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Minutes - Board - 2017-05-09 A4;i SANI'T�Ry� 1 y/ t"•P?ORATE9 COSTA MESA SANITARY DISTRICT MINUTES OF BOARD OF DIRECTORS STUDY SESSION MAY 9, 2017 Members Present Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer Members Absent None Staff Present Scott Carroll (General Manager), Alan Burns (District Counsel), Noelani Middenway (District Clerk), Wendy Davis (Finance Manager), Kaitlin Tran (Senior Accountant), Lieu Tran (Administrative Assistant), Marc Davis (District Treasurer), Rob Hamers (District Engineer), Ed Roberts (Code Enforcement Officer), Dyana Bojarski (Management Analyst II), Gina Terraneo (Management Analyst I), Nabila Guzman (Management Analyst I) Others Present Dean Ruffridge (CR&R) Meeting called to order at 9:30 A.M. A. OPENING ITEMS Procedural: 1. Roll Call President Scheafer called the meeting to order at 9:30 A.M. District Clerk, Noelani Middenway, conducted roll call. All Board Members were present. Procedural: 2. Public Comments COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD MAY 9,2017 President Scheafer opened public comments. Seeing nobody wishing to speak, President Scheafer closed public comments. B. ITEMS OF STUDY Receive and File: 1. Organics Tonnage Report Recommendation: That the Board of Directors receive and file the report. General Manager, Scott Carroll, presented the Organics Tonnage Report and noted that the collected tonnage decreased in April. There were no questions or discussion and the report was received. Receive and File: 2. Code Enforcement Officer Report -April Recommendation: That the Board of Directors receive and file the report. Code Enforcement Officer, Ed Roberts, provided report details. He noted that there were 6 proactive scavenging investigations primarily concentrated on the west side of Costa Mesa. Mr. Roberts added that there were 105 cases of trash carts in public view. Discussion followed regarding scavenging and the District's large item pickup service. There were no further questions or discussion and the report was received. Receive and File: 3. Alkaline Battery Recycling Program - Final Report Recommendation: That the Board of Directors receive and file the report. Management Analyst I, Gina Terraneo, provided report details. She noted that 13 schools participated in the Battery Recycling Program and collected a total of 6,973 pounds of batteries. Additionally, Ms. Terraneo presented 2 graphs indicating growth in the level of participation and collection totals over the 4 year span of the program. Director Perry asked who collects the batteries and if the District receives diversion credit for recycling batteries. Ms. Terraneo responded that Mercury Disposal Systems collects the batteries and affirmed that the District receives diversion credit for the batteries. President Scheafer commented that the increase in participation has been dramatic during the current year. There were no further questions or discussion and the report was received. i 1 COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD MAY 9,2017 Discussion: 4. Preliminary Budget Review For FY 2017-18 and FY 2018-19 Recommendation: That the Board of Directors provide direction on the preliminary Biennial Budget for Fiscal Years 2017-18 and 2018-19. General Manager, Scott Carroll, introduced the preliminary budget and noted that it is the first draft for the Board of Directors' review. Finance Manager, Wendy Davis, provided an overview of the budget presentation. She noted that this is the 3rd year that the District plans to adopt a deficit budget to utilize reserves. Ms. Davis also noted that staff is working on reconciling the solid waste occupancy count with CR&R. Discussion followed regarding the occupancy count, the possibility of conducting a field audit, and the challenge of projecting new occupancies. Ms. Davis noted that the budget proposes the addition of a paid Intern position. Senior Accountant, Kaitlin Tran, provided an overview of the budget expenditures. She noted that changes in staffing included the addition of an Intern, the transition from a part-time to full-time Maintenance Assistant, the transition from a part-time Accounting Clerk to a full-time Administrative Assistant, and the transition from the Permit Technician position to an Engineering Technician position. Ms. Tran also noted that the District plans to create a new promotional video, conduct a wastewater and solid waste rate study, pay increased legal fees due to ongoing litigation, and pay increased utility costs for the new headquarters. Director Perry asked why rent is being charged to the Solid Waste Fund for the headquarters property. Ms. Davis explained that the Wastewater Fund owns the new headquarters building and that it may be seen as unfair for wastewater ratepayers to be fully responsible for the cost of the new building without also charging solid waste ratepayers. President Scheafer asked that this issue be placed on a future agenda for further discussion. Ms. Tran shared the proposed Capital Outlay expenditures, including a server and software upgrade, installation of solar panels, installation of an automatic front door, repair of the HVAC system, the addition of an entrance sign, and the purchase of a portable generator. Assistant Secretary Ooten asked why the District needs to purchase an additional generator. COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD MAY 9,2017 Mr. Carroll noted that the District does not have a portable generator dedicated to its headquarters for emergency purposes. Vice President Ferryman asked if the budget takes into account savings that will result from the installation of solar panels. Ms. Davis noted that the potential savings were not taken into account in the preliminary budget. President Scheafer requested clarification regarding the Sharps and Pharmaceuticals Program budgets. Discussion followed regarding the termination of the District's contract with Steven's Pharmacy and the potential addition of a replacement drop box location. Ms. Davis provided an overview of Capital Improvement Projects, including those that are anticipated to be completed by June 30, 2017. Discussion followed regarding the Manhole Rehabilitation Project and the use of contingency funds to address manhole rehabilitation. Ms. Davis presented the expected solid waste expenditures and the projected tonnage of recycled and organic material through Fiscal Year 2019-2020. Discussion followed regarding the occupancy reporting methods and the trash collection rate. Ms. Davis presented the District's projected level of reserves in the Solid Waste Fund and discussed a Fiscal Year 2019-2020 rate adjustment. Additionally, she provided an overview of the Wastewater Fund's net position and reserves. Ms. Davis noted that the District has experienced far less sanitary sewer overflows (SSOs) and wastewater maintenance issues since hiring a second wastewater crew, resulting in savings. Discussion followed regarding the adequacy of the Earthquake/Emergency reserves and upcoming Board of Directors meetings. Mr. Carroll noted that the Board of Directors requested further discussion regarding rent being charged to the Solid Waste Fund, the Earthquake/Emergency reserves, and asset management. He added that these discussion items will be brought to the Board of Directors meeting on May 25, 2017 and if there are no changes to the preliminary budget, the budget will be COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD MAY 9,2017 brought to the Board of Directors for approval at the June 22, 2017 Regular Board Meeting. There were no further questions or discussion and the report was received. C. ADJOURN TO CLOSED SESSION Mr. Carroll commented that the closed session item will allow the Board of Directors to discuss acquiring the property at 2252 Fairview Road to store District equipment. President Scheafer adjourned the meeting to closed session at 11:19 A.M. to confer with Real Property Negotiators (Gov Code §54956.8) regarding the property at 2252 Fairview Road, Costa Mesa. The agency negotiator was Scott Carroll and the other negotiating party was Mike Johnson. D. CLOSING ITEMS Procedural: 1. Reconvene to Open Session President Scheafer reconvened the meeting to open session at 11:48 A.M. and reported that direction was given to staff to negotiate the terms for the property at 2252 Fairview Road. Procedural: 2. Oral Communications & Director Comments There were no oral communications or director comments. Procedural: 3. Adjournment President Scheafer adjourned the meeting at 11:49 A.M. i i / , 1 / Ar ene Schafer Michael Scheafzi Secretary President 1