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HomeMy WebLinkAboutBOARD MINUTES 05-17-12MINUTES OF THE REGULAR MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON MAY 17, 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, May 17, 2012. President Nejedly called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Hockett, McGill, Menesini, Williams, Nejedly ABSENT: Members: None 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 General Manager Ann Farrell said the District's Treatment Plant recently won the following safety awards: a. 2011 PLANT SAFETY AWARD (LARGE PLANT) FROM THE CALIFORNIA WATER ENVIRONMENT ASSOCIATION (CWEA) b. 2012 GEORGE W. BURKE, JR. FACILITY SAFETY AWARD FROM THE WATER ENVIRONMENT FEDERATION (WEF) AND CWEA In January 2012, the District received the regional 2011 Large Plant Safety Award from the San Francisco Bay Section of CWEA. This newest award is at the state level. In recognition of the excellence of the District's active and effective safety program and safety record, it was also awarded the 2012 George W. Burke, Jr. Facility Safety Award, which is also a statewide award. Safety Officer Diane Hinson introduced members of the Plant Operations Department Safety Team and others responsible for the District having received the awards. Ms. Maura Bonnarens, Past President of CWEA, commended the Board and management staff for supporting the District's employees, having no serious injuries during the Book 61- Page 242 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 period of the award (2010- 2011), being involved in CWEA, and providing strong leaders to CWEA over the years. She presented both awards to President Nejedly. 4. CONSENT CALENDAR It was moved by Member Hockett and seconded by Member McGill to adopt the Consent Calendar as recommended. Motion passed by unanimous vote of the Board. a. Approve minutes of Board meetings held on the following dates: 1) April 12, 2012; and 2) April 19, 2012. b. Approve expenditures dated May 3, 2012 and May 17, 2012. Reviewed by Budget and Finance Committee. C. Adopt Resolution 2012 -035 authorizing execution of a Consent to Common Use Agreement with Contra Costa Water District (CCWD) for an easement over 321 Golf Club Road in Pleasant Hill (APN 153 - 040 -009; Job 4985 — Parcels 15 and 35; Job 7181 — Parcel 2), and authorize staff to record documents with the Contra Costa County Recorder. d. Adopt Resolution 2012 -036 accepting an amendment to a grant of easement from Contra Costa County on lands commonly referred to as the Buchanan Fields Golf Course (APN 125 - 010 -022 and APN 125 - 010 -023; District Project 5980 — Parcel R- 2), and authorize staff to record documents with the Contra Costa County Recorder. e. Set June 21, 2012 at 2:00 p.m. as the date and time for a public hearing to consider: (1) confirming and levying final assessments for the Vista Del Orinda Contractual Assessment District (CAD) No. 2010 -2 in Orinda, (2) placing the Fiscal Year 2012 -13 assessments on the Contra Costa County tax roll for collection, and (3) adopting an uncodified ordinance establishing reimbursement fees for the properties which could directly connect to Job 6499. Set June 21, 2012 at 2:00 p.m. as the date and time for a public hearing on District Annexation 183 — Orinda, Pleasant Hill, and Walnut Creek negative declaration. g. Authorize the President of the Board of Directors and the Secretary of the District to execute an agreement with the City of Orinda for an initial term of one year with automatic annual renewals unless cancelled for the District to provide operation and maintenance services for the two new Wilder Pumping Stations. Book 61- Page 243 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER Closed session Item 13.c. was considered out of order. District Labor Counsel Daniel Clinton attended that closed session, after which he left the meeting. Items 8.a. and 8.b. were also taken out of order to accommodate members of the public who were present. 6. BIDS AND AWARDS a. AWARD A CONSTRUCTION CONTRACT IN THE AMOUNT OF $1,562,091 TO PACIFIC TRENCHLESS INC. FOR THE NORTH ORINDA SEWER RENOVATIONS, PHASE 4, DISTRICT PROJECT 5973 It was moved by Member Williams and seconded by Member Menesini to award a construction contract in the amount of $1,562,091 to Pacific Trenchless, Inc., the lowest responsive and responsible bidder for the North Orinda Sewer Renovations, Phase 4, District Project 5973; 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. Motion passed by unanimous vote of the Board. 7. REPORTS a. GENERAL MANAGER 1) Update on permit counter and connection fee collection matters Senior Engineer Tom Godsey presented the update. He stated that staff has completed its first field inspections to confirm whether or not certain lots have been developed, the evaluation process has been revised to include the latest aerial photo data that became available this week, and the dates of discovery are being recorded in situations where monies are collectable and the statute of limitations has not expired. The City of San Ramon has agreed to allow District staff to sign -off on final permit inspections. A meeting is scheduled with the City of Martinez next week. Nearly half of the outstanding fee applications are related to sewer repairs where fees were quoted but no permits were issued and no work was inspected. Therefore, no fees are due. Mr. Godsey presented a progress table showing that as of last week, the team of accountants was 64 percent through reviewing all applications. 2) Announcements The following written announcements were included with the agenda packet: a) Public bidding for 2012 Cured -in -Place Pipe (CIPP) Sliplining Project, District Project 8405 Book 61- Page 244 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 b) Public bidding for Seismic Improvements for Rental Property Project (4737 Imhoff Place), District Project 8231 c) Public bidding for Survey Monument Replacement Contract No. 39341 d) United States Environmental Protection Agency (EPA) denies all Petitions for Reconsideration of Sewage Sludge Incinerators Rule General Manager Ann Farrell said that Member McGill had raised the question of what it could cost to comply with the new regulations. She said approximately $8 million has been included in the proposed Capital Improvement Budget over the next 3 to 5 years to install a new scrubber and perform work on the incinerator burners to meet the new regulations. District Counsel Kent Alm acknowledged that the denial likely will be appealed from both sides and the result of those appeals will be many years off. e) Recent staff promotions: Nate Hodges, Edgar Lopez, Nancy Molina, Name Morales, and Mark Wenslawski promoted to Associate Engineers in the Engineering Department (Capital Projects Division) effective May 7, 2012 f) Annual Summer Student Safety Picnic to be held July 18, 2012 g) Records Center — Status of Conversion of Records h) Employees to attend International Right of Way Association Annual Education Conference in Seattle, Washington, June 8 -13, 2012 b. COUNSEL FOR THE DISTRICT District Counsel Kent Alm reported with regard to the Schaeffer, et al. v. Gregory Village Partners, L.P., Central Contra Costa Sanitary District, et al., Contra Costa County Superior Court Case No. MSC11 -01307 matter. He said a ruling was made yesterday which is unfavorable to the District. The decision as to how best to proceed will be discussed at a future closed session. 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 Book 61- Page 245 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 expenses; future meetings or conferences for which they will receive the stipend or for which the District will pay their expenses Member Hockett Member Hockett reported on the May 16, 2012 Human Resources Committee meeting, which was also attended by President Nejedly in Member Williams' absence, and summarized the Action Summary. The Board received the report without comment. Member McGill Member McGill reported on the May 7, 2012 meeting with Pleasant Hill Mayor Hanecak and City Manager Catalano at which he was accompanied by General Manager Ann Farrell. Member McGill reported on the May 3, 2012 Contra Costa Mayors' Conference hosted by the Town of Danville. Member McGill and Member Hockett reported on the May 8, 2012 Capital Projects Committee meeting and summarized the Action Summary. The Board received the report without comment. Member McGill and President Nejedly reported on the May 15, 2012 Budget and Finance Committee meeting and summarized the Action Summary. The Board received the report without comment. Member Williams brought up the subject of the District's policies and procedures, requesting a list of the District's existing policies. General Manager Ann Farrell said administrative staff has been working to develop a list, which involves separating the policies (under Board's purview) from the procedures (under staffs purview). Secretary of the District Elaine Boehme said the process is nearly complete. Given the fact that much of what the District does is related to environmental sustainability, Member Williams wondered if the Board has considered developing a sustainability policy. 2) Announcements Member McGill provided a written report covering Announcements. 8. ENGINEERING General Manager Ann Farrell said the District has a very successful Contractual Assessment District (CAD) Policy for encouraging property owners to convert from septic to sewer by providing District financing for the cost of building neighborhood sewers. This program typically functions by having the project proponents fund the cost of the sewers, including the cost of any non - participants, with the District providing 10 -year financing. Book 61- Page 246 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 With regard to the potential CAD in the El Toyonal -Alta Vista -Dos Osos area of Orinda and the St. Mary's Road CAD in Lafayette, the District has been asked to make exceptions to its CAD Policy by (1) financing the participant shares for more than 10 years, and (2) funding the non - participant shares. She noted that while the District has provided financing of non - participant shares for CADs, it has not previously funded them, except in the case of the Alhambra Valley, which was a special exception. a. CONSIDER AUTHORIZING AN EXCEPTION TO THE DISTRICT'S CONTRACTUAL ASSESSMENT DISTRICT (CAD) POLICY NO. BP 010 TO ALLOW THE DISTRICT TO FUND THE COST OF NON - PARTICIPANTS FOR THE PROPOSED EL TOYONAL -ALTA VISTA -DOS OSOS CAD IN ORINDA Background /Staff Presentation Provisional Environmental Services Division Manager Jarred Miyamoto -Mills provided background information on the proposed CAD in the El Toyonal area of Orinda, noting that it is in the East Bay Municipal Utility District's ( EBMUD) San Pablo Reservoir Watershed, where the County Health Department imposed a moratorium in 1970 disallowing septic systems for development of vacant properties or expansion of existing homes. Only limited repairs and replacements are allowed for existing homes. Of the 45 properties in the area, 25 are developed and 20 are vacant. Under the District's current CAD Policy, at least 60 percent of the benefitting properties must already be developed. Initial participants cover the entire project cost, including the non - participant shares. When the District provides financing, it charges interest at the minimum rate of 6 percent per year. This amount is collected as an assessment on the tax roll for each participating property owner for up to 10 years. Participants are reimbursed overtime as the non- participants later connect and pay reimbursement fees. Mr. Miyamoto -Mills said proponents of an El Toyonal CAD have made two requests for exception to the District's current CAD Policy: (1) that the District fund (rather than finance) the non - participants' shares, and (2) that the District consider a repayment period of more than 10 -years for participants. The proponents have stated two reasons for these requests. First, the septic systems in the EBMUD watershed pose a threat to public health and the environment. Second, there is an unusually high cost associated with extending public sewer to this area because El Toyonal is a steep, narrow, winding and busy road, and the area's topography necessitates that long, steep private laterals be installed. Mr. Miyamoto presented a map of the El Toyonal area and described the two scenarios (A and B) contained in his position paper which, for the most part, exclude those properties for which no sewer service is desired. Mr. Miyamoto -Mills noted that the costs set forth in these scenarios are expressed in ranges because no firm design or construction bids have been obtained. Mr. Miyamoto -Mills said a number of issues must be considered if the Board were to contemplate making an exception to its CAD Policy by funding non - participant shares for an El Toyonal CAD. First, recovery of funds by the District would be Book 61- Page 247 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 slowed because it would have to wait until non - participants connected to the sewer before being reimbursed. He acknowledged that there is no way of knowing when or if this would occur. Second, at this time, a number of area residents oppose the extension of public sewer. They do not want the environmental impact of additional homes and traffic in the area, and they do not want to endure the noise and other disruptions associated with construction projects. They also object to paying the District's "carrying cost" as part of the non - participant reimbursements. Finally, they do not wish to be required to connect to the public sewer involuntarily. He said that while it has never been the District's policy to require anyone to connect to the public sewer, in the case of a failing septic tank, the County Health Department could mandate sewer connection. Mr. Miyamoto -Mills outlined possible strategies to mitigate the unfavorable cash - flow impacts of making an exception to the District's CAD Policy by funding non- participant shares for an El Toyonal CAD. With regard to the request by the proponents of an El Toyonal CAD that the District consider a repayment period of more than 10 years, Mr. Miyamoto -Mills said that allowing a 15- or 20 -year repayment period would extend the period over which the District would be repaid by 5 or 10 years. This would reduce the annual payments required of the participants and increase the amount of interest paid to the District. Mr. Miyamoto -Mills concluded his presentation by reiterating the views of the members of the Capital Projects Committee, who recently reviewed this matter. The Committee members wished to maintain the District's current CAD Policy that requires participants to cover non - participants' shares, but allows the Board to consider requests for exceptions under special circumstances. Public Comments Mr. Robert C. Cheasty of Cheasty & Cheasty, a Berkeley law firm, spoke on behalf of proponents Robert and Ingrid Wander. The Wanders have been precluded from building on their site because of the 1970 moratorium; they cannot build until sewers are installed. He noted that the District's mission is to provide sanitary sewers to the extent possible. He said the Wanders understand that some property owners are opposed to the potential CAD, but they believe that situation will resolve with time. He urged the District to grant the CAD Policy exceptions as requested. Mr. Sing Tan expressed support for the proposed El Toyonal CAD to end groundwater contamination from failing septic tanks in the area. Mr. Robert Wander said he and his wife, Ingrid, support a CAD in the El Toyonal area and would accept a CAD in any form the Board Members deem best. Ms. Robin Spencer Holmes, an independent environmental consultant and property owner in the area, said she is opposed to installing sewers in the area. She pointed out that most of the roads in the area are only single lane, or single- and -a- half width; therefore, it would be very difficult to have many trucks and equipment Book 61- Page 248 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 on them. She encouraged the Board to pay careful attention to what the majority of homeowners want. Mr. Russell Cohn spoke in support of the project. He read a letter from resident Stefanie Peischl who could not attend the meeting, but who also supported the project. Mr. Cohn concluded his remarks by saying that people should have the right to use their own property, but that right has been revoked for many property owners in the El Toyonal area because of the 1970 moratorium. He said he must assume that the Contra Cost County Health Department invoked its moratorium for a good reason: that failing septic systems are a danger to the area. Mr. Joe Lieber said his property has a failed septic system. A new septic system would be high maintenance and ultimately subject to failure over time. He reiterated Mr. Cohn's point that there was sound reasoning behind the moratorium because septic tanks pose hazards to health and safety. Mr. Michael Bowen spoke in opposition to the proposed extension of the sewer on El Toyonal. He summarized the contents of his letter to President Nejedly dated May 16, 2012, copies of which were distributed at the meeting. Mr. Leo Lieber spoke in support of the proposed El Toyonal CAD. While traffic disruption goes hand in hand with construction, the final result could be an improved road. He said his septic system is failing and in need of replacement. He stated that this is a health issue, not a development issue. Board Discussion Member Williams said that the District has a duty to look after the public's interests and protect the environment by installing sewers and treating wastewater. He noted that land use is not the District's arena. He stated his belief that the Board should follow the terms of its CAD policy without deviation. Thus, he said he would support formation of an El Toyonal CAD under the parameters set forth in the District's CAD Policy, without exceptions. Member Menesini agreed to forming a CAD in the El Toyonal area on the basis of protecting public health. President Nejedly acknowledged that this is a tough decision. He stated that while he was neither pro - development nor anti - development, he disagreed with those who believe that older septic tanks are not a health issue. He also said that traffic and other disruptions to the area during construction were not a factor in his decision because such disruptions took place when existing structures were built and it seems unfair to deny owners of vacant lots the same opportunity. At this time, however, he noted that the number of participating property owners is less than required under the current CAD Policy. Because he would like to extend sewer service to the area, President Nejedly said he would vote in favor of an El Toyonal CAD but, like Member Williams, he would not support funding of non- participant shares because of the apparent low participation level at this time. Book 61- Page 249 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 Member McGill said he has been relatively frustrated with the opponents' stated acceptance of septic systems; they are not preferable to sewers. He said he would like to see sewers installed in the area and agreed with President Nejedly that higher CAD participation is needed. He also said he was willing to consider extending the payback period for participants in order to boost participation levels. For these reasons, he said he was willing to approve the formation of an El Toyonal CAD with the requested exceptions from the CAD Policy as long as all of the following conditions, as set forth by Mr. Miyamoto -Mills in his staff presentation, were incorporated: 1) Excluding from the CAD boundaries vacant properties that are unlikely to be developed. 2) Requiring participants to pay off any remaining assessment balances upon sale of their property (due -on -sale clause). This would not apply to non- participants. 3) Instituting annual increases in non - participant reimbursement fees to compensate for lost investment opportunity (carrying) costs, as has been done with the District's Alhambra Valley Assessment Districts (AVAD). 4) Continuing to collect non - participant reimbursement fees until all District funds are recovered, as is done with the AVADs. Board Action It was moved by Member Hockett to adopt exceptions to a potential El Toyonal CAD under Scenario B, as set forth in the Position Paper. This would include 35 properties, including all of the proponents' properties. As part of her motion, she proposed funding non - participant shares. To clarify, President Nejedly asked Member Hockett if her motion included extending the repayment period for participants beyond 10 years as well as the 4 conditions specified by Member McGill. She said it did. Member McGill seconded the motion to adopt exceptions to a potential CAD in the El Toyonal area based on Scenario B set forth in the Position Paper and in the staff presentation to: (1) allow the District to cover up to 18 non - participant shares (assuming 17 participants) out of 35 properties (51 percent of the project) at an approximate cost to the District of $310,000 to $476,000; and (2) provide a repayment period for participants of longer than 10 years; under the following conditions: 1) Vacant properties that are unlikely to be developed will be excluded from the CAD boundaries; 2) Participants will be required to pay off any remaining assessment balances upon sale of their property (due -on -sale clause); 3) Annual increases in non - participant reimbursement fees will be instituted to compensate for lost investment opportunity (carrying) costs; and 4) Non - participant reimbursement fees will continue to be collected until all District funds are recovered. Member Williams stated that he would not support the motion as it violated the District's CAD Policy and may appear to subsidize certain individuals. Book 61- Page 250 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 Motion passed by the following vote of the Board: AYES: Members: Hockett, McGill, Menesini NOES: Members: Williams, Nejedly ABSENT: Members: None District Counsel Kent Alm and General Manager Ann Farrell said staff will return at a future meeting documenting the special circumstances justifying the exceptions to the CAD Policy. b. CONSIDER AUTHORIZING AN EXCEPTION TO THE DISTRICT'S CAD POLICY NO. BP 010 TO ALLOW THE DISTRICT TO FUND THE COST OF NOW PARTICIPANTS FOR THE PROPOSED ST. MARY'S ROAD CAD NO. 2011 -1 IN LAFAYETTE Staff Presentation Mr. Miyamoto -Mills said the St. Mary's Road CAD No. 2011 -1 in Lafayette was initiated by the Board in March 2011. At that time, the Board approved formation of the CAD, the project and election, overruled protests, and ordered the improvements. In April 2012, the Board modified the CAD boundaries by removing a cluster of uninterested property owners and shortening the sewer length, which had the effect of lowering costs and boosting participation rates. He said the reason the matter was before the Board at this meeting was to consider a request by the St. Mary's CAD participants for District to fund the cost of 3.5 non - participant shares. Mr. Miyamoto -Mills said the St. Mary's CAD meets the District's formation criteria under its current CAD Policy. The CAD will serve 13 properties (split into 14 payment shares, as explained below) at a projected total cost of $378,000. One of the properties is owned by the City of Lafayette and used as a large ball field. Earlier in the CAD process, the City agreed to pay 2 participant shares because it would have 2 sewer connections on the property, and 5 other property owners agreed to participate with 1 share apiece. That would leave 7 reimbursable shares to cover non - participants costs. Since then, the City has agreed to seek Council approval to cover 2 of the non - participant shares (for a total of 4 shares). The City Council is expected to consider this matter in mid June. In addition, 2 of the participating property owners each have agreed to cover 3 /4th of the cost of 1 non- participant share, for a total of 1.5 shares. This leaves 3.5 shares left to be covered, which are the shares for which the participants have requested District funding. The proponents' reasons for seeking financial assistance are the relatively high cost of constructing a sewer project at this location, the extra costs of each connection needing a residential pumping system and pressure lateral (an additional $24,000 to $35,000 per parcel, including District fees), and the proximity of Las Trampas Creek, which is vulnerable to impact by failing septic systems. Mr. Miyamoto -Mills said the cost for 7 shares (50 percent) without the District funding the reimbursable non - participant shares is $54,000 per participant. If the Book 61- Page 251 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 District covered the 3.5 non - participant shares ($94,000), the cost would be reduced to $27,000 per participant. The Capital Projects Committee has recommended that exceptions to the current CAD Policy be considered for the St. Mary's CAD, which is unique because of the partnership with coordinating property owners and the City of Lafayette. If the Board decides to make an exception to the CAD Policy in this instance, staff will need to bring back to the Board a proposed resolution citing the rationale for any exception. Board Discussion Absent the last vote on the proposed El Toyonal area CAD, Mr. Miyamoto -Mills stated that the District has never funded non - participant shares for any CAD, only AVADs. Member Williams said he fully supported the formation of CADs; however, he was concerned that District funding of non - participant shares would set a precedent, making it difficult for the Board to decline similar requests in the future. In response to a question from Member McGill, Mr. Miyamoto -Mills clarified that the St. Mary's CAD proponents have not requested an extension of the repayment period for participants beyond the usual 10 years. Board Action It was moved by Member Menesini and seconded by Member McGill to fund up to 3.5 reimbursable non - participant shares out of 14 total shares for the St. Mary's Road CAD No. 2011 -1 in Lafayette, at an approximate cost to the District of $94,000, under the following conditions: 1) Participants will be required to pay off any remaining assessment balances upon sale of their property (due -on -sale clause); 2) Annual increases in non - participant reimbursement fees will be instituted to compensate for lost investment opportunity (carrying) costs; and 3) Non - participant reimbursements fees will continue to be collected until all District funds are recovered. Motion passed by the following vote of the Board: AYES: Members: Hockett, McGill, Menesini NOES: Members: Williams, Nejedly ABSENT: Members: None President Nejedly said he voted against this matter because he agreed with Member Williams that the situations presented to the Board at this meeting differ from that in the Alhambra Valley and he too is concerned about precedent setting. 9. TREATMENT PLANT a. ADOPT RESOLUTION 2012 -037 AUTHORIZING THE GENERAL MANAGER TO AMEND THE EXISTING PROFESSIONAL SERVICES AGREEMENT IN THE AMOUNT OF $98,000 WITH CAROLLO ENGINEERS INCREASING THE COST Book 61- Page 252 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 CEILING BY $402,000 FOR A NEW CONTRACT CEILING OF $500,000, TO ALLOW FOR DESIGN AND REPAIR OF THE COGENERATION UNIT WITHOUT THE SOLICITATION OF COMPETITIVE BIDS General Manager Ann Farrell said staff has proposed the adoption of a resolution to allow for design and repair of the damaged cogeneration unit without the solicitation of competitive bids. The investigation has been turned over from the technical consultants to the insurance company, EDT. Staff believes the system may be back in service by mid -June at an estimated cost for repair of $400,000, which is in addition to the Carollo Engineer's contract of $100,000, bringing the total to $500,000. In response to a question from Member Williams, Ms. Farrell stated that the District's insurance policy will cover the repair costs as well as the out -of- pocket costs associated with the incident, such as the additional cost of electrical power. It was moved by President Nejedly and seconded by Member Williams to adopt Resolution 2012 -037 and authorize the General Manager to amend the existing professional services agreement in the amount of $98,000 with Carollo Engineers, increasing the cost ceiling by $402,000 for a new contract ceiling of $500,000, to allow for design and repair of the cogeneration unit without the solicitation of competitive bids. Motion passed by unanimous vote of the Board: 10. BUDGET AND FINANCE a. RECEIVE THE FISCAL YEAR 2012 -13 OPERATIONS AND MAINTENANCE BUDGET AND THE FISCAL YEAR 2012 -13 DEBT SERVICE FUND BUDGET Provisional Finance Manager Thea Vassallo presented a summary of the proposed Fiscal Year (FY) 2012 -13 Operations and Maintenance (O &M) Budget and the FY 2012 -13 Debt Service Fund Budget, which the Board will be asked to adopt at the June 7, 2012 Board meeting. Ms. Vassallo reviewed some of the assumptions used in the FY 2012 -13 O &M Budget. Revenue assumptions include a Sewer Service Charge of $371, which reflects the $30 rate increase approved by the Board last year. Of that amount, $344 per Residential Unit Equivalent (RUE), or $56.2 million, is allocated to O &M. Anticipated O &M revenue from the City of Concord is $10.8 million. 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, $3.8 million will go to the trust with the remaining $4.5 million going toward retiree health care premiums. Retirement expense (Central Contra Costa Retirement Association (CCCERA)) has risen nearly 13.8 percent. There also have been increases to healthcare costs ranging from 5.86 to 14.6 percent for both active employees and retirees. The Administrative Overhead percentage is assumed to be 123 percent of capitalized salary, an 11 percent increase from the previous year. The vacancy factor was reduced from 4 percent to 3 percent for salaries; benefits remain the same at 4 percent. Book 61- Page 253 None. None. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 Ms. Vassallo said that total District revenues for FY 2012 -13 are expected to be $70.2 million and expenses are anticipated to be $68.3 million, resulting in a positive cash flow of $1.9 million. Comparing these figures with the budgeted figures for FY 2011 -12, O &M revenues and expenses are projected to increase by 12.9 percent and 2.7 percent, respectively. The bulk of the revenue increase is attributable to the $30 increase in the Sewer Service Charge that will go into effect on July 1, 2012. Projected O &M reserves at June 30, 2013 are expected to be $10.2 million. Overall, Ms. Vassallo said the FY 2012 -13 O &M budgeted expenses are 6.8 percent more than the FY 2011 -12 projected actual expenses. While salaries are roughly the same, benefit costs are projected to increase because of increases in retirement and medical expenses. Higher expenditures are anticipated in the following categories: repairs and maintenance ($76,000 owing to increased Information Technology costs), professional and legal ($41,000 due to several studies commissioned by the Administration Department), outside services ($328,000 because of the National Pollutant Discharge Elimination System (NPDES) permit renewal and increased use of temporary help to cover during retiree vacancies and recruitments), and 2012 election expense. Budgeted expenses for chemicals is the only category for which expenses are projected to be lower, due to decreased usage and favorable natural gas pricing. Finally, Ms. Vassallo explained that the FY 2012 -13 Debt Service Fund Budget, which captures all the revenue and expenses associated with the District's debt service, includes revenues of $5.6 million from ad valorem tax and interest on the Bond Reserve Fund allocated as follows: $3.8 million to principal and $1.8 million to interest. Total budgeted ad valorem tax is $12.9 million, $5.3 million of which is being allocated to the Debt Service Fund; the balance will go to the Sewer Construction Fund. 11. EMERGENCY SITUATIONS REQUIRING BOARD ACTION 12. SUGGESTIONS FOR FUTURE AGENDA ITEMS 13. CLOSED SESSION The Board recessed at 4:19 p.m. to reconvene in the Caucus Room in closed session regarding the following matters: Book 61- Page 254 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 17, 2012 a. CONFERENCE WITH LEGAL COUNSEL — ANTICIPATED LITIGATION — SIGNIFICANT EXPOSURE TO LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(b): • One Potential Case b. CONFERENCE WITH LEGAL COUNSEL — EXISTING LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(a): • City of Brentwood et al. v. Robert Campbell et al., Contra Costa County Superior Court Case No. N11 -1029 The Board recessed at 4:50 p.m. to reconvene in the Board Room in open session. C. PERSONNEL MATTERS PURSUANT TO GOVERNMENT CODE SECTION 54957(b)(1) — DISCIPLINE, DISMISSAL OR RELEASE OF A PUBLIC EMPLOYEE This item was taken out of order. The Board recessed at 2:08 p.m. to reconvene in the Caucus Room in closed session regarding Item 13.c. The Board recessed at 2:26 p.m. to reconvene in open session. 14. REPORT OUT OF CLOSED SESSION With regard to Items 13.a. and 13.b., District Counsel Kent Alm said there was nothing to report. With regard to Item 13.c., District Labor Counsel Daniel Clinton reported that the Board provided direction to staff and no final action was taken. 15. ADJOURNMENT There being no further business to come before the Board, President Nejedly adjourned the meeting at 4:55 p.m. 40aA'&G( /�• Gc�� James A. Nejedly TE't. President of the Board of Directors Central Contra Costa Sanitary District COUNTERSIGNED: County of Contra Costa, State of California Elaine R. Boehme, C M C Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Book 61- Page 255