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HomeMy WebLinkAboutBOARD MINUTES 05-24-01 128 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON MAY 24, 2001 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 May 24, 2001. President Hockett called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: ABSENT: Members: Members: Nejedly, Menesini, Lucey, Boneysteele, Hockett None a. INTRODUCE EMPLOYEES . PETE TRAPP. PLANT OPERATOR I . ROBERT MAROON. MATERIALS COORDINATOR I Mr. Robert Maroon, Materials Coordinator I, was introduced and welcomed to the District by President Hockett and the Board of Directors. Mr. Pete Trapp, Plant Operator I, will be recognized at the June 7, 2001 Board Meeting. 2. PUBLIC COMMENTS Mr. David Rolley, Central Contra Costa Sanitary District Employees Association and Union President, addressed the Board relative to Plant Operators' pay. Mr. Rolley stated that he has asked that this item be placed on the June 7, 2001 Board Meeting agenda. 3. AWARDS AND COMMENDATIONS a. RECEIVE NORTH AMERICAN SOCIETY OF TRENCHLESS TECHNOLOGY TENTH ANNIVERSARY AWARD FOR CCCSD'S PIONEER WORK IN PIPE BURSTING AND MICROTUNNELING Mr. Charles W. Batts, General Manager, stated that the District is honored to receive the North American Society of Trenchless Technology (NASTT) Tenth Anniversary Award for our pioneer work in pipe bursting and microtunneling. While this was a District effort, individuals such as Robert Baker, John Larson, Ba Than, Henry Thom, and Tad Pilecki deserve special recognition for their innovative use of trenchless technology. Mr. Batts introduced Mr. John A. Larson, Director of Collection System Operations, who stated that in the mid-1980's the District proposed to send a delegation to the No-Dig Technology Conference in London, and staff was reminded that this was a very expensive conference and staff should come back with something of benefit for the expenditure. Central Contra Costa Sanitary District was the first district in North America to use no-dig technology, and we have used many different forms through the years. Mr. Larson acknowledged Mr. Ba Than, Associate Engineer, who worked on one of the first pipe bursting projects at the District. President Hockett received the NASTT Tenth Anniversary Award and acknowledged staff for their innovative and effective use of trenchless technology. b. RECEIVE ASSOCIATION OF METROPOLITAN SEWERAGE AGENCIES (AM SA) 2001 NATIONAL ACHIEVEMENT AWARD IN PUBLIC INFORMATION AND EDUCATION FOR THE CENTRAL CONTRA COSTA SANITARY DISTRICT OUR WA TER. OUR WORLD PESTICIDE REDUCTION PROGRAM 05 24 01 129 Mr. Batts, General Manager, stated that Board Member Mario Menesini and Community Affairs Manager Harriette Heibel attended last weekend's Association of Metropolitan Sewerage Agencies (AMSA) conference in Washington, D.C. to receive the 2001 National Achievement Award for Public Information and Education for the District's Our Water, Our World pesticide reduction program. Mr. Batts introduced Ms. Heibel, Community Affairs Manager, who stated that the District is honored to receive this award. This program is a partnership with private businesses and Master Gardener volunteers. Ms. Heibel recognized Executive Assistant and liaison with the Master Gardeners Earlene Millier, Community Affairs Representative Bonnie Mayer, and Graphics Technician III Son Nguyen, and former District employee Bart Brandenburg, all who played significant roles in making this program a success. President Hockett was joined by the Board in commending staff for this significant achievement. c. ADOPT RESOLUTION COMMENDING ROBERT D. BEEBE FOR HIS SERVICE TO DUBLIN SAN RAMON SERVICES DISTRICT Mr. Batts, General Manager, stated that it is fitting this the Board recognize Mr. Bob Beebe, General Manager of Dublin San Ramon Services District, not only for his outstanding leadership of a sister agency, but also for his efforts in water recycling and other activities that have benefitted wastewater agencies throughout the State of California. It was moved by Member Boneysteele and seconded by Member Menesini, that Resolution No. 2001-057 be adopted, commending Robert D. Beebe for his service to Dublin San Ramon Services District. The motion was unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Boneysteele, Menesini, Nejedly, Lucey, Hockett None None 4. CONSENT CALENDAR Member Lucey requested that Item m. be removed from the Consent Calendar for discussion. It was moved by Member Menesini and seconded by Member Lucey, that the Consent Calendar, consisting of Items a. through n. and excluding Item m. which was pulled for discussion, be approved as recommended, resolutions adopted as appropriate, and recordings duly authorized. a. Resolution No. 2001-058 accepting work and Offers of Dedication at no cost to the District from Suncrest Homes Number Four LLC on the map of Subdivision 7154, Job 5233, Parcel 1, Alamo area, was adopted and recording was authorized. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None b. Resolution No. 2001-059 accepting work and Offers of Dedication at no cost to the District from Essex San Ramon Partners on the map of Subdivision 8058, Job 5295, Parcel 1, Walnut Creek area, was adopted and recording was authorized. 05 24 01 130 Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None Resolution No. 2001-060 accepting work and Offers of Dedication at no cost to the District from Pulte Homes on the map of Subdivision 8128, Job 5305, Parcel 1, Danville area, was adopted and recording was authorized. c. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: d. Menesini, Lucey, Nejedly, Boneysteele, Hockett None None Resolution No. 2001-061 accepting work and Offers of Dedication at no cost to the District from Davidon Homes on the map of Subdivision 8141, Job 5320, Parcell, Danville area, was adopted and recording was authorized. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None Resolution No. 2001-062 accepting work and Offers of Dedication at no cost to the District from Shapell Industries of Northern California on the revised map of Subdivision 8131, Job 5335, Parcel 1, San Ramon area, was adopted and recording was authorized. e. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: f. Menesini, Lucey, Nejedly, Boneysteele, Hockett None None Resolution No. 2001-063 accepting work and Offers of Dedication at no cost to the District from Shapell Industries of Northern California on the revised map of Subdivision 8131, Job 5336, Parcel 1, San Ramon area, was adopted and recording was authorized. Motion unanimously approved on the following vote: 05 24 AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None g. Resolution No. 2001-064 accepting work and Offers of Dedication at no cost to the District from Camino Moraga LLC on the map of Subdivision 01 131 8067, Job 5347, Parcell, Moraga area, was adopted and recording was authorized. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None Resolution No. 2001-065 accepting work and Offers of Dedication at no cost to the District from the Mark Pringle Company LLC on the map of Subdivision 8173, Job 5353, Parcel 2, Walnut Creek area, was adopted and recording was authorized. h. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None Resolution No. 2001-066 accepting work and Offers of Dedication at no cost to the District from the Laurel Drive Associates LLC on the map of Subdivision 8005, Job 5359, Parcel 1, Danville area, was adopted and recording was authorized. I. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None Grant of Easement from Gerald Scatena for Job 4477, Parcel 2, Alamo area, was accepted at no cost to the District, recording was authorized, and Resolution No. 2001-067 was adopted to that effect. J. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None Authorization was given for Proposed Annexation (P.A.) 01-11 (Alamo), P.A. 01-12 (Martinez), P.A. 01-13 (Alamo), P.A. 01-14 (Alamo), P.A. 01-15 (Orinda), P.A. 01-16 (Alamo), and P.A. 01-18 (Orinda) to be included in a future formal annexation to the District. k. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None 05 24 01 132 I. The contract work for the Outfall Improvements Project, Phase 4, DP 7184, by Kaweah Construction Company was accepted, and the filing of the Notice of Completion was authorized. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None n. The Agreement and Indemnification for Employment Recruitment Services for Delta Diablo Sanitation District was approved. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Lucey, Nejedly, Boneysteele, Hockett None None At this time, President Hockett proceeded to Item m. Following discussion of the final accounting for the project which will be presented at the time of close out, it was moved by Member Lucey and seconded by Member Menesini, that Consent Calendar Item m., the contract work for the Household Hazardous Waste Collection Facility Improvements Project, DP 8180, by RemCon, be accepted, and that the filing of the Notice of Completion be authorized. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Lucey, Menesini, Nejedly, Boneysteele, Hockett None None At this time, President Hockett reverted to the order of the agenda. 5. HEARINGS CONDUCT THE PUBLIC HEARING WHICH WAS CONTINUED FROM MAY 10. 2001 TO RECEIVE COMMENTS ON A PROPOSED ORDINANCE TO RETITLE AND AMEND CHAPTER 6.12 OF THE DISTRICT CODE REGARDING THE CAPACITY FEE PROGRAM AND CONSIDER ADOPTION OF A SCHEDULE OF CAPACITY FEES. RATES. AND CHARGES a. President Hockett stated that the purpose of this public hearing is to receive comments on a proposed ordinance to retitle and amend Chapter 6.12 of the District Code regarding the Capacity Fee Program and to consider adoption of a Schedule of Capacity Fees, Rates, and Charges. Mr. Batts, General Manager, stated that this item was continued from May 10, 2001, to provide time for staff to consider the City of Concord's request related to allocation of Capacity Fee revenue. District Counsel and staff have concluded that the proposed Capacity Fee Program is not necessarily related to the issues raised by the City of Concord and that resolution of those issues can proceed separately. District and City staff have begun weekly meetings to work toward this end. 05 24 01 133 Mr. Batts introduced Mr. Jarred Miyamoto-Mills, Principal Engineer, who stated that the District is considering revision to District Code Chapter 6.12, formerly the Capital Improvement Fees, and is recommending changing to the proposed Capacity Fee Program. The District's current Capacity Fees are $2,571 per residential unit equivalent (RUE) for gravity service and $2,920/RUE for pumped services. These fees fall in the lower third when compared with other nearby agencies. Senate Bill 1760 redefined "capacity charge" as either charge to buy-in to existing assets or charge for future facilities to be constructed that will benefit customer or property. Mr. Miyamoto-Mills stated that since most District assets needed to serve future customers exist, the buy-in method is appropriate. The proposed Capacity Fee approach for the buy-in calculation would take the value of assets divided by the number of residential unit equivalents to determine the Capacity Fee. Based on this calculation the proposed Capacity Fees would be $3,360/RUE for gravity service and $4,070/RUE for pumped service. The proposed Capacity Fees fall below the median when compared with other nearby agencies. Mr. Miyamoto-Mills showed a comparison of agency Capacity Fees based on the State Water Resources Control Board Wastewater User Charge Survey Report for Fiscal Year 2000- 2001. Notices of the public hearing originally scheduled for May 10, 2001 were published and posted. In addition, letters were mailed to the Home Builder's Association of Northern California and 134 developers, contractors, architects, and engineers who regularly pay District Connection Fees or estimate fees for their clients. Informal meetings were held to discuss the proposal with interested customers on April 24 and May 1, 2001. Only two comments were received. Sunset Development asked what the proposed fees would be and Mr. Guy Bjerke, of the Home Builders Association, indicated that this was the approach that he suggested be used more than 11 years ago. Mr. Miyamoto-Mills stated that the proposed District Code revision includes a number of editorial changes. If the Board adopts the proposed ordinance, the following findings would also be adopted: . Customers have made a substantial investment in assets that will benefit new users; . The purpose of the Capacity Fee Program is to equalize the investment in assets between current and new users ensuring that new users pay their fair share for capacity; . New users generate an added burden on services and facilities; . To maintain an adequate level of service, maintenance of existing capacity and construction of new capacity in the future is necessary; . Current fund balances and Capacity Fee revenue will be allocated to: Life-cycle replacement, renovation, upgrading, and improvements to maintain existing capacity; and Addition and expansion of facilities when needed or required to meet legal and regulatory requirements; . Revenue will be allocated to: Equitable adjustment of contributions between current, new, and contractual users; Fund the new users' share of "Funds Required" in the: . Sewer Construction Fund . Running Expense Fund 05 24 01 134 . Self Insurance Fund . There is a strong and reasonable relationship between the added burden of new users and the Capacity Fees; and . The Capacity Fee Program is exempt from the California Environmental Quality Act (CEQA). Mr. Miyamoto-Mills stated that if the Board adopts the proposed ordinance, the Capacity Fees will be effective July 9, 2001. At 2:26 p.m., President Hockett opened the public hearing to receive comments on a proposed ordinance to retitle and amend Chapter 6.12 of the District Code regarding the Capacity Fee Program and to consider adoption of a Schedule of Capacity Fees, Rates, and Charges. There being no comments, the public hearing was closed. Discussion followed with regard to designation of such funds by other agencies, the published and mailed notices provided to interested parties, and typical fees a developer would have to pay for constructing new residences. Mr. Kenton L. Aim, Counsel for the District, stated that the proposed ordinance attempts to clarify the issue of shell-type buildings. A fee is charged when these type buildings are connected and frequently it is based on the lowest type use. When a restaurant or some other use go in later, the appropriate fees may not be captured. In this ordinance, an attempt has been made to put in a better mechanism for capturing the appropriate fees. Following discussion, it was moved by Member Boneysteele and seconded by Member Menesini, that Ordinance No. 217 be adopted, retitling and amending Chapter 6.12 of the District Code regarding the Capacity Fee Program and adopting the Schedule of Capacity Fees, Rates, and Charges. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Boneysteele, Menesini, Nejedly, Lucey, Hockett None None b. CONDUCT A PUBLIC HEARING ON THE DRAFT CAPITAL IMPROVEMENT BUDGET (CIB) FOR 2001-2002 AND 2002-2003 AND THE DRAFT 2001 TEN-YEAR CAPITAL IMPROVEMENT PLAN (ClP). APPROVE THE 2001 CIP. AND APPROVE THE CIB FOR INCLUSION IN THE 2001-2002 DISTRICT BUDGET President Hockett stated that the purpose of this public hearing is to receive comments on the Draft Capital Improvement Budget (CIB) for 2001-2002 and 2002-2003 and on the Draft 2001 Ten-Year Capital Improvement Plan (CIP). Mr. Batts, General Manager, introduced Ms. Ann E. Farrell, Director of Engineering, who distributed the handout from the April 27, 2001 Capital Projects Committee/Board Workshop on the CIB/CIP and indicated that she will use some of those overheads in her presentation today. Ms. Farrell briefly reviewed how the Capital Improvement Program works. Often the amount spent is significantly less than what is authorized in anyone year because of multi-year projects. Staff is attempting to keep the authorization level to the lowest practical amount through realistic performance estimates. The General Manager is authorized to allocate funds to projects. Staff spends those funds as designated for the projects. Currently, expenditures are tracking fairly well to authorizations. Today the Board will be asked to authorize the funds needed for the 2001- 2002 and 2002-2003 fiscal years. Because the Dougherty Valley Tunnel and Trunk Sewer Project has been subtracted out of the budget since it will be paid for by the developer, it is proposed that $1,665,339 be returned to the Sewer Construction Fund this year. The total proposed authorization for projects that are active in the 2001-2002 fiscal year is $39 million, $1.6 million will be returned to the Sewer Construction Fund, and 2001-2002 expenditures are estimated to be $25.1 million. This amount is higher 05 24 01 135 than anticipated in subsequent years and it does not include the San Ramon projects which the District agreed to move forward as a result of the settlement agreement with the City of San Ramon. The following are the major projects for fiscal year 2001-2002: . . Pleasant Hill Relief Interceptor, Phase 4 ($5,745,000) Orinda Crossroads Pumping Station - Long Term ($1,963,000) Moraga Pumping Station - Long Term ($1,932,000) Collection System Renovation Program - Near Term ($1,210,000) Pumping Station SCADA and Power Management ($822,800) Recycled Water - Pleasant Hill Relief Interceptor, Phase 4 ($800,000) . . . . Ms. Farrell stated that total planned expenditures for fiscal year 2002-2003 is $21 million, and that is the target for future years as well. The major projects planned for fiscal year 2002-2003 are: . . Collection System Renovation Program ($2,040,000) Lower Orinda Pumping Station Renovation ($2,000,000) Concord Industrial Forcemain ($1,377,000) M4-A Forcemain Relocation ($1,235,000) TV Inspection Program ($1,000,000) Pumping Station SCADA and Power Management ($817,000) Solids Conditioning Building Ventilation Improvements ($ 817 ,000) Collection System Urgent Projects ($750,000) . . . . . . Ms. Farrell stated that the Ten-Year Capital Improvement Plan (CIP) is based on the following assumptions: . Expenditure of approximately $21 million per year; . 3 percent inflation per year; . Increase of the Sewer Service Charge as needed to fund the capital program; Ms. Farrell reviewed capital revenue and expenditures projections from 1999-2000 through 2010-2011, indicating that the District will need to increase revenue to the CIP to close the revenue gap. Reserves are currently being spent down. When reserves reach the appropriate level, expenditures can no longer exceed revenues. In summary, Ms. Farrell stated that in the 2001 Capital Improvement Plan: . Capacity expenditures are replaced by renovation/replacement expenditures. . An expenditure goal of $21 million per year has been established and budgeted. This will be reassessed each year with the TV Inspection Program and Treatment Plant Study to confirm whether this is still a good target. . Current projection of priorities are: Treatment Plant Collection System General Improvements Recycled Water 30 percent 60 percent 5 percent 5 percent These priorities will be reassessed each year as well. With putting the Information Technology Project into the General Improvements Program, there may be a need to reassess the 5 percent for General Improvements priority projections. . The capital component of the Sewer Service Charge will need to be raised consistently to fund the capital program. 05 24 01 136 . Loss of ad valorem taxes would create additional revenue needs from the Sewer Service Charge. Ms. Farrell reviewed the San Ramon facilities which will be authorized separately. The tunnel and trunk sewer are estimated to cost $17 million. All of this expense is being paid by the developer. The San Ramon (Larwin) Pumping Station Project is estimated to cost $7 million and the Forcemain Project is estimated to cost $6 million. Staff will be looking at the financial impacts of moving these projects forward. Bond financing may be needed if these projects are accelerated. The developers have agreed to work with the District on the issue of this additional expense and may defray some of the interest costs. At 2:45 p.m., President Hockett opened the public hearing to receive comments on the draft Capital Improvement Budget for 2001-2002 and 2002-2003 and the draft 2001 Ten-Year Capital Improvement Plan. There being no comments, the public hearing was closed. It was moved by Member Boneysteele and seconded by Member Menesini, that the draft 2001 Ten-Year Capital Improvement Plan be approved and that the draft Capital Improvement Budget be approved for inclusion in the 2001-2002 District Budget. There being no objection, the motion was unanimously approved. Member Lucey thanked the Board Capital Projects Committee and staff for working together to reduce the amount of the budget to something more realistic. 6. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER Mr. Batts, General Manager, requested that Item 9.a., Engineering, be taken out of order to accommodate interested persons in the audience. President Hockett proceeded to Item 9.a., Engineering. 9. ENGINEERING a. AUTHORIZE THE GENERAL MANAGER TO EXECUTE AN AGREEMENT WITH MONTGOMERY WATSON FOR THE DESIGN OF THE SAN RAMON PUMPING STATION RENOVATIONS PROJECT. DP 5460 Mr. Batts, General Manager, introduced Mr. William E. Brennan, Capital Projects Division Manager, who stated that the consultant for this project was selected in July 2000. The San Ramon (Larwin) Pumping Station Project was then put on hold due to the issues with the Dougherty Tunnel and Trunk Sewer Project. Proposals were solicited from seven consultants, all who had done prior work for the District. Three firms responded: G.S. Dodson, Montgomery Watson, and WRMS Engineering (formerly known as NPG). In February 2001, Director of Engineering Ann Farrell reported to the Board on the consultant procurement process. The Board told staff to encourage broad participation by the consultant community in work at the District. The two most recent consultant procurement processes were for the Recycled Water Industrial Project and Phase 5 of the Outfall Project. In the case of the Recycled Water Industrial Project, which is on the agenda today, four firms with specialized experience were targeted. In the case of the Outfall Phase 5 Project, a broad approach was used and 38 firms were solicited. No proposals were received. At this time, staff is planning to use a more focused approach in an effort to get proposals. Following discussion of the proposals received and process used for the San Ramon Pumping Station Renovations Project, and the need to move forward, It was moved by Member Menesini and seconded by Member Nejedly, that the General Manager be authorized to execute a professional services agreement with Montgomery Watson in the amount of $500,000 for the design of the San Ramon Pumping Station Renovations Project, DP 5460. There being no objection, the motion was unanimously approved. Mr. Brennan reviewed the preliminary layout of the pumping station to ensure compatibility with the trunk sewer work. The capacity of the pumping station will be limited to 16 MGD and the District will comply with the terms of the settlement between the City of 05 24 01 137 San Ramon, the developers, and the District. The elements of the project include architectural improvements, landscaping, four new 200 HP pumps, and wetwell extension. The trunk sewer work will include the wetwell extension. The public information component of this project will include tours of the San Ramon Pumping Station and meetings with the pumping station neighbors during the course of the design. Development of this process is just beginning and staff will be meeting in the near further with City of San Ramon staff to discuss the proposed approach. As part of the recent settlement, the District has agreed to a review by the City of San Ramon for noise, odor, landscaping, architectural appearance, and other esthetic issues related to this project. As part of the settlement agreement, it was agreed to build a new forcemain. Using a map, Mr. Brennan described the alignment for the forcemain and gravity sewer. Mr. Brennan reviewed the schedule for the San Ramon Pumping Station Renovations Project, noting that design is planned to be completed in March 2002, construction is planned to begin in May 2002, and completion of construction is anticipated to be June 2003. President Hockett thanked Mr. Brennan for the update and reverted to the order of the agenda. a. 7. REPORTS GENERAL MANAGER 1 ) Mr. Batts, General Manager, stated that with the recent settlement reached with the City of San Ramon, the District is working with the City to move quickly to start construction of the Dougherty Tunnel and Trunk Sewer Project. Mr. Batts introduced Mr. Curtis W. Swanson, Environmental Services Division Manager, who reported that to date 70 sets of plans and specifications for the Dougherty Tunnel and Trunk Sewer Project have been distributed. Bids will be opened on June 20, 2001 and award of the construction contract is scheduled for the July 5, 2001 Board Meeting. Construction will begin July 30, 2001 with completion of the trunk sewer planned for December 2001 and completion of the tunnel expected by October 2002. A meeting with residents is scheduled for May 30, 2001 at the San Ramon City Council Chambers. The City of San Ramon will host the meeting and has been good enough to advertise the meeting and send out notices. There may be some changes to the plans and specifications to improve the project or lessen impacts based on input received at this meeting. Work is proceeding to locate additional staging areas, field offices, and specialty staffing to assist with this project. The District has still not received the encroachment permit from the City of San Ramon. It is expected by June 6, 2001. The encroachment permit is important because it confirms a lot of the actions required in the contract. The developer financing agreement with Windemere must be approved before the Board can award the contract. Staff is also working with Windemere to complete the temporary pumped service agreement in case there is a delay during construction. As the Board is aware, the framework for settlement was negotiated with the developers and the City of San Ramon. Out of that was to come a formal settlement agreement that must be finished. The target to finish that formal settlement agreement is the first of June 2001. 2) Mr. Batts introduced Mr. Jim Belcher, Senior Engineer, who reported that the Cogeneration Air Inlet Project is nearly complete. Staff is very pleased with the results of plant site energy monitoring. Staff is also looking at how the District can participate in the 20/20 Energy Program signed by the Governor, but the energy use of the new Laboratory building will offset any savings achieved from Cogeneration Air Inlet Project. The District is also looking at Senate Bill, SB-5X which provides funding for energy-related projects. As previously reported to the Board, the District has had inquiries concerning locating power plants at the District. The Contra Costa County Board of Supervisors has indicated opposition to any more local power plants. While the County has limited ability to prevent power plants, it can try to influence state power regulators who do have final approval of such 05 24 01 05 138 24 project. More blackouts are predicted for this summer. The treatment plant and all but three pumping stations have been exempt from rolling blackouts. The three pumping stations that are not exempt have backup power or long influent storage time. The California Energy Commission is looking at these exemptions and the District is being asked to reconsider its exemption. Staff will be coming back to the Board for input at a future Board Meeting. Mr. Belcher reviewed natural gas purchases to date and reported that additional natural gas was purchased for May. With regard to landfill gas, the District has been invoiced for landfill gas usage for the period August 2000 through April 2001. The 1998 contract price, not the one agreed to in September 2000, was used in computing the amount due. The landfill gas compressor facility has been down since May 1, 2001 for maintenance. With regard to continued energy conservation efforts, staff is evaluating pre- cooling on cogeneration inlet air and working aggressively to optimize plant equipment operation and timing out of service to maximize savings. 3) Mr. Batts introduced Mr. James M. Kelly, Director of Plant Operations, who provided the Board with copies of the Feasibility Study and Request for Compliance Schedule for the District's National Pollutant Discharge Elimination System (NPDES) Permit No. CAO037648 which was submitted to the Regional Water Quality Control Board (RWQCB) May 23, 2001. The last day for comments has been extended to June 4, 2001 and the RWQCB hearing on the District NPDES permit is scheduled for June 20, 2001. Mr. Kelly stated that it appears that there are six new water quality-based effluent limits that the District cannot comply with in the short term and interim limits have been requested for these. They are: . Mercury . Cyanide . Dioxin . Tributyltin . Phthlate . Acrylonitrile Mr. Kelly stated that to get consistent compliance requires more than 80 percent reduction for all six chemical constituents. In order to receive interim limits and a compliance schedule, the District must show that it cannot achieve compliance and must submit an infeasibility analysis. The infeasibility analysis requires that the District identify efforts to quantify sources of pollutants, document source control efforts to date, propose a schedule for future source control measures, and demonstrate the schedule is as short as practical. Mr. Kelly stated that since his last report to the Board, it appears that the District's Tentative Order will require broader pollution prevention efforts, additional ambient water quality monitoring, and support for the earliest completion of the TMDL's. In summary, Mr. Kelly stated that there are last minute evolving changes in the water quality-based effluent limits; there have been significant challenges to meet comment deadlines; the District cannot comply with six water quality-based effluent limits; there is a high probability of compliance with the proposed interim limits; and additional studies and pollution prevention efforts will be necessary as a result of the new permit. 4) Mr. Batts, General Manager, reported that the National Foundation of Integrated Pest Management has expressed interest in promoting the District's Integrated Pest Management (lPM) Program to other municipalities. While in Washington, D.C. last weekend, Board Member Menesini and Community Affairs Manager Harriette Heibel had an opportunity to meet with Foundation representatives. Mr. Batts introduced Community Affairs Manager Harriette Heibel, who stated that the Foundation is looking at several programs and is meeting with the Environmental Protection Agency (EPA) to try to get funding. The District may hear more from the 01 139 Foundation; and in any case, it was a definite compliment to the District's IPM Program. 5) Mr. Batts, General Manager, announced that Mr. John A. Larson, Director of Collection System Operations, has announced that he plans to retire this summer to pursue career goals as a consultant utilizing his collection system expertise. Mr. Batts stated that he has asked Mr. Don Rhoads, Field Operations Superintendent, to act as Interim Manager reporting through Director of Plant Operations Jim Kelly. The Board extended their best wishes to Mr. Larson. 6) Mr. Batts, General Manager, announced that the District is advertising for bids for the North Clarifier Paving Improvements Project, DP 6153. Mr. Batts described the scope of work and stated that the engineer's estimate for the project is $200,000. 7) Mr. Batts, General Manager, reported on May 12, 2001 a temporary household hazardous waste collection event was held in Danville and 416 vehicles were served. These community-based drive-in events continue to be very popular with the participants. However, there were several complaints received from customers about the telephone appointments system operated by Philip Services as part of the service contract. The District will follow up on this issue. District staff was on hand at the event and reported that the event operated smoothly and no organizational problems were noted. 8) Mr. Batts, General Manager, reported that early on Saturday, May 19, 2001, there was a leak in the District's recycled water line serving the median on Chilpancingo Parkway in Pleasant Hill. Contra Costa Water District (CCWD) was called on the repair. They responded and it took them several hours to determine that the leak was not in their system. CCWD then called the District and the Collection System Operations (CSO) on-call crew responded and shut down the recycled water line using the isolation valve on Buchanan Golf Course. It is estimated that 50,000 gallons of recycled water leaked into Pacheco Creek. The leak has been reported to the Regional Water Quality Control Board, State Office of Emergency Services, and County Health Department. Samples of the creek showed there was no impact on the receiving water. It appears that the failure was directly related to a poor joint. 9) Mr. Batts, General Manager, announced that a settlement agreement has been executed with Ranger Pipeline relating to the emergency repair of the Recycled Water Pipeline in Buchanan Field Golf Course and the District has received a check in the amount of $125,000 from Ranger Pipeline and their commitment to repair future problems with the work they were responsible for on that part of the recycled water pipeline installation. Mr. Batts recognized Mr. Henry Thom, Senior Engineer, for his efforts in negotiating this settlement. 10) Mr. Batts, General Manager, reported that District staff met with staff from the City of Concord to discuss contractual issues. Several minor issues have been resolved. The City of Concord has been asked to provide a proposal on the issue of the fair sharing of future capital contributions. A second meeting has been set for next week. Staff will keep the Board informed. 11 ) Mr. Batts, General Manager, clarified a recent newspaper article which reported a virus in the District's computer system. BREAK 05 24 01 140 President Hockett declared a recess at the hour of 4: 1 0 p.m., reconvening at the hour of 4:25 p.m. with all parties present as previously designated. b. c. d. a. COUNSEL FOR THE DISTRICT 1 ) Mr. Kenton L. Aim, Counsel for the District, provided a brief update on recent changes in Conflict of Interest regulations. Mr. Aim stated that although the changes are very detailed, they are intended to be more user friendly. Mr. Aim highlighted the changes which deal primarily with definitions and examples to help clarify the intent of the regulations. SECRETARY OF THE DISTRICT None BOARD MEMBERS 1 ) Member Menesini reported on the Association of Metropolitan Sewer Agencies (AM SA) Awards Program he attended in Washington, D.C. on May 20, 2001. Mr. Leonard Battaglia, of West County Wastewater District, received the AMSA 2001 Public Service Award; Delta Diablo Sanitation District received the AMSA 2001 Award for Research and Technology for its Recycled Water Facility which supplies East County power plants and public works; and Central Contra Costa Sanitary District received the AMSA 2001 National Environmental Achievement Award in the Public Information and Education category for Our Water, Our World pesticide reduction program. It is significant that three national award winners were from Contra Costa County. The Contra Costa County Board of Supervisors will be celebrating this achievement. 2) Member Menesini reported that the May 21, 2001 Environmental Alliance Discussion Series featured Director of Plant Operations Jim Kelly and a tour of District treatment facilities. On June 18, 2001, Mr. Michael Vukelich, founder and developer of the Color Spot Nurseries, will discuss the economics and politics of mass production of plants that will thrive in different climates and environments. 3) Member Menesini announced that the District's Sewer Science Program Teachers' Evaluation and Appreciation event was held recently at CSO. It is an excellent program and the teachers are very happy with it. 8. ADMINISTRATIVE AUTHORIZE THE GENERAL MANAGER TO EXECUTE A REPROGRAPHICS SERVICES AGREEMENT WITH XEROX CORPORATION Mr. Batts, General Manager, introduced Ms. Harriette Heibel, Community Affairs Manager, who described the Reprographics Services Center (RSC) contract and request for proposals process. Ms. Heibel stated that a work team approach was used. Vendor walk-throughs, analysis of both three-year and five-year proposals, vendor interviews, and on-site visits to vendors were used in evaluating the proposals. Ms. Heibel reviewed the comparison of the three proposals submitted and the cost savings resulting from going to a five-year contract over a three-years contract. All vendors were requested to bid on all proposal options. Ms. Heibel stated that based on the mix of equipment proposed to meet the District's current service needs, the fact that the overall cost for Xerox was significantly lower than the other proposals received, and the ability for the District to purchase paper and binding supplies rather than having the contractor do so, it is recommended that a five-year contract be approved with Xerox Corporation. Discussion followed with' regard to equipment costs and charges, installation, approving a five-year contract rather than a three-year contract, and the financial stability of Xerox Corporation. 05 24 01 141 It was moved by Member Menesini and seconded by Member Nejedly, that the General Manager be authorized to execute a Reprographics Services Agreement with Xerox Corporation for five years. There being no objection, the motion was approved with Member Lucey abstaining. It was noted that Member Lucey abstained from voting on this matter since he owns stock in Xerox Corporation in excess of $25,000. b. AUTHORIZE APPLICATION FOR A CERTIFICATE OF CONSENT TO SELF INSURE WORKERS' COMPENSATION LIABILITIES Following discussion of the California Sanitation Risk Management Authority (CSRMA) Workers' Compensation Program, it was moved by Member Boneysteele and seconded by Member Lucey, that Resolution No. 2001-068 be adopted, authorizing application to the Director of Industrial Relations, State of California, for a Certificate of Consent to Self Insure Workers' Compensation Liabilities, and that the General Manager be authorized to execute all necessary documents for completion of the application to the Director of Industrial Relations, State of California. There being no objection, the motion was unanimously approved. 9. ENGINEERING a. AUTHORIZE THE GENERAL MANAGER TO EXECUTE AN AGREEMENT WITH MONTGOMERY WATSON FOR THE DESIGN OF THE SAN RAMON PUMPING STATION RENOVATIONS PROJECT. DP 5460 This item was taken out of order earlier in the agenda. b. AUTHORIZE THE GENERAL MANAGER TO EXECUTE AN AGREEMENT WITH RBF CONSULTING FOR THE COMPLETION OF THE FACILITIES PLAN FOR THE RECYCLED WATER INDUSTRIAL PROJECT. DP 7201 Mr. Batts, General Manager, stated that the Board is requested to authorize execution of an agreement with RBF Consulting for preparation of a business plan for the Recycled Water Industrial Project according to the guidelines in the general agreement between Central Contra Costa Sanitary District (CCCSD) and Contra Costa Water District (CCWD). The business plan would be submitted to the CCCSD Board for approval prior to meetings with CCWD. While the business plan is expected to move forward, CCWD opposition could make the project difficult or impossible. Ms. Ann E. Farrell, Director of Engineering, reviewed the February 26, 2001 letter from CCWD Director of Planning Greg Gartrell and the accompanying list of issues to be addressed in the planning study. Ms. Farrell stated that staff will be meeting with CCWD and will avoid spending any funds on engineering if there are any political or other issues requiring resolution. Staff would like to get the preliminary cost information that will be generated in the facilities plan prior to meeting with CCWD. Member Lucey asked if binding arbitration is required by the general agreement between CCCSD and CCWD. Ms. Farrell stated that she will check and advise the Board. It was moved by Member Boneysteele and seconded by Member Nejedly, that the General Manager be authorized to execute an agreement with RBF Consulting for $165,000 for the Facility Plan completion for the Recycled Water Industrial Project, DP 7201. There being no objection, the motion was unanimously approved. 10. TREATMENT PLANT a. AUTHORIZE THE GENERAL MANAGER TO TRANSFER $600.000 FROM AN OPERA TIONS AND MAINTENANCE ACCOUNT TO AN ESCROW ACCOUNT FOR LANDFILL GAS PAYMENTS 05 24 01 142 Mr. Batts, General Manager, stated that as Mr. Belcher stated earlier, Board authorization is requested to transfer $600,000 from the Treatment Plant landfill gas O&M account to an interest bearing escrow account. The $600,000 represents staff's position regarding the contractual value of the landfill gas used to date. Due to the uncertainty of the contractual relationships between NEO and Acme and staff's unwillingness to become entangled in a possible commercial dispute, it is recommended that this money be sequestered until its final disposition becomes clear. It was moved by Member Boneysteele and seconded by Member Nejedly, that the General Manager be authorized to transfer $600,000 from the Plant Operations Department landfill gas account (001-0420-730-0503) to an escrow account. There being no objection, the motion was unanimously approved. 11. CORRESPONDENCE a. NOTE RECEIPT OF LETTER DATED MAY 2. 2001 FROM CHARLES BEESLEY OF CONTRA COSTA MOSQUITO AND VECTOR CONTROL DISTRICT Receipt was noted of the May 2, 2001 letter from Mr. Charles Beesley, recently retired General Manager of Contra Costa Mosquito and Vector Control District, thanking the District for its letter of commendation for his years of service. 12. APPROVAL OF MINUTES a. MINUTES OF APRIL 19. 2001 b. MINUTES OF ADJOURNED REGULAR BOARD MEETING OF APRIL 27.2001 It was moved by Member Boneysteele and seconded by President Hockett, that the minutes of the Regular Board Meeting of April 19, 2001 and the minutes of the Adjourned Regular Board Meeting of April 27, 2001, be approved as presented. There being no objection, the motion was unanimously approved. 13. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED MAY 24. 2001 Member Lucey, Chair of the Budget and Finance Committee, stated that he and Member Nejedly reviewed the expenditures and found them to be satisfactory. It was moved by Member Lucey and seconded by Member Nejedly, that the Expenditure List dated May 24, 2001, including Self Insurance Check Nos. 101730-101745, Running Expense Check Nos. 131694-132161, Sewer Construction Check Nos. 23268-23335, Manual Payroll Check Nos. 48776-48777, and Regular Payroll Check Nos. 53614-53643, be approved as recommended. There being no objection, the motion was unanimously approved. 14. BUDGET AND FINANCE a. RECEIVE THE 2001-2002 OPERATIONS AND MAINTENANCE BUDGET Mr. Batts, General Manager, stated that the 2001-2002 Operations and Maintenance (O&M) Budget is being presented for the Board's review. The 2001-2002 O&M Budget reflects a Sewer Service Charge increase of $24, $19 of which is proposed to be allocated to the O&M portion of the District's budget and $5 reallocated to the Capital portion. Mr. Batts introduced Ms. Deborah Ratcliff, Controller, who stated that the position paper presented to the Board focuses on projected actual for 2000-2001 fiscal year compared to the proposed budget for the coming year, 2001-2002. Ms. Ratcliff stated that in her presentation she will focus on the budget to budget comparisons to provide a broader perspective for the Board. At a Board workshop in January 2001, the five-year projections were reviewed and the need for a Sewer Service Charge increase was discussed. Following further discussions at subsequent Board Meetings, a notice 05 24 01 143 was mailed advising the public of a proposed Sewer Service Charge increase of up to $24 per year for up to three years. The proposed budgets are based on a $ 24 rate increase in the Sewer Service Charge allocating $19 to O&M and $5 to the Sewer Construction Fund to partially offset the $16 that was transferred to O&M last year. Ms. Ratcliff summarized the 1999-2000 actual, 2000-2001 projected, and 2001-2002 budgeted O&M revenues, expenses, and reserves. Revenues for 2000-2001 are projected to be $37,333,000 at fiscal year end compared to 2001-2002 budgeted revenues of $40,992,000. This is due primarily to an increase in revenue from the City of Concord and the proposed increase in the Sewer Service Charge. Expenses for 2000-2001 are projected to be $37,662,000 at fiscal year end compared to 2001-2002 budgeted expenses of $40,209,000. This increase is mainly due to increases in the area of salaries and benefits and utilities. In 1999-2000 there was a $1.8 million deficit in reserves. Again in 2000-2001 a deficit of $330,000 is projected, decreasing the O&M fund balance at June 30, 2001 from $3,926,000 to $3,597,000. In 2001-2002, an increase in reserves of $782,000 is budgeted, bringing the fund balance to $4,379,000 at June 30, 2002. Ms. Ratcliff reviewed the key labor costs and the other key costs imbedded in the 2001-2002 O&M Budget, which make up the 12.1 percent increase budget to budget. Ms. Ratcliff noted that a vacancy factor of $500,000 savings was imbedded in salaries. Ms. Ann E. Farrell, Director of Engineering, reviewed the following assumptions on which the Capital Improvement Plan is based: . Expenditure of approximately $ 21 million per year; . 3 percent inflation per year; Increase of the Sewer Service Charge as needed to fund the capital program; Ms. Farrell stated that Sewer Construction Fund (Capital) reserves are currently be spent down. When reserves reach the appropriate level, expenditures can no longer exceed revenues. In the 2005-2006 fiscal year, the Sewer Service Charge becomes the primary funding source for the Capital Improvement Program. Ms. Farrell reviewed the projected Sewer Service Charge capital component needed to fund the Ten-Year Capital Improvement Plan (CIP) without and with the San Ramon projects that the District agreed to escalate as part of the settlement agreement with the City of San Ramon and the developers. When the escalated San Ramon projects are included, a $36 increase in the Sewer Service Charge would be required to fully fund the CIP in 2002-2003. Ms. Farrell stated that once the $36 increase in Sewer Service Charge is made using current assumptions, another adjustment would probably not be needed during the ten-year period for the CIP. If additional bond or Taxation and Revenue Anticipation Notes (TRANS) financing were to be used to partially offset the cost of escalating the San Ramon projects, the required increase in the Sewer Service Charge would be approximately $14 per year for the next two years. . In response to a question from Member Lucey, Ms. Farrell stated that other capital projects could be put off in an effort to offset the escalated San Ramon projects, but a number of projects are already under contract and would need to be completed. In conclusion, Ms. Farrell stated that the Sewer Service Charge will become increasingly important as a source of funds for capital projects. The capital component of the Sewer Service Charge will need to increase significantly over the next ten years. Increasing the Sewer Service Charge sooner results in the benefit of lowering of the overall increase required. Additional financing will be needed to escalate the San Ramon projects. Mr. Batts, General Manager, stated that a Board Financial Planning and Policy Workshop was held in January 2001 to provide information to the Board and to stimulate dialogue on the District's rate setting process. Following discussions at subsequent Board Meetings, mailing of a public notice of a proposed Sewer Service Charge increase of up to $24 per year for up to three years was authorized. This notice was mailed to 96,655 property owners. To date the District has received a total of 80 responses. Of those, 5 were in favor of the proposed increase. 05 24 01 144 At the January workshop, one of the questions was how accurate were the projections included in the Five-Year O&M Plan. Mr. Batts reviewed the 2001-2002 O&M Budget compared to the Five-Year O&M Plan and stated that the biggest variance was in utilities. Mr. Batts highlighted the increase in O&M expenses in the areas of salaries, benefits, utilities, maintenance, and all other, and the impact on the Sewer Service Charge, again noting that the largest increase ($3.5 million) was in utilities. Because of the uncertainty in certain areas and the potentially significant impact of increases in those areas, "what if" scenarios were developed. Mr. Batts reviewed the following scenarios which could result in the need for an additional Sewer Service Charge increase: . A 50 percent increase in energy prices would cost about $2.5 million, or $17 on the Sewer Service Charge. . A 50 percent drop in sewer connections would generate $3 million less in revenue, equating to $21 on the Sewer Service Charge. . A 30 percent increase in chemicals prices would cost about $300,000, or $2 on the Sewer Service Charge. . 6 percent general inflation rate represents about $500,000, or $4 on the Sewer Service Charge. Other future concerns include loss of ad valorem tax revenue, added retirement system costs, and other unknown energy-related increases. Mr. Batts reviewed the "Central San Check Book," showing a beginning balance at July 2001 of $45 million, a year-end balance at June 2002 of $39 million, and funds required of $39 million to make it through the low point in the year. By June 2003, the end of year two, the year end balance is estimated to be $25 million with funds required of $30 million, making it necessary to go to Taxation and Revenue Anticipation Notes (TRANS) financing. By year three, June 2004, the year-end balance is $24.4 million and funds required are $31.7 million. TRANS financing or some other financing would be required to make up that shortfall. Mr. Batts stated that the District is not the only agency that is having these problems. Mr. Batts reviewed the anticipated rates increases for nearby agencies. Mr. Batts stated that at the rate setting hearing on June 7, 2001, staff will recommend that the Board increase the Sewer Service Charge by $24 dollars for the first year and a maximum of $24 each for the two years after that. Then in years two and three, public hearings will be held to set the actual rates depending on the circumstances at that time from $0 to a maximum of $24. Mr. Kenton L. Aim, Counsel for the District, stated that if the Board sets the rates at a maximum of $24 per year for subsequent years, the Board can decrease the rates at a noticed public hearing without further mailed notice. Member Lucey stated that he understands the reason for the proposed increase is almost entirely for utility costs and no one could have anticipated that, but we do not know whether utilities will go up or down in the future. Member Lucey stated that he will vote against any rate increase because he thinks that if there is a shortfall in one year it should come from reserves. Member Lucey stated that he does not think it is healthy to have $50 million in reserves and he does not think it will hurt the District's bond rating to draw the reserves down further. Member Boneysteele stated that he does not agree that those are just reserves like dollars in the checking account at the beginning of each period. The reserves are funds collected from people wanting service and buying into the treatment plant. The funds are to provide those capital facilities they and other people will need. It is in the nature of accrued depreciation. Member Boneysteele stated that he does not think the District should feel guilty for having those reserves, and he does not think the District should take capital funds and use them for operating expenses. Member Menesini stated that he will be reviewing the information provided carefully before the June 7, 2001 public hearing. It is obvious the District cannot just keep drawing down the reserves. Member Menesini stated that he would be very concerned if the 05 24 01 145 District keeps eroding the reserves until there are problems. Rather than waiting until we reach crisis, Member Menesini stated that the District must take action. President Hockett stated that she would not support drawing down the reserves any further. Current reserves only amount to four or five District projects. Once those reserves are drawn down, you cannot get them back. Why borrow money when it is ratepayers who receive the services and should be paying for the services they receive. President Hockett stated that no one could have predicted what would happen with energy costs last year. President Hockett stated that she would support a $24 increase for the next three years with the opportunity to decrease those rates if the full $24 is not needed to provide the services. Mr. Batts thanked the Board for their input. 15. EMERGENCY SITUATIONS REQUIRING BOARD ACTION None 16. ANNOUNCEMENTS/SUGGESTIONS FOR FUTURE AGENDA ITEMS None 17. ADJOURNMENT There being no further business to come before the Board, President Hockett adjourned the meeting at the hour of 5:52 p.m. ~~~~ PresidéfftTEJf the Board of Directors, Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: a¿~ Sec e ar of the Central on a Costa Sanit ry District, County of Contra Costa, State of California 05 24 01