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HomeMy WebLinkAboutBOARD MINUTES 05-18-00 91 MINUTES OF THE REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON MAY 18, 2000 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 18, 2000. President Lucey called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Nejedly, Menesini, Hockett, Boneysteele, Lucey ABSENT: Members: None a. INTRODUCE NEW EMPLOYEE . VICTORIA LAMICA. PURCHASING AND MATERIALS MANAGER Ms. Victoria Lamica, Purchasing and Materials Manager, was introduced and welcomed to the District by President Lucey and the Board of Directors. 2. PUBLIC COMMENTS None 3. CONSENT CALENDAR It was moved by Member Hockett and seconded by Member Nejedly, that the Consent Calendar, consisting of Items a. through c., be approved as recommended, resolutions adopted as appropriate, and recordings duly authorized. a. Quitclaim deeds to Bruce A. Myers and Paulette M. Myers (195 Lakewood Road), Dennis S. Downs and Michelle Downs (185 Lakewood Road), and William C. Herbert and Roxana L. Herbert (115 Russell Drive) for three easements in connection with the Lakewood Sewer Renovation Project, DP 4805, were approved; the President of the Board of Directors and the Secretary of the District were authorized to execute said Quitclaim Deeds; staff was authorized to record said Quitclaim Deeds with the Contra Costa County Recorder; and Resolution Nos. 2000-036. 2000-037. and 2000-038 were adopted to that effect. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Hockett, Nejedly, Menesini, Boneysteele, Lucey None None b. Quitclaim Deeds to Frederick A. Johnson and Carole R. Johnson, and Ethel M. Green for two easements in connection with the South Orinda Sewer Improvements Project, DP 4928, were approved; the President of the Board of Directors and the Secretary of the District were authorized to execute said Quitclaim Deeds; staff was authorized to record the Quitclaim Deeds with the Contra Costa County Recorder; and Resolution Nos. 2000-039 and 2000-040 were adopted to that effect. 05 18 00 92 Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Hockett, Nejedly, Menesini, Boneysteele, Lucey None None c. Authorization was given for P.A. 00-3 (Walnut Creek), P.A. 00-4, P.A. 00-5, P.A. 00-6, P.A. 00-7, P.A. 00-8, P.A. 00-9 (Alamo), P.A. 00-10 (Danville), and P.A. 00-11 (San Ramon) to be included in a future formal annexation to the District. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Hockett, Nejedly, Menesini, Boneysteele, Lucey None None 4. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER None 5. ITEMS HELD OVER FROM PREVIOUS BOARD MEETINGS a. ADOPT A RESOLUTION APPROVING A DEWATERING UPGRADE PROJECT. AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE CONTRACTS WITH ALFA- LAVAL SEPARATION. INC. Mr. Charles W. Batts, General Manager, stated that this item was held over from the May 2, 2000 Board Meeting. At that time it was District Counsel's opinion that a majority of the quorum must approve the motion, and the vote was 2 to 1 vote with 1 abstention in favor of approving the staff recommended Dewatering Upgrade Project. Member Boneysteele abstained due to a concern regarding a potential conflict of interest and asked staff to determine if a conflict of interest actually existed. The Board passed a subsequent motion by a vote of 3 to 0 for Alfa-Laval Separation, Inc. to repair and upgrade one centrifuge at a cost not to exceed $130,000. Upon review of this matter, staff believes that the immediate repair alternative which will require work on additional units, the advantages of the recommended alternative, and benefits of the upgrades were not fully described. In addition, District Counsel has determined that the initial 2 to 1 vote on the recommended Dewatering Upgrade Project was adequate to approve the first motion. Finally, it has been determined that Member Boneysteele does not have a conflict of interest and may vote on this item. Alfa-Laval Separation, Inc. is privately held by a Swedish company by the name of Tetralaval. Mr. Batts stated that staff believes that this project is very important and should be brought back to the Board. Mr. Batts introduced Mr. James M. Kelly, Director of Plant Operations, who stated that it is recommended that the Dewatering Upgrade Project to refurbish all four centrifuges and purchase a new rotating unit, be approved. The centrifuges were placed into service by the District in 1988. There is now 30 percent more sludge going into the centrifuges and they are older. There is a need to upgrade and repair all four centrifuges. At anyone time, one of the four centrifuges is always down for a semi-annual or annual repair. A major overhaul is done on two centrifuges each year. Because of the age of the centrifuges and the maintenance schedule, many times there are only two centrifuges in operation. Two operating centrifuges are required to provide the necessary dewatering capacity. Purchase of a complete spare rotating unit will provide almost immediate replacement and uninterrupted service. It was moved by Member Menesini and seconded by Member Boneysteele, that Resolution No. 2000-041 be adopted, approving the Dewatering Upgrade Project, DP 6151, and the 05 18 00 93 sole sourcing of the described upgrades, modification, and repairs to four Alfa-Laval PM 75000 centrifuges at the repair facilities of Alfa-Laval Separation, Inc., incorporating Alfa- Laval Separation's technological developments to improve performance; and that the General Manager be authorized to execute a series of contracts with Alfa-Laval Separation, Inc. to accomplish this work at a cost of $1,300,000. Motion approved on the following vote: AYES: Members: Menesini, Boneysteele, Nejedly, Hockett NOES: Members: Lucey ABSENT: Members: None 6. REPORTS a. GENERAL MANAGER 1 ) Mr. Batts, General Manager, provided a brief update on the Dougherty Tunnel and Trunk Sewer Project. Mr. Batts reported that the developers have initiated the dispute resolution process with the City of San Ramon regarding violation of the settlement agreement. A mediation has been tentatively scheduled for May 24, 2000. The City of San Ramon and the developers have requested that the District Board's ad hoc committee attend. Members Nejedly and Lucey indicated that they would attend. If President Lucey is unable to attend, Member Menesini indicated that he would attend. 2) Mr. Batts, General Manager, introduced Ms. Harriette Heibel, Community Affairs Manager, who provided an overview of the District's public outreach efforts. Ms. Heibel stated that key messages in the following categories are targeted to reach the public: . . Pollution Prevention Household Hazardous Waste Collection Facility W astew ater /Stormw ater Recycled Water Sewer Service Charge Construction Projects Customer Service Recruitment . . . . . . The District's Sewer Squad Program reached 2,100 students in 25 different schools this year through 90 presentations by the Lindsay Museum. In response to questions from the Board, Ms. Heibel stated that two years ago an extensive evaluation of this program was done. In addition, each year teacher evaluations are requested, feedback is provided, and changes are made to the program and materials as appropriate. The presentations are made throughout the District service area. Ms. Heibel indicated that she would provide Member Menesini a breakdown of the schools and regions. The Sewer Science Program carried the District's pollution prevention message to 500 students in 20 classrooms. Efforts are underway to incorporate additional schools and teachers in the program next year. The District participates in the Newspapers in Education Program with 14 partners. The District's pollution prevention message reached over 5,000 students in 179 classrooms through this program. The Kids in Gardens Program is for teachers. Since the District has multiple partners in this program, the District's cost has been reduced from $15,000 a workshop to $5,000 per year for two workshops involving 60 teachers. This is another way the District gets its pollution prevention message out. 05 18 00 94 05 Treatment Plant Tours were provided to 115 students last year. Staff intends to increase that next year. A new curriculum is being created and tour signs and stations will be placed throughout the plant. Community Affairs staff worked closely with the Plant Operations Department staff on this program. Information is sent to teachers in advance and a five-minute video has been developed for that purpose. In response to a question from Member Menesini, Ms. Heibel stated that a post-site curriculum is being developed for use next year and she will share it with Member Menesini when it is available. The District participates in the Contra Costa Green Business Program, communicating our pollution prevention message. To date, the focus has been auto repair shops but during the coming year printers will be included in the program. This program is announced in the District Pipeline Newsletter, brochures, and postings throughout the County. Last year 46 auto repair shops were certified as Green Businesses. The Integrated Pest Management (IPM) Store Partnerships have reached 13 Central County stores with the District's pollution prevention message. Two hundred store employees have been trained. In the IPM Training Program, Master Gardeners have trained 40 gardeners. In a new venue, the District conducted Pest Control Operators Workshop. Although they do not necessarily want the IPM message, 22 pest control operators attended the workshop and were trained. The Pipeline Newsletter is one of the main ways the District reaches the public. Usually one or two issues are produced each year. The Pipeline reaches both residents and businesses. Eight public workshops were held by the Master Gardeners. In addition the Master Gardeners conducted 22 special group workshops for both residents and businesses. More than 100 people attended brown bag lunches last year at Bank of America. Ms. Heibel noted that this is a completely new opportunity for the District. In addition, the District has produced an on-line gardening guide which many other agencies are linking to. Throughout the year, the District participates in environmental events. Last year we were involved in seven events including Earth Day and Chamber of Commerce events. The District is a member of the BASMAA/BADA Media Relations Group. Last year a media relations reference guide was produced and generated media coverage for participants. Printed materials are prepared for the District's Household Hazardous Waste Collection Facility, including Pipeline Newsletter articles, display materials, and ads to announce various parts of the Household Hazardous Waste Collection Program. In these, effort has been made to link the household hazardous waste, pollution prevention, and integrated pest management messages. Wastewater/Stormwater is part of a combined message in the general student education program geared toward both students and teachers. Last year, 800 to 1,000 inspections were done as part of the Pretreatment/Stormwater Inspection Program. As part of the Restaurant Inspection Program, 400 grease inspections were conducted. Two hundred inspections were made in the Auto Repair Shop Inspection Program. When appropriate, information is left behind to help shops become compliant. Hundreds of brochures were distributed providing information recycled water. More emphasis will be placed on this program in the future. 18 00 95 Notification of the proposed increase in the District's annual Sewer Service Charge was done both in the Pipeline Newsletter and by letter. J ,J '...,., <:"( Construction project information is part of a multi-faceted project communications effort. Hundreds of people and businesses are contacted each year through letters, public meetings, and notices. This effort is done primarily by Engineering Department staff. Ms. Heibel stated that on the Pleasant Hill Interceptor Project about 200 contacts were received from the public and about 200 contacts were received with regard to the South Orinda Sewer Improvements Project. Most of those were resolved. With what is happening now in the City of San Ramon, staff knows that there is more we can do in the future. With regard to customer service, the Collection System Operations (CSO) Department mailed 437 surveys last year and received a 54 percent response rate. Of those, there was a 94 percent satisfaction level. Three thousand four hundred Fix-It- Tickets were mailed with the Pipeline Newsletter to targeted areas. Four responses were received. Additional areas will be contacted in the future. District Hotlines received more than 1,000 calls last year. Most of those were to the Household Hazardous Waste Hotline, but the Public Information Hotline receives a number of calls as well. More than 270 users log on to the District's web page each day. The most popular site is District recruitments. There are also many requests for the on-line IPM gardening guide. Recruitments are another way the District reaches out to the public through the web, newspapers, and brochures. Ms. Heibel stated that the Communication Services proposed budget for 2000-2001 is $208,000, about $30,000 less than last year. Because partnership efforts have been successful, the District will be reaching bigger audiences but the costs will be less. Ms. Heibel noted that this proposed budget does not include funds for the public outreach efforts of the Engineering Department or other departments. Ms. Heibel stated that she would welcome any ideas from the Board. Member Nejedly stated that it is evident that there has been some communication that did not happen in San Ramon. It has come to a point where it is very important to communicate with people either personally or through letters. Member Nejedly stated that the public outreach being done now is great, but more focus should be put towards notifying people well in advance. In response to a question from Member Menesini, Ms. Ann E. Farrell, Director of Engineering, stated that the San Ramon Project was somewhat different. Unfortunately because the District did not do the Environmental Impact Report (EIR), we relied on others to notify the public. Usually the District notifies people much earlier and gets their input early. The District will be paying more attention to that in the future. At the request of Member Hockett, Mr. Batts clarified the roles of the Ms. Heibel and Communication Services staff in relation to construction project notification. Mr. Batts stated that Ms. Heibel provides a lot of energy to all the District public outreach efforts and she has been a resource to the Construction Project Public Outreach Task Force. Ms. Farrell stated that Engineering Department staff will be working more closely with Ms. Heibel to coordinate the overall public outreach and notification efforts. President Lucey thanked Ms. Heibel for her report. 05 18 00 96 3) 05 Mr. Batts, General Manager, introduced Mr. Jim Belcher, Senior Engineer, who stated that at the November 18, 1999 Board Meeting, staff updated the Board on the current status of the landfill gas contract. The contract had expired July 1, 1999. The District was purchasing landfill gas under a sliding scale arrangement. With regard to negotiations with Acme Landfill for a contract for purchase of landfill gas, Mr. Belcher stated that there are three areas of concern: 1) regulatory compliance, 2) system reliability, and 3) price. With regard to regulatory compliance, Acme has agreed to be named as the responsible party relative to Bay Area Air Quality Management District (BAAQMD) issues with regard to fugitive emissions from landfill gas at the plant site. If there is a problem, Acme would receive the ticket and would be the responsible party. Acme is responsible for the piping to the District building and then it becomes the responsibility of the District. The sulfur content and cost of testing has been resolved. BAAQMD agreed to accept the Acme test results on a weekly basis. With regard to system reliability, Neo, a subsidiary of Northern States Power, is the new operator for Acme. Neo has received a permit to install a 950 KW generator for self power and potential power to sell to the District. They also have the right to install a new power line to the District so they can evaluate their costs to us. With regard to price, NEO has presented a proposal for landfill gas pricing. District staff will review the proposal and make a presentation to the Board if it is acceptable. President Lucey asked staff when they anticipate negotiations will be concluded. Mr. James M. Kelly, Director of Plant Operations, stated that he gave NEO and Acme's attorney a 30 to 60 day time frame. Discussion followed with regard to the District terminating the contract. President Lucey stated that he is concerned with tying the landfill gas contract to electrical power. President Lucey asked that staff report back on the status of negotiations at the next Board Meeting. Member Nejedly stated that he thinks the District should take the gas. It is environmentally sound and the District has a good system to take it but because it is dirty gas we must clean it. Even at 90 percent of the cost of natural gas, it costs the District more to take the landfill gas. President Lucey thanked Mr. Belcher for the update. 4) Mr. James M. Kelly, Director of Plant Operations, distributed a report and highlighted the May 4-6, 2000 California Association of Sanitation Agencies (CASA) Conference. Topics of discussion included the Little Hoover Commission Report, the CASA Mission Statement, state and federal lawsuits relating to total maximum daily load (TMDL), and National Pollutant Discharge Elimination System (NPDES) permit issues. 5) Mr. Batts, General Manager, reported on the Little Hoover Commission Report on Special Districts. The Little Hoover Commission is a 12 person appointed bipartisan commission created in 1962. It is an independent state oversight agency to promote economy and efficiency in government. The recommendations of the Little Hoover Commission often become legislation. The Little Hoover Commission Report on Special District was released May 3, 2000. The Report looked at the organization and funding of local government. The Little Hoover Commission Report contained the following findings relative to the 2,200 independent special districts: . Special districts are often invisible to the public and policymakers, compromising oversight and accountability. Local Agency Formation Commission (LAFCO) is not promoting effectiveness and efficiency through reorganization of special districts. . 18 00 97 . Policymakers and community lack tools to assess consolidation and change the status quo. Special districts'",~~mtlltimillion dollar reserves that are not publicized or considered. Property tax allocations to enterprise districts distort the cost of service and create inequities. . . The Little Hoover Commission Report also looked at Board compensation packages and made the following additional findings: . . . . Special districts hoard public resources. Special districts receive no oversight. Consolidation or elimination is needed. Special districts need community scrutiny. Mr. Batts stated that the results have received little press coverage or discussion since the Report was released. There is organized opposition by the California Association of Sanitation Agencies (CASA) I California Special Districts Association (CSDA), and Association of California Water Agencies (ACWA), but they cannot muster what is needed to stop this. It is likely that special districts will lose property tax allocations. Central Contra Costa Sanitary District was mentioned four times in the Report: on page 59, the District's prudent reserve policy was discussed and it was stated that the District's retained earnings are 427 percent of annual revenue; on pages 70 and 71 in a sidebar and table, it was stated that the District receives 11 percent of revenue from property tax and 2 percent of all property tax to enterprise districts; and in Appendix D, there was a table of largest enterprise districts in which the District is number 15 in the top 25 for retained earnings. The Report stated that special districts should be more like cities and keep enough money on hand to pay bills. Mr. Batts noted that that is the District's criteria for the adequate funds budgeting concept. Member Boneysteele stated that when the Uniform Code of Accounting was adopted, he tried but was unsuccessful in getting them to use the term "contributions in aid of construction" as in the utility industry rather than "retained earnings." Now the result is the misleading statement of retained earnings. Mr. Batts stated that District staff and other agencies have talked to the Little Hoover Commission and explained this issue. In a sidebar in the Report, it is noted that assets are made up of retained earnings and contributed assets. President Lucey stated that he has a couple comments with regard to the Executive Summary but all in all it is an excellent report that lets the public know what is going on. There are a lot of inaccuracies but we must be accountable to the taxpayers and the citizens and many special districts are not. There is potential for consolidations. The Report says that LAFCO should do its job. The District can raise rates if we lose the property tax revenue. President Lucey stated that he believes that the District looks very good in terms of the generic recommendations. President Lucey requested staff to go through the recommendations and with a plus or minus indicate if the District is complying or not. Mr. Batts stated that staff will provide that feedback to the Board. 6) Mr. Batts, General Manager, announced that the District is advertising for the Furnace Total Hydrocarbon (THC) Monitoring System Project, DP 7195. This project is to meet the new regulatory requirements of the Clean Water Act Section 503 which requires measurement of THC, oxygen, and carbon monoxide from furnace flue gas. The engineer's estimate for the work is $250,000. 05 18 00 98 7) 8) 9) 10) 11 ) Mr. Batts, General Manager, announced that a Mobile Household Hazardous Waste Collection event was held on May 13, 2000 in Danville. There were 228 vehicle trips. Of those 68 percent were by Danville residents and 19 percent by San Ramon residents. In a survey, most participants indicated that they preferred this type of event over visiting the permanent facility, despite the infrequency of such events and the need for an appointment. Mr. Batts, General Manager, announced that there was a dispute with regard to the substitution of the glass and glazing subcontractor for the Laboratory Improvements Project. The parties agreed to a hearing in which the Director of the Administrative Department Paul Morsen acted as the Hearing Officer. A copy of Mr. Morsen's decision and the related information has been provided to the Board. Mr. Batts, General Manager, announced that in accordance with the Board's direction, settlement in the amount of $35,000 of the William Bolin claim relating to a landslide at 30 St. Stephens Drive, Orinda, has been reached. Mr. Batts, General Manager, announced that once again the newspapers have carried the story of the rescue of the terrier who was trapped a second time in an abandoned storm drain in Walnut Creek. A Collection System Operations (CSO) Department crew was called to assist in rescuing the animal. Member Nejedly stated that it is fine that CSO responded but the District must be careful in spending taxpayers' money in this way. If the cost was significant, thought should be given to sending a bill to the animal's owner. Mr. Batts, General Manager, stated that the list of design and construction contracts for the Treatment Plant and Pumping Stations was provided to the Board as requested by President Lucey. Staff would be happy to meet with any Board Member to discuss the scope of any of the projects or programs. Also if there is any interest on the Board's part, the Capital Improvement Budget Workshop scheduled for Fall could cover this material or any other areas of particular interest in the District's Capital Improvement Program. President Lucey stated that the information provided helped give an overview of the significant amount of work proceeding in the plant and pumping stations. 12) Mr. Batts, General Manager, suggested that the Board may wish to schedule a special Board Meeting to instruct labor negotiators in closed session with regard to the Management Support/Confidential Group (MS/CG) contract negotiations. Following discussion, it was the consensus of the Board that the matter be calendared for consideration at the June 1, 2000 Board Meeting. b. COUNSEL FOR THE DISTRICT None c. SECRETARY OF THE DISTRICT d. 05 None BOARD MEMBERS 1 ) Member Menesini announced that the presentation on pollution in the bay and estuaries by Dr. Bruce Thompson, Senior Scientist of the San Francisco Estuary Institute, was very informative. The June 19, 2000 Environmental 18 00 99 Alliance discussion series will feature Ms. Marcia Brockbank, Program Manager for the San Francisco Estuary Project. Ms. Brockbank will discuss national and local estuary ,"projects. All those interested are invited to attend. 7. ENGINEERING a. CONSIDER THE FORMATION OF A CONTRACTUAL ASSESSMENT DISTRICT (CAD) FOR PROPERTIES ON REGENT PLACE IN ALAMO FOR INSTALLATION OF SEWER IMPROVEMENTS: ADOPT RESOLUTIONS OF INTENTION TO CREATE REGENT PLACE CAD NO. 2000-2. FOR APPROVAL OF THE BOUNDARY. AND REQUESTING CONSENT OF CONTRA COSTA COUNTY FOR CCCSD TO CONDUCT PROCEEDINGS FOR THE CAD Mr. Batts, General Manager, stated that this is the initial step in formation of a Contractual Assessment District (CAD). Estimated costs and more detailed information about the proposed Regent Place CAD will be presented at the public hearing. The proposed Regent Place CAD will begin with five participants, the minimum number; however, the CAD could potentially be extended to serve ten homes. If the CAD proceeds, funds for construction will come from the 2000-2001 Capital Improvement Budget. Member Nejedly requested a summary sheet showing an accounting for all Contractual Assessment Districts each time a new CAD is considered. Mr. Curt Swanson, Environmental Services Division Manager, stated that he would provide such a summary and noted that if this CAD is eventually formed, project costs will come from the 2000- 2001 Capital Improvement Budget. Discussion followed with regard to information given to residents who are interested in forming a CAD. Mr. Swanson stated that a flyer has been developed showing the steps, approvals required, and so on to assist interested residents. In addition, District staff meets with interested homeowners to answer questions on estimated costs, the time involved, and steps that must be completed. It was moved by Member Menesini and seconded by Member Nejedly, that Resolution No. 2000-042, a resolution of intention to create Regent Place Contractual Assessment District No. 2000-2 for the purpose of installing sewer improvements, be adopted; that Resolution No. 2000-043 be adopted, approving the boundary of the assessment district; and that Resolution No. 2000-044 be adopted, requesting consent from Contra Costa County for CCCSD to conduct proceedings for the Regent Place CAD No. 2000-2. Motion unanimously approved on the following vote: AYES: Members: NOES: Members: ABSENT: Members: Menesini, Nejedly, Hockett, Boneysteele, Lucey None None BREAK At 3:55 p.m., President Lucey declared a recess reconvening at the hour of 4:09 p.m. with all parties present as previously designated. 8. APPROVAL OF MINUTES a. MINUTES OF APRIL 20. 2000 It was moved by Member Boneysteele and seconded by President Lucey, that the minutes of April 20, 2000 be approved as presented. There being no objection, the motion was unanimously approved. 05 18 00 ,'; 100 9. APPROVAL OF EXPENDITURES a. EXPENDITURE LIST DATED MAY 18. 2000 Member Menesini, Chair of the Budget and Finance Committee, stated that he and Member Boneysteele reviewed the expenditures and found them to be satisfactory. It was moved by Member Menesini and seconded by Member Boneysteele, that the Expenditure List dated May 18, 2000, including Self Insurance Check Nos. 101614- 101615, Running Expense Check Nos. 124699-125262, Sewer Construction Check Nos. 22162-22200, Payroll Manual Check Nos. 48668-48673, and Payroll Regular Check Nos. 51108-51166, be approved as recommended. There being no objection, the motion was unanimously approved. 10. BUDGET AND FINANCE a. RECEIVE THE 2000-2001 OPERATIONS AND MAINTENANCE BUDGET Mr. Batts, General Manager, stated that the 2000-2001 Operations and Maintenance (O&M) Budget is presented for the Board's review. The 2000-2001 O&M Budget reflects a Sewer Service Charge increase and reallocation of a portion of the capital component of the current Sewer Service Charge. A public hearing has been set for June 1, 2000 for consideration of the recommended Sewer Service Charge increase. The District's ratepayers have received notice of that public hearing. Mr. Batts introduced Ms. Deborah Ratcliff, Controller, who stated that at the end of January 2000, a Board workshop was held at which five-year projections were reviewed and the need for a Sewer Service Charge increase was discussed. A public notice was sent out proposing up to a $24 increase in the Sewer Service Charge. The O&M Budget before the Board was calculated using a $185 Sewer Service Charge allocation to O&M. This is based on a $28 increased allocation of Sewer Service Charge revenue split between an increase in the Sewer Service Charge and a reallocation from the Sewer Construction Fund to the O&M Fund. Ms. Ratcliff summarized the 1998-1999 actual, 1999-2000 projected, and 2000-2001 budgeted revenues, expenses, and reserves. Revenues for 1999-2000 are projected to be $31,924,000 at fiscal year end compared to 2000-2001 budgeted revenues of $36,372,000. This is due primarily to the $28 increase in Sewer Service Charge revenues going to O&M. Expenses for 1999-2000 are projected to be $33,387,000 at fiscal year end compared to 2000-2001 budgeted expenses of $35,861,000. This increase is mainly due to increases in the area of salary and benefits. In 1998-1999 there was a $1.5 million deficit in reserves. Again in 1999- 2000 a deficit of $1.5 million is projected, decreasing the fund balance at June 30, 2000 from $5,725,000 to $4,262,000. In 2000-2001, an increase in reserves of $511,000 is budgeted, bringing the fund balance to $4,773,000 at June 30, 2001. Ms. Ratcliff reviewed the key labor costs imbedded in the 2000-2001 O&M Budget which make up $1,341,000 of the $ 2 million increase in expenses, and highlighted the key increases in the remaining line items. Ms. Lesley Klein, Engineering Assistant III in the Sewer Service Charge Section, stated that staff prepared notice of the proposed Sewer Service Charge increase which was mailed to 110,592 property owners using a mailing list generated from information from the Contra Costa County Assessor's Office. The District received a total of 146 responses. Of those 146 responses received, 31 were written responses received either by U.S. mail or electronic mail, and 115 were telephone responses. Of the 146 responses received, 17 were opposed to the proposed Sewer Service Charge increase of up to $24, 17 requested differential rates, and all others totaled 112. The all others category included such things as address corrections, requested information on District programs, questions about the area served, the method used in calculating the bill, and the impact on individual pieces of property. Ms. Klein stated that all responses received to date have been acknowledged and answered. Overall most responses were favorable. Many people requested more information about the District. A very small percentage of the notices were returned as undeliverable. 05 18 00 101 Mr. Batts, General Manager, provided an overview of the O&M Budget and Sewer Service Charge rate setting process, noting that the Sewer Service Charge has remained constant at $188 since 1994 when it was adjusted due to loss of a portion of the ad valorem tax revenue. Mr. Batts reviewed the efforts made to maintain the constant Sewer Service Charge for the past six years; increasing costs and regulatory requirements; and Sewer Service Charge scenarios including a $24 increase, a $18 increase, and a $12 increase. Mr. Batts stated that the projections in each of these scenarios are based on the District retaining its ad valorem tax revenue. In the discussion that followed the Board provided input to staff on the rate setting scenarios and presentation for the June 1, 2000 public hearing. b. APPROVE THE DRAFT 2000-2001 CAPITAL IMPROVEMENT BUDGET ADDENDUM FOR INCLUSION IN THE 2000-2001 DISTRICT BUDGET Mr. Batts, General Manager, stated that the Draft 2000-2001 Addendum to the two-year Capital Improvement Budget was presented at the last Board Meeting. The Draft Addendum proposes addition of ten new projects to the Capital Improvement Budget and significant changes to project schedules and scope of some projects which will result in return of $1.2 million to the Sewer Construction Fund. Staff recommends approval of the Capital Improvement Budget Addendum. It was moved by Member Hockett and seconded by President Lucey, that the draft Addendum to the 1999-2000 and 2000-2001 Capital Improvement Budget be approved for inclusion in the 2000-2001 District Budget. There being no objection, the motion was unanimously approved. c. APPROVE THE 2000-2001 EQUIPMENT BUDGET FOR INCLUSION IN THE 2000- 2001 DISTRICT BUDGET AND RAISE THE CONTINGENCY FUND TO $60.000 WITH THE GENERAL MANAGER'S AUTHORITY LIMIT INCREASED TO $5.000 PER REQUEST Mr. Batts, General Manager, stated that the proposed 2000-2001 Equipment Budget has been reviewed by the Capital Projects Committee and the full Board, and approval is now requested. It was moved by Member Boneysteele and seconded by President Lucey, that the 2000- 2001 Equipment Budget be approved for inclusion in the 2000-2001 District Budget to be adopted at the June 15, 2000 Board Meeting, and that the Contingency Fund be increased from $40,000 to $60,000 annually with the General Manager's authority limit increased from $3,500 to $5,000 per request. There being no objection, the motion was unanimously approved. 11. EMERGENCY SITUATIONS REQUIRING BOARD ACTION None 12. ANNOUNCEMENTS/SUGGESTIONS FOR FUTURE AGENDA ITEMS None 13. CLOSED SESSION a. REAL PROPERTY NEGOTIATIONS With respect to real property negotiations, the closed session was held pursuant to Government Code Section 54956.8. The real property which the negotiations may concern is the property at 5501 Imhoff Drive, Martinez, California. The District negotiators Messrs. Kenton L. Aim and Paul Morsen may negotiate with representatives of County Quarry Products. 05 18 00 102 b. SIGNIFICANT EXPOSURE TO LITIGATION Pursuant to Government Code Section 54956.9(b), a point has been reached where in the opinion of the Board of Directors of the Central Contra Costa Sanitary District, on the advice of its Counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the District. One potential matter is to be discussed. c. INITIATION OF LITIGATION Pursuant to Government Code Section 54956.9(c), on the advice of Counsel based on existing facts and circumstances, the Board of Directors of the Central Contra Costa Sanitary District has decided or is deciding whether to initiate litigation. One potential matter is to be discussed. At 4:48 p.m., President Lucey declared the closed session to discuss real property negotiations and anticipated litigation as noted above. At 6:00 p.m., it was moved by President Lucey and seconded by Member Boneysteele, that the adjournment time of the meeting be extended to 6: 15 p.m. to allow the Board to complete necessary business. There being no objection, the motion was unanimously approved. At 6:07 p.m., President Lucey concluded the closed session and reconvened the meeting into open session. 14. REPORTS OF DISCUSSIONS IN CLOSED SESSION Mr. Kenton L. Aim, Counsel for the District, reported that direction was provided to Counsel and staff during closed session with regard to Items 13.a. and 13.b. noted above, and District Counsel was authorized to file a writ regarding the City of San Ramon's denial of the encroachment permit for what has been known as the Dougherty Tunnel and Trunk Sewer Project alignment down Estero Drive in San Ramon. 15. ADJOURNMENT There being no further business to come before the Board, President Lucey adjourned the meeting at the hour of 6:09 p.m. COUNTERSIGNED: 05 18 00