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Minutes - Board - 2022-07-12COSTA MESA SANITARY DISTRICT MINUTES OF BOARD OF DIRECTORS STUDY SESSION JULY 12, 2022 NOTE: THIS HYBRID IN -PERSON AND TELECONFERENCED MEETING WAS CONDUCTED UTILIZING ELECTRONIC MEANS CONSISTENT WITH STATE OF CALIFORNIA ASSEMBLY BILL 361(Gov. CODE 54953(B)(3)). Members present Arlene Schafer, Art Perry, Brett Eckles, Mike Scheafer Members absent Bob Ooten Staff present Scott Carroll (General Manager), Noelani Middenway (District Clerk and Public Information Officer), Alan Burns (District Counsel), Kaitlin Tran (Finance Manager), Dyana Bojarski (Administrative Services Manager), Mark Esquer (District Engineer), Gina Terraneo (Management Analyst II), Nabila Guzman (Management Analyst I), Lieu Tran (Accountant), David Griffin (Interim Code Enforcement Officer) Others present Mike Balliet, Michael Balliet Consulting Julie Barreda, CR&R Mike Carey, CR&R Jim Mosher, District resident Meeting Called to order at 8:01 A.M. A. OPENING ITEMS Procedural: 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.) COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 Vice President Scheafer called the meeting to order at 8:01 A.M. District Clerk and Public Information Officer, Noelani Middenway, noted that Vice President Scheafer, Secretary Schafer, Director Perry, and Director Eckles were present while President Ooten was not present. B. PUBLIC COMMENTS Procedural: 1. Public Comments Vice President Scheafer opened public comments. Hearing none, he closed public comments. C. ITEMS OF STUDY Action, Receive and File:1. Receive and File June 2022 Code Enforcement Officer Report Recommendation: That the Board of Directors receive and file this report. Vice President Scheafer introduced the report. Interim Code Enforcement Officer, David Griffin, presented report details. Vice President Scheafer commented on the trash issues occurring in the alley of Royal Palm Drive. He noted that there are several enclosures that are overflowing with trash. He added that there is a scavenger who rides a bicycle that frequents the area. Mr. Griffin stated that he will increase his patrol of that area. Vice President Scheafer commented that he has seen customers give their trash to scavengers. Mr. Griffin reported that there were 81 cases of trash carts in public view for June 2022. Vice President Scheafer shared that there is curb and gutter construction taking place in the northern section of the Mesa Verde neighborhood, which may be causing accessibility issues for CR&R drivers. COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 Secretary Schafer expressed recognition for the District newsletter and shared that customers in her neighborhood have been placing their trash carts on the curb when they are missed for service. She inquired if the District's service area is still experiencing scavengers. Mr. Griffin stated that scavenging has decreased due to the increase in patrolling. Director Eckles thanked Mr. Griffin for his efforts in reducing scavenging. There was no further discussion, and the report was received. Action, Receive and File: 2. Receive and File Waste Composition Study #2 from Michael Balliet Consulting Recommendation: That the Board of Directors provide comments regarding the results of the Solid Waste Characterization Study conducted on May 19, 2022. Vice President Scheafer introduced the item. General Manager, Scott Carroll, stated that Michael Balliet Consulting (MBC) conducted the Waste Composition Study #2 for the District. Management Analyst I, Nabila Guzman, stated that Mike Balliet performed a waste composition study for the neighborhood surrounding Killybrooke Lane in May 2022. Mike Balliet of MBC described the study process. He clarified that film plastics, mixed plastics, and contaminated plastics are characterized as trash. He shared that another study is being performed on July 13, 2022. Vice President Scheafer commented on the pictures of food waste included in the report. He inquired about palm leaves. Mr. Balliet stated that palm is considered a contaminant due to its fibrous makeup. District resident, Jim Mosher, commented that he is not a District solid waste customer, but he is interested in this item. He suggested for the Board to COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 review its two waste composition studies to help determine its educational outreach material. He inquired about the tonnage amounts in both the Organics Recycling Carts and Mixed Waste Carts and how much organic waste was recovered from the Mixed Waste Carts. He commented on how trash is collected. He asked how contaminated paper and cardboard is counted according to Senate Bill (SB) 1383. He noted that the District does not have a method for disposing of contaminated paper and cardboard and asked if there is a penalty associated with these items. He commented on the practicality of the study and noted that the study's results may change depending on which trash carts are selected. He proposed that it might be more beneficial to inspect each trash cart separately. Director Perry asked if the study inspects the waste collected in the Organics Recycling Carts. Mr. Balliet stated that organic waste has been inspected at CR&R's Anaerobic Digester Facility. He noted that CR&R performs sample characterization studies on its organics waste. He added that, by inspecting Mixed Waste Carts, the study can determine if customers are properly sorting organic waste. He stated that the study may include some variance, but it follows the state's methodology of random sampling. Vice President Scheafer asked if he knows which trucks are being sampled ahead of time. Mr. Balliet stated that waste is compacted during the collection process, but it expands back to its shape when dumped for inspection. Vice President Scheafer asked if organic waste found in the Mixed Waste Carts is landfilled or recycled. Mr. Balliet discussed state regulations for organic waste. Director Eckles inquired if there is any explanation as to why this neighborhood produced better results than the area analyzed in the Waste Composition Study #1. Mr. Balliet stated that this neighborhood may have performed better due to the increase in outreach regarding SB 1383 and the District's Organics COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 Recycling Program. He also noted that results may be dependent on the number of single-family and multi -family residences included in the sample. He added that trend data will be available after a full year of these studies. Director Perry asked how these results compare to the City of Newport Beach. Mr. Balliet shared that he does not consult for the City of Newport Beach. There was no further discussion, and the report was received. Action: 3. Free Shredding/Compost Event — Final Report Recommendation: That the Board of Directors receive and file this report. Vice President Scheafer introduced the item. Ms. Guzman provided report details. She stated that the event was held in partnership with CR&R, who provided compost and nine workers, Newport - Mesa Unified School District (NMUSD), who assisted with permits, staffing, and location, and the City of Costa Mesa, who provided four workers. She reported that the event had a total of 34 workers, used three shredding trucks to collect over 11,000 pounds of paper; and distributed 1,120 bags of compost. She added that about 661 cars participated in the event, and that the total event cost was under budget at $12,607. Vice President Scheafer expressed recognition of District staff and its event partners. Secretary Schafer thanked all participants and expressed support for hosting the event again in the future. Vice President Scheafer commented that the event was a successful expenditure of District funds. Director Perry asked if the event had more than enough workers. Ms. Guzman stated that the event was overstaffed, but that the District over - planned after learning that the City of Newport Beach's event was understaffed. COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 Director Perry commented that Estancia High School was a great location for facilitating the event. Director Eckles thanked District staff and noted that it was a good team - building event for all participants. He agreed that Estancia High School was a great location. He stated that the District should aim to host this event on an annual basis. He proposed that there may be more participants next year and does not recommend reducing the number of workers since having a long line of cars could slow down the event. Secretary Schafer thanked the City of Costa Mesa for their assistance with the street signs. Director Perry recommended sharing this item at the upcoming Liaison Committee meeting. Mr. Carroll confirmed that this item is on the meeting agenda. There was no further discussion. Action: 4. Provide Comments and Suggestions to Contract Negotiations Preliminary Deal Points with CR&R Environmental Services Recommendation: That the Board of Directors provide comments and suggestions to staff regarding contract negotiations preliminary deal points with CR&R Environmental Services. Vice President Scheafer introduced the item. Mr. Carroll provided report details. He shared that District staff has been meeting with CR&R regarding contract negotiations that ensure compliance with SB 1383. He discussed transitioning to a three -cart system. He stated that the District intends to replace one Mixed Waste Cart with a blue cart for recycling. He reported that CR&R is proposing a monthly cost of $24.08 to implement the new terms of the contract, which is a 4% increase from the Fiscal Year 2022-23 projected cost described in the 2018 Solid Waste Rate Study. He added that the actual monthly rate would be $26.68, which includes overhead costs such as labor and special programs. He stated that the District will have to conduct a Proposition 218 hearing for the new rate COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 in 2023. He noted that this item will be reviewed by the Citizens Advisory Committee (CAC) and that the final contract will be presented at the August Board meeting. Director Perry inquired about the available sizes of the blue recycling cart. Mr. Carroll stated that customers can request a 90-gallon recycling cart or a smaller -sized option. Director Eckles asked if 90-gallon carts will be available for trash. Mr. Carroll stated that customers will have the option to request a 90-gallon cart for trash. Director Eckles suggested for CR&R to automatically switch all 65-gallon trash carts to 90-gallon carts. Mr. Carroll stated that automatically switching out all carts would increase the overall cost. He noted that the District will be educating their customers about the option to switch to a 90-gallon cart. Discussion followed regarding the three -cart system in Newport Beach and educational outreach. Director Eckles asked if the rate survey will include data from other agencies for comparison. Mr. Carroll stated that the survey will include the costs that the District and other agencies pay to CR&R. He noted that the survey may not include overhead costs. Director Eckles requested for the survey to include overheard costs. Mr. Carroll stated that the District typically hires MBC to conduct a most favorable rate survey. Director Eckles asked if the District can absorb the costs associated with year five of the Solid Waste rate increase. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 Mr. Carroll clarified that Director Eckles is referring to Item CS. Director Eckles asked if the duration of the existing contract with CR&R is being extended. Mr. Carroll stated that the Board decides the duration of CR&R's contract. Discussion followed regarding amending CR&R's existing contract or drafting a new contract. District Counsel, Alan Burns, stated that the preferred method is to integrate the existing contract with the proposal regarding SB 1383 regulations. Director Eckles inquired about the existing duration of the contract. Mr. Carroll stated that the duration of the contract is 10 years with the option to extend it for five years unless violations have occurred. He noted that CR&R is granted an opportunity to correct any violations, and after doing so the Board can extend the contract for another five years. Director Eckles requested a few more opportunities to review CR&R's proposed contract before adopting it. Discussion followed regarding the three -cart system. Mr. Carroll stated that if customers prefer to retain their second Mixed Waste Cart, then they will be required to pay an additional fee for that cart. Director Eckles shared that the residents in his homeowners' association do not break down their cardboard boxes before placing them in the recycle bin. Vice President Scheafer recommended including a sticker instructing customers to breakdown cardboard on the new recycling carts. CR8cR representative, Julie Barreda, shared that there is no available rebate for plastic bottles and aluminum cans at recycling centers. She proposed that it will be more convenient to recycle at home with a separate recycling cart. She discussed issues related to cardboard recycling. She shared that CR&R COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 performed extensive outreach for the City of Newport Beach. She expressed support for hosting town hall meetings with the District to inform customers about the three -cart system. She added that the cart designated for trash becomes less used once people know how to properly source separate. Vice President Scheafer shared, that at previous town hall meetings, multiple customers shared stories about source separating. There was no further discussion. Action: 5. Consider Approving 2.8% Rate Adjustment to CR&R Environmental Services Recommendation: That the Board of Directors direct staff to report back on July 25, 2022 to consider approving 2.8% rate adjustment to CR&R Environmental Services. Vice President Scheafer introduced the item. Mr. Carroll provided report details. He shared that this item is included in the District's negotiations with CR&R. He stated that he stipulated with CR&R that he would recommend approval of a 2.8% rate adjustment request since the District has available funding for it. He noted that a higher rate adjustment would require a Proposition 218 hearing, at an additional cost to the District. He added that this rate adjustment is not reflective of CR&R's performance levels. He stated that District staff and CR&R are currently working through issues regarding driver shortages, missed trash pickups, and issues stemming from inflation. Director Perry asked if this item will be presented at the July Board meeting for official approval. Mr. Carroll confirmed that it will be presented to the Board after it is reviewed by the CAC. Director Eckles inquired about CR&R's initial rate adjustment request. Mr. Carroll stated that 5.6% was their initial rate adjustment request. Director Eckles clarified that the District is currently capable of affording a 2.8% rate adjustment, however, it cannot afford a 2.8% rate adjustment and COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 the proposed monthly rate increase for additional services over the next fiscal year. He inquired as to why this item was presented separately from Item C4. Mr. Carroll stated that CR&R requested to review this item separately at the July Study Session. Director Eckles requested to review the final contract costs as one item. Director Perry expressed support for placing this item on the July Board meeting agenda for final approval. There was no further discussion. D. CLOSING ITEMS Procedural: 1. Oral Communications and Director Comments Director Perry asked about the location of the Liaison Committee meeting taking place this Friday, July 15, 2022. Mr. Carroll stated that Mesa Water District is hosting the meeting, which starts at 8:00 a.m. Ms. Middenway commented that she will share the meeting agenda with the Board. Mr. Carroll stated that the District will be discussing their Shredding and Compost Event and an American flag retirement ceremony. Vice President Scheafer commented that the Orange County Cemetery District has a program for properly disposing of American flags. Director Eckles requested for Newport -Mesa Unified School District to provide an update regarding their compliance with SB 1383. He shared that the Costa Mesa Chamber of Commerce is requesting a lunch seminar to discuss SB 1383. He recommended partnering with the City of Costa Mesa to share information at the event. COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JULY 12, 2022 Secretary Schafer commented on the new CR&R trash trucks. She asked how many new trucks are servicing the District. Ms. Barreda confirmed that there are 4 new trucks for the District's service area and each truck includes the District's banner. There were no additional comments. Procedural: 2. Adjournment Vice President Scheafer adjourned the meeting at 9:01 A.M. (4p,kj,�� r Arlene Schafer Bob Ooten Secretary President