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HomeMy WebLinkAboutBOARD MINUTES 06-16-11MINUTES OF THE REGULAR MEETING ' OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON JUNE 16, 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, June 16, 2011. President Hockett called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: McGill, Nejedly, Williams, Hockett ABSENT: Members: Menesini a. PLEDGE OF ALLEGIANCE TO THE FLAG The Board and staff joined in the Pledge of Allegiance. 2. PUBLIC COMMENTS There were no public comments. 3. AWARDS AND COMMENDATIONS Following a presentation by Controller Debbie Ratcliff, the Board accepted the Comprehensive Annual Financial Report (CAFR) award for the Fiscal Year ended June 30, 2010 for the eleventh consecutive year. The Board commended staff for their hard work in earning this award. 4. CONSENT CALENDAR It was moved by Member Williams and seconded by Member McGill to adopt the Consent Calendar as recommended. Motion passed by the following vote of the Board: AYES: Members: McGill, Nejedly, Williams, Hockett NOES: Members: None ABSENT: Members: Menesini a. Approve minutes of May 19, 2011 Board meeting. b. Approve expenditures dated June 16, 2011. Reviewed by Budget and Finance Committee. Book 61 — Page 11 C. a a. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 Adopt Resolution 2011 -018 expressing appreciation to retiring Deputy Director of Contra I Costa County Public Works Mitch Avalon. Deny claim for damages submitted by Susan McCollom. Reviewed by Budget and Finance Committee. Approve medical leave of absence without pay for Maintenance Crew Member II Christian Aughtry. Approval recommended by Human Resources Committee. Approve medical leave of absence without pay for Maintenance Crew Member II David Quintero. Approval recommended by Human Resources Committee. Approve request for emergency withdrawal of funds from the Deferred Compensation Plan. Authorize the General Manager to execute a Reprographics Services Agreement with Xerox Corporation for a term of five years at an estimated total cost of $1,421,865 ($284,373 per year). Reviewed by Budget and Finance Committee. 5. PUBLIC HEARINGS CONDUCT PUBLIC HEARING TO RECEIVE COMMENTS ON THE FOLLOWING ' MATTERS. REVIEWED BY BUDGET AND FINANCE COMMITTEE. 1) Consider adopting Resolution 2011 -019 directing that a Certificate of Unpaid Charges be recorded to establish a lien on residential property owned by Gregory M. and Jeanmarie Reginato at 5231 San Pablo Dam Road, El Sobrante (APN 433 - 230 - 024 -5), in connection with unpaid capacity fees and charges related to residential property at 161 Twin Peaks Drive in Walnut Creek: Environmental Services Division Manager Curt Swanson said the delinquent amount owed by Gregory Reginato stems from a home he built prior to 2005 located at 161 Twin Peaks Drive in Walnut Creek that was connected to the District's public sewer without payment of capacity fees and other fees and charges. Staff discovered the situation in 2005 and began efforts to collect the unpaid fees and charges. An agreement was reached with Mr. Reginato and the then owners of the home where they each would pay half the outstanding fees. The homeowners paid; Mr. Reginato paid only $1,000 of the $2,195 owed. The current amount owed is $2,190.56, comprised of the $1,195 outstanding balance, which has been delinquent since May 2008, plus a 10 percent delinquency charge and penalties of 1 -1/2 percent per month, as provided in the District Code. Mr. Swanson said staff recommends that a Certificate of Unpaid Charges be recorded, effectively establishing a lien against Mr. Reginato's personal residence , in El Sobrante, until such time as the amount is paid in full. The public hearing was opened. Book 61 — Page 12 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 Mr. Reginato offered to pay the $1,195 outstanding balance, but nothing more. Noting that the District is more than willing to work with ratepayers on those rare occasions when situations such as this arise, Member Nejedly expressed concern about the number of years this has dragged on and the amount of staff time that has been devoted to trying to collect the outstanding balance. For these reasons, he was not amenable to forgiving the delinquency charge or penalties. He said he would, however, consider giving Mr. Reginato six months to pay the outstanding balance in full before directing staff to file a lien on his residence. Mr. Reginato said this would be satisfactory to him. The public hearing was closed. President Hockett stated that she was not in favor of letting this matter continue for another six months and suggested a shorter time period would be more appropriate. After a brief discussion, and with Mr. Reginato's verbal consent, it was the consensus of the Board that he be given an additional three months to pay the entire amount owed of $2,190.56. It was moved by Member Williams and seconded by Member Nejedly to adopt Resolution 2011 -019 directing that a Certificate of Unpaid Charges be executed and held for recording in the event that any unpaid balance remains from Gregory M. and Jeanmarie Reginato on September 16, 2011. Motion passed by the following vote of the Board: ' AYES: Members: McGill, Nejedly, Williams, Hockett NOES: Members: None ABSENT: Members: Menesini 2) Consider adopting the following resolutions regarding delinquent charges related to Monsoon Masala Restaurant at 2375 Contra Costa Boulevard in Pleasant Hill (property owned by Loja Pleasant Hill LLC, APN 150- 300 - 012 -5): • Resolution 2011 -020 directing that delinquent charges be placed on the 2011- 12 Contra Costa County tax roll for collection; Resolution 2011 -021 directing that a Certificate of Unpaid Charges be recorded to establish a lien upon this retail property owned by Loja Pleasant Hill LLC, in connection with unpaid capacity fees and charges for Monsoon Masala Restaurant; and /or Resolution 2011 -022 authorizing termination of sewer service at 2375 Contra Costa Boulevard in Pleasant Hill by disconnection of the property on August 1, 2011. Environmental Services Division Manager Curt Swanson explained that the ' Monsoon Masala Restaurant was opened in a converted retail space by restaurant owner Priyanka Kumar in downtown Pleasant Hill in 2007 without securing a permit or paying approximately $42,000 in capacity fees owed. Staff attempted to enter into a 15 -year capacity use agreement with both the restaurant owner and the property owner at that time, but the property owner was unwilling Book 61 — Page 13 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 to sign the agreement as required by the District Code. In 2008, the restaurant owner agreed to an aggressive installment payment plan, and paid more than half ' the amount owed by November of that year. At that time, the restaurant owner asked to suspend the payment plan for one year, citing the economic downturn. Payments were to resume in February 2010; however, no further payments have been received since November 2008. The account became delinquent in August 2010. The total amount owed is $28,260.96, which includes a 10 percent delinquent charge and penalties calculated at 1 -1/2 percent per month. Mr. Swanson noted that the property underwent a change of ownership in November 2010 and the new property owner, Loja Pleasant Hill LLC, also has declined to enter into a capacity use agreement. The restaurant owner recently proposed a new plan where monthly payments of $1,000 would be made until the debt was fully discharged. Mr. Swanson noted that placing the delinquent charges on the 2011 -12 Contra Costa County tax roll, as proposed in the agenda packet, has turned out not to be an option due to the change of ownership of the property. The other two options presented remain available: directing staff to (1) establish a lien against the property owner and /or the restaurant owner's residence or (2) terminate sewer service at 2375 Contra Costa Boulevard in Pleasant Hill. Mr. Swanson said staff does not recommend terminating service to the property. Rather, staff recommends that an alternative payment plan be negotiated with the restaurant owner with the understanding that a lien will be established in the event of default. ' In response to a question from Member Williams, Mr. Swanson confirmed that placing a lien against the property owner effectively would lead to eviction of the restaurant owner. Any capacity fees paid up to that point would remain as a credit on the property in terms of capacity. The public hearing was opened. Ms. Kumar spoke on behalf of Monsoon Masala. She said she has every intention of paying all fees in full and wishes to be given another chance to do so. The restaurant has remained open despite great financial hardship. At this point, the restaurant has a five -year lease. If things turn around, she would be glad to accelerate payments voluntarily. However, if the business is forced to shut down, it would put her and her staff out of work and the District would receive no further payments. Ms. Kumar expressed a desire to enter into a payment agreement similar to what would have been offered had the property owner been willing to sign a 15 -year capacity use agreement when the business first opened in 2007. She was frustrated that the same 15 -year option is not available to a business owner /tenant when a property owner refuses to participate. District Counsel Kent Alm said one of the key bases for the capacity use ' agreement is property owner participation so fees can be collected on the property tax roll. Thus, unlike a promissory note, there is a built -in mechanism for automatic payment. Book 61 — Page 14 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 ' In response to a question from Member Nejedly, Mr. Swanson said formal letters of default were sent in August 2010, but there has been no response to efforts to reach Ms. Kumar since that time. Member Nejedly reiterated that it is very rare when the District runs into a situation such as this and expressed concern that Ms. Kumar has been unresponsive to the District. President Hockett asked if an alternative payment plan could be arranged spreading monthly payments over the time that would have been remaining had a 15 -year capacity use agreement been entered into at the time the restaurant opened in 2007. In other words, develop a promissory note with the restaurant owner for an approximate 11 -year time frame under terms and interest rates similar to those in the District's capacity use agreements, with the understanding that in the event of delinquency of more than 30 days, staff will return to the Board to request adoption of a resolution directing that a Certificate of Unpaid Charges be recorded against the property owner, in effect leading to eviction of the restaurant owner. She said such a payment agreement would give the restaurant owner a way to pay her obligation with a smaller, fixed monthly amount, and would give the District a way to begin receiving the fees owed with the security of a property lien, should that become necessary. Mr. Swanson responded affirmatively to this proposal, as did Ms. Kumar. The Board members discussed this matter in some detail, noting that if the ' business fails, the District will receive no fees. Member McGill said that while he would like to see this restaurant stay in business to help keep downtown Pleasant Hill viable, the District also has to design capacity fees for the load that restaurants and other high volume generators produce. If the District does not collect the fees, or have a guarantee that it will be able to collect them, then the District is absorbing that cost if it never gets paid because it has built for that capacity. President Hockett conceded that it is not a perfect system, but she would be willing to allow the restaurant owner the opportunity to succeed and become responsible with her payments. In response to a question from Member Williams, Mr. Alm said there is no District Code provision that provides for an alternative procedure for promissory notes for business owners when a property owner declines to enter into a capacity use agreement. In the last couple of years, however, when such situations have arisen, they have been brought to the Board for approval of the payment arrangement. The public hearing was closed. Member McGill inquired about the interest rate that would be charged under such a payment arrangement. Mr. Alm said it would be the same six percent per annum used in the capacity use agreement program. Mr. Alm also pointed out that a lien is only good for 10 years. Therefore, it is of no real use to adopt a resolution regarding a Certificate of Unpaid Charges in this instance, but staff could come back to the Board in the event of default. Book 61 — Page 15 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 Member Williams expressed concern with the lengthy time period being considered. He said he would advocate for a shorter time period. President ' Hockett said it is important that the monthly payment be achievable; if too high, the restaurant may have to close. Member Nejedly agreed with Member Williams yet acknowledged that that if the property owner had originally participated in the capacity use agreement, the restaurant owner would have been able to spread out the payments similar to that proposed by President Hockett. For that reason, he was in favor of the proposal because the 15 -year time period is standard procedure for the District. It was moved by Member Nejedly and seconded by President Hockett to direct staff to (1) enter into a promissory note with the restaurant owner of Monsoon Masala Restaurant covering the $28,260.96 balance owed, under terms similar to what would have been in place had a 15 -year capacity use agreement been entered into at the inception of the business in 2007, with payments to be divided into equal monthly installments, with interest calculated at the prevailing rate for the District's capacity use agreements; and (2) return to the Board to request adoption of a resolution directing that a Certificate of Unpaid Charges be recorded against the current property owner if at any time payments under said promissory note become delinquent by more than 30 days. Motion passed by the following vote of the Board: AYES: Members: McGill, Nejedly, Williams, Hockett ' NOES: Members: None ABSENT: Members: Menesini Mr. Alm noted that in the event of default on the promissory note, the property owner must be given 60 -day notice. After 60 days, the Certificate of Unpaid Charges could be filed. b. CONDUCT PUBLIC HEARING TO RECEIVE COMMENTS ON AND CONSIDER ADOPTION OF THE FOLLOWING RESOLUTION AND ORDINANCE REGARDING THE CONNECTION FEE DEFERRAL PROGRAM. REVIEWED BY BUDGET AND FINANCE COMMITTEE • Resolution 2011 -023 extending the program for subdivisions for two years, to June 30, 2013; and Ordinance No. 267 (uncodified) reinstating the program participation fees in the Schedule of Environmental and Development - Related Rates and Charges, established by Ordinance No. 264, in accordance with District Code Chapter 6.30. Environmental Services Division Manager Curt Swanson stated that, in response to a request from homebuilders for relief from the credit and cash flow crisis caused by the , economic recession, the Board approved a Connection Fee Deferral Program in 2009 for a one -year pilot period. Under the program, utility connection fees are deferred until the close of escrow rather than paid upon issuance of permits or connection to services. The Board extended the program for one more year in 2010 with the addition of fees to Book 61 — Page 16 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 cover administrative and interest costs. The current program, which has not been ' utilized for the past 18 months, is set to expire on June 30, 2011. Nevertheless, homebuilders have requested that the District continue the program to allow flexibility during these tough economic times. Staff recommends that the program be allowed to expire due to low usage. Alternatively, he said the Board could continue the program for another one to two years. In that event, however, staff would recommend that the program be limited to major and minor subdivisions only. The public hearing was opened. Bob Glover, Executive Officer of the Building Industry Association (BIA) of the Bay Area thanked the District for implementing the program two years ago, acknowledging that the District was a pioneer not only in the Bay Area, but throughout the State of California, for addressing a significant issue in the industry. As the building industry is still greatly depressed, he urged the Board to continue the program for another year or two. Keeping the program in place would not cost the District anything and may even allow it to recoup some of the costs of developing the program. He was agreeable to limiting it to subdivisions. Mr. Glover concluded by saying that the District's efforts have been very much appreciated by the BIA. The public hearing was closed. After hearing Mr. Glover's comments, Member Nejedly said he had changed his mind and would be in favor of continuing the program for another two years. It was moved by Member Williams and seconded by Member Nejedly to adopt (1) Resolution 2011 -023 extending the Connection Fee Deferral Program for subdivisions for two years, to June 30, 2013; and (2) Ordinance No. 267 (uncodified) reinstating the Connection Fee Deferral Program participation fees as proposed. Motion passed by the following vote of the Board: AYES: Members: McGill, Nejedly, Williams, Hockett NOES: Members: None ABSENT: Members: Menesini 6. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER Item 9.a. was taken out of order. 7. BIDS AND AWARDS a. AWARD A CONSTRUCTION CONTRACT IN THE AMOUNT OF $1,578,000 TO AZTEC ' CONSULTANTS. INC. THE LOWEST RESPONSIVE BIDDER FOR THE TREATMENT PLANT PIPING RENOVATIONS PHASE 6 DISTRICT PROJECT 7288: FIND THAT THE PROJECT IS EXEMPT FROM CALIFORNIA ENVIRONMENTAL QUALITY ACT Book 61 — Page 17 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 (CEQA); AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE THE CONTRACT DOCUMENTS SUBJECT TO SUBMITTAL REQUIREMENTS ' General Manager James Kelly stated that on June 1, 2011 the District received six bids for construction of the Treatment Plant Piping Renovations, Phase 6, District Project 7288. This phase of the project consists of replacing sections of the scrubber water piping at the seal tanks on the wet scrubbers and in the SCB plenum, replacing a section of the centrate pipe at the foam suppression tank, and replacing air supply pipelines and aeration air diffuser assemblies in pre- aeration tanks, primary tank distribution channels, and primary tank effluent channels. In addition, the construction work will include installing baffles within one of the primary sedimentation tanks, installing day tanks at the standby power building generators, replacing a flow meter on an aeration blower, and removing pipe insulation, which contains asbestos, at various locations around the treatment plant. The Engineer's estimate was $1,540,000. Staff reviewed the bids and recommended awarding the project to the lowest responsive bidder, Aztec Consultants, Inc., for $1,578,000. It was moved by Member Williams and seconded by Member McGill to find that the project is exempt from CEQA; to award a construction contract to Aztec Consultants, 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, Nejedly, Williams, Hockett NOES: Members: None ABSENT: Members: Menesini b. AWARD A CONSTRUCTION CONTRACT IN THE AMOUNT OF $1.638.900 TO PRECISION ENGINEERING INC., THE LOWEST RESPONSIVE BIDDER FOR THE LAFAYETTE SEWER RENOVATIONS, PHASE 7 DISTRICT PROJECT 5990: 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 26, 2011 the District received six bids for construction of the Lafayette Sewer Renovations, Phase 7, District Project 5990. This seventh phase of the 13 -phase project will renovate approximately 14,000 linear feet of 6 -, 8 -, 12 -, and 15 -inch sewer lines in public streets and private easements in the City of Lafayette. The Engineer's estimate was $2 million. Staff reviewed the bids and recommended awarding the project to the lowest responsive bidder, Precision Engineering, Inc., for $1,638,900. It was moved by Member Williams and seconded by Member McGill to find that the project is exempt from CEQA; to award a construction contract to Precision Engineering, Inc.; and to authorize the General Manager to execute the contract documents as I recommended. Motion passed by the following vote of the Board: Book 61— Page 18 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 AYES: Members: McGill, Nejedly, Williams, Hockett ' NOES: Members: None ABSENT: Members: Menesini 8. REPORTS a. GENERAL MANAGER 1) Update on Collection System Operations Facility District Proiect 8208 Associate Engineer Paul Seitz presented the regular construction progress update on the Collection System Operations (CSO) Facility project by showing photos of both the interior and exterior work. Inside, the focus is on continuing with drywall, painting, plumbing, and electrical and mechanical work. Outside, numerous yard improvements are taking place, including wrought iron fencing and preparation for pouring concrete for the entry and walkways. He noted that PG &E recently set the gas meter. The middle yard is being prepped for the pouring of permeable concrete. In response to a question from Member Williams, Mr. Seitz said preliminary permeability rate tests were 300 inches per hour, although he acknowledged that this rate is expected to decrease over time. In conclusion, Mr. Seitz said the project remains 17 days behind schedule with completion anticipated in mid October. 2) Update on Contra Costa County Employees' Retirement Association (CCCERA) The Board acknowledged receipt of the report in the agenda packet. 3) Update on pension reform legislation The Board acknowledged receipt of the report in the agenda packet. 4) Title V Permit renewal application The Board acknowledged receipt of the report in the agenda packet. 5) Location for 2012 labor negotiations The Board acknowledged receipt of the report in the agenda packet, in which staff recommends holding the 2012 employee contract negotiations off site, at JFK University, because this neutral location is available at no cost and would minimize interruptions for all parties involved. After a brief discussion, the Board directed staff to hold the 2012 labor negotiations at JFK University. ' 6) Announcements The following written announcements were included with the agenda packet: Book 61 — Page 19 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 a) Status of inquiry by County Hazardous Materials Program re discharge at , Moraga Pump Station — matter resolved b) Recent bid results on chemicals (centrifuge polymer and sodium hypochlorite) for Fiscal Year 2011 -12 will provide significant savings to District The following additional written announcement was made at the meeting: c) July 12, 2011 Special Board meeting scheduled to interview three benefits and labor negotiations consultants b. COUNSEL FOR THE DISTRICT Mr. Alm announced that no closed session would be needed for Item 12.b. because a demurrer had been granted effectively dismissing the District from the litigation. C. SECRETARY OF THE DISTRICT No reports. BOARD MEMBERS 1) Board Member reports on recent meetings for which they received the stipend: r 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 Day their expenses Member McGill Member McGill reported on the June 2, 2011 Contra Costa Mayors' Conference hosted by the City of Lafayette featuring political satirist Will Durst. Member McGill reported on the June 9, 2011 Horizon Leadership Series, a recurring series of dynamic interactions with major decision makers in the future of this region. This first event of the series featured David E. Durant, Mayor of Pleasant Hill. Member McGill reported on the Contra Costa Council Annual Installation Dinner held in Lafayette on June 9, 2011. Member Neiedly Member Nejedly and President Hockett reported on the June 13, 2011 Budget I and Finance Committee meeting and summarized the Action Summary. The Board received the report without comment. Book 61 — Page 20 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 Member Williams rMember Williams reported on the June 2, 2011 Contra Costa Mayors' Conference hosted by the City of Lafayette featuring political satirist Will Durst. President Hockett President Hockett noted that she did not attend the June 2, 2011 Contra Costa Mayors' Conference hosted by the City of Lafayette featuring political satirist Will Durst. President Hockett and Member Nejedly reported on the June 9, 2011 Human Resources Committee meeting and summarized the Action Summary. The Board received the report without comment. President Hockett reported on the Contra Costa Council Annual Installation Dinner held in Lafayette on June 9, 2011. 2) Consider following Board discussion items: a) Consider scheduling a Board retreat to discuss strategic planning — Member McGill ' Member McGill stated he believes there is value to holding a Board retreat to discuss strategic planning and it was his hope that General Manager James Kelly would coordinate a retreat similar to the one held October 31, 2007. In coordinating the previous retreat, Mr. Kelly interviewed various consultants and selected one to serve as a facilitator for the retreat. The consultant interviewed the Board members separately to determine their areas of interest and then provided that information to all Board members in advance of the retreat. Ultimately, the ideas generated during the strategic planning session were incorporated into the District's business plan. In response to a question from Member Williams, Mr. Kelly said the intent of the retreat was to clarify the Board's priorities so staff could focus its efforts in those areas. Member Williams said that he was interested in learning about the other Board members' priorities and discussing the benefits to the District of having a strategic plan. It was the consensus of the Board to direct General Manager James Kelly to (1) proceed with interviewing two or three potential consultants knowledgeable about strategic planning processes, one of whom will be selected to work with the Board to move through the process; and (2) coordinate a date and location for the upcoming Board retreat to ' discuss strategic planning. b) Consider forming an Ad Hoc Committee to analyze 2011 -12 Succession Planning — President Hockett Book 61— Page 21 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 President Hockett noted that the District will be facing a great deal of ' change in the coming year due to anticipated retirements. She stated that creation of an Ad Hoc Committee to analyze succession planning issues would enable the Board to become more knowledgeable and prepared to deal with these changes. She proposed that an Ad Hoc Committee be created for analyzing 2011 -12 succession planning and proposed that Member McGill be selected to join her on the Committee. Mr. Alm asked if there was consensus among the Board members to form an Ad Hoc Committee for 2011 -12 Succession Planning for the purpose stated above, with President Hockett and Member McGill serving as the Committee members. All present Board members responded affirmatively. 3) Announcements Member McGill provided a written report covering Announcements. He also reported that at its last meeting, the Contra Costa Local Area Formation Commission ( LAFCO) nominated the District for the "Project of the Year" award for its work on catching up with its backlog of annexations. Noting that the nomination was prompted by the LAFCO Executive Office and everyone was supportive of the nomination, he said a presentation will be made at the State conference in August. He concluded by stating this is yet another acknowledgment of the District's good work and kudos were due to the Environmental Services Division of the Engineering Department. t 9. HUMAN RESOURCES a. RECEIVE PRESENTATION FROM REPRESENTATIVE OF KAISER PERMANENTE REGARDING PROPOSED CONTRACT RENEWAL RESULTING IN A RATE INCREASE EFFECTIVE JULY 1 2011 General Manager James Kelly stated that Kaiser Permanente proposed a 16.99 percent rate increase for the upcoming renewal effective July 1, 2011 through June 30, 2012. Staff expressed concern at the size of the increase and asked Kaiser to reconsider. Kaiser proposed a 3.25 percent reduction in the proposed increase contingent upon their having an opportunity to discuss their rate review methodology and process with the full Board. He introduced Kaiser Account Manager Jason Douglass who presented an overview of underwriting methodology and the factors considered in setting the District's renewal rate for the coming plan year. He noted that the District falls into the category of groups with approximately 500 members, including current employees and early retirees and their dependents. For groups that size, a credibility factor is assigned based equally on two factors: (1) claims utilization during a rolling 12 -month period, and (2) a risk calculation based on prescription drug utilization. With regard to claims utilization, he noted that the District's inpatient claims during the most recent rolling 12 -month period ' were significantly greater than for the prior year. The risk calculation, which takes into account pharmacy utilization within the District, is used to project what actuaries and underwriters believe would be needed for the coming plan year based on the prior year's Book 61— Page 22 -7 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 prescription drug usage. If 1.00 is considered the normative number, the District is at 1.34, which is 0.55 points above the prior year. In summary, Mr. Douglass said the District has had a higher than usual claims utilization, which has led to a net renewal increase of 13.7 percent. There will be no change in benefits. He also said Kaiser will be conducting some brown bag lunch programs, among other things, to complement the District's existing wellness program. b. CONSIDER ADOPTING (1) RESOLUTION 2011 -024 AUTHORIZING BOARD PARTICIPATION IN THE HEALTH FLEXIBLE SPENDING ARRANGEMENT (HFSA) OF THE DISTRICT'S SECTION 125 CAFETERIA PLAN AND (2) THE SUMMARY OF MATERIAL MODIFICATIONS AND AMENDMENT NO. 1 TO THE HFSA ALLOWING BOARD MEMBERS THE OPTION TO PARTICIPATE IN THE HFSA FOR REIMBURSEMENT OF QUALIFIED MEDICAL EXPENSES IN LIEU OF DISTRICT MEDICAL COVERAGE General Manager James Kelly explained that staff was directed at the May 11, 2011 Human Resources Committee meeting to proceed with the necessary documents to allow the Board members to participate in the District's HFSA of the Cafeteria Plan in lieu of the District's more expensive medical coverage. Staff identified the need to create a resolution authorizing the participation and a change to the HFSA plan document, as reported to the Board at the May 19, 2011 Board meeting. Staff has now prepared the necessary documents and is seeking Board approval. It was moved by Member Nejedly and seconded by Member McGill to adopt (1) Resolution 2011 -024 authorizing Board participation in the Health Flexible Spending Arrangement (HFSA) of the District's Section 125 Cafeteria Plan, and (2) the Summary of Material Modifications and Amendment No. 1 to the HFSA, allowing Board Members the option to participate in the HFSA for reimbursement of qualified medical expenses, in lieu of District medical coverage. Motion passed by the following vote of the Board: AYES: Members: McGill, Nejedly, Williams, Hockett NOES: Members: None ABSENT: Members: Menesini C. REVIEW DRAFT RESPONSE TO GRAND JURY REPORT NO 1104 — "ELECTED BOARD MEMBERSHIP" General Manager James Kelly noted that the District's draft response to the Contra Costa Grand Jury Report No. 1104 dated April 26, 2011 was included in the agenda packet. This report questioned compensation and benefits for special district boards and city councils. The District's various responses to the Grand Jury indicate that it has implemented an annual public review of such compensation and that the compensation and benefits for District Board members are fair and appropriate given the time spent by Board members on District business. The Board members had no comment on the draft response. It was moved by Member Nejedly and seconded by Member Williams to accept the draft response to Contra Book 61— Page 23 None. None. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 Costa Grand Jury Report No. 1104 as presented. Motion passed by the following vote of the Board: I AYES: Members: McGill, Nejedly, Williams, Hockett NOES: Members: None ABSENT: Members: Menesini 10. EMERGENCY SITUATIONS REQUIRING BOARD ACTION 11. SUGGESTIONS FOR FUTURE AGENDA ITEMS 12. CLOSED SESSION The Board recessed at 3:52 p.m. to reconvene in the Caucus Room in closed session to confer with Legal Counsel regarding the following matters: a. Conference with labor negotiators pursuant to Government Code Section 54957.6: ' District Negotiators: General Manager James Kelly, Secretary of the District Elaine Boehme Employee Organizations: (1) Employees' Association, Public Employees Union, Local One; (2) CCCSD Management Support/Confidential Group (MS /CG), and (3) Management Group b. Conference with Legal Counsel — existing litigation pursuant to Government Code Section 54956.9(a): • Nellie Freeman v. Central Contra Costa Sanitary District, Contra Costa County Superior Court Case No. C10- 01142. C. Closed Session pursuant to Government Code Section 54957.10 - request for early withdrawal of funds from Deferred Compensation Plan. The Board recessed at 4:49 p.m. to reconvene in the Board Room in open session. 13. REPORT OUT OF CLOSED SESSION ' District Counsel Kent Alm stated that no reportable action was taken in closed session with respect to Item 12.a. No closed session was necessary with regard to Item 12.b (as previously reported) or 12.c. Book 61 — Page 24 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of June 16, 2011 ' 14. ADJOURNMENT There being no further business to come before the Board, President Hockett adjourned the meeting at 4:50 p.m. I A Barbara D. Hockett President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: aine� ; R. Boehme, CMC ''Secretary of,the- District Centrai,- Gcnt`re -Costa Sanitary District ' County of Contra Costa, State of California Book 61 — Page 25