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Minutes - Board - 2019-12-19COSTA MESA SANITARY DISTRICT MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING DECEMBER 19, 2019 Members present Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer Members absent None Staff present Scott Carroll (General Manager), Alan Burns (District Counsel), Robin Hamers (District Engineer), Marc Davis (District Treasurer), Kaitlin Tran (Finance Manager), Dyana Bojarski (Administrative Services Manager), Nabila Guzman (Management Analyst 1), Gina Terraneo (Management Analyst II & Acting District Clerk) Others present Jim Mosher (District resident), Michael Balliet (Michael Balliet Consulting LLC), Joshua Calhoun (Teaman Ramirez & Smith, Inc) Meeting called to order at 5:32 P.M. A. OPENING ITEMS Procedural: 1. Call to Order - President Ferryman President Ferryman called the meeting to order at 5:32 P.M. Procedural: 2. Pledge of Allegiance Vice President Ooten led the Pledge of Allegiance. Procedural: 3. Invocation - Vice President Ooten Vice President Ooten led the Invocation. Procedural: 4. Roll Call - (If absences occur, consider whether to deem those absences excused based on facts presented for the absence — such determination shall be the permission required by law.) COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 Acting District Clerk and Management Analyst II, Gina Terraneo, conducted roll call and noted that all Board Members were present. Procedural: 5. Announcement of Late Communications - Unless directed otherwise by the Board of Directors, all actions shall be based on/memorialized by the latest document submitted as a late communication. General Manager, Scott Carroll, shared that written comments were received from District resident, Jim Mosher. He added that copies of these comments were provided to the Board. Procedural: 6. Ceremonial Matters and Presentations None at this time. B. Public Comments Procedural: 1. Public Comments President Ferryman opened public comments. Seeing no one wishing to speak, he closed public comments. C. CONSENT CALENDAR Action (Consent): 1. Approve Consent Calendar Recommendation: That the Board of Directors approve the Consent Calendar as presented. Action (Consent), Minutes: 2. Approve the Board of Directors Study Session Minutes of November 12, 2019 Recommendation: That the Board of Directors approve the meeting minutes as presented. Action (Consent): 4. Approve the Directors' Compensation and Reimbursement of Expenses Recommendation: That the Board of Directors approve the compensation and reimbursement of expenses as presented. Action (Consent): 5. Adopt Warrant Resolution No. CMSD 2020-06 Approving District Warrant Registers Recommendation: That the Board of Directors adopt Warrant Resolution No. CMSD 2020-06 approving District warrants for the month of November in the amount of $952,613.06. Action (Consent): 6. Payroll Transparency Disclosure for November 2019 COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 Recommendation: That the Board of Directors approve and file the report. Action (Consent): 7. Accept the occupancy count as presented as 22,890 and direct staff to prepare a warrant to CR&R Environmental Services for $237,220.52 for November 2019 collection Recommendation: That the Board of Directors accept the occupancy count as presented using 22,890 as the correct number of active units and direct staff to prepare a warrant to CR&R Environmental Services for November 2019 collection based on this occupancy report so long as the contractor fulfills the obligations of the agreement in the amount of $237,220.52 to be ratified in the December 2019 warrant list. Action (Consent): 8. Approve the preparation of a warrant to CR Transfer in the amount of $196,470.49 for November 2019 recycling and disposal services in the December 2019 warrant register Recommendation: That the Board of Directors approves the preparation of a warrant to CR Transfer in the amount of $196,470.49 for November 2019 recycling and disposal services to be ratified in the December 2019 warrant register. Action (Consent): 9. Contracts Signed by the General Manager Recommendation: That the Board of Directors receive and file this report. Action (Consent): 10. Investment Report for the Month of November 2019 Recommendation: That the Board of Directors approve the Investment Report for the month of November 2019. Motion: To pull Item C3 for discussion and approve the remainder of the Consent Calendar as presented. Motion by Bob Ooten, second by Mike Scheafer. Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer Action (Consent), Minutes: 3. Approve the Board of Directors Regular Meeting Minutes of November 21, 2019 Recommendation: That the Board of Directors approve the meeting minutes as presented. Secretary Schafer noted that Director Perry asked when the Board would be receiving the most recent tonnage data for the Orange Coast College Recycling Center. Mr. Carroll noted that this data is presented to Board on a monthly basis during Study Sessions. Secretary Schafer asked when the next portion of the Mendoza Pump Station smoke testing will occur. COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 Mr. Carroll noted that information about the smoke test was provided to the Board at their last Board Meeting. He noted that the Board will be updated once the District gathers additional information. Motion: That the Board of Directors approve the meeting minutes as presented. Motion by Art Perry, second by Bob Ooten. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer There was no further discussion. D. PUBLIC HEARINGS None at this time. E. GENERAL MANAGER'S REPORTS Procedural: 1. Receive and file the Comprehensive Annual Financial Report, Auditor's Report in Accordance with Government Auditing Standards, and the Auditors' Required Communication for the year ended June 30, 2019 Recommendation: The Board of Directors receive and file: 1) The Comprehensive Annual Financial Report for Year Ended June 30,2019, 2) Auditors' Report in Accordance with Government Auditing Standards, and 3) The Auditors' Required Communication for the Year Ended June 30, 2019. Finance Manager, Kaitlin Tran, presented the Comprehensive Annual Financial Report (CAFR). She noted that the auditor's letter is included with the report and that the auditor issued a clean opinion. Ms. Tran shared that total assets exceeded liabilities, the net position of the Solid Waste Fund decreased by approximately $380,000, and a deficit budget was adopted in the Solid Waste Fund. She also noted that the net position of the Wastewater Fund increased by about $960,000 and a new Wastewater combination cleaning truck was purchased. Ms. Tran then introduced Joshua Calhoun of Teaman Ramirez & Smith, Inc to provide further details. Mr. Calhoun shared that his auditing firm's role is to provide an opinion on financial statements and ensure that they are in accordance with Generally Accepted Accounting Principles (GAAP). He shared that the Auditor's Report shows that an unmodified or "clean" opinion was issued, and that no issues were found with regard to internal control over financial reporting and the financial statements' compliance with GAAP. He shared that the attached letter discusses the conduct COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 of the audit, and he noted that there were no disagreements with management regarding the financial statements. Mr. Calhoun welcomed questions. Director Scheafer thanked Mr. Calhoun for his report and requested clarification regarding the use of the term "financial institutions" in the letter. Mr. Calhoun noted that financial institutions refer to the banks and the Local Agency Investment Fund (LAIF). Director Perry confirmed that the District's unrestricted funds total about $18.9 million. Vice President Ooten complimented Ms. Tran on her work. Director Perry inquired about the District's current unfunded pension liability. Discussion followed regarding when it would be appropriate to pay off the District's unfunded pension liability. Ms. Tran noted that she was not sure of the exact amount, but she estimated that the District's current unfunded pension liability is about $89,000. District Treasurer, Marc Davis, noted that the amount can fluctuate, as it is impacted by the performance of the California Public Employees' Retirement System's (CaIPERS) portfolio. Director Scheafer commented that it may be useful to see a comparison between the unfunded pension liabilities of various agencies. Mr. Calhoun commented that page 41 of the CAFR shows the District's share of the net pension liability. He added that the District has a relatively low unfunded pension liability in comparison with other agencies he has worked with. There was no further discussion and the report was received. Action, Receive and File: 4. FY 2018-19 CR&R Performance Review Recommendation: That the Board of Directors receive and file this report. President Ferryman moved up Item E4 in the agenda. Management Analyst I, Nabila Guzman, noted that an annual review of CR&R was conducted by the District and a consultant, Michael Balliet. She added that Mr. Balliet was also asked to conduct a waste composition review to address discrepancies in CR&R's reported waste composition. COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 Mr. Balliet provided report details. He noted that he found CR&R to be doing a good job overall, but that he had 2 concerns that were alleviated after additional follow-up was made. He shared that 6 vehicle leaks were reported, and he found that 5 of the leaks were related to a particular area of the trash trucks that were being damaged due to the acidity of the food waste being collected. Mr. Balliet noted that these leaks were repaired, but he recommended that CR&R ensure that there is no design flaw in future vehicles that are purchased. Additionally, he shared that CR&R was using a waste composition study that was conducted several years ago in order to report its diversion data to the District. He explained that the study was significantly different from CR&R's master manifest, and so he conducted a waste composition study using samples from 3 separate truck routes and about 300 pounds of waste. Mr. Balliet noted that his results indicated 7% less organic material than CR&R reported, but he determined that CR&R's reported percentage was within the realm of possibility due to the fluctuation in organic waste generation during different seasons. He shared that the District has a lot of green waste and food waste being placed in its regular mixed waste carts, and he commented that all cities are facing this challenge. Lastly, he suggested that the District ask CR&R to conduct quarterly waste composition studies to provide more accurate diversion data. Director Perry confirmed that CR&R can use a bigger sampling of waste collected from various routes to improve the accuracy of their waste composition. Discussion followed regarding how to determine which routes to take samples from. Mr. Balliet noted that his samples came from the routes that serviced Baker Street, an area near Newport Boulevard, and Mesa Verde. He added that he did not take into account whether the routes did or did not have organics carts. Discussion followed regarding whether CR&R's trucks are shared between different jurisdictions and CR&R's collection schedule. Vice President Ooten noted that CR&R's complaint log only includes calls that are made directly to them. Director Scheafer expressed concern about the number of complaints that the District received regarding CR&R's services. He noted that there was a significant increase between last year and this year. Mr. Balliet commented that there were about 6 concerning complaints that he looked into, and these were primarily a result of trash truck driver turnover. He noted that CR&R seemed to take reasonable steps to address these issues by counseling the drivers. COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 Director Scheafer commented that there seem to be more complaints after holidays. Mr. Balliet commented that more waste is generated during holidays, and therefore the trucks fill up faster during their routes. He noted that the holidays tend to be a more challenging time of the year for trash haulers. Director Scheafer noted that the lifespan of a trash truck is recommended to be about 10-11 years, whereas the trucks that service the District are closer to 18 years old. Discussion followed regarding truck maintenance and air quality standards. District resident, Jim Mosher, provided comments. He noted that he does not believe there has been any change in what CR&R claims to be the mixture of what they recycle, and that there has not been a change in the waste composition percentages from last year to this year. He noted differences in the way that organics and mixed plastic are reported in CR&R's master manifest in comparison with the monthly reports. He commented that it is difficult to compare the waste composition data in Mr. Balliet's report with CR&R's data. Lastly, Mr. Mosher posed the question of where recyclables go, given that there is a limited market for recycling. Ms. Guzman presented key points from the District's audit, including the increase in truck leak and breakdown complaints. She noted that District staff met with CR&R Senior Vice President, Dean Ruffridge, to address these complaints. She shared that CR&R is looking into replacing trucks in their fleet and adding a mixed waste truck route to address missed pickups. Ms. Guzman noted that CR&R is waiting on a compressed natural gas (CNG) tank for this additional truck. She went on to explain that the District's contract with CR&R states that their Sustainability Specialist would dedicate 20 hours per week to public outreach, but upon auditing his hours, District staff found that he was spending the majority of his hours on administrative matters. Ms. Guzman shared that CR&R agreed to provide a consultant to conduct cart -to -cart public outreach for 10% of the District's service area per quarter. Director Scheafer reiterated his concerns regarding missed pickup complaints and an increase in truck breakdowns. He commented that he would like for the monthly solid waste reports to include the number of complaints received. He commented that the number of complaints is unacceptable, and that the District should discuss getting CR&R trucks to a better standard. Discussion followed regarding addressing this issue with CR&R and updating routes to alleviate missed pickups. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 Director Scheafer verified that complaints about CR&R drivers can include speeding and spilling trash in the street. President Ferryman commented that the District needs to be clear and specific with its direction to CR&R. Director Scheafer noted that the Solid Waste Ad Hoc Committee can discuss these issues further. Motion: To provide CR&R with specific expectations to address missed collections and truck standards at the next Study Session. Motion by Jim Ferryman, second by Arlene Schafer. Director Scheafer suggested that the Board allow the Solid Waste Ad Hoc Committee to identify the key issues and bring a recommendation to the Board. Director Perry indicated agreement with Director Scheafer. President Ferryman retracted his motion and noted that there is no need to take formal action at this time. There was no further discussion and the report was received. Action: 2. Consider Approving Out -of -State Travel for General Manager to attend Servant Leadership Conference in Hurst, Texas on January 23-24, 2020 Recommendation: That the Board of Directors Consider Approving Out -of -State Travel for General Manager to attend Servant Leadership Conference in Hurst, Texas on January 23-24, 2020. Motion: To approve out-of-state travel for General Manager to attend the Servant Leadership Conference in Hurst, Texas on January 23-24, 2020. Motion by Art Perry, second by Mike Scheafer. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer There was no discussion. Action: 3. CMSD's Emergency Preparedness Exercise Debriefing Recommendation: That the Board of Directors receive and file this report. Mr. Carroll shared that the Emergency Preparedness Exercise provided an opportunity for all employees to practice emergency response procedures. He noted that the last exercise was conducted in 2017 and it featured an earthquake scenario, whereas the recent exercise utilized a severe flooding scenario. Mr. Carroll noted that staff developed a list of 9 lessons learned as a result of the COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 exercise, which included reaching out to the Cities of Newport Beach and Costa Mesa to learn about their emergency operations centers (EOCs), obtaining radios for the new wastewater vehicles, purchasing meals ready to eat (MREs) to feed staff during extended emergencies, installing lockable manholes in areas prone to flooding, obtaining webEOC training, and replacing old sandbags at the District Yard. Vice President Ooten noted that Orange County Sanitation District's (OCSD) exercises often focus on incidents of high flow, and he suggested that District staff reach out to OCSD to learn about their procedures. Discussion followed regarding the Orange County Fairgrounds sewers and the flow meter that the District installed at the Fairgrounds. Secretary Schafer verified that the District has a Sewer Master Plan. Vice President Ooten requested a future Study Session item to discuss the procurement of lockable manholes. Director Perry verified that the District will be purchasing the MREs soon and noted that schools purchase MREs for emergency purposes also. There was no further discussion and the report was received. F. ENGINEER'S REPORTS Action, Receive and File: 1. Receive and File the Monthly Capital Improvements Project Status Report Recommendation: That the Board of Directors receive and file the report. District Engineer, Robin Harriers, presented the report and welcomed questions. There were no comments or questions and the report was received. Action: 2. 3150 Bear Street, Trinity Broadcasting Network Redevelopment into School, Approval in Concept of Accepting CMSD Sewer Main and Easements Recommendation: The Board of Directors approve in concept the sewer alignment utilizing the direct connection to the OCSD trunk sewer including the acceptance of CMSD easements and sewer main along with an easement for access and maintenance with formal documents to be brought back to the Board for approval at a later date. Mr. Harriers displayed a sewer map of the Trinity Broadcasting Network (TBN) property and its surrounding area. He described the flow of wastewater in the area surrounding the property and noted that the District is recommending redirecting the wastewater flow to the OCSD Gisler -Red Hill trunk sewer to account for COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 capacity concerns. He noted that this would create the need for the District to be granted easements over a small portion of the TBN property and over the City of Costa Mesa property. Mr. Harriers noted that District staff is recommending that the Board approve this plan in concept, and then District staff will bring this item back at a later date. District Counsel, Alan Burns, commented that the Environmental Review was edited because the project was originally proposed as a minor sewer alteration, and therefore it was considered to be exempt from the California Environmental Quality Act (CEQA). He explained that this exemption only applies if there is no significant environmental effect. Mr. Burns noted that the proposed minor sewer alteration would have a dramatic effect on the environment in that it allows for increased development. He noted that at this point, District staff is utilizing the planning exemption because they are currently in the conceptual planning stages and formal approval is not yet being considered. Mr. Burns noted that if the process proceeds, it will involve indemnification agreements, land use agreements, and the City of Costa Mesa's CEQA analysis. He reiterated that today, Mr. Harriers is giving a conceptual presentation to find out if the Board has any objections. Discussion followed regarding the Costa Mesa City Council's approval of the school on the property. President Scheafer indicated support for the recommendation. He confirmed that after the Board approves the project in concept, then the City of Costa Mesa will have to take further steps to move forward. Additional discussion followed regarding the process of selling the TBN property and the redevelopment plans. Motion: To approve in concept the sewer alignment utilizing the direct connection to the OCSD trunk sewer including the acceptance of CMSD easements and sewer main along with an easement for access and maintenance with formal documents to be brought back to the Board for approval at a later date. Motion by Mike Scheafer, second by Arlene Schafer. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Jim Ferryman, Mike Scheafer There was no further discussion. G. TREASURER'S REPORTS Nothing to report. COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 H. ATTORNEY'S REPORTS Nothing to report. I. 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. Information: 1. Orange County Sanitation District (OCSD) - (President Ferryman) President Ferryman and Vice President Ooten provided updates regarding the OCSD meeting, including that there is a potential buyer for the property that OCSD owns near its headquarters. Information: 2. Santa Ana River Flood Protection Agency (SARFPA) - (Director Perry) Director Perry noted that there was no meeting this month. Information: 3. Independent Special Districts of Orange County (ISDOC) - (Secretary Schafer) Secretary Schafer noted that ISDOC is working on creating a scholarship. Information: 4. California Special Districts Association (CSDA) - (Secretary Schafer) Secretary Schafer noted that she will continue to be on CSDA's Legislative Committee. Information: 5. Special District Risk Management Authority (SDRMA) - (Director Scheafer) Director Scheafer noted that the next meeting will take place in January. Information: 6. Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55, Operations Code Section 3.01.030 Director Perry provided an update regarding the Water Advisory Committee of Orange County (WACO) meeting. COSTA MESA SANITARY DISTRICT PAGE 12 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD DECEMBER 19, 2019 J. OLD BUSINESS None at this time. K. NEW BUSINESS None at this time. L. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS Discussion: 1. Oral Communications and Director Comments President Ferryman commented that it is difficult to hear District staff without the Boardroom audio functioning. He asked when the Boardroom audio visual system will be replaced. Mr. Carroll noted that the new system is scheduled for replacement in January and it should be complete in time for the next Board Meeting. M. ADJOURN TO CLOSED SESSION No closed session. N. RECONVENE TO OPEN SESSION No closed session. O. CLOSING ITEMS Procedural: 1. Adjourn President Ferryman adjourned the meeting at 7:08 P.M. Arlene Schafer Secretary —(14v4 r/1,44 A I Au I 7*� Jam Ferryman Presi nt