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HomeMy WebLinkAboutBOARD MINUTES 05-19-11MINUTES OF THE REGULAR MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON MAY 19, 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, May 19, 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 a. PLEDGE OF ALLEGIANCE TO THE FLAG The Board and staff joined in the Pledge of Allegiance. General Manager James Kelly announced that Richard Pio Roda, Esq. of Meyers, Nave, Riback, Silver & Wilson was attending the meeting in place of District Counsel Kenton L. Alm, who was unable to attend. b. INTRODUCTIONS Board Members welcomed newly -hired Engineering Support Information Systems Analyst, Carolyn Knight, and Administrative Assistant — Plant Operations Department, Alma Kadic. There were no public comments. 2. PUBLIC COMMENTS 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 Book 60 — Page 300 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 19, 2091 a. Approve minutes of Special Board meeting /Capital Projects Board Workshop held April 14, 2011. b. Approve expenditures dated May 19, 2011. Reviewed by Budget and Finance Committee. C. Set June 16, 2011 at 2:00 p.m. as the date and time for a public hearing to consider placing delinquent fees and charges on the 2011 -12 Contra Costa County tax roll for collection, placing liens on properties owned by those persons who have not paid applicable fees and charges, and/or terminating service to properties for which fees and charges are delinquent. Reviewed by Budget and Finance Committee. d. Return claim for damages submitted by Paladin Law Group on behalf of Ryan, Anne and Reese Schaeffer as untimely. Reviewed by Budget and Finance Committee. e. Authorize the General Manager to execute a professional services agreement with Michael L. Johnson LLC in an amount not to exceed $120,000 for toxicity testing in conjunction with the 2011 Suisun Bay Monitoring Toxicity Identification Evaluation. 4. PUBLIC HEARINGS a. CONDUCT PUBLIC HEARING FOR THE FORMATION OF VISTA DEL ORINDA CONTRACTUAL ASSESSMENT DISTRICT CAD NO. 2010-2, DISTRICT PROJECT 6499 A public hearing was conducted regarding the formation of the Vista Del Orinda Contractual Assessment District (CAD) No. 2010 -2, District Project 6499, for Orinda sewer improvements. Principal Engineer Jarred Miyamoto -Mills gave a presentation in which he showed the CAD boundary map and described the project, stating that it met all the criteria for formation of a CAD. The estimated cost of the main sewer extension per property without CAD financing was $16,500 for each of the 10 properties, for a total of $165,000. Mr. Miyamoto -Mills said staff recommends that the Sewer Construction Fund be used to finance the proposed CAD. If all participants choose to finance through the CAD, it is projected to generate $57,000 over the ten -year period using a six percent annual percentage rate. It was moved by Member McGill and seconded by Member Menesini to adopt (1) Resolution 2011 -015 overruling protests to the project; and (2) Resolution 2091 -016 approving the Engineer's Report, assessments, ordering improvement, and finding the project exempt from California Environmental Quality Act (CEQA); authorize a $165,000 allocation from the Collection System Program contingency; and authorize the General Manager to execute an agreement with parcel owners in conjunction with said CAD. Motion passed by the following vote of the Board: Book 60 — Page 301 None. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 19, 2011 AYES: Members: McGill, Menesini, Nejedly, Hockett NOES: Members: None ABSENT: Members: Williams 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER 6. BIDS AND AWARDS a. AWARD A CONSTRUCTION CONTRACT IN THE AMOUNT OF $1,538.000 TO K. J. WOODS CONSTRUCTION INC. THE LOWEST RESPONSIVE BIDDER FOR THE SOUTH ORINDA SEWER RENOVATIONS PHASE 5 DISTRICT PROJECT 5989• FIND THAT THE PROJECT IS EXEMPT FROM CALIFORNIA ENVIRONMENTAL QUALITY ACT CEQA • AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE THE CONTRACT DOCUMENTS SUBJECT TO SUBMITTAL REQUIREMENTS General Manager James Kelly stated that on May 3, 2011 the District received ten bids for construction of the South Orinda Sewer Renovations, Phase 5, District Project 5989. This project consists of installing approximately 11,000 linear feet of 6- and 8 -inch sewer lines within public rights -of -way and easements utilizing horizontal directional drilling, pipe - bursting and open -cut construction methods. The Engineer's Estimate was $2,285,000. Staff reviewed the bids and recommended awarding the project to the lowest responsive bidder, K. J. Woods Construction, Inc., for $1,538,000. It was moved by Member Nejedly and seconded by Member Menesini to find that the project is exempt from CEQA; to award a construction contract to K. J. Woods Construction, Inc.; and to authorize the General Manager to execute the contract documents as recommended. Motion passed by the following vote of the Board: AYES: Members: McGill, Menesini, Nejedly, Hockett NOES: Members: None ABSENT: Members: Williams 7. REPORTS a. GENERAL MANAGER 1) Update on Collection System Operations Facility, District Project 8208 Senior Engineer Alex Rozul presented photographs indicating that more exterior siding has been installed and the roof is now complete. While work is progressing Book 60 -- Page 302 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 19, 2011 both inside and outside the building, the primary focus is on providing power to the building and installing the building elevator system. 2) Contra Costa Counly Employees' Retirement Association CCCERA update Director of Administration Randall Musgraves reported on the May 4, 2011 meeting of the CCCERA Board, specifically agenda Item 5 concerning a presentation by CCCERA's actuary, The Segal Company, regarding the effect of contribution rates for new CCCERA members with membership dates on or after January 1, 2011 because employees hired after that date have lower terminal pay assumptions. Because the effective date straddles a fiscal year, Segal said it needed to provide two sets of contributions — one with combined rates that had not yet been de- pooled (January 1 to June 30, 2011) and the other with separate de- pooled rates (July 1 to June 30, 2012). In order to better accommodate its members' financial software, the CCCERA Board passed a motion to adopt the new rates for new hires with membership on or after January 1, 2011, but to be effective July 1, 2011. At its next evaluation, Segal will give employers credit for any overpayments made for new hires during the January 1, 2011 to June 30, 2011 window. Mr. Musgraves concluded by stating that the CCCERA Board's decision will have a negligible effect on the District since there have been only five new hires as of January 1, 2011. In conclusion, Mr. Musgraves said efforts are underway to set up a meeting between the District's Ad Hoc Committee and representatives of CCCERA to discuss matters raised in the District's March 4, 2011 letter to the CCCERA Board. 3) Update on Senate and Assembly Bills covering enhanced benefits The Board acknowledged receipt of the report in the agenda packet. 4) Announcements The following written announcements were included with the agenda packet: a) Senior Right of Way Agent Rick Hernandez's attendance at the International Right of Way Association's Conference in Atlanta, Georgia from June 12 - 15, 2011 b) San Ramon Mobile Household Hazardous Waste Collection event on May 7, 2011 a success c) New process for Capital Project closeouts d) Lafayette Sewer Renovation Project (Phase 7) Public Workshop on May 5, 2011 Book 60 — Page 303 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 19, 2011 e) Walnut Creek Sewer Renovation Project (Phase 8) Public Workshop on May 12, 2011 f) Bureau of Reclamation Title 16 Grants awarded to Delta Diablo and Dublin San Ramon g) Update on the District's Moraga Pumping Station Show Cause letter and follow up The following additional written announcements were made at the meeting: h) Passing of CSO Maintenance Crew Leader Ron Galloway, Jr. i) Iron House Sanitary District filled Board Vacancy with Dave Contreras j) Source Control /Pollution Prevention Service Agreement executed with Mt. View Sanitary District k) Public bidding on Thursday, June 9, 2011 for Walnut Creek Sewer Renovations, Phase 8, District Project 5992 b. COUNSEL FOR THE DISTRICT Richard Pio Roda, Esq., filling in for District Counsel Kent Aim, announced that the District Counsel's report regarding settlement of the claim regarding a sewer overflow at 3320 Woodview Court in Lafayette would be continued to a later date when Mr. Alm is in attendance. C. SECRETARY OF THE DISTRICT Secretary of the District Elaine Boehme announced that, to date, a total of 85 protests have been received as a result of the Proposition 218 notice. Fourteen of the protests are considered invalid under the District's protest guidelines and one was a suggestion rather than a protest. Ms. Boehme also announced that a meeting of the Outreach Committee has been scheduled for May 25, 2011. 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 Book 60 — Page 304 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 19, 2011 meetings or conferences for which they will receive the stipend or for which the District will pay their expenses Member McGill Member McGill reported on the May 5, 2011 Contra Costa Mayors' Conference hosted by the City of Oakley featuring speakers on One Bay Area — Senate Bill 375 Sustainable Communities, Strategies, Process and Outcome. Member McGill and Member Menesini reported on the May 12, 2011 Household Hazardous Waste Committee meeting and summarized the Action Summary. The Board received the report without comment. Member Nejedly Member Nejedly and President Hockett reported on the May 16, 2011 Budget and Finance Committee meeting and summarized the Action Summary. The Board received the report without comment. Member Nejedly and Member McGill reported on the May 17, 2011 Ad Hoc CCCERA Committee meeting. Member Nejedly said the Committee met with staff, District Counsel and attorney Scott Kivel, Esq. to discuss its approach to the meeting with CCCERA representatives. As reported earlier, efforts are underway to set up the meeting. President Hockett President Hockett and Member Nejedly reported on the May 11, 2011 Human Resources Committee meeting and summarized the Action Summary. President Hockett noted that the Committee referred several items to the full Board for further action; General Manager James Kelly said each of those items will be brought to the Board in the near future. Member McGill asked if the Committee had discussed the proposed Public Employee Pension Reform Act (Proposition 11- 0007), noting that it was his understanding that it would go into effect immediately should it pass on a June ballot. He said he would like to receive more detail on the Act. Mr. Kelly said staff will be meeting with the Committee again in the near future to review this matter, but it was his understanding that any vote would most likely be delayed until the November ballot. Once known, additional information will be provided to the Board. 2) Announcements Member McGill provided a written report covering Announcements. Book 60 — Page 305 a CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 99, 2097 8. ENGINEERING CONSIDER ALLOWING THE PROGRAM FOR DEFERRED PAYMENT OF CONNECTION FEES TO EXPIRE ON JUNE 30 2011 The Board members considered the recommendations of staff and the Budget and Finance Committee to allow the program for Deferred Payment of Connection Fees to expire on June 30, 2011, as set forth in Resolution 2010 -033. Principal Engineer Jarred Miyamoto -Mills presented a brief history of the program, noting that it was implemented after requests from the homebuilding community for relief from the credit and cash flow crisis caused by the economic recession. Rather than paying utility connection fees upon issuance of permits or connection to services, the program allows such fees to be deferred until the close of escrow. Implemented on a pilot basis in 2009, and continued for one year in 2010 with the addition of fees to cover administrative and interest costs, the current program is set to expire on June 30, 2011. Two developers took advantage of the program the first year; however, no one has opted to use the program since fees to recover costs were established during the second year. It is for this reason that staff and the Committee have recommended that it be allowed to expire on June 30, 2011. Member McGill said he has spoken with several homebuilders who expressed an interest in the program's continuance and suggested that most likely it has not been utilized because there is so little building taking place. He suggested that the program remain in place for another two years, after which it can be reevaluated. Member Nejedly stated that the program should be allowed to expire because it has not been utilized and it requires staff time to keep it in place. It was moved by Member McGill and seconded by Member Menesini to set a public hearing for 2:00 p.m. on June 16, 2011 to receive comments and consider: 1) Finding that special circumstances require continuing suspension, modification and relief from application of District Code Section 6.08.040 and Subsection 6.12.030D, pertaining to the time for payment of connection fees; 2) Approving an extension of the program and limiting its application to connections in subdivisions; and 3) Reinstating program participation fees in the uncodified Schedule of Environmental and Development - Related Rates and Charges pursuant to Chapter 6.30 of the District Code to recover administration costs of the program. Motion passed by the following vote of the Board: AYES: Members: McGill, Menesini, Hockett NOES: Members: Nejedly ABSENT: Members: Williams Book 60 — Page 306 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 19, 2011 b. AUTHORIZE THE GENERAL MANAGER TO EXECUTE A TAKEOVER AGREEMENT WITH OLD REPUBLIC SURETY COMPANY TO REPLACE NCCI, INC. AS THE CONTRACTOR TO COMPLETE THE TREATMENT PLANT PIPING RENOVATIONS. PHASE 5, DISTRICT PROJECT 7276 General Manager James Kelly explained that, as previously reported, contractor NCCI, Inc. voluntarily terminated its work on the Treatment Plant Piping Renovations (Phase 5), District Project 7276, after defaulting on its financial obligations. In accordance with the terms of the NCCI contract, the District made a demand to Old Republic Surety Company (NCCI's surety) for completion of the project, and settlement of all claims and stop notices in accordance with the contract's performance and payment bonds. Old Republic commenced completion of the project, and proposed a Takeover Agreement to memorialize the Old Republic's obligations under the bonds. In summary, the proposed Takeover Agreement would provide that (1) Old Republic will hire a completion contractor, (2) all District payments will be made to Old Republic, and (3) Old Republic will handle the administration of all current claims and stop notices and seek payment therefor from retention. In conclusion, Mr. Kelly said it was also appropriate to file a Notice of Cessation of Work with regard to the NCCI contract in order to insure formal legal notice is provided to all subcontractors and materials suppliers that the NCCI contract has been terminated. It was moved by Member McGill and seconded by Member Nejedly to authorize the General Manager to execute a Takeover Agreement with Old Republic Surety Company to replace NCCI, Inc. as the contractor to complete the Treatment Plan Piping Renovations, Phase 5, District Project 7276, and authorize the filing of a notice of Cessation of Work on the NCCI, Inc. contract. Motion passed by the following vote of the Board: AYES: Members: McGill, Menesini, Nejedly, Hockett NOES: Members: None ABSENT: Members: Williams 9. BUDGET AND FINANCE a. RECEIVE THE FISCAL YEAR 2011 -12 OPERATIONS AND MAINTENANCE BUDGET AND THE FISCAL YEAR 2011 -12 DEBT SERVICE FUND BUDGET Controller Debbie Ratcliff presented information on the proposed Fiscal Year (FY) 2011- 12 Operations and Maintenance (O &M) Budget and the FY 2011 -12 Debt Service Fund Budget, with a view toward adopting all budgets at the June 2, 2011 Board meeting. She noted that the Board will be asked at the meeting to approve a $30 Sewer Service Charge increase for each of the next two fiscal years with most of the increase for FY 2011 -12 being allocated to the Sewer Construction Fund. Book 60 — Page 307 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 19, 2011 Ms. Ratcliff reviewed some of the assumptions used in the FY 2011 -12 O &M Budget. Revenue assumptions include a Sewer Service Charge of $341, which reflects the proposed $30 rate increase for FY 2011 -12. Of that amount, $302 per Residential Unit Equivalent (RUE) is allocated to O &M, and $39 per RUE to the Sewer Construction Fund. Total budgeted ad valorem tax (from property taxes) is projected to be $12.2 million, of which $6.9 million and $5.3 million are allocated to the Sewer Construction Fund and Debt Service Fund, respectively. Expense assumptions include an allocation of $8.3 million from the O &M Fund for unfunded liability associated with the GASB 45 trust. Of that amount, $4.5 million will go to the trust with the remaining $3.8 million going toward retiree health care premiums. This is a $1.4 million increase from the past year because the actuary (1) lowered the assumed interest earnings on the GASB 45 trust (from 8 percent to 6.5 percent), and (2) raised retiree health care costs over the next 20 years. Additionally, CCCERA has increased retirement contribution rates by 9.17 percent. There also have been increases to health care costs for both current employees and retirees. The Administrative Overhead percentage is assumed to be 112 percent of capitalized salary, which is a 5 percent reduction from the previous year. The vacancy factor was raised from 3 percent to 4 percent for salaries; benefits remain the same at 4 percent. With the anticipated Sewer Service Charge increase of $30 in FY 2011 -12, total District revenues are expected to be $84 million and expenses $92 million, resulting in an $8 million drawdown of reserves -- $4.3 million from the O &M reserve and $3.7 from the Sewer Construction Fund. She explained that the District is really in a catch -up mode owing to the fact that there has been no Sewer Service Charge increase in the past several years. Comparing these figures with the budgeted figures for FY 2010 -11, O &M revenues are projected to decrease slightly by 0.2 percent while expenses will increase 5.7 percent. Reducing the O &M reserves by $4.3 million effectively means that the O &M Fund balance at the end of FY 2011 -12 will be $2.2 million below the District's prudent reserve level, defined as 10 percent of expenses for that budget year. Ms. Ratcliff said total labor costs are projected to increase $2.9 million over last year's budget. While net salaries and wages are projected to decrease slightly, retirement expense is expected to increase by $2.4 million due to the aforementioned CCCERA 9.17 percent retirement contribution rate increase (3 percent of which is attributable to normal costs and market losses being spread over five years, and 6 percent to CCCERA de- pooling costs). Medical insurance expenses will increase approximately $862,000. Overall, the FY 2011 -12 O &M Budget expenses are 5.7 percent higher than the FY 2010 -11 budget, or $3.6 million. While salaries are somewhat lower, benefit costs are projected to be higher due to retirement expenses, as are expenditures in the following categories: repairs and maintenance ($34,000), hauling and disposal ($54,000), professional and legal ($41,000 due in large part to 2012 labor negotiations and the National Pollutant Discharge Elimination System (NPDES) permit renewal), and outside services ($778,000 due to updating the standard operating procedure manuals, Book 60 — Page 308 None. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 19, 2011 training videos and process control systems standardization in the plant). Budgeted expenses for utilities, materials and supplies, and all other categories are projected to be roughly $277,000 lower than the FY 2010 -11 budget due in large part to rates being locked in for natural gas and the fact that there will be no election expense next year. Finally, Ms. Ratcliff explained that the FY 2011 -12 Debt Service Fund Budget, which captures all the revenue and expenses associated with the District's debt service, includes revenues of $5.5 million from ad valorem tax and interest on the Bond Reserve Fund allocated as follows: $3.6 million to principal and $1.9 million to interest. 10. EMERGENCY SITUATIONS REQUIRING BOARD ACTION 11. SUGGESTIONS FOR FUTURE AGENDA ITEMS Member McGill suggested that a discussion be held on the merits of holding a board retreat to discuss priorities and goals with a view toward developing a strategic plan for the District. 12. CLOSED SESSION The Board recessed at 3:00 p.m. to reconvene in the Caucus Room in closed session to confer with Legal Counsel regarding the following matters: a. Conference with Legal Counsel regarding existing litigation pursuant to Government Code Section 54956.9(a): • Gre o Village Partners L.P. v. Chevron U.S.A. Inc. M.B. Enterprises, and Central Contra Costa Sanitary District, U.S. District Court, Northern District of California, Case No. CV 11 1597 JCS. b. Conference with Legal Counsel - Anticipated Litigation — significant exposure to litigation pursuant to Government Code Section 54956.9(b): • Schaeffer claim (Paladin Law Group). C. Conference with Legal Counsel - Anticipated Litigation - initiation of litigation pursuant to Government Code Section 54956.9(c): • Two potential cases. The Board recessed at 3:20 p.m. to reconvene in the Board Room in open session. Book 60 — Page 309 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 19, 2011 13. REPORT OUT OF CLOSED SESSION Mr. Pio Roda reported that no reportable action was taken in closed session. 14. ADJOURNMENT There being no further business to come before the Board, President Hockett adjourned the meeting at 3:21 p.m. arbara D. Hockett President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: (;]E- Elaine R. Boehme, CMC Seaetaru of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Book 60 — Page 310