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HomeMy WebLinkAboutBOARD MINUTES 03-03-111 1 1 MINUTES OF THE REGULAR MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON MARCH 3. 2011 The Board of Directors of the Central Contra Costa Sanitary District convened in a regular meeting in the Board Room, 5019 Imhoff Place, Martinez, County of Contra Costa, State of California, at 2:00 p.m. on Thursday, March 3, 2011. President Hockett called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: McGill, Menesini, Nejedly, Hockett ABSENT: Members: Williams PLEDGE OF ALLEGIANCE TO THE FLAG The Board and staff joined in the Pledge of Allegiance. 2. PUBLIC COMMENTS There were no public comments. General Manager James Kelly stated that a closed session item needs to be added to the agenda, regarding an overflow which took place on Friday, February 25. While Collection System Operations crews may have been aware of the overflow prior to the agenda's posting, the magnitude of the incident was not fully understood until Saturday, February 26. District Counsel Kent Alm stated that, in this case, a unanimous vote from the Board is needed to add the item to the agenda, finding that the need to discuss the item came after the agenda was posted, and that there is a need to act or address the item prior to the next Board meeting, scheduled for March 17. Mr. Alm added that the substantial damage and cost of the overflow leads staff to seek Board direction and the ability to inform the Board of the circumstances, as there will be activities in the interim before the March 17 Board meeting. It was moved by Member Nejedly and seconded by Member Menesini to add Item 9. Closed Session as recommended. Motion passed by the following vote of the Board: AYES: Members: McGill, Menesini, Nejedly, Hockett NOES: Members: None ABSENT: Members: Williams Book 60 — Page 247 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 3, 2011 3. CONSENT CALENDAR It was moved by Member Menesini and seconded by Member Nejedly to adopt the Consent ' Calendar as recommended. Motion passed by the following vote of the Board: AYES: Members: McGill, Menesini, Nejedly, Hockett NOES: Members: None ABSENT: Members: Williams a. Approve expenditures dated March 3, 2011. Reviewed by Budget and Finance Committee. b. Receive January Financial Statements and Investment Reports. Reviewed by Budget and Finance Committee. C. Approve minutes of February 3, 2011 Board meeting. d. Adopt Resolution 2011 -006 accepting an amendment to a grant of easement of Contra Costa County for an Iron Horse Corridor parcel in the City of Pleasant Hill (District Project 1541 — Parcel 10'), and authorize staff to record the documents with the Contra Costa County Recorder. None. 4. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER I 5. REPORTS GENERAL MANAGER 1) Update on Collection System Operations Facility, District Project 8208 Senior Engineer Alex Rozul presented the regular construction progress update on the Collection System Operation Facility project and showed photos of the construction. He stated that the focus includes constructing the roof and the exterior curtain wall and windows, the HVAC, electrical and plumbing. The contractor remains twenty -seven calendar days behind schedule. 2) Report on Environmental Protection Agency (EPA) final sewage sludge incinerator regulations (Section 129) Director of Plant Operations Margaret Orr provided an initial analysis on the Section 129 regulations, with background on the standards of performance for ' new stationary sources and emission guidelines for existing sources. She Book 60 — Page 248 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 3, 2011 outlined the requirements of Section 129, including concentration limits of nine ' pollutants, and stated that the District currently monitors fifty -seven and will add two to comply with continuous parametric monitoring requirements. In addition, to comply with ash handling requirements, the District will also alter the way in which the trucks are loaded. 1 L Ms. Orr also presented figures on the District's stack emissions studies used by the EPA to create the standard. While the District meets the 129 requirements based on the information in hand, there is little data for some of the parameters, namely, hydrochloric acid and dioxins. Full compliance is expected to be required in March 2016 or as late as May 2016. She stated that the National Association of Clean Water Agencies (NACWA) and the National Resources Defense Council (NRDC) are considering filing a petition of reconsideration over fluidized bed incinerator standards and mercury limits, respectively. She noted that possible litigation may also change timelines for compliance. 3) Announcements The following written announcements were included with the agenda packet: a) Director of Engineering Ann Farrell's attendance at Water Environmental Research Foundation Council meeting on March 23 and 24, 2011 in Virginia; b) Staff attendance at California Water Environmental Association (CWEA) Annual Conference in Ontario, CA from April 12 through April 15, 2011; C) District Land Surveyor Liz Chariton's attendance at California Land Surveyor Association and Nevada Association of Land Surveyors Conference in Nevada from March 5 through March 9, 2011; and d) Notice of Intent to Adopt Resolution of Necessity for Two Residential Properties at 43 and 47 Camino Encinas in Orinda. There were no additional announcements made at the meeting. b. COUNSEL FOR THE DISTRICT 1) Written legal update District Counsel Kent Alm referred Board Members to the written Legal Update included in the Board packet. He stated that there have been some potential litigation matters over the last few months that might end up in eminent domain work, and announced that, at a future meeting, the Board may be asked to set a hearing for a Resolution of Necessity on two matters. Book 60 — Page 249 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 3, 2011 2) Provide direction to staff regarding response to Contra Costa County Employees' Retirement Association ( CCCERA) Mr. Alm referred Board Members to the letter incorporating changes made by the Budget and Finance Committee at their February 28 meeting. Member McGill stated that while it reflects the direction of the District, he was not sure that the offer to pay up front should be included in the letter. Member Nejedly responded that the CCCSD Board has been saying this in open session. President Hockett stated that the trade off was for better rules, regulations and guidelines on the part of the CCCERA Board. It was moved by Member Nejedly and seconded by Member Menesini to approve the letter. Motion passed by unanimous vote of the Board. C. SECRETARY OF THE DISTRICT Secretary of the District Elaine Boehme announced the upcoming Human Resources Committee meeting, scheduled for March 9. She stated that, should the Board elect to hold it as a result of discussion surrounding the possible Proposition 218 notice, an Outreach Committee meeting is tentatively scheduled for March 8. d. BOARD MEMBERS 1) Board Member reports on recent meetings for which they received the stipend; , and meetings or conferences for which the District paid their expenses future meetings or conferences for which they will receive the stipend or for which the District will pay their expenses Member McGill Member McGill stated that, over the next two months, he will be scheduling meetings as Local Agency Formation Commission (LAFCO) representative with independent districts. He will inform Board Members if there are meetings in their liaison cities. Member Neiedly Member Nejedly and President Hockett reported on the February 28, 2011 Budget and Finance Committee meeting and summarized the Action Summary. The Board received the report without comments. General Manager James Kelly stated that staff will bring to the Board on the Consent Calendar an item amending the District Code so that Budget and Finance Committee will have the authority to ratify staff recommendations on matters involving installment payments of capacity fees. He also distributed a , memorandum on the February 17, 2011 Pension Benefits and Employee Book 60 — Page 250 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 3, 2011 ' Relations Boot Camp attended by President Hockett and Members McGill and Nejedly. President Hockett President Hockett reported on the January 27, 2011 Contra Costa Council USA 2011 meeting with keynote speakers Bob Woodward (on the topic of Inside the Obama White House) and The Honorable Willie Brown. 2) Announcements a) Member McGill provided a written report covering Announcements. 6. BUDGET AND FINANCE FINANCIAL PLANNING AND POLICY WORKSHOP General Manager James Kelly stated staffs recommendation to publish a Proposition 218 notice indicating a Sewer Service Charge increase up to $30 per year for each of the next two years. This action would support the District's goals of excellent customer ' service, regulatory compliance, responsible rates and high performance. It also addresses Capital Program needs and challenges over the next decade, as well as unfunded liabilities, and assumes cash flow payment for construction of ammonia - removal facilities instead of funding through bond financing. Mr. Kelly stated that there has been no Sewer Service Charge increase for the past two years, and Operations and Maintenance costs are rising faster than the rate of inflation, principally due to increases in benefit costs. Unfunded liabilities have increased, largely due to increased retiree health costs (GASB 45) and pension fund ( CCCERA) liabilities. The District is projecting to draw down approximately $10 million from the Sewer Construction Fund to fund the Fiscal Year 2010 -11 Capital Program and has incurred additional bonded indebtedness in order to continue to fund the Capital Program without raising rates. The capital component of the Sewer Service Charge needs to be significantly increased to adequately fund the Capital Program. Mr. Kelly added that the District has total cash reserves of $73.5 million as of June 30, 2010 which are projected to be reduced to $63.1 million by June 30, 2011. The District has significant liabilities in the areas of bond debt, GASB 45 and CCCERA Unfunded Actuarial Accrued Liability (UAAL). Major operating and maintenance (O &M) expense increases in 2011 -2012 include labor at 3.5 percent, benefits at 9.6 percent due to CCCERA and increase in healthcare costs, ' and outside services at 42.2 percent for additional help documenting operating Book 60 — Page 251 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 3, 2011 procedures for succession. On the Capital side, money has been budgeted to address ' ongoing renewal and replacement needs as well as to fund expected regulatory requirements and projected capacity needs. Mr. Kelly reviewed the possible scenarios, stating the first scenario used the same assumptions as last year's selected alternative for comparison purposes. This year, the second alternative, this year's baseline, includes expenses for implementation of AB 32 to control greenhouse gases and de- pooling of the District's pension obligations such that the District fully funds its obligations, both of which are currently required. The third alternative adds the capital and O &M cost of ammonia removal (nitrification) to the second alternative, and the fourth alternative adds some paying down unfunded liabilities for retiree health costs and pension obligations. Staff recommends the Board base rates on the fourth alternative, which fully funds the recommended Capital Program in addition to providing for some paying down of unfunded liabilities. This alternative results in the need for Sewer Service Charge rate increases of approximately $30 per year for the next ten years. Staff further recommends the Board authorize a Proposition 218 notice for a 2011 -2012 Sewer Service Charge rate increase of up to $30 per year and a 2012 -13 Sewer Service Charge rate increase of up to $30 per year. Member McGill stated that he prefers not to collect money from current ratepayers to fund projects that will primarily benefit future ratepayers. For that, he advocates selling , bonds, where the people who are benefiting from the improvement are the ones who pay' for it. On the other hand, unfunded CCCERA liabilities and other post - employment benefits are expenses from the past, and the District should be moving as aggressively as possible to pay them down. He stated his support for an increase larger than $30, adding that, with a larger increase, the debts can be paid down sooner. He spoke in favor of a $54 increase, stating that last year he did not want to raise rates, having seen the effect of the downturned economy firsthand, but he is anxious to get the debt paid down. President Hockett stated, regarding the scenario of a $54 increase for two years, that $54 is a large increase after no increase for the past two years. She stated that her relationship with ratepayers is not to shock them but to approach the situation in a softer manner by consistent moderate rate increases to achieve the District's goals. She listed two accomplishments with a $30 increase: the number is not as considerable a hit for ratepayers, and it allows for a smooth landing in the future if it is continued throughout the ten -year period. Member Menesini stated that the District needs to raise rates, and that he would recommend a $30 rate increase for two years. Member Nejedly and President Hockett concurred. 1 Book 60 — Page 252 Il n None. it CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 3, 2011 CONSIDER THE FOLLOWING MATTERS REGARDING THE DRAFT PROPOSITION 218 NOTICE: 1) Review draft resolution and policy for accepting Proposition 218 notice protests General Manager James Kelly stated that the draft resolution and policy for Proposition 218 notices would accept written and signed letters that are mailed or hand delivered, signed faxes or PDFs of a signed protest sent via e-mail. The draft of the proposed Proposition 218 notice notes these conditions for a protest to be considered valid. This matter will be brought back to the Board on March 17, 2011 for final consideration. Mr. Alm asked for Board direction in the submittal of protests on page one of the policy, namely, if the public should be asked to indicate Sewer Service Charge protest on the envelope. It is not a requirement, but it helps ensure its safe delivery. As the envelope would be addressed to the Secretary of the District, the Board did not consider it necessary. Mr. Alm also stated that, while the law does not require a signature on a protest, a number of agencies have required it as a manner of verification. Member Nejedly suggested a notation that a signature is not required. President Hockett agreed. Mr. Alm stated an option for the Board's consideration, but not as a suggestion or staff recommendation, that there are entities that include a protest form or coupon for convenience on the bottom of the notice to rip off and send back. President Hockett stated that she would prefer to forego that option. 2) Review draft Proposition 218 notice General Manager James Kelly stated that staff has received comments from Member Nejedly, which will be circulated to the full Board. This matter will be brought back to the Board on March 17. 2011 for final consideration. Mr. Alm asked the Board if the policy should agreed that it should. be referenced in the notice. The Board Book 60 — Page 253 v N lil � CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 3, 2011 8. SUGGESTIONS FOR FUTURE AGENDA ITEMS General Manager James Kelly referred to the new addition to the Board's agenda packet, which previews key agenda items in the coming year. Member Nejedly expressed the need to be cautious, going back to recent discussions regarding teleconferencing. He stated that the District is veering toward enabling absences and is starting to bend too much to individual Board members' busy schedules. He stated that the District needs to run and should not be hindered because of the absence of a Board member. While items of importance have been moved as needed in the past, he cautioned against it becoming a common occurrence. President Hockett stated that the District has never had a policy on absenteeism, but it might be something to look at in the future. None. 9. CLOSED SESSION Conference with Legal Counsel — Anticipated Litigation pursuant to Government Code Sections 54956.9(b) and (c) — one potential case — 3320 Woodview Court in Lafayette. 10. REPORT OUT OF CLOSED SESSION 11. ADJOURNMENT There being no further business to come before the Board, President Hockett adjourned the meeting at 4:09 p.m. Barbara D. Hockett President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Elaine R; Boehhle, CMC Secretary ofthe Central Contra Costa Sanitary District, County of Contra Costa State of California Book 60 — Page 254 r-7 L 1