08 - CR&R Audit Implementation Plan
Protecting our community's health and the environment by providing solid waste and sewer collection services.
www.cmsdca.gov
Costa Mesa Sanitary District
….an Independent Special District
Memorandum
T o: Operations Committee
Via : Scott Carroll , General Manager
From: Javier Ochiqui, Management Analyst
Date: June 18, 2013
Subject: CR &R Audit Implementation Plan
Summary
Michael Balliet Consulting, LLC was retained by CMSD to perform a review of CR&R,
Environmental Services. On May 23 , 2013, the Board of Directors reviewed the audit
results and approved the recommendations from Michae l Balliet Consulting , LLC . The
Board of Directors directed staff to develop an implementation plan that focused on
the “unclear” areas . Staff is providing the Operations Committee with the CR&R A udit
I mplement ation P lan.
Staff Recommendation
That the Operations Committee recommend to the Board of Directors to approve the
CR&R Audit Implementation P lan.
Analysis
The purpose of the review was to establish CR&R’s compliance with contract terms
and performance during fiscal year 2011/2012. The auditor stated that CR&R is in
compliance with 25 of 28 review question s (89%). T he audit or identified 3 areas that
were “unclear .” Below are the 3 areas t hat the CR&R Audit Implementation P lan will
focus on :
Compliance Area
1. Reasonability of CR&R rates / Annual rate review
2. Verify green waste diversion percentage
3. Most favorable rate
Operations Committee
June 18 , 201 3
Page 2 of 2
CMSD staff will work with District Counsel, CR&R , and Michael Balliet Consulting,
LLC to revise the contract in order to clarify the area s of concern. Attached is the
CR&R Audit I mplementation P lan providing further details, recommendations, and
action plan .
Strategic Plan Element & Goal
This item complies with the objective and strategy of Strategic Element 2.0, Solid
Waste, which states:
“Objective: Our ob jective is to manage the collection and recycling of residential trash
in the most economical and environmentally friendly way.”
“Strategy : We will do this by looking for ways to improve efficiencies, achieve high
customer satisfaction, and considering pr udent new recycling methods.”
Legal Review
CMSD staff will work with District Counsel to revise the contract in order to clarify the
areas of concern.
Financial Review
CMSD and CR&R have agreed to implement the plan and revise the contract in order
to cl arify the “unclear” compliance areas. In addition, CR&R is willing to pas s billing
and collections savings on to CMSD via a $0.50 rate reduction . Therefore, the Fiscal
Year Base Rate per Occupancy per the Agreement will be reduced from $9.1554 to
$8.9054 p er household and the Recycling/Disposal rate will be reduced from $52.22 to
$51.97 per ton.
Public Notice Process
Copies of this report are on file and will be included with the complete agenda packet
for the June 18 , 2013 Operations Committee meetin g at District Headquarters and
posted on the District’s website .
Alternative Actions
1. R efer the matter back to staff for additional information.
Attachments
1 – CR&R A udit I mplementation P lan
ATTACHMENT 1
COSTA MESA SANITARY DISTRICT
CR&R AUDIT IMPLEMENTATION PLAN
FINANCIAL REVIEW
Recommendation # Compliance Comments Action Plan Employee
Responsible for
Implementation
Start
Date
Completion
Date
Status
15. Reasonability of CR&R rates.
Annual rate review
Unclear
Rate guarantee language in contract is
ambiguous. Rates can be considered
reasonable or unreasonable
Work with District staff,
Counsel , Michael Balliet
Consulting, LLC and CR&R to
revise the contract in order to
clarify
Management
Analyst June 2013 August/
September 2013 In progress
OPERATIONAL REVIEW
Recommendation # Compliance Comments Action Plan Employee
Responsible for
Implementation
Start
Date
Completion
Date
Status
6. Verify green waste diversion
percentage Unclear Exact percentage of green waste diversion
requires disposal composition study
Enter into an Agreement with
Michael Balliet Consulting , LLC
to perform a waste
characterization study and
Amendment review
Management
Analyst July 2013 August 2013 Pending
Agreement
COMPLIANCE REVIEW
Recommendation # Compliance Comments Action Plan Employee
Responsible for
Implementation
Start
Date
Completion
Date
Status
2. Most Favorable Rate Unclear Current agreement terminolo gy is too vague
for a definitive determination
Delete from contract and
replace with within 10 percent of
net to hauler OC average
language
Management
Analyst June 2013 August/
September 2013 In progress