Minutes of the Regular Meeting of the Board of Directors of DELTA DIABLO SANITATION DISTRICT June 9, 2010 The meeting was called to order by Chair Davis on Wednesday, June 9, 2010 at 5:31 p.m. in the Board Room located at 2500 Pittsburg-Antioch Highway, Antioch. Present were Directors James Davis, Federal Glover and Nancy Parent. Also present were Mary Ann Mason, District Counsel; Gary W. Darling, General Manager; Kerry Yoshitomi, Deputy General Manager; Dennis Laniohan, Operational Services Director; Karen Ustin, Business Services Director; Denise Jones, Office Manager/Secretary to the Board; Steve Dominguez; Caroline Quinn, Engineering Services Director; Cheryl Rhodes Alexander, Human Resources Manager; Dean Eckerson, Principal Engineer; Jayne Strommer, Project Manager; Matt Gotshall, Computer Analyst/P&T Bargaining Unit Representative; Steve Laren, Safety Officer; Thanh Vo, Assistant Engineer; Wayne Rebstock, Senior Operator; Brian Padilla, Operator II; Walter Pease, Assistant Public Works Director, City of Pittsburg; Chris Davenport, Project Manager, The Covello Group; Dorothy Miller, Resident of Pittsburg; Louis Renner, Resident of Antioch; Jerry L. McKeever, Resident of Bay Point; and Arnold Murillo, Resident of Pittsburg. PUBLIC COMMENTS None RECOGNITION Recognize and Congratulate Brian A. Padilla on Promotion to Operator II Mr. Dominguez introduced Brian Padilla who was recently promoted to Operator II after completing all required standards for promotion. He noted that Mr. Padilla’s promotion is in line with the District’s Strategic Business Plan Goal of encouraging and supporting employees in career advancement. Mr. Padilla was hired as an Operator-in-Training in 2007 after completing the Process Technology (P-Tech) Program through Los Medanos College. Mr. Dominguez asked that the Board recognize and congratulate Mr. Padilla on his promotion. On behalf of the Board, Chair Davis congratulated Mr. Padilla on a job well done, and the Board received and filed the report. Recognize and Congratulate Wayne Rebstock on Promotion to Senior Operator Mr. Dominguez introduced Wayne Rebstock who was recently promoted to Senior Operator after completing all required standards and participating in a competitive process of evaluation by a panel of management-level wastewater professionals. Mr. Rebstock came to the District in 2008 from Central Contra Costa Sanitary District and prior to that worked as a pipefitter for the City of Antioch. Mr. Rebstock thanked the Board and staff for the opportunity to acquire new skill sets, and noted that he is prepared for future opportunities. On behalf of the Board, Chair Davis congratulated Mr. Rebstock on a job well done, and the Board received and filed the report. PUBLIC HEARING Conduct Public Hearing on Sewer Service and Delinquency Charges and Collection System Charges and Surcharges; Adopt Ordinance Establishing Charges; and Adopt Resolution Approving Final Engineer’s Report and Directing Collection of Certain Sewer Service and Delinquent Charges on County Tax Roll Chair Davis noted that he had received requests from the public to speak and would call on those people at the appropriate time during the presentation. He introduced Ms. Ustin who provided a Power Point presentation. Ms. Ustin reported that, pursuant to Proposition 218, a notice was mailed to each property owner in the District on April 22, 2010, and six protest letters were received as of this date. She noted that protests may be received through the end of the Public Hearing. Ms. Ustin reported that the proposed 4.8% increase is lower than the 5.5% that was projected in last year’s rate analysis. She explained the District’s wastewater related charges for each Zone and total District charges with the Street Sweeping component added in, and then compared the sewer service charges to those of other cities. This comparison shows that the District’s charges are below the average for the region. She outlined proposed rates for next five years. Ms. Ustin briefly explained reserves and how they are used for the Operations and Maintenance (O&M) fund, Capital Asset (CA) fund, and Capital Asset Replacement (CAR) fund. She noted that the District’s facilities have reached an age where funds are required to replace the aging infrastructure. Ms. Ustin discussed a proposed inter-fund transfer of from CAR to CA and an inter-fund loan from CAR to the Expansion fund, explaining the philosophy that growth should pay for growth. The loan will be repaid with interest by FY18. Ms. Ustin ended her presentation by stating that if the Board were to take staff’s recommended action, rate adjustment would be effective July 1, 2010. Director Glover asked Ms. Ustin to explain for the public in attendance, the process used in determining the need for a fee increase. Ms. Ustin explained that, each year, staff estimates expenses and determines if revenues are enough to cover those costs. This year, the District’s biggest cost is in the Capital Asset component. If revenues are not enough to cover the estimated costs, a rate increase is needed. Ms. Ustin noted that District staff strives to keep the costs as low as possible through a variety of means, including utilizing a competitive bidding process. Director Parent asked what the increase would be if an analysis were not done on a yearly basis, and Ms. Ustin explained that an analysis is necessary every year because fluctuations are largely driven by the Capital Program. Staff uses a multi-year rate model to keep rate adjustments relatively smooth rather than fluctuating widely year-over-year. Chair Davis opened the Public Hearing at 5:48 p.m. The first member of the public to address the Board was Dorothy Miller from Pittsburg. Ms. Miller stated she is on social security and sees no planned increases in her income for this year or the future. She expressed her concern regarding the District’s rate increase, in addition to the other local utility increases this year. She is frustrated that that there is nothing the public can do to stop the rate increase other than to have 50% of the affected public protest, which is not likely to happen. The second member of the public to address the Board was Louis Renner of Antioch. Mr. Renner believes Delta Diablo was not very forthcoming about what the costs are that have resulted in the proposed increase. He stated there is a 4% increase in sewer collection system charges and an 8% increase in water rates from the City of Antioch, and such increases will continue over the next five years, but the District did not state that in their Notice as the City did. Mr. Renner noted that he has been able to manage a $26,000,000 budget and keep it flat over the past five years by cutting costs. The third member of the public to address the Board was Jerry L. McKeever of Bay Point. Mr. McKeever represents Riverview Mobile Home Park located in an annexed area at Willow Pass Road. There are many retiree tenants living in the Park and he is trying to get answers for them regarding how the rate increase will affect them. He had spoken with Ms. Ustin more than a month prior to the meeting, but needed clarification on which rate would be applied to his property, which was recently annexed by Pittsburg. He agreed to stay after the meeting and speak with Ms. Ustin. The fourth member of the public to address the Board was Arnold Murillo of Pittsburg. He reported that a year ago he paid his tax bill and a month later received notice of an error in the sewer tax calculation, requiring him to submit another payment. Mr. Murillo spoke on behalf of his neighbors as well as himself when he asked how much money does it really costs to run a sewer plant for the number of people in Pittsburg. He asked why so much money is needed and is the Board pocketing some of that money. Chair Davis noted that staff had presented the reports explaining the need prior to the Public Hearing. Mr. Murillo thanked the Board for their time. Director Glover stated that the wastewater system and infrastructure need to be maintained and the pipes need to be replaced to make sure the sewage stays in the pipes. No one wants increased fees, but sewer service is needed. Everyone, including the Board, have to pay increased fees. All of the people who use the facilities need to pay for them. There being no additional comments from the public, Chair Davis closed the Public Hearing at 6:03 p.m. Director Parent noted that the proposed increase is allowed by law, and the District uses the County tax rolls to more efficiently collect the charges. Staff has tried to keep rate increases incremental rather than keeping rates the same for several years and then have a huge spike. Next year, staff is projecting a 4.8% increase, but just like this year, an analysis will be conducted and if there is money left over from a project, that money is put in the pot and could possibly result in a smaller increase. Director Parent asked that staff put the District’s Budget document on the District’s website and she encouraged residents to go there. She noted that Board will consider Sewer Service Charges again next year and there will be another opportunity for the public to speak. She noted that sewer is different than water, which comes into your house. Customers pay monthly for water, but sewer is billed yearly on the property tax bill. In response to Mr. Renner’s earlier comment regarding money going into the Board Members’ pockets, most would be surprised to hear that Board Members make about $200 per month. She noted that the Board meets monthly and receives financial results and the Finance Committee reviews those costs carefully. Maintenance of the system has to be done because of the very negative impacts if it was not done. Chair Davis added that there was a time when he thought increases were not necessary, but now that he is on the Board, he understands that these things need to be done. As Finance Committee Chair, he assured the public that the District’s rate increase was lower than previously projected and set at the absolute minimum required, and that staff has examined every cost-cutting measure available. Director Glover stated that the Board is very accessible to talk about any issues and concerns the ratepayers have. Director Glover moved approval, seconded by Director Parent and by unanimous voice vote, the Board adopted the Ordinance establishing Sewer Service and Delinquency Charges and Collection System Charges and Surcharges; and adopted the Resolution approving the Final Engineer’s Report and Directing Collection of Certain Sewer Service and Delinquent Charges on the County Tax Roll. CONSENT CALENDAR Director Glover moved approval, seconded by Director Parent and, by unanimous voice vote, the Board approved the following Consent Calendar items according to staff recommendations: Approve Minutes of May 12, 2010; Approve District Monthly Check Register, April 2010; Adopt Resolution Establishing Fiscal Year 2010/11 Appropriations (GANN) Limit for Expenditures That Can be Funded from Proceeds of Taxes; Authorize General Manager to Execute Amendment No. 3 to Consulting Services Agreement in the Amount of $30,000, ENS Resources, Inc., Federal Legislative Advocacy Services, Bay Area Biosolids to Energy, Project No. 10089; Authorize General Manager to Execute Amendment No. 2 to Consulting Services Agreement in the Amount of $30,000, Edelstein, Gilbert, Robson, & Smith, State Legislative Advocacy Services, Bay Area Biosolids to Energy, Project No. 10089; Authorize General Manager to Execute Amendment No. 2 to Professional Services Agreement, Clean Harbors Environmental Services, Inc., Contract Extension and 4% Increase in Labor Unit Costs, Household Hazardous and Conditionally Exempt Small Quantity Generator Waste Management Services; and Authorize Staff to File Notice of Exemption; Authorize General Manager to Execute Construction Services Agreement in the Amount of $328,000, JMB Construction, Inc.; Authorize General Manager to Approve Construction Change Orders in an Amount Not to Exceed $65,600; Authorize General Manager to Execute Consulting Services Agreement in the Amount of $46,505, The Covello Group, Inc; and Authorize Additional Budget Appropriation of $146,000, Replacement of Arcy Lane Influent Junction Structures, Project No. 10127. DELIBERATION Adopt Resolution Approving Budget Appropriations for Fiscal Year 2010/2011 Ms. Ustin noted no proposed changes to the Operating Budget for 2011/2011 which was approved by Board last year. The Capital Budget is based on the Capital Improvement Program (CIP) which was approved last month. Overall, the Budget totals $21.8M for all Programs. She provided a Power Point presentation of the individual breakdown of the various Programs. Ms. Ustin noted that the Appropriations Summary is included as an attachment and shows total sources of funds as $39.1M, and total uses of funds as $39.1M. She explained each line item and noted that, as part of the Budget appropriations, staff is requesting inter-fund loans and inter-fund transfers as discussed during the Sewer Service Charge presentation, both to be completely repaid by FY 2018. Director Parent moved approval, seconded by Director Glover and by unanimous voice vote, the Board adopted the Resolution approving Budget Appropriations for FY 2010/2011. PRESENTATIONS AND REPORTS None GENERAL MANAGER'S COMMENTS Mr. Darling reported that the Antioch Recycled Water Project is progressing very well. The repaving is scheduled to start in July. DIRECTORS’ COMMENTS None CORRESPONDENCE Receive Monthly Report dated May 28, 2010, Federal Advocates, Inc., Bay Area Recycled Water Coalition, Project No. 90024 The Board received and filed the report. Receive Monthly Federal Lobbying Report dated May 2010, ENS Resources, Inc., Bay Area Biosolids to Energy Coalition, Project No. 10089 The Board received and filed the report. Receive Monthly State Lobbying Report dated May 27, 2010, Edelstein, Gilbert, Robson and Smith, Bay Area Regional Biosolids to Energy Coalition, Project No. 10089 The Board received and filed the report. Receive Letter dated May 27, 2010, Congressman John Garamendi, Award of American Recovery and Reinvestment Act Funding The Board received and filed the report. CLOSED SESSION None ADJOURNMENT There being no further business to come before the Board, the meeting was adjourned at 6:15 p.m. The next Regular Meeting of the Board of Directors will be Wednesday, July 14, 2010 at 5:30 p.m. Federal D. Glover Board Secretary (Recording Secretary: Denise Jones) Board of Directors Meeting Page 5 June 9, 2010 Z:\Board\Minutes\2010\08_Minutes-June 9, 2010.doc Z:\Board\Minutes\2010\08_Minutes-June 9, 2010.doc