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HomeMy WebLinkAboutBOARD MINUTES 10-01-09 MINUTES OF THE REGULAR MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON OCTOBER 1, 2009 The District Board of the Central Contra Costa Sanitary District convened in a regular meeting at its regular place of business, 5019 Imhoff Place, Martinez, County of Contra Costa, State of California, at 2:00 p.m. on Thursday, October 1, 2009. President Nejedly called the meeting to order. 1. ROLL CALL PRESENT: Members: Hockett, Lucey, McGill, Nejedly ABSENT: Members: Menesini a. PLEDGE OF ALLEGIANCE TO THE FLAG Board and staff joined in the Pledge of Allegiance. 2. PUBLIC COMMENTS There were no public comments. 3. AWARDS AND COMMENDATIONS a. ADOPT RESOLUTIONS RECOGNIZING SERVICE AWARD RECIPIENTS General Manager James Kelly stated that, each year, the Board recognizes the service of employees who have been at the District for five, ten, fifteen, twenty, twenty-five, thirty, and thirty-five years. This year the Board is being asked to adopt resolutions honoring seventeen employees. The Service Awards luncheon will be held in the District’s Multi Purpose Room on October 28, 2009, at 11:45 a.m. It was moved by Member Hockett and seconded by Member McGill to adopt Resolutions 2009-074 through 2009-091. Motion passed by the following vote of the Board: AYES: Members: Hockett, Lucey, McGill, Nejedly NOES: Members: None ABSENT: Members: Menesini Book 59 – Page 98 Board Minutes of October 1, 2009 4. CONSENT CALENDAR General Manager James Kelly distributed a revised exhibit for Item 4.d. on the Consent Calendar. It was moved by Member Lucey and seconded by Member McGill to adopt the Consent Calendar as recommended, including the revised exhibit. Motion passed by the following vote of the Board: AYES: Members: Hockett, Lucey, McGill, Nejedly NOES: Members: None ABSENT: Members: Menesini a. Approve expenditures dated October 1, 2009. Reviewed by Budget and Finance Committee. b. Receive August 2009 Financial Statements. Reviewed by Budget and Finance Committee. c. Approve minutes of September 3, 2009 Board meeting. d. Adopt Resolution of Application 2009-092 requesting that Contra Costa Local Agency Formation Commission (LAFCO) initiate proceedings for District SOI Amendment 181 to amend CCCSD’s Sphere of Influence (SOI) in three areas, SOI Amendment Areas 181-1, 181-2, and 181-3, including the finding that the SOI Amendment is exempt from CEQA. e. Adopt Resolution of Application 2009-093 requesting that Contra Costa LAFCO initiate proceedings to annex eleven annexation areas to the District, District Annexation 178, including the finding that annexation of each property in Annexation Areas 178-1 through 178-11 (inclusive) is exempt from CEQA. f. Adopt Resolution of Application 2009-094 requesting that Contra Costa LAFCO initiate proceedings to detach two areas from CCCSD, District Detachment 182, including the finding that the properties being detached in Detachment Areas 182-1 and 182-2 are exempt from CEQA. g. Adopt Resolution 2009-095 accepting an offer of dedication from Katkar Properties LLC for an easement in the unincorporated area of Walnut Creek shown on the map of subdivision 8824, Job 5888, Parcel 2, and authorize staff to record documents with the Contra Costa County Recorder. h. Adopt Resolution 2009-096 accepting a grant of easement from Shapell Industries, Inc. in the city of San Ramon, District Project 5860, Parcel 3, and authorize staff to record documents with the Contra Costa County Recorder. Book 59 – Page 99 Board Minutes of October 1, 2009 i. Authorize the General Manager to execute a professional services agreement for a one-year period with a cost ceiling of $60,000, and with two optional one-year extensions for a total amount of $180,000 if extended for two more years, with JDH Corrosion Consultants, Inc. for cathodic protection survey and miscellaneous as-needed services for the District-wide cathodic protection program. 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER None. 6. REPORTS a. GENERAL MANAGER 1) Refinancing 1998 and 2002 Revenue Bonds. 2) Issuance of New Bonds, Competitive versus Negotiated Sale. General Manager James Kelly stated that, at the Board meeting on September 17, 2009, staff discussed the financial advantages to refinancing the District's 1998 and 2002 outstanding debt, and the need for bond financing of up to $33 million and/or large sewer service charge increases to fund needed capital projects. Staff was directed to bring back additional information regarding the refinancing of existing debt and the process for issuing up to $33 million in new debt. The additional information will be addressed in items 6.a.1 and 6.a.2. He stated that Controller Debbie Ratcliff will give a presentation on the refinancing of the District's existing debt and Tom Lockard, from Stone and Youngberg, will give a presentation on the process of issuing new debt and the various factors that the Board would want to consider. Also, Chick Adams, Bond Counsel from Jones Hall, will answer any questions. The two issues of refinancing existing debt and obtaining new debt will be separated for discussion and for Board voting at the October 15, 2009 Board meeting. Member Lucey questioned why information was being presented on bond issuance when the Board has not yet decided to proceed with issuing bonds. He requested that the matter be deferred until after the Board has voted on whether or not to issue bonds. The remaining Board Members recommended proceeding with a brief presentation from the Bond Counsel and Financial Advisor as they were already in attendance and ready to make their presentation. Book 59 – Page 100 Board Minutes of October 1, 2009 Mr. Lockard stated that $9,920,000 remains outstanding of the 1998 revenue bonds with five years left until maturity. The current interest rate is 4.25 percent to 4.7 percent and, if refinanced, the interest rate would drop to 0.75 percent to 2.1 percent, for a net present value savings of $615,000. The bonds will not be refinanced unless savings (net present value) of $400,000 are realized. For the 2002 revenue bonds, the remaining balance is $12,930,000 with 14 years left until maturity. The current interest rate is 4 percent to 5 percent and, if refinanced, the interest rate would drop to 0.75 percent to 3.7 percent for a net present value savings of $729,000. The total savings if both sets of bonds were refinanced would be $1.3 million. The 2002 bonds will not be refinanced unless savings (net present value) of $500,000 are realized. Mr. Lockard described the refinancing and bond issuance schedules, both of which would close on December 2, 2009. He confirmed that the rate would be locked in when the bonds are sold. Mr. Lockard presented information on the issuance of new bonds and stated that in order to obtain $30 million for capital projects, bonds in the amount of $32.8 million would need to be issued and sold. The new bonds would have a 20-year term with a final maturity of September 1, 2029. He described Build America Bonds, which were created by Stimulus legislation to spark municipal markets. The bonds are taxable bonds with a federal subsidy of 35 percent of the interest cost. Mr. Lockard indicated that it is highly unlikely that the federal government would end the subsidy program. Further, the bonds would be structured with a conventional 10-year call date that would provide flexibility in this unlikely scenario. Whether Build America Bonds would make economic sense for the District would depend upon market conditions at the time of sale. Mr. Lockard then discussed competitive sale versus negotiated sale of the bonds, and stated that he recommends the negotiated sale. The financing team will consist of Director of Administration Randy Musgraves, Controller Debbie Ratcliff, KNN Financial (Pricing Consultant), Meyers Nave (District Counsel), Chick Adams and Chris Lynch of Jones Hall (Bond Counsel), Tom Lockard and Bridget Katz of Stone and Youngberg (Investment Bank), and Marianne Diaz of US Bank Trust (Trustee). Controller Debbie Ratcliff stated that staff recommends that the Board authorize the refinancing of the existing bonds with a negotiated sale; authorize issuance and sale of new bonds in the amount of $32.8 million with a negotiated sale; authorize Build America Bonds if favorable; and approve combining the refinancing of the existing bonds and the issuance and sale of the new bonds to reduced the cost of issuance (approximately $130,000 savings). Book 59 – Page 101 Board Minutes of October 1, 2009 Board Members directed staff to continue with bond refinancing process and issuance of new bonds and to bring the necessary resolutions back directly to the Board for action. 3) Proposition 1A Securitization Program. General Manager James Kelly stated that, as part of the State’s budget crisis resolution, 8 percent of property tax will be borrowed from local governments throughout the state for fiscal year 2009-2010. The District is anticipating a reduction in property tax revenue for this fiscal year of approximately $1 million. To help ease the pain, the State proposed to debt finance the amount local governments will not receive through property tax distribution, and provide the funds to the entities from the debt financing. The State is proposing to sell the bonds on their credit and pay the principal and interest for the funds in 2013, the same year as repayment for borrowed funds. The "clean-up" legislation for the Proposition 1A Receivables Financing Program (also identified as the Securitization Program), SB 67, failed to be enacted prior to the adjournment of the Senate. The Proposition 1A Receivables Financing Program has been structured assuming that SB 67 will become law. Local entities are encouraged to submit their request for inclusion in the debt financing as soon as possible. If the District chooses to pursue State reimbursement this year, the District must pass a resolution by the next Board meeting, October 15, 2009. Mr. Kelly concluded that staff is recommending not pursuing the debt financing from the State. The Budget and Finance Committee reviewed this matter at their Monday meeting and has concurred with staff’s recommendation. Board Members concurred with the recommendation of the Budget and Finance Committee and staff. 4) General Manager James Kelly announced that, in 1948, the developer of the Las Lomitas Subdivision Unit No. 1 (near the Camino Tassajara, Ramona Road and Gil Blas Road area of Danville) constructed a sewage collection and treatment system to serve the development. At that time, no sewer easements or rights of way were recorded for the sewers that were built in the backyards of most lots. In 1955, the treatment system was abandoned, and the District annexed the subdivision and connected its sewers to the San Ramon Valley public sewer system. The District has operated and maintained the system ever since. In 1977, the Board adopted and recorded an "easement declaration" resolution stating that the District has the right to operate and maintain the Book 59 – Page 102 Board Minutes of October 1, 2009 sewer lines in their current location. In early 2008, staff concluded that the 1977 resolution did not clearly identify the specific subdivision lots affected. In February 2008, the Board addressed this issue by adopting an amendment to the 1977 resolution that included a list of the Assessor's Parcel Numbers of all affected lots. All of the then current property owners of affected lots were notified by letter of the proposed Board action prior to the Board meeting. After the Board action, another letter including a copy of the recorded resolution was sent to each of the affected property owners to ensure that they received actual notice of the District's rights. Over the past two years, the Capital Projects Division evaluated the condition of the backyard sewers to determine whether renovation or relocation would be advisable. Television inspection and field reconnaissance indicated that the existing sewers are serviceable, and that renovation or replacement would not be necessary at this time. 5) General Manager James Kelly announced that the Service Awards Luncheon for employees celebrating their anniversary with the District will be held in the District Multi-Purpose Room on Wednesday, October 28, 2009, starting at 11:45 a.m. 6) General Manager James Kelly announced that, on September 18, 2009, a coordination meeting was held between District staff and the new leadership at Concord, including Alex Pascual, Director of Public Works and Engineering Services; and Mario Camorongan, Assistant City Engineer. The group briefly reviewed all of the current agreements and issues with City of Concord. An updated key contact list was developed based on the new organization at the City of Concord. The meeting was very congenial and all agreed to continue to work cooperatively on issues of mutual concern and benefit. 7) General Manager James Kelly announced that the Permit Counter is scheduled to re-open on Monday, September 28, 2009. The final punchlist items for the first floor restroom and painting in the stairwell, from the handrail replacement, were completed on Friday, September 25, 2009. The Reception Counter remodel is scheduled from September 28 to October 16, 2009. At this time, the hi-lo drinking fountain, kick-plates, and door-stops for the breezeway doors will also be installed. 8) General Manager James Kelly announced that sewage sludge is regulated as a byproduct of the wastewater treatment process and not a solid waste, and is currently regulated under the Clean Water Act, Part 503. The United States Environmental Protection Agency (USEPA) Office Book 59 – Page 103 Board Minutes of October 1, 2009 of Resource Conservation and Recovery (ORCR) is in the process of determining if sewage sludge should be regulated as a solid waste. The ORCR recently received a court-approved extension of the determination deadline until April 15, 2010. If ORCR determines that sewage sludge is a solid waste, sewage sludge incineration would also be subject to the Clean Air Act Amendments, Section 129, and the USEPA Office of Air Quality Planning and Standards would have until December 14, 2010, to develop new emission limits for sewage sludge incinerators. If sewage sludge is determined to be a solid waste and new emission limits are developed, it is our understanding that the limits will take into consideration the performance of the existing multi- hearth furnaces. Past practice by the USEPA is to set limits based on the best performance (top 12 percent) in the regulated category. The impact of the new emission limits on the District is unknown at this time. District staff is working with the National Association of Clean Water Agencies to monitor the regulatory process and will provide information and comments at the appropriate time. 9) General Manager James Kelly announced that September and October are typically the months when weather is hot, air stagnant, and odor becomes more of a challenge. The treatment plant has recently been experiencing higher-than-normal levels of odors. Several employees have recently noticed increased odors, and this week a resident on Blum Road contacted the District about the increased odors. Steps are being taken to reduce odors through increased housekeeping, modified operation strategies, and increased addition of odor control chemicals. Most of the plant’s expenditures for odor control chemicals occur during the late summer months. Staff will keep the Board apprised if extraordinary costs are incurred due to more necessary measures. b. COUNSEL FOR THE DISTRICT No reports. c. SECRETARY OF THE DISTRICT 1) 2010 Board Calendar. Secretary of the District Elaine Boehme presented the draft 2010 Board Calendar and asked for input from the Board. The Board had no recommended changes. Book 59 – Page 104 Board Minutes of October 1, 2009 d. BOARD MEMBERS 1) Board Member reports on future meetings or conferences for which they will receive the stipend or for which the District will pay their expenses; recent meetings for which they received the stipend; and meetings or conferences for which the District paid their expenses. Member Lucey Member Lucey and President Nejedly reported on the September 28, 2009 Budget and Finance Committee meeting and summarized the Action Summary. The Board received the report without comments. Member McGill Member McGill provided a written report on his attendance at meetings for which he received the stipend or for which the District paid his expenses. He reported on the recent meeting with the City of Pleasant Hill Mayor and City Manager, and stated that they asked the District to give a presentation regarding basic services provided by the District. They also expressed interest in utilizing recycled water. 2) Announcements Member Lucey commented on a cartoon distributed by Local One depicting three Board Members attending a CASA conference. He requested that staff look into the cost savings if three Board Members waived attendance at CASA conferences, and the cost savings if Local One’s travel and conference budget were cut by 60 percent. Member Lucey also asked staff to calculate the cost of the annual Service Awards Lunch, including the cost of staff time to attend. 7. EMERGENCY SITUATIONS REQUIRING BOARD ACTION a. RECEIVE REPORT ON EMERGENCY DECLARED ON MAY 21, 2009 AND AUTHORIZE THE GENERAL MANAGER UNDER PUBLIC CONTRACT CODE 22050(b) TO CONTINUE WITH EMERGENCY REPAIRS ON THE RECYCLED WATER PIPELINE AT GRAYSON CREEK IN MARTINEZ, IF WORK HAS NOT BEEN COMPLETED Senior Engineer Ba Than presented an update on the emergency repairs on the recycled water pipeline at Grayson Creek. He stated that the temporary recycled water Book 59 – Page 105 Board Minutes of October 1, 2009 eight hours. The temporary pipe completely failed on Sunday morning, resulting in the release of 67,000 gallons of recycled water. The contractor mobilized Sunday afternoon ' and permanent service was restored by 1:40 p.m. on Tuesday. The clean-up and punch list will be completed before October 15, 2009. Staff is working on recovering costs above $250,000 from the District's property loss policy. He recommended termination of the emergency declaration for the repairs of the recycled water pipeline at Grayson Creek. President Nejedly stated that the District should not have to pay for its staff time to assist with the repair that was the fault of the contractor. He stated that he has requested a cost analysis, and reparation should be requested from the contractor. Board Members concurred with the staff recommendation to terminate the emergency situation. 8. SUGGESTIONS FOR FUTURE AGENDA ITEMS None. 9. ADJOURNMENT There being no further business to come before the Board, President Nejedly adjourned , the meeting at 2:54 p.m. James A. Ne President of t of Directors, Central Contra Costa Sanitary District, County of Contra Costa, State of California :~ -: ;COUNTERSIGNED: :s'- 4 ,,. "C ;` -~ ~E~ ~Elaihe R. l3oehine ` Secretary of the Central Contra Costa Sahitary"District, County of Contra Costa State of California Book 59 -Page 106