hoped that the computer center on the third floor of the
Headquarters Office Building can be moved to this location as well to further
enhance service.
.
Project Implementation Support ($15,000)
.
TCP/IP Connectivity to AS/400 ($0) - Staff was able to modify the existing
software so there was no additional cost over the staff time involved.
Mr. Greenawalt stated that the following projects were delayed: Standardization of Word
Processing Software, Intranet Development, and HTE Permit Software for Laptops for
Inspectors. These projects will be reviewed and reevaluated in the future. Mr.
Greenawalt reviewed the proposed project for Year 2, 2002-2003, and requested Board
consideration and approval.
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PC Replacement Program ($100,000)
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.
Intranet Development ($80,000)
.
Human Resources and Training Database Software ($40,000)
.
Network Center Upgrade ($80,000)
.
Network Operation Tools ($40,000)
.
MIS Tracking Software ($15,000)
.
Increase Bandwidth between HOB and CSO ($5,000)
.
Upgrade of PC Operating Systems ($0)
.
Upgrade of PC Desktop Word Processing Software ($60,000)
.
Centralized Network Data Storage and Backup System ($60,000)
.
Miscellaneous Projects ($20,000)
The total estimated Information Technology Development Budget for 2002-2003 is
$500,000. In addition, there are two existing projects: Document Imaging system
($134,000), and Mainsaver Software Upgrade ($125,000) for a total of $759,000 in
2002-2003.
Member Lucey asked if all these items are necessary. Mr. Randall M. Musgraves, Director
of Administration, stated that they are necessary. They will improve technology and
allow the District to be more productive while maintaining the same or less staffing. This
is part of the overall strategy. Mr. Batts stated that part is for productivity gain, part for
reliability, part for standardization of software, and part for speed. Discussion followed
with regard to keeping current with technological advances.
President Menesini thanked Mr. Greenawalt for his presentation.
Ms. Farrell stated that the 2002-2003 Recycled Water Program totals $310,000. As the
Board is aware, the large industrial recycled water project was deferred because it was
not being supported by Contra Costa Water District and it is very costly. At this time, the
District is just trying to maintain the existing program. No large investments in recycled
water are being made at this time.
Ms. Farrell highlighted four large projects that are being deferred this year. They are the
Solids Conditioning Building Ventilation Improvements ($017,000/$10,000) which was
deferred to allow the Aeration Air Renovations Project to proceed; the Lower Orinda
Pumping Station Renovation ($2,000,000/$181,000); the M4-A Force Main Relocation
($1,235,000/$126,000); and the Recycled Water Industrial Demonstration Project
($632,000/$10,000) for a total reduction in expenditures $4,357,000. Ms. Farrell stated
that these deferrals were made to accommodate moving the San Ramon projects forward
both from a financial and staffing standpoint.
Ms. Farrell continued with a review of the new projects that have been added to the
individual CIB Programs for 2002-2003. The dollars are total project costs, not costs to
be incurred the next fiscal year.
Treatment Plant New Projects
.
Aeration Air Renovations (estimated $1,300,000)
.
Fire Alarm Panel Replacement ($57,000)
.
North Clarifiers Paving Improvements ($220,000)
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.
.
Plant Control System Improvements ($2,724,000)
Standby Pumps Refurbishment ($825,000)
Collection System Program New Projects
.
.
.
Alhambra Valley Facilities Planning Study ($32,000)
Concrete Corrosion Renovation ($2,065,000)
Cement Sewer Evaluation ($64,000)
Discussion followed with regard to the Alhambra Valley Facilities Planning Study and its
controversial nature from a political standpoint, but there is a need to proceed with
planning for this area. The Board will be kept informed.
General Improvements Program New Projects
.
.
.
Collection System Operations Yard Paving ($138,000)
Fuel System Modifications ($144,000)
Headquarters Office Building HV AC and Roof Renovation ($481,000)
Ms. Farrell reviewed the detail of the 2002-2003 Board authorization required. As of July
2001 when the San Ramon Addendum was approved by the Board, the 2002-2003 total
proposed authorization including the San Ramon Addendum was $43,806,000 and total
proposed expenditures were $33,803,000. Today, the 2001-2002/2002-2003
Addendum calls for a 2002-2003 total proposed authorization of $43,070,000 and
proposed expenditures of $33,711,000. Because of the deferrals that have been made
and the projects that were completed early, the additional authorization needed has been
reduced from $18,643,000 to $13,325,000.
Ms. Farrell reviewed the CIB Summary for 2002-2003, stating that the Capital Program
funding will operate in a deficit mode until 2004-2005. This assumes that the proposed
bond financing will provide an infusion of $15 million this year and it also assumes that
$ 21 of the $ 24 Sewer Service Charge rate increase in 2002-2003 will be used for the
Capital Program. Ms. Farrell stated that these assumptions were made before the District
learned that O&M benefit costs were going up considerably and before Board
consideration of whether to add additional staff in the Collection System Operations
Division.
In closing, Ms. Farrell stated that with regard to future revenue structure for capital
projects:
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At current projections, the Capital Program will be in deficit mode until
2004-2005;
.
Need $15 million bond issue in 2002-2003;
.
Need $21 of $24 Sewer Service Charge increase in 2002-2003 to bring the
Capital Improvement Program (CIP) Sewer Service Charge component to
$41 per Residential Unit Equivalent (RUE);
.
Need $12 of $24 Sewer Service Charge increase in 2003-2004 to bring the
CIP Sewer Service Charge component to $53 per RUE;
.
Need $4 of $16 Sewer Service Charge increase in 2004-2005 to bring CIP
Sewer Service Charge component to $57 per RUE;
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Total of almost $40 per RUE increase in Sewer Service Charge is needed
over the next three years;
.
2004-2005 CIP revenue equals expense of about $21 million per year (in
year 2000 dollars) with inflation; and
.
If spending is greater than $21 million per year, the CIP portion of the
Sewer Service Charge must be further increased.
Ms. Farrell stated that the District has entered an era where the Capital Program must be
funded from the rates. Every decision we make will impact rates.
President Menesini stated that there was a great deal of information presented and it is
difficult to absorb in one meeting.
Mr. Batts agreed that the magnitude of this document is significant, but indicated that
many of the projects will be discussed at future Board Meetings. Mr. Batts commended
staff for the work that went into producing this document and the information presented
to the Board. Mr. Batts stated further that the District is fortunate to have MIS
Administrator Mark Greenawalt. Under his direction, the District's system has gone from
one where everyone purchases what they need for their particular application without
thought to its compatibility with other District needs, to one that is tightened down,
software is compatible, and data can be shared.
Member Boneysteele stated that the workshop has been very helpful. The Board is a part-
time Board dealing with a large business. The Board has an excellent staff and it is their
responsibility to see that the Board does have the information it needs.
Member Lucey requested that next week at the Collection System Operations Division
(CSOD) workshop, staff provide information on women and minority hiring at CSOD and
any issues that have come up as a result of the District hiring a number of former Roto
Rooter employees.
4. REPORTS/ANNOUNCEMENTS
a.
REPORT ON COUNTY NON-POINT SOURCE NATIONAL POLLUTANT DISCHARGE
ELIMINATION SYSTEM (NPDES) PERMIT
Mr. Batts, General Manager, distributed and briefly reviewed the handouts from a
presentation on the Contra Costa Clean Water Program New Development Requirements
made by Messrs. Don Freitas and Tom Dalziel, of Contra Costa County, at the April 16,
2002 Board of Supervisors meeting. Mr. Batts stated that this is an issue that affects the
whole County and it will likely come back to this District at some point in the future. The
purpose of the Contra Costa County Clean Water Program is to reduce or eliminate the
discharge of pollutants to municipal stormwater drainage systems, using Best
Management Practices in the areas of source control, pollution prevention, design and
engineering controls, and operation and maintenance practices; but, they do not treat the
stormwater runoff. Runoff is the biggest source of water pollution in urban areas. Contra
Costa County unincorporated areas, the 19 Cities in the County, and the Flood Control
and Water Conservation District have a Joint Municipal National Pollutant Discharge
Elimination System (NPDES) permit. The Regional Water Quality Control Board (RWQCB)
is talking about requiring stormwater treatment for Contra Costa County as is already
required in Santa Clara County and in Southern California. Permit activities would include
new development and construction site controls, continuation of public education and
industrial outreach, municipal maintenance activities, increase in inspection activities, illicit
discharge control activities, monitoring and special studies, and watershed management
activities. All public and private development, redevelopment, and capital improvement
projects that create or replace one acre or more of impervious surface will be required to
treat or infiltrate 80 to 90 percent of the runoff on-site two years from the date of
adoption of the requirement. The one acre threshold will be reduced to 5,000 square feet
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within three years of adoption. Mr. Batts stated that the County Clean Water Program
is working with Flood Control to determine how the County will deal with this.
5. ADJOURNMENT
There being no further business to come before the Board, President Menesini adjourned
the meeting at the hour of 4: 1 0 p.m. to a site visit at the Dougherty Tunnel.
~ ~£J¿ú2cS~'
President of the Board of Directors,
Central Contra Costa Sanitary District,
County of Contra Costa, State of California
COUNTERSIGNED:
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