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HomeMy WebLinkAbout19.b. Minutes-Administration Committee 09-18-18 Page 1 of 8 Item 19.b. CENTRALSAN CENTRAL CONTRA COSTA SANITARY DISTRICT October 4, 2018 TO: HONORABLE BOARD OF DIRECTORS FROM: KATIE YOUNG, SECRETARYOF THE DISTRICT SUBJECT: SEPTEMBER 18, 2018 -ADMINISTRATION COMMITTEE - CHAIR MCGILL AND MEMBER WILLIAMS Attached are minutes of the above Committee meeting. Strategic Plan re-In GOAL ONE: Provide Exceptional Customer Service Strategy 1 - Build external customer relationships and awareness ATTACHMENTS: 1. Administration Committee Minutes 09-18-18 2. Item 4.a. (Handout) October 4, 2018 Regular Board Meeting Agenda Packet- Page 248 of 265 Page 2 of 8 Arlai CENTRAL SAN CENTRAL CONTRA COSTA SANITARY DISTRICT 5019 IMHOFF PLACE, MARTINEZ, CA 9,4553-A392 REGULAR MEETING OF THE BOARD OF DIRECTORS: CENTRAL CONTRA COSTA JAMES A.NEJEDLY SANITARY DISTRICT President ADMINISTRATION COMMITTEE DAVIDWILLIAMS Presiddent Pro Tem PAUL H CAUSEY MINUTES MICHAEL R.MCGILL TAD J PILECKI TuesdaySeptember 18, 2018 PHONE: (925)222-9192 F p FAX. (921)372-0192 8:30 a.m. www.centralsan.org Executive Conference Room 5019 Imhoff Place Martinez, California Committee: Chair Mike McGill Member David Williams Staff.- Roger S. Bailey, General Manager Katie Young, Secretary of the District Ann Sasaki, Deputy General Manager Phil Leiber, Director of Finance and Administration Emily Barnett, Communications and Intergovernmental Relations Mgr. (left after Item 4.a.) Danea Gemmell, Planning and Development Services Division Manager (left after Item 4.a.) Teji O'Malley, Human Resources Manager Todd Smithey, Finance Administrator (left after Item 4.b.) Donna Anderson, Assistant to the Secretary of the District 1. Call Meeting to Order Chair McGill called the meeting to order at 8:30 a.m. 2. Public Comments None. 3. Items for Committee Recommendation to Board a. Review draft Position Paper to approve proposed revisions to: 1) Board Policy No. BP 005 - Statement of Investment Policy; and October 4, 2018 Regular Board Meeting Agenda Packet- Page 249 of 265 Page 3 of 8 Administration Committee September 18, 2018 Page 2 2) Investment Guidelines Documents (IGDs) related to the Public Agencies Post-Retirement Health Care Plan Trust, which includes both of the following: • IGD for the existing Government Accounting Standards Board 45 Other Post-Employment Benefits Trust (GASB 45 OPEB Trust), and • IGD for the Pension Prefunding Trust Mr. Leiber highlighted the proposed minor changes to each of the above documents. Member Williams asked if the ratings for permissible Central San investments as stated in BP 005 are the highest ratings available. Mr. Leiber said AAA is the strongest long-term rating, but those specified in BP 005 (AA, and the highest equivalent short-term ratings of A-1, P-1, F1) are still very high. Chair McGill commented that as a result of the Great Recession, lenders tightened their loan requirements but, in the bull market since then, it appears to him that the standards of some lenders are beginning to relax. He raised the issue to increase staff sensitivity when making investment decisions involving reliance on ratings assigned by rating agencies which appeared to have not moved as quickly as they should have on past instances of credit deterioration. Mr. Leiber said the bar has been set high for the District's investment portfolio and if there were to be some slippage, it would not fall too far. If investments were being purchased farther down on the rating scale, there are tools available to help guide those decisions as well. Staff will review those options and bring back tools that may be available. A brief discussion took place regarding the current balance of Other Post- Employment Benefits (OPEB) unfunded liabilities. Mr. Smithey said that as of the last valuation in 2016, the total accrued liability was $103 million, of which $50.6 million was unfunded. Member McGill said that when the OPEB Trust was created in 2009, the OPEB unfunded liability exceeded $100 million. COMMITTEE ACTION: Reviewed and recommend Board approval of proposed changes to BP 005 and both IGDs. October 4, 2018 Regular Board Meeting Agenda Packet- Page 250 of 265 Page 4 of 8 Administration Committee September 18, 2018 Page 3 4. Other Items a.* Receive mock-ups of sample Proposition 218 notices as requested by Committee at the May 9, 2017 meeting Ms. Barnett noted that the 2017 Proposition 218 notice was a big departure for Central San in its style and format, which included more imagery and less text. She said this is considered a best practice from the standpoint of communicating the District's messaging. Due to its success, other agencies, including East Bay Municipal Utility District and Contra Costa Water District, have or are in the process of updating the style of their Proposition 218 notices to model Central San's most recent notice. In response to the Committee's request, Ms. Barnett distributed three sample Proposition 218 mock-ups as referred to in the agenda material, each of which included either a cut-out form or tear-off card for customers to use to protest proposed rate increases. Cost projections associated with processing the protests were also provided, with variations for whether or not postage was prepaid by Central San, and staff time related to several anticipated return rates. Member Williams said he had no problem with tracking staff time to process additional protests, but he said the cost of doing so should not be a consideration in evaluating his suggestion. Ms. Barnett also shared a slide from a presentation given by Napa County Sanitation (see attached) about the results of an approach similar to that suggested by this Committee implemented with their last Proposition 218 notice. As indicated on the slide, Napa San incurred reputational damage and a lot of ire in their community. She noted that it can take a significant amount of time and money to recover from such an outcome; in fact, it can take years. It can also serve to vulcanize a small group of ratepayers who may have hard feelings toward the District for one reason or another. With this sort of approach, it is unlikely that protest levels will rise to a majority of ratepayers, yet the process will have upset a large portion of customers who may only know the agency by its good reputation. If trusted customer feedback is the end goal, Ms. Barnett said, in her opinion, there are other more accurate ways to obtain it without causing the damage that this suggested process could incur. One such option would be statistically accurate customer surveys. Chair McGill said that Ms. Barnett raised a significant point. Ultimately, genuine customer feedback is the most useful. He said it appears to him that generating a Proposition 218 notice to meet legal requirements, and obtaining meaningful customer feedback are two separate issue that are being mixed. October 4, 2018 Regular Board Meeting Agenda Packet- Page 251 of 265 Page 5 of 8 Administration Committee September 18, 2018 Page 4 Member Williams agreed that Central San's reputation is sterling and probably one of the best around and he does not want to interfere with that, but if the only thing a customer receives is positive feedback from the agency (e.g. awards won, quick response times), they are the ones paying for the service. He suggested pointing out something that is not positive about Central San, though such things are few and far between. This is just part and parcel of being a community. The people paying rates should understand that they have the right to be for or against any rate proposals. Mr. Bailey said distributing an informative and transparent Proposition 218 notice is important, but it is by no means a substitute for the multitude of information and data the Board has received during many hours of Board and Committee meetings and Board workshops leading up to making rate decisions on behalf of Central San. So, in essence, the ratepayers are being asked to make a cursory decision about rates based solely on a Proposition 218 notice. In his experience, he said most taxpayers will vote against any tax increases, so he suspects that if the protest process was as simple as sending in a pre-paid tear-off card, most likely they will do so. But that does not mean it is a good and reasoned vote. Mr. Bailey said he would encourage the Board Members to utilize the authority that the ratepayers/voters have entrusted them with and say no to considering this approach and not shy away from making informed decisions that are in the best interest of Central San's customers. Member Williams said that would amount to saying the Board does not need the ratepayers'opinions with regard to rates. He then said the question becomes whether the District wishes to abide by the spirit of Proposition 218, or not. Ms. Barnett said that customer feedback based on focus groups has indicated that customers do not have time to follow the District's issues as closely as staff and Board Members. To help keep them informed, Central San distributes both a legal Proposition 218 notice as well as a "soft" notice by reproducing virtually the entire text in the Pipeline publication during the Proposition 218 comment period, which also is mailed to every customer. Other agencies do not do that. Central San also goes above and beyond by hosting rate information workshops for residential and business customers throughout the service area. Mr. Bailey pointed out that Central San's current Board Members are all very engaged in the District's business and very well educated on the issues it faces. They do not rubber stamp anything and when it comes to considering rates; they make very informed decisions about which the public can be proud. He said he feels good about the current process. October 4, 2018 Regular Board Meeting Agenda Packet- Page 252 of 265 Page 6 of 8 Administration Committee September 18, 2018 Page 5 Ms. Barnett reiterated that the staff recommendation is to utilize a similar Proposition 218 notice in 2019 as that used in 2017 and to use other methods to obtain customer feedback. Member Williams said he preferred the mock-up Option 3 with a tear-off card insert. Chair McGill said he was inclined to support the staff recommendation as stated by Ms. Barnett. COMMITTEE ACTION: The Committee was split on this matter, with Chair McGill preferring to use a similar Proposition 218 notice in 2019 to that used in 2017 and utilizing other methods such as surveys to obtain customer feedback, and Member Williams preferring to modify the Proposition 218 notice to include a tear-off card insert to make it easier for ratepayers to protest. Because of the split decision, the matter will be presented to the full Board for consideration with no Committee recommendation. b. Receive information on contra Costa County Employees' Retirement Association's (CCCERA) valuation as of December 31, 2017 Mr. Smithey highlighted the information included with the agenda material, stating that the valuations as of December 31, 2017 are used to establish contribution rates for the coming Fiscal Year 2019-20. He said it is a good news report. Of note, CCCERA's overall funded status is 91% on a market value basis, which is important because that represents money in the bank. With respect to Central San's valuation, the funded status on a valuation value basis increased to 8 1.1% and the unfunded actuarial accrued liability (UAAL) decreased from $81.6 million to $74.1 million. He said if you take that UAAL amount and subtract the estimated $5.5 million balance in Central San's Pension Prefunding Trust (created in 2017 for rate stabilization) and the $7.6 million in estimated deferred returns for Central San, the unfunded pension liability is approximately$61 million, which represents substantial progress made toward reducing Central San's unfunded pension liabilities. COMMITTEE ACTION: Reviewed and provided input to staff. C. Receive information on new Catastrophic Leave Program Ms. O'Malley reviewed the memorandum included with the agenda material. She said the bargaining groups will develop guidelines for the Program, which will then be included in the charter, adding that this employee benefit requires no Board action. In Ms. O'Malley's opinion, the October 4, 2018 Regular Board Meeting Agenda Packet- Page 253 of 265 Page 7 of 8 Administration Committee September 18, 2018 Page 6 new Catastrophic Leave Program offers no foreseeable downside to the District. COMMITTEE ACTION: Received the information. d. Receive report on employee turnover rates for Fiscal Year 2017-18 Ms. O'Malley highlighted the information included in the agenda material. COMMITTEE ACTION: Received the report. e. Receive list of future agenda items COMMITTEE ACTION: Received the list. 5. Announcements a. Mr. Bailey announced that the Board will receive an update in the near future on the Refinery Recycled Water Exchange Project Preliminary Feasibility Evaluation between Central San, Contra Costa Water District, and Santa Clara Valley Water District. COMMITTEE ACTION: Received the announcement. 6. Future Scheduled Meetings a. Tuesday, October 9, 2018 at 8:30 a.m. (Member Williams not available; Member Pilecki will serve as alternate) Tuesday, November 6, 2018 at 8:30 a.m. Tuesday, November 20, 2018 at 8:30 a.m. 7. Suggestions for Future Agenda Items a. Mr. Bailey suggested an update on the upcoming transition to Ca1PERS for the provision of employee medical benefits. b. It was also suggested that additional information on Item 4.a. be provided to the full Board, including whether or not the Board has any discretion with respect to the counting of protests for rental properties and leased commercial space, how mailings are handled for multi-family apartments, etc. 8. Adjournment — at 10:17 a.m. * Attachment October 4, 2018 Regular Board Meeting Agenda Packet- Page 254 of 265 Attachment 2 Committee Item 4.a. (Handout) lies ult s 20 negative Letters to the Editor Ads in newspaper opposing rate sn increase Yard signs opposing the rate o t 1 increase NEW TAXIS ! Positive editorial in the Napa In Napa County Register Protest the 53� Sewer Rate Increase!, 21268 protests (less than 10%) October 4, 2018 Regular Board Meeting Agenda Packet- Page 255 of 265