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HomeMy WebLinkAbout03.a.1) Draft minutes of Regular Meeting held 05-16-13MINUTES OF THE REGULAR MEETING •Q • I OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON MAY 16, 2013 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 16, 2013. President Nejedly called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Causey, McGill, Pilecki, Williams, Nejedly ABSENT: Members: None a. PLEDGE OF ALLEGIANCE TO THE FLAG The Board and staff joined in the Pledge of Allegiance. b. INTRODUCTIONS None. The Board welcomed new employees Douglas Little, Shift Supervisor in the Plant Operations Division, and James Ramirez, Vehicle and Equipment Mechanic in the Collections System Operations Division. 2. PUBLIC COMMENTS 3. AWARDS AND COMMENDATIONS a. PRESENTATION TO THE DISTRICT OF PIPE USERS GROUP (PUG) APPRECIATION PLAQUE BY ROBERTS MCMULLIN, VICE - CHAIRMAN OF THE NORTHERN CALIFORNIA PUG, AND JIMMY DANG, SECRETARY OF THE NORTHERN CALIFORNIA PUG Provisional General Manager Curt Swanson stated that, in 1992, the District became one of the founding charter members of the Northern California Pipe Users Group (PUG), a forum of public agencies, engineers, and industry professionals dedicated to improving the design, construction, and operation of sewer and water systems. District staff participates in training programs and serves as elected members of the PUG Board of Directors. Through PUG's efforts, the availability and use of CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 trenchless technologies throughout Northern California has dramatically increased with a corresponding reduction in costs of sewer line replacement. Mr. Roberts McMullin, Vice - Chairman, and Mr. Jimmy Dang, Secretary, of PUG expressed gratitude to the District for its continued support and willingness to share technologies. They presented the Board with an Appreciation Plaque and acknowledged Senior Engineer Sasha Mestetsky for his involvement with the PUG Board of Directors. b. PRESENTATION BY THE DISTRICT OF WASTEWATER AND WATER AGENCIES "EXCELLENCE IN WATER RESEARCH" AWARDS TO TWO STUDENT WINNERS OF THE CONTRA COSTA COUNTY SCIENCE AND ENGINEERING FAIR HELD IN MARCH Communication Services Manager Michael Scahill stated that ten Alameda County and eleven Contra Costa County water and wastewater agencies combined efforts for the first time this year to create the regional Excellence in Water Research Awards. He introduced the two students who won the awards. Ms. Ann Marie Delauriers, an 8th grader at North Creek Academy in Walnut Creek, described her project, "Levees: Keeping Our Neighborhoods Safe," which won first place and $400 in the Junior Division. Mr. Brett Musacchio, a sophomore at De La Salle High school in Concord, described his project, "The Effects of Mercury on E. Coli," which won second place and $300 in the Senior Division. President Nejedly congratulated and presented the awards to Ms. Delauriers and Mr. Musacchio. The winners' teachers, both of whom were present, also received $100 each for their efforts. C. RECOGNIZE 2012 SAFETY SUGGESTION OF THE YEAR AWARD RECIPIENT MIKE KLUBBEN, CONSTRUCTION EQUIPMENT OPERATOR IN THE COLLECTION SYSTEM OPERATIONS DIVISION, FOR HIS SUGGESTION TO DEVELOP A HIGHLY EFFECTIVE NOTCHED DEVICE FOR TURNING SANITARY SEWER ROD THROUGH MANHOLES Provisional General Manager Curt Swanson stated that, every year, the District Safety Committee reviews all the prior year's award - winning monthly safety suggestions made by District employees. The Committee then votes on which suggestion provided the greatest safety enhancement or greatest reduction in workplace hazards. Environmental Compliance Inspector and District Safety Committee Chair John Ortega explained that Construction Equipment Operator Mike Klubben created an effective notched device which helps Collection System Operations (CSO) Crew Members work more efficiently and safely when rodding a sewer. Mr. Klubben then 2 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 showed the device and described how it works, after which President Nejedly presented him the Safety Suggestion of the Year plaque. 4. CONSENT CALENDAR a. Approve minutes of Board meetings held on the following dates: April 18, 2013 (Special meeting) and April 18, 2013 (Regular meeting). b. Approve expenditures dated May 16, 2013. Reviewed by Budget and Finance Committee. C. Set June 20, 2013 at 2:00 p.m. as the date and time for a public hearing to consider adopting the draft Fiscal Year 2013 -14 Capital Improvement Budget (CIB) and approving the 2013 Ten -Year Capital Improvement Plan (CIP). d. Set June 20, 2013 at 2:00 p.m. as the date and time for a public hearing to consider: 1) Adopting the following budgets for Fiscal Year 2013 -14: • Operations and Maintenance Budget • Debt Service Fund Budget, and • Self- Insurance Fund Budget; and 2) Establishing Sewer Service Charge rates for Fiscal Years 2013 -14 and 2014 -15. e. Adopt Resolution 2013 -010 approving a real property agreement with John Stephens Downs and Stephanie Marlin Downs, owners of the property located at 110 Lombardy Lane in Orinda (APN 266- 082 -006), regarding installation of a private storm drain on the property within a District easement; and authorize staff to record the agreement with the Contra Costa County Recorder. f. Adopt Resolution 2013 -011 accepting a grant of easement from Laura Undlin, property owner at 40 Barbara Road in Orinda (APN 273 - 063 -029) (Job 2645 — Parcel 6); and authorizing staff to record documents with the Contra Costa County Recorder. It was moved by Member McGill and seconded by Member Causey to adopt the Consent Calendar as recommended. Motion passed by unanimous vote of the Board. None. 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER 3 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 6. BIDS AND AWARDS a. APPROVE THE FOLLOWING ACTIONS IN CONNECTION WITH PRIMARY TREATMENT RENOVATIONS, DISTRICT PROJECT 7285: 1) Award a construction contract in the amount of $10,277,000 to W. M. Lyles Company, the lowest responsive and responsible bidder for the Primary Treatment Renovations, District Project 7285; 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; 2) Authorize the General Manager to execute an amendment in the amount of $338,000 to an existing professional services agreement with HDR Engineering, Inc., for construction support, increasing the cost ceiling to $1,165,768; and 3) Authorize the General Manager to execute an inspection services agreement with Complete Project Solutions, Inc. in an amount not to exceed $346,000 to supplement District staff inspections Provisional General Manager Curt Swanson stated that two of the Treatment Plant's primary sedimentation tanks were constructed in the mid 1960s, and the other two were constructed in the mid 1970s. The tanks, associated piping and equipment are nearing the end of their useful lives. The proposed project includes renovation of piping, equipment, concrete, and electrical components related to the primary treatment process. It also includes the renovation or replacement of two primary effluent pumps, motor control centers, and grit and scum equipment. HDR Engineering and District staff prepared the plans and specifications for the project, with an Engineer's estimate of $10,500,000. Five sealed bids were received, ranging from $10,277,000 to $12,580,000. The Engineering Department reviewed the bids and determined W. M. Lyles, Company to be the lowest responsive bidder, with a bid amount of $10,277,000. In response to a question from Member McGill, Provisional General Manager Curt Swanson noted that all District projects require contractors to pay prevailing wages, and follow any related State Department of Industrial Relations (DIR) decisions concerning area practices (work scope for different labor classifications). Several of these area practice decisions affect wastewater and water treatment plants and sewers. These requirements are covered in the District's standard bid specifications and at pre -bid meetings. With respect to this particular project, an informational notice also was sent to prospective bidders about the prevailing wage determination and highlighting the DIR work scope decisions that are specific to Contra Costa County. Mr. John Lyles of W. M. Lyles Company, the lowest responsive and responsible bidder for the Primary Treatment Renovations project, who was present at the 2 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 meeting, confirmed that he was familiar with the prevailing wage and DIR decisions concerning area practices. Member Causey expressed budgetary concerns, stating that the Board was being asked to approve an amount 48 percent over budget for the next fiscal year, and 10 percent over budget for the following year. He also expressed concern with the distribution of costs in the estimated budget and asked the Board to refer the matter to the Capital Projects Committee for review and recommendation before awarding the project to determine whether it is in keeping with the overall project as outlined in the capital budget. Member Williams noted that while he was sensitive to Member Causey's concerns, his understanding was that the District's capital budget is developed on a program or "bucket" basis where multiple projects for a particular program category are grouped together and audthorized with an associated total dollar amount for that bucket. While certain projects may come in over or under budget, the overall budget allocation to any particular bucket/program area remains the same. Within any bucket, staff may move projects and apportion funds as deemed necessary. Provisional General Manager Curt Swanson confirmed Member Williams' understanding, and stated that for large renovations projects such as the one under consideration, it is not unusual to discover more items that need to be taken care of than originally envisioned at the time the project was budgeted. Also, in this case, the original plan was to design the project in- house, but numerous retirements required staff to seek outside assistance. Member Pilecki added that at that the time capital budgets are developed, which is roughly one to one and one -half years ahead of time, no cushion is included for contingencies. After allowing for a 15 to 20 percent contingency, he said this project is essentially on target for the next fiscal year. Member McGill suggested the Board go forward with the award, but also ask the Capital Projects Committee to do the level of analysis requested by Member Causey. He noted that he believed this should be used as an example project, and the analysis should not be done on other projects at this time. Member Williams asked for clarification as to what would be accomplished by the Capital Projects Committee's analysis. Member McGill stated that the goal would be for the Board to develop a better understanding of the process in terms of how the figures that appear in the capital budget become those that appear in the Post -Bid Pre - Construction Estimate. Member Williams said this is a complex issue and noted that staff could easily remedy the issues being raised by overestimating project costs, resulting in artificially raised sewer service rates. He said he was not going to study project estimates that staff has already vetted, but he was not averse to receiving an overall review of staff's estimating techniques. He cautioned that the Board should be mindful of the message it is sending. 5 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 Member Pilecki proposed that the Board discuss Committee authorities at the upcoming Board Priorities Workshop. He stated his belief that it is not the Board's job to micromanage staff. He asked staff to schedule discussion of over - budget projects at the next Capital Projects Committee meeting. President Nejedly stated that over the last several years in particular, the District has had a number of projects come under budget. He added that it is the General Manager's responsibility to oversee capital projects and determine sources of additional funds when necessary. Often, once a project gets underway, it is more cost effective to expand the scope of work to deal with items not necessarily known at the outset. He noted that the Primary Treatment Renovations is a very large project and the lowest bid was very close to the Engineer's Estimate. Mr. Aram Hodess, Business Manager of the United Association of Plumbers and Steamfitters Local 159 in Martinez, expressed concern whether the contractor for the project will abide by the prevailing wage rules and DIR decisions concerning area practices. Mr. Hodess, as a District ratepayer, said he was very pleased with the responses of District staff concerning this issue and the discussion that took place during this meeting. He did, however, seek confirmation from the proposed contractor, W. M. Lyles Company, that while it understands the DIR directives, it also intends to follow them and pay prevailing wages. He also sought confirmation that the District intends to monitor and enforce payment of proper prevailing wages for the pipe work on this project. Provisional General Manager Curt Swanson said that while the contractor must provide the District with certified payrolls, the District is not staffed to monitor the payrolls. The District relies on its contractors to abide by the rules. If a problem should develop, the District will forward any complaints to the DIR and will cooperate fully with any investigation. Mr. John Lyles, Senior Project Manager, confirmed that his company intended to follow the directives and pay prevailing wages. It was moved by Member McGill and seconded by Member Pilecki to award a construction contract in the amount of $10,277,000 to W. M. Lyles Company, the lowest responsive and responsible bidder for the Primary Treatment Renovations, District Project 7285; find that the project is exempt from California Environmental Quality Act (CEQA); authorize the General Manager to execute the contract documents subject to submittal requirements; authorize the General Manager to execute an amendment in the amount of $338,000 to an existing professional services agreement with HDR Engineering, Inc.; and authorize the General Manager to execute an inspection services agreement with Complete Project Solutions, Inc. in an amount not to exceed $346,000. Motion passed by the following vote of the Board: AYES: Members: McGill, Pilecki, Williams, Nejedly NOES: Members: Causey ABSENT: Members: None 6 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 7. REPORTS a. GENERAL MANAGER 1) Update on Seismic Improvements for Headquarters Office Building (HOB), District Project 8226 Associate Engineer Edgar Lopez provided a construction progress update on the Seismic Improvements project. He noted that staff vacated the HOB in late January 2013, and construction within the building has been ongoing since that time. The duration of the $2.8 million contract awarded December 6, 2012, is 240 calendar days. There is an early completion bonus, and all work is expected to be done by August 2013, per the general contractor DL Falk Construction, Inc.'s latest schedule dated April 29, 2013. Mr. Lopez showed pictures of the construction progress, lead and asbestos abatement, temporary shoring, pipe work to install structural steel, and the recycled water line being piped to the HOB. He stated that carpeting, painting, and minor improvements to the bathrooms are forthcoming. Pending change orders and requests for compensations are being reviewed; no stop notices or claims have been received; and the subcontractors seem to be working well with the general contractor. 2) Announcements The following written announcements were included with the agenda packet: a) Public bidding for Cured -In -Place Lining of Sanitary Sewers, District Project 5999 Member Causey noted that this project looks to be 35 percent over budget and stated that, when the project comes to the Board for approval, he would like a clear explanation of where the additional funds would originate and what effect these would have on other projects. He noted that each project over budget combines with others to total a considerable amount of money, and he wants to know how the District will handle that impact, and what projects would potentially be deferred as a result. b) Staff attendance at SunGard Public Sector Users Group Association (SUGA) Annual Conference in Orlando, Florida, from June 23 -27, 2013 C) District Transparency Certificate of Excellence offered by California Special Districts Association (CSDA) 7 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 Provisional General Manager Curt Swanson stated that, with the Board's concurrence, Secretary of the District Elaine Boehme will work with staff toward completing the requirements to apply for certification. Member Causey expressed concerns whether this is an appropriate use of staff time, to which Provisional General Manager Curt Swanson responded that he believed this to be an important issue, and staff is available to put together the application materials. The Board members concurred with staff's plan to submit an application for the certification. The following additional announcements were made at the meeting by Provisional General Manager Curt Swanson: d) Family Day Event, including "Shine and Show," to be held at Collection System Operations Facility in Walnut Creek on June 8, 2013 e) Update on nutrient studies b. COUNSEL FOR THE DISTRICT No reports. C. SECRETARY OF THE DISTRICT Secretary of the District Elaine Boehme reported that the Board Priorities Workshop scheduled for May 21, 2013 has been postponed. 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 Causey Member Causey reported on the May 2, 2013 Mayors Conference hosted by the City of Orinda featuring Contra Costa Times columnist Dan Borenstein speaking on pension reform in California. Member McGill Member McGill and President Nejedly reported on the May 6, 2013 Enterprise Committee meeting and summarized the Action Summary. He noted staff should move forward with updating the Recycled Water Master Plan. The Board received the report without comment. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 Member McGill reported on the May 8, 2013 Industrial Association of Contra Costa County (IACCC) May Forum featuring a presentation Earl L. Hagstrom including an overview of the technical, environmental, economic, and legislative issues associated with Hydraulic Fracturing. Member McGill and President Nejedly also reported on the May 14, 2013 Budget and Finance Committee meeting and summarized the Action Summary. Member McGill noted that he asked at the meeting that a Board travel breakdown be added to the budget for transparency and consistency with the staff travel breakdown. The Board received the report without comment. Member Williams Member Williams and Member Pilecki reported on the May 7, 2013 Human Resources Committee meeting and summarized the Action Summary. The Board received the report without comment. 2) Announcements Member McGill provided a written report covering Announcements and other meetings. 8. BUDGET AND FINANCE a. RECEIVE THE FISCAL YEAR 2013 -14 OPERATIONS AND MAINTENANCE BUDGET AND DEBT SERVICE FUND BUDGET Finance Manager Thea Vassallo presented a summary of the proposed Fiscal Year 2013 -14 Operations and Maintenance (O &M) and Debt Service Fund Budgets, which were distributed to the Board at its May 2, 2013 meeting and reviewed by the Budget and Finance Committee at its May 14, 2013 meeting. Revenue assumptions include a Sewer Service Charge (SSC) rate of $405 per Residential Unit Equivalent (RUE), which includes the proposed $34 increase. Of that amount, $365 per RUE, or $59.5 million, is allocated to O &M. Anticipated O &M reimbursement revenue from the City of Concord is $12.8 million. Ms Vassallo stated that the top expense assumptions include an $8.1 million allocation for Governmental Accounting Standards Board (GASB) 45 Other Post - Employment Benefits (OPEB) benefits; a $5 million early pay down of the Contra Costa County Employees' Retirement Association (CCCERA) Unfunded Actuarial Accrued Liability (UAAL); an increase in retirement expenses of 3.5 percent; increases to healthcare costs for active employees and retirees; administrative overhead of 135 percent; and vacancy factors of 2 percent for salaries and 3 percent for benefits. Total revenues are budgeted at $75,152,000 and expenses at $77,825,000, for a net O &M loss of $2,673,000. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 Ms. Vassallo said ad valorem tax is anticipated to be $13.7 million during Fiscal Year 2013 -14, $5.6 million of which will be allocated to the Debt Service Fund to cover interest and principal on the District's outstanding bonds. The remaining balance will go to the Sewer Construction Fund. O &M reserve at June 30, 2014 are expected to be $6.7 million. Hearings on both the O &M and Debt Service Fund budgets will be held June 20, 2013. Referring to page 6 of Ms. Vassallo's handout, Member McGill pointed out that the District is rapidly covering its GASB 45 OPEB obligation. With respect to the projected $6.7 million O &M reserves at next fiscal year end, he noted that the primary reasons it was so much less than the past several years was due to the anticipated $5 million early payment toward the District's UAAL. He said he was comfortable drawing down the reserves to that level because the District has done so on occasion in the past and the ratios are very similar to when that has occurred. Ms. Vassallo stated that while the District has no Board policy on cash reserves, it has generally used a guideline of 10 percent of the following year's O &M expenses. She said staff is in the process of polling other agencies with regard to their reserve policies. Member Pilecki proposed restructuring the budgeting schedule so that the Board considers rate increases in January, six months prior to considering the budgets. He stated that this would make it less overwhelming for the Board in the amount of information to evaluate at one time, and for staff to develop that information without having to speculate on changes to the SSC rate. Member Causey asked staff to schedule discussion of the matter for the upcoming Board Priorities Workshop. Member Pilecki noted that anticipated rate increases over the next five years are two to three times the Consumer Price Index (CPI). His discussions with members of the public reveal that they are highly interested in what has been done to control costs. He encouraged the Board to take advantage of the current opportunity not to fill vacant positions, to combat the costs of salary and benefits. He supported paying $5 million toward the UAAL, but stated the need to put together a plan for 5 to 10 years in the future, considering switching to defined contribution versus defined benefit plans for both retirement and medical programs, reorganizing the District's structure, using technology to improve efficiency and fill less positions, and redefining duties. He was not necessarily advocating any particular idea, but believed the Board should decide on a long -term approach to cost control. Absent regulatory requirements and possible loss of ad valorem tax, he said the goal should be toward keeping rate increases down to the level of the CPI. Member McGill stated that he agreed that this matter was worth considering; however, he noted that rate increases are based on a certain performance level. Overflow limits and air and water regulatory requirements are becoming increasingly stricter, and the Board must weigh the risk of incurring fines in its rate - setting 10 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 process. He suggested this would be a good topic for the upcoming Board workshop. 9. EMERGENCY SITUATIONS REQUIRING BOARD ACTION a. RECEIVE UPDATE ON EMERGENCY DECLARED ON MAY 2, 2013 AND, IF WORK HAS NOT BEEN COMPLETED, AUTHORIZE THE GENERAL MANAGER UNDER PUBLIC CONTRACT CODE 22050(B) TO CONTINUE TO DIRECT CASE /COTTER, INC., D. W. NICHOLSON CORP., AND DISTRICT FORCES TO PERFORM EMERGENCY REPAIRS ON THE DAMAGED DISSOLVED AIR FLOTATION (DAF) TANK, DISTRICT PROJECT 7265, TREATMENT PLANT EQUIPMENT REPLACEMENT PROJECT None. Senior Engineer Craig Mizutani presented an update on the status of the repairs on Dissolved Air Flotation (DAF) Tank No. 1, which failed catastrophically on April 19, 2013. He stated that, at the May 2, 2013 Board Meeting, the Board declared an emergency to allow immediate repairs. Work began the next day, including sandblasting by F.D. Thomas and mobilization by D.W. Nicholson. A structural inspection was conducted on May 10, which found the main beams to be in satisfactory condition, but the cross supports to be corroded. The damaged baffle and track have been removed and replaced, and replacement arms are being fabricated. The other two DAF Tanks were found to be in a better condition, but a clutch with a lower tripping point, has been installed in DAF Tank No. 3. While it was previously reported that the anticipated startup date was May 27, it is now June 5, as additional time was needed for structural repairs. Member Williams requested that, once the repair is completed, staff share an analysis of the lessons learned from this emergency situation. He noted that he would be particularly interested if staff has discovered any other equipment beyond the DAF Tanks at risk of this type of failure. It was moved by Member McGill and seconded by Member Williams to continue the emergency and ratify by 4 /5th vote the General Manager's actions under Public Contract Code 22050 to perform emergency repairs on a damaged DAF Tank, District Project 7265, Treatment Plant Equipment Replacement Project, and authorize the expenditure of up to $200,000 for completion of the repair work. Motion passed by unanimous vote of the Board. 10. SUGGESTIONS FOR FUTURE AGENDA ITEMS 11. CLOSED SESSION The Board did not hold the scheduled Closed Session. 11 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of May 16, 2013 a. Conference with labor negotiators pursuant to Government Code Section 54957.6: None. District Negotiators: • Labor Negotiation and Benefits Counsel Edward L. Kreisberg, Esq. • Provisional General Manager Curt Swanson • Human Resources Manager Teji O'Malley • Secretary of the District Elaine Boehme Employee Organizations: • Employees' Association, Public Employees Union, Local One • Management Support/Confidential Group (MS /CG) • Management Group 12. REPORT OUT OF CLOSED SESSION 13. ADJOURNMENT There being no further business to come before the Board, President Nejedly adjourned the meeting at 4:11 p.m. James A. Nejedly President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Elaine R. Boehme, CIVIC Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California 12