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Minutes - Board - 2022-11-28COSTA MESA SANITARY DISTRICT MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING NOVEMBER 28, 2022 NOTE: THIS HYBRID IN -PERSON AND TELECONFERENCED MEETING WAS CONDUCTED UTILIZING ELECTRONIC MEANS CONSISTENT WITH STATE OF CALIFORNIA ASSEMBLY BILL 361(GOV. CODE 549530)(3)). Members present Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer Members absent None Staff present Scott Carroll (General Manager), Noelani Middenway (District Clerk & Public Information Officer), Gina Terraneo (Management Analyst II), Kaitlin Tran (Finance Manager), Dyana Bojarski (Administrative Services Manager), Mark Esquer (District Engineer), Marc Davis (District Treasurer), Alan Burns (District Counsel), Nabila Guzman (Management Analyst I) Others present Judith Gielow, Citizens Advisory Committee Mike Carey, CR&R Environmental Services Sabrina Marquez, CR&R Environmental Services Dan Worthington, Former CMSD Board member Meeting called to order at 4:30 P.M. A. OPENING ITEMS Procedural: 1. Call to Order - President Ooten COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 President Ooten called the meeting to order at 4:30 P.M. Procedural: 2. Pledge of Allegiance — President Ooten President Ooten led the Pledge of Allegiance. Procedural: 3. Invocation — Vice President Scheafer Vice President Scheafer 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.) District Clerk & Public Information Officer, Noelani Middenway, conducted roll call and noted that President Ooten, Vice President Scheafer, Secretary Schafer, Director Perry, and Director Eckles were present. Procedural: S. 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. None. Procedural: 6. Ceremonial Matters and Presentations. None. B. PUBLIC COMMENTS Procedural: 1. Public Comments President Ooten opened public comments. Hearing none at this time, he closed public comments. C. CONSENT CALENDAR Action (Consent): 1. Approve Consent Calendar COSTA MESA SANITARY DISTRICT PAGE 3 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 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 October 13, 2022 Recommendation: That the Board of Directors approve the meeting minutes as presented. Action (Consent), Minutes: 3. Approve the Board of Directors Regular Meeting Minutes of October 24, 2022 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): S. Approve the preparation of a warrant to CR Transfer in the amount of $195,072.70 for October 2022 recycling and disposal services in the November 2022 warrant register Recommendation: That the Board of Directors approves the preparation of a warrant to CR Transfer in the amount of $195,072.70 for October 2022 recycling and disposal services to be ratified in the November 2022 warrant register. Action (Consent): 6. Accept the occupancy count as presented as 23,091 and direct staff to prepare a warrant to CR&R Environmental Services for $246,004.59 for October 2022 collection Recommendation: That the Board of Directors accept the occupancy count as presented using 23,091 as the correct number of active units and direct staff to prepare a warrant to CR&R Environmental Services for October 2022 collection based on this occupancy report so long as the contractor fulfills the obligations of the agreement in the amount of $246,004.59 to be ratified in the November 2022 warrant list. Action (Consent): 7. Receive and File the October 2022 Organics Tonnage Report COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 Recommendation: That the Board of Directors receive and isle this report. Action (Consent): 8. Receive and File the October 2022 Solid Waste Diversion Report Recommendation: That the Board of Directors receive and file this report. Action (Consent): 9. Receive and File October 2022 Contracts Signed by the General Manager Recommendation: That the Board of Directors receive and file this report. Action (Consent): 10. Approve Payroll Transparency Disclosure for October 2022 Recommendation: That the Board of Directors approve and file the report. Action (Consent): 11. Adopt Warrant Resolution No. CMSD 2023-05 Approving District Warrant Registers Recommendation: That the Board of Directors adopt Warrant Resolution No. CMSD 2023-05 approving District warrants for the month of October in the amount of $1,222,157.26. Action (Consent): 12. Approve the Investment Report for the Month of October 2022 Recommendation: That the Board of Directors approve the Investment Report for the Month of October 2022. Motion: To approve the Consent Calendar as presented. Motion by Art Perry, second by Mike Scheafer. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer There was no further discussion. D. PUBLIC HEARINGS None at this time. E. GENERAL MANAGER REPORTS COSTA MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 Action: 8. Consider Relocating U.S. Flag Drop -Off Box to Costa Mesa - Mesa Verde Library Recommendation: That the Board of Directors provide direction to staff. President Ooten requested to discuss Item E8 prior to Item El. Former Costa Mesa Sanitary District Board member, Dan Worthington, discussed the history of the U.S. Flag and the recitation of the Pledge of Allegiance. He noted that a flag can either be burned or buried for proper disposal. He discussed his position as a scout master. He commented that many U.S. flags are not displayed properly in Costa Mesa. He noted that local fire departments in Newport Beach were collecting and properly disposing of used U.S. flags. He shared about his efforts to implement a drop box for U.S. flags at District headquarters. He suggested donating the District's drop box to the Mesa Verde Library. Vice President Scheafer asked which agency will be overseeing collection and disposal. Mr. Worthington stated that he will be delivering the flags to the fire department for disposal. Director Perry asked if District staff has a recommendation for this item. General Manager, Scott Carroll, stated that District staff is seeking direction from the Board. Director Perry recommended loaning the drop box to the Mesa Verde Library. Vice President Scheafer stated that loaning the drop box makes the District liable for any issues. He recommended donating the drop box to the Mesa Verde Library. President Ooten shared that he has donated a drop box for books to the Mesa Verde Library that has been there for 10 years with no incident. He COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 expressed support for loaning or donating the District's American Flag Drop Box. Mr. Worthington commented that he has received approval from the City of Costa Mesa to move the drop box to the library. He confirmed that the City owns the property. Director Eckles expressed support for donating the drop box to the Mesa Verde Library. Motion: To direct staff to implement Option 2, as stated in the staff report, to donate the drop-off box to the Mesa Verde Library. Motion by Michael Scheafer, second by Arlene Schafer. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer Mr. Carroll stated that District staff will draft a resolution to formally recognize the Board's decision. There was no further discussion. Action, Receive and File: 1. Carryover Appropriations and Carryover Encumbrances for Fiscal Year 2021-22 to Fiscal Year 2022-23 Recommendation: That the Board of Directors approve the re -appropriation of funds in the Fiscal Year 2021-22 for the carryover items form the prior fiscal year as detailed in Attachments A and B, and summarized as follows: 10 Solid Waste fund: Carryover Appropriations $14,630, Encumbrances $15,467.50 20 Wastewater Fund: Carryover Appropriations $1,974,090.18, Encumbrances $1,116,902.69 President Ooten introduced the item. Motion: To approve the re -appropriation of funds in the Fiscal Year 2021-22 for the carryover items from the prior fiscal year as detailed in Attachments A and B, and summarized as follows: 10 Solid Waste fund: Carryover Appropriations $14,630, Encumbrances $15,467.50 COSTA MESA SANITARY DISTRICT PAGE 7 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 20 Wastewater Fund: Carryover Appropriations $1,974,090.18, Encumbrances $1,116,902.69 Motion by Brett Eckles, second by Art Perry. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer There was no further discussion. Action, Receive and File: 2. Receive and File the First Quarter Budget Review for FY 2022-23 Recommendation: That the Board of Directors receive and file this report. President Ooten introduced the item. Finance Manager, Kaitlin Tran, provided report details. She stated that, as of September 30, 2022, approximately 23% of the Solid Waste Fund and Wastewater Fund has been expended. She noted that District staff is projecting the Solid Waste Fund to have a savings of $408,000. She stated that the Wastewater Fund is projected to meet its budgeted amount. She noted that these projections will be more precise as the year progresses and stated that the staff report provides a more detailed analysis. There was no discussion, and the report was received. Action, Receive and File: 3. Receive and File Fiscal Year 2021-22 Annual Compliance Report for Requirements of Government Code Section 66013 (d) for Capacity Charges Recommendation: That the Board of Directors receive and file this report. President Ooten introduced the item. Ms. Tran provided report details. She stated that the Facilities Revolving Fund has received approximately $138,000 in capacity charges. She added that, as of June 30, 2022, the total funds available in the Facilities Revolving Fund was approximately $356,000. She noted that the District's Drought Tolerant Landscape Project is in process and will be funded with capacity charges. COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 Vice President Scheafer inquired about the District's photovoltaic battery storage project. Mr. Carroll stated that it would supply power to the District during a power outage. He noted that the project has not been started. There was no further discussion, and the report was received. Action: 4. CR&R Proposed Flat Rate vs. Per Tonnage Rate Recommendation: That the Board of Directors provides feedback to staff. President Ooten introduced the item. Mr. Carroll provided report details. He presented a breakdown of CR&R's proposed flat rate fee. He discussed the potential impact of accessory dwelling units (ADUs) on tonnage rates. He recommended proceeding with a per tonnage rate rather than a flat rate based on District staffs analysis. Director Eckles asked how much tonnage would result in a higher per tonnage rate than CR&R's proposed flat rate. Mr. Carroll stated that District staff did not calculate that amount. Discussion followed regarding tonnage data trends. President Ooten discussed tonnage data in relation to weather trends and economic recessions. He stated that the District has saved about $700,000 this year due to lower tonnage amounts than projected. He expressed support for a per tonnage rate. Director Eckles expressed support for President Ooten's analysis. He inquired about negotiating a lower flat rate with CR&R. Mr. Carroll stated that CR&R refuses to lower their proposed flat rate. President Ooten inquired about how CR&R calculates overhead costs. COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 Vice President Scheafer commented on the impact of ADUs. Mr. Carroll stated that, based on current ADU permit data, the District does not project a significant impact on tonnage rates as a result of ADU developments. Vice President Scheafer stated consumers on a fixed income may prefer a flat rate fee. President Ooten stated that the flat rate is also subject to increases. Director Eckles stated that per tonnage rates are similar to usage fees. There was no further discussion. Action, Receive and File: S. Receive and File FY 2021-22 CR&R Performance Review Recommendation: That the Board of Directors receives and files CR&R's Annual Performance Review for FY 2021-22. President Ooten introduced the item. Management Analyst I, Nabila Guzman, provided report details. She stated that CR&R experienced issues with providing adequate staffing levels for the District's service area. She discussed CR&R route delays due to staffing challenges and trash truck mechanical issues. She added that trash customers experienced lengthy wait times when calling CR&R's customer service line. She stated that CR&R's net -to -hauler rate was $4.69 below the county average due to decreases in overall tonnage collected. She shared that CR&R received 767 missed trash complaints during the year in review. She highlighted CR&R's efforts with the District's Compost and Shredding Event. Director Perry asked if CR&R has improved their phone issues. Ms. Guzman confirmed that CR&R fixed their phone issues in August 2022. She noted that they hired more customer service staff and revised their phone system. COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 Vice President Scheafer expressed recognition for CR&R representative, Mike Carey. There was no further discussion, and the report was received. Action: 6. Second Review of Draft Agreement Amendment with CR&R Incorporated Recommendation: That the Board of Directors review the second draft amendment and provide staff with feedback. President Ooten introduced the item. Mr. Carroll provided report details. He shared that District Counsel, Alan Burns, has reviewed the draft agreement amendment and discussed changes regarding liquidated damages, occupancy counts, cart inventory, and rate increases. He noted that the District must have substantial evidence to deny CR&R a rate increase. He added that the District has a right to hire a third -party contractor to assist with the Christmas Tree Collection Program. Director Perry asked if the District has requested bids for the third -party contractor. Mr. Carroll stated that the District has released a request for proposals but has yet to receive a bid. Director Perry asked if CR&R can hire the third -party contractor. Mr. Carroll stated that, last year, CR&R failed to hire a third -party contractor to help pick up Christmas trees. Discussion followed regarding cost -of -living adjustments (COLAs). Mr. Burns stated that requiring substantial evidence to deny rate increases is considered a low standard. He added that if there is an overall failure to COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 perform the contract by CR&R, then the District has the right to terminate the contract. Director Eckles asked if the District could deny CR&R a rate increase without having to provide evidence. Mr. Burns confirmed that, in this regard, Board decisions are not required to provide findings and conclusions. Director Eckles inquired about the number of missed trash pickups required for liquidated damages. Mr. Carroll stated that liquidated damages will be based on monthly totals. Ms. Guzman stated that the draft agreement amendment will be revised to note that missed trash pickups will be calculated monthly for liquidated damages, rather than on a weekly basis. President Ooten stated that the District and CR&R should be using the same process to calculate COLAs. Ms. Guzman stated that this issue has been addressed during negotiations and revised to reflect the District's process. Discussion followed regarding the District's plan for addressing missed Christmas tree pickups. Vice President Scheafer commented that many customers do not properly prepare their trees for collection. Secretary Schafer recommended advertising the Christmas Tree Collection Program in the District's winter newsletter. Discussion followed regarding District outreach for the Christmas Tree Collection Program. COSTA MESA SANITARY DISTRICT PAGE 12 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOvEMBER 28, 2022 Vice President Scheafer asked when this item will be brought back to the Board for approval. Mr. Carroll stated that District staff will present this item again at the December Board meeting. Director Eckles inquired about the contract term. Ms. Guzman stated that the contract term has not changed since the Board's first review. Director Eckles stated that the term ends on June 30, 2028 with the option for both parties to extend the contract for another five years upon mutual agreement. There was no further discussion. Action: 7. Authorize Staff to Solicit RFPs for Constructing Project #342 — Drought Tolerant Landscape at CMSD Headquarters Recommendation: That the Board of Directors: 1. Approve transferring $164,200 from the Facilities Revolving Fund for construction, inspection, and contract administration costs for Project #342 — Drought Tolerant Landscape at CMSD Headquarters; and 2. Direct staff to solicit RFPs for construction of this project President Ooten introduced the item. Mr. Carroll provided report details and shared the original project budget. He stated that the sidewalk on Red Hill Avenue and Paularino Avenue and changes to the monument sign have both been removed from the project. He shared that the revised project cost is $318,000, which is a 37% decrease from the original amount. He discussed District staffs recommendations for the revised budget. Director Eckles asked for more details regarding the project budget. Discussion followed regarding the proposed budget. COSTA MESA SANITARY DISTRICT PAGE 13 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 Mr. Carroll clarified that the Facilities Revolving Fund is funded by capacity charges. Mr. Burns stated that the Facilities Revolving Fund must be spent on capital facilities projects and not services. Motion: To: 1. Approve transferring $164,200 from the Facilities Revolving Fund for construction, inspection, and contract administration costs for Project #342 - Drought Tolerant Landscape at CMSD Headquarters; and 2. Direct staff to solicit RFPs for construction of this project. Motion by Art Perry, second by Mike Scheafer. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer There was no further discussion. F. ENGINEER'S REPORTS Action, Receive and File: 1. Receive and File the Capital Improvement Status Report Recommendation: That the Board of Directors receive and file the Engineer's Report. President Ooten introduced the report. There was no discussion, and the report was received. Action: 2. Fiscal Year 2022-23 Capital Outlay Budget Adjustments, New Project #343 Elden Emergency Bypass Pumping Improvements, New Project #344 Redhill #149671 Sewer Grade 5 Replacement, and Asset Management Fund Transfer for Project #341 Elden FM Redundancy Recommendation: That the Board of Directors approve: 1. 22-23 FY Capital Outlay Budget Adjustments, as detailed in Attachment A, for a no -cost change to the budget; and COSTA MESA SANITARY DISTRICT PAGE 14 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NovEMBER 28, 2022 2. New Project #343 Elden Emergency Bypass Pumping Improvement Budget of $1.0 million; and 3. New Project #344 Redhill #149671 Sewer Grade 5 Replacement Budget of $100,000; and 4. Transfer $300,000 from Asset Management Fund to the Wastewater Fund to the Project 341 Elden FM Redundancy Design Appropriation President Ooten introduced the item. District Engineer, Mark Esquer, provided report details. He discussed proposed projects #343 Elden Emergency Bypass Pumping Improvements and #344 Redhill Sewer Grade 5 Replacement. He shared maps of both project areas. He discussed the concerns regarding potential sanitary sewer overflows (SSOs) and the proposed budget for both projects. He requested fund transfers for project #341 Elden Forcemain Redundancy and summarized the requested budget adjustments included in Attachment A of the staff report. Discussion followed regarding the budget adjustments. Vice President Scheafer inquired about the lay flat hose for Project #343. Mr. Esquer stated that construction work and the lay flat hose are required to complete the bypass for Project #343. Discussion followed regarding lay flat hoses. Vice President Scheafer asked about the timeline for Project #343. Mr. Esquer stated that it will take about three to nine months. Discussion followed regarding avoiding the area around the OC Fair & Event Center during the OC Fair. Mr. Esquer reviewed the staff report's recommendations. Motion: To approve: COSTA MESA SANITARY DISTRICT PAGE 15 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 1. 22-23 FY Capital Outlay Budget Adjustments, as detailed in Attachment A, for a no -cost change to the budget; and 2. New Project #343 Elden Emergency Bypass Pumping Improvement Budget of $1.0 million; and 3. New Project #344 Redhill #149671 Sewer Grade 5 Replacement Budget of $100,000; and 4. Transfer $300,000 from Asset Management Fund to the Wastewater Fund to the Project 341 Elden FM Redundancy Design Appropriation Motion by Art Perry, second by Arlene Schafer. Director Eckles offered a substitute motion to approve an additional budget increase of $300,000. Mr. Esquer stated that the recommended action to amend the budget is required to create the two new projects and complete the fund transfer. Director Eckles retracted his substitute motion. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer There was no further discussion. G. TREASURER'S REPORTS None at this time. H. ATTORNEY'S REPORTS Action: 1. Consider Adopting Resolution No. 2022-975 Authorizing Remote Meetings Recommendation: That the Board of Directors Adopt Resolution No. 2022-975 authorizing remote meetings. President Ooten introduced the item. Motion: To adopt Resolution No. 2022-975 authorizing remote meetings. COSTA MESA SANITARY DISTRICT PAGE 16 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 Motion by Bob Ooten, second by Art Perry. Final Resolution: Motion Carries 5-0 Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer There was no further discussion. 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 days 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. 1. Orange County Sanitation District (OCSD) - (President Ooten) President Ooten shared that OCSD's General Manager, Jim Herberg, is retiring in February 2023. He provided a brief overview of OCSD's November Board meeting. 2. Santa Ana River Flood Protection Agency (SARFPA) - (Director Perry) President Ooten stated that he will submit written notes on the SARFPA meeting. 3. Independent Special Districts of Orange County (ISDOC) - (Secretary Schafer) Secretary Schafer stated that ISDOC is undergoing the process of electing new board members. She noted that she will not be running for Board President. 4. California Special Districts Association (CSDA) - (Secretary Schafer) Secretary Schafer stated that she visited Sacramento for three CSDA meetings. She expressed recognition for CSDA's Finance Committee. COSTA MESA SANITARY DISTRICT PAGE 17 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 S. Special District Risk Management Authority (SDRMA) - (Director Scheafer) Vice President Scheafer stated that SDRMA has had several emergency board meetings over the last few weeks. He shared that, because of the actions by SDRMA staff and board members, he will be resigning as Board President. He noted that he will remain an SDRMA board member. 6. Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55, Operations Code Section 3.01.030 Director Perry stated that he submitted his written meeting notes to the District. There was no further discussion. 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 Vice President Scheafer congratulated his colleagues on their reelection to the Board. He commented that, based on election results, District voters are not interested in consolidation with Mesa Water District. He noted that the three opponents never attended a District meeting or met with staff to learn about the District. There were no additional comments. M. ADJOURN TO CLOSED SESSION COSTA MESA SANITARY DISTRICT MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD NOVEMBER 28, 2022 None at this time. N. RECONVENE TO OPEN SESSION None at this time. O. CLOSING ITEMS PAGE 18 Procedural: 1. Adjourn - The next meeting of the Costa Mesa Sanitary District Board of Directors will be held on Monday, December 19, 2022. President Ooten adjourned the meeting at 6AS p.m. Arlene Schafer Secretary Bob Ooten President