Loading...
Minutes - Board - 2021-11-09 I 4/SANftlief- rFe ��. 8 �' yr irtq� 0,0p PRATE,,/( COSTA MESA SANITARY DISTRICT MINUTES OF BOARD OF DIRECTORS STUDY SESSION NOVEMBER 09, 2021 NOTE:THIS HYBRID IN-PERSON AND TELECONFERENCED MEETING WAS CONDUCTED UTILIZING ELECTRONIC MEANS CONSISTENT WITH STATE OF CALIFORNIA ASSEMBLY BILL 361(Gov. CODE 54953(B)(3)). Members present Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer Members absent None Staff present Scott Carroll(General Manager),Alan Burns (District Counsel),Noelani Middenway (District Clerk and Public Information Officer), Kaitlin Tran (Finance Manager), Dyana Bojarski (Administrative Services Manager), Mark Esquer (District Engineer), Gina Terraneo (Management Analyst II), Nabila Guzman (Management Analyst I), David Griffin (Facilities Maintenance Worker & Interim Code Enforcement Officer), Lieu Tran (Accountant), Autumn Alvarez (Accounting Clerk) Others present Anthony Elowsky, Robert D. Niehaus, Inc. Ichiko Kido, Robert D. Niehaus, Inc. Jim Mosher, District resident Mike Carey, CR&R Zachary Van Dinther, Robert D. Niehaus, Inc. Meeting called to order at 8:00 A.M. A. OPENING ITEMS COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09, 2021 Procedural: 1. 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.) Vice President Scheafer called the meeting to order at 8:00 A.M. District Clerk and Public Information Officer, Noelani Middenway, noted that Vice President Scheafer, Secretary Schafer, Director Perry, and Director Eckles were present at this time while President Ooten was not present. Vice President Scheafer presided over the meeting in lieu of President Ooten. B. PUBLIC COMMENTS Procedural: 1. Public Comments Vice President Scheafer opened public comments. Ms. Middenway stated that the District received late communications yesterday, which have been provided to the Board and to the public. Hearing no members of the public wishing to speak,Vice President Scheafer closed public comments. C. ITEMS OF STUDY Action: 1. Provide Staff Direction Regarding 2021 Wastewater Rate Study Recommendation: That the Board of Directors provide direction to staff regarding the 2021 wastewater rate study. General Manager, Scott Carroll, discussed the purpose of wastewater rate studies. He stated that the last wastewater study was performed about 10 years ago and the last rate adjustment was in 2017. He noted that for the current budget cycle the District has been using reserve funds to balance the Wastewater budget. He shared that Robert D. Niehaus, Inc. (RDN) was awarded a contract to conduct a wastewater rate study. He added that the proposed wastewater rates will be discussed at the November and December Board meetings. COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09, 2021 Ichiko Kido, RDN Senior Financial Analyst, presented key assumptions, including account growth projections of 160 to 200 new accounts per year and large increases in accessory dwelling units (ADUs) in the coming years due to Assembly Bill (AB) 68. She discussed ADU charges for sewer services and personnel costs like costs of living and merit increases. President Ooten entered the meeting at 8:08 a.m. Ms. Kido discussed escalation factors, such as, overall inflation, utilities, equipment, personnel, fuels and automobiles, construction, and insurance expenses. She displayed the current rates, which distinguish between residential(single family and multi-family)and non-residential(commercial and industrial) properties. She compared revenue and expenditure projections from Fiscal Year 2020-21 to Fiscal Year 2026-27. She discussed key operating and capital outlay expenses, such as two additional Wastewater Maintenance Workers, general engineering support and resources, flow meter rental and cloud access, IT security maintenance and monitoring, a combination cleaning unit, a pickup truck, and a forklift. She reviewed the District's capital improvement projects (CIPs) for the next five to ten years. She discussed revenue requirements and the proposed revenue adjustments which require a 9.9% increase to balance the Wastewater budget. She noted that, if the District does not implement a rate adjustment, then their reserves will be depleted by Fiscal Year 2026-27. She added that if a 9.9% rate increase is implemented, then the District will have about $10 million dollars in reserves, which is a healthy reserve level for the District's size. Ms. Kido reviewed the District's 2012 Wastewater Rate Study and the flow estimates used for that study. She noted that, according to the District's 2020 Master Plan, flow estimates have reduced from 11.1 million gallons per day (gpd) to 8.6 million gpd. She discussed the study's analysis of household size and stated that the weighted average is 2.95 per single family home, 2.52 per multi-family home, 2.39 per trailer home, and 1.25 per ADU. She reviewed the study's cost of service analysis, which determined the percentage of revenue requirements for which each customer class is responsible. She stated that the proposed cost of service percentage is 32.2% for single family residential (SFR), 29% for multi-family residential (MFR), 10.8% for commercial properties with average strength, 10.9% for commercial properties with high strength, 16% for industrial, 1% for trailer homes, and COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09, 2021 0.4%for ADUs. She shared the proposed rates for each customer class: $95.18 for SFR, $72.04 for MFR, $41.50 for commercial properties with average strength $46.21 for commercial properties with high strength, $106.87 for industrial, $67.18 for trailer homes, and $34.99 for ADUs. She presented a rate comparison with other agencies and stated that the District will be maintaining one of the lowest rate structures with the proposed rate increases.She reviewed the proposed 5-year rate schedule.She discussed the proposed median billing units for commercial and industrial properties. President Ooten stated that the wastewater rate study indicates that the previous policies were insufficient, especially since a 9.9% rate increase is needed to ensure a balanced budget. He suggested for the previous District policies regarding wastewater rates to be re-examined. He added that the District may not have the necessary funding for its CIPs. He stated that the proposed rate increases are appropriately conservative and that the percentage amounts sound higher than the actual amount increases. Vice President Scheafer exited the meeting at 8:34 a.m. and President Ooten presided over the remainder of the meeting. Director Eckles stated that, by year five of the rate increase, the District will have achieved an overall rate increase of about 50%. He inquired if the District's current spending rate is too high. Mr. Carroll stated that the District has not implemented a rate adjustment in five years. Ms.Kido stated that,based on the expenditures,the District needs to increase its revenues. Director Eckles inquired about the proposed rate for ADUs. Ms. Kido stated that the estimated occupancy for ADUs was scaled against the household size for SFR customers to determine the household size of ' 1.25. She added that an ADU charge will be 42% of an SFR charge. Director Eckles discussed regional comparisons for the proposed rate structure. 1 COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09, 2021 Mr. Carroll noted that other organizations will also be increasing their rates over the next five years. He stated that, even if other organizations do not increase their rates,the District's wastewater rate will still be lower than$12 per month by year five of the rate schedule. Director Eckles inquired about how often other organizations increase their rates. Mr. Carroll stated that other organizations tend to adjust their rates annually. Director Eckles inquired about a one or two-year increase for wastewater rates rather than a five-year increase. Mr. Carroll stated that the District is required to do a Proposition 218 hearing each time rates are adjusted, which adds more costs to the process. He shared that most agencies adopt five-year rate increases. Director Eckles asked why this item was presented to the Board before being presented to the Citizens Advisory Committee (CAC). Mr. Carroll stated that the presentation was provided to receive comments and feedback from the Board. He noted that it will be presented to the CAC tomorrow evening.He added that the item will be revisited at another Board meeting to receive more direction. Director Perry asked if the rate schedule can be adjusted after two years of implementation. Mr. Carroll stated that the Board can lower the rates, but a Proposition 218 hearing would be required to increase the rates. Ms. Kido stated that the proposed rates listed in the presentation are at the highest level that the Board can approve. District Counsel, Alan Burns, inquired about a date for the Proposition 218 hearing and notices. 1 COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09,2021 Mr. Carroll stated that he does not have an exact date, but it would most likely occur in February or March of 2022. Director Perry shared that Vice President Scheafer requested a special meeting on November 16, 2021 to revisit this item. The Board agreed to schedule a special meeting for November 16, 2021 at 8:00 a.m. District resident, Jim Mosher, recommended adding the presentation slides to the CAC meeting agenda. He inquired if the actual wastewater study has been made available to the public. Mr. Carroll confirmed that theresentation slides have been included udedinthe CAC meeting agenda.enda.He stated that the wastewater studyhas not been made available to the public,but that it will be available once District staff receives direction from the Board. Mr. Mosher stated that the initial assumption of about 200 new AD Us seems to be an underestimate compared to the City of Costa Mesa's expected increases. He shared that the City of Newport Beach is estimating about 600 new dwellings each year in the next eight years. He noted that these estimates will affect the wastewater rate study. He stated that the presentation showed a moderate rate increase for year one but did not explain that the increase will be almost 10% annually. He discussed the proposed rate increases for MFRS. Director Perry expressed agreement with Mr. Mosher's comments about the estimated increases in new accounts. He shared that the City of Costa Mesa has been looking at all open land for possible development. President Ooten suggested reviewing the minutes of the City's recent meeting about housing. Director Eckles requested to review a historical breakdown of wastewater rates from other agencies to assess the District's level of impact. He added that he is interested in receiving feedback from the CAC. COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09,2021 President Ooten shared that in 2006 the District had a 50%rate increase from $19 dollars per year to $38 dollars per year. He suggested adding the phrase "not to exceed x amount" in the staff report to explain that these amounts are the maximum rate increases. There was no further discussion. Action, Receive and File: 2. Receive and File October 2021 Code Enforcement Officer Report Recommendation: That the Board of Directors receive and file this report. Interim Code Enforcement Officer, David Griffin,provided report details. He stated that there were six reported instances of scavenging and that he tagged 22 trash carts for being stored in public view. He noted that there were no cases of graffiti detected. He shared that the number of cases for each topic are a bit lower than usual due to other work commitments. Secretary Schafer inquired about the scavenging cases. Mr. Griffin stated that four scavengers were detected on a Wednesday and two scavengers were detected on a Monday. He noted that scavenging cases have been decreasing in the College Park neighborhood. Director Eckles commended Mr. Griffin for his efforts on reducing scavenging. There was no further discussion, and the report was received. Action, Receive and File: 3. Review and Comment on the September 2021 Cart- to-Cart Outreach Results Recommendation: That the Board of Directors receive and file this report. President Ooten introduced the item. 1 Management Analyst I, Nabila Guzman, stated that she visited three neighborhoods in September with Mike Carey of CR&R to conduct cart-to- cart outreach. She noted that most of the Organics Recycling Carts did not contain food waste. She shared that she will be visiting additional neighborhoods in December to observe customers' participation rates. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09,2021 President Ooten suggested providing educational materials before conducting another round of outreach to determine if they are effective. Director Perry inquired about the December outreach schedule. Ms. Guzman stated that they will be visiting a few neighborhoods starting the first Thursday of December. She noted that the September outreach was done in neighborhoods with Wednesday trash routes. President Ooten asked if District staff has time to prepare some educational materials. Ms. Guzman stated that she will work with staff to draft social media posts. Discussion followed regarding the logistics of targeting specific areas. President Ooten recommended for each trash cart to be properly labeled.He shared that he found 75 carts with missing or partially missing decals. He asked how many carts were observed in September. Ms. Guzman stated that they visited 180 residences. Secretary Schafer shared that she attended the City of Costa Mesa's Neth Park dedication ceremony. She stated that other attendees were not aware of the District's Organics Recycling Program. She suggested hosting a workshop with CR&R, District staff, and City staff on a Saturday for the public to learn more about the program. She requested to discuss this suggestion at the November Board meeting. President Ooten stated that the District is required to educate the public about organics recycling. He noted that the City has indicated that they will be hosting multiple meetings regarding this issue. He added that there is a lot of misunderstanding about how to utilize each trash cart. He stated that all carts need to be labeled and that magnets indicating what types of waste belong in each cart should be available for all customers. COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09,2021 Director Eckles expressed agreement with Secretary Schafer's suggestion. He suggested working with the City of Newport Beach to better educate the public. Mr. Carroll stated that the District hosted eight townhall meetings before instituting the Organics Recycling Program. He noted that hundreds of customers attended these meetings. He added that he will contact the City of Costa Mesa and CR&R to determine meeting dates. He stated that these meetings and workshops fulfill CalReycle's educational requirements. President Ooten stated that the District will need to do more than host townhall meetings to change recycling behaviors. Mr. Mosher stated that this report was presented at the Solid Waste Ad Hoc Committee Meeting. He expressed agreement with labeling all trash carts. He shared that the City of Newport Beach will be starting their organics recycling program very soon, but they have not provided enough education and outreach. He reiterated the cart-to-cart outreach process. He stated that 11 some carts may contain food waste that is not visible during the inspection process and that some customers may be using their food waste for composting.He recommended lifting the lids of both trash carts to get a more accurate observation. He discussed CR&R's diversion report and requested to review the City of Costa Mesa's report to CalRecycle. He noted that the District does not have a fair estimate of how much waste is being recovered. President Ooten stated that the District has reviewed the City's reports. Mr. Carroll stated that he will request that report from the City. There was no further discussion, and the report was received. Action: 4. Review and Comment on Proposed Senate Bill 1383 - Mandatory Organic Waste Disposal Reduction Recommendation: That the Board of Directors review and comment on the proposed ordinance and direct staff to bring back the ordinance on November 22, 2021 for adoption consideration. President Ooten introduced the item. it COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09, 2021 Mr. Carroll provided an overview of SB 1383. He stated that this law applies to special districts and that the first step is to adopt an ordinance. He shared that Mr. Mosher submitted written comments on the ordinance which have been provided to the Board and made available to the public. He noted that this draft ordinance will be reviewed by the CAC tomorrow and that the final draft will be presented at the November Board meeting. Director Eckles asked if the Board will have the opportunity to edit this ordinance after the November Board meeting. Mr. Carroll stated that District staff can present the ordinance at the December Board meeting if more edits are necessary. Director Eckles inquired about the ordinance's language on fines and enforcement. Mr. Carroll stated that enforcement does not begin until 2024. He noted that the District, CR&R, and the City of Costa Mesa has not determined which agency will oversee enforcement. He stated that this ordinance identifies fine amounts,which are consistent with the District's current fines for trash carts in public view. He noted that the Board can adjust the fines. Discussion followed regarding fines and determination of hearing officer. Director Eckles asked how the agencies will determine which agency is the main enforcer. Mr. Carroll stated that the Board and Costa Mesa City Council will determine the lead enforcer. He noted that if the two agencies cannot agree, then legal counsel will advise. Mr. Burns stated that the law delegates certain duties and responsibilities to the City and to the District. Mr. Carroll stated that the District's primary focus is educating the public on the new regulations. Discussion followed regarding the comments noted on the draft ordinance. COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09,2021 President Ooten inquired if the proposed changes were mostly submitted by Mike Balliet, Solid Waste Consultant for the District and the City. Mr. Carroll stated that the draft ordinance is based on the State's model, as it pertains to the District. President Ooten inquired about the District's adoption of its Code Enforcement fines. Mr. Carroll stated that the administrative citation ordinances were adopted during his first year of employment with the District. He proposed that fines were included to grant the District the authority to write citations rather than utilizing the court system to issue misdemeanors. President Ooten inquired if the District is recruiting for a Code Enforcement Officer. He asked how long Mr. Griffin will serve as the Interim Code Enforcement Officer. Mr. Mosher stated that the City of Costa Mesa has already adopted an ordinance addressing SB 1383. He noted that it has provisions requiring residents to have three carts, but clauses say that District customers are not obligated to have this amount.He stated that the draft ordinance has missing definitions and that the main section that needs revision is definition AA(pg. 6) regarding prohibited container contaminants. He noted that the draft ordinance mentions "blue carts" which the District does not issue. He added that the last section needs considerable revision as it states that it is a violation to place recyclables in the black cart, which is incorrect. Mr. Carroll stated that District staff will be revising the draft ordinance accordingly. There was no further discussion. Action: 5. Receive and File CR&R's Benchmark Measures Progress Report Recommendation: That the Board of Directors receive and file this report. President Ooten introduced the item. COSTA MESA SANITARY DISTRICT PAGE 12 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD NOVEMBER 09, 2021 Ms. Guzman P rovided updates on CR&R's eight benchmarks for October P 2021. Director Eckles inquired about the complaints that the District received last week about CR&R's service. ISI Ms. Guzman stated that those complaints will be included in the November 2021 report. President Ooten inquired about benchmark#6. Ms. Guzman stated that the District's trash truck fleet is old. She explained that trucks that carry more than 12 tons experience greater wear and tear. She also noted that it can reduce a truck's ability to stop quickly. She stated that this is not a regulatory problem, but a concern submitted by Mr. Balliet. President Ooten stated that there should be a better explanation for that benchmark to be included since it is not considered a regulatory concern. He added that CR&R has made substantial progress on benchmark #2, but they are not meeting all the standards set by the Board. There was no further discussion, and the report was received. Procedural: 1. Oral Communications and Director Comments There were no additional comments by the Board. Procedural: 2. Adjournment President Ooten adjourned the meeting at 9:33 A.M. lad ildrj \-16,JA Arlene Schafer Bob Ooten Secretary President