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HomeMy WebLinkAbout2008-05 Ops ow MINUTES OF THE OPERATIONS COMMITTEE Engineering, Operations R Maintenance, and Technical Services Orange County Sanitation District May 7, 2008—5:00 p.m. A meeting of the Operations Committee of the Orange County Sanitation District was held on May 7, 2008, at 5:00 p.m. in the Sanitation District's Administrative Office. (2) ROLL CALL Following the Pledge of Allegiance, a quorum was declared present, as follows: Operations Directors Present: Staff Present: Larry Crandall, Chair Jim Ruth, General Manager Ken Parker, Vice Chair Bob Ghirelli, Assistant General Manager Charles Antos Nick Arhontes, Dir. of Operations & Maintenance Don Bankhead Jim Herberg, Director of Engineering Leslie Daigle Ed Torres, Director of Technical Services Rose Espinoza Lorenzo Tyner, Director of Finance and Patsy Marshall Administrative Services Roy Moore Lilia Kovac, Committee Secretary David Shawver Tod Haynes, Engineering Manager Harry Sidhu John Linder, Engineering Manager Constance Underhill Matt Smith, Engineering Manager James M. Ferryman, Board Chair Layne Baroldi Doug Davert, Board Vice Chair Carla Dillon Dave Heinz Operations Directors Absent: Vlad Kogan Simon Watson Chuck Winsor Others: FILED IN THE OFFICE OF THE CLERK OF THE BQARD ORANGE COUNTYSANRATION uI CT (3) APPOINTMENT OF CHAIR PRO TEM MAY 28 2008 No appointment was necessary. 7 'h BY: (4) PUBLIC COMMENTS There were no public comments. Minutes of the Operations Committee May 7, 2008 Page 2 (5) REPORT OF THE COMMITTEE CHAIR Chair Crandall reported that General Manager, Jim Ruth, had been awarded the Greater Los Angeles Federal Executive Board Leadership Award at the annual Public Service Recognition Week ceremony held May 7, 2008 in Long Beach (6) REPORT OF THE GENERAL MANAGER Jim Ruth, General Manager, did not give a report. (7) CONSENT CALENDAR ITEMS a. MOVED, SECONDED, AND DULY CARRIED: Approve minutes of the April 2, 2008 Operations Committee meeting. b. Item pulled for discussion. C. OP08-18 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: 1)Approve Change order No. 5 to the contract issued to Hill Brothers Chemical Company for the Purchase of Magnesium Hydroxide, Specification No. C-2005-244, authorizing a unit rate increase of$0.20 per gallon,for a total unit price of$1.84 per gallon, plus applicable sales tax for a one-year period effective July 1, 2008 through June 30, 2009, and all other terms of the contract shall remain in effect (P.O. 102362 OB). 2)Authorize a 10% unit cost escalation contingency. d. Item pulled for discussion e. OP08-20 MOVED, SECONDED,AND DULY CARRIED: Recommend to the Board of Directors to: 1)Award a contract to Olin Chlor Alkali Products,for the Purchase of Sodium Hydroxide (Caustic Soda) 25%solution, Specification No. C-2008-371 BD, for delivery to the plants for the period July 1, 2008 through June 30, 2009,for a unit price of$459.90 per dry ton plus freight of$200.00 per dry ton, plus applicable sales tax for an estimated annual amount of$431,235.00, with four one-year renewal options; and, 2)Authorize a 10%annual cost escalation contingency. 3)Award a contract to Basic Chemical Solution, LLC, for the Purchase of Sodium Hydroxide (Caustic Soda)50% solution, Specification No. C-2008-371 BD, for delivery in the collection system,for the period July 1, 2008 through June 30, 2009,for a unit price of$539.00 per dry ton, subject to the Harriman Chemsult Limited Index, plus freight of$39.48 per dry ton, plus applicable sales tax for an estimated annual amount of $235,075.00 with four one-year renewal; and, ' Minutes of the Operations Committee May 7, 2008 Page 3 4)Authorize an 8%quarterly cost escalation contingency. f. OP08-21 MOVED, SECONDED, AND DULY CARRIED: Approve Amendment No. 1 to Cooperative Projects Grants Program Contract No. 0604 with Midway City Sanitary District, providing for an 11-month time extension. g. OP08-22 MOVED, SECONDED,AND DULY CARRIED: Recommend to the Board of Directors to: 1)Approve a budget Increase of$128,100 for Rehabilitation of District Siphons, Contract No. 2-68,for a total budget of $7,854,100; and, 2)Approve a contingency increase of$136.108 (3%)to the construction contract with Ken Thompson, Inc.,for Rehabilitation of District Siphons, Contract No. 2-68, for a total contingency of$363,008 (8%). END OF CONSENT CALENDAR b. OP08-17 Director of Technical Services, Ed Tortes, answered questions that arose from the report, and will be clarifying prior to sending to the Board of Directors for approval. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to authorize the General Manager to sell surplus emission reduction credits via negotiated contracts with ICAP United, Inc. and Cantor CO2e, LP, in a form approved by General Counsel. d. OP08-19 Director of Operations and Maintenance, Nick Arhontes, announced clerical corrections to the report,which will reflect in the report going to the Board of Directors for approval. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: 1)Authorize the General Manager to approve renewal of a contract with Neutron Products, Inc., for Purchase of Anionic Polymer, Specification No. C-2006-273, authorizing a price increase of$.15Ab, for a total price of$3.0011b, for a one-year period effective September 1, 2008 through August 31, 2009(P.O. 102634-OB). 2)Authorize a 10%cost escalation contingency. (8) ACTION ITEMS a. OP08-23 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to approve a contingency increase of$623,114(17%)to the Professional Design Services Agreement with Earth Tech, Inc.,for Sludge Digester Rehabilitation at Plant No. 1, Job No. 131-100,for a total contingency of$989,652 (27%). Minutes of the Operations Committee May 7, 2008 Page 4 b. OP08-24 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to approve a contingency increase of$2,003,323 (18%) to the Professional Design Services Agreement with HDR, Inc. for Sludge Dewatering and Odor Control at Plant No. 1, Job No. P1-101, for a total contingency of$3,116,281 (28%). C. OP08-25 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to Approve Amendment No. 8 to the Professional Services Agreement with Integrated Program Management Consultants, a joint venture of Parsons Water and Infrastructure, Inc., and CH2M Hill, Inc., for Program Management Services for the Capital Improvement Program authorizing: 1) Establish an amount not to exceed $16,987,271 for year seven (Fiscal Year 2008/09)of the ten-year contract; and, 2) Increase the total amount of the ten-year contract to an amount not to exceed $93,077,246. (9) INFORMATIONAL ITEMS a. OP08-26 FY07/08 Budget Update Director of Finance and Administrative Services, Lorenzo Tyner, presented a brief overview of the two-year budget, highlighting the revised Capital Improvement Program, the planned staffing levels, and the Sanitation District's financial position. It was also noted that State budget proposals may include a loss of state funding to special districts. (10) DEPARTMENT HEAD REPORTS Assistant General Manager, Bob Ghirelli, reported that staff would be hosting Director Marshall, Buena Park city council members and city staff to a plant tour of the OCSD facilities, the Groundwater Replenishment System, and CIP projects in progress. Staff extended an invitation to all cities to join the tour. Director of Operations and Maintenance, Nick Arhonles, introduced Dave Heinz, Treatment Plant Operations Manager, who briefly presented an overview of two recent emergency repairs on pipeline issues and its complexities. (11) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY Committee Chair Larry Crandall, announced there would be a construction progress tour of the Ellis Pump Station at 4:30 p.m. on Thursday, June IVh. Miribtes of the Operations Committee May 7, 2008 Page 5 (12) CLOSED SESSION There was no closed session. (13) ADJOURNMENT AND FUTURE MEETING DATES The Chair declared the meeting adjourned at 6:08 p.m. The next Operations Committee meeting is scheduled for Thursday, June 12, 2008, at 5:00 p.m. Submitted by: Ulld Kovac Committee Seaetary H:Wepl gendMOpemficns Committee\0pembons 2008t0508W50708 Oper MinWw.d= Distributed at th O era ions Committee r Proposed Budget FY 08-09 and FY 09-10 Meeting Operations Committee May 7, 2008 Proposed Budget for FY 08-09 and FY 09-10 6 May 7.2008 Highlights of the proposed budget: ♦ Budget Oullays • FYPPOe Bu$p•1=5513mills- • FYOB WBurd, ::$5e9 mlllgn • FY09loeul9e1.1,1=1lbn • Revised Capital Improvement Program(CIP) • to%livarasem FY05-09 • 32%Manese In FY 09-10 ♦ increased Stalling Levels—1%per year,001 and Bag FTEs • Strong Financial Positioning—maintains AA bond rating • TM-year Budget—annual updates Additional revenue and debt financing are required to support needed capital improvements . R•MnWi _____ _FY 060E eos verges $219M PI) $242M(46%) Genee lnwme $19M 1s01) $110M(2YF) OeYl Prpcw05 $25aM(62%) $,..0m) Tonsil— p93N San M oulla c FY" P`01,10 on'I—.r,.1.-1 U41 M(75%) $]35 M(69%) T1ae1man1 a 0epaN $146M(PS%) $ea.02,) TelKpuarye Was 11,110Is Proposed Budget FY 08.09 and FY 09-10 Operations Committee May 7.2008 Sources of Funds Oenenl 5117 M $Il]%M FNF6CIugt S46% Iname Feeaa tMrpn �% St18M 54�96M OMI PmwaCe RYM a]% MMPoaeOv FIYfM 9t96 FY 06UB FT M10 Tele1:450 N l llbn Teal:SJ] lr_ Most OCSD revenue Is related to User Fees. FY 08.09 FY 09-10 General User Fees $183 M $203 M Permit User Fees $ 16 M $ 18 M Capital Facilities Capacity $ 20 M $ 21 M Charges Total Fees&Charges $219 M $242 M Most of our non-fee related revenues come from property taxes. "am FY 09.10 Property Tex $as M $fib M Interest $1 s M $19 M Interagency Sewer Charges $29 M $24 M Other $ am $ am Total Norr•Fee Belated Revenue $117 M $116 M 2 Proposed Budget FY 09-09 and FY 09-10 Operations Committee May 7, 2008 Outlays Outlays will decrease almost$100 million in FY 09-10, primarily due to the CIP. FY OB-09 IY 09.10 clpp.W a ..) $441 M� $335 Myew Treatment taxi Disposal $148 M oz $155 M lawl Total Outlays $588 M $490 M The Capital Improvement Program can be divided Into five distinct areas. Facets f 0s10 1.$ecwMary Treatment Fscilwas $1 so M $ 99 M 2.Gmun ter Replenistanent System $ 3 M $ OM 3.Treatment Plant Reheh I UpgraEea $102 M $ 76 M 4,collections $ 91 M $ fie M 5.Debt Seale $ 77M c 91M TOW $441 M $335 M 3 Proposed Budget FY 08-09 and FY 09-10 Operations Committee May 7, 2008 More than 5145 million is allocated to Treatment and Disposal Expenses. CIF(izWding Doti Service) $441 M m%i 5 MIS M mmv Trastmant and Disposal S iM M in,e S 155 M tav Tote)Expenditures $589 M $490 M Total Treatment and Disposal Expenses increase $21 million from FY 07-06 to FY D9-10. 11% 5fi 5149 M 4134 M FY 07-06 FY 08-09 FY 09-10 P,ge.W Pm Prcpwed Total operating costs will increase an average of 7.6%from S134 to S155 over 2 years. . ,. ._.... F -_ 1. r-na r a 1 211 a.w ram ua,...so.,..s..m .-.vw cma...u.e.a.m .n nee r.waKwie.... xuu xm. ems nru Proposed Budget FY 08-09 and FY 09-10 Operations Committee May 7, 2008 The majority of the expenditure increase will occur in three categories: FY08-W FY09-10 Category Millions MUM 1. Salaries and Benefits $4.4 $6.0 2. Contractual Services $8.6 $0.4 3. Operating Expenses $3.9 $1.3 Existing collective bargaining agreements and a t %increase in staffing will increase Salaries and Benefit costs. Proposed Propond FY 08-08 FY 09.10 Wages + 2.5M + 4.7M Benefits + 1.9 M + 1.3 M Total Salaries + 4.4 M + 6.0 M &Benefits Biosolids hauling costs continue to rise increasing contractual services budget. FY WN FY W10 P.Po Pro W Solids Removal + 5.6 M +1.9 M Other Waste Dlspmal + 2.7 M <1.5 M> Ogler + 0.3 M Total Conuactua Services + 8.6 M +0.4 M 5 Proposed Budget FY 08-09 and FY 09-10 Operations Committee May 7, 2008 The costs of chemicals required to treat effluent to current levels continue to Increase. Propowd Propowd Ev Mas "0s10 Chemicals .23 M +OA M Irauerp dwawwn 6 ader wpual Chemiml Coagulame +12 M +0.9 M Other +02M — Total Operating +3sM +1.3M Ezpemes Next Steps ♦ Additional Administrative Committee meetings ♦ Budget presentations for each Committee ♦ Presentation and adoption at the June Board meeting Distributed at th O rations Committee 0 IPMC Contract Meeting Perations Committee May 7, 2008 Capital Improvement Program Management Using IPMC a • May 2008 Why Use Management Consultant? ♦ Limited in-house resources ♦ Provides flexible staffing ability ♦ Quick response to needs ♦ Single point of responsibility ♦ Uniform approach on multiple projects ♦ Provide skills transfer ♦ Access to technical experts ♦ Desire to become more business-like Cash Flow Performance ONM 101% •ay(�t 109% 109% SxsaM •Muelel Ferw••1 erx 53W M St50M 90T. 014 S1WM B% SEOM- MM 01-02 02-03 03-04 N-05 OS-05 E 7 07-00' Egewuwa iw Ev me•w e�w m a rowv wow vuro Ab. IPMC Contract Operations Committee May 7, 2008 Staffing Budget Compared to Overall CIP $400 M - - m.M •IPMc •CCSp S]00 M •COnilnpem/ $t50 M s ' •Conavllnnl• S]00M ' •Conslmdlon 5150M SIoM ■ ■ ■.■.■ ■ $50M OM OB 09 0510 10.11 11-00 1b1] 1}ti Ii15 Fiscal Year Staffing Budget Compared to FY 08-09 CIP ocao iYrAM IPMC f1iAY 0% 5'. CPMI„p•ncy� SHAM Con 5'= 51]9 1.11• COn51rudwt S285 0 M 78'. Total FY 08-09 CIP = S363.200.000 Projected CIP Staffing Needs 165 169 • IPMC 162 149 ocso ■ ■ ■ ■ i 89 99 99 99 69 c u,rcmYez, 0"9 0S10 10'11 1191 AGu•1 L IPMC Contract Operations Committee May 7,2008 Example of Varying IPMC Staffing Needs FY 01-0! 0 9 M10 I 1D11 11.12 Profap tMnagora 6 6 5 2 3 Prgem Englnwre 12 11 10 0 6 R0ai2en1 En91wen 9 11 10 7 2 Inspectors 13 15 16 11 6 ProjectC nude 14 16 13 11 9 Prolw 1 11 13 11 9 6 COneUudim Supp0rl Total 66 70 63 50 33 IPMC Staff Costs Compared to OCSD Staff ocso IPMC-$127 M 02-03 05 06 ...9 11-12 IPMC Assists in Many Areas of CIP Planning and Execution ♦ Planning-CIP validation,special studies ♦ Protect/program management ♦ Design management-special reviews • Construction management-inspection, engineering ♦ Project commissioning and start-up 3 IPMC Contract Operations Committee May 7, 2008 IPMC Budget Performance .. YY YW YY BW,1 i.YSZ/! 41.W.1W WS110L� NldNd9 e}AYW P0.MIli BMM}t,,Y.M I,y1W 11,Ii1Y Rp,1i iYtl,.tlt �tlCl0 M�WLp tY1N it,MdM PfaAN 4HI]t) PTSP} iYIAY '6SNb�bM1 WOwYSS W�be�ppp Awele Staff Recommendation Authorize an amount not to exceed $16,987,271 for year seven (PY 08-09). Questions? vise Our weEcne: Www.00SD.com STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Notice and Agenda for the Operations Committee Meeting of Orange County Sanitation District to be held on May 7, 2008, was duly posted for public inspection in the main lobby of the Districts'offices on April 30, 2008. IN WITNESS WHEREOF, 1 have hereunto set my hand this 30th day of April 2008. Lilia Kovac, co mitte Secretary Orange County Sanitation District HADEPTIAGENDAMPERATIONS COMMITTEEWGENDA CERTIFICATION.DOC Distributed at the O erations Committee S 0 Emergency Repairs Meeti g Operations Committee May 7, 2008 Emergency Repairs at Plant No. 1 and 2 6 May 7,2008 TmMml1.nI Ho.3ln Hu.1,1—Beoc 120-inch Discharge Line Repair v�mpsi on y� � � 1 LI* * t January 18, 2008 emergency repairs initiated Emergency Repairs Operations Committee May 7, 2008 *D,,,,,,r,dPatch over hole hole in pipe due to corrosion Other corrosion oinjected points found and into voids in soil repaired .-1..Olnl Xo.1 In F W nMln O1hy 90-Inch Primary Influent Lines Repair i aa: �pCy1• I L L Emergency Repairs Operations Committee May 7, 2008 Seepage discovered March 9, 2008, Initiated investigation N W A challenge to stop the flow &I P r_. -• "tester Leak identified West 90-inch Pipe Emergency Repairs Operations Committee May 7, 2008 i "joint Final repair with new seal West 90-Inch Pipe oIM LargecrackRepair options discovered to be determined East 90-Inch Pipe iuWmenl PWm W.2 In nunnnamn Bunn Groundwater Seepage in an Abandoned Meter Pit aw��N Permanent fix yet to be determined Emergency Repairs Operations Committee May 7, 2008 Emergency Repairs at Plant No. 1 and 2 it May 7.2008 ina,mmn,Plant No,2In aunangten french 120-inch Discharge Line Repair ocean owmll Booster station Effluent Hume a'. O sa� ti o era son..ne a., Is OJanu,ry' 18, 2008 emergency repairs initiated J Distributed at th Operations IPMC Contract Committee O v Operations Committee Meeting May 7, 2008 Capital Improvement Program Management Using IPMC a • May 2008 Why Use Management Consultant? ♦ Limited in-house resources ♦ Provides flexible staffing ability ♦ Quick response to needs ♦ Single point of responsibility ♦ Uniform approach on multiple projects ♦ Provide skills transfer ♦ Access to technical experts ♦ Desire to become more business-like Cash Flow Performance .M B.dgN IOaA tOB% moM ••,leW lel FereuM B% EW N $1NIM fTi t qf4 N M14 XOM bM O1-03 0?03 00-01 0145 OS-06 O6-07 07-00' '[wm,un�o-rr mte me uwy m e io-«aa mwy..iune aw. IPMC Contract Operations Committee May 7, 2008 Staffing Budget Compared to Overall CIP "OO M M.M {� e DOOM 1+II .COnllryexry $210M •COnfulUMa 5200M •Conslru[Ibn $ISOM � $I OOM ■ ■ ■ ■ ■ ■ 550M 0M 0849 Of10 10-11 11-12 13-13 1314 1415 Fscal Year Staffing Budget Compared to FY 08-09 CIP 1 ocso PMc 530M 52b 17M gya 5% CO �9% $14.8 [y e.G M COna.M1anb— 5% $R9M Construction K85.8 M 78% Total FY 08-09 CIP 6363,200,000 Projected CIP Staffing Needs 165 169 • IPMD 6249 OCSD ■ ■ ■ ■ M 99 99 tma 9 99 99 C—Mrear, 01-09 0990 10-11 11-12 Atlml L IPMC Contract Operations Committee May 7,2008 Example of Varying IPMC Staffing Needs Pv mUe OB OPto It, 11-12 Project Manage. 6 6 5 4 3 Project Engineers 12 1 11 10 a 5 %Sident Engineer, 9 11 111 Inspanor, 14 15 Project Cwn 14 14ftJ.I/ 11 /3 Corslr w,sgVWTwo] 66 TO IPMC Staff Costs Compared to OCSD Staff PMc ocso I PM � .1 C-5127 M dz-03 — 0S06 oe-os 11-12 IPMC Assists in Many Areas of CIP Planning and Execution ♦ Planning-CIP validation,special studies ♦ Project/program management ♦ Design management-special reviews ♦ Construction management-inspection, engineering ♦ Project commissioning and start-up 3 IPMC Contract Operations Committee May 7,2008 IPMC Budget Performance R OlM WM 9� M.�6Pl Nt!N.11O 3�t1MM� S�lMtXi INAN.W i,6.tir.YY FAVCbw,.1X]]t 11-M)@ �ttl6�tl �itlI3A A]Q11 Rnuliq pl1N i,.lmy, 'i1lDYtl t].WdO 4DttM t�N.W 'E4eYn,brvmuwuNJu�bs NNPMms. Staff Recommendation Authorize an amount not to exceed $16,987,271 for year seven (FY 08-09). Questions? Visit Our Website: WWW.00SD.COm T Distributed at the Operations Committee -7 U q Proposed Budget FY 08-09 and FY 09-10 Meeting Operations Committee May 7, 2008 Proposed Budget for FY 08-09 and FY 09-10 e May 7.200B Highlights of the proposed budget: • Budget Outlays • FY07-0a Buren=551]mllan ♦ FY[e-09 Bud".5589 mu.. • FY p)IO Budge=Slap lNbn • Revusd Caput Impron enem Program(CIP) le^„....eua n n Dees • ]xY deauwnFY o9.l0 ♦ Increased staffing Levels—1°b Mr year,Bat and Bab"Es • slmng Financial Positioning—maintains M wnd rating • Tm-Year Budget—annual updates Additional revenue and debt financing are required to support needed capital improvements . B.r..� ease np•lr axd large 5219M pA.1 SNRM(d6'.1 —11.in.uma 511]M Qyel SI 16 M(W.1 pcelRrcee6t 5256M 513M 01.1 Tort Mwnlw PRY WIY QW/s rYPp Insists CIP 1rtag0.o15.rrta SHIM 13Y1 STJSM ISA) 1aePwYa0.pxY SIMM IaS\I SISSM I., Ties assets PPP PRP Proposed Budget FY 08-09 and FY 09-10 Operations Committee May 7, 2008 Sources of Funds Y1PM Emtanl Ircane RpA Wegm iflb S11fiM WtaM � my �' GSBY yx 0.slnmN $IYIM 3]% FY WAS FYY 10 Talt$Si M01b1 Telel:boll Mullen Most OCSD revenue is related to User Fees. FY 0e Fy09.10 General User Fees $183 M $203 M Permit User Fees $ 16 M $ ism Capital Facilities Capacity $ 20 M $ 21 M Charges Total Fees&Charges $219 M $242 M Most of our non-fee related revenues come from property taxes. FY 0e-0e "09,10 Property Tax $65M $68M Interest $ 18 M $19 M Interagency Sewer Charges $29 M $24 M Other $ 510 $ 5 M Total Non-Fee Related Revenue $117 M $116 M 2 Proposed Budget FY 08-09 and FY 09-10 Operations Committee May 7, 2008 Outlays Outlays will decrease almost$100 million In FY W10,primarily due to the CIP. FY 0l nOF70 optmewaa,str,es $M1111ime $336111l Ores Traasnenl and gappal $1MMpaq $1$$$101+1 TOW OWaya $$wm 11,10011111 The Capital Improvement Program can be divided into five distinct areas. F 0509 FY 79-10 1.Secondary Treatment Facilte6 $16611 $ al 2.Groundwater Replenishment System $ 3M S OM 3.Treatment Plant Reha,/Upgrades $102 M $ 76 M d.Collections $ 91 M $ 68 M 5.Dett Semi $ n M $ 91 M Toted $"IM $335M 3 Proposed Budget FY 08-09 and FY 09-10 Operations Committee May 7, 2008 More than $145 million is allocated to Treatment and Disposal Expenses. FY WN FY 0$-10 CIP(Including Debt Service) $441 M the%t $335 M tmri Treatment antl Disposal $14a M my $155 M Pml Total Expenditures $509 M $490 M Total Treatment and Disposal Expenses Increase $21 million from FY 07-09 to FY 09-10. % 5x -it 48 M FY 07-08 FY 08-09 FY 09-10 Project. P.,.ea Pr.,r.d Total operating costs will Increase an average of 7.6%from$134 to$155 over 2 years. :x...eiom, .1n.p 11— z1... na nsww....v..e.. mo-ro w nanovw.e.. mi izooi t.YlgvWipapA. inw. Proposed Budget FY 08-09 and FY 09.10 Operations Committee May 7,2008 The majority of the expenditure increase will occur in three categories: F 0 F o910 Category Millions Minors I. Salaries and Benefits $4.4 $6.0 z. Contractual Services $6.6 $0.4 3. Operating Expenses $3.9 $1.3 Existing collective bargaining agreements and a 1 %Increase in staffing will Increase Salaries and Benefit costs. PropoW prepo FY OB-0e "wio Wages a 25 M ♦ 47001 Senellts ♦ 1.9 M ♦ 1.3 M Total Salaries ♦ 4.4 M ♦ SA M a Benefits Biosolids hauling costs continue to rise increasing contractual services budget. FY o609 "Wit) prppoW nrwo Solias Removal s5.6M v1.911A o0,er waste Disposal a 2.1111 <1.sm> olner ♦ 031101 Total Contractual Services ♦ 6.6M ♦0.4M 5 Proposed Budget FY 08-09 and FY 09-10 Operations Committee May 7,200B The costs of chemicals required to treat effluent to current levels continue to increase. Y F Rraro p l FY 0&W F 0310 Chemicals +25M +a<M nrowm eu�ni.mmaaevuraaq Chemical Coagulants +1.2M +0.9M Omer ♦02M — Tow Operafing ♦3.9M +12M Expanses Next Steps ♦ Additional Administrative Committee meetings ♦ Budget presentations for each Committee ♦ Presentation and adoption at the June Board meeting ORANGE COUNTY SANITATION DISTRICT 7141U�P411 NOTICE OF MEETING i/14!'ifi21Si5[i uanv.C4Cd.Cmm OPERATIONS COMMITTEE Engineering, Operations 8: Maintenance, and Technical Services ma01y eaanse: P.0 Fiw InI IQallanl A 5Yt28 25 8 r(12'i ORANGE COUNTY SANITATION DISTRICT 101144 e0e Awnw Fdntanvanm.U'92705 me WEDNESDAY, MAY 7, 2008 - 5:00 P.M. renn,ml AaenH.0 DISTRICT'S ADMINISTRATIVE OFFICES cltletl 10844 ELLIS AVENUE Anaheim FOUNTAIN VALLEY, CALIFORNIA 92708 5izfi 5aena Iwn. v✓ww.ocsd.com �yl,asr: hwnlaln Yallry �1191'hlll [iarthm lA,nw NwRlnlryiu', 5rnm1 'W7 The regular meeting of the Operations Committee of the Orange County Sanitation District will be held at the above location, date and time. e H11" i as Alanuula A4,v4xiln 5eaa; "118 FYflI%' O Sam 21 e Alfi Slay 5ee"h 9anmli Ta:pn Vlls PnrF YUMa IinIN Cawyy OI Ormpe 1artfGry OlsyHete Q,FCJ MY.53 Mili,wy I)ty Wasp viatHme Irinne Hanrli To maintain world-c/ass leadership in wes[ewater 8ntl water resource management OPERATIONS COMMITTEE MEETING DATES OPERATIONS COMMITTEE BOARD MEETING DATE MEETING DATE 05/07/08 05/28/08 06/12/08** 06/25/08 07/02/08 07/23/08 AUGUST DARK 08/27/08 09/03/08 09/17/08* 10/01/08 10/22/08 11/05/08 11/19/08* 12/03/08 12/17/08* JANUARY DARK 01/28/09 02/04/09 02/25/09 03/04/09 03/25/09 04/01/09 04/22/09 05/06/09 03/27/09 O6/03/09 04/24/09 *Meetings are being held on the third Wednesday of the month. **Meeting scheduled to the second Thursday of the month due to conflict with League of Cities. ROLL CALL OPERATIONS COMMITTEE Engineering, Operations & Maintenance, and Technical Services Meeting Date: May 7, 2008 Time: 5:00 p.m. Adjourn: COMMITTEE MEMBERS (13) Larry Crandall Chair Ken Parker Ice Chair) Charles Antos Don Bankhead Rose Espinoza Patsy Marshall Roy Moore David Shawver Harry Sidhu Constance Underhill Don Webb James M. Ferryman Board Chair Doug Davert Board Mice Chair OTHERS Brad H in, General Counsel STAFF Jim Ruth, General Manager Bob Ghirelli, Assistant General Manager Nick Arhontes, Dir. of Operations & Maintenance Jim Herber , Direct of Engineering Ed Torres, Director of Technical Services Lorenzo Tyner, Director of Finance and Administrative Services Lilia Kovac, Committee Secretary Tod Ha es John Linder Matt Smith H Wepaagenda\Opembons Committee\Opemtions 2008\0508\02Roll Call.d= AGENDA REGULAR MEETING OF THE OPERATIONS COMMITTEE Engineering, Operations & Maintenance, and Technical Services ORANGE COUNTY SANITATION DISTRICT May 7, 2008 - 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) 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 April 2, 2008 Operations Committee meeting. b. OP08-17 Recommend to the Board of Directors to authorize the General Manager to sell surplus emission reduction credits via negotiated contracts with CAP United, Inc. and Cantor CO2e, LP, in a form approved by General Counsel. (Book Page 11) Book Page I Operations Committee 05/07/08 Page 2 C. OP08-18 Recommend to the Board of Directors to: 1)Approve Change order No. 5 to the contract issued to Hill Brothers Chemical Company for the Purchase of Magnesium Hydroxide, Specification No. C-2005-244, authorizing a unit rate increase of$0.20 per gallon, for a total unit price of$1.84 per gallon, plus applicable sales tax for a one-year period effective July 1, 2008 through June 30, 2009, and all other terms of the contract shall remain in effect(P.O. 102362 OB). 2)Authorize a 10% unit cost escalation contingency. (Book Page 13) d. OP08-19 Recommend to the Board of Directors to: 1) Authorize the General Manager to approve renewal of a contract with Neutron Chemicals, Inc., for Purchase of Anionic Polymer, Specification No. C-2006-273, authorizing a price increase of $.015ft for a total price of$3.00/lb, for a one-year period effective September 1, 2008 through August 31, 2009 (P.O. 102810-OB). 2)Authorize a 10%cost escalation contingency. (Book Page 15) e. OP08-20 Recommend to the Board of Directors to: 1)Award a contract to Olin Chlor Alkali Products,for the Purchase of Sodium Hydroxide (Caustic Soda) 25% solution, Specification No. C-2008-371 BD, for delivery to the plants for the period July 1, 2008 through June 30, 2009, for a unit price of$459.90 per dry ton plus freight of$200.00 per dry ton, plus applicable sales tax for an estimated annual amount of$431,235.00, with four one-year renewal options; and, 2)Authorize a 10% annual cost escalation contingency. 3)Award a contract to Basic Chemical Solution, LLC, for the Purchase of Sodium Hydroxide (Caustic Soda) 50% solution, Specification No. C-2008-371 BD, for delivery in the collection system, for the period July 1, 2008 through June 30, 2009, for a unit price of$539.00 per dry ton, subject to the Harriman Chemsult Limited Index, plus freight of$39.48 per dry ton, plus applicable sales tax for an estimated annual amount of$235,075.00 with four one-year renewal; and, 4)Authorize an 8% quarterly cost escalation contingency. (Book Page 16) f. OP08-21 Approve Amendment No. 1 to Cooperative Projects Grants Program Contract No. 0604 with Midway City Sanitary District, providing for an 11-month time extension. (Book Page 18) g. OP08-22 Recommend to the Board of Directors to: 1)Approve a budget increase of $128,100 for Rehabilitation of District Siphons, Contract No. 2-68,for a total budget of$7,854,100; and, 2)Approve a contingency increase of$136,108 (3%)to the construction contract with Ken Thompson, Inc., for Rehabilitation of District Siphons, Contract No. 2-68,for a total contingency of$363,008 (8%). (Book Page 23) Book Page 2 Operations Committee 05/07/08 Page 3 END OF CONSENT CALENDAR h. Consideration of items deleted from Consent Calendar, if any. (8) ACTION ITEMS a. OP08-23 Recommend to the Board of Directors to approve a contingency increase of $623,114 (17%)to the Professional Design Services Agreement with Earth Tech, Inc., for Sludge Digester Rehabilitation at Plant No. 1, Job No. P1-100, for a total contingency of$989,652 (27%). (Book Page 25) b. OPO8-24 Recommend to the Board of Directors to approve a contingency increase of $2,003,323(18%) to the Professional Design Services Agreement with HDR, Inc. for Sludge Dewatering and Odor Control at Plant No. 1, Job No. P1-101, for a total contingency of$3,116,281 (28%). (Book Page 27) C. OPOS-25 Recommend to the Board of Directors to Approve Amendment No. 8 to the Professional Services Agreement with Integrated Program Management Consultants, a joint venture of Parsons Water and Infrastructure, Inc., and CH2M Hill, Inc., for Program Management Services for the Capital Improvement Program authorizing: 1) Establish an amount not to exceed $16,987,271 for year seven (Fiscal Year 2008/09) of the ten-year contract; and, 2) Increase the total amount of the ten-year contract to an amount not to exceed $93,077,246. (Book Page 29) (9) INFORMATIONAL ITEMS a. OP08-26 FY07108 Budget Update— Lorenzo Tyner (Book Page 37) (10) DEPARTMENT HEAD REPORTS • Emergency Repairs (11) OTHER BUSINESS, COMMUNICATIONS, SUPPLEMENTAL AGENDA ITEMS, OR ITEMS FOR FUTURE AGENDAS, IF ANY (12) CLOSED SESSION Book Page 3 Operations Committee 05/07/08 Page 4 During the course of conducting the business set forth on this a9entla as a regular meeting of the Committee,the .Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, .pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6,as noted. .Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) :employee actions or negotiations with employee representatives; or which are exempt from public disclosure .under the California Public Records Act, may be reviewed by the Committee during a pennitled closed session :antl are not available for pudic inspection. At such time as the Committee takes final actions on any of these subjects,.the minutes will reflect all required.disclosures of information. a. Convene in closed session. b. Reconvene in regular session. C. Consideration of action, if any, on matters considered in closed session. (13) ADJOURNMENT-The next Operations Committee meeting is scheduled for Thursday, June 12, 2008, at 5:00 p.m. Book Page 4 Operations Committee 05/07/08 Page 5 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 Operations 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 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 Adjournment: 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 Secretary ten days in advance of the Committee meeting. (Committee Chair Lary Crandall (714)593-4400 slcrandall(daol.com Committee Secretary: Lille Kovac (714)593-7124 Ikovac(alocsd.com (General Manager Jim Ruth (714)593-7110 imthralocstl.cem iAssistent General Manager Bob Ghirelli (714)593-7400 rchirelliAmsd.com (Director of Technical Services Ed Tones (714)593-7080 etorres(docsd.com Director of Engineenng Jim Herberg (714)593-7300 iherbero0ocsd.com Dir.of Operations and Maintenance Nick Amontes (714)593-7210 namontes(docsd.com Book Page 5 Operations Committee Rolling Agenda Report Calendar Date Dept Action or Description of Report Information June TS EnerTech Biosolds Processing Facility Construction Information Update June O&M Purchase of Ferrous Chloride Action June O&M Purchase of Bleach Action June O&M Deep Well Injection Information Only June O&M WERF Cost-Effective Rehab Methods for Private Information Only Laterals Executive Summary Approve Quitclaim Agreement with City of Newport Action July Eng Beach re Bitter Point Pump Station Replacement, Job No. Sdg July Eng T�iunk m�men�t No. ReachoBP�rNNo.77 37 edhill Action H:WePMgeotla\0pe2lions Commigeel wmfions 2oo8wowcRoning Agee a.dw Book Page 6 MINUTES OF THE OPERATIONS COMMITTEE Engineering, Operations & Maintenance, and Technical Services Orange County Sanitation District April 2, 2008—5:00 p.m. A meeting of the Operations Committee of the Orange County Sanitation District was held on April 2, 2008, at 5:00 p.m. in the Sanitation District's Administrative Office. (2) ROLL CALL Following the Pledge of Allegiance, a quorum was declared present, as follows: Operations Directors Present: Staff Present: Larry Crandall, Chair Jim Ruth, General Manager Ken Parker, Vice Chair Bob Ghirelli,Assistant General Manager Charles Antos Nick Arhontes, Dir. of Operations&Maintenance Don Bankhead Jim Herberg, Director of Engineering Rose Espinoza Ed Torres, Director of Technical Services Patsy Marshall Lilia Kovac, Committee Secretary Roy Moore Tod Haynes, Engineering Manager David Shawver John Linder, Engineering Manager Harry Sidhu Matt Smith, Engineering Manager Constance Underhill Jim Bunor Don Webb Mark Esquer James M. Ferryman, Board Chair Vlad Kogan Doug Davert, Board Vice Chair Mike Moore Simon Watson Operations Directors Absent: Chuck Winsor Others: Gino Rapagna, IPMC (3) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (4) PUBLIC COMMENTS There were no public comments. (5) REPORT OF THE COMMITTEE CHAIR Chair Crandall reported that the tunnel work was completed on Ellis Street, and the road was now open to traffic. Book Page 7 Minutes of the Operations Committee April 2, 2008 Page 2 (6) REPORT OF THE GENERAL MANAGER Jim Ruth, General Manager, did not give a report. (7) CONSENT CALENDAR ITEMS a. MOVED, SECONDED, AND DULY CARRIED: Approve minutes of the March 5, 20D8 Operations Committee meeting. b. OP08-10 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: 1)Approve a Professional Services Consultant Agreement with Boyle Engineering for the Corrosion Standards Update, Specification No. CS-2007-344BD, in an amount not to exceed $291,445; and 2)Approve a 19%contingency ($55,374). C. OP08-11 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: 1)Approve plans and specifications for P1 Multiple Locations Office Modifications, Project No. SP-127, on file at the office of the Clerk of the Board; 2)Approve Addenda No. 1 and No. 2 to the plans and specifications; 3) Receive and file bid tabulation; and, 4) Reject all bids for P1 Multiple Locations Office Modifications, Project No. SP-127. d. OP08-12 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: 1)Approve a Professional Consultant Services Agreement with RBF Consulting, Inc. for the Carbon Canyon Sewer and Pump Station Abandonment, Contract No. 2-24-1, providing for construction support services for an amount not to exceed $498,129; and, 2)Approve a 10% contingency($49,813). e. OP08-13 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: 1) Approve Amendment No. 1 to Cooperative Projects Grants Program Contract No. 0502 with City of Newport Beach, providing for an 18-month time extension with no expanded scope of work, and no increase of grant funding; and, 2) Approve Amendment No. 2 to Cooperative Projects Grants Program Contract No. 0602 with Garden Grove Sanitary District, providing for a six-month time extension. Book Page 8 Minutes of the Operations Committee April 2,20D8 Page 3 f. OPOB-14 MOVED, SECONDED, AND DULY CARRIED: Approve an increase in the contingency to the purchase contract for Purchase and Installation of Modular/Systems Furniture, Specification No. E-2007-353BD, for an additional 20% ($25,124) increasing the total contingency to 40% ($50,248). END OF CONSENT CALENDAR g. No items considered. (8) ACTION ITEMS a. OP08-15 MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: 1)Approve the renewal of Purchase Order No. 101758- OB for the purchase of Cationic Polymer, Specification No. C-2003-143, issued to Polydyne Inc., with a unit rate increase of$0.13 per active pound for Solution Polymer increasing the total price to$1.88 per active pound plus tax, and a unit rate increase in Mannich Polymer of$0.153, increasing the total price to $1.682 per active pound plus tax, for an estimated amount of$1,950,000 for the period July 1, 2008 through June 30, 2009. 2)Authorize a 10°/u ($195,000) contingency. (9) INFORMATIONAL ITEMS a. OPOB-16 Emerging Issue: Climate Change and Greenhouse Gas Emissions Director of Technical Services, Ed Torres, introduced the subject to the Operations Committee members as an emergent issue. He introduced Mike Moore, Environmental Assessment Manager, who provided a broad overview of climate change, pending legislation, and its effects on water supply. (10) DEPARTMENT HEAD REPORTS Director of Engineering,Jim Herberg, reported the Sanitation District had been the recipient of the Primavera Excellence Award. Mr. Herberg also presented the progress of the Capital Improvement Program, the consent decree accomplishments, and the CIP program based on the Proposition 218-approved rates and the 5-year plan. Director of Operations and Maintenance, Nick Arhontes, briefly presented an update on the North County Yard construction progress including a cost saving approach on railroad facilities to be removed by OCS. He also reported two leaks were discovered at Plant 1 underground primary influent feed lines, and another underground leak at the metering probe manholes on Book Page 9 Minutes of the Operations Committee April 2, 2008 Page 4 the Plant 2 main outfall. These leaks require emergency repairs and the costs are expected to exceed $200,000. Ratification for the emergency repairs will be submitted to the Board of Directors for approval. It was also reported that damage to one of the Plant 2 pumps was incurred during outfall pump system testing. Director of Technical Services, Ed Torres, reported Sanitation District staffs involvement with the National Water Research Institute (NWRI)as members of the Blue Ribbon Panel, evaluating the amount of disinfectants used on the discharged water. Mike Moore provided a brief report of his attendance at a wastewater conference in Mexico City; and a brief report of a biosolids spill on the 1-5 Freeway in Hollywood. (11) OTHER BUSINESS. COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS. IF ANY Board Vice Chair Doug Davert reported that he presented the pictures of the concrete grout debris removal process from the regional sewer at Tustin's council meeting and it was received with much interest. It was then suggested that the Sanitation District provide more educational programs to the cities for viewing on local cable channels. Chair Crandall reported that staff will be presenting a report on pharmaceuticals found in the wastewater to the GW RS Steering Committee. (12) CLOSED SESSION There was no closed session. (13) ADJOURNMENT AND FUTURE MEETING DATES The Chair declared the meeting adjourned at 6:15 p.m. The next Operations Committee meeting is scheduled for Wednesday, May 7, 2008, at 5:00 p.m. Submitted by: e L is K vac Committee Secretary H Vep8a0enda\Ope28ons Commiftw\Ope20ons 20080408\040208 Open Mlnutm.do= Book Page 10 OPERATIONS COMMITTEE pleenne Dace TO Bd.urd,. 05/07/08 05/21/0B AGENDA REPORT Rem Number Item Number Orange County Sanitation District oP08-17 FROM: James D. Ruth, General Manager Originator: Edward M. Torres, Director of Technical Services SUBJECT: Sale of Surplus Emission Reduction Credits GENERAL MANAGER'S RECOMMENDATION • Authorize the General Manager to sell surplus emission reduction credits via negotiated contracts with ICAP United Inc., and Cantor CO2e, LP, in a form approved by General Counsel. SUMMARY • The District currently owns over 700 lb/clay of VOC ERCs; South Coast Air Quality Management District (SCAQMD) emission reduction credits (ERC)for Reactive Organic Gases (commonly referred to as VOC's). • District staff accounted for the amount of ERCs required for our own Capital Improvement Projects in order to get permits for construction and operation and have determined that a surplus of up to four hundred pounds per day of VOC ERCs exists. • Market prices for one pound of VOC ERCs in April 2006, were $2,000 and recently reached an all time high of$18,000. The current average market price of one pound per day of VOC ECRs is approximately $16,000. For 400 Ibs of VOC ERCs this equates to $6.4 million dollars. • Staff recommends that we sell the 400 Ibs of VOC ERC's due to high market value and because the SCAQMD is considering devaluating old ERCs that have not been used in years. • Staff recommends contracting with two experienced ERC brokerage firms, ICAP United Inc., and Cantor CO2e, LP, rather than pursuing an RFP process in order to take advantage of the current high market value and avoid a possible devaluation of the market price due to public perception of"flooding the market"with our ERCs. • ICAP is the only existing broker to have previously structured ERCs transactions for OCSD and CantorCO2e is the world's longest standing environmental brokerage created to serve companies in the carbon constrained economy and is active in the South Coast AQMD VOC ERC market. . Form No.otv=-x a ,W DMM7 Page 1 Book Page I I PRIOR COMMITTEE/BOARD ACTIONS None ADDITIONAL INFORMATION • An ERC is a credit earned by a company when it reduces air emissions beyond what is required by existing permits and rules. It is an asset that can be used by its owner or sold or traded to companies that need emission offsets for project development. • The vast majority of the District's ERCs came from the retirement of 23 diesel engines when the Central Power Generation system came on line in 1992. Form No.ow402-4 PemeaE oLotNl Page 2 Book Page 12 OPERATIONS COMMITTEE MeeOngDale TOB .orOr. asio�ioa osnaioe AGENDA REPORT Item Number Item Number OPOa 1B Orange County Samtatlon Datnct FROM: James D. Ruth, General Manager Originator: Nick Arhontes, Director of Operations and Maintenance SUBJECT: CONTRACT FOR MAGNESIUM HYDROXIDE, SPECIFICATION NO. C-2005-244, FOR ODOR AND CORROSION CONTROL IN THE COLLECTION SYSTEM GENERAL MANAGER'S RECOMMENDATION 1) Approve Change order No. 5 to the contract issued to Hill Brothers Chemical Company for the Purchase of Magnesium Hydroxide, Specification No. C-2005-244, authorizing a unit rate increase of$0.20 per gallon, for a total unit price of$1.84 per gallon, plus applicable sales tax for a one-year period effective July 1, 2008 through June 30, 2009, and all other terms of the contract shall remain in effect (P.O. 102362 OB). 2) Authorize a 10% unit cost escalation contingency. SUMMARY The proposed Change Order No. 5 for the unit price increase of$0.20 per gallon will provide additional services to supply, operate, monitor, and maintain chemical dosing systems to cost effectively control hydrogen sulfide to specified target limits. This includes installation, upgraded chemical storage and dosing equipment, advanced wireless remote monitoring system, and additional labor for field sampling. PRIOR COMMITTEEIBOARD ACTIONS Approved contract award for Hill Brothers Chemical Company on November 16, 2005, Agenda Report OMTS05-54. ADDITIONAL INFORMATION Magnesium hydroxide is a non hazardous chemical and has been used successfully in our collection system odor and corrosion treatment program since September 2002. H'.Wept�gen LIOMmUons OommlXeelOpmallons 20UBW508WB-18.0 2005-244.Mag Hydrox.tloc Rw .00i01ro1 Page 1 Book Page 13 • Continuous treatment with magnesium hydroxide provides odor control odor by slightly raising the pH of the sewage to reduce the formation of hydrogen sulfide. Hydrogen sulfide combines with moisture in the sewer and forms sulfuric acid which then corrodes unprotected concrete and certain metals. • OCSD staff will be conducting random sampling and lab analysis of the delivered chemical to assure quality and contract compliance. This authorization complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted in Divisions 420, 830, and 840, line item 55. Award Date: November 2005 Contract Amount: $1.64/gal. +tax Contingency: 6% May 2008 Contract Amount: $1.84/qal. +tax Contingency: 10% M^4eglagxgawpnaEona Ca Mm%Op .,2008bSO =-l6.G-2g 2"Mag HOMX.dw R—• p IM7 Page 2 Book Page 14 OPERATIONS COMMITTEE Neeb09We 4ad.ufolr. 05/07/08 os/7R/o9 AGENDA REPORT roeM OS-19 Item Number Nu Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Nick Arhontes, Director of Operations and Maintenance SUBJECT: CONTRACT FOR ANIONIC POLYMER, SPECIFICATION NO. C-2006-273 GENERAL MANAGER'S RECOMMENDATION 1) Authorize the General Manager to approve renewal of a contract, with Neutron Chemicals, Inc., for Purchase of Anionic Polymer, Specification No. C-2006-273, authorizing a price increase of$.015/Ib, for a total price of $3.00/lb, for a one-year period effective September 1, 2008 through August 31, 2009 (P.O. 102810-OB). 2) Authorize a 10% cost escalation contingency SUMMARY • Neutron, our current supplier, has provided data to purchasing/contracts staff to substantiate their request for increase. This is due to the recent increase in the cost of the raw materials used to manufacture anionic polymer coupled with higher fuel prices. It is staffs opinion, the request is reasonable. • Staff has determined that the remaining contract renewals will not be exercised, and this contract will be rebid in 2009. PRIOR COMMITTEE/BOARD ACTIONS None ADDITIONAL INFORMATION Anionic polymer and ferric chloride are added to the primary influent at both plants to enhance the removal of BOD and improve the settling of suspended solids during primary treatment. We call this our chemically enhanced primary treatment (CEPT) process. This item has been budgeted for divisions 830 and 840 in Operating Budget line items 48. Award Date: June 2006 Contract Amount: $2.85/lb+tax Contingency:00% Mav 2006 Contract Amount: $3.00/Ib+tax Contingency: 10% FOM N0.DMI02-2 R...1YP.07 Page 1 Book Page 15 OPERATIONS COMMITTEE Mee0n8 Date To9d.of Dlr. 0 07108 05/2a/08 AGENDA REPORT 1e Number Item Number OPae-20 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Nick Amontes, Director of Operations & Maintenance SUBJECT: CONTRACTS FOR THE PURCHASE OF SODIUM HYDROXIDE, SPECIFICATION NO. C 2008-371 BD FOR ODOR CONTROL IN THE COLLECTION SYSTEM AND PLANTS. GENERAL MANAGER'S RECOMMENDATION 1. A. Award a contract to Olin Chlor Alkali Products, for the Purchase of Sodium Hydroxide (Caustic Soda) 25% solution, Specification No. C-2008-371 BD, for delivery to the plants for the period July 1, 2008 through June 30, 2009, for a unit price of$459.90 per dry ton plus freight of$200-00 per dry ton, plus applicable sales tax for an estimated annual amount of $431,235.00, with four one-year renewal options; and, B. Authorize a 10% annual cost escalation contingency. 2. A. Award a contract to Basic Chemical Solution, LLC, for the Purchase of Sodium Hydroxide (Caustic Soda) 50% solution, Specification No. C-2008-371 BD, for delivery in the collection system, for the period July 1, 2008 through June 30, 2009, for a unit price of$539.00 per dry ton, subject to the Harriman Chemsult Limited Index, plus freight of$39.48 per dry ton, plus applicable sales tax for an estimated annual amount of $235,075.00 with four one-year renewal; and, B. Authorize an 8% quarterly cost escalation contingency. SUMMARY • A formal bid package was mailed to 15 vendors. Thirteen vendors did not respond, and two responded. The bids were opened on April 15, 2008. • The cost escalation factor is based on the Harriman Chemsult Limited Index and the prices continue to increase in the West Coast regional markets. Caustic soda supply on the West Coast is very tight and the expectation is that unit prices will continue to increase. As a result, Basic Chemical Solution, LLC, price is firm for 90 days of the bid acceptance period and then with quarterly price protection thereafter. Conditionally, the unit price for the 50% solution caustic soda would be adjusted based on the Harriman Chemsult Limited Index. Form No.o IW 2 v Co,ww 0 0 .-M- e Page 1 Book Page 16 PRIOR COMMITTEE/BOARD ACTIONS Specification No. C-2005-22OBD approved on May 25, 2005, Agenda Report OMTS05- 26, ADDITIONAL INFORMATION • OCSD has an established odor control program that consists of adding several chemicals in both the collection system and treatment plants to control hydrogen sulfide formation. This is a common by-product of the wastewater collection and treatment process that causes nuisance odors and also leads to the formation of sulfuric acid which corrodes unprotected concrete and metal structures. • Sodium hydroxide (also called lye, or caustic soda), in conjunction with bleach or hydrogen peroxide is also added to the chemical scrubbers at the treatment plants to remove hydrogen sulfide from the odorous air from the sewers and also treatment processes. • The goal of adding sodium hydroxide in the collection system is to dose specific trunklines that are not treated by the four continuous-chemical feed stations in the region. For these sewers, sodium hydroxide is batch dumped from the supplier's tank truck. This helps maintain hydrogen sulfide levels in the sewage at target levels determined thru sampling and monitoring by staff. This complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted in Division 420, 830, and 840, line item 51. Award Date: June 2008 Contract Amount: $659.90/dry ton+tax(25%)Contingency: 10%annual Award Date: June 2008 Contract Amount: 8578.48/dry ton+tax(50%)Contingency: 8% quarterly Forth NO.DW-102-2 VEUSCO.M CWOLO flw 04M-0 Page 2 Book Page 17 OPERATIONS COMMITTEE Meeang Dale TO 13d of Dir. os/m/oe 01/21108 AGENDA REPORT ImmP Da Nu-2m1ber Item Number O Orange County Sanitation District FROM: James D. Ruth, General Manager Jim Herberg, Director of Engineering SUBJECT: COOPERATIVE PROJECTS GRANTS PROGRAM GENERAL MANAGER'S RECOMMENDATION Approve Amendment No. 1 to Cooperative Projects Grants Program Contract No. 0604 with Midway City Sanitary District, providing for an 11-month time extension. SUMMARY • The Cooperative Projects Grants Program (Program) provides funds to local agencies for projects that reduce or eliminate inflow and infiltration (1/1) to the sewer collection system. • The Midway City Sanitary District (MCSD) requests Amendment No. 1 to Cooperative Projects Grants Program Contract No. 0604, to provide for an 11-month time extension to complete the project. • In FY 05106, the Orange County Sanitation District's (OCSD) Program budget was reduced to fulfill its obligation to only outstanding grants; MCSD has two outstanding grants. Funding will be moved to accommodate the time extension. PRIOR COMMITTEE/BOARD ACTIONS In July 2006, the Board of Directors approved Contract No. 0604 for$519,750 in grant funds to MCSD. ADDITIONAL INFORMATION Cooperative Projects Grants are paid to local agencies on a reimbursement basis after project completion. The total amount of grant reimbursements provided to member agencies since 1999 through the Program is approximately $23.1 million. The MCSD has been identified as having a localized inflow problem by the OCSD long-term flow monitoring efforts. Under Cooperative Project No. 604 (CP-604), the MCSD is to replace and upsize approximately 3,780 linear feet (If) of sewer to provide sufficient capacity for development and redevelopment projects. The new sewer and manhole rehabilitation are to reduce III in specific areas of MCSD Basin 22. Page 1 Book Page 18 The Project completion date was projected for May 31, 2008. The Contractor was awarded the project in December 2007. The Contractor was to begin work in January 2008, but has experienced a major setback in his current project that has caused this project to be delayed. The MCSD would like to retain this Contractor, since he has performed work for the MCSD in the past, and his bid is approximately 75% of the anticipated construction cost. The funds necessary to complete the upsizing of the sewer will be contributed by both the Garden Grove Sanitary District(GGSD) and the MCSD on a proportional basis. The total project cost is $2,310,000; GGSD will provide $1,270,500, MCSD will provide $519,750, and OCSD is to provide $519,750. No additional funds are being requested by the agencies. In reviewing the overall benefits to OCSD, staff is recommending that an 11-month time extension to CP-604 be considered for approval. The new pipeline will reduce local 1/1 in specific areas and increase capacity, thereby reducing the risk of sewer spills in MCSD and GGSD. ATTACHMENT 1. Letter from Midway City Sanitary District 2, Revised Exhibit C — Schedule AA:sa H:Wep0agendakowmtions committee\Operation 20=050a108-21.Coop Pmie s.doc Page 2 Book Page 19 eowdorelree m Tn,one oieP Greoe P.Epperean AI P. Joy L Neug Neegebeuer Meigle L Riee Acdng General Mauner xen Robbins March 24, 2008 Orange County Sanitation District Mr. John Linder, Engineering Manager P.O. Box 8127 Fountain Valley, CA 92728-8127 Subject: Cooperative Projects Contract No. 0604 Replace Approximately 3,780 Lineal Feet of Sanitary Sewer Line Request for Contract Revision. Dear Mr. Linder: The Midway City Sanitary District (MCSD) has entered into Cooperative Projects Contract No. 604 with the Orange County Sanitation District (OCSD) for replacement of 3,780 feet of sewer pipe to reduce inflow and infiltration within MCSD Basin. The Project completion date was projected for May 31, 2008. However the MCSD work effort for the subject project has been delayed. The Contractor was awarded the project in December 2007. The Contractor had intended to start work in January 2008 but ran into major problems on his current project, thus affecting this project schedule. The MCSD would like to continue to retain this Contractor, since he has done work for our District in the past and his bid is approximately 75% of our anticipated construction cost. However, the MCSD will require additional time to complete the Project. The Midway City Sanitary District respectfully requests that OCSD consider a time extension to CP- 604. Our estimated completion date is November 30, 2008, with final report and invoices submitted to OCSD by April 30, 2009, as illustrated in the enclosed updated schedule, Revised Exhibit C. Thank you very much for your assistance and allowing our District to participate in the Cooperative Projects Program. If any additional data is required, please contact our District Consultant Engineer, Don Greek, at (714) 568-0200, ext. 207. 14461 cedanvood Avenue a Westminster,California 92683 a (714) 893-3553 a Fax(714)891-8624 www.mcsondstcom Rook Paee 20 Letter to J. Linder 3124/08 Page 2 Very truly yours, e Robbins Acting General Manager Midway City Sanitary District Attachment— Revised Exhibit C 14451 Cedamood Avenue•Westminster, California 92683 • (714) 893-3553 Fax (714)891-8624 w .mcsandstcom Book Page 21 3/24108 REVISED EXHIBIT C PROJECT MILESTONE SCHEDULE PIPELINE REPLACEMENT MILESTONE COMPLETION DATE REQUESTED REVISION TASK 1: Contract Executed by OCSD October 2006 TASK 2: Begin Project Design November 2006 TASK 3: Permitting Process February 2007 TASK 4: Solicit Bids Award Construction Contract March 2007 December 2007 TASK 5: Construction Phase March 2008 November 30, 2008 TASK 6: Final Report and Invoice Submittal May 2008 Aril 30, 2009 OPERATIONS COMMITTEE M-In' Deee Toed.o01N 05/07/08 05/28/ 8 AGENDA REPORT item Number Rem Number OP08-22 Orange County Sanitation District Colliomi Facilities FROM: James D. Ruth, General Manager Originator: Jim Herberg, Director of Engineering Project Manager: Alberto Acevedo SUBJECT: REHABILITATION OF DISTRICT SIPHONS, CONTRACT NO. 2-68 GENERAL MANAGER'S RECOMMENDATION 1. Approve a budget increase of$128,100 for Rehabilitation of District Siphons, Contract No. 2-68, for a total budget of$7,854,100. 2. Approve a contingency increase of$136,108 (3%) to the construction contract with Ken Thompson, Inc., for Rehabilitation of District Siphons, Contract No. 2-68, for a total contingency of$363,008 (8%). SUMMARY • This project rehabilitates 16 of the 87 siphons owned by the Orange County Sanitation District (Sanitation District) within the service areas. The rehabilitation includes all work necessary to install foul air by-pass lines at each of the 16 siphons to minimize odor impacts. • The contractor is near 40% completion for the project. However, as the project progresses, multiple inaccuracies of record drawings provided to the consultant and undisclosed utilities have created a substantial amount of field modifications to the original construction recommendations. In addition, several cities have requested additional changes to the original drawings creating additional cost to the project. These include mostly additional paving requirements. PRIOR COMMITTEEIBOARD ACTIONS • August 2007—Approval of contract with Ken Thompson for a total amount not to exceed $4,537,600 and a 5 % contingency. • July 2007—Approval of Amendment No. 2 to the PSA with Dudek &Associates, Inc. for$310,088, increasing the total amount to not to exceed $1,461,244. Form No.DW-102-2 Revised 03/01/07 Page 1 Book Page 23 • February 2007 —Approval of Amendment No. 1 to the PSA with Dudek & Associates, Inc. for$164,000, increasing the total amount not to exceed $1,151,156. • November 2006—Approval of a Budget increase of$2,200,000 to the construction contract budget, for a total construction budget of$ 4,700,000. • October 2004—Approval of PSA with Dudek &Associates, Inc. for an amount not to exceed $987,156. ADDITIONAL INFORMATION This request for increase in the project contingency complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted (Page A-6, Item No. 9). Award Date: 8/22107 Contract Amount: $4,537,600 Contingency: $226,900 (5%) 5128/08 $136,108 (3%) JH:AA:tic:gc HinlglobalWgenda Draft Reporls\0perelionsV-68 AR Contingency Increase 5.7.08.doc Forth No.DW402-2 Revised 03/01/07 Page 2 Book Page 24 OPERATIONS COMMITTEE Meeting Date Toad.01Dir. 05/07/08 os/23/oe AGENDA REPORT aem Number Item Number Ores-23 Orange County Sanitation District Dig scion& Handling 8 lids FROM: James D. Ruth, General Manager Originator: Jim Herberg, Director of Engineering Project Manager: Gino Rapagna SUBJECT: SLUDGE DIGESTER REHABILITATION AT PLANT NO. 1, JOB NO. P1-100 GENERAL MANAGER'S RECOMMENDATION Approve a contingency increase of$623,114 (17%) to the Professional Design Services Agreement with Earth Tech, Inc., for Sludge Digester Rehabilitation at Plant No. 1, Job No. P1-100, for a total contingency of$989,652 (27%). SUMMARY • This project rehabilitates and upgrades ten anaerobic sludge digesters, two digested sludge holding tanks, and appurtenant systems at the Orange County Sanitation District's (Sanitation District) Plant No. 1. • The Consultant is approximately 70% complete with preliminary and final design services. The first element of the Preliminary Design Phase was to prepare an Engineering Study Report to better define the project for preliminary and final design. In contracting for design services, it was understood that contract amendments would be considered as appropriate to complete the design based on the findings of the Engineering Study Report. Approved Amendment No. 1 addressed required additional work performed during the preliminary design. • To address required additional work to be performed during final design and to enable consideration of the Consultant's pending request for Amendment No. 2, additional PDSA contingency authorization is requested. The Consultant's request for Amendment No. 2 is based on additional effort to be expended for preparation of more design drawings than were anticipated during preparation of their proposal for engineering services. These additional drawings relate to improvements to digester heating systems, structural renovation, power and control modifications, chemical feed system modifications, communication system upgrades, and miscellaneous other items. Escalation for labor associated with the project taking longer than anticipated for preliminary and final design is also included. Form No.DW-102-2 Revised 03/01/07 Page 1 Book Page 25 • Based an the findings of the Engineering Study and Preliminary Design Reports, and reconsideration of project resource requirements, revised staff, engineering, and construction cost estimates have been developed. These estimates indicate that reallocation of budget is necessary to complete components of the project. The requested budget reallocation does not impact the overall project budget. PRIOR COMMITTEEIBOARD ACTIONS • February 2005-Approval of PSA with Earth Tech, Inc. for an amount not to exceed $3,665,377 and establish a 10% contingency for design amendments. ADDITIONAL INFORMATION This request for increase in the project contingency complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted (Page A-8, Item No. 51). Award Date: 2/23/05 Contract Amount: $3,665,377 Contingency: $366,538(10%) 5128/08 $623,114(17%1 989.652 f274F1. JH:GR:tic:gc H1oep1\agenda\0peraUons Commiltee\Owrations 2008\0508WB-23.P7-100 PSAooc Form No.Dw102-2 Rev,sed 03101107 Page 2 Book Page 26 OPERATIONS COMMITTEE recenny Dab- T.00d of Dir. oSimios oS128 8 AGENDA REPORT Item08-24 Iem Numbe O Num Orange County Sanitation District Solids ng Digestion FROM: James D. Ruth, General Manager Originator: Jim Herberg, Director of Engineering Project Manager: Gino Rapagna SUBJECT: SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO. 1, JOB NO. P1-101 GENERAL MANAGER'S RECOMMENDATION Approve a contingency increase of$2,003,323 (18%) to the Professional Design Services Agreement with HDR, Inc. for Sludge Dewatering and Odor Control at Plant No. 1, Job No. P1-101, for a total contingency of$3,116,281 (28%). SUMMARY • This project replaces existing sludge dewatering and solids area odor control systems and installs primary sludge and waste activated sludge (WAS) thickening systems at the Orange County Sanitation District's (Sanitation District) Plant No. 1. • The Consultant is approximately 25% complete with preliminary and final design services. The first element of the Preliminary Design Phase was to prepare an Engineering Study Report to better define the project for preliminary and final design. In contracting for design services, it was understood that contract amendments would be considered as appropriate to complete the design based on the findings of the Engineering Study Report. is To address required additional work to be performed during preliminary and final design, and to enable consideration of the Consultant's anticipated request for Amendment No. 1, additional PDSA contingency authorization is requested. The Consultant's request for amendment will be based on additional effort to be expended for preparation of the Preliminary Design Report and more design drawings than were anticipated during preparation of their proposal for engineering services. The additional effort relates to the need for a larger than anticipated thickening and dewatering building, existing biosolids storage and load out system modifications, construction of a new tunnel for major pipe routing through the project site, demolition of facilities to enable optimal siting of proposed odor control systems, power building modifications, site piping and electrical modifications and miscellaneous other items. Escalation for labor associated with the project taking longer than anticipated for preliminary and final design will also be included. Form No.DW-002.2 Revised 03/01/07 Page 1 Book Page 27 • Based on reconsideration of project resource requirements, revised staff and engineering cost estimates have been developed. These estimates indicate that slight reallocation of budget is necessary to complete components of the project. The requested budget reallocation does not impact the overall project budget. PRIOR COMMITTEE/BOARD ACTIONS • May 2005 —Approval of Professional Design Services Agreement with HDR Engineering, Inc. for an amount not to exceed $11,129,575. ADDITIONAL INFORMATION This request for increase in the project contingency complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted (Page A-8, Item No. 52). Award Date: 5/25/05 Contract Amount: $11,129,575 Contingency: $1,112,958(10%) 5128108 $2,003,323(18%) $a.1ls.zal 1za�). JH:GR:tic:gc H:Wep0agenda\Opemiions Commi8ee Operabons 2008W06N% 5-24.P1401 PSA.docx Form No. DW-102-2 Revised 03/01/07 Page 2 Book Page 28 OPERATIONS COMMITTEE Meetlng Date To etl,d qr. AGENDA REPORT as/o�ioI osiNuft Item N mper Ilem N ber Orange County Sanitation District oFoe zc Misc.8 Support Projects FROM: James D. Ruth, General Manager Originator: Jim Herberg, Director of Engineering Project Manager: Matt Smith SUBJECT: INTEGRATED PROGRAM MANAGEMENT CONSULTANTS GENERAL MANAGER'S RECOMMENDATION Approve Amendment No. 8 to the Professional Services Agreement with Integrated Program Management Consultants, a joint venture of Parsons Water and Infrastructure, Inc., and CH2M Hill, Inc., authorizing: 1) Establish an amount not to exceed $16,987,271 for year seven (Fiscal Year 2008/09) of the ten-year contract; and 2) Increase the total amount of the ten-year contract to an amount not to exceed $93,077,246. SUMMARY • We are currently in the sixth year of a ten-year contract with Integrated Program Management Consultants (IPMC). It is anticipated that the current Capital Improvement Program (CIP) will require the use of IPMC at least through Fiscal Year (FY) 2011-12 to coincide with the completion of the secondary treatment projects. • Staff will be working on 73 active projects during FY 2008-09 with a total projected CIP expenditure in excess of$360,000,000. FY 008-09 represents the peak annual cash expenditure in the 20-year CIP. • A detailed planning effort, along with resource forecasting, has identified the need for 70 IPMC staff to augment the Orange County Sanitation District (Sanitation District) staff to complete next fiscal year's work. Most of the identified staff are currently working on Sanitation District projects. New hires, and/or replacement staff will be phased in over the fiscal year as required. IPMC will augment Sanitation District staff in Division 740 (Planning), Division 750 (Project Management), Division 760 (Engineering and Construction), and Division 770 (Facilities Engineering). The functions that these staff will perform are described in more detail below, along with the recommended budget for FY 2008-09. Rm»]OYLIIJ) Form No.W IW 2 Page 1 Rook Paee 29 The benefits provided by IPMC include the rapid mobilization of highly skilled/technical staff, flexibility to change the mix of staff positions on an immediate, and as-needed basis, the ability to quickly reduce staff as workloads decrease, project controls expertise, and many years of experience working on similar programs throughout the United States and the world. Staff believes that using a Program Management Consultant approach is a practical, cost-effective, and efficient way to augment Sanitation District staff to deliver the CIP during the next four years of significant work. PRIOR COMMITTEE/BOARD ACTIONS • Operations Committee—May 2007 —Approval of Amendment No. 7 to the Professional Services Agreement with Integrated Program Management Consultants for$15,997,936, increasing the total amount not to exceed $76,089,975, and extending the PDSA for an additional five-year period through FY 2011-12. • PDC — May 2006—Approval of Amendment No. 6 to the Professional Services Agreement with Integrated Program Management Consultants for $14,999,656, increasing the total amount not to exceed $60,092,039. • PDC —June 2005—Approval of Amendment No. 5 to the Professional Services Agreement with Integrated Program Management Consultants for $15,585,558, increasing the total amount not to exceed $45,092,383. • PDC —June 2004—Approval of Amendment No. 4 to the Professional Services Agreement with Integrated Program Management Consultants for$12,836,801, increasing the total amount not to exceed $29,506,825. • Board — June 2003 —Approval of Amendment No. 3 to the Professional Services Agreement with Integrated Program Management Consultants for$150,000, and an additional $12,484,750 for year two of the contract, FY 2003-04, increasing the total amount not to exceed $16,670,024. • PDC —June 2003—Approval of Amendment No. 2 to the Professional Services Agreement with Integrated Program Management Consultants for$50,000, increasing the total amount not to exceed $4,035,274. • PDC —June 2003—Approval of Amendment No. 1 to the Professional Services Agreement with Integrated Program Management Consultants for $50,000, increasing the total amount not to exceed $3,985,274. • PDC —August 2002 —Approval of Professional Services Agreement with Integrated Program Management Consultants for an amount not to exceed $3,935,274. Forth No,D.IU-1 R.W0 p1N1 Page 2 Book Pape 3n ADDITIONAL INFORMATION Based on the current schedule and project workload, staff has estimated the level of effort that will be required from IPMC through FY 2011-2012. It is currently anticipated that no IPMC Staff will be required after FY 2011-2012; however, staff will continually estimate the need for staff, both permanent and temporary, to support the CIP. The Sanitation District is continually evaluating whether to hire permanent staff and reduce the number of IPMC staff. The estimate of IPMC staff required for each fiscal year does not include the addition of more permanent Sanitation District staff which would reduce the IPMC staff needs currently projected. For the anticipated ten-year duration of the IPMC contract, the overall staff cost associated with the CIP is approximately$428,000,000 (currently estimated at $301,000,000 for Sanitation District staff, and $127,000,000 for IPMC staff). During this period of time, the Sanitation District will be expending approximately $2,200,000,000 for engineering, design, and construction of capital facilities. The $127,000,000 planned to be expended for IPMC support equates to 5.8% of the total planned CIP expenditures. The average hourly billing rate for IPMC staff during FY 2007-08 was approximately $124/hr. IPMC billing rates include salaries, benefits, fixed costs which are sometimes referred to as overhead (Buildings, Administration, Utilities, Insurance, etc.), and a 5% profit. The "overhead" rate which is applied to an employee's raw salary is approximately 145% for IPMC. As a comparison, the engineering consultants who conduct studies and develop designs for the Sanitation District typically have an overhead rate range of about 190 to 200%. IPMC overhead rate is 145% because the Sanitation District is providing office space and equipment to their field staff. The costs for IPMC will be charged to the individual CIP projects. Funding for IPMC costs are included in individual project budgets. Each fiscal year, as projects are planned, scheduled, budgeted, and resource needs identified, a projected cost will be presented to the Operations Committee for approval. Semi-annual updates for the entire program will also be provided. Planning (Division 740) IPMC is providing personnel to augment the Sanitation District's Planning staff. General assignments and duties are as follows: • IPMC will provide one Project Engineer (Gordon) to support planning efforts related to preparation of the Strategic Plan Update. • Two Electrical and Instrumentation & Control (I&C) Engineers (Woods, Lai) and one Civil Designer/Computer Assisted Design & Drafting (CADD) Technician (Beltran) to provide technical support for facility records and database management. Fmm No.ow4@-2 FwIme02101N1 Page 3 Book Page 31 r Project Management Office (PMO) (Division 750): The PMO is home to the project management and project controls staff. Project Management Staff: In FY 2008-09, the PMO will be managing 73 active projects with a total budget of $2,413,000,000. The project budget ranges in size from $1,000,000 to over $200,000,000. The Sanitation District has completed a staffing analysis, and believes a workload of three to six projects per Project Manager (PM) (based on size, and complexity) is appropriate. IPMC will provide personnel to augment the Sanitation District's Project Management Personnel in the PMO. The positions are described below: • One Program Manager (Rapagna) to provide general management and supervision of all IPMC staff. The Program Manager will work with the Director of Engineering, the PMO Manager, and the Engineering and Construction Manager to ensure compliance with contracts, policies, and procedures. The Program Manager will provide technical oversight and direction in all aspects of the program and help ensure successful delivery of the CIP. The Program Manager manages technical work executed by the home office staff. • Four Project Managers (Acevedo, MacDonald, MacLeod, Schock) to supplement seven Sanitation District Project Managers. The PMs provide day-to-day management and technical knowledge to deliver the assigned projects. • One Business Manager(Billhardt) to provide assistance in the areas of time keeping, resources, accounting, and contracts management. • One Administrative Assistant (Chamberlain) to provide clerical and general administrative support, e.g., preparing agenda reports, general correspondence. Project Controls Staff: Currently there are 196 projects being tracked by the Project Controls Group. Of these, 73 are active engineering projects, 33 are in the future, and 84 are cancelled or completed. These projects require a variety of monthly updates including cost reporting, development of performance measures, reports, and other presentation materials. Each staff function is described below: • One Project Controls Manager/Project Scheduler (Michael) to provide scheduling and cost reporting support, QA/QC, technical oversight, and direction to controls staff. F.Wo O 'Qt RamaCo iw Page 4 Book Page 32 • One Project Scheduler (GrosJean) to prepare project cost, and schedule updates and milestone tracking in support of PMO Project Managers. Other duties performed by the schedulers include assisting in the CIP budgeting process, cash flow updates, preparation and updating of resource and workload planning information, providing input to the preparation of the Engineering CIP Semi Annual Report, and provide training and support to Sanitation District staff on the use of the various computer software tools including P6, Access, and Business Object. • One Project Scheduler (Gaus) to maintain and process the baseline cost and schedule databases. Other duties include providing technical support to PMs in preparing monthly and fiscal year cash flow analysis and report development, preparation of PMO meeting presentation materials, and assisting in the preparation of annual CIP updates and other programmatic cost and schedule reports. • One Project Controls Analyst (Reichenbach) assigned to assist in time reporting, charge numbers, and general quality assurance of data used in the system. Other duties include preparation of the semi-annual reports, updating the PM Manual, and maintaining portions of the automated weekly timesheet in PCS for Sanitation District staff. She will also serve as part-time scheduler on a number of Engineering CIP projects. • Five Construction Cost Estimators (Brown, Collett, Davison, Villanueva, Zimmerman) assigned to prepare estimates for change orders, help negotiate changes during construction, review design consultant estimates, and provide cost estimate input during the annual CIP validation process. • One Construction Scheduling Lead (Alexander) to provide oversight on all matters related to the construction field scheduling. Other duties include review and guidance in the preparation of monthly construction schedule analysis reports prepared by IPMC and the Sanitation District field scheduling personnel. Will also participate in the preparation of time impact analysis and review of contractor submitted claims. • Five Construction Schedulers (Dedhia, Rodriguez, Sugasawara, two new hires) assigned to ensure that contractors provide quality baseline schedules and keep them current (a vital element in our claims avoidance program). Field Schedulers review the contractor's initial schedule submittal and the schedule of values. Monthly updates are required from the contractors, which must also be reviewed. Progress claimed by the contractors must be reviewed against the schedule plan each month for payment, and any request for additional time through change orders must be analyzed. • One Document Control Lead (Cazares) to provide document control expertise and support for all aspects of CIP-related document management. F0.No.D IM-R RrilxEMIW Page 5 Book Page 33 Engineering & Construction Management(Division 760) IPMC is providing personnel to augment the Sanitation District's Engineering and Construction Management (E&CM) staff. E&CM is responsible for providing all the technical resources to the Project Managers. General assignments and duties are as follows: • Ten Resident Engineers/Construction Managers (Barth, Bomkamp, Bryan, Collins, Cuellar, Haid, Rein, Waite, Vohra, one new hire) to support construction management of CIP projects within the boundaries of the Sanitation District's two operating treatment facilities and outside of the plant boundaries, i.e., for pipeline and pump station contracts. They will utilize existing Sanitation District CM policies and procedures to represent the Sanitation District, coordinate construction activities, manage the construction contract, and document contractor compliance with the contract requirements. • Three Electrical and Instrumentation & Control (EI&C) Engineers (Corey, Etemadi, one new hire). These Engineers are assigned to the CIP projects to provide specialized technical support to the project teams during both the design and construction phases. They ensure consultant and construction contractor compliance with Sanitation District requirements, guidelines, and polices. • Two Project Engineers (Aghanian, one new hire). Project Engineers serve as the technical leads within the Sanitation District's project teams, and assist the PMs with verification of the project elements, coordinating project requirements with the O&M Department, developing the design consultant SOW, selecting the design consultant, and ensuring the construction documents are prepared using the Sanitation District standards. During the construction phase, they resolve design questions and issues for the Resident Engineers. • Six Civil/Mechanical Inspectors (Chemotti, Gilbert, Hough, Jimenez, Kwiecien, one new hire), two Electrical Inspector (Whitney, one new hire), and four Instrumentation & Control Inspector (Beck, Jordan, Stewart, one new hire) to support Quality Assurance of CIP projects within the two Treatment Facilities. They will utilize existing Sanitation District QA policies and procedures to represent the Sanitation District, coordinate construction and O&M activities, monitor construction site safety, and document contractor compliance with the contract requirements. • Three Civil Inspectors (Daniel, Martin, Sankar) to support Quality Assurance of pipeline and pump station projects. They will utilize existing Sanitation District QA policies and procedures to represent the Sanitation District, coordinate construction and traffic control activities, monitor construction site safety, and document contractor compliance with the contract requirements. • One Commissioning Specialist (new hire) to support commissioning and start-up of CIP projects within the two Treatment Facilities. F"No.U ,M.3 gmife]gYOtq) Page 6 Book Page 34 • Eight Administrative Assistants (Corona, Hays, Inman, Leavitt, Marquez, Moore, Noya, Yousef) to provide a variety of administrative support including Submittals/Document Clerks (Corona, Hays, Corona, Yousef) for processing and tracking of construction contractor submittals; Project Administrative Assistant (Moore) for processing project correspondence and filing; general administrative support (Inman, Marquez, Noya) for processing project correspondence, Agenda Reports, and preparing policy and procedures manual. Facilities Engineering (Division 770) IPMC is providing personnel to augment the Sanitation District's Facilities Engineering staff. Facilities Engineering is responsible for providing Project Managers and technical resources to implement miscellaneous small capital improvement projects to enhance safety, reliability, and efficiency of facility operations. General assignments and duties are as follows: • One Project Manager(Davis) to provide day-to-day management and technical knowledge to deliver the projects. • One Project Engineer(Shah)and one Civil Designer/Computer Assisted Design & Drafting (CADD)Technician (Tran) to provide technical support and assistance to PMs for project implementation. O&M Department Capital Project Support The O&M Department provides technical support to the Engineering Department during design and construction of CIP projects. IPMC will provide two Project Engineers (Takahashi and Sharma) to coordinate input from O&M technical staff, and to represent O&M at the various design and construction meetings. This support frees up the O&M staff to perform their regular duties. Home Office Support "Home Office Support" is supplementary services from the offices of the Joint Venture Parties, Parsons and CH2M HILL, made readily available to support the needs of the Engineering Department. Technical study (task orders) work is based on providing engineering and other technical support for specific assignments using a pre-agreed upon scope of work, fee, and schedule. These tasks will be as authorized by the Director of Engineering when required, and may include assistance in the following areas: • General Administration and Home Office Technical Support— general administration support includes accounting, contract administration, invoices, reproduction, and safety reports and reviews. Routine home office technical support includes urgent technical support (usually task less than 40 hours) in all areas of waste water engineering, construction, and project controls. Fa,m No.O IW3 Ravleeoaamtm! Page 7 Book Page 35 • CEQA and NEPA Assistance— support to the Planning Division on a variety of treatment, collections, and pump station projects in preparing environmental documentation. • O&M studies —Support O&M with studies on various issues. • Community Outreach Support—assist the Communications Department as needed on all collections projects in preparing outreach plans, conducting meetings, crisis management plans, etc. • IT and PCS systems programming support, including support for troubleshooting and system upgrades. • General technical support—throughout the year, issues come up which need technical support and/or immediate attention. For example, in FY 07/08, IPMC provided support related to office space and lobby improvements planning, grants program assistance, tunnel construction, Expedition software configuration, technical specification development and revision, constructability review, Construction Manual editing, cost estimating. ALTERNATIVES Increase the Sanitation District's permanent Staff—This option would require a lengthy process and extensive effort to recruit, hire, train, and make productive a large number of new employees. It is also projected that staffing needs will vary from year to year, and that after the completion of the consent order work, the Sanitation District will not need these permanent staff to manage the future CIP. This option would not be optimum for filling these varying needs. JH:MS:tic:gc H:Wept gendMOWmflons Comminee10pe21ions 200810508108-25.IPMC M8.09.dm FW No.D =-2 ge vm oLotN] Page 8 Book Page 36 OPERATIONS COMMITTEE MeebRga a rose.Dra.. asio2roe as�zeiae AGENDA REPORT IQyn Numbe 'b Numbs Orange County Samtatwn Datnc[ oP 26 FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: 2008-09 AND 2009-10 DISTRICT PROPOSED BUDGET UPDATE GENERAL MANAGER'S RECOMMENDATION Information item. SUMMARY This report will provide an overview of the District's 2008-09 and 2009-10 Proposed Budget. The Proposed Budget will be presented to the full Board for adoption on June 25, 2008. Highlights of the Proposed 2008-09— 2009-10 Budget include: 1) Limited Growth Total resource requirements are projected to grow by 15 percent for 2008-09 as the projected budgeted expenditures ($589 million) represent a $76 million change from the 2007-08 budgeted expenditures ($513 million). In the following year, however, total resource requirements are projected to decrease by 18 percent as the projected budgeted expenditures for 2009-10 are $481 million. 2) A revised Capital Improvement Program (CIP) Staff projects that CIP expenditures for 2008-09, excluding debt service, ($359 million) will increase by 18 percent from the 2007-08 budgeted expenditures ($302 million). CIP expenditures are then expected to decrease by 32 percent to $244 million in 2009-10. 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) Increased Staffing Levels As previously described by the General Manager, the Proposed Budget includes a 1 percent increase in Full-Time Equivalent (FTE) positions in 2008-09 (641 FTE) and 2009-10 (648 FTE) as compared to an authorized total of 634 FTE in 2007-08. A number of positions have also been changed or transferred between divisions to better address operational priorities as new facilities come online. Fmm No.DW-102] R...ONDN7 Page 1 13ouk Pace 37 5) Two-Year Budget Staff has once again prepared a two-year budget. Because a separate CIP review and approval process exists, a two-year budget is appropriate and more effective for the District. Staff will provide annual updates on all major expense categories. Two Year Budget Summary Revenues: 2008-09 2009-10 Fees & Charges $219 million (37%) $242 million (46%) General Income $117 million (20%) $116 million (22%) Debt Proceeds $256 million (43%) $173 million (32%) Total $592 million 5531 million Expenditures: 2008-09 2009-10 CIP, including Debt $441 million (75%) $326 million (68%) Treatment and Disposal Costs $148 million (25%) $155 million (32%) Total 5589 million $481 million PRIOR COMMITTEE/BOARD ACTIONS None. ADDITIONAL INFORMATION The Budget Development Process Staff completed a comprehensive list of assumptions to apply to the budget relating to costs, revenue, rates, inflation, etc. These assumptions were subsequently recommended by the Administration Committee and approved by the Board. With these guidelines in mind, District finance staff reviewed all major District resources and expenditures. The General Manager met with each department head and division leader to review, discuss and prioritize each department's major activities. These activities were also reviewed to ensure alignment with the District's goals. A formal process for reviewing these goals will be established as a part of the annual update of the District's Strategic Plan. Revenues and Expenditures Revenues The Sanitation District obtains it revenues from three main sources: 200"9 2009-10 Fees & Charges $219 million (37%) $242 million (46%) General Income $117 million (20%) $116 million (22%) Debt Proceeds $256 million (43%) $173 million (32%) Total 5592 million $531 million Fom No.O Im J Rwlx].03N1N1 Page 2 Book Page 38 2008-09 2009-10 A) Fees— $219 million (37%) $242 million (46%) 1) General User Fees $183 million $203 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 $ 16 million $ 18 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 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) $ 20 million $ 21 million The Capital Facilities Capacity Charge 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 District's current rate structure allows for increases in CFCC in accordance with the Engineering News Record (ENR) Index. B) General Income— $117 million (20%) $116 million (22%) 1) Property Taxes $ 65 million $ 68 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 2 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 Form Na.O 1. Rewea'.0=1W Page 3 Book Page 39 from special districts to school districts that began in 1992-93. The District's share of the 1 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. As a resu@ of the State's previous fiscal crisis, the District received a 40 percent reduction of its full allocation of property tax funds for fiscal years 2004-05 and 2005-06. The actual dollar amount of reduction was $32.4 million over this two-year period. Although the funding level was restored in 2006-07, the State is now in another fiscal crisis, and special district property tax revenue takeaways are now again being considered by the State. 2008-09 2009-10 2) Interest $ 18 million $ 19 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 $ 34 million $ 29 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 $26 million in 2008-09 and $21 million in 2009-10. C) Debt— $256 million (43%) $173 million (32%) 1) Certificates of Participation (COP) Certificates of Participation (COPS) are the 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 District spends it funds on two activities: 2008-09 2009-10 CIP, including Debt $441 million (75%) $326 million (68%) Treatment and Disposal $148 million (25%) $155 million (32%) Total 8589 million S481 million Form No.DW=3 Rwiaetl.0=1N7 Page 4 Book Page 40 A) Capital Improvement Program (CIP) — $441 million (75%) $326 million (68%) 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 Also related to the CIP are the District's 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 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 District issues debt in the form of Certificates of Participation (COPS). COPs are a forth 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. 2008-09 200940 8) Treatment and Disposal Costs— $148 million (25%) $155 million (32%) Staff projects $148 million and $155 million in 2008-09 and 2009-10 respectively to perform the operations at the District's two treatment plants and other related treatment activities, as well as support activities not directly charged to CIP. Treatment and disposal 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. Support activities include Regional Assets, Technical Services, and Administration. JDR:LT:MW Fom,No,orIM nw..ea.M1.7 Page 5 Book Page 41 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