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HomeMy WebLinkAboutBOARD MINUTES 04-24-03 195 MINUTES OF THE ADJOURNED REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON APRIL 24, 2003 The District Board of the Central Contra Costa Sanitary District convened in an adjourned regular session at its regular place of meeting, 5019 Imhoff Place, Martinez, County of Contra Costa, State of California, at 2:02 p.m. on April 24, 2003. President Nejedly called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Hockett, Lucey, Boneysteele, Nejedly ABSENT: Members: Menesini Member Menesini entered the meeting at the hour of 2:04 p.m. a. PLEDGE OF ALLEGIANCE TO THE FLAG Board and staff joined in the Pledge of Allegiance to the Flag. 2. PUBLIC COMMENTS None 3. CLOSED SESSION a. LABOR NEGOTIATIONS This closed session was not held. 4. REPORT OF DISCUSSION IN CLOSED SESSION None Member Menesini entered the meeting at this time. Mr. Charles W. Batts, General Manager, requested that Item 6, Reports/Announcements, be taken out of order at this time prior to the break. There being no objection, President Nejedly proceeded to Item 6., Reports/Announcements. 6. REPORTSAANNOUNCEMENTS a. Mr. Batts, General Manager, announced that the bargaining team for the Management Support/Confidential Group (MS/CG) has informed the District that their membership overwhelmingly approved the contract offer made by the Board at a membership meeting on Tuesday, April 22, 2003. A position paper will be presented at the next regular Board Meeting. b. Mr. Batts, General Manager, announced that on Friday, April 18, 2003, at about 10:45 a.m., a portion of the roof of the new San Ramon Pumping Station caught fire during a test of the new engine generator. The contractor and the San Ramon Valley Fire Department quickly put out the fire. At this time, it is believed that the fire was the result of a field change done by the contractor to the exhaust piping from the engine generator. The change comprised rerouting the exhaust pipe to fit through a previously constructed opening through the roof. The angle of the pipe made it impossible to install the specified thimble as specified by the engineer. The thimble insulates the exhaust pipe from the roof. The engineer was not asked to review the field fit for the exhaust piping, and a different type of 04 24 03 196 thimble may have to be provided. The contractor ran the test apparently believing that for the limited duration of the performance test it would be possible to operate the engine generator without the thimble in place. A fire resulted, and the roof was slightly damaged. The exhaust pipe will be mounted vertically as originally envisioned. This will allow installing the thimble as envisioned in the design. The engineer believes that with the proper installation, the existing roof would be adequately protected from the exhaust heat. The design engineer Montgomery Watson Harza also looked at the feasibility and cost of providing a new noncombustible material at the exhaust penetration for a "belt and suspenders" approach. Capital Projects Division Manager Bill Brennan and Director of Engineering Ann Farrell attended the San Ramon City Council meeting on April 22, 2003 to answer questions and respond to any concerns of the City. c. Mr. Batts, General Manager, announced that the District's postage machine has failed beyond economic repair. This item was included in the 2003-2004 Equipment Budget. A position paper requesting approval to purchase the postage machine from the 2002-2003 Equipment Budget contingency will be placed on the next Board Meeting agenda for the Board's consideration. The cost of the postage machine is approximately $6,000. d. Mr. Batts, General Manager, announced that several staff members will be out of the office beginning Wednesday, April 30, 2003 attending the California Association of Sanitation Agencies (CASA) meeting. e. Mr. Batts, General Manager, announced that the work is underway to widen Highway 680 to accept a new HOV (carpool) lane. The crossing at Highway 4 will lead to modification of the overpass and entry ramps. Several District pipelines will be impacted. Staff is working with the State, but since this is a fast track project details are not yet completed. At this time, President Nejedly reverted to the order of the agenda. 5. CAPITAL PROJECTS COMMITTEE MEETING/BOARD WORKSHOP a. PROVIDE OVERVIEW OF THE DRAFT FISCAL YEAR 2003-2004 CAPITAL IMPROVEMENT BUDGET AND DRAFT 2003 TEN-YEAR CAPITAL IMPROVEMENT PLAN b. REVIEW CONTRACTUAL ASSESSMENT DISTRICT (CAD) PROGRAM STATUS Mr. Batts, General Manager, stated that this is the third Board workshop that focuses on the District's Capital Improvement Budget (CIB) and Plan. The November workshop laid out the preliminary Capital Improvement Budget and associated costs. The January Board Financial Planning and Policy Workshop used the preliminary CIB and Operations and Maintenance (O&M) projections to develop a rate strategy. This workshop is the result of that plan and provides detail on the projects included in the proposed budget. Director of Engineering Ann Farrell will outline the CIB and Capital Improvement Plan (CIP), the reduction in capital spending based on probable loss of ad valorem (property tax) revenue, and the impact on future programs. After a break, Board Members who wish may stay to inquire about individual project details and descriptions. Mr. Batts introduced Ms. Ann E. Farrell, Director of Engineering, who thanked all those who helped in the preparation of the Draft 2003-2004 Capital Improvement Budget and Draft 2003 Ten-Year Capital Improvement Plan: Randy Schmidt, Gail Chesler, Don Berger, John Mercurio, Tad Pilecki, Ba Than, Curt Swanson, and Bill Brennan, and the operating groups. Ms. Farrell stated that the input from the operating groups was particularly important this year when the District is trying to defer projects. Ms. Farrell thanked everyone for their cooperation, stating that hopefully this is a plan that will save money for the District but still get critical issues addressed. 04 24 03 197 Ms. Farrell reviewed the agenda for the workshop and reviewed historical Capital Program activity, noting that 1999-2000 actual expenditures without Dougherty Valley were $21.3 million, total revenue was $21'1&~milliÓnHess total debt service of $2.2 million (partially funded from O&M) for net revenue of $19.4 million, a deficit of $1.9 million. In 2000-2001 actual expenditures without Dougherty Valley were $28 million, total revenues were $18.9 million less total debt service of $2.6 million (partially funded from O&M) for net revenue of $16.3 million, a deficit of $8.5 million. In 2001-2002, when staff began conscientiously trying to defer projects, actual expenditures without Dougherty Valley were $20.5 million, total revenues were $17 million plus bond proceeds of $15 million less total debt service of $2.7 million (partially funded from O&M) for net revenue of $29.3 million, a positive variance of $8.8 million. In 2002-2003 actual expenditures without Dougherty Valley are projected to be $22 million, total revenue is projected to be $22.6 million which includes $3.2 million increase in the Sewer Service Charge capital component from $20 to $41 and about $1 million more in connection fees than budgeted, less total debt service of $3.4 million (partially funded from O&M) for projected net revenue of $19.2 million, a deficit of 2.8 million. Ms. Farrell noted that the pay-as-you-go approach is the best approach if the District can continue to do that because we do not want debt service consuming more and more of our annual revenue. Ms. Farrell reviewed two proposed 2003-2004 alternatives. The status quo alternative (recommended if the District retains its ad valorem tax revenue) shows annual revenue of $23,700,000 less total debt service of $3,400,000 less total expenditures of $25,873,000 for a deficit of $5,573,000. The ad valorem loss alternative shows annual revenue of $16,800,000 less total debt service of $3,400,000 less expenditures of $18,700,000 for a deficit of $5,300,000. The status quo alternative assumes an increase of $13 added to the existing $41 for a total of $54 from the Sewer Service Charge going to capital projects. The ad valorem loss alternative also assumes an increase to $54 for the capital component of the Sewer Service Charge going to capital projects and loss of $6.2 million in property tax and reduction in Concord revenues of $700,000. Ms. Farrell noted that in both alternatives the projected deficit is about $5 million. The deferrals in project expenditures are offset by the loss in ad valorem tax and reduction in Concord revenues. Ms. Farrell stated that the District is able to sustain a deficit Capital Improvement Program for a few more years until we are able to build the Sewer Construction Fund back up again. Ms. Farrell provided a summary of debt service, noting that the recycled water loan interest of $60,000, the recycled water loan principal of $127,000, the 1998 bond interest of $1,041,000 and the 1998 bond principal of $1 ,375,000 are funded from O&M. The 2002 bond interest of $800,000 is funded from Capital. Ms. Farrell reviewed a graph showing the types and amount of debt, and indicated that $3.5 to $4 million in debt which we are obligated to pay each year equals about $23 to $26 on the Sewer Service Charge rate. Ms. Farrell briefly described the Collection System Program projects and funding levels for the status quo alternative ($17,843,000) and the ad valorem loss alternative ($13,200,000) as follows: (Note that the expenditures under the status quo alternative appear to the left and the ad valorem tax expenditures to the right within the parenthesis. Where reductions have been made, the ad valorem costs are bolded. . Pleasant Hill Interceptor Phase 5 ($1,800,000 I $0) . South Orinda Sewer Improvements Phase 2 ($1,468,000 I $348,000) San Ramon Pumping Station Renovations ($1,377,000 I $1,377,000) . . Lower Orinda Pumping Station Renovation ($1,235,000 I $1,235,000) Walnut Creek Renovations Phase 1 ($1,178,000 I $1,178,000) . . Collection System Renovation Program ($1,100,000 I $850,000) 04 24 03 198 . Concrete Corrosion Contra Costa Blvd. Phase 1 ($1,091,000 I $1,091,000) . TV Inspection Program ($1,000,000 I $500,000) Cured-In-Place Pipe ($779,000 I $0) . . Pleasant Hill Road East Trunk ($731,000 I $731 ,000) Developer Sewers ($625,000 I $625,000) . . Pumping Station SCADA and Power Management ($524,000 1$524,000) Contractual Assessment Districts ($500,000 I $0-$300,000) . . Total Collection System Projects <$500,000 ($4,435,000 I $4,435,000) Discussion followed with regard to the risk analyses used in determining which projects would be deferred. Ms. Farrell stated that about 1988 the District began a Collection System Renovation Program. During the last 15 years $42,292,240 has been spent on collection system renovations, for an average of $2.8 million per year. Of that, $10,006,200 was spent in Lafayette, $10,677,000 was spent in Martinez, $12,069,000 was spent in Orinda, $1,000,000 was spent in Pleasant Hill, $8,000,000 was spent in Walnut Creek and Rossmoor, $393,000 was spent on the TV Inspection Program, and $147,000 was spent on Spot Repairs. As can be seen from this list, more is spent on renovations in the older parts of the collection system. Ms. Farrell reviewed the proposed Collection System Renovation Program for the next ten years, 2002-2003 through 2012-2013, noting that a total of $75,432,000 is planned to be spent, an average of $7.5 million per year for the next ten years. This is a fairly proactive program compared to the $3 million per year spent in the past. It is in response to the proposed Capacity Assurance, Management, Operations and Maintenance (CMOM) regulations and to show that the District is using due diligence to address the aging infrastructure. Ms. Farrell reported that as of April 2003, 16 Contractual Assessment District (CAD) projects have been completed or are under construction. Since 1997, $2,756,792 has been authorized for CAD projects. Seven CAD projects, with an estimated cost of $995,000, are currently in design. There are no CAD projects awaiting formation approval. Nine neighborhoods have expressed interest in CAD projects. The Board of Directors authorized $1,000,000 for CAD projects in the 2002-2003 Capital Improvement Budget. The 2002-2003 total to date is $612,646 for the following CAD projects: . Camille Court CAD 2002 $161,570 . EI Pintado CAD 2002 $158,965 . Arbor Lane CAD 2002 (Proposed) $142,111 . Echo Spring CAD 2001 (Proposed) $150,000 Ms. Farrell stated that current estimates are that about $300,000 may need to be spent in 2003-2004 for CAD projects even if the District stopped the program immediately. The estimated carryover of $300,000 would be for the following CAD projects: . Camille Court $ 30,000 . EI Pintado $ 50,000 . Arbor Lane $100,000 04 24 0"'" .J -- . Echo Spring $120,000 Member Lucey asked if all the potential CAlzl'participants have been told that the District could stop the CAD program at any time, so the $300,000 may not be spent next year. Ms. Farrell stated that all potential participants are aware that the program can end at any time. Ms. Farrell presented the following CAD funding alternatives if the District should lose its ad valorem tax revenue: 1. Discontinue the CAD Program at the end of Fiscal Year 2002-2003, but provide continued funding for all approved projects (approximately $300,000); or 2. Authorize $500,000 per year to continue the CAD Program and delete or defer $500,000 of other projects or approve additional funds. Discussion followed with regard to the estimated number of septic tanks remaining in the District service area, the estimated cost to convert the remaining septic tanks to the sanitary sewer system, the fact that many of the properties currently served by septic tanks would not quality for the CAD Program under the current criteria, and the present low interest rates making home equity loans a viable alternative to the District's CAD Program. It was noted that the District's CAD Program has served as the primary catalyst to bring the community together, interacting with the public, bringing residents together, and providing technical expertise and advice. Following discussion, it was the consensus of the Board that $300,000 be included in the draft 2003-2004 Capital Improvement Budget to complete the approved CAD projects and that the CAD Program be discontinued. Ms. Farrell thanked the Board for their direction and indicated that the CAD line item will be reduced to $300,000 in the draft 2003-2004 Capital Improvement Budget. Ms. Farrell briefly described the Treatment Plant Program projects and funding levels for the status quo alternative ($6,037,000) and the ad valorem loss alternative ($4,000,000) as follows: . Outfall Improvements Phase 5 ($1,836,000 1$1,836,000) . Aeration Air Renovations ($1,374,000 1$0) . Standby Effluent Pumps Refurbishment ($698,000 I $0) Treatment Plant Soil Remediation ($450,000 1$450,000) . . Steam Turbine System Upgrades ($305,000 I $305,000) Plant Control System Improvements ($300,000 1$300,000) . . Total Treatment Plant Projects < $300,000 ($1,074,000 I $1,074,000) Ms. Farrell then went on to the Recycled Water Program. She stated that the Recycled Water Program funding has decreased. Each new connection is reviewed to ensure cost effectiveness. Staff will be meeting with the Board's Recycled Water Committee to discuss larger projects such as the Industrial Project; however funding has not been included in the draft 2003-2004 Capital Improvement Budget. The Recycled Water Program status quo alternative is $376,000, and the ad valorem loss alternative is $200,000. Ms. Farrell reviewed the General Improvements Program status quo alternative ($1,617,000) and ad valorem loss alternative ($1,300,000) as follows: . Equipment Budget ($540,000 I ?) 04 24 199 03 200 . MIS Plan ($448,000/1) . Total General Improvements Projects <$400,000 ($629,000/1) Ms. Farrell stated that a 20% reduction in General Improvements Program expenditures is needed or spending must be reduced by $300,000 in other programs. Ms. Farrell stated that this matter will be discussed further at the staff level and the necessary reductions will be identified. c. REVIEW DRAFT MIS/INFORMATION TECHNOLOGY DEVELOPMENT BUDGET FOR 2003-2004 At this time Ms. Farrell introduced Mr. Mark Greenawalt, MIS Administrator, who provided an overview of the Information Technology Development Capital Improvement Budget. Mr. Greenawalt stated that the 2002-2003 budget approved by the Board was $500,000. It is projected that $345,000 of that will be spent, a 30 percent savings. This was achieved by deferral or elimination of projects. Mr. Greenawalt stated that to date $225,000 has been expended on the following 2002-2003 budget components: . PC Replacement Program ($80,000) . Human Resources Information System ($28,000) . Microsoft Office ($28,000) . AS 400 Hardware Upgrade ($45,000) Centralized Backup ($40,000) . . Miscellaneous ($4,000) The following 2002-2003 items totaling $120,000 are pending and should be completed by the end of the current fiscal year: . HVAC in Network Center ($20,000) Content Management Software ($50,000) . . Records Management Software Upgrade ($23,000) . Risk Management Claims Software ($2,000) . Board Room Audio/Presentation ($25,000) In addition, $30,000 of the $188,000 Document Imaging System authorization will be spent in the current fiscal year. Mr. Greenawalt stated that the proposed 2003-2004 budget is $448,000, a 10 percent decrease over the previous fiscal year. Mr. Greenawalt reviewed the proposed projects for the 2003-2004 fiscal year as follows: 04 . PC Replacement Program ($90,000) . Network Center Fire Protection System ($40,000) Network Operations Server ($40,000) . . PC Management Software ($10,000) . HTE Software Upgrade ($85,000) 24 03 201 . GroupWise Email Software Upgrade ($25,000) . Engineering Survey Software '($5Ûi,OOO) . Materials Services Bar Coding System ($18,000) . Permit Counter Terminals (Included in PC Replacement Program) . TV Video Database (Delayed) . Mainsaver Software Upgrade ($90,000) SNAP System ($70,000 of the $298,000 budgeted amount) . . Document Imaging System ($79,000 of the $188,000 budgeted amount) Discussion followed concerning the HTE software in comparison to other software programs available. Mr. Greenawalt stated that he is satisfied that HTE is as good a system as others in the market. The cost to replace the HTE system would be in the range of $2 million including staff time. Ms. Debbie Ratcliff, Controller, stated that HTE is a very reliable financial system. It runs the accounting, finance, and payroll systems. HTE is very accurate and the system rarely goes down. Member Menesini stated that he would like to meet with Mr. Greenawalt to get a better understanding of the terms and systems. Mr. Greenawalt stated that he would be happy to meet with Member Menesini and any other Board Members that might be interested in a more detailed presentation. Mr. Greenawalt provided a brief overview of future projects planned for the 2004-2007 time period, including Centralized Network Data Storage, TelephoneNoicemail Upgrades, Laboratory Information Management System (LlMS) Upgrade, On-Line Permit System, GPS, Network Expansion in Plant, and Wireless Laptops. Following discussion of future projects, President Nejedly thanked Mr. Greenawalt for his report. Member Hockett requested to be excused and left the meeting at the hour of 3:13 p.m. d. SUMMARY Ms. Farrell stated that the purpose of this workshop is to ask for Board authorization of funds for the coming fiscal year. Ms. Farrell presented the Capital Improvement Budget summary for fiscal year 2003-2004. Ms. Farrell reviewed the estimated program expenditures without deferral of projects for 2003-2004 of $25,873,000, noting that if property tax revenues are lost, staff will defer projects as discussed earlier to offset this loss and reduce expenditures to a target amount of $18,700,000. The estimated allocated authorization carryover from the previous fiscal year is anticipated to be $17,949,000, including approximately $5,000,000 for projects to be closed out at yearend; the estimated additional allocation needed for the 2003-2004 year is $30,183,000, which includes approximately $13,000,000 for projects to be deferred if property tax revenue is lost; for a total proposed authorization of $48,132,000 for 2003- 2004. Ms. Farrell noted that this will come back to the Board for consideration at the May 22, 2003 Board Meeting. In closing, Ms. Farrell reviewed the future revenue structure for capital projects, stating that the District had the benefit of $15 million bond proceeds added to the Sewer Construction Fund in 2002-2003. The bond proceeds have given the District a cushion, and the balance at July 1, 2003 is projected to be $43,300,000. In 2003-2004 there will be deficit spending in capital projects of $5,000,000 under either the status quo alternative or the ad valorem loss alternative. Ms. Farrell stated, as she has said for the last few years, increases in the Sewer Service Charge capital component continue to be needed to bring capital revenue in line with capital expense. The Ten-Year Capital Plan 04 24 03 ,- ._.~..-- ".~ 202 indicates more than doubling the Sewer Service Charge capital component over the next five years from $54 in 2003-2004 to $114 in 2008-2009 ($124 status quo alternative). President Nejedly thanked Ms. Farrell and Mr. Greenawalt for their presentations. BREAK At 3:20 p.m., President Nejedly declared a recess. The meeting reconvened at 3:30 p.m. Members Hockett, Lucey, and Nejedly had left the meeting, and Members Menesini and Boneysteele remained for the detailed project discussion. e. PROVIDE DETAILED PROJECT DISCUSSION IF REQUESTED BY BOARD Ms. Farrell described recent and ongoing investigations relative to the Aeration Air Leak Assessment Project. A surveillance survey of the AIN tank structure has been done. Data on air usage for the years 2000,2001, and 2002 has been compiled, and monitoring of the AIN tank air usage for 2003 is ongoing. Upcoming work scheduled for this summer includes: . . . . . Mapping of cracks in floor slab in Basins 1 C/1 D; Video camera investigation of the air plenum box drain lines; Subsurface investigation using ground penetrating radar; Core drilling through the slab at select locations; and Expansion joint repair in Basins 1 C/1 D. Ms. Farrell presented the air usage data for 2000,2001, and 2002 and showed photographs of the AIN tanks. Mr. Tad Pilecki, Principal Engineer, discussed prioritization of work by CSO and Engineering. CSO prioritizes sewer repairs on a rating system of 1 (high) through 5 (low). Engineering has a past practice of prioritizing sewer replacements on a rating system of 1 through 4. Engineering is developing a new rating system based on pipe condition and other factors. The primary focus of the CSO construction maintenance work is to keep the collection system working, to prevent overflows, and to do spot or structure repairs. CSO priority ratings indicate: . . . . . Priority 1 - Work that must be done now - there is eminent hazard or difficult maintenance access on a frequently cleaned line; Priority 2 - Work that should be done soon - there is a shifted joint on a high frequency cleaning line; Priority 3 - Work that should be done next year - there are lots of cracks, but they do not impact day-to-day operations; Priority 4 - Work that should be done if crews are already there - there are some cracks, pipe round; and Priority 5 - Wish List - protruding lateral. The primary focus of Engineering's critical line segment list is asset protection, rehabilitation and renovation of the collection system. 04 . Priority 1 - Work that must be done - several CSO Priority 1 and 2 repairs needed; 24 OQ.' Ù 203 . Priority 2 - Work that should be done - several CSO Priority 2 and 3 repairs; . Priority 3 - Work that needs to be done to coordinate with other agencies or projects; and . Priority 4 - Wish List - lowest priority projects. Mr. Pilecki noted that pipe condition is just one of the factors considered. Additional factors include capacity issues, location, number of overflows, maintenance history, utility coordination, and right-of-way issues. Mr. Pilecki briefly reviewed the Television Inspection Rating Schedule Defect Classification Table, the new priority system being developed. This is an automated system that will allow staff to handle a lot of data in an efficient manner. Discussion followed with regard to use of the data generated to provide the basis for use by the Board in making decisions on where and how capital funds will be spent. Board and staff briefly discussed the Plant Control System Project. A tour will be set up for Members Menesini and Boneysteele and any other Board Members who might be interested. Members Menesini and Boneysteele commended staff on the work that went into preparation of the budget components and on the informative presentations. 6. REPORTS~NNOUNCEMENTS This item was taken out of order earlier in the agenda. 7. ADJOURNMENT There being further business, the meeting was adjourned at the hour of 4:11 p.m. to reconvene at 2:00 p.m. on Thursday, May 8,2003 for an Adjourned Regular Board Meeting. ~--- C-. 7?oo.'¿c Pre' ent of the Board of rectors? Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: 04 24 03