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Minutes - Board - 2024-04-16COSTA MESA SANITARY DISTRICT MINUTES OF THE BOARD OF DIRECTORS SPECIAL MEETING APRIL 16, 2024 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), Marissa Pereyda (Management Analyst II), Angela Colunga (Administrative Assistant I) Others present Cindy Brenneman, Citizens Advisory Committee Member Dean Fisher, Citizens Advisory Committee Member Jeremy Tamargo, NBS Government Finance Group Julie Barreda, CR&R Representative Michael Tou, Citizens Advisory Committee Vice Chair Mike Carey, CR&R Representative Sue Lester, Citizens Advisory Committee Chair Thomas Chandler Meeting called to order at 6:00 P.M. A. OPENING ITEMS Procedural: 1. Call to Order - President Scheafer President Scheafer called the meeting to order at 6:00 P.M. COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS SPECIAL MEETING HELD APRIL 16, 2024 Procedural: 2. 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: 3. 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. None. B. PUBLIC COMMENTS Procedural: 1. Public Comments President Scheafer opened public comments. Director Eckles commented that he will be utilizing his cell phone during the meeting to view the agenda. Hearing no additional comments, President Scheafer closed public comments. C. DISCUSSION Discussion: 1. Discuss Draft Solid Waste Rate Study and Recommended Rates Recommendation: That the Board of Directors provide direction to staff. General Manager, Scott Carroll, introduced the item. Citizens Advisory Committee (CAC) Member, Dean Fisher, entered the meeting at 6:02 p.m. COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS SPECIAL MEETING HELD APRIL 16, 2024 Management Analyst II, Marissa Pereyda, presented report details. She discussed the rate study's occupancy rate, which includes collection costs, driver salaries and wages, and administrative costs. She explained how CR&R's Consumer Price Index (CPI) adjustments may affect the occupancy rate. She provided information regarding the District's net -to -hauler rate, which is within 10% of the average rate in Orange County. She noted that any references to a recommended 35% reserve target level have been removed from the rate study. President Scheafer asked if the occupancy rate includes Senate Bill (SB)1383 compliance costs. Ms. Pereyda stated that SB 1383 compliance costs are included in the proposed rates. She shared that the District has a dedicated Sustainability Specialist from CR&R that will be conducting field inspections. CAC Member, Cindy Brenneman, joined the meeting at 6:06 p.m. Director Eckles asked if the 5% rate adjustment to the occupancy rate is a fixed cost. Ms. Pereyda explained that the yearly 5% rate adjustment is an assumed cost. She noted that the Board has the discretion to approve up to 5% each year. She confirmed that the proposed occupancy rates, excluding the CPI adjustments, are fixed. CR&R representative, Julie Barreda, stated that CR&R's rate adjustment requests will be based on the actual CPI index. She noted that, according to CR&R's contract, they cannot request a rate adjustment over 5%. Discussion followed regarding potential changes to the occupancy rate based on state regulations and accessory dwelling units (ADUs). Secretary Perry inquired about the two new trash trucks. Discussion followed regarding changes to mixed waste, recycling, and organic waste tonnages and costs. COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS SPECIAL MEETING HELD APRIL 169 2024 President Scheafer stated that landfill costs should reduce based on tonnage decreases. Ms. Barreda shared that Midway City Sanitary District's recent waste characterization reports showed that 50% of the items placed in the landfill carts should have been placed in the recycling or organic waste carts. Vice Secretary Ooten discussed CR&R's occupancy data compared to the City of Costa Mesa's data. Ms. Pereyda explained CR&R's occupancy data and noted that it includes multifamily properties of up to four units. She noted that CR&R's occupancy report is verified each month. She shared that the District is acquiring more ADU and multifamily customers. Secretary Perry asked how many customers have switched from dumpster service to cart service. Ms. Pereyda stated that she can provide more information on that and shared that the District recently had about four accounts transition from dumpster service to cart service. She noted that more multifamily properties are interested in cart service due to the increase in regulations for dumpster service. Ms. Barreda commented on the effects of space constraints on dumpster service. Director Eckles inquired about CR&R's cost increases for the City of Newport Beach. Thomas Chandler entered the meeting at 6:19 p.m. Discussion followed regarding the District's collection rates compared to the City of Newport Beach. Mr. Carroll proposed comparing the District's solid waste rates to other local jurisdictions every three or six months. COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS SPECIAL MEETING HELD APRIL 16, 2024 Discussion followed regarding the regional monthly customer rate comparisons for Fiscal Year 2024-2025. Director Eckles inquired about a two or three-year rate schedule rather than a five-year rate schedule. Jeremy Tamargo of NBS Government Finance Group explained the rate study's proposed five-year rate schedule. He noted that a two or three-year rate schedule will result in higher rate increases than a five-year rate schedule. He recommended conducting a new rate study for unforeseen circumstances. Director Eckles inquired about the District's 30% reserve level. Mr. Carroll stated that Board policy requires a 30% reserve level. He confirmed that this item will be presented at the April Board meeting for adoption. Director Eckles expressed concern about the proposed rate study and thanked staff for providing additional information. CAC Chair Sue Lester asked if the Board is interested in implementing a tiered rate system based on cart sizes and waste production. President Scheafer stated that Mr. Carroll has discussed a tiered rate system and noted that the Board will act in the best interest of its customers. Mr. Carroll shared that CR&R will be conducting a cart survey, which will help determine a variable rate structure. He noted that a variable rate structure will require a new rate study. There was no further discussion. D. CLOSING ITEMS Discussion: 1.Oral Communications and Director Comments COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS SPECIAL MEETING HELD APRIL 16, 2024 None. Procedural: 2. Adjournment President Scheafer adjourned the meeting at 6:34 p.m. Art Perry Mike Scheaf r Secretary President