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Home My WebLink About01.a. Approve minutes of meeting held 03-25-2021 Page 1 of 5 Item 1.a. CENTRALSAN SANITARYjdf A- hom CENTRAL CONTRA COSTA , . April 15, 2021 TO: HONORABLE BOARD OF DIRECTORS FROM: KATIE YOUNG, SECRETARY OF THE DISTRICT SUBJECT: MARCH 25, 2021 SPECIAL BOARD MEETING MINUTES Attached are the draft minutes of the above Board meeting. ATTACHMENTS: 1. Draft Minutes of 03-25-21 Board meeting April 15, 2021 Regular Board Meeting Agenda Packet- Page 7 of 185 Page 2 of 5 CENTRAL SAN CENTRAL •NTRA COSTA SANITARY DISTRICT 5019 • MINUTES* BOARD OF DIRECTORS: TAD J PILECKI President SPECIAL BOARD MEETING DAVID R. WILLIAMS Multi-Purpose Room President Pro Tent Thursday, March 25, 2021 BARBARA D.HOCKETT 1.00m. MARIAHN LAURITZEN p' MICHAEL R.MCGILL DRAFT Open Session — Multi-Purpose Room (Video recorded) NOTICE In accordance with the Governor's Executive Order N-29-20, which suspended certain requirements of the Brown Act due to the ongoing COVID-19 pandemic, all Board Members participated in this meeting via teleconference. Members of the public were provided options to participate in the meeting as provided on the agenda. ROLL CALL A regular meeting of the Board of Directors was called to order by President Pilecki at 1:00 p.m. Secretary of the District Katie Young called roll: PRESENT(via videoconference): Members: Hockett, Lauritzen, McGill, Williams, Pilecki ABSENT. Members: None PLEDGE OF ALLEGIANCE Ms. Young recited the Pledge of Allegiance. PUBLIC COMMENT PERIOD No comments. These summary minutes are supplemented by a corresponding video recording available on the District's website at centralsan.org. April 15, 2021 Regular Board Meeting Agenda Packet- Page 8 of 185 Page 3 of 5 CENTRAL CONTRA COSTA SANITARY DISTRICT March 25, 2021 Special Board Meeting Minutes- Page 2 FINANCIAL PLANNING WORKSHOP 2. Conduct the Financial Planning Workshop, during which the following will be presented and discussed: • Current Financial Condition Review • Pension Overview and Funding Financial Strategies • Financial Plan Update • Rates General Manager Roger S. Bailey reviewed the recent financial accomplishments included in the agenda material. Director of Finance and Administration Phil Leiber reviewed the information included in the agenda material on Central San's current financial condition and other factors to be considered in the annual rates check-in and noted that, despite the challenges of COVID- 19, the agency was in good financial shape due to previous fiscal discipline provided by the Board. He also presented an overview of pension costs and financial strategies for reducing interest expense associated with the District's unfunded actuarial accrued liabilities (UAAL). One such strategy included the use of lower-cost debt financing (through State Revolving Fund (SRF) loans) to free up Sewer Service Charge revenue that otherwise would have gone toward the Capital program. In response to a question from President Pilecki, Mr. Leiber stated that the City of Concord pays a 33% share of the treatment plant and other general costs. This percentage covers operating costs and a share of capital projects related to the treatment plant and general improvements. Subsequently, he presented on pension and Other Post-Employment Benefits (OPEB) matters, including an overview of pension and OPEB funding, the issue of potential pension superfunding and why this is not a significant concern, and a potential pension funding that would achieve two important goals - reaching full funding, and saving annual interest carrying costs. He reviewed the approach of additional borrowing to support the capital project and using available revenues to pay down pension obligations, including the potential savings, and risks. Planning and Development Services Division Manager Danea Gemmell provided a financial plan update overviewing slides included in the agenda material. This included the status of the State Revolving Fund (SRF) Loan for the Solids Handling Facility Improvements Project (Solids Handling), capital program size and composition, financial plan assumptions, and recommended course of action, continuing with the previously approved rates for year 3 of the 4-year rate plan, and presented the financial plan update. In relation to the discussion regarding capital improvement loans, Director of Engineering and Technical Services Jean-Marc Petit provided an update on the bid opening extension recently announced for the Solids Handling Project, stating that staff will provide more information to the Engineering and Operations Committee at a future meeting. April 15, 2021 Regular Board Meeting Agenda Packet- Page 9 of 185 Page 4 of 5 CENTRAL CONTRA COSTA SANITARY DISTRICT March 25, 2021 Special Board Meeting Minutes - Page 3 In response to a question from President Pilecki, Ms. Gemmell advised that the annual impact of K-12 school usage is approximately $800,000. Member Hockett inquired why the colleges are not included in that figure. Senior Engineer Thomas Brightbill stated that colleges are generally charged based on consumption and, whereas with K-12 schools, they are billed on a per-student rate assuming certain water use by pupil and number of days on campus. Mr. Brightbill reviewed the sewer service charge rate portion of the presentation included in the agenda material, which included a comparison of Central San rates to peer agencies, rate trend, and recommendation for FY 2021-22 (year 3 of the 4-year rate plan). Member Lauritzen requested staff add the median comparison to the rate comparison chart, in addition to the average. Ms. Gemmell also reviewed recycled water rates, in which Board member discussion ensued. Member McGill suggested continuing free drive-up recycled water in the event of a drought, which was supported by Member Lauritzen. Member Williams opined that it is not cost effective to allow free usage overall for recycled water, which has value and a cost to produce; accordingly, the District needs to charge for the use of recycled water to cover its costs. Member Hockett concurred that recycled water has value and should be valued, and that the District does have to pay for the cost of its services. Ms. Gemmell advised that at the construction fill site, the users receive 100,000 gallons free and then contractors are charged for additional quantities beyond 100,000 gallons. Ms. Lauritzen opined that until recycled water is a default choice, the District should encourage and promote its use and make acquiring recycled water as easy as possible. President Pilecki stated that although the District wants to promote the use of recycled water, it needs to be paid for and there is a significant investment associated. He opined that the customers who have recycled irrigation available for their landscaping should be charged for the use, and those who receive recycled water from the Recycled Water Fill Station should not be charged. PFM financial advisor, Sarah Hollenbeck, stated that she was in agreement with the information and comments provided to the Board from Mr. Leiber regarding the merits of the pension funding proposal. The Board took a 10-minute recess at 2:42 p.m. Mr. Bailey reviewed the upcoming dates regarding the rate and budget hearings. April 15, 2021 Regular Board Meeting Agenda Packet- Page 10 of 185 Page 5 of 5 CENTRAL CONTRA COSTA SANITARY DISTRICT March 25, 2021 Special Board Meeting Minutes - Page 4 BOARD ACTION: Conducted the workshop and provided direction to staff through Board consensus as follows: • Move forward with the strategy described during the workshop for saving interest savings for pension UAAL costs; and • Maximize the use of SRF funding. OTHER BOARD ACTION ITEMS 3. Set public hearing for April 15, 2021 at 1:30 p.m. to consider the approved Sewer Service Charge (SSC) rates for Fiscal Year (FY) 2021-22 BOARD ACTION: Motion was made by Member McGill and seconded by Member Hockett to set a public hearing for April 15, 2021 at 1:30 p.m. to consider the approved SSC rates for FY 2021-22. Motion passed by unanimous roll call vote. ANNOUNCEMENTS None. ADJOURNMENT The meeting was adjourned at 2:51 p.m. Tad J. Pilecki President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Katie Young Secretary of the District Central Contra Costa Sanitary District County of Contra Costa, State of California April 15, 2021 Regular Board Meeting Agenda Packet- Page 11 of 185