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Bayshore Sanitary District

Minutes

Special Meeting of June 25, 2009 (see the Agenda)

Opening of Meeting:

The meeting was called to order by President Gallagher at 3:46 P.M.

Roll Call:

Present: Gallagher, Quinteros, Rizzi, Swanbeck, Tonna
Absent: None
Staff: Clerk Landi, Engineer Yeager, Maintenance Director Landi, Counsel Bakker (4:30 P.M.)

FY 2009-2010 Budget Workshop

The Board and staff were provided with budget worksheets which included the FY 08-09 Budget as well as the projected revenues and expenses for the fiscal year.

Discussed projected revenues for fiscal year 2009-10. The anticipated amount of sewer service charge reflects a decrease when compared to the prior year. This is attributable to a slight decline in water usage as well as a decrease in usage by the Cow Palace. Due to the current, uncertain economic climate, it is not possible to estimate when new development will occur; therefore, no new connection fees will be budgeted. In regard to property taxes, there was consensus that it would not be sound planning to rely on receiving the same level of tax revenue for FY 09-10 with so much uncertainty surrounding how the State may deal with its budget deficit. After discussion, it was decided to budget tax receipts at approximately 50% of that received during this fiscal year.

After review and discussion the total estimated Operating Revenues were set at $1,006,000. The Non-Operating Revenues are projected to be $126,300. And Contribution from Contingency Funds will be $45,000. The Total Revenues and Contributions total $1,177,300.

Next, the Operating Expenditure accounts were reviewed one-by-one and the allocated amounts for FY 09-10 were established. Total Operating Expenditures are $1,132,300. Capital Improvement Projects total $45,000. There will be no contributions to Contingency Funds. Total Expenses for FY 2009-10 are $1,177,300.
These figures are subject to change prior to formal adoption of the budget on July 23, 2009.

Before recessing, Board and Staff discussed the general financial condition of the District, the purpose of reserve and contingency funds and the eventual loss of property tax revenue.

The Budget Workshop portion of the meeting was recessed at 5:30 P.M. The Special Meeting was reconvened at 6:53 P.M.

Roll Call:

Present: Gallagher, Quinteros, Rizzi, Swanbeck, Tonna
Absent: None
Staff: Clerk Landi, Engineer Yeager, Maintenance Director Landi,
Counsel Bakker

Oral and Written Communications:

  1. Communications from members of the public
    None
  2. Communications from members of the District Board and Staff
    None
  3. Acknowledgment of recent correspondence to the District

    The President acknowledged receipt of the CSDA Conference brochure and registration for its September Conference. Two Directors expressed interest in attending.

Consent Items:

(Any member of the Board or the public can request that an item be removed from the consent agenda. If there are no objections all items are voted upon by one motion.)

  1. Minutes of the Regular Meeting of May 28, 2009 and Special Meeting of June 11, 2009
  2. Payment authorization for bills and compensation
  3. Accept 5/31/09 monthly report on District’s current financial status
  4. Accept May, 2009 checking account statement reconciliation

    President Gallagher removed Item 8 from the Consent Agenda. A motion was made by Director Quinteros, seconded by Director Swanbeck and unanimously passed by voice vote to approve Consent Items 4-7 which include payment by check numbers 4798-4812
  1. Resolution No. 09-01, a Resolution Establishing the FY 2009-2010
    Appropriations Limit

    A motion was made by Director Swanbeck to adopt Resolution No. 09-01 setting the appropriations limit for fiscal year 2009-2010 at $2,988,155. The motion was seconded by Director Quinteros and unanimously passed by voice vote.

Board Reports – consideration of matters relating to:

  1. President Gallagher
    1. LAFCO: The Municipal Service Reviews for the City of Palo Alto and City of Menlo Park have been continued to allow for comment.
    2. CSDA: The next meeting will be in August.
    3. Meeting with Fechter & Co.: The President and Clerk met with Craig Fechter who recently submitted a proposal to conduct the District’s annual audit. The President reported that he is a young accountant with seven years experience and is based in Sacramento. He has two associates and is interested in growing his practice and would like to increase his special district client base. He indicated he would be directly in charge of the audit. The President went on to say it is difficult to change auditors but if you have the information needed to perform an audit, it shouldn’t be a problem. The President and Clerk agreed that based on this meeting, they feel confident that Fechter & Co. are capable of providing auditing service for the District.
  2. City of Daly City:
    1. City of Daly City: Director Rizzi reported that Daly City has a Five Year Plan and part of that plan is to access Freeway 101 from Geneva Avenue. Director Swanbeck advised the Board that the UPC plan does include a Bayshore Boulevard to 101 connection which is anticipated to be a transportation hub. There was discussion about the Daly City development plans in the Syufy property and Cow Palace parking lot areas.

  3. City of Brisbane:
    1. The EIR will be issued in October and is anticipated to be in the circulation, discussion phase for about two years.

Staff Reports:

  1. Maintenance Director – consideration of matters relating to:
    1. Monthly report on District operations and maintenance: The monthly report is self explanatory. There were no questions.
  2. District Engineer – consideration of matters relating to:
    1. Annual Sewer Service Charge Report: The report was distributed and the total for FY 2009-10 is projected at $1,002,000. The reduction from last year is due to decreased water usage by the Cow Palace and the motels. It was noted that this year’s report shows that there are more properties owned by banks and a number of properties have 0 water usage.
    2. 2665 Geneva Avenue: The condominium property is owned by 2265 Geneva LLC. The El Rancho parcel continued to be billed after the building was demolished. The physical connection is where the condo project is located. The vacant Baldini, et al parcel should be treated as vacant parcel #25; however, it has been erroneously billed for four years. Therefore, Baldini, et al should be refunded $500 and the condominium parcel #28 needs to be billed the $500.

      The question now is how the sewer service charge billing should be handled since this is a unique project. When dealing with single family residential connections, the Clerk would generate a prorated billing effective the date of connection through the end of the fiscal year + the $125 annual fixed charge. The condo connection was inspected in May, 2008 so using that same formula, they should have been billed $125 for each of the 75 units plus the estimated water usage for May-June, 2008; that was not done. Likewise, when the sewer service charges were calculated for Fiscal Year 2008-09, they would have been billed $125 for each of the 75 units plus the annual estimated water usage; that was not done. The Engineer and Jen Faught of Meyers-Nave have come to the conclusion that they should be billed $125 for each of the units plus the actual water usage. However, based on water usage records obtained from the City of Daly City, they do not have a water hookup which presents a dilemma.

      A condo unit could be sold at any time and the District would have no knowledge. The President suggested we write a letter to Fergus O’Sullivan, the developer, explaining the District’s Ordinance. The Engineer said that the sewer service charges must be levied due to the time needed to get the report to EDS who converts it into the format required by San Mateo County. And the County must receive the report no later than August 10.
      There was discussion about how other single family developments were billed and again, it was acknowledged that this is a unique project. There was further discussion about billing the $125 per unit fixed fee when there is no occupancy. Counsel and the District Engineer feel that we must comply with our Ordinances.

      A motion was made by Director Swanbeck to refund the Baldini, et al parcel $500 and to issue a bill in the amount of $500 to 2265 Geneva LLC. The motion was seconded by Director Quinteros and passed unanimously by voice vote.

      There was consensus that the $125 per unit fee be placed on the sewer service charge roll, that Fergus O’Sullivan be so advised, advised of his ability to request a waiver, and that he be invited to the next meeting to discuss this matter. The Engineer will draft the letter which will be reviewed by Counsel
    3. Geneva Laundromat: They were issued a partial billing last year with the caveat that we would compare their usage to that of the Palace Laundromat when it opened for business. Their assumption was that their usage would decline once the Palace was opened for business. As it turns out both of the laundromats have exceeded their capacity and will need to either cut back their usage or purchase additional capacity.
  3. District Counsel – consideration of matters relating to:
    1. Saddleback sewer service charges manual billings: Counsel Bakker has obtained records from Bill Esselstein and anticipates having more information once he has had a chance to read all the history.
  4. District Clerk – consideration of matters relating to: No report.

Old Business:

  1. Senator Leland Yee, SB586 regarding the Cow Palace parking lot: Counsel said this is still an active bill. The President said this can be removed from the agenda.
  2. FY 2008- 09 auditing service: A motion was made by Director Tonna to use the services of Fechter & Co. for the audit subject to the following conditions: the fee will not exceed $9,600, Counsel will review the letter of engagement and the Clerk will check two references. The motion was seconded by Director Swanbeck and it was passed unanimously by voice vote.

New Business:

  1. CSDA proposed Bylaw changes: A motion was made by Director Quinteros, seconded by Director Swanbeck and unanimously passed delegating authority to respond to the President.
  2. Ratification of President’s execution of Agreement for Compensation to County of San Mateo for Collection of Special Assessment Charges: Counsel reviewed the contract and felt it was necessary and needed to be signed by the President and submitted by the June deadline. The per parcel fee for collection services is reasonable. A motion was made by Director Quinteros to ratify the President’s action on behalf of the District. The motion was seconded by Director Swanbeck and passed by voice vote.
  3. Reports on other matters: no action will be taken.
    1. The President reported that a meeting has been scheduled on July 7th with the SFPUC.

Closed Session:

  1. Conference with Legal Counsel – existing litigation (Subdivision [a] of Section 54956.9)
    Bayshore Sanitary District v. City & County of San Francisco, San Francisco Public Utilities Commission; Case No. CGC 07-469434

The Closed Session began at 8:07 P.M. and ended at 8:29 P.M. No reportable action was taken.

Adjournment:

A motion was made by Director Quinteros, seconded by Director Swanbeck and passed to adjourn the meeting at 8:29 P.M. The next meeting is July 23, 2009.

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