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HomeMy WebLinkAbout04.a.1) Approve minutes of March 15, 2012 Board meetingM .Q./ INUTES OF THE REGULAR MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON MARCH 15, 2012 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 15, 2012. President Nejedly called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: McGill, Williams, Nejedly ABSENT: Members: Hockett, Menesini a. PLEDGE OF ALLEGIANCE TO THE FLAG The Board and staff joined in the Pledge of Allegiance. b. INTRODUCTIONS The Board Members welcomed Mike Zubrzycki, Staff Engineer in the Capital Projects Division. PUBLIC COMMENTS There were no public comments, however General Manager James Kelly requested that action on Items 3.b. and 8.a. be tabled to a future meeting when the full Board was in attendance. The Board Members agreed with this request. Mr. Kelly, who would be retiring on March 30, 2012, took a moment to thank the Board for the honor and pleasure of serving as General Manager for the past five and one -half years. 3. CONSENT CALENDAR a. RECOGNIZE 2011 SAFETY SUGGESTION OF THE YEAR AWARD RECIPIENT HOUSEHOLD HAZARDOUS WASTE (HHW) TECHNICIAN II MATTHEW THOMAS General Manager James Kelly stated that each year the District Safety Committee reviews the safety suggestions submitted by employees during the preceding year. The Committee then picks the suggestion it believes offers the greatest impact on preventing injury or reducing workplace hazards. Following a report from Safety and Risk Management Administrator Shari Deutsch, President Nejedly presented the award for 2011 to Matthew Thomas, HHW Technician II, in recognition of his 0 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 suggestion to modify the HHW Collection Facility north and south gates by adding a guide track and wheel system to make the gates safer and easier to close. DOPT RESOLUTION 2012 -020 RECOGNIZING GENERAL MANAGER JAMES KELLY ON HIS UPCOMING RETIREMENT It was the consensus of the Board to postpone action on this matter until more Board Members could be present. 4. CONSENT CALENDAR It was moved by Member McGill and seconded by Member Williams to adopt the Consent Calendar as recommended. Motion passed by the following vote of the Board: AYES: Members: McGill, Williams, Nejedly NOES: Members: None ABSENT: Members: Hockett, Menesini a. Approve minutes of Board meetings held on the following dates: 1) February 16, 2012; and 2) February 22, 2012. b. Approve expenditures dated March 15, 2012. Reviewed by Budget and Finance Committee. C. Set public hearing on April 19, 2012 at 2:00 p.m. to consider adoption of a proposed uncodified ordinance to amend the Schedule of Environmental and Development - Related Rates and Charges. Reviewed by Budget and Finance Committee. d. Set public hearing on April 19, 2012 at 2:00 p.m. to consider adoption of a proposed uncodified ordinance to amend the Schedule of Capacity Fees. Reviewed by Budget and Finance Committee. e. Adopt Resolution 2012 -021 accepting an amendment to a grant of easement from Contra Costa County for Iron Horse Corridor (IHC) parcels located within the City of San Ramon (IHC - Parcels 59, 61 -66); adopt Resolution 2012 -022 authorizing execution of a quitclaim deed to Contra Costa County for sewer easements on IHC parcels located within the City of San Ramon (District Project 5554 — Parcels 1 -3); adopt Resolution 2012 -023 accepting an amendment to a grant deed to Contra Costa County for an IHC parcel located within the unincorporated area of Alamo (IHC — Parcel 32); and authorize staff to record documents with the Contra Costa County Recorder. Direct staff to secure the services of an arbitrator in accordance with the District's grievance procedure — Scott Kahlor. K CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 g. Direct staff to secure the services of an arbitrator in accordance with the District's grievance procedure — Shawn Bitle. h. Adopt the revised job classification for Information Systems Specialist. Recommended by Human Resources Committee. 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER None. 6. REPORTS a. GENERAL MANAGER 1) Financial analysis regarding possible funding alternatives for Contra Costa Employees' Retirement Association Unfunded Actuarial Accrued Liability At the Board meeting held September 1, 2011, Member McGill requested that staff evaluate approaches to more cost effectively address the District's roughly $120 million in retirement unfunded actuarial accrued liabilities (UAAL), currently subject to the 7.75 percent interest rate charged by the Contra Costa Employees' Retirement Association ( CCCERA), in essence "refinancing" the District's obligation in much the same way an individual might refinance a mortgage to obtain a lower interest rate. A comprehen- sive financial analysis was performed by staff and a report was included as part of the agenda packet. Director of Administration Randy Musgraves provided a summary review of the analysis, findings, and recommendations. He said there are three basic ways to fund the UAAL: (1) have CCCERA continue to finance the UAAL at its 7.75 percent assumed rate of return, (2) raise sewer service charge rates and pay cash in excess of the annual UAAL requirement, or (3) debt finance all or a portion of the UAAL. After analyzing each scenario, Mr. Musgraves said it was clear that the sooner the District can pay on the UAAL in excess of the annual requirement, the more savings would accrue from reduced interest expense. Cash payments generated by raising rates would produce the greatest savings. To illustrate, he said that adopting three annual $60 sewer service charge rate increases beginning with Fiscal Year 2013 -14 would enable the District to (1) fully pay off its retirement UAAL within 15 to 20 years and (2) begin to fund its capital program such that it would be able to afford future capital projects required by anticipated stringent regulatory changes. Debt financing using Revenue Bonds at 3.25 percent would save more interest expense than Pension Obligation Bonds at 4.86 percent. Staff has concluded that a combination of raising sewer service charge rates over the next three years and debt financing up to $75 million using Revenue 3 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 Bonds would yield optimum results while preserving bonding capacity for future needs. Based on this conclusion, Mr. Musgraves said it was staff's recommendation to proceed with a two- pronged approach: a) Request a written agreement from CCCERA setting the parameters for early payment of the UAAL, including assurances that CCCERA will remain de- pooled and allowing any monies paid by the District to CCCERA be credited only to the District's payoff of its UAAL, and addressing how future over- or under - funding would be handled; and b) If an agreement with CCCERA can be reached, begin the process of obtaining approximately $75 million Revenue Bond debt financing to pay a portion of the UAAL. (A sewer service charge rate increase to pay off the UAAL more rapidly could be considered during the financial planning process for Fiscal Year 2013 -14.) A lengthy discussion took place during which Mr. Musgraves and District Counsel Kent Alm responded to inquiries from the Board Members. In response to a question from Member Williams, Mr. Musgraves acknowledged that if CCCERA's investment earnings fall short of 7.75 percent, the District's retirement UAAL would rise above the current $120 million level. Mr. Alm stated that he could not predict how failsafe an agreement with CCCERA may be, given the latitude afforded retirement boards. He noted that the Board was not being asked at this time to take any formal action with regard to alternative funding of the UAAL; rather, he said direction was sought as to whether the Board was in favor of staff proceeding with the two- pronged approach set forth by Mr. Musgraves. Given that interest rates are not likely to go much lower, and that negotiating an agreement with CCCERA could take some time, Member McGill said time was of the essence. He favored proceeding with CCCERA discussions and preliminarily pursuing bond funding as soon as possible; adding that exploring sewer service rate increases to make up the shortfall could be explored once these matters were decided. It was the consensus of the Board for staff to proceed with the two- pronged approach as outlined by Mr. Musgraves. 2) Final draft report on Bartle Wells Associates' audit of the District's permit counter and connection fee collection practices In December 2011, staff engaged the public finance advisory firm of Bartle Wells Associates to conduct an audit of permit counter and connection fee collection practices. Doug Dove of Bartle Wells spearheaded the audit and his final report was included in the Board's agenda packet. The Budget and Finance Committee was briefed on the report at its meeting on Monday, March 12. Mr. Dove presented the Board with eight key findings and recommendations resulting from the audit. 4 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 Mr. Dove and staff responded to a number of questions from the Board about the SunGard software that has been used by permit counter staff since 1993. Member McGill said the Budget and Finance Committee was quite dismayed to see the range of difficulties encountered with the software and the problems need to be dealt with as soon as possible. He stated that technology has become so much more enhanced since the SunGard system was implemented and the District should move ahead toward taking advantage of technological improvements now available. Deputy General Manager /Director of Engineering Ann Farrell reported that, after eliminating unresolved items for which no fees are owed, staff has determined that roughly $4.6 million of the $20.5 million indicated in the SunGard report requires investigation. About a year ago staff began looking at this issue. It is a painstaking and slow process. Staff has been able to resolve 20 to 30 permits over the course of the year, some of which have resulted in the collection of past due revenue. Given the amount of time needed to investigate the permit backlog, Ms. Farrell said staff is looking at reassigning Senior Engineer Tom Godsey to deal exclusively with this matter and hiring temporary accounting clerks to obtain a clear picture as to what portion of the $4.6 million represents actual uncollected fees. Following that, a determination will be made as to the best method of collection, including dealing with any statute of limitations issues. The goal is to have a specific game plan in place by June of this year. Staff intends to provide an update at each regular Board meeting until the matter is resolved. 3) Real properties owned by the District 4) In October 2011, the Real Estate Committee requested to see a list of District -owned properties and also directed staff to ensure that properties with revenue generating potential were being maximized. Staff prepared the 2012 Real Property List which was included in the agenda packet. Board Member McGill inquired as to whether the Shell pipeline owned by the District was included in the listing. Senior Right -of -Way Agent Rick Hernandez said the listing provided in the agenda packet was for real property owned in fee simple, not pipes that the District owns on easements throughout its service area. Member McGill said that with all the upcoming retirements, leading to the loss of a great deal of institutional knowledge, staff needs to be structured in keeping detailed inventories of the District's assets, including those which run across easements. General Manager James Kelly said that he and Ann Farrell have been addressing such issues during this time of transition. Announcements The following written announcements were included with the agenda packet: 5 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 a) Staff retirements scheduled: 1) Controller Debbie Ratcliff on March 30, 2012 2) Field Operations Superintendent Steve Considine on March 30, 2012 3) Information Systems Specialist Ralph Bates on March16, 2012 4) Senior Plant Operator Robert Roberts on March 30, 2012 b) Clean Water Environmental Association (CWEA) Conference attendees updated c) Listing of the District's Major Compliance Reports The following additional written announcements were distributed at the meeting: d) Update on Retirements of Information Systems Specialist Ralph Bates and Field Operations Superintendent Steve Considine e) Collection System Operations Facility Open House scheduled for Saturday, May 5, 2012 from 10 a.m. to 3 p.m. f) District Hazard Mitigation Plan approved by the Federal Emergency Management Agency (FEMA) g) Lien to be released on El Sobrante property of Gregory and JeanMarie Reginato h) March 14, 2012 Regional Water Quality Control Board meeting on waste discharge requirements i) Vallejo National Pollutant Discharge Elimination System (NPDES) permit petitioned for review j) March 8, 2012 Natural Gas Outage Notification from Pacific Gas and Electric Company (PG &E) General Manager James Kelly briefly described the written announcement concerning PG &E's emergency notification last week that the natural gas line to the District's treatment plant would be shut down for a period of time in order to repair a ruptured line. He described how quick work by staff allowed the plant to continue operating without a permit violation. No additional announcements were made. N CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 b. COUNSEL FOR THE DISTRICT District Counsel Kent Alm reported on the favorable outcome of the District's recent motion to dismiss in Gregory Village Partners, L.P. v. Chevron, et al. 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. With one exception, all of the District's motions were granted. While they were granted with leave to amend, on one important issue plaintiffs failed to plead sufficient facts on the part of the District to proceed with their claim and it appears they will have difficulty meeting the required threshold. C. SECRETARY OF THE DISTRICT No reports. 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 Williams In Board Member Hockett's absence, Member Williams reported on the March 8, 2012 Human Resources Committee meeting and summarized the Action Summary. The Board received the report without comment. Member McGill Member McGill reported on the March 1, 2012 Contra Costa Mayors' Conference hosted by the City of Pittsburg. Speakers included Kristin Connelly and others regarding State Budget and Governance Reforms being proposed as an Initiative Measure by California Forward. Member McGill reported on the March 12, 2012 Budget and Finance Committee meeting which was also attended by President Nejedly and summarized the Action Summary. The Board received the report without comment. 2) Provide direction to Voting Delegate (Member McGill) regarding the District's vote for a candidate to fill the existing vacancy for the Special Districts representative for Local Area Formation Commission ( LAFCO) General Manager James Kelly noted that there are two candidates running to fill the vacant Special District seat on the Contra Costa LAFCO Board when Member McGill's term expires in May. In February, the Board nominated Member McGill for re- election. Last month, the Board also 7 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 named Member McGill as Voting Delegate and Member Williams as Alternate. Mr. Kelly said the Board was being asked to provide direction to the Voting Delegate or Alternate on how to cast the District's vote in the upcoming election set for April 16, 2012. It was moved by President Nejedly and seconded by Member Williams that the District's vote be cast for nominee and fellow Board Member McGill and that the Voting Delegate and Alternate be authorized to cast any necessary subsequent vote using their discretion in the event of a tie vote or run -off. Motion passed by the following vote of the Board: AYES: Members: McGill, Williams, Nejedly NOES: Members: None ABSENT: Members: Hockett, Menesini 3) Announcements Member McGill provided a written report covering Announcements and other meetings. 7. TREATMENT PLANT a. AUTHORIZE THE GENERAL MANAGER TO AMEND THE EXISTING TECHNICAL CONSULTING SERVICES AGREEMENT WITH THE AVOGADRO GROUP, LLC, IN AN AMOUNT NOT TO EXCEED $125,005, FOR A NEW CONTRACT CEILING OF UP TO $225.000. FOR ASSISTANCE WITH MULTIPLE HEARTH FURNACE SOURCE TESTING General Manager James Kelly said this matter was fully explained in the position paper included in the agenda packet. In short, he said this testing is required as part of the new permit for the multiple hearth furnace. It was moved by Member Williams and seconded by President Nejedly to authorize the General Manager to amend the existing technical consulting services agreement with The Avogadro Group, LLC, in an amount not to exceed $125,005, for a new contract ceiling of up to $225,000, for assistance with multiple hearth furnace source testing. Motion passed by the following vote of the Board: AYES: Members: McGill, Williams, Nejedly NOES: Members: None ABSENT: Members: Hockett, Menesini CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 8. HUMAN RESOURCES a. ADOPT RESOLUTION 2012 -024 APPOINTING PRINCIPAL ENGINEER JARRED MIYAMOTO -MILLS TO THE POSITION OF ENVIRONMENTAL SERVICES DIVISION MANAGER It was the consensus of the Board to postpone action on this matter until more Board members could be present. b. AUTHORIZE THE ADDITION OF AN ADMINISTRATIVE ASSISTANT POSITION IN THE PLANT OPERATIONS DEPARTMENT IN THE FISCAL YEAR 2011 -2012 STAFFING PLAN General Manager James Kelly said that in the past, Plant Operations had one Administrative Supervisor and two Administrative Assistants. One Administrative Assistant was deleted from last year's staffing plan. Existing staff has not been able to keep up with the workload indicating that the second position needs to be added back to the administrative staff. Another vacant position has been deleted from the Plant Operations Department staffing plan in Fiscal Year 2012 -13 to provide the long -term funding for this position. It was moved by Member Williams and seconded by Member McGill to authorize the addition of an Administrative Assistant position in the Plant Operations Department. Motion passed by the following vote of the Board: AYES: Members: McGill, Williams, Nejedly NOES: Members: None ABSENT: Members: Hockett, Menesini Member Williams did comment, however, that given the likelihood of sizeable future rate increases to deal with the District's Unfunded Actuarial Accrued Liability (UAAL), he urged staff to continue to pay careful attention to optimizing staffing needs and any other area for saving costs. 9. BUDGET AND FINANCE a. RECEIVE THE 2011 ANNUAL REPORT OF THE DEFERRED COMPENSATION PLAN ADVISORY COMMITTEE Annually, the Deferred Compensation Advisory Committee reviews the three providers and prepares a report for the Board regarding fund performance and fees. General Manager James Kelly said all three providers have met their contractual obligations, as indicated in the material in the agenda packet. D CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 It was moved by President Nejedly and seconded by Member McGill to receive the report. Motion passed by the following vote of the Board: AYES: Members: McGill, Williams, Nejedly NOES: Members: None ABSENT: Members: Hockett, Menesini b. APPROVE THE UPDATED ADMINISTRATIVE PROCEDURES FOR EMERGENCY WITHDRAWALS FROM THE DISTRICT'S 457 DEFERRED COMPENSATION PLAN General Manager James Kelly said staff recommended that future emergency withdrawals be processed by the Controller and Deferred Compensation Advisory Committee, eliminating the requirement for Board approval. The Controller follows strict guidelines regarding emergency withdrawals and Board approval is not required by the IRS. The Budget and Finance Committee reviewed this issue and asked that any emergency withdrawal processed by the Advisory Committee be announced at the following Budget and Finance Committee meeting. It was moved by Member McGill and seconded by Member Williams to approve the updated procedures as presented in the agenda packet. Motion passed by the following vote of the Board: AYES: Members: McGill, Williams, Nejedly NOES: Members: None ABSENT: Members: Hockett, Menesini 10. EMERGENCY SITUATIONS REQUIRING BOARD ACTION President Nejedly thanked staff for so adeptly handling the recent emergency situation at the Treatment Plant after the PG &E natural gas supply pipeline ruptured. None. 11. SUGGESTIONS FOR FUTURE AGENDA ITEMS 12. CLOSED SESSION President Nejedly announced that no closed session was needed for Item 12.a. a. Personnel matter pursuant to Government Code Section 54957 — Performance Evaluation for General Manager. 10 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of March 15, 2012 13. REPORT OUT OF CLOSED SESSION Closed Session not held. 14. ADJOURNMENT There being no further business to come before the Board, President Nejedly adjourned the meeting at 3:25 p.m. James A. Nejedly President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Donna M. Anderson Acting Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California 11