Loading...
HomeMy WebLinkAboutBOARD MINUTES 02-06-14 (Special)MINUTES OF THE SPECIAL MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON FEBRUARY 6, 2014 The Board of Directors of the Central Contra Costa Sanitary District convened in a special meeting in the Board Room, 5019 Imhoff Place, Martinez, County of Contra Costa, State of California, at 2:00 p.m. on Thursday, February 6, 2014. President Williams called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Causey, McGill, Nejedly, Pilecki, Williams ABSENT: Members: None a. PLEDGE OF ALLEGIANCE TO THE FLAG The Board and staff joined in the Pledge of Allegiance. b. INTRODUCTION None. The Board welcomed new employee Neil Meyer, Plant Maintenance Division Manager. 2. PUBLIC COMMENTS 3. AWARDS AND COMMENDATIONS a. PRESENTATION OF 2013 CALIFORNIA WATER ENVIRONMENT ASSOCIATION (CWEA) SAN FRANCISCO BAY SECTION AWARDS BY STEVE DOMINGUEZ CWEA BAY SECTION PRESIDENT, California Water Environment Association (CWEA) Bay Section President Steve Dominguez stated that the District continues to show its excellence by winning awards, and he presented the Collection System of the Year award to the Board. He also presented the Collection System Person of the Year award to Maintenance Crew Leader Don Bartlett; and the Supervisor of the Year award to Field Operations Superintendent Steve Sauter, who received the award on behalf of Maintenance Supervisor Dante Marchetti. Book 63 — Page 48 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of February 6, 2014 4. CONSENT CALENDAR a. Approve minutes of January 9, 2014 Board meeting. b. Approve expenditures dated February 6, 2014. C. Receive December 2013 Financial Statements and Investment Reports, and receive six -month variance review of Operations and Maintenance Budget for Fiscal Year 2013 -14. d. Adopt Resolution 2014 -006 supporting a Walnut Creek Watershed Council and reaffirming a financial contribution of $10,000. Reviewed by Finance Committee. e. Approve the Pleasant Hill- Grayson Creek Trunk Sewer, District Project 8412, for California Environmental Quality Act (CEQA) /permitting purposes and direct staff to file a Notice of Exemption with the Contra Costa County Clerk. Delete a vacant Senior Control Systems Engineer position (S83, $9,416- $11,385) and add and authorize the filling of an Associate Control Systems Engineer position (S79, $8,547- $10,334). Member Causey requested that Item 4.e. be considered separately. It was moved by Member McGill and seconded by Member Pilecki to adopt Consent Calendar Items 4.a. through 4.d. and 4.f., as recommended. Motion passed by unanimous vote of the Board. Member Causey requested that Item 4.e. be referred to Engineering & Operations Committee for review prior to Board action, given that the project appeared to have doubled in size, cost, and scope. He stated that he believed substantial changes like those should come through the Committee first. It was moved by Member Causey and seconded by Member Pilecki to refer Item 4.e. to the Engineering & Operations Committee for discussion before Board action. Motion passed by unanimous vote of the Board. The item was added to the agenda for the February 11, 2014 Engineering & Operations Committee meeting. None. 5. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER Book 63 — Page 49 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of February 6, 2014 6. BIDS AND AWARDS a. WAIVE NON - MATERIAL OMISSIONS AND AWARD A CONSTRUCTION CONTRACT IN THE AMOUNT OF $131,270 TO AMP ELECTRIC THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER FOR THE COGEN CONTROLS UPGRADE, DISTRICT PROJECT 7308• FIND THAT THE PROJECT IS EXEMPT FROM CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA): AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE THE CONTRACT DOCUMENTS SUBJECT TO SUBMITTAL REQUIREMENTS General Manager Roger Bailey stated that, in April 2013, a contract was awarded to Solar Turbines to upgrade the controls of the cogeneration system. Additional groundwork needs to be completed, including electrical work by a separate contractor. Of the three bids received, AMP Electric was determined to be the lowest responsive bidder, once staff, in consultation with District Counsel, determined that the defects in the bid from AMP Electric should be waived as non- material issues. District Counsel Kent Alm confirmed his office's findings that the omissions were non - material, as they did not create an unfair advantage or allow the low bidder the option to renege. It was moved by Member Pilecki and seconded by Member Nejedly to waive non- material omissions and award a construction contract in the amount of $131,270 to AMP Electric, the lowest responsive and responsible bidder for the Cogen Controls Upgrade, District Project 7308; 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. Announcements The following announcements were included in the agenda packet: 1) Nicolas Chavis advanced to Plant Operator II in the Plant Operations Division effective January 17, 2014. 2) Internal Revenue Service (IRS) announced bond subsidy update 3) No businesses were in significant non - compliance for 2013 The following announcements were made at the meeting: Book 63 — Page 50 CENTRAL CONTRA COSTA SANITARYDISTRICT Board Minutes of February 6, 2014 4) Director of Operations Curt Swanson to retire, effective March 29, 2014 5) Arc Flash Incident on February 4, 2014 at Maltby Pumping Station 6) Public Hearing scheduled for April 9, 2014 on Tentative Nutrient Watershed Permit b. COUNSEL FOR THE DISTRICT District Counsel Kent Alm announced that the Board authorized the dismissal of the appeal of the City of Brentwood et al. v. Robert Campbell et al., Contra Costa County Superior Court Case No. N11 -1029 (Chevron Ad Valorem Tax Matter) and that each of the remaining entities did the same. The dismissal language stated that the participating parties did not agree with the auditor and tax collector's positions, so a record exists that the District did not concede the issue on the merits. Several jurisdictions have expressed interest in a legislative solution. C. SECRETARY OF THE DISTRICT Secretary of the District Elaine Boehme announced the upcoming meetings of the Finance Committee on February 10, 2014 and Administration; Engineering & Operations; and Real Estate, Environmental & Planning Committees on February 11, 2014. 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 and Member Pilecki reported on the January 27, 2014 Ad Hoc Committee meeting regarding the CoCo San Sustainable Farm. The Board received the report without comment. Member Causey also reported on the February 2 -5, 2014 National Association of Clean Water Agencies (NACWA) Winter Conference in Santa Fe, New Mexico. He commented that the District had a strong presence at the event and commended Provisional Associate Engineer Melody LaBella for her presentation entitled, "Toilets Are Not Trash Cans!" Book 63 — Page 51 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of February 6, 2014 Member McGill Member McGill and President Williams reported on the January 22, 2014 Administration Committee meeting and summarized the Action Summary. Member Nejedly stated concerns with the transition to the paperless agenda process considered by the Committee, noting possible difficulties with navigating through documents on a tablet and managing a District - specific email account. District Counsel Kent Alm stated that the issue would be brought to the full Board for discussion, and it was his recommendation to create a separate email account as a dividing line between personal- and business - related activity, as District - related communications would be subject to the Public Records Act. Further discussion of the transition to paperless agendas was added to the agenda of the February 11, 2014 Administration Committee meeting. Member Causey suggested that the Administration Committee also consider options for the District's negotiator in the next labor negotiations, so that person is chosen early enough to be involved in the planning stages and to consult with the Board. Member McGill also reported on the January 23, 2014, 28th Annual East Bay USA event; the January 27, 2014 California Special Districts Association Contra Costa Chapter (CCSDA) Meeting; his February 3, 2014 presentation given at Pleasant Hill City Council Meeting; and his February 4, 2014 presentation given at Walnut Creek City Council Meeting. President Williams President Williams reported on the February 2 -5, 2014 National Association of Clean Water Agencies (NACWA) Winter Conference in Santa Fe, New Mexico. 2) Announcements Member McGill provided a written report covering Announcements and other meetings. Book 63 — Page 52 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of February 6, 2014 8. BUDGET AND FINANCE a. HOLD PRELIMINARY RATE DISCUSSION REGARDING FISCAL YEAR 2014 -15 SEWER SERVICE CHARGE, PREVIOUSLY APPROVED TO INCREASE BY $34 TO $439 PER RESIDENTIAL UNIT EQUIVALENT, AND PROVIDE DIRECTION REGARDING ANY ADDITIONAL INFORMATION DESIRED AND SET A DATE AND TIME FOR THE PUBLIC HEARING General Manager Roger Bailey stated that, last year, the Board adopted Ordinance No. 278, which approved a rate increase of $34 per Residential Unit Equivalent (RUE) for Fiscal Year (FY) 2013 -14 and a rate increase of $34 per RUE for FY 2014 -15, subject to conditions including holding a public hearing. The District looks at ten years of financial information, including costs and revenues, and the financial plan must be balanced each year, with no deficit in any given year. Another driver of revenue requirement, the use of cash reserves, is restricted, and the District's Capital Improvement Plan (CIP) is predominantly funded on a pay -as- you -go basis. While other agencies issue bonds or borrow money to fund their CIP, the District prefers to have funds in place in advance of the projects. Therefore, rates are not just raised to cover annual operating costs, but also to cover ongoing projected costs, and the District tries to avoid rate spikes. General Manager Roger Bailey explained that the District has large payments to make annually between July and December. The payment to Contra Costa County Employees' Retirement Association (CCCERA) was approximately $16.2 million in the current fiscal year and is projected to be about $19.5 million next fiscal year. In August, a debt service payment of approximately $5 million will be due. President Williams recalled that, at a previous Board meeting, he asked whether the District has a target for its reserves. General Manager Roger Bailey replied that there is no formal policy; however, the question will be asked as part of the upcoming cost -of- service study. General Manager Roger Bailey discussed various scenarios and ran a live model. Member Causey noted that there did not seem to be any discussion regarding changing the Operations and Maintenance (O &M) side of the budget. He suggested that rates be escalated no more than the consumer price index and to match them to what the District does with O &M, given the underlying assumption that the majority of the budget will remain the same, at $70 million, rising each year for ten years. He also asked that the District consider setting rates for both the Capital Program and O &M that are fixed, based on need, and let the two operate separately. He stated that it appeared that the capital fund is tapped whenever the O &M budget needs more money, and, to be sustainable, both programs need to exist on their own. General Manager Roger Bailey stated that, in order to stay on schedule, staff proposed that on February 20, the Board receive the Ten -Year Plan materials; on Book 63 — Page 53 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of February 6, 2014 February 24, the Finance Committee discuss the Ten -Year Plan materials; on March 6, the Board conduct its Ten -Year Financial Plan Workshop; and on April 17, the Board hold a public hearing on rates. June 5 would be the latest date for the public hearing, in order to have a rate adjustment by July 1. He asked the Board for direction on what time and date to set the public hearing on rates. Following discussion, the Board set April 17, 2014 at 6:00 p.m. as the date and time for the regular meeting, with the public hearing to follow at 7:00 p.m., in order to facilitate the maximum attendance by the public. Member Pilecki stated that, as far as the overall model system, he noticed that a number of years show no rate increases; however, he believed the District should at least every year have a cost -of- living adjustment (COLA) increase, because there are large projects on the horizon and the potential for asset management costs. He requested running a scenario with the current Unfunded Actuarial Accrued Liability (UAAL) payments maintained without the $75 million in UAAL prepayment. He also recalled his comment in 2013, when proposing a $20 rate increase, asking whether all vacant staff positions must necessarily be filled. Member Causey agreed with Member Pilecki's suggestion to factor in the minimum consumer price index (CPI) in the Ten -Year Plan. He requested running a scenario with a ten percent reduction in O &M costs across the board and a scenario where the cash flow for retirement costs would be on a monthly or quarterly basis rather than in July. Member Nejedly cautioned against multiple years without a rate increase and raised concerns with the suggestion of cutting costs across the board. He stated that, at some point, the costs will need to be paid and it was his preference to do it now. General Manager Roger Bailey stated that he will need time to assess the optimal staffing level and the risks associated with changing the CIP, and he planned to incorporate a staffing -needs assessment with the cost -of- service study. Member McGill stated that he would like to see budget options with the Board's high - level policy goals in mind. He would like to see how those goals translate into expenses and what the District is trying to accomplish, and how they tie into future rates. 9. ENGINEERING a. RECEIVE OVERVIEW OF CAPITAL PROGRAM Engineering Assistant III Earlene Millier presented an overview of the Capital Improvement Budget (CIB) Financial Process and Authority Limits. She summarized that the Sewer Construction Fund (SCF) is replenished each year from capacity Book 63 — Page 54 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of February 6, 2014 fees, property taxes, and a portion of Sewer Service Charge (SSC) revenue. The Board approves authorizations from the SCF to four program (Treatment Plant, Collection System, General Improvements, and Recycled Water) balances each year, and then the General Manager approves allocations from program balances to individual projects. Projects spend and allocate funds as needed but cannot exceed the remaining program balance without Board approval. The Board approves final project budgets upon award of construction contracts. Unspent funds are returned to the programs when the projects close out, and, at the end of the fiscal year, unallocated funds are returned from the programs to the SCF. Member Causey stated his opinion that there are challenges in the way the information is presented for the Board to understand what is happening financially. President Williams supported the monthly and quarterly reporting that was requested by the Engineering & Operations Committee, but noted that the Board's job is to make sure the appropriate amount of money is being spent in the four programs. Day -to -day managing is staff's purview. He stated concerns that staff was being given busy work of putting reports together for the Board, in order for the Board to make decisions that staff is capable of making themselves. Member Pilecki replied that the reports requested by the Committee are generated by staff regardless, but he shared President Williams' concerns of creating extra work for staff. Member Nejedly added that he would like to see the Board move away from micromanaging and create policy. b. CONSIDER RECOMMENDATION OF FORMER CAPITAL PROJECTS COMMITTEE TO REVISE GENERAL MANAGER AUTHORITY LIMITS RELATED TO THE CAPITAL IMPROVEMENT PROGRAM General Manager Roger Bailey discussed the changes proposed by the Engineering & Operations Committee to the General Manager Authorization Table that was revised on December 15, 2011. Member Pilecki, Chair of the Engineering & Operations Committee, stated that the goal of the proposed changes was to create transparency and a better understanding of the actions of the Capital Program. President Williams noted that there was a difference between informing Board Members versus asking Board Members for approval on matters that are within staff authority. He stated concerns that the District's engineers may subconsciously inflate project costs, which would result in higher than necessary rate increases. He noted that the General Manager is accountable for managing the District. Book 63 — Page 55 None. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of February 6, 2014 Member McGill stated that he was unsure if he understood the implications well enough to make a recommendation to bring back a resolution. He stated that the District's system has worked well to date, and he did not know for certain if changes needed to be made to address issues that have been brought up by Board Members. Member Nejedly stated that the Board has raised the General Manager's limits over the years and noted that the District has not had any major problems that necessarily warrant the proposed changes. He stated that he would concur with changes to reconstruct a few things, but the General Manager is ultimately held accountable for his actions. President Williams stated that he was not in favor of the General Manager authority for allocating funds to individual project budgets to be changed from "Total program budget plus contingency" to "Total CIB /CIP Project budget plus 20 percent." He stated his support for the allocation of funds to the four programs and to use criteria to move projects around as long as the pots of money are adhered to. He noted that the General Manager would inform the Board of any significant overruns. Member Pilecki noted that there seemed to be little support for changing the authority for allocating funds to individual project budgets from "Total program budget plus contingency" to "Total CIB /CIP Project budget plus 20 percent," or for changing the authority for allocating funds from program contingency accounts to projects not included in the CIB. It was moved by Member Pilecki and seconded by Member Causey to direct staff to prepare a resolution amending the authority limits under the District's Capital Improvement Program effective July 1, 2014, for adoption on the Consent Calendar at a future Board meeting, as follows: 1) revise the authorization limits to modify the authorization for "Individual equipment items and equipment contingency in the Equipment Budget" from 1100,000 or less" to "Up to amount specified in Equipment Budget" for the General Manager and "Above amount specified in Equipment Budget" for the Board of Directors, and 2) revise the authorization limits to "allocate funds for project budget overruns after award of construction contract" from "15 percent of final project budget" for the General Manager to "Up to $1,000,000" (changed from original proposed table with revisions). Motion passed by the following vote of the Board: AYES: Members: Causey, McGill, Pilecki, Williams NOES: Members: Nejedly ABSTAIN: Members: None 10. EMERGENCY SITUATIONS REQUIRING BOARD ACTION Book 63 — Page 56 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of February 6, 2014 11. SUGGESTIONS FOR FUTURE AGENDA ITEMS Member Causey suggested that the Board discuss the possibility of changing the name of the District. 12. ANNOUNCEMENT OF CLOSED SESSION (Pursuant to Government Code Section 54957.7) District Counsel Kent Alm announced Closed Session Item 13.a. 13. CLOSED SESSION The Board recessed at 5:00 p.m. to reconvene in closed session in the Caucus Room regarding the following matters: a. PERSONNEL MATTERS PURSUANT TO GOVERNMENT CODE SECTION 54957 — PERFORMANCE EVALUATION FOR GENERAL MANAGER The Board recessed at 5:24 p.m. to reconvene in the Board Room in open session. 13. REPORT OUT OF CLOSED SESSION District Counsel Kent Alm reported that no reportable action was taken in closed session. 14. ADJOURNMENT There being no further business to come before the Board, President Williams adjourned the meeting at 5:24 p.m. a..w David R. Williams President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: ,1'�1-2 Elaine R. Boehme, CMC Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Book 63 — Page 57