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03 - Minutes Board of Directors 2013-08-29 C OSTA M ESA S ANITARY D ISTRICT M INUTES OF B OARD OF D IRECTORS R EGULAR M EETING A UGUST 29 , 2013 ______________________________________________________________________ I. C ALL TO O RDE R The Board of Directors of the Costa Mesa Sanitary District met in reg ular session on August 29 , 2013 at 5:3 0 p.m. at 628 W. 19 th Street, Costa Mesa. II. P LEDGE OF A LLEGIANCE Director Perry led the Pledge of Allegiance. III. I NVOCATION Vice President Scheafer led the Invocation. IV. R OLL C ALL D IRECTORS P RESENT : Mike Scheafer, Rob ert Ooten, Art Perry , Arlene Schafer D IRECTORS A BSENT : James Ferryman S TAFF P RESENT : Scott Carroll, General Manager; Noelani Middenway, Deputy Clerk of the District; Robin B. Hamers, District Engineer; Ala n Burns, District Counsel; Marc Davis , District Treasurer ; Stacey Cuevas, Finance Manager; Elizabeth Pham, Management Assistant O THERS P RESENT : Dean Ruffridge, CR&R; Lawrence Jones, CR&R ; Jim Mosher, Resident ; Richard Stoneman, Newport Beach Resident V. C EREMONIAL M ATTERS AND P RESENTATIONS – None. VI. A NNOUNCEMENT OF L ATE C OMMUNICATIONS - General Manager Carroll indicated that Mr. Jim Mosher had submitted written public comments that were provided to the Board for review. VII. P UBLIC C OMMENTS Vice President Scheafer invited members of the public to address the Board. Seeing no one , Vice President Scheafer closed public comments. VIII. C ONSENT C ALENDAR 1. Board of Directors Study Session Meeting Minutes of July 16 , 2013 The Board of Directors Study Session Meeting Minutes of July 16, 2013 , was a pproved as presented. ITEM NO. 03 C OSTA M ESA S ANITARY D ISTRICT P AGE 2 M INUTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD A UGUST 29, 2013 __________________________________________________________________________________ 2. Board of Directors Regular Meeting Minutes of July 31 , 2013 The Board of Directors Regular Meeting Minutes of July 31, 2013 , was approved as presented. 3. Occupancy report and payment to Costa Mesa Disposal 4. Contract Payment to CR Transfer for Recycling and Disposal Services The Board of Directors approved the occupancy report and payment to Costa Mesa Disposal for the month of July 2013. The Board of Directors approved payment to CR Transfer for recycling and disposal servi ces for the month of July 2013. 5. Adoption of a Warrant Resolution No. CMSD 2014 -2 Approving District Warrant Registers The Board of Directors approved adoption of Warrant Resolution No. CMSD 2014 -2 Approving District Warrant Registers for the month of July in the amount of $1,085,990.72 . 6. Directors' Compensation and Reimbursement of Expenses The Board of Directors approved Directors' compensation and reimbursement of expenses for the month of July 2013. 7. Investment Report The Board of Directors a pproved the Investment Report for the month of July 2013. 8. Auditor Communication Letter Audit FY 2012 -13 Director Perry pulled this item for discussion. 9. Resolution No. 2013 -842 – Authorizing the Disposition of District Assets 10. Budget Transfer for Per mit Office Storage Units The Board of Directors approved Resolution No. 2013 -842. Director Perry pulled this item for discussion. E ND OF C ONSENT C ALENDAR Director Ooten moved for approval of the Consent Calenda r with the exception of Item No s . 8 and 10 . D irector Schafer seconded the motion. T he motion carried 4 -0 . In regards to Item No. 8, Mr. Mosher provided public comment concerning a letter from the auditor to the District and requested clarification of the auditor’s scope of work. Director Perry questioned if the District had in house staff to work with the auditor. General Manager Carroll responded to Director Perry’s q uestion and noted that Ms. Stacey Cuevas, Finance Manager, would be working directly with the auditor. Mr. Carroll responded to the public C OSTA M ESA S ANITARY D ISTRICT P AGE 3 M INUTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD A UGUST 29, 2013 __________________________________________________________________________________ comment and confirmed that the auditor’s scope of work is to ensure that the District is following the generally accepted accounting principles and does not include identifying fraud or misreporting. Mr. Marc Davis, District Treasurer, noted t hat the firm is engaged to conduct a financial statement audit and to perform a risk assessment of the District. Discussion followed regarding the auditors obligation to communicate suspected fraud and the reporting of material misstatements. There we re no further questions or comments concerning this item. In regards to Item No. 10, Director Perry requested clarification of the budgetary need for permit office storage units. General Manager Carroll responded to Director Perry’s comment and in dicated that the storage units would be placed in the permit room to create an organized space to house the sewer plans. There were no additional questions or comments concerning this item. Director Ooten moved to approve Item Nos. 8 and 10. Director P erry seconded the motion. The motion carried, 4 -0. Vice President Scheafer requested to discuss Item No. 18 at this point in the agenda. X. G ENERAL M ANAGER /D ISTRICT C LERK R EPORTS 18 . Sewer Service to 2457 – 2459 Santa Ana Avenue Recommendation: That the Board of D irectors approves the following: 1. Reimburse the property owner $23,625.37 for sewer services not received from FY 2001/02 to 2012/13 alone with related expenses incurred by the property owner for rehabilitating his sewer lateral. 2. Direct sta ff to prepare a settlement agreement with the property owner and authorize the General Manager to sign agreement on behalf of the District. 3. Direct staff to file a claim with the Special District Risk Management Authority (SDRMA) to seek reimbursement for the settlement cost and repair costs to reconnect the sewer lateral to the District mainline. General Manager Carroll deferred to Mr. Rob Hamers, District Engineer, for report details and noted that the property owner was present at the meeting. Mr. Ha mers provided report details and indicated that in 1977 the District had inadvertently terminated sewer connectivity to Mr. Stoneman’s property when a manhole had been placed on top of Mr. Stoneman’s sewer lateral. Mr. Hamers felt that it was very clearly identified by the Engineer, his staff, two contractors, and Mr. Stoneman and that the claim was valid. Mr. Hamers deferred to Mr. Carroll for a breakdown of the proposed reimbursement. General Manager Carroll provided details of the financial review and noted that the settlement for C OSTA M ESA S ANITARY D ISTRICT P AGE 4 M INUTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD A UGUST 29, 2013 __________________________________________________________________________________ $23,625.37 was justified based on the hardships caused to him and the tenants on his property. Mr. Carroll indicated that he and Mr. Stoneman would sign a settlement agreement and a check would be issued to Mr. Stoneman. A cop y of the settlement agreement, check, and any additional costs incurred would then be filed as a claim with the Special District Risk Management Authority (SDRMA) to seek reimbursement for the settlement cost and repair costs to reconnect the sewer lateral to the District mainline. Vice President Scheafer questioned if part of the assessment fees were from the Orange County Sanitation District (OCSD). General Manager Carroll responded to Vice President Scheafer and confirmed that the assessment fees were completely separate from the claim that would need to be filed with OCSD. Vice President Scheafer questioned Mr. Alan Burns, District Counsel, if the District’s reimbursement to Mr. Stoneman for rent credit and gift cards that Mr. Stoneman had given to the tenants on the property would be considered a gift of public funds. District Counsel Burns responded to Vice President Scheafer’s question and indicated that the Board is making a recommendation for approval of a package settlement and felt that it is justified. Director Ooten moved for approval. Director Perry seconded the motion. District Engineer Hamers noted that invoices from Schuler Engineering, Inc. would be sent directly to the District and is not part of the reimbursement to Mr. Stoneman and will be applied to the claim to SDRMA. Director Ooten revised his motion and moved to approve payment to Mr. Stoneman per the staff report recommendation and authorize staff to reimburse the contractor. Director Perry seconded the motion and stated that he would like to hear from Mr. Mosher for any comments on the item. Mr. Mosher responded that he had no comments on the item. The motion carried, 4 -0. Vice President Scheafer apologized to Mr. Stoneman for not having asked if he had any questions and invited Mr. Stoneman to address the Board. Mr. Stonem an questioned if he is at risk of toxic exposure. Mr. Hamers replied that Mr. Stoneman was not at risk. There were no additional questions or comments . 11. Final Year End Budget for FY 2012 -13 Recommendation: That the Board of Directors receive and file the report. General Manager Carroll deferred to Finance Manager, Stacey Cuevas, to provide the report. Ms. Cuevas provided details of the year end expenditure report for Fiscal Year 2012 -13. Ms. Cuevas noted that t he District w ould realize a surplus under 5.2 million dollars with eighty -six percent of that amount deriving from the CIP budget . Ms. Cuevas indicated that a payment of just C OSTA M ESA S ANITARY D ISTRICT P AGE 5 M INUTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD A UGUST 29, 2013 __________________________________________________________________________________ und er $10,000 had been made to Cal P E RS for the prefunding of retirement benefits. Discussion followed regarding the payment to Cal PERS an d the estimation of what the District wil l owe towards i ts unfunded liability . Vice President Scheafer questioned Mr. Carroll whether or not the District is promoting lockable trash containers. Mr. Carroll indicated that the District has not been aggressive in promoting the lockable containers. Director Ooten requested that a discussion regarding the Inflow & Infiltration (I&I ) program be brought to the Board at its October Study Session. Mr. Hamers commented that a payment to National Plant Services had been made to re -plug and seal every manhole and that the District is cleaning half of the lines. There were no additional questions or answers and the report was received and filed. 12. Operations and CIP Carry Forward Request – FY 2013 -14 Recommendation: That the Board of Direc tors approves the carry forward appropriations from FY 2012 -13 in the following amounts: 1. Operations: $90,931.42 2. Capital Improvement Projects: $3,442,476.62 General Manager Carroll requested that this item be pulled from the agenda. 1 3 . Board of Di rectors Health Insurance Recommendation: That the Board of Directors provides direction to staff. General Manager Carroll provided report details regarding the Board of Directors Health Insurance and noted that no members of the Board are currently part icipating in the program and suggested that a termination resolution for non -Cal P ERS members be filed in July 2014 and wil l take effect in January of 2015 . Discussion followed regarding whether or not to keep the health insurance plan at the cost of $60 a year. Director Perry felt that it would be a good idea to keep the health insurance plan as there may be changes in the Board of Directors. Director Ooten moved to direct staff to file a termination resolution. The motion died for lack of a second. Vice President Scheafer made a substitute motion to calendar the item and bring the item back in April, 2014. Director Perry seconded the motion. The motion carried 3 -1, with Director Ooten opposed. C OSTA M ESA S ANITARY D ISTRICT P AGE 6 M INUTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD A UGUST 29, 2013 __________________________________________________________________________________ 1 4 . Remove and Replace vs. Trenchless Technology Recommendation: That the Board of Directors receives and files this report. General Manager Carroll provided details of a remove and replace vs. trenchless technology analysis report. Mr. Carroll discussed the challenges and benefits of both methods and st ated that the District saved nearly $2 million dollars by using trenchless technology. Discussion followed regarding the fold and form technology method. Vice President Scheafer stated that another benefit to utilizing trenchless technology is worker s afety. There were no additional questions or comments and the report was received and filed. 15 . Rewarding Ideas Program Recommendation: That the Board of Directors approves rewarding the following employees for their ideas: 1. Anna Sanchez, $850 for sav ing $4,250.41 on copy machines. 2. Javier Ochiqui, $100 for enhancing morale and promoting and branding CMSD. 3. Jaesen Alfassa, $100 for parking lot safety. General Manager Carroll introduced the item and welcomed any questions from the Board. Director Oote n expressed opposition in approving Ms. Sanchez’s rewarding idea submission as he did not feel that it was appropriate for management to participate in the rewarding ideas program. Director Ooten noted that as a matter of policy he would be willing to appr ove the submission but would propose a review and change of the policy to where management is not allowed to apply. Director Perry expressed opposition in supporting $850 for the proposed idea. General Manager Carroll indicated the title of the program is the Employee Rewarding Ideas Program and did not specify that only specific employees would be able to participate in submitting their ideas. Mr. Carroll noted that the policy is written that a ny employee would be eligible to receive up to twenty perce nt of the first year’s annual savings or revenues and that Ms. Sanchez’s suggested award of $850 is twenty percent. Director Ooten stated that he would be willing to approve the recommended awards based upon the current policy with the opportunity to ame nd the policy. General Manager Carroll suggested that the Board approve the recommended awards as it does abide by the current policy and bring back the program policy for review at a future meeting. Vice President Scheafer invited Mr. Mosher to addres s the Board. Mr. Mosher provided public comment and agreed with Director Ooten’s comments and felt that cost savings and creativity is expected of managers and is built into the salaries they receive and should not be a separate reward. Mr. Mosher indic ated that he felt there was a discrepancy in Ms. Sanchez’s report as there is no expense shown regarding the copy machine that is being operated at the District yard, therefore, creating less of a savings than was stated. C OSTA M ESA S ANITARY D ISTRICT P AGE 7 M INUTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD A UGUST 29, 2013 __________________________________________________________________________________ General Manager Carroll responde d to public comment and explained that a color copier/plotter was to be purchased at the cost of over $5,000. Ms. Sanchez’s idea to transfer the old copier from District headquarters to the District yard, along with the elimination of maintenance fees for unused equipment , attributed to the savings amount stated in the report. Vice President Scheafer stated that whether the $850 is exorbitant or not it still a dhered to the policy . Director Ooten moved approval of the recommendation with the understandi ng that the policy will be brought back to the Board for review at a future meeting. Director Schafer questioned if each rewarding idea could be voted on by a separate motion. Vice President seconded Dire ctor Ooten’s motion as it adheres to the current p o licy. The motion failed, 2 -2, with Directors Perry and Schafer opposed. Director Perry moved approval of Mr. Javier Ochiqui and Mr. Jaesan Alfassa’s rewarding ideas for $100 each. Director Schafer seconded the motion. The motion carried 4 -0. Vic e President Scheafer moved that the rewarding idea for Ms. Anna Sanchez be brought back to the September 2 6 , 2013 Board meeting for discussion with the full Board. Director Ooten seconded the motion. The motion carried 4 -0. XII. ENGINEER’S REPORTS 1 6 . Project Status Report Recommendation: That the Board of Directors receive and file the report. District Engineer Hamers introduced the item and welcomed any questions from the Board. Director Ooten expressed concern regarding the completion of emergency projects that are still in process . District Engineer Hamers reported that the projects are nearly fifty percent done. Discussion followed regarding whether or not there is a need to distinguish between achievable and challenging projects. D istrict Engineer Hamers provided an update of back -up generators for the various pump stations. Director Perry requested that the CIP reports be printed in larger format. There were no additional questions or comments and the Board was received. 1 7 . Proposed Emergency Services Agreement – Alpha Traffic Services, Inc. C OSTA M ESA S ANITARY D ISTRICT P AGE 8 M INUTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD A UGUST 29, 2013 __________________________________________________________________________________ Recommendation: That the Board of Directors approves and executes the emergency services agreement. General Manager Carroll introduced the item and noted a change in the recom mendation as the agreement was not available at the time of the meeting. Mr. Carroll noted that the contract amount was within his purview to execute so it is recommended that the Board receive and file the report. Mr. Carroll deferred to Mr. Hamers. Dis trict Engineer Hamers indicated that the District prefers to maintain two traffic control companies on hand for emergency traffic control services and recommended approval of the contract with Alpha Traffic Services, Inc. Director Perry questioned how payments are made to the contractor. Dis trict Engineer Hamers confirmed that payment will be made upon services received from the contractor. There were no additional questions or comments and the report was received and filed. XI I. TREASURER’S REPORTS – None XI II . ATTORNEY’S REPORTS - None X I V. LOCAL MEETINGS A. Orange County Sanitation District (OCSD) – (Director Ooten ) Recommendation: That the Board of Directors accepts oral report. Director Ooten reported on his attendance of the OCSD meeting and discussed OCSD’s need to purc hase oxygen for the sludge plant. B. Santa Ana River Flood Protection Agency (SARFPA) – (Secretary Perry) Recommendation: That the Board of Directors accepts oral report. Nothing to report at this time. C. Independent Special Districts of Oran ge County (ISDOC) – (Vice President Scheafer) Recommendation: That the Board of Directors accepts oral report. Vice President Scheafer reported that ISDOC vote d 18 -3 for ISDOC to continue it s membership with the Orange County Council of Government s (OCCOG) and that the next ISDOC Executive meeting will discuss revisions to the ISDOC Bylaws. D. California Special Districts Association (CSDA) Recommendation: That the Board of Directors accepts oral report. Vice President Scheafer noted that the Board wou ld be attending the CSDA annual conference in Monterey in September. C OSTA M ESA S ANITARY D ISTRICT P AGE 9 M INUTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD A UGUST 29 , 2013 ____________________________________________________________________________ E. California Association of Sanitation Agencies (CASA) Recommendation: That the Board of Directors accepts oral report. Vice President Scheafer reported that he attended the CASA confe rence in San Diego with Directors Perry and Scheafer . 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. Director Schafer rep orted on her attendance of the ISDOC, WACO, CMSD Study Session, Regular Board meeting, and the Chamber of Commerce Breakfast. Vice President Scheafer noted that Midway City received an award at the CASA conference for Best Operations. Director Ooten report ed that a discussion regarding the spending of Measure 1 and 2 funds occurred at the ISDOC meeting. XVI. OLD BUSINESS - None XVII. NEW BUSINESS 19 . Independent Special Districts of Orange County (ISDOC) Recommendation: That the Board of Directors ap proves President Ferryman or Vice President Scheafer to vote on behalf of the Costa Mesa Sanitary District for ISDOC’s proposed Bylaws. General Manager Carroll reported that this item was requested to be brought to the Board for approval. Director Oote n moved for approval. Director Perry seconded the motion. The motion carried 4 -0. XVIII. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS Vice President Scheafer indicated that he was contacted by the Senior Center regarding a sponsorship opportunity for an event on October 18. Discussion followed regarding how the event ties in with the District’s function. Vice President Scheafer requested that the item be placed on the September Board meeting agenda. General Manager Carroll indicated that he would con tact the Senior Center for additional details regarding the event. C OSTA M ESA S ANITARY D ISTRICT P AGE 10 M INUTES OF THE B OARD OF D IRECTORS R EGULAR M EETING H ELD A UGUST 29 , 2013 ____________________________________________________________________________ Director Ooten requested that staff contact the Board when time sensitive mail is received. Director Schafer questioned if the District was advertised in the Costa Mesa Recreation magaz ine. Ms. Pham confirmed that the District is advertised in the publication. XIX. ADJOURNMENT There being no further business to come before the Board of Directors, Vice President Scheafer adjourned the meeting at 6:53 p.m. THE NEXT REGULAR MEETI NG OF COSTA MESA SANITARY DISTRICT BOARD OF DIRECTORS WILL BE HELD ON SEPTEMBER 2 6 , 2013 AT 5:30 P.M. IN THE DISTRICTS BOARD ROOM, 628 W. 19 TH STREET. _________________________ _________________________ Art Perry James Ferryman Secretary President