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Minutes - CAC - 2019-05-16COSTA MESA SANITARY DISTRICT MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING MAY 16, 2019 CAC Members present Elodie Katz, Judith Gielow, Mike Carey, Mike Mcllroy, Monte Fields, Phil Marsh, Steven Takahashi CAC Members absent Albert M. Graham Jr., Andrew Nielson, Judith Takaya, Sue Lester Board Members present Bob Ooten, Jim Ferryman Staff present Scott Carroll (General Manager), Marc Davis (District Treasurer), Noelani Middenway (District Clerk), Kaitlin Tran (Finance Manager), Gina Terraneo (Management Analyst II), Nabila Guzman (Management Analyst 1) Others present Jim Mosher (District resident) Meeting called to order at 6:00 P.M. A. OPENING ITEMS Procedural: 1. Call to Order Chair Carey called the meeting to order at 6:00 P.M. He thanked the Committee for proceeding with business in his absence. He noted that he has been unable to attend the past few meetings because he was teaching a class that coincided with the Citizens Advisory Committee's (CAC) meeting day and time. Procedural: 2. Roll Call District Clerk, Noelani Middenway, conducted roll call and noted that Chair Carey and Committee Members Fields, Gielow, Katz, Mcllroy, and Takahashi were present. Committee Member Marsh entered the meeting at 6:01 P.M. COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 16, 2019 Procedural: 3. Public Comments Chair Carey opened public comments. Seeing no one wishing to speak, he closed public comments. Presentation: 4. Ceremonial Matters - Introduction of new CAC members Judith Gielow, Judith Takaya, Steven Takahashi and recognizing the reappointment of Sue Lester and Monte Fields to the CAC. Ms. Middenway shared that Judith Gielow, Judith Takaya, and Steven Takahashi are newly appointed CAC Members. She added that Committee Members Sue Lester and Monte Fields were reappointed to the CAC for a second term. B. ITEM Action, Minutes: 1. Approve the Joint Board of Directors and Citizens Advisory Committee Meeting Minutes of March 13, 2019 Recommendation: That the Citizens Advisory Committee approves the meeting minutes as presented. Chair Carey presented the minutes of the March 13, 2019 Joint Board of Directors and Citizens Advisory Committee Meeting. He welcomed discussion and a motion for approval. Chair Carey noted that he was not present for this meeting and would therefore abstain from the vote. Motion: To approve the meeting minutes as presented. Motion by Elodie Katz, second by Mike Mcllroy. Final Resolution: Motion Carries 6-0-4-1 Aye: Elodie Katz, Judith Gielow, Mike Mcllroy, Monte Fields, Phil Marsh, Steven Takahashi Not Present: Albert M. Graham Jr., Andrew Nielson, Judith Takaya, Sue Lester Abstain: Mike Carey There was no discussion. Minutes: 2. Approved Board of Directors Special Meeting Minutes of March 28, 2019 Recommendation: That the Citizens Advisory Committee receives and files the report. Chair Carey presented the approved minutes of the March 28, 2019 Board of Directors Special Meeting. He welcomed discussion. There were no questions or comments and the report was received. COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 16, 2019 Minutes: 3. Draft Board of Directors Regular Meeting Minutes of April 25, 2019 Recommendation: That the Citizens Advisory Committee receives and files the report. Chair Carey presented the draft minutes of the April 25, 2019 Board of Directors Meeting. He welcomed discussion. There were no questions or comments and the report was received. Action, Discussion: 4. Preliminary Budget Review For FY 2019-2020 and FY 2020- 2021 Recommendation: That the Citizens Advisory Committee provide feedback to staff regarding the proposed FY 2019-20 and FY 2020-21 Budgets. President Ferryman entered the meeting at 6:05 P.M. General Manager, Scott Carroll, explained that the District has a two-year budget cycle and introduced Finance Manager, Kaitlin Tran, to present the preliminary budgets for Fiscal Years 2019-2020 and 2020-2021. He noted that District staff is requesting feedback on the budgets. Ms. Tran presented the preliminary budgets for FY 2019-20 and FY 2020-21. She explained that the budget development process begins with District staff submitting their budget requests to the Finance Department, then the Finance Department reviews and analyzes these requests and submits them to the General Manager for review and feedback, and lastly, the Finance Department develops the preliminary budgets. Ms. Tran shared that the Board of Directors provided District staff with feedback during the May Study Session and the CAC is now being asked to provide feedback prior to the Board's consideration of the budgets in June. She then provided an overview of the preliminary FY 2019-20 Solid Waste budget of $6,512,000. Ms. Tran noted that the Solid Waste Fund has been operating at a deficit and a Solid Waste Rate Study was conducted to address this deficit and determine new proposed rates. She explained that solid waste rates will increase from $216 to $224.88 per year, so long as there is no majority protest to the rate increase and the rates are approved by the Board of Directors at their June Board Meeting. Ms. Tran provided a description the District's revenue sources, which include the annual charge, an additional container charge, investment earnings, contributions, charges for service, property taxes, and other non -operating revenues. She noted that expenditures include operations and maintenance costs, and she presented a document detailing the accounts within the Solid Waste and Wastewater Funds. Ms. Tran shared that CR&R, the District's trash hauler, requested a Consumer Price Index (CPI) increase of 5.8% and the District is currently in the process of auditing CR&R's profit margin. She noted that the 5.8% CPI increase is included in the preliminary budget, should the Board of Directors approve it. Ms. Tran noted that the Wastewater Fund has a balanced FY 2019-20 preliminary budget of $5,935,000, and she reported that the COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 16, 2019 District is not planning to increase its wastewater rates within the next two fiscal years. She provided an overview of the revenue sources, which include the annual charge, investment earnings, charges for services, permits, inspection fees, and other non -operating revenues. She explained that expenditures include salaries and benefits, operations and maintenance costs, and capital improvement projects. She noted that the preliminary FY 2020-21 Solid Waste budget is $6,309,000 and the Solid Waste Fund will be operating at a deficit. Ms. Tran explained that if the proposed solid waste rate increase is approved, solid waste rates will increase from $224.88 to $240.60 per year. She reiterated the Solid Waste Fund revenues and expenditures. Ms. Tran noted that the Wastewater Fund has a balanced FY 2020-21 preliminary budget of $5,945,000. She reiterated the Wastewater Fund revenues and expenditures. Lastly, she presented Attachment C, which includes a list of the proposed Capital Improvement Projects (CIP) for the next two fiscal years. Committee Member Katz confirmed that the proposed solid waste rate increase and CR&R's requested CPI increase are included in the preliminary budgets. Ms. Tran reiterated that CR&R's CPI increase is dependent upon Board approval. She noted that, as far as she knows, CR&R has not requested a CPI increase before. Mr. Carroll noted that CR&R has not requested a CPI increase since at least 2006. Committee Member Katz asked if CR&R takes into account the benefits they receive from collecting increasing amounts of organic waste when requesting a CPI increase. Mr. Carroll responded that this was taken into consideration during the negotiation process for CR&R's contract. He added that the Board of Directors has the option to approve the full CPI increase requested, a partial CPI increase, or no CPI increase. Committee Member Marsh verified that the District's contract with CR&R was entered into last year and will be in effect for ten years. Chair Carey confirmed that CR&R can request a CPI increase every two years. He commented that another factor in CR&R's revenues is the deflating markets for recyclable materials. Committee Member Gielow commented that it does not seem fair that some residents may be disposing of less waste, yet paying more for trash collection under the proposed solid waste rate increase. She suggested using a tiered rate system that charges residents according to their trash cart size. COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 16, 2019 Mr. Carroll noted that District staff researched the possibility this type of rate structure, but the CAC and the Board of Directors did not recommend the proposed tiered rate structure. President Ferryman explained that the process of auditing trash cart sizes would have been costly for the District. Committee Member Katz noted that CR&R's trash collection vehicles are not capable of weighing each cart to determine the actual amount of waste disposed per household. Committee Member Fields noted that the tiered rate structure could incentivize residents to obtain smaller carts in order to pay less for trash service, and then overfill the small carts. Committee Member Gielow noted that residents have been warned that their trash carts will not be emptied if they are overfilled. She commented that it may be worth the cost to conduct a trash cart audit. Committee Member Marsh commented that the audit would have cost about $30,000. Committee Member Gielow commented that charging per trash cart would incentivize residents like herself to dispose of less waste. She asked if CR&R is the only trash hauler available. Chair Carey noted that there are other available trash haulers; however, the District's exclusive franchise hauler for residential service is CR&R. Jim Mosher, a District wastewater customer, commented that the finalized budget will be approved with some slight changes to what is being presented in the preliminary budgets today. He explained that per Proposition 218, the annual charges that appear on ratepayers' property tax bills are restricted funds and can only be used for the purposes identified (solid waste and wastewater collection) and to benefit the property for which it is being collected. Mr. Mosher also noted that some District ratepayers pay a portion of the 1 % of their assessed property value to the District, which is then considered unrestricted funds. He noted that page 1 of Attachment A includes an unrestricted property tax amount of $320,000, and upon the budget's approval, this amount will appear in a separate column to be used for the District's contribution to the City of Costa Mesa's permanent bridge shelter. Lastly, Mr. Mosher commented that this contribution would not be to the advantage of the property owners. COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 169 2019 Committee Member Fields requested an update regarding the purchase of the new wastewater truck that was discussed during a previous CAC meeting. He also inquired about the President Pump Station reconstruction project. Mr. Carroll noted that the wastewater truck was approved for purchase this fiscal year and should arrive within a few weeks. He added that the President Pump Station reconstruction is budgeted for FY 2019-20 and the Board of Directors approved Alternative 2. He explained that the District will first test the integrity of the dry well to find out if Alternative 2 is viable, and if it is not, Alternative 3 will be implemented. Committee Member Katz requested clarification regarding the unrestricted revenue that the District receives from property taxes. Mr. Carroll confirmed that the District receives a small amount of unrestricted revenue through the property taxes and District staff plans to separate this funding into a general fund (like most cities do). He noted that in the past, this funding has been transferred to the Solid Waste Fund to help stabilize rates. Mr. Carroll added that these funds will be used for the contribution toward the City of Costa Mesa's permanent bridge shelter. President Ferryman confirmed that the District will have $320,000 in property tax revenue in FY 2019-20 and $326,000 in FY 2020-21. Committee Member Katz requested clarification regarding the difference in salaries and benefits between the Solid Waste and Wastewater Funds. Vice President Ooten noted that the solid waste side of operations is primarily provided by CR&R, a contractor, whereas the wastewater staff is employed in- house. Ms. Tran explained that the salaries and benefits of District employees are calculated according to their role. She noted that positions like the General Manager and Human Resources are funded 50% from the Solid Waste Fund and 50% from the Wastewater Fund, whereas wastewater maintenance staff are 100% funded by the Wastewater Fund. Discussion followed regarding the breakdown of salaries and benefits for other District positions. There were no further questions or discussion and the report was received. Action (Consent): 5. Alkaline Battery Recycling Program - Final Report Recommendation: That the Citizens Advisory Committee receive and file the report. COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY % 2019 Management Analyst I, Nabila Guzman, provided an overview of the Alkaline Battery Recycling Program. She noted that the most recent collection period took place from September 2018 to April of 2019, and a total of 12,662 pounds of batteries were collected by local schools and diverted from landfills. Ms. Guzman shared that the District revised its reward structure for the program last year in order to make the rewards more equitable. Discussion followed regarding the various schools that participated in the program and their collection totals. Ms. Guzman noted that each participating school is awarded a check at the end of the year. Chair Carey asked how the District conducts educational outreach to each school at the beginning of each year. Ms. Guzman noted that she provides each school with flyers describing the importance of keeping batteries out of landfills. Committee Member Katz verified that the schools that do not participate in the program have declined participation. She noted that she can share the program information with other parents at Paularino Elementary School. Committee Member Fields noted that Estancia High School and Costa Mesa High School are not participating. Ms. Guzman noted that she has tried reaching out to these schools before, but they have not elected to participate. There were no other questions or comments and the report was received. Action, Receive and File: 6.2019 Compost & Donation Event Recommendation: That the Board of Directors receive and file this report. Ms. Guzman shared that the District hosted a successful Compost Giveaway and Clothing Donation event on April 27, 2019 at the Orange Coast College Recycling Center. She noted that Clothes for the Cause collected clothing donations and paid the District a total of $378 for the 3,780 pounds of clothing collected, which will go towards next year's Alkaline Battery Recycling Program rewards. Ms. Guzman noted that over 200 residents attended the event to pick up compost, which was provided by CR&R. She shared that the event was promoted in the District newsletter and on social media. Lastly, Ms. Guzman noted that the event's popularity led to a minor traffic jam on Adams Avenue, so the District plans to host the event at a larger location next year. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 16, 2019 Vice President Ooten verified that textiles are one of the most common materials that end up in landfills. Chair Carey complimented District staff on the success of the event. Committee Member Katz asked how this clothing donation compared to last year's clothing donation event. Ms. Guzman noted that this event attracted nearly double the amount of clothing donors as last year's event. Chair Carey commented that there was significant interest in the compost giveaway. Ms. Guzman shared that residents from neighboring cities came to get compost, since they had seen the event promotion on social media. Committee Member Marsh confirmed that about half of the compost that CR&R provided was given out during the event. Committee Member Katz confirmed that District staff checked the attendees' proof of residency to make sure they lived within the District's service area prior to giving them compost. Ms. Guzman commented that it would have been too difficult for District staff to identify whether attendees were single-family or multi -family residents, so all residents within the District's service area were given compost at the event. There were no further questions or comments and the report was received. Action: 7. Consider Appointing Two CAC Members to Serve on the Policy Review Ad Hoc Committee Recommendation: That the Citizens Advisory Appoint Two Members to Serve on the Board of Directors Policy Review Ad Hoc Committee. Mr. Carroll explained that the District regularly assembles an Ad Hoc Committee to review policies and procedures, such as the administrative regulations, operations code, and employee handbook. He noted that the Ad Hoc Committee will meet and bring recommendations to the Board of Directors for consideration. Mr. Carroll noted that the CAC is being asked to appoint two members to the committee, and the Board will appoint two members at their May Board Meeting. Lastly, he added that the Ad Hoc Committee meetings will be public meetings, subject to the Brown Act. Committee Member Fields volunteered to join the committee. COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 165 2019 ........_.._.-- Vice President Ooten asked what the time commitment will be for the committee. Mr. Carroll noted that the committee will decide when and how often they are able to meet. He commented that they will likely meet once a month. Committee Member Katz asked when recommendations will be needed from the committee. Mr. Carroll noted that there is no specific deadline, but it may take at least 3 meetings before a recommendation can be made. Committee Member Takahashi volunteered to join the committee. Motion: To appoint Committee Members Fields, and Takahashi to the Policy Review Ad Hoc Committee. Motion by Mike Carey, second by Monte Fields. Final Resolution: Motion Carries 7-0-4 Aye: Elodie Katz, Judith Gielow, Mike Carey, Mike Mcllroy, Monte Fields, Phil Marsh, Steven Takahashi Not Present: Albert M. Graham Jr., Andrew Nielson, Judith Takaya, Sue Lester There was no further discussion. Action: 8.2019 Topics to be Discussed at Future CAC Meetings Recommendation: That the Citizens Advisory Committee (CAC): 1. Review the list of topics to be discussed at future CAC meetings: 2. Approve a list of topics to be forward to the Board of Directors for approval. Mr. Carroll shared that per the CAC Handbook, the Board President, General Manager, and CAC Chair will meet annually to discuss potential topics to bring to the CAC. He presented the list of topics that were developed this year and requested the CAC's feedback. Committee Member Katz confirmed that the "Evolving Recycling Market" topic involves the shift from Chinese recycling markets. She also asked if the CAC can discuss the topic of solid waste diversion. Mr. Carroll suggested that District staff bring in a representative from CR&R to discuss diversion. Chair Carey suggested that this discussion include updates on state recycling regulations. Vice President Ooten suggested that this discussion also include an explanation of the shift from quantifying progress through diversion to pounds per capita disposal. COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 16, 2019 Mr. Carroll noted that the CAC can provide additional feedback via email if they think of additional topics later. The CAC indicated approval of the topics proposed for their July meeting. Committee Member Fields requested clarification regarding the proposed topics of "Solid Waste/Recycling Plan for Multi -Family" and "Inflow Reduction Program." Mr. Carroll noted that Ms. Guzman is developing a plan to propose that the District take over multi -family and commercial trash collection services in Costa Mesa, which will be shared with the CAC and Board of Directors for feedback and then presented to the City of Costa Mesa. He explained the concept of inflow and the District's efforts to identify areas with high rates of inflow. Discussion followed regarding the plugging and sealing of manholes to reduce inflow. There was no further discussion and the report was received. Action: 9. Consider Rescheduling Standard Meeting Day and Time for CAC Meetings Recommendation: That the Citizens Advisory Committee approve rescheduling the standard day and time for CAC meetings. Ms. Middenway noted that Committee Member Lester provided written comments regarding Item B9 and copies were provided to the CAC and the public for review. Chair Carey welcomed discussion. Committee Member Marsh indicated that his schedule is flexible. Committee Member Fields suggested that CAC meetings occur on Wednesdays. Chair Carey noted that he may have a conflict on Wednesdays if his class continues in the Fall. He suggested Thursdays. Mr. Carroll noted that the Board is also considering changing their regular meeting day and time. Committee Member Marsh noted that many of the CAC members are also members of the Lions Club, which meets on the first and third Tuesdays of the month. He added that this leaves the second and fourth Tuesdays of the month available. COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 16, 2019 Committee Member Gielow noted that she has a commitment on the second Tuesday of each month. Committee Member Marsh suggested the fourth Tuesday of the month. Mr. Carroll noted that the next CAC meeting is tentatively scheduled for July 10th. Chair Carey noted that he will be at a conference on this date. Committee Member Katz suggested that the next meeting take place on Wednesday, July 17th. Chair Carey noted that he is available on this date and confirmed that the meeting time will be 6:00 P.M. The CAC indicated support for meeting on July 17th at 6:00 P.M. Chair Carey asked that all members come prepared with their preferred meeting days and times for further discussion of a regular meeting schedule. There was no further discussion. C. CLOSING ITEMS Procedural: 1. Committee Member & Staff Comments Committee Member Katz confirmed that the proposed solid waste rate increase will be included in the next quarterly newsletter. She suggested that the newsletter also mention that residents can receive up to two organics carts per household. She commented that she has seen some neighbors fill one organics cart and place additional green waste in their regular mixed waste cart. Vice President Ooten commented that CR&R tries to separate out green waste that is placed in the mixed waste cart and send it to the Anaerobic Digestion Facility. Mr. Carroll noted that green waste can be contaminated if it is placed in the mixed waste cart, so it is best to place it in the organic waste cart. President Ferryman thanked the CAC for the time they are dedicating to learning about the District. He commented that the Board of Directors and staff are open- minded, and he encouraged the CAC to bring any feedback or recommendations forward. There were no further comments. COSTA MESA SANITARY DISTRICT PAGE 12 MINUTES OF THE CITIZENS ADVISORY COMMITTEE SPECIAL MEETING HELD MAY 16,2019 Procedural: 2. Adjournment Chair Carey adjourned the meeting at 7:13 P.M. Mike Carey Citizens Advisory Committee Chair