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05 - 2013-02-27 Minutes Board of Directors ITEM NO. 05 C OSTA M ESA S ANITARY D ISTRICT M INUTES OF B OARD OF D IRECTORS R EGULAR M EETING F EBRUARY 27, 2013 ______________________________________________________________________ I. C ALL TO O RDE R The Board of Directors of the Costa Mesa Sanitary District met in reg ula r session on February 27, 2013 at 5:3 0 p.m. at 628 W. 19 th Street, Costa Mesa. II. P LEDGE OF A LLEGIANCE President Ferryman led the Pledge of Allegiance. III. I NVOCATION Director Scheafer led the Invocation. IV. R OLL C ALL D IRECTORS P RESENT : James Ferryman, Mike Scheafer , Robert Ooten, Art Perry , Arlene Schafer D IRECTORS A BSENT : None S TAFF P RESENT : Scott Carroll, General Manager; Anna Sanchez, Administrative Service Manager; Noelani Middenway, Deputy Clerk of the District; Robin B. Hamers, Distri ct Engineer; Ala n Burns, District Counsel; Marc Davis , District Treasurer; Javier Ochiqui, Management Analyst O THERS P RESENT : Jim Mosher, Resident; Debbie Morris, HF&H Consultants, Lai th Ezzet, HF&H Consultants ; Dean Ruffridge, CR&R V. C EREMONIAL M ATTERS AND P RESENTATIONS – Board of Director Oath of Office The Oath of Office was administered to new Board Director Arlene Schafer. VI. A NNOUNCEMENT OF L ATE C OMMUNICATIONS VII. P UBLIC C OMMENTS Regarding the Consent Calendar Item 10, the TRC contract, Jim Mosher referenced rules regarding public funds noting that local government bodies may not grant extra compensation or allowance to a public officer, employee or contractor after a service C OSTA M ESA S ANITARY D ISTRICT P AGE 2 M IN UTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD F EBRUARY 27, 2013 ________________________________________________________________ has been rendered or the contract entered into. He added that the public must know, in advance what was agreed to be done. It was noted that Mr. Mosher provided written comments regarding Items 1, 2 and 3 and that corrections will be completed after adoption by the Board. General Manager Scott Carroll reported that the corrections suggested by Mr. Mosher were valid. VIII. C ONSENT C ALENDAR 1. Board of Directors Minutes of Special Meeting Minutes of January 10, 2013 The Board of Directors Special Meeting Minutes of January 10, 2013, was approved as presented. 2. Board of Directors Special Meeting Minutes of January 14, 2013 The Board of Directors Special Meeting Minutes of January 14, 2013, was approved as presented. 3. Operations Committee Minutes of January 15, 2013 The Operations Committee Minutes of January 15, 2 013, was approved as presented. 4. Board of Directors Regular Meeting Minutes of January 2 4, 2013 The Board of Directors Regular Meeting Minutes of January 2 4, 2013, was approved as presented. 5. Occupancy report and payment to Costa Mesa Disposal The Board of Directors approved the occupancy report and payment to Costa Mesa Disposal for the month of January 2013. 6. Contract Payment to CR Transfer for Recycling and Disposal Services The Board of Directors approved payment to CR Transfer for recy cling and disposal services for the month of January 2013. 7. Adoption of a Resolution Approving District Warrant Registers The Board of Directors adopted a resolution approving District warrants for the Month of January 2013 in the amount of $671,187.15. 8. Directors' Compensation and Reimbursement of Expenses The Board of Directors approved Directors' compensation and reimbursement of expenses for the month of January 2013. 9. Investment Report as of January 31, 2013 The Board of Directors receiv ed and filed the report. C OSTA M ESA S ANITARY D ISTRICT P AGE 3 M IN UTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD F EBRUARY 27, 2013 ________________________________________________________________ 10. Fifth Amendment to Agreement with Technology Resource Center The Board of Directors approved the Fifth Amendment to Agreement. 11. Budget Adjustment – Fairview Trunk The Board of Directors approved the budget adjustment of $5,000. 12. Resolution No. 2012 -829 Ordering that Ordinance No. 96 has been Published The Board of Directors adopted Resolution No. 2012 -829. 13. Claim No. 13 -001 -Weisenberger Item pulled for separate discussion and consideration. E ND OF C ONSE NT C ALENDAR Director Ooten moved for approval of the Consent Calendar as amended and except for the item pulled for a separate vote (Item No. 13 ). Director Schafer seconded the motion. District Counsel Alan Burns clarified Item 10 regarding the TRC co ntract and reported that the amount is within the General Manager's contracting authority. The motion carried 5 -0. In response to an inquiry from Director Scheafer regarding Claim No. 13 -001 -Weisenberger, Administrative Service Manager Anna Sanchez rep orted that the claim was for alleged damage to a vehicle that had driven over the concrete encasement to one of the CMSD manholes. The Costa Mesa Police Department as well as the Public Works Department responded to the scene, but CMSD was never notified of any occurrence. Staff reviewed the status of the street and maintenance records to determine if the District had been on notice to determine whether there was a hazardous condition at the site. The District had not been on notice until it was notified by the claimant thirty days after the incident had occurred. Therefore, staff is recommending rejection of the claim. She reported that the dollar amount falls under the threshold of the premium and SDRMA recommended that the District can take action at this time. She stated that the claimant indicated that he may pursue further options. Director Scheafer noted that since this was a single -car accident, the claimant is technically at fault. He expressed concerns that crews working in the field may w ant to review situations that may cause potential problems in the future and communicate back to the Board. Mr. Burns will provide a memo to the Board and will be providing information to the attorney -client. C OSTA M ESA S ANITARY D ISTRICT P AGE 4 M IN UTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD F EBRUARY 27, 2013 ________________________________________________________________ Mr. Burns suggested having a Closed Sess ion on the matter. Director Scheafer indicated the need to be proactive with any potential problems. Ms. Sanchez added that when the City responded with their Public Works Department, they made the repairs. She added that the claimant submitted a cl aim to the City. Director Schafer moved to continue Consent Calendar Item VIII. 13. Director Perry seconded the motion. The motion carried 5 -0. IX. P UBLIC H EARINGS - None X. G ENERAL M ANAGER /D ISTRICT C LERK R EPORTS 14. CalPERS Annual Valuation Report as of June 30, 2011 Recommendation: Direct staff to implement one of the recommendations pertaining to CMSD's unfunded liability. Mr. Carroll deferred to District Treasurer Marc Davis for a report. Mr. Davis noted this informational item relates to the transference of the valuation account as related to the District's portion of the pool retirement plan. He referenced a new accounting standard that will be effective with fiscal year ended June 30, 2015 and addressed previous discussions by the Board regarding its unfunded liability. He reported this is the first report from CalPERS that identifies the District’s unfunded liability as of June 30, 2011, which is approximately $201,000. He presented options for the Board to consider in addressing the District's unfunded liability. Mr. Davis presented details of the standards and reported that the District will be required to report its unfunded liabilities on its financial statements in the future and addressed details of the related options, includ ed funding the unfunded liability in full, set ting aside funds to make that payment in the future or waiting to see what occurs. He presented recommendations for the latter option. Discussion followed regarding previous direction to staff to begin a re serve account, CMSD's separate retirement and other post -employment benefits plans and the establishment of an irrevocable trust. It was noted that the post -employment benefits trust does not play into the retirement account at all. Mr. Davis reported that the $201,000 is a reflection of previous retirees and current employees and their projections for retirement. In a few years, CMSD will be required to report the unfunded liabilities as a liability within its financial statements and that CMSD is und er no obligation to pre -fund it. C OSTA M ESA S ANITARY D ISTRICT P AGE 5 M IN UTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD F EBRUARY 27, 2013 ________________________________________________________________ Director Scheafer moved to direct staff to wait and see what occurs with CalPERS (Option 3) and report back to the Board in a future. Director Perry seconded the motion. The motion carried 5 -0. 15. CR&R Environmenta l Services Performance Audit Recommendation: That the Board of Directors receive and file the report regarding the General Manager awarding a contract. General Manager Carroll presented the report noting it requires the appropriation of $21,000 f rom the Solid Waste Reserve Fund to fund an audit for CR&R Environmental Services. Staff has received three proposals, evaluated each and determined the best value i s Michael Balliet Consultants. Mr. Carroll reported that he will be executing the contract and t hat the funds will be reimbursed by CR&R under the contract terms with CR&R. Debbie Morris, Costa Mesa resident , representing HF&H Consultants, addressed their proposal for the audit and referenced a sewer rate study conducted by her firm for CMSD thus proving the quality of their work. She reported that the firm only works for public jurisdictions in order to avoid any perceived or actual conflicts of interest. She referred to Lai th Ezzet , HF&H Senior Director . Mr. Ezzet distributed printed informa tion to the Board and addressed the results of CMSD staff's evaluation of the proposal . Mr. Ezzet presented HF&H's qualifications, pr oposed versus actual costs and scores given based on costs . He felt that there was no proportionality given to the points and added their auditor is a Certified Public Accountant (CPA) that specializes in performing solid waste audits whereas the competitor is not. He stressed the importance of getting the job done right versus ge tting it done at a lower cost and added that if CMSD does not require a CPA, HF&H Consultants can do the job for $20,000 with non -certified personnel and still do it right. President Ferryman stated that the Board is relying on the General Manager's review and recommendation. Mr. Carroll reporte d that any of the three firms are well qualified to perform the work and that the decision came down to cost. Members of the Board indicated the importance of supporting the General Manager on his decision. Director Ooten moved to accept the General Manager's recommendation to appropriate $21,000 for the CR&R Environmental Services audit. Director Schafer seconded the motion. The motion carried 5 -0. 16. Schedule a Special Meeting for Strategic Plan Review – Oral Report Recommendation: That t he Board of Directors schedule a special meeting in the first week of March 2013. C OSTA M ESA S ANITARY D ISTRICT P AGE 6 M IN UTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD F EBRUARY 27, 2013 ________________________________________________________________ Mr. Carroll requested that the Board schedule a special meeting to discuss the progress made on achieving the Strategic Plan goals . Members of the Board concurred to sch edule a special meeting on March 12, 2013 at 9:30 a.m. 17. Schedule a Special Meeting for Zero Waste Plan – Oral Report Recommendation: That the Board of Directors schedule a special meeting in March or April 2013. Mr. Carroll requested that the Board schedule a special meeting to discuss the Zero Waste Plan. Members of the Board concurred to schedule a special meeting on April 10, 2013 at 9:30 a.m. 18. Adopt Ordinance No. 97 Pertaining to Records and Resolution No. 2013 -827 - Update to Records R etention Schedule Recommendation: That the Board of Directors adopt Ordinance No. 97 pertaining to Records; adopt Resolution No. 2013 -827 and the updated Records Retention Schedules. Mr. Carroll presented the report noting that the proposed ordin ance and resolution will update the agency's records retention program. Director Ooten moved to adopt Ordinance No. 97. Director Scheafer seconded the motion. Mr. Carroll noted a member of the public would like to comment on this item. Jim Mosher re quested clarification regarding those authorized to change the retention policy noting that it should not be delegated, but rather is a responsibility of the Board. He questioned the policy of retaining certain records for less than thirty days. Distri ct Counsel Burns affirmed that the ordinance and resolutions establish that the Board shall set the timelines for records retention. In response to an inquiry from the Board, Mr. Carroll reported that the timeline for retaining records depends on the re tention schedule adopted by the Board and varies, depending on the type of record. Director Scheafer moved adoption of 2013 -827 and the updated Records Retention Schedules. Director Schafer seconded the motion. The motion carried 5 -0. C OSTA M ESA S ANITARY D ISTRICT P AGE 7 M IN UTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD F EBRUARY 27, 2013 ________________________________________________________________ 19. Telephon e Book Recycling Program Recommendation: That the Board of Directors approves awarding a minimum of $300 to schools that have demonstrated a good faith effort to promoting the District’s Telephone Book Recycling Program. Mr. Carroll presented th e report noting previous direction by the Board that if a school has demonstrated good faith effort s to promote the District's Telephone Book Recycling Program, it would be awarded a minimum of $300 regardless of the number of books collected. He reported that the item was reviewed by the Operations Committee and recommended that the Board approve the item accordingly. He added that twelve schools demonstrated good -faith efforts that will total $3,600. Discussion followed regarding the schools that mad e no efforts to promote the program. Director Ooten moved to approve awarding a minimum of $300 to schools that have demonstrated a good faith effort to promoting the District’s Telephone Book Recycling Program. Director Perry seconded the motion. The motion carried 5 -0. 20. Rewarding Ideas Program Recommendation: That the Board of Directors approves rewarding District employee Noelani Middenway $1,000.00 for her suggestion to save over $13,000 annually on printing costs. Mr. Carroll report ed that the program was approved by the Board during the last budget review process to encourage staff to develop innovative and creative ideas that would save money or demonstrate improved efficiencies. He announced that Noelani Middenway submitted a pro posal that would save the District over $13,000 in annual printing costs by no longer printing staff reports for preparing agenda packets . Instead, staff will send to reports electronically to the D eputy C lerk’s office where the agenda packet will be prep ared and reviewed electronically . Director Ooten moved to approve rewarding District employee Noelani Middenway $1,000.00 for her suggestion to save over $13,000 annually on printing costs. Director Scheafer seconded the motion. Mr. Carroll reported that the program runs continuously and that this is the second award since its start. Members of the Board congratulated Ms. Middenway on her idea. The motion carried 5 -0. Discussion followed regarding the need to have a program in place for at lea st one year before an award is made and the possibility of revising the program in the future to revise the maximum award depending on the level of savings realized by the CMSD. It C OSTA M ESA S ANITARY D ISTRICT P AGE 8 M IN UTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD F EBRUARY 27, 2013 ________________________________________________________________ was noted this would be an appropriate item to discuss at the upcoming Str ategic Planning meeting. XI. O PERATIONS C OMMITTEE 21. Tuesday, February 19, 2013, 9:30 a.m. - (Director Scheafer and Director Ooten) Recommendation: That the Board of Directors accepts and files report. Director Scheafer highlighted the report from CR&R regarding their GPS technology and the OCSD update. Discussion followed regarding the timing for sending out CMSD Prop 218 notices compared with OCSD and the possibility of coordinating the matter with them. Director Ooten commented about his participation o n the City's Sustainability Sub -Committee and he mentioned the subcommittee is developing a list of criteria and checklist to sponsor sustainable community events which will be made available to other committees. The City will produce a Sustainable Event Planning Guidebook oriented to local events for the public and he reported that he will be asking the District to support the program by promoting the guide and educational materials on memory sticks along with placing it on the City and CMS D websites. Discussion followed regarding funds available in the budget to promote the City’s 60 th Anniversary events . Members of the Board directed staff to place the item on the Operations Committee agenda for its next meeting and the possibility of placing banners on CR&R trucks in support of the anniversary events . XII. E NGINEER 'S R EPORTS 22. Project Status Report Recommendation: That the Board of Directors receive and file the report. Mr. Hamer's noted nothing to report at this time. XIII. T REASURER 'S R EPORT - None XIV. A TTORNEY 'S R EPORT - None XV. L OCAL M EETINGS A. Orange County Sanitation District (OCSD) – (President Ferryman) Recommendation: That the Board of Directors accepts oral report. President Ferryman reported that the meeting is currently in progress and that they will be considering an initial vote on a proposed rate increase. C OSTA M ESA S ANITARY D ISTRICT P AGE 9 M IN UTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD F EBRUARY 27, 2013 ________________________________________________________________ B. Santa Ana River Flood Protection Agency (SARFPA) – (Secretary Perry) Recommendation: That the Board of Directors accepts oral report . Director Perry noted he provided a report during the last Board meeting and that the next meeting of SARFPA will be next month. C. Independent Special Districts of Orange County (ISDOC) – (Director Scheafer) Recommendation: That the Board of Directo rs accepts oral report. Director Scheafer presented an update on the recent ISDOC meeting noting that the OCCOG has a new Executive Director and that ISDOC considered the draft presentation on By -Laws Amendments and those documents will be circulated to CMSD soon. D. California Special Districts Association (CSDA) Recommendation: That the Board of Directors accepts oral report. No reports at this time. E. California Association of Sanitation Agencies (CASA) Recommendation: That the Board of Dire ctors accepts oral report. No reports at this time. F. Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55, Operations Code Section 3.01.030 Recommendation: That the Board of Directors accepts oral report. XVI. O LD B USINESS - None XVII. N EW B USINESS - None XVIII. O RAL C OMMUNICATIONS AND D IRECTOR C OMMENTS Mr. Carroll confirmed upcoming meeting s with the Liaison Committee s. President Ferryman reported that CSDA is calling for nominations for a Regional Board seat and t hat he is considering running. Additionally, he stated that Director Scheafer would like to run for a CSDA Finance Corporation seat. He requested placing the items on the Board's agenda for next month's meeting. Mr. Carroll noted a vacant seat at the SDRMA and Director Scheafer indicated that he C OSTA M ESA S ANITARY D ISTRICT P AGE 10 M IN UTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD F EBRUARY 27, 2013 ________________________________________________________________ would be interested in running for that seat rather than CSDA Finance Corporation. Director Schafer hoped that a discussion will occur during the Strategic Plan meeting on telephone directories. XIX. A D JOURNMENT TO C LOSED S ESSION – 6:4 7 p.m. 23. Public Employee Performance Evaluation (Gov. Code §54957) - Title: General Manager Conference with Labor Negotiator (Gov. Code §54957.6) Agency Negotiator: President Ferryman Unrepresented Employee: General M anager XX. R ECONVENE TO O PEN S ESSION – 7:00 p.m. D istrict Counsel Burns reported that the Board authorized President Ferryman to negotiate with the General Manager on a salary increase in which they have reached an agreement on a 7% merit salary incre ase, and the General Manager will pay 2.5% of his share of CalPERS pension cost and for the following two years the General Manager will be ask ed to pay an additional 2.5% in 2014 and an additional 2% in 2015 so that he will be paying his full 7% share of pension cost by 2015 . It was noted that the agreement will be formalized at the Board's meeting in March. XXI. A DJOURNMENT President Ferryman adjourned the meeting at 7:05 p.m. to the next regular meeting of the Costa Mesa Sanitary District Board of Directors on March 28, 2013 at 5:30 p.m. in the District's Board Room, 628 W. 19th Street. _________________________ _________________________ Secretary President