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Minutes - Board - 2012-04-16Item VII. A. 2. • • COSTA MESA SANITARY DISTRICT MINUTES OF BOARD OF DIRECTORS REGULAR MEETING APRIL 16, 2012 CALL TO ORDER The Board of Directors of the Costa Mesa Sanitary District met in regular session on April 16, 2012 at 5:32 p.m. at 628 W. 19th Street, Costa Mesa. PLEDGE OF President . Ooten . led the Pledge of ALLEGIANCE Allegiance. INVOCATION Director Scheafer led the Invocation ROLL CALL DIRECTORS PRESENT: Robert Ooten, James Ferryman, Jim Fitzpatrick, Art Perry, Mike Scheafer DIRECTORS ABSENT: None STAFF PRESENT: Scott Carroll, General Manager; Anna Sanchez, Administrative Service Manager; Robin B. Harriers, District Engineer; Alan Burns, District Counsel; Jacque Rogers, Assistant.to the Treasurer; Teresa Gonzalez, Accounting Manager, Code Enforcement Officer Isidro Gallardo OTHERS PRESENT Dean Ruffridge, CR &R; Rick Simonson, HF &H Consultants, John Farnkopf, HF &H Consultants CEREMONIAL MATTERS AND PRESENTATIONS CITATION OF MERIT: • Costa Mesa Police Department, Corporal Julian Trevino COSTA MESA SANITARY DISTRICT PAGE 2 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 • CMSD Code Enforcement Officer, Isidro Gallardo Corporal Julian Trevino was unable to attend at this time; however, President Ooten commended CMSD Code Enforcement Officer Gallardo for working in cooperation with the Costa Mesa Police Department on the successful anti- scavenging program. President Ooten and Members of the Board presented a Citation of Merit to Mr. Gallardo for his efforts in identifying the locations and instances of scavenging activities within the City. AWARDS FOR ENVIRONMENTAL EXCELLENCE: Waldorf School of Orange County — Class of 2016 President Ooten and Board Members presented an Award for Environmental Excellence to the Waldorf School of Orange County Class of 2016 for their efforts and involvement in promoting and tutoring younger students on the importance of recycling. It was noted the student are very involved in collecting recycled materials and educating their peers for increased recycling efforts. Director Fitzpatrick commented positively on the school's curriculum and students and noted the great partnership with CMSD in recycling efforts. • Friends of the Costa Mesa Libraries President Ooten and Members of the Board presented an Award of Environmental Excellence to the Friends of the Costa Mesa Libraries. President Ooten accepted the award on their behalf and addressed the collection and distribution of books to organizations such as jails, Goodwill and libraries. He addressed the organization's budget and reported that approximately 200 tons of materials including books, tapes and DVD's have been collected, distributed and recycled by the Friends. ANNOUNCEMENT OF LATE COMMUNICATIONS District Counsel Alan Burns addressed a late transmittal including three policies should have been received and be part of the agenda under item XIV. (B). CONSENT CALENDAR REPORTS MINUTE APPROVAL Special Board of Directors Meeting The minutes of the Special Board of Discussing Strategic Plan — Directors Meeting Discussing Strategic Plan March 7, 2012 of March 7, 2012, were approved as • presented. iJ • COSTA MESA SANITARY DISTRICT MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 Sewer System Committee Meeting — March 13, 2012 Recycling Committee Meeting — March 19, 2012 Special Board of Directors Meeting — Administrative Hearing for FOG Violation — March 21, 2012 Regular Board of Directors Meeting — March 22, 2012 FINANCIAL REPORTS Occupancy Report and payment to Costa Mesa Disposal — April 2012 Contract Payment to CR Transfer for Recycling Services & Disposal for March 2012 Adoption of Warrant Resolution No. CMSD 2012 -10 Ratifying Payment for the Month of March 2012 in the amount of $627,052.75 PAGE 3 The minutes of the Sewer System Committee Meeting of March 13, 2012, were approved as presented. The minutes of the Recycling Committee Meeting of March 19, 2012, were approved as presented. The minutes of the Special Board of Directors Meeting — Administrative Hearing of FOG Violation of March 21, 2012, were approved as presented. The minutes of the Regular Board of Directors Meeting of March 22, 2012, were approved as presented. The Occupancy Report and payment to Costa Mesa Disposal for April 2012, was approved as submitted. This item was pulled from the Consent Calendar for a separate vote. Warrant Resolution No. CMSD 2012 -10 Ratifying Payment for the Month of March 2012 in the amount of $627,052.75 was adopted as submitted and payment was ratified. Directors' Compensation and Directors' . Compensation and Reimbursement of Expenses for the Reimbursement of Expenses for the Month Month of March 2012 of March 2012, as listed in the Agenda Report dated April 16, 2012, were approved and ratified. Budget Transfer for Sewer Maintenance The Budget Transfer for Sewer Maintenance was received and filed. Budget Transfer for Gladwell The Budget Transfer for Gladwell COSTA MESA SANITARY DISTRICT PAGE 4 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 • Governmental Services, Inc. Governmental Services, Inc. was received and filed. Budget Transfer for Clerk & Temporary The Budget Transfer for Clerk and Staff Services Temporary Staff Services was received and filed. Quarterly Budget Report Investment Report as of March 31, 2012 END OF CONSENT CALENDAR The Quarterly Budget Report was received and filed. The Investment Report as of March 31, 2012; was approved as submitted. Director Ferryman moved for approval of the Consent Calendar except for items pulled for a separate vote VII. B. 6. Director Scheafer seconded the motion. The motion carried 5 -0. Director Fitzpatrick reported several trash contracts were made available to him and stated reviewing them was very insightful. He requested conducting an in -depth review of the contracts.at the May Board meeting and reported CM Disposal does not currently • have a business license. He requested the proper registration of the entity in Costa Mesa. Director Fitzpatrick moved to ratify Contract Payment to CR Transfer for Recycling Services & Disposal for March 2012 as submitted. Director Scheafer seconded the motion. The motion carried 5 -0. PUBLIC COMMENTS President Ooten opened the Public Comments section of the meeting and invited those interested in addressing the Board to do so at this time. There was no response and President Ooten closed the Public Comments section of the meeting. GENERAL MANAGER'S REPORTS DRAFT SEWER RATE STUDY General Manager Carroll introduced the item and deferred to Accounting Manager Gonzalez for a report. Accounting Manager Gonzalez referenced a draft technical memo distributed to the Board, introduced the consultants hired to assist the District with the Sewer Rate Study and deferred to them for a report. • COSTA.MESA SANITARY DISTRICT PAGE 5 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 John Farnkopf, HF &H Consultants, provided a PowerPoint presentation focusing on cost of services analysis. Mr.. Farnkopf reported on the cost of service allocations and current rates for the various classes of service. A list of rates by the largest customers was distributed to provide an idea how the rate changes will affect major customers. In addition, a comparison of residential rates with other members of OCSD was distributed. General Manager Carroll presented staff recommendations to direct staff to continue studying the analysis using the rate as a base rate and returning to the Board with a five -year plan in next budget cycle. Discussion followed regarding accepting the study and directing staff to proceed with further studying, the sewer rates and return to the Board with a five (5) year plan for adjusting rates. It continued regarding the need to provide clear information, categorization, the possibility of establishing exemption categories and the need to be fair and be able to justify increases. It was noted the goal is to complete the task by mid -year and educate the public to provide end results. Director Fitzpatrick requested a timeline and General Manager Carroll indicated he will provide one. is REVIEW CMSD'S PRELIMINARY FY 2012 -13 OPERATING AND CAPITAL IMPROVEMENT BUDGET General Manager Carroll presented details of the preliminary FY 2012 -13 operating and capital improvement budget and commended staff for their help, especially Accounting Manager Gonzalez. He addressed revenues including comparisons between 2011 -12 and 2012 -13. Mr. Carroll requested direction from the Board on various items within the budget. Regarding the three new positions, the Board expressed a desire to leave it up to the General Manager to implement. The Board also agreed with the proposed tuition reimbursement and reward ideas plans as well as the proposed cafeteria plan. Regarding the vactor truck, the Board directed staff to proceed with the purchase of a new truck versus a used one. The Board approved the proposed succession planning strategies but noted it will be a work -in- progress and that further consideration will be needed going forward. The Board also approved the proposed increase in liability insurance. 0 Regarding the sewer rate study, Mr. Carroll reported money is in the budget to have COSTA MESA SANITARY DISTRICT PAGE 6 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 • HF &F help with the Proposition 218 tasks and staff will return at a future date with a five , (5) year plan. Discussion followed regarding solid waste rates. Mr. Carroll noted there is a very healthy reserve which could be used to subsidize lowering the rates. He stressed the CR &R proposal was for informational purposes only. Mr. Carroll reported that CR &R can request an increase but the Board is under no obligation to approve it. He stated the Board can stabilize the rate for the next ten (1,0) years, if it so desires. He added that CR &R is proposing no rate increases for the next two (2) years. Discussion followed regarding whether the CR &R rate is conditioned on the anaerobic digester proposal. Dean Ruffridge, CR &R Representative, stated he would need to confirm that and return with an answer to the Board. Director Fitzpatrick expressed concerns regarding not having certainty that the rates will not be increased. He stated the need for budgetary certainty to the process. He felt the District should be going out for competitive bid and have the market lower the rates. • General Manager Carroll requested direction from the Board regarding the desired rate noting the Board has an option to lower the rate. It was noted the more information that can be obtained, the better. Discussion followed regarding CR &R looking for a commitment and feedback regarding the anaerobic digester. Mr. Ruffridge stated CR &R does not need a commitment from CMSD in order to proceed with the anaerobic digester and that the company was only looking for certainty. It was noted the CR &R sunset discussion will occur at the Board meeting in May. General Manager Carroll explained the Board has an opportunity to lower the rate by using the reserve to subsidize. Director Scheafer indicated his preference would be to lower the rate and felt the rate should not be established until information is received from CR &R regarding their rates. Mr. Carroll stated the rates will be $19.95. Director Perry suggested a rate between $19.30 and $18.00. He noted that many cities COSTA MESA SANITARY DISTRICT PAGE_7 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 . are going to increase their rates. Ensuing discussion pertained to the addition of a 5% franchise fee. President Ooten indicated he was not in favor of decreasing the rates to $18.00. He acknowledged the healthy reserve and felt a study should be budgeted for next year to be able to properly compare rates.. He reported residential rates in Newport Beach are funded out of their general reserves. He felt it is a complex issue and that the Board needs help to understand how to make the appropriate comparisons. Discussion followed regarding the rates at Newport Coast. Director Ferryman moved to direct staff to review the possibility of setting the rate at $19.00. Director Perry seconded the motion. Director Fitzpatrick indicated he would like to revise the operations code to not have a trash exemption in the code and seek competitive bidding to reduce the rates and keep the rate at $19.95 until justification can be obtained for possible changes. He suggested asking CR &R to justify their rate to CMSD and possibly propose a rate reduction. Discussion followed regarding whether that is within the scope of the current contract • with CR &R. Director Fitzpatrick indicated he would like' to decrease the rate and ask CR &R to commit to decrease their rates to CMSD. RECESS AND RECONVENE President Ooten called for a recess at 8:25 p.m. The assembly reconvened at 8:35 p.m. with all members present. PROPOSAL FOR PRELIMINARY ENGINEERING SERVICES FOR PROJECT #101 - WEST SIDE PUMPING STATIONS ABANDONMENT General Manager Carroll presented details of the report and asked for Board approval. Director Perry moved to accept the proposal for preliminary engineering services for Project #101, West Side Pumping Stations Abandonment. Director Ferryman seconded the motion. The motion carried 5 -0. AUDIO RECORDING DESTRUCTION POLICY General Manager Carroll presented the report addressing the current policy and noting • it is consistent with the Attorney General's opinion. He added that audio tapes are used COSTA MESA SANITARY DISTRICT PAGE 8 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 ias a tool and sought direction regarding alternative actions to amend the existing policy. Discussion followed regarding whether or not to amend the policy. District Counsel Burns explained the official record of Board meetings are the approved minutes. Director Fitzpatrick moved to direct staff to amend the existing policy to no longer destroy audio recordings of Board meetings. President Ooten. seconded the motion. The motion carried 3 -2 with Directors Perry and Ferryman, opposed. ENGINEER'S REPORTS PROJECT STATUS REPORT General Manager Carroll announced the Operations meeting will be held on May 15, 2012 from 9:30 a.m. to noon, at the discretion of the Board. NEWPORT BANNING RANCH DEVELOPMENT - OPTIONS FOR SEWER SERVICE PROVIDER District Engineer Hamers reported the City of Newport Beach has annexed other areas and have a deal with CR &R. He addressed areas served by Irvine Ranch Water District • and reported it has created a one (1) foot strip in the west boundary of Costa Mesa and the Banning Ranch that no one can legally leap over to claim jurisdiction. For CMSD to take over sewer collection there would need to be an agreement with the City than by asserting control. CMSD could be the sewer provider noting the sewer for the Banning Ranch area is small and to be considered, CMSD would need to enter into discussions with the City. Director Ferryman felt CMSD should extend a helping hand. Mr. Carroll reported speaking with Costa Mesa City Manager Dave Kiff who is aware of CMSD's interest. Discussion followed regarding the possibility of LAFCO requiring them to use CMSD, the possibility of proposing sewer service since Newport Beach has a track record of outsourcing and whether Newport Beach's residents pay into their General Fund. Mr. Hamers indicated they pay some but stated that when areas of the County were annexed, they did not want to provide services so they were amenable to leave the existing sewer and trash service with CMSD because. it was the existing provider. However, residents wanted the city to provide trash services because they provided lower rates. He added that residents pay a property tax increment but not additional environmental fees. • COSTA MESA SANITARY DISTRICT PAGE 9 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 • General Manager Carroll stated the Newport Beach City Council will consider certification of the Environmental Impact Report (EIR) but it will need to go before the Coastal Commission. The city is aware of that CMSD is available for discussion. President Ooten felt CMSD should try to understand the positives and negatives associated with providing service to Banning Ranch. Director Fitzpatrick suggested letting the city know that CMSD is considering studying the issue. TREASURER'S REPORTS Assistant to the Treasurer, Jacque Rogers, reported no Treasurer's Report at this time. ATTORNEY'S REPORT RESOLUTION NO. 2012 -812 DISSOLVING THE RECYCLING AND SEWER SYSTEM COMMITTEES AND COMBINING SAID COMMITTEES TO BECOME THE OPERATIONS COMMITTEE Director Perry move to adopt Resolution No. 2012 -812 dissolving the Recycling and Sewer System Committees and combining said committees to become the Operations Committee. Director Ferryman seconded the motion. • Director Fitzpatrick felt it is the Board's intention to remove him as Chair of the Recycling Committee Director Fitzpatrick made a substitute motion to remove him as chair of the Recycling Committee and maintain two separate committees. He addressed CIP projects and the need for dedicated time. He felt that a prolonged meeting in the middle of the day would not be as productive. The substitute motion failed for lack of a second. Director Scheafer reported it is easier for him to attend one prolonged meeting that two separate meetings. He expressed his appreciation to Director Fitzpatrick for his accomplishments in the Recycling Committee and stated he would support ad hoc committees as needed. The motion carried 4 -1 with Director Fitzpatrick, opposed. RESOLUTION NO. 2012 -813 REGARDING THE USE OF PERSONAL ELECTRONIC DEVICES DURING BOARD MEETINGS District Counsel Burns reported this item is being presented at the request of Director COSTA MESA SANITARY DISTRICT PAGE 10 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 Scheafer and noted it discourages the use of personal electronic devices during Board meetings except in an emergency. He added it may present issues with the Brown Act and may be perceived as receiving evidence or as not paying attention to the proceedings. Director Perry moved to adopt Resolution No. 2012 -813 regarding the use of personal electronic devices during Board meetings. Director Scheafer seconded the motion. Discussion followed regarding policies from other cities regarding the matter, promoting the use of technology in one instance and discouraging it in others. Director Fitzpatrick expressed concerns that one Member of the Board is not in compliance for his failure to use the assigned Ipad. Director Fitzpatrick provided a substitute motion to receive and file the item. President Ooten seconded the substitute motion. The motion failed 2 -3 with Directors Scheafer, Perry and Ferryman, opposed. District Counsel Burns explained the appropriate actions. The motion carried 4 -1 with Director Fitzpatrick, opposed. • LOCAL MEETINGS ORANGE COUNTY SANITATION DISTRICT (OCSD) Director Ferryman reported there was no meeting this month but stated actions taken at last month's meeting. SANTA ANA RIVER FLOOD PROTECTION AGENCY (SARFPA) Director Ferryman reported they are in arbitration and have hired a high - powered attorney and is at capacity. Should they prevail, they are looking at $100 million and may hire other counsel to increase efforts. INDEPENDENT SPECIAL DISTRICTS OF ORANGE COUNTY (ISDOC) President Ooten reported there was a quarterly meeting and a presentation was made by Assemblyman Norm regarding cessation of redevelopment. He added there was also a presentation by Board Supervisor Warlock. Director Scheafer indicated the next meeting will be on May 31, 2012, at 11:30 a.m. • COSTA MESA SANITARY DISTRICT PAGE 11 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 0 CALIFORNIA SPECIAL DISTRICTS ASSOCIATION (CSDA) No report. CALIFORNIA ASSOCIATION OF SANITATION AGENCIES (CASA) No report. OTHER MEETINGS QUALIFYING FOR REIMBURSEMENT UNDER CMSD ORDINANCE NO. 55, OPERATIONS CODE SECTION 3.01.030 Director Perry reported attending the WACO meeting and reported that LAFCO raised its rates by 5% for the next two years. OLD BUSINESS None. NEW BUSINESS DECLARATION OF QUALIFICATIONS TO VOTE FORM - DESIGNATING A BOARD MEMBER TO VOTE ON BEHALF OF CMSD FOR OC LAFCO ELECTIONS General Manager Carroll addressed a letter from LAFCO regarding upcoming elections and noted the need to designate a Board Member to vote on behalf of CMSD. Director Ferryman moved to designate President Ooten. Director Perry seconded the motion. The motion carried 5 -0. Director Perry moved to designate Director Ferryman as an alternate. Director Scheafer seconded the motion. The motion carried 5 -0. SUBMIT PUBLIC RECORDS ACT REQUEST TO THE CITY OF COSTA MESA REGARDING FORMER CITY ATTORNEY KIM BARLOW'S WRITTEN OPINIONS REGARDING COMPATIBILITY /INCOMPATIBILITY OF OFFICE Director Ferryman indicated he made this request. Director Fitzpatrick stated he is not aware of any such memo. Director Ferryman stated its existence is common knowledge at City Hall. Director Fitzpatrick indicated if there were such a document, he would have received it and felt it may be privileged and confidential. • COSTA MESA SANITARY DISTRICT PAGE 12 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 Director Perry moved to direct District Counsel to draft a letter to the City of Costa Mesa regarding former City Attorney Kim Barlow's written opinions regarding compatibility /incompatibility of office. Director Ferryman seconded the motion. Discussion followed regarding whether or not the document exists. The motion carried 4 -1 with Director Fitzpatrick, opposed. Director Fitzpatrick moved to direct staff to review City of Costa Mesa City Council agendas during the applicable time period. President Ooten seconded the motion. The motion failed 2 -3 with Directors Scheafer, Perry and Ferryman, opposed. OBTAIN LEGAL OPINION FOR DISCLOSING ATTORNEY- CLIENT PRIVILEGED & CONFIDENTIAL DOCUMENTS District Counsel Burns presented a memo regarding obtaining outside opinion for the aforementioned item. Director Fitzpatrick felt there is no need for outside opinion and indicated he could not trust someone who would disclose attorney - client privileged and confidential documents. He expressed concern that there is a Director who doesn't care what the Board has to say. The issue died for lack of a motion. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS Director Fitzpatrick expressed concern that the Board has a policy for paperless agenda and that one Member does not comply. He requested that staff reconsider the decision to adopt the policy at an upcoming agenda and look at awards it has applied for regarding the issue. Staff will bring the item at the May meeting of the Board. Director Fitzpatrick expressed concern with the way Board Members dress and felt it to be unprofessional. He requested that staff return with a dress policy for the Board to consider at its meeting in May. Director Ferryman requested placing on the next agenda, revised procedures on how items can be placed on agendas. is 0 • COSTA MESA SANITARY DISTRICT PAGE 13 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING HELD APRIL 16, 2012 ADJOURNMENT President Ooten adjourned the meeting at 9:42 p.m. Secretary President