Loading...
2017_09_21_boardThursday, September 21, 2017 Board of Directors Regular Meeting 290 Paularino Avenue, Costa Mesa 5:30PM A. OPENING ITEMS Subject 1. Call to Order Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Procedural A. OPENING ITEMS Subject 2. Pledge of Allegiance Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Procedural A. OPENING ITEMS Subject 3. Invocation Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Procedural A. OPENING ITEMS (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.) Subject 4. Roll Call Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Procedural A. OPENING ITEMS Subject 5. Ceremonial Matters and Presentations Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Procedural A. OPENING ITEMS Unless directed otherwise by the Board of Directors, all actions shall be based on/memorialized by the latest document submitted as a late communication. Subject 6. Announcement of Late Communications Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Procedural A. OPENING ITEMS This time has been set aside for persons in the audience to make the Board of 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 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 7. Public Comments Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Procedural B. CONSENT CALENDAR Motion & Voting Subject 1. Approve Consent Calendar Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action (Consent) Recommended Action That the Board of Directors approve the Consent Calendar as presented. That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR File Attachments minutes_studysession_august2017.pdf (52 KB) Motion & Voting Subject 2. Approve Board of Directors Study Session Meeting Minutes of August 8, 2017 Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action (Consent) Recommended Action That the Board of Directors approve the Study Session Minutes of August 8, 2017 as presented. That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR File Attachments minutes_board_august2017.pdf (80 KB) Motion & Voting Subject 3. Approve Board of Directors Board Regular Meeting Minutes of August 24, 2017 Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action (Consent) Recommended Action That the Board of Directors approve the Board regular meeting minutes of August 24, 2017 as presented. That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR a. Directors' compensation for the month of August 2017 b. Directors' reimbursement of expenses for the month of August 2017 File Attachments a. director compensation.pdf (953 KB) b. director expense reimbursement.pdf (202 KB) Motion & Voting Subject 4. Approve the Directors' Compensation and Reimbursement of Expenses Meeting Sep 21, 2017 - 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. That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR Summary 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 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 budget. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the September 21, 2017 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 Aug 2017.pdf (895 KB) Motion & Voting Subject 5. Approve Payroll Transparency Disclosure for August 2017 Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action (Consent) Recommended Action That the Board of Directors approve and file the report. Goals 7.0 Finance That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR Summary The occupancy count is the number of residential customers that the District pays CR&R for the trash truck to stop and pick-up trash. The District pays CR&R $9.7954 per occupant per month. Each month, new residential customers in brand new developments contact the District to establish new trash service. District staff contacts CR&R to approve the drop-off of carts at the residence, which results in an increase in the occupancy count as shown on the attached list. Over the years, some discrepancies have occurred in the number of total occupancies. District staff has been working with CR&R to reconcile the entire list of service addresses for the past few months. While this process in underway, the District and CR&R have agreed to freeze the occupancy count at the March 2017 level. District staff will continue to track the number of new service addresses, but the District will only pay for the total occupancy count of 22,518 until the total address list is verified. Thirteen (13) accounts have been added since the last billing period. The payment calculation is based on the following: District's Current Rate for August of 2017: 22,518 x $9.7954 = $220,572.82 Recommendation That the Board of Directors accept the occupancy count as presented using 22,518 as the correct number of active units and direct staff to prepare a warrant to CR&R Environmental Services for August 2017 collection based on this occupancy report so long as the contractor fulfills the obligations of the agreement in the amount of $220,572.82 to be ratified in the September 2017 warrant list. Analysis Accept the occupancy count as presented using 22,518 as the correct number of active units and direct staff to prepare a warrant to CR&R Environmental Services for August 2017 collection based on this occupancy report so long as the contractor fulfills the obligations of the agreement in the amount of $220,572.82 to be ratified in the September 2017 warrant list. 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 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 budget to pay for the services provided. Subject 6. Accept the occupancy count as presented as 22,518 and direct staff to prepare a warrant to CR&R Environmental Services for $220,572.82 for August 2017 collection Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action (Consent) Preferred Date Sep 21, 2017 Absolute Date Sep 21, 2017 Recommended Action Accept the occupancy count as presented using 22,518 as the correct number of active units and direct staff to prepare a warrant to CR&R Environmental Services for August 2017 collection based on this occupancy report so long as the contractor fulfills the obligations of the agreement in the amount of $220,572.82 to be ratified in the September 2017 warrant list. Goals 2.2 Annual Contract Audits 2.4 Develop Strategies for 75% Waste Diversion Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the September 21, 2017 Board of Directors Regular meeting at District Headquarters and posted on the District’s website. Alternative Actions Refer item back to staff with further instructions. File Attachments Occupancy Report August 2017.pdf (102 KB) Motion & Voting That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR Summary The following is a summary of the CCTV (Closed Circuit TV) Pilot Program activity for the 2017-2018 fiscal year as of August 31, 2017: Adopted CCTV Budget $50,000 FY 16-17 Carryover Budget 0 Total Budget $50,000 FY 17-18 New Applications Received = 28 Applications Processed for Payment = 10 $ 2,100 Applications In Process = 18 4,250 Available Spots Based on Funding = 175 43,650 Total Projected Cost $50,000 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 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 budget to pay for the services provided. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the September 21, 2017 Board of Directors regular meeting at District Headquarters and posted on the District’s website at www.cmsdca.gov. Alternative Actions Refer item back to staff with further instructions. Motion & Voting Subject 7. Receive and file CCTV (Closed Circuit TV) Program Report Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action (Consent) Recommended Action That the Board of Directors receive and file the report. Goals 1.9 Sewer Lateral Assistance Program (SLAP) That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR Summary Staff is providing the Board with the Annual Compliance Report to fulfill the information and reporting requirements of Government Code Section 66013(d) for Capacity Charges. Staff Recommendation Staff recommends the Board receive and file this report. Analysis On May 27, 2010 the Board adopted Ordinance No. 76, revising the charges collected by the District and establishing that fixture fees are capacity charges and making related clarifying changes. (CMSD § 6.04.040) Fixture fees are capacity charges for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities. Upon payment of the fees, the money shall be deposited in a separate capital facilities account maintained in accordance with Government Code Section 66013(d). For each such separate account, the District shall, within one hundred eighty (180) days of the close of the fiscal year, make available to the public the following information: (1) A description of the charges deposited in the fund. (2) The beginning and ending fund balance of the fund and the interest earned from investment of moneys in the fund. (3) The amount of charges collected in that fiscal year. (4) An identification of all of the following: (A) Each public improvement on which charges were expended and the amount of the expenditure for each improvement, including the percentage of the total cost of the public improvement that was funded with those charges if more than one source of funding was used. (B) Each public improvement on which charges were expended that was completed during that fiscal year. (C) Each public improvement that is anticipated to be undertaken in the following fiscal year. (5) A description of each interfund transfer or loan made from the capital facilities fund. The information provided, in the case of an interfund transfer, shall identify the public improvements on which the transferred moneys are, or will be, expended. The information, in the case of an interfund loan, shall include the date on which the loan will be repaid, and the rate of interest that the fund will receive on the loan. Legal Review District Counsel has reviewed this report. The report complies with Gov. Code § 66013 and CMSD Operations Code 6.04.040. Environmental Review Preparing the yearly compliance report 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.” Subject 8. Receive and File Fiscal Year 2016-2017 Annual Compliance Report for Requirements of Government Code Section 66013 (d) for Capacity Charges. Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action Recommended Action Staff recommends the Board receive and file this report. Goals 7.0 Finance Financial Review Finance staff confirms that the Annual Compliance Report presents fairly the financial activity of the Facilities Revolving Fund for the fiscal year ending June 30, 2017. During the fiscal year 2016-17, the Facilities Revolving Fund received $183,352 in capacity charges, interest income earned of -$3,715 which was lower due to fair market valuation adjustments recorded at year end. There were no expenditures incurred during the fiscal year. As of June 30, 2017, the funds available in the Facilities Revolving Fund were $183,328. In comparison, the capacity charges collected in fiscal year 2015-16 were $257,323. The decrease of $73,971 in capacity charges collected over the prior fiscal year was the result of the timing of payments received from several large new residential development projects. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the September 21, 2017 regular Board of Directors meeting at District Headquarters and on District’s website www.cmsdca.gov Alternative Actions Refer the matter back to staff. File Attachments Annual Compliance Report for Capacity Charges FY16-17.pdf (51 KB) Motion & Voting That the Board of Directors receive and file this report. Motion by Art Perry, second by Jim Ferryman. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR Summary California Government Code requires special districts to disclose, at least annually, any reimbursement paid by the District of at least $100 for each individual charge for services or products received by a Board Member or Staff. The Annual Report of Expenses for Fiscal Year 2016-17 is provided as Attachment A of this report. Analysis Section 53065.5 of the California Government Code states that “Each special district, as defined by subdivision (a) of Section 56036, shall, at least annually, disclose any reimbursement paid by the district within the immediately preceding fiscal year of at least one hundred dollars ($100) for each individual charge for services or product received. "Individual charge" includes, but is not limited to, one meal, lodging for one day, transportation, or a registration fee paid to any employee or member of the governing body of the district. The disclosure requirement shall be fulfilled by including the reimbursement information in a document published or printed at least annually by a date determined by that district and shall be made available for public inspection.” Attached is the Annual Report of Expenses for the Fiscal Year 2016-17 which will be published on the District's website under the Transparency tab. 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 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 is the policy of the District to encourage and promote training and educational opportunities for all District employees so that the services they render to the District may be made more effective. Attendance at educational seminars, conferences and meetings by Board Members and/or Staff are also encouraged to monitor new legal requirements and technological advancements in the solid and wastewater industries. The reimbursement of approved training, travel and other work related expenses are dictated by the CMSD Employee Handbook, Policy 2.4 and the Operations Code, Section 3.01.090; Conferences, Travel and Expenses. The $7,478.26 of reimbursements reported on Attachment A have met the requirements outlined above. The Annual Report of Expenses are included on the District's website under the Transparency tab. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the September 21, 2017 regular Board of Directors meeting at District Headquarters and on District’s website www.cmsdca.gov. Alternative Actions Refer the matter back to staff. File Attachments Annual Report of Expenses FY16-17 .pdf (180 KB) Subject 9. Receive and File Annual Report of Expenses- Fiscal Year 2016-17 Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action (Consent) Recommended Action Staff recommends that the Board of Directors receive and file the Annual Report of Expenses for the Fiscal Year 2016-17. Goals 7.0 Finance Motion & Voting That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR File Attachments WARRANT RESO 2018-3.pdf (297 KB) Motion & Voting Subject 10. Adopt Warrant Resolution No. CMSD 2018-03 Approving District Warrant Registers in the amount of $485,582.37 Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action (Consent) Recommended Action That the Board of Directors adopt Warrant Resolution No. CMSD 2018-03 approving District warrants for the month of August 2017 in the amount of $485,582.37. Goals 7.0 Finance That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR Summary This payment to CR Transfer is for the sorting of recyclables from the mixed waste and disposal of the remaining waste at the landfill. With the implementation the Organics Recycling Program adopted by the Board, this payment also includes the diverting of the organics waste to the Anaerobic Digestion facility to be recycled into fertilizer or renewable natural gas to fuel the refuse trucks. Recommendation That the Board of Directors approve the preparation of a warrant to CR Transfer in the amount of $221,343.57 for August 2017 recycling and disposal services to be ratified in the September 2017 warrant register. Analysis Below is a chart depicting the total tonnage and payments due for residential and organic waste collected in Costa Mesa and Newport Beach. Please note there was a discrepancy with billing this month, CR&R's billing system inaccurately calculated invoice totals and under billed us $58.22 but CMSD will be paying what is reflected in the invoice. Costa Mesa Newport Beach Total Residential Waste $153,483.49 $4,409.40 $157,892.89 Organics $60,486.14 $2,964.54 $63,450.68 Total Payment $221,343.57 Tonnage Residential Waste 2954.04 84.88 3038.92 Organics 845.96 41.72 887.68 Total Tonnage 3926.60 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 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 budget to pay for the services provided. Subject 11. Approve the preparation of a warrant to CR Transfer in the amount of $221,343.57 for August 2017 recycling and disposal services in the September 2017 warrant register Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action (Consent) Preferred Date Sep 21, 2017 Absolute Date Sep 21, 2017 Recommended Action Approve the preparation of a warrant to CR Transfer in the amount of $221,343.57 for August 2017 recycling and disposal services to be ratified in the September 2017 warrant register. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the September 21, 2017 Board of Directors regular meeting at District Headquarters and posted on the District’s website at www.cmsdca.gov. Alternative Actions Refer item back to staff with further instructions. Motion & Voting That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer B. CONSENT CALENDAR Summary Attached is the Investment Report for the month of August 2017. As required by the District’s Statement of Investment Policy, the Investment Report delineates all investment activity during the month. 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 August 31, 2017. The District’s investments are in compliance with the Statement of Investment Policy adopted by the Board at the June 22, 2017 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 August 31, 2017, was 1.443%. The yield to maturity of the portfolio was 1.448%. The District’s weighted average interest rate was 36 basis points (0.359%) above the LAIF average monthly rate for August 2017 of 1.084%. The weighted average number of days to maturity for the District’s total portfolio was 892 days (2.44 years). The average duration of the underlying securities in LAIF as of August 31, 2017 was 179 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 less than one year as of August 31, 2017 was 28.35%. 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: Classification Description Solid Waste Fund: Operating reserve Equal to 30% of the operations budget of the Solid Waste Fund per Operations Code Section 4.030.020. The Operating Reserve can only be accessed with prior Board approval. Designated for revenue dry period Equal to 5 months of budgeted expenditures for the fiscal year to cover the cash deficit during the period in which the District does not receive any revenue. Undesignated Currently used for rate stabilization and payment of organics recycling costs. Wastewater Fund: Operating reserve Equal to 25% of the operations budget of the Wastewater Fund per Operations Code Section 4.030.020. The Operating Reserve can only be accessed with prior Board approval. Reserved for capital outlay Set aside for capital improvement projects approved and budgeted by the Board, but which have not yet been completed. Subject 12. Approve Investment Report for the Month of August 2017 Meeting Sep 21, 2017 - 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 August 2017. Goals 7.0 Finance Designated for revenue dry period Equal to 5 months of budgeted expenditures for the fiscal year to cover the cash deficit during the period in which the District does not receive any revenue. Undesignated Wasterwater funds available to be appropriated by the Board. Facilities Revolving Fund Collection of fixture fees which is a restricted revenue source and can only be used for new sewer facilities. Asset Replacement Fund Accumulation of funds for replacement of vehicles, equipment and computers. Asset Management Fund Accumulation of funds in accordance with asset management model for long-term 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 0.900% for the year ending June 30, 2018. Through August 31, 2017, the portfolio has earned a weighted average interest rate of 1.429%. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the September 21, 2017 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 - August 2017.pdf (599 KB) Motion & Voting That the Board of Directors pull item #8 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Jim Ferryman, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer D. GENERAL MANAGER'S REPORTS Summary On Wednesday, September 6, 2017, the District received a Contribution Application from the Costa Mesa High School (CMHS) Mustang Football Boosters to sponsor a banner for the 2017-2018 school year. The Boosters are seeking a monetary contribution of $500-$1,000 to hang 1-2 stadium banners on the CMHS campus. Currently, the District has an existing Organic Recycling Program Banner hanging at Mustangs Field (pictured in Attachment B). Staff Recommendation: That the Board of Directors: 1. Establish the purpose CMSD is trying to serve as a contributor to the Costa Mesa High School Football Boosters; and 2. Describe how the expenditure will advance CMSD’s purpose; and 3. Consider contributing $500 to continue hanging a CMSD Organics Recycling Program banner at Mustangs Field. Analysis According to the procedures implemented on July 31, 2013, the Board of Directors must do the following in order to determine if a contribution should be made: Establish the purpose the District is trying to serve by contributing. This purpose must be established as one of the District’s statutory powers or a power that would be incidental to those purposes. For example, District purposes include properly treating sewage, preventing SSOs, and recycling. Describe how the contribution will advance the District's purpose. In previous years, the Boosters allowed for banner sponsorships ranging from $250 to $2,500, depending on the length of time the banner would be displayed (during the football season only or year-round), the number of banners displayed, and the size of the banner. The Boosters have restructured their sponsorship program to include a flat rate of $500 per banner, per location as follows: Banner Location Cost Size Mustangs Field $500 3' x 5' Gymnasium $500 3' x 5' Baseball Field $500 3' x 5' Subject 1. Consider contributing $500 to Costa Mesa High School Football Boosters for Stadium Banner Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action Preferred Date Sep 21, 2017 Absolute Date Sep 21, 2017 Fiscal Impact Yes Dollar Amount $500.00 Budgeted Yes Budget Source 10-100100-4420 & 20-100100-4420 (Public Information/Education/Community Promotions Sponsorships) Recommended Action That the Board of Directors: 1. Establish the purpose CMSD is trying to serve as a contributor to the Costa Mesa High School Football Boosters; and 2. Describe how the expenditure will advance CMSD’s purpose; and 3. Consider contributing $500 to continue hanging an Organics Recycling Program banner at Mustangs Field. Goals 4.0 Community Outreach & Communications 3.2 Strengthen our ties with local governments, Special districts and educational institutions Softball Field $500 3' x 5' Aquatics $500 3' x 5' The banners are displayed from the time of purchase/production until the end of the school year. If indicated on the sponsorship form, sponsorships can directly support one of the following school programs: band, baseball, softball, girls basketball, boys basketball, girls volleyball, boys volleyball, football, boys swim, girls swim, boys water polo, girls water polo, track, or cross country. Additionally, the Contribution Application (Attachment A) states that the banner can help educate CMHS students and the community about recycling and electronics disposal. Due to the District's limited Sponsorship budget, staff is recommending a $500 sponsorship of a single banner in Mustangs Field. High school football typically attracts the highest attendance out of all school sports, so the District's banner would be most visible to residents in this location. If the District's banner is kept as is, the banner promotes the Organics Recycling Program and encourages residents to recycle their food scraps and green waste by participating in the Organics Recycling Program. The banner also directs residents to the District's Organics Recycling Program webpage to learn more about the program. The Organics Recycling Program is relevant to most Costa Mesa residents, therefore the banner may be most effective in promoting this program. However, if the Board of Directors directs staff to design a new banner, the following other programs can be considered for promotion: Large Item Collection Program Closed Circuit Television (CCTV) Program Fats, Oils, & Grease (FOG) Program Legal Review Not applicable. Environmental Review The consideration of a monetary contribution to a non-profit organization to be used as a vehicle for promoting a District recycling program is an administrative matter and is not a disturbance of the environment similar to grading or construction and is not a project under CEQA or the District’s CEQA Guidelines. Financial Review Currently, there are sufficient funds available in the FY 2017-18 Public Information/Education/Community Promotions Sponsorships account for this $500 contribution. A total of $8,000 is budgeted for sponsorships during FY 2017-2018 and the District has expended a total of $5,500 in contributions. This leaves a remainder of $2,500 for FY 2017-2018. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the September 21, 2017 Board of Directors regular meeting at District Headquarters and posted on the District’s website. Alternative Actions 1. Do not approve the contribution of $500 to continue hanging an Organics Recycling Program banner at Mustangs Field. 2. Approve a contribution of an alternative amount or in a different location (Gymnasium, Baseball Field, Softball Field, Aquatics). 3. Refer the matter back to staff. File Attachments A - CMHS Football Contribution Application.pdf (825 KB) B - Organics Recycling Program Banner.jpg (5,441 KB) Motion & Voting To contribute $500 to continue hanging a banner at Mustangs Field for the purpose of promoting the Organics Recycling Program and increasing the District's solid waste diversion rate. Motion by Art Perry, second by Arlene Schafer. Final Resolution: Motion Carries Aye: Arlene Schafer, Art Perry, Jim Ferryman, Mike Scheafer D. GENERAL MANAGER'S REPORTS Summary On February 22, 2017 the Board of Directors accepted CR&R's offer to negotiate a new contract for solid waste services that included the elimination of the evergreen clause, to be substituted with a fixed term with renewal options along with new program parameters. The negotiations were to be completed within 3-6 months. Staff is providing the Board with an update on negotiations that include points that were agreed and disagreed upon. In fact, negotiations are at an impasse and staff is now seeking direction from the Board. Recommendation That the Board of Directors provide direction to staff Analysis Since 2006, CR&R Environmental Services has been providing curbside solid waste and recycling collection services to all Costa Mesa residents and a small portion of Newport Beach residents (Santa Ana Heights). Commercial solid waste and recycling services in Costa Mesa is managed by the City through an open market process that allows up to nine different hauling companies the authority to collect and dispose of commercial waste. CR&R provides residential solid waste and recycling collection services in Newport Beach and twenty-four different hauling companies are authorized to collect and dispose commercial waste in the City. CMSD's contract with CR&R expired in 2016 and now the term is on a year to year basis that includes a six year evergreen clause, which means the contract will expire six years after CR&R receives a cancelation notice from CMSD. For example, if CMSD sent a cancelation notice in 2017, the contract will expire in 2023. CR&R provides a "mixed waste stream" collection program where all refuse and recyclable materials are disposed of in automated carts and then the recyclables are separated at CR&R's transfer station in the City of Stanton. In 2015, CR&R implemented a curbside organics recycling program where green waste and food scraps are delivered to CR&R's anaerobic digestion facility in the City of Perris where the material is converted into Renewable Natural Gas (RNG). In addition, CR&R has provided the following special programs. Telephone Book Recycling. This program ended in 2012 because telephone books are becoming obsolete, so a new program was implemented, Alkaline Battery Recycling Program. Christmas Tree Recycling. Excess Boxes & Household Furnishings. Large Item Pickups. Door-to-Door Household Hazardous Waste Collection for seniors and disabled residents Lockable trash carts Other programs CR&R is required to perform as per the terms of the agreement, include: Tours of CR&R's Recycling and Transfer Station. A monetary contribution of $10,000 per year to assist CMSD with public education. A cash donation of $500 per year to support local recycling efforts, such as the Alkaline Battery Recycling Program. A monetary contribution of $10,000 to provide a Household Hazardous Waste (HHW) collection program. Provide a static display of baled recyclables at the annual Community Run and provide $200 for prizes. A monetary contribution of $5,000 to support anti-scavenging of recyclable materials. Signage on CR&R's collection trucks that promote recycling programs. As a result of the programs implemented by CR&R, CMSD is experiencing the highest solid waste diversion rate for residential collection services (a percentage of solid waste being diverted away from landfills) of all CR&R contract cities in Orange County, as shown below. Jurisdiction Residential Diversion Rate CMSD 59.44% Subject 2. CR&R Contract Negotiations - Update Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action Fiscal Impact Yes Recommended Action That the Board of Directors provide direction to staff. Goals 2.00 Solid Waste 2.4 Develop Strategies for 75% Waste Diversion Stanton 50.57% Tustin 54.71% Laguna Hills 48.72% Newport Beach 47.28% Laguna Niguel 46.82% Orange 46.28% San Juan Capistrano 43.91% Dana Point 43.14% San Clemente 43.11% Rancho Santa Margarita 42.52% Lake Forest 39.65% La Habra 37.32% Aliso Viejo 37.09% Source: CR&R CMSD's original goal is to divert 75% of the waste stream in 2015 and 90% of the waste stream in 2020. Now, the focus is to divert 75% by 2020. There has been no solid waste rate increases in the past eleven years. In fact, the Board of Directors approved two rate reductions in the last seven years. As per direction of the Board, for the past six months staff and CR&R have been negotiating for a new contract to provide solid waste and recycling collection services. The following deal points have been agreed upon by staff and CR&R: 1. A fixed term limit of ten years with two five year extension options. The evergreen clause is removed and now the Board of Directors will have option to solicit bids towards the end of the ten year term or the Board can extend the agreement for another five years. 2. District wide door-to-door household hazardous waste (HHW) collection program. Each household will be allowed three pickups per year. The total pounds allowed to be picked up at each household is set by the County. 3. Free Mulch Event. Once a year CR&R will provide free mulch to residents in the Spring time. 4. CR&R will reimburse CMSD $35,000, along with annual CPI increases, for various programs including public education, anti- scavenging, hiring a consultant to evaluate CR&R's performance, and a donation for the Alkaline Battery Recycling Program. 5. A comprehensive outreach program that will help CMSD achieve 75% diversion. CR&R's Sustainability Coordinator will dedicate 20 hours a week promoting solid waste diversion programs in CMSD. Attached is a description of the plan. You may recall one of the findings in the Organics Recycling Behavioral Study is that residents will recycle more organics when they learn their neighbors are recycling organics. One idea is to recognize residents for doing a good job with their recycling efforts by having a photo of them in the newsletter and awarding them a gift card. This is done in the City of Santa Ana (see attachment). 6. Roll-out assistance to senior/ADA residents without requesting documentation. Residents will no longer have to provide proof of their age or medical documentation proving they are disabled. Residents will contact CMSD to request roll-out service and then staff will email CR&R to request said service. 7. CPI Increase. CR&R can request a two year CPI rate increase, but the request will have to go before the Board for approval consideration. Some cities have automatic CPI rate increases, but staff believes the District will lose control setting the rates if an automatic adjustment is implemented. CR&R did agree to allow CMSD to review their financial books to determine their profit margin with CMSD. The following deal points were not agreed upon by staff and CR&R. 1. Newport Beach Transfer Station. Staff requested CMSD's waste be unloaded at the City of Newport Beach transfer station, located at 592 Superior Avenue. Using Newport Beach transfer station will improve collection efficiency and reduce CR&R's fuel costs, which can help stabilize rates. However, according to CR&R state regulators are requiring weighing scales for the transfer trailers that will be hauling waste out of the City, but the station is too small for such scales. CR&R suggested another location for the scales, but the City denied the suggestion. Until the City and CR&R can resolve this issue, CMSD will not be able to use the transfer station. 2. GPS System on CMSD Computers. Staff requested CR&R GPS System, a computerized system that tracks the location of their fleet, be uploaded on CMSD computers so staff can track the fleet in CMSD. Having CR&R GPS on CMSD computers will greatly improve customer service for both agencies. For instance, when residents want to learn when their carts will be emptied, staff can give residents the location of the nearest CR&R truck and the approximate time of arrival. If a resident calls HQ to complain his/her cart was not emptied, staff can inform the person if or when CR&R's truck was in the neighborhood. However, CR&R's GPS is proprietary and they are not willing to share the system with CMSD at this time. CR&R did agree to share with staff video recordings if a resident complains his/her cart was not empty. The video recording will demonstrate the truck was at the person's home, or not, emptying his/her cart. 3. Lowering the Organics Recycling Rate. According to the Second Amendment with CR&R, dated February 25, 2014, the following is stated: "For being the first agency in Orange County to commit to the AD facility, CONTRACTOR agrees the DISTRICT will have the lowest conversion technology rate in the County. If CONTRACTOR negotiates a lower rate with any Orange County agency, then that rate shall become the rate of the DISTRICT." Staff has learned that on October 27, 2015 the City of Stanton negotiated an organics recycling program with CR&R at no additional cost to residents. The program began in 2016 and according to the agreement between Stanton and CR&R, all future costs for organics are to be approved by the City at or after July 1, 2019. See attached staff report and contract. CR&R disagrees that Stanton's organics program is free. According to CR&R, the City of Stanton is charged $87.50 a ton for organics, compared to $71.50 a ton charged to CMSD. However, when staff requested copies of City of Stanton bills showing the $87.50 a ton charge, Stanton officials informed staff there are no bills because the organics program is temporary free to residents. Since the difference between $87.50 and $71.50 is $16.00, staff suggested to CR&R that CMSD's rate be decreased by $16.00 to $55.50 a ton for three years. Reducing the organics rate to 55.50 a ton could save CMSD over $450,000 in organics costs for the next three years. CR&R said "No" to the temporary rate reduction. OPTIONS There are several options to consider, which is why staff is seeking direction from the Board. The options are: 1. Do nothing and continue with the existing contract with CR&R on a year to year basis. 2. Direct staff to send CR&R a cancelation notice to be effective September 20, 2023 and direct staff to prepare a Request for Proposal and begin soliciting proposals from qualified solid waste companies in 2021. 3. Direct District Counsel to review the Second Amendment to determine if a breach of contract exist, or not, due to the City of Stanton's Organics Recycling contract. 4. Direct staff to continue negotiating with CR&R. 5. Accept the deal points agreed upon by staff and CR&R and direct staff to bring back a new contract for the Board's approval consideration. Legal Review Not applicable at this time, but the Board can direct District Counsel to review the Second Amendment with CR&R to determine if a breach of contract exist or not. In addition, if the Board directs staff to bring back a new contract then District Counsel will assist in preparation of said contract. Environmental Review Contract negotiations is an administrative matter and is not a disturbance of the environment similar to grading or construction and does not constitute a project under CEQA or the District’s CEQA Guidelines. Financial Review Depending on the Board's decision there will be financial impacts to CMSD. The financial impacts for each option are described below. 1. Do nothing and continue with the existing contract with CR&R on a year to year basis. Financial Impact - A do nothing position will still have financial impacts to CMSD because the solid waste fund balance is offsetting organics recycling costs. In addition, the total tonnage collected by CR&R is increasing due to infill development. Staff is estimating the fund balance will be exhausted in three years and will require a rate increase that could be as high as $4.00 a month. This does not take into consideration a CPI rate adjustment requested by CR&R. 2. Direct staff to send CR&R a cancelation notice to be effective September 20, 2023 , direct staff to prepare a Request for Proposal (RFP) and begin soliciting proposals from qualified solid waste companies in 2021. Financial Impact - Due to the evergreen clause, the cancelation of service will not go into effect for six years. As mentioned above, in three years the rate may have to be increased unless costs are cut and/or additional revenue sources are identified. In addition, there are consulting costs to help prepare and evaluate proposals and assist transitioning with a new hauler (assuming CR&R is not selected). The City of Newport Beach spent nearly $200,000 on consulting services when the City contracted for residential solid waste and recycling collection services. Typically, when public agencies request proposals for solid waste collection services competition among the hauling companies will result in lowering the agencies costs, but there is no guarantee CMSD's costs will be reduced by conducting an RFP especially when there are fewer competing hauling companies in the market. Also, if the Board wants to continue using anerobic digestion technology for diversion the District will probably no longer have the lowest organics rate. 3. Direct District Counsel to review the Second Amendment to determine if a breach of contract exist, or not, due to the City of Stanton's Organics Recycling contract. Financial Impact - Costs for legal services will increase especially if District Counsel determines a breach of contract exists. How much legal services will cost is unknown at this time. 4. Direct staff to continue negotiating with CR&R. Financial Impact - There will be staff costs for continuing negotiations. As mentioned above, the impasse is regarding the City of Stanton's organics recycling program. If CR&R agrees to temporary lowering the organics rate CMSD will experience some savings in organics costs, but if CR&R does not agree to lowering the fee costs for the organics recycling program will increase, especially as the program is recently experiencing an increase in tonnage. 5. Accept the deal points agreed upon by staff and CR&R and direct staff to bring back a new contract for the Board's approval consideration. Financial Impact - Approving this option will result in some enhanced services provided by CR&R such as a District wide door-to-door HHW collection program, free mulch for residents and a strong commitment to public outreach, but without cutting costs and/or finding additional revenue sources rates will most likely increase in the next three years. It will be the first rate increase in nearly fifteen years. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the September 21, 2017 Board of Directors regular meeting at District Headquarters and on District website at www.cmsdca.gov Alternative Actions The alternative actions are mentioned above. File Attachments Community Outreach Plan.pdf (200 KB) Santa Ana Recycle Right!.pdf (240 KB) City of Stanton Staff Report and Contract.pdf (410 KB) E. ENGINEER'S REPORTS Summary Attached is a summary of the Capital Improvement Project activities 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 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 budget. Public Notice Process Copies of this report are on file and will be included with the complete agenda packet for the September 21, 2017 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 CIP Updates Sept 2017.pdf (25 KB) Subject 1. Receive and File Capital Improvement Projects Status Report Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Action, Receive and File Recommended Action The Board of Directors receive and file this report. Goals 1.4 System Wide Sewer Replacement and Repair Program 1.1 Manhole Cover Maintenance Program 1.0 Sewer Infrastructure F. TREASURER'S REPORTS Subject 1. Treasurer's Reports Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type G. ATTORNEY'S REPORTS Subject 1. Attorney's Reports Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type H. LOCAL MEETINGS: In accordance with AB 1234 (Gov. Code 53232.3), a report is required to be given by a Director for any meeting for which expense reimbursement of any kind is provided. Note: For meetings for which the per diem compensation is sought, the Operations Code provides that such compensation is authorized for each day’s service rendered as a Director at the request of the Board (not to exceed six days in one month), and certain meetings are specified as being eligible as set forth in District Operations Code § 3.01.030. For meetings not so listed, the Board must approve the service for it to be eligible for the per day compensation. Subject 1. Orange County Sanitation District (OCSD) - (Vice President Ferryman) Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type H. LOCAL MEETINGS: In accordance with AB 1234 (Gov. Code 53232.3), a report is required to be given by a Director for any meeting for which expense reimbursement of any kind is provided. Note: For meetings for which the per diem compensation is sought, the Operations Code provides that such compensation is authorized for each day’s service rendered as a Director at the request of the Board (not to exceed six days in one month), and certain meetings are specified as being eligible as set forth in District Operations Code § 3.01.030. For meetings not so listed, the Board must approve the service for it to be eligible for the per day compensation. Subject 2. Santa Ana River Flood Protection Agency (SARFPA) - (Director Perry) Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type H. LOCAL MEETINGS: In accordance with AB 1234 (Gov. Code 53232.3), a report is required to be given by a Director for any meeting for which expense reimbursement of any kind is provided. Note: For meetings for which the per diem compensation is sought, the Operations Code provides that such compensation is authorized for each day’s service rendered as a Director at the request of the Board (not to exceed six days in one month), and certain meetings are specified as being eligible as set forth in District Operations Code § 3.01.030. For meetings not so listed, the Board must approve the service for it to be eligible for the per day compensation. Subject 3. Independent Special Districts of Orange County (ISDOC) - (President Scheafer) Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type H. LOCAL MEETINGS: In accordance with AB 1234 (Gov. Code 53232.3), a report is required to be given by a Director for any meeting for which expense reimbursement of any kind is provided. Note: For meetings for which the per diem compensation is sought, the Operations Code provides that such compensation is authorized for each day’s service rendered as a Director at the request of the Board (not to exceed six days in one month), and certain meetings are specified as being eligible as set forth in District Operations Code § 3.01.030. For meetings not so listed, the Board must approve the service for it to be eligible for the per day compensation. Subject 4. California Special Districts Association (CSDA) - (Secretary Schafer) Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type H. LOCAL MEETINGS: In accordance with AB 1234 (Gov. Code 53232.3), a report is required to be given by a Director for any meeting for which expense reimbursement of any kind is provided. Note: For meetings for which the per diem compensation is sought, the Operations Code provides that such compensation is authorized for each day’s service rendered as a Director at the request of the Board (not to exceed six days in one month), and certain meetings are specified as being eligible as set forth in District Operations Code § 3.01.030. For meetings not so listed, the Board must approve the service for it to be eligible for the per day compensation. Subject 5. Special District Risk Management Authority (SDRMA) - (President Scheafer) Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type H. LOCAL MEETINGS: In accordance with AB 1234 (Gov. Code 53232.3), a report is required to be given by a Director for any meeting for which expense reimbursement of any kind is provided. Note: For meetings for which the per diem compensation is sought, the Operations Code provides that such compensation is authorized for each day’s service rendered as a Director at the request of the Board (not to exceed six days in one month), and certain meetings are specified as being eligible as set forth in District Operations Code § 3.01.030. For meetings not so listed, the Board must approve the service for it to be eligible for the per day compensation. Subject 6. Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55, Operations Code Section 3.01.030 Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type K. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS Summary Analysis Legal Review Environmental Review Financial Review Public Notice Process Alternative Actions Subject 1. Oral Communications and Director Comments Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type N. CLOSING ITEMS THE NEXT REGULAR MEETING OF COSTA MESA SANITARY DISTRICT BOARD OF DIRECTORS WILL BE HELD ON OCTOBER 26, 2017 IN THE DISTRICT'S BOARD ROOM, 290 PAULARINO AVE, COSTA MESA, CA 92626. Subject 1. Adjourn Meeting Sep 21, 2017 - Board of Directors Regular Meeting Access Public Type Procedural