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06 - Minutes Special Meeting 2013-10-29 ITEM NO. 06 CMSD OSTA ESA ANITARY ISTRICT MBDSM INUTES OF OARD OF IRECTORS PECIAL EETING O29,2013 CTOBER ______________________________________________________________________ COThe Boardof Directors of the Costa Mesa ALL TO RDER Sanitary District met in specialsession on th October 29, 2013at 9:30A.M. at 628 W. 19 Street, Costa Mesa. RCDP: James Ferryman, Art Perry, Arlene Schafer, OLL ALLIRECTORS RESENT Mike Scheafer DA: Robert Ooten IRECTORS BSENT SP:Scott Carroll, General Manager;Noelani TAFF RESENT Middenway, Deputy Clerk of the District; Javier Ochiqui, Management Analyst; Elizabeth Pham, Management Assistant; OP: Jim Mosher, Resident; Ray Ott, Resident; THERS RESENT Dean Ruffridge, CR&R; Mike Silva, CR&R; Lawrence Jones, CR&R; Julia McGinnis, Orange County Waste & Recycling PC UBLIC OMMENT President Ferryman invited members of the public to address the Board. Mr. Jim Mosher provided public comment option to introduce a separate green waste stream into the trash collection program and how kitchen would or would not be a part expressed concern that the Board was operating with an absence of clear and accurate information and that what needed to be achieved is unknown. Mr. Ray Ott provided public comment questioning if the Board would be making a decision at the current meeting or if just taking information. CMSD P2 OSTA ESA ANITARY ISTRICTAGE MBDSM INUTES OF THE OARD OF IRECTORS PECIAL EETING HO29,2013 ELD CTOBER ________________________________________________________________ would be accepting informa be held to discuss this matter further. Seeing no one further, President Ferryman closed public comments. anaerobic digestive (AD) facility and organics recycling program. Mr. Carroll noted that an additional option had been brought forward after the agenda had been distributed and would be presented to the Board. Mr. Carroll provided a report on how the organics recycling program would work, identified the costs of implementing the program, addressed how the community would be made aware of the new program, and provided details of other methods and programs available to recycle green and food waste. Director Perry requested clarification of the fees to be paid. Mr. Carroll responded that a fee will be paid at the AD facility for the disposal of the organics and another fee for any trash going to the landfill. Mr. Silva indicated that the AD fee was already included in the proposal and that the District would not be paying twice. Mr. Carroll noted that the estimated cost of participation in AD program would be approximately $500,000 which would include the purchase of 1,000 kitchen pails and the disposal costs at the AD of $71.50 per ton. President Ferryman questioned how the generated fuel would be folded into the profit margin. Mr. Silva responded that the fee of $71.50 per ton is the net of the true cost of $121 per ton. That the compressed natural gas (CNG) had been netted out, government subsidy and carbon offset. Discussion followed regarding the implementation of a pilot organics recycling program. noted that implementing the organic recycling program would not constitute a breach of the existing contract. Mr. Carroll provided an additional suggestion that had not been included in the staff report which would implement a three-cart system which would allow residents to maintain their current two mixed waste carts and add a third cart for organics at no additional cost. Discussion followed. CMSD P3 OSTA ESA ANITARY ISTRICTAGE MBDSM INUTES OF THE OARD OF IRECTORS PECIAL EETING HO29,2013 ELD CTOBER ________________________________________________________________ President Ferryman suggested phasing into the program. Mr. Silva recommended a one hundred percent roll out of the program. Discussion followed regarding the different sizes of the organics carts. President Ferryman questioned what the average rate would be for other agencies to participate in the AD program versus what the District would pay. Mr. Silva indicated that of the five quotes that have been provided to other agencies, the average cost was $85 per ton, the City of Los Angeles being quoted $72.50, and CMSD at $71.50 per ton. Mr. Dean Ruffridge discussed the benefits of CMSD participating in the AD project to achieve seventy-five percent diversion and ultimately reaching the goal of zero waste. Discussion followed regarding the production of methane gas. Mr. Carroll indicated that the District is being innovative by utilizing state of the art technology in achieving 75% diversion in residential waste alone. President Ferryman stated that he was pleased that the District conducted the satisfaction survey which indicated that the rate payers were willing to pay a bit more to achieve 75% diversion. Vice President Scheafer concurred with President Ferryman and felt that educating the residents would be the challenge more than the cost of the program as the District has prided itself as being the single-can system. Mr. Silva stated that, as the inventor of the one can system who signed the contract with CMSD, the single-can system that was developed in 1992 is antiquated as technology, collection methods and government regulations have changed. Mr. Ott provided public comment and expressed concern regarding the disposal of kitchen waste. Discussion followed. Mr. Ott provided public comment and questioned if the proposed new process would encourage residents to dispose of more items down the drain. Mr. Silva responded and noted that District Engineer Hamers anticipated that the sum total would be positive as residents are currently using their drain as a disposal with no other alternative in mind. CMSD P4 OSTA ESA ANITARY ISTRICTAGE MBDSM INUTES OF THE OARD OF IRECTORS PECIAL EETING HO29,2013 ELD CTOBER ________________________________________________________________ Director Perry requested confirmation that there would not be a rate change to the ratepayers with the incorporation of the AD program and questioned how long it would be till there was a change. Mr. Carroll responded and stated that the decision was up to the Board, but there would be no rate increase over the next two fiscal years per the adopted two year budget. Mr. Carroll noted that he provided the Board with a projection of incremental rate increases over a length of time for their review. Mr. Ruffridge stated that the earliest cart delivery date would be in September 2014 but could be delayed till January 2015 and that the Districting electing to implement the AD program 90 days after it begins in September would not be a problem. Mr. Ruffridge commented that the implementation of the AD program would gain positive recognition from other counties. President Ferryman asked when CR&R would need to receive a response from the Board regarding the AD program. Mr. Ruffridge stated that CR&R would like a commitment or an idea of the direction that the Board wanted to go in at its earliest opportunity. Mr. Carroll indicated that an amendment to the current contract would be appropriate if the Board chose to participate in the AD program and that he and Dean had drafted an amendment, provided it to District Counsel Burns to review, and would be ready to be placed on the November 21, 2013 Board meeting agenda. Mr. Carroll noted that the Board could approve the contract amendment on November 21 with a start date of January 2015, which would lock the District in at a rate of $71.50 per ton. Mr. Ruffridge noted that in addition to locking in the rate, the hauling and CRT rate would also be reduced, which would be a savings of $.50 per month. President Ferryman questioned if there would be an out of the contract if CR&R was not able to perform by a certain time. Mr. Silva confirmed that CR&R need to perform and that there is no risk to the District if the facility is not built or working properly. Director Perry questioned if the AD facility would be fully operational by September 2014. Mr. Ruffridge indicated that expectation is to be fully operational by September 2014. Mr. Mosher provided public comment and noted that he did intend to leave the impression that he was opposed to recycling and that he personally does not produce any green waste. Mr. Mosher reiterated that he did not feel that a true figure of how CMSD P5 OSTA ESA ANITARY ISTRICTAGE MBDSM INUTES OF THE OARD OF IRECTORS PECIAL EETING HO29,2013 ELD CTOBER ________________________________________________________________ much kitchen waste is generated by residences and that the impact on pounds per person per day with the AD program may be miniscule compared to the total waste that is being produced. Mr. Mosher discussed the usage of garbage disposals and the environmental impacts of waste going to the ocean versus the AD facility and encouraged District staff to have a stand on the issue when conducting public education. Mr. Mosher also addressed the issue of organics being banned from the landfill and questioned compliance. Mr. Ott questioned what yard, food, or household waste percentages of the current blended containers. Mr. Silva indicated that the bulk of the container was green waste. Discussion followed. industry would prefer the waste to be handled by the AD facility. Director Perry requested clarification regarding the $.50 savings. Mr. Carroll indicated that $.25 would be saved on the hauler rate and $.25 would be saved on the CRT rate for a total of $.50 and noted that the savings were calculated in the projections. Discussion followed regarding the timeframe for the savings to be applied. Mr. Ruffridge noted that the $.50 savings was a result of the audit and was unrelated to the signing of the contract to participate in the AD program. Director Schafer requested a copy of the proposed contract amendment prior to Board approval. President Ferryman questioned if the contract amendment would run in parallel to the current contract. General Manager Carroll confirmed that it would and would not affect the contract term. Vice President Scheafer suggested that the contract amendment be placed on the November 21, 2013 agenda. General Manager Carroll requested a motion from the Board. Director Perry suggested that the public be made aware of what has transpired. General Manager Carroll noted that he would prepare a press release. CMSD P6 OSTA ESA ANITARY ISTRICTAGE MBDSM INUTES OF THE OARD OF IRECTORS PECIAL EETING HO29,2013 ELD CTOBER ________________________________________________________________ Mr. Ott provided public comment regarding public outreach. President Ferryman indicated that the Board will take a proactive approach. Mr. Mosher provided public comment and requested clarification of the contract amendment options. Director Schafer suggested that the District provide a press release regarding the proposed approval of the contract amendment. Discussion followed regarding advertising of the program in upcoming District newsletters. A DJOURNMENT There being no further business to come before the Board, President Ferryman adjourned the meeting at 10:32 a.m. _________________________ _________________________ Art Perry James Ferryman Secretary President