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Minutes - Board - 2010-04-22COSTA MESA SANITARY DISTRICT MINUTES OF BOARD OF DIRECTORS REGULAR MEETING APRIL 22, 2010 CALL TO ORDER PLEDGE OF ALLEGIANCE INVOCATION ROLL CALL • DIRECTORS PRESENT: DIRECTORS ABSENT: The Board of Directors of the Costa Mesa Sanitary District met in regular session on April 22, 2010 at 5:30 p.m. at 628 W. 19th Street, Costa Mesa. Director Ferryman led the Pledge of Allegiance. Mr. Fauth gave the invocation. Arlene Schafer, Robert Ooten, Gary Monahan, James Ferryman, Art Perry STAFF PRESENT: Scott Carroll, General Manager; Joan Revak, Office Manager /Clerk of the District; Robin B. Hamers, District Engineer; Alan Burns, Legal Counsel; Tom Fauth, Operations Manager; Marc Davis, Treasurer; Sherry Kallab, Administrative Manager OTHERS PRESENT Shawn Dewane, Director Mesa Consolidated Water District Brett R. Barbre, Director Municipal Water District of Orange County John Withers, Director Irvine Ranch Water District • r • COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 Susan Trager, Commission Vice Chair Laguna Beach County Water District. Charley Wilson, Director Santa Margarita Water District ANNOUNCEMENT OF LATE COMMUNICATIONS Ms. Revak reported there were no late communications received after posting the agenda and mailing the Board packet. CONSENT CALENDAR Director Ferryman moved to approve the Consent Calendar. Director Monahan seconded the motion. Motion carried 5 -0. REPORTS MINUTE APPROVAL Minutes of Sewer System Committee Meeting — March 16, 2010 The Minutes of the Sewer System Committee Meeting of March 16, 2010 were approved as distributed. Minutes of Recycling Committee Meeting The Minutes of the Recycling Committee — March 22, 2010 Meeting of March 22, 2010 were approved as distributed. Minutes of the Regular Board of Directors Meeting — March 25, 2010 Minutes of the Special Meeting — April 7, 2010 Refunds The Minutes of the Regular Board of Directors Meeting of March 25, 2010 were approved as distributed. The Minutes of the Special Meeting of April 7, 2010 were approved as distributed. There were no refund requests for the month of March 2010. Occupancy Report and Payment of The Trash Occupancy Count documented $196,795.32 to Costa Mesa Disposal — one increase for the occupancy report for March 2010 solid waste collection as of April 1, 2010. Therefore, the total for March is 21,495 and the payment of $196,795.32 was ratified. 0 • • COSTA MESA SANITARY DISTRICT MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 Monthly Spill Report to State Water Resources Control Board Waste Diversion Report for March 2010 Contract Payment of $178,562.61 to CR Transfer —March 2010 PAGE 3 The Monthly Spill Report to the State Water Resources Control Board (SWRCB) for April 2010 was accepted as submitted. The Waste Diversion Report dated March 2010 was accepted as submitted. The contract payment of $178,562.61 to CR Transfer for recycling services and disposal for the month of March 2010 was ratified as submitted. Contract Payment of $10,733.30 The contract payment of $10,733.30 to CR to CR Transfer - Santa Ana Transfer for recycling services and disposal Heights /Newport Beach — March 2010 for Santa Ana Heights /Newport Beach for the month of March 2010 was ratified as submitted. Ordinance Enforcement Officer's The Ordinance Enforcement Officer's Report Report dated April 12, 2010 was accepted as submitted. ENGINEER'S REPORTS Project Status Report The Project Status Report dated April 2010 was accepted as submitted. Howard S. Wright Contractors Invoice The Howard S. Wright Invoice for work in the amount of $321,722.88 performed through March 31, 2010 in the amount of $321,722.88 was ratified as submitted. TREASURER'S REPORTS Financial Report as of March 31, 2010 Treasurer's Report as of March 31, 2010 The Financial Report as of March 31, 2010 was accepted as submitted. The Treasurer's Report as of March 31, 2010 was accepted as submitted. • • • COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 Warrant Register for the month of Warrant Resolution #CMSD 2010 -10 was March 2010 in the amount of approved, authorizing the President and $1,027,898.42 Secretary to sign the warrant ratifying the payment of certain claims and demands, and specifying the funds out of which the same were paid in the amount of $1,027,898.42. Directors Compensation & Reimbursement of Expenses for the month of March 2010. Director Compensation and Expense Reimbursements for the month of March 2010 were approved and ratified as follows: President Schafer: $1,326.00 + $22.00 Vice President Ooten: $1,326.00 + $47.00 Director Monahan: $442.00 Director Ferryman: $1,326.00 + $12.00 Director Perry: $884.00 END OF CONSENT CALENDAR President Schafer motioned to consider a non - agenda item because the need arose after posting of the agenda. Director Monahan seconded the motion. Motion carried 5 -0 PUBLIC COMMENTS President Schafer acknowledged the public and noted they were in attendance to present comments on Item XV.D.1. of the agenda. President Schafer stated after the March 25, 2010 Board of Directors meeting where Mr. Freschi and Mr. Dewane spoke, she realized the Board of Directors should have offered time for Mr. John Withers and Mr. Charley Wilson to address the Board. District Counsel Alan Burns stated there was a question as to whether an item could be reconsidered and as the item is properly noted on the agenda, and in compliance with the Brown Act, the Board can legally reconsider the item. Mr. Withers of the Irvine Ranch Water District and the ISDOC representative to LAFCO expressed his appreciation to the CMSD Board of Directors to allow him to speak and stated he has served on LAFCO for 16 years since Special Districts were seated and continues to serve as he is passionate about Special District form of government and believes we are the ones closest to the people and are very focused on the role he plays in serving special districts. Mr. Withers stated he is an elected official on the Irvine Ranch Water District and has served for twenty one years. More recently became a member of the Board of the Orange County Sanitation District and very proud of the assignment he has there. After only six months he is serving on the Steering Committee and Vice Chairman on the Administrative and Finance Committee and he thinks it is in recognition of his experience and the fact he is enthusiastic about whatever he undertakes. Mr. Withers also serves on the National Water Research Institute Board and does not have ambitions for higher office. "I really like what I do and I am proud that I have been COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 endorsed by a number of LAFCO colleagues. Supervisor Bill Campbell said to me, `I don't agree with you on all the issues, but I am endorsing you and Charley because I think you have done a great job.' Peter Hertzog, President of LAFCO and Susan Wilson both endorse me and to be represented by colleagues is meaningful to me and I take a special pride in that. We have letters from Congressmen, Gary Miller, Ken Calvert, and State Senator Tom Harmon and I think anyone can do that but I don't know that they know that much about LAFCO. It's the 27 special districts that are very aware of LAFCO that we care most about. I am proud of the fact that some of the smallest support our candidacy and I am real proud of the fact that the Capistrano Bay Community Services District, Three Arch Bay Community Services District, Emerald Bay, Sunset Beach Sanitary District, Surfside Storm Water Protection, Surfside CSD, Rossmoor /Los Alamitos Sanitary District are all endorsing our candidacy. The key thing about LAFCO is you have to count to four. You need four votes to get something done or you need four votes to prevent something from getting done. Because I've been there so long and am really a resource, people will say, John, what do you think? We have been very effective in reaching out. The key is making the bridge to the county members, the public member and putting the coalition together. I tell people I am the middle of five kids and that's true and had to work with my brothers and sisters and kind of a compromiser and that serves me well on LAFCO. I am very proud of some of the work we have done. Another issue at LAFCO is the municipal service review process and it is required by state law that every five years must do one and I am real proud of the fact we have turned it around 180 degrees. It used to be we would worry about what LAFCO will come up with and slam something on us. That has changed completely. LAFCO is now more of a resource and the emphasis is on local people to develop things they want to do and bring it up to LAFCO. I am real proud of the progress we have made to that extent. Also in running our LAFCO staff in the last two years we have reduced our budget by 15% the last two years and this year's proposed budget has no increase. We run it like a business and are mindful of the resources we all pay and it is based on gross revenue of the budget, size of the district on a sliding scale and we are real proud of that. On the MWDOC issue, I have been reelected to LAFCO four times, it has never been an issue. No one has ever said I have not been responsive. This year we did have a big issue with this whole north /south county, to split up MWDOC. I have never felt that was a good idea. I don't think the benefits outweigh the costs and all the distractions and quite frankly delude our effectiveness as a county. I am very happy to report about ten days ago — I give MWDOC credit — they reached out to the south county people and made some additional concessions, presented a package to south county and all the south county agencies have all ratified the frame work for settling this. I understand there were a couple of issues raised for clarification. I understand the general manager talking. My own district has ratified the framework for settlement by a unanimous vote. We wanted to lead by example. This thing has been going on for about three years and everybody knows we've spent way too much money and time on this thing. I took the view that because I am on LAFCO I really should stay out of the negotiations, I didn't want to be �. biased. In looking back on that, maybe I should have gotten involved earlier — maybe it could have been solved earlier. I am proud of the fact this thing is 90% of the way there. 0 COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 It is imminently resolvable and I know from my own district and others we are committed to making it work and being problem solvers. I brought a copy of the south county letter if you would like to see it. I think this is why there is a campaign. You probably have received lots of calls, from congressmen and others. My hope is that we can get this thing settled and get on to the work before us. I would just say in closing, of all the Boards I serve on, I think I like LAFCO the best just because of the challenges it presents — people from all walks of life — big districts, small districts - trying to do the best for their community, people down in Coto, south county, people trying to figure how they are going to govern their cities. It means a lot that I continue to work on this thing, I am very dedicated and passionate about it, I try to be very honest, transparent and accessible to people. I will continue to be that way. I believe Arlene Schafer and I have a great relationship on LAFCO — we have worked very close on different issues. I have worked with Director Ferryman at OCSD and I think we have a great relationship. I know there have been times where there have been issues between IRWD and the San District and I know there were one where there was some conflict and Director Ferryman called and said to me, `this is nuts, let's get it solved' and I said `you are right' and we brought people together and that's the kind of guy I am and what you see is what you get. I have been called all kinds of things in this campaign and it's really too bad, but I believe let's take the high road. I believe in being positive and talking about my experience and the accomplishments of LAFCO. We have great staff. I respectfully ask for your support, it would mean a lot to me. I'll try to continue the good work I have done and I very much appreciate your time and attention. If there are any questions, l would be happy to answer and questions you might have. You may or may not know there was a piece of legislation called the " Gotch" bill by Assemblyman Mike Gotch .back in 1992 that reformed LAFCOs and gave LAFCOs new powers to consolidate like -kind agencies and special districts. The trade -off was that if LAFCO was going to have these powers, special districts should have a seat at the table. I originally ran as the alternate on LAFCO and have been there ever since, reelected four times and never been challenged. This year because of other issues it has gotten very political. I am not a vindictive guy, win, lose or draw I will continue to do good work." Director Monahan asked if Mr. Withers was involved in the Santa Ana Heights and Irvine Ranch Water District dispute of a few years ago, was it a LAFCO issue. Mr. Withers replied, "Santa Ana Heights was a private, mutual water company and for whatever reason they decided to go out of business and went to auction of their private shares and actually, I think all of us, Irvine Ranch, Mesa Consolidated and the public...... the big competition at the time were the private water companies were all bidding like sharks in the water, and we decided at IRWD that it got down to a matter of economics and what people were willing to pay. In the end our district paid about $1100 per share and you owned a share by virtue of owning a fee piece of property. In the end it was a bid and again, you can look back on history and what did and didn't happen, people were accused of different things. I do know that Susan Trager, who is here tonight, was actually the attorney for the Santa Ana Heights Mutual Water Company. On the transparency Issue, my District has been Involved in several consolidations and I have always felt it was not fair for me to participate in those issues. On every consolidations • COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 our District has been involved I have recused myself on every vote because I did not think it was the right thing to do. It is something that goes back ten years and you can check the record and I've been very consistent on it. Thank you very much." President Schafer asked if Mr. Wilson would like to speak. Mr. Wilson stated "I have had the privilege of serving as the special district alternate for the past eight years. I came into LAFCO in 2002. My home base is an elected board member of the Santa Margarita Water District that has its own history in a private takeover attempt, which is what brought me into the water business when a hostile takeover was attempted. I have also 15 years of working experience in Costa Mesa back when John Seymour when he represented the area. The work I did in my current capacity working for the electric utility with Southern California Edison where I served as your liaison for a number of years. For a long time I hosted your local public access television show and many of you were guests on the show. I actually know Costa Mesa more than a lot of city communities I've lived in over the years. I appreciate being able to come here and talk to you and present my qualifications. As I see it the LAFCO issue without covering the stuff John covered, is about background and my background is well established and I am in the utility business and understand the utility business. As with John, I am not interested to run for higher office and am not interested in using this as a • platform to run for higher office. This is not a place where you make a lot of friends but that is part of the challenge. Because I am an expert in utility kinds of things it.is a place where I find where I can best contribute to local government in Orange County. It is about expertise — the Cortese -Knox- Hertzberg Act is not a simple Act. It is not something that you want on the job training. It.takes a long time to understand it and how it works and how it applies to special districts. I have that expertise after eight years of service. It is about experience. You get that experience by actually sitting at the dias and although I serve as your alternate member, one of the great things about serving as an alternate in Orange County is unlike other boards where they don't even allow you to sit at the dias and kind of put you off in another room. Alternates in this case have all rights and activities up until the vote and I vote only if John or Arlene are not in attendance. I have the knowledge and ability to still have an impact because of the way they allow active participation and I have used that, according to Joyce, I have the best attendance of all the commissioners, both seated and alternates and I take this very seriously in my obligation to represent special districts. It's about relationships; you have to be able to work with city members, county members, public members, you've got to be able to have your views heard and understand so that an informed choice can be made. That is what LAFCO is about. Anyone who wants to come into LAFCO with a pre- determined outcome is very badly mistaken. On one day you will have agreements, on another you will have disagreements. As John Campbell said, `you guys deserve to be there the way you conduct yourselves is appropriate and I support you being there and continuing your service'. Peter Hertzberg said basically the same thing. I went through a very difficult period with an MSR with the El Toro Water District. Peter thought Lake Forest ought to have El Toro as they were neat lines on the map. Peter now understands that neat lines on a map have nothing to do with hydraulics and how water districts operate. He now • COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING FIELD APRIL 22, 2010 understands as we have a relationship in which he was willing and able to listen and we were effective in that. Relationships become very, very important as you go forward and your effectiveness. We have been very effective as your team, literally with the three members in this room as your special district representation. El Toro exists today because of our effectiveness, Emerald Bay exists today because of our effectiveness when Laguna Beach wanted to take them over. Sunset Beach exists today because of our effectiveness when the city of Huntington Beach wanted to take them over. Many special districts exist today because of how we have conducted ourselves in understanding the needs of special districts. So, thank you for allowing us to speak. We would love for you to reconsider the position you currently have now that you have had an opportunity to hear from us and understand what is really at stake in this. You are looking for open, effective, honest, transparent, fiscally prudent representative that is highly effective. I believe we are the clear choice and we thank you and ask for your support. Thank you." President Schafer asked if there were any questions. Shawn Dewane stated he would like to speak. Mr. Dewane stated "I got involved in this as I have a personal philosophy that I am generally opposed to the concept of centralized planning and the sense I got as Mesa went through our MSR process that there was an effort at the state level to urge away all of the independent special. districts. I am in the capital markets business for a living and we talk about a concept called `moral hazard' which means we who are involved in investing peoples' money need to be keep in mind where the risk is and where the risk transfer is -and what it really comes down to when making an investment you have to be dealing across the table with someone you know, and as Mr. Wilson correctly pointed out this is all about relationships. The relationship that I believe counts most is the relationship between the people who live in the communities and the governing bodies that govern those communities. Independent Special Districts that provide single service provide the most accountability. I believe government skills best when it skills laterally across the communities and not vertically, centralizing the planning in one centralized decision - making body. John and Charley both correctly point out that LAFCO is a very powerful body and they only count to four, and what troubles me about that process is that there are then four people who govern the lives of many people who have no say in the vote as to whether or not those LAFCO commissioners are appointed. The people who vote to elect us, the Special Districts, perhaps have an intermediate say all the way up to LAFCO but the effect on the map on your wall is tremendous when you consider four people have the say as to whether or not. Mesa serves the water, whether or not the Sanitary District stands on its own, whether or not the revenues we generate from the sale of water go to subsidize the public safety budget that the City and all kinds of other issues that then become impossible to separate from each other, impossible to make a comparison; for the competitiveness of the water rate, the competitiveness of the salaries, the job training, job opportunities, the abilities of governing bodies, the people who serve • in our positions to have the training and expertise to carryon in the future. COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 Those opportunities begin to exist and all of a sudden we are left with a few centralized decision - makers who then control the outcomes of all of the lives of us in the county and in the cities we live in. It is the individual ability, the self- determination that the individual liberties we have to be able to come into this Board room and into Mesa's Board room and our Chairman across the desk is with us specifically about the water issues; specifically with you about the Sanitary District issues. It doesn't work well when you come in and try to parse apart your conversation — you are doing sanitation — you are doing water issues, and who do I really talk to. There is nobody who is accountable and that is where who do I really talk to. If we use history as any example, history is littered with examples of failed bureaucracies that relied on centralized planning to make their decisions about the resources on which we live. That is the perspective. If elected to the LAFCO Commission, I would like to say one additional thing as there have been rumors circulating and one rumor is that I am doing this to further the ambition of Mesa to take over the Sanitary District and I would like the record to accurately reflect that is not my motive and that is not my purpose or ambition of Mesa to take over the Sanitary District. I would work with you to further strengthen the independence of this District and not to merge it with Mesa or any other city. So, thank you very much." • President Schafer asked if anyone else cared to address the Board. Susan Trager, a Commission' er of the Laguna Beach County Water District stated she would like to communicate to you if it is permissible, the support of the Laguna Beach County Water District, which is the city council for the reelection and return of Charley Wilson and John Withers to the LAFCO Board. I have been around the county for a very long time, since the 70's, with water issues, sewer issues, a lot of LAFCO issues and land use issues. I have a sense of what goes on here. I am here today because I am very troubled by some of the comments I read that Brett Barbre communicated on the March 25, 2010 meeting here. I think the astonishing extortion of what actually occurred in the Santa Ana Heights decision to sell itself and go out of business. He described it inaccurately, was not there, and. neither of the candidates challenging Mr. Withers and Mr. Wilson were there. They weren't even involved much in water or anything sanitary at the time. I was the lawyer for Santa Ana Heights. It was assumed for a long time they would be taken over by Mesa Consolidated. There was a dust off between the long -time engineer of the Heights and Mesa and he went back to the Board and said we really need to do this a different way. The Board decided it was going to hold an auction and instructed the lawyers, I was one of them, to make a list of suitable invitees to the auction. At the time there was a lot of push as has been represented by Mr. Withers. They made a list, sent out invitations, the bids came in. It took a longtime because the bids were very thoughtful and there was a lot of appraisal. The Board members thought it would be best for the shareholders to uphold their fiduciary obligations to the shareholders to get the highest price for the shares as possible. IRWD came in with the highest bid and there was an immense amount of litigation. Mesa was a sore loser — Mesa Consolidated Water District — this community paid dearly for the legal representation and cost and probably 3, 4, 5 proceedings and a lot of litigation to try stop and put aside the sale and try to unravel it. • COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 A lot of hard feelings, the losing lawyers were still angry. My firm handled a lot of litigation that was involved and ultimately prevailed. The Santa Ana Heights was taken over and dissolved by the Irvine Ranch Water District and both the directors and the majority of the shareholders were pretty happy with it. That is what happened. Not part of a main, horrible scheme of the Irvine Ranch Water District to take over the world. That was not an unwilling seller. They wanted to take it over, they couldn't raise the capital to modify their - - the equipment for the redevelopment that was going on in their service area. So they needed to do something radical so that everybody got service and that is what happened. I was there I was a witness. Contrary to what was said at the meeting by Mr. Barbre - that is not what happened and I wanted the opportunity to say that and I really hope you have it in you to change your vote and to reelect people who are experienced on LAFCO. You don't want on- the -job training and I hope you will do that. Thank you very much." President expressed her appreciation for the explanation by Ms. Trager. Director Ferryman moved to rescind the former motion of the March 25, 2010 meeting and consider voting again. Director Ooten seconded the motion. Motion carried 4 -1. • Director Ferryman moved for the District to support Charley Wilson and John Withers as our representatives to LAFCO. President Schafer seconded the motion and asked for discussion. Director Monahan stated he would not be supporting the motion and stated it has nothing to do with the two gentlemen he is not supporting and thanked Mr. Wilson and Mr. Withers for their many, many years of very good service. Director Monahan stated at this point in time and with everything going on with LAFCO and the way things are going he is really impressed with the fact we could have some local representation with Mr. Freschi and Mr. Dewane. Director Monahan said he supports Mr. Freschi and Mr. Dewane as they are local and the District would have a bigger voice at LAFCO and much more personal attention. Motion carried 4 -1. WRITTEN COMMUNICATIONS Ms. Revak reported there were no written communications. MANAGER'S REPORTS Mr. Carroll requested consideration of an Issue arose after the agenda was posted and there is a need to take immediate action as this item is needed to meet the budget schedule. Director Monahan moved to include this item regarding a fleet maintenance agreement. Director Perry seconded the motion. Motion carried 5 -0. Director Monahan addressed Legal Counsel Alan Burns on whether it would be a conflict of interest to vote on this issue as Director Monahan serves on the City Council of Costa Mesa. Mr. Burns stated there was not a conflict of interest as Mr. Monahan was elected to serve both entities. • COSTA MESA SANITARY DISTRICT PAGE 11 'MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 Mr. Carroll presented two options to the Board of Directors to lower the District's fleet maintenance cost with a contract with the City of Costa Mesa (CCM) or the City of Newport Beach. The difference is the labor rate with Costa Mesa being $96.52 and Newport Beach a rate of $75.00. The current contractor, Nextruck charges $110 an hour. Mr. Hamers stated on many occasions the CMSD has attempted to work on projects with the City of Costa Mesa, however, in the past the City has not presented a favorable rate for the services required. The current contract with Nextruck states either party can request a dissolution of the agreement given 10 days notice. Director Monahan suggested meeting with City of Costa Mesa personnel and offering the agreement to the City if they can meet the $75.00 an hour rate. The Board of Directors gave direction to Mr. Carroll to contact the. Assistant City Manager at the CCM in an attempt to lower the rate to $75.00 an hour. If the CCM agrees, Mr. Carroll was given direction to negotiate an agreement with the CCM. If the CCM does not match the Newport Beach labor rate, Mr. Carroll is authorized to negotiate a contract with the City of Newport Beach. Mr. Carroll requested the agenda item under Treasurer's Reports, the Plan Check, Inspection, Permit and Annexation Charges be considered at this time as Director Perry must leave the meeting at 6:30 p.m. • Director Ferryman moved to adopt CMSD Ordinance No. 75, Revising the Plan Check, Inspection, Permit & Annexation Fee Provisions of the District Operations Code. Director Monahan seconded the motion. Motion carried 5 -0. Mr. Davis presented an analysis of a comprehensive user fee study in order to calculate the full cost of providing specific sewer - related services to the public. The study will serve as the basis for setting updated or new user fees for plan check, inspection, permit and annexation services. The District's user fees were last updated by Resolution 94 -556, adopted in July 1994. Mr. Davis presented the scope, methodology and results of the study and Mr. Carroll noted the study and report were provided to the Building Industry Association (BIA) for their review and comment and, to date, the District has not received any comments from the BIA nor is a representative here tonight. Mr. Davis noted the results of the study noting all existing fees are recommended to be adjusted to recover the full cost of providing the service. Additionally, the fee for construction of new facilities is recommended to be set at $10.00 a linear foot and capped at $20,000. This fee was determined after the results of an analysis that found the average plan check and inspection cost for the last five tract developments in the District was $1,360 per 100 linear foot. Mr. Davis also reported Staff currently performs services for which there is no existing fee and recommends user fees be established for small new developments, swimming pool connection, minor on -site plumbing work, large new developments and cap lateral and demolition. Mr. Davis noted using the average units performed, adoption of the recommended fees will result in an increase in annual revenue to the Liquid Waste Fund in the amount of $24,292. 0 COSTA.MESA SANITARY DISTRICT PAGE 12 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING FIELD APRIL 22, 2010 Director Perry left the meeting at 6:30 p.m. Director Ooten moved for adoption of CMSD Resolution No. 2010 -777, Establishing Plan Check, Inspection, Permit and Annexation Fees, with a review every three years. Further discussion on the study ensued. Director Monahan seconded the motion. Motion carried 4 -0. MANAGER'S REPORTS (CONTINUED) STERICYCLE Mr. Carroll presented a summary of the program with Stericycle to pick up and dispose of used hypodermic needles at local pharmacies. Several years ago, the District and Stericycle were at odds over the agreement between both agencies to continue to provide the services and District Staff refused to sign the Stericycle standard form of agreement. Options were presented to the Board: 1. Continue status quo by paying Stericycle invoices. Instruct Steven's and White Front Pharmacies that when the contracts expire do not sign any extensions, • amendments and /or new agreements with Stericycle. Direct staff to solicit bids from other vendors who are qualified to perform a Sharps program. 2. Pay Stericycle the costs for terminating the contracts with Stevens and White Front Pharmacies and direct staff to solicit bids from other vendors who are qualified to perform a Sharps program. 3. Direct Staff to coordinate a cease and desist of services between Stericycle and Stevens and White Front Pharmacies, discontinue paying Stericycle invoices and solicit bids from other vendors who are qualified to perform a Sharps Program. Stevens and White Front may decide to discontinue offering their stores at a drop -off site in which case the District would have to find other pharmacies who are willing to participate in the program. Stevens and White Front will be responsible for paying any outstanding balances. Currently, _ Stevens outstanding balance to Stericycle is $802.35 and White Front outstanding balance is $951.86. Director Monahan moved to select option 3, as proposed by District Staff. President Schafer seconded the motion. Director Ooten stated his belief that Staff committed to this program, was well aware of the costs associated with the program, and funds have been budgeted. Director Ooten expressed the opinion that the District has funds to pay Stericycle and believes Staff did not follow -up on the program and it is remiss of Staff not knowing that these pharmacies were signing the agreements with Stericycle. Director Ooten stated there is no risk involved in person's getting pricked. Director Ooten noted the District has a commitment COSTA MESA SANITARY DISTRICT PAGE 13 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 • to the community for this program; there have been discussions about expanding the program, and he is not in favor of concluding payment to Stericycle. Mr. Carroll stated he believes it is not good business practice to offer a service without an agreement and if the Board is agreeable to continue and when the agreement with Stevens and White Front expires, Staff can then negotiate their own contract. Director Ooten stated he is concerned that Staff just became aware of the situation. Director Ferryman suggested Staff go to the pharmacies and explain the program and that the District does not have signed agreements with Stericycle. Mr. Fauth stated Stericycle went behind the District's back with the pharmacies and insured the Board CMSD Staff did not know about it. Mr. Burns stated he did agree the District should not continue to pay when the contract is between two private parties as that may be a gift of public funds issue and secondly, as Mr. Carroll reported we cannot encourage them to terminate their contract but we can say "we are not going to pay any longer — you (Stericycle) signed the contract with the pharmacies and didn't ask us about and if you want to contact us later, we will be happy to talk about it." Mr. Carroll stated Staff is not in favor of terminating the Sharps program but basically wants to tie up some loose ends. Director Ooten made a motion for the District to continue to pay Stericycle until and unless an alternative option is available. The substitute motion is that the CMSD continue to serve the public by paying Stericycle until and unless an alternative is found. Madame President stated the substitute motion died for lack of a second. President Schafer asked for a vote on the first motion. Motion carried as follows: Ayes: Arlene Schafer, Gary Monahan, James Ferryman Noes: Robert Ooten Absent: Arthur Perry LETTER OF SUPPORT FOR ASSEMBLY BILL 2407 Mr. Carroll reported on Assembly Bill 2407. Currently, south Orange County cities are under the jurisdiction of the San Diego Regional Water Quality Control Board. The proposed legislation would realign the San Diego and Santa Ana Regional Water Quality Control Board boundaries to allow the south Orange County cities to be under the Santa Ana regional jurisdiction. Director Ferryman moved to approve the letter of support for AB 2407 and direct Staff to mail said letter to the author of the Bill and to the District's state legislators. Director Ooten seconded the motion. Motion carried 4 -0. • COSTA MESA SANITARY DISTRICT PAGE 14 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 LETTER OF SUPPORT FOR ASSEMBLY BILL 2182 Mr. Carroll reported on Assembly Bill 2182. The Irvine Ranch Water District (IRWD) and the North Bay Watershed Association (NBWA) are co- sponsoring a bill from Assembly member Jared Huffman (6t" District) that will allow public agencies to fund private septic to sewer conversions and lateral replacements. Staff believes this bill, if passed, could benefit the District and is recommending the Board of Directors support this bill by sending a letter of support to the bill's author and to the District's state representatives, Senator Harman and Assemblyman Van Tran. Director Ooten moved to approve the letter of support for AB 2182 and direct Staff to mail said letter to the bill's author and to the District's state legislators. Director Monahan seconded the motion. Motion carried 4 -0; RECYCLING COMMITTEE -MONDAY, APRIL 19, 2010 Director Ooten reported on the Recycling Committee meeting held April 19, 2010. President Schafer attended the meeting in place of Director Perry. One of the items discussed was a change in contractor to assist in the composting program. Mr. Patrick McNelly is no longer available to work with the CMSD. The services of Ms. Francine Kaplan will be utilized. Ms. Kaplan has a good background and will assist Mr. Fauth in developing the use of County funds. Discussion was held on the use of Styrofoam containers. Director Ooten reported discussion was held on the purchase of earth machines for distribution to CMSD residents. Mr. Fauth advised the Committee the 2008 -2009 Grant does not include earth machines for distribution to CMSD residents, only schools. The Board of Directors must decide if they wish to continue with the residential program and, if so, plan for this additional expenditure in the budget. Ms. Revak reported on three field trips scheduled for tours of the materials recovery facility at CR &R and the Frank R. Bowerman Landfill for students from Estancia High School, California Elementary and College Park Elementary. The Recycling Committee Goals will be integrated into the CMSD Strategic Plan. ENGINEER'S REPORTS PROJECT #171 IRVINE PUMPING STATION FORCE MAIN REHABILITATION Mr. Hamers presented a report on Project #171 Irvine Pumping Station Force Main Rehabilitation summary of the District' Inflow Reduction Program. Staff determined the Irvine Pumping Station force main is the.number one CMSD force main candidate for rehabilitation or replacement based on its history and operating conditions as further described. • COSTA MESA SANITARY DISTRICT PAGE 15 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 Mr. Hamers explained the 2005 Sewer Master Plan identified a force main replacement program as an important element in eliminating sanitary sewer overflows (SSOs). Force mains are the pressure sewer lines from the low -lying pumping stations to the outlet manholes located at a higher grade. The CMSD has 20 pumping stations and therefore, 20 force mains. Because force mains operate under pressure, breaks in force mains are similar to breaks in water lines where water is gushing out at high volumes. Because flows in force mains are so high, SSOs from breaks in force mains result in large spill volumes. For instance, should a five minute spill occur from a break in the Irvine pumping station force main, the spill would total 5 min x 1,500 gal /min = 7,500 gallons. This volume is far above a typical gravity sewer spill volume. Therefore, agencies should conclude force main rehabilitation is a priority. Mr. Hamers stated further, force main condition assessment is at this point in time an inexact science, meaning there is no current method to determine the structural integrity of the entire line. What is needed is a new technology consisting of a no -dig method of introducing a probe in the line from the outlet manhole all the way down the line while it measures the pipe wall thickness. Even though new technology is approaching this ability, it is believed the Irvine Pumping Station force main is ready for rehabilitation or replacement. Mr. Hamers presented a condition assessment of the existing force main, a limitations of condition assessment, rehabilitation options considered and .resources investigated. Mr. Hamers noted Staff is currently arranging with lining manufacturers and pipeline contractors to assess the rehabilitation /replacement methods, practicalities and costs, after which Engineer's Estimates of the options will be prepared. The Sewer System Committee will review this item at the May or June 2010 Committee meeting. SEWER SYSTEM COMMITTEE Director Monahan reported on the Sewer System Committee meeting held on April 13, 2010. There were no sewer spills in the last month. Several items and updates on projects were discussed. The Santa Margarita Water District Force Main spill was discussed. Asset Management was discussed. Mr. Carroll and Mr. Fauth attended a workshop on the subject and gave a brief report. There were updates on all CMSD projects. A CCTV vehicle demonstration was presented. The next meeting of the Sewer System Committee will be held on May 18, 2010 at 10:30 a.m. COSTA MESA SANITARY DISTRICT PAGE 16 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 • TREASURER'S REPORTS The Treasurer's Reports were addressed earlier in the meeting. ATTORNEY'S REPORTS Claim by Back Bay, Ltd. For Property at 2651 -1675 Irvine Avenue (CMSD Project #168 — Irvine Pump Station Relocation) Mr. Burns reported he may have been overly optimistic in his earlier report on the progress on this case. The parties are still far apart in coming to an agreement. Mr. Burns will continue to monitor the progress and report to the Board of Directors. Adoption of on Ordinance Enacting an Administrative Citation Imposing Civil Fines for Violations of District Ordinances Mr. Burns presented for the Board's consideration, a draft ordinance enacting an administrative citation system for the District's Operations Code. This ordinance allows a code violation to be prosecuted civilly. Because violations would be civil, the offender would not be subjected to criminal sanctions. Staff would still have discretion to cite violations as criminal offenses when appropriate. Mr. Burns recommends the Board of Directors provide input on the subject and direct Staff to bring back for approval consideration a final draft version of an ordinance that will enact an administrative citation system. LOCAL MEETINGS ORANGE COUNTY SANITATION DISTRICT (OCSD) Director Ferryman reported at the Groundwater Replenishment meeting. Director Ferryman reported OCSD finally came to an agreement with IRWD on a Solids Agreement transferring IRWD solids to the OCSD Wastewater System and reimbursing OCSD for its costs, in a form approved by General Counsel. SANTA ANA RIVER FLOOD PROTECTION AGENCY (SARFPA) Director Ferryman stated a meeting of the Santa Ana River Flood Protection Agency was not held this month. • COSTA MESA SANITARY DISTRICT PAGE 17 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 INDEPENDENT SPECIAL DISTRICTS OF ORANGE COUNTY ( ISDOC) President Schafer reported on the ISDOC Board meeting held on April 6, 2010. A legislative report was given. There was discussion on the two seats up for election as ISDOC representative to LAFCO. Discussion was held on potential programs /speakers for the July 29, 2010 quarterly meeting. There was also discussion on ISDOC's role for the CSDA Annual Conference. It was agreed ISDOC will host the 1 st Welcome Reception with others from Orange County co- hosting part of the reception. LOCAL AGENCY FORMATION COMMITTEE ( LAFCO) President Schafer reported on the LAFCO meeting held on April 14, 2010; a public hearing on the proposed LAFCO budget for Fiscal Year 2010 -2011. Proposed Latent Powers Activation for Three Arch Bay Community Services District was continued until May. LAFCO is working on 2010 Unincorporated Islands handbook and more data is needed. A County boundary update was presented. ORANGE COUNTY COUNCIL OF GOVERNMENTS President Schafer attended a meeting of OCCOG today at OCTA. Discussion was held on an OCTA and OCCOG joint meeting. Membership in OCCOG was discussed. There are 38 members out of 40 who have responded. Dues are $5,000. ISDOC is a holdout as each Board must report and vote to be a member. They are also awaiting a response from San Juan Capistrano. CHAMBER OF COMMERCE President Schafer attended the April 7, 2010 meeting of the Chamber of Commerce. Reports were given by representatives of several entities, including updates on Bills and information. CALIFORNIA SPECIAL DISTRICTS ASSOCIATION (CSDA) President Schafer attended meetings in Sacramento on April 10, April 16 and is flying to Sacramento on April 23, 2010. They included meetings of the Legislative Committee, an Ad Hoc Committee evaluating the General Manager, the Education Committee and Educational workshops being held in conjunction with the CSDA Annual Conference in Newport Beach. 1, CMSD RESOLUTION NO. 2010 -778 NOMINATING ARLENE SCHAFER TO REPRESENT THE CSDA FOR REGION 6, SEAT B. Director Ferryman moved to approve CMSD Resolution No. 2010 -778 Nominating Arlene Schafer to Represent the CSDA for Region 6, Seat B. Director Ooten seconded the motion. Motion carried 4 -0. COSTA MESA SANITARY DISTRICT PAGE 18 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 CALIFORNIA ASSOCIATION OF SANITATION AGENCIES (CASA) The CASA Spring Conference is being held at the Newport Beach Marriott Hotel April 28 -30, 2010. President Schafer, Director Ferryman and General Manager Scott Carroll will attend on Wednesday, April 28 and Friday, April 30, 2010; Director Perry will attend on Friday, April 30, 2010; and Director Ooten will attend on Wednesday, April 28, 2010. OLD BUSINESS PRESENTATION OF PLAQUE FROM THE CMSD HONORING ED FAWCETT, COSTA MESA CHAMBER OF COMMERCE, AT MESA VERDE GOLF CLASSIC ON APRIL 19, 2010. Director Ferryman reported on the April 19, 2010 Mesa Verde Golf Classic held to raise money for Costa Mesa youth sports through Costa Mesa United. Mr. Ed Fawcett, CEO of the Chamber of Commerce was honored for his longstanding work to better our community. In recognition of Ed's outstanding, dedicated service and leadership to the City of Costa Mesa, Director Ferryman presented a plaque to honor Mr. Fawcett on behalf of the Costa Mesa Sanitary District. • NEW BUSINESS There was no new business to report. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS Mr. Hamers reported the CMSD Maintenance Yard should be completed by the end of May or early June 2010. The City of Costa Mesa received federal stimulus funds to re- pave Wilson Street and that allows the CMSD to save money by not having to engage the contractor to put in the drive approach and sidewalk. However, the City work won't be completed until some time after the Yard is done. President Schafer stated an Open House at the Yard is planned for fall 2010. Director Ooten reported attending the WDR Steering Committee meeting and heard about developing new means of measuring SSOs and everybody believes it should be changed. There was an update on the Santa Margarita spill. Director Monahan provided an update on the idea of one franchise trash hauler for the City of Costa Mesa. Director Monahan also reported hearing that Poseidon was approved in the City of Huntington Beach and requested General Manager Scott Carroll to investigate and report back to the Board. 0 • COSTA MESA SANITARY DISTRICT PAGE 19 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 22, 2010 Director Monahan also reported hearing OCTA did approve the study on the end of the 55 freeway, in other words where the 55 meets 19th Street. They are going to study four different options on going down to about 15th Street. At this point in time, the public favorite and the engineer's favorite is what they call "cut and cover' so they tunnel underneath downtown, and there would be a really nice downtown with through traffic going straight through. Director Monahan reported City Council did expand by one hour on the 4th of July until 9:00 p.m. instead of 8:00 p.m. the mandatory closing of the fireworks stands. The City also omitted the ban on handhelds which are the new form of sparklers, not the metal ones, they are called "morning glories" and they are a wooden or bamboo material and they are incredibly safe sparklers. The big issue, Director Monahan reported, is the City's proposal to purchase the Orange County Fairgrounds from the state. The City Council voted unanimously on the decision during a closed- session meeting. City Manager Allan Roeder, Council members Katrina Foley and Gary Monahan delivered a proposal for buying the Fairgrounds to Sacramento. President Schafer adjourned the meeting at 7:59 p.m.