Minutes - Board - 2009-05-01r�
COSTA MESA SANITARY DISTRICT
MINUTES OF SPECIAL MEETING
MAY 15 2009
The Costa Mesa Sanitary District held a Special Meeting at 11:45 a.m. on Friday, May 8,
2009 at 628 W. 19th Street, Costa Mesa.
Directors Present: Art Perry, Arlene Schafer, Bob Ooten, Gary Monahan, James Ferryman
Staff Present: Robin B. Harriers, Manager /District Engineer; Tom Fauth, Assistant
Manager; Joan Revak, Board Secretary/Program Manager /Clerk of the
District; Marc Davis, Treasurer /Director of Finance; Teresa Gonzalez,
Accountant
President Schafer called the meeting to order at 11:45 a.m. and turned the meeting over
to Mr. Davis.
I. Proposed CMSD Fiscal Year 2009 -2010 Budget
Mr. Davis gave a presentation on the Preliminary Fiscal Year 2009 -2010 budget. The
preliminary budget includes an increase in the liquid waste annual charge in order to fund
necessary capital replacements and a contribution for the construction of the District yard.
No increase is required to the existing solid waste annual charge.
Mr. Davis provided highlights of the preliminary budget for fiscal year 2009 -10 and the
projected actual revenues and expenses for fiscal year 2008 -09.
Revenues:
• Increase sewer rates 5.00%
• Continue to not budget for general property taxes
• Reduction in average return on investments
• Elimination of insurance reimbursement.
Expenses:
■ Replacement of Ordinance Enforcement Officer
■ No election
■ Reduction in contracted services
■ Elimination of contribution to operating reserve
■ Contribution to the District yard
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Minutes of Special Meeting
May 8, 2009
• Budget Overview
Solid Waste Fund:
Property y axes
Page 2
No estimated revenue for property taxes has been included in the preliminary budget, due
to the uncertainty surrounding the District's continued receipt of general property tax given
the uncertainty surrounding the State's financial condition, as well as the District's past
practice of not budgeting this revenue source.
Investment Earnings
Investment earnings are expected to decrease by $15,000 or 25.00% as compared to the
prior year. This decrease is attributable to lower short-term interest rates. Interest is
estimated at an average of 2.00% for the year.
Salaries & Benefits
Salaries and benefits are anticipated to decrease by $6,400, or 3.28% as compared to
prior year projections. This decrease is primarily attributable to the planned filling of the
• Ordinance Enforcement Officer (OEO) position at a salary level less than currently being
paid.
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Operations & Maintenance
Operations and maintenance costs are anticipated to increase by $124,710, or 2.65 %, as
compared to the prior year projections. This increase is primarily attributable to an
increase in the contingency as compared to the contingency actually used in fiscal year
2008 -09. For the prior fiscal year, the contingency was budgeted at $125,000 and only
$6,650 has been accessed through March 31, 2009. The preliminary budget for fiscal
year 2009 -10 keeps the contingency flat at $125,000.
Programs
Programs are budgeted to increase by $43,000, or 135.65 %, over the prior year
projections. This increase over projections is actually a small decrease as compared to
the prior year's amended budget of $77,700. The preliminary budget provides for an
increase of $4,000 in the budget for the Sharp's program due to an anticipated increase in
the number of pharmacies participating in the program. The preliminary budget decreases
the appropriation for the Household Hazardous Waste program by $7,000 in order to
reflect a budget in line with prior years' expenses.
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Minutes of Special Meeting
May 8, 2009
Liquid Waste Fund:
Annual Charge
Page 3
The annual charge required to fund the preliminary budget of the Liquid Waste Fund
needs to increase 5.00% for fiscal year 2009 -10. The increase in the annual sewer
charge will be considered at a separate public hearing.
Salaries & Benefits
Salaries and benefits are anticipated to decrease by $94,100, or 8.05 %, as compared to
the prior year's projected annual expenses. The decrease is primarily attributable to the
planned filling of the OEO position at a salary level less than currently being paid.
Additionally, in fiscal year 2008 -09, the Maintenance Supervisor position received a
retroactive salary increase that was originally budgeted as part of the 2007 -08 fiscal year.
Operations & Maintenance
Operations and maintenance costs are anticipated to increase by $85,605, or 5.10 %, over
the prior year's projected actual expenses. The significant components of this increase
• are:
■ Increase of $100,000 for the annual contribution to the sinking fund. This
contribution was budgeted as CIP in fiscal year 2008 -09. As the nature of the
expense does not meet the definition of CIP, Staff has reclassified the budget for
the annual contribution to operations and maintenance.
■ Increase of $188,000 in contingency. This amount is set aside for use during the
fiscal year should any unforeseen expenses occur which were not included as part
of the adopted budget. During the 2008 -09 fiscal year, additional appropriations in
the amount of $140,000 were required through March 31, 2009.
■ Increase of $125,000 for the FOG contract and televising sewer lines. These items
have previously been budgeted as part of CIP, but do not meet the definition of an
improvement project. Therefore, Staff reclassified these costs to operations and
maintenance cost.
■ Decrease in election costs of $38,000 as an election will not be held in fiscal year
2009 -10.
■ Decrease in contracted sewer line maintenance in the amount of $308,000 due to
the finalization of all lines being cleaned and televised. Future contracted sewer
• line maintenance will consist solely of production cleaning and the District's
maintenance crew will handle hot spots.
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Minutes of Special Meeting Page 4
May 8, 2009
Mr. Davis gave a summary of capital improvement projects with a total of $2,115,000 for
fiscal year 2009 -10.
Discussion was held on operations and maintenance and Staff was directed to allocate a
total of $80,000 to Plan Check & Inspection and $40,000 for Engineering and Inspection
for the Sewer Lateral Assistance Program.
Mr. Davis will make the necessary changes to the FY 2009 -2010 Budget to be presented
to the Board for adoption at the May 20, 2009 regular Board of Directors' meeting.
II. Confirm date of Thursday, July 30, 2009 at 6:00 p.m. for Sewer & Trash Public
Hearing
The date of Thursday, July 30, 2009 at 6:00 p.m. was confirmed for the Sewer and Trash
Public Hearing. The meeting will be held in the CMSD conference room at 628 W. 19th
Street, Costa Mesa. The postcard notification to the ratepayers will occur prior to June 15,
2009.
IV. Public Comments
No members of the public were present.
ADJOURNMENT
President Schafer adjourned the meeting at 1:34 p.m.
Secr tary
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President