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HomeMy WebLinkAbout2004-01 ORANGE COUNTY SANITATION DISTRICT N BB2-2a„ .,: 4)%2i%,56 '°°�•° NOTICE OF MEETING 8m 8,27 Way.� OF THE 7ze-8127 STEERING COMMITTEE .aa...: Bps Avenue `ae y.r ORANGE COUNTY SANITATION DISTRICT 92]0370,8 pe�.... WEDNESDAY, JANUARY 28, 2004 - 5 P.M. • clu.. Anene:m DISTRICT'S ADMINISTRATIVE OFFICE area 10844 ELLIS AVENUE eaa,a Pa" FOUNTAIN VALLEY, CALIFORNIA 92708 b Valley FWlmron Grove �Beach Irnnc v r+e�e A regular meeting of the Steering Committee of the Board of Directors of Orange County Sanitation District will be held at the above location, date and Alam:tas Beech time. o nae nacenua Same a a seal Beam s� rasa, ✓Ale PaH Yan e.wr el t Wan"a."e. ' Y(11A Ve b.k+y OirtMtts Cafe Mesa Micaay Ow i6r OiKrlttt �Fanch T.me,m h wotldclasa leaderoh,1n wastewater and ware,resource maeagemem. STEERING COMMITTEE AND BOARD MEETING DATES FOR THE NEXT TWELVE MONTHS Wednesday, January 28, 2004 Wednesday, February 25, 2004 Wednesday, March 24, 2004 Wednesday, April 28, 2004 Wednesday, May 26, 2004 Wednesday, June 23, 2004 Wednesday, July 28, 2004 Wednesday, August 25, 2004 Wednesday, September 22, 2004 Wednesday, October 27, 2004 Wednesday, November 17, 2004 Wednesday, December 15, 2004 'Tentatively rescheduled from regular fourth Wednesday. STEERING COMMITTEE (1) Roll Call: Meeting Date: January 28, 2004 Meeting Time: $p.m. Meeting Adjourned: Committee Members Shirley McCracken, Board Chair Steve Anderson, Board Vice Chair _ Brian Donahue, Chair, PDC Committee _ Jim Ferryman, Chair, OMITS Committee Brian Brady, Chair, FAHR Committee Jim Silva, Supervisor _ Norm Eckenrode, Past Board Chair Others Thomas L.Woodruff, General Counsel Don Hughes Staff Present Blake P. Anderson, General Manager................................ Bob Ghirelli, Director of Technical Services....................... David Ludwin, Director of Engineering............................... Patrick Miles, Director of Information Technology.............. Robert Ooten, Director of Operations& Maintenance........_ Gary Streed, Director of Fnance,?reasurer....................... Lisa Tomko, Director of Human Resources........................ Carol Beekman, Communications Services Manager........ Jim Herberg, Engineering Manager Jean Tappan. Secretary..................................................... c: Lenora Crane AGENDA REGULAR MEETING OF THE STEERING COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JANUARY 28, 2004 AT 5 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the Districts Administrative offices not less than 72 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the office of the Board Secretary. Items Not Posted: In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency item or because there is a need to take immediate action,which need came to the attention of the Committee subsequent to the posting of agenda,or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you require any special disability related accommodations,please contact the Orange County Sanitation District Board Secretarys office at(714)593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Items Continued: Items may be continued from this meeting without further notice to a Committee meeting held within five(5) days of this meeting per Government Code Section 54954.2(b)(3). Meeting Adioumment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955(posted within 24 hours). (1) ROLL CALL (2) APPOINTMENT OF CHAIR PRO TEM. IF NECESSARY (3) PUBLIC COMMENTS All persons wishing to address the Steering Committee on specific agenda items or matters of general interest should do so at this time. As determined by the Chairman,speakers may be Book nuber 1 -2- January 28, 2004 Agenda deferred until the specific item is taken for discussion and remarks may be limited to three minutes. 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) APPROVE MINUTES OF PREVIOUS MEETING Approve draft minutes of the December 17, 2003 Steering Committee meeting. (5) REPORT OF COMMITTEE CHAIR (6) REPORT OF GENERAL MANAGER A. In-County Biosolids Alternatives B. Miscellaneous Committee Housekeeping Issues C. Fiftieth Anniversary Celebration Plans (Carol Beekman) (7) REPORT OF GENERAL COUNSEL (8) DISCUSSION ITEMS (Items A-E) A. NW RI Asset Management Blue Ribbon Panel Report (Doug Stewart) B. Regional Water Quality Control Board Order re Urban Runoff (Bob Ghirelli) C. Biosolids Advisory Committee (Bob Ghirelli) D. Review Agenda Items scheduled to be presented to Committees in February (Information item only) E. Review and consideration of Agenda Items for Board of Directors Meeting of January 28, 2004 (9) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT Book nuber 2 -3- January 28, 2004 Agenda (12) FUTURE MEETING DATES The next Steering Committee Meeting is scheduled for 5 p.m., Wednesday, February 25, 2004. The next Board Meeting is scheduled for 7 p.m., Wednesday, February, 2004. (13) CLOSED SESSION During the course of conducting the business set forth on this agenda as a regular meeting of the Steering Committee, the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. 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 the California Public Records Act, may be reviewed by the Directors during a permitted closed session and are not available for public inspection. At such time as final actions are taken by the Board on any of these subjects, the minutes will reflect all required disclosures of information. A. Convene in closed session, if necessary 1. Convene in closed session to confer with General Counsel - Potential Litigation. Significant exposure to litigation pursuant to Government Code Section 54956.9(b). 2. Convene in closed session to consider General Manager's Annual Performance Evaluation and Compensation (Government Code Section 54957.6) B. Reconvene in regular session C. Consideration of action, if any, on matters considered in closed session. (14) ADJOURNMENT jt H:IDEPN oA\SIEEPMG COMMRiE£WVlW'GI H.SC AGENOADCC Book nuber 3 -4- January 28. 2004 Agenda 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: Shirley McCracken (714)765-5247(Anaheim City Hall) Committee Staff Contact: Blake P.Anderson (714)593-7110 General Counsel: Thomas L.Woodruff (714)564-2605 Secretary: Jean Tappan (714)593-7101 (714)962-0356 (Fax) E-mail: pappan®oosd.00m Book hither 4 DRAFT MINUTES OF STEERING COMMITTEE MEETIN Wednesday, December 17, 2003 A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, December 17, 2003 at 5 p.m., in the District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: STEERING COMMITTEE MEMBERS: OTHERS PRESENT: Directors Present: Thomas L.Woodruff, General Counsel Steve Anderson, Chair pro tem,Vice Chair Mike Moore Jim Ferryman, Chairman, OMTS Committee Chris Townsend Brian Brady, Chairman, FAHR Committee Norm Eckenrode, Past Board Chair STAFF PRESENT: Blake Anderson, General Manager Directors Absent: Bob Ghirelli, Director of Technical Services Shirley McCracken, Chair Carol Beekman, Communications Services Brian Donahue,Chairman, PDC Committee Manager Jim Silva, County Supervisor Jim Colston, Legislative and Regulatory Affairs Liaison Jean Tappan, Committee Secretary (2) APPOINTMENT OF CHAIR PRO TEM Vice Chair Steve Anderson was appointed Chair pro tem. (3) PUBLIC COMMENTS There were no comments by any member of the public. (4) RECEIVE. FILE AND APPROVE MINUTES OF PREVIOUS MEETING The minutes of the November 19, 2003 Steering Committee meeting were approved as drafted. (5) REPORT OF THE COMMITTEE CHAIR Committee Chair announced that registrations for CASA and the Orange County Leadership Symposium are due to Jean Tappan this week. Director Brian Brady asked for staff assistance in reviewing the task force's draft and recommending options for changes to the Approval and Compensation for Directors' Meeting Attendance policy. Back nuber 5 Minutes of the Steering Committee Page 2 December 17, 2003 (6) REPORT OF THE GENERAL MANAGER A. Legislative Update General Manager Blake Anderson asked Chris Townsend to update the directors on the California Senate Committee on Local Government hearing he attended in November that concerned special districts. He stated that the Sanitation District is a good agency but he wanted to provide information on the goings-on in Sacramento. Among things that were discussed were 1)what is a meeting? 2)putting caps on the number of meetings and 3) limits on stipend amounts. Mr.Townsend stated that he will continue to monitor this issue and will keep the agency informed. He suggested that the District continue to use CASA as an avenue and provide proactive participation through them. A discussion followed on backfilling the monies lost as a result of the reduction in vehicle license fees. Mr.Anderson reported that$1 million has been earmarked in the House VA-HUD- Independent Agencies budget for our secondary treatment expansion. He thanked Congressman Cox and Directors Ridgeway and Silva for their efforts on our behalf. Last week, Mr. Anderson met with Senator Diane Feinstein to go over several issues and discussed the ear marked funds. He told her that we would be requesting$50 million over the next decade representing less than a 20%federal share. Senator Feinstein said that she would provide support in the future. Carol Beekman and Mr.Anderson attended the a CASA legislative committee meeting in Sacramento December 5 and they submitted three separate white papers on state-wide standards for water reclamation, state-wide biosolids and urban runoff funding. Meetings will be scheduled with the Jarvis group on including urban runoff in the Proposition 218 exemptions. B. Orange County Leadership Symposium,January 9-11. Lake Arrowhead Mr. Anderson urged the directors to attend this event, which is intended to provide the electeds tools to improve dialogue on city and county issues. C. Draft NWRI Report regarding Asset Management Mr. Anderson stated that the NW RI-sponsored asset management review panel has submitted its findings. Staff is suggesting that two members of the panel present the findings to the Board in February. A summary report will be presented to the Steering Committee in January. Staff also suggests that the report be presented to all of the working committees because of the wide financial, planning, engineering and operational implications that asset management implies. Mr.Anderson suggested that the OMTS Committee be designated as the committee of jurisdiction. He then summarized the findings for the directors. D. Universal Power Industries Corporation Proposal Mr.Anderson and General Counsel Woodruff discussed an unsolicited proposal on an energy ahemative. While many of the terms sound very attractive, there are still questions that need to be answered before making any commitment. It was generally agreed that the legal, financial and technical issues were too difficult to overcome and that the proposal should not Book nuber 6 Minutes of the Steering Committee Page 3 December 17, 2003 be explored further. (7) REPORT OF GENERAL COUNSEL General Counsel Thomas Woodruff announced that the Court of Appeals has affirmed the trial court's decision regarding Crow Winthrop. The Appellate Court issued a ruling that the District's Capital Facilities Capacity Charge Ordinance is not subject to Proposition 218 and therefore the fees imposed on Crow Winthrop were not invalidly charged. Appellate costs are to be paid by Crow Winthrop. Mr. Woodruff announced that there was a need to add an additional closed session item to the agenda which surfaced subsequent to the posting of the agenda pursuant to Government Code Section 54954.2. MOVED, SECONDED AND DULY CARRIED to add an item of existing litigation to the closed session agenda. (8) DISCUSSION ITEMS(Items A-B) A. Update on the Renewal of the NPDES Ocean Discharge Permit Jim Colston updated the committee on where we are with the permit renewal. The operational plan update has been presented to the Regional Board, as well as a description of the disinfection facilities and how that system will continue to operate. Meetings continue on other aspects of the permit. Mr.Colston then outlined the scheduled. It is expected that a draft permit will be received in January or early February. There will then be 45 days for public comments. A workshop is anticipated in April or May and it will be held locally. Adoption should take place in July and after the permit is adopted discussions on the consent decree process begins. No significant changes are anticipated in the ocean monitoring program. The Communications Services Division is assisting with the public education process. A discussion followed on the definition of'blending processes' and 30/30 secondary treatment standards. B. The agenda items scheduled to be presented to the Board at tonight's meeting were reviewed. There were no questions or clarifications required. (9) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There was no other business discussed. (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. Book nuber 7 Minutes of the Steering Committee Page 4 December 17, 2003 (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND/OR STAFF REPORT There were none. (12) CONSIDERATION OF UPCOMING MEETINGS The next Steering Committee meeting is scheduled for Wednesday, January 28, 2004 at 5 p.m. The next Board Meeting is scheduled for Wednesday, January 28, 2004 at 7 p.m. (13) CLOSED SESSION The Committee convened at 6:16 p.m. in Closed Session, pursuant to Sections 54956.9(a) and(b), to discuss two items. Item 12 A.2. was deleted from the agenda. Item 13.A.3.was added per the motion adopted under Item 7 above. The matter is existing litigation, WOODSIDE V. ORANGE COUNTY SANITATION DISTRICT, at al. There were no reportable actions taken by the Committee. Minutes of the Closed Session are on file with the Board Secretary. Confidential Minutes of the Closed Session held by the Steering Committee have been prepared in accordance with Government Code Section 54957.2, and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A report of the recommended actions will be publicly reported at the time the approved actions become final. At 6:57 p.m., the Committee reconvened in regular session. (14) ADJOURNMENT The Chair declared the meeting adjourned at 6:57 p.m. Submitted by: Je#frappan SlIpling Committee Secretary N Cpnm WNEC1,117035L Newres.Ex Book nuber 8 STEERING COMMITTEE Meeting Date To ad.of Dir. 1/28/04 2/25/D4 AGENDA REPORT itemrvumber Item Numbe 9A Orange County Sanitation District FROM: Bob Ooten, Director of Operations and Maintenance Originator: Doug Stewart, Asset Management Coordinator SUBJECT: Blue Ribbon Panel Report on Asset Management GENERAL MANAGER'S RECOMMENDATION Receive and file report from National Water Research Institute (NWRI) on OCSD's Asset Management Strategic Plan. Direct staff to request NWRI to provide an oral presentation at the February 25, 2004 Board Meeting. The District's purpose for applying asset management is to build on the DART reinvention foundation that focused on Operations and Maintenance work flow efficiencies. Asset management will expand the focus to a project's life cycle using new risk and consequence tools to improve delivering the right project at the right time. SUMMARY • Staff will present a summary of the NWRI report to the January Steering Committee, a summary of the process used by NWRI to review the Strategic Plan and the results of the panel review. • If tonight staff receives direction of the Steering Committee to do so, NWRI staff and the Peer Review Committee will present the results of Blue Ribbon Panel Review of the OCSD Asset Management Strategic Plan to the Board of Directors meeting on February 25, 2004. • The Asset Management Strategic Plan was adopted by the OCSD Board in December 2002. The Asset Management Executive Summary is attached. • In April 2003,the Board of Directors instructed staff to obtain an independent review of the OCSD Asset Management Strategic Plan and directed Staff to evaluate produce a more staff-driven program. The Board also requested an unbiased third-party view of the concept and approach proposed by staff to asset management. • At the request of Staff, in October 2003, NWRI convened a panel of experts to review the Asset Management Strategic Plan and hear presentations by staff and consultants on the concepts and content contained within the plan. The presentations lasted for a day one-half. • In November 2003, the panel produced the attached report containing findings and conclusions. The panel was made up of experts from other public agencies, regulatory Book nuber 9 officials, business executives, and asset management practitioners. The panel members and their affiliations are list in the back of the attached report. • The report findings and conclusions are summarized below: 1. Staff and management has developed a reasonable approach to asset management and is developing some of the best asset management thinking in the U.S. 2. The plan is highly jargonized and overly detailed in its approach and loses credibility in its presentation. 3. The approach to asset management outlined in the strategic plan is conceptually reasonable but a detailed implementation plan needs to be developed. 4. Specific recommendations s are as follows: a. Develop a simple, clear implementation plan and schedule. b. Formally designate an asset management"champion" c. Complete some listed tasks early. d. All capital projects should have a business plan performed for them. e. Establish an asset management committee with responsibility for an organization-wide approach to implementation. Staff will present an overview of the peer review process and results to the Steering Committee. Staff is beginning to work on an implementation plan that will be substantially staff driven with an appropriate consultant's input. PROJECT/CONTRACT COST SUMMARY BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This Rem has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION ALTERNATIVES There are two altematives to providing asset management. The original consultant driven program, one that is a balance of staff and consultants and the substantially staff driven plan that is under design. CEGA FINDINGS Not applicable ONda—M end S MngaYeppenLL•W Sn,nps Tenp In,emel RIaZLI TEERMG COMMITTEE M Su PiOWn 1aM Rewn rygndi Rown IAewan t-ta. a�aoe Page 2 Book nuber 10 ATTACHMENTS 1. NWRI Blue Ribbon Panel Report 2. Asset Management Strategic Plan Executive Summary L:Nocvmntt pnO58k�peVepgrNuel5o4viP�Te^W�a�y INemetRMNOIWV$ RWGNMMn E0.MSue Rlb.n P"Pe A,".ftWJSIa t-l4 MI.Ex Page 3 Book nuber 11 National Water Research Institute Blue Ribbon Panel Report Asset Management Strategic Plan Review Orange County Sanitation District October 6-7, 2003 Holiday Inn Costa Mesa, California Book nuber 12 Introduction In response to a request for assistance from the Orange County Sanitation District (OCSD),the National Water Research Institute(N WRI)organized and appointed a Blue Ribbon Panel(Panel)of experts to review and evaluate the document,Asset Management Strategic Plan and Frame Work Analysis and to provide a report that would document the Panel's findings and recommendations regarding the implementation of an Asset Management Program by OCSD. This document summarizes the findings and recommendations of the Panel derived from a study of the above document and from presentations by the OCSD staff and consultants during the first Panel meeting on October 6-9,2003, in Costa Mesa,California. The Charge to the Panel The Blue Ribbon Review Panel was convened to assist OCSD by providing the following functions: 1. The Panel will act as a neutral third party in a review and evaluate the asset management approach as described in the document,Asset Management Strategic Plan and Framework Analysis. In other words, is the outlined approach the correct one for the organization? 2. From the presentations and documents provided in the first meeting,the Panel will document its findings and make recommendations on how to best assist OCSD in implementing the proposed strategic plan. 3. Al a yet to be determined dale, the Panel will participate in an interactive workshop with the OCSD staff,consultants,and others to finalize a methodology to implement the strategic plan. Background Since July 1998, OCSD has been engaged in the District Assessment and Reinvention Team(DART)process in an effort to close the competitive gap in the Operations and Maintenance Department identified in a March 1996 competitive assessment. DART prompted the initiation of several work processes and system enhancements in the operations and maintenance areas that have resulted in the achievement of significant benefits for the OCSD. The progress made by DART throughout the organization has become the foundation for the asset management initiative found in the strategic plan referenced above. 1 Book nuber 14 The organizing principles of OCSD,as described by OCSD General Manager Blake Anderson,serve as the fundamental architecture under which the proposed asset management program will exist. The principles include: • Environmental stewardship as a function of regional cooperation. • Wastewater management wherein reclamation is a process that uses wastewaters as a resource. • Business principles incorporating the triple bottom line approach that recognizes the needs of society,environment,and finance. • Workplace environment that integrates how the organization behaves relative to opportunities,responsibilities,and authority. FINDINGS OCSD,a well-regarded and professional government agency, is considering re-casting its management decision-making with an asset-centric approach as its over-arching organizing principle.As part of this approach,overall investment in the future will be keyed to lifecycle costs,rather than the initial capital costs of a project.This change in emphasis is designed to trigger a new way of looking at OCSD operations,maintenance, and capital investments. The proposed OCSD advanced asset management program is one of the only early stage development programs of its kind in America and could be implemented by one of the largest government agencies of its kind west of the Mississippi. Staff The staff is very competent and enthusiastic about the asset management program proposal and is committed to working hard to deliver value to OCSD. In fact,staff management is fully engaged in leading OCSD in best asset management thinking in the U.S.—they have few peers. A great deal of work has been done on the detailed investigation of ways to implement the asset management program, its potential value to OCSD,the organizational steps needed, the phasing of implementation,metrics,etc. There is a good sense that the staff has done its homework. The OCSD asset management team is complimented for the work it displayed on analyzing and reducing some existing capital expenditure program(Capex)by a thorough and detailed review of 15 of the 2003-2004 projects using advanced asset management principles. Preliminary results provided confidence that significant Capex savings and lifecycle cost reductions would accrue. 2 Book nuber 15 It was assumed by the Panel that OCSD is not over staffed,and that it is the right size to run the current operation and maintenance and Capex. It will take significant resources to tan, monitor,study,and create an asset management program. Strategic Plan The Panel found the asset management strategic plan to be heavily jargonized and detailed in its approach. Because of this,it lacks clarity of purpose and disenfranchises non-technical parties.There were too many"buzz words"to explain simple concepts. The plan,as presented, is thorough and rigorous,but loses credibility in the way it is reported.There is too much emphasis on processes/systems, rather than on output.This loss of credibility is unfortunate,as the overall anticipated costs and benefits might be significant. From the strategic plan, it almost appears that the overall goal of the project is to "measure confidence"in the decision-making processes,rather than to improve performance. The plan includes a great deal of detail in specific,small steps that need to be(or could be)taken to improve data and processes throughout the organization. More attention should be paid to those things that are interrelated with OCSD's asset/soume needs.The forecasted financial benefits of the program are huge compared to program costs. The source of these forecasts,however, should be better described (otherwise,the forecasts do not have credibility). From discussions with the staff, it is clear that the forecasts are based on cost savings experienced in Australia and New Zealand from various levels of management-practice implementation. This is probably the best that can be done and should be taken seriously; however,without explanation, the forecasts are easily dismissed. Program Delivery The approach to asset management is conceptually reasonable,but will not deliver the maximum benefits unless the implementation program is disciplined and focused(i.e., levels of service,asset condition,asset criticality, and Capex reviews). It should be recognized that the implementation plan already has many checks and balances. The program is presented as one package with no options and slightly different implementation timeframes. The package presents"form over function"in its initial presentation—it must reflect substance in its implementation. In addition,the package appears overly ambitious in its timeframe for a Year Three deliverable. 3 Book nuber 16 organization Embracing fully the asset management approach and philosophy(which is widely-used in wastewater and sewage treatment agencies in Australia and New Zealand and becoming more widely accepted in the U.S. [e.g., Seattle Public Utilities])has found some resistance within in the OCSD organization. Some of the resistance is from "sticker shock"at cost estimates. Concern over costs is compounded by recent decisions to increase the OCSD capital expenditure budget to$2.4 billion,which required a IS- percent increase in fees. There appears to be a noticeable level of difference between the staffs level of understanding of the asset management program,which appears to be significant,and the level of understanding and the information required by the OCSD Board of Directors for the decision-making process. Current asset management practices at OCSD have not developed to the level needed to ensure best value to the OCSD or to ensure service provision to its stakeholders and other customers. There is a very strong middle-management buy-in/ownership of the need to improve asset management;therefore, improvements in asset management will continue whether there is approval for implementation of the Strategic Plan or not. The use of advanced asset management techniques seems a logical and appropriate step for OCSD.The question for moving into this program is one of scope, implementation, and whether the program is tightly focused around the level of service goals and a better understanding of existing assets.The idea behind bringing a more rigorous asset management program to OCSD seems consistent with the staffs desire to improve performance,control costs,and enhance OCSD's reputation as one of the best agencies of its kind in the world. The asset management approach envisioned for OCSD may be unusual in water and wastewater agencies, but it is used fairly Often in American private industry when large capital decisions about infrastructure must be made.Using this aggressive analysis of front-end investment, lifecycle examination,and careful monitoring of maintenance options is not uncommon in sophisticated private industry where front-end costs are exceptionally high. The Strategic Plan The"level of confidence" metric that is the centerpiece of determining the success of the program may not be the exact metric to maximize program outcomes as described in the plan even though the plan reflects a genuine desire by staff to bring undefined "best practices" into all OCSD operations. The Panel found the focus on Best Available Practices(BAPs)and the target level of "confidence"to be peripheral to the main point of the plan. Implementation of BAPs is a means to an end,not an end itself. 4 Book nuber 17 RECOMAMNDATIONS The asset management strategic plan describes a program that has a strong potential to deliver advanced outcomes with significant benefits to the organizations;however, though the Panel recognizes the efforts by the OCSD staff to date, it nevertheless recommends the following be considered prior to implementing the program: • The Panel recommends that key aspects of the plan could be enhanced by incorporating specific targets for implementation and completion. This will help maximize early and ongoing benefits to OCSD,especially in reducing Capex and in improving security,reliability,and performance of the assets. • Implementation will require a clear plan to integrate asset management into the normal day-to-day workflow at OCSD.The proposed program needs to be a part of the continuous improvement process,building on the current work and expanding into all areas of the organization. The program,therefore,needs some quick winners to gamer wide support from the organization. To achieve quick winners,an approach might be for the program to aim for quick results in Capex. • To ensure success,the program needs a"champion'to carry the torch through to final implementation and will aid in overcoming the cultural changes that will occur in the early period of implementation. • The plan should be focused on the job to be done(e.g., know the condition of the asset and its role in providing service)and establish a maintenance policy based on that. • The plan should articulate clearly the essential activities to be completed before the first values would be realized and should be presented as a total package with a reasonable and acceptable budget. • The proposed approach described in the plan needs to be pared down to essential outcomes. Then, one can discuss how those outcomes will be achieved, including the possibility of phasing in the overall program outcomes over time. • Because the Panel felt that the overall strategic plan presentation lacked a concise statement of the core concept of the proposal,it recommends that a statement be developed that would be a first principle(e.g.,"We will examine each asset from the point of view of its contribution to the levels of service and manage it accordingly!). ➢ Assets should be managed to minimize the cost of owning and operating them while continuously delivering the desired levels of service. 5 Book rather 18 ➢ Integrate planning,design,construction,operations,maintenance,funding, warehousing,rehabilitation,replacement,disposal, data management, and strategic decision-making for one purpose:To provide cost-effective(and sustainable)public infrastructure. • The program should clearly articulate priorities and benefits from the separable components, such as asset identification,criticality evaluation,and risk assessment. It should also be crafted in a manner that will generate clear work products for program component evaluation and,therefore,would provide opportunities for the use of the off-ramps,should that be the will of the Board. • All Capex and operating and maintenance expenditures(Opex)that relate to existing assets are likely to be sub-optimal,both in a cost and asset management sense, without a full picture of asset conditions and asset criticalities(as they stand). This evidence is critical to decision making. • The plan proposes methods and measures to consider this issue,which is fundamental to building confidence and understanding at the earliest possible time and to achieving immediate and ongoing cost and asset performance gains. It is recommended that initial resources focus on the task ahead,especially for critical assets. • To ensure the progratt's success in a timely fashion certain aspects of OCSD's asset management program must be accelerated to gamer early success. These include: ➢ Asset condition assessment. ➢ Asset criticality assessment. ➢ Risk assessments and valuation of risk,at least for the initially perceived top 100 asset risks. ➢ Driven for new asset creation. ➢ Whole of business view of where and how much risks it can carry. These elements will largely assist the prioritization of Capex and will minimize risk to OCSD and deliver confidence in asset performance. Also, should Capex programs need to be truncated at any time due to,say,financial constraints, this offers a way to focus maximum value from any available Capex spending. • Since the plan relies on the levels of service required,it is recommended that a set of guiding principles of service be created at the earliest possible time. It is important that initial levels of service be reviewed periodically based on the acquisition of better information and technology. This integration is normal and sensible. Key levels of service should be adopted early on. Further, is recommended that no project proceeds without a review relative to financial and asset performance gains. Further,it is certain that,as asset confidence 6 Book outer 19 is built and management improvements are prioritized,the assessment of projects and programs will yield even greater benefits. • A regional planning approach led by OCSD would be a sensible way to ensure that complementary investments between the municipalities and OCSD occur as often as possible. • OCSD should establish an Asset Management Committee. The Asset Management Committee should be comprised of representatives from key areas of the organization, including engineering,finance,operations,maintenance,and information systems. • OCSD management must continually commit to and demonstrate the value of the program to the district. • The concept of an Asset Management University,although interesting,should be revisited in terns of an OCSD University,whereby asset management is but one of many activities found within a more holistic training curriculum for the district. 7 Book nuber 20 Asset Management Strategic Plan Blue Ribbon Review Panel Chair Stan OBelte Orange County Business Council Irvine, California Members Mick Bourke Environmental Protection Authority Victoria, Australia Alan Lamont Lawrence Livermore National Laboratory Livermore, California Gordon Logan South East Water Limited Melbourne,Australia Jerry Thibeault Regional Water Quality Control Board,Santa Ana Region Riverside,California Stephen Tucker Los Angeles Department of Water and Power Los Angeles,California NWRI Staff Support Ronald Linsky Executive Director 8 Book nuber 21 Am Aaaay,e reKt A-a&tic P14 4�k Exe .6iY, S'a rowa�� Introduction Since July 1998 OCSD has been engaged in the District Assessment and Reinvention Team (DART) process in an effort to close the competitive gap in the Operations and Maintenance Department identified in a March 1996 competitive assessment. DART's initiation of several work process and system enhancements in the operations and maintenance areas resulted in the achievement of significant benefits for the District. The progress made by DART and other initiatives throughout the organization has become the foundation for the asset management initiative that this strategic plan addresses. Beginning in 2000, as part of the DART work, the OCSD staff began researching m infrastructure asset management practices. The staff found that substantial benefits had o been achieved by agencies that applied comprehensive, agency-wide advanced asset x management practices. This was particularly evident in Australia and New Zealand where asset management had been a focused national priority for over 15 years. Based on the potential benefit that OCSD could derive from asset management, the Board iv approved a contract in April 2002 for a strategic plan and framework analysis report. The exhibit to the left depicts the Bow of strategic steps that led to the development of the OCSD Asset Management Strategic Plan. This Executive Summary is organized to answer the key strategic questions shown. The major headings are in fact the questions. Total Enterprise Asset Management Total Enterprise Asset Management means, "Managing assets to minimize the cost of owning and operating them while continuously delivering the desired customer service." (OCSD Asset Management Committee) "Asset management embraces a number of broad principles dealing with how public agencies like counties, cities, and special districts make decisions about public infrastructure. It integrates planning, design, construction, operations, maintenance, funding, warehousing, rehabilitation, replacement, disposal, data management and strategic decision making for one purpose: to provide cost-effective (and sustainable) public infrastructure." (Blake Anderson) PARSONS ES-1 Am, Iffara�remeat Al-ate,aie Pei How Do Our Asset Management Practices Measure Up? Australia and New Zealand are recognized world leaders in advanced asset management. A sophisticated and comprehensive assessment tool developed in Australia, which has been applied to over 100 utilities and is calibrated against recognized worldwide asset management best practices, was used to objectively measure and evaluate OCSD's current asset management practices. The assessment showed that OCSD currently performs with excellence in many of the areas measured; however, there are several significant asset management best practices that simply have not been deployed at OCSD, or any other major U.S. utility. There are also several existing practices, processes,and tools that can and should be enhanced. The assessment tool scores organizations on the basis of"confidence level' which is a rating that reflects the level of confidence an organization and its stakeholders can have gin the data, information, and decision-making tools and processes an organization uses z- related to its infrastructure and the services those assets provide. Confidence level scores relate directly to the application of best practices. They are quantifiable and measurable, and provide an objective rating of asset management practices. The assessment tool can also be used to audit the progress of an organization's development of asset management practices. The overall assessment confidence level rating scores for OCSD are: • Pre DART Program(1996)status...............................................................47% • Current status(2002)..................................................................................68% The following confidence level benchmark scores are provided for comparison: • Average large Australian wastewater businesses.......................................81% • Top 10%of Australian businesses..............................................................90% • Average of all assessed Australian businesses...........................................86% It is important to note that the best practices changes in both operations and maintenance associated with the DART initiative and other internal initiatives significantly improved the District's asset management rating. Enhanced maintenance practices, work process modifications and information system advancements were all developed by DART. Other initiatives not included in DART resulted in work process refinements such as the restructuring in Engineering, which enhanced capital project planning and delivery. PARSONS� ES-2 4vee,C /ffaaar eareat s'trate�ie P2aa Other initiatives like the J-42 project that provided loop diagrams and equipment numbering, the Facilities Atlas project that provided enhanced system drawings, and internal modifications to inventory practices were all best practices enhancements. While there is a significant gap between OCSD and the benchmarks, the Parsons/GHD Team believes that the District probably leads most major US utilities in asset management practices,as a result of its DART Program and other initiatives. - j What is the Appropriate Level of Asset Management for Us? - _ Confidence level improvement targets for OCSD were collaboratively set by OCSD's _ Asset Management Committee, Executive Management Team, and other members of the ' '{! staff. The targets are: • 3-year improvement target.................. s • 4 to10-year(BAP)improvement target .....................................................92% q. There was consensus by all OCSD staff and management members participating in the yya. �i: Y' Ira asset management strategic planning processes that advanced asset management is appropriate for OCSD. How and When Should We Fill the Gap? Workshop participants choosing AM Improvement Program 3-year and BAP targets Two 2-day workshops, numerous interviews, and a comprehensive gap analysis process led to consensus regarding the specific and best appropriate Total Enterprise Asset Management (TEAM) improvement components with which to "fill the gap." Specific improvement components for the Total Enterprise Asset Management(TEAM)Program were selected and prioritized into two major implementation phases: a 3-year period, and a Best Appropriate Practices (BAP) period of 4 to 10 years. The recommended target confidence level scores for each of these periods resulted from the gap analysis processes. The targets set for each implementation planning period, and the improvement components identified and selected to accomplish filling the gap, were predicated on the approval and deployment of the implementation strategies contained in the TEAM Program Charter, which is discussed below in "How Should the AM Improvement Program be Organized?" PARSONS ES-3 {asset Iffoapeweat Ye-a&pe, Pe4K Considering the Gap, Which Component Improvements are Needed for Our Asset Management? Some 1500 specific best practices, which correspond directly to confidence level scores, were considered in the gap analysis process. Through collaborative workshops, 274 individual best appropriate practices improvements were selected for inclusion in the OCSD TEAM Program, and are the basis for the targeted confidence level score goals. The preliminary list of improvement components is appended to this report. This list will be refined and modified during detailed implementation planning,which is recommended as the next phase of the District's TEAM Program. These improvement components are necessary to"fill the gap"between current practices and targeted best appropriate practices, and are required for the District to achieve the benefits that can be realized from improved asset management. How Should the Asset Management Improvement r: Program be Organized? R A proposed TEAM Program Charter was developed that established the critical strategic in I� framework for the program. The TEAM Program Charter was collaboratively developed + as part of the strategic planning process The TEAM Charter provides the unified ' strategic level guidance necessary to advance the program's development through the implementation planning and implementation phases of the TEAM Progmm. 3 The TEAM Charter includes the following statements: . Future External Stakeholder Perception . Internal TEAM Mission . Key Business Strategy I . Implementation Strategies,and TEAM Commitments to AM(over-arching principles)—presented in the body of OCSD staff working on TEAM Charter Program this report,but not included in this Executive Summary. PARSONS� ES-4 1�� Afee,e /ffana�enfent S'twate# peso The following elements of the TEAM Charter are presented and briefly discussed below. External Stakeholder Perception Statement Our customers, our peers, regulatory agencies, and other stakeholders recognize us as being innovative,efficient, and effective stewards of the OCSD infrastructure assets and for being leaders in total enterprise asset management. This statement reflects how OCSD wants the performance of its TEAM Program to be perceived and valued by those stakeholders outside the organization. Internal TEAM Mission Our TEAM mission is to plan, create, acquire, maintain, operate, rehabilitate, replace, W and dispose of assets in the most cost-effective manner at the required level of service for g present and future generations. r. � This statement reflects the mission of the TEAM Program front an interns! OCSD ,g perspective. i Key Business Strategy 1v v OCSD will use TEAM as a primary means of reducing total life cycle infrastructure costs; sustaining a high-quality Level of Service; applying risk mitigation and management; meeting environmental compliance requirements; and meeting other 7 .A organizational goals. i _ d 1 +•�1k�y i ,� This statement presents the strategic intent of the TEAM Program, and is proposed to become one ofOC.SD's key business strategies. TEAM Program Implementation Strategies The following are the proposed implementation strategies for the TEAM Program improvement components. They will be deployed through the planning and OCSD managers debating and deciding implementation phases of the program. Each of these strategies is essential to the on TEAM Program strategies successful implementation of the program. They are designed to maximize early bene(ts and ensure that necessary foundational change elements of the program are developed and institutionalized. PARSONS ^®' ES-5 Affet /VIaKa me ft A-a& iC Pear The strategies are largely self-explanatory, but summary discussion is included where amplification is considered necessary. The TEAM Program implementation strategies are: 1. OCSD will use structured and detailed implementation planning as the means of determining the specific objectives,tasks, priority, schedule, and resource levels necessary to effectively implement the short-term and long-term asset management program supported by an appropriate business case. This ensures that the entire TEAM Program is appropriately planned, budgeted and scheduled to deliver maximum benefit to OCSD. 2. OCSD will provide additional resources necessary to effectively implement the TEAM Program. OCSD will augment existing staff with the additional staff, consultant and contractor resources needed to deploy the identified AM improvement program tasks with minimal disruption to the organization, and >- its current workloads. 0 The potential benefits in terms of life cycle cost management, service sustainability, and focused asset management decision-making warrants the deployment of the TEAM Program as a primary activity within the District for several years. The OCSD staff already has many significant initiatives in progress, and has limited additional staff resources available to take judicious and timely advantage of the opportunities that TEAM presents. The forecasted cost-to-benefit ratio and other benefits of a fully deployed comprehensive asset management program support the strategy of augmenting and supplementing OCSD normal staffing levels with transitional resources. The asset management program recommendations developed during this strategic planning project received broad support from management and staff The single largest concern expressed had nothing to do with the "what"or the"why" aspects of the program, but rather "how"the program could be deployed in the face of current workloads. 3. OCSD will create an asset information hierarchy to provide appropriate roll-up information necessary for confident TEAM decision-making, and to align with and support advanced infrastructure processes and applications planned for the TEAM Program. PARSONS ^®' ES-6 Irk Anfet /ffa1(aaeHre7t Ai&g1e Plow & The asset information hierarchy determines the way TEAM information systems are structured to make the TEAM Program decision-making information, tools, processes,and procedures available to the staff in the appropriate format and with the appropriate focus for their decision-making roles. 4. OCSD will leverage information technologies to support TEAM processes, and will systematically move toward advanced, user-friendly software applications and comprehensive systems integration and interconnectivity. The TEAM Program goals require the extensive use of information systems and technologies. Information needs to be consistent, timely, properly formatted, and easy to use in order to be of meaningful decision-making value. Systems integration, interconnectivity, and user-friendly software applications are essential to the long- term success of the TEAM Program. W 5. OCSD will leverage the use of improved applications processes, and procedures g "Key to this is the prompt replacement to enhance knowledge capture and retention (from experienced, knowledgeable ofthe current CLthlS s)stem, staff, retirees, and consultants) and to improve overall data and knowledge Workshop attendees identified this as a availability and use. critically important implementation strategy. Using new processes in conjunction with new sollware applications will enable timely,efficient,and effective analysis and evaluation of asset information to support high quality asset decision-making. 6. OCSD will initiate a systematic program of condition assessment necessary to support asset-planning activities,and provide a meaningful and useful reporting system. Knowing,tracking, and prioritizing the condition of assets are critically important to effective asset management; this is especially true for replacement and renewal "we must commit to creating on decision- making, financial forecasting, and resources optimization. Condition organisational structure wish the information is fundamental to numerous other aspects of asset management. Getting necessary resources to develop and this vital information developed and in a format that supports asset management sustain the AMprogram while decision-making is a key and essential strategy. maintaining commitment to our curt eni operation." 7. OCSD will modify its organizational structure, align its organizational culture, Workshop atendees identified this as a and develop internal organizational development and change management critically important implementation capabilities necessary to effectively support the deployment and sustained strategy. operations of the TEAM Program. PARSONS ^®' ES-7 f�sset /�aifa�reyrce�ft rS'twate�ie P�K Comprehensive asset management requires a major shift in organizational focus if the system and task elements of the TEAM Program are to deliver maximum benefits to OCSD, and achieve the sustainability, service level, and life cycle cost benefits mission of the program. This strategy recognizes that the basic structure and focus of the organization must be modified to align with the mission of the program. Workshop attendees identified this as a 8. OCSD will align and clarify its roles and responsibilities, training programs, critically important implementation and other human resource processes and systems to support TEAM strategies strategy. and goals. The TEAM Program requires that the organization be realigned around the management of its assets, realizing that these assets directly affect OCSD's ability to provide services and accomplish its mission. The TEAM Program involves new skills that require training, as well as clear definition of roles and responsibilities at all levels of the organization. The TEAM Program requires fundamental change tm within the organization, and the human resources systems and processes need to be $ modified to appropriately align with TEAM. Failure to do this will create confusion, inefficiency and ineffectiveness,and hamper the success of the Program. c 9. OCSD will monitor (audit) its TEAM Programs implementation progress on a periodic basis to ensure the desired confidence level improvement targets are achieved,and that critical project elements are on schedule. This strategy essentially ensures that the continuous quality improvement process is used throughout the deployment of the TEAM Program. 10. OCSD will deploy the funded 3-year TEAM Program target tasks through the use of project scheduling and management tools in order to plan and track implementation activities. These aspects of the Program will be This strategy deploys sound project management techniques to ensure that the project .fast tracked"for early implementation of the improvement component projects is appropriately scheduled, implementation while planning of the other aspects of the Program is taking sequenced,resourced and tracked. place_ It. OCSD will fast track Capital Expenditure Evaluation (CapEx); CMMS, Workshop attendees suggested this SCADA, and FIS integration, modifications, and replacement planning; implementation strategy and identified it as organizational structure change; roles and responsibilities clarification being critically important. implementation; and asset hierarchy aspects of the program, because these are PARSONS = ES-8 Am t /IfaKayeweryt Al-ate,aie Plan t foundational and will also be viewed as"Quick Starts"for the AM improvement program. The envisioned TEAM Program includes certain improvement components that produce significant early benefits, or that are especially crucial to the program. Implementation of these particular elements of the TEAM Program should be expedited. Why is the Asset Management Program Right for Us? The AM Program is right for OCSD because it is expected to reduce the District's total Infrastructure life cycle costs by at least 15% over and above the savings already achieved by the DART program and other initiatives. The TEAM Program will help ensure the sustainability of the District's infrastructure and services, and will help the District continue to meet its environmental goals. m 8 Estimated Financial Benefits (Savings or Funding Reallocation Opportunities) As noted in the margin, US EPA estimates that application of TEAM Program asset o The US EPA esomates that management approach at typical U.S. utilities can result in total life cycle cost reductions application of Total Enterprise in the 20-30% range. Based on the best practices assessment process, and OCSD's Asset Management by US utilities resultant confidence level score, the Parsons/GHD Team found that a portion of this can reduce total life cycle casts an "typical" cost reduction potential has already been achieved at OCSD as a result of the estimated 20 to 30% DART Program and other initiatives. The best appropriate practices recommended for the OCSD TEAM Program are expected to reduce the total life cycle costs by at least another 15%. The 25-year TEAM Program financial benefit forecast is: ■ 25-year Capital Improvement Program reallocation/ reduction benefits of about $75 million (which is in addition to savings that are anticipated from traditional value engineering and program management efforts already underway) • 25-year Total Life Cycle benefits are estimated to be$350 million as depicted in Exhibit ES-I Further discussion of the financial modeling and results is found in Section 4 of this report. PARSONS M ES-9 Awd /ffaaay"mirt �ftr 4pe P& EXHIBIT ES•1. A 25-YEAR VIEW OF THE PROJECTED BENEFITS FROM TEAM PROGRAM 160 Net Total Annual Costs without 140 AMP Benefits Net Taal 120 Exceed InibalAfiInitiaalluBenefits $35days 5ected 0Million Befi $am**ss.s■„�� Annual 100 ����•������� Cost offs....■■## *� ($ Million) S0 Break Even Point Expected Net Total Annual Cost with AMP Benefits 60 40 ti°0° Fiscal Year AMIP is the recommended AM improvement program that is designed to enable OCSD to reach its Best Appropriate Practices confidence level target in 10 years. PARSONS ES•10 Arm Iffalratexrelire A-ate�ieAk The Total Life Cycle TEAM Program financial benefit forecast is: • $600 million(current dollars)based on • 15%of the estimated$4 billion current value of OCSD's assets" • A May 1998 System Replacement Needs Analysis report by RW Beck estimated the mplacemeal value ofGCSD's assets at$d028 million in 1997 dollars. The magnitude ofC1P projects planned over lite next 20 years, which now will include full secondary 1malmem, coupled with other adjustments, indicates that the actual replacement value ofOCSD's assets would fall within the range shown. In Parsons/GHD's opinion,the current replacement value Is already closer to$4 billion than$2 billion. TEAM Program Costs The TEAM Program provides a strategic and management framework that focuses on $t minimizing total infrastructure asset life cycle costs, while ensuring that OCSD's levels e� of service are being met on a consistent and sustained basis,at an acceptable business risk exposure level. The TEAM Program framework helps prioritize and integrate various aspects of OCSD's operations, processes, practices,and systems in a focused and logical manner. Because TEAM comprises best management practices, program costs include many that OCSD would probably chose to implement over time during the normal course of its business, whether or not the TEAM Program existed. For example, the information systems integration, systems control and data acquisition equipment (SCADA), and software applications replacement (such as the computerized maintenance management system) are all items that OCSD would eventually replace with or without the TEAM Program framework. In essence, the proposed TEAM Program aggregates and accelerates costs that would have been incurred eventually in order to achieve the benefits earlier,and accomplish the implementation of the best appropriate practices in a structured, integrated,and effective way. The TEAM Program approach enables OCSD to focus on the application of best appropriate practices, which are consistent with excellence in utility management. The TEAM approach provides the coordination and integration of these practices within a sound strategic,planning and organizational framework. PARSONS ES-II asset Iffaaapwe7t Ytwategie Pear The costs estimated here are not additional costs, but are costs consolidated for the purposes of developing the asset management business case, and establishing a TEAM Program budget. The costs are based on Parsons/GHD's experience from many similar programs in Australia and New Zealand. The preliminary strategic level cost estimate for the TEAM Program framework is $22 - $38 million over a 6 to 10-year period (2002 dollars). These estimates include OCSD manpower, implementation planning and assistance, information systems changes, new software purchase and deployment, training programs, process and procedure changes, and accomplishment of the items included in the preliminary TEAM Improvement Program task lists. These estimated costs and benefits will be further refined during the recommended detailed implementation planning phase. Based on the above factors and assuming worst-case costs, the Benefit Cost Analysis results are: cc • 25-year benefit cost ratio is expected to be approximately 9:1 Total Life Cycle benefit cost ratio is expected to be in the 15:1 to 20:1 range, depending on the actual replacement value of the system Clearly, there are strong financial reasons for implementing an OCSD TEAM Program. There are other important reasons that are briefly summarized below. Level of Service Sustalnability OCSD services are highly infrastructure dependent. Improved management of OCSD's infrastructure assets will result in fewer failures, and will ensure that services are delivered on a sustained basis. The best practices based components of the TEAM Program will enhance levels of service by decreasing critical failures, (through use of failure mode analysis, and risk-consequence processes, and expanded condition assessment), and ensuring that appropriate reinvestment strategies are planned, based on accurate infrastructure renewal forecasting tools. It will also ensure that the impacts of financial decisions on level of service and long-teen sustainability are clearly understood through TEAM modeling and reporting processes. PARSONS ES-12 Am,t /laaa�r went &6-a&tie Pea Environmental Environmental protection is a key element of OCSD's overall mission. Implementing TEAM Program measures that include failure mode and criticality analysis, prioritized capital renewal and replacement,and reliability centered maintenance are elements of the TEAM Program that help assure that OCSD's environmental protection mission is met. The condition assessment monitoring and evaluation aspects of the TEAM Program will contribute to the proper operations of OCSD's system of infrastructure. Having high confidence level processes, procedures, information, data, and tools in place to manage OCSD's assets in accordance with best appropriate practices will enhance OCSD's ability to continue meeting its environmental compliance goals, even as the District's infrastructure continues to age. How Do We Move Ahead? m g The key steps necessary to move ahead with the TEAM Program are: is Approve this AM Strategic Plan and Framework Analysis Report, and its recommendations. is Proceed with Phase 2,Tactical Work Plan Development. Phase 2 would perform detailed implementation planning necessary to determine the specific actions, resources, schedule, and costs for the recommended TEAM Program improvement components, and to ensure efficient and effective implementation occurs with minimal disruption to the organization. This planning process will require 12-I8 months of work to complete. is Proceed with"Quick Start"planning and implementation. This step involves the expedited, high priority planning and implementation of the"Quick Start" items described in the Strategic Framework and Business Case (Section 4). The four identified "Quick Start" items are expected to produce significant short-term results.The items are: • Capital Expenditure Evaluation ■ Asset Hierarchy and Processes • CMMS Replacement and Systems Interconnectivity, PARSONS ES-13 Amet Iffaaae�reat rS'twate�ie Peam • Organizational Structure and Development These four items should be expedited and should immediately proceed to implementation following the planning of each item. • Proceed with 3-year target implementation. This step is the acmal implementation of the selected TEAM Program improvement components targeted for the 3-year planning horizon,shown in the Appendix. • Proceed with Best Appropriate Practices target implementation. This step is the actual implementation of the selected TEAM Program improvement components identified for the Best Appropriate Practices (4-10 year)planning horizon,shown in the Appendix. 8 • Continuous monitoring and improvement. Monitor TEAM Program progress and continuously make improvements to it on a cost benefit basis. Exhibit ES-2 shows how confidence levels increase over w time as best practices targets are achieved. This Program is considered dynamic, '^ rather than static,and will be subject to continuous improvement. PARSONS PS-14 4eeet Aafageafeat St-a&Ile, Peaff EXHIBIT ES-Y. CONCEPT OF CONTINUOUS ASSET MANAGEMENT IMPROVEMENT PROGRAM Target Level Best of AM Practices Appropriate (BAP) AM Practices E------------------------------- (BAP) Quality of \ AM Practices 3-Year Target .4. ............. Progress of ' "Confidence Level" AM Improvement to Program o° Current F p Status Of � ... . AM Practices w rn 2002 3-Years Less than IO Years TIME This illustrates Prow OCSD would progress from its current level ofAM practices to Best Appropriate Practices(BAP). BAP may not in all cases equal current world's best practices. PARSONS ES-15 asset /�aaa�eeereat 5'twate,pie P14 How Do We Build Knowledge and Consensus for Asset Management in Our Organization? Knowledge and support for asset management within OCSD were furthered considerably during the strategic planning project through: • Extensive training sessions and comprehensive manuals that focused on advanced AM practices and processes • Dialogue with highly experienced AM practitioners • Credible,comprehensive,and objective assessments • Collaborative, inclusive,and open workshops • Extensive and open dialogue between Parsons/GHD Team and OCSD staff on y every aspect of the project g • Consensus-based decision making and participatory processes in the post assessment segments of the project • Collaborative development of implementation strategies that appropriately address OCSD staff and management consensus As the TEAM program progresses, it is vital that knowledge building continues to enable OCSD staff to be ready to utilize AM improvement components when implemented. The level of AM knowledge is critical to the success of organizational changes as OCSD moves toward an asset-centered organization. What are the Conclusions and Recommendations? Summary of Conclusions • The DART and Engineering Reinvention initiatives represent a significant improvement and contribution to the overall OCSD AM practices. These initiatives lifted the confidence level score 20% (from 47% in 1996 to 68% in 2002). • In conducting the interview and workshop programs, the Parsons/GHD Team ® was impressed by the quality of staff throughout the organization. They were PARSONS t ES-16 An, /ffaffapeffefft A-a&Ito P& receptive and enthusiastic about the new approaches being raised and debated in workshops. • The comprehensive and objective assessment confirmed that there are significant gaps between current OCSD asset management processes and recognized best practices,even with the measured gains resulting from the DART Program. • The assessment process findings indicate that OCSD already does a good job in many areas that were assessed. However, there are several areas of advanced asset management that are new to virtually all U.S. utilities that need to be deployed at OCSD in order to close the gap between current and best practices at appropriate levels. • The proposed confidence level targets established for the 3-year and Best Appropriate Practices planning horizons will substantially and aggressively 8 enhance OCSD's asset management practices, and will produce significant x financial,level of service sustainability and environmental benefits. • The packages of TEAM Program improvement components prescribed to close the gap between current and best appropriate practices for the 3-year and Best m Appropriate Practices planning periods were derived from the best practices based assessment.The collaboratively set confidence level targets are appropriate as a starting point for the recommended implementation planning phase. • The proposed TEAM Program Charter is appropriate and necessary to provide the strategic framework needed to provide uniform organization-wide shared vision,guidance,clarity,and strategic direction. • The proposed implementation strategies contained in the TEAM Program Charter are appropriate and necessary to ensure efficient and effective development and deployment of the TEAM Program. • The forecasted financial,level of service sustainability,and environment benefits that comprise the business case clearly indicates that OCSD should move forward with the TEAM Program. • The proposed "Quick Start" items identified in the business case can deliver significant and important benefits early in the TEAM Program, and should be expedited. PARSONS ES-17 Asset /laojerxe(t rS'twa&yie Pea r Recommendations • Accept and approve the Asset Management Strategic Plan and Framework Analysis Report. • Accept and approve the TEAM Program Charter. • Proceed with the Phase 2, Tactical Work Plan Development, which includes "Quick Start"initiatives. m 8 PARSONS� ES-19 National Water Research Institute Blue Ribbon Panel Report Asset Management Strategic Plan Review Orange County Sanitation District October 6-7, 2003 Holiday Inn Costa Mesa, California Bmk nuber 40 Introduction In response to a request for assistance from the Orange County Sanitation District (OCSD),the National Water Research Institute(NWRI)organized and appointed a Blue Ribbon Panel(Panel)of experts to review and evaluate the document,Asset Management Strategic Plan and Frame Work Analysis and to provide a report that would document the Panel's findings and recommendations regarding the implementation of an Asset Management Program by OCSD. This document summarizes the findings and recommendations of the Panel derived from a study of the above document and from presentations by the OCSD staff and consultants during the first Panel meeting on October 6-7,2003, in Costa Mesa,California. The Charge to the Panel The Blue Ribbon Review Panel was convened to assist OCSD by providing the following functions: I. The Panel will act as a neutral third party in a review and evaluate the asset management approach as described in the document,Asset Management Strategic Plan and Framework Analysis. In other words, is the outlined approach the correct one for the organization? 2. From the presentations and documents provided in the first meeting,the Panel will document its findings and make recommendations on how to best assist OCSD in implementing the proposed strategic plan. 3. At a yet to be determined date, the Panel will participate in an interactive workshop with the OCSD staff, consultants,and others to finalize a methodology to implement the strategic plan. Background Since July 1998,OCSD has been engaged in the District Assessment and Reinvention Team(DART)process in an effort to close the competitive gap in the Operations and Maintenance Department identified in a March 1996 competitive assessment. DART prompted the initiation of several work processes and system enhancements in the operations and maintenance areas that have resulted in the achievement of significant benefits for the OCSD. The progress made by DART throughout the organization has become the foundation for the asset management initiative found in the strategic plan referenced above. _ I Book nuber 41 The organizing principles of OCSD,as described by OCSD General Manager Blake Anderson,serve as the fundamental architecture under which the proposed asset management program will exist. The principles include: • Environmental stewardship as a function of regional cooperation. • Wastewater management wherein reclamation is a process that uses wastewaters as a resource. • Business principles incorporating the triple bottom line approach that recognizes the needs of society,environment, and finance. • Workplace environment that integrates how the organization behaves relative to opportunities,responsibilities,and authority. FINDINGS OCSD,a well-regarded and professional government agency, is considering re-casting its management decision-making with an asset-centric approach as its over-arching organizing principle.As part of this approach,overall investment in the future will be keyed to lifecycle costs, rather than the initial capital costs of a project.This change in emphasis is designed to trigger a new way of looking at OCSD operations, maintenance, and capital investments. The proposed OCSD advanced asset management program is one of the only early stage development programs of its kind in America and could be implemented by one of the largest government agencies of its kind west of the Mississippi. Staff The staff is very competent and enthusiastic about the asset management program proposal and is committed to working hard to deliver value to OCSD. In fact, staff management is fully engaged in leading OCSD in best asset management thinking in the U.S.—they have few peers. A great deal of work has been done on the detailed investigation of ways to implement the asset management program, its potential value to OCSD,the organizational steps needed,the phasing of implementation,metrics,etc. There is a good sense that the staff has done its homework. The OCSD asset management team is complimented for the work it displayed on analyzing and reducing some existing capital expenditure program (Capex)by a thorough and detailed review of 15 of the 2003-2004 projects using advanced asset management principles. Preliminary results provided confidence that significant Capex savings and lifecycle cost reductions would accrue. 2 Book nuber 42 1 It was assumed by the Panel that OCSD is not over staffed,and that it is the right size to ran the current operation and maintenance and Capex. It will take significant resources to run, monitor,study, and create an asset management program. Strateeic Plan The Panel found the asset management strategic plan to be heavily jargonized and detailed in its approach. Because of this, it lacks clarity of purpose and disenfranchises non-technical parties.There were too many"buzz words"to explain simple concepts. The plan,as presented, is thorough and rigorous,but loses credibility in the way it is reported.There is too much emphasis on processes/systems, rather than on output.This loss of credibility is unfortunate,as the overall anticipated costs and benefits might be significant. From the strategic plan, it almost appears that the overall goal of the project is to "measure confidence"in the decision-making processes,rather than to improve performance. The plan includes a great deal of detail in specific, small steps that need to be(or could be)taken to improve data and processes throughout the organization. More attention should be paid to those things that are interrelated with OCSD's asset/source needs.The forecasted financial benefits of the program are huge compared to program costs. The source of these forecasts,however,should be better described (otherwise,the forecasts do not have credibility). From discussions with the staff, it is clear that the forecasts are based on cost savings experienced in Australia and New Zealand from various levels of management-practice implementation. This is probably the best that can be done and should be taken seriously;however,without explanation, the forecasts are easily dismissed. Proemat Delivery The approach to asset management is conceptually reasonable, but will not deliver the maximum benefits unless the implementation program is disciplined and focused(i.e., levels of service,asset condition,asset criticality, and Capex reviews). It should be recognized that the implementation plan already has many checks and balances. The program is presented as one package with no options and slightly different implementation timeframes. The package presents"form over function" in its initial presentation—it must reflect substance in its implementation. In addition,the package appears overly ambitious in its timeframe for a Year Three deliverable. 3 Book nuber 43 Organization Embracing fully the asset management approach and philosophy(which is widely-used in wastewater and sewage treatment agencies in Australia and New Zealand and becoming more widely accepted in the U.S. [e.g., Seattle Public Utilities])has found some resistance within in the OCSD organization. Some of the resistance is from"sticker shock"at cost estimates. Concern over costs is compounded by recent decisions to increase the OCSD capital expenditure budget to$2A billion,which required a 15- percent increase in fees. There appears to be a noticeable level of difference between the staffs level of understanding of the asset management program,which appears to be significant,and the level of understanding and the information required by the OCSD Board of Directors for the decision-making process. Current asset management practices at OCSD have not developed to the level needed to ensure best value to the OCSD or to ensure service provision to its stakeholders and other customers. There is a very strong middle-management buy-inlownership of the need to improve asset management;therefore,improvements in asset management will continue whether there is approval for implementation of the Strategic Plan or not. The use of advanced asset management techniques seems a logical and appropriate step for OCSD.The question for moving into this program is one of scope, implementation, and whether the program is tightly focused around the level of service goals and a better understanding of existing assets.The idea behind bringing a more rigorous asset management program to OCSD seems consistent with the staffs desire to improve performance,control costs,and enhance OCSD's reputation as one of the best agencies of its kind in the world. The asset management approach envisioned for OCSD may be unusual in water and wastewater agencies, but it is used fairly often in American private industry when large capital decisions about infrastructure must be made. Using this aggressive analysis of front-end investment, lifecycle examination,and careful monitoring of maintenance options is not uncommon in sophisticated private industry where front-end costs are exceptionally high. The Strategic Plan The"level of confidence"metric that is the centerpiece of determining the success of the program may not be the exact metric to maximize program outcomes as described in the plan even though the plan reflects a genuine desire by staff to bring undefined"best practices"into all OCSD operations. The Panel found the focus on Best Available Practices(BAPS) and the target level of "confidence"to be peripheral to the main point of the plan. Implementation of BAPs is a means to an end,not an end itself. 4 Book nuber 44 1 RECOMMENDATIONS The asset management strategic plan describes a program that has a strong potential to deliver advanced outcomes with significant benefits to the organizations; however, though the Panel recognizes the efforts by the OCSD staff to date, it nevertheless recommends the following be considered prior to implementing the program: • The Panel recommends that key aspects of the plan could be enhanced by incorporating specific targets for implementation and completion. This will help maximize early and ongoing benefits to OCSD,especially in reducing Capex and in improving security,reliability,and performance of the assets. • Implementation will require a clear plan to integrate asset management into the normal day-to-day workflow at OCSD.The proposed program needs to be a part of the continuous improvement process,building on the current work and expanding into all areas of the organization. The program,therefore,needs some quick winners to gamer wide support from the organization. To achieve quick winners,an approach might be for the program to aim for quick results in Capex. • To ensure success,the program needs a"champion"to carry the torch through to final implementation and will aid in overcoming the cultural changes that will occur in the early period of implementation. • The plan should be focused on thejob to be done(e.g.,know the condition of the asset and its role in providing service)and establish a maintenance policy based on that. • The plan should articulate clearly the essential activities to be completed before the first values would be realized and should be presented as a total package with a reasonable and acceptable budget. • The proposed approach described in the plan needs to be pared down to essential outcomes. Then,one can discuss how those outcomes will be achieved, including the possibility of phasing in the overall program outcomes over time. • Because the Panel felt that the overall strategic plan presentation lacked a concise statement of the core concept of the proposal, it recommends that a statement be developed that would be a first principle(e.g.,"We will examine each asset from the Point of view of its contribution to the levels of service and manage it accordingly."). ➢ Assets should be managed to minimize the cost of owning and operating them while continuously delivering the desired levels of service. 5 Book nuber 45 ➢ Integrate planning,design, construction,operations,maintenance,funding, warehousing,rehabilitation,replacement,disposal,data management,and strategic decision-making for one purpose:To provide cost-effective(and sustainable)public infrastructure. • The program should clearly articulate priorities and benefits from the separable components,such as asset identification,criticality evaluation,and risk assessment. It should also be crafted in a manner that will generate clear work products for program component evaluation and,therefore,would provide opportunities for the use of the off-ramps, should that be the will of the Board. • All Capex and operating and maintenance expenditures(Opex)that relate to existing assets are likely to be sub-optimal, both in a cost and asset management sense, without a full picture of asset conditions and asset criticalities(as they stand). This evidence is critical to decision making. • The plan proposes methods and measures to consider this issue, which is fundamental to building confidence and understanding at the earliest possible time and to achieving immediate and ongoing cost and asset performance gains. It is recommended that initial resources focus on the task ahead,especially for critical assets. • To ensure the program's success in a timely fashion certain aspects of OCSD's asset management program must be accelerated to gamer early success. These include: ➢ Asset condition assessment. ➢ Asset criticality assessment. ➢ Risk assessments and valuation of risk,at least for the initially perceived top I00 asset risks. ➢ Drivers for new asset creation. ➢ Whole of business view of where and how much risks it can carry. These elements will largely assist the prioritization of Capex and will minimize risk to OCSD and deliver confidence in asset performance. Also,should Capex programs need to be truncated at any time due to,say, financial constraints,this offers a way to focus maximum value from any available Capex spending. • Since the plan relies on the levels of service required, it is recommended that a set of guiding principles of service be created at the earliest possible time. It is important that initial levels of service be reviewed periodically based on the acquisition of better information and technology. This integration is normal and sensible. Key levels of service should be adopted early on. Further, is recommended that no project proceeds without a review relative to financial and asset performance gains. Further, it is certain that,as asset confidence 6 Book nuber 46 1 is built and management improvements are prioritized,the assessment of projects and programs will yield even greater benefits. • A regional planning approach led by OCSD would be a sensible way to ensure that complementary investments between the municipalities and OCSD occur as often as possible. • OCSD should establish an Asset Management Committee. The Asset Management Committee should be comprised of representatives from key areas of the organization, including engineering,finance,operations,maintenance,and information systems. • OCSD management must continually commit to and demonstrate the value of the program to the district. • The concept of an Asset Management University,although interesting,should be revisited in terms of an OCSD University,whereby asset management is but one of many activities found within a more holistic training curriculum for the district. 7 Book nuber 47 Asset Management Strategic Plan Blue Ribbon Review Panel Chair Stan Oftelie Orange County Business Council Irvine,Califomia Members Mick Bourke Environmental Protection Authority Victoria,Australia Alan Lamont Lawrence Livermore National Laboratory Livermore,Califomia Gordon Logan South East Water Limited Melboume,Australia Jerry Thibeault Regional Water Quality Control Board,Santa Ana Region Riverside,Califomia Stephen Tucker Los Angeles Department of Water and Power Los Angeles,Califomia NWRI Staff Support Ronald Linsky Executive Director 8 Book nuber 48 Page 1 of 1 Fields, Jeanie From: Ryan, Gail Sent: Tuesday, January 20,2004 7:36 To: Fields, Jeanie Subject: RE: Reimbursement for calculator Yes, I was out last week, but if you want to come over, I'll take care of the paperwork while you're here. Cad Ryan Contracts/Purchasing Assistant Orange County Sanitation District Tel: (714) 593-7583 Fax: (714) 965-0728 eNm@ soc d com ---Original Message-- From: Fields,Jeanie Sent: Tuesday,January 20, 2004 7:32 AM To: Ryan, Gail Subject: Reimbursement for calculator Importance: High Hi Gail: Can you tell me if you have a reimbursement for me in the amount of$56.557 Thank you, Jeanie Fields X7077 1/20/2004 Book nuber 49 STEERING COMMITTEE t4eebogze/wDate To ad.ofDB. t/ AGENDA REPORT Item Number [em Number B.B. Orange County Sanitation District FROM: Blake Anderson, General Manager Originator: Jean Tappan, Committee Secretary SUBJECT: CA Regional Water Quality Control Board Notice of Violation Issued to the Cities of Newport Beach, Huntington Beach, Santa Ana, Fountain Valley, Costa Mesa and the County of Orange GENERAL MANAGER'S RECOMMENDATION Information only. SUMMARY Provided for information and general discussion only. PRIOR COMMITTEE/BOARD ACTIONS Received by the Ad Hoc Committee re Urban Runoff on January 14, 2004. PROJECT/CONTRACT COST SUMMARY N/A BUDGETIMPACT ❑ This item has been budgeted. (Line item: ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION ALTERNATIVES XWpups,Ealileann0�bt28 MQCBUr M.E Rm asow, Pagel Book nuber 50 CEQA FINDINGS ATTACHMENTS neeoreoe�ae�siaa.�o cm.�.nwoa�raizew MMS w M,. Page 2 Book nuber 51 California Regional Water Quality Control Board - Santa Ana Region Terry Tamminen lalemet Srnemry foe A ldtt Iov/wgrb8Main St,Suie n a961-334 Arnold ,Rwrcdym208 Environrnenml Phone(909)782-4130-PAX(909)781-6288 Schwarsenegger Pronrtioa Govemar December 23, 2003 Vicki Wilson, Director Orange County Public CERTIFIED MAIL Facilities and Resources Dept. Return Receipt Requested 300 North Flower Street, 7 h Floor Santa Ana, CA 92703 Dave Kiff Ray Silver David Ream Assistant City Manager City Manager City Manager City of Newport Beach City of Huntington Beach City of Santa Ana 3300 Newport Blvd. 200 Main Street 20 Civic Center P.O. Box 1768 Huntington Beach, CA 92648 Santa Ana, CA Newport Beach, CA 92658 92701 Raymond Kromer Allan Roeder City Manager City Manager City of Fountain Valley City of Costa Mesa 10200 Slater Ave. P.O. Box 1200 Fountain Valley, CA 92708 Costa Mesa, CA 92626 NOTICE OF VIOLATION OF ORDER NO. R8-2002-0010 (MS4 PERMIT)- DISCHARGES OF POLLUTED NON-STORMWATER TO THE SANTA ANA RIVER AND THE PACIFIC OCEAN, and REQUEST FOR TECHNICAL AND MONITORING INFORMATION PURSUANT TO SECTION 13267 OF THE CALIFORNIA WATER CODE This letter is to notify the County of Orange, and the Cities of Huntington Beach, Newport Beach, Costa Mesa, Fountain Valley, and Santa Ana that discharges of non- storm water/urban runoff (hereinafter collectively referred to as nuisance flow) to the Santa Ana River, and from the Santa Ana River to the Pacific Ocean, are causing and/or contributing to violations of water quality standards. This is a violation of Receiving Water Limitation, Provision IV.1, of the MS4 Permit. This letter sets forth a requirement under California Water Code Section 13267 that the County of Orange and the above named cities provide a technical report regarding the sources of polluted urban runoff in the Santa Ana River and the impacts of the discharge from the River on the Pacific Ocean. On October 15, 1999 we requested that the County of Orange, and the Cities of Huntington Beach, Costa Mesa, Fountain Valley, and Santa Ana submit a technical report for the investigation of bacteriological water quality impairments in the Talbert California Environmental Protection Agency • eec)eled Paper C Book nuber 52 OCPFRD, C WC 13267 Request _2_ December 23,2003 I Channel, Lower Santa Ana River, and the Greenville Banning Channel. On November 16, 1999 the County of Orange provided the requested report, which proposed Phase I of the Coastal Runoff Impact Study (CRIS-1) to be completed by researchers from the University of California at Irvine (UCI) and led by Dr. Stan Grant and Dr. Brett Sanders. This work was funded by the County of Orange, the National Water Research Institute and the State Water Resources Control Board. The results of this investigation, which focused on the Talbert Watershed, together with the results of the subsequent Phase II of the CRIS which focused on the Lower Santa Ana River and Newport Slough, have been submitted to this office in full compliance with our October 15, 1999 letter. We appreciate the work that has been done to date to address this problem. We would also like to thank the County and the cities for taking proactive actions to divert polluted urban runoff from the Talbert and Santa Ana River watersheds to the sanitary sewer system to correct violations of the MS4 permit. These diversions appear to have had a very positive impact on water quality in the ocean, and the extent of violations of the water quality objectives has been greatly reduced from what we experienced in 1999. However, the evidence provided by the CRIS investigations also shows that discharges from the Santa Ana River continue to violate water quality standards, and one of the likely sources of this pollution is the nuisance flows entering the Santa Ana River from various sources downstream from the current diversion. We have reviewed the CRIS Phase I and II reports and believe that these reports provide a significant amount of evidence demonstrating that discharges of nuisance flows from the Talbert and Santa Ana River watersheds are causing and/or contributing to violations of water quality standards for bacteria. We also believe that the evidence in these reports clearly shows that the discharges of nuisance flows are not the sole cause of violations of water quality standards, and that there are still some unidentified sources contributing to the concentrations of bacteria we see along Huntington State Beach north of the mouth of the Santa Ana River. However, since the discharge from the Santa Ana River to the Pacific Ocean routinely exceeds water quality objectives for bacteria there is still a need for further investigation and control of bacteria sources in this watershed. Evidence Supporting the Requirement/Threat to Water Quality 1. According to a study entitled "Coastal Runoff Impact Study Phase 11: Sources and Dynamics of Fecal Indicators in the Lower Santa Ana River Watershed" (Grant, at al, UCI, 2002), the Santa Ana River discharge may contribute up to 70% of the total coliform bacterial pollution found along Huntington State Beach. The discharge from the river exceeded water quality objectives for bacteria in 58% of the samples collected during 2002. 2. According to A. Boehm, at al., "Decadal and Shorter Period Variability of Surf Zone Water Quality at Huntington Beach, California,"June 21, 2002, a regression analysis of fecal indicator bacteria monitoring over 40 years, California Environmental Protection Agency Ca 8egxled Paper Book nuber 53 OCPFRD, CWC 13267 Request -3- December 23,2003 11suggest[s] that total coliform concentrations have been slowly rising over time." The most recent fecal indicator bacterial pollution along Huntington State Beach actually started in 1997, two years before the adoption of AB411 establishing a water quality objective for enterococcus. Violations of the enterococcus objective make the water pollution problem more apparent, and the majority of violations of water quality standards are for the enteroccocus objective. 3. The is no evidence from any of the numerous studies of the Huntington Beach pollution problem that shows bacteria from Orange County Sanitation District's offshore discharge is impacting the beach water quality. 4. After the completion of numerous sanitary surveys by OCSD, the cities of Huntington Beach and Newport Beach, and the California State Parks Department we have not found any evidence of leaking sewers, or other sewage discharges that are causing the bacterial pollution in the Santa Ana River and the Pacific Ocean. 5. After diverting all the nuisance flows from the Talbert Channel and Marsh, the discharge from the marsh no longer routinely exceeds water quality objectives for bacteria, as was the case in 1999 before the diversions were put in place. 6. According to Komex, "AES Huntington Beach Generating Station Surf Zone Water Quality Study", August 4, 2003, the AES discharge may entrain the discharge from the Santa Ana and San Gabriel Rivers and cause an impact at monitoring stations 6N and 9N. Komex found no sources of fecal indicator bacteria at the AES plant that could explain the pollution found along the beach. Source tracking analysis done as part of the study found no evidence of human waste within the AES plant, but did find some indication of human waste bacteria in the samples collected at stations 6N, 9N and the River. 7. As part of the Santa Ana River project in the 1990s, the Army Corps of Engineers identified 10 drains discharging into, or crossing, the Santa Ana River downstream of the current diversion system. Report Requested In accordance with California Water Code Section 13267, please provide the following report: 1. Provide a plan and schedule for investigating, identifying, and eliminating sources of fecal indicator bacteria being discharged from the Santa Ana River to the Pacific Ocean, downstream of the diversion near OCSD's Plant No. 1 in Fountain Valley. California Environmental Protection Agency �J% Rer kdPaper Book nuber 54 OCPFRD, CWC 13267 Request -4- December23,2003 2. If the nuisance flows in the storm drains are not eliminated, then the County/cities shall develop and implement a monitoring program to quantity the load of fecal indicator bacteria from these drains to the River. The monitoring program should include the flow rate of the discharge over the entire monitored period and collection and analysis of samples of the discharge and upstream water quality in the Santa Ana River. The nuisance flow samples and the upstream samples shall be analyzed for total and fecal coliform and enterococcus bacteria using the membrane filtration method. Deadlines: A workplan, including the schedules, shall be provided to this office no later than February 9, 2004. If the discharge is not eliminated and the County implements a monitoring program according to No. 2 above, all collected monitoring data shall be submitted monthly, by the 30 day of the month following the analysis. Penalties for Failure to Submit the Report: This Order is issued pursuant to Section 13267 of the California Water Code. Failure to comply with this Order can result in penalties under Water Code Section 13268, in an amount up to$5,000 per day for each day of violation. Appeal to the Board: If you believe this Order has been issued in error, you may submit a written request for a hearing before the Regional Board. Note, however, that the terms of this Order will remain in effect pending such a hearing. Be further advised that the time for filing a petition for review of this Order with the State Water Resources Control Board is within 30 Days from the date of this Order. If you have any questions, please call me at (909) 782-3284 or Ken Theisen at(909) 320-2028. All legal questions should be directed to our legal counsel, Jorge Leon at (916) 341-5180. Sincerely, Gerard J. Thibeault Executive Officer cc:Jorge Leon, SW RCB Office of Chief Counsel HB TAC (via email) California Environmental Protection Agency plrD .0 R<cWkdPape, Book nuber 55 STEERING COMMITTEE Meeringza/D4 Dare To ad.or Dir. t/ AGENDA REPORT Iem Number Item Numbe s.c. Orange County Sanitation District FROM: Robert Ghirelli, Director of Technical Services Originator: Layne Baroldi, Legal & Regulatory Affairs Liaison SUBJECT: Biosolids Advisory Committee (BAC) GENERAL MANAGER'S RECOMMENDATION Information Item SUMMARY • The Long-Range Biosolids Management Plan (Plan)was received and filed at the December Board meeting. Staff is now moving forward to implement the various elements of the plan consistent with the District's biosolids environmental management system (EMS). • One element of the EMS is a commitment to public outreach and education. To honor this commitment, staff will be asking for the help of a public Biosolids Advisory Committee (BAC)to review and make recommendations on the selection of future biosolids management options. • OCSD staff will consult with the BAC in preparing its recommendations regarding biosolids management contracts for approval by the Board of Directors in spring or early summer. The BAG will also be asked to make recommendations regarding the role the public should play in advising OCSD as the Plan is implemented overtime. • The process for creating the BAC will start with sending an announcement to a large number of interested stakeholders on OCSD's mailing lists directing them to a BAC application on the OCSD website. Staff will review the submitted applications and select up to eight members of the public representing a variety of backgrounds and experience (e.g. environmental, economic, industry, regulatory, service area representation, etc.)to serve on the BAC. • BAC meetings will be held over the next few months to educate the group on biosolids issues. The group will then be asked to assist staff in reviewing proposals submitted by biosolids technology vendors and preparing a recommendation for OCSD's future biosolids management options for consideration by the Board of Directors. • Unless there is an objection by the Steering Committee, staff intends to proceed as described above. H:bpllepa WISINi,p CpmiXN`W V enb12BM P'pmiEs PMNry nMnitlN M.Ox PNnNA Page 1 Book nuber 56 PRIOR COMMITTEE/BOARD ACTIONS None PROJECT/CONTRACT COST SUMMARY N/A BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. X Not applicable (information item) ADDITIONAL INFORMATION None ALTERNATIVES N/A CEOA FINDINGS N/A ATTACHMENTS None mmNr Page 2 Book nuber 57 STEERING COMMITTEE Meeang Date To ad.or Dir. 1/28/04 AGENDA REPORT ItemNumter RemNumtw S.D. Orange County Sanitation District FROM: Blake P. Anderson, General Manager Originator: Jean Tappan, Committee Secretary SUBJECT: February Agenda Items for Consideration by Working Committees GENERAL MANAGER'S RECOMMENDATION Review with staff the agenda items tentatively scheduled for review by the Working Committees at their February meetings. SUMMARY Staff routinely prepares for the Steering Committee a list of items scheduled for presentation to the Working Committees and the Board at their next monthly meetings. This allows the Steering Committee the opportunity to review these items early enough to make reassignments in the review or approval process. The following items are scheduled to be considered by the Committees in February: OMTS Committee: 1. Consider Contract for Small Diameter Pipe Sewer Cleaning 2. Report on Impacts of Pending Air Quality Regulations PDC Committee: 1. Ratify Change Order 12 to Job No. P1-37, Primary Clarifiers Nos. 16-31 and Related Facilities at Plant 1 2. Ratify Change Order 5 to Job No. J-35-3, Area Classification Study Implementation at Plants Nos. 1 and 2 3. Approve Amendment No. 2 to PSA for Specification No. PSA- 2001-33BD, Materials Testing and Geotechnical Engineering Services 4. Approve Amendment No. 2 to PSA for Specification No. PS- 2002-33BD, Materials Testing and Geotechnical Engineering Services 5. Approve Amendment No. 3 to PSA for Specification No. PSA- 2001-3481), Surveying Services 6. Ratify Change Order 1 to Job No. J-77, Effluent Pump Station Annex 7. Ratify Change Order 4 to Contract 1-2-4, Bushard Trunk Sewer Rehabilitation 8. Award PSA for Job No. P2-47, Secondary Treatment Rehabilitation at Plant 2 9. Award PSA for Job No. P1-102, Secondary Activated Sludge Facility 2 at Plant 1 10. Approve Amendment No. 5 to PSA for Job No. P2-82, Plant Utilities Rehabilitation and Refurbishment Book outer 58 11. Authorize GM to Execute a Reimbursement Agreement with City of Tustin re Gisler-Redhill Trunk Improvements, Contract No. 7-36; Orange Trunk Improvements, Contract 7-39; Gisler- Redhill/North Trunk Improvements, Contract 7-41; and City of Tustin Projects Nos. 6106 and 6151 FAHR Committee: 1. Consider Quarterly SWAP Report 2. Consider Mid-year 03-04 Financial Report 3. Consider Quarterly Investment Management Program Report 4. Consider revised Purchasing Resolution 5. Consider Budget Assumptions, calendar and Fiscal Policy Statements 6. Report on Preliminary Sewer Service User Fees for 2003-04 7. Consider Unrepresented Groups Compensation and Benefits B. Consider changes to Human Resources Policies and Procedures 9. Consider changes to Safety Policies PROJECT/CONTRACT COST SUMMARY N/A BUDGET IMPACT ❑ This item has been budgeted. (Line item: ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION NA ALTERNATIVES NA CEOA FINDINGS Not a project. ATTACHMENTS NA jt H`bpNpaMeW eenry Lemmltw`d Van`01R9M IiM d NU la Fatrer bx em.b arxi� Page 2 Book nuber 59 STEERING COMMITTEE Meeting Date To 86.or Dir. 1/29/09 AGENDA REPORT Item Number Item Number &E. Orange County Sanitation District FROM: Blake P. Anderson, General Manager Originator: Jean Tappan, Committee Secretary SUBJECT: Agenda Items for Consideration by the Board GENERAL MANAGER'S RECOMMENDATION Review with staff the agenda items tentatively scheduled for consideration by the Board at its January 28, 2004 meeting. SUMMARY Staff routinely prepares for the Steering Committee lists of items scheduled for presentation to the Working Committees and the Board at their next monthly meetings. This allows the Steering Committee the opportunity to review these items early enough to make reassignments in the review or approval process. The following items are scheduled to be considered by the Board at the January 28, 2004 meeting: 9. Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same, as follows: a. Adopt Resolution No. OCSD 04-01, Appointing a Secretary Pro Tern to the Board of Directors, and Repealing Resolution No. OCSD 03-01. b. (1) Receive and file petition from Richard Dittberner requesting annexation of 0.55 acres to Orange County Sanitation District (OCSD), in the vicinity of Via Vista and Cooks Corner, in an unincorporated area of Orange County; and, (2) Adopt Resolution No. OCSD 04.02, authorizing initiation of proceedings to annex said territory to OCSD (Proposed Annexation No. OGSD-38—Dittberner Annexation). C. Approve a reimbursement agreement with the Orange County Public Facilities and Resources Department(PFRD)for the relocation of Orange County Sanitation District's sewer facilities in Skyline Drive for an estimated amount not to exceed $231,602, as required by PFRD's Master Plan Storm Drain Program, in a form approved by General Counsel. d. Approve Amendment No. 3 to the Professional Services Agreement with ADS Environmental Services for Long Term Flow Monitoring Program, Job No. J-73-2, waiving the requirement for Errors and Omissions insurance with no change to the total contract amount not to exceed $6,337,400. END OF CONSENT CALENDAR Book nuber 60 10. Consideration of items deleted from Consent Calendar, if any. COMMITTEE REPORTS AND RECOMMENDED ACTIONS 11. STEERING COMMITTEE Consent Calendar a. Order draft Steering Committee Minutes for the meeting held on December 17, 2003 to be filed. Non-Consent Calendar b. Review and consideration of agenda items considered by the Steering Committee re the January 28, 2004 meeting. C. Consideration of items deleted from Steering Committee Consent Calendar, if any. 12. URBAN RUNOFF AD HOC COMMITTEE Consent Calendar a. Order draft Urban Runoff Ad Hoc Committee Minutes for the meetings held on May 21, 2003, and January 14, 2004,to be filed. Non-Consent Calendar b. Approve a sole source Professional Services Agreement with Integrated Program Management Consultants (IPMC), a joint venture of Parsons Infrastructure & Technology Group, Inc. and CH2M Hill, Inc., to conduct an urban runoff study in an amount not to exceed$223,123. G. Consideration of items deleted from Urban Runoff Ad Hoc Committee Consent Calendar, if any. 13. JOINT GROUNDWATER REPLENISHMENT SYSTEM COOPERATIVE COMMITTEE (JCC) JCC Consent Calendar a. Order Joint Groundwater Replenishment System Cooperative Committee Minutes for the meetings held on November 10, 2003, and December 1, 2003 to be filed. JCC Non-Consent Calendar b. Consideration of items deleted from JCC Consent Calendar, if any. NON-CONSENT CALENDAR N Wepiaae�ozb^,wnnv ComfiltaeWaVanN12B0a U.al ABa lo,J.WerbecMc Ra ..' WOW Page 2 Book nuber 61 14. Receive and file Treasurer's Report for the month of December 2003. 15. Ratify use of General Manager's emergency purchasing authority, Resolution No. OCSD 99-23, for Purchase Order No.41836-OS issued to Dynamic Fabrication Inc. for$121,568.94, including tax and freight, and a contingency of$3,341.06 for any unforeseen work that may be required to complete the repair, for a total amount not to exceed $125,000.00,for the Emergency Repair of the Plant 2 Truck Loading Station Auger System. 16. (a) Establish a budget for Realignment of Coast Highway Trunk Sewer, Contract No. 5-13-1, in the amount of$103,000 for the reimbursement of Orange County Sanitation District's share of construction and staff costs; (b)Approve a reimbursement agreement with the City of Newport Beach for Realignment of Coast Highway Trunk Sewer, Contract No. 5-13-1 near Jamboree Road and Backbay Drive, in a form approved by General Counsel,for an estimated amount not to exceed$80,000; and, (c)Authorize the General Manager to execute quitclaim deeds, in a form approved by General Counsel, to transfer the existing easement to the Irvine Company and the Orange County Public Facilities Resource Department, which upon project completion will no longer be required. 17. (a)Approve plans and specification and Addenda Nos. 1, 2, and 3 for Peak Flow Management, Job No. J-67, on file at the office of the Board Secretary; (b) Receive and file bid tabulation and recommendation; and, (c)Award a construction contract to Margate Construction, Inc.for Peak Flow Management,Job No. J-67,for an amount not to exceed$1,250,900. 18. (a) Approve Plans and Specifications and Addenda Nos. 1 and 2 for Plant Utilities Rehabilitation and Refurbishment, Job No. P2-82, on file at the office of the Board Secretary; (b) Receive and file bid tabulation and recommendation; and, (c)Award a construction contract to Norman A. Olsson Construction, Inc. for Plant Utilities Rehabilitation and Refurbishment,Job No. 132-82, for an amount not to exceed $2,778,985. 19. (a)Approve plans and specifications for Rehabilitation of Crystal Cove Pump Station, Contract No. 5-54, on file at the office of the Board Secretary; (b) Receive and file bid tabulation and recommendation; and, (c)Award a construction contract to L.H. Engineering Co.for Rehabilitation of Crystal Cove Pump Station, Contract No. 5-54,for an amount not to exceed $144,806.85. 20. (a) Approve plans and specifications and Addendum No. 1 for Gisler-Redhill Trunk Improvements, Reach "A", Contract No. 7-36; Orange Trunk Improvements, Contract No. 7-39; Gisler-Redhill/North Trunk Improvements, Contract No. 7-41; and City of Tustin Project Nos. 6106 and 6151, on file at the office of the Board Secretary; n`<wn.oawcvs�emmcommnea�m�."eizew un of aAaro,.w�aremv me n. .a Page 3 Book nuber 62 (b) Receive and file bid tabulation and recommendation; and, (c) Award a construction contract to ARB, Inc.,for Gisler-Redhill Trunk Improvements, Reach "A"Contract No.7-36; Orange Trunk Improvements, Contract No. 7-39; Gisler- Redhill/North Trunk Improvements, Contract No. 7-41; and City of Tustin Project Nos. 6106 and 6151,for an amount not to exceed$18,375,999. 21. (a) Reject the unsolicited proposal submitted by Revenue Enhancement Group, dated November 2003, Identifying Undercharged Commercial Parcels; and, (b) Direct staff to evaluate non-residential parcels to determine if those parcels have been undercharged for annual sewer service user fees and, if so,to collect the proper charges on the property tax bill on a going forward basis. 22. Adopt Ordinance No. OCSD-21, an Ordinance of the Board of Directors of Orange County Sanitation District,Adopting Fees, Procedures and Policies Concerning Annexations of Territory to the District, and Repealing Ordnance No.OCSD-03: a. Open meeting b. Close meeting c. Discussion by Board of Directors d. Recommended actions: 1. Motion to read Ordinance No.OCSD-21 by title only and waive reading of said entire ordinance. (The waiver of the reading of the entire ordinance must be adopted by a unanimous vote of Directors present.) 2. Motion to adopt Ordinance OCSD-21, An Ordinance of the Board of Directors of Orange County Sanitation District, Adopting Fees, Procedures and Policies Concerning Annexations of Territory to the District; and Repealing Ordinance No. OCSD-03. 23. Adopt Ordinance No. OCSD-22, An Ordinance of the Board of Directors of Orange County Sanitation District, Reaffirming Sanitary Sewer Service Charges; Adopting Revised Capital Facilities Capacity Charges; Adopting Revised Miscellaneous Charges and Fees Relating to Industrial Dischargers, Source Control Permittees and Wastehaulers; and repealing Ordinance No. OCSD-20: a. Open meeting b. Close meeting C. Discussion by Board of Directors d. Recommended actions: 1. Motion to read Ordinance No. OCSD-22 by title only and waive reading of said entire ordinance. (The waiver of the reading of the entire ordinance must be adopted by a unanimous vote of Directors present.) 2. Motion to adopt Ordinance OCSD-22, An Ordinance of the Board of Directors of Orange County Sanitation District, Reaffirming Sanitary Sewer Service Charges; Adopting Revised Capital Facilities Capacity Charges; Adopting Revised Miscellaneous Charges and Fees Relating to Industrial Dischargers, Source Control Permittees and Wastehaulers; and repealing Ordinance No. OCSD-20. PROJECT/CONTRACT COST SUMMARY nveor+v.m�ceena wm.n.enau�wtuaoa uu a au,a m,m.e...e� q,,,,,, ewe Page 4 Book nuber 63 N/A t BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION NA ALTERNATIVES NA CEQA FINDINGS Not a project. ATTACHMENTS NA jt x:meorea.m.�aenm cmm.nerau.ne,zeoa ue w uw m,.w,maa.r aoc Page 5 Book nuber 64 Orange County Sanitation District (714) 962-2411 www.ocsd.com mailing address: P.O. Box 8127 Fountain Valley, California 92728-8127 street address: 10844 Ellis Avenue Fountain Valley, California 92708-7018 OCSD 6/03