2019_02_12_studyTuesday, February 12, 2019
Board of Directors Study Session
290 Paularino Avenue, Costa Mesa at 9:30AM
Public Comments: Any member of the public may address the Board. Speakers on agenda items
should identify themselves to the District Clerk before the meeting so that their input can be
provided at the time the item is considered. Speakers on non-agenda items will be heard under
Public Comments.
Pursuant to State law, the Board may not discuss or take action on non-agenda items except under
special circumstances. Speakers must limit their remarks to four minutes or as decided upon by the
Presiding Officer. The Presiding Officer reserves the right to declare any speaker out of order.
Obtaining Agenda Materials: The public is entitled to copies of all documents that are made part of
the agenda packet. If any document or other writing pertaining to an agenda item is distributed to
all or a majority of the Board after the packet is prepared, a copy of that writing may be obtained at
the District offices at 290 Paularino Avenue, Costa Mesa, California.
In Compliance with ADA: Contact District Clerk, Noelani Middenway, at (949) 645-8400, 48 hours
prior to meeting if assistance is needed (28 CFR 35.102.35.104 ADA Title II).
A. OPENING ITEMS
1. Roll Call - (If absences occur, consider whether to deem those absences excused based on facts presented for the
absence – such determination shall be the permission required by law.)
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.
1. Public Comments
C. ITEMS OF STUDY
1. January 2019 Code Enforcement Officer Report
2. Organics Tonnage Report
3. Solid Waste Diversion Report
4. Contracts and Purchase Orders Signed by the General Manager
5. Quarterly Legislative Update - Quarter 1
6. SB 212 - Pharmaceutical and Sharps Waste Stewardship
7. Solid Waste Rate Study
8. Wastewater Service Boundaries between Costa Mesa Sanitary District and City of Newport Beach
9. Construction Inspection Program
10. CMSD 75th Anniversary Ad Hoc Committee Meeting - Oral Report
D. CLOSING ITEMS
1. Oral Communications and Director Comments
2. Adjournment
Tuesday, February 12, 2019
Board of Directors Study Session
290 Paularino Avenue, Costa Mesa at 9:30AM
Public Comments: Any member of the public may address the Board. Speakers on agenda items
should identify themselves to the District Clerk before the meeting so that their input can be
provided at the time the item is considered. Speakers on non-agenda items will be heard under
Public Comments.
Pursuant to State law, the Board may not discuss or take action on non-agenda items except under
special circumstances. Speakers must limit their remarks to four minutes or as decided upon by the
Presiding Officer. The Presiding Officer reserves the right to declare any speaker out of order.
Obtaining Agenda Materials: The public is entitled to copies of all documents that are made part of
the agenda packet. If any document or other writing pertaining to an agenda item is distributed to
all or a majority of the Board after the packet is prepared, a copy of that writing may be obtained at
the District offices at 290 Paularino Avenue, Costa Mesa, California.
In Compliance with ADA: Contact District Clerk, Noelani Middenway, at (949) 645-8400, 48 hours
prior to meeting if assistance is needed (28 CFR 35.102.35.104 ADA Title II).
A. OPENING ITEMS
James Ferryman, President
Robert Ooten, Vice President
Arlene Schafer, Secretary
Michael Scheafer, Director
Arthur Perry, Director
Subject 1. Roll Call - (If absences occur, consider whether to deem those absences excused
based on facts presented for the absence – such determination shall be the
permission required by law.)
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Procedural
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.
Subject 1. Public Comments
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Procedural
C. ITEMS OF STUDY
To: Board of Directors
From: Ed Roberts, Code Enforcement Officer
Date: February 12, 2019
Subject: January 2019 Code Enforcement Officer Report
Summary
Attached is the monthly report from Officer Roberts describing his enforcement activities for the month of January regarding scavenging
of recyclable materials, trash carts stored in public view and graffiti on trash carts.
Recommendation
That the Board of Directors receive and file this report.
Analysis
In the month of January, Officer Roberts approached seven (7) individuals he observed scavenging from CMSD trash carts. In the same
month, he issued 105 warning notices to residents storing their trash carts in public view. Officer Roberts found no graffiti on trash carts in
the month of January.
Officer Roberts enforcement activities are described in more detail in the attached report.
Legal Review
Not applicable.
Environmental Review
Code enforcement activities and reporting are not a disturbance of the environment similar to grading or construction and do not
constitute a project under CEQA or the District’s CEQA Guidelines.
Financial Review
Officer Roberts' activities are funded in the adopted budget.
Public Notice Process
Copies of this report are on file and will be included with the complete agenda packet for the February 12, 2019 Board of Directors Study
Session meeting at District Headquarters and posted on the District’s website.
Alternative Actions
1. Direct staff to report back with more information.
File Attachments
January 2019 CEO report.doc (1,565 KB)
Subject 1. January 2019 Code Enforcement Officer Report
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Discussion
C. ITEMS OF STUDY
To: Board of Directors
Via: Scott Carroll, General Manager
From: Nabila Guzman, Management Analyst I
Date: February 12, 2019
Subject: Organics Tonnage Report
Summary
A total of 698.89 tons of organic waste were collected and recycled in January 2019.
Staff Recommendation
That the Board of Directors receives and file this report.
Analysis
Below is a graph depicting the total tonnage of organic waste collected during each month of the last three fiscal years.
Subject 2. Organics Tonnage Report
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Action, Receive and File
Recommended Action That the Board of Directors receive and file this report.
Goals 2.00 Solid Waste
2.5 Monitor advancements and technology in the solid waste industry
File Attachments
Organic Recycling.png (19 KB)
Tonnage Summary.png (25 KB)
Legal Review
Not applicable.
Environmental Review
Consideration of the Organics Tonnage Report is an administrative matter and not a disturbance of the environment similar to grading or
construction and not a project under CEQA or the District’s CEQA Guidelines.
Financial Review
Not applicable.
Public Notice Process
Copies of this report are on file and will be included in the complete agenda packet for the February 12, 2019 Board of Directors Study
Session meeting at District Headquarters and posted on the District’s website.
C. ITEMS OF STUDY
To: Board of Directors
Via: Scott Carroll, General Manager
From: Nabila Guzman, Management Analyst I
Date: February 12, 2019
Subject: Solid Waste Diversion Report
Summary
A total of 2,190.36 tons of solid waste were collected and recycled in January 2019.
Staff Recommendation
That the Board of Directors receive and file this report.
Analysis
Using data from CR&R's Recycling Report and OCC's Recycling Center Recycling Report, staff has calculated the diversion rate for the
last seven months at 61.62%. A total of 26,125.73 tons of solid waste materials have been collected, of which 16,099.08 tons have been
diverted away from landfills. In addition to curbside collection from CR&R, CMSD offers a variety of other waste diversion programs
including large item pickup, where white goods are collected. The total tonnage of white goods for the month of January was not available
in time to include in this report. However, these numbers will be included in the February report. Attachment A is the fiscal year 2018-19
diversion rate support.
Legal Review
Not applicable.
Environmental Review
Consideration of the Solid Waste Diversion Report is an administrative matter and not a disturbance of the environment similar to grading
or construction and not a project under CEQA or the District’s CEQA Guidelines.
Financial Review
Not applicable.
Public Notice Process
Copies of this report are on file and will be included in the complete agenda packet for the February 12, 2019 Board of Directors Study
Session meeting at District Headquarters and posted on the District’s website.
Alternative Action
1. Direct staff to report back with more information.
File Attachments
CRR-OCC Diversion.pdf (73 KB)
Subject 3. Solid Waste Diversion Report
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Action, Receive and File
Recommended Action That the Board of Directors receive and file this report.
Goals 2.00 Solid Waste
C. ITEMS OF STUDY
To: Board of Directors
From: Scott Carroll, General Manager
Date: February 12, 2019
Subject: Contracts and Purchase Orders Signed by the General Manager
Summary
On January 24, 2019, the Board of Directors was considering adopting Ordinance No. 124, reenacting the purchasing provisions of the
District's Operations Code. The ordinance, if adopted, will give the General Manager greater authority to sign contracts that are valued
up to $200,000. The Board did not adopt the ordinance, but instead directed staff to bring back a list of contracts signed by the General
Manager. Attached are lists of contracts signed by the General Manager for the past three years.
Recommendation
That the Board of Directors receive and file this report and provide direction to staff regarding the proposed Ordinance No. 124 -
Reenacting the Purchasing Provisions of the District's Operations Code
Analysis
Attached are three lists of contracts signed by the General Manager in the past three years. The lists include contracts for capital
improvement projects (CIP), service contracts and purchase orders (POs). District policy requires contracts for projects and/or services
in value over $5,000. Purchase orders are issued for services less than $5,000 or for equipment and supplies that cost up to $125,000.
Equipment costing over $125,000 (e.g. wastewater combination cleaning truck) requires Board approval. For instance, on July 8, 2016,
the General Manager signed a purchase order for acquiring a CCTV trailer for $91,260.
As you can see in the attachments, purchase orders are predominately used form of contracts signed by the General Manager. The
General Manager has signed an average of 41 POs in the last three years. You will notice on the list of POs there are purchase orders
issued for services valued over $5,000 such as Golden Bell Products, Robert Thorton Architects and Lan Wan Enterprise. Some services
are sole source like Lan Wan Enterprise. Lan Wan Enterprise manages the District's Information Technology and therefore their services
are needed to upgrade servers. Golden Bel Products is the only contractor in California that has a license to spray Insecta, which is the
only registered product of its type and active ingredient labeled for use in wastewater manholes (see attachment). However, the PO
issued to Robert Thorton Architects should have been a contract instead, which was a mistake by the General Manager You also notice
some PO sequence numbers are missing. That's because PO numbers were issued to signed service contracts to encumber the funds,
Legal Review
Not applicable, but if the Board directs staff to bring back Ordinance No. 124 for approval consideration, District Counsel will be present
the ordinance to the Board
Environmental Review
Reviewing contracts signed by the General Manager is an administrative matter and not a disturbance of the environment similar to
grading or construction and does not constitute a project under CEQA or the District’s CEQA Guidelines.
Financial Review
There are no financial impacts to the District for reviewing signed contracts by the General Manager
Public Notice Process
Subject 4. Contracts and Purchase Orders Signed by the General Manager
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Action
Recommended Action That the Board of Directors receive and file this report and provide direction to staff regarding
the proposed Ordinance No. 124 - Reenacting the Purchasing Provisions of the District's
Operations Code
Goals 5.0 Administrative Management
Copies of this report are on file and will be included with the complete agenda packet for the February 12, 2019 Board of Directors study
session meeting at District Headquarters (290 Paularino Avenue) and posted on the District's website at www.cmsdca.gov.
Alternative Actions
1. Direct staff to report back with more information.
File Attachments
Contracts last 3 yrs.pdf (23 KB)
POs last 3 yrs.pdf (149 KB)
Golden Bell Products.pdf (72 KB)
Jabco Sole Source July 2015.pdf (273 KB)
C. ITEMS OF STUDY
To: Board of Directors
Via: Scott Carroll, General Manager
From: Gina Terraneo, Management Analyst II
Date: February 12, 2019
Subject: Quarterly Legislative Update - Quarter 1
Summary
The Quarterly Legislative Update provides the Board of Directors with analyses of measures pending in Sacramento that are of interest to
the District. On July 22, 2010, the Board of Directors gave authority to the President to write support and/or opposition letters on behalf of
the Board if that position has been taken by an agency the District is a member of. For all other bills, staff recommendations for formal
District positions on legislation will be agendized and presented for Board action at their regular Board of Directors meetings. When the
Board takes formal action on a piece of legislation, the President will advocate the support or opposition of individual bills as approved by
the Board. This Legislative Analysis also provides the Board of Directors with informative updates on State issues.
Recommendation
That the Board of Directors receive and file the Quarterly Legislative Update.
Analysis
As of February 4, 2019, 341 bills have been introduced in the Assembly and 203 bills have been introduced in the Senate. The following
bills are of interest to the District and are summarized in the attached Quarterly Legislative Report for Quarter 1:
AB 9 - Employment discrimination: limitation of actions.
AB 51 - Employment discrimination: enforcement.
AB 129 - Waste management: plastic microfiber.
AB 134 - Safe, clean, affordable, and accessible drinking water.
AB 161 - Solid waste: paper waste: electronic proofs of purchase.
AB 171 - Employment: sexual harassment.
AB 196 - Paid family leave.
AB 215 - Dumping.
AB 231 - California Environmental Quality Act: exemption: recycled water.
AB 333 - Whistleblower protection: state and local independent contractors.
AB 257 - Solid waste: woody biomass: disposal.
AB 291 - Emergency preparedness.
SB 13 - Accessory dwelling units.
SB 33 - Solid waste: reduction and recycling.
SB 54 - Single-use plastic waste: reduction.
SB 135 - Disability compensation: paid family leave.
SB 188 - Discrimination: hairstyles.
Additionally, the District's representatives in the Legislature are Senator John Moorlach and Assemblywoman Cottie Petrie-Norris.
Senator John Moorlach serves on the following Senate Committees:
Public Safety (Vice Chair)
Governance and Finance (Vice Chair)
Budget and Fiscal Review
Subject 5. Quarterly Legislative Update - Quarter 1
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Action, Receive and File
Recommended Action That the Board of Directors receive and file the Quarterly Legislative Update.
Goals 5.3 Stay informed on applicable federal, state and regional regulations
Energy, Utilities, and Communications
Housing
Insurance
Budget Subcommittee #5 on Corrections, Public Safety, and the Judiciary
Joint Legislative Audit Committee
Assemblywoman Cottie Petrie-Norris serves on the following Assembly Committees:
Accountability and Administrative Review (Chair)
Appropriations
Judiciary
Revenue and Taxation
Veterans Affairs
Legal Review
Not applicable
Environmental Review
Consideration of pending legislation is an administrative matter and is exempt from the requirements of the California Environmental
Quality Act (CEQA) (Public Resources Code Section 21000 et. seq.). Section 15300.4 of CEQA allows an agency while establishing its
own procedures “to list those specific activities which fall within each of the exempt classes”, and the District has adopted “CEQA
Guidelines and Implementing Procedures” that state on page 6 ”Projects” does not include …. C. Continuing administrative or
maintenance activities.”
Financial Review
Not applicable.
Public Notice Process
Copies of this report are on file and will be included with the complete agenda packet for the February 12, 2019 Board of Directors Study
Session meeting at District Headquarters and posted on the District’s website.
Alternative Actions
1. Direct staff to report back with more information.
File Attachments
Quarterly Legislative Report - Q1 - 2019.pdf (109 KB)
C. ITEMS OF STUDY
To: Board of Directors
Via: Scott Carroll, General Manager
From: Nabila Guzman, Management Analyst I
Date: February 12, 2019
Subject: SB 212 — Pharmaceutical and Sharps Waste Stewardship
Summary
Governor Brown signed Senate Bill 212, the nation's first extended producer responsibility program for sharps and pharmaceutical waste
in September 2018. Much like CalRecycle's current stewardship programs for paint, mattresses, and carpet, responsibility will be placed
on manufacturers to participate through stewardship organizations to design, fund, and implement a take-back program for their
products.
Staff Recommendation
That the Board of Directors receive and file this report.
Analysis
Governor Brown signed Senate Bill 212 on September 30, 2018, to establish safe and convenient disposal options for home-generated
pharmaceutical drug and sharps waste. SB 212 addresses a variety of problems that exist due to a lack of system to manage these
products at the end of their useful life. Because of the bill, manufacturers of sharps, prescriptions and over-the-counter medications will
be required to create, fund and participate in a statewide take-back system. Cal Recycle estimates 936 million sharps are used by
consumers in California each year, of which approximately 31% of those are thrown in the trash.
With the passing of this bill, CalRecycle is required to adopt regulations for the implementation of SB 212, the nation's first extended
producer responsibility program for sharps and pharmaceuticals. Much like CalRecycle's current stewardship programs for paint,
mattresses, and carpet, responsibility will be placed on manufacturers to participate through stewardship organizations to implement a
take-back program for their products. CalRecycle will have oversight and enforcement responsibilities, which will require coordination with
the Board of Pharmacy and possibly other state agencies.
CalRecycle has begun to hold workshops but the program is not expected to be implemented until Fiscal Year 2021-22. District staff will
continue to monitor the development of this program and will bring back the item when more information is available.
Below is CalRecycle's anticipated timeline of major activities
Subject 6. SB 212 - Pharmaceutical and Sharps Waste Stewardship
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Action, Receive and File
Recommended Action That the Board of Directors receive and file this report.
Goals 2.00 Solid Waste
File Attachments
SB212.png (64 KB)
Legal Review
Not applicable.
Environmental Review
Consideration of a pharmaceutical and sharps program is an administrative matter and not a disturbance of the environment similar to
grading or construction and not a project under CEQA or the District’s CEQA Guidelines.
Financial Review
Not applicable.
Public Notice Process
Copies of this report are on file and will be included in the complete agenda packet for the February 12, 2019 Board of Directors Study
Session meeting at District Headquarters and posted on the District’s website.
Alternative Action
1. Direct staff to report back with more information.
C. ITEMS OF STUDY
To: Board of Directors
Via: Scott Carroll, General Manager
From: Nabila Guzman, Management Analyst I
Date: February 12, 2019
Subject: Solid Waste Rate Study Report
Summary
The Costa Mesa Sanitary District solicited proposals for conducting a solid waste rate and feasibility study in May 2018. Over the last four
months the consultant, NBS Government Finance Group has assessed the District's current solid waste rates and evaluated changing the
rates to separate charges based on cart sizes. They have projected annual revenues and expenses were evaluated as the basis to
propose future rates. Their draft study report is attached to this report and a brief summary of the findings is found below.
Staff Recommendation
That the Board of Directors provide direction to staff.
Analysis
In May 2018, staff solicited proposals for conducting a solid waste rate and feasibility study. Two firms responded to the Districts RFP,
both firms demonstrated experience in conducting rate studies for various other agencies. However, NBS Government Finance Group
had more experience with smaller agencies like CMSD and provided the quickest timeline to complete the study. CMSD entered into an
agreement with NBS Government Finance Group to perform the rate and feasibility study in September 2018.
The District needed a rate and feasibility study to understand how much rates should be increased to cover the cost of solid waste
collection and disposal as well as build back the District’s reserves. Study findings showed that the solid waste fund was operating at an
annual deficit because of the costs associated with the organics program. Since the implementation of this program, CMSD had been
using reserve funds to cover the costs and keep rates stable.
NBS Government Finance Group performed a cost analysis based on a possible tier rate structure. They looked into breaking down the
rates based on cart size, with residents who own 90-gallon carts paying more than those residents with 35-gallon carts. Ultimately, staff
decided not to implement a tier rate system for the following reasons:
The Districts current billing system does not allow for this type of rate schedule. The system is heavily customized to allow for
annual assessment charges to be transmitted to the County and the software company is not allowing further customization to our
programs. District staff could upgrade the billing system that would allow a tier rate structure at an estimated cost of $50,291.86
which would include software, uploading data into new system, training and implementation.
CMSD has never kept track of type, size or quantity of carts issued, this has always been done by CR&R. For the purpose of the
rate study, CMSD staff obtained a list of carts issued from CR&R but staff is unaware of the accuracy of the list. NBS created a
cost of service analysis off this list but even if it is slightly incorrect it can significantly alter the revenue expected. District staff felt
uneasy implementing a tier rate structure that could be based off bad data.
There are just too many cart combinations out there to adequately implement a tier rate structure. Essentially, the tier rate
structure proposed 90-gallon carts cost more to own then the 35-gallon carts. Taking a closer look at this proposal, District staff
realized there are homes with just one 90-gallon mixed waste cart while many other homes have two 60-gallon mixed waste carts.
The first resident would be paying more under the tier rate structure while having less capacity to dispose of trash because
everyone has the ability to throw away 120-gallons of waste versus just 90-gallons.
District staff and NBS presented their initial findings and recommendations to the Citizens Advisory Committee at their January 9th
meeting. Committee members favored a tier rate system versus a flat rate increase because they favor the theory that residents who
Subject 7. Solid Waste Rate Study
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Action, Receive and File
Recommended Action That the Board of Directors provide direction to staff.
Goals 2.00 Solid Waste
dispose of more trash should be paying a higher rate then those residents who are producing and disposing of less trash. The reasons
why a tier rate system is not a viable option at the moment were shared and the suggestion of having a one time rate increase to help the
District buy time and verify the cart data as well as upgrade their billing system was shared.
Based on feedback received, District staff directed the consultant to look at the District's expenditures and projections and check if a one
time rate increase of $23.40 a year would help the District buy time before falling below the minimum reserve level threshold. The revised
options are presented in the consultants draft report attached and briefly explained below.
Option 1 — One-Time Rate Increase in 2019 (Recommended)
One single rate increase in July 2019 of 10.83%. This option gives staff time to evaluate the feasibility of verifying cart size data and
making changes to the District's billing software to enable the implementation of rates based on cart-size. Under this option, rates would
return to their 2005-2011 level of $19.95 a month or 239.40 annually.
Option 2 — Eliminate the Deficit in Five Years (Alternative)
Under this Option, the rates are increased 4.1% in year 1, 7.0% in years 2 and 3, and 6.0% iin years 4 and 5, which equates to an
increase over 5 years of 33.9%.
The Consultant, NBS Government Finance Group and District staff are both recommending the Board of Directors adopt option 1. This
option better meet's the District's future goal of implementing rates based on cart-sizes. On Wednesday, January 30, 2019, the District
held the first of two Town Hall meetings to discuss the solid waste rate increase. The public meeting was not well attended, only two
residents attended and asked a few questions regarding both options presented. Not much feedback was received from attendees as to
which option was preferred but the District will be holding the second Town Hall meeting on Wednesday, February 26 at 6 PM before Prop
218 notices are mailed out
Legal Review
Not applicable.
Environmental Review
Consideration of a solid waste rate increase is an administrative matter and not a disturbance of the environment similar to grading or
construction and not a project under CEQA or the District’s CEQA Guidelines.
Financial Review
The Solid Waste Fund has been operating at a deficit in order to eliminate the large reserve fund balance at Board direction. The
implementation of the organics program without a rate increase is helping to reduce the reserve balance. Based upon current
projections, the Solid Waste Fund will not have adequate operating reserves according to existing Board policy toward the end of Fiscal
Year (FY) 20-21, and will enter a deficit cash position during (FY) 22-23. Should the Board select Option 1, the Solid Waste Fund will not
have adequate operating reserves according to the proposed policy (35% of operations and maintenance budget) during FY 21-22, and
the deficit cash position will be delayed until FY 24-25. Should the Board select Option 2, the Solid Waste Fund will not have adequate
operating reserves according to the proposed policy during FY 21-22, and the deficit cash position will be delayed until FY 26-27. Due to
the unavailability of cart size data, any financial impact as the result of a tiered structure cannot be determined at this time.
Public Notice Process
Copies of this report are on file and will be included in the complete agenda packet for the February 12, 2019, Board of Directors Study
Session meeting at District Headquarters and posted on the District’s website.
File Attachments
Option 1.png (9 KB)
Option 2.png (11 KB)
C. ITEMS OF STUDY
To: Board of Directors
From: Scott Carroll, General Manager
Date: February 12, 2019
Subject: Wastewater Service Boundaries between Costa Mesa Sanitary District and City of Newport Beach
Summary
Located near Upper Newport Bay are numerous properties in the City of Newport Beach where the wastewater is flowing to the Costa
Mesa Sanitary District (CMSD) mainline. These properties are located outside CMSD service boundaries and therefore, they are not
assessed a wastewater fee by CMSD for wastewater collection services. For the past 57 years, the City of Newport Beach paid CMSD a
"capacity" fee for collecting and delivering wastewater to treatment facilities at Orange County Sanitation District.
For the past year, staff from CMSD, City of Newport Beach and OC LAFCO (Orange County Local Agency Formation Commission) have
been collaborating to expand CMSD boundaries and annex most of the properties into CMSD service area. Annexing the properties into
CMSD service area will allow CMSD to assess wastewater fees on the properties tax roll for services rendered and the City of Newport
Beach can forgo most of the payments to CMSD.
Recommendation
That the Board of Directors receive and file this report.
Analysis
BACKGROUND
In the early 1960's, areas of Newport Beach were developed where the wastewater connects to the CMSD mainline instead of the typical
connection to a City mainline. This was most likely done due to ease of connection, hydraulics, and/or costs. All the wastewater
eventually goes to treatment facilities at Orange County Sanitation District (OCSD). On January 19, 1961, the Costa Mesa Sanitary
District (CMSD) and the City of Newport Beach entered into their first agreement for 162 residential lots near the intersection of Irvine
Avenue and 22nd Street. As more properties were developed, new contracts between the agencies were executed such as May 14,
1962 and September 1, 1971. The last agreement between CMSD and the City of Newport Beach was executed on August 9, 1979. An
amendment of the agreement was entered into on December 12, 1991 where the fees increased, but the term and conditions of the 1979
Agreement remained the same.
The agreement expired nearly twenty years ago on August 9, 1999, but CMSD and City officials have agreed to a "gentlemen" agreement
where the City would continue paying the capacity fees to CMSD. Every year, CMSD sends an invoice to the City's Finance Department
and the invoice is paid in full. In FY 2018-19, the City paid CMSD nearly $20,000 for the capacity fees. Attached are copies of the
agreements.
AREA DETAILS
Attached as exhibits are maps showing the locations of the properties in question. Below are descriptions of those properties along with
the recommendations from CMSD, City of Newport Beach and OC LAFCO staff.
Exhibit A: This map is an overview of all the properties. The blue highlighted areas were part of the 1979 agreement with the exception
of one property on Mesa Drive. The green highlighted areas are properties that have been constructed since the 1979 agreement. With
the assistance from the City of Newport Beach, staff learned the City is not paying CMSD a capacity fee for some properties on Mesa
Drive nor are some properties paying OCSD a fee for treating wastewater. For instance, the City is not paying CMSD a capacity fee for
the properties located at 2100, 2128, 2412, and 2612, but the properties are paying a fee to OCSD. The City is paying CMSD a capacity
fee for the properties located at 2242 and 2252 Mesa Drive, but the same properties are not paying a fee to OCSD. The City is not
Subject 8. Wastewater Service Boundaries between Costa Mesa Sanitary District and City of
Newport Beach
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Discussion
Goals 1.0 Sewer Infrastructure
3.00 Partnerships
paying CMSD a capacity fee for the property located at 2600 Mesa Drive nor is this property paying a fee to OCSD. This property is
essentially receiving free wastewater service. The pink dashed line is the existing jurisdictional service boundary between CMSD and the
City. The line was confirmed by OC LAFCO staff by researching records and previous annexations. The red line is the proposed
boundary change being recommended by CMSD, City and OC LAFCO staff.
Exhibit B: This map identifies properties otherwise known as Tract 3801. The streets located in this tract include Irvine Avenue,
Francisco Drive, Santiago Drive, Tradewinds Lane, Windward Lane, Leeward Lane and Galaxy Drive. The City owns and maintains the
wastewater mainline located on these streets, and they maintain the private sewer laterals. The properties located in Tract 3801 are
charged a wastewater user fee by the City. Wastewater from Tract 3801 flows into CMSD's mainline located on Irvine Avenue at the
intersection of Santiago Drive. CMSD, City and OC LAFCO staff recommend these properties remain within the City service area and
CMSD continues billing the City a capacity fee for the total flow from these properties. A new agreement will be developed between the
two agencies to address the full recovery of capacity costs to CMSD.
Exhibit C: This map identifies a property known as Harbor Christian Church located at 1401 Irvine Avenue. The property is within the
City service boundary and has a physical wastewater connection to the CMSD mainline on Tustin Avenue. The City charges the property
owner a wastewater surcharge of $10.00 per month, but does not charge a wastewater user fee. Due to the property physically
connected to CMSD's mainline, and no City mainline is nearby, CMSD, City and OC LAFCO staff recommend the CMSD service
boundary be expanded to include the annexation of this property. The City will stop charging a wastewater surcharge fee to the property
owner.
Exhibit D: This map identifies properties known as Tract 4444. OC LAFCO has determined these properties are within the City service
area. When the development was constructed in 1962, a dedicated wastewater main and lateral system was given to the City. All of the
wastewater from the highlighted area flows to the CMSD mainline located at the end of the cul-de-sac on Silver Lane. The City charges a
wastewater user fee to these properties. Due to the dedicated wastewater system for the condominium complex and all the flow going
into CMSD's system. CMSD, City and OC LAFCO staff recommend the CMSD service boundary be expanded to include the annexation
of these properties. The City will stop charging wastewater fees to the property owners.
Exhibit E: This map identifies properties known as Bay Corporate Plaza and YCMA along University Drive. Both properties are
connected to a privately owned wastewater line within the private property and privately owned street end of University Drive. The private
wastewater line connects to a small portion of the wastewater main owned by the City adjacent to Tract 4444 (Exhibit D) and wastewater
flows to the CMSD mainline located at the end of the cul-de-sac on Silver Lane. The City does not charge a wastewater user fee to these
properties. Should Tract 4444 (Exhibit D) be annexed into CMSD, then Corporate Plaza would be connected directly to CMSD. CMSD,
City and OC LAFCO staff recommend the CMSD service boundary be expanded to include the annexation of these properties.
Exhibit F: This map identifies a property known as the Interpretive Center. This is a County run facility within Newport Beach with
minimal structures. Identical to University Drive (Exhibit E), the property has a privately owned sewer main and connects to the City
wastewater main near Tract 4444 (Exhibit D) and the wastewater flow goes to the CMSD mainline at the end of the cul-de-sac on Silver
Lane. The City does charge a wastewater user fees to this property. CMSD, City and OC LAFCO staff recommend the CMSD service
boundary be expanded to include the annexation of this property. The City will stop charging wastewater fees to the property owner.
Exhibit G: This map identifies properties along Mesa Drive. The blue highlighted property is not part of the 1979 Agreement. After 1979,
The green highlighted properties have been developed that included septic systems. However, the City municipal code does not allow
septic systems and requires owners to connect to a public wastewater system when constructing or reconstructing a home. The City
does not own a wastewater mainline on Mesa Drive, so for the health and safety of the public, CMSD gave permission for these
properties to connect to CMSD mainline on Mesa Drive. All the properties on Mesa Drive are connected to CMSD mainline, but the
highlighted properties are located outside CMSD boundary, which means CMSD cannot assess a wastewater fee on their property tax
roll. The City does not provide wastewater service to the properties on Mesa Drive, so the City cannot charge wastewater user fees to
the property owners. Nor is OCSD assessing a fee for wastewater treatment at 2242 and 2252 Mesa Drive. The property at 2600 Mesa
Drive is not being charged a wastewater user fee from the City nor is it being charged a fee from OCSD. In essence. this property is
receiving free wastewater service. There are six properties on Mesa Drive (not highlighted) that are within CMSD's boundary and are
being assessed a wastewater fee from CMSD and OCSD. CMSD, City and OC LAFCO staff recommend the CMSD boundary be
expanded to include the annexation of the blue and green properties on Mesa Drive.
TIMELINE FOR ANNEXATION
March 2019 - CMSD and City staff will host town hall meetings with residents living on the properties described above. The purpose of
the meetings is to garner support for annexation. Residents will receive the same information as in this report and staff will be available
to answer questions. In addition, residents will learn about the different services provided by both CMSD and the City. For instance, the
City will no longer maintain private sewer laterals for residents residing in Tract 4444 (Exhibit D), but they will be eligible to participate in
CMSD's Sewer Inspection Rebate Program (SIRP) where they can receive up to $750 for videoing their sewer lateral and installing a
ground level clean-out. Residents will also learn about the difference in wastewater rates where Newport Beach charges $11.02 a month
and CMSD charges $7.70 a month for single family and $4.52 for multi-family residents for wastewater collection and delivery services.
For commercial properties, the monthly rate at CMSD its $41.09 per 1,000 square foot of building size and the commercial rate in
Newport Beach varies based on meter size and commodity rate. The rates pay for maintenance, capital replacement, sewer video,
salaries and benefits as well as compliance with the State of California Waste Discharge Requirements (WDR) and the Sanitary Sewer
Management Plan (SSMP) developed by both agencies.
April 23, 2019 - Newport Beach City Council will consider adopting a resolution supporting the annexation of the properties described
above. They will also consider a new agreement between the City and CMSD for capacity fees. All the properties described above will
be included in the new agreement in which the City will continue paying the District until the properties in question are approved for
annexation by OC LAFCO. If OC LAFCO does not receive a majority protest from the above property owners and the LAFCO
Commission approves annexation than an amended agreement without the annexed properties will be brought back to the City Council,
and eventually to the Board of Directors, for approval consideration.
April 25, 2019 - CMSD Board of Directors will consider adopting a resolution describing the intent to annex the properties above and the
Board will consider approving the capacity fee agreement with the City of Newport Beach.
May 2019 - CMSD staff will complete and submit to OC LAFCO their Project Application Form. The application will include the following:
Adopted resolutions from CMSD and the City of Newport Beach
A map and legal description that was reviewed and approved by the Orange County Surveyor
Signed Indemnification Agreement
California Environmental Quality Act (CEQA) determination
Disclosure of political expenditures
Plan for services including any change in the level of service
July 2019 - OC LAFCO Commission will consider approving CMSD's application.
August/September 2019 - LAFCO holds a protest hearing and makes a determination on the value of written protests filed and not
withdrawn. A majority protest exist if protest are filed by at least 50% of the registered voters residing within the proposed annexed
properties. If a majority protest exist, LAFCO will terminate the proceedings and deny CMSD's application.
If a majority protest occurred, then staff will report back to the Board with options to consider, which may include terminating wastewater
services for the blue and green properties on Mesa Drive and/or taking legal action against the property owners for receiving a gift of
public funds. If the majority protest fails then the new service boundary and annexation will be approved by LAFCO and CMSD will be
able to assess wastewater fees for the properties mentioned above in FY 2020-21.
Legal Review
Not applicable at this time; however, District Counsel will review the new agreement with the City of Newport Beach and the resolution to
annex the properties before being presented to the Board.
Environmental Review
Providing information regarding the wastewater service boundaries between CMSD and City of Newport Beach is an administrative
matter, which will not result in direct or indirect physical changes to the environment similar to grading or construction and is not
considered a project under CEQA. However, a CEQA determination will be provided to the public when CMSD submits its annexation
application to OC LAFCO.
Financial Review
The LAFCO application process will cost less than $10,000. The District is required to submit a deposit of $5,600 to LAFCO that will be
used for LAFCO staff time and material costs. LAFCO will return the balance, if any, to the District. Other cost include the State Board of
Equalization for $2,200 and CEQA fees. However, CEQA fees will be waived if the annexation project is determined to be statutorily or
categorically exempt from CEQA. District Counsel is reviewing statutes that will allow the District to recover LAFCO application expenses
as part of the wastewater assessment fees of the annexed properties above.
The District currently receives approximately $19,485 in wastewater funds for these properties, all paid for through the City of Newport
Beach. After annexation, an additional $666 in wastewater funds will be generated annually for properties currently not receiving an
assessment. Of the total current revenue amount, the District receives approximately $13,457 a year from the City for Tract 3801.
Public Notice Process
Copies of this report are on file and will be included in the complete agenda packet for the February 12, 2019 Board of Directors Study
Session meeting at District Headquarters and posted on the District’s website at www.cmsdca.gov.
Alternative Actions
1. Direct staff to report back with more information.
Attachments
1. Agreements with the City of Newport Beach
2. Exhibit A: CMSD current and proposed service boundaries for Newport Beach properties
3. Exhibit B: Tract 3801
4. Exhibit C: Harbor Christian Church
5. Exhibit D: Tract 4444
6. Exhibit E: University Drive
7. Exhibit F: Interpretive Center
8. Exhibit G: Mesa Drive
File Attachments
Agreements CMSD-NB.pdf (1,551 KB)
Exhibit A Service Boundaries.pdf (508 KB)
Exhibit B Tract 3801.pdf (649 KB)
Exhibit C Harbor Christian Church.pdf (390 KB)
Exhibit D Tract 4444.pdf (480 KB)
Exhibit E University Drive.pdf (518 KB)
Exhibit F Interpretive Center.pdf (513 KB)
Exhibit G Mesa Drive.pdf (513 KB)
C. ITEMS OF STUDY
To: Board of Directors
From: Scott Carroll, General Manager
Date: February 12, 2019
Subject: Construction Inspection Program
Summary
Attached is a letter from Rob Hamers requesting his firm be reinstated to providing construction inspection services for the District. Mr.
Hamers will speak before the Board regarding his request.
Since July 23, 2009, Robin B. Hamers & Associates (RBHA) has provided construction inspection services to the District. On August 31,
2018, RBHA was instructed not to provide inspection services while an investigation was conducted into the firm's inspection services
billings. The investigation has concluded, and while the investigator found no evidence that laws were broken, he was very critical
regarding the lack of oversight on the RBHA inspector. Based on the findings in the investigation report, staff believes improvements can
be made in the inspection program, which are described in more details below.
Recommendation
That the Board of Directors provide direction to staff.
Analysis
Inspection services are needed for wastewater infrastructure improvements to ensure compliance with construction designs and
specifications as well as being compliant with plumbing and CMSD codes. Within the next five years, staff has identified the following
capital improvement projects.
#318 – President Pump Station Reconstruction
#319/320 – Canyon Force Main Replacement and Pump Station Reconstruction
#321 – Indus Mainline Phase 2
#323 – Iowa Force Main Replacement
#324 – Brick Manhole Rehabilitation – Applying cured-in-place epoxy fiberglass composite liners
#325 - Westbluff Pump Station Rehabilitation
#326 - 19 Street Force Main Replacement
#327 - Aviemore Force Main Replacement
#328 – Seabluff Force Main Replacement
#329 – Ductile Iron Pipe (DIP) Rehabilitation Project
#330 – Brick Manhole Rehabilitation Phase 2
In addition, the District issues approximately 400 permits a year that require inspections for cleanout installation, new lateral tie-in
connection, remove and replace existing lateral and liner installations. The District also provides inspection services for manhole
installations, manhole covers raise to grade and at times, grease interceptor installations (EEC provides most of the inspections for
grease interceptor installations). When RBHA was instructed not provide inspection services during the investigation, the District hired
the firm, AndersonPenna Partners, Inc., to provide inspection services at $125.00 an hour. To date, the District has paid a total amount of
$20,700 to AndersonPenna for inspection services. The District's Engineering Technician coordinates the inspector's workload by
Subject 9. Construction Inspection Program
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Action
Recommended Action That the Board of Directors provide direction to staff
Goals 1.0 Sewer Infrastructure
5.0 Administrative Management
6.0 Personnel/Organizational Management
6.5 Create a Development Plan
6.7 Promote high employee satisfaction
th
informing him about upcoming projects. The two meet regularly and at times they meet with the District Engineer. RBHA charged the
District $70.00 an hour for inspection services. In the last four years, the following are the total costs paid to RBHA for inspection
services.
FY 2017-18 - $149,205
FY 2016-17 - $172,795
FY 2015-16 - $150,342
FY 2014-15 - $145,490
It should be noted that in FY 2016-17 the District performed three major construction projects that required evening work. The force
mains on Harbor Blvd, Victoria Street and at South Coast Plaza were replaced with HDPE (High-Density Polyethylene) PVC (Polyvinyl
Chloride) pipes that will last another fifty to one hundred years. RBHA inspector worked a double shift performing inspection services
during the day and then inspection services in the evening for the three force main replacement projects. Also, in the first half of FY
2014-15, RBHA inspection hourly rate was $64.50 an hour.
Staff believes hiring its own in-house inspector will save money in the long run for the District while maintaining level of service. A job
description and salary range for an inspector position is currently being developed by the District's consultant responsible for conducting
the Compensation & Classification study, but after researching websites, below are the fully burden hourly rate (salary and benefits) for
special district construction inspectors in Orange County that inspect wastewater projects.
Low High
Orange County Sanitation District 58.54 71.13
Irvine Ranch Water District 43.40 61.78
Yorba Linda Water District 43.81 56.08
Moulton Niguel Water District 38.62 49.45
Santa Margarita Water District 47.53 65.52
South Coast Water District 53.96 72.56
47.64 62.75Average
45.67 63.65Median
Having an in-house District inspector gives staff an opportunity for advancement in the organization and adheres to the District's Strategic
Goals described below.
Strategic Goal No. 6.5: Create a Development Plan
Strategic Goal No. 6.7: Promote high employee satisfaction
The District's Engineering Technician has expressed interest in becoming the District's construction inspector. A professional
development plan has been created for him that includes enrolling at Santiago Canyon College to earn a Public Works Certificate with an
emphasis on construction inspection and signing up using American Public Works Association (APWA) eLearning portal for APWA
Construction Inspection 201 webinar, which is a 24-course program. The program includes an array of information for the Engineering
Technician, including: communication; contractor relations; plans and specifications; construction meetings; progress meetings;
scheduling; documentation; negotiations; and project close-out. In addition, the Engineering Technician is going on ride along with the
current inspector from AndersonPenna to gain firsthand knowledge and experience as a construction inspector. Staff believes the
Engineering Technician will be educated and trained to begin providing inspections services for the District by July 2020.
A new method and procedure staff wants to implement is an inspection scheduling program for contractors. Many public organizations
have online scheduling where contractors visit the organization's website to schedule an inspection. Contractors are required to enter
their permit number and sometimes the street number. Then, they select an inspection day and a preference for inspection (e.g. morning
or afternoon) and provide a call back number. The inspector will call the contractor, and then they will agree on a time for the inspection
day selected by the contractor. To control costs, staff recommends no standard inspections would be scheduled after 3:30 pm and
additional fees would apply to contractors if they requested off hours and/or weekend inspections to cover overtime expenses. Requiring
contractors to schedule inspections online has several benefits, such as:
1. District management can provide over sight of the inspector's workload.
2. The District controls the inspection workload not the contractors.
3. Share status and inspection information seamlessly across departments and with the public.
4. Assign permits, projects, and inspection data to GIS assets.
Legal Review
The District Counsel has reviewed the legal issue involved in reducing services and Mr. Hamer’s letter. District Counsel’s opinion is that
Mr. Hamers has certain limited contract rights in this Agreement with the District. Most significantly, Mr. Hamers has no property right in
the position of District Engineer but is entitled to notice if terminated, and if terminated immediately without cause, would be entitled to a
sum equivalent to three month’s billings. Significantly, there is no guarantee of any level of work or payment amount. Mr. Hamers has not
been terminated as District Engineer, but inspection work was suspended while the investigation into alleged wrongdoing related to
inspection services by Mr. Hamer’s subcontractor was completed. Mr. Hamers continued to provide District Engineer services during this
time.
Mr. Hamers does have the right to address the Board but should do so from the audience and should not sit in his District Engineer seat
while the matter is being discussed. He should make it clear he is acting in his personal interests and is not providing advice as District
Engineer when he addresses the Board.
District Counsel will be attendance at the Study Session.
Environmental Review
Job classification and compensation for an Inspector position is an administrative matter, which will not result in direct or indirect physical
changes to the environment similar to grading or construction and is not considered a project under CEQA.
Financial Review
Promoting the Engineering Technician to Inspector would cost an additional $24,000 a year when using the high median hourly rate for
special district construction inspector (see above). The cost could change after the Compensation & Classification Study is finished. The
fully burden annual salary is estimated at $132,392, which is nearly $17,000 less than inspection costs performed by RBHA in FY 2017-
18. This analysis is assuming the newly promoted inspector can perform both functions as Engineering Technician and Inspector.
However, if the workload determines a full time inspector is needed, then the District will have to hire an additional staff person as
Engineering Technician for approximately $81,000 to $109,000 a year.
Additional expenses for the Inspector position would include a vehicle. To support the District's mission of protecting the community's
health and the environment, staff recommends acquiring an electric vehicle like the Chevrolet Bolt EV or the Ford Focus Electric. The
cost for both vehicles ranges from $30,000 to $45,000. Other expenses would include procuring and installing a vehicle charger for
$15,000 and a wireless tablet for $500 so the inspector can take pictures and use an electronic inspection log. If approved by the Board,
the Inspector, Engineering Technician, vehicle, vehicle charger and wireless tablet will be budgeted in the FY 2020-21 Budget.
The annual license fee to acquire an online inspection program, via the District's Computerized Maintenance Management System
(CMMS), Cityworks is $9,000, but staff believes a simpler system can be attained for less. Other costs will include implementation and
training. Funding for this program is not in the budget, so staff is recommending the Board direct staff to bring this item back to the
February 28, 2019 regular Board of Directors meeting to consider appropriating money from the Wastewater Fund Balance to pay for this
expense. Staff will have an approximate amount at your February 28th meeting.
Public Notice Process
Copies of this report are on file and will be included in the complete agenda packet for the February 12, 2019 Board of Directors Study
Session meeting at District Headquarters and posted on the District’s website at www.cmsdca.gov.
Alternative Actions
1. Direct staff to report back with more information.
File Attachments
Inspection Request 020619.2 (002).pdf (174 KB)
C. ITEMS OF STUDY
ation.
Subject 10. CMSD 75th Anniversary Ad Hoc Committee Meeting - Oral Report
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Action
Recommended Action That the Board receive and file this report.
Goals 4.0 Community Outreach & Communications
4.5 Celebrate the District’s 75th Anniversary
D. CLOSING ITEMS
Subject 1. Oral Communications and Director Comments
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type
D. CLOSING ITEMS
THE NEXT STUDY SESSION OF THE COSTA MESA SANITARY DISTRICT BOARD OF DIRECTORS WILL BE HELD ON
TUESDAY, MARCH 12, 2019 AT 9:30 A.M. IN THE DISTRICTS BOARD ROOM, 290 PAULARINO AVENUE, COSTA MESA.
Subject 2. Adjournment
Meeting Feb 12, 2019 - Board of Directors Study Session
Access Public
Type Procedural