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2023_12_18_boardMonday, December 18, 2023 Board of Directors Regular Meeting Time: 4:30 p.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 paste the following into your browser - https://us02web.zoom.us/join 2. Enter the Meeting ID number - 850 1825 3471 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 850 1825 3471# 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 Subject :1. Call to Order - President Scheafer Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Procedural A. OPENING ITEMS Subject :2. Pledge of Allegiance - President Scheafer Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Procedural A. OPENING ITEMS Subject :3. Invocation - Vice President Schafer Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Procedural A. OPENING ITEMS Subject :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.) Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Procedural Public Content Michael Scheafer, President Arlene Schafer, Vice President Arthur Perry, Secretary Robert Ooten, Vice Secretary Brett Eckles, Director A. OPENING ITEMS Subject :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. Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Procedural A. OPENING ITEMS Subject :6. Ceremonial Matters and Presentations Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Procedural B. PUBLIC COMMENTS - This time has been set aside for persons in the audience to make comments on items within the subject matter jurisdiction of the Costa Mesa Sanitary District that are not listed on this agenda. Members of the public will have the opportunity to address the Board of Directors about all other items on this agenda at the time those items are considered. Under the provisions of the Brown Act, the Board of Directors is prohibited from taking action on oral requests but may refer the matter to staff or to a subsequent meeting. The Board of Directors will respond after public comment has been received. Please state your name. Each speaker will be limited to four (4) continuous minutes. Subject :1. Public Comments Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Procedural File Attachments 2023-12-18_CMSD_agenda_comments_JimMosher.pdf (84 KB) C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :1. Approve Consent Calendar Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent) Recommended Action :That the Board of Directors approve the Consent Calendar as presented. Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :2. Approve the Board of Directors Study Session Minutes of November 14, 2023 Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent), Minutes Recommended Action :That the Board of Directors approve the meeting minutes as presented. Minutes :View Minutes for Nov 14, 2023 - Board of Directors Study Session Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Gina Terraneo, Management Analyst II Date: December 18, 2023 Subject: Approve the Board of Directors Study Session Minutes ofNovember 14, 2023 Summary The recorded minutes of theNovember 14, 2023Board of Directors Study Session are hereby submitted to the Board of Directors for review and approval. Analysis Attached to the staff report are the minutes for the Board of Directors Study Session onNovember 14, 2023. Staff Recommendation That the Board of Directors approve the meeting minutes as presented. Legal Review Not applicable. Environmental Review Consideration of public meeting minutesis 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 December 18, 2023 Board of Directors Regular Meeting at District Headquarters and posted on the Districts website. Alternative Actions 1. Do not approve the meeting minutes as presented. 2. Direct staff to report back with more information. File Attachments minutes_2023_11_14_ss.pdf (103 KB) Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :3. Approve the Board of Directors Regular Meeting Minutes of November 27, 2023 Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent), Minutes Recommended Action :That the Board of Directors approve the meeting minutes as presented. Minutes :View Minutes for Nov 27, 2023 - Board of Directors Regular Meeting Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Gina Terraneo, Management Analyst II Date: December 18, 2023 Subject: Approve the Board of Directors Regular Meeting Minutes ofNovember 27, 2023 Summary The recorded minutes of theNovember 27, 2023Board of Directors Regular Meetingare hereby submitted to the Board of Directors for review and approval. Staff Recommendation That the Board of Directors approve the meeting minutes as presented. Analysis Attached to the staff report are the minutes for the Board of Directors Regular Meeting onNovember 27, 2023. Legal Review Not applicable. Environmental Review Consideration of public meeting minutesis 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 December 18, 2023 Board of Directors Regular Meeting at District Headquarters and posted on the Districts website. Alternative Actions 1. Do not approve the meeting minutes as presented. 2. Direct staff to report back with more information. File Attachments minutes_2023_11_27_rm.pdf (113 KB) Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :4. Adopt Warrant Resolution No. CMSD 2024-06 Approving District Warrant Registers Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent) Budgeted :Yes Recommended Action :That the Board of Directors adopt Warrant Resolution No. CMSD 2024-06 approving District warrants for the month of November in the amount of $310,607.98. Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Sean Phan, Associate Accountant Date: December 18, 2023 Subject: Adopt Warrant Resolution No. CMSD 2024-06 Approving District Warrant Registers Summary Attached is the Warrant Resolution, which ratifies the payment of certain claims and demands and specifies the funds from which they were paid. Recommendation That the Board of Directors adopt Warrant Resolution No. CMSD 2024-06 approving District warrants for the month of November in the amount of $310,607.98. Analysis Attached is theWarrant Resolution, which ratifies the payment of certain claims and demands and specifies the funds from which they were paid. Legal Review Not Applicable. 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 whichfall within each of the exempt classes", and the District has adopted "CEQA Guidelines and Implementing Procedures" that state onpage 6 "Projects" does not include .... C. Continuing administrative or maintenance activities." Financial Review Sufficient funds are available 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 December 18, 2023 Board of Directors Regular meeting at District Headquarters and posted on the District's websitewww.cmsdca.gov. Alternative Actions Refer item back to staff with further instructions. File Attachments WARRANT RESO 2024-06.pdf (387 KB) Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :5. Approve the Directors' Compensation and Reimbursement of Expenses Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent) Recommended Action :That the Board of Directors approve the compensation and reimbursement of expenses as presented. Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Noelani Middenway, District Clerk & Public Information Officer Date: December 18, 2023 Subject:Directors' Compensation and Reimbursement of Expenses Summary The Directors' Compensation and Reimbursement of Expensesare hereby submitted to the Board of Directors for review and approval. Analysis Attached to the staff report are the Directors' Compensation and Reimbursement of Expenses. Staff Recommendation That the Board of Directors approve the compensation and reimbursement of expenses as presented. Legal Review Not applicable. Environmental Review Consideration of public meeting minutesis an administrative matter and is exempt from the requirements of the California Environmental Quality Act (CEQA) (Public Resources Code Section 21000 et. seq.). Section 15300.4 of CEQA allows an agency while establishing its own procedures "to list those specific activities which fall within each of the exempt classes," and the District has adopted "CEQA Guidelines and Implementing Procedures" that state on page 6 "Projects" does not include...C. Continuing administrative or maintenance activities. Financial Review Not applicable. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the December 18, 2023 Board of Directors Regular meeting at District Headquarters and posted on the District's website. Alternative Actions 1. Do not approve the compensation and reimbursement of expenses as presented. 2. Direct staff to report back with more information. File Attachments board_comp.pdf (1,194 KB) Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :6. Approve Payroll Transparency Disclosure for November 2023 Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent) Fiscal Impact :Yes Budgeted :Yes Recommended Action :That the Board of Directors approve and file the report. Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Sean Phan, Associate Accountant Date: December 18, 2023 Subject: Approve Payroll Transparency Disclosure for November 2023 Summary Attached is the Payroll General Ledger Distribution Report summarizing each payroll during the month. Recommendation That the Board of Directors approve and file the report. Analysis Attached is the Payroll General Ledger Distribution Report summarizing each payroll during the month. Legal Review Not Applicable. 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 whichfall within each of the exempt classes", and the District has adopted "CEQA Guidelines and Implementing Procedures" that state onpage 6 "Projects" does not include .... C. Continuing administrative or maintenance activities." Financial Review Sufficient funds are available 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 December 18, 2023 Board of Directors Regular meeting at District Headquarters and posted on the District's website www.cmsdca.gov. Alternative Actions Refer item back to staff with further instructions. File Attachments Payroll Transparency Disclosure November 2023.pdf (171 KB) Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :7. Approve the Preparation of a Warrant to CR Transfer for $212,177.44 in the December 2023 Warrant Register for November 2023 Recycling and Disposal Services Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent) Recommended Action :That the Board of Directors approve the preparation of a warrant to CR Transfer in the amount of $212,177.44 in the December 2023 warrant register for November 2023 recycling and disposal services Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Marissa Pereyda, Management Analyst II Date: December 18, 2023 Subject: Approve the preparation of a warrant to CR Transfer for $212,177.44 in the December warrant register for November 2023 recycling and disposal services Summary The District pays CR Transfer monthly for the sorting of recyclables from mixed waste and landfill disposal of the remaining waste. With the implementation of the Organics Recycling Program adopted by the Board, this payment also includes the diversion of organic waste to an anaerobic digestion facility to be recycled into renewable natural gas to fuel the solid waste collection trucks or to be processed into compost. Recommendation That the Board of Directors approve the preparation of a warrant to CR Transfer in the amount of $212,177.44 in the December 2023 warrant register for November 2023 recycling and disposal services. Analysis The following chart outlines the total tonnage and payments due for residential and organic waste collection in Costa Mesa and Newport Beach. The tonnage rates approved by the Board of Directors on August 21, 2023, effective July 1, 2023, is $59.35 per ton for mixed waste recycling and disposal and $81.66 per ton for organics recycling. Type of Waste Invoice No.Tonnage Rate Amount Billed Residential Waste - Newport Beach 45172 81.12 $59.35 $4,814.46* Residential Waste - Costa Mesa 45171 2475.70 $59.35 $146,932.90* Total Residential Waste $151,747.36 Organics Recycling 45204 740.02 $81.66 $60,430.08* Total Organics $60,430.08 Grand Total $212,177.44 *Due to weight ticket calculation rounding, some invoice totals may be off by a few cents. Legal Review Not applicable. Environmental Review Consideration of the CR Transfer warrant 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 Sufficient funds are available in the adopted FY 2023-24 budget. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the December 18, 2023, Board of Directors Regular Meeting held at 290 Paularino Avenue and posted on the District's website at www.cmsdca.gov. Alternative Actions Refer item back to staff with further instructions. Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :8. Approve the Occupancy Count of 23,101 and Direct Staff to Prepare a Warrant to CR&R Environmental Services for $258,405.84 for November 2023 Solid Waste Collection Services Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent) Recommended Action :That the Board of Directors: 1. Approve the occupancy count of 23,101; and 2. Direct staff to prepare a warrant to CR&R Environmental Services for $258,405.84 for November 2023 solid waste collection services to be ratified with the December 2023 warrant register. Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Marissa Pereyda, Management Analyst II Date: December 18, 2023 Subject: Approve the Occupancy Count of 23,101 and Direct Staff to Prepare a Warrant to CR&R Environmental Services for $258,405.84 for November 2023 Solid Waste Collection Services Summary The District's monthly payment to CR&R Environmental Services (CR&R) for solid waste collection services is calculated by multiplying the set occupancy rate by the occupancy count, approved each month by the Board of Directors. The current occupancy rate is $11.1864 and the November 2023 occupancy count presented to the Board of Directors is 23,101. The November occupancy count payment includes a one time credit of $11.1864 to correct the October occupancy count, for a total payment of $258,405.84. Recommendation That the Board of Directors: 1. Approve the occupancy count of 23,101; and 2. Direct staff to prepare a warrant to CR&R Environmental Services for $258,405.84 for November 2023 solid waste collection services to be ratified with the December 2023 warrant register. Analysis The occupancy count is the number of active accounts in the District's jurisdiction receiving solid waste collection services. The occupancy rate approved by the Board of Directors on August 21, 2023, effective July 1, 2023, is $11.1864. The District pays CR&R $11.1864 per account, per month for solid waste collection services. The occupancy count is increased or decreased monthly for new residential developments and demolitions. As of November 30, 2023, the District's occupancy count was 23,101 with one (1) account removed since the last billing period. The occupancy count approved by the Board of Directors for October 2023 was 23,102. The October occupancy count included one (1) account that should have been removed from the occupancy count. That account has been removed from the November occupancy count and a one time credit of $11.1864 has been issued to correct the October occupancy count payment to CR&R Environmental Services. Occupancy Count X Occupancy Rate =Total + One Time Credit = Total Payment to CR&R 23,101 $11.1864 $258,417.03 ($11.1864) $258,405.84 District staff will continue to track the number of new and removed service addresses. Legal Review Not applicable. Environmental Review Consideration of the occupancy count 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 in 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 administration or maintenance activities. Financial Review Sufficient funds are available in the adopted FY 2023-24 budget. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the December 18, 2023, Board of Directors Regular Meeting held at 290 Paularino Avenue and posted on the District's website at www.cmsdca.gov. Alternative Actions Refer item back to staff with further instructions. File Attachments November_2023_Occupancy_Report.pdf (109 KB) Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :9. Investment Report for the Month of November 2023 Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent) Recommended Action :That the Board of Directors approve the Investment Report for the month of November 2023. Goals :8.0 Finance Public Content To: Board of Directors From: Marc Davis, District Treasurer Date: December 18, 2023 Subject: Approve the Investment Report for the Month of November 2023 Summary Attached is the Investment Report for the month of November 2023. As required by the District's Statement of Investment Policy, the Investment Report delineates all investment activity during the month. Recommendation That the Board of Directors approve the Investment Report for the month of November 2023. Analysis This report lists the types of securities held in the District's portfolio, the institutions from which the securities were purchased, maturity dates and interest rates as of November 30, 2023. The District's investments are in compliance with the Statement of Investment Policy adopted by the Board at the June 26, 2023 regular meeting, as well as the California Government Code. The market values in this report were provided by our third party custodian, Pershing, LLC, except for the Local Agency Investment Fund (LAIF). The market value of LAIF was provided by the State Treasurer's Office. It does not represent the value of the underlying securities within the pool, but rather the par or cost amount, which is the amount the District is entitled to withdraw. This reporting practice is consistent with industry standard practices for similar funds. The weighted average stated rate of return (current yield) for the District's investment portfolio as of November 30, 2023, was 1.972%. The yield to maturity of the portfolio was 2.112%. The District's weighted average interest rate was 170 basis points (1.698%) below the LAIF average monthly rate of 3.670% for the month of October 31, 2023. The average monthly rate for November is not yet available. The weighted average number of days to maturity for the District's total portfolio was 646 days (1.77 years). The duration of the underlying securities in LAIF as of November 30, 2023 was 244 days. The District's investment portfolio is in compliance with its liquidity limitations, which requires that a minimum of 20.00% of the portfolio must mature within one year. The percentage of the portfolio maturing in one year or less as of November, 2023 was 26.45%. The District has adequate cash reserves necessary to meet its obligations for the next six months. A majority of the District's cash and investments is reserved or set aside for specific purposes. A description of the various classifications of the District's cash and investments are as follows: :Solid Waste Fund - Equal to 30% of the operations budget of the Solid Waste Fund per Operations CodeOperating Reserve Section 4.030.020. The Operating Reserve can only be accessed with prior Board approval. - Equal to 5 months of budgeted operating expenses for the fiscal year toDesignated for Revenue Dry Period cover the cash deficit during the period in which the District does not receive any of its annual charges from the County of Orange. The revenue dry period is from June through October. - Remaining available cash, which is currently used for rate stabilization and payment of organicsUndesignated recycling costs. :Wastewater Fund - Equal to 25% of the operations budget of the Wastewater Fund per Operations CodeOperating Reserve Section 4.030.020. The Operating Reserve can only be accessed with prior Board approval. - Set aside for capital improvement projects approved and budgeted by the Board,Reserved for Capital Outlay but which have not yet been completed. - Equal to 5 months of budgeted operating expenses for the fiscal year toDesignated for Revenue Dry Period cover the cash deficit during the period in which the District does not receive any of its annual charges from the County of Orange. The revenue dry period is from June through October. - Remaining available cash, which is available to be appropriated by the Board.Undesignated - Collection of fixture fees which is a restricted revenue source and can only be used for newFacilities Revolving Fund sewer facilities. - Accumulation of funds for replacement of vehicles, equipment and computers.Asset Replacement Fund - Accumulation of funds in accordance with the asset management model for long-termAsset Management Fund replacement of sewer pipes and related infrastructure. Legal Review Legal review is not required. 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 portfolio was budgeted to earn an average rate of 1.577% for the year ending June 30, 2023. Through November 30, 2023, the portfolio has earned a weighted average interest rate of 2.023%. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the December 18, 2023 Board of Directors regular meeting at District Headquarters (290 Paularino Avenue) and on the District's website at www.cmsdca.gov. Alternative Actions Refer the matter back to staff. File Attachments Investment Report - November 2023.pdf (449 KB) Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles C. CONSENT CALENDAR - All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Subject :10. Receive and File November 2023 Contracts Signed by the General Manager Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action (Consent) Fiscal Impact :Yes Budgeted :Yes Recommended Action :That the Board of Directors receive and file this report. Goals :6.0 Administrative Management Public Content Contracts/Agreements 1. Lakewood Alarm - Purchase and install a new digital card reader to open HQ doors. Cost: then per month.$2,730 $138.00 Purchase Orders 1. Down to Earth Lawn & Garden Service Tree Trimming at Rob Hamers Yard. Cost: $1,290 2. Jamison Engineering Cleaning and removing debris at South Coast Pump Station.Cost: $4,865 Consent All matters listed on the consent calendar are considered to be routine and may be acted upon by one motion after public comment has been received. Only Board of Directors may pull an item for discussion. Reading of resolutions is waived and they will be adopted and numbered. Now is the time for those in the audience who wish to speak to items listed on the consent calendar. Each speaker will be limited to four (4) continuous minutes of comment on the consent calendar as a whole. Motion & Voting To approve the Consent Calendar as presented. Motion by Art Perry, second by Brett Eckles. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles E. GENERAL MANAGER'S REPORTS Subject :1. Receive and File the Popular Annual Financial Report (PAFR) for the Year Ended June 30, 2023 Meeting :Dec 18, 2023 - Board of Directors Regular Meeting To: Board of Directors From: Scott Carroll, General Manager Date: December 18, 2023 Subject: Receive and File November 2023 Contracts Signed by the General Manager Summary At the January 24, 2019Board of Directors meeting, the Board directed the General Manager to submit a list of contracts he signed during the previous month.Below are the contracts he signed in the monthsof November 2023. Recommendation That the Board of Directors receive and file this report. Analysis The following contracts were signed by the general manager in November 2023. Legal Review Not applicable Environmental Review Providing the Board of Directors a monthly list of contracts signed by the General Manager is anadministrative matterthat will not result in direct or indirect physical changes in the environment and isnot considered a "project". Financial Review There is adequate funding in the budget to perform the contract services mentioned above. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the December 18, 2023 Board of Directors regular meetingat District Headquarters and on District website at.www.cmsdca.gov Alternative Actions 1. Direct staff to report back with more information Access :Public Type :Action, Receive and File Budgeted :Yes Recommended Action :That the Board of Directors receive and file the Popular Annual Financial Report for the year ended June 30, 2023. Goals :8.1 Finance - Achieve financial excellence awards 8.0 Finance Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Kaitlin Tran, Finance Manager Date: December 18, 2023 Subject:Receive and File the Popular Annual Financial Report (PAFR) for the Year Ended June 30, 2023. Summary Government Finance Officers Association (GFOA) established the Popular Annual Financial Reporting Program (PAFR) to encourage governments to take information from theirAnnual Comprehensive Financial Report (ACFR) and condense it into a smaller easily understandable document that the general public can read without a background in finance. The GFOA then recognizes governments for their achievement. The District has won this prestigious award for the last eight years. The PAFR for the year ending June 30, 2023 has been completed and submitted to the GFOA. It is attached for your review. Recommendation That the Board of Directors receive and file the Popular Annual Financial Report (PAFR) for the Year Ended June 30, 2023. Analysis According to GFOA's website, the GFOA established the Popular Annual Financial Reporting Awards Program (PAFR Program) in 1991 to encourage and assist state and local governments to extract information from their annual comprehensive financial report to produce high quality popular annual financial reports specifically designed to be readily accessible and easily understandable to the general public and other interested parties without a background in public finance and then to recognize individual governments that are successful in achieving that goal. The PAFR is another tool to demonstrate an agency's transparency efforts because it takes a large comprehensive finance report, the ACFR, and condenses it to several pages using graphs and charts so that the public can easily understand the spending trend of their local government. Surprisingly, not many public agencies in California received thePAFR award from GFOA. In 2022, only five municipalities in Orange County received the PAFR award. Special recognition goes to CMSD's Finance Department (Kaitlin Tran, Lieu Tran and Sean Phan) for completing the audit and creating another outstanding PAFR! Legal Review Not applicable. Environmental Review The preparation of financial statements is an administrative action that is categorically exempt under 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 only financial impact is the application cost of $250, which was included in the Districts budget. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the December 18, 2023 Board of Directors regular meetingat District Headquarters and on District website at .www.cmsdca.gov Alternative Actions 1. Direct staff to report back with more information. File Attachments PAFR 2022-23.pdf (19,374 KB) E. GENERAL MANAGER'S REPORTS Subject :2. Receive and file the Annual Comprehensive Financial Report (ACFR), and the Auditors' Required Communication for the year ended June 30, 2023. Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Receive and File Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Kaitlin Tran, Finance Manager Date: December 18, 2023 Subject:Receive and file the Annual Comprehensive Financial Report (ACFR), and the Auditors' Required Communication for the year ended June 30, 2023. Summary The annual financial audit of the District has been completed. Attached to this report are the audited financial statements, the auditors report in accordance with Government Auditing Standards, and the auditors required communication for the fiscal year ended June 30, 2023. Paul Kaymark, Partner, Nigro & Nigro PC, which is the Districts independent audit firm that conducted the annual audit. Recommendation The Board of Directors receive and file: 1) The AnnualComprehensive Financial Report for Year Ended June 30,2023, 2) The Auditors Required Communication for the Year Ended June 30, 2023. Analysis Financial highlights during the year ended June 30, 2023 included: The Districts net position increased 1.44%, or $936,922 from the prior years net position of $64,863,195 to $65,800,117, as a result of the years operations. Operating revenues increased by 10.74%, or $1,288,247 from $11,944,766 to $13,283,013, from the prior year, primarily due to increases in wastewater and trash assessment revenue as a result of rate increases. Operating expenses before depreciation expense increased by 24.56% or $2,216,674 from $9,024,086 to $11,240,760, from the prior year, primarily due to increases in wastewater disposal expenses, as well as general and administrative costs. TheAnnual Comprehensive Financial Report and the Auditors' Required Communication for the year ended June 30, 2023 are attached to this report. Legal Review Not applicable. Environmental Review The preparation of financial statements is an administrative action that is categorically exempt under 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 cost of the annual audit was $15,000, which was included in the Districts budget. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the December 18, 2023, Board of Directors regular meeting at District Headquarters and on Districts website at www.cmsdca.gov. Alternative Actions Refer the matter back to staff. File Attachments DASHBOARD - CMSD - 2023.pdf (141 KB) CMSD - Final Communication With Governance Letter - 2023.pdf (354 KB) CMSD ACFR 2023 BOD Meeting 12-18-23.pdf (2,483 KB) E. GENERAL MANAGER'S REPORTS Subject :3. Consider Approving the 2024 Meeting and Office Closure Calendar Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action Recommended Action :That the Board of Directors approve the Costa Mesa Sanitary District 2024 Meeting and Office Closure Calendar as presented. Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Noelani Middenway, District Clerk/Public Information Officer Date: December 18, 2023 Subject: Consider Approving the 2024 Meeting and Office Closure Calendar Summary Attached is the proposed Costa Mesa Sanitary District 2024 Meeting & Office Closure Calendar for consideration and approval. Recommendation That the Board of Directors approve the Costa Mesa Sanitary District 2024 Meeting and Office Closure Calendar as presented. Analysis The following meeting dates deviate from their regular schedule due to conferences, office closures, and holidays: : The regular Board meeting has been moved from Monday, May 27 to Tuesday, May 28 due to the May Board Meeting Memorial Day holiday. : The regular Board meeting is currently scheduled for Monday,December 23. If the Board December Board Meeting wishes to reschedule this meeting, District staff can move this to Monday, December 16. Legal Review Not applicable. Environmental Review Approving the 2024 Meeting & Office Closure Calendaris an administrative matter, which will not result in direct or indirect physical changes to the environment similar to grading or construction and is not considered a project under CEQA. Financial Review Not applicable. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the December 18, 2023 Board of Directors RegularMeeting at District Headquarters and posted on the Districts website. Alternative Actions 1. Direct staff to make specified changes to proposed calendar. File Attachments calendar_2024_meeting_officeclosure.pdf (98 KB) Motion & Voting To approve the Costa Mesa Sanitary District 2024 Meeting and Office Closure Calendar as presented. Motion by Brett Eckles, second by Bob Ooten. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles G. TREASURER'S REPORTS Subject :1. Financing Options for Elden Forcemain Redundancy Project Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Discussion, Presentation Public Content To: Board of Directors Via: Scott Carroll, General Manager From: Marc Davis, District Treasurer Date: December 18, 2023 Subject:Funding Options for Elden Force Main Redundancy Project Summary The Costa Mesa Sanitary District (District) has the need to complete a very large project to begin in the next couple of years for which adequate funding is not available. This report describes funding options for this project. Recommendation That the Board of Directors provide direction on funding options for the Elden Force Main Redundancy Project. Analysis Project 341, Elden Force Main Redundancy Project, generally comprises installing a redundant force main from the Elden pump station to the discharge location at the Fairgrounds entrance. The project will include the following components: New force main connection at theElden pump station. Replace the force main crossover valves. Install approximately 3,600 linear feet of 18 inch piping. Jack and bore under the SR-55 freeway. Rehabilitate approximately 2,300 linear feet of Techite pipe, currently out-of-service and unavailable for use. Replace the discharge structure to accommodate dual/redundant force mains. Staff estimates the cost of the project to be approximately $10.5 million, but could range between $9 million and $13 million. This report provides financing options for the Board's consideration in order to fund the cost of the project. Each of the following scenarios assumes a project cost of $10.5 million. Lease-Purchase Financing This financing mechanism allows for payment of the project through lease payments. Voter approval is not required. There is no pledging or restricting assets. The District just needs to budget the lease payment. The term is variable and can range from 10 to 20 years. This type of financing is quick to fund as it can be accomplished in 90 days or less. Fees range from 1% to 3% of the project cost ($105,000 to $315,000) and are included in the lease payments. Recent interest rates for lease-purchase financing have ranged from 5.0% to 6.5%. The actual interest rate will be determined at the time the District enters into the lease-purchase arrangement. The table below identifies estimated lease payments. Number of Years Interest Rate Annual Payment Estimated Total Interest 10 5.0%$1,388,000 $3,060,000 10 6.5%$1,488,000 $4,065,000 20 5.0%$862,000 $6,420,000 20 6.5%$974,000 $8,665,000 Certificates of Participation (COPs) COPs are a type of financing where an investor purchases a share of the lease revenues of a program. The mechanism is similar to the lease-purchase financing in that the District will make lease payments for the project, but the lease payments will ultimately go to the investors. Voter approval is not required.The District just needs to budget the lease payment. The term is variable and can range from 10 to 20 years. This type of financing is more involved and can take from 3 to 6 months. Bond counsel and possibly a financial advisor may be required. Recent interest rates for COPs have ranged from 4.5% to 6.0%. The actual interest rate will be determined at the time the District goes to market. The table below identifies estimated lease payments. Number of Years Interest Rate Annual Payment Estimated Total Interest 10 4.5%$1,356,000 $2,735,000 10 6.0%$1,454,000 $3,725,000 20 4.5%$826,000 $5,700,000 20 6.0%$933,000 $7,970,000 30 4.5%$662,000 $8,955,000 30 6.0%$782,000 $12,610,000 General Obligation (GO) Bonds The District could issue GO bonds to fund the project. GO bonds require approval of 2/3 of the voters in order to be issued. If approved, an ad valorem tax is placed on the property tax to fund the repayment of the GO bonds. The GO bonds are secured by the full faith and credit of the District and are generally rated. The lower the rating the higher the interest rate on the bonds. Over the past 20 years, an AA rated GO bond has had an average interest rate of 4.37%. GO bonds typically have a maturity of 30 years. Costs of issuance are approximately 3% of the project amount and are added to the principal issued. Assuming the District can achieve an AA rating, the table below identifies the estimated bond payments. Insurance could be purchased by the District for the GO bonds. Under this scenario, the rating is based upon the creditworthiness of the insurer and not the District. Number of Years Interest Rate Annual Payment Estimated Total Interest 30 4.37%$650,000 $8,715,000 Cash Buy Down The previously discussed lease-purchase financing and COPs assume that the entire amount of the project would be financed. The District could elect to utilize some of its cash on hand to buy down the total amount to be financed. As of November 30, 2023, the District had the following cash balances in funds other than the Solid Waste and Wastewater Funds. Facilities Revolving Fund - $94,624 Fixed Asset Replacement Fund - $2,605,850 Asset Management Fund - $4,643,734 The District should consider using all of the available funds from the Facilities Revolving Fund as this fund is restricted and the monies can only be used for new sewer facilities, of which this project qualifies. Some funds could be used from the Fixed Asset Replacement Fund and/or the Asset Management Fund to help reduce the amount to be financed. The Fixed Asset Replacement Fund accumulates funds for the eventual replacement of general fixed assets, such as vehicles, computers, furniture/fixtures, etc. The Asset Management Fund is used to fund wastewater projects. As an example, a $2 million cash buy down would result in the following estimated payments. Lease-Purchase: Number of Years Interest Rate Annual Payment Estimated Total Interest 10 5.0%$1,132,000 $2,495,000 10 6.5%$1,214,000 $3,310,000 20 5.0%$704,000 $5,215,000 20 6.5%$794,000 $7,060,000 A $2 million cash buy down against the lease-purchase financing option would save the District between $565,000 and $1,605,000 in interest over the life of the lease. COPs: Number of Years Interest Rate Annual Payment Estimated Total Interest 10 4.5%$1,106,000 $2,225,000 10 6.0%$1,186,000 $3,035,000 20 4.5%$674,000 $4,640,000 20 6.0%$764,000 $6,420,000 30 4.5%$540,000 $7,280,000 30 6.0%$638,000 $10,250,000 A $2 million cash buy down against the COPs financing option would save the District between $510,000 and $2,360,000 in interest over the life of the lease. GO Bonds: Number of Years Interest Rate Annual Payment Estimated Total Interest 30 4.37%$532,000 $7,035,000 A $2 million cash buy down against the GO bonds financing option would save the District approximately $1,680,000 in interest over the life of the bond issue. Should the District elect to do a cash buy down, each $1 million of buy down would result in approximately $20,000 per year in lost investment earnings. This equates to lost investment earnings of $200,000 to $600,000 over the period of financing at current market conditions. The lease-finance, COPs and GO bonds can all be refunded should interest rates decline. Grant Funding District staff should research available grants from local, state and federal agencies that may cover a portion of the total cost of the project. Often times projects need to be shovel ready in order to compete for funding. Additionally, the District could utilize its public affairs contract to assist in lobbying efforts for project funding. Should the District obtain federal funding and spends more than $750,000 in federal funds in any fiscal year, then it will be subject to the requirements of the Single Audit Act and an additional audit of its federal financial assistance will be required in any year in which the District spends more than $750,000 in federal funds. The cost of a Single Audit can range from $5,000 to $10,000. Staff welcomes feedback and suggestions from the Board of Directors. Legal Review Not applicable. Environmental Review Review of waste composition studies 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 Due to the size of this project, the District will most likely need to fund some or all of the project with long-term financing. To do so, the District will need to fund the debt service payments from the Wastewater Fund on an annual basis. The debt service payments will typically be paid semi-annually. There are several options available to the District to fund the payments. The Facilities Revolving Fund receives revenue that is restricted to new or improved sewer facilities. Payment of the annual debt service payment would qualify for use of these funds. Since the funds are restricted, they should be used first before other funds. The District could transfer on an annual basis, all revenue received by the Facilities Revolving Fund to the Wastewater Fund to help offset the annual debt service payment. Average annual revenue over the past 10 years has been approximately $150,000. These funds will not completely cover the annual debt service payment. The General Fund receives approximately $350,000 in property tax revenue each year. These funds are currently being transferred to the Solid Waste Fund to help with rate stabilization. They could be redirected to the Wastewater Fund to help offset the debt service payment. However, any amounts redirected will result in a shortfall to the Solid Waste Fund. Each year, the Wastewater Fund budgets for capital improvement projects of approximately $1,800,000. This amount could be reduced for some or all of the annual debt service payment. The result would be less funds available for annual capital projects, but no increase in the annual charge. Fully budget the annual debt service payment in the Wastewater Fund without any reduction in capital projects or other expenses. This would likely necessitate an increase in the annual charge. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the December 18, 2023, Board of Directors Meeting held at 290 Paularino Avenue and posted on the District's website at www.cmsdca.gov. Alternative Actions Refer item back to staff with further instructions. 1. 2. 3. 4. 5. File Attachments Elden Force Main Redundancy Project Funding Options.pptx (246 KB) H. ATTORNEY'S REPORTS Subject :1. AB 1033 Accessory Dwelling Units: Local Ordinances: Separate Sale or Conveyance Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Discussion Goals :6.0 Administrative Management 6.6 Administrative Management - Stay informed of Federal and State legislation Public Content To: Board of Directors From: Alan Burns, District Counsel Date: December 18, 2023 Subject:AB 1033 Accessory Dwelling Units: Local Ordinances: Separate Sale or Conveyance Summary A series of laws have provided accessory dwelling units (ADUs), or second units, favored status in the law and required cities and other local government entities, to allow multiple living unit arrangements on property traditionally viewed as single-family residential. The following is provided to assist in determining how this impacts the sanitary district. AB 1033 makes new revisions to that law. That bill authorizes cities to allow the selling of the two units independently. Previously, the two units had to be sold together, on one lot. Recommendation That the Board of Directors receive and file this report. Analysis ADUs are accessory dwelling units. There are also junior ADUs. This memo will generally use the term ADU unless a different term is required. Government Code §65852.26 The new law a local agency to allow an ADU to be sold or conveyed separately from the main residence if the requires all following apply: The ADU or primary dwelling was built by a qualified nonprofit corporation. There is an enforceable restriction on the use of the land by recorded covenant between the buyer and a qualified nonprofit entity that satisfies the R & T Code. The property is held pursuant to a recorded tenancy in common agreement that meets certain criteria. A grant deed has been recorded. 5. Notwithstanding 65852.2(f)(2)(A), if requested by the utility providing service to the primary residence, the ADU has a , water or electrical connection to the utility.separate sewer Government Code §65852.2 A city can have a local ordinance for ADUs provided: It designates areas where ADUs are permitted, and may be based on adequate sewer and water. The ADUs must also not negatively impact traffic flow and public safety. ADUs may be rented separately from the main unit, but (before AB 1033) could not be sold separately. The lot must be zoned for residential single-family or multi-family and must include an existing or proposed dwelling. The ADU is attached to or located within an existing dwelling. If there is an existing primary dwelling, the FAR of the ADU does not exceed 50% of the existing primary dwelling. Total Floor Area of a detached ADU does not exceed 1200 square feet No passageway can be required between the dwellings. Set back rules allowed, no more than 4 from side property line. Approval of a local health official can be required if a private sewer system is used. Parking shall not exceed one space per ADU or bedroom. Units must be ministerially approved within 60 days. In addition to the requirement that a local agency allow a separate sale or conveyance pursuant to Gov C 65852.26, a local agency may also adopt a local ordinance to allow the sale of the separate units as condominiums if the following occurs: These shall be created pursuant to the Davis-Sterling Common Interest Development Act (CC 4400 et seq.) The condos are created in conformance with applicable objective requirements of the Subdivision Map Act A safety inspection is conducted No condo or subdivision plan shall be recorded without lien holders consent If an ADU is established as a condo, the local agency shall require the owner to provide notice of the condo plan and separate ownership to every utility, including sewer. Dwelling units that are already part of a condo plan must notify the existing HOA and may not record such a plan without the express approval of the existing HOA. Ministerial approval of ADUs In addition to the authority provided above to create and sell ADUs separately, the law further provides [§65852.2(b)(1)] that when an agency has not adopted an ordinance governing ADUs, that it shall ministerially approve or deny the application within 60 days. Ministerial ADUs with on-site treatment systems must provide a percolation test. (On-site systems not allowed in this district.) Fees charged for the construction of ADUs shall be determined in accordance with GC 66000 and 66012 et seq. An ADU shall not be considered a new residential use for purposes of calculating connection fees or capacity charges for sewer use unless the ADU is constructed with a new single-family dwelling. (f)(1) A local agency or special district shall not impose an impact fee that is less than 750 square feet. Any impact fees for units 750 square feet and over, must be proportionate in relation to the main dwelling. Impact fee has the same meaning as in 66000(b), but includes park fees (66477). Impact fee does not include connection fees or capacity charges charged by a local agency or special district. For an ADU described in (e)(1)(A), a special district shall not require the applicant to install a new or separate connection directly between the ADU and the utility or impose a related connection fee or capacity charge, unless the dwelling was constructed with a new single family dwelling or upon separate conveyance of the ADU per (a)(10). For an ADU not described in (e)(1)(A), a special district may require a new or separate utility connection directly between the ADU and the utility. Consistent with 66013, the connection fee or capacity chare shall be proportionate to the burden of the ADU upon the sewer system (using square footage or drainage fixture unit values). Legal Review District Council prepared the summation of AB 1033. Environmental Review Providing legislative analysis 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 It's premature to determine the financial impact AB 1033 will have on the district. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the December 18, 2023, Board of Directors regular meeting at District Headquarters and on Districts website at www.cmsdca.gov. Alternative Actions 1. Direct staff to report back with more information. File Attachments 20231214 CMSD- ADU's.pptx (157 KB) 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 days 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. Subject :1. Orange County Sanitation District (OCSD) - (Vice Secretary Ooten) Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type : 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 days 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. Subject :2. Santa Ana River Flood Protection Agency (SARFPA) - (Secretary Perry) Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type : 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 days 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. Subject :3. Independent Special Districts of Orange County (ISDOC) - (Vice President Schafer) Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type : 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 days 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. Subject :4. California Special Districts Association (CSDA) - (Vice President Schafer) Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type : 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 days 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. Subject :5. Special District Risk Management Authority (SDRMA) - (President Scheafer) Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type : 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 days 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. Subject :6. Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55, Operations Code Section 3.01.030 Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type : K. NEW BUSINESS Subject :1. Adopt Resolution 2023-988 Requesting the Orange County Water District (OCWD) Board of Directors Consider the Appointment of Robert "Bob" Ooten to Fill the Vacancy in the Office of Director for Division 7 Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Action, Receive and File Preferred Date :Dec 18, 2023 Absolute Date :Dec 18, 2023 Recommended Action :That the Board of Directors adopt Resolution 2023-988 requesting the Orange County Water District (OCWD) Board of Directors consider the appointment of Robert "Bob" Ooten to fill the vacancy in the office of Director for Division 7. Goals :4.1 Partnerships - Build relationships with local agencies, small businesses, and non-profit agencies to promote sustainable practices Public Content RESOLUTION NO. 2023-988 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE COSTA MESA SANITARY DISTRICT REQUESTING THE ORANGE COUNTY WATER DISTRICT (OCWD) BOARD OF DIRECTORS CONSIDER THE APPOINTMENT OF ROBERT BOB OOTEN TO FILL THE VACANCY IN THE OFFICE OF DIRECTOR FOR DIVISION 7. WHEREAS, the Orange County Water District (OCWD) was formed in 1933 to manage and replenish the regions groundwater basin as well as ensuring water reliability and quality, preventing seawater intrusion, and protecting Orange Countys rights to Santa Ana River water; and , OCWD is governed by ten board of directors who are responsible for implementing WHEREAS policies that foster sound management of the regions groundwater basin to support the advancement of OCWDs mission to provide an adequate, reliable, high quality water supply; and a vacancy exists in the office of Director for Division 7 of OCWD; andWHEREAS, WHEREAS, the Board of Directors of OCWD has decided to fill the vacancy in the office of Director for Division 7 by appointment; and the Costa Mesa Sanitary District (CMSD) Board of Directors believe Vice Secretary WHEREAS, Robert Bob Ooten is qualified and experienced to serve on OCWD Board of Directors, as described below: Registered professional engineer with an emphasis on planning, designing, and constructing wastewater/water systems. Retired from Orange County Sanitation District (OC San) after 25 years of service. Part of the initial OC San/OCWD team that studied the feasibility of developing a dependable water supply from wastewater. Served on the evaluation team for hiring planning and design consultants for phase one of the Groundwater Replenishment System (GWRS). Served on the OC San/OCWD steering committee during the planning, design, construction, operation, and expansion of the GWRS. Developed an asset management system at OC San that reduced capital improvement costs for one project by $44 million dollars. Past President of the 7000-member California Water Environment Association (CWEA). Past leadership positions for the Water Environment Federation (WEF). Recognized by Governor Arnold Schwarzenegger and Congresswoman Loretta Sanchez for 25 years of public service. Eighteen years of experience adopting policies as an elected official while serving 1. 2. Eighteen years of experience adopting policies as an elected official while serving on CMSD Board of Directors. Currently serving as Active Director of OC San Board of Directors. Served as Alternate Director of OC San Board of Directors for fourteen years. Alternate Executive Committee Member of the Santa Ana River Flood Protection Agency (SARFPA). NOW, THEREFORE, BE IT RESOLVED: The governing body of the Costa Mesa Sanitary District supports Vice Secretary Robert Bob Ooten applying to Orange County Water District to fill the vacancy in the office of Director for Division 7. The governing body of the Costa Mesa Sanitary District encourages the Board of Directors of the Orange County Water District to consider the appointment of Robert Bob Ooten to fill the vacancy in the office of Director for Division 7. PASSED and on this 18 day of December 2023.ADOPTED th _______________________________ _______________________________ Secretary, Costa Mesa Sanitary District President, Costa Mesa Sanitary District Board of Directors Board of Directors STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF COSTA MESA ) I, Noelani Middenway, District Clerk of the Costa Mesa Sanitary District, hereby certify that the above and foregoing Resolution No. 2023-988 was duly and regularly passed and adopted by said Board of Directors at a regular meeting thereof, held on the 18 day of December 2023 byth the following votes: AYES: NOES: ABSENT: ABSTAIN: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Costa Mesa Sanitary District, this 18 day of December 2023.th _________________________________ Noelani Middenway Clerk of the Costa Mesa Sanitary District File Attachments Resolution 2023-988 - Ooten Appointment to OCWD Div. 7.docx (23 KB) Motion & Voting To adopt Resolution 2023-988 requesting the Orange County Water District (OCWD) Board of Directors consider the appointment of Robert "Bob" Ooten to fill the vacancy in the office of Director for Division 7. Motion by Art Perry, second by Mike Scheafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Bob Ooten, Mike Scheafer, Brett Eckles L. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS Subject :1. Oral Communications and Director Comments Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Discussion O. CLOSING ITEMS Subject :1. Adjourn Meeting :Dec 18, 2023 - Board of Directors Regular Meeting Access :Public Type :Procedural Public Content The next regular meeting of the Costa Mesa Sanitary District Board of Directors will be held at 4:30 p.m. on Monday, January 22, 2024 in the District's Boardroom, located at 290 Paularino Avenue, Costa Mesa, CA 92626.