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Agenda Packets - Board - 2003-05-29Board of Directors Arlene Schafer Greg Woodside James Ferryman Art Perry Dan Worthington Phone (714) 754 -5043 Fax (714) 432 -1436 Mailing Address P. O. Box 1200 Costa Mesa, CA 92628 -1200 _ �lJtra I � ) lJ/ � J �� �t ar; � I � �s r��c� ... an Inbepenbent Special District NOTICE OF SPECIAL MEETING COSTA MESA SANITARY DISTRICT BOARD OF DIRECTORS MAY 29, 2003 The Board of Directors of the Costa Mesa Sanitary District will meet on Thursday, May 29, 2003 at 4:00 p.m., in Conference Room 1A at the Costa Mesa Civic Center, 77 Fair Drive, Costa Mesa, California to consider the following: I. Institutional. Issues — Consider. Giving City of Costa Mesa One -Year Notice of Termination of Operating Agreement II. Consider Attendance by President Schafer at CSDA Round Table in Sacramento — Friday, May 30, 3003 II. Public Comments Street Address 77 Fair Drive Costa Mesa, CA 92626 -6520 Dated: May 27, 2003 Joa w Ra vak/ Clerk of the District �O '�� Printed on Protecting our communitN s health 6N providing solid waste anc� sewer collection services. Recvclecl Paper costamesasanitarNbistriet.org COSTA 9WESA SAjVTART(DIST4UCT Memorandum To: Board of Directors District Counsel ... an Independent Speciaft l sti ict From: Rob Harriers, Manager /District Engineer' Date: May 29, 2003 Subject: Termination of Operating Agreement with the City of Costa Mesa District Staff has accomplished various tasks in preparation for giving the City of Costa Mesa one -year notice of termination of the City /District operating agreement. Based on research and planning completed to date, Staff is confident that all necessary steps can be taken within the one year period in order to successfully relocate the administrative headquarters and become independent of the City. The following items are enclosed for Board consideration: • Proposed one year termination letter addressed to the City Council and Allan Roeder with the Institutional Issues paper attached • Preliminary new manpower flow chart • Updated Implementation Plan • Legal opinion from Alan Burns Staff is prepared to answer questions regarding the enclosed information before or during the special meeting. Based on Board discussion during the past two years and opinions expressed at the February 2003 strategic planning workshop, Staff recommends the Board authorize signature and transmittal of the termination letter, which sets the termination date as June 30, 2004. Board of Directors Arlene Schafer Greg Woodside James Ferryman Art Perry Dan Worthington r r6 '0 III S C.- osta Mesa sanrl-i iitar D LL ", rr c t ... an Inbepenbent Special Dist -rict May 29, 2003 Honorable Mayor and City Council Mr. Allan Roeder, City Manager City of Costa Mesa 77 Fair Drive Costa Mesa, CA 92626 Dear Mayor, City Council and Allan: The Board of Directors and staff of the District greatly enjoy working with Phone the City on Sanitary District matters, however, the District has found it (714) 754 -5043 necessary to relocate its administrative staff to a larger site where the staff can better meet its mandated responsibilities. The new State of California Fax regulations regarding sewer system management coupled with the (714) 432 -1436 comprehensive trash collection and special recycling programs offered to the community necessitate expanding field and office staff and office space to meet these challenges. Enclosed is a paper titled "Institutional Issues" that outlines the limitations of the existing office space at City Hall and other areas of concern that Mailing Address hinder the District's ability to meet its mission. These issues are not new P o. Box 1200 but they are now magnified due to the increase in the daily business of the Costa Mesa, CA District needed to maintain the high level of service provided to the public. 92628 -1200 The future relationship between the City and the Sanitary District can be whatever both parties believe is best for the agencies and the public served. A variety of services are currently being shared and it may be appropriate to continue some of them Street Address The District has considered moving its headquarters to various properties 77 Fair Drive in Costa Mesa and has also discussed the concept of constructing a new Costa Mesa, CA headquarters adjacent to City Hall on a parcel of land that would be sold 92626 -6520 to the District. However, the District has been notified that a building adjacent to City Hall is not possible but that a site adjacent to the Communications Center on Vanguard Way may be available. A central location of municipal services certainly has its benefits and the City would receive payment for the land. Prr,redon Protecting our communitv,s �eaft6 bvv provibing solid waste anb sewer collection services. RecvdedPaper costamesasanitarl�(blstrlct.org May 29, 2003 At a special meeting on May 29, 2003, the Board voted to give the City one -year termination notice as required in the City /District Agreement. In order for both agencies to incorporate this matter into their respective budgets, the Board established June 30, 2004 as the day for officially terminating the Agreement. This letter constitutes the official notice. It is suggested the City designate a small committee to work with the District through the issues of separating services. Your participation would be greatly appreciated. From an overall standpoint, the Sanitary District Board considers this action to be necessary due to stricter sewer regulations and the evolution of District provided services. The Board and Staff wish to express their appreciation and goodwill to the City. There is a significant benefit to the public of agencies working closely together and the District intends to continue the relationship. Thank you for your consideration in this matter. Sincerely, Robin B. Harriers Manager /District Engineer (949) 631 -1731 office (714) 293 -2727 cell Attachment cc: Board Staff William J. Morris, Director of Public Services, CCM Pr „,red„n Protecting our communitv,s hea[tb �� provibing so[ib waste anb sewer co[[ection services. Recycled Paper costamesasanitarY bistrlct.0rg Page 2 Costa Mesa Sanitary District Institutional Issues May 29, 2003 Overview The Costa Mesa Sanitary District is an independent special district that provides trash collection to 21,000 residences and sewer service to a population of over 110,000 through a 326 -mile long sewer system. The District was formed in 1944 and has been successful in operating in an efficient, cost effective, manner throughout its history. Because the District remains focused on its two responsibilities — trash collection and sewer service — the District has been able to provide high quality service. The District is an industry leader in providing specialized resident - friendly recycling programs. Two examples are a free residential household hazardous waste collection program and a free used - syringe recycling program for the estimated 10% of the population that administers home injections. Two other highly successful programs are the telephone book recycling program for 30 schools that provides over $10,000 in awards, and the popular free large item collection. This is all in addition to the new standardized container program that has been well received by the community. The sewer system is in excellent condition due to a long- standing aggressive maintenance and rehabilitation program. Other components of a successful program are also in place: a current Sewer Master Plan, a set -aside fund for future sewer replacements, and an outreach program to assist property owners with maintenance of their sewer laterals. Additionally, three Staff members - the Manager, Assistant Manager, and the Attorney - sit on Steering Committees for the regional conformance to the State Water Quality Control Board's Waste Discharge Requirements. Although the District is very successful in providing excellent service through a dedicated Board and Staff, the following list of Institutional Issues identified during the 2003 strategic planning process are considered to limit the current and future capabilities of the District. L Current Office Location in City Hall Existing administrative office space is only 464 square feet for four staff members. Two of the staff members are sharing one office, and the third, the Assistant Manger, is in an office measuring eight feet by twelve feet. The Assistant Manager requires a second computer to monitor District field operations and bookcase area for District records and reference manuals resulting in very little desk space and a cramped environment. Institutional Issues May 29, 2003 Page 2 of 2 2. The District needs a dedicated meeting room to hold the monthly regular meetings, monthly special meetings, monthly agenda review meetings, the safety meetings with the field crews, meetings with other agencies, and meetings with the public. 3. The President, Board members, and the Manager, have insufficient space to meet with the Assistant Manager and staff to discuss District business. 4. There is no storage area or storage rooms for supplies. Items are being stored under desks. 5. There are no offices for the District's intern or future staff members. Staff will have to be expanded to include a monitoring and enforcement officer to insure the food service establishments are adhering to the grease control program requirements. II. District Assets 1. The District desires to invest its funds in a headquarters as a long -term asset and to lessen the chances of the State taking the District's cash assets to solve the State budget crisis. III. Identity Developers, contractors, engineers, and the public who inquire about District services in the areas of the City of Newport Beach and unincorporated Orange County served by the District are confused trying to find the District Administrative Office because of its location at the City Hall of Costa Mesa. The District is an independent special district and there is no signage or other identification. 2. There is confusion regarding the District's identity within City Hall of Costa Mesa and within the City itself. IV. Staff Member Job Titles and Compensation 1. The District desires to award job titles and compensation for its staff members in a manner different from the City. Under the City system, there are no job titles or commensurate compensation for Assistant Manager, Project Manager, or Administrative Assistant. V. Performance of District Responsibilities 1. The District may need two full time sewer cleaning crews in order to meet the State mandated prohibition of sewer spills. The District currently shares one of the crews with the City. The crew is responsible for cleaning storm drains. CONFIDENTIAL CMSD INSTITUTIONAL ORGANIZATION Key: Existing *** New * * New Responsibilities: - Personnel Management - New Contracts - Regulatory Compliance Safety Management *** New Contract/Services: - Accounting - Purchasing - Payroll & Benefits - MIS - Fleet Maintenance - Facility Maintenance - Graphics / Mailroom CONFIDENTIAL 05/23/2003 CMSD Board of Directors ------------ - - - - -- - - -I -- I General Counsel -------------------- I Manager /District Engineer ------------ - - - - -- - - -, -- I Treasurer ---------------------------------- - - - - -- - - -. -- I Assistant Manager -------------------- I District Clerk/Special ------------ - - - - -- ---------------------------------- - - - - -- - -- -- ----------------------------------- - - - - -• -- - -- Project Manager /Exec Sec -------------------- I - Field Crew Supervisor I I ** Receptionist/ I I I Permit Processing I I Permit Processing I I Call Center Administrator I I Specialist #1 1 I Specialist/Adm Asst I I -J Field Crew #1 1-1 I Ordinance Enforcement 1- I Webmaster I 1-1 Field Crew #2 1- Rotational Intern I - Stenographer I I - *** Field Crew #3 Key: Existing *** New * * New Responsibilities: - Personnel Management - New Contracts - Regulatory Compliance Safety Management *** New Contract/Services: - Accounting - Purchasing - Payroll & Benefits - MIS - Fleet Maintenance - Facility Maintenance - Graphics / Mailroom CONFIDENTIAL 05/23/2003 CONFIDENTIAL COSTA WES$ SoMTARTDISMM ... an Independent Specid D strict Memorandum To: Robin Hamers, Manager /District Engineer From: Thomas Fauth, Assistant Managery�` ti . Date: April 16, 2003 Subject: CMSD Institutional Issues — Phase I Implementation Plan REFERENCES: 1. 2 -18 -03 Manager Memo to Board & Staff, "Public Dissemination of Information." 2. 2 -1 -03 Strategic Planning Workshop 3. 9 -8 -94 Creative Management Solutions Final Report: "Implementation Status." BACKGROUND: Reference 3 documented analysis considering whether City administrative and field operations services might be directly provided by District employees, private contractors and /or vendors rather than using City staff. Reference 2 provided direction to District Staff to further pursue Institutional Issues for a potential District relocation and associated factors. Reference 1 provided two informational papers outlining the District's position on Institutional Issues and Franchising Trash Collection. This Memo builds on these references to establish a current baseline of options and their impacts where possible. DISCUSSION: The attached document, titled "Phase I Implementation Plan ", is intended to become a living document as the Plan details are developed. This Memo (including attachments) is intended for internal staff use only until formal CMSD Board of Directors authorization is given. The Paper addresses the following areas: CMSD Organization (staff and field) and Siting Contracted Services Operational Constraints Operational Assets Cost Estimates Attachment "Phase I Implementation Plan" I- CONFIDENTIAL PHASE I - IMPLEMENTATION PLAN The District is responsible for providing two primary services — 1) Residential Trash Collection and 2) District Wide Sewer System Ownership, Operations and Maintenance. This Paper addresses the District impacts and requirements to meet these responsibilities in a completely autonomous manner in a separate facility with District only personnel and contracted services. I. CMSD Organization (staff and field) and Siting a. Staffing — Organization Chart i. Manager /District Engineer - Contracted ii. Assistant Manager - Employee iii. District Clerk/Project Manager - Employee iv. Two Permit Processing Specialists - Employees v. Reception ist/CalI Center Administrator - Employee vi. General Counsel — Contracted vii. Treasurer - Contracted viii. Ordinance Enforcement Officer — Contracted ix. Stenography — Contracted x. Rotational Intern —Agreement b. New Responsibilities i. Manager /Asst Manager 1. Personnel Management (Position Descriptions, Steps, Grades, Hire, Relieve, Performance Evaluations, Promotions) 2. Services Agreements /Contracts Management a. Payroll & Benefits, CALPERS, Insurances b. Accounting — Receivable and Payable and Reporting Systems c. MIS (central server & firewall security), LAN, S/W, SCADA — Communications Center Alarm Reporting d. Fleet Maintenance (Vactor trucks, Pickups, Hoist truck, staff car) e. Facility Maintenance /Housekeeping f. Graphics, Mailroom, Reproduction 3. Regulatory Compliance (Fed, State, County, Local) 4. Training (CWEA, field crews, staff admin) 5. Safety Management (Field Crews, Evacuation, Emergencies) I `... s c. Field Crews i. District Employees or Agreement with City Of Costa Mesa d. Facility Siting i. Lease or Buy ii. Size: Square Footage based on: 1. District Manager's Office 2. Assistant Manager (2 desks, work table) 3. District Clerk (1 desk, work table) 4. Two Permit Processing Specialists (2 desks, 2 work tables) 5. Receptionist/Call Center /Intern (2 desks, 1 work table) 6. Storage Rooms /Audio - Visual /Copier 7. Director's Chambers /Offices (2 desks, 1 work table) 8. District Board Public Meeting Room 9. Two Conference Rooms (one large, one small), Tables, Chairs, teleconference 10. Library/File /Supplies Storage 11. Lunchroom /Breakroom (Table, Chairs, refrigerator, microwave, sink, coffee pot) 12. Yard Area and Hoist Garage — Contract or Relocate 1111. Contracted Services a. Ongoing Services and Contracts i. Residential Trash Collection — Costa Mesa Disposal contract ii. Recycling Services — CR Transfer contract iii. Sewer System Maintenance — Crews and emergency contractors iv. Customer Service — All aspects — Service v. SCADA telemetry & Reporting — Contract and Service vi. Permits Processing — Need Permits Plus SW — Service vii. Board Meetings — Packets — Service viii. Code (Ordinance) Enforcement Officer — Agreement ix. Newsletters — Service x. Special Projects — Service and Contracts A. Public Information — Public Outreach — Service xii. Budgeting — Service 1 I ` Y 1 , b. New Services and Contracts i. Payroll ii. Accounting iii. Purchasing iv. MIS v. Fleet Maintenance vi. Facility Maintenance /Housekeeping III. Operational Constraints a. Vehicle Lease vs Own i. Three vactor trucks ii. One Pickup truck iii. One Hoist truck iv. One Staff Car — vs Mileage Reimbursement b. Crews — size and number i. One Supervisor — contracted or employee ii. Two or three two -man crews — contracted or employee IV. Operational Assets a. Pump Repair Garage & Hoist i. Contract or Relocate ii. GR85 Generator iii. GR190 Generator iv. Barnes Pumps b. Pumps, manhole covers, tools, i. "Yard" storage area ii. Contract or Relocate c. Staff Office Computer Systems and SW (4), printers, Office furniture, SCADA computer systems (3), fax, printers V. , Cost Estimates (under study) k ALAN R. BURNS JOHN 7L HARPER" OF MAISE . =I A CUMTIN• MCHAEL MONTGOMERY 'A PROFESSIONAL CORPORATION HA"ER LAW OMCF.SOF HA"ER & BURNS ► , L r A L414rM L A87 M PAKINF KMW IN= WING PROFFSIMAY. CORPORADON 453 S GLASSELL STREET' ORANGE, CALIFORMA 92666 AMP Clr W I CAN R RNAR nNn (VU9) 674,MS (714) T71 -7728 FAX (714) 744 -3350 TO: President Schafer and Board of Directors FROM: District Counsel DATE: May 23, 2003 RE: District Options As a supplement to the excellent memo done by Assistant Manager Tom Fauth, the following are my comments on the legal issues that would be involved in a separation from the City. The District has a year to year lease for the present facilities within City Hall. Curiously it has a one year term that has never been renewed since the Lease was entered into on December 9, 1993. The Lease provides that the District is to pay for the telephone and utilities and is to pay for maintenance. We are required to surrender the space in good repair, with holes in the walls covered, etc. It appears that no formal notice of termination is necessary but it would be a good idea to provide such notice to make our actions consistent with the service contract termination. (Section 7.02 below.) The Agreement between the City and District for service was executed about the same time as the Lease Agreement and the two documents were meant to complement each other. 2.01 - Each year the City and District are to agree on the labor needed by District. 3.01 - The City and District are to agree on an annual basis what sum of money is to be paid for City services. 3.01 - Each year a "City / District budget" is to be adopted by each entity by resolution of each governing body. (I think we have not done this in the past.) 7.02 - The City/District service contract may be terminated concurrently with the Lease. 1 Costa Mesa Sanitary District District Options May 23, 2003 Page 2 8.01- The District owns the furniture, fixtures and the office equipment. 8.02 - The City owns all vehicles. 10.02 - There is a provision for one year's notice to terminate. 10.03 - There is a duty to cooperate when the agreement is terminated. The District also has an AB 939 agreement which does not appear to be affected by any actions with respect to changing the current arrangement. It provides that we cooperate with the City in having our contractor report on the diversion rates and generally monitor the contractor's actions in collecting trash. The Health and Safety Code provides specific authority for the District to: "acquire by purchase . _ . condemnation proceedings or otherwise, such real and personal property . , , within or without the limits of the District, as in the judgment of the Board are necessary or prepare to the exercise of its powers ... " Section 6514 "employ and pay necessary agents and assistants." Section 6517 "do any act necessary or proper to the complete exercise and effect of any of its powers, or for the purpose for which it is formed." Section 6522 Ql�j Land I Tce A,ithorit y Ones nistrict A city does have certain land use control over District operations. Government Code Section 53091 provides that each local agency shall comply with all building and zoning ordinance of the city. Building and zoning ordinances do not apply to facilities for wastewater treatment, but would apply to administrative buildings, warehouses, garages and corporate yards. Provisions for public facilities are also subject to review by the planning agency of a city to determine that the use is in conformance with the General Plan, (Government Code Sections 65401, 65402) These are not difficult issues but we will need to discuss with the City staff what would be the appropriate zoning for our use to see if a general industrial zone will be acceptable (if we have a corporate yard and vehicles) or if an office zone is more appropriate. The City may have a "public facilities zone" _ This will depend on the type of facility that we occupy and the specifics of the zoning code. f�. Costa Mesa Sanitary District District Options May 23, 2003 Page 3 If we were to build our own facility we would probably be required to comply with the same public bidding laws that apply to our sewer jobs, (Public Contract Code Section 20801) (The definition of "project" refers to "sewer facilities. ") I have previously advised you of the very complicated employment laws that must be observed if we are to administer our own personnel system. That system would probably include whether we adopt a "merit" or "classified" system (Health and Safety Code Section 6497), whether employees have vested rights to their job so that they cannot be removed but for cause (as city employees have), and a whole range of benefits including vacations, pensions, sick leave, administrative leave, FLSA and overtime laws. The laws and policies that would need to be addressed probably include the following: vested rights/discipline, probation, work periods, dress codes, classification systems of employees and their job duties (which are then matched against similar jobs and pay for comparison purposes), evaluation and advancement systems (including automatic ranges for advancement to "top step "), different types of leave (family, sick leave, pregnancy, military, jury duty, etc.), vacation, holidays, reimbursement programs, grievances, disciplinary procedures, layoff policies, workers compensation and insurance, health insurance (which will need to be arranged for the group), deferred compensation, pension rights, sexual harassment, drug and alcohol abuse, use of District property including telephone, fax and Internet, equal employment and discrimination. (Some of the foregoing laws might not apply if we meet the definition of "small employer.") In a hypothetical case involving an employee with a substance abuse problem the District would be confronted with disciplinary investigation, disciplinary proceedings and appeals, ADA, FEHA, and workers compensation issues, just to name a few. One such problem can involve three attorneys paid for at District cost (to prosecute the disciplinary case, to advise the hearing body and a separate attorney for the workers compensation case). We definitely are benefited by having a knowledgeable Treasurer who not only administers a large department that provides full service payroll and related functions but also is up to date with the investment policies and the laws that govern public money investment, most particularly as those laws have been amended since the 1994 Orange County banlauptcy. Of course having the City and District being the landlord and tenant puts our current Treasurer in a difficult position as it relates to lease terms and costs negotiations. The District would need its own purchasing officer who would be responsible for purchase orders and buying everything from pencils to vehicles and manholes, Costa Mesa Sanitary District District Options May 23, 2003 Page 4 These are a few of the legal issues that will need to be addressed and is meant as a simple checklist and issue- spotter to assist you in making decisions, a - Alan R. Burns District Counsel Cc: District Manager / Engineer Assistant Manager District Clerk