Minutes - Board - 2012-12-20 ASP SAN/T,gRy
( s
�'Q a aoo �_ "O'6,4 1p
y 70,• 6 O °
_a%
--RPpRov
COSTA MESA SANITARY DISTRICT
MINUTES OF BOARD OF DIRECTORS REGULAR MEETING
DECEMBER 20, 2012
CALL TO ORDER The Board of Directors of the Costa Mesa
Sanitary District met in regular session on
December 20, 2012 at 6:00 p.m. at 628 W.
19th Street, Costa Mesa.
II. PLEDGE OF President Ooten led the Pledge of
ALLEGIANCE Allegiance.
III. INVOCATION Director Scheafer led the Invocation.
• IV. ROLL CALL DIRECTORS PRESENT: Robert Ooten, James Ferryman, Jim
Fitzpatrick, Art Perry, Mike Scheafer
DIRECTORS ABSENT: None
STAFF PRESENT: Scott Carroll, General Manager; Anna
Sanchez, Administrative Service Manager;
Noelani Middenway, Deputy District Clerk;
Robin B. Hamers, District Engineer; Alan
Burns, District Counsel; Marc Davis, District
Treasurer; Javier Ochiqui, Management
Analyst
OTHERS PRESENT: Robert Dickson, Costa Mesa Planning
Commissioner; Bradley Zint, Daily Pilot
Newspaper; Dean Ruffridge, CR&R; Rick
Simonson, HF&H Consultants; John
Farnkopf, HF&H Consultants; Nitin Patel,
White Nelson Diehl Evans, LLP
V. CEREMONIAL MATTERS AND PRESENTATIONS-Appoint Board of Directors Officers
President: James Ferryman — Motion: Perry/Scheafer—4-1 (Fitzpatrick). Motion carried.
Vice President: Mike Scheafer- Motion: Perry/Ferryman — 5-0. Motion carried.
COSTA MESA SANITARY DISTRICT PAGE 2
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
HELD DECEMBER 20, 2012
President: James Ferryman — Motion: Perry/Scheafer— 4-1 (Fitzpatrick). Motion carried.
Vice President: Mike Scheafer- Motion: Perry/Ferryman — 5-0. Motion carried.
Secretary: Art Perry- Motion: Scheafer/Ferryman — 5-0. Motion carried.
Vice Secretary: Bob Ooten — Motion: Perry/Scheafer— 5-0. Motion carried.
Director: Jim Fitzpatrick
THE MEMBERS OF THE BOARD CHANGED SEATS TO ASSUME THEIR NEWLY APPOINTED
POSITIONS.
VI. ANNOUNCEMENT OF LATE COMMUNICATIONS
General Manager Scott Carroll indicated that five emails from members of the public.
regarding the Special Meeting agenda item had been received after the agenda had
been posted.
President Ooten indicated that the emails were in support of Director Fitzpatrick and
requested that the emails be made available to the members of the Board.
Director Fitzpatrick requested that the record reflect that the late communication items
were being distributed after a vote had been taken by the Board.
Director Ferryman questioned District Counsel if it would appropriate to go back into
closed session as the Board was not privy to the late communications that were
received.
District Counsel Burns indicated that the late communications that were received would
not validate the Boards action but it would be a question as to whether the Board would
want to reconsider the action that was taken. He stated that the Board would be able to
re-enter into closed session should they wish to.
Director Fitzpatrick indicated that there was one other that email that was not included
in what was presented to the Board.
General Manager Carroll confirmed that all communications that he received had
indeed been presented to the Board.
The Board unanimously agreed to enter back into closed session to review and discuss
the late communications.
THE BOARD ADJOURNED INTO CLOSED SESSION AT 6:05 P.M.
THE BOARD RECONVENED INTO OPEN SESSION AT 6:15 P.M.
President Ooten reported that the Board ratified its previous action to pursue litigation
consistent with the Attorney General's findings by a vote of 4-0.
COSTA MESA SANITARY DISTRICT. PAGE 3
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
HELD DECEMBER 20, 2012
VII. PUBLIC COMMENTS -There were no public comments.
VIII. CONSENT CALENDAR
1. Operations Committee Minutes of The minutes of the Operations Committee
November 13, 2012 Meeting of November 13, 2012, were
approved as presented.
2. Board of Directors Minutes of The minutes of the Board of Directors
November 15, 2012 Meeting of November 15, 2. 012, were
approved as presented.
3. Occupancy Report and payment to The Occupancy Report and payment to
Costa Mesa Disposal — November Costa Mesa Disposal for November 2012,
2012 was approved as submitted.
4. Contract Payment to CR Transfer for The Contract Payment to CR Transfer for
Recycling Services & Disposal for Recycling Services & Disposal for
November 2012 November 2012 was approved.
5. Adoption of Warrant Resolution No. Warrant Resolution No. CMSD 2013-06
CMSD 2013-06 Approving District approving District warrants for the Month of
Warrant Registers November 2012 in the amount of
$1,202,222.87 was approved.
6. Directors' Compensation and This item was pulled from the Consent
Reimbursement of Expenses for the Calendar for separate vote.
Month of November 2012
7. Investment Report as of November The Investment Report as of November 30,
30, 2012 2012 was approved.
8. Adoption of Form 806 — Agency Form 806 — Agency Report of Public Official
Report of Public Official Appointments was approved.
Appointments
9. Adoption of Resolution Nos. 2012- Resolution Nos. 2012-825 and 2012-826
825 and 2012-826 Ordering the Ordering the Publication of Ordinance Nos.
Publication of Ordinance Nos. 94 and 94 and 95 was adopted.
95
10. Budget Transfer for Building The Budget Transfer for Building
Maintenance Maintenance was approved as presented.
11. Costa Mesa Sanitary District 2013 The Costa Mesa Sanitary District 2013
COSTA MESA SANITARY DISTRICT PAGE 4
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
HELD DECEMBER 20, 2012
Meeting Calendar Meeting Calendar was approved.
12.Refund of Sanitary Assessment The Refund of Sanitary Assessment
Overpayment — Lachner Overpayment — Lachner was approved.
END OF CONSENT CALENDAR
Director Ooten moved for approval of the Consent Calendar except for items pulled for
a separate vote (Item No. 6). Director Perry seconded the motion, which carried 5-0.
Regarding Item No. 6, there was discussion regarding the ability to reimburse Director
Fitzpatrick for his attendance of the Newport Beach Liaison Committee meeting in the
month of November. Further discussion determined that the Board of Directors, by vote,
could approve the reimbursement of meetings not listed in the current code.
General Manager Carroll recommended that the governing Ordinance that identifies
which meetings are reimbursable be reviewed and updated to incorporate such
meetings.
Director Ooten moved for approval of Item No. 6. Director Scheafer seconded the
motion, which carried 5-0.
IX. PUBLIC HEARINGS- None
X. GENERAL MANAGER/DISTRICT CLERK REPORTS
13. Nominations and Appointments
President Ferryman moved to nominate and appoint Director Scheafer as Chairman of
the CMSD Operations Committee. Director Perry seconded the motion, which carried 5-
0.
Director Perry moved to nominate and appoint President Ferryman to the OCSD Board
of Directors. Directors Scheafer seconded the motion, which carried 4-1, with Director
Fitzpatrick opposed.
Director Perry moved to nominate and appoint Director Bob Ooten as the alternate to
the OCSD Board of Directors. Directors Scheafer seconded the motion, which carried 5-
0.
Director Scheafer 'moved to nominate and appoint Director Perry to the SARFPA
Committee. Director Ooten seconded the motion, which carried 5-0.
Director Scheafer moved to nominate and appoint President Ferryman as the alternate
to the SARFPA Committee. Director Perry seconded the motion, which carried 5-0.
COSTA MESA SANITARY DISTRICT PAGE 5
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
HELD DECEMBER 20, 2012
Director Perry requested to discuss the possibility of bringing back the Recycling
Committee. Director Scheafer concurred.
14. Sewer Rate Study
General Manager Carroll introduced the item.
Mr. John Farnkopf, HF&H Consultants, LLC, provided a presentation on the sewer rate
study. He discussed in detail how much revenue is required to meet the District's
requirements, including O&M, capital improvements and reserve funds. He also
addressed how to evaluate the District's existing customer classes and how to
determine the cost of service for each customer class.
General Manager Carroll indicated that he understood the Boards concerns regarding
the proposed increase in annual rates and indicated that the in order to comply with
Proposition 218 everyone would need to pay their fair share. He went on to say that
Single family residents will see the most significant rate adjustment in the first year at
23.7% while all other classes will see a rate decrease. The dollar amount increase is
$1.36 per month for single family accounts in the first year. The total increase by the
fifth year will be $1.95 per month for single family accounts.
District Engineer Hamers noted that the sewer rate study is revenue neutral and based
solely on Proposition 218.
Discussion followed regarding the policies addressing operating funds, funds available
for unforeseen expenditures, and whether or not funds are where they need to be when
emergency capital projects need to be addressed.
Director Fitzpatrick suggested that Orange Coast Sanitation District provide a
presentation on how OCSD's rates are calculated at an upcoming Operations
Committee meeting.
General Manager Carroll commended HF&H Consultants and CMSD Staff on providing
a very defendable study. He indicated that upon approval of this study a public hearing
date will need to be set at the January 24, 2013 to hold a public hearing date on April
25, 2013. He provided details of the information to be provided in the public hearing
notices and indicated that the notices would be mailed out during the week of February
4, 2013. He went on to say that a sewer rate adjustment workshop would be held at the
City's Neighborhood Community Center during the week of March 11, 2013.
There were no additional questions or comments.
Members of the Board concurred to accept and approve the study.
COSTA MESA SANITARY DISTRICT PAGE 6
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
HELD DECEMBER 20, 2012
15. Financial Statements for Fiscal Year Ended June 30, 2012
District Treasurer Marc Davis introduced the item and Mr. Nitin Patel, Partner of White
Nelson Diehl Evans, LLP, which is the firm that conducted the annual audit.
Mr. Patel presented to the Board the financial statements and results of the
comprehensive annual financial report for the Fiscal Year ended June 30, 2012. He
highlighted details of the report on internal control over financial reporting and on
compliance and other matters based on an audit performed in accordance with
Government Auditing Standards.
There were no questions or comments.
Director Ooten moved to receive and file the Comprehensive Annual Financial Report
(CAFR) for Fiscal Year Ended June 30, 2012. Director Scheafer seconded the motion,
which carried 5-0.
16. Schedule a Special Meeting — Solid Waste Technology Presentation
Mr. Carroll provided an oral report and recommended that a Special Meeting be held to
receive a Solid Waste Technology Presentation from CR&R.
The Board concurred that a Special Meeting be set for January 10, 2013 at 9:30 a.m. to
receive a Solid Waste Technology Presentation from CR&R.
17. CMSD's Website
General Manager Carroll provided details of the updated CMSD website. He noted that
the new website would allow staff to upload documents instantaneously, thus increasing
efficiency while creating a cost savings to the District by decreasing the need for the
consultant's technical assistance.
Mr. Ochiqui provided a visual presentation of the new website.
The Board expressed support of moving forward with the new changes and
complimented staff on a job well done in revamping the CMSD website.
Discussion followed regarding external email access for the Board members and
marketing of the CMSD website.
There were no further questions or comments and the report was received.
18. Budget Process
Mr. Carroll provided details of his proposal to develop a two year budget instead of a
COSTA MESA SANITARY DISTRICT PAGE 7
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
HELD DECEMBER 20, 2012
traditional one-year budget. He discussed the proposed schedule for developing and
adopting the FY 2013/14 —2014/15 Budget.
Discussion followed regarding the appropriate date to set sewer rate adjustments.
There were no additional questions or comments.
Director Scheafer moved to approve the proposed budget process for Fiscal Years
2013-14 and 2014-15.
19. Knowledge Transfer Program
General Manager Carroll provided details. of the Knowledge Transfer Program and
indicated that additional RFP's were submitted to three qualified firms. He indicated that
of the three firms only one had submitted an RFP and that staff had since reviewed the
previously submitted RFP from The Mejorando Group as well as Management Partners.
Based on the District's "Best Value" method, Mr. Carroll recommended that the Board
approve appropriating $18,800 and to direct the General Manager to enter into an
agreement with The Mejorando Group for conducting a Knowledge Transfer Program.
President Ferryman felt that the Knowledge Transfer Program was mandatory and felt
that the cost to value was justified.
Director Fitzpatrick supports the concept of a Knowledge Transfer Program, but would
prefer hiring a local firm such as Management Partners.
Director Ooten moved to approve staff's recommendation of appropriating $18,800 and
direct the general manager to enter into an agreement with The Mejorando Group for
conducting a Knowledge Transfer Program. Director Scheafer seconded the motion,
which carried 3-2, with Directors Fitzpatrick and Perry opposed.
20. Emergency Equipment at 23rd Street Pump Station
Mr. Carroll discussed the Board's direction for staff to install an emergency by-pass
pump at the 23rd pumping station. He indicated that the City of Newport Beach's
Municipal Code forbids placing such equipment above ground and staff is requiring
CMSD to construct an underground vault for placing the emergency equipment. He
noted that the primary purpose for installing emergency equipment is to ensure the
pumps are working during a massive power outage and felt that an emergency
generator would meet that objective.
Director Ooten moved to direct staff to install an emergency generator at the 23rd Street
Pump Station. Director Perry seconded the motion.
Discussion followed regarding providing alternatives to the City for undergrounding the
COSTA MESA SANITARY DISTRICT PAGE 8
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
HELD DECEMBER 20, 2012
emergency equipment.
Director Ooten withdrew his motion.
Director Fitzpatrick recommended that staff continue seeking an exemption from
Newport Beach City Council for placing the emergency bypass pump above ground.
The Board concurred with Director Fitzpatrick and directed staff to do so.
Director Fitzpatrick moved the item. Director Scheafer seconded the motion, which
carried 5-0.
XI. OPERATIONS COMMITTEE
21. Tuesday, December 11, 2012, 9:30 a.m. — (Vice President Ferryman and
Director Perry)
Director Ferryman reported on the Operations Committee meeting of December 11,
2012. He provided details on the diversion rate of 57%, indicated there were no
recycling action items, and noted that there was a small sewer spill of seven gallons that
was immediately contained.
Director Scheafer expressed appreciation of OCSD's attendance of the meeting.
Director Fitzpatrick commented on the omission of one sentence of the CR&R contract
that was omitted from the code and felt that it was a critical element.
Discussion followed regarding the State fee for processing recyclables and recycling
values.
Members of the Board concurred to receive and file the report.
XII. ENGINEER'S REPORTS
22. Project Status Report
District Engineer Hamers indicated that there was nothing to report.
There were no questions or comments.
Members of the Board concurred to receive and file the report.
23. Project #191 — Emergency Work on Santa Ana and 23rd Street Force
Mains — Acceptance of Improvements
Mr. Hamers noted that the emergency work on the Santa Ana and 23rd Street Force
COSTA MESA SANITARY DISTRICT PAGE 9
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
HELD DECEMBER 20, 2012
Mains had been completed and that staff recommends the acceptance of the
improvements.
Director Scheafer moved to: •
1. Accept improvements as completed and file a Notice of Completion.
2. Authorize payment—of 5% retention 35 days after Notice of Completion is
recorded.
3. Exonerate Labor and Material bond after Notice of Completion is recorded and
exonerate Faithful Performance Bond one year of Notice of Completion is
recorded.
Director Perry seconded the motion, which carried 5-0.
XIII. TREASURER'S REPORTS- None
XIV. ATTORNEY'S REPORTS- NONE
XV. LOCAL MEETINGS
A. Orange County Sanitation District (OCSD) — (Vice President Ferryman)
Director Ferryman announced that Jim Herberg will assume the General Manager's
position in January 2013 and that current General Manager Jim Ruth will be retiring. He
provided details of the recent OCSD meeting addressing the audit results of SARPA,
ground water replenishment, and discussions regarding Proposition 218.
B. Santa Ana River Flood Protection Agency (SARFPA) — (Director Perry)
C. Independent Special Districts of Orange County (ISDOC) — (Director
Scheafer)
Director Scheafer announced that he was elected Second Vice President of ISDOC
replacing Director Ooten.
D. California Special Districts Association (CSDA)
E. California Association of Sanitation Agencies (CASA)
F. Other Meetings Qualifying for Reimbursement under CMSD Ordinance
No. 55, Operations Code Section 3.01.030
Director Scheafer discussed his meeting with the Executive Director and Board
COSTA MESA SANITARY DISTRICT PAGE 10
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
HELD DECEMBER 20, 2012
President of the Senior Center to create a partnership between CMSD and the Senior
Center.
President Ferryman discussed his attendance of the WACO meeting and provided
details of the presentations regarding legislation concerning water issues.
Director Fitzpatrick presented details of his attendance of the OCSD Board Meeting and
discussed the dialogue regarding change orders. He also provided details of his
attendance of the City of Newport Beach Council Meeting where they discussed
seeking competitive bids.
XVI. OLD BUSINESS- None
XVII. NEW BUSINESS- None
XVIII. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS - None
XIX. ADJOURNMENT
President Ferryman adjourned the meeting at 8:30 p.m. to the next regular meeting of
the Costa Mesa Sanitary District Board of Directors on January 24, 2012 at 5:30 p.m. in
the District's Board Room, 628 W. 19th Street.
Art Perry James Fer- man
Secretary President
II