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HomeMy WebLinkAboutBOARD MINUTES 11-16-23)ICENTRAL SAN MINUTES* REGULAR BOARD MEETING Board Room Thursday, November 16, 2023 2:30 p.m. Open Session — Board Room (Video recorded) ROLL CALL BOARD OF DIRECTORS: BARBARA D. HOCKETT President MARIAHN. LAURITZEN President Pro Tem MICHAEL R. MCGILL TAD J. PILECKI FLORENCE T. WEDINGTON A regular meeting of the Board of Directors was called to order by President Hockett at 2:30 p.m. Secretary of the District Katie Young called roll: Present: Members: Lauritzen, McGill, Pilecki, Wedington, Hockett Absent: Members: None PLEDGE OF ALLEGIANCE The Board, staff and audience joined in the Pledge of Allegiance. PUBLIC COMMENT PERIOD No comments. REQUESTS TO CONSIDER MATTERS OUT OF ORDER None. CONSENT CALENDAR 1. Approve the following: a. November 2, 2023 Board meeting minutes 2. Approve proposed Board Member conference attendance for 2024 These summary minutes are supplemented by a corresponding video recording available on the District's website at centralsan.org. Book 71— Page 191 CENTRAL CONTRA COSTA SANITARY DISTRICT November 16, 2023 Board Meeting Minutes — Book 79-Page 192 3. Approve proposed Board Calendar for 2024 4. Set public hearing on December 21, 2023 at 2:30 p.m. to consider revisions to District Code Titles 6, 7 and 10 5. Update Board Policy No. BP 018 - Sick Leave for Temporary Employees 6. Consider revisions to Board Policy No. BP 048 - Budget BOARD ACTION: Motion was made by Member McGill and seconded by Member Wedington to adopt the Consent Calendar as recommended. Motion passed by unanimous roll call vote. OTHER BOARD ACTION ITEMS 7. Appoint Board President for a one-year term commencing January 1, 2024 President Hockett nominated Member Lauritzen as Board President, in accordance with Board Policy BP 044, for 2024. BOARD ACTION: Motion was made by Member Hockett and seconded by Member McGill to appoint Member Lauritzen as Board President for a one-year term commencing January 1, 2024. Motion passed by 4-0-1 roll call vote [Lauritzen abstain]. 8. Appoint Board President Pro Tern for a one-year term commencing January 1, 2024 Member Lauritzen nominated Member McGill as Board President Pro Tem, in accordance with Board Policy BP 044, for 2024. BOARD ACTION: Motion was made by Member Lauritzen and seconded by Member Pilecki to appoint Member McGill as Board President Pro Tern for a one-year term commencing January 1, 2024. Motion passed by unanimous roll call vote. 9. Receive Pre -Audit Fiscal Year 2022-23 Capital Improvement Budget Year -End Status Report Capital Projects Division Manager Edgar Lopez reviewed the presentation included in the agenda materials. Mr. Lopez briefly reviewed the charted variances and noted that all areas but one saw positive variances. Member Wedington asked for more detail about the Interest Income category that is showing a positive 2000% variance. CENTRAL CONTRA COSTA SANITARY DISTRICT November 16, 2023 Board Meeting Minutes — Book 71-Page 193 Finance Manager Kevin Mizuno stated that this large variance is due to the significantly higher interest rates that have occurred over the past year, and as a result Central San's investments are now earning much higher interest than in past years or compared to budget. In response to a question posed by Member McGill regarding handling multiple projects, Mr. Lopez responded that there are frequent changes in projects and their associated budgets. They are carefully monitored for variances, the ability of staff to handle multiple projects, and physical limitations associated with the footprint of each project. All these factors impact project completion and budgets. Member Wedington asked if the Budget for Solids Handling Facility Phase 2 was for construction only or includes other costs. Mr. Lopez responded that the budget includes some pre -construction costs and design costs. BOARD ACTION: Motion was made by Member Wedington and seconded by Member Lauritzen to receive the Capital Improvement Budget year-end report as presented. Motion passed by unanimous roll call vote. 10. Receive Fiscal Year (FY) 2022-23 Pre -Audit Year -End Financial Statement Summary Report, consider alternatives for handling various pre -audit budget variances, amend the 2023-24 Budget consistent with these actions, and direct budgeted funds to Pension Prefunding Trust Mr. Mizuno reviewed an updated presentation included in the agenda materials. Member Pilecki asked if the recommendations made by PFM in November 2016 would still be the best approach considering the current financial situation in the world. Mr. Mizuno acknowledged that Member Pilecki's question is a valid one and stated that current circumstances and possible different approaches because of the change in circumstances will be addressed in the upcoming Financial Workshop. As requested by Member McGill, Mr. Mizuno provided an explanation and background on the Rate Stabilization Reserve Account. Member Pilecki stated that his understanding of the Rate Stabilization Account was that it was created for possible use for multiple reasons. General Manager Roger Bailey confirmed that the Rate Stabilization Account can be used for multiple purposes as authorized by the Board of Directors. Member McGill stated that he understands that sometimes there is concern about being "super funded" from a pension perspective. Deputy General Manager — Administration Phil Leiber explained the concept of "super funding" where continued contributions may need to be made to Contra Costa County Employees Retirement Association (CCCERA) even if the pension funding level were to reach 100%. By contributing to the Pension Prefunding Trust, CENTRAL CONTRA COSTA SANITARY DISTRICT November 16, 2023 Board Meeting Minutes — Book 71-Page 194 the issue of "super funding" does not arise, and the funds could be used to make normal pension contributions to CCCERA. Member Pilecki suggested that the direction of variance funds be as recommended by staff for $2.1 M to Operations and Maintenance (O&M) capital reserves, $12M to working capital reserves, and $0.4M to self-insurance but that the balance be held until the Financial Workshop is conducted and further decisions can be made. Mr. Bailey suggested emphasized the importance of ensuring the pension and OPEB liabilities were fully funded, especially in light of market volatility. Member Pilecki noted that putting funds in the Other Post Employment Benefits (OPEB) trust and Pension Prefunding trust prohibits Central San from using those funds for any other reason. Discussion ensued about the merits of placing the funds in the Rate Stabilization Account, and the ability to earn a relatively high return in safe debt related investments under the California Government Code. BOARD ACTION: Motion was made by Member Pilecki and seconded by Member Lauritzen to Receive the Pre -Audit Year -End Financial Statement Summary Report, and take the following actions: A. Direct staff on the disposition of FY 2022-23 net budgetary variances totaling $18.2 million: 1. Operations and Maintenance (O&M) fund favorable budgetary variance of $5.8 million designated for the following purposes, $2.1 million - Retain in O&M working capital reserves consistent with adopted FY 2023-24 budget, $0.5 million - Transfer to Self-insurance fund to augment unanticipated FY 2023-24 legal costs, $3.2 million - Transfer to the Rate Stabilization Account. 2. Sewer Construction fund favorable budgetary variance of $12.0 million to be retained in working capital reserves. 3. Self -Insurance fund favorable budgetary variance of $0.4 million to be retained in working capital reserves consistent with the adopted FY 2023-24 budget. B. Amend the FY 2023-24 O&M fund budget to increase appropriations by $0.5 million to facilitate inter -fund transfers of prior year favorable budget variances to the Self -Insurance fund ($0.5 million). C. Direct $1.0 million in trust contributions already included in the O&M fund's FY 2023-24 adopted budget to the Pension Prefunding trust. Motion passed by unanimous roll call vote. CENTRAL CONTRA COSTA SANITARYDISTRICT November 16, 2023 Board Meeting Minutes — Book 71-Page 195 LEGISLATIVE MATTERS 11. Receive final 2023 California State Legislative Session report Communications and Government Relations Manager Emily Barnett reviewed the Central San 2023 Priority Legislative Tracking Sheet and informational articles provided in the agenda materials. Member McGill asked why the legislation regarding sick time for temporary employees was not presented previously to the Board and stated that he found the approval process a little disturbing. Ms. Barnett explained that the legislation was a last-minute approval and up until just recently was not expected to be passed. BOARD ACTION: Received the report. REPORTS AND ANNOUNCEMENTS 12. General Manger — Reports a. Receive Annual Recycled Water Program Update Associate Engineer Richard Foss reviewed the presentation included in the agenda materials. Member Wedington asked if any outreach was being undertaken to promote the program. Ms. Barnett confirmed that information has been shared with the public but opined that most of the new users were created by word-of-mouth and by observing an increased number of customers with water totes in their vehicles. Outreach will continue, but customer -to -customer information sharing seems to be the most active means of enlisting new users. Member McGill thanked Mr. Bailey for allowing the report to be presented and commended staff for their work. BOARD ACTION: Received update. b. Receive Fiscal Year 2022-23 Household Hazardous Waste Program Annual Report Senior Household Hazardous Waste Technician Geoff Niswander reviewed the presentation included in the agenda materials. Member Lauritzen asked if users of the reuse room were coming for other purposes and then discovered the reuse room or if their initial intent was to visit the reuse room. Mr. Niswander stated that both scenarios were true. CENTRAL CONTRA COSTA SANITARY DISTRICT November 16, 2023 Board Meeting Minutes — Book 71-Page 196 Member Wedington asked what the most common items were dropped off by customers. Mr. Niswander stated that, by weight, latex paint makes up the largest number of items, but many other types of items are also dropped off regularly. BOARD ACTION: Received the report. c. Monthly Lab Update: Covid-19/Wastewater Epidemiology Update The Board had no questions. BOARD ACTION: Received update. 13. General Manager —Announcements a. Announcements — November 16, 2023 No further announcements were made during the meeting. 14. Counsel for the District No report. 15. Secretary of the District Ms. Young announced the following upcoming Committee meetings: • Finance (Special) —Monday, November 27 at 9:30 a.m. BOARD ACTION: Received the announcements. 16. Board Members - Committee Minutes a. October 27, 2023 — Finance Committee (Special) — Chair Hockett and Member Lauritzen b. October 31, 2023 — Administration Committee (Special) — Chair Lauritzen and Member McGill BOARD ACTION: Received the Committee minutes. 17. Board Members - 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. a. Member Lauritzen • November 2, 2023 - Mayors Conference, City of Brentwood, 150 City Park Way, Brentwood, CA CENTRAL CONTRA COSTA SANITARY DISTRICT November 16, 2023 Board Meeting Minutes — Book 71-Page 197 Member McGill November 1, 2023 - Central San Service Awards Luncheon, The Greenery Restaurant, 1551 Marchbanks Dr., Walnut Creek, CA Member McGill also provided a written report covering his announcements and other meetings. Member Pilecki • November 1, 2023 - Central San Service Awards Luncheon, The Greenery Restaurant, 1551 Marchbanks Dr., Walnut Creek, CA • November 8, 2023 - Contra Costa Local Agency Formation Commission [stipend declined] Member Wedington • November 1, 2023 - Central San Service Awards Luncheon, The Greenery Restaurant, 1551 Marchbanks Dr., Walnut Creek, CA President Hockett • November 1, 2023 - Central San Service Awards Luncheon, The Greenery Restaurant, 1551 Marchbanks Dr., Walnut Creek, CA BOARD ACTION: Received the reports and announcements. 18. Board Members - Re:-, uests for Sti wend/Reimbursement or Conference Attendance No requests. EMERGENCY SITUATIONS None. REQUESTS FOR FUTURE AGENDA ITEMS None. ANNOUNCE CLOSED SESSION pursuant to Government Code Section 54957.7} District Counsel Leah Castella announced that a closed session would be held for Items 19 and 20. Member Pilecki announced that he would recuse himself from Item #20. RECESS TO CLOSED SESSION The Board recessed at 4:34 p.m. to reconvene in closed session in the Caucus Room after a brief break. CENTRAL CONTRA COSTA SANITARY DISTRICT November 16, 2023 Board Meeting Minutes — Book 71-Page 198 Closed Session (Not video recorded) CLOSED SESSION 19. Conference with Legal Counsel — Anticipated Litigation — exposure to litigation pursuant to Government Code Section 54956.9(d)(2): One Potential Case — • Roesbery Car Care 20. Conference with Legal Counsel - existing litigation pursuant to Government Code Section 54956.9(d)(1); • Kappel v. Central Contra Costa Sanitary District, et al., Contra Costa County Superior Case No. MSC19-01012 Member Pilecki recused himself from this Item. RECESS TO OPEN SESSION The Board recessed at 5:07p.m. to reconvene in open session in the Board Room. REPORT OUT OF CLOSED SESSION None. ADJOURNMENT The meeting was adjourned at 5:08 p.m. Barbara D. Hockett President of the Board of Directors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: ( _Vk Katie Yon C , , Civic Secreta f he ' trict Central Contra Costa Sanitary District County of Contra Costa, State of California