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Home My WebLink About10/15/2009 AGENDA BACKUPCentral Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 3.c. Consent Calendar Type of Action: ACCEPT CONTRACT WORK /AUTHORIZE FILING OF THE NOTICE OF COMPLETION Subject: ACCEPT THE CONTRACT WORK FOR THE HEADWORKS AND MECHANICAL SHOP ROOFS, DISTRICT PROJECT 7211, AND AUTHORIZE FILING OF THE NOTICE OF COMPLETION Submitted By: Initiating Dept. /Div.: Dana Lawson, Associate Engineer Engineering / Capital Projects REVIEWED AND RECOMMENDED FOR BOARD ACTION: k�on - AA--� D. Lawson B. Than cki A. Farrell Jame .Kelly, Gener Manager ISSUE: Construction has been completed on the Headworks and Mechanical Shop Roofs, District Project 7211, and the work is ready for acceptance. RECOMMENDATION: Accept the contract work for the Headworks and Mechanical Shop Roofs, District Project 7211, and authorize filing of the Notice of Completion. FINANCIAL IMPACTS: None related to this action. ALTERNATIVES /CONSIDERATIONS: Not applicable. Filing the Notice of Completion is advisable under the California Civil Code, Section 3093. BACKGROUND: Both the Headworks Building and the Mechanical Shop/ Warehouse roofs have experienced deterioration due to the low pH of the vapor coming from the Odor Control Units adjacent to the Headworks Building. Both roofs were rehabilitated with a protective coating designed for industrial/ corrosive environments. On May 21, 2009, the Board of Directors authorized the award of a contract for the construction of the project to Best Contracting Services. The Notice to Proceed was issued on July 13, 2009. The work was substantially completed on September 18, 2009. The remaining items of work consist of minor punch -list items, which do not affect the project acceptance. Immediately upon acceptance, the contractor is relieved of the duty of maintaining and protecting the contract work. Guaranty and warranty periods required by the contract and the statutory period for filing of liens and Stop Notices start on the date of acceptance by the Board of Directors. Final payment to the contractor is made after expiration of the statutory period for filing of liens and Stop Notices, provided no liens or Stop Notices have been filed, and provided the punch -list items have been completed. N: \PESUP \Position Papers \Lawson \7211 Accept Contract Work NOC.doc Page 1 of 2 POSITION PAPER Board Meeting Date: October 15, 2009 Subject: ACCEPT THE CONTRACT WORK FOR THE HEADWORKS AND MECHANICAL SHOP ROOFS, DISTRICT PROJECT 7211, AND AUTHORIZE FILING OF THE NOTICE OF COMPLETION The total authorized budget for the project is $250,000. The budget includes the cost of engineering design, construction management and inspection, testing services, and contractor services. An accounting of the project costs will be provided to the Board at the time of project closeout. It is appropriate to accept the contract work at this time. RECOMMENDED BOARD ACTION: Accept the contract work for the Headworks and Mechanical Shop Roofs, District Project 7211, and authorize filing of the Notice of Completion. N:\PESUP \Position Papers \Lawson \7211 Accept Contract Work NOC.doc Page 2 of 2 Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 3.d. Consent Calendar Type of Action: ACCEPT CONTRACT WORK/AUTHORIZE FILING OF THE NOTICE OF COMPLETION subject: ACCEPT THE CONTRACT WORK FOR THE A -LINE RELIEF INTERCEPTOR, PHASE 2A, DISTRICT PROJECT 5980, AND AUTHORIZE FILING OF THE NOTICE OF COMPLETION Submitted By: Initiating Dept. /Div.: Alex Rozul, Senior Engineer Engineering / Capital Projects REVIEWED AND RECOMMENDED FOR BOARD ACTION: A. Roz A.A. Farrell James ellY, Gener ISSUE: Construction has been completed on the A -Line Relief Interceptor, Phase 2A, District Project 5980, and the work is now ready for acceptance. RECOMMENDATION: Accept the contract work for the A -Line Relief Interceptor, Phase 2A, District Project 5980, and authorize filing of the Notice of Completion. FINANCIAL IMPACTS: None related to this action. ALTERNATIVES /CONSIDERATIONS: Not applicable. Filing the Notice of Completion is advisable under the California Civil Code, Section 3093. BACKGROUND: The A -Line Relief Interceptor, Phase 2A, is a joint project with the City of Concord consisting of two components: 1) construction of approximately 3,100 linear feet of 96 -inch diameter concrete sewer pipe, the A -Line Relief Interceptor through Buchanan Fields Golf Course and across Concord Avenue, and 2) construction of approximately 1,455 linear feet of 48- and 72 -inch diameter pipelines from the Concord Pumping Station to the proposed A -Line Relief Interceptor pipeline at the Meridian Park Boulevard /Galaxy Way intersection, Concord's gravity connection to the A -Line Relief Interceptor. Concord has accepted the gravity connection work as complete. On October 18, 2007, the Board of Directors authorized the award of a contract for the construction of the project to Mountain Cascade, Inc. The Notice to Proceed was issued on February 18, 2008. The work was substantially completed on September 18, 2009. The remaining items of work consist of minor punch -list items, which do not affect the project acceptance. N IPESUMCbradley \POSITION PAPERS \Rozul \5980 - AcceptContractWork.doc Page 1 of 2 POSITION PAPER Board Meeting Date: October 15, 2009 subject. ACCEPT THE CONTRACT WORK FOR THE A -LINE RELIEF INTERCEPTOR, PHASE 2A, DISTRICT PROJECT 5980, AND AUTHORIZE FILING OF THE NOTICE OF COMPLETION Immediately upon acceptance, the Contractor is relieved of the duty of maintaining and protecting the Contract work. Guaranty and warranty periods required by the Contract and the statutory period for filing of liens and Stop Notices start on the date of acceptance by the Board of Directors. Final payment to the Contractor is made after expiration of the statutory period for filing of liens and Stop Notices, provided no liens or Stop Notices have been filed, and provided the punch -list items have been completed. The total authorized budget for the project is $24,790,000. The budget includes the cost of engineering design, construction management and inspection, testing services, and contractor services. An accounting of the project costs will be provided to the Board at the time of project closeout. It is appropriate to accept the contract work at this time. RECOMMENDED BOARD ACTION: Accept the contract work for the A -Line Relief Interceptor, Phase 2A, District Project 5980, and authorize filing of the Notice of Completion. N:\PESMCbradley \POSITION PAPERS \Rozu1\5980 - AcceptContractWork.doc Page 2 of 2 Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009. No.: 3.e. Consent Calendar Type of Action: ADOPT RESOLUTION Subject: ADOPT A RESOLUTION ACCEPTING A GRANT OF EASEMENT IN THE CITY OF ORINDA FROM MARY C. SEARBY, AND AUTHORIZING STAFF TO RECORD THE EASEMENT DEED WITH THE CONTRA COSTA COUNTY RECORDER (JOB 29, PARCEL 17') Submitted By: Initiating Dept✓Div.: Molly Mullin, Senior Right of Way Agent Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: t M. Mullin S. and C. Swanson A.A. Fa mes elly, eneral anager ISSUE: A resolution of the Board of Directors is required to accept grants of easements and to authorize staff to record documents. RECOMMENDATION: Adopt a resolution accepting a grant of easement and authorizing staff to record the easement deed with the Contra Costa County Recorder. FINANCIAL IMPACTS: The new easement was acquired at no cost to the District. ALTERNATIVES /CONSIDERATIONS: None. BACKGROUND: The Board of Directors regularly accepts easements by resolution. The recommended resolution will accept a newly executed easement from the current property owner of 30 St. Stephens Drive, Orinda. During plan review for a proposed carport upgrade project, staff determined that though a public main was installed on the property in 1955, no easement was ever recorded. The current property owner has now executed a grant of easement. Staff reviewed the easement documents and determined that they are in compliance with District standards. RECOMMENDED BOARD ACTION: Adopt a �VGgS S FOA a0 o o Q D Q° sy w 4w a 2 ' o m A42-, P SITE A42-, 'YOA N ppNCN RD El N \O� ao� VICINITY MAP N.T.S. resolution accepting a grant of easement from Mary C. Searby, in the city of Orinda, and authorizing staff to record the resolution with the Contra Costa County Recorder. 'Easement parcel numbers are for internal job log use only. NAENVRSEMPosition Papers Wlullin\2009 \5860_FP_GOE Searby - FINAL 10- 15- 09.doc Central Contra Costa Sanitary District d AQ ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 Type of Action: ADOPT RESOLUTION No.: 3.f. Consent Calendar subject: ADOPT A RESOLUTION ACCEPTING AN OFFER OF DEDICATION FROM STEPHEN BARBATA FOR AN EASEMENT IN THE CITY OF WALNUT CREEK, AND AUTHORIZING STAFF TO RECORD THE RESOLUTION WITH THE CONTRA COSTA COUNTY RECORDER (JOB 5732, PARCEL 4') Submitted By: Initiating Dept ✓Div.: Pat Camorongan, Engineering Assistant III Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD AC P. Camorongan J. Mi amoto -Mills C. Swanson A. Farrell ames Kelly General anager ISSUE: A resolution of the Board of Directors is required to accept offers of dedication, and to authorize staff to record documents. RECOMMENDATION: Adopt a resolution accepting an offer of dedication for an easement in the town of Danville, and authorizing staff to record the resolution with the Contra Costa County Recorder. FINANCIAL IMPACTS: The new easement was acquired at no cost to the District. ALTERNATIVES /CONSIDERATIONS: None. BACKGROUND: The Board of Directors regularly accepts easements by resolution. The recommended resolution will accept an easement required for a recent sewer extension off Orchard Estates in the city of Walnut Creek. Staff has reviewed the easement documents and determined that they are in compliance with District standards. RECOMMENDED BOARD ACTION: Adopt a resolution accepting an offer of dedication from Stephen Barbata for an easement in the city of Walnut Creek, and authorizing staff to record the resolution with the Contra Costa County Recorder. 'Easement parcel numbers are for internal job log use only. ao G�PC\O o QIb�qM'r ° GREEK Po ORCHARD WALNUT AVE ESTATES n NORTH y G) rn r y A SITE oPO �a VICINITY MAP N.T.S. N: \ENVRSEC \Position Papers \Camorongan \10 -15 -09 Board Mtg \5732_PP Barbata - FINAL 10- 15- 09.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 3.g. Consent Calendar Type of Action: ADOPT RESOLUTION Subject: ADOPT A RESOLUTION ACCEPTING AN OFFER OF DEDICATION FROM GOLDEN BUFFALO, LLC, FOR AN EASEMENT IN THE TOWN OF DANVILLE, AND AUTHORIZING STAFF TO RECORD THE RESOLUTION WITH THE CONTRA COSTA COUNTY RECORDER (JOB 5736, PARCEL 1') Submitted By: Initiating Dept. /Div.: Pat Camorongan, Engineering Assistant III Engineering /Environmental Services /RRE D E'VIIEEWW.ED AND RECOMMENDED FOR BOARD ACTION: P. Camorongan J. Miy oto-Mi ls '` /', C. Swanson A ames WKelly eneral Manager ISSUE: A resolution of the Board of Directors is required to accept offers of dedication, and to authorize staff to record documents. RECOMMENDATION: Adopt a resolution accepting an offer of dedication for an easement in the town of Danville, and authorizing staff to record the resolution with the Contra Costa County Recorder. FINANCIAL IMPACTS: The new easement was acquired at no cost to the District. ALTERNATIVES /CONSIDERATIONS: None. BACKGROUND: The Board of Directors regularly accepts easements by resolution. The recommended resolution will accept an easement required for a recent sewer extension off Lawrence Road in the town of Danville. Staff has reviewed the easement document and determined that it is in compliance with District standards. BLACKHAWK — RD 0149 O UE LAWRENCE RD SITE RECOMMENDED BOARD ACTION: Adopt a resolution accepting an offer of dedication from Golden Buffalo, LLC, for an easement in the town of Danville, and authorizing staff to record the resolution with the Contra Costa County Recorder. *Easement parcel numbers are for internal job log use only. VICINITY MAP N:\ENVRSEC \Position Papers \Camorongan \10 -15 -09 Board Mtg \5736_ PP Buffalo Pei 1 - FINAL 10- 15- 09.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 Type of Action: ADOPT RESOLUTION No.: 3.h. Consent Calendar Subject. ADOPT A RESOLUTION ACCEPTING AN OFFER OF DEDICATION FROM GOLDEN BUFFALO, LLC, FOR AN EASEMENT IN THE TOWN OF DANVILLE SHOWN ON THE MAP OF MINOR SUBDIVISION MS 851 -2003, AND AUTHORIZING STAFF TO RECORD THE RESOLUTION WITH THE CONTRA COSTA COUNTY RECORDER (JOB 5795, PARCEL 1 *) Submitted By: Initiating Dept /Div.: Pat Camorongan, Engineering Assistant III Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: I,-- P. Camorongan J. Mi oto -Mills C. wanson A. Farre Jame .Kelly General Manager ISSUE: A resolution of the Board of Directors is required to accept offers of dedication and to authorize staff to record documents. RECOMMENDATION: Adopt a resolution accepting an offer of dedication for an easement in the town of Danville, and authorizing staff to record the resolution with the Contra Costa County Recorder. FINANCIAL IMPACTS: The new easement was acquired at no cost to the District. ALTERNATIVES /CONSIDERATIONS: None. BACKGROUND: The Board of Directors regularly accepts easements by resolution. The recommended resolution will accept an easement shown on the map of minor subdivision MS 851 -2003 required for a recent sewer extension off Lawrence Road in the town of Danville. Staff has reviewed the subdivision map and determined that it is in compliance with District standards. RECOMMENDED BOARD ACTION: Adopt a resolution accepting an offer of dedication from Golden Buffalo, LLC, for an easement in the town of Danville ogM�No SYCp'lA� T BLACKHAWK VAR° RD RD a DAnM d M9LZ I o LAWRENCE GPN °N RD SITE CANYON Rp e° VICINITY MAP N.T.S. shown on the map of minor subdivision MS 851 -2003, and authorizing staff to record the resolution with the Contra Costa Countv Recorder. 'Easement parcel numbers are for internal job log use only. N: \ENVRSEC \Position Papers \Camorongan \10 -15 -09 Board Mtg \5795_ PP 01 Buffalo - FINAL 10- 15- 09.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 3.i. Consent Calendar Type of Action: ADOPT RESOLUTION Subject: ADOPT A RESOLUTION ACCEPTING AN OFFER OF DEDICATION FROM MONTKARL, LLC, FOR AN EASEMENT IN THE TOWN OF DANVILLE SHOWN ON THE MAP OF MINOR SUBDIVISION MS 858 -2000, AND AUTHORIZING STAFF TO RECORD THE RESOLUTION WITH THE CONTRA COSTA COUNTY RECORDER (JOB 5795, PARCEL 2') Submitted By: Initiating Dept✓Div.: Pat Camorongan, Engineering Assistant III Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: P. Camorongan J. amoto -Mills C. Swanson A. Farrell mes . Kelly Oe nera Manager ISSUE: A resolution of the Board of Directors is required to accept offers of dedication, and to authorize staff to record documents. RECOMMENDATION: Adopt a resolution accepting an offer of dedication for an easement in the town of Danville, and authorizing staff to record the resolution with the Contra Costa County Recorder. FINANCIAL IMPACTS: The new easement was acquired at no cost to the District. ALTERNATIVES /CONSIDERATIONS: None. BACKGROUND: The Board of Directors regularly accepts easements by resolution. The recommended resolution will accept an easement shown on the map of minor subdivision MS 858 -2000 required for a recent sewer extension off Lawrence Road in the town of Danville. Staff has reviewed the subdivision map and determined that it is in compliance with District standards. RECOMMENDED BOARD ACTION: Adopt a resolution accepting an offer of dedication from Montkarl, LLC, for an easement in the town of Danville shown on the map of minor subdivision MS 858 -2000, and authorizing staff to record the C,gMNO SY VA T BLACRKHHAWK L RD LAWRENCE �ION RD O SITE CROP CANYON Rp e 1 VICINITY MAP N.T.S. resolution with the Contra Costa County Recorder. 'Easement parcel numbers are for internal job log use only. N:\ENVRSEC \Position Papers \Camorongan \10 -15 -09 Board Mtg \5795_ PIP 02 Montkarl -FINAL 10- 15- 09.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 3.j . Consent Calendar .Type of Action: APPROVE PROGRAM EXPANSION; AUTHORIZE AGREEMENT subject: APPROVE EXPANSION OF THE PHARMACEUTICAL COLLECTION PROGRAM AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE MEMORANDA OF UNDERSTANDING WITH THE CITY OF CLAYTON, CITY OF CONCORD, TOWN OF DANVILLE, CITY OF MARTINEZ, TOWN OF MORAGA, AND CITY OF ORINDA FOR A PHARMACEUTICAL COLLECTION PROGRAM. Submitted By: Initiating DeptJDiv.: David Wyatt, HHW Supervisor Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: D. Wyatt C. Swanson A. Farrell Jam M. Kelly General Manager ISSUE: The Board of Directors' approval is requested to approve the expansion of the Pharmaceutical Collection Program and authorize the General Manager to execute memoranda of understanding (MOU) with the City of Clayton, City of Concord, Town of Danville, City of Martinez, Town of Moraga, and the City of Orinda to be a partner in the District's Pharmaceutical Collection Program. RECOMMENDATION: Approve expansion of the Pharmaceutical Collection Program and authorize the General Manager to execute MOU with the City of Clayton, City of Concord, Town of Danville, City of Martinez, Town of Moraga, and the City of Orinda to be a part of the District's Pharmaceutical Collection Program. FINANCIAL IMPACTS: The annual operating cost per pharmaceutical collection site is estimated to average between $6,000 and $8,000. The annual operating cost is estimated to be $54,000 to $72,000 annually for the current three sites and six expansion collection sites. These costs include waste disposal, outreach, and some administrative costs. ALTERNATIVES /CONSIDERATIONS: Alternatives would be to not expand and continue with the current three collection sites in Martinez and Walnut Creek or consider other types of pharmaceutical collection alternatives. BACKGROUND For the past eight months, the Contra Costa County Office of the Sheriff, City of Walnut Creek, and the District have been operating the Pharmaceutical Collection Program. Residents drop off unwanted pharmaceuticals in secure collection bins located at the Walnut Creek City Hall, Sheriff Field Operations Bureau and County Hospital. Collection bins for the Sheriff and County Hospital were purchased by the District, and the Central Contra Costa Solid Waste Authority (CCCSWA) bought the bin for Walnut N: \ENVRSEC \Position Papers \Wyatt\2009 \PP Expand Pharm Coll Program 10- 15- 09.doc POSITION PAPER Board Meeting Date: October 15, 2009 Subject. APPROVE EXPANSION OF THE PHARMACEUTICAL COLLECTION PROGRAM AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE MEMORANDA OF UNDERSTANDING WITH THE CITY OF CLAYTON, CITY OF CONCORD, TOWN OF DANVILLE, CITY OF MARTINEZ, TOWN OF MORAGA, AND CITY OF ORINDA FOR A PHARMACEUTICAL COLLECTION PROGRAM Creek. Each city is responsible for obtaining Drug Enforcement Agency (DEA) approval for its collection site and supervising the collection and storage of the unwanted pharmaceuticals. The District is responsible for arranging and paying for the costs of disposal of the collected pharmaceutical wastes and outreach. Since February, the three collection sites have collected more than 3,000 pounds of pharmaceuticals at a cost of about $12,000. The Walnut Creek site has accounted for over 70 percent pharmaceuticals collected. On July 16, 2009, the Board approved continuing the Walnut Creek pharmaceutical collection program on a permanent basis. At this meeting, staff advised the Board that other cities have inquired about having collection programs in their communities. The HHW Committee considered expansion of the Pharmaceutical Collection Program to other cities in the District service area on August 24, 2009. The HHW Committee recommended that the collection program be expanded to any interested city. Letters of interest were sent to cities that are not currently participating in the program. Staff received responses from six cities (Clayton, Concord, Danville. Martinez, Moraga and Orinda) asking for a collection program in their city. Lafayette, Pleasant Hill, and San Ramon declined the District's offer. The letter explained, as with the Sheriff and Walnut Creek sites, that their city's law enforcement group would be responsible for the collection and management of the unwanted pharmaceuticals until they are picked up for disposal. Collection containers would be purchased by CCCSWA, Allied Waste, and Concord Disposal. RECOMMENDED BOARD ACTION: Approve expansion of the Pharmaceutical Collection Program and authorize the General Manager to execute MOU with the City of Clayton, City of Concord, Town of Danville, City of Martinez, Town of Moraga, and the City of Orinda to be a partner in the District's Pharmaceutical Collection Program. N:\ENVRSEC \Position Papers \Wyatt\2009 \PP Expand Pharm Coll Program 10- 15- 09.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 NO.: 3.k. Consent Calendar Type of Action: AUTHORIZE AGREEMENT subject: AUTHORIZE THE GENERAL MANAGER TO EXECUTE PROPERTY RESTORATION AND LOSS OF REVENUE COMPENSATION AGREEMENTS WITH BUCHANAN FIELDS GOLF COURSE, INC. RELATED TO THE A -LINE RELIEF INTERCEPTOR, PHASE 2A PROJECT, DP 5980 Submitted By: Initiating Dept /Div.: Alex Rozul, Senior Engineer Engineering / Capital Projects REVIEWED AND RECOMMENDED FOR BOARD ACTION: A. R62ul ! ilecki / I PrAlm ISSUE: Board of Directors' authorization is required for the General Manager to enter into agreements where no clear authority has been granted from the Board. RECOMMENDATION: Authorize the General Manager to enter into property restoration and loss of revenue compensation agreements with Buchanan Fields Golf Course, Inc. (BFGC) for activities related to the A -line Relief Interceptor, Phase 2A Project, District Project 5980. FINANCIAL IMPACTS: Compensation for restoration of the'golf course is $118,500. Compensation for lost profit is being negotiated and is not expected to exceed $70,000. ALTERNATIVES /CONSIDERATIONS: The Board can decide not to delegate authority to the General Manager to execute the agreements. BACKGROUND: Contra Costa County (County) owns the underlying land rights to the BFGC and leases the property to Buchanan Fields Golf Course, Inc. In order to proceed with the construction of the A -line Relief Interceptor, Phase 2A Project in a timely manner, the District obtained Rights -of -Entry Agreements (ROE) from the County and BFGC in October 2007. The District adopted a Resolution accepting a Grant of Easement from the County at the June 18, 2009 Board meeting. The District compensated the County $116,400. The ROE with BFGC included terms that required the District to compensate BFGC a negotiated cost to restore any areas damaged by project construction and to reimburse the BFGC for lost business profit due to project activities. Upon completion of all contract work affecting the golf course in March 2009, BFGC provided restoration proposals from several registered golf course landscapers. Staff negotiated a final compensation amount of $123,500 for golf course and parking lot restoration. Mountain Cascade, Inc. was responsible for some of the parking lot damage and N: \PESUP \Cbradley \POSITION PAPERS \Rozu1\5980- BFGC Comp PP TJP.doc Page 1 of 2 POSITION PAPER Board Meeting Date: October 15, 2009 subject. AUTHORIZE THE GENERAL MANAGER TO EXECUTE PROPERTY RESTORATION AND LOSS OF REVENUE COMPENSATION AGREEMENTS WITH BUCHANAN FIELDS GOLF COURSE, INC. RELATED TO THE A -LINE RELIEF INTERCEPTOR, PHASE 2A PROJECT, DP 5980 provided $5,000 for their share of that restoration. Staff is currently negotiating with BFGC the loss of business revenue, which is not expected to exceed $70,000. The total area in the golf course affected by the construction and permanent and temporary easements is approximately 66,000 square feet. This translates to a cost of approximately $4.60 per square foot, taking into account all the costs paid to the County and BFGC. Based on real estate standard practice and other easements the District has procured, this is a reasonable level of compensation and reflects the ongoing goodwill and cooperation between the District and the County and BFGC. RECOMMENDED BOARD ACTION: Authorize the General Manager to enter into property restoration and loss of revenue compensation agreements with Buchanan Fields Golf Course, Inc. for activities related to the A -line Relief Interceptor, Phase 2A Project, DP 5980. N:\PESUP\Cbradley \POSITION PAPERS \Rozul \5980- BFGC Comp PP TJP.doc Page 2 of 2 4.a. Hearings PUBLIC HEARING TO RECEIVE COMMENTS ON A PROPOSED ORDINANCE TO ESTABLISH REIMBURSEMENT FEES FOR SANITARY SEWER FACILITIES IN ALHAMBRA VALLEY: DISTRICT PROJECT 5919 ( ALHAMBRA VALLEY TRUNK.SEWER AVAD 2007 -1); AND JOBS 6412 (MONTEIRA AVAD 2007 -4); 6439 (RELIEZ VALLEY AVAD 2007 -3); 6441 (QUAIL AVAD 2007 -6); AND 6442 (GORDON /MILLTHWAIT AVAD 2007 -2) SUGGESTED AGENDA October 15, 2009 Request staff presentation. II. Public Hearing: A. Receive public comments. B. Request staff response, as appropriate. C. Close Public Hearing. III. Board deliberation regarding proposed ordinance to establish a reimbursement fee for sanitary sewer facilities In Alhambra Valley: District Project 5919 (Alhambra Valley Trunk Sewer AVAD 2007 -1); and Jobs 6412 (Monteira AVAD 2007 -4); 6439 (Reliez Valley AVAD2007 -3); 6441 (Quail AVAD 2007 -6); and 6442 (Gordon /Millthwait AVAD 2007 -2) N:\ENVRSEMPosition Papers \Leavift\2009\2009 Reimb AVAMAgenda for Public Hearing.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 4.a. Hearings Type of Action: CONDUCT PUBLIC HEARING; ADOPT ORDINANCE Subject: CONDUCT A PUBLIC HEARING TO RECEIVE COMMENTS ON A PROPOSED ORDINANCE (UNCODIFIED) TO ESTABLISH REIMBURSEMENT FEES FOR SANITARY SEWER FACILITIES IN ALHAMBRA VALLEY: DISTRICT PROJECT 5919 ( ALHAMBRA VALLEY TRUNK SEWER AVAD 2007 -1); AND JOBS 6412 (MONTEIRA AVAD 2007 -4); 6439 (RELIEZ VALLEY AVAD 2007 -3); 6441 (QUAIL AVAD 2007 -6); AND 6442 (GORDON /MILLTHWAIT AVAD 2007 -2 Submitted By: Initiating DeptJDiv.: Russell Leavitt, Engineering Assistant III Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: )[? 4.0/ � C. k R. Leavitt Swanson A. Farrell K. Alm James . Kelly Gener anager ISSUE: When a reimbursement fee is proposed for a property that could connect to a "special facility" or a "standard facility," the District Code requires that a public hearing be held prior to the Board of Directors' consideration of the fee for adoption. RECOMMENDATION: Conduct a public hearing to receive comments on the proposed Ordinance (uncodified) to establish reimbursement fees for sanitary sewer facilities in Alhambra Valley: District Project 5919 (Alhambra Valley Trunk Sewer AVAD 2007 -1); and Jobs 6412 (Monteira AVAD 2007 -4); 6439 (Reliez Valley AVAD 2007 -3); 6441 (Quail AVAD 2007 -6); and 6442 (Gordon /Millthwait AVAD 2007 -2). Adopt the Ordinance. FINANCIAL IMPACTS: If the recommended fees are established by the Board following the public hearing, the District will recover its investment in the AVAD facilities over time as connections occur. Additionally, an administrative charge to offset District costs is incorporated into the reimbursement fees. ALTERNATIVES /CONSIDERATIONS: Not applicable. BACKGROUND: The design and construction of special facilities for District Project 5919 (Alhambra Valley Trunk Sewer) were paid for by the District. The design and construction of standard facilities for Jobs 6412, 6439, 6441 and 6442 were financed by the District under the Alhambra Valley Assessment District (AVAD) Program. The District will be repaid in two different ways. Property owners who chose to participate in the AVADs will repay the District through assessments. Property owners who are not participating in the AVADs will repay the District through the Reimbursement Program when they connect to the public sewer in the future. These sewers have been completed, accepted by the District and contributed by the AVAD participants to the District for public use. N: \ENVRSEC \Position Papers\Leavitt\2009\2009 Reimb AVADS \CondHearing- AdoptOrd AVADReimb 10- 15- 09.doc Page 1 of 2 POSITION PAPER Board Meeting Date: October 15, 2009 subject. CONDUCT A PUBLIC HEARING TO RECEIVE COMMENTS ON A PROPOSED ORDINANCE (UNCODIFIED) TO ESTABLISH REIMBURSEMENT FEES FOR SANITARY SEWER FACILITIES IN ALHAMBRA VALLEY: DISTRICT PROJECT 5919 ( ALHAMBRA VALLEY TRUNK SEWER AVAD 2007 -1); AND JOBS 6412 (MONTEIRA AVAD 2007 -4); 6439 (RELIEZ VALLEY AVAD 2007 -3); 6441 (QUAIL AVAD 2007 -6); AND 6442 (GORDON /MILLTHWAIT AVAD 2007 -2 A public hearing was held earlier this year to establish assessments for those Alhambra Valley property owners who opted to participate in an AVAD. AVAD participants have chosen to either pay off their assessment up front or have begun to finance their assessment on their property tax bill over a period of 15 years. Property owners who have chosen not to be assessed, and thus have not paid or financed an assessment, are known as AVAD "non- participants." In the future, these non - participants may connect to the public sewers, but when they do so, the District will charge them a reimbursement fee. In such cases, the District Code requires that the reimbursement fee structure "provide for full reimbursement of any and all costs associated with installation of local street sewers" (Section 6.220.400). Each AVAD non - participant's share of the cost of local sewer facilities is being covered by CCCSD. The reimbursement fees to be considered at this public hearing would allow the District to recover the non - participants' shares of the cost of the District - constructed or contributed facilities. The proposed reimbursement fees are summarized in Attachment 1. The reimbursement fees were calculated by increasing an amount equal to the 2009 participants' assessment by 3.185 percent to reflect the average investment rate of return that could have been earned by investing CCCSD funds in the State of California's Local Agency Investment Fund (LAIF) during the 2008 -2009 fiscal year (2.185 percent) plus one percent to offset ongoing administrative expenses. This is the amount a non - participant would pay if connecting to the sewer system between now and June 30, 2010. The fees would be charged in addition to Capacity Fees and other District charges, such as those for permits, inspection, and sewer service. Staff will recommend similar reimbursement fee adjustments for Board consideration annually. Appropriate notices have been posted and published in the Contra Costa Times. In addition, individual letter notices were mailed to the owners of all affected properties, as required by District Code. RECOMMENDED BOARD ACTION: Conduct a public hearing to receive comments or the proposed ordinance (uncodified) to establish reimbursement fees for sanitary sewer facilities In Alhambra Valley: District Project 5919 (Alhambra Valley Trunk Sewer AVAD 2007 -1); and Jobs 6412 (Monteira AVAD 2007 -4); 6439 (Reliez Valley AVAD 2007 -3); 6441 (Quail AVAD 2007 -6); and 6442 (Gordon /Millthwait AVAD 2007 -2). Adopt the Ordinance. N: \ENVRSEMPosition Papers \Leavitt\2009\2009 Reimb AVADS\CondHearing- AdoplOrd AVADReimb 10- 15- 09.doc Page 2 of 2 ATTACHMENT ORDINANCE NO. 2009- AN ORDINANCE (UNCODIFIED) TO ESTABLISH REIMBURSEMENT FEES FOR THE PROPERTIES WHICH COULD DIRECTLY OR INDIRECTLY CONNECT TO DISTRICT PROJECT 5919 ( ALHAMBRA VALLEY TRUNK SEWER AVAD 2007 -1); AND DIRECTLY CONNECT TO JOB 6412 (MONTEIRA AVAD 2007 -4); 6439 (RELIEZ VALLEY AVAD 2007 -3); 6441 (QUAIL AVAD 2007 -6); AND 6442 (GORDON /MILLTHWAIT AVAD 2007 -2) IN ALHAMBRA VALLEY WHEREAS, the Central Contra Costa Sanitary District (District) Code Chapter 6.20 provides for reimbursement to installers of standard and special facilities from fees charged property owners when they apply.to connect their property to the public sewer system; and WHEREAS, District Code Chapter 6.20 provides for the establishment of reimbursement accounts for constructed standard and special facilities; and WHEREAS, District Project 5919 (Alhambra Valley Trunk Sewer), the location of which is shown in Exhibit A of this ordinance, incorporated in full herein by this reference is a special facility as defined in District Code Chapter 6.20; and WHEREAS, Jobs 6412 (Monteira AVAD 2007 -4), 6439 (Reliez Valley AVAD 2007 -3), 6441 (Quail AVAD 2007 -6) and 6442 (Gordon /Millthwait AVAD 2007 -2), the locations of which are shown in Exhibit A of this ordinance, are standard facilities as defined in District Code Chapter 6.20; and WHEREAS, reimbursement fees have been calculated by a method consistent with District Code Section 6.22.400 to provide "for full reimbursement of any and all costs associated with installation of local street sewers" and are summarized in Exhibit B of this Ordinance, incorporated in full herein by this reference; and WHEREAS, a properly noticed public hearing to receive comments on the proposed reimbursement fees was conducted at the District Board of Directors' regularly scheduled meeting on October 15, 2009. NOW, THEREFORE, the Board of Directors of the Central Contra Costa Sanitary District does ordain as follows: Section 1. The reimbursement fees applicable to properties that connect to District Project 5919 (Alhambra Valley Trunk Sewer) special facilities, and Jobs 6412 (Monteira AVAD 2007 -4), 6439 (Reliez Valley AVAD 2007 -3), 6441 (Quail AVAD 2007 -6) and 6442 (Gordon /Millthwait AVAD 2007 -2) standard facilities, as set forth in Exhibit B of this ordinance, are hereby established. Said reimbursement fees have been calculated in the manner required by District Code Chapter 6.22.400. NAENVRSEMPosition Papers \Leavitt\2009\2009 Reimb AVADS\2009 Ordinance Attachment 10- 15- 09.doc Ordinance No. 2009 - Page 2 of 2 Section 2 The reimbursement fees set forth in Exhibit B of this ordinance shall be administered, adjusted, and collected according to the provisions of District Code Chapter 6.22.400 during the periods when said reimbursement fees are in effect. Section 3 Exhibits A and B hereto shall be maintained in the office of the Secretary of the District; and made available for inspection during the periods when said reimbursement fees are in effect. Section 4 This ordinance shall be a general regulation of the District and shall be published once in the Contra Costa Times, a newspaper of general circulation within the District, and shall be effective on the eighth calendar day following such publication and shall be effective until such time as the fees are amended by Ordinance. PASSED AND ADOPTED by the Board of Directors of the Central Contra Costa Sanitary District on the 15th day of October 2009, by the following vote: AYES: Members: NOES: Members: ABSENT: Members: James A. Nejedly President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED FI=0kAI -=MIT Iii- Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Approved as to Form: Kenton L. Alm Counsel for the District NAENVRSEC \Position Papers\Leavitt12009t2009 Reimb AVADSt2009 Ordinance Attachment 10- 15- 09.doc ............ .... ID r LEGEND: ED REIMBURSEMENT PROPERTIES Central Contra Costa EXHIBIT Sanitary District NON-PARTICIPATING (REIMBURSEMENT) PROPERTIES A TRUNK SEWER AVAD NO. 2007-1 DIRECT CONNECTION Page 1 of 5 0 Q Y W J I „�,RE11E1 I cccwln. REIMBURSEMENT PROPERTIES Central Contra Costa Sanitary District V / JN €l iF SITE LOCATION MAP N.T.S. noon ,,,,�� ^�nnn� „nuuunuuunuuw €l I 0 300 FEET iF NON - PARTICIPATING (REIMBURSEMENT) PROPERTIES RELIEZ VALLEY AVAD NO. 2007 -3 HILL EXHIBIT Page of 5 MARTIN 4 ... ............ 0 ix SITE ----- - ............ LOCATION MAP N.T.S. . ............ di T . .... .. . ... 1 .... ..... ... ----- --- QUAIL HOLLOW CT . . ........ ER a 9F ................ RA: Lly . ....... ... . .... ... . ...... . . . ..... .... Pp N . ........ ... . ... LEGEND: 0 300 FEET REIMBURSEMENT PROPERTIES Central Contra Costa EXHIBIT Sanitary District NON-PARTICIPATING (REIMBURSEMENT) PROPERTIES A MONTEIRA "AD NO. 2007-4 o Page 4 of 5 JN HILL LOCATION MAP N.T.S. Z AY N LEGEND: 0 400 REIMBURSEMENT mm%w� PROPERTIES FEET Central Contra Costa EXHIBIT Sanitary District NON—PARTICIPATING (REIMBURSEMENT) PROPERTIES A QUAIL "AD NO. 2007-6 Page 5 of 5 acne-. 2009 -2010 AVAD REIMBURSEMENTS N:\ENVRSEC\Position PaperMLeavitt\2009\2009 Reimb AVADSt2009 Ordinance Attachment 10- 15- 09.doc 2009 -2010 2009 PARCEL REIMBURSEMENT FEE ASSESSMENT TO BE PAID BY AVAD NON - PAID /FINANCED BY PARTICIPANTS PRIOR TO AVAD AVAD PARTICIPANTS CONNECTION a AVAD 2007 -1 Trunk Sewer $20,525 $21,179 Direct Connector AVAD 2007 -1 Trunk Sewer $7,142 $7,369 Indirect Connector AVAD 2007 -2 Gordon /Millthwait $11,116 $11,470 AVAD 2007 -3 $21,443 $22,126 Reliez Valley AVAD 2007 -4 $13,269 $13,692 Monteira AVAD 2007 -6 Quail $27,613 $28,492 w /no access (b) AVAD 2007 -6 Quail $32,400 $33,432 w /access (c) (a) The reimbursement fees were calculated by increasing an amount equal to the 2009 participants' assessment by 3.185 percent to reflect the average investment rate of return that could have been earned by investing CCCSD funds in the State of California's Local Agency Investment Fund (LAIF) during the 2008 -2009 fiscal year (2.185 percent) plus one percent to cover ongoing administrative expenses. (b) No vehicular access to Quail Lane: 367 - 150 -001; 367- 150 -013; 367 -150- 010; 365- 100 -014; 365- 110 -025; 365- 110 -023 (c) Vehicular access to Quail Lane: 365 -100 -015; 365 -110 -016; 365 - 110 -017; 365 - 110 -003 N:\ENVRSEC\Position PaperMLeavitt\2009\2009 Reimb AVADSt2009 Ordinance Attachment 10- 15- 09.doc Item 4.a. Central Contra Costa Sanitary District Public Hearing to Consider Reimbursement Fees for Alhambra Valley Assessment Districts (AVADs) Jarred Miyamoto- Mills, Principal Engineer October 15, 2009 AVAD Reimbursement Fees • Five AVAD sewers have been completed. • Assessments for participants were previously established by the Board. • Participants have either paid their assessments upfront, or have begun paying annual installments. • Today's Public Hearing is to consider Reimbursement Fees to charge non - participants when they connect to the AVAD public sewers. • Fees will make the District whole by reimbursing its investment in AVAD facilities. 1 2009 -2010 AVAD Reimbursement Fees Questions...? 2009 -2010 Reimbursement 2009 Parcel Assessment Fee to be Paid by AVAD AVAD Paid/Financed by AVAD Non - Participants Prior to Participants Connectlon- AVAD 2007 -1 Trunk Sewer $20,525 $21,179 Direct Connector AVAD 2007 -1 Trunk Sewer $ 7,142 $ 7,369 Indirect Connector AVAD 2007 -2 $11,116 $11,470 Gordon/Millthwait AVAD 2007 -3 $21,443 $22,126 Reliez Valley AVAD 20074 $13,269 $13,692 Monteira AVAD 2007 -6 Quail $27,613 $28,492 w /no access AVAD 2007 -6 Quail $32,400 $33,432 w /access Questions...? Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 6.a. Consent Calendar Type of Action: AWARD CONSTRUCTION CONTRACT /AUTHORIZE EXECUTION OF CONTRACT DOCUMENTS /AUTHORIZE AGREEMENT AMENDMENTS subject: AWARD A CONSTRUCTION CONTRACT AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE CONTRACT DOCUMENTS SUBJECT TO SUBMITTAL REQUIREMENTS WITH BOBO CONSTRUCTION, INC., AND AUTHORIZE AGREEMENT AMENDMENTS WITH CALPO HOM & DONG, DCM /GEOENGINEERS, AND SWINERTON MANAGEMENT AND CONSULTING FOR THE CONSTRUCTION OF THE CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY, DISTRICT PROJECT NO. 8208 Submitted By: Initiating Dept /Div.: Paul Seitz, Associate Engineer Engineering / Capital Projects REVIEWED AND RECOMMENDED FOR BOARD ACTION: PSeitz A. R&ul cki A. Farrell Manager ISSUE: On October 6, 2009, twenty -one (21) sealed bids were received and opened for the construction of the CSOD Administration, Crew, and Warehouse Facility, District Project No. 8208. The Board of Directors must award the contract or reject bids within 110 days of the bid opening. Board authorization is required to amend consulting agreements beyond staffs authority. RECOMMENDATION: Award a construction contract, authorize the General Manager to execute the Contract Documents subject to favorable review of insurance certificates, bond submittals, appropriate Contractor license, and any other required submittals (SUBMITTALS), and authorize amendments to existing consulting agreements. FINANCIAL IMPACTS: Approximately $13,933,000, including City of Walnut Creek Permitting Process, facility conceptual design, detailed design, bid price, contingency, and construction management. ALTERNATIVES /CONSIDERATIONS: Reject all bids, which is not recommended. BACKGROUND: The CSOD administration and crew building was originally constructed as the District's headquarters office building and was not designed for its current use as a collection system operations building. The administration and crew building, warehouse, and corporation yard facilities have reached an age and condition where significant rehabilitation, upgrading, and replacement are needed. In addition, CSOD staffing has increased to meet District growth and increased regulatory N: \PESUP\Cbradley \POSITION PAPERS \Seitz \8208 - Award Construction Contract.doc Page 1 of 9 POSITION PAPER Board Meeting Date: October 15, 2009 subject: AWARD A CONSTRUCTION CONTRACT AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE CONTRACT DOCUMENTS SUBJECT TO SUBMITTAL REQUIREMENTS WITH BOBO CONSTRUCTION, INC., AND AUTHORIZE AGREEMENT AMENDMENTS WITH CALPO HOM & DONG, DCM /GEOENGINEERS, AND SWINERTON MANAGEMENT AND CONSULTING FOR THE CONSTRUCTION OF THE CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY, DISTRICT PROJECT NO. 8208 demands, therefore, additional space is needed. Overall, the existing CSO facilities do not meet the current and future needs of the District. The project consists of construction of a new CSO administration, crew, and warehouse building. The project also includes site improvements, such as new paving and landscaping. Prior to the start of construction, the District must obtain permits from the City of Walnut Creek and address any City requirements. The CSOD staff will move to Martinez for the duration of the construction. The project is expected to be completed in spring 2011. The architectural firm of Calpo Hom & Dong prepared the plans and specifications for the project. The Engineer's estimate for construction of the CSOD Administration, Crew, and Warehouse Facility is $13,000,000. This project was advertised on August 26 and 31, 2009. Twenty -one (21) sealed bids ranging from $8,455,000 to $11,585,000 were received and publicly opened on October 6, 2009. The Engineering Department conducted a technical and commercial review of the bids and determined that Bobo Construction, Inc. is the lowest responsive bidder with a bid amount of $8,455,000. A summary of bids received is shown in Attachment 1. The District will administer the construction contract and will provide contract administration, inspection, survey, office engineering, and submittal review. Staff recommends retaining Calpo Hom & Dong (CHD), DCM /GeoEngineers (DCM), and Swinerton Management and Consulting (SMC) to provide construction support for this project because these consultants performed a key role in preparing the plans and specifications and have a unique understanding of the project. CHD and DCM will review shop drawings and submittals, provide responses to requests for information, review design changes and change orders, attend progress meetings, as needed, anc provide intermittent construction inspection. SMC will provide construction management support and specialty inspection. Amendments with not -to- exceed cost ceilings have been negotiated with each consultant: CHD $470,000 (total agreement $1,305,000); DCM $52,000 (total agreement $68,432); and SMC $115,000 (total agreement $165,000). The funds required to complete this project, as shown in Attachment 2, are $11,878,000. The total cost of the CSOD Administration, Crew, and Warehouse Facility is anticipated to be $13,933,000. The current bid climate is very favorable at this point in time, as indicated by the number of bids received. This translates to a very NVESUP \Cbradley \POSITION PAPERS \Seitz \8208 -Award Construction Contract.doc Page 2 of 9 POSITION PAPER Board Meeting Date: October 15, 2009 subject: AWARD A CONSTRUCTION CONTRACT AND AUTHORIZE THE' GENERAL MANAGER TO EXECUTE CONTRACT DOCUMENTS SUBJECT TO SUBMITTAL REQUIREMENTS WITH BOBO CONSTRUCTION, INC., AND AUTHORIZE AGREEMENT AMENDMENTS WITH CALPO HOM & DONG, DCM /GEOENGINEERS, AND SWINERTON MANAGEMENT AND CONSULTING FOR THE CONSTRUCTION OF THE CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY, DISTRICT PROJECT NO. 8208 low construction price realized by the District that will affect the costs for planning, design, and construction management as a percent of construction. This project is included in the fiscal year (FY) 2009 -2010 Capital Improvement Budget (CIB) on pages GI 21 and 22. Staff has conducted a cash -flow analysis of the General Improvement Program Budget/Sewer Construction Fund Balance and concluded that adequate funds can be made available for this project by raising sewer service charge rates, selling bonds, and /or deferring projects. The environmental effects of this project were addressed in the Collection System Operations (CSO) Facilities Improvements Project Mitigated Negative Declaration approved by the Board of Directors on December 21, 2007. Subsequently, a Notice of Determination was filed in compliance with the California Environmental Quality Act (CEQA). RECOMMENDED BOARD ACTION: Staff recommends the following: Award a construction contract in the amount of $8,455,000 for the construction of the CSOD Administration, Crew, and Warehouse Facility, District Project No. 8208, to Bobo Construction, Inc., the lowest responsive bidder. 2. Authorize the General Manager to execute the Contract Documents subject to SUBMITTAL requirements. 3. Authorize the General Manager to execute amendments to existing professional services agreements with Calpo Hom & Dong, DCM /GeoEngineers, and Swinerton Management and Consulting not to exceed $470,000, $52,000, and $115,000, respectively. WPESUP\Cbradley \POSITION PAPERS \Seitz \8208 - Award Construction Contract.doc Page 3 of 9 ATTACHMENT CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY DISTRICT PROJECT 8208 SUMMARY OF BIDS PROJECT NO.: 8208 DATE: OCTOBER 6, 2009 PROJECT NAME: CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY PROJECT LOCATION: WALNUT CREEK, CALIFORNIA ENGINEER EST.: $13,000,000 NO. BIDDER BID PRICE 1 Bobo Construction, Inc. $8,455,000 9728 Kent Street Elk Grove, CA 95624 916- 685 -2285 2 Reeve Knight Construction, Inc. $8,572,288 128 Ascot Drive Roseville California 95661 916- 865 -1524 3 Wright Contracting, Inc. $8,694,000 3020 Dutton Avenue Santa Rosa, CA 95407 707 - 528 -1172 4 Brown Construction, Inc. $8,700,000 1465 Enterprise Boulevard West Sacramento, CA 95691 916- 373 -9300 5 Allen L. Bender, Inc. $8,701,784 2798 Industrial Boulevard West Sacramento, CA 95691 916 - 372 -2190 6 Zovich Construction $8,785,000 2485 Technology Drive Hayward, CA 94545 510- 784 -1273 NAPESUP\Cbradley \POSITION PAPERS \Seitz \8208 - Award Construction Contract.doc Page 4 of 9 ATTACHMENT 1 (Continued) CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY DISTRICT PROJECT 8208 SUMMARY OF BIDS PROJECT NO.: 8208 DATE: OCTOBER 6, 2009 PROJECT NAME: CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY PROJECT LOCATION: WALNUT CREEK, CALIFORNIA ENGINEER EST.: $13,000,000 7 Zakskorn Construction Company, dba ZCON Builders $8,828,598 780 West Grand Avenue Oakland California 94612 510 - 444 -4190 8 Roebbelen Contracting, Inc. $8,858,000' 1241 Hawks Flight Court El Dorado Hills, CA 95762 916 -939 -1110 9 Tilton Pacific Construction $8,910,807 4170 Citrus Avenue Rocklin, CA 95677 916 - 630 -7200 10 Alten Construction, Inc. 72012 th Street $8,921,101 Richmond, CA 94801 510- 234 -4200 11 Sausal Corporation $8,945,700 422 Whitney Street San Leandro, CA 94577 510 - 568 -6600 12 McCrary Construction Co. $8,954,500 1300 Elmer Street Belmont, CA 94002 650 - 594 -1550 N: \PESUP \Cbradley\POSITION PAPERS \Seitz \8208 -Award Construction Contract.doc Page 5 of 9 ATTACHMENT 1 (Continued) CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY DISTRICT PROJECT 8208 SUMMARY OF BIDS PROJECT NO.: 8208 DATE: OCTOBER 6, 2009 PROJECT NAME: CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY PROJECT LOCATION: WALNUT CREEK, CALIFORNIA ENGINEER EST.: $13,000,000 13 Overaa $8,970,000 200 Parr Boulevard Richmond, CA 94801 510 - 234 -0926 14 West Coast Contractors, Inc. $8,996,000 2320 Courage Drive, #111 Fairfield, CA 94533 707 -435 -1000 15 Diede Construction, Inc. $9,050,000 12393 N. Highway 99 W. Frontage Road Lodi, CA 95240 209 - 369 -8255 16 John Plane Construction, Inc. $9,164,500 100 North Hill Drive, Suite 12 Brisbane, CA 94005 415 -468 -0555 17 Ralph Larsen & Son, Inc. $9,274,000 300 8th Avenue San Mateo, CA 94401 650 - 579 -0339 18 San Jose Construction $9,400,000 1210 Coleman Avenue Santa Clara, CA 95050 -4397 408 - 986 -8711 19 Barry Swenson Builder $9,480,000 777 North First Street, Fifth Floor 7 San Jose, CA 95112 408 - 287 -0246 N: \PESUP \Cbradley \POSITION PAPERS \Seitz \8208 - Award Construction Contract.doc Page 6 of 9 ATTACHMENT 1 (Continued) CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY DISTRICT PROJECT 8208 SUMMARY OF BIDS 20 W. A. Thomas Company, Inc. 2356 Pacheco Boulevard $9,592,000 Martinez, CA 94553 -2038 925 - 228 -9600 21 Zolman Construction & Development, Inc. $11,585,000 565 Bragato Road, Unit B San Carlos, Ca 94070 510 - 784 -1273 BIDS OPENED BY /s /Elaine Boehme DATE October 6, 2009 NAPESUP \Cbradley \POSITION PAPERS \Seitz \8208 - Award Construction Contract.doc I Page 7 of 9 N N Z W Q Q } J U Q LL W W C/) a p � O N W Q 00 z �i00 p Z F V ujN W 0 Z C) 0-0 Z U W O aa T) U) FL Z U) O p a Q p O U N 0 U c 0 � � o o N O O V 0 0 N o O � 7 M co O E 0 0 o w 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N O u1 O N f+7 C C 0 0 0 0 VZ 1- O O O O O ,I O O O O eH NT � tH � tH 0) N Ys O N tH 00 LO (0 C-4 � to a) 0- N VA N 649- e/ � ta V1 L 0 O F E !' N O v c _ Z O E m R U H E m O o a 3 p z a E y 'O N V U W ,� A F VOi d C O N = y d Z 7 N o V N a a0.. A E d' Q o C " ° @ °L > 0 = o° y N a U) ° a aEi c ,c°o Z E N V Z O o co r 0 0 O R 0 0 - m V O Y d 0) 0 M j c c r a0i U a O N V W O O M U Vl H H y V +' W d Q O Q. F V U a H p Z R a ti O j Z O N O V U C z r N m O co a) m m a 9 0 U c 0 j N U 3 N m d w a a z O H N a °m U a D LU w L e e e e e M N O le N 00 14 of I': 0 0 0; o 0 r N 00 O O r C M N t 00 M 47 eA O) O M N r Vk M O O O O O O O O O O 00 h O O �(1 00 Cl) M 10 N Q) h 1, fH O fA fH N 0 0 0 0 0 0 O O a N 0 0 0 0 0 0 O O O) 1� M 0 0 0 0 0 0 O O 00 I: Cl) O N O 16 N W 1f) Le O 4 0; CD LO h N N Cl) )f1 N P fA VA l r VA fA fA IA O W ff) tf> ♦il vz w E O rn c Z w 0 w « W N Y N a° w O ° Z x W ~ m co otS 3 w j w C w .' Z E O to = D J ~� � w w l OLL L C E d ciQVZO (n w °—'Z w Z W F u0 Zd L) c o c R� C �` rn� J ly X V ° E U) W W H O H O � F ad y w o W � 3 o U) O Q� ayi c E a ZZ<n W t, ) CM LU ~ O°r ° V V d W N O O O = 'A' .2 p d H 7 y I I w cOi y L I Z d V uj O Q p' Q a m v m °> o Q Q-j m a a LL' _ m 'O H � a 3 x c c Im Qw ►- cgcvmwc)► -H w w Q m� ° �mmy O O W o O r H a Q �w m mace a o �a In y U) y � ci z 52 U) O 7 00 CL IL Q v ai v ui Ic 1: w U) 0 U C O U 7 N C O U w O C (D U N O_ N N (0 C 0) E N O) N C n1 E C O U 7 L Zn C O C N C O) N a) rn c C C N a 0 0 O w 0 U C O U 2 m c 0 U — 3 v 'n >m o Y L :3 � L � m . r m O D) N CD (0 d Co Central Contra Costa Sanitary District October 14, 2009 File: 8208.8.3, 9.0 TO: HONORABLE BOARD OF DIRECTORS VIA: JAMES M. KELLY, GENERAL MANAGER �Allp FROM: ANN E. FARRELL, ENGINEERING DEPARTMENT DIRECTOR KENT ALM, DISTRICT COUNSE � TAD J. PILECKI, CAPITAL PRO IVISION MANAGER _tB1� SUBJECT: BID PROTEST FROM REEVE- KNIGHT PERTAINING TO CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY, DISTRICT PROJECT 8208 - AGENDA ITEM 6 A On October 12, 2009, the District received a timely protest from Reeve - Knight Construction, Inc. (Reeve- Knight) pertaining to the Bid submitted by Bobo Construction, Inc. (BCI), the apparent low bidder (Attachment 1). On October 13, 2009, the District received a response to the protest from McDonough Holland and Allen PC, a law firm representing Bobo Construction, Inc. (Attachment 2). District staff and Legal Counsel have carefully reviewed both letters and have determined that the protest issues raised by Reeve - Knight are in part without merit and do not require disqualification of the low bid when taken as a whole. The issues raised do not result in a material change in BCI's bid, nor unfairly favor BCI in comparison with other bidders. District staff verbally contacted Reeve - Knight on October 13 and indicated that staffs recommendation to the District's Board of Directors would be to reject their bid protest. On October 14, a representative from Reeve - Knight contacted the District and indicated verbally and via e-mail that they would not be pursuing the bid protest further (Attachment 3). Attachment 4 is a letter from the District acknowledging Reeve - Knight's response and indicating that District staff would be recommending to the Board of Directors to reject the bid protest from Reeve - Knight and proceed with the award to BCI, the lowest responsive bidder for the CSOD Administration, Crew and Warehouse Facility, District Project 8208. During its deliberations with respect to Agenda Item 6 a, Award of a Construction Contract to Bobo Construction, Inc., the Board of Directors needs to amend staffs recommendation to include "Reject the Bid Protest from Reeve - Knight Construction, Inc. "as the first item for consideration, prior to the award of the construction contract and authorization of agreement recommendations. /jf Attachments cc: Douglas Craig N:\PESUPTESIGNTistrict Projects \8208 \Bid Protest Reeve Knight \Memo to the Board.doc 1 REEVE- KNIGHT 1 CONSTRUCTION. Inc. October 12, 2009 Ms. Elaine R. Boehme 128 Ascot Drive I Roseville. CA 95661 1 License 0659107 p: 916.865.1500 1 f: 916.786.5113 1 www.reeve- knlght.com Secretary of the District Central Contra Costa Sanitation District 5019 Imhoff Place Martinez Place, CA 94553 Via Email and Overnight Re: CSOD Administration, Crew, and Warehouse Facility Dear Ms. Boehme, ATTACHMENT 1 We acknowledge receipt from your website of the Bid Results for the subject. In accordance with Section 20 of the Instructions to Bidders, we hereby protest the results of the bidding with Bobo Construction listed as apparent low bidder. This protest is made within (5) business days and is being copied to the apparent low bidder, as required by the instructions. Our protest is made due to the following: 1) Bobo Construction did not list a subcontractor for `concrete finishes'. The value of this work was just below the Y2% listing threshold. This subcontractor, however, is required by Specification Section 03360- Special Concrete Floor Finishes 1.03.13 and 1.05.A to be certified by the manufacturer of the specified system. Diacon, listed by Reeve - Knight is so certified by Retroplate. 2) Bobo did not list a subcontractor for the expansion joint system. Subcontractor prices for this work exceeded 1/2 a/o of the bid price. Reeve - Knight rightfully listed a subcontractor for this work. 3) Bobo listed `Joseph Bros' for the drywall work. `Joseph Brothers' is evidenced by the Contractors State License Board as holding only a'B' license. Please see attached. It is not believed that a Contractor holding a'B' license can contract for this scope without also holding the requisite C -19 "Drywall" license or, in the event they are also providing `carpentry or framing', without the contract including at least (2) unrelated trades. Please see the attached as excerpted from the Business and Professions Code. The bid received from Joseph Brothers proposes to provide drywall and metal framing but does not propose at least (1) additional trade as is believed to be required by the statute. 4) Bobo listed 'Aclif for the ceramic tile work. The CSLB does not have any record of Aclif. Further, the representative for the specified tile does not have record of providing pricing to this company. 5) Bobo listed ` Hampa' for window coverings. The CSLB notes that Hampa has certified that they do not have any employees and are without workers compensation insurance. They are thus not in compliance with the insurance requirements for the project. 6) Bobo listed ThyssenKrupp for elevator. The basis of Specification Section 14212 - Hydraulic Passenger Elevator is a proprietary Otis Elevator system. 1.04.13 of that specification states specifically that , "Manufacturers other than those named will not be considered until Contracting Officer is satisfied that systems and equipment proposed for work meet requirements... ". The bid addenda make no mention of such a satisfactory alternate elevator manufacturer. ThyssenKrupp cannot thus be asserted as an acceptable substitution prior to bid. Reeve - Knight has listed Otis as specified. 7) Bobo listed `Titan' for fueling equipment. Titan-PME is not a licensed contractor. They cannot be engaged in a subcontract for this specification. 8) Bobo listed 'OPC' for electrical. The CSLB does not have any record of OPC or any obvious variations. Further, the representative for the specified generator and transfer switch does not have record of providing pricing to this company. COMMITTED to trusting refatlonships, built on o foundation of INTEGRITYond dependability re- Check it License or Home Improvement Salesperson (HIS) Registration - Contractors State License Board Page I of 2 Department of Consumer Affairs;• Contractors State Eiden a Board Contractor's License Detail - License # 849169 mDISCLAIMER: A license status check provides Information taken from the CSLB license database. Before relying on this Information, you should be aware of the following limitations. CSLB complaint disclosure is restricted by law (B&P 7124.61. If this entity is subject to public complaint disclosure, a link for complaint disclosure will appear below. Click on the link or button to obtain complaint and /or legal action information. Per B&O 7n7�, only construction related civil judgments reported to the CSLB are disclosed. Arbitrahuns are not listed unless the contractor fails to comply with the terms of the arbitration. Due to workload, there may be relevant information that has not yet been entered onto the Board's license database. License Numbef: 849169 Extract Date: 10/08/2009 JOSEPH BROTHERS ENTERPRISE INC Business Information: 1695 ABRAM CT STE 101 SAN LEANDRO, CA 94577 Business Phone Number: (510) 351 -7443 Entity: Corporation Issue Date: 11101x2004 Expire Date: 11/3012010 License Status: This license is current and active. All Information below should be reviewed. CLASS DESCRIPTION Classificatiu.m. B GENERAL BUILDING CONTRACTOR CONTRACTOR'S BOND This license filed Contractor's Bond number FS2717004 in the amount of $12,500 with the bonding company GREAT AMERICAN INSURANCE COMPANY. Effective Date: 10/292008 Bonding: Contractor's Bonding History BOND OF QUALIFYING INDIVIDUAL 1. The Responsible Managing Officer (RMO) KEN JOSEPH certified that he/she owns 10 percent or more of the voting stock/equity of the corporation. A bond of qualifying individual is not required. - Effective Date: 11/01/2004 Workers' Compensation: This license has workers compensation insurance with the STATE COMPENSATION INSURANCE FUND https: / /wwut2. c sib.ca.gov /Onl ineServices /CheekL icenselLicenseDetail. asp' ?LicNum = 849169 a 10/8/2009 Fax Proposal Jbseph, CA License N 849 169 i ns_e; ;Xb Estimator: Tim Glime 916456 -7071 916456 -7072 Fax Project: CSOD Administration, Crew and Warehouse, Walnut Creek Date: 10!8/2009 Addenda: 1,2,3 &4 Comments Base Bid: $ 388,907.00 Provide all Materials, Labor and Equipment necessary to complete the Drywall and Metal Framing Sections Of the Project per Plans and Specs Exclusions: Wood Blocking Backing and Framing, Insulation, Structural Steel, Durrock (Tile Backer Board), Doors and Frames, Acoustical Ceilings, Fire caulking, Access Panels, Imbeds, Shaft work, Barricade, Shop. Drawings, Paints and Primers Lowery Pads, Waterproof Membranes, Expansion screeds Drywall Primer is to be furnished and installed by others Finished drywall to receive Level 5 smooth finish The base bid includes famish and install of densglas sheathing at exterior metal framing There is no metal framing or drywall at the roof screen Furnish and install Tile Backer Board at walls as a substrate for interior tile Add S 25,675.00 Please Direct all Questions to Tim Glime If the Price Quoted Should Be More Than 10% Low Please Advise Us Prior to Close of Bid Quote Valid for 30 Days 1695 Abram Court Suite 101 San Leandro, CA 94577 Phone (510)351 -7443 Fax (510)351 -7249 f j Check a License or Home Improvement Salesperson (HIS) Registration -Contractors State License Board Page 2 of 2 Effective Date: 11/17/2007 BQI's Bonding Hislory This license is exempt from having workers compensation insurance: they certified that they have no employees at this time. Workers' Compensation: Effective Date: 0621/2007 Expire Date: None Personnel listed or. this license (current or disassociated) are listed on other licenses. Personnel List Other Licenses Conditions of Use I Privacy Policy Copyright 0 2009 State of California https:H%vww2.cslb.ca. gov /Onl ineServices /CheckL icenseiL icenseDetai 1. asp ?L icN um= 900477 10/8/2009 l ATTACHMENT It McDonough Holland & Allen It Attorneys at Law Robert W. O'Connor Attorney at Law Sacramento Office 916.444.3900 tel 916.444.0707 fax roc@mhalaw.com October 13, 2009 VIA FACSIMILE AND OVERNIGHT DELIVERY Ms. Elaine Boehme Secretary of the District Central Contra Costa Sanitary District 5019 Imhoff Place Martinez, CA 94553 Re: Central Contra Costa Sanitary District Administration Crew and Warehouse Facility, Project 8208 Bids Opened October 6, 2009 Response of Bobo Construction, Inc. to Bid Protest Letter of Reeve - Knight Construction, Inc., dated.October 12, 2009 Dear Ms. Boehme: We represent Bobo Construction, Inc. ( "Bobo ") with respect to the above - referenced bid protest. Bobo submitted the lowest monetary bid for the project in the sum of $8,455,000. Reeve - Knight Construction, Inc. ( "Reeve- Knight ") is the disappointed second low bidder. Reeve - Knight's bid was in the amount of $8,572,288, which is $117,288 higher than Bobo's bid. For the reasons outlined in this letter, Reeve - Knight's protest is without merit and should be rejected. Sacramento A. Response to specific protest l=- rounds asserted by Reeve -Kni g ht 500 Capitol Mall —' 18th Floor Sacramento, CA 1. Bobo's alleged failure to list a "subcontractor for the concrete floor finish work. 95814 tel 916.444.3900 toll free 800.403.3900 In its protest letter, Reeve - Knight states that Bobo did not list a subcontractor for fax 916.444.8334 concrete finishes. However, Reeve - Knight concedes that no listing was required because the value of this work is less than one -half of one percent. Oakland 1901 Harrison Street 9th Floor Reeve- Knight also states that the concrete finish subcontractor must be certified Oakland, CA by the manufacturer. Although it is correct that Specification Section 03360, subpart 94612 tel 510.273.8780 1.05 B. I., which pertains to Concrete Floor Finishes, provides that the contractor toll free 800.339.3030 fax 510.839.9104 1240427x137490/0001 www.mhalaw.com McDonough Holland 9 Allan x Attorneys at Law Ms. Elaine Boehme Secretary of the District October 13, 2009 Page 3 maybe replaced if that listed subcontractor is not properly licensed. Whether or not it becomes necessary for Bobo to replace Joseph Brothers as its listed drywall subcontractor, Bobo will comply with the law, and once again this is not meritorious grounds for rejection of Bobo's bid. 4. Bobo's listing of "Aclif' for ceramic tile work. Reeve - Knight contends that Bobo's subcontractor list states "Aclif' for tile work. Although this is true, it again is not meritorious grounds for rejection of Bobo's bid. There is no company by the name of Aclif Through inadvertence the correct name, California Tile Installers, was not properly reflected on Bobo's subcontractor listing sheet. Bobo either will perform this work with its own forces or, if permitted by District, substitute California Tile Installers.in place of Aclif. In either case, Bobo can and will comply with the Subcontractor Listing Law. 5. Bobo's listing of Hampa for blinds. As stated by Reeve- Knight; Bobo listed Hampa Trading Corporation, which holds California contractor's license number 900477 in the D52 Window Covering classification, for "blinds." Reeve - Knight contends that Bobo's bid should be rejected because the Contractor's State License Board website indicates that Hampa does not have workers' compensation insurance. After reviewing Reeve - Knight's protest letter, Bobo contacted Hampa in order to investigate this contention. Hampa has assured Bobo that it does, in fact, have workers' compensation insurance and has provided a certificate of insurance to verify this fact. If for any reason it is determined that Hampa is not properly licensed because of a defect with respect to its workers' compensation insurance coverage, Bobo will comply with the law by requesting subcontractor substitution under Public Contract Code section 4107 (a)(6), which as noted above expressly permits substitution in the event a listed subcontractor is not properly licensed. Even if Hampa must be replaced as the subcontractor for the blinds or window covering work, once again this is not meritorious grounds for rejection of Bobo's bid. 6. Bobo listed ThyssenKrup for elevator work. Bobo listed ThyssenKrup for elevator work, as alleged by Reeve - Knight. Apparently, Reeve - Knight mistakenly believes that Bobo was required to list Otis Elevator instead'of ThyssenKrup because Otis is the only elevator manufacturer 1240427v13749010001 McDonough Holland A Allan m Attorneys at Law Ms. Elaine Boehme Secretary of the District October 13, 2009 Page 5 further well established that a bid which substantially conforms to a call for bids may, though it is not strictly responsive, be accepted if the variance cannot have affected the amount of the bid or given a bidder an advantage or benefit not allowed other bidders or, in other words, if the variance is inconsequential. [Citations.]" Ghilotti Construction Co. v. City of Richmond, 45 Cal.AppAth 897, 904 (1996). In Domar Electric. Inc. v. City of Los Angeles, 9 Cal.4th 176 (1994), the California Supreme Court emphasized that the purpose of competitive bidding is "to secure the best work or suppliers at the lowest price practicable, and they are not enacted for the benefit or enrichment of bidders, and should be so construed and administered as to accomplish such purpose fairly and reasonably with sole reference to the public interest." 9 CalAth at 173. The Supreme Court further stated: "Thus, [laws] requiring competitive bidding are not to be given such construction as to defeat the object of insuring economy and excluding favoritism and corruption." /d. Applying these legal principles, it is clear that Reeve - Knight's bid protest is without merit. Bobo's bid is fully responsive. Even if any of the issues raised by Reeve - Knight rise to the level of a bid irregularity, any such irregularity clearly is minor and can and should be waived by the District. C. Conclusion. Based upon the foregoing, Bobo respectfully requests that Reeve - Knight's bid protest be denied and that the contract for the project be awarded to Bobo as the lowest responsive and responsible bidder. Very truly yours, R6bert W. O'Connor roc:pal cc: Chris Bobo (via email) Randy Cannon, Senior Estimator, Reeve - Knight Construction, Inc. (via facsimile) Kenton L. Alm, District Counsel (via facsimile) 1240427v137490/0001 q !,fudy Freier - Re Reeve - Knight Protest Use this email as attachment 3 Page 1 j ATTACHMENT From: Tad Pilecki To: Freier, Judy Date: 10/14/2009 1:50:33 PM Subject: Re: Reeve - Knight Protest - Use this email as attachment 3 >>> Randy Cannon <RandvC( reeve- knight.com> 10/14/2009 9:17 AM >>> Good Morning Alex, I am following -up our discussion yesterday regarding the circumstances of the Reeve - Knight bid protest. I have reviewed the subject with our Pre - Construction Manager. Please accept this written confirmation that we will not be pursuing the bid protest further. Thank you very much for the opportunity and good luck with the project. Sincerely, Randy Cannon SENIOR ESTIMATOR LEED(r) ACCREDITED PROFESSIONAL D: 916.865.1543 C: 916.390.1289 E: randvc0reeve- kniaht .com <mailto:randvc(aD.reeve - kniaht.com> W: reeve - knight.com f cid: image002. gif(a)01 CA4CAF.255956401 ATTACHMENT 4 It District FAX: (925) 372 -7892 I.I.M.SA1 REI.I.Y Gcn "'d AJurmger KhMION L. MAY CnuneelJiv ihr Davin (5W) ,vux.zrnm October 14, 2009 1- JAINER. 801.HME CERTIFIED MAIL NO. 7006 0810 0005 0892 3636 Svcrclnry,f /hr lJ;,rnc File: 8208.5.1.4 Reeve - Knight Construction, Inc. 128 Ascot Drive Roseville, CA 95661 Attn: Mr. Randy Cannon Dear Mr. Cannon: CSOD ADMINISTRATION, CREW, AND WAREHOUSE FACILITY, PROJECT 8208, PROTEST OF BID Central Contra Costa Sanitary District (District) staff has carefully reviewed your timely protest dated October 12, 2009, pertaining to the bid submitted by Bobo Construction, Inc. (BCI) for the subject project. We have also reviewed the letter submitted by McDonough Holland & Allen PC on behalf of BCI on October 13, 2009. Based on District staff and Legal Counsel review, it is our opinion that the issues raised in your protest letter do not raise material variances from the specifications requiring a bid disqualification, nor would result in a material change in BCI's bid. We informed you verbally of District staffs determination /Board recommendation on October 13, 2009. On October 14, 2009, you informed us verbally and via e-mail that Reeve - Knight Construction, Inc. will not be pursuing the bid protest further. Our Board of Directors will formally reject your bid protest at its October 15, 2009 Board Meeting prior to awarding the construction contract for the subject project to BCI, the lowest responsive bidder. Please contact me if you have any questions. Sincerely, 7 Alex V. Rozul Senior Engineer AVR:jf A " Recyrlea Paper Agenda Item 7.a 1) Board Meeting of October 15, 2009 Written Announcements: Staff Commendations a) Laserfiche Award The District was named winner of the Laserfiche Run Smarter Award. Laserfiche provides the document imaging system used by the District to store and manage documents. The award recognizes the District's use of Laserfiche to provide specific savings, efficiency, and service benefits. The award will be accepted by Information Technology Analyst John Phillips at the Los Angeles Laserfiche Conference in January 2010. John is the project coordinator for the District's Laserfiche implementation and is the key reason that the award was received. The award includes hotel accommodations and attendance at the conference, where John will deliver a presentation describing how the District utilizes Laserfiche. Staff Training b) John Ortega to attend Investigation /Enforcement training in New Mexico Environmental Compliance Inspector II John Ortega has been awarded a scholarship by the Western States Project (WSP) to attend a three -day training in Albuquerque, New Mexico from November 2 through November 4, 2009. This training is included in the Source Control training budget for fiscal year 2009 -10 but was originally identified to be held in California. Most expenses will be paid directly by the WSP (e.g. registration, hotel) while the District will pay other expenses and then be reimbursed under the WSP scholarship (e.g. travel, meals, incidentals). The total amount the District will advance for future reimbursement will be less than $800 with the potential for up to $100 of the expenses not being covered by the WSP scholarship and therefore paid by the District. General c) Orinda Smoke Testing As part of its on -going efforts to cost effectively evaluate and identify problems within the collection system, the District is conducting a pilot smoke testing project in three areas in Orinda involving approximately 21,000 feet of sewer. The smoke testing work will be performed by Veolia Environmental Services. The goal of smoke testing is to identify breaks in mains and private laterals, illegal connections such as roof leaders or storm drains, and deficient plumbing in residences. If identified, these conditions could reduce infiltration and inflow in the future. Correction would be addressed by future District projects or code enforcement. Smoke testing entails releasing a non - toxic, non - staining, and odorless smoke that is harmless to humans, animals, and material goods into the sewer system. The smoke moves through the sewer lines and will exit from any breaks in the line, from any collapsed sewers, or illegal connections. District staff will be present to address any issues that may arise. Notification letters were sent to the affected homeowners and door hangers will be distributed prior to the work. The Orinda Moraga Fire Department has been notified and will be updated on daily basis. The work is scheduled to begin on Wednesday, October 14, 2009 and will last for up to one week. Staff will report back to the Board on the results of the testing at a future Board Meeting. d) Clean Water Program Agreement Renewal The County Board of Supervisors voted to approve the Clean Water Program (CWP) Agreement renewal at their October 6, 2009 meeting. According to CWP staff, the participating cities need to sign a resolution before the agreement can be finalized. Unfortunately, due to a reassignment within the County Counsel's office, the drafting of this resolution has been delayed. CWP staff is working to finalize the agreement this month but an actual date is uncertain at this time. Source Control staff continue to work on program initiatives (conducting dental inspections, initiating Best Management Practice (BMP) permit program for vehicle service facilities including follow -up site inspections). CWP staff has been informed that due to the extended delays in processing the agreement renewal, the annual inspection goals for the cities may not be met this fiscal year. e) Blanket Agreement with Arborist Consultants Staff requested proposals from a dozen certified arborists to provide consulting services during design and construction of collection system projects. Six proposals were received and evaluated, and staff has selected the following three Arborists based on experience, work product and cost: Joseph McNeil Arborists Tree Wise Horticultural Services Staff is proceeding to negotiate blanket agreements (under $50,000) with each of the three firms which will be in place through June 30, 2012. Work assignments will be made on the basis of availability, cost, and required expertise. The use of these blanket agreements will enable staff to cost - effectively respond to residents and city requests for evaluating and protecting trees on District projects. f) Replacement of Sewer Main in Green Street Neighborhood in Martinez Last year, staff attempted to replace the existing sewer main within the Green Street Neighborhood in Martinez in order to avoid continued overflows. Although most property owners supported the sewer project, staff could not obtain the necessary land rights from all nine property owners, and the project was placed on hold so alternatives could be considered. Since then, staff has completed their evaluation of the alternatives and has determined that the best renovation approach continues to be replacing the sewer and obtaining new easements from the same nine properties. Staff is ready to re -visit the site to perform additional survey and design work. Staff is advising the Board, since some property owners may be concerned that we are coming back into their neighborhood. Staff will be updating the Board at a future meeting regarding our planned approach for obtaining the necessary easements. Ir Agenda Item 7.a 1) Board Meeting of October 15, 2009 Additional Written Announcements: Finance Matters g) Update on October 14, 2009 Contra Costa County Employees' Retirement Association Board of Directors Meeting At the October 14, 2009 Contra Costa County Employees' Retirement Association ( CCCERA) Board of Directors meeting, CCCERA staff and the Actuary were directed to "depool" assets and liabilities by employer, retrospectively to December 31, 2008. The impact of this change will be reflected in the next rate study for implementation in 2010 -11. Once CCCERA releases the "depooling" data and impacts in December 2009; staff will inform the Budget and Finance Committee, and Board of the impact to the District. Even though this is a significant change, staff does not believe that there will be a significant financial impact to the District at this time. That said, the consultant hired to review this issue has commented to staff that it is. very difficult to absolutely know the financial impact at this time because only the CCCERA Actuaries have the data. General Updates h) Wet Weather Updates The first storm of the season arrived on October 13, 2009, producing 3.9 inches of rain at the treatment plant. The peak flow during the storm was slightly over 140 million gallons per day (MGD). At the peak flow, 80 MGD was treated in the secondary process and 60 MGD was bypassed to the holding basins. This was the largest storm in October in many years. Approximately 11 million gallons of primary effluent was bypassed to the holding basins. All of the bypassed flows have been drained back and processed. The treatment plant had no major incidents. However, there . were several roof leaks and some localized flooding. The treatment plant remained in compliance with all of the National Pollutant Discharge Elimination System requirements during the storm event. The pumping stations performed well during the rain event. For the period of the storm, the rainfall recorded at the pumping stations was 3.7 inches in Martinez, 3.5 inches in Sam Ramon, 5.2 inches in Moraga, and 5.0 inches in Orinda Crossroads. A diesel- driven wet weather pump was utilized at Orinda Crossroads. Electrically- driven wet weather pumps were utilized at Martinez, Lower Orinda, and San Ramon. There were no callouts for pumping stations personnel and only one for Collection System Operations Department personnel. There were no reported overflows. i) Products Being Marketed for Disposal of Pet Waste to Sanitary Sewer Staff has recently become aware of several products being marketed to promote disposal of pet waste to the public sanitary. sewer.. Some of these products are shown on the attached sheets, and they fall into two categories: 1) So- called "flushable" bags that pet owners are instructed to fill with pet waste, and then flush down the toilet. The claim that these bags are "biodegradable," and so are appropriate for flushing is problematic. Though the bags may biodegrade over time, they would likely remain intact while in the sewer system posing the risk of plugging in both the customers lateral and the public sewer. In addition, the bags could worsen the plastic waste problems at, pumping stations. 2) Pet waste receptacles for installation on customers' cleanouts or laterals to provide for discharge of waste and flushing water directly to the public sewer. These devices range from a simple funnel attachment to connect directly to a cleanout (similar to an Overflow Protection Device), to more elaborate toilet -like waste flushers. The instructions for use of these receptacles include flushing them with water from a garden hose or a directly connected waterline. In some cases, users are encouraged to use these receptacles to flush the flushable bags. Staff has discussed the pet waste disposal issue with solid waste authority staff, and jointly concluded that the most environmentally appropriate disposal method for pet waste is to place it with household garbage for weekly pick up. Staff intends to discourage the discharge of pet waste to the sewer system by adding discussion of the bags and pet waste receptacles to the "don't flush" sections in the Pipeline Newsletter and on the website at centralsan.org. In addition, we will not issue permits for installation of receptacles on customers' laterals. de '"Doggie Doo Drain" A E Easy to Install ... 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O O Gl O 0. ro w ro .D O_ CC y R 5 y-0 0 b t n =u 7 M_ C1. 7 w C7 m a O O CL ur J d cng a N Q1 ro CL a 0 O O �O n ® N 0 ®A L N 3 w N v eat ` rn vamJ a O d 0 W o' Z O LL' W O d f� �a a O � d � ti 11 i 9 V a Q dos m VJ c m y T a d N y m o a 3 o O v t N 3 c� O t � N � C 0 '' a c Co o Co L N O_ ;a C Y O c M U � a L O N 0) 7 T YO N 3 t R d L 7 O N N 0 L O L N 7 w L (V L a+ t ►1 o� Ctf Q O 0 n N N L N 3 w 0) c c (9 2 06 0) C 'a n .0 U) N CY) o_ .0 CN 0) c c (9 2 06 0) C 'a n .0 U) N Central Contra Costa Sanitary District Board Meeting October 15, 2009 Board Member McGill Item 7.d.1) FUTURE MEETINGS AND CONFERENCES WITH PAID EXPENSES AND /OR STIPEND Presentation to Pleasant Hill City Council October 19, 2009 Meeting with City of Walnut Creek Officials and Jim Kelly October 21, 2009 MEETINGS AND CONFERENCES THAT EXPENSES AND /OR STIPEND WAS PAID Attended the Mayors' Conference in Oakley, CA, October 1, 2009 Attended the Contra Costa Council Luncheon with Caltrans Director Randy Iwasaki October 2, 2009 Recycled Water Committee Meeting October 12, 2009 Item 7.d.2 Announcements Attended: Contra Costa Council Land Use Task Force Meeting October 14, 2009 CBIA Fall Meetings October 14 and 15, 2009 Will attend: Concord Chamber Mixer October 15, 2009 Contra Costa Council Board Meeting October 16, 2009 Pleasant Hill Chamber Mixer October 21, 2009 John F Kennedy University Alumni Day October 17, 2009 Contra Costa Council Water Task Force Meeting October 20, 2009 Tour and Presentation by CalTrans of the Bay Bridge East Span October 23, 2009 Pleasant Hill Demonstration Garden Open House October 25, 2009 HBANC Eastern Division Board Meeting October 27, 2009 CCCSD Awards Luncheon October 28, 2009 Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 NO.: 8.a. Budget .and Finance Type of Action: AUTHORIZE THE REFINANCING OF REVENUE CERTIFICATES subject: AUTHORIZE THE REFINANCING OF THE 1998 AND 2002 REVENUE CERTIFICATES Submitted By: Initiating Dept /Div.: Debbie Ratcliff, Controller Administrative /Finance & Accounting REVIEWED AND RECOMMENDED FOR BOARD ACTION: D. Ratcli RN/graves ames M elly, eneral pager ISSUE: Authorization from the Board of Directors is required to refinance outstanding existing debt through the sale and delivery of long -term Revenue Refunding Bonds. RECOMMENDATION: Authorize the refinancing of the outstanding existing 1998 and 2002 bonds. FINANCIAL IMPACTS: By refinancing the District's outstanding existing debt, in an amount not to exceed $25 million, cost savings of approximately $1.3 million will be realized over the remaining term of the bonds. ALTERNATIVES /CONSIDERATIONS: The Board could choose not to refinance the outstanding existing debt; however, because of the significant cost and savings due to favorable interest rates (.75% - 3.7% compared to 4% - 5 %), it is not recommended. BACKGROUND: In December 1994, the District borrowed $25 million through the sale and delivery of long -term (20 years) Revenue Installment Certificates. In 1998, due to favorable interest rates, the remaining principal on the Revenue Certificates was refinanced to save interest expense over the remaining term. Current market conditions (interest cost of .75% - 3.7 %) offer the District an opportunity to achieve a significant savings in debt service (approximately $1.3 million net of the cost issuance) by refunding the District's 1998 and 2002 bonds using the same remaining terms. The proposed refunding has been discussed with the Budget and Finance Committee, and they concur with staffs recommendation. RECOMMENDED BOARD ACTION: Authorize the refinancing of the outstanding existing 1998 and 2002 bonds. N: VWDMINSUPWDMINIPOSPAPER1Approve & Authorize the Refinancing of 1998 & 2002 Revenue Certificates 10 -15 -09 - Version 2.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 8.b. Consent Calendar Type of Action: AUTHORIZE THE ISSUANCE AND SALE OF REVENUE CERTIFICATES OF PARTICIPATION subject: AUTHORIZE THE ISSUANCE AND SALE OF A MAXIMUM OF $33 MILLION IN REVENUE CERTIFICATES OF PARTICIPATION Submitted By: Initiating DeptJDiv.: Debbie Ratcliff, Controller Administrative / Finance & Accounting REVIEWED AND RECOMMENDED FOR BOARD ACTION: D. Ratcli yV raves ISSUE: Authorization from the Board of Directors is required to issue approximately $33 million of new debt through the sale and delivery of Revenue Certificates of Participation. , RECOMMENDATION: Authorize the sale of a maximum of $33 million of new debt in the form of Revenue Certificates of Participation for a term of 20 years. FINANCIAL IMPACTS: By issuing new debt of a maximum of $33 million, the District will be providing needed funds for capital expenditures relating to the wastewater system, will help smooth future Sewer Service Charge rates, and will provide for a minimum fund balance to ensure that the District's cash flow needs are met. ALTERNATIVES /CC+NSIDERATIONS: The District could consider not issuing new debt or an amount that is less than $33 million. However, after detailed analysis by staff, the Sewer Service Charge rate would need to be increased significantly or capital projects would have to be deferred to meet cash flow requirements if the Board chooses not to issue debt, or an amount significantly less than $33 million. BACKGROUND: Staff has presented to the Board at the September 3rd, September 17 th dber 1st meetings, the need to borrow $33 million dollars to provide financing for certain capital projects relating to the wastewater system (the Sludge Loading Facility, Standby Power, CSO Facility, HHW Improvements, Wet Weather Bypass, and Collection System Renovation). Due to favorable market conditions, and favorable construction bid climate, staff is recommending the sale of Revenue Certificates of Participation. Build America Bonds are available for the new debt. These are taxable bonds which are subsidized by the Federal Government at a rate of 35% of the interest costs. The District would rely on the advice of the underwriter and pricing consultant whether it N: tADMINSUPWDMIN\POSPAPER1Approve & authorize Revenue Certificates of Participation 10- 15- 09.doc POSITION PAPER Board Meeting Date: October 15, 2009 Subject AUTHORIZE THE ISSUANCE AND SALE OF A MAXIMUM OF $33 MILLION IN REVENUE CERTIFICATES OF PARTICIPATION would be feasible and in the best interest of the District to issue Build America Bonds for some or all of the new debt. RECOMMENDED BOARD ACTION: Authorize the sale of a maximum of $33 million of new debt in the form of Revenue Certificates of Participation. N:\ ADMINSUP\ADMIN \POSPAPER\Approve & authorize Revenue Certificates of Participation 10- 15- 09.doc Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 8.c. Budget and Finance Type of Action: ADOPT RESOLUTION subject: ADOPT RESOLUTION AUTHORIZING THE REFINANCING OF THE EXISTING 1998 AND 2002 REVENUE CERTIFICATES, OR ADOPT RESOLUTION AUTHORIZING BOTH THE REFINANCING OF EXISTING DEBT OF APPROXIMATELY $25 MILLION AND THE ISSUANCE OF A MAXIMUM OF $33 MILLION IN NEW DEBT Submitted By: Initiating Dept /Div.: Debbie Ratcliff, Controller Administrative /Finance & Accounting REVIEWED AND RECOMMENDED FOR BOARD ACTION: D. Ratcli Ryl us ves General Manager ISSUE: Adoption of a resolution is required to refinance existing 1998 and 2002 Revenue Certificates, or to both refinance existing debt not to exceed $25 million and issue new debt (Revenue Certificates of Participation) in the amount not to exceed $33 million. RECOMMENDATION: Adopt a resolution to refinance existing debt only or to refinance _ both existing debt of $25 million and issue new debt (Revenue Certificates of Participation) in the amount not to exceed $33 million. FINANCIAL IMPACTS: By refinancing the District's outstanding debt not to exceed $25 million, cost savings of approximately $1.3 million will be realized over the remaining term of the bonds. By issuing new debt of not to exceed $33 million in Revenue Certificates, the District will be providing needed funds for capital expenditures relating to the wastewater system, will help smooth future Sewer Service Charge rates, and will provide for a minimum fund balance to ensure that the District's cash flow needs are met. By combining both the refinancing and the new issuance, the District would save approximately $130,000 in issuance costs. ALTERNATIVES /CONSIDERATIONS: The Board could choose not to adopt resolutions for refinancing or for both refinancing and issuing new debt; however, based on current market conditions of both low interest rates and low bid estimates, staff does not recommend it. BACKGROUND: Staff is seeking Board direction and authorization regarding refunding $25 million of existing debt and new debt not to exceed $33 million. The previous two N: \ADMINSUPWDMIN \PDSPAPER\Approve & Authorize the Refinancing of 1998 & 2002 Revenue Certificates 10 -15 -09 - Paper 3.doc POSITION PAPER Board Meeting Date: October 15, 2009 Subject: ADOPT RESOLUTION AUTHORIZING THE REFINANCING OF THE EXISTING 1998 AND 2002 REVENUE CERTIFICATES, OR ADOPT RESOLUTION AUTHORIZING BOTH THE REFINANCING OF EXISTING DEBT OF APPROXIMATELY $25 MILLION AND THE ISSUANCE OF A MAXIMUM NOT TO EXCEED $33 MILLION IN NEW DEBT Position Papers provide answers to staff. The Board is now being asked to adopt the appropriate resolution to authorize the refunding of a maximum of $25 million or both the refunding of $25 million and the sale of a maximum of $33 million new debt using a negotiated or competitive method, based upon the Board's actions. If the Board authorizes the refinancing of the 1998 and 2002 Revenue Certificates only, staff is recommending using the negotiated sale method at a cost of issuance of approximately $262,000 for the cost of issuance. The Board will be asked by staff to adopt the appropriate resolutions, green attachment. If, however, the Board authorizes the issuance of $33 million in new debt in addition to the $25 million refinancing, then staff will recommend to the Board to combine the sale into one, and use the negotiated sale method. A savings of approximately $130,000 will be realized by combining the two offers versus if the District sold the issues separately. The Board will be asked by staff to adopt the appropriate resolutions, blue attachment. At the Board meeting on October 1, 2009, Tom Lockard, Financial Advisor from Stone & Youngberg, discussed two approaches to bond sales, competitive sale and negotiation sale. The District has done both in the past with the 1998 issue being sold in a negotiated sale and the 2002 issue being sold in a competitive sale. A competitive sale sets a day and time to take bids from interested underwriters. A negotiated sale allows for pre- marketing and market timing to get the best possible interest rate. An independent pricing consultant works for the District on the negotiations to ensure a fair interest rate. Mr. Lockard and Mr. Adams, Bond Counsel from Jones Hall, are recommending a negotiated sale based on the current volatility in the market and the ability to pre- market the sale. The attached resolution for the refinancing only using a negotiated sale, authorizes the issuance of Refunding Bonds, approves the execution of the Indenture of Trust with U.S. Bank, provides for a minimum savings threshold, that if not met, the Refunding Bonds would not be sold, approves the Preliminary Official Statement, engages Jones Hall as Bond Counsel, engages KNN Public Finance as Pricing Consultant, appoints N: WDMINSUPVADMIN\POSPAPERVApprove & Authorize the Refinancing of 1998 & 2002 Revenue Certificates 10 -15 -09 -Paper 3.doc POSITION PAPER Board Meeting Date: October 15, 2009 subject: ADOPT RESOLUTION AUTHORIZING THE REFINANCING OF THE EXISTING 1998 AND 2002 REVENUE CERTIFICATES, OR ADOPT RESOLUTION AUTHORIZING BOTH THE REFINANCING OF EXISTING DEBT OF APPROXIMATELY $25 MILLION AND THE ISSUANCE OF A MAXIMUM NOT TO EXCEED $33 MILLION IN NEW DEBT Stone & Youngberg LLC as underwriter under a Bond Purchase Contract and authorizes all other necessary actions.: Also attached is a resolution for a competitive sale that appoints Stone & Youngberg LLC, as financial advisor to the District. The attached resolution for the combined offering of refinancing and issuing new debt using a negotiated sale authorizes the issuance of certificates in the combined amount of $58 million. In addition to the previously stated actions, it also approves an Installment Sale Agreement between the District and the Central Contra Costa Sanitary District Facilities Financing Authority, and includes the authorization to issue Build America Bonds, if in the District's best interest. Also attached is an alternative resolution for the combined sale that provides for the Board to approve issuance and sale through a competitive sale. RECOMMENDED BOARD ACTION: Staff recommends the Board adopt: 1) The Refinancing Resolution using a negotiated sale if the Board approves refinancing only (green attachment); or 2) The combined resolution. using a negotiated sale if the Board approves both the refinancing of existing debt and issuance of new debt (blue attachment). N:\ ADMINSUP\ADMIN \POSPAPER\Approve & Authorize the Refinancing of 1998 & 2002 Revenue Certificates 10 -15-09 - Paper 3.doc REFUNDING RESOLUTIO14 — NEGOTIATED SALE RESOLUTION NO. RESOLUTION OF THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT AUTHORIZING THE ISSUANCE AND SALE OF WASTEWATER REVENUE REFUNDING BONDS IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $25,000,000 TO REFUND OUTSTANDING 1998 BONDS AND 2002 CERTIFICATES OF PARTICIPATION, AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, the Central Contra Costa Sanitary District (the "District') presently owns and operates facilities and property for the collection, treatment and disposal of wastewater within the service area of the District (the "Wastewater System "), and in order to provide funds to finance improvements to the Wastewater System the District has previously issued the following obligations (collectively, the "Prior Debt'): • Central Contra Costa Sanitary District 1998 Refunding Revenue Bonds in the aggregate original principal amount of $25,335,000 (the "1998 Bonds "); and Installment Sale Agreement dated as of June 1, 2002, between the Authority and the District, under which the District is obligated to pay installment payments in the aggregate original principal amount of $16,565,000 (the "2002 Certificates); and WHEREAS, in order to provide funds to refund the Prior Debt and thereby realize interest rate savings to the District, the Board of Directors of the District proposes to authorize the issuance and sale of 2009 Wastewater Revenue Refunding Bonds of the District in the aggregate principal amount of not to exceed $25,000,000 (the 'Refunding Bonds'), under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the 'Refunding Bond Law "); and WHEREAS, the Refunding Bonds will be secured by a pledge of and lien on the net revenues derived by the District from the operation of the Wastewater System; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitation District as follows: Section 1. Authorization of Refunding Bonds. The Board of Directors hereby authorizes the issuance of the Refunding Bonds in the maximum principal amount of $25,000,000, for the purpose of providing funds to refund the Prior Debt. The Refunding Bonds shall be revenue bonds which are payable from and secured by a pledge of and lien on the net revenues of the Wastewater System. The Refunding Bonds are authorized to be issued under the provisions of the Refunding Bond Law. Section 2. Approval of Financing Documents. The Board of Directors hereby approves each of the following financing documents in substantially the respective forms on file with the Secretary, together with any changes therein or additions thereto approved by the General Manager or the Director of Administration (each, an "Authorized Officer"), provided that the execution thereof by the General Manager shall be conclusive evidence of such approval: Indenture of Trust dated as of December 1, 2009, between the District and U.S. Bank National Association, as trustee, prescribing the terms and provisions upon which the Refunding Bonds are issued. Irrevocable Refunding Instructions given by the District to U.S. Bank National Association, as trustee for the Prior Debt, establishing an irrevocable escrow fund to be held, invested and administered for the purpose of refunding the Prior Debt. The General Manager is hereby authorized and directed for and in the name and on behalf of the District to execute the final form of each of the foregoing documents, and the Secretary is hereby authorized and directed to attest and affix the seal of the District to the final form of each of the foregoing documents. Section 3. Negotiated Sale of Refunding Bonds; Minimum Savings Threshold. The Board of Directors hereby authorizes and directs the negotiated sale of the Refunding Bonds to Stone & Youngberg LLC as underwriter (the "Underwriter") under the Bond Purchase Contract in substantially the form on file with the Secretary together with any changes therein or additions thereto deemed advisable by an Authorized Officer, whose execution thereof shall be conclusive evidence of the approval of any such changes or additions. The Board of Directors hereby delegates to an Authorized Officer the authority to accept an offer from the Underwriter to purchase the Refunding Bonds and to execute the Bond Purchase Contract for and in the name and on behalf of the District. An Authorized Officer is hereby authorized and directed to execute the final form of the Bond Purchase Contract for and in the name and on behalf of the District. Notwithstanding the foregoing paragraph, the Refunding Bonds are authorized to be sold to the Underwriter only if the following minimum savings are realized as a result of the refunding: (a) for the refunding of the 1998 Bonds, the net present value savings must be at least $400,000; and (b) for the refunding of the 2002 Certificates, the net present value savings must be at least $500,000. The Refunding Bonds shall not be sold to the Underwriter unless the Underwriter represents to the District in the Bond Purchase Contract that such minimum savings amounts have been achieved. In the event that the minimum savings amount is achieved for only one issue of the Prior Debt, the Refunding Bonds may be sold only for the refunding of such issue of the Prior Debt. Section 4. Official Statement. The Board of Directors hereby approves and deems nearly final within the meaning of Rule 15c2 -12 of the Securities Exchange Act of 1934, except for permitted omissions, the preliminary Official Statement describing the Refunding Bonds in the form on file with the Secretary, together with appropriate revisions as required to incorporate provisions relating to the Refunding Bonds. Distribution of such Preliminary Official Statement by the Underwriter is hereby approved. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to such Preliminary Official Statement for the purpose of finalizing such document, and the execution thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes and additions. The Board of -2- Directors hereby authorizes the distribution of the Final Official Statement by the Underwriter to purchasers of the Refunding Bonds. The Final Official Statement shall be executed in the name and on behalf of the District by an Authorized Officer. Section 5. Engagement of Professional Services. The Board of Directors hereby approves the engagement of the law firm of Jones Hall, A Professional Law Corporation, to act as bond counsel and disclosure counsel to the District in connection with the issuance of the Refunding Bonds. The Board of Directors hereby further approves the engagement of the firm of KNN Public Finance to act as pricing consultant to the District in connection with the sale of the Refunding Bonds. The Director of Administration is hereby authorized and directed to execute an agreement with each of said firms on behalf of the District, in the respective forms on file with the Director of Administration. Section 6. Official Actions. The President, the General Manager, the Director of Administration, the Controller and all other officers of the Board of Directors and the District are each authorized and directed in the name and on behalf of the District to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate the issuance and sale of the Refunding Bonds and any of the other transactions contemplated by the agreements and documents approved pursuant to this Resolution. Whenever in this Resolution any officer of the District is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 7. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. -3- PASSED AND ADOPTED this 15'" day of October, 2009, by the following vote: AYES: NOES: ABSENT: COUNTERSIGNED:. Secretary of the Central Contra Costa Sanitary District, County of Contra Costa, State of California Approved as to Form: Jones Hall, A Professional Law Corporation Bond Counsel to the District ME President of the Board of Directors of the Central Contra Costa Sanitary District, County of Contra Costa, State of California REFUNDING RESOLUTION — COMPETITIVE SALE RESOLUTION NO. RESOLUTION OF THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT AUTHORIZING THE ISSUANCE AND SALE OF WASTEWATER REVENUE REFUNDING BONDS IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $25,000,000 TO REFUND OUTSTANDING 1998 BONDS AND 2002 CERTIFICATES OF PARTICIPATION, AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, the Central Contra Costa Sanitary District (the "District') presently owns and operates facilities and property for the collection, treatment and disposal of wastewater within the service area of the District (the "Wastewater System "), and in order to provide funds to finance improvements to the Wastewater System the District has previously issued the following obligations (collectively, the "Prior Debt'):- Central Contra Costa Sanitary District 1998 Refunding Revenue Bonds in the aggregate original principal amount of $25,335,000 (the "1998 Bonds "); and Installment Sale Agreement dated as of June 1, 2002, between the Authority and the District, under which the District is obligated to pay installment payments in the aggregate original principal amount of $16,565,000 (the "2002 Certificates); and WHEREAS, in order to provide funds to refund the Prior Debt and thereby realize interest rate savings to the District, the Board of Directors of the District proposes to authorize the issuance and sale of 2009 Wastewater Revenue Refunding Bonds of the District in the aggregate principal amount of not to exceed $25,000,000 (the 'Refunding Bonds "), under the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the 'Refunding Bond Law "); and ' WHEREAS, the Refunding Bonds will be secured by a pledge of and lien on the net revenues derived by the District from the operation of the Wastewater System; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitation District as follows: Section 1. Authorization of Refunding Bonds. The Board of Directors hereby authorizes the issuance of the Refunding Bonds in the maximum principal amount of $25,000,000, for the purpose of providing funds to refund the Prior Debt. The Refunding Bonds shall be revenue bonds which are payable from and secured by a pledge of and lien on the net revenues of the Wastewater System. The Refunding Bonds are authorized to be issued under the provisions of the Refunding Bond Law. Section 2. Approval of Financing Documents. The Board of Directors hereby approves each of the following financing documents in substantially the respective forms on file with the Secretary, together with any changes therein or additions thereto approved by the General Manager or the Director of Administration (each, an "Authorized Officer'), provided that the execution thereof by the General Manager shall be conclusive evidence of such approval: • Indenture of Trust dated as of December 1, 2009, between the District and U.S. Bank National Association, as trustee, prescribing the terms and provisions upon which the Refunding Bonds are issued. • Irrevocable Refunding Instructions given by the District to U.S. Bank National Association, as trustee for the Prior Debt, establishing an irrevocable escrow fund to be held, invested and administered for the purpose of refunding the Prior Debt. The General Manager is hereby authorized and directed for and in the name and on behalf of the District to execute the final form of each of the foregoing documents, and the Secretary is hereby authorized and directed to attest and affix the'seal of the District to the final form of each of the foregoing documents. Section 3. Competitive Sale of Refunding Bonds; Minimum Savings Threshold. The Board of Directors hereby authorizes and directs the sale of the Refunding Bonds by competitive public bidding. Bids shall be received, and the Refunding Bonds shall be sold, subject to the terms and conditions set forth in the Official Notice of Sale in substantially the form on file with the Secretary together with any additions thereto or changes therein deemed advisable by the Director of Administration, whose execution thereof shall be conclusive evidence of the approval of any such additions or changes. The Director of Administration is hereby authorized and directed to accept the best bid determined in accordance with the Official Notice of Sale, in the name and on behalf of the District. Jones Hall, A Professional Law Corporation, as bond counsel to the District, is hereby authorized and directed to cause an appropriate notice of the District's intention to sell the Refunding Bonds to be published once in The Bond Buyer in accordance with 53692 of the Government Code. Such publication shall be made at least five days before the date set for receipt of bids on the Refunding Bonds. Notwithstanding the foregoing provisions of this Section 3, the Refunding Bonds are authorized to be sold only if the following minimum savings are realized as a result of the refunding: (a) for the refunding of the 1998 Bonds, the net present value savings must be at least $400,000; and (b) for the refunding of the 2002 Certificates, the net present value savings must be at least $500,000. The sale of the Refunding Bonds shall not be awarded to the best bidder unless the District's financial adviser determines that such minimum savings amounts have been achieved. In the event that the minimum savings amount is achieved for only one issue of the Prior Debt, the Refunding Bonds may be sold only for the refunding of such issue of the Prior Debt. Section 4. Official Statement. The Board of Directors hereby approves and deems nearly final within the meaning of Rule 15c2 -12 of the Securities Exchange Act of 1934, except for permitted omissions, the preliminary Official Statement describing the Refunding Bonds in the form on file with the Secretary, together with appropriate revisions as required to incorporate provisions relating to the Refunding Bonds. Distribution of such Preliminary Official Statement to prospective bidders by the financial -2- adviser is hereby approved. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to such Preliminary Official Statement for the purpose of finalizing such document, and the execution thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes and additions. The Board of Directors hereby authorizes the distribution of the Final Official Statement by the winning bidder to purchasers of the Refunding Bonds. The Final Official Statement shall be executed in the name and on behalf of the District by an Authorized Officer. Section 5. Engagement of Professional Services. The Board of Directors hereby approves the engagement of the law firm of Jones Hall, A Professional Law Corporation, to act as bond counsel and disclosure counsel to the District in connection with the issuance of the Refunding Bonds. The Board of Directors hereby further approves the engagement of the firm of Stone & Youngberg LLC to act as financial adviser to the District in connection with the issuance of the Refunding Bonds. The Director of Administration is hereby authorized and directed to execute an agreement with each of said firms on behalf of the District, in the respective forms on file with the Director of Administration: _ Section 6. Consent to Bidding by Financial Adviser. Stone & Youngberg LLC, as financial adviser to the District, has requested approval from the District to bid or participate in the bidding for the purchase of the Refunding Bonds upon the competitive public sale thereof as provided in Section 3, and the Board of Directors hereby gives its consent thereto in accordance with the requirements of Section 53691 of the Government Code of the State of California. Section 7. Official Actions. The President, the General Manager, the Director of Administration, the Controller and all other officers of the Board of Directors and the District are each authorized and directed in the name and on behalf of the District to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate the issuance and sale of the Refunding Bonds and any of the other transactions contemplated by the agreements and documents approved pursuant to this Resolution. Whenever in this Resolution any officer of the District is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 8. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. -3- PASSED AND ADOPTED this 15'h day of October, 2009, by the following vote: AYES: NOES: ABSENT: COUNTERSIGNED: Secretary of the Central Contra Costa Sanitary District, County of Contra Costa, State of California Approved as to Form: Jones Hall, A Professional Law Corporation Bond Counsel to the District 0 President of the Board of Directors of the Central Contra Costa Sanitary District, County of Contra Costa, State of California NEW MONEY AND REFUNDING RESOLUTION — NEGOTIATED SALE RESOLUTION NO. RESOLUTION OF THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT AUTHORIZING THE ISSUANCE AND SALE OF WASTEWATER REVENUE CERTIFICATES OF PARTICIPATION IN THE MAXIMUM PRINCIPAL AMOUNT OF $58,000,000 TO REFINANCE OUTSTANDING DEBT AND FINANCE VARIOUS WASTEWATER PROJECTS, AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, the Central Contra Costa Sanitary District (the "District') presently owns and operates facilities and property for the collection, treatment and disposal of wastewater within the service area of the District -(the "Wastewater System"), and in order to provide funds to finance improvements to the Wastewater System the District has previously issued the following obligations (collectively, the 'Prior Debt "): • Central Contra Costa Sanitary District 1998 Refunding Revenue Bonds in the aggregate original principal amount of $25,335,000 (the "1998 Bonds "); and • Installment Sale Agreement dated as of June 1, 2002, between the Authority and the District, under which the District is obligated to pay installment payments in the aggregate original principal amount of $16,565,000 (the "2002 Certificates); and WHEREAS, the Board of Directors of the District wishes at this time to provide funds to refinance the outstanding Prior Debt and to finance certain capital expenditures relating to the Wastewater System (the "Projects "); and WHEREAS, in order to provide financing for such purposes, the District has requested that the Central Contra Costa Sanitary District Facilities Financing Authority, a nonprofit public benefit corporation duly organized and existing under the laws of the State of California (the "Authority"), enter into an Installment Sale Agreement (the "Installment Sale Agreement") with the District; and WHEREAS, in order to raise funds for such purposes, the Authority proposes to assign its rights under the Installment Sale Agreement to U.S. Bank National Association, as trustee (the "Trustee ") and the Authority, the Trustee and the District propose to enter into a Trust Agreement under which the Trustee will execute and deliver 2009 Wastewater Revenue Certificates of Participation in the aggregate principal amount of not to exceed $58,000,000 (the "Certificates') representing the direct, undivided fractional interests of the owners thereof in the semiannual payments which the District is obligated to make thereunder in respect of debt service on the Certificates; and WHEREAS, the Board of Directors wishes to authorize the issuance and sale of the Certificates . at this time for the purpose of providing funds to refinance the outstanding Prior Debt and to finance the Projects; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitary District as follows: Section 1. Approval of Financing Plan and Related Documents: The Board of Directors hereby approves the issuance and sale of the Certificates in the maximum principal amount of $58,000,000 for the purpose of providing funds to refinance the outstanding Prior Debt (in the maximum principal amount of $25,000,000) and to finance the Projects (in the maximum principal amount of $33,000,000). To that end, the Board of Directors hereby approves each of the following financing documents in substantially the respective forms on file with the Secretary, together with any changes therein or additions thereto approved by the General Manager or the Director of Administration (each, an "Authorized Officer"), provided that the execution thereof by the General Manager shall be conclusive evidence of such approval. Installment Sale Agreement between the District and the Authority, under which the Authority agrees to provide funds to refinance the outstanding Prior Debt and to finance the Projects in consideration of semiannual payments to be made by the District from the net revenues of the Wastewater System. Trust Agreement among the District, the Authority and the Trustee, whereby the Trustee agrees to execute and deliver the Certificates and to apply the proceeds thereof to accomplish the purposes of the financing. Irrevocable Refunding Instructions given by the District to U.S. Bank National Association, as trustee for the Prior Debt, establishing an irrevocable escrow fund to be held, invested and administered for the purpose of refunding the Prior Debt. The General Manager is hereby authorized and directed for and in the name and on behalf of the District to execute the final form of each of the foregoing documents, and the Secretary is hereby authorized and directed to attest to the final form of each of the foregoing documents. The schedule of semiannual payments attached to the Installment Sale Agreement shall correspond to the payments of principal and interest represented by the Certificates, to be determined upon the sale thereof as set forth in Section 2. Section 2. Negotiated Sale of Certificates. The Board of Directors hereby authorizes and directs the negotiated sale of the Certificates to Stone & Youngberg LLC as underwriter (the "Underwriter") under the Certificate Purchase Contract in substantially the form on file with the Secretary together with any changes therein or additions thereto deemed advisable by an Authorized Officer, whose execution thereof shall be conclusive evidence of the approval of any such changes or additions. The Board of Directors hereby delegates to an Authorized Officer the authority to accept an offer from the Underwriter to purchase the Certificates and to execute the Certificate Purchase Contract for and in the name and on behalf of the District. An Authorized y*2 Officer is hereby authorized and directed to execute the final form of the Certificate Purchase Contract for and in the name and on behalf of the District. The amount of Underwriter's discount for the Certificates shall be not more than 1.00% of the par amount thereof and the average rate of interest to be represented by the Certificates (taking into account any original issue discount on the sale thereof) shall not exceed 5.50% per annum. Section 3. Minimum Savings Threshold. Notwithstanding the foregoing provisions of Section 2, the Certificates are authorized to be sold to the Underwriter for the purpose of refunding the Prior Debt only if the following minimum savings are realized as a result of the refunding: (a) for the refunding of the 1998 Bonds, the net present value savings must be at least $400,000; and (b) for the refunding of the 2002 Certificates, the net present value savings must be at least $500,000. The Certificates shall not be sold to the Underwriter for the purpose of refunding the Prior Debt unless the Underwriter represents to the District in the Certificate Purchase Contract that such minimum savings amounts have been achieved. In the event that the minimum savings amount is achieved for only-one issue of the Prior Debt, the Certificates may be sold only for the refunding of such issue of the Prior Debt. The failure to meet such minimum savings in connection with the refunding of the Prior Debt shall not have any effect on the issuance of the Certificates for the Projects. Section 4. Build America Bonds Designation. The Board of Directors hereby directs an Authorized Officer to determine, based on advice from the Underwriter, whether it is feasible and in the best interests of the District to sell a portion of the Certificates in the form of "Build America Bonds" under and within the meaning of Section 54AA of the Internal Revenue Code of 1986 (the "Tax Code "). If an Authorized Officer determines that it is in the best interests of the District to issue and sell a portion of the Certificates in such form, an Authorized Officer is authorized to make the necessary election in the name and on behalf of the, District as required by the Tax Code, and to approve such amendments to the documents approved under this Resolution as may be required to effectuate such issuance. Section 5. Official Statement. The Board of Directors hereby approves and deems nearly final within the meaning of Rule 15c2 -12 of the Securities Exchange Act of 1934, except for permitted omissions, the preliminary Official Statement describing the Certificates in the form on file with the Secretary, together with appropriate revisions as required to incorporate provisions relating to the Certificates. Distribution of such Preliminary Official Statement by the Underwriter is hereby approved. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to such Preliminary Official Statement for the purpose of finalizing such document, and the execution thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes and additions. The Board of Directors hereby authorizes the distribution of the Final Official Statement by the Underwriter to prospective purchasers of the Certificates. The Final Official Statement shall be executed in the name and on behalf of the District by an Authorized Officer. Section 6. Engagement of Professional Services. The Board of Directors hereby approves the engagement of the law firm of Jones Hall, A Professional Law Corporation, to act as bond counsel and disclosure counsel to the District in connection with the issuance of the Certificates. The Board of Directors hereby further approves the engagement of the firm of KNN Public Finance to act as pricing consultant to the District in connection with the sale of the Certificates. The Director of Administration is 1911 hereby authorized and directed to execute an agreement with each of said firms on behalf of the District, in the respective forms on file with the Director of Administration. Section 7. Official Actions. The President, the General Manager, the Director of Administration, the Controller and all other officers of the Board of Directors and the District are each authorized and directed in the name and on behalf of the District to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate the issuance and sale of the Certificates and any of the other transactions contemplated by the agreements and documents approved pursuant to this Resolution. Whenever in this Resolution any officer of the District is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 8. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. -4- 0 PASSED AND ADOPTED this 15'" day of October, 2009, by the following vote: AYES: NOES: ABSENT:' President of the Board of Directors of the Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: Secretary of the Central Contra Costa Sanitary District, County of Contra Costa, State of California Approved as to Form: Jones Hall, A Professional Law Corporation Bond Counsel to the District -5- f 0 NEW MONEY AND REFUNDING RESOLUTION — COMPETITIVE SALE RESOLUTION NO. RESOLUTION OF THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT AUTHORIZING THE ISSUANCE AND SALE OF WASTEWATER REVENUE CERTIFICATES OF PARTICIPATION IN THE MAXIMUM PRINCIPAL AMOUNT OF $58,000,000 TO REFINANCE OUTSTANDING DEBT AND FINANCE VARIOUS WASTEWATER PROJECTS, AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, the Central Contra Costa Sanitary District (the "District') presently owns and operates facilities and property for the collection, treatment and disposal of wastewater within the service area of the District (the "Wastewater System "), and in order to provide funds to finance improvements to the Wastewater System the District has previously issued the following obligations (collectively, the "Prior Debt'): • Central Contra Costa Sanitary District 1998 Refunding Revenue Bonds in the aggregate original principal amount of $25,335,000 (the "1998 Bonds "); and • Installment Sale Agreement dated as of June 1, 2002, between the Authority and the District, under which the District is obligated to pay installment payments in the aggregate original principal amount of $16,565,000 (the "2002 Certificates); and WHEREAS, the Board of Directors of. the District wishes at this time to provide funds to refinance the outstanding Prior Debt and to finance certain capital expenditures relating to the Wastewater System (the "Projects "); and WHEREAS, in order to provide financing for such purposes, the District has requested that the Central Contra Costa Sanitary District Facilities Financing Authority, a nonprofit public benefit corporation duly organized and existing under the laws of the State of California (the "Authority "), enter into an Installment Sale Agreement (the "Installment Sale Agreement") with the District; and WHEREAS, in order to raise funds for such purposes, the Authority proposes to assign its rights under the Installment Sale Agreement to U.S. Bank National Association, as trustee (the "Trustee ") and the Authority, the Trustee and the District propose to enter into a Trust Agreement under which the Trustee will execute and deliver 2009 Wastewater Revenue Certificates of Participation in the aggregate principal amount of not to exceed $58,000,000 (the "Certificates ") representing the direct, undivided fractional interests of the owners thereof in the semiannual payments which the District is obligated to make thereunder in respect of debt service on the Certificates; and WHEREAS, the Board of Directors wishes to authorize the issuance and sale of the Certificates at this time for the purpose of providing funds to refinance the outstanding Prior Debt and to finance the Projects; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitary District as follows: Section 1. Approval of Financing Plan and Related Documents. The Board of Directors hereby approves the issuance and sale of the Certificates in the maximum principal amount of $58,000,000 for the purpose of providing funds to refinance the outstanding Prior Debt (in the maximum principal amount of $25,000,000) and to finance the Projects (in the maximum principal amount of $33,000,000). To that end, the Board of Directors hereby approves each of the following financing documents in substantially the respective forms on file with the Secretary, together with any changes therein or additions thereto approved by the General Manager or the Director of Administration (each, an "Authorized Officer"), provided that the execution thereof by the General Manager shall lie conclusive evidence of such approval`. Installment Sale Agreement between the District and the Authority, under which the Authority agrees to provide funds to refinance the outstanding Prior Debt and to finance the Projects in consideration of semiannual payments to be made by the District from the net revenues of the Wastewater System. Trust Agreement among the District, the Authority and the Trustee, whereby the Trustee agrees to execute and deliver the Certificates and to apply the proceeds thereof to accomplish the purposes of the financing. Irrevocable Refunding Instructions given by the District to U.S. Bank National Association, as trustee for the Prior Debt, establishing an irrevocable escrow fund to be held, invested and administered for the purpose of refunding the Prior Debt. The General Manager is hereby authorized and directed for and in the name and on behalf of the District to execute the final form of each of the foregoing documents, and the Secretary is hereby authorized and directed to attest to the final form of each of the foregoing documents. The schedule of semiannual payments attached to the Installment Sale Agreement shall correspond to the payments of principal and interest represented by the Certificates, to be determined upon the sale thereof as set forth in Section 2. Section 2. Competitive Sale of Certificates. The Board of Directors hereby authorizes and directs the sale of the Certificates by competitive public bidding. Bids shall be received, and the Certificates shall be sold, subject to the terms and conditions set forth in the Official Notice of Sale in substantially the form on file with the Secretary together with any additions thereto or changes therein deemed advisable by the Director of Administration, whose execution thereof shall be conclusive evidence of the approval of any such additions or changes. The Director of Administration is hereby authorized and directed to accept the best bid determined in accordance with the Official Notice of Sale, in the name and on behalf of the District. The amount of purchaser's discount for -2- the Certificates shall be not more than 1.00% of the par amount thereof and the average rate of interest to be represented by the Certificates (taking into account any original issue discount on the sale thereof) shall not exceed 5.50% per. annum. Jones Hall, A Professional Law Corporation, as bond counsel to the District, is hereby authorized and directed to cause an appropriate notice of the District's intention to sell the Certificates to be published once in The Bond Buyer in accordance with 53692 of the Government Code. Such publication shall be made at least five days before the date set for receipt of bids on the Certificates. Section 3. Minimum Savings Threshold. Notwithstanding the foregoing provisions of Section 2, the Certificates are authorized to be sold to the best bidder for the purpose of refunding the Prior Debt only if the following minimum savings are realized as a result of the refunding: (a) for the refunding of the 1998 Bonds, the net present value savings must be at least $400,000; and (b) for the refunding of the 2002 Certificates, the net present value savings must be at least $500,000. The sale of the Certificates for the purpose of refunding the Prior Debt shall not be awarded to the best bidder unless the District's• financial adviser determines that such minimum savings amounts have been achieved. In the event that the minimum savings amount is achieved for only one issue of the Prior Debt, the Certificates may be sold only for the refunding of such issue of the Prior Debt. The failure to meet such minimum savings in connection with the refunding of the Prior Debt shall not have any effect on the issuance of the Certificates for the Projects. Section 4. Build America Bonds Designation. The Board of Directors hereby directs an Authorized Officer to determine, based on advice from the financial adviser, whether it is feasible and in the best interests of the District to sell a portion of the Certificates in the form of "Build America Bonds" under and within the meaning of Section 54AA of the Internal Revenue Code of 1986 (the "Tax Code "). If an Authorized Officer determines that it is in the best interests of the District to issue and sell a portion of the Certificates in such form, an Authorized Officer is authorized to make the necessary election in the name and on behalf of the District as required by the Tax Code, and to approve such amendments to the documents approved under this Resolution as may be required to effectuate such issuance. Section 5. Official Statemerit. The Board of Directors hereby approves'and deems nearly final within the meaning of Rule 15c2 -12 of the Securities Exchange Act of 1934, except for permitted omissions, the preliminary Official Statement describing the Certificates in the form on file with the Secretary, together with appropriate revisions as required to incorporate provisions relating to the Certificates. Distribution of such Preliminary Official Statement to prospective bidders by the financial adviser is hereby approved. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to such Preliminary Official Statement for the purpose of finalizing such document, and the execution thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes and additions. The Board of Directors hereby authorizes the distribution of the Final Official Statement by the winning bidder to purchasers of the Certificates. The Final Official Statement shall be executed in the name and on behalf of the District by an Authorized Officer. Section 6. Engagement of Professional Services. The Board of Directors hereby approves the engagement of the law firm of Jones Hall, A Professional Law Corporation, to act as bond counsel and disclosure counsel to the District in connection -3- with the issuance of the Certificates. The Board of Directors hereby further approves the engagement of the firm of Stone & Youngberg LLC to act as financial adviser to the District in connection with the issuance of the Certificates. The Director of Administration is hereby authorized and directed to execute an agreement with each of said firms on behalf of the District, in the respective forms on file with the Director of Administration. Section 7. Consent to Bidding by Financial Adviser. Stone & Youngberg LLC, as financial adviser to the District, has requested approval from the District to bid or participate in the bidding for the purchase of the Certificates upon the competitive public sale thereof as provided in Section 2, and the Board of Directors hereby gives its consent thereto in accordance with the requirements of Section 53691 of the Government Code of the State of California. Section 8. Official Actions. The President, the General Manager, the Director of Administration, the Controller and all other officers of the Board of Directors and the District-are each authorized-and -directed in the name and on behalf of the District to, make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate the issuance and sale of the Certificates and any of the other transactions contemplated by the agreements and documents approved pursuant to this Resolution. Whenever in this Resolution any officer of the District is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 9. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. -4- PASSED AND ADOPTED this 15`" day of October, 2009, by the following vote: AYES: NOES: ABSENT: COUNTERSIGNED: Secretary of the Central Contra Costa Sanitary District, County of Contra Costa, State of California Approved as to Form: 9 Jones Hall, A Professional Law Corporation Bond Counsel to the District President of the Board of Directors of the Central Contra Costa Sanitary District, County of Contra Costa, State of California -5- CENTRAL CONTRA COSTA SANITARY DISTRICT FACILITIES FINANCING AUTHORITY SPECIAL MEETING OCTOBER 15, 2009 AGENDA CALL TO ORDER ROLL CALL 3. PUBLIC COMMENTS 4. ISSUANCE AND SALE OF REVENUE CERTIFICATES OF PARTICIPATION a. Adopt a resolution of the Central Contra Costa Sanitary District Facilities Financing Authority authorizing the issuance and sale of 2009 Revenue Certificates of Participation in an amount not to exceed $58 million, which includes $25 million in refinancing existing Revenue Bonds and the issuance and sale of up to $33 million in Revenue Certificates of Participation. (No presentation is planned; staff will be available to answer questions.) Staff Recommendation (Motion Required): Adopt a resolution of the Central Contra Costa Sanitary District Facilities Financing Authority authorizing the issuance and sale of 2009 Revenue Certificates of Participation in an amount not to exceed $58 million, which includes $25 million in refinancing existing Revenue Bonds and the issuance and sale of up to $33 million in Revenue Certificates of Participation. 5. ADJOURNMENT a. Adjourn special meeting of the Authority and reconvene as the Board of Directors of the Central Contra Costa Sanitary District. Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 8.d. Budget and Finance Type of Action: ADOPT RESOLUTION Subject: ADOPT RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT FACILITIES FINANCING AUTHORITY AUTHORIZING THE ISSUANCE AND SALE OF 2009 REVENUE CERTIFICATES OF PARTICIPATION IN THE MAXIMUM AMOUNT OF $58 MILLION Submitted By: Initiating Dept /Div.: Debbie Ratcliff, Controller Administrative /Finance & Accounting REVIEWED AND RECOMMENDED FOR BOARD ACTION: D. Rat / et J .��nn,�,f� �r Oaves Jam Kelly, Ge I Manager ISSUE: Authorization by the Board of Directors of the Central Contra Costa Sanitary District Facilities Financing Authority is required to issue and sell Revenue Certificates of Participation for the combined refinancing of existing debt of $25 million and the issuance of new debt not to exceed $33 million. RECOMMENDATION: Adopt resolution approving the installment sale of wastewater facilities improvements to the Central Contra Costa Sanitary District, authorizing execution of the related Installment Sale Agreement, Trust Agreement, and approving delivery and sale of not to exceed $58 million of 2009 Revenue Certificates of Participation. FINANCIAL IMPACTS: The Central Contra Costa Sanitary District Facilities Financing Authority agrees to finance the cost of specific capital projects and to sell the completed projects to the District in consideration of semi - annual installment payments by the District. ALTERNATIVES /CONSIDERATIONS: None BACKGROUND: In order to refinance existing debt in an amount not to exceed $25 million and to provide financing for certain capital projects relating to the wastewater system (the Sludge Loading Facility, Standby Power, CSO Facility, HHW Improvements, West Weather bypass and Collection System Renovation), the District has requested that the Central Contra Costa Sanitary District Facilities Financing Authority, a nonprofit public benefit corporation, enter into an Installment Sale Agreement with the District under which the Authority agrees to finance the acquisition, construction and installation of the projects and to sell the completed projects to the District in consideration of the payment by the District of semi - annual installment. payments. N:\ADMINSUP\ADMIN \POSPAPER \Issuance and sale of 2009 Revenue Certificates 10- 15- 09.doc POSITION PAPER Board Meeting Date: October 15, 2009 subject: ADOPT RESOLUTION OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT FACILITIES FINANCING AUTHORITY AUTHORIZING.THE ISSUANCE AND SALE OF 2009 REVENUE CERTIFICATES OF PARTICIPATION IN THE MAXIMUM AMOUNT OF $58 MILLION Based on the previous position papers, the attached resolutions (yellow attachment) provides for the Board of Directors of the Financing Authority to approve the issuance and sale of Revenue Certificates of Participation in the maximum amount of $58 million using a negotiated sale, appoints Stone & Youngberg LLC as underwriter through a Bond Purchase Contract, to approve and execute an Installment Sale Agreement between the District and the Financing Authority, to approve and execute a Trust Agreement between the District, the Financing Authority and U.S. Bank, N.A. as Trustee and authorize all other necessary actions. Also attached is an alternative resolution that provides for the Board of Directors to approve the issuance and sale through a competitive sale. RECOMMENDED BOARD ACTION: Adopt resolution approving the installment sale of wastewater facilities improvements to the Central Contra Costa Sanitary District, authorizing execution of the related Installment Sale Agreement, Trust Agreement, and approving delivery and sale of not to exceed $58 million of 2009 Revenue Certificates of Participation using a negotiated sale. N:WDMINSUPWDMIN \POSPAPER \Issuance and sale of 2009 Revenue Certificates 10- 15- 09.doc NEW MONEY AND REFUNDING RESOLUTION — NEGOTIATED SALE RESOLUTION NO. RESOLUTION OF THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT FACILITIES FINANCING AUTHORITY AUTHORIZING THE ISSUANCE AND SALE OF WASTEWATER REVENUE CERTIFICATES OF PARTICIPATION IN THE MAXIMUM PRINCIPAL AMOUNT OF $58,000,000 TO REFINANCE OUTSTANDING DEBT OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT AND FINANCE VARIOUS WASTEWATER PROJECTS, AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, the Central Contra Costa Sanitary District (the "District') presently owns and operates facilities and property for the collection; treatment and disposal of wastewater within the service area of the District (the "Wastewater System "), and in order to provide funds to finance improvements to the Wastewater System the District has previously issued the following obligations (collectively, the "Prior Debt'): • Central Contra Costa Sanitary District 1998 Refunding Revenue Bonds in the aggregate original principal amount of $25,335,000 (the "1998 Bonds "); and • Installment Sale Agreement dated as of June 1, 2002, between the Authority and the District, under which the District is obligated to pay installment payments in the aggregate original principal amount of $16,565,000 (the "2002 Certificates); and WHEREAS, the District has determined at this time to provide funds to refinance the outstanding Prior Debt and to finance certain capital expenditures relating to the Wastewater System (the "Projects "); and WHEREAS, in order to provide financing for such purposes, the District has requested that the Central Contra Costa Sanitary District Facilities Financing Authority, a nonprofit public benefit corporation duly organized and existing under the laws of the State of California (the "Authority "), enter into an Installment Sale Agreement (the "Installment Sale Agreement") with the District; and WHEREAS, in order to raise funds for such purposes, the Authority proposes to assign its rights under the Installment Sale Agreement to U.S. Bank National Association, as trustee (the "Trustee ") and the Authority, the Trustee and the District propose to enter into a Trust Agreement under which the Trustee will execute and deliver 2009 Wastewater Revenue Certificates of Participation in the aggregate principal amount of not to exceed $58,000,000 (the "Certificates ") representing the direct, undivided fractional interests of the owners thereof in the semiannual payments which the District is obligated to make thereunder in respect of debt service on the Certificates; and WHEREAS, the Board of Directors wishes to authorize the issuance and sale of the Certificates at this time for the purpose of providing funds to refinance the outstanding Prior Debt and to finance the Projects; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitary District Facilities Financing Authority as follows: Section 1. Approval of Financing Plan and Related Documents. The Board of Directors hereby approves the issuance and sale of the Certificates in the maximum principal amount of $58,000,000 for the purpose of providing funds to refinance the outstanding Prior Debt (in the maximum principal amount of $25,000,000) and to finance the Projects (in the maximum principal amount of $33,000,000). To that end, the Board of Directors hereby approves each of the following financing documents in substantially the respective forms on file with the Secretary, together with any changes therein or additions thereto approved by the Executive Director or the Treasurer (each, an "Authorized Officer"), provided that the execution thereof by the Executive Director shall be conclusive evidence of sdch approval: Installment Sale Agreement between the District and the Authority, under which the Authority agrees to provide funds to refinance the outstanding Prior Debt and to finance the Projects in consideration of semiannual payments to be made by the District from the net revenues of the Wastewater System. Trust Agreement among the District, the Authority and the Trustee, whereby the Trustee agrees to execute and deliver the Certificates and to apply the proceeds thereof to accomplish the purposes of the financing. The Executive Director is hereby authorized and directed for and in the name and on behalf of the Authority to execute the final form of each of the foregoing documents, and the Secretary is hereby authorized and directed to attest to the final form of each of the foregoing documents. The schedule of semiannual payments attached to the Installment Sale Agreement shall correspond to the payments of principal and interest represented by the Certificates, to be determined upon the sale thereof as set forth in Section 2. Section 2. Negotiated Sale of Certificates. The Board of Directors hereby authorizes and directs the negotiated sale of the Certificates to Stone & Youngberg LLC as underwriter (the "Underwriter") under the Certificate Purchase Contract in substantially the form on file with the Secretary together with any changes therein or additions thereto deemed advisable by an Authorized Officer, whose execution thereof shall be conclusive evidence of the approval of any such changes or additions. The amount of Underwriter's discount for the Certificates shall be not more than 1.00% of the par amount thereof and the average rate of interest to be represented by the Certificates (taking into account any original issue discount on the sale thereof) shall not exceed 5.50% per annum. The Certificates shall be sold for the purpose of refunding the Prior Debt only in the event and to the extent that the minimum amount of savings is achieved in accordance with the resolution adopted by the Board of Directors of the District with respect to the Certificates. -2- Section 3. Build America Bonds Designation. If the District determines that it is in the best interests of the District to issue and sell a portion of the Certificates in the form of Build America Bonds, an Authorized Officer is authorized to approve such amendments to the documents approved under this Resolution as may be required to effectuate such issuance. Section 4. Official Actions. The President, the Executive Director, the Treasurer, the Secretary and all other officers of the Board of Directors and the Authority are each authorized and directed in the name and on behalf of the Authority to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate the issuance and sale of the Certificates and any of the other transactions contemplated by the agreements and documents approved pursuant to this Resolution. Whenever in this Resolution any officer of the Authority is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 5. Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. -3- PASSED AND ADOPTED this 15'" day of October, 2009, by the following vote: AYES: NOES: ABSENT: President of the Authority Board of the Central Contra Costa Sanitary District Facilities Financing Authority, County of Contra Costa, State of California COUNTERSIGNED:" Secretary of the Central Contra Costa Sanitary District Facilities Financing Authority, County of Contra Costa, State of California Approved as to Form: Jones Hall, A Professional Law Corporation Bond Counsel to the District -4- NEW MONEY AND REFUNDING RESOLUTION — COMPETITIVE SALE RESOLUTION NO. RESOLUTION OF THE BOARD OF DIRECTORS OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT FACILITIES FINANCING AUTHORITY AUTHORIZING THE ISSUANCE AND SALE OF WASTEWATER REVENUE CERTIFICATES OF PARTICIPATION IN THE MAXIMUM PRINCIPAL AMOUNT OF $58,000,000 TO REFINANCE OUTSTANDING DEBT OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT AND FINANCE VARIOUS WASTEWATER PROJECTS, AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, the Central Contra Costa Sanitary District (the "District') presently owns and operates facilities and property for the collection, treatment and disposal of wastewater within the service area of the District (the "Wastewater System "), and in order to provide funds to finance improvements to the Wastewater System the District has previously issued the following obligations (collectively, the "Prior Debt'): Central Contra Costa Sanitary District 1998 Refunding Revenue Bonds in the aggregate original principal amount of $25,335,000 (the "1998 Bonds "); and Installment Sale Agreement dated as of June 1, 2002, between the Authority and the District, under which the District is obligated to pay installment payments in the aggregate original principal amount of $16,565,000 (the "2002 Certificates); and WHEREAS, the District has determined at this time to provide funds to refinance the outstanding Prior Debt and to finance certain capital expenditures relating to the Wastewater System (the "Projects "); and WHEREAS, in order to provide financing for such purposes, the District has requested that the Central Contra Costa Sanitary District Facilities Financing Authority, a nonprofit public benefit corporation duly organized and existing under the laws of the State of California (the "Authority'), enter into an Installment Sale Agreement (the "Installment Sale Agreement") with the District; and WHEREAS, in order to raise funds for such purposes, the Authority proposes to assign its rights under the Installment Sale Agreement to U.S. Bank National Association, as trustee (the "Trustee ") and the Authority, the Trustee and the District propose to enter into a Trust Agreement under which the Trustee will execute and deliver 2009 Wastewater Revenue Certificates of Participation in the aggregate principal amount of not to exceed $58,000,000 (the "Certificates ") representing the direct, undivided fractional interests of the owners thereof in the semiannual payments which the District is obligated to make thereunder in respect of debt service on the Certificates; and WHEREAS, the Board of Directors wishes to authorize the issuance and sale of the Certificates at this time for the purpose of providing funds to refinance the outstanding Prior Debt and to finance the Projects; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Central Contra Costa Sanitary District Facilities Financing Authority as follows: Section 1. Approval of Financing Plan and Related Documents. The Board of Directors hereby approves the issuance and sale of the Certificates in the maximum principal amount of $58,000,000 for the purpose of providing funds to refinance the outstanding Prior Debt (in the maximum principal amount of $25,000,000) and to finance the Projects (in the maximum principal amount of $33,000,000). To that end, the Board of Directors hereby approves each of the following financing documents in substantially the respective forms on file with the Secretary, together with any changes therein or additions thereto approved by the Executive Director or the Treasurer (each, an "Authorized Officer"), provided that the execution thereof by the Executive Director shall be conclusive evidence of such approval: • Installment Sale Agreement between the District and the Authority, under which the Authority agrees to provide funds to refinance the outstanding Prior Debt and to finance the Projects in consideration of semiannual payments to be made by the District from the net revenues of the Wastewater System. • Trust Agreement among the District, the Authority and the Trustee, whereby the Trustee agrees to execute and deliver the Certificates and to apply the proceeds thereof to accomplish the purposes of the financing. The Executive Director is hereby authorized and directed for and in the name and on behalf of the Authority to execute the final form of each of the foregoing documents, and the Secretary is hereby authorized and directed to attest to the final form of each of the foregoing documents. The schedule of semiannual payments attached to the Installment Sale Agreement shall correspond to the payments of principal and interest represented by the Certificates, to be determined upon the sale thereof as set forth in Section 2. Section 2. Competitive Sale of Certificates. The Board of Directors hereby authorizes and directs the sale of the Certificates by competitive public bidding. Bids shall be received, and the Certificates shall be sold, subject to the terms and conditions set forth in the Official Notice of Safe which is approved by the District. The amount of purchaser's discount for the Certificates shall be not more than 1.00% of the paramount thereof and the average rate of interest to be represented bithe Certificates (taking into account any original issue discount on the sale thereof) shall not exceed 5.50% per annum. The Certificates shall be sold for the purpose of refunding the Prior Debt only in the event and to the extent that the minimum amount of savings is achieved in accordance with the resolution adopted by the Board of Directors of the District with respect to the Certificates. Section 3. Build America Bonds Designation. If the District determines that it is in the best interests of the District to issue and sell a portion of the Certificates in the form of Build America Bonds, an Authorized Officer is authorized to approve such -2- amendments to the documents approved under this Resolution as may be required to effectuate such issuance. Section 4. Official Actions. The President, the Executive Director, the Treasurer, the Secretary and all other officers of the Board of Directors and the Authority are each authorized and directed in the name and on behalf of the Authority to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate the issuance and sale of the Certificates and any of the other transactions contemplated by the agreements and documents approved pursuant to this Resolution. Whenever in this Resolution any officer of the Authority is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 5: Effective Date. This Resolution shall take effect from and after the date of its passage and adoption. f f f i i f f f f 1 f R Sea PASSED AND ADOPTED this 15'h day of October, 2009, by the following vote: AYES: NOES: ABSENT: President of the Authority Board of the Central Contra Costa Sanitary District Facilities Financing Authority, County of Contra Costa, State of California COUNTERSIGNED:' Secretary of the Central Contra Costa Sanitary District Facilities Financing Authority, County of Contra Costa, State of California Approved as to Form: Jones Hall, A Professional Law Corporation Bond Counsel to the District -4- Central Contra Costa Sanitary District ' BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: October 15, 2009 No.: 8.e. Budget and Finance Type of Action: RECEIVE AUDITED FINANCIAL STATEMENTS subject: RECEIVE THE AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Submitted By: Debbie Ratcliff, Controller Initiating Dept. /Div.: Administrative / Finance & Accounting REVIEWED AND RECOMMENDED FOR BOARD ACTION: a '�� 1. - - 10 71/9 James &. Kelly, General Manager ISSUE: The audited financial statements of the Central Contra Costa Sanitary District for the Fiscal Year ended June 30, 2009, are being submitted to the Board of Directors. RECOMMENDATION: Receive the audited financial statements for the Fiscal Year ended June 30, 2009. FINANCIAL IMPACTS: None ALTERNATIVES /CONSIDERATIONS: None BACKGROUND: The firm of Cropper Accountancy Corporation, Certified Public Accountants, has completed its examination of the District's financial statements for the Fiscal Year ended June 30, 2009, and has submitted the audited financial statements and auditor's opinion thereon. In the routine performance of their examination of the financial statements, the auditors evaluate the District's internal accounting controls to determine the nature and extent of the auditing procedures required. Based on their observations during the course of the examination, the auditors advised District management of any significant deficiencies or material misstatements and any recommendations to improve the system of internal accounting controls. There were no deficiencies or recommendations for improvements in internal controls this year. The audited financial statements were reviewed in detail with John Cropper from Cropper Accountancy Corporation at the Budget and Finance Committee meeting on September 28, 2009, and will be reviewed with the full Board at the October 15, 2009, Board Meeting. A copy of the audited financial statements has been received by the Board under separate cover. N: WDMINSUPWDMIN \POSPAPERWudited Financial Statements 10- 15- 09.doc - Page 1 of 2 POSITION PAPER Board Meeting Date: October 15, 2009 subject. RECEIVE THE AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 In accordance with Government Code Section 53891, information from the audit will be used to prepare a report to the State Controller's office. The report will be sent electronically by the annual deadline of October 19, 2009. The audited financial statements are also sent to the County Auditor - Controller, Contra Costa County Board of Supervisors, and Bond Rating Agencies. RECOMMENDED BOARD ACTION: Receive the audited financial statements for the Fiscal Year ended June 30, 2009. N: \ADMINSUP\ADMIN \POSPAPER\Audited Financial Statements 10- 15- 09.doc Page 2 of 2 CENTRAL CONTRA COSTA SANITARY DISTRICT ' FINANCIAL STATEMENTS JUNE 30, 2009 Cropper Accountancy Corporation Certified Public Accountants TABLE OF CONTENTS Paee No. Independent Auditors' Report 1 Management's Discussion and Analysis 2-6 Statement of Net Assets 7 Statement of Revenues, Expenses, and Changes in Net Assets 8 Statement of Cash Flows 9 Notes to Financial Statements 10-30 Supplementary Information: Combining Schedule of Statement of Net Assets 31 Combining Schedule of Statement of Revenues, Expenses, and Changes in 32 Net Assets Schedule of Running Expense — Comparison of Budget and Actual 33 Expenses by Department Running Expense — Schedule of Supplemental Net Assets Analysis 34 I I Cropper Accountancy Corporation Certified Public Accountants 2977 Ygnacio Valley Road, 4460 Walnut Creek, California 94598 Tel: (925) 932 -3860 INDEPENDENT AUDITORS' REPORT Fax: (925) 932 -3862 To the Board of Directors of Central Contra Costa Sanitary District Martinez, California We have audited the accompanying financial statements of the Central Contra Costa Sanitary District as of and for the years ended June 30, 2009 and 2008, as listed in the table of contents. These basic financial statements are the responsibility of the District's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of I America and the State Controller's Audit Requirements for California Special Districts. Those standards require that we plan and perform the audit to obtain a reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, ' evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as. well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the ' financial position of the Central Contra Costa Sanitary District as of June 30, 2009 and 2008, and the changes in financial position and cash flows for the years then ended in conformity.with accounting principles generally accepted in the United States of America, as well as accounting systems prescribed by the State Controller's office for special districts. The Management's Discussion and Analysis is not a required part of the basic financial statements but is supplemental information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation. of the required supplementary information. However, we did not audit this information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The combining fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. I 6u�Aeeowdwo4l &�n�vn CROPPER ACCOUNTANCY CORPORATION September 23, 2009 I I I Central Contra Costa Sanitary Distridt 5079 Imhoff Place, Martinez, CA 94553 -4392 (925) 228 -9500 • www.centralsan.org MANAGEMENT'S DISCUSSION AND ANALYSIS This section of the District's annual financial report presents an analysis of the District's financial performance during the fiscal year ended June 30, 2009. This information is presented in conjunction with the audited financial statements, which follow this report. Three years of comparative data is required; however, variance explanations are for differences between 2008 -09 and 2007 -08. 1 FINANCIAL HIGHLIGHTS The District's 2008 -09 financial highlights are listed below. These results are discussed in more detail 1 later in the report. • The District's total ending net assets increased by $10.1 million or 1.67% in 2008 -09 when compared to fiscal year 2007 -08 • Total revenues were $82.6 million in 2008 -09 compared to $82.2 million in 2007 -08 • Total 2008 -09 expenses were $78.8 million compared to $75.0 million in 2007 -08 • Capital Contributions decreased from $10.7 million in 2007 -08 to $6.3 million in 2008 -09. 1 OVERVIEW OF THE FINANCIAL STATEMENTS This annual report includes the management's discussion and analysis report, the independent auditor's report and the basic financial statements of the District. The financial statements also include notes that explain information in the financial statements in more detail. 1 REQUIRED FINANCIAL STATEMENTS The Financial Statements of the District report information utilizing methods similar to those used by private sector companies. These statements offer short and long -term financial information about its activities. • Statement of net assets — reports the District's current financial resources (short-term spendable resources) with capital assets and long -term obligations • Statement of revenues, expenses and changes in net assets —reports the District's operating and non - operating revenues by major source along with operating and non - operating expenses and capital contributions • Statement of cash flows — reports the District's cash flows from operating activities, investing, capital and noncapital financing activities 1 i, RecycW Paper 2 STATEMENT OF NET ASSETS The following table shows the condensed statement of net assets of the Central Contra Costa Sanitary District for the past three years: Condensed Statement of Net Assets Fiscal Year Fiscal Year Fiscal Year 2nnR -2nn9 2007 -2nnR 2n06 -2007 Current Assets $ 73,481194 $ 86,373,020 $ 80,148,191 Capital Assets 578,889,989 560,288,889 543,622,261 Other Non - current Assets 4,964 404 5,219,183 5,506,090 Total Assets 657,335,587 651,881,092 629,276,542 Current Liabilities 15,098,030 13,270,194 9,120,863 Non - Current Liabilities 30,557 514 37,000,803 36,419,802 Total Liabilities 45,655,544 50,270,997 45,540,665 Invested in Capital Assets, Net of Related Debt 552,165,498 531,119,639 512,101,920 Restricted - Debt Service 3,163,956 3,185,416 3,216,163 Unrestricted 56,350,589 67,305,040 68,417,794 Total Net Assets $ 611,680,043 $ 601,610,095 $ 583,735,877 The total net assets of the District increased to $611.7 million in 2008 -09, a $10.1 million increase from 2007 -2008. The increase in net assets is the result of net income of $3.8 million and capital contributions of $6.3 million (shown in the next table). By far the largest portion of the District's net assets (90.3% percent) reflects its investment in capital assets (e.g. land, buildings, machinery, equipment, and sewer line infrastructure), less any related debt used to acquire those assets that is still outstanding. The District uses these capital assets to provide services to its ratepayers; consequently, these assets are not available for future spending. Although the District's investment in its capital assets is reported net of debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. There is currently $3.2 million restricted for debt service. The remaining balance of $56.4 million in unrestricted net assets may be used to meet the District's ongoing obligations to its ratepayers and creditors. REVIEW OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS The table on the following page shows the condensed statement of revenues, expenses, and changes in net assets for the Central Contra Costa Sanitary District for the past 3 years: 3 Revenues, Expenses, and Changes in Fiscal Year Fiscal Year Fiscal Year Net Assets 2008 -2009 2007 -2008 2006 -2007 Sewer Service Charges SSC $ 51,843,311 $ 48,414,017 $ 44,100,883 Other Service Charges and misc. 1,540,833 1,465,569 1,657,238 Total Operating Revenue 53,384,144 49,879,586 45,758,121 Customer Contributions SSC 13,938,421 14,970,637 15,945 915 Property Tax 12,539,375 12,254,168 11,762,731 Permit & Inspection Fees 1,093,756 1,335,160 1,615 308 Interest and All Other 1,672,618 3,771,438 4,574,156 Total Non-Operating Revenues 29,244,170 32,331,403 33,898,110 Total Revenues 82,628,314 82,210,989 79,656,231 Total Labor and Benefits 39,440,034 37,312,472 34,678,665 Chemicals & Utilities 7,414,467 7,223,877 7,024,986 Repairs and Maintenance 3,057,540 2,985,670 3,254,643 Professional, Legal and Outside Services 2,832,001 2,613,658 2,298,712 Materials & Supplies 1,954,288 1,728,963 1,734,504 Hauling and Disposal 880,589 877,885 850,439 Self- Insurance Expense 958,906 916,639 519,284 All Other 1,437,429 1,247,298 1,444,082 Depreciation Expense 19,417,941 18,615,747 17,714,714 Total Operating Expenses 77,393,195 73,522,209 69,520,029 Non - Operating Expense - Interest Expense 1,421,686 1,518,142 1,609,104 Total Expenses 78,814,881 75,040,351 71,129,133 Income Before Capital Contributions 3,813,433 7,170,638 8,527,098 Contributed Sewer Lines 1,231,022 1,444,420 3,521,704 Capital Contributions - Connection Fees 5,025,493 9,259,160 8,917,658 Total Capital Contributions 6,256,515 10,703,580 12,439 362 Change in Net Assets 10,069,948 17,874,218 20,966,460 Beginning Net Assets 601,610,095 583,735,877 562,769,417 Ending Net Assets $ 611,680,043 $ 601,610,095 $ 583,735,877 In 2008 -09, operating revenues increased by $3.5 million or 7.03 %; non - operating revenue decreased by $3.1 million or - 9.55 %. The change in total revenue resulted in a small increase of $0.4 million or 0.51 %. The SSC rate increased in 2008 -09 by 3.7% and there were new connections to the system. Additionally, a portion of SSC revenue was shifted from non - operating to operating revenue. The total ' impact of these changes results in a $3.4 million increase in SSC operating revenue, and a decrease of 41.0 million in SSC non - operating revenue. Property Tax revenue had a modest $0.3 million increase due to a 2.33% growth to the tax base, in spite of the sub -prime mortgage crisis and recession. In 2008 - 09, permit and inspection fees decreased by -$0.2 million, or - 18.08 %, in the struggling economy. Interest and All Other revenue decreased by -$2.1 million, or - 55.65 %. This is mostly due to lower interest earnings on District investments due to lower investment rates and investment balances. ' In 2008 -09, operating expenses increased by $3.9 million or 5.27 %. This is mainly due to increases in total labor, depreciation expense, increased self- insurance claims, technical services, chemical, and I utility costs. Labor and Benefits increased by $2.1 million or 5.70% due to cost -of- living adjustments, merit increases, filling of vacant positions, and increased benefit costs in general. Depreciation expense increased by $0.8 million, which reflects new capital additions. Non - Operating Expense, which is made 91 up of debt service interest expense decreased slightly as more principal was paid off. Total 2008 -09 , income before capital contributions decreased from $7.2 million in 2007 -08 to $3.8 million in 2008 -09 or a net decrease of -$3.4 million or -46.82 %. ' Capital contributions in 2008 -09 were $6.3 million compared to $10.7 million in 2007 -2008, resulting in a decrease of $4.4 million or - 41.55 %. This was mainly due to less contributed sewer lines and ' connection fees due to the construction and housing slowdown. The total change in net assets decreased from $17.9 million in 2007 -08 to $10.1 million in 2008 -09. CAPITAL ASSETS As of June 30, 2009, the District's investment in capital assets totaled $578.9 million, which is an increase of $18.6 million or 3.32% over the capital asset balance of $560.3 million at June 30, 2008. Capital assets include the District's entire major infrastructure including wastewater treatment facilities, sewers, land, buildings, pumping stations, vehicles, and furniture and equipment exceeding our capitalization policy limit of $5,000, net of depreciation. A comparison of the District's capital assets over the past 3 fiscal years is presented below: Fiscal Year Fiscal Year Fiscal Year r:anital GCCPtQ 200R -2009 2007 -2008 2006 -2007 Land $ 17,114,720 $ 17,114,720 $ 17,114,720 Sewage Collection System 273,333,617 242,706,977 226 796,748 Contributed Sewer Lines 146,757,520 145,596,316 144,151,897 Outfall Sewers 8,518,443 8,518,443 8,518,443 Sewage Treatment Plant 268,399,708 264,327,208 255,008,296 Recycled Water Infrastructure 11,936,662 11,936,662 11,726,507 Pumping Stations 52,404,387 51,632,331 50,082,876 Buildings 19,997,044 19,987,656 19,537,601 Intangible Assets 1,521,424 - - Furniture & Equipment 14,523,054 13,730,782 12,951 529 Motor Vehicles 5,983,539 5,224,941 4,575,910 Construction In Progress 24,645,390 28,515,814 24,536,196 Subtotal 845,135,508 809,291,850 775,000,723 Less Accumulated Depreciation 266,245,519 249,002,961 231 378,462 Total Capital Assets (net of depreciation) $ 578,889,989 $ 560,288,889 $ 543,622,261 The major reasons for the increase of $18.6 million in capital assets, net of depreciation, are: • Sewer pipe ongoing renovations, pumping station improvements, and contributed sewer lines ($32.6 million) • Treatment plant infrastructure renovations, upgrades, equipment, and improvements ($4.1 million) • All other asset categories, including construction in progress, decreased slightly ($0.8 million) • Capital Asset increases are offset by an increase of $17.2 million in accumulated depreciation due to our increasing capital asset value and its associated depreciation expense. See Note #4 in the audited financial statements. 5 IDEBT ADMINISTRATION The District has the following outstanding debt as of June 30, 2009: 1998 Revenue Refunding Bonds $ 10,820,277 2002 Revenue Bonds 13,585,000 Water Reclamation Loan Contract 1,484,491 ' $ 25,889,768 See Note #6 in the audited financial statements. ECONOMIC AND OTHER FACTORS Changes in the state budget have a significant impact on the District. The State currently faces an unprecedented budget deficit. Previous California budget deficits were partially remedied by shifting a portion of local property tax to the state in 2004 -05 and 2005 -06. The tax shift ended in 2006 -07, and ' the voters passed Proposition IA that mandates the State repay any future property tax that it borrows in an effort to curtail local government tax raids. The Governor and legislature voted to suspend Proposition IA, and the District will lose a portion of property tax revenue in 2009 -10. The amount is estimated to be approximately $1.2 million. The State is obligated to pay back local governments, plus interest, in 3 years. It is uncertain if the State will have the resources for repayment. The State's problems will continue into future budgets and will have a trickle -down effect on local governments. tSome of the other factors the District faces in the future are: • The recession, recovery, and the future state of the economy • Large market losses in 2008 and 2009 will increase the cost of retirement benefits • Other Post - Employment benefit required contributions based on actuarial analyses using lower interest rates ' • Reduced new connections and connection fees • Regulatory requirements becoming more stringent, causing the District to spend more on compliance, both for operations and maintenance costs and capital projects • Low interest rates negatively impact interest earnings In addition to making efforts to reduce spending and improve process efficiencies, the District has the ability to raise the Sewer Service Charge to meet our long -term commitments. The District has a Standard and Poors AAA rating, and can obtain bond financing if necessary. FINANCIAL CONTACT The financial report is designed to provide our customers and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact: Controller, Central Contra Costa Sanitary District, 5019 Imhoff Place, Martinez, CA 94553. 1 6 This page intentionally left blank FINANCIAL STATEMENTS CENTRAL CONTRA COSTA SANITARY DISTRICT Statement of Net Assets June 30, 2009 and 2008 ASSETS Current Assets Cash and cash equivalents Short term investments Accounts receivable Interest receivable Parts and supplies Prepaid expenses Total Current Assets Noncurrent Assets Restricted cash and investments Land, property, plant and equipment, net of accumulated depreciation Construction in progress Contractual assessment district receivable Revenue bond issuance costs, net of amortization Total Noncurrent Assets Total Assets LIABILITIES Current Liabilities Accounts payable and accrued expenses OPEB transition payable Interest payable Current portion of refunding revenue bonds Current portion of water reclamation loan contract Current portion of accrued compensated absences Liability for uninsured claims Refundable deposits Total Current Liabilities Noncurrent Liabilities Revenue bonds, net of current portion OPEB obligation Accrued compensated absences, net of current portion Water reclamation loan contract, net of current portion Total Noncurrent Liabilities Total Liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total Net Assets 2009 $ 41,484,847 13,495,124 16,063,402 143,522 1,636,566 657,733 73,481,194 3,644,092 554,244,599 24,645,390 1,122,915 197,397 583,854,393 657,335,587 5,688,477 4,966,336 382,229 2,390,000 148,523 529,000 750,000 243,465 15,098,030 22,015,277 1,611,622 5,594,647 1,335,968 30,557,514 45,655,544 552,165,498 3,163,956 56,350,589 $ 611,680,043 The accompanying notes are an integral part of the financial statements 7 2008 $ 66,665,766 17,002,243 340,273 1,612,059 652,679 86,273,020 3,696,773 531,773,075 28,515,814 1,394,333 228,077 565,608,072 651,881,092 8,673,582 419,656 2,300,000 144,759 790,000 629,820 312,377 13,270,194 24,212,648 5,990,813 5,312,851 1,484,491 37,000,803 50,270,997 531,119,639 3,185,416 67,305,040 $ 601,610,095 I CENTRAL CONTRA COSTA SANITARY DISTRICT Statement of Revenues, Expenses, and Changes in Net Assets Years Ended June 30, 2009 and 2008 ' OPERATING REVENUE Sewer service charges (SSC) Service charges - City of Concord Other service charges Miscellaneous charges ' Total operating revenue OPERATING EXPENSES Sewage collection and pumping stations Sewage treatment Engineering ' Administrative and general Depreciation Total operating expenses ' OPERATING LOSS I I NON - OPERATING REVENUES (EXPENSES) Taxes City of Concord cash contributions to capital costs Customer cash contributions to capital cost (SSC) Permit and inspection fees Interest earnings Interest expense Other income (expense) Total non - operating revenues (expenses) Income before contributions and transfers Contributed sewer lines Capital contributions - connection fees CHANGE IN NET ASSETS Total Net Assets - Beginning Total Net Assets - Ending 2009 $ 43,087,454 8,755,857 872,978 667,855 53,384,144 11,817,621 22,927,971 6,834,321 16,395,341 19,417,941 77,393,195 (24,009,051) 12,539,375 5,485,858 8,452,563 1,093,756 1,033,095 (1,421,686) 639,523 27,822,484 3,813,433 1,231,022 5,025,493 10,069,948 601,610,095 $ 611,680,043 The accompanying notes are an integral part of the financial statements 8 2008 $ 40,207,157 8,206,860 869,589 595,980 49,879,586 10,905,468 22,054,203 6,332,830 15,613,961 18,615,747 73,522,209 (23,642,623) 12,254,168 5,336,273 9,634,364 1,335,160 2,527,621 (1,518,142) 1,243,817 30,813,261 7,170,638 1,444,420 9,259,160 17,874,218 583,735,877 $ 601,610,095 CENTRAL CONTRA COSTA SANITARY DISTRICT 13.938,421 Statement of Cash Flows Connection fees Years Ended June 30, 2009 and 2008 9,259.160 Acquisition and construction of capital assets 2009 2008 Cash Flows From Operating Activities: (2,444,759) (1158,462) Receipts from customers and users $ 55.395.420 $ 46,825,663 Payments to suppliers (18.306,594) (7,360135) Payments to employees and related benefits (42,824,881) (40,326,309) Net cash used in operating activities (5,736,055) (860,781) Cash Flows From Noncapital Financing Activities: Interest received 1.229.846 Receipt of taxes 12,539.375 12,254,168 Inspection /permit fees and other non - operating income 1.733.280 2.578.977 Interest paid on reimbursements payable (6.206) - Net cash provided by non capital and related financing activities 14.266.449 14.833.145 Cash Flows From Capital And Related Financing Activities Capital contributions 13.938,421 14.970.637 Connection fees 5,025,493 9,259.160 Acquisition and construction of capital assets (36.788,271) (31855,254) Principal paid on bonds (2,444,759) (1158,462) Interest paid on bonds (1,229,600) (1,508,630) Net cash used in capital and related financing activities (21,498,716) (13,291549) Cash Flows From Investing Activities (Increase) decrease in: Purchase of short term investments (13,495,124) - Interest received 1.229.846 2.248.555 Net cash provided (used) in investing activities (12,265,278) 2.248.555 Net decrease in cash and cash equivalents (25.233.600) 2.928.370 Cash and cash equivalents. July 1 70.362.539 67.434.169 Cash and Cash equivalents, June 30 $ 45.128.939 $ 70.362.539 Reconciliation of operating loss to net cash provided (used) by operating activities Operating gain (loss) (24,009,051) (23,642,623) Adjustments to reconcile operating income to net cash used in operating activities: Depreciation expense 19,417,941 18,615,747 Net book value on capital assets retired 253 17,299 (Increase) decrease in: Accounts receivable 1.210.259 (2,811,019) Parts and supplies (24.507) (69,041) Prepaid expenses (5,054) 118,895 Increase (decrease) in: Accounts payable and accrued expenses (1991249) 1529.733 Refundable deposits (68,912) (241904) Liability for uninsured claims 120,180 - OPEB obligation 594,289 2,832,926 Accrued compensated absences 20396 790.206 Net cash used in operating activities $ (5.736,055) _L __L860,7811 Noncash investing, capital, and financing activities Contributions of capital assets $ 1.231.022 $ 1,444.420 End of Period: Unrestricted cash and equivalents $ 41,484,847 $ 66,665.766 Restricted cash and equivalents 3.644.092 3.696.773 $ 45.128.939 $ 70.361539 The accompanying notes are an integral part of the financial statements NOTES TO THE FINANCIAL STATEMENTS CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The Central Contra Costa Sanitary District, a special district and a public entity established under the Sanitary District Act of 1923, provides sewer service for the incorporated and unincorporated areas under its jurisdiction. A Board of Directors comprised of five elected members governs the District. As required by accounting principles generally accepted in the United States of America, these basic financial statements present Central Contra Costa Sanitary District and its component unit. The component unit discussed in the following paragraph is blended in the District's reporting entity because of the significance of its operational or financial relationship with the District. Blended Component Unit — Component units are legally separate organizations for which the District is financially accountable. Component units may also include organizations that are fiscally dependent on the District, in that the District approves their budget, the issuance of their debt or the levying of their taxes. In addition, component units are other legally separate organizations for which the District is not financially accountable but the nature and significance of the organization's relationship with the District is such that exclusion would cause the District's financial statements to be misleading or incomplete. For financial reporting purposes, the component unit discussed below is reported in the District's financial statements because of the significance of its relationship with the District. The component unit, although a legally separate entity, is reported in the financial statements using the blended presentation method as if it were part of the District's operations because the Governing Board of the component unit is essentially the same as of governing board of the District and because its purpose is to finance facilities to be used for the direct benefit of the District. The Central Contra Costa Sanitary District Facilities Financing Authority was organized solely for the purpose of providing financial assistance to the District by acquiring, constructing, improving and financing various facilities, land and equipment purchases, and by leasing or selling certain facilities, land and equipment for the use, benefit and enjoyment of the public served by the District. The Corporation has no members and the Board of Directors of the Corporation consists of the same persons who are serving as the Board of Directors of the District. There are no separate basic financial statements prepared for the Corporation. Basis of Accounting The District's financial statements are prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of America as promulgated by the Government Accounting Standards Board (GASB). In addition, the District applies all applicable Financial Accounting Standards Board (FASB) pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. The District is a proprietary entity; it uses an enterprise fund format to report its activities for financial statement purposes. Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the cost and expenses, including depreciation, of providing goods or services to its customers be financed or recovered primarily through user charges; or where the governing body has decided that periodic determination of revenues earned, expense incurred, and net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. 10 ' CENTRAL CONTRA COSTA SANITARY DISTRICT ' Notes to Financial Statements Years Ended June 30, 2009 and 2008 ' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ' Enterprise funds are used to account for activities similar to those in the private sector, where the proper matching of revenues and costs is important and the full accrual basis of accounting is required. With this measurement focus, all assets and liabilities of the enterprise are recorded on its ' statement of net assets, all revenues are recognized when earned and all expenses, including depreciation, are recognized when incurred. ' Enterprise funds distinguish operating revenues and expenses from non - operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with an enterprise fund's principal ongoing operations. The principal operating revenues of the District are charges to customers for services. Operating expenses for the District include the costs of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non - operating revenues and ' expenses. For internal operating purposes, the District's Board of Directors has established four separate sub- funds, each of which includes a separate self - balancing set of accounts and a separate Board approved budget for revenues and expenses. These sub -funds are combined into the single enterprise fund presented in the accompanying financial statements. The nature and purpose of these ' sub -funds are as follows: Running Expense Running expense accounts for the general operations of the District. Substantially all operating revenues and expenses are accounted for in this sub -fund. Sewer Construction Sewer construction accounts for non - operating revenues, which are to be used for acquisition or construction of plant, property and equipment. Selfinsurance Self insurance accounts for interest earnings on cash balances in this sub -fund and cash t allocations from other sub - funds, as well as for costs of insurance premiums and claims not covered by the District's insurance coverage. Debt Service Debt service accounts for activity associated with the payment of the District's long term bonds and loans. ' That portion of the District's net assets which is allocable to each of these sub -funds has been shown separately in the accompanying financial statements. ' The District's Board of Directors adopts annual budgets on a basis consistent with accounting principles generally accepted in the United States of America. 11 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Investments Investments held at June 30, 2009, with original maturities greater than one year, are stated at fair value. Fair value is estimated based on quoted market prices at year -end. All investments not required to be reported at fair value are stated at cost or amortized cost. Prepaids Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in the financial statements. Bank Escrow Deposit An escrow agreement was formed between the District and the National Park Service for the Right of Way through the John Muir National Historic Site, in lieu of issuing a performance bond. The current Right of Way Permit is 10 years, but is renewable and must remain in effect so long as there is sewerage running through the area; therefore, it is. unlikely that the escrow funds will ever be released to the District. These funds are restricted cash in the financial statements. See note 2. Parts and Supplies Parts and supplies are valued at average cost and are used primarily for internal purposes. Property, Plant, and Equipment Purchased capital assets are stated at historical cost. Capital assets contributed to the District are stated at estimated fair value at the time of contribution. The capitalization threshold for capital assets is $5,000. Expenditures, which materially increase the value or life of a capital assets are capitalized and depreciated over the remaining useful life of the asset. The term depreciation includes amortization of intangible assets. Depreciation of exhaustible capital assets has been provided using the straight -line method as follows: Years Sewage Collection Facilities 75 Intangible Assets 75 Sewage TreatmentTlant and Pumping Plants 40 Buildings 50 Furniture and Equipment 5— 15 Motor Vehicles 6- 15 12 ICENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 ' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Defined Contribution Retirement Plans District employees may defer a portion of their compensation under a District sponsored Deferred Compensation Plan created in accordance with Internal Revenue Code Section 457. Under this Plan, participants are not taxed on the deferred portion of their compensation until it is distributed to them; distributions may be made only at termination, retirement, death, or in an emergency as defined by the Plan. The District does not make contributions to the plan. On August 20, 1997, the provisions of the Internal Revenue Code covering section 457 were amended to require existing plans to establish trusts for assets of plans so that they would not be subject to the right of general creditors. The District amended its plan during the fiscal year ended June 30, 1999 to meet this requirement. Consequently, at June 30, 2009, the plan's assets are held in trust for the exclusive benefit of the participants and are not included in the District's financial statements. The District also contributes to a money purchase plan created in accordance with Internal Revenue Code section 401(a). Contributions to the plan are made in accordance with a memorandum of understanding stating that in lieu of making payments to Social Security, the District contributes to ' the 401 (a) Plan an amount equal to that which would have been contributed to Social Security on behalf of its employees as long as the District is not required to participate in Social Security. The assets are held in trust and are not recorded on the books of the District. The District contributed ' $1,521,718 to the plan during the year ended June 30, 2009. Property Taxes Property tax revenue is recognized in the fiscal year for which the tax is levied. The County of Contra Costa levies, bills and collects property taxes for the District; all material amounts are ' collected by June 30. General County taxes collected are the same as the amount levied since the County participates in California's alternative method of apportionment called the Teeter Plan. The Teeter Plan as provided in Section 4701 at seq. of the State of Revenue and Taxation Code establishes a mechanism for the county to advance the full amount of property tax and other levies to taxing agencies based on the tax levy, rather than on the basis of actual tax collections. Although this system is a simpler method to administer, the County assumes the risk of delinquencies. The County in return retains the penalties and accrued interest thereon. Secured Property tax bills are mailed once a year during the month of October on the current secured tax roll, to the owner of the property as of the lien date (January 1). Payments can be made in two installments, and are due on November 1 and February 1. Delinquent accounts are assessed a penalty of 10 percent. Accounts, which remain unpaid on June 30, are charged an additional 1 %2 percent per month. Unsecured property tax is due on July 1 and becomes delinquent on August 31. The penalty percentage rates are the same as secured property tax. 13 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Compensated Absences The liability for vested vacation, compensatory time, and sick pay is recorded as an expense when earned. District employees have a vested interest in 100 percent of accrued vacation time and 85 percent of accrued sick time for employees hired before May 1, 1985. Employees hired after May 1, 1985 have a vested interest in up to 40 percent of their sick time, based upon length of employment with the District. The accrued compensated absences increased to $6,123,647 from $6,102,851 or $20,796 in fiscal 2009. The current portion of the liability to be used within the next year is estimated by management to be approximately $529,000. The change of $20,796 consists of increases of $529,043 and decreases of $508,247. Statement of Cash Flows For purposes of the statement of cash flows, all highly liquid investments, including restricted assets, with maturities of three months or less when purchased, are considered to be cash equivalents. Included therein are petty cash, bank accounts, Cal Trust and the State of California Local Agency Investment Fund (LAIF). Restricted assets are debt service amounts maintained by fiduciaries and not available for general expenses. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. New Accounting Pronouncements In April 2004, GASB issued GASB No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. This Statement provides guidance on how to report OPEB plans that qualify as a trust or agency funds or as fiduciary component units of either a participating employer, a plan sponsor, a public employee retirement system (CalPERS, or other administering entity). The requirements for this statement are effective for fiscal periods beginning after December 15, 2006 provided GASB 45 is also implemented. The District implemented this standard in conjunction with GASB 45 in fiscal 2009. In July 2004, GASB issued GASBS No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This Statement requires local governmental employers who provide other postemployment benefits (OPEB) as part of the total compensation offered to employees to recognize the expense and related liabilities (assets) in the Financial Statements. This Statement establishes standards for the measurement, recognition, and display of OPEB expense /expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information (RSI) in the financial reports of State and local governmental employers. 14 i CENTRAL CONTRA COSTA SANITARY DISTRICT i Notes to Financial Statements Years Ended June 30, 2009 and 2008 i1. Description of District and Summary of Significant Accounting Policies (continued) iNew Accounting Pronouncements (continued) The District implemented the provisions of this Statement for the fiscal year ended June 30, 2009 i (effective for fiscal years beginning after December 31, 2007). See note 10 for additional information. i In November of 2006, GASB issued GASBS No. 49, Accounting and Financial Reporting Pollution Remediation Obligations. The District is required to implement the provisions of this Statement for the fiscal year ended June 30, 2009 (effective for periods beginning after December 15, 2007). This ' standard addresses current or potential detrimental effects of existing pollution by participating in pollution remediation activities such as site assessments and cleanups. The scope of the document excludes pollution prevention or control obligations with respect to current operations, and future i pollution remediation activities that are required upon retirement of an asset, such as a landfill closure. This statement was formally implemented in the current fiscal year. i In June of 2007, GASB issued GASBS No. 51 Accounting and Financial Reporting for Intangible Assets. The District is required to implement the provisions of this Statement for the fiscal year ended June 30, 2010 (effective for periods beginning after June 15, 2009; for governments classified as phase i 2 under GASBS No. 34, retroactive reporting is required for intangible assets acquired in fiscal years ended after June 30, 1980). This Statement requires that all intangible assets not specifically excluded by its scope provisions be classified as capital assets. Governments possess many different types of i assets that may be considered intangible assets, including easements, water rights, patents, trademarks, and computer software. Intangible assets, and more specifically easements, are referred to in the description of capital assets in Statement No. 34, Basic Financial Statements — and Management's i Discussion and Analysis —for State and Local Governments. This reference has created questions as to whether and when intangible assets should be considered capital assets for financial reporting i purposes. The District recorded intangible assets acquired in fiscal year ended June 30, 2009 and will formally implement this Statement in fiscal year ending June 30, 2010. The implementation of the provisions of this standard may have a material effect on the financial statements of the District. iIn November of 2007, GASB issued GASBS No. 52 Land and Other Real Estate Held as Investments by Endowments. The provisions of this Statement apply to entities' financial statements ended June i 30, 2009 (effective for periods beginning after June 15, 2008). This Statement requires endowments to report their land and other real estate investments at fair value and governments to report the changes in fair value as investment income and to disclose the methods and significant assumptions i employed to determine fair value, and other information that they currently present for other investments reported at fair value. Endowments exist to invest resources for the purpose of generating income. Other entities that exist for similar purposes— pension and other postemployment i benefit plans, external investment pools, and Internal Revenue Code Section 457 deferred compensation plans— however, report land and other real estate held as investments at their fair value. This standard does not apply to the District. 15 CENTRAL. CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 1. Description of District and Summary of Significant Accounting Policies (continued) New Accounting Pronouncements (continued) In June of 2008, GASB issued GASBS No. 53, Accounting and Financial Reporting for Derivative Instruments. This Statement requires governments to measure derivative instruments at fair value in their economic resources measurement focus financial statements. Derivative instruments are often complex financial arrangements used by governments to manage specific risks or to make investments. By entering into these arrangements, governments receive and make payments based on market prices without actually entering into the related financial or commodity transactions. Derivative instruments associated with changing financial and commodity prices result in changing cash flows and fair values that can be used as effective risk management or investment tools. Derivative instruments, however, can also expose governments to significant risks and liabilities. Common types of derivative instruments used by governments include interest rate and commodity swaps, interest rate locks, options (caps, floors, and collars), forward contracts, and future contracts. The District is required to implement the provisions of the Statement for the fiscal year ending June 30, 2010 (effective for periods beginning after June 15, 2009), which should allow users of the financial statements to more fully understand the District's resources available to provide services. The District does not currently hold such instruments which would be classified as derivatives other than a minor amount held through the State Investment Pool and Cal Trust. In March of 2009, GASB issued GASBS No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement will improve financial reporting by providing fund balance categories and classifications that will be more easily understood. Elimination of the reserved component of fund balance in favor of a restricted classification will enhance the consistency between information reported in the government -wide statements and information in the governmental fund financial statements and avoid confusion about the relationship between reserved fund balance and restricted net assets. The fund balance classification approach in this Statement will require governments to classify amounts consistently, regardless of the fund type or column in which they are presented. As a result, an amount cannot be classified as restricted in one fund but unrestricted in another. The fund balance disclosures will give users information necessary to understand the processes under which constraints are imposed upon the use of resources and how those constraints may be modified or eliminated. The clarifications of the governmental fund type definitions will reduce uncertainty about which resources can or should be reported in the respective fund types. The provisions of the Statement are effective for fiscal years beginning after June 30, 2010. Fund balance reclassifications made to conform to the provisions of this Statement should be applied retroactively by restating fund balance for all prior periods presented. The District is classified as an Enterprise Fund and not a Governmental Fund Type. As such, this standard does not directly apply to the District. In March of 2009, GASB issued GASBS No. 55, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. This Statement will improve financial reporting by contributing to the GASB's efforts to codify all GAAP for state and local governments so that they derive from a single source. This Statement will make it easier for preparers of state and local government financial statements to identify and apply all relevant guidance. This Statement will not result in a change in current practice or have a material effect on the financial statements of the District. 16 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 1. Description of District and Summary of Significant Accounting Policies (continued) New Accounting Pronouncements (continued) In March of 2009, GASB issued GASBS No. 56, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards. This Statement will improve financial reporting by contributing to the GASB's efforts to codify all sources of generally accepted accounting principles for state and local governments so that they derive from a single source. This effort is important from the perspective of bringing the authoritative accounting and financial reporting literature together in one place, with that guidance modified as necessary to appropriately recognize the governmental environment and the needs of governmental financial statement users. This Statement will not result in a change in current practice or have a material effect on the financial statements of the District. Reclassifications Certain items in the prior year financial statements have been reclassified to match their presentation in the current year financial statements. 2. CASH AND CASH EQUIVALENTS Summary of Cash and Investments Investments as of June 30, 2009 are classified in the accompanying financial statements as follows: Cash and cash equivalents $ 41,484,847 Short term investments 13,495,124 Restricted cash and investments 3,644,092 Total Cash and Investments $ 58,624,063 * Includes $100,000 bank escrow deposit- see note 1 General Authorizations Limitations as they relate to interest rate risk, credit risk, and concentration of credit risk are indicated in the schedules below: Authorized Investment Tvoe U.S. Treasury Obligations Banker's Acceptance Commercial Paper (1) Collateralized Certificates of Deposit County Pooled Investment Funds Local Agency Investment Fund (LAIF) Maximum Maximum Maximum Remaining Percentage Investment Maturity of Portfolio In One Issuer 1 year None None 180 40% 15% 270 25% 15% 1 year (2) 30% 15% N/A None None N/A None None (1) Prime quality; limited to corporations with assets over $500,000,000 (2) Prior approval of the Board of Directors must be obtained to acquire maturities beyond one year 17 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements ' Years Ended June 30, 2009 and 2008 2. CASH AND CASH EQUIVALENTS (continued) Authorized Under Debt Agreements Authorized Investment Type Federal Securities Direct or indirect obligations of the following agencies of the USA: Export-Import Bank Farmers Home Administration Participation Certificates issued by the GSA Mortgage- backed bonds or pass - through obligations issued by GNMA, FNMA, FHLMC, or FHA Project notes issued by the US Department of HUD Public housing notes and bonds guaranteed by the USA Certificates of Deposit (fully insured by FDIC) Commercial Paper — US Corporations (1) Bankers acceptances (1) State Investment Pool (LAIF) Money Market Funds (1) (1) Rated highest short-term rating by S &P and Moody's Interest Rate Risk Maximum Maximum Maximum ' Remaining Percentage Investment Maturity of Portfolio In One Issuer None None ' None None None None None None None None None None , None None None None None None ' None None None None None None None None None 270 Days None None , 180 Days None None None None None None None , None Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The District manages exposure to interest rate risk by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. The District's investments at year end with the exception of the U.S Treasuries and Commercial Paper below are held in external investment pools which are liquid investments. Information about the sensitivity of the fair values of the District's investments to market interest rate fluctuation is provided by the following schedule that shows the distribution of the District's investment by maturity: Investment Tye Treasury Bills Commercial Paper- GE Capital Commercial Paper- GE Capital Commercial Paper - Citi Group Total Fair Value Maturity $ 4,995,763 10/22/09 2,000,000 8/21/09 1,500,000 9/11/09 4,999,361 7/21/09 $ 13,495,124 ' CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 ' 2. CASH AND CASH EQUIVALENTS (continued) Credit Risk Credit risk is the risk that an issue of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical ' rating organization. Presented below is the actual rating as of the year -end for each investment type. Not ' Required Rating as of Year End Fair To Be Investment Type Value Rated AAA A -1 Unrated ' Cash $ 1,684,847 $1,684,847 Money Markets 3,544,092 $3,544,092 CDs 10,000,000 10,000,000 Commercial Paper 8,499,361 $4,999,361 $3,500,000 Treasuries 4,995,763 4,995,763 CalTrust 2,200,000 2,200,000 State Investment Pool 27,700,000 27,700,000 ' Total $58,624,063 $11,684,847 $8,539,855 $4,999,361 $33,400,000 ' Concentration of Credit Risk During the current fiscal year the District invested 51% of its monies in the State Investment Pool (LAIF) and CalTrust (a County Joint Powers Agency Authority), which are not limited by the California Government Code or District Investment Policy. Investments in County Treasury — The District is considered to be a voluntary participant in an external investment pool. The fair value of the District's investment in the pool is reported in the ' accounting financial statements at amounts based upon the District's pro -rata share of the fair value provided by the County Treasurer for the entire portfolio (in relation to amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by ' the County Treasurer, which is recorded on the amortized cost basis. Investment in the State Investment Pool — The District is a voluntary participant in the Local Agency ' Investment Fund (LAIF) that is regulated by California government code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the District's investment in the pool is reported in the accompanying financial statement at amounts based upon the District's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which is recorded on the amortized costs basis. 1 19 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 2. CASH AND CASH EQUIVALENTS (continued) Custodial Credit Risk — Investments Custodial risk for investments is the risk that, in the event of the failure of the counterparty (e.g. the broker - dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code does not contain legal or policy requirements that would limit the exposure to custodial credit risk. The District's policy is to use the services of the Treasurer's Office of the County of Contra Costa, which will transact the District's investment decisions in compliance with the requirements of the District's policy. The County Treasurer's Office will execute the District's investments through such broker - dealers and financial institutions as are approved by the County Treasurer, and through the State Treasurer's Office for investment in the Local Agency Investment Fund. 3. ACCOUNTS RECEIVABLE At June 30, 2009, accounts receivable are comprised of the following: City of Concord (see Note 8) $ 14,626,217 Household Hazardous Waste Partners 681,415 All other 755,770 Total accounts receivable 16.063.402 This space intentionally left blank. 20 ' CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 ' 4. LAND, PROPERTY, PLANT AND EQUIPMENT, AND CONSTRUCTION IN PROGRESS Property, plant and equipment, and construction in progress are summarized below for the year ended June 30, 2009: Balance ' Beginning Transfer Balance of Year Additions Retirements from CIP End of Year At Cost ' Capital assets not being depreciated Land $ 17,114,720 $ - $ $ $ 17,114,720 Construction in progress 28,515,814 35,734,500 (39,604,924) 24,645,390 Total nondepreciated assets 45,630,534 35,734,500 = (39,604,924) 41,760,110 Capital assets being depreciated ' Sewage collection system 242,706,977 (100,000) 30,726,640 273,333,617 Contributed sewer lines 145,596,316 1,231,022 (69,818) - 146,757,520 Outfall sewers 8,518,443 - - 8,518,443 Sewage treatment plant 264,327,208 (1,405,000) 5,477,500 268,399,708 Recycled water infrastructure 11,936,662 - - 11,936,662 Pumping stations 51,632,331 - (300,000) 1,072,056 52,404,387 ' Buildings 19,987,656 - 9,388 19,997,044 Intangibles 1,521,424 1,521,424 Furniture and equipment 13,730,782 - (5,644) 797,916 14,523,054 ' Motor vehicles 5,224,941 1,053,772 295,174) 5,983,539 Total depreciated assets 763,661,316 2,284,794 2,175,636 39,604,924 803,375,398 ' Less accumulated depreciation Sewage collection system 33,984,272 3,484,462 (100,000) 37,368,734 Contributed sewer lines 41,261,472 1,961,239 (69,818) - 43,152,893 Outfall sewers 2,426,913 113,353 _ 2,540,266 Sewage treatment plant 136,502,000 9,173,635 (1,405,000) 144,270,635 Recycled water infrastructure 3,553,488 469,234 - 4,022,722 Pumping stations 14,133,442 2,152,938 (300,000) - 15,986,380 Buildings 5,318,319 631,390 5,949,709 Intangibles - 10,142 - 10,142 Furniture and equipment 8,499,236 1,050,390 (5,391) - 9,544,235 ' Motor vehicles 3,323,819 371,158 (295,174) 3,399,803 Total accumulated depreciation 249,002,961 19,417,941 2,175,383 - 266,245,519 ' Total capital assets being depreciated, net 514,658,355 (17,133,147) 253 39,604,924 537,129,879 Capital assets, net $ 560,288,889 $ 18,601,353 $ 253 $ - $ 578,889,989 21 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 5. ASSESSMENT DISTRICTS The District established the Contractual Assessment District (CAD) program to help homeowners finance the cost of connecting to the District. The construction costs associated with the project within the program are capitalized and depreciated. Individual homeowners are assessed an amount equal to their share of the construction costs and connection fee. The assessments plus interest are generally payable over 10 years. At year -end, the receivable balance was $1,122,915. The District also established the Alhambra Valley Assessment District (AVAD) to provide services to residents in the Alhambra Valley in Martinez. Residents have the choice to pay cash or finance the construction costs and connection fees. At year -end the receivable balance was $397,430. 6. LONG -TERM DEBT Revenue Bonds — 2002 In May 2002, the District issued $16,565,000 of Revenue Installment Certificates for Wastewater Facilities Improvements, with interest rates ranging from 4.0 to 5.0 %. The bonds are secured by a pledge of revenue. Principal payments are due annually on September 1, commencing in fiscal year 2005, and interest is payable semi - annually on September 1 and March 1 of each year. Refunding Revenue Bonds — 1998 & 1994 Defeased Debt In September 1998, the District issued $25,335,000 of Refunding Revenue Bonds with interest rates ranging from 3.5 and 4.7 %. The Bonds are secured by a pledge of revenue. Principal payments are due annually on September 1, and interest is payable semi - annually on September 1 and March 1. The District issued the 1998 Refunding Revenue Bonds to advance refund the 1994 Revenue Installment Certificates, which had interest rates of 5.25 to 6.25 %. The net proceeds were deposited in an escrow fund to service and redeem the 1994 debt. As a result, the advance refunding met the requirements of an in- substance debt defeasance, and the outstanding balance of the 1994 debt was removed from the District's accounts. The 1994 issue no longer has an outstanding balance. The excess of the amount required to be deposited into the escrow fund over the net carrying amount of the 1994 debt resulted in a deferred loss. The deferred loss is reported as reduction of the new debt and is being amortized over the 15 -year term of the new debt. Summary The changes in the District's long -term obligations during the year consisted of the following Balance Deferred Balance Due in July 1, 2008 Cost Deductions June 30 2009 One Year Revenue bonds $26,512,648 $ 192,629 $ 2,300,000 $ 24,405,277 $ 2,390,000 Water Reclamation Loan 1,629,250 144,759 1,484,491 148,523 $28.141.898 _ 1 2 2Q $ 2.444.759 $_25.889.768 $_238.523 22 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 6. LONG -TERM DEBT (continued) Debt Service Requirements The 2002 and 1998 Revenue Bonds debt service requirements are as follows: Fiscal Year Ending June 30, 2002 Debt Service Requirement 2010 1,265,261 2011 1,263,561 2012 1,265,762 2013 1,266,391 2014 1,265,437 2015-2019 6,334,686 2020 —2024 6,350,116 Total 19,011,214 Amount representing interest (5,426,214) Principal outstanding 13,585,000 Less: Unamortized deferred loss on refunding year end - 11,655,000 13,585,000 Short-term portion of revenue bonds (655,000) Long -term portion of revenue bonds $ 12,930,000 Water Reclamation Loan Contract 1998 Debt Service Requirement Total 2,216,478 3,481,739 2,222,341 3,485,902 2,217,429 3,483,191 2,216,648 3,483,039 2,219,600 3,485,037 2,220,995 8,555,681 - 6,350,116 13,313,491 32,324,705 (1,658,491) (7,084,705) 11,655,000 25,240,000 (834,723) (834,723) 10,820,277 24,405,277 (1,735,000) (2,390,000) $ 9,085,277 $ 22,015,277 The District has entered into a contract with the State of California State Water Resources Control Board (the Board), which advanced the District $2,916,872 for design and construction costs for projects related to recycled water treatment programs. 23 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 6. LONG -TERM DEBT (continued) Water Reclamation Loan Contract (continued) The District must repay advances from the Board over a 20 -year period beginning March 31, 1999, with an interest rate of 2.60 %. Debt service requirements are as follows: Years 2010 2011 2012 2013 2014 2015-2018 Total Amount representing interest Less: Current portion of Water Reclamation Loan Contract Long term portion of Water Reclamation Loan Contract Local Improvement District Bonds Debt Service Requirements $ 187,119 187,119 187,119 187,119 187,119 748,479 1,684,074 (199,583) 1,484,491 (148,523) $ 1,335,968 Within the District's boundaries, there exist several Improvement Districts, which were formed for the sole purpose of financing sewer system improvements. The District has no oversight responsibility for these Districts and is not liable for repayment of any bonds issued to finance these local improvement districts. Contra Costa County acts as the agent for the property owners in these districts in collecting assessments, forwarding collections to bondholders, and initiating foreclosure procedures, if appropriate. The outstanding balance on these bonds was $80,000 at June 30, 2009. 7. RISK MANAGEMENT The District is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disaster. The District joined with other entities to form the California Sanitation Risk Management Authority ( CSRMA), a public entity risk pool currently operating as a common risk management and insurance program for the member entities. The purpose of CSRMA is to spread the adverse effects of losses among the member entities and to purchase excess insurance as a group, thereby reducing its cost. Through CSRMA, the District purchases property insurance and workers' compensation insurance. 24 Liabilitv for Uninsured Claims The Governmental Accounting Standards Board (GASB) requires state and local governments to record their liability for uninsured claims in their financial statements. The District's uninsured claims activity and exposure relates primarily to its general and automobile liability program. The District records its estimated liability for uninsured claims in this area based on the results of periodic actuarial evaluations. The actuarial evaluations are typically performed every two years. For intervening years, the liability for uninsured claims is reviewed for adequacy based on claims activity during the intervening period. Ki i, CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements ' Years Ended June 30, 2009 and 2008 ' 7. RISK MANAGEMENT (continued) Insurance Coverage The District's insurance coverage is as follows: Self Insured Deductible Per Type of Insurance Coverage Insurer Limits Occurrence All -Risk Property Fire Public Entity Property Insurance Program ( PEPIP) $505,541,991 $ 250,000 Boiler & Machinery PEPIP $ 50,000 - (Shared Limits per Occurrence) $100,000,000 $ 250,000 Liability Errors and Omissions Insurance Company of the State of Pennsylvania (AIG) $ 15,000,000 $ 1,000,000 Employment Practices Liability AIG $ 15,000,000 $ 1,000,000 ' Employment Practices Liability Admiral Insurance Company $ 1,000,000 $ 15,000 General Liability AIG $ 15,000,000 $ 1,000,000 Auto Liability AIG $ 15,000,000 $ 1,000,000 Pollution (General Aggregate) American International Specialty $ 5,000,000 $ 5,000 General Liability Lines Insurance Co. (Occurrence) Pollution (Legal Liability American International Specialty Aggregate) (Claims Made) I Lines Insurance Co $ 10,000,000 $ 50,000 Workers' Compensation CSRMA $ 750,000 - Excess Workers' Compensation National Union Fire Insurance ' Company (statutory) $ 50,000,000 $ 750,000 Fiduciary Liability Nation Union Fire Ins. Com $ 1,000,000 $ 5,000 Liabilitv for Uninsured Claims The Governmental Accounting Standards Board (GASB) requires state and local governments to record their liability for uninsured claims in their financial statements. The District's uninsured claims activity and exposure relates primarily to its general and automobile liability program. The District records its estimated liability for uninsured claims in this area based on the results of periodic actuarial evaluations. The actuarial evaluations are typically performed every two years. For intervening years, the liability for uninsured claims is reviewed for adequacy based on claims activity during the intervening period. Ki CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements ' Years Ended June 30, 2009 and 2008 7. RISK MANAGEMENT (continued) Liability for Uninsured Claims (continued) For the fiscal year ended June 30, 2009, 2008, and 2007, settlements have not exceeded insurance coverage. Changes in the District's estimated liability for uninsured claims for fiscal years 2009, ' 2008, and 2007 are summarized as follows: 2009 2008 2007 Beginning balance S 629,820 S 629,820 $881,500 Provisions for claims incurred in the current year and changes in the liability for uninsured — ' claims incurred in prior years 286,220 387,095 (208,667) Claims and claim adjustment expenses paid (166,040) (387,095) (43,013) Ending balance $ 750,000 $ 629,820 $ 629,820 8. AGREEMENT WITH THE CITY OF CONCORD In 1974, the District and the City of Concord (the City) entered into a cost - sharing agreement under which the District became responsible for providing sewage treatment facilities and services to the City. Under this agreement, the City pays a service charge for its share of operating, maintenance and administrative costs and makes a contribution for its share of facilities capital costs expended. Service charges and contributions to capital costs from the City totaled $8,755,857 and $5,485,858 respectively, for the year ended June 30, 2009. 9. PENSION PLAN Plan Description Substantially all District full -time employees are required to participate in the Contra Costa County Employees' Retirement Association (CCCERA), a cost - sharing multiple- employer public employee deferred benefit retirement plan (Plan), governed by the County Employee's Retirement Law of 1937, as amended. The latest available actuarial and financial information for the Plan is for the year ended December 31, 2007. The Contra Costa Employees' Retirement Association issues a publicly available financial report that includes financial statements and supplemental information of the Plan. That report is available by writing to Contra Costa County Employees' Retirement Association, 1355 Willow Way, Suite 221, Concord, CA 94520 -5728 or by calling (925) 521 -3960. The Plan provides for retirement, disability, and death and survivor benefits. Annual cost of living (COL) adjustments to retirement allowances can be granted by the Retirement Board as provided by State statutes. Retirement benefits are based on age, length of service and final average salary. 26 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 9. PENSION PLAN (continued) Plan Description (continued) Subject to vested status, employees can withdraw contributions plus interest credited, or leave them as a deferred retirement when they terminate, or transfer to a reciprocal retirement system. Plan Contribution Requirement The Plan requires employees to pay one -half of the basic retirement benefit and one -half future COL costs. However, the District has paid the employee's basic contributions in accordance with the Memorandum of Understanding (MOU). The contribution requirement and payment from the District for the plan years ended June 30, 2009, 2008 and 2007 was as follows: Covered payroll for fiscal years ended June 30 Employer required contributions to pension Employee required contributions to pension Total required contributions Percentage of payroll 2009 2008 2007 $ 24,202,098 $ 22,503,704 $ 21,504,951 9,084,809 913,027 $ 9,997,836 41% The District pension plan covered 265 participants during the year. This space intentionally left blank. 27 8,757,705 892,488 $ 9,650,193 43% 8,045,860 861,387 $ 8,907,247 41% CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 10. POST EMPLOYMENT HEALTH CARE BENEFITS Plan Description The District's defined benefit post employment healthcare plan, (DPHP), provides medical benefits to eligible retired District employees and beneficiaries. DPHP is part of the Public Agency portion of the Public Agency Retirement System (PARS), an agent multiple - employer plan administered by PARS, which acts as a common investment and administrative agent for participating public employees within the State of California. A menu of benefit provisions as well as other requirements as established by the State statute with the Public Employees' Retirement Law. DPHP selects optional benefit provisions from the benefit menu by contract with PARS and adopts those benefits through District resolution. PARS issues a separate Comprehensive Annual Financial Report. Copies of the PARS annual financial report may be obtained from PARS, P.O. Box 12919, Newport Beach, CA 92658; by calling 1(800) 540 -6469; or by emailing info @pars.org. Funding Policy The District is required to contribute the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal annual costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. Trust amounts funded above or below the ARC are recorded on the books as an OPEB asset or liability /obligation, respectively. Because of the volatility of the economy, the District opted to make monthly installments into the OPEB Trust to take advantage of dollar- cost - averaging. On November 6, 2008, the Board approved payments into the Trust of $560,000 per month for 20 months. Annual OPEB Cost For 2009, the District's annual OPEB cost (expense) was $4,612,856, which is comprised of $2,372,856 in medical premiums to retirees (an implied subsidy) as well as $2,240,000 in actual contributions to the PARS Trust, which is less than the ARC of $6,224,478 by $1,611,622. The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the OPEB obligation for 2009 and the preceding year are presented below: Annual Fiscal Year OPEB Cost Percentage of OPEB Cost Contributed Net OPEB Obligation 6/30/09 $ 4,612,856 74% $ 1,611,622 Two actuarial studies have been performed by the District. The first study was as of June 30, 2005 and the last was as of June 30, 2007. Based on these studies, the Board set aside funds in a liability account for the three years, 2009, 2008 and 2007, while investigating Trust options. The amount in excess of the net OPEB obligation ($4,966,336) was a one -time transitional liability reclassified to current liabilities for payment to the OPEB Trust. W. CENTRAL CONTRA COSTA SANITARY DISTRICT 1 Notes to Financial Statements Years Ended June 30, 2009 and 2008 ' 10. POST EMPLOYMENT HEALTH CARE BENEFITS (continued) ' The following table shows the components of the District's annual OPEB costs for the year 2009, the amount actually contributed to the plan, and changes in the District's net OPEB obligation: ' Annual required contribution (ARC) $ 6,224,478 Trust contributions (2,240,000) Contributions for medical premiums paid (implied subsidy) (2,372,856) Total ARC contributions (4,612,856) Net increase in net OPEB obligation 1,611,622 Net OPEB obligation — beginning 7/1/2008 0 ' Net OPEB obligation — ending 6/30/2009 1,611,622 Board designated funds — reclassified to accounts payable 4,966,336 Total OPEB obligation and provision $ 6,577,958 ' Funding Status and Funding Progress The funded status of the plan as of July 1, 2007 (most recent actuarial evaluation) was as follows: Actuarial Accrued Liability (AAL) $ 68,447,956 ' Actuarial Value of Plan Assets (2,341,251) Unfunded Actuarial Accrued Liability (UAAL) $ 66.106.705 Funded Ratio (Actuarial Value of Plan Assets /AAL) 3.4% Covered Payroll (Active Plan Members) $ 22.648.230 UAAL as a Percentage of Covered Payroll 292% ' Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. The funded status of the plan and the annual required contributions of the employer are subject to continual revision, as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information, presents multiyear trend information that shows whether the actuarial value of the plan assets is increasing or decreasing over time, relative to the actuarial liabilities for benefits. Actuarial Methods and Assumptions Projections for benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation as well as the historical pattern of sharing benefit costs between the employer ' and plan members. The actuarial methods and assumptions used include techniques that are designed to reduce short-tern volatility in actuarial accrued liabilities and actuarial value of assets, consistent with the long -tern perspective of the calculations. The next actuarial valuation will be performed in October 2009. 1 29 CENTRAL CONTRA COSTA SANITARY DISTRICT Notes to Financial Statements Years Ended June 30, 2009 and 2008 10. POST EMPLOYMENT HEALTH CARE BENEFITS (continued) The following is a summary of the actuarial assumptions and methods: Valuation Date Actuarial Cost Method Amortization Method Average Remaining Period Actuarial Assumptions: Investment Rate of Return Inflation 11. LEASE COMMITMENTS July 1, 2007 Entry Age Normal Cost Method Level Over Service 30 Years as of the Valuation Date 5% 11 % down to 4% over a 7 -year period The District leases various facilities and equipment under operating leases. Following is a summary of operating lease commitments as of June 30, 2009: , Fiscal Year Office Endine Equipment Facilities Total 2010 $ 271,849 $ 50,550 $ 322,399 2011 271,849 52,050 323,899 2012 - 26,400 26,400 Total 543 6 8 12 0 672 6 8 Total rental expense for the fiscal years ended June 30, 2009 and 2008 was $520,941 and $481,673, respectively. 12. COMMITMENTS AND CONTINGENCIES Commitments and contingencies, undeterminable in amount, include normal recurring pending claims and litigation. In the opinion of management, based upon discussion with legal counsel, there is no pending litigation which is likely to have a material adverse effect on the financial position of the District. Claims and losses are recorded when they are reasonably probable of being incurred and the amount is estimable. Insurance proceeds and settlements are recorded when received. The District has purchase commitments relating to construction projects at June 30, 2009 of $20,610,541. 30 I 1 1 i 1 1 1 1 SUPPLEMENTARY INFORMATION 1 1 1 1 1 1 1 i 1 1 1 CENTRAL CONTRA COSTA SANITARY DISTRICT COMBINING SCHEDULE OF STATEMENT OF NET ASSETS AS OF JUNE 30, 2009 ASSETS Current Assets Cash and cash equivalents Short term investments Accounts receivable Interest receivable Due from other sub -funds Parts and supplies Prepaid expenses Total Current Assets Noncurrent Assets Restricted cash and investments Land, property, plant and equipment, net of accumulative depreciation Construction in progress Contractual assessment district receivable Revenue bond issuance costs net of amortization LIABILITIES Current Liabilities Accounts payable and accrued expenses OPEB transition payable Due to other sub -funds Interest payable Current portion of refunding water revenue bond Current portion of water reclamation loan contract Liability for uninsured claims Accrued compensation absences Refundable deposits Total Current Liabilities NONCURRENT LIABILITIES Revenue bonds, net of current portion OPEB obligation Accrued compensated absences Water reclamation loan contract net of current portion Total Liabilities NET ASSETS Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total Net Assets Running Sewer Self Debt Expense Construction Insurance Service Elimination Total $ 919,151 $ 36,821,330 $ 3,744,366 $ - $ - $ 41,484,847 - 13,495,124 - - - 13,495,124 9,781,709 6,273,938 7,755 - - 16,063,402 - 129,671 13,851 - - 143,522 99,872,633 83,767,272 902,622 35,086,798 (219,629,325) - 1,636,566 - - - - 1,636,566 657,733 - 657,733 112,867,792 140,487,335 4,668,594 35,086,798 (219,629,325) 73,481,194 100,000 - - 3,544,092 r - 3,644,092 554,244,599 - - - - 554,244,599 24,645,390 - - - - 24,645,390 - 1,122,915 - - - 1,122,915 - 197,397 197,397 691,857,781 141,610,250 4,668,594 38,828,287 (219,629,325) 657,335,587 2,707,229 2,974,299 6,949 - - 5,688,477 4,966,336 - - - - 4,966,336 107,286,236 98,991,774 792,932 12,558,383 (219,629,325) - 2,093 - - 380,136 - 382,229 - - 2,390,000 - 2,390,000 - - - 148,523 - 148,523 - - 750,000 - - 750,000 529,000 - - - - 529,000 140,095 103,370 - 243,465 115,630,989 102,069,443 1,549,881 15,477,042 (219,629,325) 15,098,030 - - - 22,015,277 - 22,015,277 1,611,622 - - - - 1,611,622 5,594,647 - - - - 5,594,647 - - 1,335,968 1,335,968 122,837,258 102,069,443 1,549,881 38,828,287 (219,629,325) 45,655,544 1 578,889,989 - - (20.724,491) - 552,165,498 - - - 3,163,956 - 3,163,956 (9,869,466) 39,540,807 3,118,713 23,560,535 - 56,350,589 $ 569,020,523 $ 39,540,807 $ 3,118,713 $ $ $ 61 1,680,043 The accompanying notes are an integral part of the financial statements ' 31 ' CENTRAL CONTRA COSTA SANITARY DISTRICT ' COMBINING SCHEDULE OF STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS ' FOR THE YEAR ENDED JUNE 30, 2009 Running Sewer Self Debt Expense Construction Insurance Service Elimination Total Operating Revenues Sewer Service Charges (SSC) S 43,087,454 $ - $ - S - S - S 43,087,454 ' Service charges - City of Concord 8,755,857 - - _ - 8,755,857 Other service charges 872,978 872,978 Miscellaneous charges 667,855 - - - - 667,855 iTotal operating revenues 53,384,144 - 53,384,144 Operating Expenses Sewage collection and pumping stations 11,817,621 - - - 11,817,621 Sewage treatment 22,927,971 _ 22,927,971 Engineering 6,834,321 - - - - 6,834,321 Administrative and general 16,304,465 - 958,906 - (868,030) 16,395,341 Depreciation 19,417,941 19,417,941 Total operating expenses 77,302,319 - 958,906 - 868,030 77,393,195 Operating Loss (23,918,175) - (958,906) - 868,030 (24,009,051) Non - Operating Revenues (Expenses): Taxes - 8,688,847 - 3,850,528 - 12,539,375 City of Concord cash contributions to capital costs 5,485,858 5,485,858 Customer cash contributions to capital cost (SSC) - 8,452,563 - - - 8,452,563 ' Permit and inspection fees 893,561 200,195 - - - 1,093,756 Interest earnings 409,270 520,802 87,106 15,917 1,033,095 Interest expense - - - (1,421,686) - (1,421)686) Other income (expense) 570,814 68,709 868,030 - (868,030) 639,523 Total non- operating revenues (expenses) 1,873,645 23,416,974 955,136 2,444,759 868,030 27,822,484 Income (loss) before contributions and transfers (22,044,530) 23,416,974 (3,770) 2,444,759 - 3,813,433 Contributed sewer lines 1,231,022 - - - - 1,231,022 Capital contributions - connection fees - 5,025,493 - - - 5,025,493 Transfers 36,788,272 (34,343,513) (2,444,759) - - Change in Net Assets 15,974,764 (5,901,046) (3,770) - - 10,069,948 Total Net Assets - Beginning 553,045,759 45,441,853 3,122,483 601,610,095 Total Net Assets - Ending $ 569,020,523 $ 39,540,807 $ 3,118,713 $ S S 611,680,043 The accompanying notes are an integral part of the financial statements ' 32 Y C I N I 4 I A y y d G Wx ne _w o O N C 7 C yj O aQM d A y r Y � b V � 4n O C O ti ce a O U y w ° c u b C C � y N y O in y b 3 u y N ty iy ayi c U V] ryii ttl v u v � � N Q, U X y L y Q U Q z a O N 01 M M V1 O 00 V) �D vl QD N M LL b9 b9 p vt o0 M O h O O� � N 'n lr f� O �--' �° � rl N O 'n V o0 of 00 V 69 69 t� V1 DO V h N Vt O O� �° V1 Oo 7 00 b9 b9 W lzi cl p h 1� b oo 'n h h O M o0 'n 1ON N h N M 7 01 01 M M M W f� a 3 � � ° ° � `M° � °�` 'n � c ° m a N N oc M 3 v O W V O O M oc N N 69 fH O p yi M M 'ii �D W v3 v3 O V o0 M O� y w ° c u b C C � y N y O in y b 3 u y N ty iy ayi c U V] ryii ttl v u v � � N Q, U X y L y Q U Q z a O CENTRAL CONTRA COSTA SANITARY DISTRICT Running Expense Schedule of Supplemental Net Assets Analysis June 30, 2009 Prior Year Balance 2008 -2009 Revenue 2008 - 2009 Expense Add Back Depreciation Expense Net Assets Attributed to General Operations All Other Net Assets Running Expense Net Assets $ 6,783,105 $ 55,257,789 (77,302,319) 19,417,941 (2,626,589) 4,156,516 The accompanying notes are an integral part of the financial statements 34 564,864,007 $ 569,020,523