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Minutes - Board - 2023-08-21COSTA MESA SANITARY DISTRICT MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING AUGUST 21, 2023 Members present Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer Members absent None Staff present Scott Carroll (General Manager), Noelani Middenway (District Clerk & Public Information Officer), Gina Terraneo (Management Analyst II), Mark Esquer (District Engineer), Alan Burns (District Counsel), Marc Davis (District Treasurer), Kaitlin Tran (Finance Manager), Dyana Bojarski (Administrative Services Manager) Others present Julie Barreda, CR&R Representative Mike Carey, CR&R Representative Michael Tou, Citizens Advisory Committee Vice Chair Meeting called to order at 4:30 P.M. A. OPENING ITEMS Procedural: 1. Call to Order — President Scheafer President Scheafer called the meeting to order at 4:30 P.M. Procedural: 2. Pledge of Allegiance — President Scheafer President Scheafer led the Pledge of Allegiance. COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 Procedural: 3. Invocation — Vice President Schafer Vice President Schafer 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 & Public Information Officer, Noelani Middenway, conducted roll call and noted that President Scheafer, Vice President Schafer, Secretary Perry, Vice Secretary Ooten, and Director Eckles 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. Ms. Middenway stated that District staff received one email from District resident, Jim Mosher, regarding a typographical error on Item E3. There were no additional late communications. Procedural: 6. Ceremonial Matters and Presentations. None. B. PUBLIC COMMENTS Procedural: 1. Public Comments President Scheafer opened public comments. Hearing none, he closed public comments. C. CONSENT CALENDAR Action (Consent): 1. Approve Consent Calendar COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 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 July 11, 2023 Recommendation: That the Board of Directors approve the meeting minutes as presented. Action (Consent), Minutes: 3. Approve the Joint Citizens Advisory Committee and Board of Directors Meeting Minutes of July 12, 2023 Recommendation: That the Board of Directors approve the meeting minutes as presented. Action (Consent), Minutes: 4. Approve the Board of Directors Regular Meeting Minutes of July 24, 2023 Recommendation: That the Board of Directors approve the meeting minutes as presented. Action (Consent): 5. Adopt Warrant Resolution No. CMSD 2024-02 Approving District Warrant Registers Recommendation: That the Board of Directors adopt Warrant Resolution No. CMSD 2024-02 approving District warrants for the month of July in the amount of $1,129,415.30. Action (Consent): 6. 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): 7. Approve Payroll Transparency Disclosure for July 2023 Recommendation: That the Board of Directors approve and file the report. Action (Consent): 8. Accept the occupancy count as presented as 23,097 and direct staff to prepare a warrant to CR&R Environmental Services for $246,068.51 for July 2023 collection Recommendation: That the Board of Directors: 1. Approve the occupancy count of 23,097; and COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 2. Direct staff to prepare a warrant to CR&R Environmental Services for $246,068.51 for July 2023 solid waste collection services to be ratified with the August 2023 warrant register. Action (Consent): 9. Receive and File July 2023 Contracts Signed by the General Manager Recommendation: That the Board of Directors receive and file this report. Action (Consent): 10. Approve the Investment Report for the Month of July 2023 Recommendation: That the Board of Directors approve the Investment Report for the month of July 2023. Motion: To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer No: None There was no discussion. D. PUBLIC HEARINGS None at this time. E. GENERAL MANAGER REPORTS Action: 1. Receive and File CMSD's Fats Oil Grease (FOG) Program Annual Assessment Report Recommendation: That the Board of Directors receives the presentation from Joe Jenkins of EEC Environmental regarding the District's FOG Control Program and provide input to staff. General Manager, Scott Carroll, stated that Joe Jenkins of EEC Environmental was not available to present this item and asked to move it to a future meeting. President Scheafer approved of rescheduling this item. COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 There was no further discussion. Action: 2. Consider Approving Out -of -State Travel for Senior Accountant and Associate Accountant to Attend 2023 Springbrook Activate Conference in Las Vegas, Nevada, from October 25-27, 2023 Recommendation: That the Board of Directors approve out-of-state travel for the Senior Accountant and Associate Accountant to attend the 2023 Springbrook Activate Conference in Las Vegas, Nevada, from October 25-27, 2023. Mr. Carroll presented report details. Motion: To approve out-of-state travel for the Senior Accountant and Associate Accountant to attend the 2023 Springbrook Activate Conference in Las Vegas, Nevada, from October 25-27, 2023. Motion by Bob Ooten, second by Art Perry. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer No: None There was no further discussion. Action: 3. Consider Awarding Angela Colunga, Administrative Assistant I, $150.00 for her Idea to use LinkedIn Learning through OC Public Libraries as an Additional Resource for Staff Development Recommendation: That the Board of Directors award Angela Colunga, Administrative Assistant I, $150.00 for her idea to use LinkedIn Learning through OC Public Libraries as an additional resource for staff development. Mr. Carroll presented report details. President Scheafer asked if District staff members are required to have a LinkedIn account to use LinkedIn Learning. Mr. Carroll stated that District staff can access LinkedIn Learning with an OC public library card. Motion: To award Angela Colunga, Administrative Assistant I, $150.00 for her idea to use LinkedIn Learning through OC Public Library as an additional resource for staff development. COSTA MESA SANrrARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS REGuLAR MEETING HELD AUGUST 21, 2023 Motion by Art Perry, second by Arlene Schafer. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer No: None There was no further discussion. Action: 4. Consider Approving CR&R Incorporated Proposal for Rate Adjustment Recommendation: That the Board of Directors considers approving one of the following actions below: 1. Approve CR&R's proposal for a 5% adjustment to the compensation schedule described in Exhibit B of the First Amendment dated January 27, 2023 and approve the adjustment to be retroactive to July 1, 2023; or 2. Approve a 3.2% adjustment to the compensation schedule that's less than 5% and approve the adjustment to be retroactive to July 1, 2023. Describe the justification for the lesser adjustment amount; or 3. Deny CR&R's proposal for any adjustment to the compensation schedule described in Exhibit B of the First Amendment dated January 27, 2023 and describe that justification for denying their proposal. Mr. Carroll provided report details. He shared that District Treasurer, Marc Davis, has reviewed CR&R's financial information. He noted that if the Board denies their request, then it must be justified by a reason unrelated to their performance. Vice Secretary Ooten asked if District staff has reviewed the February 2022 to February 2023 Consumer Price Index (CPI) data. Mr. Carroll stated that the February 2022 to February 2023 CPI rate is SAW Discussion followed regarding the timeline of CR&R's rate adjustment request and CPI data. Director Eckles asked if CR&R's profitability has increased. Mr. Davis confirmed that their profitability increased over the last year. COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 Director Eckles stated that the District approved a 2.8% CPI increase two years ago. President Scheafer reiterated that CPI rates have decreased from February 2022 to February 2023. He noted that, during that year, CPI reached a high of 8% but has dropped considerably. He inquired about District staffs three recommendation options. Mr. Carroll stated that the Board has the discretion to approve a rate adjustment of 5% or less. He explained that the average rate of inflation over the last five months is 3.2%, which was used to determine one of District staffs recommendations. Vice Secretary Coten asked for the cost of a 5% rate adjustment. Mr. Carroll stated that a 5% rate adjustment would be approximately $270,000. Director Eckles asked if the CR&R workers servicing the District are unionized. CR&R representative, Julie Barreda, confirmed that those workers are part of a union. She stated that she provided each Board member with a handout and explained how CR&R calculates their rate adjustments. She discussed a five-year review of CPI increases, disposal rates, and union costs. Director Eckles asked if CR&R's rate adjustment could have been negotiated into the contract amendment. Ms. Barreda stated that the rate adjustment was not included due to the costs associated with Proposition 218 hearings. President Scheafer inquired about the Board's ability to approve a rate adjustment other than 5% since it is not clearly stated in the contract language. District Counsel, Alan Burns, stated that the Board has the legal power to approve the 5% request or propose another amount. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 Motion: To approve CR&R's proposal for a 5% adjustment to the compensation schedule described in Exhibit B of the First Amendment dated January 27, 2023 and approve the adjustment to be retroactive to July 1, 2023. Motion by Art Perry, second by Bob Ooten. Director Eckles stated that he does not support the motion due to CR&R's profitability increases and the likelihood of their requesting an annual rate adjustment. President Scheafer requested amending the contract language so that it clearly states that the Board can approve alternatives to the proposed rate adjustment. Mr. Carroll stated that District staff will discuss that change with CR&R. Ms. Middenway conducted a roll call vote for the motion. Final Resolution: Motion Caries 4-1 Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer No: Brett Eckles There was no further discussion. Action: S. Consider Approving the Acquisition of One (1) New Vactor 2112-18 Combination Sewer Cleaning Unit from Haaker Equipment Company for $639,084.64 Recommendation: That the Board of Directors: 1. Approve the transfer of $140,000 from the Fixed Asset Replacement Fund to the Capital Outlay Fund in FY 2024-25; and 2. Approve the acquisition of one (1) new Vactor 2112-18 combination sewer cleaning unit from Haaker Equipment Company for $639,084.64. Mr. Carroll presented report details and discussed Vac -Con unit repairs. He noted that this item is included in the District's budget, but its cost has increased since the budget was approved. He noted that the price is still lower than similar models from other manufacturers. Secretary Perry asked if the District has to pay the full amount up front. COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 Mr. Carroll stated that the District will issue a purchase order and pay for the cleaning unit once it arrives. Discussion followed regarding how District funds are expended for this item. Mr. Carroll stated that the District will be borrowing money from the Asset Replacement Fund and implementing a five-year plan to repay the funds. Director Eckles requested to review the District's repayment plan. President Scheafer inquired about other major equipment in need of repairing. Mr. Carroll stated that the Wastewater Department's fleet is young and that this is the oldest unit in the fleet. He noted that he does not anticipate any other equipment needing replacement in the next five years. Discussion followed regarding the District's second Vactor truck and the Asset Replacement Fund. Vice Secretary Ooten expressed support for another Vactor truck. Secretary Perry asked if the current cleaning unit can be used until its replacement is delivered. Mr. Carroll confirmed that the current cleaning unit is still functional and will be auctioned once the new unit is delivered. Motion: To: 1. Approve the transfer of $140,000 from the Fixed Asset Replacement Fund to the FY 2024-25 Capital Outlay Fund; and 2. Approve the acquisition of one (1) new Vactor 2112-18 combination sewer cleaning unit from Haaker Equipment Company for $639,084.64. Motion by Art Perry, second by Bob Ooten. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer No: None COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 There was no further discussion. F. ENGINEER'S REPORTS Action, Receive and File: 1. Receive and File the District Engineer's Report and Capital Improvement Projects Status Recommendation: That the Board of Directors receive and file the Engineer's Report. District Engineer, Mark Esquer, provided report details and an update on current projects. Discussion followed regarding the Elden Forcemain Redundancy Project. Vice President Schafer asked if there were any issues associated with the recent tropical storm. Mr. Esquer stated that he is not aware of any issues resulting from the storm. Discussion followed regarding the costs associated with relining pipes and the Elden Forcemain Redundancy Project. Vice Secretary Ooten inquired about a timeline for a potential sewer rate increase. Mr. Carroll stated that the District is currently in the middle of a two-year rate increase, but it can be amended. President Scheafer asked if there were any issues related to the Orange County Fair. Mr. Esquer stated that he is not aware of any issues resulting from the fair. Discussion followed regarding the Orange County Fairgrounds and the Orange County Sanitation District's (OCSD) Fairview project. COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 There was no further discussion, and the report was received. G. TREASURER'S REPORTS None. H. ATTORNEY'S REPORTS None. 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. 1. Orange County Sanitation District (OCSD) - (President Ooten) Vice Secretary Ooten stated that there is nothing to report. 2. Santa Ana River Flood Protection Agency (SARFPA) - (Director Perry) Secretary Perry stated that there is nothing to report. 3. Independent Special Districts of Orange County (ISDOC) - (Secretary Schafer) Vice President Schafer stated that ISDOC is still looking for a Board Secretary. She noted that she shared information about the California Special Districts Association (CSDA) at ISDOC's recent meeting. President Scheafer stated that a few members from local water districts are interested in ISDOC withdrawing its membership from the Orange County Council of Governments (OCCOG). He noted that he is currently working with OCCOG to convince ISDOC to remain a member. COSTA MESA SANITARY DISTRICT PAGE 12 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 4. California Special Districts Association (CSDA) - (Secretary Schafer) Vice President Schafer shared that she attended a CSDA Alliance meeting. S. Special District Risk Management Authority (SDRMA) - (Director Scheafer) President Scheafer provided an update on SDRMA's recent Board elections. He shared that all three incumbents were reelected. He stated that they discussed Board and employee handbooks at their recent meeting and noted that CSDA & SDRMA's annual meeting is taking place soon. 6. Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55, Operations Code Section 3.01.030 Vice President Schafer shared that she attended a Water Advisory Committee of Orange County (WACO) meeting. There was no further discussion. 1. 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 President Scheafer commented on the recent tropical storm. Vice President Schafer shared that CSDA will be conducting Board elections at their next executive meeting. COSTA MESA SANITARY DISTRICT PAGE 13 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD AUGUST 21, 2023 There were no additional comments. M. ADJOURN TO CLOSED SESSION None at this time. N. RECONVENE TO OPEN SESSION None at this time. O. CLOSING ITEMS Procedural: 1. Adjourn - The next meeting of the Costa Mesa Sanitary District Board of Directors will be held on Monday, September 25, 2023. President Scheafer adjourned the meeting at 5:31 p.m. P- Art Perry Secretary Mike Scheafer President