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HomeMy WebLinkAboutBOARD MINUTES 07-17-14MINUTES OF THE REGULAR MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON JULY 17, 2014 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, July 17, 2014. President Williams called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Causey, Nejedly, Pilecki, McGill, Williams ABSENT: Members: None a. PLEDGE OF ALLEGIANCE TO THE FLAG None. The Board and staff joined in the Pledge of Allegiance. 2. PUBLIC COMMENTS 3. CONSENT CALENDAR a. Approve minutes of June 19, 2014 Board meeting. b. Approve expenditures dated July 17, 2014. Approval recommended by Finance Committee. C. Adopt Resolution 2014 -021 authorizing (1) execution of a Real Property Agreement with property owners Patrick David Lamy and Karin Marie Orelind of 551 Miner Road, Orinda; and (2) staff to record the document with the Contra Costa County Recorder. d. Adopt updated salary schedule for all District job classifications effective July 1, 2014 to meet disclosure requirements of a "publicly available pay schedule" under the Public Employees' Pension Reform Act of 2013 (PEPRA). It was moved by Member Causey and seconded by Member Pilecki to adopt the Consent Calendar as recommended. Motion passed by unanimous vote of the Board. Book 63 — Page 158 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of July 17, 2014 4. CALL FOR REQUESTS TO CONSIDER ITEMS OUT OF ORDER None. 5. REPORTS a. GENERAL MANAGER 1) Presentation by John Bartel of Bartel Associates LLC comparing (1) Contra Costa Employees Retirement Association ( CCCERA) and California Public Employees' Retirement System (CaIPERS) and (2) defined benefit plans and defined contribution plans. General Manager Roger Bailey stated that over the past several months, the Administration Committee has held a series of meetings with actuary and consultant John E. Bartel, President of Bartel Associates, LLC, to explore several topics of interest to the Board, namely: (1) the pros and cons of CCCERA versus CaIPERS as the District's retirement plan administrator, and (2) comparisons between defined benefit (DBP) and defined contribution (DCP) plans. Mr. Bartel briefly summarized his discussions with the Administration Committee, as set forth in the written material he provided prior to the Board meeting and in the Committee meeting Action Summaries. With regard to the first topic, the pros and cons of CCCERA versus CaIPERS, he said the single biggest driver of costs for any system, assuming similar benefits levels, is rate of return net of expenses. While the two systems have nearly identical historical investment returns since 1999, CCCERA's returns are slightly ahead of those of CaIPERS. Also, a move from CCCERA to CaIPERS would result in a noticeable amount of out -of- pocket costs in terms of staff time, and legal and consulting issues. Therefore, it was his recommendation that the District remain with CCCERA on the bases of rate of return and the costs associated with making the move. In terms of customer service, Member Nejedly expressed frustration with CCCERA, noting that he has found them difficult to deal with and receive information from in recent years. Member Pilecki agreed. On the other hand, Member Causey said that in his past dealings with CaIPERS, he has found it very difficult to reach a live person, let alone receive information. He acknowledged that while CCCERA may have issues in terms of customer service, he believes CaIPERS has even more. Mr. Bartel said retirement systems are very complex and notoriously difficult to deal with. If a comparison were made only on the basis of customer service, he believes one would find CaIPERS far more difficult to work with than CCCERA. Book 63 — Page 159 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of July 17, 2014 Moving to the second topic, comparing DBPs and DCPs, Mr. Bartel stated at the outset that, in his opinion, moving to a DCP or a hybrid DBP /DCP likely would require legislative action. CCCERA is governed by the County Employees' Retirement Law of 1937 (CERL), and CalPERS is governed by the California Public Employees' Retirement Law (PERL). Both CERL and PERL contain language to the effect that all employees within the same classification must continue with their respective retirement system. Mr. Bartel said he would defer to legal counsel for a final opinion, but, in his estimation, all of the District's employees would be in the same classification (non- safety). So, for example, if it was desired that new employees be placed in a DCP or a DBP with a lower benefit formula than the DBP for current employees, Mr. Bartel believes legislative action to change the relevant section of the CERL would be necessary. The same would be true under CalPERS. Mr. Bartel said the chances of making such a legislative change would be low. Member Causey asked if a new "agency" could be created for affected employees to avoid the legal impediments. Mr. Bartel replied that he believed the retirement systems would view both agencies as structurally the same so, in his opinion, this would not be an option. District Counsel Kent Alm mentioned that he knew of a smaller agency that inquired of CalPERS about switching to a DCP. The agency was told such a change might be possible with the unanimous vote of both current and new employees. Continuing his presentation, Mr. Bartel described the characteristics of a DBP. He stated that while the benefit to the employee is defined in a DBP, the contribution necessary to achieve that benefit might vary from one year to the next, creating more volatility (risk) to the employer. The nature of DBPs is such that the employer typically assumes all the risk; an employer basically would have to negotiate with employees to mitigate some of this risk. He also said DBPs are more efficient than DCPs; studies consistently show that the rate of return net of expenses is higher in DBPs than in DCPs. With respect to DCPs, Mr. Bartel said they are generally less efficient than DBPs in that their rate of return net of expenses is lower. In a DCP, all risk is assumed by the employee. A DCP is very predictable for the employer, which is the reason nearly all companies in the private sector have moved to DCPs. Member Pilecki noted one advantage of a DCP is that the employee contributions, as well as some or all of the employer contributions, belong to the employee and may be transferred to an employee's beneficiaries upon death. Mr. Bartel agreed, adding that it is not uncommon for there to be no survivor benefit with a DBP. Unless an employer supplements its DBP with a Book 63 — Page 160 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of July 17, 2014 term life insurance program that would replace a death benefit, a DBP can create an issue for an employee's heirs. Member Causey raised the issue of employees managing their own retirement accounts in a DCP and asked if any long -term studies address this subject. Mr. Bartel said that while some employees do an excellent job of managing their accounts, all risk is on the individual. Even if they have successfully managed their accounts, unless they are careful about their investments, particularly once their account balance grows larger as they approach retirement, they face significant risks depending on the market. Bottom line, he said it is incumbent upon employers to make sure their plan participants are educated with regard to those risks. In the interest of full disclosure, however, Mr. Bartel shared Member Causey's concern that many employees do not feel equipped to manage their own retirement accounts. President Williams noted that after evaluating the advantages and disadvantages of a DCP, coupled with the fact that moving to a DCP or a hybrid DBP /DCP would require legislative action, the option of a DCP or hybrid plan did not appear to be viable. Member McGill agreed and moved that the Board direct the Administration Committee to focus its efforts on DBPs and the options available to the District within a DBP. Member Pilecki seconded the motion. Member Causey said in his view the Board should cease work on this issue instead of exploring further alternatives. President Williams clarified that Member McGill's motion was for the Committee to continue to explore concepts in anticipation of the 2017 labor negotiations and, with respect to the District's DBP, look at options within the existing plan. Motion passed by the following vote of the Board: AYES: Members: McGill, Nejedly, Pilecki, Williams NOES: Members: Causey ABSTAIN: Members: None With regard to the CCCERA versus CaIPERS issue, it was moved by Member Nejedly and seconded by Member McGill to remain with CCCERA for the District's retirement plan administration. Motion passed by unanimous vote of the Board. 2) General Manager Announcements The following announcements were included in the agenda packet: a) Recap of contracts signed by General Manager during second quarter 2014; and Book 63 — Page 161 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of July 17, 2014 b) No delinquent accounts to be placed on tax roll for coming year. No additional announcements were made at the meeting. b. COUNSEL FOR THE DISTRICT 1) Report on Tentative Order of San Francisco Bay Regional Water Quality Control Board regarding site cleanup requirements for the properties located at 1643 Contra Costa Blvd. (Gregory Village Partners matter) and 1705 Contra Costa Blvd. (Chevron U.S.A. matter) in Pleasant Hill District Counsel Kent Alm announced that the Regional Water Quality Control Board (RWQCB) issued its tentative order on the Gregory Village property that has been discussed with the Board in previous closed sessions. The tentative order named Chevron, Gregory Village, and prior owners of the properties, but it did not name the District, and the District was not found to be a discharger. The RWQCB disagreed with the District's assumption that the District's sewer ordinance has prohibited discharges since 1953. While they do not agree that the District prohibited it, they agree that at no time, at least since 1974, could the tetrachloroethene (PCE)- impacted wastewater have been discharged and be near the limits applied by the District. The District has 30 days to submit comments, up to August 4, 2014, and the hearing is scheduled for September 10, 2014. If substantial comments that are adverse to the District are filed at the last minute, staff will be provided time to respond after the August 4 deadline. Mr. Alm also announced that his office received a Public Records Act request from Daniel Borenstein of the Contra Costa Times because his firm, Meyers Nave, represents both the District and CCCERA. The request was for retirement information on four retired employees, and the indication was that an article will be published at some point. C. SECRETARY OF THE DISTRICT 1) Announce that election nomination period is open Secretary of the District Elaine Boehme announced that the election nomination period for candidates running for the District's Board opened on July 14, 2014, and will close on August 8, 2014. The period will be extended five days for non - incumbents only if an incumbent does not file. Ms. Boehme also announced the July 21, 2014 Finance Committee meeting at 3:00 p.m. and the July 23, 2014 Administration Committee meeting at 8:00 a.m. Book 63 — Page 162 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of July 17, 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 reported on the July 13 -16, 2014 National Association of Clean Water Agencies (NACWA) Summer Conference in Portland, Oregon. He asked the Board to consider changing the name of the District, in the spirit of innovation, collaboration, partnerships, and rebranding of wastewater treatment agencies. He stated his opinion that the District should look to the philosophy of the utility of the future, be a spokesperson to the public for what it does, and have a name that is more descriptive of resource recovery and the types of services the District provides to the community. Member Causey reported that the August 1, 2014 Finance Committee meeting has been moved from 2:00 p.m. to 12:00 p.m. Member McGill Member McGill and President Williams reported on the July 2, 2014 Administration Committee meeting. The Board received the report without comment. Member McGill reported on the July 10, 2014 Contra Costa County Mayors Conference hosted by the City of Oakley, featuring a presentation on "Community Choice Aggregate Energy for Contra Costa." Member McGill also reported that he will be running for reelection to the District's Board of Directors in November 2014. President Williams President Williams reported on the July 13 -16, 2014 National Association of Clean Water Agencies (NACWA) Summer Conference in Portland, Oregon. 2) Announcements Member McGill provided a written report covering his announcements and other meetings. Member Nejedly announced that an overflow occurred in his neighborhood, and he commended staff on its efforts in resolving the issue quickly and to the customer's satisfaction. Book 63 — Page 163 CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of July 17, 2014 3) Board Member requests for advance authorization to receive a stipend for meeting attendance not specifically addressed in the current Board Compensation Resolution None. 4) Provide direction to Member McGill, the District's representative and voting delegate for the Contra Costa Chapter of the California Special Districts Association (CSDA), on how to vote at the upcoming CSDA Election for Representative of Region 3, Seat C As the District's representative and voting delegate on the Contra Costa Chapter of the CSDA, Member McGill stated that two people are running for the Region 3 Seat C. He recommended voting for incumbent Stanley Caldwell of Mt. View Sanitary District (MVSD) given his long relationship with the District, his many years of service, and his dedication to both the MVSD and CSDA. It was moved by Member Pilecki and seconded by Member Causey to direct Member McGill to cast the District's vote for Stanley Caldwell. Motion passed by unanimous vote of the Board. 5) Provide direction to Member McGill on how to vote at the upcoming Local Area Formation Commission ( LAFCO) special election to fill the regular special district seat vacated by Dwight Meadows' recent passing Igor Skaredoff, President of the Contra Costa Resource Conservation District (CCRCD) and LAFCO candidate, asked the Board to consider voting for him for the open seat. He stated that he has been nominated to succeed Mr. Meadows and, if elected, he would devote himself to facilitating a better connection between the business and environmental communities. He also offered to foster the ongoing relationship between the District and the CCRCD, regardless of whether or not he is elected. Member Nejedly stated that there are four people running and suggested nominating Steve Anderson of the Moraga - Orinda Fire District. He stated he had no problems with voting for Mr. Skaredoff; his concern was that he did not know any of the candidates but Mr. Anderson, so it was difficult for him to recommend anyone else without having dealt with them personally. Member Causey noted that George Schmidt of the West County Wastewater District has been the Alternate for a long time, so it may be appropriate to nominate him as Mr. Meadows' successor, especially since he can bring continuity and experience to the position. Member McGill, Special District Representative to Local Agency Formation Commission ( LAFCO), stated that he avoided making a voting Book 63 — Page 164 None. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of July 17, 2014 recommendation because he would be serving with the electee. He noted that all candidates have assets, and he could make a recommendation if needed; however, he left the decision to his fellow Board Members. Member Pilecki recognized Mr. Skaredoff's efforts in attending two Board meetings (the first was on June 19, 2014) to ask for the Board's consideration. It was moved by Member Pilecki and seconded by President Williams to direct Member McGill to vote for Igor Skaredoff of the Contra Costa Resource Conservation District. Motion passed by unanimous vote of the Board. It was moved by Member Pilecki and seconded by Member Nejedly to authorize the Voting Delegate or Alternate to cast any necessary subsequent vote using his discretion in the event of a tie vote or runoff. Motion passed by unanimous vote of the Board. 6. EMERGENCY SITUATIONS REQUIRING BOARD ACTION 7. SUGGESTIONS FOR FUTURE AGENDA ITEMS Member Causey suggested earlier in the meeting that the Board agendize a discussion of possibly changing the District's name, as he had suggested at a previous Board Meeting. By consensus, the Board directed staff to add the item to a future Board Meeting, via the Administration Committee. 8. ANNOUNCEMENT OF CLOSED SESSION (Pursuant to Government Code Section 54957.7) District Counsel Kent Alm announced Closed Session Item 9.a. 9. CLOSED SESSION The Board recessed at 3:40 p.m. to reconvene in closed session in the Caucus Room regarding the following matter: a. PERSONNEL MATTERS PURSUANT TO GOVERNMENT CODE SECTION 54957 — PERFORMANCE EVALUATION FOR GENERAL MANAGER The Board recessed at 4:10 p.m. to reconvene in the Board Room in open session. Book 63 — Page 165 None. CENTRAL CONTRA COSTA SANITARY DISTRICT Board Minutes of July 17, 2014 10. REPORT OUT OF CLOSED SESSION 11. ADJOURNMENT There being no further business to come before the Board, President Williams adjourned the meeting at 4:10 p.m. David R. Williams 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 Book 63 — Page 166