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Tuesday, April 11, 2023
Board of Directors Study Session
Time: 8:00 a.m.
Location: Costa Mesa Sanitary District - 290 Paularino Ave., Costa Mesa, CA 92626
***
The livestream of the meeting can be viewed by clicking the "Video" icon on this page (which will be
made available at the start of the meeting) or by visiting www.youtube.com/CostaMesaSanitary.
***
To participate in the meeting by computer:
1. Copy and past the following into your browser - https://us02web.zoom.us/join
2. Enter the Meeting ID number - 825 2896 6090
3. Click "Join."
***
To join the meeting with a mobile device:
1. Download the Zoom app at the Google Play Store (for Android devices) or the App Store (for Apple
devices)
2. Open the Zoom app. Select "Join a Meeting."
3. Enter Zoom Meeting ID. Select "Join Meeting."
***
To join the meeting by phone:
1. Call 1-669-900-6833.
2. You will be asked to enter the Meeting ID number. Dial 825 2896 6090#
3. Lastly, you will be asked to enter your Participant ID. Press the # symbol again to bypass this step.
***
Public Comments: Members of the public can submit any comments in real time during the meeting or
prior to the meeting in writing for the Board of Directors' consideration by sending them to the District
Clerk, Noelani Middenway, at nmiddenway@cmsdca.gov. Those comments will be made part of the
official public record of the meeting.
***
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 from the
District Clerk's Office.
***
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
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C. ITEMS OF STUDY
1. Introduction to Sean Phan, Associate Accountant - Oral Report
2. Receive and File March 2023 Code Enforcement Officer Report
3. Preliminary Biennial Budget Review for Fiscal Years 2023-24 and 2024-25
D. CLOSING ITEMS
1. Oral Communications and Director Comments
2. Adjournment
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Tuesday, April 11, 2023
Board of Directors Study Session
Time: 8:00 a.m.
Location: Costa Mesa Sanitary District - 290 Paularino Ave., Costa Mesa, CA 92626
***
The livestream of the meeting can be viewed by clicking the "Video" icon on this page (which will be
made available at the start of the meeting) or by visiting www.youtube.com/CostaMesaSanitary.
***
To participate in the meeting by computer:
1. Copy and past the following into your browser - https://us02web.zoom.us/join
2. Enter the Meeting ID number - 825 2896 6090
3. Click "Join."
***
To join the meeting with a mobile device:
1. Download the Zoom app at the Google Play Store (for Android devices) or the App Store (for Apple
devices)
2. Open the Zoom app. Select "Join a Meeting."
3. Enter Zoom Meeting ID. Select "Join Meeting."
***
To join the meeting by phone:
1. Call 1-669-900-6833.
2. You will be asked to enter the Meeting ID number. Dial 825 2896 6090#
3. Lastly, you will be asked to enter your Participant ID. Press the # symbol again to bypass this step.
***
Public Comments: Members of the public can submit any comments in real time during the meeting or
prior to the meeting in writing for the Board of Directors' consideration by sending them to the District
Clerk, Noelani Middenway, at nmiddenway@cmsdca.gov. Those comments will be made part of the
official public record of the meeting.
***
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 from the
District Clerk's Office.
***
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
Michael Scheafer, President
Arlene Schafer, Vice President
Arthur Perry, Secretary
Robert Ooten, Vice Secretary
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 Apr 11, 2023 - Board of Directors Study Session
Type Procedural
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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 Apr 11, 2023 - Board of Directors Study Session
Type Procedural
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C. ITEMS OF STUDY
Subject 1. Introduction to Sean Phan, Associate Accountant - Oral Report
Meeting Apr 11, 2023 - Board of Directors Study Session
Type Presentation, Receive and File
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C. ITEMS OF STUDY
To: Board of Directors
Via: Scott Carroll, General Manager
From: David Griffin, Interim Code Enforcement Officer
Date: April 11, 2023
Subject: Receive and File March 2023 Code Enforcement Officer Report
Summary
This report summarizes major points for three ordinance enforcement topics covering scavenging, graffiti on trash carts, and trash container
enforcement. For the month of March, 2023, the CMSD Interim Code Enforcement Officer (CEO) focused his efforts on patrols in various parts
of the community. The goal is to identify and deter instances of scavenging and residential trash carts left within the public view.
Recommendation
That the Board of Directors receives and files this report.
Analysis
In the month of March, the District saw several complaints filed with CMSD Interim Code Enforcement staff regarding scavenging activity in the
city. As with most scavenging complaints, the alleged violations take place in the early morning hours. To address resident concerns, the
Interim Code Enforcement Officer is patrolling streets by 6:30 a.m.
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 Griffins' 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 April 11, 2023 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
CEO Report March 2023.doc (1,183 KB)
Subject 2. Receive and File March 2023 Code Enforcement Officer Report
Meeting Apr 11, 2023 - Board of Directors Study Session
Type Receive and File
Goals 2.0 Solid Waste
2.9 Solid Waste - Enhance Code Enforcement presence
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C. ITEMS OF STUDY
To: Board of Directors
Via: Scott Carroll, General Manager
From: Kaitlin Tran, Finance Manager
Date: April 11, 2023
Subject: Preliminary Biennial Budget Review for Fiscal Years 2023-24 and 2024-25
Summary
The following represents Staff’s proposed preliminary Biennial Budget for the Fiscal Years (FY) 2023-24 and 2024-25. Staff are requesting
directions from the Board on the attached preliminary budget. The two-year budget will be brought back with the Board's recommendations
incorporated to the May 9, 2023, Study Session. Staff will be requesting adoption of the two-year budget on June 26, 2023.
Recommendation
That the Board of Directors provide feedback to staff regarding the proposed preliminary Biennial Budget for the Fiscal Years 2023-24 and
2024-25.
Analysis
The following are highlights of the proposed preliminary Biennial Budget for the FYs 2023-24 and 2024-25:
General Fund Revenue:
At the beginning of FY 2019-20 budget, the District created a General Fund to account for the unrestricted financial resources of the general
government. These unrestricted resources consist primarily of general property taxes and investment earnings. Staff is assuming a 2%
increase in property tax revenue each year. The proposed preliminary property tax revenues are $348,000 and $355,000 for FY 2023-24 and
2024-25, respectively. Property tax revenues are unrestricted revenues previously recorded in the Solid Waste Fund for rate stabilization. Staff
are proposing the Board continue to transfer this revenue to the Solid Waste Fund through this budgetary process. If more revenue is received
than the budgeted amount at fiscal year-end, staff will make a recommendation to the Board of Directors to transfer the revenue to either the
Solid Waste or the Wastewater Fund.
Preliminary Budget FY 2023-24 (Attachment A):
The total preliminary budget for FY 2023-24 is $15,386,200. The Solid Waste Fund preliminary budget reflects a balanced budget of
$7,024,900 which includes the final 6% rate increase from the 2019 Solid Waste Rate Study adopted by the Board. The Wastewater Fund
reflects a balanced budget of $8,013,300 which includes the rates increase from the 2022 Sewer Rate Study adopted by the Board.
The fiscal year 2023-24 preliminary personnel total budget is $3,785,800. This is a 13% increase from the FY 2022-23 adopted personnel
budget due to the following:
1. The February-to-February Consumer Price Index (CPI) for the Orange-Los Angeles-Riverside Counties is 5.1%. Last fiscal year, the
CPI was 7.4%, however, staff received a 5% Cost of Living Adjustment (COLA). To reduce the impact of not receiving the full cost-of-
living adjustment, staff are requesting a 6% increase for the 2023-24 fiscal year. If a 5.1% Cost of Living Adjustment (COLA) is
approved by the Board, it will cost the District $127,900. A 6% COLA would add an additional $20,800, totaling $148,700.
2. Reclassification of the Code Enforcement Officer from part-time to a full-time position.
Subject 3. Preliminary Biennial Budget Review for Fiscal Years 2023-24 and 2024-25
Meeting Apr 11, 2023 - Board of Directors Study Session
Type Discussion
Goals 8.6 Finance - Develop a long-term Capital Improvement Plan (CIP)
8.4 Finance - Maintain appropriate reserve levels
8.2 Finance - Adopt a balanced budget
8.0 Finance
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3. Five percent merit increase to employees who are eligible. There will be five employees that will not be eligible because they have
reached their maximum salary range in this fiscal year.
4. A new full-time Administrative Assistant position to assist the Engineering Department. The salary and benefits costs to add this
position for FY 23-24 and 24-25 are $85,000 and $91,000, respectively. These costs will be charged 100% to the administrative
wastewater fund salary and benefits. The new position will provide support to the District Engineer and the Engineering Technician.
The tasks include managing permit files for destruction, assisting with managing construction invoices, preparing written
correspondences, coordinating with other departments and primary sewer-related interface with the public.
5. A new part-time (PT) Accounting Clerk position to assist the Finance Department. The part-time position is not eligible for benefits.
The recruitment for this position will begin in January 2024, the half-year salary cost for this position is $15,000 and the FY 24-25 cost
is $32,000. The request for this part-time position is due to the following:
Over the last few years, in person audits have become remote audits. As a result, it requires all documents to be scanned
and uploaded to a portal to be audited. It is time consuming to scan, organize, label and file invoices, cash receipts, payroll
records, journal entries bank reconciliations, and all financial records.
Increase in payroll processing time due to policy changes and additional staffing over the years.
Increase in back-billing, requires time to research, gather billing information, and follow up on invoices and payment plans.
Increase in request for purchase orders. Finance staff are now generating purchase orders for all capital improvement
project agreements and change orders.
Finance is now overseeing assessments.
Budget Award Submission – The District is a Triple Crown Winner.
Future goals- Staff is currently tracking fixed assets on an Excel Spreadsheet. The goal is to track fixed assets in software.
The fiscal year 2023-24 preliminary Operations and Maintenance total budget is $9,837,400, excluding transfers out, programs and capital
improvement projects. This is a 7% increase from the FY 2022-23 adopted O&M budget due to the following significant new or increase in
projects or events:
Description Cost
Citizen Wide Survey $45,000
Classification and Compensation Study $50,000
Bilingual Translation Services $5,000
Comprehensive Parcel and Levy Audit (County Assessments)$21,500
Springbrook Cloud Migration Upgrade $20,000
Permit & Fixture Fee Study $25,000
New IT Projects $18,700
On-site IT Manager $44,400
Solid Waste Rate Study $55,000
Contractual Engineering, Plan Check and Inspection Services $147,000
CR&R 5% Cost of Living Adjustment Increase $270,400
Three-cart System Communications Campaign & Consulting $150,000
Solid Waste Rate Study Town Hall Meeting Postcards, Prop 218 Notices $33,000
Pump Station - Irvine & Harbor ArcFlash Electrical Repair $25,000
ArcFlash Study (4 Pump Stations)$52,500
777 Pump Station voltage monitor and display (10)$25,000
Pump Overhauls (3)$36,000
Liability Insurance $345,000
Asset Replacement $404,000
AV Project: Additional Mics & Optimize Equipment $20,400
IT Project: Server Replacement $13,500
Signage for HQ $8,000
Crane Truck Replacement $191,000
Demolish District Yard Old Hitch Crafter Building $200,000
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CR&R has submitted an annual solid waste rate adjustment request of 7.1% for the FY 2023-24. As stated in Section 3.4 of the First
Amendment to the Agreement dated January 27, 2023, the Hauler may propose an adjustment to the maximum the rates by multiplying each
rate by the percentage change in the CPI for All Urban Consumers in the Los Angeles Area, not seasonally adjusted ( CPI- U) — Los Angeles -
Long Beach- Anaheim for the twelve (12) month period ending in February. For the term of the agreement, the CPI request is capped at five
percent (5%) per year. The February-to-February 2023 CPI for Los Angeles-Long Beach-Anaheim area is 5.1%.
The FY 2023-24 preliminary budget includes 5% adjustment for the hauler, recycling, and organics rates. FY 2024-25 preliminary budget
includes 0.5% (half of a percent) COLA. A budget deficit will be created if a higher COLA percentage is applied for CR&R’s rates for FY 2024-
25; expenses will exceed revenues. Therefore, staff could only apply half of a percent COLA. The three-cart system will begin in the fiscal Year
2024-25 and there will be a new rate structure charged by CR&R. A Solid Waste Rate study is required and included in FY 2023-24. Below is
a table to compare the current rates to the 5% and 0.5% rate adjustments.
Staff estimates the FY 2022-23 year-end account to be 23,092 and increase 0.1% for FYs 2023-24 and 2024-25, 23,118 and 23,141,
respectively. Based on the previous data, the recycling tonnage has decreased over the years and has remained at 30,000 since FY 21-22.
Staff projects recycling tonnage will remain around 30,000. On the other hand, organics tonnage has fluctuated since the pandemic. Due to the
increase in the SB 1383 advertisement and education, staff projects a 3% and 5% increase in tonnage for FYs 203-24 and 2024-25 budget,
respectively.
The FY 2023-24 preliminary budget includes the 5% COLA, hauler cost of $3,103,200, recycling cost of $1,780,800 and organics costs of
$794,900. A 5% rate increases will cost the District $270,400.
The FY 2024-25 preliminary budget includes the 0.5% COLA, hauler cost of $3,122,400, recycling cost of $1,789,300 and organics costs of
$838,800. A 0.5% rate increases will cost the District $ 29,100.
Preliminary Budget FY 2024-25 (Attachment B):
The total preliminary budget for FY 2024-25 is $15,484,800. This budget year does not include rate increases; however, 0.1% of new accounts
for services are added. The Solid Waste Fund preliminary budget reflects a balanced budget of $7,028,600 and it does not include a rate
increase. A Solid Waste Rate study in FY 2023-24 will determine if a rate adjustment is needed in FY 24-25. Staff will propose a budget
amendment to the Board of directors if a rate adjustment is needed. The Wastewater Fund reflects a balanced budget of $8,101,200.
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The fiscal year 2024-25 preliminary personnel total budget is $4,061,800. This is a 7% increase from the FY 2023-24 preliminary budget.
The FY 2024-25 preliminary budget does not include any new positions or changes in personnel that were not requested in the prior fiscal
year. There is an estimated Cost of Living Adjustment (COLA) of 5% included and a 5% merit increase for employees who are eligible. There
will be six employees that will not be eligible because they have reached their maximum salary range in this fiscal year.
The fiscal year 2024-25 preliminary Operations and Maintenance total budget is $9,799,000 excluding transfers out, programs and capital
improvement projects. This is less than 1% increase from the FY 2023-24 preliminary O&M budget because there were less studies required to
be conducted. The most significant events in FY 2024-25 will be the new three-cart system and the new rate structure set by CR&R.
Capital Outlay
The preliminary budget for FY 2023-34 includes a request of $46,400 for the Administration Capital Outlay budget to replace a rooftop air
conditioning curb unit, update AV project, replace IT server, and add signage for headquarters. The District Yard Capital Outlay budget
requests a total of $391,000 to demolish the old hitch crafter building at the District Yard and to replace the crane truck. The budget request to
replace the crane truck is $191,000. The District has set aside $170,000 in the Asset Replacement Fund over the years to replace the crane
truck. Staff is requesting to transfer $170,000 from the Asset Replacement Fund to the Wastewater Fund to help cover the cost.
The preliminary budget for FY 2024-25 includes a request of $50,000 for the Administration Capital Outlay budget to start the second phase of
the HQ Landscape project. Staff is requesting to transfer $50,000 from the Facilities Revolving Fund to support the second phase of the HQ
Landscape project. The Board had approved the use of the Facilities Revolving Fund in the first phase of the HQ Landscape project. The
District Yard Capital Outlay budget requests a total of $500,000 to replace the 10-year-old combo cleaning truck. The District has set aside
$400,000 in the Asset Replacement Fund over the last 10 years to replace the truck. Staff is requesting to transfer $400,000 from the Asset
Replacement Fund to the Wastewater Fund to help cover the cost.
Programs
Staff is requesting to continue the Battery Recycling Program with the budget of $20,000 for each budget year.
Capital Improvement Projects (CIP)
The total budget of the preliminary Capital Improvement Projects (CIP) for fiscal years 2023-24 and 2024-25 are $1,433,000 and $1,911,000,
respectively. At the March 23, 2023 Board Meeting, the Board of Directors approved to transfer $622,300 from the Asset Management Fund,
into the Wastewater fund and appropriate $622,300 to CIP # 341, Elden Force Main Redundancy. This action caused the level of Reserves in
the Asset Management Fund to fall below $5 million. Therefore, during this budget cycle, staff is requesting to transfer $480,000 and $143,000,
in FYs 2023-24 and 2024-25, respectively, from the Wastewater fund to the Asset Management Fund.
Capital Improvement Projects FY 2023-24 FY 2024-25
City MH Adjustment Program #309 $20,000 $45,000
Manhole Cover Repairs #311 50,000 25,000
President PS Rehab #318 53,000 -
Brick Manhole Rehab Ph 2 #324 164,000 81,000
Calcium Removal Ph 1 #327 125,000 100,000
Aviemore Force Main Repl #329 85,000 -
Westbluff PS Rehab #330 50,000 -
Gisler Force Main Repl #334 480,000 -
Sewer Siphon Lining #335 50,000 -
Grade 4 Sewer Repairs #336 25,000 300,000
Air-Vac Rehab and Removal #337 65,000 -
21st Street FM Rehab #339 21,000 220,000
Sea Bluff PS 46,000 355,000
Harbor Generator Project 104,000 420,000
Elden Odor Project 95,000 -
California Force Main Rehab -200,000
Mendoza FM Rehab & Redundancy -165,000
Total $1,433,000 $1,911,000
Legal Review
Not applicable.
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Environmental Review
Subject activity 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
The report attachments include details for the following:
Attachment A - Preliminary Budget FY 2023-24
Attachment B- Preliminary Budget FY 2024-25
Attachment C- General Fund & Solid Waste Fund Balance Projections
Attachment D- Wastewater Fund Balance Projections
Public Notice Process
Copies of this report are on file and will be included with the entire agenda packet for the April 11, 2023 Board of Directors study session
meeting at District Headquarters and on District website at www.cmsdca.gov.
Alternative Actions
1. Refer the matter back to staff for additional information.
File Attachments
Attachment A - FY23-24 Preliminary Budget.pdf (803 KB)
Attachment B - FY24-25 Preliminary Budget.pdf (819 KB)
Attachment C - General & Solid Waste Fund Balance Projections.pdf (696 KB)
Attachment D - Wastewater Fund Balance Projections.pdf (693 KB)
CRR Rates.png (41 KB)
CRR-Historical Data.png (60 KB)
CRR Budgets.png (60 KB)
CRR Budgets-24-25.png (38 KB)
Workflow
Workflow Apr 6, 2023 3:04 PM :: Submitted by Kaitlin Tran. Routed to Scott Carroll for approval.
Apr 6, 2023 5:15 PM :: Approved by Scott Carroll. Routed to Noelani Middenway for
approval.
Apr 6, 2023 7:07 PM :: Forced Approval by Gina Terraneo as the document publisher.
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D. CLOSING ITEMS
Subject 1. Oral Communications and Director Comments
Meeting Apr 11, 2023 - Board of Directors Study Session
Type
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D. CLOSING ITEMS
The next Study Session of the Costa Mesa Sanitary District Board of Directors will be held at 8:00 a.m. on Tuesday, May 9, 2023 in the
District's Boardroom, located at 290 Paularino Avenue, Costa Mesa, CA 92626.
Subject 2. Adjournment
Meeting Apr 11, 2023 - Board of Directors Study Session
Type Procedural