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HomeMy WebLinkAbout1995-04 County Sanitation Districts of Orange County,California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley,CA 92728-8127 Telephone: (714) 962-2411 DRAFT MINUTES OF THE STEERING COMMITTEE the Office of the Sacrew Gount Sa(�itatbn Dlstrio(s NO(s) .6 C(n, // April 26, 1995 - 5:30 p.m. MAY 2241995 r.-�C -- A meeting of the Steering Committee of the County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California was held Wednesday, April 26, 1995, at 5:30 p.m., at the Districts' Administrative office. (1) ROLL CALL The roll was called and a quorum declared present, as follows: STEERING COMMITTEE: OTHERS PRESENT: Present: Thomas L. Woodruff, General Counsel Director William Steiner John C. Cox, Jr., Joint Chair Mike Steiner Peer A. Swan, Vice Joint Chair `-' John J. Collins, Chair, PDC Pat McGuigan, Chair, OMTS Roger Stanton, VC Finance & Personnel STAFF PRESENT: Donald F. McIntyre, General Manager Absent: Blake P. Anderson, Assistant General Manager Michael White, Controller George Brown, Chair, FPC Jean Tappan, Secretary (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS There were no comments by any member of the public. (4) APPROVAL OF MINUTES The minutes of the March 8, 1995 Steering Committee meeting were approved as drafted. p Minutes of the Steering Committee Meeting Page 2 �..� April 26, 1995 (5) REPORTS OF THE COMMITTEE CHAIR GENERAL MANAGER AND GENERAL COUNSEL No reports were made. (6) STEERING COMMITTEE DISCUSSION ITEMS (d) Concept Budget Mike White, Controller, presented a brief overview of the draft of the newly- developed Concept Budget. The draft will also be presented to the operating committees at their May meetings. The final budget will be presented to the Committees at their June meetings and to the Directors at the June 28 Joint Board meeting for approval. After discussing the one-step budget process, time frame, consolidation, team approach, process, level of control and amendments (provisions for change) and assumptions, the concept was accepted. Other items discussed were anticipated changes in staffing as a result of the Ernst &Young report, fee increases, training, and privatizing security. The CORF budget was presented by Finance Director Gary Streed and discussed. The new format organizes projects by the flow through the plants. Staff was directed to add an overview or summary statement to each of the projects that states what is being done now, and what can be gained by doing the project. A very preliminary budget, based on receiving all of the OCIP funds, was presented depicting reserves and carryover, revenues, requirements, additions to and deductions from reserves, and estimated ending reserves. General Manager Don McIntyre indicated that the 2020 Vision should be updated starting next year and include revised long-term investment and reserves policies as well as changes in the capital improvements program. (a) Staff Time and Costs for Preparation of Agenda for Committee Meetings The General Manager discussed the issue of staff time necessary to prepare for the operating committees and the Joint Boards meetings. While the numbers may not be totally accurate, they indicate that the process needs revision. The Committee decided to continue the existing process until the end of the year Minutes of the Steering Committee Meeting Page 3 April 26, 1995 (December) and then revisit the issue. In the meantime, staff and the Committee will consider any recommendations put forth to streamline the process, including merging the Districts. (b) Management Performance Review Program (MPRP) The General Manager asked the Committee to reconsider the MPRP, based on the E&Y report and staffs comments. The program, as presently implemented, is not working. More training is required and the program needs to be funded at above the cost-of-living. After further discussion, staff was directed to investigate alternatives and report back. (c) Consideration of Solid Waste Management System. The General Manager met with Bill Popejoy and Mr. Taormino of Anaheim Disposal on the landfill system, currently managed and operated by the County of Orange. The Districts have the authority under the Special Districts Act to manage this system. However, all cities must agree to use the County landfills in order to ensure revenues. At this time, the County appears to have an inflated value placed on the landfills, and studies staff has completed show that their value just isn't there. Staff will continue to track this issue and report back to the Committee as events occur. (6) CLOSED SESSION There was no closed session. (7) OTHER BUSINESS No other business was discussed. (8) MATTERS TO BE REPORTED AT A SUBSEQUENT MEETING There were no matters to be reported. v Minutes of the Steering Committee Meeting Page 4 April 26, 1995 (9) MATTERS ON A FUTURE AGENDA FOR ACTION AND A STAFF REPORT There were no matters for a future agenda. (10) CONSIDERATION OF UPCOMING MEETINGS The next meeting will be at the call of the Joint Chair. (11) ADJOURNMENT The Steering Committee adjourned at approximately 7:10 p.m. Submitted by: J Tappan, tees g Committee Secretary j:Pxptladgm�strtrcommNur9510<28%.min STATE OF CALIFORNIA 1 ) SS. COUNTY OF ORANGE 1 Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Notice and the Agenda for the Steering Committee meeting held on Wednesday, April 26 1995, was duly posted for public inspection in the main lobby of the Districts' offices on April 21, 1995. IN WITNESS WHEREOF, I have hereunto set my hand this Twenty-sixth day of April, 1995. Penny Kyle, S c etary ob ach f the Boards of Directors of C ty Sa i Lion Districts Nos. 1, r, 11, 13 & 4 of Orange County, California I/C Posted: �-� , 1995,13P.M. By: Signature o , COUNTY SANITATION N DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY,CALIFORNIA 92728-8127 10844 ELLIS, FOUNTAIN VALLEY, CALIFORNIA 9 210 8-10 1 8 �^4ce couH� (714)962-2411 April 21, 1995 NOTICE OF MEETING STEERING COMMITTEE COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA WEDNESDAY, APRIL 26, 1995 - 5:30 P.M. DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 A special meeting of the Steering Committee of the Joint Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, will be held at the above location, time and date. STEERING COMMITTEE Roll Call: Meeting Date: April 26, 1995 Meeting Time: 5:30 p.m. Meeting Adjourned: Committee Members John C. Cox, Jr., Joint Chair . . . . . . . . . . . . . . _ Peer A. Swan, Vice Joint Chair . . . . . . . . . . . _ George Brown, Chair, FAHR . . . . . . . . . . . . . _ John J. Collins, Chair, PDC . . . . . . . . . . . . . . Pat McGuigan, Chair, OMTS . . . . . . . . . . . . . Roger Stanton, Vice Chair, FAHR . . . . . . . . . Others Present Thomas L. Woodruff, General Counsel . . . . Staff Present Donald F. McIntyre, General Manager . . . . . . _ _ Blake P. Anderson, Asst. General Manager . . _ _ Jean Tappan, Secretary . . . . . . . . . . . . . . . . . _ _ COUNTY SANITATION DISTRICTS of ORANGE COUNTY. CALIFORNIA AGENDA f DSXP ELLIS AVENUE oa eax fl@7 STEERING COMMITTEE PD(JMAIN"LLEY,CAUFOPNIX 927288117 n1n862.24n JOINT BOARDS OF DIRECTORS COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 SPECIAL MEETING WEDNESDAY, APRIL 26, 1995, 1995 - 5:30 P.M. .........................................................................................................................................................................._..., In accordance with the requirements of California Government Code Section 54954.2, i this agenda has been posted in the main lobby of the Districts'Administrative Offices not less i i than 72 hours prior to the meeting date and time above. In the event any matter not listed on this agenda is proposed to be submitted to the i Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) i as an emergency item or that there is a need to take immediate action which need came to the attention of the Committee subsequent to the posting of the agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the i meeting date. i...............................................................................................................................................................................: (1) Roll Call (2) Appointment of Chairman Pro tem, if necessary. (3) Public Comments: All persons wishing to address the Committee on specific agenda items or matters of general interest should do so at this time. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to five minutes. -1- April26, 1995 Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Committee except as authorized by Section 54954.2(b). (4) Consideration of Motion to Receive and Approve the Minutes of the Steering Committee Meeting held March 8, 1995. (5) The Committee Chairman, General Manager and General Counsel may present verbal reports on miscellaneous matters of general interest to the Committee Members. These reports are for information only and require no action by the Committee Members. (a) Report of Committee Chairman (b) Report of General Manager (c) Report of General Counsel (6) Steering Committee Discussion Items. (a) Staff time and costs for preparation of agenda for Committee Meetings. (b) Management Performance Review Program (MPRP). (c) Consideration of Solid Waste Management System. (d) Concept Budget. (7) Closed Session. ..................................................................................................................................................... Closed Session: During the course of conducting the business set forth on this agenda as a regular meeting of the Committee, the Chairman may convene the Committee in closed session to consider matters of pending or potential litigation, or personnel matters, pursuant to Government Code i Sections 54956.9, 54957 or 54957.6. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employment actions or negotiations with employee representatives; or which are exempt from public disclosure under I the California Public Records Act, may be reviewed by the Committee during a I permitted closed session and are not available for public inspection. At such time as final actions are taken by the Committee on any of these subjects, the minutes will reflect all required disclosures of information. t....................................................................................................................................................I -2- April 26, 1995 (a) Convene in closed session, if necessary. (b) Reconvene in regular session. (c) Consideration of action, if any, on matters considered in closed session. (d) Report on discussion taken in closed session, as required. (8) Other business, if any. (9) Matters which a Director would like staff to report on at a subsequent meeting. (10) Matters which a Director may wish to place on a future agenda for action and a staff report. (11) Consideration of upcoming meeting dates. (12) Adjourn. Notice to Committee Members: For any Questions on the agenda or to place items on the agenda,Committee members should contact the Committee Chair or the Secretary ten days in advance of the Committee meeting. Committee Chair John C.Cox,Jr. (714)721-6660 Secretary. Jean Tappan (714)962-2411.Fitt.2001 (714)962-0356(Fax) f W,pdocbmWrcomm`042695.agn -3- STEERING COMMITTEE AGENDA FOR APRIL 26, 1995 (4) Consideration of motion approving Draft Minutes of March 8, 1995 Steering Committee Meeting. Summary Attached are the draft minutes for the March 6, 1995 Steering Committee. Recommendation Consideration of a motion approving the draft Minutes of the Steering Committee meeting held March 8, 1995. wpdwVmWru mb42695.4 v County Sanitation Districts of Orange County,California P.O.Box 8127 a 10844 Ellis Avenue Fountain Valley,CA 9272MI27 Telephone: (714)962-2411 DRAFT MINUTES OF THE STEERING COMMITTEE MARCH 8, 1995 -5:30 P.M. A meeting of the Steering Committee of the County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California was held Wednesday, March 8, 1995, at 5:30 p.m., at the Districts'Administrative office. (1) ROLL CALL The roll was called and a quorum declared present, as follows: STEERING COMMITTEE: OTHERS PRESENT: Present: Thomas L. Woodruff, General Counsel John C. Cox, Jr., Joint Chair Peer A Swan, Vice Joint Chair STAFF PRESENT: John J. Collins, Chair, PDC Pat McGuigan, Chair, OMTS Donald F. McIntyre, General Manager Roger Stanton, VC Finance & Personnel Blake P. Anderson, Assistant General Manager George Brown, Chair, FPC Absent: None (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS There were no comments by any member of the public. Minutes of the Steering Committee Page 2 March 8, 1995 (4) REPORTS OF THE COMMITTEE CHAIR, GENERAL MANAGER AND GENERAL COUNSEL No reports were made. (5) STEERING COMMITTEE RECOMMENDATIONS (a) After a discussion by the Committee, a motion was made, seconded and duly carried to recommend to the Joint Boards to amend Classification and Compensation Resolution No. 79-20, establishing the position classification of Assistant General Manager and authorize two positions and establish salary ranges of$90,000 - $120.000. (b) Staff reported on the issue of privatization and discussed where we now contract for private sector services and what opportunities may exist for additional privatization at the Districts. The Committee expressed a strong opinion that selling the treatment plant outright is not an option for staff to consider. Some of the recommendations were to look at what degree we are automated and is there a dollar savings available if we continue to automate. Staff was directed to first attempt to benchmark our efficiency and costs relative to other POTWs and report back its progress at future meetings of the Steering Committee. Staff was directed to continue to look for opportunities to make our operations more efficient. (c) Discussion of Committee Structure and Charter. After a discussion on the issue of Committee structure and charter, a motion was made, seconded and duly carried to keep the committee structure as it now exists with the following changes in the schedule when the committees meet. Committee Meet Operations, Maintenance and 1 st Wed, 5:30 p.m. Technical Services Planning, Design and 1 st Thu, 5:30 p.m. Construction Finance, Administration and 2nd Wed, 5:30 p.m. Human Resources Executive 3rd Wed, 5:30 p.m. Steering 4th Wed, 5:30 p.m. Joint Boards of Directors 4th Wed, 7:30 p.m. Minutes of the Steering Committee Page 3 March 8, 1995 (6) CLOSED SESSION There was no closed session. (7) OTHER BUSINESS There was a discussion of a personnel matter related to seeking addenda to professional services agreements. (8) MATTERS TO BE REPORTED AT A SUBSEQUENT MEETING There were no matters to be reported. (9) MATTERS ON A FUTURE AGENDA FOR ACTION AND A STAFF REPORT There were no matters for a future agenda. (10) CONSIDERATION OF UPCOMING MEETINGS (11) ADJOURNMENT The Steering Committee adjourned at approximately 7:15 p.m. �:brytloegml+trcommW3D895.min STEERING COMMITTEE AGENDAFOR APRIL 26, 1995 (6)(a) Discussion of Staff Time and Costs for Preparation of Agenda for Committee Meetings Summary Attached is a staff-prepared matrix detailing staff hours and associated costs for preparing for the OMTS, PDC, FAHR, Executive and Steering Committees, as well as the Joint Boards meeting. The matrix does not include the amount of time the General Manager's office spends on the Committee agenda process. Staff is currently evaluating the process to try to streamline it. One suggestion has been to eliminate the Executive Committee and have the Committees report directly to the Joint Boards of Directors. Recommendation Discussion item only at this time. wpdWgmistrc mmW426956a MONTHLY STAFF EFFORTS SPENT ON BOARD AND COMMITTEE MATTERS PREPARATION OF AGENDA PREPARING FOR&ATTENDING PREPARATION OF MINUTES Management. Technical Secretarial Manage- Technical I Secretarial Management Technical Secretarial Staff Staff - Staff : . ment Staff ' Staff Staff Staff Staff Staff Hrs $ .. Hrs $. Hrs $ Hrs F $ Hrs $. .Hrs $ Hrs $. Hrs s;. $ Hrs . OMTS 81 4106 63 2351 48 1130 31 2117 28 1048 8 197 5 273 9 236 PDC 110 5683 94 3629 32 819 105 2630 206 6133 21 538 1.5 94 4 104 F&P 134 6523 11 244 38 980 50 2560 13 400 4 103 10.5 597 7 181 EXEC 9 528 2 68 24 1338 12 423 1 18 2.5 167 STEER 1 71 2 142 1 71 BOARD 84 4086 182 7177 338 9218 45 2455 9 324 160 2123 1 71 46 1132 TOTAL 419 20997 352 13469 456 12147 257 11242 268 8328 194 2979 21.5 1273 66 1653 GRAND TOTALS HRS $ l - MANAGEMENT STAFF 697.5 33,512 TECHNICAL STAFF 620 21,797 SECRETARIAL STAFF 716 16,779 TOTAL STAFF EFFORT 2033.5 72,088 NOTE: $ = Hrs x[salary+overhead of 29%] j:\wpdoc\gm\comm.bd COMMITTEE MEETING TOTAL HOURS TOTAL DOLLARS OMTS 273 $11,458 PDC 573.5 $19,630 FAHR 267.5 $11,588 EXEC 50.5 $2,542 STEERING 4 $284 BOARD 865 $26,586 TOTALS 2083.5 $72,088 1 i STEERING COMMITTEE AGENDAFOR APRIL 26, 1995 (6)(b): Discussion of Management Performance Review Program (MPRP) Summary Attached is information regarding this program which suggests very clearly that it is not working. In addition to the findings of the E&Y study, I have attached a memorandum dated April 13, 1995 from John Dettle, Chairperson for the MPRP Review Committee, which reiterates most of the findings in the E&Y study. Finally,just this past week, I met with representatives of the Supervisory and Professional Management Team, who repeated many of the same concerns. Backoround It is my understanding that in April or May of years when the merit pool is not established, staff submits a recommendation to the Personnel Committee (now the Finance, Administration and Human Resources Committee) regarding an appropriate level of funding for the pool. This recommendation is based on several external salary surveys and certain internal comparisons with other bargaining groups. The recommendation is normally discussed at one or more meetings, and then moves to the Executive Committee and Boards for approval either as recommended by staff or as amended. Concurrent with that process, performance reviews are completed for all individuals covered by the MPRP program. Each of the review scores is converted to a percentile value, and reported on a Rating Worksheet. Staff then performs a cross-divisional comparison of the rating values as a "validity" check. Actual percentage increase values are then assigned to the five performance rating categories such that an average performer scoring at the 50th percentile level will receive a salary adjustment approximately equal to the cost of living. Increasingly higher percentages are assigned to performance ratings in the categories of Exceeds Expectations and Outstanding based upon the amount of available funds and actual ratings. The increase percentages are verified against the actual pool to ensure that adequate funds are available to meet the projections. Departmental managers then assign an actual increase amount to each employee based on their performance rating. The increase is discussed with the employee as a final step. Observations As some of you know, I have serious reservations about this program. My experience in Pasadena suggests that even though we had a merit (bonus) program for management personnel and executed it well, I felt that the management problems associated with the program are not really worth the effort. I say that because problems of training people to evaluate subordinates in a way that ensures equity is very demanding, and perhaps an impossible task. Even though this kind of program has been in place in the Districts for a number of years, I see no evidence that there has been any training to ensure equity, which should precede start of the program. I see no evidence that there is a system in place that outlines expectations at the beginning of the year against which the people should be measured. I personally do not believe that merit should be built into base pay. If you have an outstanding performance one year that increases your pay by several percentage points (let's say 6 or 8%), that should not increase your base pay. The program that I favor is a bonus system. Four associated problems have to do with funding inequities, which should be done independent of other adjustments; cost of living adjustments which should be the basis for moving the pay ranges; the ranges are so broad as to give a very misleading statement to employees and to the marketplace; and finally, apparently the merit pool has not been funded above a cost of living level. In summary, if the Boards believe that maintaining this kind of program is important, then I think we need to do the same thing we are doing with the capital program; that is, stop, put the things in place that need to be done before commencing this kind of program and look ahead a year or two to implement the program after sufficient training and systems work have been done. To restate, my experience says that these programs are very time consuming, very expensive and may work well in free enterprise, but may not have the payoff for the public sector. Finally, my view is that pay does not by itself create incentives, but perceptions of inadequate pay do create disincentives. Programs that recognize individual's contributions to the organization, aggressive training and employee benefits may have far more significance in helping performance than pay alone. wpdwVmWrb mmZ42695.6b County Sanitation Districts of Orange County Human Resources Review Action Plans 4. Improve quality of Findings the Management Performance Review • Managers and subordinates express concern that the MPRP does not"incenlivize"performance and therefore Program(MPRP) does not meet its stated goal of providing "...an incentive for consistent and meritorious performance."The pool percentage is viewed as an entitlement at the low end of performance and is not viewed as significant enough to impact performance at the high end of performance. In addition, percentage spreads are not seen as Inge enough to differentiate top from bottom performers and thus are not effective performance drivers ■ Them is widespread employee dissatisfaction with the MPRP.Employees express in focus groups and inter- views inequity concerns relative to the step process,market rates and the stated intent of the program.We iden- tified that zero percent of employees were in the top salary quartile in the 1993 and 1994 performance years. Some portion of outstanding employees should reside in the top quartile to effectively reward performance at Fiscal year 1993-94 reviews were completed haphazardly because they were not initially liedio a salary increase ■ Certain MPRP procedures have not been communicated since the roll-out of the revised program in 1991 e.g. pro-rated procedure for new hims.In addition,overall MPRP policies and procedures do not exist in any acces- sible format,though they are referenced to in the MOU ■ There has been no training on the MPRP since the revised program was rolled-out in 1991 ■ Comments to support review ratings generally reflect job responsibilities rather than performance outcomes. l This pattern is seen at the top levels also.Department Head reviews are typically narrative essays which do not reflect specific and measurable performance objectives ■ There is variability across the districts in the way managers are reviewing their subordinates. Reviews are not being calibrated across supervisors,making them invalid selection tools for promotions ■ Though promotional postings indicate position requirements, guidelines for what individuals can do to achieve promotion are unclear ■ See Appendix B for Flowchart of the MPRP JERNST&YOUNG LLP 23 County Sanitation Districts of Orange County Human Resources Review Solutions ■ Ensure reviews are completed and given annually for all exempt personnel regardless of monetary increase ■ Redesign process to allow employee input prior to finalization of review. Add self-appraisal workshect to prompt dialogue during performance discussions ■ Increase emphasis on ongoing feedback ■ Develop instruction booklet for supervisors and employees including: • Program philosophy • Critical dates • Program design • Examples of specific and measurable performance objectives • Ratings definitions • Discussion of ratings errors ■ Provide supervisory training on the following: • Program design • How to write specific and measurable performance objectives • How to provide meaningful employee feedback • Mechanisms for ongoing feedback ■ Evaluate video training alternative for modelling performance feedback ■ Institute a quality control mechanism to monitor the consistency of ratings across supervisors and ensure that performance feedback is job-specific and outcome versus responsibility-based ■ Build accountability for quality and timeliness of MPRP feedback into managers performance reviews ■ Utilize computerized tracking and reporting system to facilitate review issuance and compliance =I SVST&YOUNG LLP is County Sanitation DWricts of Orange County Human Resources Review ■ Place MPRP forms on disk to facilitate timely completion of reviews ■ Validate performance expectations against job descriptions ■ Establish linkage to promotions ■ Relate ratings definitions in performance dialogue to concrete examples of the performance results and behav- ions required to achieve various ratings so that employees know how to reach the next highest rating level ■ Include career planning component and link development plan to career planning ■ Recognize constraints of union environment in development and implementation of action plan. Union mem- bership approval would be required for all substantive program changes i.e., involving more than changes to administrative procedures.In instances where substantive changes are proposed,develop a plan to achieve union approval ■ Consider setting standard percentage increases by rating category and announcing the percentage ranges at the beginning of the performance year. The following is an example: 8- 10 percent Outstanding ' 6- 8 percent Exceeds Expectations 4-6 percent Meets Expectations 2-4 percent Improvement Needed 0-2 percent Unacceptable In the above example,all employees rated outstanding could expect to receive the same percentage increase, which could range from 8 to 10 percent. In addition, consider making the percentage spread wide enough to ` differentially reward performance at the lop and low ends.Although these changes could not be implemented l until the 1997-8 fiscal year and would require passage by union membership, the proposed changes would motivate performance and thus achieve the stated goals of the MPRP Costs/Benefits Costs ■ Resources to develop instruction booklet and supervisory training course including possible video component. Cost estimate for footage and editing for a half hour training video is$3,000 to$5,000 J ERNST&YOUNG it 25 County Sanitation Districts of Orange County Human Resources Review ■ Staff time to deliver and undergo supervisory training related to the MPRP ■ Staff time to provide ongoing coaching and counselling,set goals,solicit employee input,monitor review qual- ity and negotiate substantive changes to the MPRP ■ Significant funding to allow the differential percentage spread necessary to motivate performance.This issue would need to be addressed by the Board Benefits ■ Enhanced performance motivation ■ Improved quality of reviews • Accuracy • Meaningfulness • Timeliness ■ Lessened legal risk through improved documentation ■ Valid selection tool ■ Reduced inequity concerns Implementation Framework Timeline: Six months Proposed Project Leader: Gary Hasenstab Proposed Team Members: General Manager Department Heads Chair of Union MPRP Review Committee Committee of Division Managers JONST&YOUNG LIP COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA Apnl 1.3, 199.rJ 119 ELLI9 AVENUE PC BOX 8127 FOUNTAIN VALLEY.CALIFORNIA 9272MI27 171419624411 MEMORANDUM TO: .'Donald F. McIntyre, General Manager Gary Hasenstab, Director of Human Resources FROM: John Dettle, Chairperson, MPRP Review Committee SUBJECT: Management Performance Review Program (MPRP) Article 11 of the Supervisory and the Professional Groups latest Memorandum of Understanding (MOU) states "A committee including bargaining unit members will be formed to review all aspects of the MPRP and pay plans." The MPRP Review Committee was formed and had its first meeting on Thursday, October 27, 1994. The Committee adopted an Agenda, attached, and started to work on the completion of those tasks. The Committee has completed surveys of the Supervisory and Professional Groups and investigations of private and public agencies. Short comings and problems with the existing system have been tallied and documented. Some of the main points are listed below. • The system fails to provide incentive for individuals to excel. There is little difference between top and middle pay increases because a pool of money requires managers to '.steal from Peter to pay Paul." • There are no written policy and procedure for managers to follow. • There are no standards for career development, performance, and evaluation. • Review procedures and evaluations are inconsistent among Divisions. • There is compaction between the Supervisors and their staff because of the small percentage increases from the pool system vs. the higher percentages from the step system. • Training the supervisors to implement the system fairly is required. The next step as a Committee was to tally and document all the improvement ideas resulting from the surveys, investigations and group discussions and then select and organize the ideas into a written Policy and Procedure. However, this next step is now put on hold because, as we understand it, Ernst & Young has completed their audit of the Personnel Department and has made recommendations for improving the MPRP process. The members of the MPRP Review Committee do not wish to spend their time duplicating the work being done by Ernst & Young or yourselves. What the Committee wishes to do is be involved and to help in improving the MPRP system. The members of the Committee are all volunteers who feel strongly that the system can be improved and who have already done much Donald F. McIntyre Gary Hasenstab April 13, 19995 Page Two work to that end. The members of the Committee come from many levels and many divisions and would make an excellent"test group"for any proposed improvements as well as having many good ideas of their own. Having the buy in of this"test group" should go a long way in obtaining the buy in of the Supervisory and Professional Groups as a whole for any proposed MPRP Policy and Procedure. We look forward to working together on this issue in the future. JCD:jac ENM372e1041395.M1 Attachment cc: Kelly Christensen Anne Marie Feery Bill Hamblin Paul Mitchell Richard Santangelo Ron Wade MPRP COMMITTEE AGENDA 1. INVESTIGATION OF AGENCIES • Prepare survey form and distribute prior to November 16, 1994. • Form Sub-Committee to investigate similar agencies with similar programs: IRWD, Tustin, CALTRANS, etc. • Form Sub-Committee to investigate programs of agencies with similar size and organization: EMA, AOMD, Anaheim, etc. • Form Sub-Committee to investigate private corporations with similar functions, i.e. consultants: Boyle, Lee&Ro 2. PROCEDURE RESOLUTION • Identify and list problems with current procedure. Refer to survey forms. Outline old procedure. • Identify and list problem solutions. List all ideas. Develop new procedure and a policy outline to obtain fairness between staff and departments. 3. DOCUMENTATION • Write up policy and procedure, review and resolve comments. • Revise MPRP farm for flexibility to customize/standardize for each department. 4. ADOPTION OF MPRP POLICY AND PROCEDURE • Review with General Manager and Director of Human Resources and request MPRP policy and procedure be adopted by Districts. • If unacceptable to management include as condition for next MOU. 5. TRAINING/IMPLEMENTATION JCD:jac ENG07201 1395 M1 t STEERING COMMITTEE AGENDAFOR APRIL 26, 1995 (6)(C) Discussion of County of Orange Solid Waste Management System Summary Staff will discuss this, provide some research information, and seek direction at the meeting. Recommendation Information only item. wpdw1gm\strcomm1N2695.6c STEERING COMMITTEE AGENDAFOR APRIL 26, 1995 (6)(d) Discussion of 1995-96 Conceptual Budget Summary Attached is a draft of the proposed 1995-96 Budget format and policy assumptions for your review. Staff will discuss this in detail and seek direction at the meeting. Recommendation Information only item, wpdocv.wrtr ommW2695.6d County Sanitation Districts of Orange County 1995-96 Proposed Budget 4`oa��gSaI SA z z � 0 � a •� C� p 'YO 711E John C. Cox, Jr. Joint Chairman Peer A. Swan Joint Vice-Chairman For the Fiscal Year July 1, 1995 through June 30, 1996 Table of Contents County Sanitation Districts Organization Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Map of The County Sanitation Districts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Administrative Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1 - Introduction General Manager's Budget Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Overview & Budget issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Background Information and Description of Services . . . . . . . . . . . . . . . . . . . . . . Section 2 - Policies, Systems, and Process Fiscal Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview of The Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reader's Guide to the Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Budget Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounting System and Budgetary Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3 - Summary-All Districts Where the Money Comes From . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Where the Money Goes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Revenue and Expense Summary . . . . . . . . . . . . . . . . . . . . . . . . . . Budget Comparisons by District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revenue by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revenue by Line Item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense by Line Item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4 - Summary -Joint Operating Budget Comparisons by Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revenue by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revenue by Line Item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense by Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expense by Line Item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table of Contents Section 5 - Department/Divisions Budgets General Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . BoardSecretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personnel/Security/Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assistant General Manager-Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director of Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchasing &Warehousing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DIRECTOR OF INFO. TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hardware Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Software Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DIR. OF MAINTENANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Planning, Scheduling &Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plant Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Collection Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mechanical Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Electrical Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Instrumentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DIR. OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plant Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DIR. OF TECHNICAL SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conservation, Recycle & Reuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Air Quality Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Environmental Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Environ. Services Lab Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Source Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DIR. OF ENGINEERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table of Contents Planning & Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6 - District Budgets DistrictNo. I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DistrictNo. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . District No. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DistrictNo. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . District No. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . District No. 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . District No. 11 . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . District No. 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . District No. 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7 - Self Insurance Funds Workers' Compensation Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public Liability Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8 - Capital Improvement Program Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Project Graphs by Type and Funding Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . Project Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Project Funding Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CIP Project Detail Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9 - Staffing Staffing by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Staffing by Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter 10 - Glossary BudgetGlossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter 11 - Index Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April 12, 1996 1.0+ `.r o�sIn¢ra 4 County Sanitation Districts of Orange County . Fiscal Policy General Financial Goals 1. To maintain financially viable Sanitation Districts that can maintain an adequate level of wastewater treatment services. 2. To maintain financial flexibility to be able to continually adapt to local and regional economic changes. 3. To maintain and enhance the sound fiscal condition of the Districts. Operating Budget Policies 4. The Districts will adopt a balanced budget by June 30 of each year. 5. The Director of Finance will prepare a budget calendar no later than January of each year. 6. An annual operating budget will be developed by verifying or conservatively projecting revenues and expenditures for the current and forthcoming fiscal year. 7. During the annual budget development process, the existing programs will be thoroughly examined to assure removal or reduction of any services or programs that could be eliminated or reduced in cost. 8. Current operating revenues will be sufficient to support current operating expenditures. 9. Annual budgets including reserves will provide for adequate design, construction, maintenance and replacement of Districts' capital plant and equipment. 10. The Districts will maintain all physical assets at a level adequate to protect the Districts' capital investment and to minimize future maintenance and replacement costs. Fiscal Policy April 12, 1995 Page 2 11. The Districts will project equipment replacement and maintenance needs for the next five years and will update this projection each year. From this projection a maintenance and replacement schedule will be developed and followed. 12. The Districts will avoid budgetary and accounting procedures which balance the current budget at the expense of future budgets. 13. The Districts will forecast its Joint Works'expenditures and revenues for each of the next five years and will update this forecast at least annually. Revenue Policies 14. Because revenues are sensitive to both local and regional economic conditions, revenue estimates adopted the Districts' Board must be conservative. 15. Staff will estimate annual revenues by an objective, analytical process utilizing trend,judgmental, and statistical analysis as appropriate. 16. Ad valorem property tax revenues of the Districts is dedicated to debt service. Expenditure Policies 17. The Districts will maintain a level of expenditures which will provide for the health, safety and welfare of the residents of the community. Service Fees 18. The Districts will set fees and user charges at a level that fully supports the total direct and indirect costs of operations, capital improvements, and debt service requirements not covered by reserves.. 19. Sewer Service User Fee will be projected for each of the next five years and this projection will be updated annually. Fiscal Policy April 12, 1995 Page 3 Capital Improvement Budget Policies 20 The Districts will make all capital improvements in accordance with an adopted and funded capital improvement program. 21. The Districts will develop an annual five-year plan for capital improvements, including design, development, implementation, and operating and maintenance costs. 22. Staff will identify the estimated costs, potential funding sources and project schedule for each capital project proposal before it is submitted to the Joint Boards for approval. 23. The Districts will use intergovernmental assistance to finance only those capital improvements that are consistent with the Capital Improvement Plan and Districts' priorities, and whose operating and maintenance costs have been included in the budget. 24. Staff will coordinate development of the capital improvement budget with the development of the operating budget. All costs for internal professional services needed to implement the CIP will be included in the operating budget for the year the CIP is to be implemented. 25. The Districts will use intergovernmental assistance and other outside resources whenever possible. 26. Cost tracking for components of the capital improvement program will be updated quarterly to ensure project completion against budget and established timelines. Short-Term Debt Policies 27. The Districts may use short-term debt to cover temporary or emergency cash flow shortages. All short-term borrowing will be subject to Board approval by resolution. 28. The Districts may utilize Board apporved inter-District loans ratherthan outside debt instruments to meet short-term cash needs. Inter-District loans will be permitted only if an analysis of the affected Districts indicates excess funds are available and the use of these funds will not impact the District's current operations. The prevailing interest rate, as established by the Districts' Treasurer will be paid to the lending District. Fiscal Policy April 12, 1995 Page 4 Long-Term Debt Policies 29. The Districts will confine long-term borrowing to capital improvements that cannot be financed from current revenue. In accordance with the 1989 Master Plan, one- half of all future long-term capital improvements will be funded from long-term debt with the remaining cost funded from capital improvement reserves and current revenues. 30. Proceeds from long-term debt will not be used for current on-going operations. 31. Before any new debt is issued, the impact of debt service payments on total annual fixed costs will be analyzed. Reserve Policies 32. An operations contingency reserve will be established to provide for non-recurring, unanticipated expenditures or to set aside funds to cover known contingencies with unknown costs. The level of this reserve will be established as needed but will not be less than 20% of the annual operating expenses. 33. A dry-period operations reserve will be established to fund operations and maintenance expenses for the first half of the fiscal year prior to receipt of taxes and user fees. The level of this reserve will be established as needed, but will not be less than 50% of annual operating expenses. 34. Reserve balances will be accumulated and maintained to fund approximately one years worth of the total cost of future capital improvements. 35. Self-insurance reserves for property (fire, flood, and earthquake), general liability, and workers' compensation will be maintained at a level which, together with purchased insurance policies, adequately protect the Districts. The Districts will maintain a reserve of$100,000,000. 36. Board approval is required before expending contingency reserve funds. Investment Policies 37. The Districts' Treasurer will annually submit an investment policy to the Districts' Board for review and adoption. Fiscal Policy April 12, 1995 Page 5 38. The investment policy will emphasize safety and liquidity before yield. Accounting, Auditing, and Financial Reporting 39. The Districts' accounting and financial reporting systems will be maintained in conformance with generally accepted accounting principles and standards promulgated by the Governmental Accounting Standards Board. 40. A fixed asset system will be maintained to identify all Districts' assets, their condition, historical cost, replacement value, and useful life. 41. Quarterly financial reports will be submitted to the Districts' Board and will be made available to the public. 42. Full disclosure will be provided in the general financial statements and bond representations. 43. The Districts' will maintain a good credit rating in the financial community. 44. An annual audit will be performed by an independent public accounting firm with the subsequent issue of an official Comprehensive Annual Financial Report, including an audit opinion and a management letter. Budget Assumptions 4121/95 Certain assumptions are necessary as a foundation for developing the Districts' budget. These assumptions guide the Board of Directors and Districts' staff in determining the level of wastewater treatment services that will be provided to the community and how these services will be funded. One key assumption used was that the County of Orange would be disbursing 77%, or approximately $295 million, from the Districts pre-petition bankruptcy deposits held within the Orange County Investment Pool by June 1995. Without these reserves, the Districts will have to make drastic cutbacks in operations and/or capital improvements in order to remain fiscally solvent. Following are other major assumptions used to develop the 1995-96 proposed budget: • Inflation for 1995-96 is projected to be 3.3 percent based on the percentage of change in the consumer price index obtained from the December 1994 Economic and Business Review report prepared by Chapman University. • Connection fees, or capital facilities connection charges, will increase by the Engineering News Record index for Los Angeles in accordance with the adopted Board Resolution. However, user fees will remain at the same rates for the fourth consecutive year. • Property tax revenues are projected to remain constant as the increases from new development are expected to be offset by a general decline in overall property valuation. • Based on information provided by the Districts' Investment Advisor, Chandler Liquid Assets, earnings on the investment of the Districts idle operating cash and reserves are conservatively budgeted at five percent. • An increase in staffing levels will be proposed based primarily on the recommendations of Ernst &Young's review of the Districts' operations in 1995. In addition, salaries are projected to increase at 3 percent in accordance with the memorandum of understanding agreements currently in place. Step increases have also been budgeted for all non-exempt employees not currently at the top of their range. • The proposed joint operating budget will also reflect a significant increase in training as a result of the Ernst and Young recommendation to provide more safety, technical, and management training. This recommenation was made in order to maximize the efficiency and effectiveness of Districts' employees while providing for a safe working environment. Budget Assumptions 4121/95 • The capital improvement program budget for the treatment plants, approximating $33 million, is being proposed at an amount that is manageable and can be realistically accomplished during the 1995-96 fiscal year.