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HomeMy WebLinkAboutBOARD MINUTES 04-10-14 (Special)MINUTES OF THE SPECIAL MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON APRIL 10, 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, April 10, 2014. President Williams called the meeting to order and requested that the Secretary Pro Tern call roll. 1. ROLL CALL PRESENT: Members: Causey, McGill, Pilecki, Williams ABSENT: Members: Nejedly a. PLEDGE OF ALLEGIANCE TO THE FLAG None. The Board and staff joined in the Pledge of Allegiance. 2. PUBLIC COMMENTS 3. REPORTS AND ANNOUNCEMENTS a. GENERAL MANAGER No reports. b. COUNSEL FOR THE DISTRICT No reports. C. SECRETARY OF THE DISTRICT No reports. d. BOARD MEMBERS Member McGill provided a written report covering Announcements. Book 63 — Page 88 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of April 10, 2014 4. ENGINEERING a. ADOPT RESOLUTION 2014 -008 SETTING FORTH REVISED GENERAL MANAGER AUTHORIZATION LIMITS SET FORTH IN THE CAPITAL IMPROVEMENT PROGRAM BUDGET. APPROVAL RECOMMENDED BY ENGINEERING & OPERATIONS COMMITTEE Capital Projects Division Manager Andrew Antkowiak explained the recommended changes to the General Manager authorization limits for inclusion into the next fiscal year Capital Improvements Program (CIP) Budget, made by the Board at its February 6, 2014 Board Meeting and modified by staff because of concerns that some of the wording changes suggested at the February 6 Board meeting may not be in keeping with the Board's intentions. After those concerns were discussed with the Engineering & Operations Committee on March 17, 2014, the wording was further modified. Member Causey stated that, when the former Capital Projects Committee originally discussed the category described, "Allocate fund for project budget overruns after award of construction contract," the General Manager was authorized 15 percent of final project budget." He recalled that it was the Committee's intent to eliminate that 15 percent. The full Board at its February 6, 2014 Board Meeting replaced the 15 percent with "a maximum of $1 million." Mr. Antkowiak explained that omitting the "15 percent" wording conceivably could give the General Manager greater authority than the Board intended, particularly on smaller projects. Following discussion, Member McGill suggested revising the General Manager authority to 15 percent of final project budget or up to a maximum of $1,000,000 per project, whichever is less." It was moved by Member McGill and seconded by Member Pilecki to adopt Resolution 2014 -008 setting forth revised General Manager authorization limits set forth in the Capital Improvement Program Budget, with the modification as suggested by Member McGill. Motion passed by the following vote of the Board: AYES: Members: NOES: Members: ABSENT: Members: McGill, Pilecki, Williams Causey Nejedly 5. CAPITAL PROJECTS BOARD WORKSHOP a. OVERVIEW OF THE FISCAL YEAR 2014 -15 DRAFT CAPITAL IMPROVEMENT BUDGET (CIB) AND DRAFT 2013 TEN -YEAR CAPITAL IMPROVEMENT PLAN (CIP) The Workshop materials were reviewed by the Engineering & Operations Committee at its March 17, 2014 meeting. Book 63 — Page 89 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of April 10, 2014 Mr. Antkowiak presented the proposed 2014 Ten -Year Capital Improvement Plan (CIP) numbers, whose total estimated expenditures was $296 million. He also presented the summary of the Fiscal Year (FY) 2014 -15 Capital Improvement Budget (CIB), whose total estimated expenditures was $25 million. He then reviewed selected FY 2014 -15 projects in the Treatment Plant, Collection Systems, General Improvements, and Recycled Water Programs. Member Causey stated that, in his experience with other public agencies, the District's philosophy with respect to budgeting and funding for capital projects was unique to him, in that most agencies have one project with one price, and if that price is exceeded, the Board is asked to authorize an increase in the project budget. In his opinion, the District's practice using "program" approval has issues of transparency, because it allows staff to spend any amount from a particular pot of funds for any of the projects in that program. He stated his belief that the Board should be concerned with the potential long -term impacts of projects being over budget, and that, eventually, the pay -as- you -go philosophy will not work and bonds will have to be issued. President Williams stated that his experience with a program -based approach is that it works quite well. The alternative approach can lead to inflated project estimates and higher rate increases. He said he would rather retain the District's current practice, with staff performing its best efforts in estimating and, in the event a project exceeds budget, the Board understanding that and allowing flexibility within the program. General Manager Roger Bailey stated that staff can track when a project is over budget, and make the distinction whether it is a result of underestimating or of unforeseen growth that arose during the project. Member Pilecki discussed the changes made by the Engineering & Operations Committee and the Board to address transparency concerns. He stated that he believed there is now a good check system in place. The Board discussed the likelihood of earthquake damage to District facilities, self - insurance funding, disaster planning, and possible coordination with other agencies in such an event. Cash reserves for these purposes will be addressed as part of the cost -of- service study. President Williams requested total historical spending and revenue data on the District's Recycled Water projects, including both net and gross figures. Member Causey stated that it appeared to him that the capital program is funded last, after the Operations and Maintenance (O &M) needs are met, which is inverse to how it should be. He stated that infrastructure replace ment/re newa I is important, and the annual contribution to the CIB should be estimated and set. Book 63 — Page 90 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of April 10, 2014 President Williams replied that once the asset management program is up and running, there will be a better understanding of what is needed. Infrastructure will continue to function and be maintained, regardless of rates. He emphasized the criticality of timing in assessing these matters. President Williams also suggested the Board discuss its philosophy on bond funding, which General Manager Roger Bailey stated could be done within the framework of the cost -of- service study. Member Causey reiterated his belief that the CIB should not be referred to as a "pay -as- you -go" program because the District has issued bonds several times in the last twelve years. 6. ADJOURNMENT There being no further business to come before the Board, President Williams adjourned the meeting at 3:30 p.m. David R. Williams President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Donna M. Anderson Secretary Pro Tern of the District Central Contra Costa Sanitary District County of Contra Costa, State of California Book 63 — Page 91