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HomeMy WebLinkAboutBOARD MINUTES 04-20-17 1 enra nt�� a �'os a and aDistrict Oil Protecting public health and the environment 5019 Imhoff Place.,Martinez, CA 94553-4392 MINUTES' BOARD OF DIRECTORS: PAUL H CA USEY Pre cident REGULAR BOARD MEETING JAMES A NEJEDLY President Pro Tent Board Room MICHAEL R AICGILL Thursday, Aprii 20, 2017 TAD J PILECKI DAVID R WILLI-AMS 1:30 p.m. Open Session — Board Room (Video recorded) 1:30 p.m. 1 . ROLL CALL A regular meeting of the Board of Directors was called to order by President Causey at 1:30 p.m. Secretary of the District Elaine Boehme called roll.- PRESENT: oll.PRESENT: Members: McGill, Nejedly, Pilecki, Williams, Causey ABSENT: Members: None PLEDGE of ALLEGIANCE The Board, staff and audience joined in the Pledge of Allegiance. 3. PUBLIC COMMENT PERIOD William Vaughn of Lafayette submitted written comments to the Secretary of the District regarding a Central San sewer renovation project near his home. He stated that the tinting of the public workshop was too late to raise concerns about how the project may affect paving on a private road adjacent to his property. He requested the District slurry seal the road to extend the pavement life, but his request was rejected. He asked the Board to reconsider his request and schedule future public workshops to allow time for public concerns to be addressed Member Nejedly asked for the Board's indulgence in requesting a brief staff report at a future Board meeting to address the issues raised by Mr. Vaughn. Member Pilecki asked for the report to include information regarding contacts that Central San employees have had with property owners ahead of the project. These summary minutes are supplemented by a corresponding video recording available on the District's website at centralsan.org. Book 65-- Page 175 CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting Minutes—Book 65-Page 176 c 4. REQUESTS TO CONSIDER MATTERS OUT OF ORDER None. 5, CONSENT CALENDAR a. Approve minutes of Board meetings held on the following dates: 1) April 0, 2017 (regular); 2} April 7, 2017 (special —tour of facility). b. Adopt Resolution No. 2017-010 accepting a grant of irrevocable offer of dedication for sanitary sewer easements from Discovery Builders, Inc., a California corporation (ROW Parcel 2), as related to the Evergreen Project, Minor Subdivision 05--0002, located in North Lafayette; and authorizing staff to record documents with the Contra Costa County Recorder. C. Adopt Resolution No. 2017--011 accepting offers of dedication for sanitary sewer easements from Shapell Industries, Inc., and Toll Brothers as related to the Gale Ranch Phase 4, Road Acceptance 1250, Subdivision 9341, 0528, located in San Ramon; and authorizing staff to record documents with the Contra Costa County Recorder. d. Approve a new project in the amount of $200,000 for the Miner Road Sewer Emergency Repairs in Orinda, District Project 8439, and authorize the General Manager to transfer $200,000 from the Self-Insurance Fund to fund the project. Approval recommended by Engineering & Operations Committee. General Manager Roger S. Bailey pulled Item 5.d. so that Capital Projects Division Manager Edgar Lopez could provide the Board with updated information. BOARD ACTION: Motion was made by Member Williams and seconded by Member Nejedly to adopt the consent Calendar as recommended, except for Item 5.d. Motion passed by unanimous vote of the Board. With regard to Item 5.d., Mr. Lopez stated that the City of Orinda commenced repairs on the Miner Road culvert yesterday, but not on the sewer pipes. Staff recently learned that Central San cannot use the City's contract with Bay Cities to perform the sewer repair work, as originally envisioned. Therefore, staff is working to find its own contractor. 1-le noted that this change does not affect the staff- recommended action as set forth in the agenda materials; his comments simply were to apprise the Board of the most recent project status. District Counsel said staff may need to come back to the Board at a future date to approve award of the contract. CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting Minutes—Book 65-Page 177 Member Nejedly expressed frustration at the amount of time it has taken to repair the broken sewer lines, noting that the sinkhole has disrupted an entire neighborhood. BOARD ACTION: Motion was made by Member Nejedly and seconded by Member McGill to adopt consent calendar Item 5.d. as recommended. Motion passed by unanimous vote of the Board. Member Williams requested a staff report on lessons that can be learned from the Miner Road situation that could be helpful should something similar occur in the future. The Board Members concurred with this request. 6. PUBLIC HEARINGS a. Conduct a public hearing to receive comment and consider adopting Uncodified Ordinance No. 294 establishing a schedule of sewer service charge (SSC) rates in accordance with District Code Chapter 6.24.030 increasing the annual SSC for residential and non-residential customers for the next two fiscal years consistent with the chart below: FY 2017-18 FY 2018-19 Increase Annual SSC Increase _ Annual SSC Single Family Residences $35 $538 $38 $576 Multi-Family Residences $34 $521 $37 $558 Effective Date July 1, 2017 July 1, 2018 (Residential rales shown in dollars per residential unit.) Non-Residential As shown in the Proposition 218 Notice mailed to property owners. General Manager Roger Bailey reviewed the presentation included with the agenda materials. In response to a question from Member Pilecki, he presented an additional slide reflecting rate scenarios that, among other variables, included an additional X2.7 million in operations and maintenance savings. President Causey opened the public hearing. Sue Noe Welsh stated her belief that the Board and staff operate the District in a consistently responsible manner by continuing to pay down pension retirement debt and figure out ways to reduce expenses while at the same time ensuring that Central San has the means to implement the Comprehensive Wastewater Master Plan (CWMP) over the next 20 years. She said she was in favor of the proposed rate increases. Mary Bates of Pleasant Hill asked the Board to consider lowering the sewer service charge for disabled citizens and lower income seniors. CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting Minutes—Book 65-Page 178 President Causey closed the public hearing. District Counsel Kent Alm stated that all classes of customers are required to pay their respective cost of service. Ms. Boehme stated that on March G, 2017, a total of 107,755 Proposition 218 notices were mailed. As of the start of the public hearing, a total of 25 protests were received, 19 of which were legally valid (most that were not legally valid did not contain required signatures). In response to a question from Member Williams, Mr. Alm confirmed that Proposition 218 requires that protests be signed. The signatures do not have to be wet signatures; a copy or emailed PDF will suffice. Member McGill noted that part of the rationale for maintaining a 7 percent increase for both years was to avoid rate volatility and reduce the amount of bonds needed in later years. He noted that while there are interest costs associated With bonds, future ratepayers who will benefit from the envisioned long-term capital improvements will help share in the cost, rather than the current ratepayers paying it all up front. He commented that the Board has given staff direction to avoid rate volatility and asked whether the difference between 5.5 percent and 7 percent was considered volatile and if staff has a preference. Mr. Bailey said either would meet the revenue requirements in the near term. In reviewing the 10-year Capital Improvement Plan, Member Pilecki commented that there is uncertainty related to both gasification (which could have a $30-$40 million impact on the budget), and the need for digesters (with a $80 million impact). He opined that staff might know a lot more on these topics in the next couple of years. Member Williams noted that over the course of the last year, the Board has looked at a number of 10-year rate scenarios, with increases ranging from as low as 8.8 percent to 18-19 percent, the variations being a function of bond financing versus pay-as-you-go funding. He said he is a proponent of pay-as- you-go funding for ongoing maintenance and operations, including routine pipe replacement, but for capital projects as outlined in the CWMP with a life of 30-40 years, it does seem generally accepted that bond funding is appropriate. He said no more funds should be collected than are needed to run the District in a reasonable, high-quality fashion to comply with all regulations. Member Williams moved to approve a 8.5 percent rate increase in each of the next two fiscal years. The motion died for lack of a second. CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting Minutes—Book 65-Page 179 Member Pilecki moved to increase rates by 4.8 percent in each of the next two years based on applying the following sources of funds toward capital improvements: (1) $2.5 million annual payments to the unfunded actuarial accrued liability(URAL) (on the premise that it will be fully funded in 10 years); (2) $3.359 million fiscal year-end 2015-16 extra reserve fund balance currently earmarked for establishing a new Internal Revenue Code Section 115 Pension Trust; and (3) Any unspent budgeted funds remaining at the end of the current fiscal year. The motion died for lack of a second. Member Williams pointed out that the pension unfunded liabilities as well as those associated with the District's other Post-Employment Benefits (OPER) Trust are debts the District currently owes and he could not support a motion that does not continue paying down those debts. Mr. Bailey added that any concerns about superfunding would be addressed by creation of the Section 115 Trust. President Causey expressed concern that the public may not be able to withstand the anticipated 18 percent rate increases needed if bonds are not issued. !le supported the staff recommendation of 7.0 percent rate increases in each of the next two years, with the requirement that a public hearing be held before imposing the second--year increase. Motion was made by Member McGill and seconded by Member Causey to find that there was not a majority protest as indicated by the receipt of only 19 legally valid letters in opposition from more than 100,000 property owners, and adopting Uncodified ordinance No. 294 (including Section 3 requiring the holding of a public hearing before imposing any second-year increase) establishing a schedule of SSC rates in accordance with District Code Chapter 6.24.030 increasing the annual SSC for residential and nonresidential customers for each of the next two fiscal years by 7.0 percent, as specified in the chart above. Motion failed by following roll call vote of the Board: AYES: Members: McGill, Causey NOES: Members: Nejedly, Pilecki, Williams ABSTAIN: Members: None Motion was made by Member McGill and seconded by Member Williams to find that there was not a majority protest as indicated by the receipt of only 19 legally valid letters in opposition from more than 100,000 property owners, and adopt Uncodified ordinance No. 294 (including CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting Minutes---Book 65-Page 180 Section 3 requiring the holding of a public hearing before imposing any second-year increase) establishing a schedule of SSC rates in accordance with District Code Chapter 6.24.030 increasing the annual SSC for residential and non-residential customers for each of the next two fiscal years by 6.5 percent. Motion failed by following roll call vote of the Board: AYES: Members: McGill, Williams, Causey NOES: Members: Nejedly, Pilecki ABSTAIN: Members: None Member Nejedly said he does not favor the use of bonds, preferring instead pay-as-you-go methods. Also, he has been troubled by the wildly fluctuating actuarially calculated balances for unfunded liabilities over the past years but is pleased with the efforts the Board has made in reducing the UAAL. He believes that too much has been spent on studies in the recent past, monies that could have been used toward capital improvements. Despite projected rate increases in the 18-percent range in the future, Member Nejedly said he refuses to support bonds and believes costs can be cut. Member McGill pointed out that the treatment plant was built primarily with federal and state grants. Those programs are no longer available and it is incumbent upon the Board to figure out how to pay for maintenance and improvements. President Causey said studies and long-terra planning are necessary and they pay off in the future. He cited Central San's new asset management program as an example. Member Pilecki proposed a rate increase of 5.5 percent, predicated on anticipated budget savings for the current fiscal year. After some discussion, he made the following motion: BOARD ACTION: Motion was made by Member Pilecki and seconded by President Causey to find that there was not a majority protest as indicated by the receipt of only 19 legally valid letters in opposition from more than 100,000 property owners, and adopt Uncodified Ordinance No. 294 (including Section 3 requiring the holding of a public hearing before imposing any second-year increase) establishing a schedule of SSC rates in accordance with District Code Chapter 6.24.030 increasing the annual SSC for residential and non-residential customers by 5.5 percent for Fiscal Year 2017-18 and by 7.0 percent for Fiscal Year 2018- 19. Motion passed by following roll call vote of the Board: AYES: Members: McGill, Pilecki, Williams, Causey NOES: Members: Nejedly ABSTAIN: Members: None CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting Minutes—Book 65-Page 181 Mr. Alm noted that the figures in the proposed ordinance included with the agenda materials will need to be readjusted to conform with the above action. He suggested that an informational copy of Uncodified ordinance No. 294 be presented at the next Board meeting for the Board's information. ilio further Board action is needed. b. Conduct a public hearing to receive comment and consider adopting Uncodified Ordinance No. 295 establishing a schedule of recycled water charges in accordance with District Code chapter 6.33 increasing the Recycled Water Charge for recycled water customers by three percent for each of the next two years consistent with the chart below.- FY elow:FY 2017-18 FY 2018-19 Service Service User Group Increase Charge I ncrease Charge Class I (former potable users) $0.10 $3.58 $0.11 $3.69 Class 11 (former canal/well users) $0.05 $1.71 $0.05 $1.76 Effective Date July 1, 2017 July 1, 2018 (Rates shown in dollars per 1,000 gallons) Planning and Development Services Division Manager Danea Gemmell reviewed the presentation included with the agenda materials. President Causey opened the public hearing. There being no public comments, he closed the public hearing. Ms. Boehme confirmed that there were no protests filed with regard to the proposed rate increases for the recycled water user groups. Member Williams recollected casting a dissenting vote at the January 26, 2017 Workshop when the Board authorized staff to prepare a Proposition 218 Notice for recycled water charges consistent with a 3 percent CPI (consumer price index) increase in each of the next two fiscal years. He said the rates should be increased to cover the actual cost of providing recycled water to the small fraction of customers who receive the recycled water. He continues to hold the position that it is inappropriate for a wastewater agency to subsidize recycled water rates since recycled water is a new water supply and should be subsidized by water ratepayers, not wastewater ratepayers. President Causey said he was in favor of staff's original recommendation at the Workshop to move toward bringing the Class ll rate closer to the Class 1 rate, which would be a step toward full cost recovery for the Recycled Water Program. However, in the interest of moving things along, he said he would support the proposed 3 percent rate increases provided staff look very closely at future rates. BOARD ACTION: Motion was made by Member Pilecki and seconded by Member Nejedly to find that there was not a majority protest and CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting!Minutes—Book 65-Page 182 adopt Uncodified ordinance No. 295 establishing a schedule of recycled water charges in accordance with District Code Chapter 5.38 increasing the Recycled Water charge for Class I (former potable water users) and Class 11 (former canal/well users) user groups for the next two fiscal years as specified in the chart above. Motion passed by following roll call vote of the Board: AYES: Members: McGill, Nejedly, Pilecki, Causey NOES: Members: Williams ABSTAIN: Members: None 7. LEGISLATIVE MATTERS a. Receive update on pending legislative matters and provide direction on priority legislation. Communication Services and Intergovernmental Relations Manager Emily Barnett reviewed the Priority Legislation Tracking Sheet included with the agenda materials, stating that Board direction was requested with regard to the position to be taken by Central San on the identified priority legislation. BOARD ACTION: Motion was made by Member McGill and seconded by Member Williams to adopt the staff recommendation to support the five pieces of priority legislation as identified on the Priority Legislation Tracking Sheet. Motion passed by unanimous vote of the Board. 8. REPORTS AND ANNOUNCEMENTS a. General Manager 1) Announcements a) Awards Received at the California Association of Public Information officials (CAPIO) b) General Manager Authorized Contracts, Agreements, Etc. - First Quarter 2017 C) Request for Interest (RFI) in a public-private partnership (P3) for development and implementation of a full-scale bioenergy facility issued and posted on PlanetBid website d) Sinkhole being repaired at St. Mary's College in Moraga CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting Minutes—Book 65-Page 183 No further announcements were made at the meeting. BOARD ACTION: Received the announcements. Due to time constraints, Items 8-b., 8.c., and the entirety of Item 8.d. were postponed to the next meeting. b. Counsel for the District BOARD ACTION: Report postponed to next meeting. C. Secretary of the District BOARD ACTION: Report postponed to next meeting. d. Board Members 1) Committee Minutes a) April 11, 2017 —Administration Committee — Member McGill and Member Williams. b) April 11, 2017 — Engineering & operations Committee — Member Nejedly and President Causey. d BOARD ACTION: Postponed to next meeting. 2) Reports and Announcements - Board Member reports on recent meetings or conferences for which they received the stipend or for which the District paid their expenses. Member McGill 9 April 6, 2017 — Contra Costa County Mayors' Conference hosted by the City of Orinda. Speaker: Larry Sly, Executive Director of Food Bank of Contra Costa and Solano Counties. • April 17, 2017 -- California Special Districts Association -- Contra Costa Chapter Meeting (CCSDA) in Martinez. ■ April 18, 2017 — Liaison meeting with Pleasant Hili Mayor and City Manager. o April 19, 2017 — California Association of Sanitation Agencies (CASA) Legislative Day in Sacramento. CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting Minutes--Book 65-Page 184 • April 20, 2017 — Industrial Association of Contra Costa County (IACCC) Forum. Speaker: Assembly Member Grayson regarding state legislative and regulatory issues. Member Ne'edl Member Pilecki Member Williams President Ca„us_y BOARD ACTION: Reports postponed to 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. No requests. 9. EMERGENCY SITUATIONS None. 10. REQUESTS FOR FUTURE AGENDA ITEMS Member Williams reiterated his request from earlier in the meeting for a staff re . g port on lessons that can be learned from the Miner Road situation in Orinda that could be helpful should something similar occur in the future. The Board Members concurred with this request. 11. ANNOUNCE CLOSED SESSION (pursuant to Government Code Section 54957.7 District Counsel Cent Alm announced that a closed session would be held for Item 13.a. 12. RECESS TO CLOSED SESSION The Board recessed at 3:52 p.m. to reconvene in closed session in the Third Floor Informal Conference Room. CENTRAL CONTRA COSTA SANITARY DISTRICT April 20, 2017 Board Meeting Minutes—Book 65-Page 185 I Closed Session — Third Floor Informal Conference Room (Not video recorded) 13. CLOSED SESSION a. Conference with labor negotiators pursuant to Government Code Section 54957.6: District Negotiators: • I EDA • Roger S. Bailey, General Manager • Ann K. Sasaki, Deputy General Manager • Philip R. Leiber, Director of Finance and Administration • Teji O'Malley, Human Resources Manager Employee Organizations: izations: • Employees' Association, Public Employees Union Local One • Management Support/Confidential Group (MS/CG) • Management Group 14. RECESS TO OPEN SESSION The Board recessed at 4:50 p.m. to reconvene in open session. 15. REPORT OUT OF CLOSED SESSION None. 16. ADJOURNMENT The meeting was adjourned at 4:50 p.m. Paul H. Causey, P.E. President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: A Elaine R. Boehme, CMC Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California