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Minutes - CAC - 2021-05-12COSTA MESA SANITARY DISTRICT MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING MAY 12, 2021 (TELECONFERENCE MEETING VIA ZOOM) NOTE: THIS MEETING WAS CONDUCTED UTILIZING TELECONFERENCING PURSUANT TO GOVERNMENT CODE SECTION 54952.2 AND THE GOVERNOR'S EXECUTIVE ORDERS IN EFFECT WAIVING SOME OF THE REQUIREMENTS OF THAT SECTION. CAC Members present Cindy Brenneman, Dickie Fernandez, Jeff Arbour, Judy Gielow, Mike Corcoran, Seth Greiner, Elodie Katz, Sue Lester CAC Members absent Andrew Nielson, Daniel Baume, Phil Marsh Board Members present Arlene Schafer Staff present Scott Carroll (General Manager), Noelani Middenway (District Clerk & Public Information Officer), Kaitlin Tran (Finance Manager), Mark Esquer (District Engineer), Gina Terraneo (Management Analyst II) Others present None Meeting called to order at 6:02 P.M. A. OPENING ITEMS Procedural: 1. Call to Order COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 Citizens Advisory Committee (CAC) Chair Katz called the meeting to order at 6:02 P.M. Procedural: 2. Roll Call District Clerk & Public Information Officer, Noelani Middenway, conducted roll call. She noted that CAC Members Arbour, Brenneman, Fernandez, Gielow, Greiner, Katz, and Lester were present while CAC Members Baume, Marsh, and Nielson were not present. CAC Member Corcoran joined the meeting at 6:33 P.M. Procedural: 3. Public Comments - Speakers will be limited to three minutes. The three minutes per speaker time allotted may be extended for good cause by a majority vote of the committee. CAC Chair Katz opened public comments. Ms. Middenway stated that no written comments were received for the CAC to review. Hearing no members of the public wishing to speak, CAC Chair Katz closed public comments. B. ITEMS Action, Discussion: 1. Appoint a Chair and Vice Chair Recommendation: That the Citizens Advisory Committee appoint a Chair and Vice Chair to serve for a term of two years ending March 2023. Ms. Middenway provided an overview of the CAC Chair and Vice Chair positions. CAC Member Lester nominated CAC Member Katz for the position of CAC Chair. CAC Member Gielow expressed support for CAC Member Lester's nomination. CAC Member Katz opened the item to discussion and other nominations. COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 CAC Member Lester complimented CAC Member Katz on her performance and noted that she has been on the committee since its inception. Motion: To appoint Elodie Katz as CAC Chair to serve for a term of two years ending March 2023. Motion by Sue Lester, second by Judy Gielow. Final Resolution: Motion carries 6-0-1-4 Ayes: Cindy Brenneman, Dickie Fernandez, Judy Gielow, Seth Greiner, Elodie Katz, Sue Lester No: None Abstain: Jeff Arbour Not Present: Daniel Baume, Mike Corcoran, Phil Marsh, Andrew Nielson CAC Chair Katz requested nominations for the position of CAC Vice Chair. CAC Member Brenneman nominated CAC Member Lester for CAC Vice Chair. CAC Member Gielow noted that CAC Member Lester has served on the committee for a long time, that she is knowledgeable, and that she can support the CAC Chair. Motion: To appoint Sue Lester as CAC Vice Chair to serve for a term of two years ending March 2023. Motion by Cindy Brenneman, second by Elodie Katz. Final Resolution: Motion carries 6-0-1-4 Ayes: Cindy Brenneman, Dickie Fernandez, Judy Gielow, Seth Greiner, Elodie Katz, Sue Lester No: None Abstain: Jeff Arbour Not Present: Daniel Baume, Mike Corcoran, Phil Marsh, Andrew Nielson There was no further discussion. Action, Discussion: 2. Approve the Citizens Advisory Committee Meeting Minutes of March 10, 2021 Recommendation: That the Citizens Advisory Committee approves the meeting minutes as presented. CAC Chair Katz presented the item. COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 Motion: To approve the Citizens Advisory Committee Meeting Minutes of March 10, 2021 as presented. Motion by Sue Lester, second by Cindy Brenneman. Final Resolution: Motion carries 6-0-1-4 Ayes: Cindy Brenneman, Dickie Fernandez, Judy Gielow, Seth Greiner, Elodie Katz, Sue Lester No: None Abstain: Jeff Arbour Not Present: Daniel Baume, Mike Corcoran, Phil Marsh, Andrew Nielson There was no discussion. Action, Discussion: 3. Preliminary Biennial Budget Review for Fiscal Year 2021- 22 and Fiscal Year 2022-23. Recommendation: That the Citizens Advisory Committee provides comments and/or suggestions regarding the proposed preliminary Biennial Budget for the Fiscal Years 2021-22 and 2022-23. General Manager, Scott Carroll, introduced the preliminary budget and described the two-year budget process. Finance Manager, Kaitlin Tran, presented the preliminary budget. She reviewed Attachments A and B of the staff report, which contain detailed line items within each revenue and expense account. She discussed the Salaries and Benefits and Operations and Maintenance expense accounts for administrative and field staff. She reviewed the Professional Services expense account and identified new items, such as the community survey, Wastewater Rate Study, and Senate Bill (SB) 1383 compliance measures. CAC Vice Chair Lester inquired about the 2020 census results and costs related to redistricting. Ms. Tran noted that there is a line item in the budget related to redistricting. Ms. Middenway noted that. there is a line item under Public Info/Edu/Community Promo for the District Voting Divisions Awareness Campaign, but this does not include the cost to hire a demographer. COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 Ms. Tran confirmed that the District has not budgeted for a redistricting consultant. Mr. Carroll stated that District staff needs to consult with District Counsel about the need for a demographer. He noted that the 2020 census data will not be available until October 2021. Ms. Tran reviewed the Public Info/Edu/Community Promo account. Mr. Carroll stated that the District has contacted the City of Costa Mesa to assist with the Cardboard Recycling and Shredding events. He noted that the City has agreed to provide additional staffing. He added that these events will likely occur in 2022. Ms. Tran reviewed the Trash Hauler, Recycling/Disposal, and Organics accounts. She noted that the preliminary budget does not include the 5.6% Consumer Price Index (CPI) increase requested by CR&R Environmental Services. She added that this request has not been approved by the Board. Mr. Carroll shared that CR&R's requested 5.6% CPI increase was on the agenda for yesterday's Study Session and noted that District staff recommended denying the CPI increase due to concerns regarding service levels. He stated that CR&R requested to pull the item from the Study Session agenda to meet with staff and address service issues. He noted that he is meeting with CR&R on May 13, 2021 and that the item will be placed on the May Board meeting agenda. Ms. Tran discussed tonnage projections and resulting costs. She noted that these numbers may be updated based on the direction given by the Board regarding CR&R's requested CPI increase. She added that, if the Board approves CR&R's CPI increase request, then the total cost will increase by $325,300 in Fiscal Year 2021-2022 and by $335,100 in Fiscal Year 2022-2023. She discussed the Special Programs account within the Solid Waste budget and reviewed the proposed budget reductions. CAC Member Corcoran joined the meeting at 6:33 p.m. Ms. Tran reviewed the Capital Outlay Admin & Operations account within the Wastewater fund. She discussed the purpose of a Facility Revolving fund. She presented the budget for Capital Improvement Projects (CIP). She COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 reviewed the projects and items removed from the preliminary budget. She presented a list of future items that were excluded from the proposed budget cycle. She discussed the fund balance for the Solid Waste fund and noted that if the budget is adopted, then the District will not meet the operating reserve requirements by Fiscal Year 2023-2024. She compared staff projections with the projections provided by the contractor who conducted the last Solid Waste Rate Study. CAC Vice Chair Lester inquired about CR&R's requested 5.6% CPI increase. She noted that if the Board approves of the increase, then it will add about $660,000 to the District's current deficit. Ms. Tran confirmed that if CR&R's CPI request is approved, then the District's deficit will increase. She reviewed Attachment D of the staff report, which shows the fund balance scenario if the CPI request is approved. CAC Vice Chair Lester stated that, even though CR&R has issued the request, the Board is not obligated to approve it. She noted that the CPI request cannot be calculated into the preliminary budget because it has not been approved. She added that the CPI request will more than double the District's deficit. Ms. Tran stated that if the CPI request is approved, then the deficit will increase annually, and the District will not meet the operating reserve requirements in Fiscal Year 2021-2022. CAC Vice Chair Lester thanked Ms. Tran for her explanation. CAC Member Fernandez inquired about CR&R's reasoning for the CPI increase. Ms. Tran stated that, according to CR&R's contract with the District, they can request a CPI increase every two years, but Board approval is required. CAC Member Fernandez stated that new solid waste legislation will go into effect in the next few years that will affect solid waste customers. Mr. Carroll shared that CR&R's reasoning for their requested CPI increase is due to the COVID-19 pandemic. He stated that the pandemic impacted many industries including solid waste. He added that the District can review COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 CR&R's financials and profit margins. He noted that this information cannot be shared with the public, but District staff can evaluate it to form a recommendation for the Board. He stated that District Treasurer, Marc Davis, has reviewed CR&R's financials and will share his findings at the June Study Session. CAC Member Arbour stated that, during the pandemic, waste haulers closed their Materials Recovery Facilities (MRFs) but did not change their rates. He noted that this may have resulted in a cost savings. He added that all waste was directly transported to the landfills without going through the MRF process. Mr. Carroll stated that District staff will be discussing that matter with CR&R. CAC Vice Chair Lester noted that CR&R previously requested a CPI increase in 2019, prior to the COVID-19 pandemic. Mr. Carroll shared that CR&R's 2019 CPI request was their first CPI increase in about 15 years. CAC Chair Katz inquired about the District's waste diversion rate and how it affects recycling and disposal charges. Mr. Carroll stated that CR&R is required to divert at least 50% of the solid waste collected. He noted that if they do not divert that amount, then they would be in violation of their contract and would have a specific number of days to rectify the issue. He added that CR&R has not violated this stipulation. He stated that all solid waste agencies in California were issued a reprieve from the State to allow good faith efforts for waste diversion. CAC Member Corcoran inquired about the definition of the 50% diversion rate. Mr. Carroll clarified that it refers to 50% of waste being diverted from the landfills. CAC Member Corcoran shared that some recyclables are sitting in warehouses and not being recycled due to a lack of an end market. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 Mr. Carroll stated that the District is looking into waste incineration technology. He noted that this topic will be presented to the CAC in the future. Ms. Tran continued her presentation of the preliminary budget and stated that the District will need to use the Wastewater fund balance to balance the budget for the next two fiscal years. She reported that the District plans to conduct a Wastewater Rate Study. She noted that if Wastewater rate increases are approved, then they will go into effect in Fiscal Year 2022-2023. CAC Member Fernandez expressed recognition for Ms. Tran's presentation. CAC Member Arbour inquired if there is another fund with extra money to help offset the deficits in the Solid Waste fund and Wastewater fund. Ms. Tran stated that the District's General fund records the property tax. She noted that the Solid Waste fund and the Wastewater fund both have their own reserve funds. Mr. Carroll stated that the District is using its reserved funds to balance the budget. He confirmed that there are deficits, but the overall budget is balanced. Ms. Tran stated that, in Fiscal Year 2019-2020, the District had a surplus in its Wastewater fund. She reported that this fund may also have a surplus at the end of Fiscal Year 2020-2021. She noted that all surplus amounts will be placed into the fund balance. CAC Chair Katz expressed recognition for Ms. Tran's presentation. She inquired about the history of the fund balances. Mr. Carroll commented that the solid waste rates in 2006 might have been set too high, which resulted in a reserve fund of five million dollars. He noted that, in the past, the solid waste expenditures were low, which resulted in a larger fund balance. He added that the Solid Waste fund does not have capital expenditures, unlike the Wastewater fund. He stated that the District must have a minimum balance of about two million dollars in its Solid Waste reserve fund. He shared that, because the Solid Waste reserve fund had a large amount of savings, the Board approved two solid waste rate decreases. COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 He noted that the COVID-19 pandemic has affected the Solid Waste reserve fund. CAC Chair Katz inquired about the fund balance of the Wastewater fund. Mr. Carroll stated that the overall goal of the District's Wastewater Department is to achieve zero sanitary sewer overflows (SSOs). He proposed that the District hire additional staff and purchases additional equipment to achieve this goal. He discussed the need for a Wastewater Rate Study to help balance the Wastewater reserve fund. CAC Member Fernandez shared that he is leading an interagency collaboration presentation in which he has invited District Engineer, Mark Esquer, and the District's Wastewater Maintenance Superintendent, Steve Cano, to attend. He stated that his presentation will focus on new techniques and innovative equipment to clean and operate sewers. Mr. Carroll stated that he is looking forward to CAC Member Fernandez's presentation. CAC Member Arbour inquired about SB 1383 enforcement requirements. Mr. Carroll shared that the preliminary budget includes a line -item budget to hire a solid waste consultant to help the District revise its contract with CR&R to comply with SB 1383 requirements. He noted that SB 1383 will require collaboration with CR&R, the City of Costa Mesa, and the County of Orange. He added that the District hopes to hire a full-time Code Enforcement Officer to help enforce SB 1383. He reported that the District has begun working with the City to comply with SB 1383 mandates. There was no further discussion. C. CLOSING ITEMS Procedural: 1. Committee Member & Staff Comments CAC Member Brenneman expressed support for the CAC and thanked CAC Vice Chair Lester for her explanation of CR&R's requested CPI increase. COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 CAC Vice Chair Lester stated that she hopes that the Board does not approve CR&R's requested CPI increase, especially since the District does not have the funds to support it. She expressed support for spending additional funds on a full-time Code Enforcement Officer or on technology that helps the District track CR&R's performance. She encouraged the CAC to review CR&R's performance analysis report. She added that, if the CPI increase is approved, then it will create a financial burden for the District. CAC Member Gielow stated that household size determines the amount of waste generated and proposed the idea of charging customers different fees based on this factor. She inquired about public outreach and education regarding organic waste recycling. She discussed the District's two -cart system. CAC Chair Katz inquired about a special Board meeting to discuss transitioning from a two -cart system to a three -cart system. Mr. Carroll stated that the meeting has not been scheduled, but it will take place soon. He discussed the District's community survey that is included in the proposed budget. CAC Chair Katz proposed that if the District transitions to a three -cart system, then they can properly count the number of carts per customer. CAC Vice Chair Lester stated that CR&R should be responsible for tracking the number of carts per customer. Discussion followed regarding types of organic waste. CAC Member Arbour discussed the overall purpose of SB 1383, which is to reduce greenhouse gas emissions by limiting the disposal of organic waste at landfills. CAC Chair Katz asked why palm fronds are not allowed in the Organics Recycling carts. CAC Member Arbour commented that palm fronds do not decompose as easily as other types of organic waste. COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 Secretary Schafer discussed the District's "Living Green" newsletter which is mailed to each District customer. CAC Member Arbour suggested that while some customers may receive District information from the newsletters, others may receive it from the District's social media platforms or other forms of public outreach. CAC Member Corcoran stated that some customers may not have the time to fully read the District's newsletter and may prefer to receive their news from social media. CAC Vice Chair Lester stated that there is not one method of communication that will reach all District customers. She noted that customers will use multiple types of media to receive their information. She expressed support for the District's newsletter. There was no further discussion. Procedural: 2. Board/Staff Comments Mr. Carroll discussed the current operating procedures at District Headquarters. He shared that the District plans to reopen its offices to all staff members and the public on June 21, 2021. He stated that the District has put certain procedures into place to protect staff. He noted that District staff will be required to wear a face mask and practice social distancing of at least three feet. He added that the front doors will be locked at District Headquarters, but that District staff will let members of the public inside as long as they are wearing a face mask. He announced that the July CAC meeting will be an in -person meeting at District Headquarters. Secretary Schafer thanked all CAC members for attending the meeting. There was no further discussion. COSTA MESA SANITARY DISTRICT PAGE 12 MINUTES OF THE CITIZENS ADVISORY COMMITTEE MEETING HELD MAY 12, 2021 Procedural: 3. Adjournment CAC Chair Katz adjourned the meeting at 7:24 P.M. Elodie Katz Citizens Advisory Committee Chair