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HomeMy WebLinkAbout2007-03 ADM t MINUTES OF THE REGULAR MEETING OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District I WEDNESDAY, March 14, 2007, AT 5:00 P.M. A meeting of the Administration Committee of the Orange County Sanitation District was held on March 14, 2007, at 5:00 p.m., in the Sanitation District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: ADMINISTRATION COMMITTEE STAFF PRESENT: MEMBERS: Jim Ruth, General Manager DIRECTORS PRESENT: Lorenzo Tyner, Director of Finance and Mark Waldman, Chair Administrative Services Phil Luebben, Vice Chair Jim Herberg, Director of Engineering Steven Choi Jeff Reed, Human Resources and Employee Bill Dalton Relations Manager Jon Dumitru Mike White, Controller Rich Freschi Penny Kyle, Clerk of the Board Darryl Miller Rich Spencer Joy Neugebauer Laurie Klinger Chris Norby Randy Kleinman Ken Parker Jim Burror Sal Tinajero Juanita Skillman Doug Davert, Board Vice Chair OTHERS PRESENT: DIRECTORS ABSENT: Brad Hogin, General Counsel Jim Ferryman, Board Chair Jim Winder HIELECL H oT�{EICE qR� (2) APPOINTMENT OF CHAIR PRO TEM ORANGE COMv SANRA770N DISTRiCi No appointment was necessary. MAR 28 2007 (3) PUBLIC COMMENTS BY. � . There were no public comments. (4) REPORT OF THE COMMITTEE CHAIR Chair Waldman did not give a report. (5) REPORT OF THE GENERAL MANAGER Jim Ruth, General Manager, recognized Jim Herberg, Director of Engineering,who briefed the Committee on the CIP budget, and responded to their questions. • Minutes of the Administration Committee March 14,2007 Page 2 (6) REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES Lorenzo Tyner, Director of Finance and Administration, introduced Randall Kleinman, Principal Financial Analyst(Risk Manager). (7) REPORT OF GENERAL COUNSEL Brad Flogin, General Counsel,did not give a report. (8) CONSENT CALENDAR ITEMS Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same, as follows: a. MOVED, SECONDED AND DULY CARRIED: Approve minutes of the February 14, 2007 meeting of the Administration Committee. b. ADM07-06 MOVED, SECONDED AND DULY CARRIED: Recommend that the Board of Directors: (1)Approve the amended Joint Powers Agreement of the CSAC (California State Association of Counties) Excess Insurance Authority which supersedes the California Public Entities Insurance Authority(CPEIH)that provides the District's excess workers' compensation Insurance coverage, in a form approved by General Counsel; and, (2)Approve the CSAC Excess Insurance Authority's amended Memorandum of Understanding for the Excess Workers' Compensation Program to incorporate non-county public entity membership in the program, in a form approved by General Counsel. END OF CONSENT CALENDAR (9) INFORMATIONAL ITEMS a. ADM07-07 2006-07 and 2007-08 District Budget Update Lorenzo Tyner, Director of Finance and Administrative Services, provided a brief overview of the FY 2007-08 budget. b. ADM07-08 2007-08 Sewer Service User Fee Estimates Mike White, Controller, discussed proposed high strength discharge sewer service fee billing method adjustments. Directors discussed whether the policy issues should be considered before or after the completion of the next rate study. It was determined that the impact of these policy issues beyond 2007-08 would be brought back for further discussion at the April meeting. } Minutes of the Administration Committee March 14, 2007 Page 3 C. ADM07-09 Succession Management Program Update Rich Spencer, Human Resources Supervisor, gave a brief report and overview of the Succession Management Program. (10) CLOSED SESSION The Committee convened in Closed Session at 6:40 p.m. pursuant to Government Code Section 54957(b)(1). Confidential Minutes of the Closed Session held by the Administration Committee have been prepared in accordance with California Government Code Section 54957.2, and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A. Convene in closed session. 1. Conference with designated representatives Jim Ruth, General Manager; Lorenzo Tyner, Director of Finance and Administrative Services; and Jeff Reed, Human Resources and Employee Relations Manager, re Meet and Confer Update re contract negotiations for employees represented by 1). Orange County Employees Association; 2). International Union of Operating Engineers, Local 501, and 3). Supervisors, Professional Management Team (part of Peace Officers Council of California) (Government Code Section 54957(b)(1). B. The Committee reconvened in regular session at 6:45 p.m. C. Consideration of action, If any, on matters considered in closed session. (11) OTHER BUSINESS,COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY (12) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT Director Miller requested a report on water conservation measures that could be applied in the treatment plant and what the projected impact would be on user fees. Director Neugebauer requested the committee be provided updates on the North County Yard. (13) FUTURE MEETING DATES The next regular Administration Committee meeting is scheduled for April 11, 2007, at 5 p.m. Minutes of the Administration Committee March 14, 2007 Page 4 (14)ADJOURNMENT The Chair declared the meeting adjourned at 6:50 p.m. Submitted by: Penny Kyl Clerk of the Board H:%deptIagenda\CommideeeWdmin COmmldee\0307t031407 Administragon Minutes.doc Leadership Competencies A competency is an underlying characteristic such as knowledge, skills, abilities, motives, traits, self-concept, and behavior that allows people to effectively perform on the job. The following leadership competencies have been identified for OCSD. • Oral Communication • Listening • Integrity/ Honesty • Interpersonal Skills (Working with Others) • Conflict Management • Team Leadership • Teaching Others • Decisiveness • Planning and Evaluation • Problem Solving • Vision • Organizational Awareness • Career Specific Expertise Competency Assessment The person being assessed will be rated by multiple raters on each of the leadership competencies using a rating scale based on proficiency levels, as shown in the following example: 1. Oral Communication —Ability to communicate ideas, thoughts, and facts orally. Speaking using correct grammar, appropriate body language, proper tone and inflection, recognizing non-verbal cues, and respecting the audience to effectively communicate ideas. ❑ Difficulty communicating ideas orally. ❑ Appropriately communicates most ideas. ❑ Effectively communicates thoughts, ideas and facts orally. ❑ Speaks in a compelling manner. ❑ Makes dynamic oral presentations. Distributed at L'-; /y d Administration Committee Meeting d Scope of Impact Scope of Impact refers to the effect or impact of the competency that is needed for successful job performance, including the operational environment and time frame within which one's work results are realized. It refers to the magnitude and complexity of the information, problems, plans, tasks, projects, or resources that are successfully handled by one's work behavior. Scope of Impact includes the scale, impact, and extensiveness of one's results, outcomes, outputs, innovations, solutions, or decisions, as well as the size, number, and range of different groups of people (employee, customer, and/or stakeholder)that are affected. Scope of Impact Assessment The position being assessed will be rated by multiple raters using a rating scale based on its Scope of Impact for each of the leadership competencies, as shown in the following example: 1. Oral Communication—Ability to communicate ideas, thoughts, and facts orally. Speaking using correct grammar, appropriate body language, proper tone and inflection, recognizing non-verbal cues, and respecting the audience to effectively communicate ideas. ❑ Ability to communicate only impacts personal work. Communication with others is limited. ❑ Communication with others impacts several employees in a team, workgroup, or task force. ❑ Communication skills impact multiple related workgroups, teams, or customers. ❑ Ability to communicate is key and affects and influences performance at the divisional level. ❑ Ability to communicate effectively in an effort to influence the entire organization, public, and Board of Directors is crucial. t Leadership Results Leadership Results are outcomes that leaders must achieve in order for the agency to meet its strategic goals and objectives. Key leadership results may be applicable across all leadership levels. Leadership results have been identified in each of four(4) specific areas. Employee: • High Performing Teams • Increased Capability of Others • High Employee Performance Levels • Confidence in Others • Employees that are Inspired to Perform Beyond Normal • More Trust from Others • Motivated Employees Process: • Positive Change • Improved Business Strategies • More Effective Implementation of Change • Innovative Products and Services • Work that is High in Quality • Effective Solutions to Process Problems Customer. • Increased Customer Satisfaction • Decreased Customer Complaints Business: • Positive Impact on Business Results • High Value to Achievement of Results • Objectives under Tough Conditions • Results with Limited Resources • Regular Results that Exceed the Typical • Goal Completion in Less Time and with Less Cost Leadership Results Assessment The person being assessed will be rated by multiple raters on each of the outcome categories using the rating scale shown in the following example: 1. High Performing Teams ❑ Most other people are better at this ❑ Below average in the bottom 30% ❑ Average in the middle of the pack ❑ Better than average, in the top 30% ❑ Among the best, in the top 10% Development Activities Quadrant 7 Quadrant 3 Quadrant 1 t • Self-directed growth and development • Seek an active role(but not leader)within • Participate in OCSD's Succession . Seek opportunities for development or key assignments Management Program,working with a training • Work to function at a greater level of coach and a mentor • Work with a coach to achieve better results scope than current position • Seek lead roles within key assignments y • Smaller role in assignments or special • Work with a coach to achieve better • Work to function at a greater level of C projects at current level results scope(magnitude,time,complexity)than U current position N Example—Serve as a subcommittee chair on a 06 multi-functional team Examples—Job rotations,action learning, task force leader, agency committee chair v V Quadrant 8 Quadrant 5 Quadrant 2 c a v • Self-directed growth and development • Self-directed growth and development • Seek an active role(but not leader)within f?E • Work with a coach to achieve better results • Work with a coach to achieve better key assignments • Smaller role in assignments or special results • Work to function at a greater level of projects at current level • Work with a mentor to improve scope than current position proficiency levels of competencies • Work with a mentor to Improve 10 • Seek assignments, special projects with proficiency levels of competencies d broaderl bigger role than current level G • Other development opportunities a Quadrats 9 Quadrant 6 Quadrant 4 • Self-directed growth and development • Self-directed growth and development • Self-directed growth and development • Attend training to Improve efficiency levels • Work with a mentor to improve efficiency • Work with a mentor and attend training to of competencies and achieve better results levels of competencies Improve efficiency levels of competencies • Seek additional learning/development • Attend training to improve efficiency • Seek additional learningl development opportunities at current level (e.g. levels of competencies opportunities at current level (e.g. seminars,workshops) • Seek additional learning/development seminars,workshops) • Seek involvement in special projects opportunities at current level (e.g. Seek Involvement in special projects seminars,workshops) • Seek involvement in special projects LAW Results High OCSD Administration Committee March 14,2007 Succession Management Succession Management Program Tools 6 March 14.2007 Orange County Sanitation Distrid Succession Management ♦ Manual ♦ Policy ♦Tools Tools ♦Workforce Planning Tool ♦ Multi-Rater Talent Assessment Tool ♦ Development Tools Distributed at Administration Committee Meeting a4 OCSD Administration Committee March 14, 2007 Succession Managernera Workforce Planning Tool ♦ Organization charts • Basic ♦ Profiles ♦ Retirement probability • Competency models ♦ Position requirements Multi-Rater Assessment Tool ♦ Leadership competency models ♦ Scope of impact— leadership level ♦ Leadership results Assessment Scoring Potential = Results= (Toul score++o a) (iotal5core+lo 51 Proficiency by Level Competency Level Isw�e+m s7 Iswre+m sl I Scope of Impact Level iswre no 51 2 OCSD Administration Committee March 14, 2007 Succession Management Leadership Analysis i 2% WE R. Potential 7% yy% poor.,-2sl 1% 7% 2% �. Results pc ,.11) Development Tools JaC 6 coadft Aplgrunenra teael 6 RabLtvle elation I' Kayy, ux Usl9nmame Formal e% Training EJeembq, 131. Lool l it 1 Miles ,3, J% Professpnal Assocarrons,etc Questions it Orange County Sanitation District w .ocsdxom 3 Distributed at Administration Committee a Meeting March 14, 2007 STAFF REPORT Proposed Non-Residential Sewer Service Fee Billing Method Adjustments Annually, the District considers the need to adjust sewer service fee rates to its residential, commercial, and industrial customers to ensure that the appropriate fees are captured to cover its costs, and that the fees are set proportionate to the service received. This process is completed through the update of the District's rate ordinance that becomes effective 30 days fallowing Board adoption. The adoption process requires a reading at two separate board meetings and a public hearing. Staff is targeting the April board meeting for the first reading of the newly proposed ordinance with a tentative 9.8 percent increase in all rates. In addition, staff will be requesting a new U. S. Post Office user fee rate and an Entertainment Venue—Open Air Facilities rate, based on attendance, to ensure that these customers are paying their fair share. Background The major revenue source of the District is the sewer service fee that is assessed on each improved parcel within the District's service area through the property tax bill of the County of Orange (County), and then subsequently collected and remitted by the County to the District. The sewer service fee covers the District's cost of collection, treatment and disposal of all wastewater received from the individual parcels. The fees are established by ordinance of the District Board and vary according to the use of the parcel and the level of service that is required. The District service area includes over 550,000 parcels, approximately 526,500 of which indicate improvements and are included in the District's sewer service fee program. Of these 526,500 improved parcels, approximately 477,500 parcels are single or multi- family residential parcels. The remaining 49,000 parcels consist of commercial, industrial, and governmental classifications, and have the most potential for reclassification and additional revenue. The single family residents (SFR) are assessed a flat rate fee, the multi-family residents are charged a flat rate fee on a per unit basis, and commercial, industrial, and governmental parcels are assessed a fee per 1,000 square foot of building improvements based on their individual property user fee code. Commercial user fees generate approximately$70 million each year. These properties are billed a rate per thousand square feet which corresponds to the specific use code of OCSD 4 F.O.Box8127 ♦ Founwn VaUb ck 927284127 ♦ (714)N2-2411 Sewer Service Fee Billing Methods March 14, 2007 Page 2 of 3 their property. The use code and square footage have been obtained through the Orange County Assessor Office Data Center, a main frame program, updated every 12 months. In October of 2003, the Revenue Division moved this database in-house and designed a program specific for our use. As a result,we have more flexibility and total control over how the database is used. For example, when construction or demolition takes place, we can ensure square footage changes are effective immediately. Our foremost concern is the accuracy of the use code and square footage information that we use to calculate the fees for our customers. During the course of the past fiscal year, staff has evaluated the use codes and billing methods that are currently in our ordinance and have established two areas for improvement or modification. This report outlines those areas and then a recommended solution for billing purposes. United States Post Offices Currently,there is no U.S. Post Office use code in the District's sewer service fee ordinance and the District has no way of accurately billing parcels that contain only U.S. Post Offices. U.S. Post Offices are currently placed in the Governmental Use category (118) and the rate is 82 percent of the SFR rate, or$135.96 per 1,000 square feet. Based upon actual water consumption received from the U. S. Post Office on several post offices in our service area, the Governmental Use category may result in overcharges up to 300 percent. At the request of the U. S. Post Office, staff evaluated the current use code for U.S. Post Offices and determined that in order to accurately bill these parcels for their wastewater discharge, a separate use code for U.S. Post Offices should be established. Staff has obtained the flow, chemical oxygen demand (COD), and suspended solids (SS) assumptions used by the County Sanitation Districts of Los Angeles County(CSDLAC)within their sewer service fee program and converted their load measurement of COD to the District's load measurement of biochemical oxygen demand (BOD). Based on the proportion of flow, BOD, and SS concentrations for U.S. Post Offices used by CSDLAC to the District's flow, BOD, and SS concentrations for Single Family Residences (SFR), staff is recommending a new use code, U.S. Post Office (225). which will charge 35 percent of the SFR rate per 1,000 square feet. This rate would have been $58.03 per 1,000 square feet for FY 2006-07 compared to $135.96 per 1,000 square feet for the Governmental Use Code (118). Entertainment Venues-Open Air Facilities Our current ordinance bills entertainment venues such as Knott's Berry Farm, Angel Stadium of Anaheim, Honda Center (formerly the Arrowhead Pond of Anaheim), Los Alamitos Race Course, Anaheim Convention Center and Soak City USA based upon Sewer Service Fee Billing Methods March 14, 2007 Page 3 of 3 the square footage of improvements that are currently listed by the assessor's office on their secured property tax bill. Disneyland and California Adventure are currently on Industrial Wastewater Discharge Permits that require the District to obtain flow data and perform annual reconciliations. A subset of entertainment venues are open-air facilities. Because open-air facilities such as Angel Stadium of Anaheim and the Los Alamitos Race Course have minimal square footages listed by the assessor's office, the current billing methodology does not accurately charge these venues for the wastewater that they are discharging. Based on a study performed by Carollo Engineers, a more fair and equitable billing methodology would be attendance rate based because of the large number of visitors that attend these venues throughout the year resulting in an abundance of wastewater discharged into the system. Angel Stadium of Anaheim is an excellent example. The assessor's office lists 46,575 square feet and their sewer service fee is only $11,199.87. The square footage captured on the property tax bill does not fully capture the amount of wastewater being discharged because the square footage is only for enclosed facilities. Staff has reviewed the entertainment venues and the information that we have regarding their discharge and sewer service fees. We are recommending that we charge open-air facilities based upon their attendance on an annual basis. The facilities would provide their annual attendance for the prior year and we would bill them 15gpd per attendee and place the fee on their annual secured property tax bill. This billing method provides a more accurate fee for the actual discharge into the system. The open-air facilities would pay a rate per MG based upon the related flow, bod and tss charge for single family residences. MG 2006-07 Esrd 2003 GPD Per per Rate per Attendance Actual Entertainment Center Attendance' Attendee— year MG— Based Fee 06-07 SSF Angel Stadium of Anaheim 3,250,000 15 48.75 $1,795.43 $87,527.21 $11,119.87 Los Alamitos Race Course 900,000 15 13.5 $1,795.43 $24,238.31 $2,176.29 'Last available attendance documentation "GPD per Attendee according to Entertainment Rate Class Evaluation prepared by Carollo Engineers "'Rate pr MG based upon SFR unit costs for flow, bod,and Ise OCSD Administration Committee March 14, 2007 FY 2007-08 Budget Overview FY 2007-08 Budget Overview I& Mamh 14,2007 Orange County Sanilallon MsOv Highlights of the proposed budget include: ♦ Second year update of the two-year budget ♦ Flat staffing levels—644 positions ♦ Capital Improvement Program(CIP) ♦ No significant change from last year's $500 million reduction ♦ Strong financial positioning—maintaining AA Bond Rating Needed capital Improvements will Increase expenditures and the need for additional revenue and debt financing. alAruA: %pIY msSCMryn $I9fiM IMSe) GeMal lncolM $IIIM 110%) GB01 P,Me T T Teul Mwnw Ye WFN LIP 1+<W+q pMsennl SeMM (T<%) T.,aOaPov' STIM ("r%l GOMawne Calls SSaM 1�1%I CanVy ROPIC Ly 5 sM 1 101 Teal EWlawrx WaY arasnwwe.cerp..rarM Distributed at Administration Committee Meeting OCSD Administration Committee March 14,2007 FY 2007-08 Budget Overvieu Revenues are shown in three major components. FY 07-08 Revenues Fee.a Total:$ 07 Million Chmae. 33% .y 59fi M '. Oalx Prodeea MeA L1aeY Most OCSD revenue is related to User Fees. FY 07-08 General User Fees $ 165 M Permit User Fees $ 19 M Capital Facilities Capacity $ 12 M Charge Total Fees 8 Charges $ 195 M Non-fee related General Income represents more than one fourth of total revenue,exceeding $100 million. FY 07-08 Property Tax $ 58M Interest $ ism Other $ 38 M Total General Income Slit 2 OCSD Administration Committee March 14,2007 FY2007-08 Budget Overview Debt Proceeds — Certificates of Participation (COPS) are our primary mechanism for financing capital projects. 1\ FY 07-08 Revenues Total:$607 William $300 M 48% Most of the District's costs are related to the Capital Improvement Program. FY 07-08 CIP twepoems J $407 M p.x1 Treatment and Disposal $ 77 M a.sn Collections Costs $ 58 M erxl Central Agency Costs $ 5 M t rx1 Total Expenditures $545 M The Capital Improvement Program can be divided into five distinct areas. FY 07-08 1.Secondary Treatment Facilities S 116 M 2.Groundwater Replenishment System $ 23 M 3.Treatment Plant Rehab/Upgrades $141 M 4.Collections Costs $ 59 M 5.Debt Service $ 65 M Total S 404 M 3 OCSD Administration Committee March 14, 2007 FY 2007-08 Budger Ovenvew More than $140 million (25%) is allocated to Operating and Maintenance Expenses. FY 07-08 CIP(including Debt Service) $407 M a4v Treatment and Disposal It 74 M u4xt Collection Costs $ So M o",Vl Central Agency Costs- $ 5 M I m Total Expenditures $545 M Next Steps ♦ Additional Administration Committee meetings ♦ Budget presentations for each Committee ♦ Budget Adoption at the June Board Meeting Questions 6 Orange County Sanitation District w ,ocscxom 4 OCSD Administration Committee March 14,2007 Capital Improvement Program Two-Year Budget Update Capital Improvement Program (CIP) n Marc014.2007 Orange County Senitawn Dlslen Increasing Level of Service ♦ 100%Secondary Standards ♦ 70 mgd Reclamation ♦ Increased System Rellability ♦ Class"A"Biosolids ♦ Less Odors ♦ Disinfection ♦ Treat Urban Runoff ♦ Fire&Safety Code Compliance Projected CIP Budget Mnilan —Currant Butlget 2 P..l(.p.nt) vm ■Prolacted NW,$ Distributed at Administration Committee Meeting OCSD Administration Committee March 14,2007 Capital improvement Progrmn Projected CIP Budget . ., »Cur rem Buegel v •Past •Gwe system mo •secondary .collection. e TP aebeb/Upgrade $ew I.FUWro nes CCgill I I I 111 Ik. W m d 1 Flwl'se, n vo CIP Validation and Reduction Efforts ♦ Started in September 2006 • Identified project cancellations and scope reductions to further reduce budget • Cancelled two O&M studies and one sewer upsizing project ♦ Delayed other capacity projects 1-3 years ♦ Delayetl a sewer rehabilitation project two years CIP Validation and Reduction Efforts,..,.. ♦ Using operational workarounds ♦ Reducing contingencies for closing projects ♦ Delayed projects for odor control and power reliability ♦ Adjusting projected cash flows 2 OCSD Administration Committee March 14, 2007 Capital Improvement Program Good News • Plant 2 Trickling filters(P2-eo) $20M underestimate ♦ Replacement of Ellis pump station(ido) $1M under estimate ♦ Two secondary consent decree dates met FY06-07to FY07-08 CIP Shifting to Construction Fulure / rulura Plennfig Conetrudion Plennl (// ae�B^ fi�netrucllon t>wB^ New Issues • Proposed regulations for engine emissions $20-$40M 77 ♦ On going testing to comply with existing air toxics regulations • Energy Master Plan recommendations 3 OCSD Administration Committee March 14,2007 Capital Improvement Pmgran Current :o. User Rate Increases m p9l 01p OFA OYIO 1411 t1-11 lYli lYN Rd r� Projected User Rate Increases Curronl m ,I i A A MO] O)p pN 0Y10 ,>11 ,Y9 9 0 61� F1�[Y ry Questions a Orange County Sanitation Distdd w .ocsd.com 4 Broker of Record Services MILESTONE SERVICES TIMETABLE Activity Responsibility Jan Feb Mu Apr May Jun Jul Aug Strategy meetings District/Aliant X X X Finalize objectives Distact/Alliant X X Develop osure dam Alliant X Perform exposure analysis Alliant X X Review policies Alliant X Perform retention analysis Alliant X X Design& finalize progmm structures Alliant X X Select markets Alliant X X Pre are market submissions Alliant X Present submissions to markets - AM= X Accompany insurers on inspections,if needed Alliant X X Address insurer questions and re guests Alliant X T. Evaluate insurer proposals Alliant X X Negotiate with "finalist"markets Alliant X Pre are proposal comparisons Alliant X X Present final proposals District/Allitx . \ X Make program selections Alliant X Advise selected markets Al = X P ue&deliver binders&invoice Alliant X X Check policies,request necessarycoaeetions X Deliver policies At Provide ongoing service* Alliant X X • Imp mt lae .1 k ld 0: E"&..0 n.d 6i. wwMq oM 10., opts, Am w..e in mating• (r yuartJ by O.npr Ctmnn tianiddtm Disttia)rm chimx nad other fie ,,.udaua nn muket nmdlmma aml,*het M.1W u.....M ta-q..to avolving Dwtea.,kc Distributed at Ilel ! ,) Administration Committee Meeting 44lliant DRIRSPECIAL" CROI'P STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Notice and the Agenda for the Finance and Administration Committee meeting to be held on March 14, 2007, was duly posted for public inspection in the main lobby of the District's offices on March 7, 2007. IN WITNESS WHEREOF, I have hereunto set my hand this 7th day of March, 2007. iliA K�Assoc. Clerk of the Board Board of Directors Orange County Sanitation District H:\DEMGMO\150\151\BS\FORMS\AGENDA CERTIFICATION-ADMIN.COMMITTEE.DOC ORANGE COUNTY SANITATION DISTRICT Phone: (7 1 41 962-24 11 NOTICE OF MEETING he: I714)99P1A59 "w^6 cawi..^' ADMINISTRATION COMMITTEE .11 Finance, Human Resources and Information Technology Boa 912 Fountain Valley CA 92128 P.127 nereee odd...: 10844 Gen Av nne p,un y.CA 9270E T019 ORANGE COUNTY SANITATION DISTRICT 92T08 M..W A,ael°° WEDNESDAY, MARCH 14, 2007 - 5:00 P.M. cities DISTRICT'S ADMINISTRATIVE OFFICES A^B1e Nd 10844 ELLIS AVENUE Buena Perk FOUNTAIN VALLEY, CALIFORNIA 92708 `M Yi65 www.ocsD.COM Pountein We.y Fuharam Onnian Bra. I'IuIIdn9Wi1 6asuh IMna lt. l W. Palms A regular meeting of the Administration Committee of the Orange L. tas Air,:".. County Sanitation District will be held at the above location, date 'Awe"Beech and time. Orange peconae Santa Ana Saw Beat Scm m Tusdn Villa Pa,a YI linde County PI Dnnye imlcery District. Costs Mesa water M.eri.t. ..vme Inch To mainhun world class leadership in wastewater and water resource management. a a b C7 b ADMINISTRATION COMMITTEE MEETING DATES Meeting Date Board Meeting Dates March 14, 2007 March 28, 2007 April 11, 2007 April 25, 2007 May 9, 2007 May 23, 2007 June 13, 2007 June 27, 2007 July 11, 2007 'July 18, 2007 August—Dark August 22, 2007 September 12, 2007 September 26, 2007 October 10, 2007 October 24, 2007 November 14, 2007 November 28, 2007 December 12, 2007 *December 19, 2007 January 2008 — Dark January 23, 2008 February 13, 2008 February 27, 2008 March 12, 2008 March 26, 2008 -Meetings being held the third Wednesday of the month. ROLL CALL ADMINISTRATION COMMITTEE Finance, Human Resources and Information Technology Meeting Date: March 14, 2006 Time: 5:00 p.m. Adjourn: COMMITTEE MEMBERS Mark Waldman Chair Phil Luebben ice Chair Steven Choi Bill Dalton Jon Dumitru Rich Freschi Darryl Miller Joy Neu ebauer Chris Norb Ken Parker Sal Tina ero Jim Winder James M. Ferryman Board Chair Doug Davert Board Vice Chair OTHERS Brad Ho in, General Counsel STAFF Jim Ruth, General Manager Nick Arhontes, Director of Operations Bob Ghirelli, Assistant General Manager Jim Herber , Director of Engineering Ed Torres, Director of Technical Services Lorenzo Tyner, Director of Finance and Administrative Services Lilia Kovac, Committee Secretary Bret Colson, Public Information Manager Jeff Reed, Human Resources and Employee _ Relations Mana er Mike White, Controller c: Lenora Crane RklepgagenemCommilleeeWamin CommiaeeW30702.Roll GOA= AGENDA REGULAR MEETING OF THE ADMINISTRATION COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, MARCH 14, 2007, AT 5:00 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California 92708 www.ocsd.com (1) DECLARATION OF QUORUM (2) APPOINTMENT OF CHAIR PRO TEM. IF NECESSARY (3) PUBLIC COMMENTS (4) REPORT OF COMMITTEE CHAIR (5) REPORT OF GENERAL MANAGER a. 2007/08 CIP Budget Update (6) REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES (7) REPORT OF GENERAL COUNSEL (8) CONSENT CALENDAR ITEMS Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same, as follows: a. Approve minutes of the February 14, 2007 meeting of the Administration Committee. Book Page 1 March 14, 2007 Page 2 b. ADM07-06 Recommend that the Board of Directors to: (1)Approve the amended Joint Powers Agreement of the CSAC (California State Association of Counties) Excess Insurance Authority which supersedes the California Public Entities Insurance Authority (CPEIA)that provides the District's excess workers' compensation insurance coverage, in a form approved by General Counsel; and, (2) Approve the CSAC Excess Insurance Authority's amended Memorandum of Understanding for the Excess Workers' Compensation Program to incorporate non-county public entity membership in the program, in a form approved by General Counsel. (Book Page 9) END OF CONSENT CALENDAR C. Consideration of items deleted from Consent Calendar, if any. (9) INFORMATIONAL ITEMS a. ADM07-07 2006-07 and 2007-08 District Budget Update (Book Page 11) b. ADM07-08 2007-08 Sewer Service User Fee Estimates (Book Page 16) C. ADM07-09 Succession Management Program Update (Book Page 19) (10) CLOSED SESSION Dwirg ttre course of conducting the business set forth on this agenda as a regular meeting of the Committee, i the Chair may convene the Committee in closed session to consider matters of pending reel estate negotiations, pending or potential litigation,or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 1 64957 or 54957.6,as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) j employee actions or negotiations with employee representatives; or which are exempt from public disclosure under the Califomia Public Records Act, may be reviewed by the Committee dudng a permitted dosed session and are not available for public inspection. At such time as final actions are taken by the Committee on any of these sukects,the minutes will reflect all required tlisdosures of information. _ A. Convene in closed session. 1. Conference with designated representatives Jim Ruth, General Manager, Lorenzo Tyner, Director of Finance and Administrative Services; Jeff Reed, Human Resources and Employee Relations Manager, and Paul Loehr, Human Resources Supervisor, re Meet and Confer Update re contract negotiations for employees represented by 1). Orange County Employees Association; 2). International Union of Operating Engineers, Local 501, and 3). Supervisors, Professional Management Team (part of Peace Officers Council of California) (Government Code Section 54957(b)(1). B. Reconvene in regular session. Book Page 2 March 14, 2007 Page 3 C. Consideration of action, if any, on matters considered in closed session. (11) OTHER BUSINESS. COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS. IF ANY (12) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT (13) FUTURE MEETING DATES The next regular Administration Committee meeting is scheduled for April 11, 2007, at 5 p.m. (14) ADJOURNMENT Book Page 3 March 14, 2007 Page 4 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 District's 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 Clerk of the Board. 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. Public Comments: Any member of the public may address the Administration Committee on specific agenda items or matters of general interest. As determined by the Chair, speakers may be 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). Consent Calendar: All matters placed on the consent calendar are considered as not requiring discussion or further explanation, and unless a particular Rem is requested to be removed from the consent calendar by a Director of staff member,there will be no separate discussion of these items. All items on the consent calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All items removed from the consent calendar shall be considered in the regular order of business. The Committee Chair will determine if any hems are to be deleted from the consent calendar. Items Continued: Items may be continued from this meeting vathout further notice to a Committee meeting held within five(5)days of this meeting per Government Code Section 54954.2(b)(3). Meeting Adtoumment This meeting may be adjourned to a later time and hems 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). 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 Clerk of the Board's 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. Notice to Committee Members: For any questions on the agenda or to place any items on the agenda, Committee members should contact the Committee Chair or Clerk of the Board ten days in advance of the Committee meeting. Committee Chair: Mark Waldman (714)827-1989 Committee Secretary: Lilia Kovac (714)593-7124 Ikovac®acad mm General Manager: Jim Ruth (714)593-7110 LMh(oZocsd.mm Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli(atocsd mm Director of Finance and Lorenzo Tyner (714)593-7550 hvnerfutocsd mm Administrative Services Human Resources and Employee Jeff Reed (714)593-7144 ireed@ocsd.mm Relations Manager I Book Page 4 b m March 14, 2007 ADMINISTRATION COMMITTEE AGENDA CALENDAR Item Action April Employee Benefits Renewals Information April Budget Development Information April First Reading of Rate Increase Action Book Page 5 MINUTES OF THE REGULAR MEETING OF THE FINANCE AND ADMINISTRATION COMMITTEE Orange County Sanitation District WEDNESDAY, February 14, 2007, AT 5:00 P.M. A meeting of the Finance and Administration Committee of the Orange County Sanitation District was held on February 14, 2007, at 5:00 p.m., in the Sanitation District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: FINANCE AND ADMINISTRATION STAFF PRESENT: COMMITTEE MEMBERS: Jim Ruth, General Manager DIRECTORS PRESENT: Bob Ghirelli, Assistant General Manager Mark Waldman, Chair Lorenzo Tyner, Director of Finance and Phil Luebben,Vice Chair Administrative Services Steven Choi Jeff Reed, Human Resources and Employee Bill Dalton Relations Manager Rich Freschi Mike White, Controller Darryl Miller Lilia Kovac, Committee Secretary Joy Neugebauer Norbert Gaia Chris Norby Bob Gaggle Ken Parker Juanita Skillman Jim Winder Doug Davert, Board Vice Chair OTHERS PRESENT: Brad Hogin, General Counsel Shirish Patel DIRECTORS ABSENT: Richard Kikuchi Jon Dumitru Ed Soong Sal Tinajero Don McLean Jim Ferryman, Board Chair (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS There were no public comments. (4) REPORT OF THE COMMITTEE CHAIR Chair Waldman did not give a report. (5) REPORT OF THE GENERAL MANAGER Jim Ruth, General Manager, did not give a report. Book Page 6 Minutes of the Finance and Administration Committee February 14, 2007 Page 2 (6) REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES Lorenzo Tyner, Director of Finance and Administration, did not give a report. (7) REPORT OF GENERAL COUNSEL Brad Hogin, General Counsel, did not give a report. (8) CONSENT CALENDAR ITEMS Consideration of motion to approve all agenda Items appearing on the Consent Calendar not specifically removed from same, as follows: a. MOVED, SECONDED AND DULY CARRIED:Approve minutes of the December 13, 2006 and the January 3, 2007 meetings of the Administration Committee. b. ADM07-01 MOVED, SECONDED,AND DULY CARRIED: Approve change order No. 1 to Purchase Order contract issued to Louis Allen International for Management and Leadership Training services, authorizing an additional $106,765, increasing the total contract amount not to exceed $153,015. END OF CONSENT CALENDAR (9) ACTION ITEMS a. ADM07-02 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: (1) Direct staff to issue new fixed rate Certificates of Participation (COP) debt sufficient to refund up to$280 million of COP Series 2003; and, (2)Authorize the General Manager to negotiate and enter into a sole source Consultant Services Agreement with Orrick, Herrington & Sutcliffe to provide bond counsel and disclosure counsel services in an amount not to exceed $125,000. b. ADM07-03 MOVED, SECONDED,AND DULY CARRIED: Recommend to the Board of Directors to approve the selection of Alliant Insurance Services, Inc., to serve as Property, Liability, and Workers' Compensation Insurance Broker of Record for a one-year period commencing on March 1, 2007, with the option to renew for an additional four one-year periods at an average commission rate per line of insurance of eight(8) percent. Directors requested a schedule of insurance activities be available prior to policies are renewed. Book Page 7 Minutes of the Finance and Administration Committee February 14, 2007 Page 3 C. ADM07-D4 MOVED, SECONDED,AND DULY CARRIED: (1)Approve a Purchase Order Contract with Lance, Soil& Lunghard, Certified Public Accountants, renewing the first year of a two-year option for intemal auditing services for the period of March 1, 2007 through February 29, 2008 for the amount not to exceed $58,670: and (2) Direct Lance, Soil& Lunghard to perform specific internal auditing assignments as the Finance and Administration Committee deems necessary. An oversight subcommittee with Directors Waldman, Luebben, and Parker will meet with auditors and staff to give direction of focus of audit areas, and will report to the Administration Committee. d. ADM07-05 MOVED, SECONDED,AND DULY CARRIED: Recommend to the Board of Directors to approve the FY 2007-08 budget assumptions and direct staff to incorporate these parameters in preparing the FY 2007-08 budget update. (10) CLOSED SESSION The Committee convened in Closed Session at 5:35 p.m. pursuant to Government Code Section 54957(b)(1). Confidential Minutes of the Closed Session held by the Finance and Administration Committee have been prepared in accordance with California Government Code Section 54957.2, and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. (11) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY (12) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. (13) FUTURE MEETING DATES The next regular Administration Committee meeting Is scheduled for March 14, 2007, at 5 p.m. (15) ADJOURNMENT The Chair declared the meeting adjourned at 5:48 p.m. Submitted by: Kovach Committee Secretary H9depU genda%CommiB sVdmin CommiWeMOM5.021407 mmin Mineres.doc Book Page 8 ADMINISTRATION COMMITTEE Meeungr»fe Tc ed.of D, 01/14/07 03/78/07 AGENDA REPORT IDgn Numl IDvn Numhe Orange County Sanitatlon District aorno7 as FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: MEMBERSHIP IN THE CSAC EXCESS INSURANCE AUTHORITY GENERAL MANAGER'S RECOMMENDATION (1)Approve the amended Joint Powers Agreement of the CSAC(California State Association of Counties) Excess Insurance Authority which supersedes the California Public Entities Insurance Authority(CPEIA)that provides the District's excess workers' compensation insurance coverage, in a form approved by General Counsel; and, (2)Approve the CSAC Excess Insurance Authority's amended Memorandum of Understanding for the Excess Workers' Compensation Program to incorporate non-county public entity membership in the program, in a form approved by General Counsel. SUMMARY OCSD has participated for several years in CPEIA, purchasing excess workers' compensation insurance and pollution liability insurance. Participation in CPEIA has allowed OCSD to obtain insurance at favorable rates at times when there were few other insurance options. Because the CSAC Excess Insurance Authority had originally allowed only counties as members, CPEIA was originally created as a sister Joint Powers Authority in 2001 to allow non- county public agencies access to the CSAC Excess Insurance Authority's programs. CPEIA has been considered a component part of the CSAC Excess Insurance Authority. Due to CPEIA's growth and the desire of CPEIA members to have a greater voice in CSAC Excess Insurance Authority decisions, a restructuring has occurred whereby CPEIA members will become members of the CSAC Excess Insurance Authority and will be given a voice in the business affairs of the CSAC Excess Insurance Authority. CPEIA will then cease to exist as of July 1, 2007. The CSAC Excess Insurance Authority is the largest property/liability insurance risk pool in the country. It is able to provide the high limits that OCSD requires. Its membership includes 54 of California's 58 counties, as well as more than 140 non-county public entities. OCSD desires to participate as a member in order to consider insurance quotes from the CSAC Excess Insurance Authority as one of its options for insurance renewals in 2007. Fo,m No.o IW4 ihwnCO PepM-F8P Mp1.151 ' PwbaE,O1l06N) Page 1 Book Page 9 PRIOR COMMITTEE/BOARD ACTIONS In July 2003, the Board approved the Joint Powers Agreement creating the California Public Entity Insurance Company and the CPEIA MOU for the Excess Workers Compensation Program. PROJECT/CONTRACT COST SUMMARY This action has no specific cost connected with it. Any decision to purchase insurance in the future will be a separate decision. BUDGETIMPACT Not applicable. ADDITIONAL INFORMATION Not applicable. ATTACHMENTS None Form No.D 14 3 aN.151 gWntle XaM_FM Page 2 a nma:01 a 7 Book Page 10 ADMINISTRATION COMMITTEE ^ °ate T00d.0i'Dir• 03/14/W AGENDA REPORT awri Number Rem Number no -m Orange County Sanitation District FROM: James Ruth, General Manager Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: 2007-08 DISTRICT BUDGET UPDATE GENERAL MANAGER'S RECOMMENDATION Informational item. SUMMARY This report will provide an overview of the Sanitation District's 2007-08 Budget. The Proposed Budget will be presented to the full Board for adoption on June 27, 2007. Highlights of the 2007-08 Budget Include: 1) Sustained Growth As anticipated when the budget was adopted, total resource requirements are estimated to increase to $545 million, an increase of 19 percent over FY 2006/07. The majority of the growth is due to increased capital requirements as part of the Capital Improvement Program. This expected level of expenditures allows the Sanitation District to maintain a projected rate increase of 9.8 percent over FY 2006/07. 2) A revised Capital Improvement Program (CIP) Staff has completed a comprehensive review of the Sanitation District's long-term CIP and recommends a $341.5 million outlay for the year; an increase of 26 percent over FY 2006/07. This level of expenditure was validated through a series of workshops and Committee meetings that were held in FY 2006-07. 3) Strong Financial Position The budget assumes ongoing revenues and reserve levels that are sufficient to maintain the District's AA Bond Rating. Bonds rated AA are judged to be of high quality by all standards. 4) Flat Staffing Levels The budget includes the same number of Full-Time Equivalent (FTE) positions (644) as authorized in FY 2005-05 and FY 2006-07. Due to minor reorganizations, some positions have been changed or transferred between divisions and departments. 5) Two-Year Budget FY 2007-08 will be the second year of the two-year budget that was adopted in June 2006. The budget document will provide an update on all major expense categories for FY 2007-08. Fa N.o 10- vwieea.ovoao� Page 1 Book Page 1 I BUDGETSUMMARY FY 2007-0B %Of (in millions) I( Revenues: Fees & Charges $ 196 33% General Income 111 18% Debt Proceeds 300 49% Total $ WU Expenditures: CIP, including Debt 407 74% Treatment& Disposal 74 14% Central Agency Costs(including Self-Insurance) 84 12% Total $ ADDITIONAL INFORMATION Second Year of the Two-Year Budget The 2007-08 District Budget is approximately$545 million. The District's Capital Improvement Program and Treatment and Disposal Program represent 75% ($407M) and 14% ($74M) of the budget respectively. These two activities represent the largest portion of the budget(89%) and are vetted through a separate and established approval process. Of the remaining 12%, approximately half is related to staffing costs. The General Manager has recommended no increase to the current authorized staffing level. Because FY 2007-OS is the second year of the two-year adopted budget, the full budget does not need to be adopted for FY 2007-08. Instead, staff will report on the CIP, the Collection, Treatment and Disposal program, and all staffing changes. The Budget Development Process For the second year of the two-year budget, staff updated the comprehensive list of assumptions that were used in the preparation of the two-year budget. These assumptions were applied in developing the adopted budget for FY 2007-08 relating to costs, revenue, rates, inflation etc. The updated assumptions were subsequently recommended by the Administration Committee and approved by the Board. With these guidelines in mind, Sanitation District Finance staff reviewed all major District resources and expenditures. Staff and the General Manager are in the process of meeting with each department to review, discuss, and prioritize each department's major activities. These activities were also reviewed to ensure alignment with the Sanitation District's goals. A formal process for reviewing these goals will be established as a part of the development of the District's Strategic Plan and will be updated annually. Fw W o it HONeeE:Otgyp) Page 2 Book Page 12 Revenues and Expenditures Revenues The Sanitation District obtains it revenues from three main sources: FY 2007-08 % of (in millions) Total Revenues: Fees &Charges $ 196 33% General Income 111 18% Debt Proceeds 300 49% Total 64Z A) Fees—$196 Million(33%) 1) General User Fees $165 million User fees are ongoing fees for service paid by customers connected to the sewer system. A property owner, or user, does not pay user fees until connected to the sewer system and receiving services. Once connected, a user is responsible for his share of the system's costs, both fixed and variable, in proportion to his demand on the system. These fees are for both Single-Family Residences (SFR)and Multiple-Family Residences (MFR). 2) Permit User Fees $19 million Permit fees are paid by large industrial and commercial property owners connected to the sewer system. These fees are for the owner's share of the system's costs, both fixed and variable, in proportion to his demand on the system. Since the inception of the Permit User Fee program in 1970, users of the District's system that discharge high volume or high strength wastewater have been required to obtain a discharge permit and pay extra fees for the costs of service. The fees are initially calculated on the basis of actual flow, Biochemical-Oxygen Demand (BOD), and Suspended Solids (SS) discharged to the sewer and are subsequently reduced by the actual property taxes they have paid to the Sanitation District. This practice is intended to ensure that these users pay their actual cost of service through a combination of user fees and property taxes. 3) Capital Facilities Capacity Charge(CFCC) $12 million The Capital Facilities Capacity Charge is charged to newly connected customers and to customers with facility expansions which indicate a potential for increased flows. It is intended to pay for costs of future plant growth that is necessitated by the additional capacity needed as customers connect or increase their flow capacity. The recent independent study of the Sanitation District's rate structure indicates that these rates should be adjusted upward. Residential CFCC will increase at a greater that sewer service fees because the CFCC have remained flat for several years and must also be adjusted to reflect the increased Capital Improvement Program (CIP). From No.owiux Faieetl:oimaur Page 3 Book Page 13 B) General income—$111 million(18%) 1) Property Taxes $58 million The County is permitted by State law(Proposition 13) to levy taxes at 1 percent of full market value (at time of purchase) and can increase the assessed value no more than two percent per year. The District receives a share of the basic levy proportionate to what was received in the 1976 to 1978 period less $3.5 million; the amount that represents the State's permanent annual diversion from special districts to school districts that began in 1992-93. The District's share of the one percent ad valorem property tax is dedicated for the payment of COP debt service. The apportionment of the ad valorem tax is pursuant to the Revenue Program of the Environmental Protection Agency and the State Water Resources Control board and in accordance with COP documents and Board policy. 2) Interest $16 million Interest earnings are generated from the investment of accumulated reserves consisting of a cash flow/contingency, a capital improvement, a renewal/replacement, and a self- insurance reserve. 3) Other $36 million The Other General Income category is comprised of a variety of smaller dollar items. Charges to Irvine Ranch Water District for Revenue Area 14's share of the treatment plant's operating costs, capital costs, and equity are approximately $25M in FY 2007-08. C) Debt—$300 million(49%) 1) Certificates of Participation (COP) Certificates of Participation (COPS) are the Sanitation District's primary mechanism for financing capital projects. COPs are repayment obligations based on a lease or installment sale agreement. COPS are not viewed as "debt by the State of California, but rather a share in an installment arrangement where the District serves as the purchaser. Expenditures The Sanitation District spends it funds on three activities: FY 2007-08 % of (In millions) Total Expenditures: CIP, including Debt $ 407 74% Treatment and Disposal Costs 74 14% Central Agency Costs (including self-insurance) 64 12% Total $ H5 A) Capital Improvement Program (CIP) —$407 million (740A) The District's CIP can be divided into five distinct areas: 1) Secondary Treatment Facilities 2) Ground Water Replenishment 3) Treatment Plant Rehabilitation and Upgrades 4) Collections 5) Debt F.No.O 1= Rw,so 01 7 Page 4 Book Page 14 i Related to the CIP are the Sanitation Districts debt service payments. Primarily, debt is issued to support the capital program because the program is too large to be supported by a "pay-as- you-go" basis. Additionally, if the Sanitation District were able to fund these projects on a"pay- as-you-go" basis, there would be an equity issue to be addressed, as current rate payers would fund all of the costs of projects for which future rate payers would receive a portion of the benefits. As previously mentioned, the Sanitation District issues debt in the form of Certificates of Participation (COPS). COPS are a form of lease revenue bond that permits the investor to participate in a stream of lease payments, installment payments or loan payments relating to the acquisition or construction of specific equipment, land, or facilities. B) Treatment and Disposal Costs—$74 million (14%) The Sanitation District allocates $74 million and 250 positions annually to perform the operations at its two treatment plants and other related treatment activities. Activities include wastewater treatment processes, biosolids disposal, disinfection, and odor control. Expenditures for the purchase of chemicals represent the largest non-salary related component of the budget. C) Other Central Costs—$64 million (12%) The Sanitation District allocates $61 million or 11% of its resources to support activities not directly charged to the CIP or Treatment and Disposal (Regional Assets, Technical Services, and Administrafion). Most central cssts are for non-labor expenditures, such as property and general liability insurance,training, materials and supplies, and service agreements. LT:JR:MW:lc Form No.IMIOt3 fleina0 01. Page 5 Book Page 15 ADMINISTRATION COMMITTEE Meetlng71 TOBd 0r0U 0.3/14/0 _AGENDA REPORT EtEniNini°' I II3nNWber nonw7-0e Orange County Sanitation District FROM: James D. Ruth, General Manager Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: 2007-08 SEWER SERVICE USER FEE ESTIMATES GENERAL MANAGER'S RECOMMENDATION Informational Item. SUMMARY The Directors adopted a plan in 2003 that included debt financing for$1.4 billion of the $2.8 billion capital improvement and rehabilitation, refurbishment and replacement program. By authorizing this amount of borrowing, the Directors were able to limit projected annual sewer user fee increases to approximately 16% (approximately$19 per year) each year through 2007-08. The Board agreed with this five-year sewer service fee rate plan and asked that the proposed fee increases be considered annually by the Board for implementation. FY 2007-08 will be the fifth year of this five-year plan. 2003-04 2004-06 2005-06 2006-07 2007-M Prop. 218 Notice $105 $126 $151 $181 $217 Pro . 218'%' Ina. 2D% 20% 20% 20% _20_°A Actual �Pf .�: Rate Incr. $100 $115 $151 $165.80 Actual`Pfo "_. "W Incr. 14.3% 15% 31.3% 8.8°k C4$. Staff has re-evaluated every project in the Validated Capital Improvement Program and many newly proposed projects as a part of the 2006-07 and 2007-08 budget preparation process. Approximately$474 million of budgeted construction costs were identified for deferral. In addition, the Sanitation District contracted with Carollo Engineers to complete a Revenue Program and Rate Analysis study. The result of these efforts was to reduce projected 2006-07 and 2007-08 single-family residential rate (SFR) increases, the basis for all sewer service charges, from 20.0%to 9.8%. PROJECT/CONTRACT COST SUMMARY Without a Board action (by 213 majority), the SFR rate for 2007-08 will remain at $165.80 per year. The $182.05 SFR rate recommended for 2007-08 will generate approximately$183.5 million of user fee, an annual increase of$17.0 million over the prior year. Book Page 16 ADDITIONAL INFORMATION Schedule for Implementing Sewer Service Fee Increase 1s' Reading of Fee Ordinance April 25, 2007 2ntl Reading, Public Hearing, &Adoption of Fee Ordinance May 23, 2007 Ordinance is Effective in 30 days, or in the New F.Y. July 1, 2007 Fees per parcel due to County Auditor-Controller August 11, 2007 Rate Increase Chronology June 2003 1) 1n June 2003, the Board approved a revised Capital Improvement Plan (CIP). 2) To support this CIP, staff recommended a five-year plan which included rate increases averaging 20%. 3) The Board directed staff to issue a Proposition 218 public notice stating the rates would increase by an amount not to exceed a total of 20% annually increase over the next five year period. 4) While the increases were tentatively approved and noticed, the Board chose not to implement the full 20% increase for 2003/04. 5) The Board did discussed alternatives between 10-20%. 6) Ultimately, the Board acted to implement a 15% increase in 2003/04. 7) Staff reset the budget and long-term cash flow model to reflect the annual increases of 15% for the subsequent five-year period. 8) Board policy stated that 50% of all future capital improvements (approximate percentage of non-capacity related projects), would be funded from current revenues and the remaining 50% through debt financing. However, reducing the projected annual rate increases to 15% required as deviation from that policy in order to support the capital program. As of July 2003, the ratio of CIP funded debt increased to 62 percent. By July 2005, this ratio decreased to 58 percent. The debt fiscal policy has subsequently been changed to provide additional flexibility when addressing this District's capital program and debt issuances. 9) While the five,year plan was still in place, the Board directed staff that to bring back the rate schedule for annual adoption. H bBPIWgmm%C fflee min ComntWO30N 07d s rsemceoo avxn w,.em ao:,>ae: mgwna Page 2 Book Page 17 June 2004 1. Through the adoption of the 2004/05 Budget, the Board acted to implement a portion of the 20% rate increase included in the five-year plan. 2. The Board acted to implement a 15% rate increase for 2004/05. June 2005 1. The CIP increased by $400M, from $1.9413 to 2.38B. 2. Additionally, Operations costs increased by $400M, from $1.313 to $1.76. 3. To support these increased costs, rates needed to be increased above 15%. 4. The Board approved a 31% rate increase for 2005-06, instead of 15%. 5. The additional increase was based on only 15% increases in each of the previous two years. 6. Both the 2005-06 Adopted Budget and the existing ordinance include 20% rate increases for06-07 and 07-08. 7. Proposition 218 notices were issued based on the 20% figure. 8. As the Board must act to implement any rate increase, it reserves the option to approve any rate increase, under the existing Proposition 218 notice, that does not exceed 20% in fiscal year 2006-07, or 40% over the next two years. June 2006 1. The CIP decreased by $549M, from $2.38B to $1.83B as budgeted construction costs were delayed or deferred. 2. The Sanitation District contracted with Carollo Engineers to complete a Revenue Program and Rate Analysis study. The result of these efforts reduced projected 2006-07 and 2007-08 single-family residential rate (SFR) increases, the basis for all sewer service charges, from 20.0% to 9.8%. CEQA FINDINGS N/A ATTACHMENTS None. x m.c�`asPwa�Cmmmaao.wamm cor .aeaonosoim Page 3 r+en�e. mvoaroa Book Page 18 ADMINISTRATION COMMITTEE Nlee"Date To Bd.or or. 03/14/07 AGENDA REPORT UeM Numhe 14m Number ADM07-09 Orange County Sanitation District FROM: James'D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: Succession Management Program Update GENERAL MANAGER'S RECOMMENDATION Information only. SUMMARY The General Manager initiated the development and implementation of a Succession Management Program that will support the organization in its evolution, determine future needs and ensure people are ready to step into leadership positions when needed. The idea of establishing a formal succession management program becomes more important when OCSD considers additional factors that influence its future labor needs and the trends that were discussed at the November 2006 FAHR meeting. The Succession Management Program has been designed to proactively address the challenge of ensuring continuity of future leadership. OCSD has developed tools to support its succession management efforts and is ready to launch the program. In their totality the program documents establish the program and related policy by summarizing the organization's status, identifying appropriate individuals to participate in the program, and providing structure and direction for employees' development. PRIOR COMMITTEE/BOARD ACTIONS None ADDITIONAL INFORMATION Background The U.S. Bureau of Labor Statistics projects a shortfall of 10 million workers by 2010 as Baby Boomers (ages 43 to 59) head into retirement. The public sector is projected to experience the impact of this shortage more quickly and significantly since the average age of public sector employees is higher than that of employees in the private sector. Form No.owtoiJ ftM AaN F- ow+.ur aawsa.ovvaar Page 1 Book Page 19 Also, the public sector has proportionally fewer younger workers. A significant percentage of employees at all levels are approaching retirement eligibility. Water and wastewater industry statistics indicate that 50 percent of employees will be eligible for retirement in the next 10 years, and 25 percent within the next five years. It is essential that the Orange County Sanitation District (OCSD) plan for the future staffing needs of the organization by implementing a succession management program. The Succession Management Program will become OCSD's passport to the future. For municipal agencies, these changing demographics have even more profound impacts. Not only is the average age of a worker higher than in other industries, but also future job positions will call for more skilled workers, increasing the competition for the limited labor pools required to fill those positions. These issues reinforce the need for practical guidance, specific tools and procedures to convert this challenge of the changing workforce into an opportunity to proactively develop a highly effective prepared future workforce. The idea of establishing a formal succession management program becomes more important when OCSD considers additional factors that influence its future labor needs. As the labor pool shrinks, competition for skilled talent increases. As competition increases, employees with strong skill sets become more valuable. This has the ability to create real retention issues at OCSD as current employees are sought after by other companies. Retention issues can be examined through detailed turnover reports. OCSD, for example saw an increase in turnover from 2.70% in FY 04/05 to 8.61% in FY 05/06. OCSD expects this trend to continue as more of its staff becomes eligible for retirement. In addition to the shrinking labor pool and increasing turnover, OCSD must look at one additional external factor that will influence the organization's workforce— college graduates and their fields of study. For example, universities are producing fewer engineering graduates, which is a predominant career path at OCSD. Finding qualified engineers is already becoming difficult at the organization, as well as others. OCSD will continue to face challenges associated with the 'War for talent" if a system is not developed to address these issues. That system is Succession Management. What is Succession Management? An effective succession management program enables an organization to identify need and prepare the right people for the right positions at the right time. Succession management involves managing a process of identifying and preparing suitable employees to replace key players within an organization as their terms expire through mentoring, training, and job rotation. It helps identify, secure, and grow the organization's knowledge base and leaders. It ensures a continuous pipeline or bench strength for key positions. It is important that potential successors be identified early and given appropriate training so that disruption is minimized and success is maximized when the time comes for their move to more senior roles. It is an ongoing process. OCSD can enhance retention and development of key employees by creating a succession management program that actively and successfully aligns employee career development with the organization's strategic goals and employee competencies with the organization's vision, mission, and values. Fmm No.o4 i1 NN. F 151 fpwMaogol-FM PwuM:O1Nb0] Page 2 Book Page 20 Benefits of Succession Management There are numerous benefits to both the employee and the employer associated with a strong succession management program. The benefits to OCSD include stable performance; continuity of leadership; organizational viability into the future; pools of skilled workers; maximized employee potential; attraction of prospective employees; retention through growth; development and advancement; and enhanced knowledge transfer. The benefits to employees include improved communication skills, morale, and effectiveness; stability, loyalty and commitment; skills development and directed training; career development; challenges; growth; increased self-confidence; improved working relationships; promotions from within the organization; and recognition. Key Findings There are numerous key findings uncovered through recent industry research. 1. OCSD must have an adequate supply of well developed staff that can fill positions at all levels. This requires the integration of future leader selection, training and development, incentives, and rewards. 2. OCSD must create personal ownership and motivation for training and development. To the extent that the organization promotes development, the more likely it will be to develop a culture of leadership. 3. OCSD's leadership development must be a dynamic process. Tomorrow's successful leaders will be different from today's successful leaders. OCSD will have to define its future leadership needs and then internally develop and implement processes and programs to build the necessary skills and experiences that will fill those needs. 4. OCSD must define the required competencies by conducting assessments and aligning competencies with the organization's strategic goals, vision, mission, and values. Competencies are an effective tool for identifying future leadership needs. 5. OCSD's employees will be more motivated to achieve career goals through self- development when specific career paths are clearly defined and training opportunities align with career goals. 6. OCSD's future leaders will need stronger financial skills, greater emotional Intelligence, and the capacity to build and bridge relationships across the organization. 7. OCSD's partners (Labor Management Committee, Executive Management Team, Board of Directors, and employees) will receive early identification and inclusion to help minimize potential barriers to policy and program implementation and assist in making the program more effective and efficient. FORA No.m IW4 N-.R.K -Fan o,.151 Ra ie 01MOT Page 3 Book Page 21 8. OCSD must design a robust succession management process from both the employees' and employer's points of view. Each perspective must be considered and included in the process to create a balanced and equitable approach. 9. OCSD must ensure that several success factors are in place to ensure effective development and implementation of a succession management program: 1) priority for Executive leadership; 2) employees committed to self-development; 3) integration into OCSD Strategic Goals; 4) integration into the organization's long-term business; 5) analysis of organizational workforce data and accessibility of critical knowledge, processes, and resources. 10. OCSD must ensure continuous communication throughout the implementation process, which is essential to ensure organizational support and effective use of the program. 11. OCSD must provide structured training programs, which provide focus for all employees to achieve goals and develop core competencies. 12. OCSD's defined career paths will guide employees who seek to become future leaders of the organization. Fo, No.0W1U, Po01.1s1 4—Re -FBA aa� olmeloi Page 4 Book Page 22 ORANGE COUNTY SANITATION DISTRICT (714) 962-241.1 www.ocsd.com Mailing Address: P.O. Box 8127 Fountain Valley, California 92 7 2 8-812 7 Street Address: 10844 EMS Avenue Fountain Valley, California 92708-7018 A T r 900Z `S L aagwaoad A A T T T a\^H3 3H1 G�4 o ti a � o U � A 6 a yO�1 dl INVS A A A }oiaisia uoijepueS Ajunoo e6ueao A uaea6oad juawo6euew uoiss000nS A A A OCSD Succession Management Program r Table of Contents r Section Page r Preface- James D. Ruth, General Manager...................................................................4 ExecutiveSummary......................................................................................................5 Backoround..........................................................................................................................--...........--.5 What Is Succession Manaaement?..........................................................................................................5 r Benefits of Succession Management........................................................................................................6 KeyFindings.............................................................................................................................................6 OCSODemographics....................................................................................................8 rThe Workforce...........................................................................................................................................8 EmployeeGrouos.....................................................................................................---...........................8 Definingthe Challenge................................................................................................10 WhatIs the Problem?-............................................................................................................................10 ^+ Where Does OCSD Stand?....................................................................................................................11 Impactof Retirements.............................................................................................................................13 The Four Generations in the Work arce..................................................................................................17 r The Depression Generation....................................................................................................................22 TheBaby Boomers.................................................................................................................................23 GenerationX...........................................................................................................................................23 GenerationY...........................................................................................................................................23 .. Existing Programs that Support Succession Management.....................................25 Tratnina and Development......................................................................................................................25 Pertormance Manaoement.....................................................................................................................25 StaHin ....................................................................................................................................................26 r Compensation and Classificafbn............................................................................................................26 Benefi ...................................................................................................................................................27 Integra(ion...............................................................................................................................................27 r Succession Management Strategies .........................................................................28 WorkforcePlannina.................................................................................................................................28 Competency Models and Assessment....................................................................................................28 SkillsAssessmenls.................................................................................................................................29 Aporenticeships.......................................................................................................................................29 Internships...............................................................................................................................................29 Strengthening the Workforce.....................................................................................31 Attractino. Developino.and Retaining a Quality Worklorce....................................................................31 Buildino an Internal Talent Pool..............................................................................................................31 LeadershipDevelopment........................................................................................................................31 Context of Succession Management.........................................................................33 Emploverand Employee Perspective.....................................................................................................33 Balancing Merit System Concepfs..........................................................................................................33 Implementing a Succession Management Program.................................................35 Succession Management Overslaht Committee.....................................................................................35 Succession Management EQkt.............................................................................................................37 r 2 u L Communication Plan...............................................................................................................................38 JobCompetendes..................................................................................................................................39 Formal Skills Assessments.....................................................................................................................40 L StrategicGoals........................................................................................................................................41 Succession Manaaenw&Devebnment Plan.........................................................................................41 CareerPaths...........................................................................................................................................42 Know/edge Manaaement........................................................................................................................43 CriticalPositions......................................................................................................................................45 Building on Existing Pronrame................................................................................................................46 TalentPipeline........................................................................................................................................50 Aoprenticeships.......................................................................................................................................51 Intemshigs...............................................................................................................................................52 Resources....................................................................................................._..........._...........................53 Continuous Improvement...........................................................................................57 6v Trackirw...................................................................................................................................................57 Monitodno................................................................................................................................................57 Measurino..............................................................................................._...............................................57 Reoortina.................................................................................................................................................57 it Implications.............................................................................................................................................58 Conclusion...................................................................................................................59 Sources........................................................................................................................61 L Acknowledgements.....................................................................................................62 Appendix......................................................................................................................63 Sample Employee Skills Inventory........................................................................................._...............64 Sample Succession Manaaement Davebpment Plan............................................................................66 Sample Microsoft Proiect Plan................................................................................................................68 L L L L L I L L L 3 L r Preface r This document represents the Orange County Sanitation District's (OCSD) roadmap to the future. OCSD anticipates significant changes in the workforce over the next decade, and this Succession Management Program is OCSD's strategy for ensuring a relatively smooth transition from its current state into the future. Succession management will support the organization in its evolution, ensuring people are ready to step into leadership positions when needed. This program will provide opportunities for self-motivated staff to shape their own careers and to strengthen r OCSD as they grow. Employees will have equal access to the program. Since participation in the program is voluntary, it is up to staff to take the initiative to volunteer, making a personal effort to develop with no guarantees. Staff will receive from the program what they put into it. During my term at the Orange County Sanitation District, I have placed focus on the r importance of establishing a succession management program. There is too much at stake for OCSD not to take action. Workforce demographics, economic factors, and the changing job market compel OCSD to strengthen its approach to workforce issues. r This document summarizes what OCSD will do to implement best practices, build on existing programs, and address areas for improvement. We already do many things well, but better integration of related elements and the inclusion of additional strategic ,., components will allow OCSD to strengthen its own talent and continue to remain a leader in the industry. OCSD's Succession Management Program has the full support of the organization. This document has been reviewed and critiqued by the Board of Directors, Executive Management Team, Managers, and the Labor Management Committee. Feedback from OCSD's general workforce has been sought and incorporated. Every one of us is a stakeholder in this organization, and we all have an interest in ensuring OCSD's Succession Management Program is implemented to the best of our abilities. r James D. Ruth General Manager Orange County Sanitation District r r r r 4 r Executive Summary Background .. The U.S. Bureau of Labor Statistics projects a shortfall of 10 million workers by 2010 as Baby Boomers (ages 43 to 59) head into retirement. The public sector is projected to experience the impact of this shortage more quickly and significantly since the average age of public sector employees is higher than that of employees in the private sector. Also, the public sector has proportionally fewer younger workers. A significant percentage of employees at all levels are approaching retirement eligibility. Water and wastewater industry statistics indicate that 50 percent of employees will be eligible for retirement in the next 10 years, and 25 percent within the next five years. It is essential that the Orange County Sanitation District (OCSD) plan for the future staffing needs of the organization by implementing a succession management program. The Succession Management Program will become OCSD's passport to the future. .. For municipal agencies, these changing demographics have even more profound impacts. Not only is the average age of a worker higher than in other Industries, but also future job positions will call for more skilled workers, increasing the competition for the limited labor pools required to fill those positions. These issues reinforce the need for practical guidance, specific tools and procedures to convert this challenge of the changing workforce into an opportunity to proactively develop a highly effective r prepared future workforce. The idea of establishing a formal succession management program becomes more important when OCSD considers additional factors that influence its future labor needs. As the labor pool shrinks, competition for skilled talent increases. As competition increases, employees with strong skill sets become more valuable. This has the ability r to create real retention issues at OCSD as current employees are sought after by other companies. Retention issues can be examined through detailed turnover reports. OCSD, for example saw an increase in turnover from 2.70%in FY 04/05 to 8.61% in FY 05/06. OCSD expects this trend to continue as more of its staff becomes eligible for retirement. In addition to the shrinking labor pool and increasing turnover, OCSD must look at one additional external factor that will influence the organization's workforce— college graduates and their fields of study. For example, universities are producing fewer engineering graduates, which is a predominant career path at OCSD. Finding qualified engineers is already becoming difficult at the organization, as well as others. OCSD will continue to face challenges associated with the "war for talent"if a system is not developed to address these issues. That system is Succession Management. What Is Succession Management? An effective succession management program enables an organization to identify and prepare the right people for the right positions at the right time. Succession 5 r management involves managing a process of identifying and preparing suitable employees to replace key players within an organization as their terms expire through mentoring, training, and job rotation. It helps identify, secure, and grow the i., organization's knowledge base and leaders. It ensures a continuous pipeline or bench strength for key positions. Succession management is insurance for when key people leave. It is important that potential successors be identified early and given appropriate L training so that disruption is minimized and success is maximized when the time comes for their move to more senior roles. It is an ongoing process. OCSD can enhance retention and development of key employees by creating a succession management program that actively and successfully aligns employee career development with the organization's strategic goals and employee competencies with the organization's vision, mission, and values. V Benefits of Succession Maneaement There are numerous benefits to both the employee and the employer associated with a strong succession management program. The benefits to OCSD include stable L performance; continuity of leadership;organizational viability into the future; pools of skilled workers; maximized employee potential; attraction of prospective employees; retention through growth; development and advancement;and enhanced knowledge transfer. The benefits to employees include improved communication skills, morale, and L effectiveness; stability, loyalty and commitment; skills development and directed training; career development; challenges;growth; increased self-confidence; improved working relationships; promotions from within the organization; and recognition. L Key Findings r There are numerous key findings uncovered through recent industry research. 1. OCSD must have an adequate supply of well developed staff that can fill positions at 6, all levels. This requires the integration of future leader selection, training and development, incentives, and rewards. w 2. OCSD must create personal ownership and motivation for training and development. To the extent that the organization promotes development, the more likely it will be to develop a culture of leadership. r 3. OCSD's leadership development must be a dynamic process. Tomorrow's successful leaders will be different from today's successful leaders. OCSD will have to define its future leadership needs and then internally develop and implement processes and programs to build the necessary skills and experiences that will fill LW needs. 6 L r 4. OCSD must define the required competencies by conducting assessments and aligning competencies with the organization's strategic goals, vision, mission, and values. Competencies are an effective tool for identifying future leadership needs. 5. OCSD's employees will be more motivated to achieve career goals through seff- development when specific career paths are clearly defined and training opportunities align with career goals. ,r 6. OCSD's future leaders will need stronger financial skills, greater emotional intelligence, and the capacity to build and bridge relationships across the organization. 7. OCSD's partners (Labor Management Committee, Executive Management Team, Board of Directors, and employees) will receive early identification and inclusion to r help minimize potential barriers to policy and program implementation and assist in making the program more effective and efficient.' 8. OCSD must design a robust succession management process from both the employees' and employer's points of view. Each perspective must be considered and included in the process to create a balanced and equitable approach. 9. OCSD must ensure that several success factors are in place to ensure effective development and implementation of a succession management program: 1)priority for Executive leadership; 2) employees committed to self-development;3) integration into OCSD Strategic Goals;4) integration into the organization's long- term business; 5) analysis of organizational workforce data and accessibility of _ critical knowledge, processes, and resources. 10.00SD must ensure continuous communication throughout the implementation process, which is essential to ensure organizational support and effective use of the program. 11.00SD must provide structured training programs, which provide focus for all r employees to achieve goals and develop core competencies. 12.00SD's defined career paths will guide employees who seek to become future �+ leaders of the organization. 'OCSD recognizes that many of the features of the Succession Management Program will, of course, be subject to the meet and confer process with the representatives of the recognized employee organizations. Therefore, potential exists for features described within the Succession Management Program document to be implemented differently than originally conceived. r r L L OCSD Demographics L The workforce The Orange County Sanitation District (OCSD) is a publicly owned treatment works v (POTW) agency that was originally formed in 1954. OCSD employs approximately 644 approved full-time employees with a current service area of 471 square miles, servicing a population of 2.4 million people. Twenty-five (25) members comprise OCSD's Board ., of Directors, with representatives from cities and agencies throughout the county. OCSD's employees perform a wide variety of jobs. OCSD functions and personnel can L be categorized into the following departments: Engineering, Administrative Services, Information Technology, Operations & Maintenance, Regional Assets & Services, and Technical Services. The tables below list the authorized workforce distribution: L BY Department Stamina BY GrouP staffing General Manager 26 Executive Management 8 L Administrative Services 69.5 management 19 Technical Services 119 Supervisors 64 Engineennii 98.25 Confidential 15 L Operations&Maintenance 249.25 Professionals 209 Information Technology 31 Operations& Maintenance 206 Regional Assets&Services 51 Paraprofessionals 108 L TOTAL FTES 644 Other 13 TOTAL I a" L Employee Grouts - Represented V There are currently six bargaining units represented by three employee organizations. The three employee organizations have established exclusive representation for each V applicable bargaining unit pursuant to OCSO's Employer-Employee Relations Resolution. Each employee organization has an assigned Business Agent who consults with bargaining unit representatives. The table below outlines represented employees. Represented Employees M273 y 501 (Operations&Maintenance - SPMT (Supervisors and Professionals OCEA Oran a Count Em lo ees AssociationTOTAL L a L L r r Unrepresented Executive Management Team (EMT) members, Managers, Confidential employees, and part-time employees are unrepresented groups. EMT members are bound by the terms and conditions of individual at-will employment agreements. Managers, Confidential, and part-time employees are bound by the terms and conditions of employment outlined in OCSD's policies and procedures. The table below outlines the unrepresented employees. r unrepresented Employees Members EMT 8 r Confidential 15 Part-Time 7 Managers 19 r TOTAL 42 For the purpose of the succession management program, employees in bargaining units will be referred to as "represented employees." r r r r r r r r r r 9 r Defining the Challenge What Is the Problem? The future is projected to bring shortages of highly skilled workers and top talent in — almost every profession and many crafts. Additionally, organizations are beginning to employ four generations of employees in the workplace at the same time. These two trends will create a work environment that has not been experienced in recent history. In the past, organizations have experienced shortages in specific occupations for short periods of time. Currently, the U.S. Department of Labor predicts that the United States will experience a severely tight labor market, especially in the area of highly skilled and professional workers. Figure 1 shows the estimated percentage change in population from 2000 to 2010 for — the U.S. and California by age group. For example, the age group of 55 to 59 will increase in California by about 51 percent and in the U.S. by about 45 percent, while the age group of 35 to 44 will decrease by about 8 percent in California and 12 percent in — the U.S. Based on such data, projections reflect a severe shortage in Prime Workers between the ages of 27 and 42. This shortage will continue until those in Generation Y (ages 26 and under) mature and prepare themselves for skilled and professional ee positions. California vs. U.S. Change in Population by Age Group — 2000 - 2010 (Estimated) r 70% 60% n Refiring Belly eoormn 50% tth i159 r 30% Ganereeon y N a unEer 20% °l "Prime Vbrkeri r 10% Gewretbn x r-L9-62 0% r CP N N m y b O Or 10% N N M N O V Vl N le {O •20% 0 California■United Steles Figure 1 (Source: U.S. Dept.of Labor Statistics) r 10 Unrepresented Executive Management Team (EMT) members, Managers, Confidential employees, and part-time employees are unrepresented groups. EMT members are bound by the terms and conditions of individual at-will employment agreements. Managers, Confidential, and part-time employees are bound by the terms and conditions of employment outlined in OCSD's policies and procedures. The table below outlines the unrepresented employees. r Unre resented Em /o ees Memflers EMT 8 r Confidential 1s Part-Time 7 Managers 19 r TOTAL 42 For the purpose of the succession management program, employees in bargaining units r will be referred to as "represented employees." r r r r 9 Defining the Challenge What Is the Problem? The future is projected to bring shortages of highly skilled workers and top talent in almost every profession and many crafts. Additionally, organizations are beginning to employ four generations of employees in the workplace at the same time. These two trends will create a work environment that has not been experienced in recent history. In the past, organizations have experienced shortages in specific occupations for short periods of time. Currently, the U.S. Department of Labor predicts that the United States will experience a severely tight labor market, especially in the area of highly skilled and professional workers. Figure 1 shows the estimated percentage change in population from 2000 to 2010 for the U.S. and California by age group. For example, the age group of 55 to 59 will increase in California by about 51 percent and in the U.S. by about 45 percent, while the age group of 35 to 44 will decrease by about 8 percent in California and 12 percent in .. the U.S. Based on such data, projections reflect a severe shortage in Prime Workers between the ages of 27 and 42. This shortage will continue until those in Generation Y (ages 26 and under) mature and prepare themselves for skilled and professional •r positions. California vs. U.S. Change in Population by Age Group 2000. 2010 (Estimated) m 70% 60% Be reselon Retiring Baby Generation _ $0% Boomore 6g 4159 40% — — --- 30% Generetb b 48 6 under 20% ehrinkin ool of "Prim Worker" ba 10% Generation x zraz i 0% real a m v w m v m -10% N N o � � N N Ci ly O d YI N r0 tp -20% ❑California in United States Figure 1 (Source:U.S. Dept. of Labor Statistics) r r 10 r Figure 2 captures the OCSD percentage change in population from the year 2001 to 2006. As with the state and national predictions, OCSD is also projecting an increase in retiring Baby Boomers and a shrinking pool of Prime Workers between 27 and 42 years of age. r Percentage Change in OCSD Population by Age Group 2001 -2006 600 500 Depress n 400% — General on 60. 300% Ge ionlone 21 b Lnder 200% ReMno aeb Shrinking pool of 600rners "PrIon Workers" 4M9 100% 2742 0/ 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 -100 .. Figure 2 Additional factors are anticipated to compound the issue for the water and wastewater industry. These include the declining appeal of public sector employment; competition for talent with the private sector; lower criteria for retirement eligibility than other sectors; regulations that do not help public agencies to retain older workers or rehire retirees; and past employment patterns of periods of growth and downsizing, hiring freezes, retirement incentives, and buyouts. Where Does OCSD Stand?? According to a 2005 study of 125 of the largest water utilities by the American Water Works Association (AWWA), the average age of a utility retiree is 56 with 24 years of service. AW WA concluded that employees generally retire shortly after they become eligible for retirement, especially if they have worked most of their eligible years for one organization. Applying this finding to the wastewater industry, the expected average age of retirees for OCSD would be 55 with approximately 22 years of service. Over the past five years, though, OCSD employees retired at an average age of 60 with 23 years of service. However, in 2005 the Orange County Employee Retirement System (OCERS), of which OCSD is a member, increased the retirement benefit to 2.5%per year of service at age 55, with the option to retire early with reduced benefits after age 50 with 10 years of service. OCSD anticipates that this may have the effect of lowering the age at which employees consider retirement. According to a 2005 AWWA study, the average age of a public utility worker is higher than the national average and is increasing. This is due in part to the high average length of service of the water and wastewater industry workforce. The study showed the average employee age for all utilities to be 44.2. The current average age of OCSD employees is 46.27. The average age of OCSD's management employees is 50.1, and non-management is 46.01. The data in Figures 3 and 4 validates that OCSD's workforce is gradually aging, and based on the average tenure of 12 years for all employees— 11 years for non- management employees and 16 years for management—OCSD's employees are choosing to continue employment with OCSD as they near retirement. Historical Average Age of OCSD Employees 60 —__ sa t 60 �6:01 46.27 _ 40 - N � n 30 20 10 — _1 0 Management Non-Management All Employees ■Current Ill Ago o 10 Veers Agc Figure 3 Historical Average Tenure of OCSD Employees 18 is 16 14 12 12 11 10 `m > 8 — 6 4 2 0 Management Non-Management All Employees m Cunenl ■5 Years Ago 010 Years Ago Figure 4 Impact of Retirements It is important to understand OCSD's potential human resources shortage. In OCSD's retirement system, employees who are 50 or older with 10 or more years of service are eligible to retire. Consider the impact of the FY04-05 retirement formula change to 2.5% @ 55: OCSD retirements increased from 4 to 33, a 725% increase. Based on OCSD's current average age of 46 with 12 years of service, a 10 year projection would place current staff at age 56 and 22 years of service, which is consistent with the AW WA utility average for retirement. Employees age 60 or older with 23 years of service (OCSD's average for retirements in the last 5 years) are considered eligible for retirement now. This relationship between eligibility, the AW WA utility average, and those who will retire helps the organization understand the potential loss and impact to the OSCD workforce. Figure 5 reflects all employees eligible to retire by employee group. According to Figure 5, the number of employees eligible to retire over the next 10 years is significant. The average over the nine-year period is about 45 percent of staff (289 employees), impacting every segment of the organization. 13 Eligible for Retirement OCSD Employees — 300 i 51% _ 42 48% 250 40% . ___42% 43% 37 40 3] 33 35 e 200 32 34 eg 9] 102 150 53 56 57 61 71 72 100 50 as 42 47 47 50 48 -45 0 . 2007 2008 2009 2010 2011 2012 2013 2014 2015 ®Management NOW OProfessional OParapmfessional ■% Figure 5 Figure 6 demonstrates the percentage of staff that likely will retire, assuming the average retirement age of 60 with 23 years of service. Carving out this segment of the organization allows for more accurate loss calculations over the nine-year projection. Projected Retirements OCSD Employees 140 120 - 20.9% z3 38 100 2, 33 80 14. °' 11 zs i 60 6 40 7. a 15 5.6% 20 3.8 9D 37 0 9i 14 18 2007 2008 2009 2010 2011 2012 2013 2014 2015 I]Management NOW OProfessional OParaprofessional ■% _ Figure 6 14 The groups of eligible retirees were narrowed down to determine OCSD's critical areas requiring planning for the future based on four groups: Management (EMT, Managers, and Supervisors), O&M (Operations and Maintenance), Professionals, and Paraprofessionals (Clerical and Technical Staff). Figures 7 through 10 provide more detailed information related to demographics of specific employee groups and potential impacts to the OCSD workforce compared to the AWWA (industry average) projected retirements. This data allows the organization to better understand areas facing the greatest impact, and consequently know where and when to focus efforts. Also, it is equally important to maintain and update the data annually to facilitate accurate planning and forecasting. 10-Year Retirement Projection - Management OCSD Employees 70% 60 50% 40% --- - 30% --- 20% -- 10% -- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ■OCSD Eligible ■AWWA Figure 7 _ l: 10-Year Retirement Projection - O & M OCSD Employees - 60% - 50% - 40% 30% -- __... ..._. 20 10% -- 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 ■OCSD Eligible MAWWA LL Figure 8 — 10-Year Retirement Projection - Professional _ OCSD Employees 70% 50% 40% 30% 20% - 10% - 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ❑OCSD Eligible MAW WA Figure 9 16 10-Year Retirement Projection - Paraprofessional _ OCSD Employees 60% - -- 50% - 40% 30% - 20% - 10% - 0% ' _ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 13 OCSD Eligible ■AW WA Figure 10 As mentioned earlier, the emphasis will be on growing OCSD's future leaders. Employee programs such as Tuition Reimbursement, Computer Purchase, Leadership Academy, Management Training, Clerical Training, and cross training must be actively supported and monitored. Establishing a process to mentor and prepare successors for highly specialized and critical management positions is a priority. Of equal importance is the need to document and pass on knowledge that is understood but not currently documented for use by management replacements and the organization as a whole. The long tenure of OCSD's employees is an important factor in the "brain drain"problem in the water and wastewater industries. When people work together for a long time, they are more likely to rely on work patterns developed over many years than on written procedures. Passing on knowledge through written procedures (where possible), verbal _ communication and training will be increasingly important in the future due to the large number of retirees. During the training of candidates, sufficient time must be allowed for the transfer of valuable historical institutional knowledge and information. This may create short-term workplace inefficiencies for the purpose of long-term stability. Since new employees are not being hired in at rates as high as in the past, OCSD must find ways to accomplish core business during knowledge transfer. The Four Generations in the Workforce The current labor force can be divided into four basic demographic workforce groups. As discussed previously, the Baby Boomers currently make up approximately 40 17 L percent of the national workforce and about 54 percent of OCSD's workforce. As Baby Boomers retire and leave the labor market, their absence will severely impact the talent pool of available workers and will create employee retention challenges. In addition to v this problem, organizations will be left to recruit, manage, and retain four different generations of workers with differing motivators. V Each of the four generations now in the workforce was influenced by the society in which it was raised. The critical events of 'their time" influenced the generations' lifestyle characteristics, social values and workplace characteristics. In much the same way, their resulting lifestyle characteristics and social values will influence the structure, management style and needs of organizations in the future. As the Baby Boomers leave the workplace to enjoy their retirement years, a potentially critical shortage of y skilled and professional workers will take place, causing organizations to compete increasingly for talented and skilled employees. The U.S. Bureau of Labor Statistics predicts that by 2010, 60 percent of new jobs will require skills possessed by only 20 L percent of the workforce. Management must be prepared to lead a diverse workgroup with varying values and motivators in order to retain valuable human resources. - The four demographic workforce groups include: L Depression Generation Born before 1946 (age 60 and older) Baby Boomer Generation Born between 1946 and 1963 (age 43 to 59) L Generation X Born between 1964 and 1979 (age 27 to 42) Generation Y Born between 1980 and now(age 26 and under) V Figure 11 shows the distribution of OCSD management and non-management employees by age group. L V L 1 V i - V I 1r III W 18 L Distribution of Management and Non-Management OCSD Employees by Age Group 120 A%g. Age of Mgt. Emp. = 50.1 A�.g. Age of Non-Mgt. Emp. = 46.01 100 Aug. Age of All Emp. = 4627 T 0 60 EE W 60 0 a 40 z 20 20-24 25-29 30.34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 Age Groups — 0 Management ■Non-Management Figure 11 Figures 12 to 14 break down the OCSD workforce into the four different generational groups. Overall, 54 percent of all OCSD employees are members of the Baby Boomers. These members hold 11 percent of management positions (EMT, Managers, and Supervisors) and 44 percent of non-management positions. It is interesting to note that the Baby Boomer managers It percent) are currently managing a workforce that is mostly Generation X (33 percent). These two generational groups are motivated by different factors and enjoy differing work environments and challenges. The current and future managers and leaders will be charged with the responsibility of motivating, communicating, and retaining a workgroup of employees with different needs. 19 Four Generations of OCSD Employees 80 70% — 60% - 50% — 30% - f 20% o — /0% 6% 0% Generation Y Generation X Baby Boomers Depression ,. Generation — ■Current ■5 Years Ago D 10 Years Ago Figure 12 Four Generations of Non-Management Employees in the OCSD Workplace 60 50% . - - _.__ _. ..� -. 44% 40% 30% 30% - 20% 10% 7% 0% - F7 t I E:W]- , Generation Y Generation X Baby Boomers Depression Generation m Current ■5 Years Ago 010 Years Ago Figure 13 20 be Four Generations of Management Employees in the OCSD Workplace tar 16% 14% 12% o -... 10/ 8% 6% 2% - 0 0a Generation Y Generation % Baby Boomers Depression Generation _ ❑Current 65Yeers Ago 01 0 Years Ago Figure 14 A brief description of each generation of workers—who they are and what motivates them — is helpful in better understanding the workforce situation. The following tables provide a summary snapshot of each of the four generations employed in the workplace today. The tables help identify and compare the generational markers for each of these groups in order to better understand the varying lifestyle and workplace characteristics of each of the four generations. (Sources: Human Resource Institute, St. Petersburg, Florida; and American Management Association, "The New Workforce"): Typical Generational Markers Depression Baby Boom Generation X Generation Y Generation Generation • Great • Civil Rights . AIDS • Poverty Depression . War on . Video Games . The . Electrification Poverty . Homelessness Environment . World War II . Race to Space . Berlin Wall • Violence . Cold War • Assassinations . The Web • Terrorism . Holocaust • Vietnam War . Dot.com • Technology . Hiroshima • Impeachment Economy . Y2K . Radio & . Hi-Tech Start- • Cost of Movies I UPS Housing 21 L L Typical LMestyle Characteristics V Depression Baby Boom Generation X Generation Y 60+ 43-59 27-42 26 and under Work Hard, Work hard, Work hard if it Good grades, `+ Save money, Play hard, doesn't interfere with Make others pay, What is play? Worry about money play, Save money Save moneyr I like it, Should I really like I like it, I don't care Who are you It's OK. it? what others think anyway? Will others? You're old tr Exercise is one Exercise is a duty Exercise for mental What's your o lion health secondsport? Buy a decent house Buy the most house Reclaim the inner city I like living with my u you can and parents commute further , V Workplace Characteristics Yd Depression Baby Boom Generation X Generation Y 60+ 43—59 27—42 26 and under Strong work ethic Money/principles Principles/satisfaction ??? it Hoe to end of row Mixed Lifestyle first Lifestyle first Manage Manage No need to lead ??? leadtfollow :. Loyal to ember Mixed Loyal to skills ??? Independent but Care deeply what Don't care what Don't care what conventional others think others think others think Lr Work well with Want others to work Work best alone Work best alone others with them Technically Technically Technically savvy Technically W challenged challenged sophisticated Follow the leader Lip service to Care about mission Must have mission mission y Strong chain of Mixed Individual first Individual first command is Want to win Want to win Want to win WaM to win I The Depression Generation V Employees born during the Depression era bring a high level of principles and values to the workplace. Having experienced the difficult times of the Great Depression, L,, members of this group are happy to have a job and are loyal, dedicated workers. u 22 V r Keeping one job for life is not uncommon for this generation, as these employees are extremely loyal to "the company." They survived through hard work, sacrifice and self- discipline. Following World War 11, they created a steadily increasing affluence and enjoyed it conservatively as they worried about what the future might hold. These senior employees make good "natural leaders." They are often the "go to" employees in the organization and often take Generation Y employees under their wing and mentor them. This has given the overlooked Depression era employees a new sense of value in the organization as they become important members of the organization's team. The Baby Boomers r At the end of World War 11, the U.S. experienced an economic boom and a baby boom. During the Baby Boom years there were more than 75 million births. The economy r continued to flourish and the Baby Boomers lived up to their parents' dream. They enjoyed greater opportunities than their parents. They are driven and selt-absorbed, and introduced the 80-hour work week. Boomers are highly competitive and focus on personal achievement. They would be unhappy sitting around without a purpose. r Boomers will be looking for more satisfying work—work they enjoy doing. They will begin to value a better balance between work and home life, and will trade higher r paying jobs for more time at home with their families. Generation X r Forty-six million Americans make up Generation X. Within this group are the "latchkey" kids and the children of divorced homes. Most employees in this group were from homes where both parents worked, and they were expected to take care of and entertain themselves. Based on this early childhood lifestyle, these employees developed a strong sense of independence and are extremely adaptable. Employees in the Generation X group saw their parents face company layoffs and, therefore, have a difficult time remaining loyal to a company or organization. Loyalties lie with their teammates and with the bosses for whom they work. They do not see the need for management to look over their shoulder and monitor their work closely. They thrive on feedback and have the ability to give feedback as well. r Generation Y r The work group currently entering the labor force is known as Generation Y. They are 76 million strong and emerged when the Baby Boomers decided to have children. The people of Generation Y are a product of the overachieving parents of the Baby Boomer generation. They are accustomed to accomplishing multiple tasks simultaneously and time management. This group is seen as a highly confident group who are great multitaskers and team players. They prefer to work in groups and sometimes have a difficult time working with others who have an independent, hands-off working 23 r philosophy. More will be learned about this group and their work habits as they become more intertwined in the workforce. Organizations have always contained a mixture of ages and generations. Due to the projected shortage of workers, leaders will be asked to pay closer attention to the factors involved in motivating the employees of each generation in an effort to — encourage maximum productivity and to attract and retain valuable human resources. Figure 15 highlights the distribution of the four demographic workforce groups from a national, state, and local perspective. Population Demographics n0% - 35% 30% — --- 25% - 20% 15% 10% — 5% 0% — Generation V Generation X Baby Boomers Depression Generation ■U.S. ■Caillomia o Orange county Figure 15 2 _ r Existing Programs that Support Succession Management It is important to take a step back and understand the existing programs within the organization that currently support succession management: 1)Training and Development; 2) Performance Management; 3) Staffing; 4) Compensation and Classification; 5) Benefits. Trainlna and Development A variety of developmental learning opportunities are offered by OCSD to encourage employees to build their knowledge, skills, and abilities. OCSD staff regularly utilizes the available programs for continuous growth. The large number of internal promotions r highlights the success of the organization's training and development programs. The organization budgets an amount equal to 2.0 percent of salaries annually to training and development programs. As a result, employees have access to a variety of opportunities, and OCSD maintains a workforce that is well trained and current. Training is a large component of the employee development program. The organization r offers numerous onsite training classes in several categories: administrative, technical, technology, regulatory, and legal. Structured programs—with a series of training classes for a specific audience (e.g. Supervisor Training Program, Clerical Training Program)—and offske classes make appropriate training available for all staff levels. r Offsite training and conferences supplement onsite offerings to fill individualized training needs. The organization's training needs are identified through periodic discussions, meetings and surveys; budget planning;and employee requests. Additional needs are r identfied for staff during performance evaluation discussions between management and employees. The Employee Development Division supports budgeted and non- budgeted training requests to ensure identified training needs are met. Training funds are centralized and administered by the Human Resources Division to allow the maximization of available resources and economies of scale. Additionally, OCSD employees are supported in further developing their skills via OCSD's reimbursement programs. The Certification Reimbursement Program was established with this intent. Financial reimbursement is available for fees associated with acquiring and maintaining OCSD-approved technical and professional licenses, certifications and registrations. The Tuition Reimbursement Program provides financial support for employees to pursue self-development through job-related educational courses at accredited colleges, universities, and approved institutions. This program provides educational opportunities that help staff update their professional or technical capabilities or prepare for future roles in the organization. r Performance Management r Performance management is the organized method of monitoring results of work activities; documenting and evaluating performance to determine achievement of goals; 25 r LL L and using performance information to make decisions, allocate resources, and communicate whether objectives are met. The system helps motivate and retain key employees and coach employees who are performing below expectations. OCSD's L Performance Management Program was developed to meet these objectives and to support the organization's vision, mission, and values. The program affects organizational processes from employee compensation to training requests. L Performance reviews provide a tool for discussing performance and goals. All OCSD employees receive performance reviews twice annually, and probationary employees are reviewed more frequently. Supervisors are responsible for supporting employee efforts to maximize potential, and use the performance review discussion as an additional opportunity to assist employees to continue to increase job knowledge, skill and ability. y aHln Staffing consists of recruitment, selection, and employment;plus additional aspects L such as training that support the workforce. OCSD has organized Its staffing function to support promotion from within the organization. Policy states that all positions are posted first for internal candidates. This is in direct alignment with a strong succession management philosophy. Internal candidates are a "known commodity", understand the organization's business, and therefore should be better positioned to step into higher level positions that become available. Qualified internal candidates compete for posted L positions through a behavioral panel interview process designed to evaluate knowledge, skills, and abilities. OCSD's staffing function further supports succession management through the use of a L recently implemented applicant tracking system. The system —complete with a resume database—stores internal applicant information, skills, applications, and resumes. Internal candidates have easy access to update resumes and job related information. The Human Resources Division, in turn, is quickly able to search for and determine which internal staff members are qualified to move into open positions. W Compensation and Classification V OCSD's compensation system attempts to provide salaries that are competitive with the relative labor market and the organization's Board-established comparison agencies. The result of having competitive salaries is that the organization is able to retain employees who possess critical knowledge and skills needed in a high performing organization. This provides the opportunity for knowledge and skill transfer to the next level of the employee population. In concert with competitive salaries, general descriptions of job responsibilities are part of the job classification structure. W W 26 I ' V r Benefits OCSD offers a retirement program through the Orange County Employees Retirement System (OCERS). OCSD employees do not pay into Social Security, with the exception of 1.45 percent of gross income, which is paid into the Medicare portion of Social Security. All employees contribute to OCERS. OCSD pays an amount equal to 23.65 percent of employees'salary into the retirement system. OCERS has established reciprocity with the majority of retirement systems within our geographic area. Reciprocal benefits are designed to allow employees who transfer retirement systems to preserve and enhance their total retirement benefits, thereby increasing OCSD's ability to recruit from other government agencies with similar retirement programs. OCSD's current retirement formula is 2.5 percent for each year of service at age 55. OCSD's benefits program is designed to help maintain wellness and protect employees r and their family members from major financial hardship in the event of illness or injury. OCSD offers a choice of an HMO or POS medical plan through Blue Cross and an HMO plan through Kaiser Pennanente. In addition to medical benefits, OCSD offers dental, vision, life and disability insurance for the workforce. Employees may also r select from a wide variety of voluntary benefits, including healthcare and dependent care flexible spending accounts (FSA), universal/term life insurance, cancer insurance, supplemental disability, pre-paid legal, and identity theft shield services. In an effort to reduce the cost of commuting to the workplace, OCSD offers a vanpool program and rideshare matching services for the benefit of employees in some areas, and these options assist in attracting and retaining employees from outside the County of Orange. r Program Integration r One critical element for a succession management program is the integration of the above five key programs: training and development; performance management; staffing and selection; compensation and classification; and benefits. These programs must be integrated with a single purpose: succession management. The absence of one activity creates instability and weakness in the whole succession management — program. The Human Resources Division will manage these program components due to its role and expertise in these areas. r The key to program integration is to understand the current impact of the five programs and which elements of succession management each supports, and to develop future enhancements that support integration and program success. Changes in these existing programs become part of the organization's transition towards succession management. OCSD recognizes that many of the features of the Succession Management Program will, of course, be subject to the meet and confer process with the representatives of the recognized employee organizations. Therefore, potential exists for features described within the Succession Management Program document to be implemented differently than originally conceived. 27 6, Succession Management Strategies L In the efforts to bridge the gap between OCSD's current programs and future staffing needs, the organization must establish strategic links between the two. The following systems will allow for OCSD's current staff to meet future workforce demands. Workforce Planning .+ Workforce planning is a practice that analyzes the present and future talent needs for the organization and identifies the best possible ways to meet these needs in both its short and long term planning. The plan must be anchored to the organization's strategy, vision, values, and direction. It must also take into account larger national, state, and local labor trends, economic trends, and internal and external workforce �. demographics. Workforce planning is the foundation of a strong succession management program. OCSD must determine which positions are critical to the success of the organization. Once these positions are identified,job competencies and skill competencies must be assessed, both for the positions and the individuals occupying those positions. Comprehensive turnover forecasts must be performed on an ongoing basis to predict future vacancies of key positions. Detailed organizational charts, or replacement charts, with targeted retirement dates for people in key positions can be developed, L, categorizing individuals by the probability of retirement. These replacement charts will contain competency profiles for critical positions and the people occupying them. L.� Competency Models and Assessment r Competencies are defined as areas of capability that enable people to perform successfully in their jobs by achieving specific outcomes or completing tasks effectively. A competency can be knowledge, skills, attitudes, values, or personal characteristics. V When these key criteria of job performance are repeated again and again in the workplace, they become engrained in behavior, or a competency. A key component of workforce planning is clarity of requirements and competencies for major job categories. Without this level of clarity, the workforce plan cannot properly match supply with demand. There are several different ways to perform and convey job analyses. Competency models are popular in organizations because they portray the knowledge, 6w skills, and abilities that lead to successful performance. Competency models are useful for several purposes and provide a common language to convey job requirements and expectations. Competencies should be linked to organizational strategy, vision, and values. Among the specific purposes for competency models are: L u 28 i ! LI r Recruitment Selection • Development • Performance feedback • Staffing planning Skills Assessments It is imperative that the organization have the most qualified individuals working in critical positions. Once job and skill requirements have been established for positions, .. OCSD can develop skills assessments to evaluate competencies. Skills assessments are useful in many instances, but particularly in two areas: to evaluate candidates who apply for a job, and for candidates to evaluate progress towards their self-development r goals. Skills assessments help the leaders of an organization develop profiles to identify high potential candidates who may be ready to succeed an individual in a key role for the organization. They can be used in both the internal and external recruitment processes when someone applies for a job. Evaluating skills as part of the interview process is also beneficial to internal candidates, as it helps them understand any skill deficiencies they may have. r Annrenticeshlns r An apprenticeship is a relationship between an employer and an employee during which the apprentice learns a specific trade. The training lasts a specified length of time. An apprenticeship program covers all aspects of the trade and includes both on-the-job training and related formal classroom instruction. The instruction covers the techniques of the trade, as well as the theory behind the techniques. It includes detailed discussion of how typical tasks are performed and the safety precautions that must be taken. Instruction is facilitated by journey level workers and other skilled persons, requiring apprentices to study trade manuals and educational materials. Apprenticeship can range from one to five years in duration. During this time, r apprentices work under journey workers. Under the journey worker's guidance,the apprentice gradually learns the mechanics of the trade and performs the work under less and less supervision. The entire process of an apprenticeship helps the knowledge transfer from an experienced employee to a new employee Many labor unions have dropped these valuable programs due to their cost. r Intemshlns Internships continue to be of great value to OCSD. OCSD's internship program serves as part of a student's educational plan to explore a given career path that integrates 29 L L classroom study with planned, supervised work. The program allows students to explore opportunities at OCSD, establish professional relationships, receive mentoring, I and provide OCSD with innovative ideas and a motivated, low cost workforce. L Internships are a cost effective method for OCSD to augment the workforce, and they afford the organization an excellent time period to evaluate new talent for entry-level professional positions. L OCSD recognizes that many of the features of the Succession Management Program will, of course, be subject to the meet and confer process with the representatives of the ,. recognized employee organizations. Therefore, potential exists for features described within the Succession Management Program document to be Implemented differently than originally conceived. w I u L L L L. L L L i . u 1 V I I W 30 4 Strengthening the Workforce Attracting. Developino. and Retaining a Quality Work/orce Before OCSD can develop the specifics of succession management, the organization must be able to answer some broader questions that will determine how it will approach workforce management and, ultimately,the specific strategies it will employ. r Succession management is a powerful tool that can be used to attract and develop the skills that OCSD requires. The ultimate goal is to ensure an adequate supply of well- trained employees who can fill positions at all levels within the organization. r Achieving this objective requires the integration of five key activities: 1)Training and Development;2) Performance Management;3) Staffing; 4) Compensation and Classification;and 5) Benefits. These activities should be integrated with a single purpose: succession management. The absence of one component weakens the whole succession management program. r Building an Internal Talent Pool A comprehensive succession management program that integrates recruitment, development, employee performance appraisals, individual potential assessments, succession management development plans, and retention programs helps ensure that an organization has the talent pool it needs to achieve its mission, provide workforce sustainability, and ensure a talent pipeline. The specific vision of that program,the approach taken, and the tools employed all guide the organization's actions in " recruitment, development, and retention. Developing interested employees ensures that potential candidates have strong " knowledge, skills, and abilities critical to key positions. As positions become available, several individuals will be qualified to apply and will be better positioned to compete based on merit system principles with other applicants. The improvements achieved through development activities will benefit the organization, whether candidates are promoted or remain longer in their current positions. V Leadership Development r Leadership development is the systematic process of developing competencies and skills of individuals who will become the future leaders of the organization's strategy, future stewards of its culture, and key stakeholders in the organization's overall success. Leadership is an expression of how employees and employers manage their mutual relationship with a sense of pride, loyalty, ownership, and respect. Creating personal ownership and motivation for training and development is a key to succession management. The more an organization promotes development and 31 L provides the necessary processes and tools for that development,the more likely it is to develop a mindset and culture of leadership throughout the organization. A culture of leadership is an environment where employees feel connected to their jobs and the L larger mission of the organization. Leadership is no longer connected to a position of authority or power, but rather creates an environment where employees feel a great sense of responsibility for what happens and how it happens. The concept of the leadership pipeline is often confused with leadership development. Leadership development efforts feed the leader pipeline. In this sense, those who are r in the pipeline are candidates for a succession management program. The pipeline is made up of employees identified for potential strategic roles across the organization I who are being groomed to perform leadership roles. First, the organization must define its future leadership needs and the various leadership competencies that match those needs. Next, OCSD must build the 6, necessary skills and experiences that will produce the desired competencies. Identifying future leadership needs of the organization can be completed by competency modeling, conducting cultural assessments, and aligning development activities with r what the strategic goals indicate will be required for leadership success. OCSD recognizes that many of the features of the Succession Management Program will, of course, be subject to the meet and confer process with the representatives of the recognized employee organizations. Therefore, potential exists for features described within the Succession Management Program document to be implemented differently than originally conceived. Ln 1„n V I„Y V IV 4 I . V 32 I L+ r r Context of Succession Management Similar to individuals, every organization is unique. Understanding the uniqueness and context of the organization is essential to the development and implementation of r succession management. Therefore, it is important to understand the perspectives of the employee, as well as the perspectives of the employer. This also includes the potential constraints within which the organization must operate. r Employer and Employee Perspective r What is OCSD's perspective? The most obvious issue is how the organization views the process. Succession management is OCSD's passport to the future via integration and expansion of programs. Succession management ensures a plentiful supply of talent for key roles in the organization and develops a process that can grow existing talent to have the skills required for those roles. The organization expects the process to be a r mechanism for managing existing human capital, for ensuring timely and accurate knowledge transfer, and for guiding future staffing requirements. r OCSD has the responsibility of creating a succession management process that will guide the development of its human resources strategies, programs and initiative, and inspire staff to take personal ownership of their own training and development. As a r unionized workplace, OCSD has a responsibility to design a program that aligns with each bargaining unit's Memorandum of Understanding. From the employee's perspective, the succession management process should be one that is clear, flexible, and fair. Employees who have drive and ambition should see the process as inspiring their training and development. For employees who want to find their niche, produce good work and be rewarded without pressure to climb the ladder, the succession process must not punish or demotivate them. The succession management process must, therefore, be positioned as optional and voluntary. " Employees need to view the process as providing an opportunity to grow, learn and evolve. From the employee's perspective, the process should help attract the best and brightest candidates and retain the most effective contributors, creating a sense of equity and the feeling of being part of a team. It should not create a competitive or adversarial environment that could reduce productivity or lower commitment to the organization. Balancing Merit System Concepts r As many wastewater utilities are required to comply with merit system requirements, so is OCSD. Effective succession management requires organizational flexibility that is -� often perceived to be beyond the bound of what merit system rules allow. There are some strategies that can be employed to work effectively within even the most arduous 33 W L public sector recruitment, selection, and employment process constraints. Consider the following perceived limitations: V • The public sector hiring process is too slow and overly rigid and hurts an organization's ability to recruit due to the time required to hire new staff • Many public sector systems have rules precluding the identification of a L successor to a position prior to the submission of a formal application and standard posting of a vacancy • Public sector systems impose strict and complex rules governing compensation, u job classifications, and work descriptions Despite these obstacles, it is still possible for OCSD to effectively navigate constraints L• and engage in succession management. Doing this requires that leaders work to prepare the organization in advance to ensure continuity during the implementation of succession management policies and strategies. u Some preparatory tasks include: L 1. A collaborative partnership with the represented employees and their business agents 2. Inclusion of the represented employees as part of the succession management La working team OCSD recognizes that many of the features of the Succession Management Program will, of course, be subject to the meet and confer process with the representatives of the recognized employee organizations. Therefore, potential exists for features described within the Succession Management Program document to be implemented differently than originally conceived. L L b L L , L L 34 1 Implementing a Succession Management Program .. Succession Management Oversight Committee ., Succession management is a program that impacts every department and division within the organization. Therefore, it is critical that the program's initial development and implementation take place from a ground-up perspective. This will be achieved by r the staffing of a steering committee. The Succession Management Oversight Committee (SMOG) provides an organizational perspective to the program. It helps guide the process, makes recommendations and ensures that the program becomes a part of the OCSD culture. It is important to understand the purpose of a group such as the Succession Management Oversight Committee. The committee generally consists of a group of high-level stakeholders who are collectively responsible for providing guidance on overall strategic direction. It does not take the place of a sponsor, but helps to spread the strategic input and buy-in to a larger portion of the organization. The SMOC will be the primary driver of OCSD's succession management program, and will be composed of representatives, organizational peers, from all departments and divisions. It will be responsible for communication with the EMT and the organization, as well as bringing information and ideas to and from each individual's respective r business unit. The SMOG will consist of twelve representatives from staff, a Public Information Office representative, and one department director as a sponsor and program champion. The twelve representatives will be appointed by their corresponding department directors, and will be distributed to ensure there is proportional representation across all departments and represented employees. The following table provides an example of ` SMOC staffing and distribution. Department 501 SPMT Management OCE4 Regional Assets and Services 1 General Management 1 Administrative Services 1 1 Technical Services 1 1 Engineering 1 1 Operations & Maintenance 2 1 Information Technology 1 The following describes the SMOC's mission, vision, values and group processes: 35 L Ji SUCCESSION MANAGEMENT OVERSIGHT COMMITTEE OPERATING PHILOSOPHY v Mission I Our commitment is ensuring that OCSD is prepared to meet future challenges by V empowering the staff to step into leadership positions within the organization and preparing the next generation of employees to successfully tackle future challenges and opportunities. Vision and Values L Vision As the committee charged with developing and implementing a winning succession management plan, our vision is to: • Create a clear, realistic roadmap for all employees to pursue higher positions or increased responsibility within the organization and maintain a world-class talent u pool. • Prepare staff to access leadership challenges within the organization. • Create a culture within the organization that desires on-going self-development, ` and increasing internal leadership capacity. Values L As a group of dedicated volunteers who are intent on success, we desire a culture that: • Respects everyone's opinion and is open to challenging the existing norms and practices. u • Values feedback and communication within the group and to all other facets of the organization. - • Strives to seek win-win opportunities through collaboration and discussion. L Process Functioning as a Team • As a large team we will seek input from all team members asking for readiness to v move forward. • We trust that every member of the team is looking out for the best interest of OCSD and creating a winning succession management strategy. • No Idea will be pushed aside because it is different or because we have or have not tried it before. ' Handling Conflict • When conflict arises, we will discuss the differences as a group until we agree on a third great idea or common ground. • Honoring our values, we will allow the group to adequately communicate various points and opinions. 36 Making Decisions . When decisions need to be made, we will ask for consensus among the entire group. Consensus is defined as "able to support the decision,"though it may not necessarily be a member's first choice or desire. .. • We will seek to ensure decisions fit within our mission, vision and culture. . Our decisions will be based on the principle that the Board and management are looking to us for solutions and a roadmap; rather than us looking to them for guidance. Succession Manaaement Policy In order for succession management to become a legitimate part of the management and operations of OCSD, the organization must develop and adopt a formal Board of Directors policy. The policy must encompass the fundamental elements of a comprehensive succession management program. Also, it will serve the purpose of institutionalizing the program and will emphasize its valve and the organization's commitment to the program's success. The responsibility for succession management rests with the full leadership of OCSD. Collectively and individually, the General Manager, the Assistant General Manager and each Department Head, Manager, and Supervisor should be directly responsible for ensuring the policy's implementation organization-wide and in their immediate areas of responsibility. Other OCSD policies should be considered when implementing a succession management policy. It is important to address and change existing policies that may inhibit or limit the organization's succession management efforts. A succession management policy will be drafted, along with other recommended policy changes, to ensure succession management program continuity and validation. Certain policies may require consideration during the policy development phase. These include, but are not limited to, the following: . 13100.00— Employee Separation . B1 10.00—Layoff Procedure . B130.00—Operator Certification Maintenance and Renewal . 13150.00— Recruitment • C10.10 —Classification and Compensation . C30.00 —Appraisal of Performance . C1 10.00—Travel Policy . C170.00— Plant Operators Grade V Certification Pay . D70.00— Retirement . D90.00—Tuition Reimbursement Program . D100.00—Certification Reimbursement Program 37 /y W • D120.00—Professional and Technical Membership and Fees • E31.00— Privacy Information and Human Resources Records U Additionally, since training and development is a key component for succession management, a separate and distinct policy must also be developed and Implemented. This will ensure training fully supports the program. ., As with other proposed changes, it would be necessary for OCSD to present any proposed policy changes through the meet and confer process. Any agreed upon W changes would be implemented with a successor Memorandum of Understanding. i Communication Plan y One of the key aspects essential to the succession management process is maintaining open and transparent communications within the organization, which includes employees, recognized employee organizations, management and the Board of Directors. V In this respect, the Public Information Office will be instrumental in driving the communication efforts throughout the development and implementation phases. A communication strategy will be developed in conjunction with the succession management plan to ensure maximum buy-in, support and proper use of the plan. There are a number of communication vehicles that will be utilized to provide OCSD's stakeholders with a comprehensive overview of the plan. The messages delivered will be timely, informative and consistent. The sharing of information will be encouraged, and feedback will be requested to make improvements to the plan as necessary. The following communication plan example is a starting point, as the communication plan will be revised continuously. L: Communication will be continuous to ensure organizational support throughout the process. The implementation methods include: W 1. Quarterly updates to the Board of Directors and management 2. Regular updates on MyOCSD 3. Informational articles on Pipeline 4. Informational handouts 5. Regular updates provided in staff meetings and at the General Manager's All Hands Meeting 6. Paycheck stutters — 7. Biannual survey to track progress LW8. Solicitation of continuous feedback from employees throughout the development and implementation stages 9. Labor Management Committee (LMC) updates � W L 38 W The successful implementation of the plan will require the collaborative effort of various departments, each focused on their area of expertise. Target Audience 1. Employees 2. Recognized Employee Organizations 3. Board of Directors 4. Management Goals 1. Maintain open and transparent communications with all OCSD employees. r 2. Gain support for the plan through education and transparent communications. 3. Elicit and report feedback during the development and implementation phases. Methods What How Who r Development Phase MyOCSD article OCSD Employees Pipeline article Management LMC Recognized Employee Organizations Board of Directors r Introduction Phase GM's All Hands OCSD Employees MyOCSD article Management Pipeline article Recognized Employee Organizations LMC Board of Directors Implementation Phase GM's All Hands OCSD Employees MyOCSD article Management r Pipeline article Recognized Employee Organizations Paycheck stutter Board of Directors Staff meetings OCSD (Public information and awareness) LMC Maintenance Phase Posters OCSD Employees Handouts Management LMC Recognized Employee Organizations Board of Directors r Job Comoetendes Strategic vision from a company's leaders is what guides all individuals to a common set of goals set forth for an organization. It should permeate all levels within the organization. In order to align individual goals and objectives with the strategic vision of the organization's leadership, the organization must establish competencies. These competencies include, but are not limited to: job competencies, character 39 competencies, leadership competencies, and core competencies. Competencies for successful job performance must be established not only for each position, but for the individuals occupying those positions as well. it Training and employee development become a major component of succession management once OCSD establishes these competencies. Training classes will be e. developed around the competencies required for specific job classifications and job families. An employee's development and growth can then be targeted for more senior or leadership positions within each job family through the assistance of the Employee 61 Development Division and the use of succession management development plans and skills inventories. V Due to the inherent time required to perform this complex task internally—for approximately 138 job class classifications, many distinct job families, four different job categories (management, professionals,paraprofessionals and trades), for over 600 1" individuals—OCSD will utilize, at least initially, outside consultant services that specialize in competency studies, analysis, and modeling. Once the organization has identified and documented all competencies for individuals to be successful in various jobs, OCSD can strategically link its skills assessment; performance management; training; and recruitment and selection processes to these competencies, thus ensuring continuity among processes. L Formal Skills Assessments W An organization needs to identify critical knowledge, skills, and abilities for each position. Formal and informal skills assessments are important tools because they L measure key skills and analyze skill gaps, determining strengths and where improvement is needed. Assessments may be used by both the individual and the organization. Individuals use them to understand their current skill levels, and the organization uses assessments to identify performance gaps and then provide appropriate training and development opportunities. When an organization identifies key skills for each position and provides assessment tools, employees may complete pre-tests or self-assessments to determine their skill level. OCSD's job classification presently list qualifications for each position: knowledge, L ability, education, and experience. This is a general basis on which to build, having identified the required knowledge and skills. However, the job classifications will not align with the organization's competencies, which will be formed during the development of the succession management program. OCSD's competencies will subsequently be included in the organization's skills assessments. Employees will be able to assess their own skills using the appropriate assessment tools, allowing them L useful information for focusing their development efforts. Skills assessments may also be administered as pre-tests in succession management training programs to establish participants' baseline skill level, to be followed with post-tests after completion of the program. W 40 u r In some cases, such as Operations & Maintenance, assessments are currently in development. The organization will utilize software to support skills assessments. Online and machine-scored assessments will be considered. Assessments will be available to employees. Additionally, OCSD will conduct skills inventories to gather information on employee experience and education. Employees will be asked to complete an information form annually, and new hires will submit the form upon hire. The information provided by employees will be entered into a searchable database that allows the organization to identify individuals who meet desired criteria. In this way, potential candidates may be identified by the Human Resources Division and for the succession management program, potentially increasing the candidate pool for an open position. A sample Employee Skills Inventory form can be found in the Appendix. Strategic Goals OCSD has established a strategic plan to define organizational goals, responsibilities, and requirements for the future. The plan is revised periodically to ensure that it meets the changing needs of the organization. The organization's vision, mission, and values were developed to help support this strategic plan, and they represent the organization's long-term commitment to excellence, establishing the necessary framework to maintain world leader status. They also provide OCSD with direction for the development of department and division goals. r The strategic planning process is important to succession management because it identifies organizational priorities. The priorities provide a framework for developing individual employee objectives and identifying the critical positions, as well as the necessary competencies that individuals must possess to achieve organizational objectives. Currently the way that individual goals are developed varies among staff. There are several employee groups that use standardized goals, while other staff members assign employee goals on an individual basis. The goal development process can foster succession management if it is further organized. A standardized approach to goal application will support both succession management and strategic planning efforts. Such an approach includes the assignment of tasks which have direct impact on strategic planning and succession management development plans that enhance critical employee competencies. Succession Management Development Plan Organizations consist of unique individuals with various aspirations, experiences, and skills. To support employee growth, organizations need to offer skill-building opportunities, both formal and informal. Those development opportunities may include 41 r V 1� a variety of training sessions, self-study, education, coaching, mentoring, on-the-job training,job shadowing,job enrichment, and rotation. A Succession Management Development Plan (SMDP) is a written schedule or plan designed to meet an employee's developmental goals. Contrasted with a haphazard approach to identifying opportunities, an SMDP provides a method of systematically planning for training and experience in order to develop the specific skills and knowledge the employee needs. The SMDP specifies the activities for the development and learning objectives, establishing a time frame, any needed resources, and evaluation criteria for each activity. It bridges the gap between present ability and requirements for future positions. Identifying the key positions for which the individual will be developed provides focus to development efforts. The SMDP allows supervisors and employees to identify strengths and interests, establish reasonable goals, and determine where the employee can best contribute and grow in the organization. Because the SMDP is the result of input from the employee and the supervisor, it is realistic and achievable. It is a living document that is reviewed frequently and revised occasionally by the supervisor and employee. U The SMDP program will be implemented by the Human Resources Division. A sample SMDP form is included in the Appendix. Training on how to prepare and monitor a SMDP with staff will be provided for Managers and Supervisors by the Human Resources Division. All OCSD departments will establish SMDP's for staff. After that, supervisors will work with staff to develop and revise the SMDP annually within 30 days of the annual performance review, and within the first three to four months for new employees. Once OCSD's competencies are established, those will be incorporated into the SMDP process. This has impacts with regard to the time associated with the performance management program. Career Paths v Employees aspire to progress in an organization, seeking a variety of experiences and higher levels of responsibility. Defined career paths provide a roadmap to the positions and skills within a function that an employee could potentially follow. Career paths offer a flow of recommended next positions, so employees at any level who desire to move into positions of additional skill and responsibility may focus their sights on a reasonable next position goal and prepare accordingly. Career path options may include 6' supervisory and alternative career paths. Historically, many organizations have relied _ on an individual's own personal initiative and the mentoring of supervisors at various levels to reach the next level. Human Resources Division staff is available to assist employees with career planning. V Career paths provide information on the necessary skills for each role, thereby providing a specific career development plan for employees. Skills assessments support career paths by providing information on skills gaps that can be addressed. Self-directed L career development enables employees to advance as far as they are capable and Li 42 L r r motivated to go with their education and training. Since they offer guidance on how employees may prepare for future options—whether a lateral position (a lateral transfer), a promotion or growth in place—such opportunities for employees to progress are a valuable retention strategy. Career paths provide clearly defined skills criteria for advancement: personal attributes, core competencies of the organization and job function, and technical skills. With established career paths,training and development activities may be selected especially to fit each employee's unique goals, thereby allowing staff to achieve greater levels of technical ability and project responsibility. The Succession Management Development Plan of an employee may be guided by the career path that person wishes to pursue. The following are sample career paths from the Engineering Department: Associate Associate Associate Engineer Engineer I Engineer II Engineer III r r Engineer Sr.Engineer Engineering Supervisor y Engineering Enginea ng Director of Supervisor Manager Engineering r OCSD's job classifications currently define the requirements for each job. With that supporting information, plus competencies, OCSD will implement career paths utilizing r the departments' subject matter experts. The Human Resources Division will establish a template for the departments' use, and departments will develop the career progression and information on professional skills required for each level of the job family. In this way, specific skill sets for each job group and level within the job group will be formally identified and standardized. Knowledge Management r An essential component of a succession management program is transferring the knowledge from an individual employee and retaining it at the organizational level. Training and developing employees to fill critical positions will be insufficient without r strategies to perpetuate such job-specific knowledge. Formal and informal processes are useful in capturing the knowledge of experienced workers before they leave. Knowledge management strategies include apprenticeships, internships and traineeships; best practices;communities of practice; documentation of 43 r V bi processes and procedures;standard operating procedures; contingency procedures; expert interviews;job aids; maps; charts; knowledge audits; knowledge fairs; knowledge maps and inventories; learning games; lessons learned debriefings; mentoring; on-the- job training; storytelling; and training. Some best practices specifically from the utility industry include documenting what has ., gone right and wrong in the past; hiring the successor sufficiently early so that there is overlap of at least three months for training and knowledge transfer before the departing employee leaves; rehiring retirees on a part-time basis to train and mentor new employees; videotaping people doing their work and discussions of experience and knowledge; procedural manuals, standardized recordkeeping, archiving and data systems; and cross-trained staff. OCSD's Recruitment policy B150.00 allows for planned recruitment, the process of recruiting a candidate for a position held by an existing OCSD employee who plans to fir, retire or leave the agency. The policy states that the objective is to ensure an adequate amount of time for cross-training. This provides the opportunity for knowledge transfer before a successor fills a position. Additional FTE considerations should be explored v when designing and implementing this program. Policies and procedures are also an essential tool for transferring valuable operating and management information to future generations. They are a very effective method to V lessen the effects of seasoned and experienced employees leaving the organization over a relatively short period of time. Due to OCSD's responsibilities in public health and the environment, policies and procedures are fundamental to responsible management and operations. Additionally, the more that fundamental activities, - systems, and programs are formally documented and trained on, the less management and staff will need to focus on inconsistencies, mistakes and emergencies caused by non-existent, obsolete or undisclosed procedures. Currently, OCSD's departments differ in regard to preparation of policies and procedures for core functions and systems, with some having very strong systems and others having few or none. Departments with low overhead may need support from outside services or department's with existing expertise. V Department-specific knowledge for all core functions will be documented in individual departmental policies and procedures. HR will secure the services of a consultant to 4 create a template for these documents and a working list of procedures to be documented based on discussions with divisions. Each department will then be _ responsible for producing, validating, implementing, and updating a comprehensive reference manual of its departmental and divisional processes and procedures. This t" will include lists of learning points for new employees, who will be provided with the checklist by their supervisor and empowered to pursue the knowledge and skills they need to acquire for their positions. v 44 r V r r Critical Positions By the very nature of the work at a wastewater collection, treatment and disposal facility, some positions will be viewed as more critical than others. There are a number of factors that may be included in determining just which positions are more critical. These factors may include: permit compliance, regulatory compliance, leadership, management, supervisory, time sensitivity, retirements, etc. Whatever the valid reason, OCSD must identify which positions it deems critical to organizational success. r The Succession Management Oversight Committee will work to identify critical positions within the organization as soon as possible, analyzing retirement forecast data and statistical data from OCERS to assist with this task. The data will allow the SMOC to look at retirement patterns and forecasts for specific groups such as the Executive Management Team (EMT), Managers, Supervisors, or even by job classification. In addition the data may be sorted by department or division. OCSD, for example,will look at how many supervisors are predicted to retire in the Operations & Maintenance Department over the next five years (Figure 16). Five-Year Forecast Operations & Maintenance Retirement .Posorl #of Potential ,Avg.'Yn;of 'Probabifily Retirements Sen4ce -Hi hi eratione Supervisor 1 25 Medium Maintenance Supervisor 6 25 r Medium Operators Supervisor 4 27 Medium Senior Maintenance Supervisor 1 36 on � __ Figure 16 r Once the critical positions are validated by the EMT, detailed organizational charts (Figure 17) will be developed that identify these positions and outline when retirements are likely to occur. As OCSD's job competency analysis is completed, competency data r will be added to the organization charts to show which knowledge, skills, and abilities will be required to be successful in each of the critical positions. Once critical positions are identified, retirements are forecast, and competencies are defined, OCSD will be r able to evaluate its current talent pools and encourage the proper development of lower level staff to prepare for future positions. r r 45 ses ses Orange County Sanitation District Plant No.t Operations Division-830 ses a was u.w oMMrGs,,,r M..rww us.ww ,e,, rosel nqn, ,N aureYa pylnrasnxv MnorYwtW, bvl,aYurTv GYlrorabn.11rv. MpnrnN MMA„ arnuser. Cps, $,,. YMMv EM! YMCpv SMgwa LMMa YMCpa Mnes. z Y.MR,m' YMLa,V &.P.KNi, M(p0 W,MN .a_ __ YMM.ry MCpp MCOw/npl M:pY M.oese"T Ya4w,Pg1 MR„m MMI,Pi m wees.—s.num se �wK Figure 17 ses Building on Existing Programs Training and Development Filling key positions that open up due to attrition (retirement, resignations) and changing business needs is an ongoing necessity. For this reason, it is important to focus on training and development for the purpose of preparing replacements. w OCSD will utilize both formal and informal skill-building opportunities for all interested staff through training sessions, self-development, certifications, tuition, coaching, and mentoring. There are additional opportunities that should be explored and developed, ses such as job shadowing, rotations, and/or cross-training. OCSD will devote the necessary time and resources to ensure all employees have the necessary knowledge and skills to fill its future positions. The training opportunities will include and/or see incorporate the following: Is Identified competencies (general and job-specific) for executives, managers, and staff 46 ses r • Prioritized training options based on the organization's strategic goals and objectives • Committed training funds fortraining need to promote staff readiness for future job openings and opportunities Defined career paths based on employee input • Career development program (SMDP)for employees Developmental ("job stretchy assignments Job rotation • Mentoring Additional tools that may support individual training and development: • Skills Assessments are used to evaluate developmental plan progress and ensure that a transfer of knowledge has occurred. The Operations and r Maintenance and Regional Assets and Services Departments are currently utilizing skills assessments to evaluate staff abilities. These assessments are incorporated into the performance management program as evaluation criteria. r Skills assessments can also be used for succession management to assess the knowledge, skills, and abilities of employees on development plans. The results can be linked with individual goals through the performance management program. • 360 Degree Feedback will be used to obtain information about employee .. performance from a variety of stakeholders. In order for performance evaluations to be utilized effectively, it is important that they are objective and honest. A more thorough and less biased evaluation can be obtained by using a number of ., observations from a variety of relevant sources to evaluate employee performance. The current performance review system includes a feature for obtaining multiple reviewer comments. This feature could be implemented as part of the current performance review process. The organization's training will be linked to developed job competencies, succession management development plans, organizational goals and objectives, cross-training objectives, and performance management. This establishes and validates career paths and talent pools. This relationship provides for the development of staff. r Performance Manaaement A performance management program is an important aspect of any succession management program because it identifies top talent within an organization and evaluates individual progress against established competencies and performance plans. High performers are identified through evaluation results. Individual strengths are enhanced and improvement areas are addressed by establishing plans for future performance. r 47 IV The OCSD Performance Management Program provides a foundation for future performance management needs. The program supports succession management objectives through the performance evaluation process and Performance Improvement Plan (PIP) program to help close gaps that exist. Employees are rated on performance competencies and goals through performance evaluations. High performers are identified by their overall ratings at the end of each review cycle. Improvement areas .. identified through the performance evaluation process are addressed through the PIP program if needed. V While the current performance management program offers support to succession management efforts, there are areas that could be enhanced to align these efforts further. The following items will assist with the successful implementation of OCSD's 6. succession management program: • Succession Manaaement Development Plans provide a framework to foster the knowledge, skills, and abilities of employees. Potential job successors are placed on specific plans to obtain the competencies that are needed for a future vacancy. The plan may include training opportunities, working with a mentor, and coaching. V Existing OCSD performance reviews may be modified to include the associated development plans. - L It is important to consider any employer obligations associated with implementing changes to the performance management program. OCSD has agreed, through the meet and confer process, to utilize the current performance management program 4 through June 2007. In order to make changes to the performance management program, it would be necessary for OCSD to present the proposed changes through the meet and confer process. Any changes to the agreed upon process would be implemented with subsequent Memorandums of Understanding (MOU's), effective sometime after June 2007. Staffinc V Recruitment, selection, and employment strategies include actions to recruit, hire, and L retain qualified candidates. The organization supports promotion from within the organization, seeking to provide interested individuals with growth and development opportunities. Enhancing OCSD's current staffing process will strengthen the organization and help OCSD to migrate toward best practice recruitment strategies. Implementation of new technologies, retiree re-employment, temporary work, and limited-term staffing can further enhance the system. v Equally important is a retention strategy. Once OCSD has hired the best available candidates at that time, it must develop and implement strategies to keep them. This will include the development of a formal retention plan, which incorporates effective orientation programs, skills to ensure frontline supervisors can facilitate transition into the organization (training, etc.), assignment of interesting and challenging work, I reduction of negative workplace practices, competitive compensation and benefits, and opportunities for growth and development. I Y• 48 V r Organization interventions are another technique that will be utilized in this effort. They include permanent redeployment of staff to other business units or plant locations (current practice in Divisions 850 and 860);temporary assignment of staff; new or modified organization structures; the establishment, implementation, and necessary training associated with a mentorship program; and mandatory training for employees in identified key positions. Alternative approaches may need to be considered. For example, the Sanitation Districts of Los Angeles County participates in a funding program for students in master's of science in environmental engineering programs, funding up to$20,000 for r related expenses. Repayment is not required if the graduate then completes a three- year employment commitment with one of the member agencies. r The future of staffing and selection at OCSD must focus on hiring the best candidates and support retaining existing staff. This includes the establishment of competencies, workforce planning strategies, talent pipeline, skills assessments, linkage to r performance management, training and development, and compensation and benefits. Comoensation and Benefits An organization's compensation and benefit plan is one of the foundations of its human resources system, and is a core element to recruitment, retention, and a succession management plan. The manner in which OCSD compensates its employees is viewed as an investment in its people, such that the organization attracts the right people, and influences and motivates their performance and contributions in a manner that aligns with OCSD's mission, vision, and values. Classification Effective and accurate job classifications support a succession management environment. Existing job classifications and class specifications will be evaluated in the context of competency-based model. Considerations are the streamlining of job duties for greater efficiency, establishing of clear job competencies, modifying job classifications to incorporate new duties, creating new job classifications as needed, redesigning job classifications to accommodate new work patterns or processes, and reallocating job classifications to meet changing business needs. The level of knowledge and skills required should be clearly articulated in each group of OCSD job families. This clarity will provide the succession management program with a sound basis from which to operate. An important mechanism for addressing position requirements is the reclassification process. There are established guidelines utilized by Human Resources for the purpose of evaluating management-initiated reclassifications. Also, employees have an avenue to initiate a reclassification evaluation, which is discussed in the Memorandum r of Understanding for each represented group. The reclassification process must be applied in concert with required competencies and skills assessments. Care must be r 49 L taken with the utilization of a reclassification process so that it does not inhibit a succession management environment, yet still provides the organization with the ability to make changes to non-vacated positions as its business needs change. L Talent Pioellne L The key to a great succession management program is maintaining strong talent pipelines for a variety of positions throughout the organization that may be exposed to a u high rate of retirement such as upper management, trades, and professional positions. Talent pipelines consist of groups of individuals who have worked to prepare themselves to be competitive for future positions as the organization experiences L attrition and retirement. Once identified,these groups of individuals are presented with opportunities for formal development through organization-sponsored training; seH- development through the use of tuition and certification reimbursement; personal L growth; coaching and organization mentorship programs, and formalized cross-training between departments. V In order to maintain talent pipelines, it is essential that employees' knowledge, skills, and abilities (KSA's), and competencies are documented, tracked and assessed. Employees will record their current KSA's and competencies using a skills inventory. L The skills inventory will be maintained in a talent management database and updated at least once per year by the employee and validated by their supervisors where required. Succession Management Development Plans (SMDP's) will assist and guide employees in developing the necessary competencies to be successful in future leadership positions. The SMDP will be incorporated into the performance management system. Skills inventories will then be used by the Human Resources L Division and management as a tool to identify and track prospective internal staff through the talent pipeline. As the respective positions become vacant, individuals - within the talent pipeline will be given the chance to interview and compete for jobs L based on their KSA's and a pre-determined score on a skills assessment. In order to effectively keep the succession management program serving the L organization and maintain ready talent pools, OCSD executives, management, and the Succession Management Oversight Committee must monitor the system. In any recruitment for advancement, there will be a successful candidate and unsuccessful L candidates or applicants. Regardless of the recruitment outcome, it is essential to provide a professional, merit-based recruitment process and to allow that process to run to completion for the sake of system effectiveness. If not, developing talent pools is L jeopardized due to a lack of participation. In addition to maintaining internal talent pipelines, OCSD will move to a proactive model of recruiting to supplement the succession management process when necessary. Traditionally, the organization has relied heavily on job postings to attract applicants. With the projected shrinking of the labor pool, however, it will become necessary to actively source candidates through other avenues. The key to a proactive model of L recruiting is the ability to establish and maintain relationships with top talent over time L 50 L r r so that when positions open up at OCSD, that talent is ready to come to work for the organization. The following are some examples of a proactive recruiting model: • Internet sourcing • Direct sourcing of current employees from other public agencies or firms • Campus networking including recruiting • Networking through user groups or professional associations Tradeshows and conferences • Job fairs r Annrenticeshios r In an effort to ensure that OCSD is able to maintain a constant pipeline of qualified talent within the trades, OCSD will embark on a comprehensive apprenticeship program. This program will involve partnering with local community colleges or trade schools for educational requirements while providing apprentices the hands-on work experience needed. This program is intended to work hand-in-hand with the employee r development program and internal recruitment process. Only apprentices who are able to demonstrate the necessary knowledge, skills, and abilities through skills assessments and the interview process may be considered for full time employment. An apprenticeship program must be viewed with similarity to an internship program, with the major difference being that the focus is in the trades. OCSD has an established internship program, which assists with the development of professionals. Operations & Maintenance, which includes the Regional Assets and Services Department (refer to Figure 6), is one of the departments most impacted by projected retirements over the r next 10 years. Currently, Operations utilizes the Operator-in-Training classification as a mechanism of staffing that business function with non-certified plant operators. Similarly, this concept must be integrated into the Maintenance trades within the organization. It is important to provide the trades with a program that produces trained replacements. Through the establishment and updating of competencies and skills assessments that provide the customer with information on the level of each apprentice's knowledge, skills, and abilities, OCSD will produce a pool of qualified applicants from which to replace the workforce. Apprenticeship programs will run for a specific duration of time and will include structured formal education. Apprenticeship planning will be based on three to five years attrition and retirement projections, and the appropriate number of positions must be considered during the budget planning process. The organization may consider approaches like limited-term employment. Similar concepts are currently used with the contractor Integrated Project Management Consultants (IPMC). This will allow the organization to develop a talent pool without increasing the overall FTE count. Additionally, a policy will be developed to assist in the administration of an 51 apprenticeship program. The administration of an apprenticeship program should be the primary responsibility of the respective business units utilizing the resources. OCSD recognizes that many of the features of the Succession Management Program will, of course, be subject to the meet and confer process with the representatives of the recognized employee organizations. Therefore, potential exists for features described r within the Succession Management Program document to be implemented differently than originally conceived. r Internships Over the years OCSD has maintained an active internship program designed to provide students an opportunity to enhance their schooling with real-world work experience. OCSD currently allots 13 internships throughout the organization. These internships - are generally performed in the areas of Engineering, Public Administration/Policy, and the Environmental Sciences; and report to several different divisions of the organization. Figures 18 and 19 provide summaries of the current numbers from OCSD's internship - program. Area of Study #of Interns Environmental Sciences 5 Engineering 6 — Public Admin/Policy 2 Figure 18 r Interns by Division 5 a � 3 U i E 2 0 Milo to 610 ON 620 Gry 630 Dv 660 M 760 Figure 19 OCSD's internship program must be part of a student's educational plan to explore a — given career path that integrates classroom study with supervised work. It will allow 52 _ r r students to explore opportunities at OCSD, establish professional relationships, receive mentoring, and provide OCSD with innovative ideas, and a motivated low cost workforce. As the skilled labor pool continues to shrink, intems will become more and more valuable to OCSD. There are several benefits to having a strong internship program: The program allows OCSD to shape, mold, mentor, and train college students to gain the experience required to perform the entry-level jobs at the organization • Provided that proper budgeting is done, the internship program acts as a well- qualified talent pool for entry-level positions r • OCSD has the ability to evaluate intems for fit, skills, and attitude prior to hiring them as regular employees • Students that perform well and enjoy their internships at OCSD are more likely to spread that information to other students on campus, helping to create a larger talent pool To improve the current internship program, OCSD will create structure within several areas to ensure that students are being utilized, educated, trained, and mentored in the manner that supports their educational goals. The following will be implemented: t. An outline of specific projects intended for the intern will be provided at the beginning of the internship. This will allow the intern to understand the r expectations for the assignment. 2. A formal or informal feedback system will be established so that supervisors can track progress, coach, mentor, and educate interns. This allows intems to know exactly where they stand and ask for guidance when needed. 3. The Human Resources Division will create a tracking database or spreadsheet to ensure that all students maintain full-time active enrollment in college. This database will be updated twice per year when students will be required to submit verification of enrollment forms from their universities. 4. OCSD will maintain a greater campus presence than it has in the past. OCSD will attend one to two campus career day events per year at major accredited universities in the area. 5. The Human Resources Division will partner with the Public Information Office (PIO) when applicable to promote OCSD's intern program as part of the PIO's educational outreach activities. 6. OCSD will offer internships in several categories, including management internships, technical internships, and engineering internships. 7. Program administration details will be addressed, such as recruitment and job fairs costs, headcount and monetary compensation. 6. Program performance metrics will be established. r Resources 53 r As the succession management program is developed and initial project plan activities begin to take place, it is important to project and plan for the associated costs. Some of the tasks that have been identified will be accomplished through the use of external — resources. These tasks were identified based upon OCSD not having the internal resources or expertise to accomplish. Figure 20 demonstrates some of the components of the project plan that will raise the need for external resources, such as consultant services, software, and training. Planning and developing a comprehensive succession management program will require activities that would be most successful with professional input and direction. — Cost of Outside Resources Total Cost: $195,000 $80,000 — — $70,000 $e0,000 $50,000 oat o $40,000 relnl 08ra $30,000 ai I-- vontm IC nt $20.000 llwa Cow — C moult it $10,000 — ....__— Coat _ _ maul -i----- Cost Stalling JOG Skills KnowledgeTraining Selectionn Competencies Assessment Management t Figure 20 _ In addition to the external costs for the succession management program, it is critical to understand the potential internal time impacts associated with the program. Many of the initial project development activities will require significant time from all departments to plan, develop, and implement. This is an organizational endeavor. Figure 21 illustrates the amount of estimated time that the initial project development — activities will require of the Executive Management Team (EMT), the Succession Management Oversight Committee, and Human Resources (HR). It is estimated that a total of 1,048 hours will be needed to complete the initial startup of the succession r management program. 34 Total Hours Projected for Initial Succession Planning Activities for EMT. Steering Committee and HR 110 350 OEM ■Steering Committee O HF � $88 1,048 TOTAL HOURS Figure 21 Figure 22 displays the estimated amount of time that the initial project development activities, sorted by task, will require of the departments and divisions of OCSD. It is anticipated that a total of 14,950 hours will be required of OCSD employees to complete the initial startup of the succession management program over a two year period. This recurring commitment will be less. It is important to note that much of the time illustrated is for tasks that are currently being done—for example, performance management and training. Portions of the anticipated project hours will occur during FY07/08, for example Knowledge Management. 55 Total Hours Projected for Initial Succession r Planning Activities for Departments and Divisions p Initial Planning B Design 5eo aaa Lass 0 Kn eMe Management r ax OTrainirg 3.1 D Datelop a Workforce Plan r SAW ■Perlonnance Managemenl8 gig Goals r e Compelencies •Tracking,Measuring& Repoairg r aAa4 14,950 TOTAL HOURS Figure 22 r It is important that the organization and its Board of Directors fully understand and commit to the time and money needed to facilitate a productive succession r management program. r r 56 r r r Continuous Improvement r An important component of any organizational initiative is its ability to ensure the continuation of the program. Therefore, the process of monitoring, evaluating, and revising the program and process must be continuous. Without tracking data and r measuring performance, continuous improvement of the program cannot be made;and it is likely that the program will become a passive and reactive solution, which may not have a lasting impact or yield the desired results. r Tracking r The organization currently has experts in tracking, measuring, and reporting on projects —the Project Management Office (PMO) in Engineering. The use of existing assets and resources provides a balance between program success and the reduction of unnecessary expenditures or misallocation of labor. Utilizing the PMO to project manage the program supports the notion of distributing the tasks and responsibilities of this program throughout the organization. r Monitoring With executive management being the key stakeholder in the process, the Executive Management Team must take the role of monitoring the program to ensure progress, departmental and divisional participation and compliance, and manager and supervisor support. An instrumental approach would be the inclusion of goals and objectives into the project management process that are directly linked to the organization's succession management program. �' Measuring The primary responsibility for measuring and evaluating the success of the program falls with the Human Resources Division. It is here that the organization can accurately measure in areas such as turnover rates (increase, decrease, or stabilization), retirements, quality of candidates competing for positions, skills assessment outcome, performance management, training and development, and costs. �' Regoriing The Succession Management Oversight Committee is the primary tool for analyzing and r reporting the program's progress to the organization. This includes staff and management. This will be accomplished in concert with the tracking phase of the program via quarterly comprehensive updates to the Executive Management Team. 57 L W Imolicntlons In many organizations, Human Resources is the primary owner of succession L, management programs. This is a mistake. The program requires multiple owners—not only Human Resources, but the Executive Management Team, Managers and employees at all levels. Just as OCSD involved all employees in the vision, mission, L and values, it must also involve all employees in the succession management program. It is not realistic or desirable for management or the Human Resources Division to have 6w sole responsibility for the development of succession management. There is simply insufficient time for either group to be able to accomplish this. The Human Resources Division provides standards, tools, and processes; and business units must play an L, important role in the implementation and continuation of the program. The Executive Management Team monitors the program and ensures accountability from managers and supervisors. L V L IL 4 L Lf I � Yd u it W 58 I ' u r r Conclusion As mentioned in the Executive Summary, the U.S. Bureau of Labor Statistics projects a shortfall of 10 million workers by 2010. The public sector is projected to experience the impact of this shortage more quickly and significantly, since the average age of public sector employees is higher than that of employees in the private sector. Water and wastewater industry statistics indicate that 50 percent of employees will be eligible for retirement in the next 10 years, and 25 percent within the next five years. It is essential that OCSD plan for the future staffing needs of the organization by implementing a succession management program. An effective succession management program will enable OCSD to identify and prepare the right people for the right positions at the right time and to identify, secure, and grow ,r the organization's knowledge base, leadership, and staff. The program will ensure a continuous flow of qualified labor. Succession management is insurance for the future. Potential successors will be identified early and given appropriate training so that disruption is minimized and success is maximized when the time comes for their move to roles within the organization. OCSD can enhance retention and development of key employees by creating a succession management program that actively and successfully aligns employee career development with the organizational strategic goals. r There are numerous benefits to both the employee and the employer associated with a strong succession management program. The benefits to OCSD include stable performance, continuity of leadership, pools of skilled workers, maximized employee potential, attraction of prospective employees, retention through growth, development and advancement, and enhanced knowledge transfer. The benefits to employees include improved communication, morale, and effectiveness; " loyalty and commitment; skills development and directed training; challenges; growth; increased self-confidence;and improved working relationships. OCSD recognizes that many of the features of the Succession Management Program will,of course, be subject to the meet and confer process with the representatives of the recognized employee organizations. Therefore, potential exists for features described within the Succession Management Program document to be implemented differently than originally conceived. Key strategies for implementation of OCSD's Succession Management Program: Succession Management Oversight Committee Workforce planning • Competency models and assessment • Skills assessments Succession management development plans 59 L V • Integration and expansion of existing programs If OCSD is to remain competitive and position itself in preparation for the future, it must L implement and maintain a succession management program. This Succession Management Program is OCSD's passport to the future. I� V L IV 1/ IV L 1� 7 L L 60 W r Sources r Association of Metropolitan Water Agencies (AMWA) and National Association of Clean Water Agencies (NACWA), The Changing Workforce... Seizing the Opportunity. r AMWA and NACWA, 2006. Eastern Municipal Water District, Professional Career Development Plan. 1998. r Hastings, Sandra, Succession Planning: Take Two. ASTD Infoline, May 2004. Irvine Ranch Water District, IRWD Succession Plan. Draft, 2006. Kraft Foods North America, Human Resources Planning Guide. November 2001. OCSD, IDP Handbook(Individual Development Plan). OCSD, September 1996. Public Resource Consultants, Orange County Sanitation District: Succession Plan and Career Investment Program (Phase 1), July 2005. Wolfe, Rebecca Luhn, Systematic Succession Planning: Building Leadership from Within. Menlo Park, California: Crisp Publications, 1996. r r r r 61 V IM Acknowledgements Ir This project is the result of much research and consideration, and the Orange County Sanitation District (OCSD)wishes to recognize those who have made significant contributions to its accomplishment. •+ Richard Spencer inspired and guided staff to create this document. Thanks to James D. Ruth, OCSD's Interim General Manager, for providing focus and direction to the .. project and ensuring organizational commitment. OCSD appreciates the willingness of fellow public agencies to share information. v East Bay Municipal Utilities District, Columbus Water Works, and Irvine Ranch Water District have provided successful models for OCSD's consideration. AMWA and NACWA produced a manual that sparked many of the ideas for OCSD's proposed u program. Public Resource Consultants (PRC) contributed to the evolution of OCSD's Succession Management Program with foundational work conducted in 2004 and 2005. Marilyn Leuck of PRC made OCSD aware of its own existing programs that support succession management and potential barriers to implementing a successful program. The following OCSD staff contributed to this document: Y� • Erika Diaz, Office Assistant • Kim Erickson, Human Resources Analyst L. • Janine Filter, Human Resources Analyst • Laurie Klinger, Senior Human Resources Analyst L • Laura Maravilla, Human Resources Analyst • Denise Martinez, Senior Human Resources Analyst • Andrew Nau, Senior Human Resources Analyst y • Jeff Reed, Human Resources and Employee Relations Manager • Richard Spencer, Human Resources Supervisor— Succession Management Project Leader • Ann Sullivan, Principal Human Resources Analyst December 2006 Human Resources Orange County Sanitation District V W 62 v ,,, ,J ;� J Appendix �� `� ,� ' �,� 't '�j `'� ,� J �` ,� `� ` � �� `� V Sample Employee Skills Inventory v Employee Name:_ Emp. No.: Hire Date: Current Job Title:_ — W Education Highest Level of Education Completed: (Select from list.) If"Other", please list: _ Major(for bachelor's degree or above.): W Degree in Progress: (Select from list.) Anticipated Graduation Date W Professional Certifications Examples include, but are not limited to, the following: CWEA (Collections and Mechanical Maintenance), Registered Professional Engineer (PE), Engineer in Training (EIT), Microsoft Certified Software Engineer(MCSE), id Professional in Human Resources (PHR), National Association of Purchasing Management, National Institute for Automotive Excellence, American Payroll Association, Certified Computer Examiner (CCE) Please list all current professional certifications below, including level/grade where appropriate. _ L. Licenses or Certificates V Examples include, but are not limited to, the following: Class B Driver's License, Class A (endorsements), Forklift Please list all current professional certifications/licenses below, including level/grade where appropriate. u Trade or Occupational Program Certificates Examples include, but are not limited to, the following: .a Heavy Equipment Maintenance/Repair, Drafting, General Office, Word Processing, Welding, Landscape Design W Please list all trade or occupational certificates and issuing institution below._ 61 V 64 W r Special Trainina and Experience ❑ Supervisory Training Program ❑ Lead Role Training Program ❑ Clerical Training Program ❑ Other Training Program(s) ❑ Welding Experience ❑ Other Work Experience Please list prior positions held, beginning with the most recent. Job Title Organization r Personal Career Goals 1. Where do you see yourself in 5 years? 10 years? r 2. Would you be interested in becoming a supervisor, manager or director? 3. What are you doing now to help you reach your career goals? r Additional Qualities or Comments r r r r r 65 u u Sample Succession Manaaement Development Plan V Employee Name: _ Emp. No.: Department: Review Date: Current Job Title: y Succession Management Development Plan Required For: ❑ Individual Career Development ❑ Newly Promoted Supervisor ❑ Target Position Short Range (1-2 Years) Career Goals: W Long Range (2-5 Years) Career Goals: u On-Job-Training (OJT) Assignments: Length: Target Completion Date: W Cross Training Recommended: W Length: Target Completion Date: Formal Classroom Training: V Technical Manuals/ Regulations: V V Other Suggested Supplemental Reading: W W V 66 V Proposed Future Developmental Tarnet Areas (Identify areas in which you would like to develop in the future.) r Supervisory and Managerial Employees: .. ❑ Communication skills ❑ Problem solving ❑ Motivational techniques ❑ Decision making ❑ Delegating ❑ Documenting employee performance .. ❑ Managing resources ❑ Organization's policies/ procedures ❑ Time management ❑ Dealing with difficult people ❑ Team building ❑ Project management ❑ Other areas (please specify) All Other Employees: ❑ Communication skills ❑ Coordinating work projects ❑ Technical expertise/job procedures ❑ Quality assurance ❑ Problem solving ❑ Diversity in the workplace ❑ Dealing with conflict ❑Team building ❑Time management ❑ Security procedures ❑ Leadership skills ❑ Resource acquisition ❑ Planning and organizing work ❑ Safety awareness ❑ Other areas (please specify) Review and Signature I have reviewed this succession management development plan and I am in agreement with this training program. Employee Signature: Date: Immediate Supervisor: Date: Department Head: Date: r Human Resources Supervisor: Date: 67