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HomeMy WebLinkAbout2007-09 ADM MINUTES OF THE REGULAR MEETING OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, September 12, 2007, at 5:00 P.M. A meeting of the Administration Committee of the Orange County Sanitation District was held on September 12, 2007, at 5:00 p.m., in the Sanitation District's Administrative Office. (2) Following the Pledge of Allegiance, a quorum was declared present, as follows: ADMINISTRATION COMMITTEE STAFF PRESENT: 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 Mike White, Controller Bill Dalton Lille Kovac, Committee Secretary Jon Dumitru Norbert Gaia Joy Neugebauer Laurie Klinger Chris Norby Jeff Reed Ken Parker Juanita Skillman Sal Tinajero Rich Spencer Jim Winder Rich Freschi OTHERS PRESENT: Doug Davert, Board Vice Chair Brad Hogin, General Counsel Jim Ferryman, Board Chair Ed Soong, PRAG Victor Hsu, Fulbright&Jaworski, LLP DIRECTORS ABSENT: Darryl Miller ELL '' CQ (3) APPOINTMENT OF CHAIR PRO TEM ORE OF THjC6OUNTKI'B TTTq ON OSRTRDICT No appointment was necessary. (4) PUBLIC COMMENTS SEP 26 2007 There were no public comments. BY• (5) REPORT OF THE COMMITTEE CHAIR Chair Waldman did not give a report. (6) REPORT OF THE GENERAL MANAGER General Manager, Jim Ruth, did not give a report. ' Minutes of the Administration Committee September 12, 2007 Page 2 (7) REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES Lorenzo Tyner, Director of Finance and Administration, provided a brief summary of various department activities; i.e., Owner Controlled Insurance Program(OCIP); Treasury management; investments, Comprehensive Annual Financial Report; staffing; Workers' Compensation program; and Proposition 218 notices. (8) REPORT OF GENERAL COUNSEL Brad Hogin, General Counsel, reported on the current negotiations with the Department of Education for the recovery of fair share of sewer fees for the last four years and future years. (9) 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 June 13, 2007 meeting of the Administration Committee. b. ADM07-41 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to adopt Resolution No. OCSD 07-_, Appointing Representatives for the District to Act as Agents on Its Behalf in the Small Claims Courts of Orange County Judicial Districts, and Repealing Resolution No. OCSD 04-12. C. Item pulled for discussion. d. Item pulled for discussion. e. ADM07-44 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to adopt Resolution No. OCSD 07-_, Terminating the California Public Entity Insurance Authority Joint Powers Agreement. END OF CONSENT CALENDAR f. ADM07-42 Director Davert requested clarification of methods available to ensure payment of permit fees. It was then, MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to approve the discharge of unoollectible debt owed by Expo- Dyeing & Finishing in the amount of$151,370.36. g. ADM07-43 Director Davert inquired about the possibility of securing debts for accounts that have defaulted, and directed General Counsel to investigate legal avenues. Minutes of the Administration Committee September 12, 2007 Page 3 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to approve a Deferred Payment Agreement with Pacific Ocean Dyeing & Finishing in the amount of$224,981.99, for the collection of all charges and fees owed for sewer service charges and industrial discharge permit fees,for a two-year period, plus interest of 10%per annum. (10) ACTION ITEMS a. ADM07-45 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to authorize issuance of up to$300 million in new fixed-rate Certificates of Participation debt. b. ADM0746 MOVED, SECONDED AND DULY CARRIED: (1)Approve a Consultant Services Agreement with Fulbright&Jaworski, L.L.P., to provide bond counsel services for a one-year period effective September 12, 2007, in a form approved by General Counsel,with option to renew for four one-year periods for an amount not to exceed$200,000 per year, and, (2)Approve a 10% contingency per year($20,000). C. ADM0747 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to authorize the General Manager to procure bids for the replacement of the Certificates of Participation Series 2006 Standby Purchase Agreement. (11) INFORMATIONAL ITEMS a. ADM0748 Succession Management Program Update Human Resources and Employee Relations Manager, Jeff Reed, briefly reviewed the background and the history of the Succession Management Program. Employee Relations Supervisor, Rich Spencer, and Laurie Klinger, Human Resources Specialist, presented details of the program and its projected timetable. (12) CONVENE INCLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54957(b)(1). There was no closed session. (13) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There were none. (14) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR Minutes of the Administration Committee September 12, 2007 Page 4 ACTION AND STAFF REPORT There were none. (15) FUTURE MEETING DATES The next regular Administration Committee meeting is scheduled for October 10, 2007, at 5 p.m. (16)ADJOURNMENT The Chair declared the meeting adjourned at 5:35 p.m. Submitted by: Lilia Kovach Committee Secretary HAdepra9endaNdmin Commit e1090T091207 Administration Minut s.doc ' Distributed at the Fi ance & Administration 0 �y Meeting September 12, 2007 MEMORANDUM TO: Administration Committee James D. Ruth, General Manager FROM: Lorenzo Tyner Director of Finance and Administrative Services SUBJECT: Administrative Services Department Update As there are items that are now posted directly to the Directors' Web-site or may not have been directly discussed during Committee, I would like to take this opportunity to provide a summary of some recent Administrative Services Department activities. 1) Owner Controlled Insurance Program (OCIP) In June, staff presented the results of feasibility study and requested the release of a request for proposals for an Owner Controlled Insurance Program (OCIP). An OCIP is a technique for consolidating the Workers' Compensation insurance and general liability insurance coverages for most participants in a construction program, thus underwriting the project itself, rather than underwriting each of the individual companies participating. The OCIP Feasibility Study is located within Director's website. Staff is currently in the process of completing a formal bid process on the potential selection of an insurance broker(s)to broker workers' compensation, general liability, and possible all risk property covering major selected projects within the District's current ten-year$2 billion capital improvement program, and to administer the OCIP. Staffs recommendation on this program will be presented to the Administration Committee in October. 2) Treasury Management Posted on the Director's website in August is the Consolidated Financial Report for the Fourth Quarterly Ended June 30, 2007. Included in this report are the Quarterly Investment Management Program Report, the Quarterly Interest Rate Exchange Agreement (Swap) Monitoring Report, and the Quarterly Certificates of Participation Report. There were no significant changes to these reports provided from previous reported quarters. The fourth quarter financial review portion of this report will be presented in November along with the audited Comprehensive Annual Financial Report. 3) Investments Annually, staff prepares an Investment Policy manual that includes the investment policy, a summary of the investment authorization, Treasury Management procedures, a certification letter from the District's money manager, PIMCO, to abide by the investment policy, a copy of the Board resolution authorizing the investment of funds, the quarterly investment program monitoring report as of June 30th, and relevant sections of the California Government Code pertaining to the investment of public funds. In July the Board readopted the District's Investment policy for FY 2007-08 with no changes. This policy will be posted to the Director's website. 4) Comprehensive Annual Financial Report OCSD independent auditors have nearly completed their examination of the District's financial statements for the year ended June 30, 2007. Each year the Administration Committee reviews the results of the audit and corresponding Auditor's report to the Committee. Atpresent no material weaknesses have been identified. The Auditor's full report will be presented at the November Administration Committee meeting. 5) Groundwater Replenishment System (GWRS) Review An independent audit firm has nearly completed its review of the GWRS. Preliminary findings will be reviewed by the Committee Chair, selected Committee members and staff. The final report will be presented to the Administration Committee at its October meeting. 6) Staffing The Employment Status Report is posted monthly to the Directors Web-site. For the period of March 2007 through September 2007, staffing has remained constant as figures have averaged as follows: Average number of new hires: 3 per month Average number of separations: 4 per month Average number of promotions: 3 per month As part of the District's 2007.08 Budget, authorized staffing has been reduced by 10 Full- Time Equivalent(FTE) from 644 to 634. All departments are managing their adjusted resources accordingly. 2 7) Workers' Compensation As a result of transition, administration of the District's Workers' Compensation program has been temporarily transferred to the Human Resources Division. As of August 31, 2007,total open claims equal 33, with a total cost of$1,775,541, a 10% increase from the$1,616,597 reported in 2006. A more comprehensive report will presented a later Committee meeting. The 33 claims that are currently open include: • 5 claims that are medical only; • 6 claims that have all been denied and are in litigation; • 6 claims that are in active treatment; and • 14 claims that are in the settlement phase, 9 of which are pending future medical provisions. 8) Proposition 218 Notices 2007-08 is the final year of the 5-year approved rate program. Although exempted from public vote of approval, California Proposition 218 requires the District to notify all property owners upon its intent to raise Sewer Service Fee user charges. Staff will again be proposing a five- year rate schedule due to the cost of mailing to 550,000 parcels. The rates are adopted through the ordinance process, and that requires two Board meetings and a public hearing. Proposition 218 Notices notify the property owners of the public hearing that coincides with the second reading of the ordinance. Notices must be mailed to property owners 45 days before the public hearing. Based upon these requirements the adoption schedule is as follows: Sewer Service User Fee Adoption Schedule 08-09 Present the 5-Year Rate Schedule to Administration Committee 2/13/2008 Prop 218 45-day notice mailed 4/11/2008 Board 1st reading of rate Ordinance 4/23/2008 Board 2nd reading &adoption of Ordinance 5/28/2008 Ordinance effective in 30 days 6/22/2007 Fiscal year begins 7/01/2008 Fees per parcel sent to Auditor/Controller 8/11/2008 A more detailed work plan will be presented as part of the 2008-09 Budget process. If you have any questions or concerns regarding this information, please feel free to contact me. 3 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 Administration Committee meeting to be held on September 12, 2007, was duly posted for public inspection in the main lobby of the District's offices on September 5, 2007. IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of September, 2007. Penny M. K e, Clerk of a Board Board of Directors Orange County Sanitation District H,\DEPnGMO\150\151\BSWORMSIAGENDA CERTIFICATION-ADMIN.COMMITTEE.DOC tiORANGE COUNTY SANITATION OISTRICT theta tJ1419B2Mit NOTICE OF MEETING tac "1979E2'xiae ADMINISTRATION COMMITTEE ww....d.mm :mailing Finance, Human Resources and Information Technology S. 81P Pn. B:u 12J filnnCO2 IA B2J28 2B 8127 6treet.0.1 tour.",ie ft(A ORANGE COUNTY SANITATION DISTRICT frn0lsln VaileY,1:4 02]BB Jn1B Member WEDNESDAY, SEPTEMBER 12, 2007 - 5:00 P.M. Agentlee cities DISTRICTS ADMINISTRATIVE OFFICES Anah.en 10844 ELLIS AVENUE Brea FOUNTAIN VALLEY, CALIFORNIA 92708 Buena I kM W W W.00SD.COM ea Fnnnr n Way I arum Huudng[un Beech, kis"d A regular meeting of the Administration Committee of the Orange La Holue I.Palma County Sanitation District will be held at the above location, date Los Alam¢," and time. N.,nit Boalal Orange misscua S.Ana Seel Ben J, Bmnun, Tuwn We P.A »Irhn Linda leant' at Orange mitary Maerine Onala Masa Md.,Oky water District, Irma Haach To melnuon world-class leadership in wastewater and water resource manegement p snx,r4 m � a zs •o p �x s4 fC a�'t'xE EN� �a ADMINISTRATION COMMITTEE MEETING DATES Meeting Date Board Meeting Dates 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 April 9, 2008 April 23, 2008 May 14, 2008 May 28, 2008 June 11, 2008 June 25, 2008 July 9, 2008 July 23, 2008 AUGUST DARK August 27, 2008 September 10, 2008 September 24, 2008 *Meetings being held the third Wednesday of the month. ROLL CALL ADMINISTRATION COMMITTEE Finance, Human Resources and Information Technology Meeting Date: September 12, 2007 Time: 5:00 p.m. Adjourn: COMMITTEE MEMBERS (14) 1 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 Tinajero Jim Winder James M. Ferryman Board Chair Doug Davert Board Vice Chair OTHERS Brad Ho in, General Counsel STAFF Jim Ruth, General Manager Bob Ghirelli, Assistant General Manager Nick Arhontes, Director of Operations& Maint. Jim Herberg, Director of Engineering Ed Torres, Director of Technical Services Lorenzo Tyner, Director of Finance and Administrative Services Lilia Kovac, Committee Secretary Jeff Reed, Human Resources and Employee Relations Manager Mike White, Controller H:Wept�gendaMmin Commitlee�OWIA02.Rail Call.da AGENDA REGULAR MEETING OF THE ADMINISTRATION COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, SEPTEMBER 12, 2007, AT 5:00 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California 92708 www.ocsd.com (1) PLEDGE OF ALLEGIANCE (2) DECLARATION OF QUORUM (3) APPOINTMENT OF CHAIR PRO TEM, IF NECESSARY (4) PUBLIC COMMENTS (5) REPORT OF COMMITTEE CHAIR (6) REPORT OF GENERAL MANAGER (7) REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES (8) REPORT OF GENERAL COUNSEL (9) 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 June 13, 2007 meeting of the Administration Committee. Book Page I September 12, 2007 Page 2 b. ADM07-41 Recommend to the Board of Directors to adopt Resolution No. OCSD 07- , Appointing Representatives for the District to Act as Agents on its Behalf in the Small Claims Courts of Orange Countv Judicial Districts, and Repealing Resolution No. OCSD 04-12. (Book Page 10) C. ADM07-42 Recommend to the Board of Directors to approve the discharge of uncollectible debt owed by Expo-Dyeing & Finishing in the amount of $151,370.36. (Book Page 13) d. ADM07-43 Recommend to the Board of Directors to approve a Deferred Payment Agreement with Pacific Ocean Dyeing & Finishing in the amount of $224,981.99, for the collection of all charges and fees owed for sewer service charges and industrial discharge permit fees, for a two-year period, plus interest of 10% per annum. (Book Page 14) e. ADM07-44 Recommend to the Board of Directors to adopt Resolution No. OCSD 07-_, Terminating the California Public Entity Insurance Authority Joint Powers Agreement. (Book Page 16) END -F CONSENT CALF DAR f. Consideration of items deleted from Consent Calendar, if any. (10) ACTION ITEMS a. ADM07-45 Recommend to the Board of Directors to authorize issuance of up to$300 million in new fixed-rate Certificates of Participation debt. (Book Page 20) b. ADM07-46 (1)Approve a Consultant Services Agreement with Fulbright&Jaworski, L.L.P., to provide bond counsel services for a one-year period effective September 12, 2007, in a form approved by General Counsel, with option to renew for four one-year periods for an amount not to exceed $200,000 per year; and, (2)Authorize a 10% contingency per year($20,000). (Book Page 23) C. ADM07-47 Recommend to the Board of Directors to authorize the General Manager to procure bids for the replacement of the Certificates of Participation Series 2006 Standby Purchase Agreement. (Book Page 26) (11) INFORMATIONAL ITEMS a. ADM07-48 Succession Management Program Update (Book Page 28) Book Page 2 September 12, 2007 Page 3 (12) CLOSED SESSION Dudng the course of conducting iha business set forth oh this agenda as a regulermeeting of the Cornmiltee, the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending or potential litigation,or personnel matters,pursuant to Government Code Sections 64956.8, 54956.9, 54957 or 54957.6,as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employee actions or negotiations with employee representatives; or which are exempt from public disclosure i under the California Public Records Ad, may be reviewed by the Committee during a permitted dosed session i and are not available for public inspection. At such time as final actions are taken by the Committee on any of y,thew subjects,the minutes will raged all required diadoaures of irdormetion. __. _. _._ ................_.__.__.._____._......__.._.._._........._........,..__..i a. Convene in closed session. b. Reconvene in regular session. c. Consideration of action, if any, on matters considered in closed session. (13) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY (14) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT (15) FUTURE MEETING DATES The next regular Administration Committee meeting is scheduled for October 10, 2007, at 5 P.M. (16) ADJOURNMENT Book Page 3 September 12, 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 dale 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 defamed 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 item 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 items are to be deleted from the consent calendar. Items Continued: Items may be continued from this meeting without further notice to a Committee meeting held within five(5)days of this meeting per Government Code Section 54954.2(b)(3). Meeting Adioumment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955(posted within 24 hours). 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"a Board ten days in advance of the Committee meeting. Committee Chair: Mark Waldman (714)827-1969 Committee Secretary: Lilia Kovac (714)593-7124 Ikovac0orsd.mm General Manager: Jim Ruth (714)593-7110 irulh�ocsd.mm Assistant General Manager Bob Ghirelli (714)593-7400 rghirelli4ocsd.mm Director of Finance and Lorenzo Tyner (714)593-7550 ItvnenWocsd.mm Administrative Services Human Resources and Employee Jeff Reed (714)593-7144 ireed/o3ocstl.mm Relations Manager H:WeptlagendMAdmin Commlaee10907103.091207 Adminisimtion Agenda.dac Book Page 4 September 12, 2007 ADMINISTRATION COMMITTEE AGENDA CALENDAR Item Action October GWRS External Review Information October ARBA Update Information November Receive and File Comprehensive Annual Financial Action Report CAFR Book Page 5 MINUTES OF THE REGULAR MEETING OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday,June 13, 2007, at 5:00 P.M. A meeting of the Administration Committee of the Orange County Sanitation District was held on June 13, 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: Bob Ghirelli,Assistant General Manager Mark Waldman, Chair Lorenzo Tyner, Director of Finance and Phil Luebben,Vice Chair Administrative Services Steven Choi Mike White, Controller Bill Dalton Lilia Kovac, Committee Secretary Jon Dumitru Norbert Gala Joy Neugebauer Randy Kleinman Chris Norby Juanita Skillman Sal Tinajero Jim Winder OTHERS PRESENT: Rich Freschi Brad Hogin, General Counsel Darryl Miller Ron Karich, Karich &Assoc. Doug Davert, Board Vice Chair Don McLean, Driver-Alliance DIRECTORS ABSENT: Ken Parker 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. Book Pne 6 Minutes of the Administration Committee June 13, 2007 Page 2 (5) REPORT OF THE GENERAL MANAGER General Manager, Jim Ruth, did not give a report. (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 May 9, 2007 meeting of the Administration Committee. b. ADM07-35 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to approve the release of a request for proposal for the administration of an Owner Controlled Insurance Program, Specification No. CS-2007-347, covering the Sanitation District's $2.5 billion capital improvement program. C. ADM07-36 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to renew the District's Excess Workers' Compensation Insurance for the period July 1, 2007 through June 30,2008 with the California State Association of Counties Excess Insurance Authority ("CSAC EIA"), in an amount not to exceed $0.003018 per dollar of actual payroll. d. ADM07-37 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to renew the District's All-Risk Property, Flood, and Boiler& Machinery Insurance Program ("Property Insurance")for the period July 1, 2007 through June 30, 2008, in an amount not to exceed $585,630. e. ADM07-38 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to renew the District's Excess General Liability Insurance Program for the period July 1,2007 through June 30, 2008, in an amount not to exceed $367,366. END OF CONSENT CALENDAR Book Page 7 Minutes of the Administration Committee June 13, 2007 Page 3 (9) ACTION ITEMS a. ADM07-39 MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to adopt Resolution No. OCSD 07-XX, Establishing Use Charges for the 2007-08 Fiscal Year Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority("SAWPA"). b. ADM07-40 Lorenzo Tyner, Director of Finance and Administrative Services, briefly presented the proposed budget update and recommended adjustments to the adopted budget. MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to approve the proposed revisions to the Operating, Capital, Debt/COP Service and Self-Insurance Budgets for FY 2007-08, as follows: Originally Proposed Adopted Revised Budget Budget FY 2007-08 FY 2007-08 Net Operations, Maintenance&Working Capital $135,602,130 $139,973,400 Worker's Compensation Self Insurance 559,400 559,400 General Liability and Property Self-Insurance 2,055,200 2,055,200 Net Capital Improvement Program 338,818,000 302,714,000 Debt/COP Service 65,462,000 65,273,720 Other Requirements 2,645,300 2,645,300 TOTAL $645,142,030 $513,221,020 (10) INFORMATIONAL ITEMS There were none. (11) CONVENE IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54957(b)(1). The Committee convened in Closed Session at 5:17 p.m. pursuant to Government Code Section 54957. Confidential Minutes of the Closed Session held by the Administration Committee have been prepared in accordance with California Government Code Section 54957(b)(1),and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. RECONVENE IN REGULAR SESSION: The Committee reconvened in regular session at 5:23 p.m. Book Page 8 Minutes of the Administration Committee June 13, 2007 Page 4 (12) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There were none. (13) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. (14) FUTURE MEETING DATES The next regular Administration Committee meeting is scheduled for July 11, 2007, at 5 p.m. (15) ADJOURNMENT The Chair declared the meeting adjourned at 5:25 p.m. Submitted by: ` C� `, _Y�46�U-ri.C�• Lille Kovac Committee Secretary Hddep0agendaVWmin Commlff eWgOn05.061307 AdminisbaWn mtnut s.doc Rook Page 9 ADMINISTRATION COMMITTEE Meeilng Date To Bd.of Dir. 09/12/07 09/26/07 AGENDA REPORT [AD IemNumbe ADMO741o741 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: ADOPT RESOLUTION APPOINTING REPRESENTATIVES OF OCSD TO ACT AS AGENTS ON ITS BEHALF IN THE SMALL CLAIMS COURTS OF ORANGE COUNTY JUDICIAL DISTRICTS, AND REPEALING RESOLUTION NO. OCSD 04-12 GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 07-_, Appointing Representatives for the District to Act as Agents on its Behalf in the Small Claims Courts of Orange County Judicial Districts, and Repealing Resolution No. OCSD 04-12. SUMMARY The Sanitation District's list of appointed representatives who act as agents on it's behalf in Orange County Small Claims Courts has not been updated since 2004. Adoption of this Resolution will update that list and appoint current Administrative Services and Financial Management Division employees to serve as District Representatives. PRIOR COMMITTEEIBOARD ACTIONS • Resolution No. OCSD 04-12 was passed and adopted at an adjourned regular meeting on April 28, 2004. • Resolution No. OCSD 98-27 was passed and adopted at a Special Meeting on July 1, 1998. ADDITIONAL INFORMATION None ATTACHMENT Proposed Resolution No. OCSD 07-_ JDR:LT:MW Farm NO.OW102.3 RwIUE:PWI137 Page 1 Book Page 10 RESOLUTION NO. OCSD 07- APPOINTING REPRESENTATIVES TO ACT AS OCSD AGENTS IN SMALL CLAIMS COURTS A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT APPOINTING REPRESENTATIVES FOR THE DISTRICT TO ACT AS AGENTS ON ITS BEHALF IN THE SMALL CLAIMS COURTS OF ORANGE COUNTY JUDICIAL DISTRICTS, AND REPEALING RESOLUTION NO. OCSD04-12 WHEREAS, the Board of Directors deems it necessary to periodically commence legal action in the Small Claims Courts to collect debts owing to the District; and, WHEREAS, legal proceedings in the Small Claims Courts must be filed on a continuing, periodic basis; and, WHEREAS, the rules of court provide that attorneys shall not be allowed to appear and represent parties to these proceedings; and, WHEREAS, it is necessary to appoint agents for the District to act for and on its behalf in the Small Claims Courts of four of the Orange County Judicial Districts. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That those persons set forth on "Exhibit A"to this Resolution are appointed to represent and appear for the District on any and all claims filed in the Small Claims Courts of the West Orange County Judicial District, the North Orange County Judicial District, the Central Orange County Judicial District, and the Orange County Harbor Judicial District. PASSED AND ADOPTED at a regular meeting held September 26, 2007. Chair ATTEST: Clerk of the Board Book Page I I EXHIBIT A RESOLUTION NO. OCSD 07- Angela Brandt Danny L. Dillon Robert Geggie Lorenzo Tyner Michael D. White Book Page 12 ADMINISTRATION COMMITTEE MeetlnBDate Ta Bd.of Dir. 09/1y07 By/Zahn AGENDA REPORT t Number Bem NUmbff nDM07-42 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: DISPOSITION OF UNCOLLECTIBLE DEBT— EXPO DYEING & FINISHING GENERAL MANAGER'S RECOMMENDATION Approve the discharge of uncollectible debt owed by Expo-Dyeing & Finishing in the amount of$151,370.36. SUMMARY In April 2004, Expo-Dyeing & Finishing filed for Chapter 11 Bankruptcy. At that time, the Sanitation District had an unsecured claim against Expo-Dyeing & Finishing in the amount of$181,780 for outstanding permittee fees consisting of$178,881 on a deferred payment agreement, and $2,899 on an unpaid balance owed from the FY 03-04 third- quarter permittee invoice. In September 2005, the Bankruptcy Court approved the Chapter 11 Reorganization that had been previously approved by the creditors. As part of this process, the debtor challenged the Sanitation District's claim of$181,780, and the Court lowered the acceptable amount to only the amount owed on the deferred payment agreement, or $178,881. The Chapter 11 Reorganization plan called for payment of seventeen percent of all outstanding debts. Thus, the outstanding debt owed to OCSD by Expo- Dyeing was reduced by the Bankruptcy Court to $30,410, or a reduction of$151,370 from the original amount owed of$181,780. Of this remaining outstanding obligation of $30,410 owed by Expo-Dyeing & Finishing, the Sanitation District has received $9,837 as of June 30, 2007 with the remaining balance to be received in future quarterly payments in accordance with the terms of the Chapter 11 Reorganization Plan. Staff is recommending that the Board approve the discharge of$151, 370 in accordance with the Chapter 11 Reorganization plan approved by the Bankruptcy Court. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION None. JDR:LT:MW FOIn No.Ouulve.a R�:MIM7 Page 1 Book Page 13 ADMINISTRATION COMMITTEE Meeting Date To Bd.of Dir. 09/12/07 09/26/07 AGENDA REPORT Item Nomber Rem Number ADM0743 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: DEFERRED PAYMENT AGREEMENT FOR CHARGES AND FEES OWED BY ONE INDUSTRIAL WASTEWATER DISCHARGE PERMITTEE GENERAL MANAGER'S RECOMMENDATION Approve a Deferred Payment Agreement with Pacific Ocean Dyeing & Finishing in the amount of$224,981.99, for the collection of all charges and fees owed for sewer service charges and industrial discharge permit fees, for a two-year period, plus interest of 10% per annum. SUMMARY Pacific Ocean Dyeing & Finishing is a holder of an industrial wastewater discharge permit issued by the Sanitation District that requires the payment of sanitary sewer service charges and industrial discharge permit fees for the cost of conveying, treating and disposing of wastewater discharged. Based on the terms of the permit, the permittee is required to pay estimated quarterly sewer service charges that are reconciled annually with actual discharge flows and levels of biochemical oxygen demand and total suspended solids. The permittee is now in default of their payment obligations and the General Manager, in accordance with Resolution No. OCSD 98-23, Article III, "Collection of Fees and Charges Relating to Industrial Waste Dischargers," may negotiate a deferred payment agreement with this permittee requiring monthly payment terms plus interest. In April 2004, the Sanitation District entered into a deferred payment agreement with Pacific Ocean Dyeing & Finishing (formerly Y2K Textile) in the amount of$203,013.54 plus interest and administrative charges for delinquent obligations. The permittee paid the agreement in full by March of 2006. As of February of 2007, the permittee became delinquent on new obligations. This delinquency has now risen to $224,981.99. The Sanitation District received a letter in June 2007, requesting a two-year deferred payment agreement on this total current obligation. The interest rate that would be used for this deferred payment agreement is 10%. F000 No.owtoia pwtiee:aYpvW Page 1 Book Page 14 PRIOR COMMITTEE/BOARD ACTIONS In April 2004, the Board approved a deferred payment agreement with Pacific Ocean and Dyeing & Finishing in the amount of$203,013.54 plus interest and administrative charges for delinquent obligations. ADDITIONAL INFORMATION N/A JDR:LT:MW Form No.GW 1= Fn'bea:uw1Nt Page 2 Book Page 15 ADMINISTRATION COMMITTEE M:n9 Dare TUBd.or Dlr. 09/12/07 09126/07 AGENDA REPORT 11 mNumber Item Number ADM07-99 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: TERMINATION OF THE CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY ("CPEIA") GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 07-_, Terminating the California Public Entity Insurance Authority Joint Powers Agreement. SUMMARY OCSD participated for several years in California Public Entity Insurance Authority (CPEIA) as a member agency, purchasing workers' compensation insurance coverage. Because the CSAC Excess Insurance Authority had originally allowed only counties as members, CPEIA was 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 have become members of the CSAC Excess Insurance Authority, and have been given a voice in the business affairs of the CSAC Excess Insurance Authority. CPEIA, therefore, no longer has a reason for existence. The CSAC Excess Insurance Authority is the largest property/liability insurance risk pool in the country. The OCSD Board has previously approved the merger of CPEIA and CSAC EIA. PRIOR COMMITTEE/BOARD ACTIONS In July 2003 the Board approved and the Board chair signed the Joint Powers Agreement creating the California Public Entity Insurance Authority and the CPEIA MOU for the Excess Workers Compensation Program. Fom No.0W 10 rgmm ReyA-ran Dq 151 Revlx101/, 7 Page 1 Book Page 16 In March 2007 the Board approved and the Board chair signed the CSAC EIA Joint Powers Agreement superseding the CPEIA and the CSAC EIA MOU for the Excess Workers Compensation Program. ADDITIONAL INFORMATION Not applicable. ATTACHMENTS Proposed Resolution No. OCSD 07 JDR:LT:MW Form NO.OMIV2 AOontle Ra -FM Dept 151 Roi .017 7 Page 2 Book Page 17 RESOLUTION NO. OCSD 07- A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT TERMINATING THE CALIFORNIA PUBLIC ENTITY INSURANCE AUTHORITY JOINT POWERS AGREEMENT WHEREAS, the CSAC Excess Insurance Authority (EIA) and the California Public Entity Insurance Authority (CPEIA) have merged into one organization, the EIA, and there is no need for the CPEIA to continue to exist; and, WHEREAS, CPEIA members are able to join the EIA as public entity members; and, WHEREAS, pursuant to Article 22 of the CPEIA Joint Powers Agreement (Agreement) the affirmative vote of the governing bodies of three-fourths of the members are required to terminate the Agreement; and, WHEREAS, there are no assets or other property to distribute under Article 22 of the Agreement. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That pursuant to the provisions of Article 22 of the Agreement it elects to terminate the CPEIA. Said termination shall become effective upon the affirmative vote of the Orange County Sanitation District Board of Directors of three- fourths of the members. PASSED AND ADOPTED at an adjourned regular meeting held September 26, 2007. Chair ATTEST: Clerk of the Board Book Page 18 CSAC EXCESS INSURANCE AUTHORITYJsko�k A Public Agency ACTION REQUESTED BY DECEMBER 31, 2007 J To: Members, California Public Entity Insurance Authori ty From: Michael Fleming, Chief Executive Officer Subject: Termination of CPEIA As you know, the transition of the CPEIA members into the CSAC EIA has been in progress for the past year and a half. 1 am pleased to report that as of June 30, 2007, all CPEIA members executed the appropriate documents to join the CSAC EIA direct. The last phase of the transition plan is the termination of the CPEIA as an entity. At its meeting on May 29, 2007, the CPEIA BoaW o Ire ors oo c Ion o Ina a the contractual agreement between the CSAC EIA and the CPEIA effective July 1, 2007. Now the CPEIA members, acting through their governing Hoards, must take action to terminate theCPEIA Joint Powers Agreement. The CPEIA will be officially terminated upon approval by three-fourths of the CPEIA members. With 134 CPEIA members, approval is needed by 101 governing boards to effect the termination. In order to conclude the business of the CPEIA, we encourage each member to present a resolution to their governing board to document their action to terminate the CPEIA (sample resolution enclosed) as soon as possible and before December 31, 2007. The CPEIA has no assets to distribute and no programs of the CPEIA were ever established. Therefore, there should be no pending issues following approval to terminate by three-fourths of the members. To reference the provisions in the CPEIA Joint Powers Agreement, please visit the ETA's website at www.csac-eia.org and click on the"Latest News" article regarding this topic. You can also obtain a Word version of the sample resolution in this area of the website. Upon action by your governing board, please send the executed resolution to the EIA office. If you have any questions, please feel free to contact me or Gina Dean at the EIA or your broker at Alliant Insurance Services. Enclosure cc: Alliant Insurance Services 3017 Gold Canal orlva Rancho Cords IPi 66670•19161631-7363•FAX(616)6,91-711Y• ea I -iti - mcuervcceaanree: a"°e°'"®"'"" �"�^ awry wrr. eww..•. w^e•R.v.. �....o... wm«w.,u w.«r.. ora .a,.. m.+.c.,.•r '^aT' uuwwaw,, ;'mn.,awa«1. ..ro•ro.u, wma e.x.aw tee,.,. ewer rw.eaa"re.,p cams. cwnr wemwe.- ew+wm.ro awb mow:. mnr twos wro a«.,, <NNPumw.YMe.r.Yltlu•IrkmLtl 81w«m,aamm,lwaC�"Jewa WYv.GN/. 0 aw, W«Y g4mOFnp,n Book Page 19.............. . ADMINISTRATION COMMITTEE Ong D+� ro B'io DU. 09/wW o9�:s1W AGENDA REPORT Item NUMM rtan Numbe ADMOMS Orange County Sanitation District FROM: James D. Ruth, General Manager Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: PROPOSAL FOR ISSUING UP TO $300 MILLION IN NEW CERTIFICATES OF PARTICIPATION GENERAL MANAGER'S RECOMMENDATION Authorize issuance of up to $300 million in new fixed-rate Certificates of Participation debt. SUMMARY Approval of the recommended action above will direct staff to begin the $300 million fixed-rate competitive debt issuance process utilizing the assistance of the financial advising firm of Public Resources Advisory Group, and the bond counsel firm of Fulbright& Jaworski. In accordance with the Sanitation District's Board-adopted Debt Policy, the District will restrict long-term borrowing to capital improvements that cannot be financed from current revenue. This policy will assist in the leveling out of user fee rates over time and avoid any spiked increases in the short-term- PRIOR COMMITTEEIBOARD ACTIONS In support of the Sanitation District's Strategic Plan capital improvement program, the Board approved the issuance of$300 million of new Certificates of Participation (COP) debt within the FY 2006-07 Adopted Budget. ADDITIONAL INFORMATION The Sanitation District currently has six series of non-subordinate COPS outstanding, comprising a total par amount of$784.1 million. The following table describes each COP in detail. Form No. u1023 pMyy;p 1M7 Page 1 Book Page 20 EXISTING COP FINANCING PROGRAM i Outgtafitling' Par Amount ' t'I q9 h�_ ! Series 2007A $95,180,000 Fixed Rate Refunding (4) Series 2006 196,600,00 Deily Variable Rate Series 2003 191,500,00 Fixed Rate Series 2000 Refunding(t) 196,800,00 Daily Variable Rate Series 1993 Refunding m 26,900,00 Synthetic Fixed Rate I'I Series 1992 Refunding(2) 77,340,00 Synthetic Fixed Rate P1 Total $784,120,000 'As of September 1,2007. (1)Series 2000 COPS refunded the Series A,B,and C issued between 1990 and 1992, (2)Series 1992 and 1993 COPS refunded the Series 1986 and a portion of the Series'B'COPS. (3)Variable rate debt swapped to a fixed rate through maturity. (4)Series 2007A COPS refunded$88.5 million portion of Series 2003. The Series 2000 refunded the $179.7 million outstanding principal balance of the 1990-92 Series A, B, and C COPS and reimbursed the Sanitation District for improvements made to the wastewater treatment system. The 1993 Refunding COPS was issued to refund $39.7 million of the Series "B" COPS. The Series 1992 Refunding COPS refunded the 1986 COPs ($107 million) issued on behalf of District Nos. 1, 2, and 3. The 1992 Refunding COPS also refunded approximately$38.4 million of the Series "B" COPs, issued in 1991. Series 2003 and 2006 were both new money debt issuances. The Series 2007A refunded a portion of the Series 2003. The following table displays the combined gross debt service cash flows for the Sanitation District's six COPs through final maturity in FY 2035-36. DEBT SERVICE STRUCTURE 80 70 D Variable Rate g 60 ■Fixed 8 Synthetic Find Rate 50 40 30 20 10 0 N O N Y b 0 O N Y a) t0 O N Y t0 O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N Fiscal Year End Fa No.UWIM RWW MOW Page 2 Rook Page 21 As shown above and in accordance with the Sanitation District's debt policy, the District currently has $393.2 million in variable rate debt outstanding and $390.9 million in fixed rate (and synthetic fixed rate) debt outstanding. However, the policy also restricts the issuance of new variable rate debt that will exceed the level of available invested reserves, which is $301.3 as of June 30, 2007. In order to remain in compliance with the District's debt policy, this proposed $300 million COP new money debt issue will be a fixed rate debt issuance. Staff is also proposing to issue this $300 million fixed rate debt has in a competitive sale as opposed to a negotiated sale due to PRAG's opinion that a competitive fixed rate sale will enable the Sanitation District to receive funds by the end of the calendar year and likely be less costly to the District. JDR:LT:MW Form Na.OWIDT9 Fw'tl0G'.0=1107 Page 3 Book Page 22 ADMINISTRATION COMMITTEE Mcebng ogre TO Bd.of Dlr. 09 ID07 - AGENDA REPORT tADNumber Rem Numhe ArxnD7 as Orange County Sanitation District FROM: James D. Ruth, General Manager Lorenzo Tyner, Director of Finance and Administration Originator: Mike White, Controller SUBJECT: SELECTION OF BOND COUNSEL GENERAL MANAGER'S RECOMMENDATION (1)Approve a Consultant Services Agreement with Fulbright&Jaworski, L.L.P., to provide bond counsel services for a one-year period effective September 12, 2007, in a form approved by General Counsel, with option to renew for four one-year periods, for an amount not to exceed $200,000 per year; and, (2) Authorize a 10% contingency per year ($20,000). SUMMARY The Sanitation District is scheduled to issue $1.15 billion in "new money" debt over the next seven years to assist with the funding of the ten-year $2.5 billion CIP. In managing this effort and to be able to move quickly in order to take advantage of changes in the economy, staff is developing a debt financing team that includes the professional services of a financial advisor, bond counsel, and underwriters. In October 2006, the FAHR Committee and Board approved a five-year contract extension with Public Resources Advisory Services (PRAG) to serve as the Sanitation District's financial advisors. We currently utilize the services of UBS and Bear Stearns serving as remarketing agents on our outstanding variable rate issues, and staff plans to continue utilizing request (RFP) for proposals of underwriters for each new proposed negotiated debt issue. The Sanitation District has used the same bond counsel for the last 14 years, and staff has had to negotiate sole source service and fees and seek the Board's approval each time a new financing opportunity has become available. Staff believes it is now a good time to re-evaluate these services and has completed a competitive bid process for bond counsel services on all debt issues to be made over the next five years. Again, by having a debt financing team in place, the Sanitation District will be able to move quickly in the future to capture any changes in market conditions as it relates to the District's debt program. Based on recent debt financing experience, 8 bond counsel firms with a presence in California were solicited for bids. Four firms responded with proposals, and the top two firms were interviewed for final consideration. After the completion of this process, Fulbright & Jaworski is being recommended for selection to serve as the Sanitation District's bond counsel. This proposed selection is for a one-year period with the Director of Finance and Administrative Services right to renew for up to four additional years. Fom,No.DW 102] RW.U VOW Page 1 Book Page 23 PRIOR COMMITTEEIBOARD ACTIONS N/A ADDITIONAL INFORMATION Orrick, Herrington & Sutcliffe (Orrick) served as the Sanitation District's bond counsel on the past five certificates of participation (COP) debt financings dating back to 1993. Most recently, they were bond counsel for the COP debt issues of 2000, 2003, 2006, and the COP refunding in May of 2007. Each time there has been a need for a new debt financing, staff has negotiated services and fees with Orrick and solicited approval of a sole source selection of bond counsel services from the Board. This practice is time consuming and changes in the market place sometime require the District to move more quickly in order to take advantage of these opportunities. This competitive bid process will allow the Sanitation District to lock in the best services available at the most competitive price for a five-year period. Utilizing the service of the Sanitation District's financial advisor, Public Resources Advisory Group (PRAG), an eligible listing of bond counsel firms was developed from the California Debt and Investment Advisory Commission database. Only those firms who served as bond counsel for at least three debt issuances of$100 million or more within the State of California during the last two full calendar years were included for consideration. Following is the listing of those firms who were deemed eligible and received a request for proposal (RFP): • Fulbright & Jaworski • Hawkins Delafield & Wood • Jones Hall • Nixon Peabody • Orrick Herrington & Sutcliffe • SidleyAustin • Squire Sanders& Dempsey • Stradling Yocca Carlson & Rauth The following four firms submitted a proposal in response to the Sanitation District's RFP: • Fulbright & Jaworski • Orrick Herrington & Sutcliffe • Sidley Austin • Squire Sanders & Dempsey An evaluation team consisting of Lorenzo Tyner, Director of Finance and Administrative Services; Mike White, Controller; Bob Geggie, Principal Accountant; and Ed Soong, Executive Vice President with Public Resources Advisory Group, evaluated these four proposals based on the pre-determined criteria of qualifications, proposed staffing, work plan, and pricing. Fulbright & Jaworski and Orrick Herrington & Sutcliffe were the two highest scoring firms and were scheduled for interviews. Folm No.DW-1013 ReWM:WNtro] Page 2 Book Page 24 Following the interviews by the evaluation team, Fulbright & Jaworski was unanimously selected as the most responsible bidder based on the proposed legal team's experience, the partners' willingness to spend fifty percent of the total bond counsel's time on each transaction, and their ability to convince the evaluation team that the Sanitation District would be a top priority account and that they would meet or beat every required deadline within any future debt financing timeline schedule. Over the past three and one-half years, the proposed legal team completed nine fixed rate transactions, two variable rate transactions, and four swap transactions. In addition, Fulbright &Jaworski was also the lowest bidder for each category within the following fixed pricing schedule that is to remain in effect over the next five-years: • New money fixed rate debt issue - $100,000 • Refunding fixed rate debt issue - $115,000 • New money variable rate debt issue - $125,000 • Refunding variable rate debt issue - $140,000 • Swap ($495 per hour) - $15,000 cap JDR:LT:MDW Forth No.D 102] RwinO oYn1101 Page 3 Book Page 25 ADMINISTRATION COMMITTEE mmiin9 Date TOBd.orM 0911ZM o9/zs/o7 AGENDA REPORT Item Number Them Number ADKD7-47 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: REPLACEMENT OF CERTIFICATES OF PARTICIPATION SERIES 2006 STANDBY PURCHASE AGREEMENT GENERAL MANAGER'S RECOMMENDATION Authorize the General Manager to procure bids for the replacement of the Certificates of Participation Series 2006 Standby Purchase Agreement. SUMMARY In March 2006, the Sanitation District issued COP Series 2006 in the amount of $200 million. At that time, a seven-year standby purchase agreement was entered into with DEPFA BANK, plc (DEPFA) that provides liquidity to variable rate investors in case certain unexpected events occur and lowers the borrowing cost on the COP Series 2006. DEPFA was selected through a competitive bid process at a cost of 11.0 basis points, or approximately $220,000 per year. This agreement now has approximately five and one-half years remaining. In July 2007, DEPFA was downgraded by Standard & Poors from an AA-to A+ long- term rating and from an A-1+to A-1 short-term rating. The Sanitation District's remarketing agent, Bear Stearns, estimates that the Sanitation District's remarketing fees are currently approximately 2.0 basis points more costly than a variable rate program supported by other higher-rated banks. In addition, the fees charged in the liquidity market have declined. Recent five-year liquidity facility agreement bids for highly-rated credits, such as the Sanitation District, have been in the neighborhood of 8.0 basis points. Each basis point costs the Sanitation District approximately $20,000 per year. The 3.0 basis spread between the existing standby purchase agreement of 11.0 basis points and current market indications of 8.0 basis points plus the increase of 2.0 basis points resulting from higher yields associated with the DEPFA standby purchase agreement would generate savings of approximately 5.0 basis points, or about $100,000 per year, or up to $550,000 over the remaining contract period with DEPFA. The out-of-pocket costs to liquidate and replace the existing standby purchase agreement are estimated as follows: Form No.DMOZ3 a 1.MIM7 Page 1 Book Page 26 • Bond counsel $10,000 - $15,000 • Financial Advisor $5,000- $10,000 • Replacement Liquidity Provider Attorney Fees $25,000- $40,000 • Rating agency fees (3) $15,000 The replacement of this standby purchase agreement would result in no termination fees to DEFPA Bank, plc. After deducting estimated costs, staff believes that approximately$470,000 in debt financing savings could be obtained through the replacement of the existing standby purchase agreement. PRIOR COMMITTEE/BOARD ACTIONS In February 2006, the Board approved the Execution and Delivery of an Installment Purchase Agreement, a Trust Agreement, a Standby Certificate Purchase Agreement, a Purchase Contract and a Remarketing Agreement in connection with the execution and delivery of Orange County Sanitation District Certificates of Participation, Series 2006, Authorizing the Execution and Delivery of such Certificates Evidencing Principal in an Aggregate Amount of Not to Exceed $200,000,000. ADDITIONAL INFORMATION None. JDR:LT:MDW F..No..1..a PevixE:IXY01N� Page 2 Book Page 27 ADMINISTRATION COMMITTEE fneedea13aa To Bd.of Dir. 09/17J07 AGENDA REPORT AD m Num ber an IDNumbe Nmb -411 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 purpose behind succession management is to provide employees an opportunity to prepare for OCSD's future staffing needs and for OCSD to build a leadership pipeline. The public sector is expecting significant employee attrition in the next few years, so it's imperative for OCSD as an agency to be prepared and for employees to be equipped with the skills to compete for positions of interest. It's designed to be an integrative approach to developing an OCSD leadership pipeline. The basic idea is to assist the organization in identifying the right people with the right skills for the right job at the right time; ensuring that well trained employees are progressing in their personal career paths in preparation for future leadership opportunities. Management has identified and defined 12 core leadership competencies deemed important to the success of this organization. This effort is intended to address the long- term developmental needs of its employees at many levels and across the span of their service to OCSD. Mastery of these competencies will keep employees careers in line with management's vision of the organization, its overall strategy, and its short-term and long-term planning. OCSD has developed a system that includes workforce planning, talent assessment, and development tools to ensure that its employees have the ability and the opportunity to reach their full potential. The first aspect of the program encompasses workforce planning information. Workforce planning information contains a series of tools that can be used to identify the agency's future staffing needs. With access to retirement probability reports, leadership profiles, competency requirements, and job descriptions for positions throughout the agency, management can identify and plan for anticipated vacancies. In addition, it gives staff the opportunity to better prepare themselves for progression to a higher-level position when future leadership opportunities occur. FomI No.o 1 3 Nevijgo pyp,q) Page 1 Book Page 28 After identifying a position of interest, staff speaks with management about career goals and objectives and a talent assessment is initiated. The talent assessment is conducted through on-line software that identifies leadership potential for future higher-level vacancies. Colleagues will then assist in the assessment by answering a series of questions. Co-workers can assess a boss, a colleague, or a staff member. The results of the assessment will identify potential in a leadership role and any developmental needs that should be explored. The Succession Management Program also contains a development aspect which includes coaching and mentoring. Participants may be paired with a coach or a mentor to assist with professional growth. Participants will engage in a variety of developmental activities including job stretch assignments, special projects, and key assignments. In addition to these developmental opportunities, OCSD will offer program participants speck training in 12 of the organization's core leadership competencies beginning January 2008. Excess seats in the competency training sessions will be made available to all OCSD staff to help them prepare for future leadership opportunities. Effective August 8, 2007, OCSD implemented a pilot Succession Management Program for all Department Heads and Managers. In addition, the Human Resources Division sent letters to each of the represented bargaining units to inform them of progress and future intent to make the program available District-wide. PRIOR COMMITTEE/BOARD ACTIONS None. ADDITIONAL INFORMATION The Human Resources Division will closely monitor the Succession Management Program over the course of the remainder of the Fiscal Year. Modifications, adjustments, and improvements will be made to the program as the Human Resources Division collects data and feedback. These "lessons learned"will provide for continuous improvement and help refine the program to ensure that it is functioning at peak performance for subsequent groups of employees. OCSD plans to make the Succession Management Program available to Supervisors on July 1, 2008 and Professionals on July 1, 2009. JDR:LT Fo m NO.DMO2.3 PeNwdo3Io1W1 Page 2 Book Page 29 ORANGE COUNTY SANITATION DISTRICT (714) 962-2411 www.ocsd.com Mailing Address: P.O. Box 8127 Fountain Valley, California 92728-8127 Street Address: 10844 Ellis Avenue Fountain Valley, California 92708-7018