HomeMy WebLinkAboutBUDGET & FINANCE AGENDA 02-01-10
Central Contra
Sanitary District
REGULAR MEETING OF THE BOARD OF DIRECTORS:
CENTRAL CONTRA COSTA nnCHACC e..+/c<--,lLL
SANITARY DISTRICT Yresidrm
HA2HARA D. NOCKL•TT
BUDGET AND FINANCE COMMITTEE /'resiJentPro ",'em
Gh.'fiAl.U N. LUCh'Y
MARIO M ML•NIiS/N!
Chair Nejedly JAMES A. NF./EOLY
Member Hockett PHONE: (925)228-9500
FAX: (925) 676-721 /
Monday, February 1, 2010 wu,w ~onrr.,l~.,., nrn
3:00 p.m.
Executive Conference Room
5019 Imhoff Place
Martinez, California
INFORMATION FOR THE PUBLIC
ADDRESSING THE COMMITTEE ON AN ITEM ON THE AGENDA
Anyone wishing to address the Committee on an item listed on the agenda will be heard when the
Committee Chair calls for comments from the audience. The Chair may specify the number of minutes
each person will be permitted to speak based on the number of persons wishing to speak and the time
available. After the public has commented,,the item is closed to further public comment and brought to the
Committee for discussion. There is no further comment permitted from the audience unless invited by the
Committee.
ADDRESSING THE COMMITTEE ON AN ITEM NOT ON THE AGENDA
In accordance with state law, the Committee is prohibited from discussing items not calendared on the
agenda. You may address the Committee on any items not listed on the agenda, and which are within their
jurisdiction; under PUBLIC COMMENTS. Matters brought up which ar_e no_t on the agenda may. be
referred to stafffor action or calendared on a future agenda.
AGENDA REPORTS
Supporting materials on Committee agenda items are available for public review at the Reception, 5019
Imhoff Place, Martinez. Reports or information relating to agenda items distributed within 72 hours of the
meeting to a majority of the Committee are also available for public inspection at the Reception. During
the meeting, information and supporting materials are available in the Conference Room.
AMERICANS WITH DISABILITIES ACT
In accordance with the Americans With Disabilities Act and California Law, it is the policy of the Central
Contra Costa Sanitary District to offer its public meetings in a manner that is readily accessible to
everyone, including those with disabilities. If you are disabled and require special accommodations to
participate, please contact the Secretary of the District at least 48 hours in advance of the meeting at (925)
229-7303.
® Recycled Paper
Budget and Finance Committee
February 1, 2010
Page 2
1. Call Meeting to Order
2. Public Comments
3. Old Business
*a. Review Outstanding Question
4. Claims Management
*a. Review new and outstanding claims
- 5. Reports and Announcements -
*a. GASB 45 Trust-Six Month Financial Review (Andrew Brown-Financial
Advisor)
*b. Outreach Program Costs for 2010
*c. Property Management Charges for David Deutscher
*d. CASA Membership Dues and Value
*e. Request to CCCERA for de-pooling- data for District's Actuary review
6. Review Expenditures
a. Review expenditures (Item 3.a. in Board Binder)
*b. Review P-Card expenditures
7. Adjournment
* Attachment
3,a,
Central Contra Costa Sanitary District
January 29, 20.10
TO: BOARD BUDGET AND FINANCE COMMITTEE
FROM: RANDALL MUSGRAVES /'~~M
DEBBIE RATCLIFF/J/L.
SUBJECT: JANUARY 19, 2010 COMMITTEE MEETING
There was one outstanding question from the last Board Budget and Finance
Committee meeting which required additional staff research. The question and answer
is provided below:
178837 International Mailing Equipment, (HASLER Inc.) -What does the
invoice for $309.75 cover?
HASLER Inc. is the company that supplies the District's postage meter. Postage
rates for flat rate mailings and several other categories increased on January 4,
2010, and per HASLER, may increase again in May. The District must purchase
a new software chip to install in the meter each time there is a postage increase.
The $309.75 paid to HASLER was for the new software chip for the January
increase and included a $50 insurance fee that will cover any potential additional
increases in specific postage category costs during 2010.
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5, a,
Central Contra Costa Sanitary District
January 29, 2010
TO: BUDGET AND FINANCE COMMITTEE
VIA: RANDALL MUSGRAVES, DIRECTOR OF ADMINISTRATION ~~
FROM: DEBBIE RATCLIFF, CONTROLLER %'~~
SUBJECT: GASB 45 SIX MONTH REVIEW
Attached is the fourth quarter report of financial results for the District's GASB 45 Trust
investments. Andrew Brown, Financial Advisor from HighMark Capital Management, will
attend the Committee meeting to discuss the report and answer any questions the
Committee may have.
The prior Committee members asked that the Financial Advisor report out on a semi-
annual basis. This practice will be continued until the Committee asks for a change in
frequency.
H:\GASB 45 Six Month Review.doc
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5,b,
Central Contra Costa Sanitary District
February 1, 2010
TO: BUDGET AND FINANCE COMMITTEE
VIA: JAMES M. KELLY, GENERAL MANAGER ~:
FROM: RANDALL MUSGRAVES, DIRECTOR OF ADMINISTRATION N1M
SUBJECT: OUTREACH PROGRAM COSTS FOR FISCAL YEAR 2009-2010
At the January 19, 2010 Committee meeting, staff was requested to report the costs for
the District's Outreach Program. Attached is a program review of the activity, the 2009-
2010 budget and expenditures to date. In addition, staff has provided a list of agencies
we currently have partnership programs with and a list of rejected programs.
Staff will be available to answer questions at the February 1, 2010 Budget and Finance
Committee meeting.
Ceatra! Co~rtra Costa San itary DisMct
2009-2010 BUD GET
PUBLIC INFORMATION/MARKETING COMMUNI CATION PLAN
•-. ~ ~ ~•
1 Community Produce and mail three issues S150,000 Fall '09 issue S52.000
Outreach of CCCSD Pipeline (printing and ($20K print/ $32K mail)
Mass and targeted postage included)
customer outreach ' ° "` `'
~•, ,
$161,000 Total CY 2010 savings: $24,000
• Overflow Protection Device $1,000 $500 (C of C inserts)
St 8.000swlncs (OPD)
• Video production $10,000 5 videos in 2009
Nn expanse „;rrr `-n, -,, ~.
prrrnir,~~l L,/ 1'~;i) t~~:ning ~:=i_,
• Surveys Included in Pipeline
Zero cost
2 Prop 218 Notice Produce and mail Proposition $35,000
$35,000 218 Notices
Targeted customer
notification
3 HHWCF Produce ads for newspaper, $30,000 $1 BK
journals, stores, special events,
Publicize availability etc. $7K grocery cart ads
of HHW facility $9K Chambers of C ads
$2K newspaper ads
$30,000
4 Pollution Participate in Contra Costa $ 7,500 S7.~~~CO i=liminate~a ~~~~ ~~ 10 I~~r
Prevention Green Business Program O~.~i -.,;li C: nun ;-- n ' x7:~)
Activities .Continue with mercury reduction $ 1,000
outreach including fact sheets, $600 to date (ads in Dental Society
Programs to dental newsletter, newsletter)
su ort NPDES
pp presentations, and website
it
i
t
perm
requ
remen
s
and less toxic Conduct P2 Awards Program $ 3,000 $3,000 for'/z page ad of winners
alternatives .Produce Best Management $ 1,000
Practices (BMP) for selected
$17,500 industries as needed,
encouraging early compliance
with pollution regulations
S7 r,,t~ s.._vl~,y~ (includes videos)
• Participate in joint projects with $ 3,000
BAPPG
• Participate in Regional Media -0-
Relations Committee
H:1Budget1P1012009-1012009-10_P2_Pubinfo_Finance Committee.doc
Centro,' Contra Costa Sanitary District
2009-2010 BUDGET
PUBLIC INFORMATION/MARKETING COMMUNICATION PLAN
• Provide materials and supplies $2,000
for healthy garden workshops
conducted by Master Gardeners
5 Student Continue participation in the $22,000
Education Water Wizards Program $11,000
(Grades 3 & 5)
Pollution Prevention Continue providing Sewer $10,000
and genera!
Science program to high school $5,000
CCCSD information students
• Provide student plant tour -0-
$82,000 program (G 6-12)
• Continue participation in Delta $50,000 $50
000
Discovery Voyage Program for ,
5`h grade students
6 Environmental Participate in appropriate event opportunities
and Community to showcase our pollution prevention efforts
Events Communicate District messages $3,000
$5,000
Promotion of
CCCSD's
messages
$5,000
7
District
Communications
Support
(Portion
included in
overall O&M
Budget)
General in-house
support to
employees
$10,000
• Continue to produce the Lateral Connection
newsletter and other employee
communication
• Conduct new employee orientation
• Provide graphic design and production
support for various District projects,
presentations, activities and events
• Continue to update graphics/photo library
• Develop electronic forms, flyer templates, and
presentations for Intranet and Internet
• Provide materials in support of organizational
training programs including training/orientation
videos for OTIS.
$5,000
H:1Budge0.P10\2009-10\2009-10_P2_Pubinfo_Finance Committee.doc 2
$ InterneUlntranet Continue implementing Content Management
System (CMS) solution for the Intranet
• Implement CMS solution for Internet $500
(Contracted Provide training to key deployers
pon`ion included 'Provide training to Internet deployers
in IT Capital • Provide informational session on new Internet
Projects Budget) site to employees
External and Create interactive Internet relationship with
internal web sites customers where appropriate
• Web hosting
$1,000
9 New Take advantage of any new outreach or $0 to date
Opportunities educational opportunities that arise from
$10,000 partnerships or media relationships
Potential new
educational
outreach
avenues
~xp~ced 55.0,_,
~;~~; ::
1 ~ Construction Meet with all persons affected by sewer
Project Outreach construction activity to provide information,
(Budgeted under instruction, and coordination before, during,
Capital Plan) and after project work.
Targeted customer
outreach
H:\BudgetlPlO\2009-1012009-10_P2_Pubinfo_Finance Committee.doc
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Central Contra Costa Sanitary District
February 1, 2010
TO: BUDGET AND FINANCE COMMITTEE /, (~
VIA: JAMES M. KELLY, GENERAL MANAGER ~~~~`7- - J
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FROM: RANDALL MUSGRAVES, DIRECTOR OF ADMINISTRATION l~
SUBJECT: PROPERTY MANAGER EXPENSES FOR 2009
At the January 19, 2010 Committee meeting, staff was requested to report the costs for the
District's Property Manager, David Deutscher Company. Attached is a detailed report of
expenditures for Mr. Deutscher for 2009. There are five components to the full payment made.
1. The District has a contractual agreement to pay Mr. Deutscher for the leasing of
District property, primarily the 4737 Imhoff Place Warehouse bays, and property
management on a monthly basis. In 2009, payments totaled approximately $15,000.
2. The District reimburses Mr. Deutscher for all repair costs paid for the repair and
maintenance of District facilities. Our agreement is that Mr. Deutscher schedules
and pays for the repair and submits the invoice as documentation for reimbursement.
There is no mark-up for reimbursement. This totaled approximately $45,000 in 2009.
3. Mr. Deutscher also schedules and pays for capitalized modifications and capital
projects to the facilities or property and submits the invoice as documentation for
reimbursement. There is no mark-up for reimbursement. This totaled approximately
$11,000 in 2009.
4. The fourth payment type is fora 10% management fee for District facilities or capital
projects. An example of charges for capital facilities was the mofications made to
Bay 1 for CSO's occupancy. An example of a capital project is the implementation of
a pipe to enclose the seasonal drainage ditch. The management fee is due to the
significant additional work for capital projects. This totaled approximately $5,000 in
2009.
5. The District has hired and paid Mr. Deutscher to assist on special projects. The only
special project to date was for an extensive search for available properties to
relocate the CSO facility. Other special projects have been less time consuming and
Mr. Deutscher has performed the work without additional compensation. An
example was follow-up work regarding CSO relocation and assistance with the golf
course proposal for the Lagiss property. That proposal never materialized due to the
death of the interested individual.
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5.d,
Central Contra Costa Sanitary District
January 28, 2010
TO: BUDGET AND FINANCE COMMITTEE
FROM: JAMES M. KELLY, GENERAL MANAGER '
SUBJECT: CALIFORNIA ASSOCIATION OF SANITATION AGENCIES MEMBER
BENEFIT AND DUES INFORMATION
For over 50 years, the California Association of Sanitation Agencies (CASH) has been
ensuring clean water for Californians. In the mid-1950s, former State Senator John
Nejedly who was Counsel for the Central Contra Costa Sanitary District (CCCSD),
conceptualized the need for a professional organization to represent all of the state's
sanitary districts. As a result of Mr. Nejedly's efforts, the "California Sanitary District
Association" was formed in 1956 and later became CASA. While the issues have
changed since the formation of CASA, the need for representation of the state's
wastewater collection and treatment agencies remain.
CASA, through its staff and member volunteers, provides its members with the
following:
1. Representation before the State Water Resources Control Board (SWRCB),
regional boards, and other state agencies on decisions and policies including both
submittal of comments and testifying. The upcoming SWRCB reconsideration of
the Waste Discharge Requirement for Sanitary Sewer Overflows is a current
example of where member agencies' interests are represented.
2. Direct and grassroots advocacy on the federal, state, and local levels on legislation
and regulations affecting public wastewater agencies. CASA represented our
interest in limiting the amount of property tax that was borrowed from us last year.
3. Tracking and commenting on emerging and pending regulations.
4. CASA holds three conferences a year to keep members up-to-date on important
technical, regulatory, and legislative matters, and on emerging trends.
5. The Washington D.C. Annual CASA Conference provides up-to-date national
regulatory and legislative information, and an opportunity to meet directly with our
elected officials and the federal regulatory officials.
6. CASA Attorney Members provide up-to-date legal information and litigation support
to the membership.
7. CASA Associate Members offer current technical information and expertise through
networking at the conferences and identifying key topics for presentations.
8. CASA Sponsors Tri-TAC - A technical advisory committee representing CASA,
League of California Cities, and the California Water Environment Association. Tri-
TAC meets monthly to improve environmental programs by working with state and
federal regulatory agencies as well as interest groups on matters related to Publicly
Owned Treatment Works.
As a result of these efforts, CASA is viewed and accepted as a trustworthy and
influential source of information at the federal level by the Environmental Protection
Agency, the state level by the SWRCB, and at the local level by the regional boards.
CASA has been able to attract outstanding persons in the field of water quality to share
their expertise, knowledge, and insight with the organization at its conferences for the
benefit of its members.
Attached is a list of 2009 CASA members and their membership dues. Also attached is
the 2009 CASA Annual Report, and an Annual Dues Calculation Statement.
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California Association of Sanitation Agencies
2010 Agency Membership Dues Statement
TAX I.D. 68.-0018896 Remit to: 1215 K Street Suite 2290, Sacramento, CA 95814
PH: (916) 446-0388 - FX: (916)231-2141 - Website: casaweb.org
'Please retum a copy of the Dues Statement with your check
December 3, 2009
Central Contra Costa Sanitary District
James M. Kelly, GM Email: jkelly@centralsan.org
5019 Imhoff Place
Martinez, CA 94553
COi~Y
. .
1. Agency 2009/2010 Operations and Maintenance Budget for sewerage collection, $ (1)
treatment, disposal and reclamation (including administrative costs, unless your agency.
is multi- u ose
r°
tv
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2. For multi-purpose agencies, allocate proportional share of administrative budget for $ (2j "
sewage services.
3. Subtract budgeted revenues to be received from other agencies that are members of $ .-. (3)
CASA, if any.
4. Total for membership dues determination (1+2-3). $ Sg ~(,/ C /) ~ (q)
5. 2010 Dues Payment insert from chart below the appropnate fee for membership ,.,
. ,: ~$` /f~ i1 `\ ~~ (5)
/0 l1CJ
1. Minimum rate maximum budget up to $500,000 $ 800
2. Budget between $500,000 up to $1,000,000 $ 1,500
3. Budget between $1,000,000 up to $2,500,000 ~ "_ _ ~ $ 4,000
4. Budget between $2,500,000 up to $5,000,000;' $ g p00
5. Budget between $5,000,000 up to $10,000,000 $ 12,000
6. Budget between $10,000,000 up to $20,000,000 $ 15,000
7. Budget between $20,000,000 up to $100,000,000 $ 18,000
8. Budget over $100,000,000 $ 25,000
'Please return acopy o/the dues statement with your check.
Thank You
"Ensuring Clean Water for California"
~,
I~NCaR /,hod area.
. ~.
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'ALIfORNIA ASSOCIATION of SANITATION AGENCIES
1215 K Street, Suite 2290 • Sacramento, CA 95314 • TEL: (916) 446-0388 - FA}C: (916) 231-2141 • www.casaweb.org
December 3, 2009
James M. Kelly, GM
Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553
RE: 2010 CASA Membership Dues Renewal
Dear Jim:
On behalf of the California Association of Sanitation Agencies (CASA), I want to
personally thank you for your ongoing commitmentao CASA:, For over 50 years, CASA
has been recognized as the leading voice on water quality" and related environmental
wastewater policy issues throughout California and Washington, DC: Today, as we look
to the future and collectively face significant challenges resulting from the current
economic environment, CASA remains committed to protecting local revenues essential
to so many as well as..working to advocate for additional funding mechanisms allowing
our agencies to:respond to their constituents which they are dedicated to serve. With
your support, CASA can continue to serve California by providing leadership, advocacy
.and up=to-date information to promote, clean water that protects both public health and
the environment , `_. ~ . _ - - .. _
Enclosed you will find your 2010 CASA membership renewal statement based on a
calendar year. The CASA Council approved the rates that have no increase in dues at the
• annual conference in August. If you have any questions or.rieed assistance with the .
renewal process,. please contact Debbie, Welch at dwelch(c~,casaweb.org or, call the office
- ~ ..
(91,6) 446-0388.. . „ ;
,.
Your membership is vital to CASA's ability to be successful on our issues and serve our
members. We rely on our members continued involvement as we embark on new
challenges in the years ahead.
On behalf of the CASA Executive Board and staff, I thank you for. your support of CASA
and wish you a happy holiday season.
Sincerely,
Ronald E. Young, P.E., D.E.I.
President
F_nsuri~r~ Clran lY/~tter For Calilo~•iria
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Pay to: California Association of Sanitation Agencies (CASA)
Address: 1215 K Street, Suite 2290
City: Sacramento State: CA Zip: 95814
Amount: $500:00 Date Desired: Friday, January 8; 2010
Distribute Check to: Suzette Lee Anne Crayton
Description 2010 Agency Membership Dues; -, , -
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ACCOUNT NO. I AMOUNT
•~ 001-0120-400. $ 18,000.00
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Central Contra Costa Sanitary District
Payment Authorization
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ANNUAL REPORT
2009 Annual Report
TABLE OF CONTENTS
Important Messages 4
State Legislation 6
Federal Legislation 11
Regulatory Report 18
Legal Affairs Report 71
Biosolids Program 25
Annual Conference 28
California Association of Sanitation Agencies
Rs IMPORTANT MESSAGES
resident's Message
Everyone who knows me knows that I come to work with a smile on my face everyday.
And I have to tell you that serving as President of this distinguished association has not
only been rewarding, but truly fun and enjoyable as well.
In leading the charge, I connected and networked with some of the most amazing
and knowledgeable people in public service, advocacy and technical arenas regarding
advancements in wastewater treatment and collection, recycled water and biosolids
resources. And every step of the way, each has shown great enthusiasm for their jobs
and taking on new and greater challenges.
We live now via e-mail, Internet and Twitter but nothing can replace old-fashioned face-
to-face communication. As a former television anchor, salesman, high school teacher
and current mayor, I am part entertainer, hand shaker and public policy maker. In leading
by example and cultivating a culture of fun, excitement and passion for the important
work that we do, I hope I inspired innovation and teamwork in a business friendly
environment in setting forth to achieve our mutual goals.
What I have learned myself is with CASA, this is an impressive organization that
prides itself on being progressive and innovative. At the start of 2009, the CASA
Board planning session resulted in setting goals and priorities that served as a strong
foundation for our working agenda. In spite of massive budget cutting amidst the state's
worsening economy, we can be proud of our accomplishments:
• Our grassroots lobbying efforts enabled individual agencies to meet with legislators
in their district offices to discuss issues of interest to the wastewater community.
• Our voices were heard in the halls of Congress where connecting member agencies
with federal policy makers reached new levels of cooperation.
• The CASA Mid-Year, Spring, Annual and Washington D.C. conferences brought
creative thinkers and leaders together in meaningful ways.
• Recognition of major accomplishments became more widely acknowledged and
celebrated with an awards ceremony that will be difficult to top.
A special thanks goes to my fellow Board Members whose collective brain trust and
strategic vision are unmatched. Also to David Williams, Board Menihra ;inri F'riv;dc
Sewer Lateral Task Force Chair for leading CASA through a twoyr~~u, tr,uc;liPUnnl
Private Sewer Laterals study and debate process that opened our eyr ~~, n, ~ ~xl,li Haul; ~
new legislative framework that would provide greater flexibility trn inr livi~ lu, it wunl~ ~w, dui
collection system agencies. And last but not least, my heartfr~ll nl rl n. ~~ :r. rho u ~ L, Ihu
CASA staff who work exceedingly well with our membr~rs ,ux I ~ n d ~,u I. ~ ~ n y; a w; d i~ n c; I r r
advance our goals. Their hard work and dedication arr~ io t.c ~ ~,~ r ~~ ~ ~~ ~~ ~~ I. ~~ i n ~~ ~ ~ ~, rku u l
this year one to remember and so successful.
Harry T Price
CASA President 2008-?_009
ectative Director's Message
As members of CASA, we strive to ensure that we stay focused on our overriding goal to protect the
public health and environment for current and future generations through the work that we do. It is
worrisome in our dual roles as parents and family members, friends, neighbors and community leaders
what will become of future generations if we do not preserve now, what could easily be gone later.
The availability of clean water is important to everyone. As traditional resources continue to
diminish due to overuse, waste and pollution, the wastewater community is working even harclr;r } ~ ~ ~ _
to provide alternative sources through recycling. With climate change being a global concern.
the wastewater community again steps up bringing on-line renewable energy projects. CASA ~ ~+
members are shifting from being viewed as the problem to being identified as the solution. ,;~'
But this year, we were not without our challenges. In the year 2009, California faced the greatest
economic downturn since the Great Depression. It was a year mired in red ink in which:
• Mandatory furloughs were ordered for state workers
• Unemployment soared to a record 12 percent
• Two million jobs were lost
• A projected $11.2 billion budget shortfall was expected to top more than $40
billion throughout the 2009-2010 fiscal year
• The state credit rating plunged to a new low as state IOUs exceeded $470 million
• The budget passed in July with $15 billion in service cuts
Like all of you, my hope is that the worst is behind us and together we can
bring California "back on its feet." There are so many opportunities for the
wastewater community to help mitigate so many of the state's challenges as
they relate to water quality and renewable energy.
Even with these challenges, CASA achieved victories on many fronts in the
battle over state, federal, legal, regulatory and biosolids' issues despite the
seemingly insurmountable fiscal challenges that stood in our way. Credit,
as always, goes to our amazing team of volunteer leaders, committee
members and member advocates who carried our voice to both the
state and nation's capitols to fight for vital clean water projects. And also.
my hats off to our dedicated staff and team of legislative advocates who
worked Tirelessly to coordinate conferences and workshops and ensure
CASA members have the tools and resources to connect to key
stakeholders, partners and top policyrnakers. Their combined talents
and teamwork allowed us as a powerful statewide organization to
make a positive di{ference in each of our respective communities and
give us hope to look forward to better days ahead.
Catherine Smith, CAE
Executive Director
LEGISLATION
State's Fiscal Situation
Continues to be Bleak
When the new two year session convened on
December 1, 2008, Governor Schwarzenegger
declared a fiscal emergency and called a Special
Session to deal with a cash flow crisis approaching
$40 billion over a period of t 8 months. He
subsequently called a second "fiscal emergency"
Special Session, under his constitutional authority.
But with the state sinking further into debt, 2009
was a difficult year on the state legislative front as
the Democrat-controlled Legislature fought tooth
and nail with the GOP minority and the Governor
in finding common ground to resolve California's
budget crisis.
In February, the Governor and Legislature
attempted to close a growing $14 billion deficit by
passing a second Budget for the 2008-09 year,
which included a series of measures placed on the
May 19 ballot that were directly linked to solving
the Budget situation. However, California voters
overwhelmingly rejected the proposed solutions.
By July, the projected deficit ballooned to $26
billion. To solve it, the four legislative leaders and
the governor agreed to a 2009-2010 Budget
package that included more than $15 billion
in cuts, would permanently take or borrow
$3.7 billion from local government, accelerate
personal and corporate income taxes, and shift
$1 billion in payments to schools into future
years. This was in sharp contrast to the delayed
budget passed in September 2008 that included
no loc~rl ~pwernment borrowing and avoided tax
increasr~s.
Unfortunately, the budget That was passed
is likely to provide only short-terra relief in an
uncertain economy. Furthermore, in two years,
the taxes enacted as pars of the February Budget
agreement are due to expire. In addition, lhr~
state will bf: rc~yuirES] to repay the $2 billion in
property taxes borrawerl fnnn kx;al government
within the next three yr•,us,
Sweeping Water Package
Signed into Law by
Governor -Significant
Set-Aside for Water
Recycling
Quote: "Water is the lifeblood of
everything we do in California." -Gov.
Arnold Schwarzenegger
Background: Governor Schwarzenegger
put water at the tap of his legislative
agenda, threatening a mass veto of more
than 700 bills if the Legislature failed to
solve California's long term water needs
by the end of the 2009 Session. At issue:
Fixing the long-neglected Sacramento-
San Joaquin Delta, which 23 million
Californians depend on for drinking water.
Also at play: How to fund an expansion of
the state's water system that analysts say
would require billions of dollars in bonds
to finance ecosystem and infrastructure
improvements and other additions.
As the midnight bill-signing deadline
loomed, the Governor called off his threat
because legislators had negotiated a
framework for fixing the infrastructure. He
gave lawmakers more time to iron out the
details and then called a "special session"
on water.
Key Issues:
• Dams. Many environmental groups
oppose them and farm interests favor
them.
• Groundwater monitoring. Democrats
propose statewide groundwater
monitoring as a requirement for
their support and suggest higher
penalties for those who take water
illegally. However, Republicans and
agricultural groundwater users oppose
it contending it would lead to state
intrusions on private property.
• Conservation. Key legislators
want changes in a proposed urban
conservation provision that would
mandate a 20 percent statewide cut in
per-capita water use by the year 2020.
• Oversight. Central to the plan is a
new government body, known as
the Delta Stewardship Council, to
oversee the delta. Communities in the
Sacramento-San Joaquin Delta want
more representation on the new state
council.
• Bond. State Treasurer Bill Lockyer
warned that saddling California's
depleted General Fund "would require
cutting even deeper into crucial services
already reeling from billions of dollars in
reductions." He argued that new water
projects should mainy be financed by
users, not the general public.
Sticking Points:
• Inclusion of an $11 billion bond which
opponents ankl (tie state couldn't
afford.
• Lessening enforcement provisions
from the water package that cracked
down on illegal diversions of water,
boosted fines and increased the power
of the state water boards -provisions
demanded by environmentalists bul
vehemently opposed by Republicans
and water districts.
• CASA Amendments were sought and
included in the final package to ensure
that the authority of the new Delta
Stewardship Council did not override
existing law and regulations governing
the wastewater industry.
Final Package Approved
After months of political wrangling, the
Legislature finally agreed to a sweeping
water overhaul on November 4, 2009. The
historic deal includes new rules for water
conservation -with most localities being
asked to reduce water use by 20 percent
over the next 10 years and restoration
of the aging Sacramento-San Joaquin
Delta ecosystem. The comprehensive
$1 1 billion water package also includes
a significant victory (or CASA and
WateReuse, as it contains $t billion for
water recycling. CASA argued before
the legislative committees on behalf of
a set-aside for water recycling. Thanks
to the support of the policy committees,
legislative leaders, WateReuse, and the
Los Angeles delegation, the original
amount of $500 million for water recycling
was ultimately increased to $1 billion.
Status: The $11 billion general obligation
bond will go before voters in November
2010.
continued on page 8
STATE LEGISLATION
CASA, Water and
Y
Wastewater Agencies
Spared the Worst from '
State Property Tax Shift
With the state out of money, local
government funds were raided, despite
previous promises by the state that local
property taxes would not be touched. AB
15 (4X) narrowly passed on the final day
of budget negotiations and was signed
into law on July 28, 2009. It authorized
about $2 billion to be borrowed from local
governments through the suspension of
Proposition 1 A which was passed by voters
in 2004. Until the money is repaid, counties
and cities and special districts would have
8 percent of their property tax revenues,
received in 2008-2009, shifted to help
balance the state budget.
While AB 14 (4X) was the legislative vehicle
that actually suspended Proposition 1A, its
companion measure AB 15 (4X) provides
some relief to local governments reeling
from the loss of property tax revenue.
AB 15 (4X) allows local governments to
participate in a newly established Joint
Powers Authority created by the state for
the purpose of "securitizing" a temporary
loan to offset the state's borrowing action.
Potential Impact: Under the California
Communities Propostion to Securdization
Program. cities. counties and special
districts that choose to enroll in the
program will be able to receive advanced
repayment of Proposition 1 A funds
borrowed from them by the state. The state
will pay for the borrowing interest incurred
and the costs of issuance required for
each agency to participate. Local agencies
and special districts participating in the
securitization program are anticipated to
receive 100 percent of their respective
Proposition 1 A receivables.
Result: The securitization program is
expected to be in place by Decenrber 2009
Mounting
Opposition by CASA
Member Agencies
Prevents Greater
Losses to Water
and Wastewater
Agencies
As a result of intense lobbying
by CASA and the Association
of California Water Agencies
(ACWA), the Legislature rejected
a proposal by the Legislative
Analyst's Office (LAO) that
the state borrow more than a
quarter of the total property tax
loan amount from wastewater
and water enterprise special
districts, commensurate with
legislative intent that enterprise
special districts be removed
from the property tax roll entirely.
Had state lawmakers adopted
the LAO's recommendation,
the state would have borrowed
virtually all of waste and
wastewater property taxes,
estimated at $500 million in
total.
Federal Stimulus Funds
and SB 27 (XXX)
Background: SB 27 (X)OC), by Senator
Gloria Negrete McLeod, would provide
funding for "shovel-ready" projects for
both the California Clean Water State
Revolving Fund (CWSRF), as well as the
State Drinking Water Revolving Fund.
The CWSRF will receive approximately
$280 million from the new Federal
funds. The funds will provide grants
or revolving fund loans for the design
and construction of projects for public
wastewater systems. SB 27 ()OOQ
would allow the State Department of
Public Health to speed up the receipt
and expenditure of federal dollars in
the fund that are received from the
federal stimulus package known as the
"American Recovery and Reinvestment
Act (ARRA)."
Potential Impact: Before the vote
on SB 27 (XXX), concerns were
expressed by CASA that large
wastewater agencies serving urban
areas would be frozen out of any grant
funds because they did not meet
the definition of a "disadvantaged
community," even though certain
areas served by the larger agencies
clearly are disadvantaged. In the end,
the State Water Resources Control
Board (SWRCB) was left with the final
authority over disbursement of the
ARRA/SRF funds.
CASA Position: Support
Result: SB 27 (XXX) passed
unanimously, the Governor signed
the bill into law and formally began
the process of requesting the federal
funds. CASA victory.
Water Softener
Regulations
Background: AB
1366, authored by
Assemblymembers Feuer,
Caballero and Strickland,
is a more narrow version of
AB 2270 (Laird), which was
vetoed by the Governor in
2008. It would allow California
wastewater agencies, in
areas with significant salinity
problems, to regulate water
softeners. These areas include
the south and central coasts,
San Joaquin Valley, Tulare
Lake and the lower half of the
Sacramento Valley Department
of Water Resources Hydrologic
Region. Among other things,
AB 1366 would:
• Allow agencies in these areas
to bypass the cumbersome
existing law and pass
ordinances that can limit the
salt contribution from self-
generation water softeners.
This authority would be
provided only if a regional
board within these areas
finds that the limitation on
softeners would contribute
to achieving its water quality
objectives.
• Requires local agencies
to provide reasonable
compensation if they decide
to remove existing water
softeners.
CASA Position: Strongly
support.
Result: Governor signed.
CASA Victory.
55 Percent Vote for
Public Improvements
Background: Assembly
Constitutional Amendment (ACA
9) by Assemblymember Jared
Huffman would allow for the use
of bonded indebtedness for the
construction, reconstruction,
rehabilitation or replacement of
public improvements, including
"sewer systems, water systems
and wastewater systems" upon
approval by 55 percent of the
voters of a particular city, county or
special district.
Potential Impact: Currently,
schools are the only entity eligible
to secure bond funding for
construction projects with a 55
percent vote and they were able
to lower the vote threshold from
two-thirds to 55 percent only
by gaining passage through the
initiative process. It is extremely
difficult to win passage of a bill
in the legislature for construction
bond funding with the current
constitutional requirement of
atwo-thirds vote threshold for
passage.
CASA Position: Support
Result: ACA 9 passed two
Assembly policy committees and
reached the Assembly floor. While
actively supported by the entire
local government community,
final approval Is doubtful because
Republicans will refuse to provide
the votes necessary for the two-
thirds vote requirement to make
the proposed constitutional
change. The bill is currently on the
Assembly floor and can be taken
up in the 2010 Session.
Binding Arbitration for Claim Disputes
Background: AB 216 (Beall, D-San Jose) would authorize
that contracts entered into after January 1, 2010 provide for
a mediation process and binding arbitration process for claim
disputes of more than $100,000 between a contractor and
a local agency. This would be required under the following
conditions:
• If the agency does not have an alternative dispute process
• If the claims remain unresolved after a certain period of time
AB 216 also would define "claim" to mean a written demand
or assertion by a contractor or local agency in regards to the
contract documents.
CASA Position: Oppose. AB 216 likely would result in
agencies incurring potentially high legal costs from arbitration
and limiting appeals in such cases.
Result: Bill held in Assembly Appropriations Committee.
"Complete and Accurate Plans" -Bill
Held Over to 2010
Background: AB 815 by Assembly member Fiona Ma is
a slightly revised version of AB 983, which was vetoed by
Governor 5chwarzenegger after passing both houses of
the Legislature in 2008. It would require local agencies to
provide "full complete and accurate plans and specifications
on contracts." The Governor rejected the measure last year
because of worries it would interfere with a court case, Los
Angeles Unified School District v Great American Insurance
Company. AB 815 is currently a "placeholder bill," that is
expected to be amended by the author and sponsors once
the court case has been settled in 2010.
Potential Impact: If AB 815 is eventually amended to a
version similar to AB 982 (Ma) of 2008: it will have significant
adverse impacts on local government, and will likely lead to
additional taxpayer costs.
CASA position: Oppose.
co
Result: Pending a hearing in the Senate Local Government
Committee, AB 815 likely will not be heard until late Spring
201n
STATE LEGISLATION CONT
5 Percent Withhold
on Contracts
Background: SB 802 (Leno,
D-San Francisco) would lower
the retention percentage
public entities can withhold
from general contractors
from 10 percent to 5 percent.
Public entities currently are
allowed to withhold at least
5 percent and up to 10
percent from payments to the
general contractor, pending
satisfactory completion of
the project. The provisions
of the bill also apply to state
contracts.
CASA Position: Oppose.
Payment retention is an
effective method of keeping
contractors on the job until a
project is complete. The bill
takes away local control and
puts CASA member agencies'
finances at risk at a time when
local government and special
districts can least afford it.
The Governor vetoed the
bill, stating in part, "When a
contractor fails to complete
a public works project, the
public entity needs recourse
to ensure that the project
gets completed. Public works
contracts have a higher level
of nsk as public entities usually
have to accept the tow bidder.
Though there are options
available to the State fo go
alter a contractor who fails to
complete the terms of a public
works contract, retaining
portions of payment to the
contractor provides incentive
for the contractor to complete
the project. "
Result: Governor vetoed
CASA Yctory.
50 Percent Recycling
Requirement on Ocean
Discharges
Background: SB 565 (Pavley, D-Santa Monica)
would require the State Water Resources Control
Board to develop a plan to recycle 50 percent of
the wastewater currently discharged to the ocean
by 2030 and to establish an annual fee on those
discharges for reimbursement of the board's costs
for the statewide plan.
Potential Impact: CASA expressed serious concerns
about giving the State Water Board the direct authority
to prepare and implement plans by using its regulatory
authority and require bay and ocean discharges to
pay for the plans through regulatory fees. Wastewater
dischargers already pay a fee for ocean discharging
and SB 565 sets up complex regulatory hurdles and
restrictions rather than working to remove barriers to
recycling equitably throughout the state.
CASA Position: Oppose, unless amended. CASH
actively worked with WateReuse, ACWA and the
Metropolitan Water District in addition to Senator
Pavley's staff and the bill's sponsors, (the Planning and
Conservation League), on amendments to remove the
objectionable portions. The proposed amendments
to the bill focus on developing the science and
technical information required to support additional
reuse opportunities through groundwater recharge
and potable reuse, which CASA believes is critical to
achieving the state's ambitious water recycling goals.
CASA Impresses
with First "Day in
the District"
CASA members produced
an impressive showing at
the association's first annual
Legislative Day in the District
on February 13, 2009.
The event provided CASA
members the opportunity
to introduce themselves to
newly elected and incumbent
legislators in their district
offices, away from the hectic
pace of the State Capitol.
CASA members met face
to face with their legislative
representatives and educated
them about their agencies'
accomplishments and priority
issues for the upcoming
2009-2010 legislative session.
In addition, individual agencies
used the opportunity to invite
their legislators to tour their
local project sites.
CASA makes it easy for
members to participate by
providing them with pertinent
issue papers and other
"leave-behind" materials
for lawmakers and their
staffs to review and refer to
as related issues surface
in the Capitol. The local
networking component of this
grassroots advocacy effort
is very important to CASA's
public affairs outreach as
relationships forged during
these meetings often could
mean the difference between
passage and defeat of CASA-
sponsored bills.
Result: CASA continues to work with Senator
I'arvley's staff and the sponsors on the amendments
Ih,~t could ultimately result in CASA's support of the
nx~asure. SB 565 is carried over to January 2010 as
a Iwo-year bill.
California Association of Sanitation Agencies
~ ~ ~~Q~~AL ~~~G~~~~TION
DRAMATIC CHANGES
THE FEDERAL LEVEL
AND WHAT IT MEANS
FOR CASA
"My presidency will mark a new
chapter in America's leadership on
climate change that will strengthen
our security and create millions of
new jobs in the process. "
President Barack Obama
• $850 billion in federal stimulus offered to
get the economy back on track
• President and Congress vow to develop
a sustainable recovery targeting public
infrastructure
• Wastewater and water projects are
the focus with more than $6 billion
appropriated to support water projects
• Climate change is the centerpiece of
Obama administration's environment
agenda
~.-~~.
1"TTT*T'R
CASA Visits and Voices
Its Opinions on the Hill
Nearly 50 CASA members traveled
to the nation's capitol for what
proved to be an invaluable and
rewarding experience in educating
federal lawmakers about CASA's
priorities. The annual Washington
D.C. conference allowed attendees
to meet. greet and strengthen
relationships with members of the
California delegation, many of whom
are in positions of power to affect
CASA legislation. Senator Barbara
Boxer, who chairs the Committee
on Environment and Public Works,
addressed CASA members at a town
hall meeting. She provided updates
on Congress' key priorities and their
potential impact on CASA in the
short and long term. Sessions at the
conference included discussions
about future initiatives from the new
administration, prospects for passage
of comprehensive climate change
legislation and how the nation will
address the increasing needs of our
aging infrastructures. Special thanks
to CASH Federal Legislative Chair
Sharon Green, Vice Chair Ann Farrell
and Federal Legislative Advocate
Eric Sapirstein for a job well done.
Their hard work and dedication in the
coordination of this event are to be
commended.
CASA Proposes Its
Own Federal Stimulus
Ideas
In asking the question: "What
would you do to get the
economy moving again?"
CASA's Sacramento office surveyed
member agencies to find out what
they would bang to the table to get
the economy moving again.
The polling produced a list of
more than $4 billion in ready-to-
go construction wastewater and
water reuse projects that could
benefit from a federal infrastructure
assistance program. The list
was submitted to the House and
Senate infrastructure congressional
leadership and House Speaker
Nancy Pelosi. In addition, CASA
joined with several national and state
organizations in urging Congress to:
• Provide $20 billion in
infrastructure assistance that
would jump start the economy
by creating 170,000 jobs.
• Focus first on ready-to-start
construction projects as
opposed to those on the list of
the State Revolving Fund (SRS.
• Offer grant assistance, rather
than loans, to ensure that
stimulus-funded projects do not
impose additional burdens on
ratepayers.
More Issues, Confusion
over Clean Water Act
and Its Implications
Background: the 1972 Clean
Water Act (CWA) was enacted to
protect the waters and wetlands
of the United States, ranging from
small streams and wetlands to large
lakes and waterways. tt sets the
basic organization for regulating
water pollution nationwide, including
the discharge of pollutants from
large industrial plants and sewage
treatment facilities. Under CWA,
the reloase of all such pollutants
requires a federal permit and the
pollutants released must meet
federally mandated sewage treatment
standards. The CWA authorizes the
federal government to fund sewage
treatment facilities and programs to
reduce water pollution, which the
individual states develop and maintain.
Court challenges: Two closely
decided U.S. Supreme Court
cases in 2001 and 2066 narrowed
[he scope of CWA jurisdiction,
stating the CWA applies only to
wetlands or water bodies that have
some hydrological connection to
a navigable-in-fact waterway. The
decisions have led to significant
confusion and permitting delays
because of uncertainty over which
waters remain protected.
Clean Water Restoration Act
of 2009: Sei ~aior Russell Feingold
D ~ti~q mtmduced legislation (S.
787) awned at clarifying the scope
of the CWA, by codifying existing
CWA jurisdiction regulations and
expressing the intent of Congress to
broadly interpret such jurisdiction.
Rep. James Oberstar (D-MN) is
drafting similar legislation and
has solicited CASA's views on his
proposal.
CASA Position: Supports modifications.
Pros: The bills state unequivocally that it
does not affect the EPA regulatory exemption
provided to design and construct man-made
waste treatment systems. It also specifically
states that nothing in the legislation would
modify or affect the exemption.
Cons: The bills neglect to address a significant
issue impacting public owned treatment works
(POTWs). And like the original act, it would
again limit the waste treatment exemption to
manmade bodies of water even though that
limited exemption was suspended by the EPA
in 1980. The bills restate that the CWA treats
groundwater separate from "waters of the
United States." This serves to signal regulators
that the bill is not intended to expand the current
treatment of groundwater. However, the bills do
not address instances where groundwater has
a hydrological connection to surface water, a
scenario courts across the nation are split.
Result: After failing to garner the votes
necessary to move the bills to the Senate and
House floors for debate and votes, attention
has shifted back to ways in which to craft an
acceptable compromise to ensure that the
waste treatment exemption is maintained. When
all is said and done, it's likely the bill will require
new facilities to use waste treatmment systems
outside waters of the United States and allow
POTWs who benefited from the exemption to
continue operating without a discharge permit.
Water Trust Fund Bill: Fees and Taxes
Background: H.R. 3202 by Rep. Earl Blumenauer would establish a Water
Protection and Reinvestment Fund to support investments in clean water
and drinking water infrastructure. In July 2009, the House Committee on
Transportation and Infrastructure, Subcommittee on Water Resources invited
various stakeholders to testify on whether a Clean Water Trust Fund would
be beneficial. The meeting was called on the heels of a newly released
Government Accounting Office (GAO) study. The report identified potential
revenue sources for such a fund while raising issues regarding who would
administer the fund, what activities would be eligible and the kinds of financial
assistance that would be offered.
State and local governments and contractors, engineers and environmentalists
were generally supportive of a dedicated protected revenue stream from a trust
fund that waste and wastewater agencies could draw upon. Some touted the
idea of using adeficit-neutral revenue source to meet growing infrastructure
needs. The lone dissenter was the American Water Works Association, which
argued that infrastructure needs should be dealt with through rates and other
local charges, rather than relying on federal assistance.
H.R. 3202 would devote 48 percent of the trust fund revenue to the Clean
Water State Revolving Fund and 35 percent to the Drinking Water State
Revolving Fund. The bill also calls for grants for non-point sources, technical
assistance for rural and small communities, security, sewer overflow controls
and drug take-back programs.
CASA Position: CASA has continued to work with other stakeholders to
ensure that should any bill move forward, CASA will be in a position work with
key members of the California delegation to remedy deficiencies identified in
any legislation.
Result: As the First Session of the 1 1 1'^ Congress closed, the legislation
has failed to gain significant support because of the continuing challenge of
identifying where revenues might be generated to create a sustainable trust fund.
con6iiuad on page 74
Passage of Sweeping Climate
Change Measure Proves
Troublesome in U.S. Senate;
CASA Testifies Before Senate
Background: A bill California Senator Barbara
Boxer hopes to merge with provisions from five
other committees cleared her Senate Environment
and Public Works Committee despite a Republican
boycott. The measure (S. 1733) introduced in
late September 2009 by Senators Boxer and
John Kerry (D-MA) calls fora 20 percent cut in
greenhouse gas emissions by 2020. Earlier this
year, the House cleared a companion measure
(H.R. 2454, Waxman-Markey) and was able to win
support for reductions of only 17 percent by 2020.
CASA President Ronald Young testified before the
Senate Committee on Environment and Public
Works in support of the bill's commitment to
provide grants to POTWs to respond to climate
change impacts upon wastewater treatment
operations. In his testimony, President Young urged
the Senate to explicitly define biomass energy
production to included biogas and biosolids.
The complex Waxman-Markey climate change
bill would reset the way the U.S. government
approaches the issue of regulating air pollution, and
specifically:
• Mandate a 17 percent cut in greenhouse gas
emissions by 2050, reductions that would be
accomplished by putting a price on carbon
dioxide through a cap and trade system.
• Require 20 percent of electricity to come from
renewable sources and increased energy
efficiency by 2020.
• Provide between $600 million and $740
million for domestic adaptation in 2015. States
may use the proceeds of sales of emission
allowances for the implementation of projects
to build resilience to the impacts of climate
change. These impacts would include extreme
weather events, water scarcity, adverse impacts
on water quality, more frequent and severe
droughts and rises in sea level.
• Authorize $7.5 million for FY 2010 (rising to
$50 million by FY 2010) for EPA's WaterSense
program, a voluntary program that labels
water-efficient high-performance products and
services.
The bill also directs federal agencies to make cost-effective,
water-efficient procurement decisions by purchasing
WaterSense products whenever possible.
The Boxer-Kerry bill would:
Cut greenhouse gas emissions by 83 percent by 2050 and 20
percent over the next decade from 2005 levels.
Create a dedicated funding mechanism to support
infrastructure needs of POTWs impacted by climate change
including sea level rise and drought.
Set up a market for pollution permits and auctions off 15
percent of the allowances each year through 2029 before
increasing to 18.5 percent after 2029. The auction revenue
would be distributed to different areas, including 6.6 percent
beginning in 2026 for direct rebates to consumers to help them
deal with higher energy bills. The EPA estimates it would cost
the average U.S. household about $100 per year.
Republicans are demanding a more thorough economic analysis
of the Kerry bill, saying it will raise energy prices and cause job
losses. The lone Democrat, Senator Max Baucus (D-MTj, who
voted against the measure, expressed concern about the market
set-up for pollution permits.
In an attempt to find a middle ground, Kerry joined with Senate
colleagues Lindsey Graham and Joe Lieberman to develop a
compromise package that would give more benefits to the oil
and nuclear power industries. The trio stressed their "dual track"
climate legislation would not usurp Boxer's efforts or the work of
the five other committees that have jurisdiction over energy and
climate policy. The Senate Energy panel already has cleared a
bill that would require more electricity to come from renewable
sources and would extend offshore oil drilling into parts of the
eastern gulf of Mexico that are now off limits.
CASA position: CASA along with other water and wastewater
associations wrote in support of the Kerry-Boxer legislation due to
its incorporation of adaptation assistance for POTW infrastructure
needs.
Status: Action on any climate bill will not occur until next
year at the earliest. With 192 nations gathering in Copenhagen
in Decen fiber 2009 to hammer out a new international treaty to
slow global warming, the Obama administration and Democrats
plan to use House and Senate action on legislation as well as the
Administration's decision to require federal agencies to begin the
process of reducing greenhouse gas emissions as proof the U.S.
is moving forward on the issue.
enate Debating State
evolving Fund (SRF)
enewal
Background: The Water Infrastructure
Financing Act (S.1005) authored by
Committee on Environment and Public
Works Chair Barbara Boxer would amend
the Federal Water Pollution Control Act
(commonly known as the Clean Water
Act) and the Safe Drinking Water Act to
improve water and water infrastructure in
the U.S. S.1005 would provide a sizeable
federal contribution to the SRF program
of $20 billion over a period of five years. In
addition, it would provide:
• A new allocation formula under which
the $20 billion is.provided to state SRF
programs.
• Grants assistance of $1.8 billion over
five years to support Combined Sewer
Overflow/Sanitary Sewer Overflow
needs.
• Subsidized SRF assistance in the
form of extended repayment terms
of 30 years, principle forgiveness and
negative interest to communities that fall
within the definition of disadvantaged.
This assistance is limited to 30 percent
of a state's SRF grant.
• Provides for an expanded set of eligible
activities that a SRF program can support
related to improved water recycling,
energy efficiency, expense monitoring and
security upgrades at plants.
CASA Position: Support
Impact: For the first time in more than
two decades, the bill's revised allocation
formula would provide a more equitable
share of infrastructure SRF assistance to
California. If the bill is enacted, California
would receive nearly 8 percent of all SRF
funding or $1.7 billion over the next five
years.
House Attacks
Pharmaceutical Pollutants
Background: Three bills are under
consideration in the House that address the
issue of pharmaceuticals entering into the
U.S. waters. The bills seek to direct programs
to prevent end-users from disposing unused
medications down toilets or drains.
• H.R. 1191, the Safe Disposal Act,
would amend the Controlled Substances
Act to provide for disposal of controlled
substances through State take-back
disposal programs and to amend the
Federal Food, Drug and Cosmetic Act
to prohibit recommendations on drug
labels for disposal through the use of
wastewater treatment systems, such as
flushing down the toilet.
CASA Position: Support. H.R. 1191 carries
value to create incentives for state and local
programs.
• H.R. 1359, the Secure and
Responsible Drug Act would provide
for dist,osal through drug take-back
programs to prevent improper disposal
i
toward greater coordination among federal,
state and local agencies on how drugs and
personal care products are disposed by
consumers.
Impact: The bill's author, Subcommittee
on Oversight and Investigations Chair Bart
Stupak, stated the importance of stemming
the flow of pharmaceuticals entering the
nation's waters, citing reports of anti-
epileptic and anti-anxiety medication found
in treated drinking water for 18.5 million
people in Southern California.
• H.R. 3202. the Water Protection
and Reinvestment Act, addresses
improper pliarrnaceutical disposal.
It would include a program to make
grants to states, nonprofits and other
governmental entities to implement drug
take-back programs. The bill also would
place labeling restrictions on drugs and
biological products to prevent flushing.
CASA Position: CASA supports the take-
back provision of H.R. 3202.
Status: Still under consideration. It
appears that the priority for health care CASA Position: CASA has joined with Status: All three bills are under review in
reform will preclude consideration of the other stakeholders to support this and other I-louse subcommittees.
bill until early next year. initiatives that would mark the first step
I
Coastal Water
Contamination and
the BEACH Act
Background: H.R. 2093,
the Beaches Environmental
Assessment and Coastal Health Act
SEACH) Act would reauthorize grants to
a +~~_ and local governments from $30 million
,r~r,ually to $40 million annually in Fiscal Years
rU t u through 2014 for beach-monitoring programs
to locate and identify likely sources of coastal water
contamination. Under the measure, recipients of
BEACH Act grants for monitoring and notification
would need to include public notification, source
tracking, sanitary surveys and prevention efforts
to address identified sources of contamination by
pathogens in coastal recreation waters adjacent to
beaches or other areas used by the public.
H.R. 2093 also requires beach-monitoring state and
local grant programs to use a rapid testing method for
water within one year following the date of validation
of arapid-testing method by the EPA. By 2012, EPA
is required to complete an evaluation and validation
of arapid-testing method for water quality criteria and
standards for pathogens and pathogen indicators.
CASA Position: Watch closely
Reasoning: CASA worked closely with
staff on the Committee on Transportation
and Infrsstnich~re to settle on a workable
definition of "rapid testing methods." The
adopted language states that rapid testing
method results must be "available as soon
as practical and not more than 6 hours after
the start of the rapid testing method in the
laboratory."
Status: Senate Bill, S.878, contains most
of the programmatic changes contained in
H R. 2093. It was approved by the Senate
Committee on Environment and Public
Works and sent to the Senate. However,
it contains afour-hour timetable for rapid
testing methods, which CASA contends
is unreasonable and impractical. The
overarching H.R. 2093 requires atwo-thirds
vote for passage.
Sewer Overflow Monitoring
and Notification Bills
Background: Bills advanced by both
the House and Senate would establish
a national sewer overflow monitoring,
reportiny and notification program
administered by the EPA. The program
would require publicly owned treatment
works (POTWs) to institute a feasible
monitoring program, notify the public
as quickly as possible when there is an
overflow and notify public authorities
immediately when an overflow threatens
to endanger human health.
House Version: H.R. 753 was included
in the Water Quality Investment Act (H.R.
1262), which passed the House. The
committee report accompanying H.R.
1262 addressed a concern raised by
CASA regarding the liability of POTW
owners and
operators for monitoring and reporting
sewer overflows occurring in Satellite
systems. The report indicates that
POTWs are not required to assume
monitoring, notifcation and reporting
responsibility for satellite collection
systems that may be connected, but not
owned or operated, to a POTW.
Senate Version: S. 937, the Sewage
Overflow Community Right to Know Act
was approved by the Committee on
Environment and Public Works and sent
to the full Senate for consideration.
Casa Position: Support
Status: The bill has yet to be scheduled
for Senate floor debate and a vote due to
the priority for health care reform. Action
is likely next year as part of the Senate
debate on S. 1005.
House Acts on Chemical Security Bills to
Guard against Terrorist Attacks
Background: The House Energy and Commerce Committee approved two pieces of
legislation that would place new security requirements on facilities across the country
that use or store dangerous chemicals. According to the Department of Homeland
Security (DHS). U.S. chemical plants and water facilities remain vulnerable to terrorist
attacks. The Department has identified more than 7,000 high-risk chemical facilities.
The current program, which was extended for one additional year under the Homeland
Security appropriations bill, does not cover drinking water and wastewater facilities.
The Chemical Facility Anti-Terrorism Act of 2009 (H.R. 2668) requires covered
facilities to assess whether there are alternative chen,lcals or processes they could use
that would reduce the consequences of a terrorist attack. As amended, the bill creates
an explicit mandate that USEPA would retain authority over POTWs and water supply
agencies, preventing the Department of Homeland Security from assuming control.
CASA Position: CASA has endorsed the legislation because of concessions made that
leave regulatory control over POTWS with USEPA and the states. Additionally because
1ltcre is not a mandatory IST provision (requiring a POTW to select alternative treatment
technologies), CASA joined with other stakeholders providing qualified support that will
allow it to work with the Senate on language to ensure POTWs are required to switch to
other technologies without a demonstrated need for such transition.
Status: The House of Representatives approved the bill and it is now pending before the
Senate. No action is expected in the Senate until late next year.
California Association of Sanitation Agencies
REGULATORY REPORT
CASA Actively
Engaged in
Process to Revise
Water Quality
Enforcement
Policy
Background: The Water
Quality Enforcement Policy
iWOEP) governs how the State
a~u1 Regional Water Boards
' prioritize and enforce violations
of permits and water quality laws.
After nearly two years of workshops,
stakeholder input, and multiple drafts, the
State Water Resources Control Board (State
Water Board) adopted a revised Water Quality
Enforcement Policy (WOEP) in October 2009.
The WOEP governs the manner in which the State
and Regional Water Boards prioritize and pursue
enforcement of violations of permits and water quality
laws. CASA, Tri-TAC and the Clean Water Summit
Partners were active participants in the WOEP update
The revised WOEP differs from the prior policy in several
ways. For example, the WOEP establishes a system
of classifying violations based on the impact to the
environment and [he conduct of the discharger. One of the
criticisms of the prior WOEP is that the policy identified so
many activities as priorities that it was difficult to determine
which of these violations was truly deserving of a high priority
status. CASA supported the approach in the revised WOEP
because the policy will target enforcement resources toward
those violations that pose a serious threat to water quality or
are the result of willful or knowing noncompliance.
A second major change is that the revised WOEP provides
a much more detailed and systematic "10 step" approach
to calculating monetary penalties. The State Water Board
considered two alternative approaches; the other proposal
involved convening of a "Monetary Liability Recommendation
Panel" of five senior management staff from the Water Boards
that would be responsible for developing <~
proposed monetary civil liability assessment
for each case. CASA supported the proposrKf
approach over the panel option, because it
provides all parties with greater transparency : r
to how penalties are calculated.
One major reason CASA did not support the
panel alternative was that it would create a
"rebuttable presumption" that the panel's
recommended penalty amount is appropriate
by requiring Regional Water Board staff to justify
any deviations from the panel's recommendation.
However, apparently in response to concerns
expressed by some of the Regional Water Boards
that the detailed methodology would lead to
"second guessing" of their calculations, the
proposed WOEP now provides that in reviewing
a petition challenging the use of this methodology
by a Regional Water Board, the State Water
Board will generally defer to the decisions made
by the Regional Water Boards in calculating
the liability amount unless "it is demonstrated
that the Regional Water Board made a clear
factual mistake or error of law, or that it abused
its discretion." This language creates a similar
presumption of correctness regarding Regional
Water Board penalty calculations.
CASA position: Many of the changes requested
by CASA, Tri-TAC and the Clean Water Summit
Partners are reflected in the WOEP as adopted.
These include:
• Instead of the typical approach for calculating
monetary penalties, the starting point for
NPDES permit effluent limit violations is the
mandatory minimum penalty (MMP) required
by statute. The Regional Water Board is to
consider the nature and circumstances of
the violation (e.g. the environmental impact, if
any) and the conduct of the discharger (e.g.
whether the violation was willful or negligent)
in deciding whether to pursue discretionary
liability above the mandatory amount.
• In recognition of the lower
threat posed by releases of
recycled water, the WOEP
establishes a maximum amount
of $1 per gallon should be
used to calculate liability, rather
than the statutory maximum of
$10 per gallon. In addition, in
recognition of the large volumes
that may be discharged, the
maximum per gallon factor to
be used in calculating liability
for sewage spills and releases
of municipal stormwater or
stormwater from construction
sites is $2 per gallon.
• Revision of a number of
problematic provisions, including
language that would have
required "any assessment
of administrative liability' for
noncompliance to "meaningfully
exceed the cost oT compliance."
CASA pointed out that if a
publicly owned treatment works
intermittently violates an effluent
limitation for salinity, compliance
with that objective could require
construction of reverse osmosis
treatment, at a cost of millions
of dollars. It would not be good
public policy to suggest that
the appropriate liability for those
effluent violations would be in
the millions of dollars.
Status: The revised WQEP is now
in effect. CASA was able to resolve
all of its significant issues through
written comments, testimony and
meetings with State Water Board
members and staff.
continued on page 20
CASA Joins Other Water,
Environmental Stakeholders
in Support of Recycled Water
Policy
Background: The State Water Board
undertook amulti-year effort to establish a
policy to increase the use of recycled water
in California. The State Water Board made
two attempts between the fall of 2007 and
the spring of 2008 to establish a policy
that addresses the concerns of the water
recycling community, as well as environmental
associations and the Department of Public
Health. In March 2008, the State Water
Board agreed to allow a small group of
stakeholders from the water, wastewater
and environmental communities 120 days to
develop a policy to replace the State Water
Board staff proposals.
In September 2008, the stakeholders
presented a proposed consensus draft of the
policy to the State Water Board. Two months
later, the State Water Board issued a draft that
tracks, for the most part, the stakeholder draft
CASA position: CASA, along with the
Association of Galrfornia Water Agencies
and the WateReuse Association, submitted
joint comments on the proposed policy
on December 19, 2008. The associations
expressed their appreciation for the State
Water Board's recognition that recycled water
is a key component of California's present and
future water supply, and that Board policies
and programs should facilitate, rather than
impede, the safe and beneficial use of recycled
water for irrigation and groundwater recharge,
among other uses. The associations also
noted with approval that the proposed policy
retains the central themes of the stakeholder
draft, including the need to streamline and
simplify permitting in order to increase
recycled water use throughout the state.
The policy also recognizes the importance of
basin-wide planning [o maintain sustainable
groundwater supplies and calls for development
of stakeholder led salt/nutrient management
plans, without unfairly burdening recycling
programs in the interim.
While the stakeholder group was able to reach
consensus on a number of challenging issues,
including the application of the antidegradation
policy to recycled water projects and the
approach to addressing constituents of
emerging concern in recycled water, the
group was unable to resolve its differences
on the question of how incidental amounts of
recycled water runoff should be addressed
in the policy. The State Water Board directed
its staff to develop proposed language on
incidental runoff and include these provisions
in the staff draft of the policy.
The associations recommended that, because
of the prominence given to the issue of
incidental runoff in the proposed policy, the State
Water Board should make clear that incidental
amounts of runoff of highly treated recycled
water do not pose a threat to water quality. The
associations expressed agreement that multiple
perrnd mechanisms, including waste discharge
requirements and municipal separate storm
sewer system (MS4) permits, may be employed
as appropriate to address minor amounts of
recycled water runoff that may occur as a result
of normal irrigation operations. However, the
letter expressed concern that the new language
regarding incidental runoff is overly detailed and
prescriptive for a policy, and conditions regarding
practices that are appropriate for a particular site
should be left to the permitting process.
Status: The Recycled Water Policy was
adopted on February 4, 2009, and approved
by the Office of Administrative Law in April
2009. The policy included provisions regarding
incidental runoff that, while not ideal from
CASA's perspective, represented a reasonable
compromise between the environmental and
water community oositions.
KY t{tF'Ufi I ~
:neral Permit Adopted for Landscape
~igation with Recycled Water
Background: AB 1481 by Assemblyman Hector De La Torre
required the State Water Board to adopt a general permit for
landscape irrigation uses that have been approved by the
California Department of Public Health by July 2009. The
bill, sponsored by the City of Los Angeles, was mined at
streamlining irrigation permitting and addressing the inconsistent
approaches of the nine regional water boards. In response to the
legislation, the State Water Board developed a general permit for
landscape uses of tertiary-treated recycled water.
Positive aspects of the general permit include:
• Agencies have the choice to opt-in to the general permit,
or to continue coverage under existing matter reclamation
permits and individual recycling requirements
• Some aspects of the general permit are less restrictive
than those in the existing permits
• The general permit requires priority pollutant monitoring
twice annually
• The general permit does not require groundwater
monitoring
• The general permit allows recycled water producers and
distributors to manage and police their individual uses
However, several provisions have caused concern for CASA
members, including:
• The general permit requires prior approval for the
appropriate public health agency before connecting new
sites
• The reporting, monitoring and paperwork requirements are
more onerous, and the tone of the general permit suggests
that recycled water is a waste to be regulated rather than a
valuable water supply
• The permit requires reporting of recycled water spills of
more than 1,000 gallons.. while the California Water Code
only requires reporting of spills in excess of 50,000 gallons
CASA position: CASA joined with the Association of
California Water Agencies (ACWA) and WateReuse California
in working with State Water Board staff and key stakeholders
to develop permit language and address key issues of
concern. As a result, the Board agreed to numerous revisions
regarding the prohibitions, findings as well as the monitoring
and reporting program.
Status: The general permit is in effect and available for entities
seeking coverage for recycled water irrigation projects.
CASA Persuades State Water
Board to Mitigate the Impact of
NPDES Permit Fee Increases _.
Background: In the summer of 2009, the State Water
Board indicated to stakeholders that the Board was
considering revising the National Pollutant Discharge
Elimination System (NPDES) permit fee schedule to
replace the existing flow-based approach to calculating
annual fees. Staff developed several alternative fee
options to address the perceived inequity of the flow-
based approach. By looking at other "revenue neutral
fee structures," the staff proposed to provide relief to
the steam electric power plants (SEPPs) that currently
pay significant annual permitting fees, because fees
were based solely on the volume of water discharged
and did not include a cap on the total amount paid by
any single discharger.
CASA Position: CASA offered two alternative
approaches for the fiscal year 2009-10 fees. The
first option was identified in testimony at the Board's
workshop and hearing, which was to retain the existing
fee schedule (Option 1), but utilize the one-time
furlough savings attributable to the NPDES permit
program to reduce the fees being paid by the largest
dischargers. The second option attempted to capture
a concept raised during the Board discussion at the
hearing, which would take the staff's recommendation
to impose a $250,000 cap on each discharge as the
starting point, but use the savings to reduce the fees
proportionally (Option 2). The State Water Board staff
estimates the non-general NPDES program share of
the furlough savings at approximately $1.9 million.
Impact: The Board adopted the
second option suggested by CASA
and applied the $1.9 million in savings
to provide a reduction in fees to all fee
payers with annual fee amounts under
the $250,000 cap. In this alternative,
the fee for the 22 dischargers with
the highest flows (240 MGD to 2.670
MGD) was capped at $250,000. The
104 dischargers between 7.5 MGD and
181 MGD will all experience at least a
doubling of fees. Even the 325 agencies
with flows exceeding up to 7.5 MGD
will experience some increase, while
only the 44 dischargers with flows at or
less than 250 GPD will remain constant.
Even so, no discharger will pay more
under this option than under the staff-
recommended Option 2.
Status: The fee schedule will remain in
effect for FY 2009-10. CASA was able
to mitigate, though not avoid, the fee
increases for its members. CASA also
persuaded the State Water Board to form
a fee stakeholder group to look into more
equitable and sustainable fee structures
that can be implemented in future years.
The stakeholder group is expected to
meet for the first time in December 2009.
CASA, Summit Partners
Weigh in on Collection
System WDR Review
Background: In the summer of
~r io~3. the State Water Resources
Control Buard solicited comments
w~tl~ regard to possible revisions to
the Waste Discharge Requirements
(WDR) Order 200fi-003 related to
Sanitary Sewer Overflows (SSOs).
The State Water Board staff held
two public workshops and accepted
written comments on a series of
specific questions designed to elicit
information about how the WDR is being
implemented and what changes are
desired by stakeholders.
CASA position: CASA, the Clean
W~rfer Summit Partners and several
other local government associations
jointly submitted comments to the
State Water Board. The comment letter
stated the view that implementation
of the SSO WDR should be allowed
to reach completion of its initial stated
goals for enrollment and reporting by all
public agencies before major changes
are made. The full SSO WDR program
has been in effect for only two years,
and the requirement for some agencies
to complete their Sewer System
Management Plans (SSMPs) does not
occur until the summer of 2010.
Many enrollees are still in the initial
stages of the implementation period for
this SSO WDR. The letter noted that
the results of the first two full years of
WDR implementation are impressive.
The State Water Board and collection
system agencies deserve to take pride
in these accomplishments.
The associations argued the State
Water Board could most positively focus
its resources on achieving compliance
with the existing program, which has not
yet been completely implemented. The
lack of reporting by the noncompliant
agencies is unfair to the agencies that
are reporting, and the map of spills
shown on the Water Board's Web site
is misleading to any viewer because of
the agencies that are not yet included
in the program, or are not reporting
appropriately.
During the last two to three years,
collection system agencies have been
developing their SSMPs, increasing
funding by their public rate-payers for
their collection system activities in a
process that usually takes a year or
more, and participating in training in
order to make improvements in their
operational capabilities and reach
compliance with the WDR.
For all of these reasons, the local
government associations suggested the
WDR be left unchanged for the present.
Instead, additional efforts by the State
Water Board to analyze program data
would be useful and appropriate. This
effort should seek to ensure the accuracy
of reported information, completeness
of information, and to identify if there
are performance concerns that need to
be strategically addressed, either as a
whole or by individual permittees. This
type of review could also ensure that
future attention is focused on the most
important issues when considering
protection of public health. This focus
is critical to permittees as it will help to
concentrate their efforts on the highest
priority issues during this time of limited
resources.
Status: The State Water Board intends
ir, hold additional public workshops in
early 2010. Proposed revisions to the
SSO WDR, if any, are anticipated to be
released for comment no earlier than
spring 2010.
,lifornia Association of Sanitation Agencies
ASA C~ A I A ~~~ 1~l~,' ~~[a
-_ ,_- , ~ ~ ~ ~~ - -~ - 0RT
Trial Court Issues
Final Decision in
Vacaville Case; CASA
Set to Appeal
As the fiscal year drew to a
close, CASA was preparing to seek review in the
California Court of Appeal of a trial court decision
regarding the State Water Board's final order on the
City of Vacaville permit. On April 7, 2009. Contra
Costa County Superior Court Judge David Flinn
ruled on the key causes of action in the case,
which contests the legality of regulatory provisions
including the Tributary "Rule" and the State
Sources of Drinkiny Water Policy. In a relatively
brief decision, the court effectively upheld the 2002
State Water Board precedential order regarding the
NPDES permit for the City of Vacaville's Easterly
Wastewater Treatment Plant. The State Water
Board order in turn largely affirmed the 2001 permit
issued by the Central Valley Regional Water Board.
The State Water Board designated its decision
as "precedential," meaning this decision sets
precedent for other, similar permitting decisions by
Regional Boards throughout California.
CASA attorneys planned to file the notice of appeal
before the end of the calendar year. Funding
for the appeal was provided through voluntary
contributions from CASA members.
The issues that will be the focus of the appeal are
those most critical to CASA members. One of
the key issues in the case involves the application
(or misapplication) of the so-called "Tributary
Statement." CASA and Vacaville argued that
the Tributary Statement does not actually
"designate" beneficial uses, but rather requires
the Regional Water Board to conduct an analysis
of beneficial uses of tributary streams at the time
it proposes to apply water quality objectives to
those streams. The Court's decision essentially
concludes that, as long as the Reyional Water
Board has a process that allows the Basin
Plan to be amended to remove unsupported
beneficial uses, it passes muster with the courts.
Similarly, CASH and Vacaville argued that
establishing effluent limits based on a "drinking
water" beneficial use derived from Resolution
88-63, the Sources of Drinking Water Policy, is
unlawful. Resolution 88-63 has been held to be an
unlawful regulation by the Office of Administrative
Law (OAL) and, therefore, cannot be a proper
basis for designating beneficial uses. In addition,
Resolution 88-63 by its own terms does not
apply to waters such as agricultural drains such
as the one to which Vacaville discharges. The
court concluded that any improper designation
of beneficial uses can be cured by amending the
Basin Plan, placing the burden on dischargers to
establish that the receiving water is not a "source
of drinking water."
With regard to the third key issue,
the relevant Basin Plan contains
water quality objectives that are
based on maximum contaminant
levels (MCLs), which are adopted
by the California Department of
Public Health (CDPH). The Basin
Plan also contains "non-detect"
water quality objectives for certain
pesticides, and the Basin Plan
delegates the authority to the
Executive Officer and to EPA to
approve laboratory techniques.
CASA and Vacaville contended
that incorporating standards
adopted by other agencies is
an improper delegation of the
exclusive authority to adopt water
quality objectives. Because these
other agencies are not required
to consider the Water Code's
mandate of reasonableness or the
factors set forth in Water Code
section 13241, allowing these
other agencies to essentially
adopt water quality objectives for
the Regional Board bypasses the
legal requirements for adopting
water quality objectives. For
example, MCLs are adopted by
CDPH to be applied at the tap,
after treatment. EPA's lab analysis
standards are adopted without
consideration of their impact
on the attainability of effluent
limits. The Court found that
deference to CDPH's expertise
was appropriate, and that the
prospective incorporation does
not constitute delegation, and
that applying a moving detection
level as a water quality objective
was simply a source of scientific
information.
CASA Urges Ninth Circuit to
Review Panel Decision Dismissing
Constitutional Challenge to Kern
County Biosolids Ordinance
~ In the tall of 2009, CASA and its fellow plaintiffs,
including the City n1 Los Angeles, filed a request with
the United S(,il~i C;nurt of Appeals for the Ninth Circuit
to reconsider the decision issued by a three judge panel
that held the plaintiffs did not have standing to challenge
the ordinance in federal court. The subject of the lawsuit
ir; a 2006 initiative approved by Kem County, known as
"Measure E", which bans the land application of biosolids
in the unincorporated areas of Kern County. Biosolids
generators located in Kern County, such as the City of Bakersfield, are in the incorporated areas of
the county and hence immune from the Measure.
Among other claims, the lawsuit alleged that Measure E violates the dormant Commerce Clause.
The trial court agreed. (City of Los Angeles v. County of Kern, 509 F. Supp. 2d 865 (C.D. Cal.
2007).) But on appeal, the three judge panel held that the district court should not have reached
the merits, holding that plaintiffs lack prudential standing to sue under the dormant Commerce
Clause. The panel held that transporting biosolids from one part of California to another does
not burden the recyclers' protected interest in the interstate waste market, and thus Plaintiffs fell
outside the "zone of interests protected by the dormant Commerce clause.
The petition for rehearing pointed out that the panel decision conflicts with United States Supreme
Court precedent and is in conflict with other appellate decisions. The transport of biosolids from one
part of California to another substantially affects interstate commerce and therefore falls within the
purview of the dormant Commerce Clause. The panel's decision conflicts with the rule that a State
(or one of its political subdivisions) may not avoid the strictures of the Commerce Clause by curtailing
the movement of articles of commerce through subdivisions of the State, rather than through the
State itself. CASA's petition argued that Congress may regulate the transport of products such
as biosolids within a state. Congress routinely regulates in-state economic activity (or businesses
that operate solely in-state, on the theory that this economic activity substantially affects interstate
commerce. The panel's holding that the large-scale shipment of biosolids within Calrfomia -and the
economic consequences on interstate markets and pricing from relocating that shipment to Arizona
-does not even implicate the zone of interests protected by the dormant Commerce Clause is
contrary to Supreme Court precedent and in conflict with decisions from other federal circuits.
The National Associaton of Clean Water Agencies (NACWA) and the National Solid Waste
Management Association filed friend of the court briefs in support of the petition for rehearing. A
decision on the petition is anticipated in early winter.
~r
CASA Active as a Friend of the Court in
Several Cases
In addition to its litigation program,
CASA has provided friend of the court
(amicus) support for several cases
of interest to CASA members. In late
2008, the California Supreme Court
granted CASA's request to file an
amicus curiae brief in Communities
for a Better Environment v. South
Coast Air Quality Management
District (2007) 158 Cal.App.4th
1336 (CBE). The primary issue in
the case is how to determine the
proper baseline under the California
Environmental Quality Act (CEQA).
The Court of Appeal held the baseline
generally hinges on actual existing
(rather than permitted) conditions.
CBE requires documentation of prior
CEQA review for a lead agency to
consider performance in determining
baseline. If left to stand, CBE may
have far-reaching consequences for
CASH member agencies with permits
that require facility or operational
modifications or periodic renewal.
CASA was among those organizations
that supported Supreme Court
review of the case last spring. As
CASA explained to the Court, CBE
could substantially affect the ability
of member agencies to provide vital
wastewater services.
CASA also joined other local
government associations in filing a
brief in a case addressing whether a
contractor must be required to prove
either affirmative misrepresentation
or active concealment by a public
agency to maintain a contract action
for breach of implied warranty based
on nondisclosure. (Los Angeles Unified
School District v. Great American
Insurance Co.) CASA joined the
League of California Cities on the brief
in support of the Los Angeles Unified
School District, urging the Court to
overturn the decision of the California
Court of Appeal, which held that a
mere negligent omission of information
is sufficient to support a contract
action for breach of the implied
warranty of correctness of plans and
specifications.
In the amicus brief, CASA and the
League argued that the decision in
Great American adopts a new standard
amounting to strict liability for public
agencies. The brief points out that
other district courts of appeal have
required a showing of intentional
concealment or positive assertions
of misleading information in order to
find liability. Without such a standard,
the public entity would essentially
become a guarantor for the contractor
and encourage careless bidding. In
its statement of interest in the case,
CASA notes that its members routinely
engage in planning, design and
construction of water and wastewater
capital improvements in order to
provide essential public services. The
vast majority of these projects are
constructed by private contractors
pursuant to a public bidding process
by which the agency is required by
law to award construction contracts
to the lowest responsible bidder.
Given the growing need for repair
and replacement of essential public
infrastructure, local agencies are
confronted with the escalating costs of
constructing these projects. In addition,
CASA members are subject to permits
under federal and state environmental
statutes that often require construction
of treatment upgrades and other
improvements within compressed
timeframes. The amicus brief points
out that CASA's members are deeply
concerned about the Court of Appeal
decision because of the specter of
increased legal exposure and costs of
constructing essential public projects.
CASA Executive Board
Approves Updates to
Litigation Policy
As part of the Association's strategic
planning effort, the CASA Executive
Board established a subcommittee
to review and revise the Litigation
Policy, which was last amended in
2003. The subcommittee members
were First Vice President Ron
Young, Director Jeffrey Hansen, and
Attorneys Committee Chair Mark
Cornelius. One of the key issues the
subcommittee addressed was the
manner in which litigation should be
funded. After considering various
models, including the solicitation of
individual agency contributions, the
subcommittee recommended that
approved litigation be considered
a core program and funded as
part of the regular budget. Under
the revised policy, adopted by the
Executive Board in May, funding
will be included in CASA's annual
General Fund budget for approved
litigation related expenses, including
payment of attorneys' fees and
costs for approved litigation.
The CASA Executive Board has
established a Legal and Regulatory
Reserve Fund to enable the
organization to retain adequate
financial resources for present and
future legal activities. The Executive
Board retains the authority to
transfer these reserve funds into the
General Fund as needed as well
as replenish the reserve fund on
an annual basis to its established
level. Because initial funding for the
Vacaville litigation was provided
through voluntary contributions, the
Executive Board chose to continue
that funding method for the
appeal phase. The revised policy
will apply to litigation initiated in
the future.
California Association of Sanitation Agencies
l~s BIOSOLIDS PROGRAM
California Biosolids EPA is Required to Reassess Incinerator
Management Options Regulations and Definition of Solid Waste
used in 2008
In Jui ie 2~~ ,the DC Ciraiit Court nilnd against EPA in ,3 c,~sF: uiv~lving ho~.v
Ai,lxoxinialely ~ SO.unfl rlry metric. they regulate Incinerators and boilers under fhe Clean Air Acl. As a result, they
tons (DM ij of California Biosolids published an Advance Notice of Potential Rulemaking on January 2, 2009
were recycled or disposed of in 2008. for public comment. The main issues focus on the definition of solid waste,
Highlights of options utilized include: in particular the distinction of what is "discarded" versus what is a legitimate
• 178,000 dmt (24°%) were land "alternative fuel." and the development of appropriate Maximum Achievable
applied as Class B Control Technology (MACT) standards. CASA and others provided comments to
• 341,000 dmt (45%) were land EPA, urging that Biosolids and digester gas be considered legitimate alternative
applied or publicly distributed as fuels and not discarded materials. The main anticipated outcome rf Biosolids are
Class A considered a discarded solid waste is a change in regulation that would be applied
• 105.000 dmt (14%) were used as to incinerators. HistoriCaly sewage sludge incinerators have been regulated under
alternative daily or final cover at section 112 of the Clean Air Act, but would likely become regulated under section
landfills 129 of the Clean Air Act. MACT standards would also be imposed on them.
• 74,000 dmt (10%) were landfilled
• 21,000 dmt (-3%) were incinerated
• 20,000 dmt (-2.5°'°) were surface
disposed or placed on dedicated
land disposal sites
• 11,000 dmt (-1.5°0) were
beneficially used in other
An agreement was reached that extended the process so that now proposed
regulations are due in April 2010 and final regulations in December 2010.
CASA Lends Support to Southern California
Reclamation Efforts
applications In the wake of the devastating Freeway Complex Fires that ravaged Orange,
Riverside and San Bernardino Counties in November 2008, the Santa Ana
Regional Water Board passed an emergency resolution to facilitate the use
of compost, including Biosolids compost, to provide erosion control
and reclamation to the burned areas. Several encouraging
meetings were held and attended by CASA. CASA members
including compost producers, regulatory staff from
the Regional Water Board, the California Integrated
1w,tste Management Board. Cal Trans, the State
~ P;uk Service, UC Riverside and other compost
xlucers and appliers. A significant hurdle
s pairing land owners or responsible public
jurisdictions with funding and reclamation
opportunities. Compost producers
and even some applicators offered to
provide services at a greatly reduced
cost but there have been no projects
implemented, to date. State Park
philosophy that fire is a natural part of the life cycle and
that impacts are not mitigated. However, research on
the benefits of compost on fire ravaged land is ongoing
through UC Riverside. Also, on October 23, 2009, the
Santa Ana RWB extended the resolution to be effective
until 2014, which will continue to facilitate such use on
future fires in the region, which have been declared a
disaster area by the Governor.
CASA Progressing on
Cross Media Issues
A CASA working group led by CASA Biosolids
Program Manager Greg Kester, Stepahnie Cheng
(EBMUD), Mary Jane Foley and John Pastore (SCAP),
Jim Dunbar (Potrero Hills Landfill), Matt Bao (LACSD)
Zacary Kay (City of Santa Rosa) Bob Gillette (Carollo
Engineers), Jim Colston (OCSD) and Lorrie Loder
(Synagro) developed a cross media questionnaire
and checklist, which was presented to Cal EPA
in late April 2009. During the meetings, the group
proposed atwo-thronged approach to identify and
mitigate potential cross media impacts that arise
from the rulemaking process. Top officials of the
California Integrated Waste Management Board,
State Water Resources Control Board and California
Air Resources Board staff provided input and were
pleased with CASA's efforts to introduce a new culture
of cooperation. The Air Resources Board and State
Water Board were expected to consider incorporating
the questionnaire into their respective Regulatory
Development Guidance training and Water Training
Academy. As AB 32 is implemented, we are seeing
more cooperation and communication between the
various agencies in CAL EPA and remain hopeful that
cross media issues are now on everyone's radar and
the documents developed as part of this process will
be fully utilized.
EPA Alarms CA:
Plan to Change
Factor
Revealing
ncer Slope
In a move that could have far-reaching consequences
for wastewater and drinking water agencies, the
EPA released a proposed strategy in early 2009 to
dramatically increase the Integrated Risk Information
System (IRIS) cancer slope factor (CSF) for inorganic
arsenic. The EPA proposal hinted of an increase in
the cancer slope factor from 1.5 mg/kg to 30.5 mg/
kg. If implemented, the action would represent a
20-fold increase in risk assumed from arsenic, and
would likely force limits for effluent, recycled water,
drinking water and potentially biosolids to be made
dramatically more stringent. There is debate regarding
the science and process used in establishing the
proposed CSF.
It was determined biosolids would likely be less
impacted because most of the arsenic present in
biosolids is in the organic form. Nevertheless, for
water, those impacts would be significant.
EPA Explains
In response to a CASA inquiry as to the status of the
proposed changes, Linda Tuxen, Special Assistant to
the Director of the National Center for Environmental
Assessment in the Office of Research and
Development, stated in late July 2009 that the EPA
document had not passed internal review and should
never have been released externally. She added that
Administrator Lisa Jackson would consider options
before making any decision and no timetable had
been established on when that decision would be
made.
CASA Watches and Waits
CASA will continue to monitor the cancer slope
ractor issue to ensure sound science and appropriate
protocols are followed regarding any change to the
IRIS factor.
Research Proposed for
Trace Organics in Land
Applied Biosolids
CASA Biosolids Manager Greg
Kester was selected as one of four
individuals to serve on a Steering
Committee with a panel of recognized
research experts to develop a
coherent preliminary research plan
for trace organic compounds in land-
applied biosolids. The committee
was formed under the leadership of
the Metropolitan Water Reclamation
District of Greater Chicago (MWRD)
and the Water Environment Research
Foundation (WERE). Its objective
is to provide EPA with scientifically
defensible research so that risk
evaluations may be conducted for
perfluorinated compounds, some
pharmaceuticals and steroidal
hormones.
A survey is currently being conducted
and has been sent to CASA
members, NACWA members and
members of Regional Biosolids
Associations across the country. A
state of the science (SOS) review
is underway and is being funded
by WERE with a completion date
expected in early 2010. The survey
and SOS review will help to further
inform the research plan which will
identify and attempt to fill the most
critical data gaps needed to conduct
effective risk assessments. A concern
of the wastewater community is that
without filling these gaps, EPA may
still feel compelled to conduct risk
assessments with what data they
have, and this would not recognize
the truly unique matrix that is
biosolids.
First Lady and Contaminated Sludge -
Not a Chance!
In June 2009, Mother Jones, the news organization which touts itself as
producers of "smart, fearless journalism," criticized Michelle Obama's
vegetable garden she started with the help of area schoolchildren. Mother
Jones claimed the garden was planted in soil that was highly contaminated
with lead from biosolids compost applications made to the White House lawn
in the early 1990s. The allegation had no scientific basis and was refuted by
three high-profile sources: The Baltimore Sun, Huffington Post (which earlier
supported the Mother Jones article) and the White House food and garden
blog on the project Obama Foodorama. Scientists quoted in the refutations
referred to the White House lead levels of 93 mg/kg as "laughably low for an
urban environment" and entirely suitable for use as a vegetable garden. They
speculated the source of such lead probably stems from lead paint or from
aerosol deposition of gasoline fumes when gas used to contain lead.
Food Show to Showcase Garden's
Healthy Benefits
To underscore the true nutritional value of the White House vegetable garden,
the Food Network announced in November 2009 that it would host an episode
of "Iron Chet America" using the First Lady's vegetable garden as a culinary
backdrop. Top chefs Mario Batali, Bobby Flay and Emeril Lagasse along with
White House Chef Cristeta Comerford will be welcomed by Michelle Obama
and allowed to use anything found in the garden to help create their meals.
Stay tuned! The episode airs January 3, 2010.
Ga'tornia Association of Sanitation Agenc
~'~~ en~n~i iei r_nni
~e
FERENCE
;ASA was formed in 1955 to provide leadership, advocacy and
information to our members, legislators, and the public, and !o
promote partnerships on clean water and beneficial reuse
issues that protect public health and the environment. Any
local public agency or public organization authorized by
law to engage in the collection, treatment, or disposal
of wastewater or the reclamation of water is
eligible for membership. Currently, CASA's
membership represents 90 percent of the
sewer population in the state.
I
Centra! Contra Costa Sanitary
District -Technological Ach~evemen7
Award (or "Aeration Air Renovations'
ANNUAL CONFERENCE CONTINUED
\' } Y ~~~~
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3
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~ M
'!'~.•.
_.. ,_~
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~ ~
General
Session at the
CASA Annual
Conference.
Awards Committee Vice Chair Ed
McCormick. Easi Bay Municipal
Utility District and Awards
Committee Chair Kathleen Werner,
Goleta Sanitary District
'.i
J~
CASH Federal Legrslatrve
Arlvrxxate, Fric S;rphstrrn
actrny as ernc~~ drxi
Udec,ior nl L egal and
Regulatory Affairs, Rnf,xar
Larson.
~~
California Association of
Sanitation Agencies
p ~ +? 1: '~ ~~~ a:. Sire ~29G
Sacramento, CA 95814
16.446.0388 phone
916.231.2141 fax
www.casaweb.org
~.E.
Central Contra Costa Sanitary Distrect
FAX: (925) 228-4624
JAMES M. KELLY
January 28, 2010 Gene21 Manager
KENTON L. ALM
Counsel !or the District
(510) 808.2000
ELAINE R. BOEHME
Ms: Marilyn Leedom SecretaryoltheDishict
Retirement Chief Executive Officer
Contra Costa County Employees' Retirement Association
1355 Willow Way, Suite 221
Concord, CA 94520 /{~~~
RE: CONTRA C COUNTY EMPLOYEE'S RETIREMENT SYSTEM DE-POOLING STUDY
Dear Ms. dom,
The Central Contra Costa Sanitary District (the District) philosophically agrees with de-pooling and the
transparency it brings for the public. The District does have a responsibility to our ratepayers to ensure
the de-pooling is accomplished equitably. The District has received a copy of the Segal Company's
January 6, 2010 letter summarizing the results of their de-pooling study. We would like to receive more
information on the detail of Segal's calculations and assumptions. Please note that the District is
seeking enough information to allow us to have an outside actuary review Segal's calculations and
assumptions for reasonableness of both method and results. At this time we requesting the data Segal
used to arrive at their results. We would like to understand the following:
1. What was the District's stand alone December 31, 2002 Unfunded Actuarial Liability (UAL) and
how did that Unfunded Actuarial Liability change as it was brought forward to December 31,
2008?
2. Is.the UAL the only component of the District's estimated 3:94% rate increase?
The information we receive may also lead to. other questions. If you and/or the Segal Company have
any questions about the requested or needed data", please call (925-229-7305) or have the Segal
Company directly contact Mr. John Bartel (650-377-1601). As an additional note, we understand the
Segal Company is presenting the last of their analysis at the Board's second February meeting. We'd
like to request that the Board not take action until we have had time to review the calculation detail.
This analysis might take 3-4 weeks after we get the requested information.
Sincerely,
J es M. Kelly
eneral Manager
cc: Randall Musgraves, Director of Administration
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`• Fargo, ND 58125-6343 I ACCOUNT NUMBER .'4248 0400-1370 564Z•;.
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' ~ ~ ;STATEMENT DATE ~ i`-'11 23 09,~-d~~
, TOTAL ACTIVITY` - 5 5 223.51`_ r
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~nl~Jl~l'I~IItIIII~h1111~1111I'Iilhl~~t~ltlihl~lyl~l~,ll..1 'MEMO STATEMENT ONfLY,= ~ I' i»
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DATE >:: DATE ;:^ TRANSACTION DESCRIPTION ,~-,~ ~ +y-'•+t ~ _REFERENCE,NUMEiER' , i MCC ? AMOUNT ,, ~f ; °'`
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