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Minutes - Board - 2018-03-22 pyo ,,lar iti N'PoRiTEo COSTA MESA SANITARY DISTRICT MINUTES OF BOARD OF DIRECTORS REGULAR MEETING MARCH 22, 2018 Members present Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman Members absent Mike Scheafer Staff present Scott Carroll (General Manager), Noelani Middenway (District Clerk), Alan Burns (District Counsel), Steve Hodges (Finance Manager), Marc Davis (District Treasurer), Robin Hamers (District Engineer), Gina Terraneo (Management Analyst II) Others present Doug Davert (East Orange County Water District) Meeting called to order at 5:30 P.M. A. OPENING ITEMS Procedural: 1. Call to Order- Vice President Ferryman Vice President Ferryman called the meeting to order at 5:30 P.M. Procedural: 2. Pledge of Allegiance - Director Perry Director Perry led the Pledge of Allegiance. Procedural: 3. Invocation -Assistant Secretary Ooten Assistant Secretary Ooten led the Invocation. Procedural: 4. Roll Call - (If absences occur, consider whether to deem those absences excused based on factsP resented for the absence — such determination shall be the permission required by law.) District Clerk, Noelani Middenway, conducted roll call. All Board Members were present, except for President Scheafer who was excused from the meeting. COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22, 2018 Procedural: 5. Announcement of Late Communications - Unless directed otherwise by the Board of Directors, all actions shall be based on/memorialized by the latest document submitted as a late communication. None at this time. Procedural: 6. Ceremonial Matters and Presentations None at this time. B. Public Comments - This time has been set aside for persons in the audience to make comments on items within the subject matter jurisdiction of the Costa Mesa Sanitary District that are not listed on this agenda. Members of the public will have the opportunity to address the Board of Directors about all other items on this agenda at the time those items are considered. Under the provisions of the Brown Act, the Board of Directors is prohibited from taking action on oral requests but may refer the matter to staff or to a subsequent meeting. The Board of Directors will respond after public comment has been received. Please state your name. Each speaker will be limited to four(4) continuous minutes. Procedural: 1. Public Comments Vice President Ferryman opened public comments. Doug Davert, Board President of East Orange County Water District, commented that he would like to request the support of the District's Board of Directors because he is running for one of the two available special district seats on Orange County's Local Agency Formation Commission (LAFCO). He shared his qualifications as a former city council member and mayor, as well as his position on several special district boards. In regards to his stances on LAFCO issues, Mr. Davert said, "one of the things that I think would be most important for you [Costa Mesa Sanitary District] is that I am not a fan of hostile takeovers. If two boards voluntarily want to join forces, I think that's a great thing to look at, a great thing to explore, and sometimes there are good reasons to do that. Other times, if the boards aren't wanting to do that and the community support isn't there, then I don't think LAFCO should be forcing anybody to do anything, unless it's a dire circumstance." He noted that he has been through the LAFCO municipal service review (MSR) process and stated that he is running for the LAFCO seat in order to "speak up for special districts." Discussion followed regarding Mr. Davert's participation in the Independent Special Districts of Orange County (ISDOC). Mr. Davert thanked the Board of Directors for their time and offered to come back to a future meeting if the Board of Directors requested for him to do so. Seeing no other members of the public present and wishing to speak, Vice President Ferryman closed public comments. COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22, 2018 C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Action (Consent): 1. Approve Consent Calendar Recommendation: That the Board of Directors approve the Consent Calendar as presented. Action (Consent): 2. Approve the Board of Directors Study Session Meeting Minutes of February 13, 2018 Recommendation: That the Board of Directors approve the meeting minutes as presented. Action (Consent): 3. Approve the Board of Directors Regular Meeting Minutes of February 22, 2018 Recommendation: That the Board of Directors approve the meeting minutes as presented. Action (Consent): 4. Approve the Directors' Compensation and Reimbursement of Expenses Recommendation: That the Board of Directors approve the compensation and reimbursement of expenses as presented. Action (Consent): 5. Adopt Warrant Resolution No. CMSD 2018-9 Approving District Warrant Registers Recommendation: That the Board of Directors adopt Warrant Resolution No. CMSD 2018-9 approving District warrants for the month of February 2018 in the amount of $781,399.61. Action (Consent): 6. Approve Payroll Transparency Disclosure for February 2018 Recommendation: That the Board of Directors approve and file the report. Action (Consent): 7. Receive and File Closed Circuit TV (CCTV) Program Report Recommendation: That the Board of Directors receive and file the report. Action: 8. Accept the occupancy count as presented as 22,558 and direct staff to prepare a warrant to CR&R Environmental Services for $220,964.63 for February 2018 collection Recommendation: That the Board of Directors accept the occupancy count as presented using 22,558 as the correct number of active units and direct staff to prepare a warrant to CR&R Environmental Services for February 2018 collection based on this occupancy report so long as the contractor fulfills the obligations of the agreement in the amount of$220,964.63 to be ratified in the March 2018 warrant list. COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22,2018 Action: 9. Approve the preparation of a warrant to CR Transfer in the amount of $165,603.01 for February 2018 recycling and disposal services in the March 2018 warrant register Recommendation: That the Board of Directors approve the preparation of a warrant to CR Transfer in the amount of $165,603.02 for February 2018 recycling and disposal services to be ratified in the March 2018 warrant register. Action: 10. Consider Accepting the Self-Audit of CMSD's Sewer System Management Plan performed by EEC Environmental. Recommendation: That the Board of Directors consider accepting the Self-Audit of CMSD's Sewer System Management Plan performed by EEC Environmental. Action (Consent): 11. Approve Investment Report for February 2018 Recommendation: That the Board of Directors approve the Investment Report for the month of February 2018. Motion: To approve the Consent Calendar as presented. Motion by Art Perry, second by Arlene Schafer. Final Resolution: Motion Carries 4-0-1 with Mike Scheafer not present. Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman There were no comments or discussion and the Consent Calendar was approved as presented. D. PUBLIC HEARINGS None at this time. E. GENERAL MANAGER'S REPORTS Action: 1. Consider Approving an Employee Lending Agreement with Orange County Sanitation District Recommendation: That the Board of Directors Approves the Employee Lending Agreement with Orange County Sanitation District and direct the General Manager to sign the Agreement on CMSD's behalf. General Manager, Scott Carroll, presented report details. He explained that Per the Operations Code, the District utilizes an alternate engineer to review plans in P9 cases when the District Engineer is the engineer on record for a private development. Mr. Carroll noted that the District approved an employee lending agreement with Orange County Sanitation District in 2015 to appoint Rudy Davilla as the Alternate District Engineer. Additionally, he explained that Mr. Davilla's hourly rate is substantially lower than the rate of the private engineer that the District had used inh t eP ast. Mr. Carroll recommended that the Board of Directors authorize him to sign the agreement on the District's behalf. COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22,2018 Motion: To approve the Employee Lending Agreement with Orange County Sanitation District and direct the General Manager to sign the Agreement on CMSD's behalf. Motion by Bob Ooten, second by Arlene Schafer. District Engineer, Robin Hamers, commented that Mr. Davilla does a good job of reviewing plans and noted that the District uses his services about once a month. Final Resolution: Motion Carries 4-0-1 with Mike Scheafer not present. Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman There was no further discussion. Action: 2. Approve Cost of Living Adjustment (COLA) to salaries in FY 2018-19 to be equal to the February to February Consumer Price Index (CPI) for the Los Angeles-Long Beach-Anaheim area of 3.6% as outlined in the Employee Handbook Recommendation: That the Board of Directors approve a Cost of Living Adjustment (COLA) to salaries in FY 2018-19 to be equal to the February to February Consumer Price Index for the Los Angeles-Long Beach-Anaheim area of 3.6% as outlined in the Employee Handbook. Finance Manager, Steve Hodges, presented report details. He explained that the District budgeted for a 2.5% COLA in Fiscal Year 2018-2019, but noted that the recommended Consumer Price Index for the Los Angeles-Long Beach-Anaheim area is 3.6%. Mr. Hodges added that staff is not seeking an appropriation for the recommended action because staff is anticipating a salary savings of $100,000 during the current fiscal year. He noted that this savings would allow for a carryover of the estimated $20,000 in expenses that would result from increasing the COLA to 3.6%. Director Perry recommended that the Board of Directors approve the budgeted 0 2.5/o COLA. Secretary Schafer indicated agreement with Director Perry. Assistant Secretary Ooten commented that he is comfortable supporting the 3.6% COLA because District employees are facing increased costs of living. Additionally, he commented that he believes that staff budgets conservatively and that the funding is available for the increased COLA. Motion: To approve the Cost of Living Adjustment (COLA) to salaries in FY 2018- 19 of 2.5%, equal to what was adopted with the biennial budget. Motion by Art Perry, second by Arlene Schafer. Final Resolution: Motion Fails 2-2-1 with Mike Scheafer not present. Aye: Arlene Schafer, Art Perry No: Bob Ooten, Jim Ferryman COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22, 2018 Discussion followed regarding how the Board of Directors should proceed. District Counsel, Alan Burns, explained that the Board of Directors can make an alternate motion or continue the item to a later time in the meeting when President Scheafer is expected to arrive. The Board of Directors continued the item to a later time in the agenda, but noted that if President Scheafer does not arrive, the Board of Directors would continue the item to the next Board of Directors regular meeting. There was no further discussion at this time. Action: 3. Consider Accepting Roof Repairs at Headquarters as Complete and Direct Staff to File a Notice of Completion and Exonerate Labor and Materials Bond 35 Days after Notice of Completion has been Filed at the County's Recorder's Office Recommendation: That the Board of Directors: 1. Accept improvements as complete and file a Notice of Completion in the County's Recorder's Office; and 2. Authorize payment of 5% retention 35 days after the Notice of Completion is recorded; and 3. Exonerate Labor and Material Bonds 35 days after Notice of Completion is recorded; and 4. Exonerate Faithful Performance Bond one year after Notice of Completion is recorded. General Manager, Scott Carroll, provided report details. He presented photos of the roof repairs and noted that the District did not have any leaks during the recent storm. Mr. Carroll added that $166,000 was budgeted for the project, but that the project came in under budget at$152,109. Motion: To accept improvements as complete and file a Notice of Completion in the County's Recorder's Office, authorize payment of 5% retention 35 days after the Notice of Completion is recorded, exonerate the Labor and Material Bonds 35 days after Notice of Completion is recorded, and exonerate the Faithful Performance Bond one year after Notice of Completion is recorded. Motion by Arlene Schafer, second by Bob Ooten. Director Perry inquired about the 5% retention. Mr. Carroll explained that the District withholds 5% of the total cost from the contractor until 35 days after the Notice of Completion is recorded. Final Resolution: Motion Carries 4-0-1 with Mike Scheafer not present. Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman There were no further questions or discussion. COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22, 2018 Action: 4. Consider Approving Agreement with Precision Electric Company for Installing Solar Photovoltaic System on HQ Rooftop for$156,500 Recommendation: That the Board of Directors approves Agreement with Precision Electric Company for Installing Solar Photovoltaic System on HQ Rooftop for$156,500. General Manager, Scott Carroll, provided report details. He noted that the District received three bids for the solar project and Precision Electric Company submitted the lowest bid. Mr. Carroll added that the bid included a performance guarantee of 75,000 kWh per year and an estimated electric energy savings of $16,000 per year. Lastly, he noted that the total cost of the project is expected to be $184,950. Motion: To approve the Agreement with Precision Electric Company for Installing Solar Photovoltaic System on HQ Rooftop for$156,500. Motion by Art Perry, second by Bob Ooten. Final Resolution: Motion Carries 4-0-1 with Mike Scheafer not present. Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman There were no questions or discussion. F. ENGINEER'S REPORTS Receive and File: 1. Receive and File Monthly Capital Improvement Projects Status Report Recommendation: That the Board of Directors receive and file the report. District Engineer, Robin Hamers, provided updates regarding the District Yard expansion, President Pump Station force main, and Canyon force main projects. He noted that the District will begin its fourth consecutive project using horizontal directional drilling (HDD). Director Perry asked which street will be impacted by the HDD. Mr. Hamers noted that the project will impact Wilson Street. Discussion followed regarding the construction timeframe, traffic control, and project logistics. Assistant Secretary Ooten asked if the Closed Circuit Television of the District's system is complete. Mr. Hamers responded that Wastewater Maintenance Superintendent, Steve Cano, is working with ProPipe to ensure that the project is complete. Discussion followed regarding the status of Grade 5 rehabilitation and the District Yard improvements. There was no further discussion and the report was received. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22, 2018 Action, Receive and File: 2. Receive and File District Engineer's Conflict of Interest for 170 Cabrillo Street in Costa Mesa Recommendation: That the Board of Directors receive and file the report. District Engineer, Robin Hamers, noted that he is submitting a declaration of conflict of interest for a project at 170 Cabrillo Street in Costa Mesa. Discussion followed regarding the project details. There was no further discussion and the report was received. G. TREASURER'S REPORTS None at this time. H. ATTORNEY'S REPORTS None at this time. I. LOCAL MEETINGS: In accordance with AB 1234 (Gov. Code 53232.3), a report is required to be given by a Director for any meeting for which expense reimbursement of any kind is provided. Note: For meetings for which the per diem compensation is sought, the Operations Code provides that such compensation is authorized for each day's service rendered as a Director at the request of the Board (not to exceed six days in one month), and certain meetings are specified as being eligible as set forth in District Operations Code § 3.01.030. For meetings not so listed, the Board must approve the service for it to be eligible for the per day compensation. Information: 1. Orange County Sanitation District (OCSD) - (Vice President Ferryman) Vice President Ferryman noted that OCSD will meet next week. Information: 2. Santa Ana River Flood Protection Agency (SARFPA) - (Director Perry) Director Perry shared that he and Vice President Ferryman attended the SARFPA meeting. He noted that SARFPA has $40 million in funding this year, but that funding will drop to $15 million next year. Additionally, he noted that there are plans to raise the spillway in 2021 and that approval of the Westminster channel is currently in process. Information: 3. Independent Special Districts of Orange County (ISDOC) - (Secretary Schafer) Secretary Schafer shared that Carolyn Emery, the Executive Director of LAFCO, attended the ISDOC meeting and provided updates from LAFCO. ISI COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22, 2018 Information: 4. California Special Districts Association (CSDA) - (Secretary Schafer) Secretary Schafer noted that many agencies are opposing SB 623 and requested that the District submit a letter of opposition for SB 623. Additionally, she noted that CSDA is supporting SB 929 to require all special districts to have websites, with the exception of small districts that cannot afford to maintain a website. Discussion followed regarding the cost of creating a website, upcoming meeting dates, and the Liaison Committee Meeting. Information: 5. Special District Risk Management Authority (SDRMA) - (President Scheafer) President Scheafer entered the meeting at 6:07 P.M. President Scheafer noted that he was unable to attend the SDRMA meeting. Information: 6. Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55, Operations Code Section 3.01.030 Assistant Secretary Ooten shared that he attended the Water Advisory Committee of Orange County (WACO) meeting and noted that there were speakers from Southern California Gas and Edison. He also noted that he attended the OCSD Operations Committee Meeting where there was discussion about fee increases over the next 5 years. Director Perry added that there was discussion about battery storage of solar energy. Discussion followed regarding the use of LED lights at the District's headquarters. J. OLD BUSINESS Action: 2. Approve Cost of Living Adjustment (COLA) to salaries in FY 2018-19 to be equal to the February to February Consumer Price Index (CPI) for the Los Angeles-Long Beach-Anaheim area of 3.6% as outlined in the Employee Handbook Recommendation: That the Board of Directors approve a Cost of Living Adjustment (COLA) to salaries in FY 2018-19 to be equal to the February to February Consumer Price Index for the Los Angeles-Long Beach-Anaheim area of 3.6% as outlined in the Employee Handbook. Director Perrysuggested that the Board of Directors revisit Item E2. He provided 99 an overview of the discussion and the failed motion to approve the budgeted 2.5% COLA. COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22,2018 District Counsel, Alan Burns, confirmed that the Board of Directors may continue discussing this item due to the item's earlier continuation. Motion: To reconsider the previous motion to approve the Cost of Living Adjustment (COLA) to salaries in FY 2018-19 of 2.5%, equal to what was adopted with the biennial budget. Motion by Art Perry, second by Arlene Schafer. District Engineer, Robin Hamers, asked how the COLA is addressed in the Employee Handbook. Finance Manager, Steve Hodges, noted that the Employee Handbook does not specify whether the Board of Directors can select an alternative COLA. General Manager, Scott Carroll, explained that the Board of Directors have discretion over the COLA and noted that they have selected an alternative COLA in the past. Mr. Burns suggested that the Board of Directors read the Employee Handbook language prior to voting in order to feel more comfortable making a decision. Director Perry withdrew his motion and Secretary Schafer withdrew her second to the motion. President Scheafer offered a substitute motion to continue Item E2 to the next Board of Directors Special Meeting on April 4, 2018. Mr. Burns noted that the Board of Directors cannot take action on Item E2 at a special meeting if the action will impact executive compensation. President Scheafer revised his substitute motion to continue Item E2 to the next Board of Directors Regular Meeting on April 26, 2018. Motion: To continue Item E2 to the next Board of Directors Regular Meeting on April 26, 2018. Motion by Mike Scheafer, second by Arlene Schafer. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer There were no further questions or discussion. K. NEW BUSINESS None at this time. L. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS Discussion: 1. Oral Communications and Director Comments COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD MARCH 22, 2018 None at this time. M. ADJOURN TO CLOSED SESSION Vice President Ferryman adjourned the meeting to closed session at 6:15 P.M. to discuss the following items: Discussion: 1. Public Employee Performance Evaluation (Gov. Code §54957) - Title: General Manager Discussion: 2. Conference with Legal Counsel - Existing Litigation Government Code §54956.9(d)(1) -- 1. The Costa Mesa Sanitary District v. Mesa Water District; OCSC No. 30-2017-00923819-CU-PT-CJC N. RECONVENE TO OPEN SESSION Vice President Ferryman reconvened the meeting to open session at 6:38 P.M. and reported that the Board of Directors gave direction to District Counsel for a settlement conference. O. CLOSING ITEMS Procedural: 1. Adjourn Vice President Ferryman adjourned the meeting at 6:38 P.M. A . ( .' ' , A' I I IA ArI'e — ' cha er Michael Scheaf. Secretary President