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Minutes - Board - 2014-07-24COSTA MESA SANITARY DISTRICT MINUTES OF BOARD OF DIRECTORS REGULAR MEETING JULY 24, 2014 CALL TO ORDER The Board of Directors of the Costa Mesa Sanitary District met in regular session on July 24, 2014 at 5:30P.M. at 628 W. 191h Street, Costa Mesa. PLEDGE OF President Ferryman led the Pledge of ALLEGIANCE Allegiance. INVOCATION Vice President Scheafer led the Invocation. ROLL CALL DIRECTORS PRESENT: James Ferryman, Robert Ooten, Art Perry, Arlene Schafer, Mike Scheafer DIRECTORS ABSENT: None STAFF PRESENT: Scott Carroll, General Manager; Alan Burns, District Counsel; Robin Hamers, District Engineer; Anna Sanchez, Administrative Services Manager; Wendy Davis, Interim Finance Manager; Javier Ochiqui, Management Analyst OTHERS PRESENT: Lawrence Jones, CR &R; Dean Ruffridge, CR &R; Jim Mosher, Resident; Barbara Geerlings, Resident; Patricia Linsky, Resident CEREMONIAL MATTERS AND PRESENTATIONS — None ANNOUNCEMENT OF LATE COMMUNICATIONS — Scott Carroll, General Manager, noted that written comments had been received from Mr. Jim Mosher and distributed to the Board for review. He noted that Mr. Mosher's comments regarding Item 17 would be addressed by District Counsel later in the meeting. COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 Alan Burns, District Counsel, indicated that a draft of General Manager Carroll's proposed contract had been submitted as a late communication. PUBLIC COMMENTS — President Ferryman invited members of the public to address the Board. Seeing no one, President Ferryman closed public comments. CONSENT CALENDAR 1. Board of Directors Study Session The Board of Directors Study Session Meeting Minutes of June 15, 2014 Meeting Minutes of June 15, 2014, was approved as presented. 2. Board of Directors Regular Meeting The Board of Directors Regular Meeting Minutes of June 26, 2014 Minutes of June 26, 2014, was approved as presented. 3. Occupancy report and payment to The occupancy report and payment to CR &R Environmental Services CR &R Environmental Services for the month of June 2014 was approved as presented. 4. Contract Payment to CR &R The Board of Directors approved payment Environmental Services for to CR &R Environmental Services for Recycling and Disposal Services recycling and disposal services for the month of June 2014. 5. Adoption of a Warrant Resolution The Board of Directors approved adoption No. CMSD 2015 -01 Approving of Warrant Resolution No. CMSD 2015 -01 District Warrant Registers Approving District Warrant Registers for the month of June 2014 in the amount of $710,049.12. 6. Directors' Compensation and The Board of Directors approved Directors' Reimbursement of Expenses compensation and reimbursement of expenses for the month of June 2014. 7. Sewer Lateral Assistance Program The Board of Directors approved the SLAP (SLAP) Update report as presented. COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 END OF CONSENT CALENDAR Director Schafer moved to approve the consent calendar. Director Perry seconded the motion. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None PUBLIC HEARINGS 8. Resolution No. 2014 -851 — Imposing Charges on the Assessment Roll for Solid Waste Collection & Resolution No. 2014 -852 — Imposing Charges on the Assessment Roll for Liquid Waste Collection Recommendation: That the Board of Directors adopt Resolution No. 2014- 851 imposing charges on the assessment roll for solid waste collection and Resolution No. 2014 -852 imposing charges on the assessment roll for liquid waste collection. President Ferryman opened the public hearing. General Manager Carroll noted that the solid and liquid waste rates had been previously approved and that proposed resolutions were to allow the new charges to be placed on the assessment roll. He noted that the solid waste rates will remain the same and the liquid waste rates would increase by two percent. Mr. Carroll indicated that the public hearing had been properly noticed and that no protests have been received. District Counsel Burns noted that the District has adhered to the Proposition 218 process and both rates have been justified through that process. He indicated that this process is a formality to impose the assessments. Discussion followed regarding sending out a reminder notice to the public of the two percent increase in the liquid waste rate. Director Perry moved to approved Resolution No. 2014 -851. Vice President Scheafer seconded the motion. President Ferryman closed the public hearing. COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None Director Schafer moved to approve Resolution No. 2014 -852. Director Ooten seconded the motion. Director Ooten noted that the two percent increase was justified by the second year budget to assist with the capital improvement projects. District Counsel Burns noted, for the record, that no one had left the hearing and that President Ferryman reopened the public hearing to hear the comments from Mr. Mosher. President Ferryman reopened the public hearing. Mr. Mosher commented regarding the rates being imposed and noted that the resolution referred to a report but did not specify the rates. District Counsel Burns noted that the report Mr. Mosher was referring to is an electronic report that the District Clerk needs to certify and provide to the Assessor. He indicated that the adopted rates were provided in the staff report. President Ferryman closed the public hearing. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None GENERAL MANAGER'S REPORTS President Ferryman moved Item 14 to this point in the agenda. 14. Sewer Lateral Assistance Program (SLAP) Appeal Recommendation: That the Board of Directors denies the appeal. General Manager Carroll introduced the item, noted that the Board discussed this item at the Study Session of July 15, and recommended denial of the appeal based on the SLAP procedures were not followed correctly. Mr. Carroll expressed concern that if the COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 Board approved this matter without the applicant following procedures it will be setting a precedent and recommended that the procedures be followed as it was written. Director Ooten expressed support of approving the SLAP refund of $1,600 due to the abrupt suspension of the SLAP program because of a lack of funds. Director Ooten made a motion for Ms. Linsky to be paid $1,600. He expressed concern that this would set a precedent but did not feel that there is much risk as this is an extenuating circumstances. District Counsel asked if Ms. Linsky had an opportunity to address the Board on the matter. Vice President Scheafer seconded the motion. President Ferryman invited Ms. Linsky to address the Board. Ms. Linsky indicated that her understanding at the time was that her rebate was denied as the program was no longer funded. She indicated that she reviewed, with Wendy Davis, Finance Manager, the video provided to her by the plumber and after viewing the video it was questionable as to whether the work performed was truly required. She noted that the plumber stated that they were aware of the SLAP procedures as they have worked with the District before and that the plumber stated the program had been suspended. She stated that she requested a copy of the before and after video for the work completed and the plumber agreed to provide her with the videos, instead, the plumber sent out a technician that afternoon to video the line, which Ms. Linsky determines that the plumber did not have a before and after video. Robin Hamers, District Engineer, indicated that he had reviewed the videos and believed that the plumber convinced the applicant to reline the line as the first approximately fifty feet was corroded cast iron pipe. He noted that there were no blockages in the line and that it was flowing fine and the work was unnecessary to be done at the time. He added that the process to remediate the cast iron pipe was questionable and could have been dug up and replaced by hand at less cost. Mr. Hamers noted that the program focuses on the necessity of what is being fixed to allow the sewer lateral to continue to work properly. Ms. Davis noted that the rebate is approved prior to the start of any work, not after. Ms. Linsky indicated that Ms. Davis made it clear that at the time a permit is generated, that a before video needs to be submitted and reviewed by District staff before the work is done. Ms. Davis reviewed the application process and noted that Ms. Linsky had not received, nor signed, the SLAP application which would indicate the she agreed to the terms and conditions of the program. She noted that the video that was submitted, with the year of COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 2008 on the date stamp, was unclear as to whether that was a before or after video as there was no narration. She noted that the application process had not been followed and that the plumber did not provide Ms. Linsky with the application. She also clarified that all additional appropriated funds had been allocated to the applicants who had submitted in fiscal year 2013 -14, and if the appeal was approved the funds would come out of the current fiscal year's budget. Mr. Carroll indicated that applications have been denied for not following procedures and that approving the appeal would set precedent. President Ferryman stated that the evidence was compelling against approving the appeal and expressed concern that an approval would appear to be a gift of public funds as there was no rationale behind the decision and felt that an exception could not be made. Director Ooten reiterated that staff was not following up on SLAP expenditures and that the program was abruptly suspended and applicants were turned away before the Board could increase the funding of the program. He felt that the District would have reimbursed Ms. Linsky if the program had not been suspended and noted that his motion stands. Director Schafer expressed concern about setting a precedent and noted that the plumber did not cooperate with Ms. Linsky by not providing her the application and not following procedure. Mr. Carroll stated that staff did its fiduciary responsibility by suspending the program and not continuing to expend funds that were unavailable. Discussion followed regarding the monitoring of SLAP funds. Mr. Carroll stated that even if funds were available, that Ms. Linsky would have been denied for not following procedures. Director Ooten expressed that he felt that the procedures were not followed because the plumber, who is familiar with the SLAP program, was aware that staff had suspended the program. Ms. Davis discussed the appropriate procedure and noted that had staff reviewed the before video, that Ms. Linsky would have received half of the cost of her video as it would have been determined that no work needed to be done. President Ferryman indicated a possibility that the plumber may have avoided submitting a before video as he may have been aware that no work needed to be done and did not want the video to be reviewed. He called for the question. COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 MOTION FAILED BY THE FOLLOWING VOTE: Ayes: Ooten, Scheafer Noes: Ferryman, Perry, Schafer Absent: None Mr. Carroll noted that an update on the SLAP program will be made available on each Board meeting agenda. Director Schafer questioned if a finding would be necessary for this item. District Counsel indicated that he would prepare a formal decision based on what was discussed at this meeting. President Ferryman supported creating a document to formalize the decision. District Counsel indicated that he will prepare a resolution confirming facts. Ms. Davis requested to review the after video provided to Ms. Linsky to ensure that the work had been completed. 9. Preliminary FY 2013 -14 Year -End Budget (4th Quarter Budget Report) Recommendation: That the Board of Directors receive and file this report. Ms. Davis provided a summary of the report noting a reduction in the solid waste fund due to staffing vacancies that were offset by contractual relationships established. She discussed savings due to the organics negotiations that brought the solid waste fund under budget, and noted a substantial savings in the sewer fund. Discussion followed regarding funds set aside for pump station abandonments, and unfunded pension liability funds. Director Ooten recommended that Mr. Carroll review Orange County Sanitation Districts staff report on unfunded liability and suggested having a discussion regarding unfunded liability at a study session meeting. There were no further questions or comments and the report was received. 10. Strategic Plan Quarterly Progress Report (4th Quarter) Recommendation: That the Board of Directors receive and file this report. Mr. Carroll indicated that the report is a quarterly update on where the District is at on achieving the goals of the Strategic Plan and made himself available to questioning. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 Discussion followed regarding grade four repairs. Director Ooten suggested that during the development of a new strategic plan a completion date be assigned to projects that are listed as "ongoing ". There were no additional questions or comments and the report was received. 11. NeoGov 13th Annual User Conference Recommendation: That the Board of Directors approves the District's Administrative Assistant attend the 2014 NeoGov user conference October 1 -3, 2014 in Las Vegas, Nevada Mr. Carroll provided a report and requested that the Board approve Dyana Wick, Administrative Assistant to attend the NeoGov user conference. He believes that her attendance would be a valuable cross training opportunity. Director Ooten made a motion to approve the recommendation. Director Perry seconded the motion. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None 12. 59th Annual California Association of Sanitation Aaencies (CASA) Conference Recommendation: That the Board of Directors give staff direction for attending the CASA Conference on August 20 -22, 2014 in Monterey, California. Mr. Carroll noted that the CASA Conference is out of the county and requires approval by the Board for its members to attend, and requested direction from the Board as to who would be attending. Director Perry made a motion to approve the recommendation. Director Schafer seconded the motion. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 Director Perry indicated that he, Director Schafer, and President Ferryman will be attending the conference. 13. Establish an Ad Hoc Committee for the Implementation of the Organics Recycling Program Recommendation: That the Board of Directors considers appointing two Board members to serve on an Ad Hoc Committee for the implementation of the Organics Recycling Program. Director Perry made a motion to approve the recommendation. Director Ooten seconded the motion. Mr. Carroll clarified that the Board would need to appoint two of its members to the Ad Hoc Committee and noted that an internal committee of staff and CR &R will facilitate the discussions of the Ad Hoc Committee. Director Perry added to his motion that Vice President Scheafer and Director Ooten be appointed to the Ad Hoc Committee. District Counsel discussed the differences between an Ad Hoc Committee and a Standing Committee and noted that it would be a violation of the Brown Act if a third Board Member were to attend the Ad Hoc Committee meeting. Vice President Scheafer seconded the motion. Mr. Mosher commented regarding the conditions that the Ad Hoc Committee must meet to not notice the meeting and who is able to vote on matters. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None ENGINEER'S REPORTS 15. Project Status Report Recommendation: That the Board of Directors receive and file the report. Mr. Hamers made himself available to respond to questions Discussion followed regarding line cleaning and the raising of manhole covers There were no additional questions or comments and the report was received. COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 TREASURER'S REPORTS 16. Investment Report for the Month of June 2014 Recommendation: That the Board of Directors approves the Investment Report for the month of June 2014. Marc Davis, District Treasurer, provided report details, and noted that the District purchased a negotiable certificate of deposit of $100,000. There were no questions or comments and the report was received. ATTORNEY'S REPORTS 17. Fourth Amendment to General Manager's Agreement Recommendation: That the Board of Directors approves the Fourth Amendment to the General Manager's Agreement. District Counsel Burns noted that the Board met in closed session to conduct Mr. Carroll's review and determined that an agreement was reached. He indicated that Mr. Mosher noted an ambiguity regarding the salary and stated that the agreement will amended to include the corrections. Vice President Scheafer made a motion to approve the recommendation. Director Ooten seconded the motion. Mr. Mosher commented noting a discrepancy in the total increase stated in the staff report, provided suggestions on how to pay the retroactive amount due to the General Manager per the contract, and requested clarification as to if the goals set for the General Manager were for the 2014 calendar year. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None Discussion followed regarding setting goals for the General Manager prior to the beginning of the fiscal year and tying in the strategic plan goals that Mr. Carroll is responsible for. Director Perry suggested placing the strategic goals on a study session agenda to review with the Board. There were no additional questions or comments. COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 18. Back Bay Center Easement Agreement Recommendation: That the Board of Directors approves the Easement Agreement that will allow for the installation of an emergency generator on Back Bay Center for backup power to the Irvine Lift Station. District Counsel Burns noted that the agreement memorializes the negotiations with Back Bay Center for backup power to the Irvine Lift Station. Director Ooten made a motion to approve the recommendation. Discussion followed. Director Schafer seconded the motion. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None LOCAL MEETINGS A. Orange County Sanitation District (OCSD) — (President Ferryman) Recommendation: That the Board of Directors accepts oral report. President Ferryman reported on his attendance of the OCSD Board meeting, discussed the $125 paid to reduce the Orange County Employees Retirement System (OCERS) and union discussions, and the interviewing of a new Financial Advisor. Director Ooten reported on the disqualification of a contractor. District Counsel reported that the lawsuit on the Kern case was thrown out due to untimely filing. B. Santa Ana River Flood Protection Agency (SARFPA) — (Secretary Perry) Recommendation: That the Board of Directors accepts oral report. Nothing to report. C. Independent Special Districts of Orange County (ISDOC) — (Vice President Scheafer) Recommendation: That the Board of Directors accepts oral report. Vice President Scheafer reported on upcoming meetings with Local Agency Formation Commission (LAFCO), discussions at upcoming meetings, and noted COSTA MESA SANITARY DISTRICT PAGE 12 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 that the District was the first to be highlighted in the ISDOC e- newsletter. D. California Special Districts Association (CSDA) - (Vice President Scheafer) Recommendation: That the Board of Directors accepts oral report. Vice President Scheafer reported that he will be completing a webinar for CSDA. E. Special District Risk Management Authority (SDRMA) — (Vice President Scheafer) Recommendation: That the Board of Directors accepts oral report. Vice President Scheafer reported on legislation regarding workers compensation. F. Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55 Operations Code Section 3.01.030 Recommendation: That the Board of Directors accepts oral report. Director Schafer reported on her attendance of the ISDOC meeting, WACO, City -Mesa- CMSD Liaison Committee meeting, study session, LAFCO meeting. District Counsel Burns noted that Director Schafer obtained a unanimous 35 -0 vote by the OC Vector Control Board for her nomination to the CSDA Board of Directors. Director Ooten reported on his visit to the City of Newport Beach Transfer Station. OLD BUSINESS - None NEW BUSINESS 19. Independent Special District of Orange County ( ISDOC) Executive Committee Recommendation: That the Board of Directors considers supporting Vice President Scheafer's candidacy for President on ISDOC's Executive Committee Director Schafer moved to approve the nomination of Vice President Scheafer to the position of President on ISDOC's Executive Committee. President Ferryman seconded the motion. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None Director Schafer indicated that she would like to bring forward a non - agenda item before the Board for discussion. COSTA MESA SANITARY DISTRICT PAGE 13 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD JULY 24, 2014 Director Ooten made a motion to discuss a non - agenda item. Vice President Scheafer seconded the motion. Director Schafer noted that the need arose for the Board to take action on the matter as there is a due date of August 15, 2014, which precedes the regular schedule meeting of August 28, 2014. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None Director Schafer expressed support of nominating President Ferryman for the CSDA award of Board President of the Year. The Board unanimously supported Director Schafer's nomination. Director Perry made the motion to approve the request. Vice President Scheafer second the motion. MOTION CARRIED BY THE FOLLOWING VOTE: Ayes: Ferryman, Perry, Ooten, Schafer, Scheafer Noes: None Absent: None It was determined that staff will prepare the nomination. Vice President Scheafer noted that SDRMA will fund his registration for the CSDA Annual Conference in Palm Springs. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS - NONE ADJOURNMENT There being no further business to come before the Board, President Ferryman adjourned the meeting at 6:55 P.M. Art Perry Secretary James Ferryman President