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HomeMy WebLinkAbout04.a. Approve minutes of August 15, 2013MINUTES OF THE REGULAR MEETING . Q OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON AUGUST 15, 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, August 15, 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 The Board welcomed new employee David Bagar, Materials Coordinator in the Administration Department. 2. PUBLIC COMMENTS There were no public comments. 3. AWARDS AND COMMENDATIONS a. ADOPT RESOLUTIONS 2013 -025 THROUGH 2013 -029 RECOGNIZING 2013 SERVICE AWARD RECIPIENTS Provisional General Manager Curt Swanson stated that the proposed resolutions recognize the service of 27 employees who have been at the District for 5, 10, 15, 20 or 25 years. The resolutions will become part of the program for the Service Awards Luncheon that will be held in the Multi- Purpose Room on October 23, 2013, to which the Board will receive invitations. It was moved by Member Williams and seconded by President Nejedly to adopt Resolutions 2013 -025 through 2013 -029 recognizing the 2013 Service Award recipients. Motion passed by unanimous vote of the Board. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of August 15, 2013 4. CONSENT CALENDAR a. Approve minutes of Board meetings held on the following dates: July 11, 2013 (closed session); July 11, 2013; and July 25, 2013. b. Approve expenditures dated August 1 and August 15, 2013. Reviewed by Budget and Finance Committee. Approval of August 1, 2013 expenditures continued from August 1, 2013. C. Receive June 2013 Financial Statements and Investment Reports. Reviewed by Budget and Finance Committee. Continued from August 1, 2013. d. Authorize medical leave of absence without pay for Utility Worker Maralee Davi through September 19, 2013. e. Adopt revised salary schedule for all District job classifications to meet disclosure requirements of a "publicly available pay schedule" under the newly- enacted Employees' Pension Reform Act of 2013 (PEPRA). Approval recommended by Human Resources Committee. Before proceeding with the Consent Calendar, Provisional General Manager Curt Swanson pointed out an inadvertent error in the position paper for Item 4.e.: the recommended effective date for the updated salary schedule was August 15, 2013, not 2015 as indicated in the staff recommendation. It was moved by Member Causey and seconded by President Nejedly to adopt the Consent Calendar as recommended, with correction of the clerical error identified by Provisional General Manager Curt Swanson. Motion passed by unanimous vote of the Board. 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER None. 6. REPORTS a. General Manager 1) Update on Field Verification of Primary Sedimentation Basin Baffles Provisional General Manager Curt Swanson explained that a recent study found that the District's primary sedimentation basin (PSB) removals are lower than most other treatment plants. Therefore, the Treatment Plant Planning section conducted a PSB Enhancement Project, which recommended a baffle system be installed in all four basins. Planning staff conducted a field verification of the modeling results and assumptions on one 2 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of August 15, 2013 basin. Because of this project's potential ability to enhance ammonia removal capacity, it is also being included in the National Pollutant Discharge Elimination System (NPDES) permit- required Nutrient Facility Plan & Site Characterization work, which is due to the Regional Water Quality Control Board (RWQCB) early next year. Assistant Engineer Samantha Engelage presented a summary of the study and its findings. She stated that the baffle system performed to staff's expectations by providing potential for cost reduction and increasing the capacity of the secondary system. The baffles increased solids removal by 19 percent, which equated to a projected 10 percent decrease in biochemical oxygen demand (BOD) load going to the secondary treatment process. These factors lead to a natural gas savings of 8 percent and an annual savings of $150,000. With annual maintenance costs estimated at $1,000, the simple payback would be 4.3 years. With this in mind, Planning recommended that the baffle system be installed in the other three basins and that Capital Projects include this installation in the Primary Treatment Renovation Project, District Project 7285. Provisional General Manager Curt Swanson pointed out that, as explained in the agenda backup materials, this was the first in a series of Board presentations over the next six months covering the three elements of the Nutrient Facility Plan & Site Characterization. The next presentation, on Treatment Plant Optimization Evaluation for Ammonia Removal, has been moved up from September 19 to the September 5, 2013 Board meeting. 2) Update on Seismic Improvements for Headquarters Office Building (HOB), District Project 8226 Provisional General Manager Curt Swanson reported that structural modifications in the HOB are substantially complete and restoration is in progress for the Seismic Improvements Project. Senior Engineer Edgar Lopez stated that 70 Requests for Information (RFIs) had been received, as well as two change orders totaling $19,798, for a new total project cost of $2,826,949. As of July 25, 2013, the contractor, D.L. Falk, had been paid $1,582,084, or 56 percent of the total project amount. Welding was substantially completed as of August 2, 2013, and rebuilding the floors was 80 percent complete. Ongoing activities include punch list items on the steel modifications, metal framing, plumbing, HVAC, electrical, painting, and carpeting. Work on the Network Upgrades, District Project 8234 continues, and the Fire Protection System Improvements, District Project 7283, are 75 percent complete. On August 14, 2013, staff estimated that the project was about 72 percent complete, with 80 percent of the time expired. The contract completion date is October 2013. The last update from D.L. Falk estimated work being completed in late October 2013, leading staff to estimate moving back in the building in November to December 2013. KJ CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of August 15, 2013 3) Update on status of the following financial matters: • Fieldman, Rolapp & Associates consulting contract; • $5 million additional payment toward Unfunded Actuarial Accrued Liability (UAAL); and • Contra Costa County Employees' Retirement Association (CCCERA) December 31, 2012 Actuarial Valuation Provisional General Manager Curt Swanson noted that the agenda backup material for the above items was reviewed by the Budget and Finance Committee on August 12, 2013. He said staff was available to respond to any questions from Board Members. With regard to the additional $5 million payment toward the District's UAAL, Member Causey expressed deep concern about the financial ramifications of delaying payment from July to December. His understanding was that payment would be made in July and any decision to delay payment, in his opinion, warranted Board input. Finance Manager Thea Vassallo said timing of the paydown was not part of the budget discussions, and no reference to the timing of the payment was included in the Board minutes or Capital Projects Committee action summaries. However, the Budget and Finance Committee has been continuously monitoring the cash reserves and discussing timing of the $5 million UAAL payment, which was specifically mentioned in the April 16, 2013 Budget and Finance Committee action summary, which discussed possibly funding the $5 million at the end of December 2013. She added that making the payment any earlier than December would put the District in a very tight cash flow position, and it was her recommendation that payment be made upon receipt of the first installment of the Sewer Service Charge in December. Member Causey said it was his understanding that all prepayments had to be made in July in order to maximize the financial benefits. Finance Administrator Todd Smithey explained that there are two types of prepayments to CCCERA: prepayments covering the District's annual pension obligation, and prepayments toward the UAAL. The former must be made in July to receive a discount rate, but the latter may be made at any time. He said the District would not participate in any market gains or losses on the funds during the six -month period between July and December, but delaying payment would have no effect on the discounted contribution rate for Fiscal Year 2014 -15. Noting that the District's Self- Insurance Fund has a balance of $445 million, Member Causey asked if a portion of the $5 million payment could come from that fund so it could be made sooner than December. District Counsel Kent Alm said some, but not all, of those funds are restricted, but he would look into the specifics if the Board desired. Ms. Vassallo noted that the Self - Insurance Fund was already funded at a lower rate than normal this year in order to free up cash for the UAAL payment. LI u CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of August 15, 2013 As members of the Budget and Finance Committee, President Nejedly and Member McGill said the Committee has been continually monitoring the UAAL balance, CCCERA funding levels, anticipated UAAL paydowns, etc. While the Committee made no recommendation as to the timing of the $5 million payment during the budget cycle, it agreed with the staff recommendation to delay payment until December to avoid cash flow issues. Member Pilecki said he believed the actions of the Budget and Finance Committee have been appropriate. Given that he was in the minority, Member Causey said he was willing to yield on the matter. As a potential long -term solution to the UAAL problem, Member Pilecki suggested that the Board look at the merits of implementing a defined contribution versus a defined benefit retirement plan for employees. 4) Announcements The following written announcements were included with the agenda packet: a) Chris Goward promoted to Plant Operations Training Coordinator, effective August 9, 2013 b) Update on recent natural gas leak in conjunction with Concord Landscape Recycled Water Project, District Project 7299 c) Treatment Plant opacity excursion experienced on July 24, 2013 d) Board Priorities Workshop scheduled for October 22, 2013 e) Purchasing and Materials Services Division receives Achievement of Excellence in Procurement Award The following additional written announcement was handed out at the meeting: f) Update on recent court ruling about Environmental Protection Agency's (EPA) mandatory greenhouse gas (GHG) reporting Member Causey noted that he believed the District should, in the long term, be moving toward becoming a greener operation, and that perhaps the Board should discuss this at the Board Priorities Workshop. 5 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of August 15, 2013 b. COUNSEL FOR THE DISTRICT 1) Written Legal Update District Counsel Kent Alm stated that he provided a written legal update in the agenda packet. C. SECRETARY OF THE DISTRICT Secretary of the District Elaine Boehme announced the upcoming meeting of the Enterprise Committee, scheduled for August 19, 2013. 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 McGill Member McGill reported on the August 1, 2013 Contra Costa County Mayors Conference hosted by the City of Martinez featuring speaker Lynn Malmstrom of CalStar. Member McGill and President Nejedly reported on the August 12, 2013 Budget and Finance Committee meeting and summarized the Action Summary. The Board received the report without comment. Member Pilecki Member Pilecki reported on the August 1, 2013 Contra Costa County Mayors Conference hosted by the City of Martinez featuring speaker Lynn Malmstrom of CalStar. 2) Announcements Members Causey, McGill, and Williams announced they would be attending the upcoming California Association of Sanitation Agencies (CASA) Conference from August 21 -24, 2013. Member McGill also provided a written report covering Announcements and other meetings. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of August 15, 2013 7. ADMINISTRATIVE a. CONCUR WITH GENERAL MANAGER'S DECISION TO EXECUTE A PROFESSIONAL ENGINEERING SERVICES AGREEMENT WITH J. M. KELLY ENGINEERING WITH A COST CEILING OF $35,000, AT THE HOURLY RATE OF $100, TO PROVIDE CONSULTING SERVICES RELATED TO NUTRIENT REDUCTION STUDIES AND PLANNING OF TREATMENT PROCESS AND RECYCLED WATER PROJECTS Provisional General Manager Curt Swanson stated that former General Manager Jim Kelly was hired as a temporary employee in January 2013 to advise and assist him as Provisional General Manager. With the start of new General Manager Roger Bailey on August 19, 2013, the scope of Mr. Kelly's assignments will change. While his administration work will end, his expertise in the field of engineering will be beneficial to the District. Due to the sensitivity of hiring a former high -level employee and, in the spirit of transparency, Provisional General Manager Curt Swanson requested the Board concur with his decision to execute the agreement for a term of approximately eighteen months. On July 23, 2013, the Human Resources Committee reviewed this matter and suggested that former General Manager Jim Kelly be retained as an engineering consultant. It was moved by Member Williams and seconded by Member Pilecki to concur with the General Manager's decision to execute a professional engineering services agreement with J. M. Kelly Engineering with a cost ceiling of $35,000, at the hourly rate of $100, to provide consulting services related to nutrient reduction studies and planning of treatment process and recycled water projects. Motion passed by unanimous vote of the Board. 8. ENGINEERING a. AUTHORIZE GENERAL MANAGER TO EXECUTE A MODIFIED CONTRACT WITH CONTRA COSTA CLEAN WATER PROGRAM WITH NO SPECIFIED TERMINATION DATE, TO ALLOW THE DISTRICT TO CONTINUE PERFORMING STORM WATER INSPECTIONS IN WEST CONTRA COSTA COUNTY Provisional General Manager Curt Swanson explained that the District has been participating in the interagency partnership to conduct stormwater inspection services under a service agreement contract with the Contra Costa Clean Water Program since 1996. The current agreement is being modified to replace East Bay Municipal Utilities District (EBMUD) with West County Wastewater District (WCWD) as the service provider for the cities in west county area. Environmental Compliance Superintendent Tim Potter provided a brief presentation on the elements of the service agreement and the extent of the proposed modifications. He stated that the agreement includes inspections performed at targeted businesses, initial enforcement for documented violations, records management and reporting, coordination efforts, audit support, cost recovery, and 7 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of August 15, 2013 indemnification. The agreement also creates efficiency by offering combined inspections, interagency partnership, and positive feedback from regulators. Mr. Potter noted that the proposed modifications, all of which have been reviewed by District Counsel Kent Alm, will change the wastewater agency serving West County Cities from EBMUD to WCWD and facilitate future changes of participating cities. There will be no change in services provided by the District. It was moved by Member Pilecki and seconded by Member McGill to authorize the General Manager to execute a modified contract with Contra Costa Clean Water Program, with no specified termination date, to allow the District to continue performing storm water inspections in Contra Costa County. Motion passed by the following vote of the Board: AYES: Members: McGill, Pilecki, Williams, Nejedly NOES: Members: Causey ABSTAIN: Members: None Member Causey stated that, while he believed the contract with Contra Costa Clean Water Program to be a beneficial necessity, he was troubled by the discounted overhead rate in the contract that is 24 percentage points below the 220 percent rate charged to the District's other existing customers to ensure full cost recovery. He said a consistent rate should be charged to everyone and, for that reason alone, he felt compelled to vote against the item. Member Pilecki pointed out that several months ago, when the reduced overhead rate was approved, staff was asked to perform an in depth evaluation of all components of the overhead rate with a view toward being able to charge a consistent rate in the future. 9. COLLECTION SYSTEM a. APPROVE SUPPLEMENTAL AUTHORIZATION OF $241.000 FROM THE SEWER CONSTRUCTION FUND TO THE FISCAL YEAR 2013 -14 EQUIPMENT BUDGET TO COMPLETE THE PURCHASE OF A NEW SEWER RODDING TRUCK ORDERED IN APRIL 2012; AND APPROVE TRAVEL OUTSIDE OF THE UNITED STATES (CANADA) FOR DISTRICT EMPLOYEES TO INSPECT THE TRUCK PRIOR TO FINAL RELEASE Provisional General Manager Curt Swanson stated that in April 2012, the District issued a purchase order to acquire a truck - mounted mechanical rodding truck, as outlined in the Fiscal Year 2011 -12 Equipment Budget. Delivery of the truck was delayed primarily due to the fact that the original manufacturer sold the line of equipment to a manufacturer in Canada. The truck is now ready for inspection prior to its delivery. He said staff was requesting a supplemental authorization to the FY 2013 -14 Equipment Budget to purchase the rodder truck and authorize staff to travel to Canada to inspect the rodder truck. He noted that this matter had been reviewed by the Budget and Finance Committee on August 12, 2013. While the Committee r5' None. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of August 15, 2013 recommended approval of the supplemental authorization and the out -of -state travel for inspection, it recommended that the seller should bear the cost of travel for inspection for future orders of these types of vehicles. President Nejedly said in his experience, the seller always bears the cost of inspection and it was he who made the recommendation at the Budget and Finance Committee meeting. In response to a question from Member Causey, Provisional General Manager Curt Swanson said travel costs are not included in the cost of the vehicle because they cannot be capitalized. While Member Pilecki agreed philosophically with President Nejedly, he believed that accounting rules required the exclusion of travel costs in the purchase amount. Member Causey asked how this appropriation would affect the current fiscal year's Equipment Budget. Provisional General Manager Curt Swanson said while the funds had been authorized in Fiscal Year 2011 -12, they were never spent and the funds were not carried over to the current year's Equipment Budget. Therefore, this year's Equipment Budget would increase from $645,000 to $886,000. It was moved by Member Pilecki and seconded by President Nejedly to approve a supplemental authorization of $241,000 from the Sewer Construction Fund to the Fiscal Year 2013 -14 Equipment Budget to complete the purchase of a new Sewer Rodding Truck ordered in April 2012; and approve travel outside of the United States (Canada) for District employees to inspect the truck prior to final release. Motion passed by unanimous vote of the Board. 10. EMERGENCY SITUATIONS REQUIRING BOARD ACTION 11. SUGGESTIONS FOR FUTURE AGENDA ITEMS President Nejedly stated that he has heard from several sources about a shortage of places to store dirt within the County; he suggested this could present an opportunity for the District. 12. ANNOUNCEMENT OF CLOSED SESSION District Counsel Kent Alm announced Closed Session Item 13.a. 13. CLOSED SESSION The Board recessed at 3:35 p.m. to reconvene in closed session in the Caucus Room regarding the following matter: CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of August 15, 2013 a. Conference with Legal Counsel - Anticipated Litigation — initiation of litigation pursuant to Government Code Section 54956.9(c): • One Potential Case The Board recessed at 4:05 p.m. to reconvene in the Board Room in open session. 14. REPORT OUT OF CLOSED SESSION With regard to Item 13.a., District Counsel Kent Alm reported that the Board (1) authorized entering into a subrogation lawsuit with the insurance company against the Wood Group to recover costs associated with the Solids Conditioning Building cogeneration explosion incident of March 29, 2012, and (2) provided further instructions and limitations on that authority. 15. ADJOURNMENT There being no further business to come before the Board, President Nejedly adjourned the meeting at 4:08 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 10