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Minutes - Board - 2022-01-11COSTA MESA SANITARY DISTRICT MINUTES OF BOARD OF DIRECTORS STUDY SESSION JANUARY 11, 2022 NOTE: THIS 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), Gina Terraneo (Management Analyst II), Nabila Guzman (Management Analyst I), David Griffin (Facilities Maintenance Worker & Interim Code Enforcement Officer), Lieu Tran (Accountant) Others present James Black, District Representative at Office of State Senator Dave Min Julie Barreda, CR&R Jim Mosher, District resident Mike Carey, CR&R Meeting called to order at 8:00 A.M. A. OPENING ITEMS 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.) COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JANUARY 11, 2022 President Ooten called the meeting to order at 8:00 A.M. District Clerk and Public Information Officer, Noelani Middenway, noted that President Ooten, Vice President Scheafer, Secretary Schafer, Director Perry, and Director Eckles were present at this time. Vice President Scheafer noted that Director Perry can see and hear the meeting remotely but is unable to connect his audio. He added that Director Perry will be watching the meeting live and communicating with him via text messaging. B. PUBLIC COMMENTS Procedural: 1. Public Comments President Ooten opened public comments. Ms. Middenway stated that CR&R submitted written comments regarding Item C3. She added that these comments have been shared with the Board and included in the agenda. District resident, Jim Mosher, shared that the Newport Beach City Council will be considering a new contract with CR&R for the next 8 to 10 years. He stated that the contract proposes a solid waste rate of $24.08 per month per household for one 96-gallon cart for waste, one 96-gallon cart for organic waste, and two 96-gallon carts for recycling material in a three -cart system. He added that CR&R is offering split -body trucks to service more congested areas of the city. Hearing no additional members of the public wishing to speak, President Ooten closed public comments. C. ITEMS OF STUDY Action, Receive and File: 1. Receive and File December 2021 Code Enforcement Officer Report Recommendation: That the Board of Directors receive and file this report. COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JANUARY 11, 2022 Interim Code Enforcement Officer, David Griffin, presented report details. He reported seven instances of scavenging, 46 trash carts in public view, and no cases of graffiti. Secretary Schafer inquired about the number of trash carts in public view. Mr. Griffin noted that there were less carts in public view this month than normal. Discussion followed regarding Mr. Griffin's patrol area. President Ooten suggested for the Code Enforcement Officer to assist with Christmas trees that are found to be in non-compliance (e.g., with stands and decorations) by sharing the District's program criteria. Mr. Griffin suggested passing out a door hanger with the Christmas Tree Recycling Program requirements. He noted that he has found many trees wrapped in plastic bags that have been placed curbside for pickup. There was no further discussion, and the report was received. Action, Receive and File: 2. Large Item Collection - Program Update Recommendation: That the Board of Directors receive and file this report. Management Analyst I, Nabila Guzman, presented report details and described the District's Large Item Collection Program. She provided a list of popular items that are disposed of (mattresses, box springs, tables, etc.). She noted that this program is the most successful District program. She stated that there have been instances in which customers have had to wait longer than two weeks for pickup, but CR&R has done a good job of completing pickups. President Ooten asked if a Christmas tree can be considered a large item for pickup. Ms. Guzman confirmed that Christmas trees can be collected as a large item. She stated that customers who missed the Christmas tree collection deadline can request a large item pickup. COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JANUARY 11, 2022 President Ooten shared that he will alert customers to remove the tree stand from their Christmas trees. Vice President Scheafer commented that the Large Item Collection Program is the District's best and most successful program. He shared that he receives more questions about this program than any other. He thanked CR&R for offering this program. Secretary Schafer expressed agreement with Vice President Scheafer's comments. President Ooten suggested issuing a press release to enhance education about the program. Mr. Mosher commented that, in Newport Beach, customers receive an unlimited amount of large item pickups. He noted that the program is currently being scaled down to five pickups per calendar year with five items per pickup under the new CR&R contract. There was no further discussion, and the report was received. Action: 3. CR&R's Benchmark Measures Final Report Recommendation: That the Board of Directors provide direction to staff. General Manager, Scott Carroll, provided report details. He stated that CR&R requested a fee adjustment last year, but the Board denied their request and agreed to revisit it after six months of reviewing the District's performance benchmarks for CR&R. He provided a status update on each performance benchmark. He noted that CR&R achieved three out of the eight benchmarks. He reviewed the suggested recommendations provided by District staff. Director Eckles inquired about the primary reason for the missed Christmas tree pickups. Mr. Carroll stated that the CR&R driver shortage was the main reason for missed collections. COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JANUARY 11, 2022 CR&R representative, Julie Barreda, confirmed that driver shortages were the primary reason. She shared that 40 CR&R drivers called out of work yesterday due to COVID-19. Director Eckles asked about the timeline for the next contractual rate review for CR&R. Mr. Carroll stated that the District conducts an annual review of CR&Ws performance. He noted that their performance will be reviewed again at the end of this calendar year. Director Eckles asked if these performance benchmarks were tracked in the past. Mr. Carroll stated that these specific benchmarks were approved and implemented last year. District Counsel, .Alan Burns, asked if a Proposition 218 hearing would be required if the Board recommends for a rate adjustment to be paid for with existing funds. Mr. Carroll stated that the District will have to review the impact of the rate adjustment on the current budget. He added that if the District cannot afford the rate adjustment, then a Proposition 218 hearing would be required. Mr. Burns stated that there will be new solid waste negotiations due to Senate Bill (SB) 1383, which will likely result in a contract amendment and a new monthly rate. Vice President Scheafer asked about the percentage of Christmas trees that were found in noncompliance. Mr. Carroll stated that the District and CR&R do not have that data. Vice President Scheafer thanked Ms. Barreda for the update regarding driver shortages. He suggested for the Board to take her update into consideration when reviewing the performance benchmarks. He shared that Director Perry is in favor of considering a 2.8% rate adjustment after COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JANUARY 11, 2022 reviewing the financial impacts. He expressed agreement with Director Perry's recommendation. Secretary Schafer requested to review the financial impacts of a 2.8% and 5.6% rate adjustment. Director Eckles stated that, when the Board reviewed this item six months ago, they also reviewed the financial impacts, which indicated that the District cannot afford a rate adjustment. He noted that the Board approved a deficit budget. Mr. Carroll also stated that, when the Board reviewed this item six months ago, a Proposition 218 hearing was required if the rate adjustment was approved. However, he noted that tonnage amounts have decreased since then. Director Eckles stated that the District does not have a balanced budget. He noted that the performance benchmarks were meant to track improvement. He added that CR&R did not achieve most of the benchmarks. He stated that he cannot justify nor can the District afford a rate adjustment. President Ooten stated that the Board approved CR&R's performance benchmarks. He added that, according to a recent evaluation, CR&R's performance was found to be satisfactory. He expressed recognition for CR&R's Large Item Collection Program. He noted that these benchmarks were not included in CR&R's recent performance evaluation. He stated that it is dismaying to regard CR&R's overall performance as satisfactory even though they did not achieve all the benchmarks. He expressed support for reviewing the financial impacts of a 2.8% and 5.6% rate adjustment. Director Eckles made a motion to deny the rate adjustment and review the performance benchmarks in six months. Ms. Barreda expressed agreement with the Board's comments. She added that CR&R would like to be in a better position service -wise. She noted that there will be costs associated with SB 1383. She suggested to revisit this discussion during the SB 1383 implementation process. COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JANUARY 11, 2022 President Ooten seconded Director Eckles' motion. Vice President Scheafer asked if the Board is denying CR&R's rate adjustment. Director Eckles amended his motion to deny any rate adjustments and to revisit the item during the negotiation process for SB 1383 compliance. President Ooten seconded Director Eckles' motion. Vice President Scheafer asked if Ms. Barreda agrees with the motion. Ms. Barreda confirmed that she supports the motion. Revised motion: To: 1. Deny CR&R's request for a solid waste rate adjustment 2. Direct staff to report back at a future Board of Directors meeting to consider approving a 5.6% solid waste rate adjustment during the implementation process for SB 1383 compliance 3. Direct staff to report back at a future Board of Directors meeting to consider approving a 2.8% solid waste rate adjustment during the implementation process for SB 1383 compliance Motion by Brett Eckles, second by Bob Ooten Final Resolution: Motion Carries 3-2 Aye: Arlene Schafer, Bob Ooten, Brett Eckles No: Art Perry, Michael Scheafer There was no further discussion. Action: 4. Performance Based Ordinance for SB 1383 Compliance Recommendation: That the Board of Directors provide direction to staff. Mr. Burns presented report details and discussed the differences between a three -cart, two -cart, and one -cart system. He also provided the differences between standard -based and performance -based models. He shared that the City of Costa Mesa is utilizing the standard -based model, which the District is also adopting. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JANUARY 11, 2022 Secretary Schafer inquired how the District is communicating with the City regarding this item. She asked if the City has adopted a three -cart system. Mr. Burns stated that the City has adopted an SB 1383 ordinance. He added that the District adopted a two -cart system but may still consider transitioning to a three -cart system. He noted that the City services multi- family residences and that they have a different container arrangement. President Ooten asked Director Eckles if his trash provider has a two or three -cart system. Director Eckles shared that this residence has a three -cart system. Vice President Scheafer inquired about the high diversion facility requirement. Mr. Burns stated that, to operate a two -cart system, CR&R will have to transition its current facility into a high diversion facility. President Ooten stated that the District is the only jurisdiction served by CR&R that is not utilizing a three -cart system. Vice President Scheafer asked if the District will need to redistribute their carts if they transition to a three -cart system. President Ooten stated that the trash cart lids will be updated. Discussion followed regarding the procedures to transition to a three -cart system and the color of Mixed Waste Carts. Director Eckles inquired about 90-gallon trash carts. Ms. Barreda stated that the District and CR&R will be discussing 90-gallon carts at their next meeting. President Ooten reviewed the options provided in the staff report. COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JANUARY 11, 2022 Mr. Carroll stated that the District cannot implement a performance -based ordinance because it does not service 90% of the residents within the District's service area. Mr. Burns confirmed that the District cannot implement a performance - based ordinance without a memorandum of understanding (MOU). President Ooten stated that he is in favor of a performance -based system. Mr. Carroll asked if Director Eckles has trash bins or carts at his residence. Director Eckles stated that he has trash bins. Mr. Burns stated that a two -cart system will be more costly than a three - cart system due to its requirement for a high diversion facility. President Ooten expressed support for a three -cart system. Discussion followed regarding negotiations for a three -cart system. Mr. Mosher commented that it is premature to make a decision regarding a standard -based or performance -based system. He shared that the City of Newport Beach will be transitioning from a two -cart system to a three -cart system. He stated that they will be replacing carts through attrition. He added that they adopted a performance -based system. The Board directed District staff to continue negotiations until SB 1383 compliance issues are resolved. Mr. Burns confirmed that no vote was taken. President Ooten suggested for the Solid Waste Ad Hoc Committee to discuss this item. There was no further discussion. Procedural: 1.Oral Communications and Director Comments There were no additional comments by the Board. COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS STUDY SESSION HELD JANUARY 11, 2022 Procedural: 2. Adjournment President Ooten adjourned the meeting at 9:00 A.M. Arlene Schafer Secretary Bob Ooten President