agendapacket_2019_02_13_cacWednesday, February 13, 2019
Special Citizens Advisory Committee Meeting
WHEN: Wednesday, February 13, 2019, 6:00 p.m.
WHERE: Costa Mesa Sanitary District Headquarters
290 Paularino Avenue, Costa Mesa, CA 92626
CONTACT: Noelani Middenway, District Clerk
PHONE: (949) 645-8400, Ext. 227
EMAIL: nmiddenway@cmsdca.gov
A. OPENING ITEMS
Subject 1. Call to Order
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type Procedural
A. OPENING ITEMS
Mike Carey, Chair
Albert Graham, Jr., Vice Chair
Andrew Nielsen
Elodie Katz
Jana Oak
Mike McIlroy
Monte Fields
Phil Marsh
Shayne Smith
Sue Lester
Tom Brenneman
Subject 2. Roll Call
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type Procedural
A. OPENING ITEMS
Subject 3. Public Comments - Speakers will be limited to three minutes. The three minutes
per speaker time allotted may be extended for good cause by a majority vote of the
committee).
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type Procedural
B. ITEM
To: Citizens Advisory Committee
Via: Scott Carroll, General Manager
From: Gina Terraneo, Management Analyst II
Date: February 13, 2019
Subject: Citizens Advisory Committee Meeting Minutes of January 9, 2019
Summary
The recorded minutes of the January 9, 2019 Citizens Advisory Committee Meeting are hereby submitted to the Citizens Advisory
Committee for review and approval.
Analysis
Attached to the staff report are the minutes for the Citizens Advisory Committee Meeting on January 9, 2019.
Staff Recommendation
That the Citizens Advisory Committee approves the meeting minutes as presented.
Legal Review
Not applicable.
Environmental Review
Consideration of public meeting minutes 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 in the complete agenda packet for the February 13, 2019 Citizens Advisory
Committee Meeting at District Headquarters and posted on the District’s website.
Alternative Actions
1. Do not approve the meeting minutes as presented.
2. Direct staff to report back with more information.
File Attachments
minutes_2019_01_09_cac.pdf (60 KB)
Subject 1. Approve the Citizens Advisory Committee Meeting Minutes of January 9, 2019
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type Action, Minutes
Recommended Action That the Citizens Advisory Committee approves the meeting minutes as presented.
Minutes View Minutes for Jan 9, 2019 - Citizens Advisory Committee
B. ITEM
Board of Directors Regular Meeting (Thursday, January 24, 2019)
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), Robin Hamers (District Engineer), Marc Davis (District Treasurer),
Noelani Middenway (District Clerk), Kaitlin Tran (Senior Accountant), Gina Terraneo (Management Analyst II)
Others present
Joshua Calhoun (Teaman Ramirez & Smith, Inc), Dan Worthington (resident), Jim Mosher (resident)
Meeting called to order at 5:29 P.M.
A. OPENING ITEMS
Procedural: 1. Call to Order - President Ferryman
President Ferryman called the meeting to order at 5:29 P.M.
Procedural: 2. Pledge of Allegiance - President Ferryman
President Ferryman led the Pledge of Allegiance.
Procedural: 3. Invocation - Vice President Ooten
Vice President Ooten led the Invocation.
Procedural: 4. 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.)
District Clerk, Noelani Middenway, conducted roll call. She noted that all Board Members were present.
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.
General Manager, Scott Carroll, noted that written communications were received from resident, Jim Mosher. He added that
copies of the written communications were provided to the Board of Directors.
Procedural: 6. Ceremonial Matters and Presentations
None at this time.
B. Public Comments
Procedural: 1. Public Comments
Subject 2. Draft Board of Directors Meeting Minutes of January 24, 2019
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type Minutes
Minutes View Minutes for Jan 24, 2019 - Board of Directors Regular Meeting
President Ferryman opened public comments.
Resident and former Costa Mesa Sanitary District Board Member, Dan Worthington, made a proposal that the District develop a
pilot program to employ local youth to roll trash carts in and out for residents in need of assistance.
President Ferryman noted that CR&R offers a trash cart roll-out service, but it may cost residents an additional fee. He asked
District staff to look into this. Seeing no one else wishing to speak, President Ferryman closed public comments.
C. CONSENT CALENDAR
Action (Consent): 1. Approve Consent Calendar
Recommendation: That the Board of Directors approve the Consent Calendar as presented.
Action (Consent), Minutes: 2. Approve the Board of Directors Study Session Minutes of December 11, 2018
Recommendation: That the Board of Directors approve the meeting minutes as presented.
Action (Consent), Minutes: 3. Approve the Board of Directors Regular Meeting Minutes of December 20, 2018
Recommendation: That the Board of Directors approve the meeting minutes as presented.
Action (Consent): 4. Adopt Warrant Resolution No. CMSD 2019-7 Approving District Warrant Registers
Recommendation: That the Board of Directors adopt Warrant Resolution No. CMSD 2019-7 approving District warrants for the month of
December 2018 in the amount of $724,712.87.
Action (Consent): 5. 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): 6. Approve Payroll Transparency Disclosure for December 2018
Recommendation: That the Board of Directors approve and file the report.
Action (Consent): 7. Approve the preparation of a warrant to CR Transfer in the amount of $181,524.02 for December 2018
recycling and disposal services in the January 2019 warrant register
Recommendation: That the Board of Directors approves the preparation of a warrant to CR Transfer in the amount of $181,524.02 for
December 2018 recycling and disposal services to be ratified in the January 2019 warrant register.
Action (Consent): 8. Accept the occupancy count as presented as 22,724 and direct staff to prepare a warrant to CR&R
Environmental Services for $222,590.67 for December 2018 collection
Recommendation: That the Board of Directors accept the occupancy count as presented using 22,724 as the correct number of active
units and direct staff to prepare a warrant to CR&R Environmental Services for December 2018 collection based on this occupancy report
so long as the contractor fulfills the obligations of the agreement in the amount of $222,590.67 to be ratified in the January 2019 warrant
list.
Action (Consent): 9. Receive and File Fiscal Year 2017-2018 Annual Compliance Report for Requirements of Government Code
Section 66013 (d) for Capacity Charges.
Recommendation: Staff recommends the Board receive and file this report.
Motion: To approve the Consent Calendar as presented.
Motion by Mike Scheafer, second by Arlene Schafer.
Director Perry asked if District staff would like to respond to comments made by resident, Jim Mosher, at this time.
Mr. Carroll noted that typographical errors in the minutes (Item C3) were corrected and are being presented with the corrections
made. He added that he responded to Mr. Mosher regarding item E9. Lastly, he noted that Mr. Mosher's comments regarding Item
H1 can be addressed during the item discussion later in the meeting.
Motion: To approve the Consent Calendar with the typographical errors corrected in Item C3.
Motion by Art Perry, second by Bob Ooten.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer
There were no further comments or discussion.
D. PUBLIC HEARINGS
None at this time.
E. GENERAL MANAGER'S REPORTS
Action, Procedural: 1. Receive and file the Comprehensive Annual Financial Report, Auditor's Report in Accordance with
Government Auditing Standards, and the Auditors' Required Communication for the year ended June 30, 2018
Recommendation: The Board of Directors receive and file:
1) The Comprehensive Annual Financial Report for Year Ended June 30,2018,
2) Auditors’ Report in Accordance with Government Auditing Standards, and
3) The Auditors’ Required Communication for the Year Ended June 30, 2018.
Senior Accountant, Kaitlin Tran, presented the Comprehensive Annual Financial Report (CAFR) for the year ended on June 30,
2018. She noted that included with the report are required correspondence from the auditors, including the Independent Auditor's
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters. Ms. Tran shared that the District
received an "unmodified" (otherwise known as a "clean") opinion from the auditing firm and noted that total assets exceeded total
expenditures by $61.8 million, of which $17.2 million is unrestricted and available to meet the District's ongoing obligations. Lastly,
she introduced Joshua Calhoun of Teaman Ramirez & Smith, Inc., the firm that conducted the District's audit.
Mr. Calhoun provided an overview of the audit process and reiterated that the district received an unmodified opinion on its
financial statements. He welcomed questions.
Director Scheafer noted that the District paid off its unfunded pension liabilities last year and asked if this had any effect on the
District's financial position.
Mr. Calhoun noted that it would take about 2 years for this to be reflected in the District's net pension liability.
Director Perry asked if the District currently has any unfunded pension liabilities.
Mr. Calhoun responded that the District has about $105,000 in unfunded pension liabilities, which he commented is very
reasonable for a District of this size.
Mr. Carroll thanked District Treasurer, Marc Davis, and Ms. Tran for taking the lead on completing the CAFR and the audit in the
absence of a Finance Manager.
Director Perry asked if the District should consider paying off the current unfunded pension liability.
Mr. Davis explained that the District's unfunded pension liability will probably never appear to be completely eliminated on the
financial statements because it is actuarily determined. However, he noted that the District could consider making another lump
sum payment toward its pension liability. He commented that the District's current unfunded pension liability is very small
compared to other agencies of the District's size.
Discussion followed regarding the California Public Employees' Retirement System's (CalPERS) actuarial calculations.
There were no further comments or discussion and the report was received.
Action: 2. 2018: A Year In Review
Recommendation: That the Board of Directors receive and file this report.
Mr. Carroll presented the 2018 Year End Report. He thanked District staff and the Board of Directors for making the District's
achievements possible.
Director Perry asked if the District got any feedback regarding the report at the last Liaison Committee Meeting.
Vice President Ooten noted that Mayor Foley commented positively about the report.
Director Scheafer complimented the design of the report.
Director Perry verified that the report was given to the Citizens Advisory Committee (CAC).
There were no further comments or discussion and the report was received.
Action: 3. 2018 Performance Measurement Final Report
Recommendation: That the Board of Directors receive and file this report.
Mr. Carroll presented the 2018 Performance Measurement Final Report. He noted that the District was successful in achieving
most of the benchmarks that were set, but those marked in red were not achieved. He added that the report is available on the
District's website and he welcomed questions.
Director Perry asked a clarifying question regarding the benchmark on page 3 of the report.
Mr. Carroll explained that the goal to have less than or equal to 0.81 sanitary sewer overflows (SSOs) per 100 miles was obtained
from Region 8 (Santa Ana) of the California Integrated Water Quality System (CIWQS). He noted that the District had 3 SSOs in
2018 and therefore did not meet this benchmark.
Discussion followed regarding how the District would compare to other CIWQS regions.
There were no further comments or discussion and the report was received.
Action: 4. Receive and File 2015-20 Strategic Plan Quarterly Update - FY 2018-19 2nd Quarter
Recommendation: That the Board of Directors receive and file this report.
Mr. Carroll presented the 2nd Quarter 2015-20 Strategic Plan Update. In regards to Goal 1.8, he noted that 340 gallons of cooking
grease were deposited at the Orange Coast College Recycling Center for recycling.
Director Perry asked if the cooking grease recycling program is available year-round.
Mr. Carroll confirmed that the program is year-round, but noted that the District promotes the program heavily during the holiday
season.
There were no further comments or discussion and the report was received.
Action: 5. FY 2018-19 Budget Review – Mid-Year
Recommendation: That the Board of Directors:
1. That the Board of Directors approve transferring $200,000 from Contingency to Sewer Maintenance.
2. That the Board of Directors receive and file this report.
Ms. Tran presented the FY 2018-19 Mid-Year Budget Review. She noted that 41.9% of the Solid Waste budget and 40% of the
Wastewater budget have been expended as of December 31, 2018. Additionally, she noted that District staff is requesting
approval of a transfer of $200,000 from the Contingency account to the Miscellaneous Sewer Work account cover costs
associated with the Elden SSO that occurred in August 2018.
Director Perry suggested that the District consider replacing the Sewer Inspection Rebate Program (SIRP) with the discontinued
Sewer Lateral Assistance Program (SLAP) due to the minimal participation in the program.
Mr. Carroll noted that SLAP was very labor intensive for District staff. He commented that he believes the District can increase its
outreach to better promote the SIRP program.
Vice President Ooten suggested that the District rename the program to the Sewer Lateral Inspection Program, which may better
explain the purpose of the program.
Director Scheafer inquired about the new wastewater truck the District will purchase this fiscal year.
Ms. Tran noted that the District has a purchase order in place for the truck and it is expected to arrive in May or June of 2018.
President Ferryman indicated agreement with Vice President Ooten's suggestion.
Motion: To approve transferring $200,000 from Contingency to Miscellaneous Sewer Work Account.
Motion by Mike Scheafer, second by Bob Ooten.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer
There were no further comments or discussion.
Discussion: 6. Discuss Preliminary Budget Calendar for the 2019-2021 Biennial Budget
Recommendation: That the Board of Directors receive and file this report.
Ms. Tran presented the Preliminary Budget Calendar for the 2019-2021 Biennial Budget.
Director Perry confirmed that the schedule takes into account the CAC's new bimonthly meeting schedule.
Vice President Ooten confirmed that the upcoming budget will reflect any changes made to the solid waste rate.
There were no further comments or discussion and the report was received.
Action: 7. Citizens Advisory Committee (CAC) January 9, 2019 Meeting Overview
Recommendation: That the Board of Directors receive and file this report.
Mr. Carroll presented the meeting overview. He noted that the CAC had many comments with regard to the solid waste rate study,
which will be taken into account for the upcoming town hall meeting on January 30th. Additionally, Mr. Carroll shared that the CAC
voted to change their current monthly meeting schedule to a bimonthly meeting schedule. He noted, however, that the CAC will
meet again in February in order to provide feedback regarding the solid waste rate study.
Director Scheafer noted that the CAC displayed interest in pursuing variable rates and asked if this would be possible.
Mr. Carroll explained that the District does not currently have an accurate trash cart inventory, and so the District would need to
develop one in order to enact variable rates. He noted that District staff plans to hire a set of interns to inventory the carts.
Director Perry commented that it may be difficult to get an accurate count of carts, since residents do not always put all of their
carts out for collection each week.
Mr. Carroll noted that the District would be most interested in the size of the carts rather than the number of carts, since variable
rates would be charged according to cart size.
Discussion followed regarding CR&R's trash cart inventory, the impact of variable rates on disposal tonnage and revenues, and
the relationship of tonnage to time of year.
Director Scheafer commented that the best people to gather the inventory data would be the trash truck drivers.
District Engineer, Robin Hamers, suggested that the District have the interns ride along with the trash truck drivers.
Mr. Carroll noted that CR&R will not allow anyone to ride with their drivers due to liability concerns.
There were no further comments or discussion and the report was received.
Action: 8. Roger Faubel Public Affairs, Inc. - Consider Approving Agreement and Directing the General Manager to Sign said
Agreement
Recommendation: That the Board of Directors approve the Agreement with Roger Faubel Public Affairs, Inc. and direct the General
Manager to sign said Agreement.
Mr. Carroll noted that the District has had a contract with Roger Faubel Public Affairs, Inc. since 2016 for public outreach
strategies. He shared that District staff is recommending the approval of an annual contract in the amount of $60,000.
Director Scheafer commented that the most valuable services that Roger Faubel Public Affairs, Inc. provides are their interaction
with the Local Agency Formation Commission (LAFCO) and other political factors in the county that impact the District.
Vice President Ooten indicated agreement with Director Scheafer. He inquired about the LAFCO municipal service review (MSR)
schedule.
Motion: To approve the Agreement with Roger Faubel Public Affairs, Inc. and direct the General Manager to sign said Agreement.
Motion by Arlene Schafer, second by Art Perry.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer
There were no further comments or discussion.
Action: 9. Receive and File General Manager's 2018 Performance Goals and CMSD Accomplishments; Direct President Ferryman
to meet with the General Manager to negotiate 2019 performance goals and compensation
Recommendation: That the Board of Directors:
1. Receive and file General Manager's 2018 performance goals and CMSD accomplishments; and
2. Direct President Ferryman to meet with General Manager to negotiate 2019 performance goals and compensation.
Mr. Carroll presented his 2018 Performance Goals and CMSD Accomplishments. He noted that 8 out of the 10 goals were
achieved. Mr. Carroll explained that 2 goals were not achieved because the District had 3 SSOs in 2018 and the District's
geographic information system (GIS) does not yet include an inventory of its trash carts.
District Counsel, Alan Burns, recommended that the word "negotiate" within the staff recommendation be changed to "discuss"
because the Board of Directors would give President Ferryman the authority to negotiate compensation with Mr. Carroll after
discussing the matter in closed session.
Motion: To direct President Ferryman to meet with the General Manager to discuss 2019 performance goals and compensation.
Motion by Mike Scheafer, second by Arlene Schafer.
Director Perry suggested that the Board provide input to President Ferryman regarding the General Manager's 2019 Goals prior to
his meeting with Mr. Carroll.
Mr. Burns suggested that the Board meet in closed session during the February Study Session to discuss the goals in order to
remain in compliance with the Brown Act.
Director Perry confirmed that Mr. Carroll will also submit ideas for his 2019 goals.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer
There were no further comments 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.
Mr. Hamers presented the Capital Improvements Projects (CIP) Status Report and welcomed questions.
There were no questions or comments and the report was received.
Action: 2. #318 President Pump Station Reconstruction; Review of Alternative 4; Pump Station Located in Cul-de-Sac
Recommendation: The Board of Directors:
1. Review Alternative 4 plans and engineer’s estimate of $1.8 million and compare with Alternatives 1, 2, and 3.
2. Direct the General Manager to secure additional project funding as needed as part of the 2019-2020 fiscal year for whichever
alternative is selected.
3. Direct the General Manager to hold one or two neighborhood meetings to ascertain the opinions of the residents of Alternative 4
design of moving the station into the cul-de sac.
4. Consider the benefits and limitations of Alternative 4 as shown in the Analysis section below. Consider the District Engineer’s
opinion of supporting Alternative 4 due to the large number of important benefits and the ability to mitigate the limitations.
Mr. Hamers presented the preliminary plans for Alternative 4 and explained how it differs from the existing pump station and
Alternatives 1, 2, and 3. He noted that the District will budget the project and complete it next fiscal year. Mr. Hamers proposed to
meet with the neighbors in the surrounding area to find out whether they approve of Alternative 4 and then bring the item back to
the Board of Directors for consideration of all alternatives.
Discussion followed regarding the abandonment of the easement, the construction timeline, the proposed locations of the control
panel and permanent generator, the elevation of the cul-de-sac, and the necessity of a permanent generator at this location.
Motion: To direct District staff to hold one or two neighborhood meetings to ascertain the opinions of residents about
the Alternative 4 design of moving the station into the cul-de sac and then bring the item back to the Board of Directors.
Motion by Art Perry, second by Bob Ooten.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer
Vice President Ooten suggested that Mr. Hamers show the neighbors an image of a similar pump station (such as Aviemore), so
that they can see what the finished product will look like.
There were no further comments or discussion.
Action: 3. #319/#320 Canyon Pump Station Rehabilitation and Sewer Force Main Replacement; Bid Opening, Award of Project,
and Transfer of Funds
Recommendation: The Board of Directors:
1. Award a contract to the lowest responsive and responsible bidder, GCI Construction, Inc., in the amount of $782,784.00
2. Approve a contingency of 10% in the amount of $78,278.40
3. Approve a transfer of $170,000 from Project 322 and $1,000 from Contingency into Project 319/320.
Mr. Hamers shared the staff recommendation.
Motion: To award the contract to the lowest responsive and responsible bidder, GCI Construction, Inc., in the amount of
$782,784.00, approve a contingency of 10% in the amount of $78,278.40, and approve a transfer of $170,000 from Project 322
and $1,000 from Contingency into Project 319/320.
Motion by Bob Ooten, second by Mike Scheafer.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer
Director Scheafer inquired about work that Orange County Sanitation District is doing on California Street.
Mr. Davis confirmed that the motion included the approval of the contingency and transfer indicated in the staff recommendation.
The Board of Directors confirmed that the entire staff recommendation was approved.
There were no further comments or discussion.
G. TREASURER'S REPORTS
Action: 1. Approve the Investment Report for the Month of December 2018
Recommendation: That the Board of Directors approve the Investment Report for the month of December 2018.
Mr. Davis presented the December 2018 Investment Report. He explained that due to the federal government shutdown, the
release of key financial and economic data is being postponed. He noted that as of December 31, 2018, the District's investment
portfolio was earning 1.930%.
There were no further comments or discussion and the report was received.
H. ATTORNEY'S REPORTS
Action: 1. Ordinance No. 124 - Reenacting the Purchasing Provisions of the District's Operations Code
Recommendation: That the Board of Directors adopt Ordinance No. 124 - Reenacting the Purchasing Provisions of the District's
Operations Code
Mr. Burns presented Ordinance No. 124, which would revise the District's purchasing ordinance to implement the new state
authority for increased contract awards without bidding or with modified bidding procedure, as set forth in the public works bidding
statutes. He explained that there are 3 proposed thresholds: contracts and purchases of $60,000 and under would require direct
bidding (obtaining quotes), those $200,000 and under would require informal bidding (obtaining bids from qualified contractors
from trade journals or lists established in accordance with state law), and those over $200,000 would require formal bidding
(placing a notice in the newspaper and regular agenda processing). He added that there would be a no-bid requirement for
jobs under $5,000. Mr. Burns proposed that these thresholds be applied to all District contracts, not just public works projects. He
also noted that the District's original informal bidding process allowed the General Manager to authorize contracts of $125,000 or
less; however, the Legislature has increased the informal authority to $200,000 since then. Mr. Burns noted that written comments
were received from Mr. Mosher, noting that other cities have lesser limits for signing authority. He noted that this matter is subject
to the Board's prerogative and comfort level.
Mr. Mosher commented that the fundamental purpose of the District's Board of Directors is to oversee the use of public funds,
which includes review of the budget and significant expenditures. He shared a document used by the City of Newport Beach that
lists the signing authority limits within different southern California cities. He noted that no city on this list has a signing authority
limit close to $200,000 other than the City of Long Beach. Mr. Mosher commented that Mr. Carroll's current authorization threshold
of $125,000 is large and a threshold of $200,000 would be extremely large.
Vice President Ooten asked Mr. Carroll how many contracts are over $125,000 and how he notifies the Board of Directors about
the contracts he approves.
Mr. Carroll responded that he informs the Board of Directors about contracts that the District enters into during his weekly
updates. He noted that he is unaware of know how many contracts are over $125,000 at this time.
Vice President Ooten recommended that the threshold remain at $125,000 and that Mr. Carroll inform the Board about how he
uses this authority for a period of time. He suggested that the Board of Directors evaluate whether the increased threshold is
needed after they are given an idea of whether contracts over $125,000 are rare or frequent. He commented that $125,000 is
sufficient unless Mr. Carroll can demonstrate that contracts of this size come before him often.
Mr. Carroll noted that he can create a monthly contract report for the Board of Directors and make it available to the public.
Director Scheafer thanked Mr. Mosher for sharing the list. He commented that he does not have any problem with increasing the
threshold to $200,000 because the Board of Directors is made aware of all public funds that are spent, and he is confident that Mr.
Carroll spends funds in the best interest of the public. He also commented that it would allow the District more flexibility and it
would save staff time. He added that he likes the idea of a monthly contract report.
President Ferryman commented that he trusts Mr. Carroll. He added that the threshold is a matter of public perception, and he
does not think it would hurt to keep the threshold at its current limit.
Director Perry indicated agreement with Vice President Ooten and commented that he would like to see a contract report at the
next Study Session indicating how many contracts Mr. Carroll approves that are near the amount of $125,000. He noted that the
Board of Directors can then use this information to decide if an increased threshold is necessary.
Motion: To continue discussion about Ordinance No. 124 until more information is brought back by the General Manager.
Motion by Mike Scheafer, second by Art Perry.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer
Director Scheafer requested that an item be placed on a future study session agenda to discuss new requirements and
legislation.
There were no further comments or discussion.
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) - (President Ferryman)
President Ferryman provided updates and shared that new OCSD Board Members were sworn in.
Vice President Ooten shared information regarding the distribution of water bond funds by the Water Advisory Committee of
Orange County (WACO) for water projects.
Director Perry shared local rainfall data.
Information: 2. Santa Ana River Flood Protection Agency (SARFPA) - (Director Perry)
Director Perry reported that there is a possibility that about $3 billion will be redirected from the Army Corps of Engineers to the
proposed border wall if President Trump declares a national emergency.
Information: 3. Independent Special Districts of Orange County (ISDOC) - (Secretary Schafer)
Secretary Schafer noted that Carolyn Emery, the Executive Officer of LAFCO, will speak at the next ISDOC meeting.
Information: 4. California Special Districts Association (CSDA) - (Secretary Schafer)
Secretary Schafer provided updates and shared that she attended CSDA's first Board Meeting of the year.
Information: 5. Special District Risk Management Authority (SDRMA) - (Director Scheafer)
Director Scheafer shared that he was elected President of SDRMA.
Information: 6. Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55, Operations Code Section 3.01.030
Director Scheafer shared that he and President Ferryman attended the Orange County Council of Governments (OCCOG)
meeting and shared information about Waste Not OC. He requested that staff share information about Waste Not OC with
restaurants and food related businesses that come to the District to obtain sewer permits.
Director Perry suggested that information about Waste Not OC be shared with the City of Costa Mesa.
Director Perry thanked District staff for hosting a successful Liaison Committee Meeting last week.
Vice President Ooten commented that the District should become more involved in communications regarding multi-family
organics recycling.
J. OLD BUSINESS
None at this time.
K. NEW BUSINESS
None at this time.
L. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS
Discussion: 1. Oral Communications and Director Comments
Secretary Schafer shared that she received a letter of appreciation from Senator Moorlach.
Discussion followed regarding the Mile Square Park improvement project.
M. ADJOURN TO CLOSED SESSION
No closed session.
N. RECONVENE TO OPEN SESSION
No closed session.
O. CLOSING ITEMS
Procedural: 1. Adjourn
President Ferryman adjourned the meeting at 7:31 P.M.
B. ITEM
To: Citizens Advisory Committee
Via: Scott Carroll, General Manager
From: Nabila Guzman, Management Analyst I
Date: February 13, 2019
Subject: Solid Waste Rate Study
Summary
On January 9, 2019, the Citizens Advisory Committee received a draft report and a presentation of the District's solid waste rate study.
The audit was performed by NBS Government Finance Group in which they recommended two flat rate increase options over the next
five years. Based on feedback received by the Committee, staff directed the consultant to make adjustments to the report and update
their recommended options to reflect the recommendations of the Committee.
Staff Recommendation
That the Citizens Advisory Committee recommend the Board of Directors adopt Option 1, a one time solid waste rate increase in 2019.
Analysis
On January 9, 2019, the Citizens Advisory Committee received a draft report and presentation by NBS Government Finance Group in
which they presented their study methodology, findings and rate increase recommendations. Based on feedback received by the
Committee, staff directed NBS to look at expenditures and projections to the solid waste fund to see if an alternative option was possible.
As discussed in the previous meeting, a tier rate system is not a viable option at the moment but the District is able to buy time by
implementing a one-time rate increase in July 2019. This one time rate increase of $1.95 a month would bring the solid waste rates back
to their original level during 2005-2011. This one time rate increase allows the District's reserve level not fall below the minimum
threshold as well as allows staff time to implement a new billing system and verify cart size data. The District's current billing system does
not allow for a tier rate system to be implemented and staff is unsure the cart data provided by CR&R is accurate.
The recommended option will increase rates to $19.95 a month or $239.40 a year for the following two fiscal years, rates after fiscal year
20-21 are unknown at this time. During fiscal year 20-21 a new rate study would need to be performed with the data CMSD will by then
have verified. New solid waste rates based on cart-sizes would need to be implemented by July 1, 2021. It is important to note the
recommended option does not fully cover trash hauler expenses or eliminate the operating deficit. It instead just gives the District time to
implement a charge by cart-size rate system.
This one time rate increase is now the District's and Consultant's recommended option with a five year flat rate increase as the alternative
option for adoption. Both of the recommendations are presented in the consultant's 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.
Subject 3. Solid Waste Rate Study
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type Action, Receive and File
Recommended Action That the Citizens Advisory Committee recommend the Board of Directors adopt Option 1, a
one time solid waste rate increase in 2019.
Goals 2.00 Solid Waste
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%.
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 with the entire agenda packet for the February 13, 2019, Citizens Advisory
Committee meeting at District Headquarters and on District website at www.cmsdca.gov
File Attachments
Option 1.png (9 KB)
Option 2.png (11 KB)
B. ITEM
To: Citizens Advisory Committee
From: Scott Carroll, General Manager
Date: February 13, 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 Citizens Advisory Committee Recommend the Board of Directors:
1. Consider adopting a resolution of intent to annex the City of Newport Beach properties that are identified in Exhibit "A;" and
2. Consider approving a new Agreement with the City of Newport Beach for wastewater capacity fees.
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
Subject 4. Wastewater Service Boundaries between Costa Mesa Sanitary District and City of
Newport Beach
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type Action
Recommended Action That the Citizens Advisory Committee Recommend the Board of Directors:
1. Consider adopting a resolution of intent to annex the City of Newport Beach properties that
are identified in Exhibit "A;" and
2. Consider approving a new Agreement with the City of Newport Beach for wastewater
capacity fees.
Goals 1.0 Sewer Infrastructure
3.00 Partnerships
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
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 13, 2019 Citizens Advisory
Committee 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)
B. ITEM
Subject 5. CMSD 75th Anniversary Ad Hoc Committee Meeting - Oral Report from Chair Mike
Carey
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type
C. CLOSING ITEMS
Subject 1. Committee Member & Staff Comments
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type Procedural
C. CLOSING ITEMS
Subject 2. Adjournment
Meeting Feb 13, 2019 - Special Citizens Advisory Committee Meeting
Access Public
Type Procedural