HomeMy WebLinkAbout06.a.1) Approve minutes of Board Workshop held 01-26-17 6.a. 1
Cen tral.
MINUTES* BOARD 4F DIRECTORS:
PAUL H.CAUSEY
President
SPECIAL. BOARD MEETING
JAMES A.NEJEDLY
President Pro Terri
Multi-Purpose Room MICHAEL R.MCGILL
Thursday, January 26, 2017 TAD J.PILECKI
DAVID R.WILLIAMS
11:00 a.m.
DRAFT .
Open Session — Multi-PuEpose Room
(video recorded)
1. ROLL CALL
A special meeting of the Board of Directors was called to order by President Causey
at 11:00 a.m. Secretary of the District Elaine Boehme called roll:
PRE'SE'NT: Members: McGill, Neaedly, Pilecki, Williams, Causey
ABSENT. Members: None
2. PLEDGE OF ALLEGIANCE
The Board, staff and audience joined in the Pledge of Allegiance.
. 3. PUBLIC COMMENT PERIOD
No comments.
4. REQUESTS TO CONSIDER MATTERS OUT OF ORDER
President Causey said Item 6.D. (Board Member reports and announcements) and
Item 7.B.l) (vehicle replacement funding approach) would be deferred to the next
meeting to allow more time for other agenda items.
5. CONSENT CALENDAR
A. Approve minutes of January 12, 2017 Board meeting.
These summary minutes are supplemented by a corresponding video recording available on the District's
website at centralsan.org..
CENTRAL CONTRA COSTA SANITARY DISTRICT
January 26, 2017 Special Board Meeting Minutes-Page 2
B. Approve updated administrative overhead percentage of 225 percent for
Fiscal Year (FY) 2017-18. Approval recommended.by Finance committee.
C. Authorize the General Manager to execute a Utility Agreement with the Town
of Moraga for sewer replacement work related to the Rheem Boulevard sink
hole repair. Approval recommended by Administration Committee.
D. Award a construction contract in the amount of $117,250 to Breneman, Inc.,
the lowest responsive and responsible bidder for District-Wide Patch Paving;
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; and authorize the General Manager to
extend the contract up to a total of five years for the amount of $585,250 (not
including Consumer Price Index (CPI) Adjustments). Reviewed by
Engineering & Operations committee.
Member Pilecki pulled item 5.C. for discussion, and Member Nejedly did the same
for Item 5.D.
BOARD ACTION: Motion was made by Member Williams and seconded by
Member Pilecki to adopt consent Calendar Items 5.A. and 5.13. as
recommended. Motion passed by unanimous vote of the Board.
Member Pilecki expressed several concerns regarding item 5.C., including the
potential for setting a precedent by providing funds to relocate sewer pipe for which
Central San is not clearly responsible.
Members McGill and Williams explained that the A dministra tion committee had
reviewed this matter and the way the agreement is structured, central San would not
be conceding its options with regard to its obligation for payment.
District counsel Kent Alm said it is not clear which party, Central San or the Town of
Moraga, has first in time and senior rights. central San would probably spend more
than $38,000 in dispute and would create ill will with the Town of Moraga. He said
the clause they agreed to add to the utility agreement indicating that Central San is
not conceding that it is obligated to pay the amount requested provides adequate
protection. From a policy standpoint, he believes the Board can move forward with
this item without setting a precedent.
President Causey said the amount requested does not include soft costs such as
staff time for inspections, etc. and suspects the true costs will be much higher. He
also believes the new storm drain could be installed beneath Central San's
unaffected sewer pipe. Finally, he believes this action sets a precedent. For these
reasons, he said he would be voting against the item.
BOARD ACTION: Motion was made by Member McGill and seconded by
Member Williams to adopt Consent calendar Item 5.C. as recommended.
Motion passed by the following vote of the Board:
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January 20, 2017 Special Board Meeting Minutes-Page 3
AYES: Members: McGill, Nejed ly, Williams
NOES: Members: Pilecki, Causey
ABSTAIN: Members: None
Member Nejedly said he pulled Item 5.D. to express concerns with the issue of public
bidding for a contract such as this. Central San has used the current contractor for
several years with very satisfactory results, yet because of the requirement to publicly
bid the contract, that contractor was outbid by a very slim margin, leaving Central San no
choice but to go with the low bidder. Changing contractors will cost Central San more in
the long run. He said that, on principal, he will vote no on this contract.
Mr. Alm said that the definition of a "district project"is statutory and varies by type of
agency. In his opinion, since this contract in vol ves paving, it is clearly a public works
project which must be bid.
In the interest of time, it was the consensus of the Board to postpone action on this
matter to the next meeting on February 2, 2017.
6. REPORTS AND ANNOUNCEMENTS
A. General Manager
1) Announcements
a) Central San to host two Customer Informational Workshops and
General Manager to participate in Rossmoor Community
informational interview
b) Collection System Operation employee to attend VACTOR
Training in Illinois
c) Manager to attend National Association of Clean Water
Agencies (NACWA) Winter Conference from February 4-8, 2017
in Tampa, Florida
d) General Manager authorized contracts, agreements, etc. -
Fourth Quarter 2016
e) Awards received at the California Water Environment
Association (CWEA)-San Francisco Bay Section Annual Awards
Banquet
BOARD ACTION: Received the announcements.
B. Counsel for the District - No report.
C. Secretary of the District - No report.
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January 26, 2017 Special Board Meeting Minutes-Page 4
D. Board Members
The entirety of Item 6.D. was postponed to the next meeti
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January 25, 2017 Special Board Meeting Minutes- Page 5
Member McGill provided a written report covering his announcements
and other meetings.
Member Neiedly
Member Pilecki
■ January 20-, 2017 - California Water Environment Association
(CWEA) - San Francisco Bay Section Annual Awards Banquet
in Concord.
■ January 25, 2017 - City of Concord - 32nd Annual Mayor's
Luncheon.
Member Williams
■ January 12, 2017 - Contra Costa County Mayors' Conference
hosted by the Town of Danville.
■ January 18-20, 2017 - California Association of Sanitation
Agencies (CASA) Mid-Year Conference in Palm Springs, CA.
President Ca
■ January 12, 2017 - contra Costa County Mayors' Conference
hosted by the Town of Danville.
BOARD ACTION: Postponed to the next meeting.
3) Requests for Stipend/Reimbursement or Conference Attendance —
Authorization to receive a stipend for meeting attendance or expense
reimbursement not specifically addressed in the current Board
Compensation Resolution, or authorization for conference attendance
not previously approved by the Board.
BOARD ACTION: Postponed to the next meeting.
7. BOARD WORKSHOP — 10-YEAR CAPITAL_IMPROVEMENT PLAN UPDATE,
PROPOSED FY 2017-18 AND FY 2018-19 CAPITAL IMPROVEMENT BUDGET,
AND RATE SCENARIOS
A. Introduction
General Manager Roger S. Bailey outlined the items to be presented during
the workshop.
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January 26, 2017 Special Board Meeting Minutes -Page 6
B. Review and summarize discussions from November 10, 2016 Board
Workshop # 3.
Mr. Bailey reviewed and summarized the directions given by the Board at the
prior workshop with respect to financial planning, recycled water accounting,
bond financing and rate scenarios.
Member Pilecki requested further discussion on the Board's direction given at
the November 20, 2016 workshop to utilize the entire $2.5 million budgeted in
this fiscal year for unfunded liabilities toward the other Post-Employment
Benefits- (OPEB) Trust.
1} Follow-up on parking lot items from Workshop #3.
Mr. Bailey said that the agenda material included in this section was in
response to the list of parking lot items generated at the previous
workshop. He noted that the item on the approach for vehicle
replacement funding has been tabled to a future meeting.
President Causey requested more information on the costs of
preparing and mailing the Proposition 218 Notices.
BOARD ACTION: Received the presentation.
C. Update on Solids Handling and Energy Alternatives presented at the
Comprehensive Wastewater Master Plan (CWMP) Workshop held June 16,
2016.
Director of Engineering & Technical Services Jean-Marc Petit and Senior
Engineer Planning and Development Dan Prost briefly reviewed the
presentation included with the agenda materials regarding solids handling
and energy alternatives. The portion of the presentation on gasification was
postponed.
Member Williams commented that the revised approach to solids.handling
has some built-in flexibility in terms of time, which is important from the
standpoint of being able to assess the outcomes of various pilot programs
pertaining to potential alternatives.
BOARD ACTION: Received the update.
D. Update on 10-Year Capital Improvement Plan (CiP) presented at the
November 10, 2016 Workshop.
Mr. Petit presented the updated CI P as included with the agenda materials.
CENTRAL CONTRA COSTA SANITARY DISTRICT
January 26, 2017 Special Board Meeting Minutes-Page 7
In response to a question from Member McGill, Mr. Petit acknowledged that the
capital projects identified in the next two years are consistent with the CWMP.
BOARD ACTION: Received the update.
E. Presentation on proposed FY 2017-18 and FY 2018-19 Capital Improvement
Budgets (CIB).
Capital Projects Division Manager Edgar Lopez re vie wed the presentation
included with the agenda materials on the proposed FY 2017-18 and 2018-19
CIB.
Member Williams and President Causey inquired as to what is included in
Applied Research and Planning Projects. Staff said that the budget is for
Treatment Plant related pilot programs. Member Ca usey asked what pilot
staff was considering for the Collection System. In the interest of time, their
additional inquiries would be added to the Parking Lot of items to be
addressed in the future.
BOARD ACTION: Received the presentation.
F. Update on Rate Impact Scenarios and Rate Implementation Schedules
Planning and Development Services Di'vi'si'on Manager Danea Gemmell
provided an Update on the rate impact scenarios and rate implemen to tion
schedules presented at the November 10, 2016 workshop, including
revenue assumptions, updated sewer service rate impact scenarios,
updated recycled water rate impact scenarios, the updated rate
implementation schedule, customer outreach workshops, and a list of
items recommended for Board action.
Member Williams asked if the Board has adopted a policy on debt
financing. Ms. Gemmell said not at thi's time, but staff is in the process of
developing one.
Member McGill commented that some of the larger capital projects over
the next ten years.will cause a spike i'n expenditures, resulting in Sewer
Service Charge (SSC) rate spikes absent debt financing. The Board must
look at the ratio of the larger expenditures to the total budget to determine
borrowing levels to smooth future rate increases. He rioted that SSC Rate
Scenario 2.1 is basically rate driven, in that it keeps rates smooth and as
low as possible.
Member Williams reiterated the point he raised at the previous workshop
that he is a strong proponent of good asset management and the
importance of intelligently getting the best possible life out of each asset.
At thi's point the forecast need is for$873 million to fund the capital
program over the next ten years, but he also recognizes that there is
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January 26, 2017 Special Board Meeting Minutes-Page 8
always going to be uncertainty. He said looking at SSC Rate Scenario 2.1
appears to make the most sense at this point.
Mr. Bailey asked if the Board was at a point where they were ready to
make a decision on the potential for using bond financing in certain
instances.
BOARD ACTION: Motion was made by Member McGill and seconded by
Member Williams to allow the use of bonds for financing large (less
frequent and non-recurring) infrastructure projects for purposes of
preparing budget and rate scenarios. Motion passed by unanimous
vote of the Board.
Member Nejedly was told he was correct in his understanding that the above
action does not authorize the use of bond financing; it simply allows budget
and rate scenarios to be prepared utilizing► bond financing for illustrative
purposes.
Ms. Susan Noe Welsh, a member of the public, stated that SSC Rate
Scenario 2.1 was, in her opi
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January 26, 2017 Special Board Meering Minutes-Page 9
Member Nejedly said REW rates should be kept at present levels with two
separate rates because if they are raised too high, people will opt out of
using REW if they are charged the same as potable water. A better time
to revisit this issue would be when infrastructures are in place for new
developments such as the Concord Weapons Station.
Ms. Gemmell presentee►the updated rate implementation schedule, reflecting
the Board's direction to bifurcate the rate hearings from the budget hearing.
The present schedule allows for the public hearing on rates to be held
April 20, 2017, and the public hearing on the next fiscal year budget on
June 1.
Ms. Gemmell also presented a slide showing the benefits of a two-year
versus a five-year rate, and concluded by stating that two upcoming
residential customer outreach workshops have been scheduled in February.
BOARD ACTION: Received the update.
G. Recap of Recommendations and Closing
BOARD ACTION: None.
8. BOARD ACTION FOLLOWING WORKSHOP
Take action by motion or provide direction to staff with respect to each of the
following items, which may include directing staff to bring back any or all of these
items for consideration at a future meeting:
A. Accelerate the public rate hearing on the annual Sewer Service Charge and
Recycled Water Charge to April 20, 2017.
BOARD ACTION: Motion was made by Member McGill and seconded by
Member Williams to set the public hearing on rates for April 20, 2017.
Motion passed by unanimous vote of the Board.
B. Allow the use of bonds for financing large (less frequent and non-recurring)
infrastructure projects for purposes of preparing budget and rate scenarios,
BOARD ACTION: Action on this item was taken earlier in the meeting.
(See Item 7.F.)
C. Establish whether the rate schedule Will be for one year, two years, or a
longer period.
A discussion took place during which it was noted that after the next two
years, staff should have more clarity regarding gasification and other energy
alternatives.
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January 26, 2077 Special Board Meeting Minutes-Page 70
President Causey said he preferred a five-year rate schedule because it
would save the costs of Proposition 218 notices and would not preclude the
Board from making any needed changes.
Member Williams said he did not necessarily disagree with President Causey
in concept, but so much more will be known as time goes by that he would be
in favor of a two-year rate schedule.
Member Pilecki said he believes there is too much uncertainty at this time for
a five-year rate schedule, but in two years he would consider a four-year rate
schedule.
Mr. Bailey said staff is working on some issues related to commercial
customers and may come back in a year or two with some recommendations
for the Board's consideration. Therefore, at this point, he said staff
recommends a two-year increase.
Ms. Welsh said she favored a five-year increase until she heard Mr. Bailey's
comments. She believes a two-year rate schedule makes more sense at this
time.
BOARD ACTION: Motion was made by Member McGill and seconded by
Member Nejedly to adopt a two-year rate schedule. Motion passed by
the following vote of the Board:
.AYES: Members: McGill, Nejedly, Pilecki, Williams
NOES: Members:. Causey
ABSTAIN: Members: None
D. For purposes of preparing Proposition 218 Notice, select preferred rate
scenario for:
1} Sewer Service Charge (Rate Scenario 1.0, 2.09 2.1 or 2.1 Blue); and
Member Nejedly said he was more inclined to recommend Rate
Scenario 2.0 but does not like bond financing. He said more
information should be considered before a decision is made.
Member Pilecki said he was leaning toward supporting Rate Scenario
2.1 Blue, stating he was prepared to make a decision now.
Member Williams said he too was prepared to make a decision at this
meeting. Like Member Nejedly, he said he is not a fan of►bond
financing but it is prudent under certain circumstances and only up to
the point of actual need. He said he would support Rate Scenario 2.
for two years.
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January 26, 2017 Special Board Meeting Minutes-Page 11
President Causey said he is not in favor of Rate Scenario 1.0 but any
of the rest of the rate scenarios were acceptable from his perspective.
However, if Member Nejedly would like to consider other rate
scenarios before making a decision, he was willing to table this item to
the next meeting.
BOARD ACTION: Motion was made by Member Pilecki and
seconded by Member Nejedly to postpone action on this item to
the February 2, 2017 meeting. Motion passed by unanimous vote
of the Board.
2) Recycled Water Charge.
Member Nejedly moved the first REW Rate Scenario depicting a 3
percent CP1 (consumer price index) adjustment in each of the next two
fiscal years. The motion was seconded by Member McGill.
Member Williams said he continues to believe that it is inappropriate
for a wastewater agency to subsidize recycled water rates. Therefore,
he was a proponent of the third REW Rate Scenario that matches
Contra Costa Water District's increase for former canallwell users.
President Causey tended to agree with Member Williams and would
prefer to move toward full cost recovery for the Recycled Water
Program.
BOARD ACTION: Motion was made by Member Nejedly and
seconded by Member McGill to authorize staff to prepare a
Proposition 218 Notice for Recycled Water Charges consistent
with a 3 percent CPI increase in each of the next two fiscal years.
Motion passed by the following vote of the Board:
AYES: Members: McGill, Nejedly, Pilecki
NOES: Members: Causey, Williams
ABSTAIN: Members: None
9. EMERGENCY SITUATIONS
None.
10. REQUESTS FOR FUTURE AGENDA ITEMS
None.
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January 26, 2017 Special Board Meeting Minutes- Page 12
11. ADJOURNMENT
The meeting was adjourned at 3:52 p.m.
Paul H. Causey
President of the Board of Directors
Central Contra Costa Sanitary District
County of Contra Costa, State of California
COUNTERSIGNED:
Elaine R. Boehme,.CMC
Secretary of the District
Central Contra Costa Sanitary District
County of Contra Costa, State of California