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HomeMy WebLinkAboutBOARD MINUTES 04-04-24110ENTRAL SAN MINUTES* SPECIAL BOARD MEETING Board Room Thursday, April 4, 2024 1:15 p.m. Open Session — Board Room (Video recorded) Rni I C:AI I BOARD OF DIRECTORS: MARIAHN. LAURITZEN President MICHAEL R. MCGILL President Pro Ten: BARBARA D. HOCKETT TAD J. PILECKI FLORENCE T. WEDINGTON A Special meeting of the Board of Directors was called to order by President Lauritzen at 9: 95 p.m. Secretary Pro Tern Eileen Hansen called roll: PRESENT. • Members: Hockett, McGill, Pilecki, Wedington, Lauritzen 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. March 21, 2024 Board meeting minutes These summary minutes are supplemented by a corresponding video recording available on the District's website at centralsan.org. Book 72 — Page 36 CENTRAL CONTRA COSTA SANITARYDISTRICT April 4, 2024 Special Board Meeting Minutes - Book 72-Page 37 2. Approve expenditures incurred February 16, 2024 through March 7, 2024 3. Receive Budget -to -Actual Expenditure overview through the month of February 2024 4. Adopt Resolution No. 2024-007 authorizing execution of Grant of Easement to Pacific Gas and Electric (PG&E) over Central San property located at 4451 Blum Road, Martinez (APN 159-140-04) Member Pilecki requested that Item 1.a. be removed from the Consent Calendar for further discussion. BOARD ACTION: Motion was made by Member McGill and seconded by Member Hockett to approve Items 2 - 4 on the Consent Calendar as recommended. Motion passed by unanimous roll call vote. In regard to Item 1.a. on the Consent Calendar, Member Pilecki advised that corrections are needed to the Board Member Reports and Announcements section of the March 21, 2024 minutes. Members Wedington, Pilecki and McGill provided updates to the announcement section with the meetings that they attended. BOARD ACTION: Motion was made by Member Hockett and seconded by Member McGill to approve Item 1.a. on the Consent Calendar with the amendments provided by the Board Members. Motion passed by unanimous roll call vote. OTHER BOARD ACTION ITEMS 5. Provide voting direction on how to cast the District's vote for a Regular Member Special District seat up for election on the Contra Costa Local Area Formation Commission (LAFCO) Central San's LAFCO Liaison President Lauritzen recommended the District cast its vote for Board Member Michael McGill. BOARD ACTION: Motion was made by President Lauritzen and seconded by Member Pilecki to cast the District's vote for Michael McGill. Motion passed by unanimous roll call vote. 6. Adopt the attached side letter between the District and MS/CG adjusting the 2024 cost of living increase outlined in Memorandum of Understanding (MOU) Article II — Pay, General Increases from 2.40% to 3.75%, effective April 18, 2024 BOARD ACTION: Motion was made by Member Hockett and seconded by Member Wedington to adopt the side letter between the District and MS/CG. Motion passed by unanimous roll call vote. 7. Adopt the attached side letter between the District and Local 1 adjusting the 2024 cost of living increase outlined in Memorandum of Understanding (MOU) Article 11 — CENTRAL CONTRA COSTA SANITARY DISTRICT April 4, 2024 Special Board Meeting Minutes - Book 72-Page 38 Salary Provisions, Section 1.4 General Increases from 2.40% to 3.75% effective April 18, 2024 BOARD ACTION: Motion was made by Member Pilecki and seconded by Member Hockett to adopt the side letter between the District and Local One. Motion passed by unanimous roll call vote. 8. Adopt the attached side letter between the District and the Management Group adjusting the 2024 cost of living increase outlined in Memorandum of Understanding (MOU) Article IV — General and Merit Increases from 2.40% to 3.75% effective April 18, 2024 BOARD ACTION: Motion was made by Member Wedington and seconded by Member Hockett to adopt the side letter between the District and the Management Group. Motion passed by unanimous roll call vote. 9. Adopt Resolution No. 2024-008 outlining the employment salary and benefits of the unrepresented at -will employees' group and rescind Resolution No. 2023-050 BOARD ACTION: Motion was made by Member Wedington and seconded by Member Hockett to adopt Resolution No. 2024-008 and rescind Resolution No. 2023-050. Motion passed by unanimous roll call vote. 10. FINANCIAL PLANNING WORKSHOP a. Conduct the Financial Planning Workshop, in which the following will be presented and discussed: • Consideration of Current Financial Status as required by two-year rate ordinance; • Overview of FY 2024-25 Draft Capital Improvement Budget and Updated Ten -Year Capital Improvement Plan; • Updated Financial Planning Assumptions; • Overview of Sewer Service Charge Rate and Competitive Comparison to Peers; and • Alternatives for use of $3.2 million O&M Variance from FY 2022-23 General Manager Roger S. Bailey reviewed the objectives and introduced the Board's workshop included in the agenda materials. Deputy General Manager — Administration Phil Leiber and Planning and Development Services Division Manager Danea Gemmell reviewed the presentation included in the agenda materials and responded to several questions from the Board Members. Topics included a preview of staff recommendations, a review of current financial conditions (including debt overview), a financial plan update including the Capital Improvement Plan (CIP) outlook, Capital Improvement Budget (CIB) analysis, assumptions CENTRAL CONTRA COSTA SANITARY DISTRICT April 4, 2024 Special Board Meeting Minutes - Book 72-Page 39 related to inflation and interest rates, and the disposition of $3.2 million Variance Funds from Fiscal Year (FY)2022-23. Mr. Leiber reminded the Board that the current two-year rate ordinance called for consideration of the previously approved rate at the beginning of year two. This presentation summarizes the conclusion reached by staff and states that staff recommendation is to stay the course on the previously adopted 4% increase to Sewer Service Charge (SSC) rates for FY 2024-25 and perform an updated Cost of Service Study for FY 2025-26. Mr. Leiber stated that the financial condition is based on the assessment of four factors, one of which is the consistency of the revenue levels to maintain the projected spending level. He stated that the best course of action is for Central San to implement moderate increases at regular intervals. Doing so avoids the need to assess large increases less frequently which can impact the organization's ability to budget accurately and spend responsibly and are very unpopular with ratepayers. In response to a question posed by Member Pilecki regarding the $30 million designated in the 10-Year CIP for Recycled Water projects, Capital Projects Division Manager Edgar Lopez confirmed that total includes only what is currently planned and does not include any specific water exchange items. Mr. Lopez clarified the numbers designated as FY 2024-25 New C1B Allocation, Projected Carry -Forward, and Approved Allocations Total. In response to a question posed by Member Pilecki, Mr. Lopez confirmed that the approved appropriation amount for FY 2024-25 is approximately $125 million but that amount does not necessarily represent the actual expenditures anticipated for the same period. In response to a question posed by Member McGill, Mr. Lopez explained that the Budget underspent the past two years has recently changed and will continue to do so because of the increased delivery capacity impacted by availability of resources, including increased contractor deliverables capacity. Regarding the information presented on capital debt assumptions, Member Pilecki asked that as part of any future Cost of Service Study, larger rate increases be considered in lieu of assuming more debt, which can be more expensive in the long term. Ms. Gemmell confirmed that such a scenario will be included. Member McGill asked if the Sewer Service Charge data presented in comparison to peer agencies is accurate because the data included agencies that are not strictly independent wastewater districts. Ms. Gemmell explained that her staff has considered that factor and many others in their rate assessment and is confident that while the agencies compared are neither CENTRAL CONTRA COSTA SANITARYDISTRICT April 4, 2024 Special Board Meeting Minutes - Book 72-Page 40 organized nor operated in exactly the same way, Central San's rates continue to be below the average rates charged by other agencies. Mr. Bailey provided the Board with a summary of key points and requested feedback on the following items: 1. The previously approved rate adjustment of 4% remains warranted for FY 2024-25 and, following a public hearing to solicit public comment, approval of the 4% rate adjustment will be agendized at a future meeting. 2. The $3.2 million variance from FY 2022-23 will be deposited into the Rate Stabilization Reserve Fund. President Lauritzen asked if any of the Board Members had any concerns they would like to express about the proposed 4% rate increase. There were no concerns. BOARD ACTION: Motion made by Member McGill and seconded by Member Pilecki to deposit the $3.2 million O&M Variance from FY 2022- 23 into the Rate Stabilization Reserve Fund. President Lauritzen stated that previously the Board has not considered a two-year Budget because of certain circumstances and asked if there would ever be a time when it might be advantageous to move to a two-year cycle. Mr. Bailey responded that the Board had previously considered such change but at the time, the decision was made to continue with current practice. He stated that perhaps now is the time to consider such a change for future Fiscal Years, and a two-year Budget should also be formulated in tandem with the Strategic Plan. Mr. Leiber stated that inflation and the uncertainty of the ClP has been the two factors that have precluded the creation of a two-year Budget but if those factors are under control, a two-year cycle could be considered with adequate advance notice at the direction of the Board. Member Pilecki asked what amount of advance notice would be required to make the implementation of a two-year Budget possible. Mr. Leiber stated that lengthy advance notice would be ideal, influenced by the ability to link the budget to the Strategic Plan and the ability to make changes to the Oracle Enterprise Resource Planning (ERP) system. In response to a statement from Member Pilecki about the timing required to implement such a change, Mr. Bailey responded that any discussions about moving forward with a planned two-year Budget cycle will need to take place CENTRAL CONTRA COSTA SANITARY DISTRICT April 4, 2024 Special Board Meeting Minutes - Book 72-Page 41 as early in the next fiscal year as possible, with discussions to be held at both the Committee and Board level. Member Hockett opined that an additional factor that should be considered before making such a change would be the impact on staff time and other resources to make it possible and asked that staff be forthcoming with any concerns about possible challenges faced. REPORTS AND ANNOUNCEMENTS 11. General Manager —Announcements a. Announcements — April 4, 2024 Mr. Bailey announced that he will be out of office the week of April 7-13 to attend National Association of Clean Water Agencies (NACW4) Water Week in Washington D.C. to represent both NACWA and WateReuse in a conversation with Commissioner Camille Calimlim Touton of the Bureau of Reclamation on Tuesday, April 9. BOARD ACTION: Received the announcements. 12. Counsel for the District No report. 13. Secretary of the District Ms. Hansen announced the following upcoming Committee meetings: Real Estate, Environmental & Planning — Tuesday, April 16 at 8:30 a.m. Finance — Tuesday, April 16, at 2:30 p.m. Board Self -Evaluation Workshop, April 23 at 1:15 p.m. BOARD ACTION: Received the announcements. 14. Board Members - Committee Minutes a. March 19, 2024 — REEP Committee — Chair Wedington and Member Hockett b. March 19, 2024 - Finance Committee — President Lauritzen and Member Pilecki BOARD ACTION: Received the Committee minutes. 15. Board Members - Re�)orts and Announcements Board Member reports on recent meetings or conferences for which they received the stipend or for which the District paid their expenses. CENTRAL CONTRA COSTA SANITARY DISTRICT April 4, 2024 Special Board Meeting Minutes - Book 72-Page 42 a. Member Hockett • March 22, 2024 — Labor Discussion with Management Support/Confidential Group (MS/CG), Central San • March 28, 2024 - Citizen of the Year Dinner Honoring John A. Coleman, Lafayette Park Hotel & Spa, 3287 Mt. Diablo Blvd., Lafayette, CA • March 29, 2024 - Labor Discussion with Management Representative Group, Central San Member McGill • March 20, 2024 — Labor Discussion with Management Support/Confidential Group (MS/CG), Central San Member McGill also provided a written report covering his announcements and other meetings. Member McGill announced that he would be absent for the April 25, 2024 Board Meeting. Member Pilecki • March 19, 2024 — Labor Discussion with Management Representative Group, Central San Member Pilecki stated that his attendance at future events and/or meetings may be impacted by his participation in ongoing District litigation and that he would be sure to keep staff and the Board advised of any changes to his schedule. Member Wedington None. President Lauritzen • March 21, 2024 — 33rd Annual County Special Districts Association Dinner, 17007 Redwood Rd., Castro Valley, CA • March 22, 2024 — Labor Discussion with Public Employees Union, Local 1, Central San • March 22, 2024 — Labor Discussion with Management Representative Group, Central San March 28, 2024 — Citizen of the Year Dinner Honoring John A. Coleman, Lafayette Park Hotel & Spa, 3287 Mt. Diablo Blvd., Lafayette, CA President Lauritzen announced that she will be seeking election to the vacant East Bay Municipal Utility District (EBMUD) Board Position 2 seat. BOARD ACTION: Received the reports and announcements. CENTRAL CONTRA COSTA SANITARY DISTRICT April 4, 2024 Special Board Meeting Minutes - Book 72-Page 43 16. Board Members - Requests for Stipend/Reimbursement or Conference Attendance No requests. EMERGENCY SITUATIONS None. REQUESTS FOR FUTURE AGENDA ITEMS None. ADJOURNMENT The meeting was adjourned at 2:41 p.m. Mariah N. Lauritze6 President of the Board of - ctors Central Contra Costa Sanitary District County of Contra Costa, State of California COUNTERSIGNED: Eileen Hansen Secretary Pro Tern Central Contra Costa Sanitary District County of Contra Costa, State of California