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HomeMy WebLinkAbout2009-06 MINUTES OF STEERING COMMITTEE MEETING Orange County Sanitation District Wednesday, June 24, 2009, at 5:30 p.m. A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, June 24, 2009, at 5:30 p.m., in the District's Administrative Office. A quorum was declared present, as follows: STEERING COMMITTEE MEMBERS: Ed Torres, Director of Technical Services DIRECTORS PRESENT: Lorenzo Tyner, Director of Finance Doug Dever, Chair and Administrative Services Larry Crandall, Vice Chair Michael Gold, Legislative Affairs Liaison Bill Dalton, Operations Committee Chair Jeff Reed, Human Resources Manager Mark Waldman, Administration Committee Mahin Talebi, Source Control Manager Chair Penny Kyle, Clerk of the Board Jim Ferryman Angela Brandt Phil Luebben Juanita Skillman David Shawver OTHERS PRESENT: STAFF PRESENT: Brad Hogin, General Counsel Jim Ruth, General Manager Leslie Daigle, Alternate Director Bob Ghirelli, Assistant General Manager Dick Ackerman Nick Arhontes, Director of Operations and Andy Chan Maintenance Michelle Hart M �� o Jim Herberg, Director of Engineering Dale Bogen TH LED IN OF THFEII BEpOF OPM E COUNTY SANITATION DIS ICT JUL 222 2�00-9 '^ PUBLIC COMMENTS Public comments were delayed until consideration of Agenda Item No. 2. COMMITTEE CHAIR REPORT Chair Doug Davert reported on a tour of the Groundwater Replenishment System taken by Attorney General Jerry Brown on June 17, and an open house held by EnerTech in Rialto on June 11. It was also reported that he and Vice Chair Crandall were planning to travel to Washington, DC, from July 7— 10. Vice Chair Crandall was recognized who gave an update on the Ad Hoc Recognition Committee and advised their recommendations would be coming to the Steering Committee in July for consideration. Minutes of the Steering Committee June 24, 2009 Page 2 GENERAL MANAGER REPORT Jim Ruth, General Manager, provided a brief overview of his monthly status report. GENERAL COUNSEL REPORT There was no report. ACTION ITEMS (1) t. MOVED, SECONDED AND DULY CARRIED: Approve minutes of the May 20, 2009 Steering Committee meeting. INFORMATION ITEMS (2 -3) 2. Supplemental Capital Facilities Capacity Charge—Baseline The following spoke in support of Jazz Semiconductor's request for transfer of the flow baseline established by Conexant to Jazz Semiconductor which was denied by the Board of Directors in 2005: Michelle Hart, Orange County Business Council; Alternate Director Leslie Daigle, Newport Beach; Andy Chan, Jazz Semiconductor; and, Dick Ackerman,Attorney for Jazz Semiconductor. 3. Legislative Affairs Report(Gold) Michael Gold provided a brief update on the state budget's struggle for approval, and the possible issuance of I.O.U.'s the following month. CLOSED SESSION (4) 4. CONFERENCE WITH LEGAL COUNSEL RE.ANTICIPATED LITIGATION (Government Code Section 54956.9(b)) Significant Exposure to Litigation Number of Potential Cases: 1 - Re. Jazz Semiconductor—Jazz Semiconductor has taken the position that Jazz is legally entitled to Conexant's SCFCC baseline. The Steering Committee convened at 5:55 p.m. in Closed Session, pursuant to Government Code Section 54956.9(b)to discuss one matter. Confidential Minutes of the Closed Session held by the Steering Committee have been prepared in accordance with Government Code Section 54957.2, and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. The Steering Committee reconvened at 6:25 p.m. in regular session. Minutes of the Steering Committee June 24, 2009 Page 3 ADJOURNMENT The next Steering Committee meeting is scheduled for Wednesday, July 22, 2009, at 5:30 p.m. The Chair declared the meeting adjourned at 6:25 p.m. Submitted by: Pe ny M. Kyle Clerk of the Board " c REQUEST TO ADDRESS THE STEERING COMMITTEE All persons wishing to address the Steering Committee on specific agenda items or matters of general interest should complete and submit this form to the Committee Secretary prior to commencement of the Steering Committee meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (15 COPIES REQUIRED) must be given to the Committee Secretary prior to the meeting for distribution. 11 DATE: b "Qt7 " " " AGENDA ITEM NO. NAME: (please print) HOME ADDRESS: (number/street) p (city/zip cod ) TELEPHONE: (_� REPRESENTING: 47- Yevd UC° (self/name of organization) REQUEST TO ADDRESS THE STEERING COMMITTEE All persons wishing to address the Steering Committee on specific agenda items or matters of general interest should complete and submit this form to the Committee Secretary prior to commencement of the Steering Committee meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (15 COPIES REQUIRED) must be given to the Committee Secretary prior to the meeting for distribution. DATE: AGENDA ITEM NO. NAME: (please print) HOME ADDRESS: (number/street) (city/zip code) - TELEPHONE: REPRESENTING: J22 (self/name of organization) REQUEST TO ADDRESS THE STEERING COMMITTEE All persons wishing to address the Steering Committee on specific agenda items or matters of general interest should complete and submit this form to the Committee Secretary prior to commencement of the Steering Committee meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (15 COPIES REQUIRED) must be given to the Committee Secretary prior to the meeting for distribution. DATE: Ian AGENDA ITEM NO. . . .4. ., . . . . . . . . .' .1 . . . 1. . . , , . . . . . . NAME: (please print) I"'t�G�R-�Ulf' "t HOME ADDRESS: Pci\ -JV6�2, ` C.„ at 16O (number/street) Vx vl- - _ (cily/zip code) TELEPHONE: REPRESENTING: )f c..�a : " �iuv.� YScL-3��i9�'� (self/name o organization) 0 REQUEST TO ADDRESS THE STEERING COMMITTEE All persons wishing to address the Steering Committee on specific agenda items or matters of general interest should complete and submit this form to the Committee Secretary prior to commencement of the Steering Committee meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (15 COPIES REQUIRED) must be given to the Committee Secretary prior to the meeting for distribution. DATE: I2-4- AGENDA ITEM NO. NAME: (please print) 2 I e HOME ADDRESS: ZZ O I )-T i IL4,e (number/street) fJIt-" D4?-+ �ell t CC 97- /60 (city/zip code) TELEPHONE: ( )0) -f� I� 7- 3 — (!?69 REPRESENTING: V ZV)v O �1Y C� (seftame of organization) y , 4 STEERING COMMITTEE (1) Roll Call: Meeting Date: June 24, 2009 Meeting Time: 5.30 p.m. Committee Members Doug Davert, Board Chair................................................... ........... y Larry Crandall, Vice Chair................................................... ........... Mark Waldman, Administration Committee Chair................ ...........�L Bill Dalton, Operations Committee Chair............................. ...........1 JimFerryman...................................................................... ...........� PhilLuebben....................................................................... ........... DavidShawver................................................................... ...........i Others Brad Hogin, General Counsel............................................. ........... ��/G� Staff Jim Ruth, General Manager................................................... . Bob Ghirelli, Assistant General Manager.................................. . ✓ Nick Arhontes, Director of Operations & Maintenance................. . ✓ Jim Herberg, Director of Engineering....................................... .J� C Ed Torres, Director of Technical Services..................................�L Lorenzo Tyner, Director of Finance&Administrative Services........�� Michael Gold, Legislative Affairs Liaison....................................IG Penny Kyle, Clerk of the Board........................................... Other Staff Present f'." /t �'ll" S/GN-/N SHEET ORANGE COUNTY SANITATION DISTRICT STEERING COMMITTEE MEETING Meeting Date 4q--of NAME ORGANIZATION/FIRM leaseprint) leaseprint) Mifl 22 l 0 HME GFNMVMERING COMMMEMIGN-IN FGRMSC COMMMEE.W STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Supplemental Agenda for the Steering Committee Meeting of Orange County Sanitation District to be held on June 24, 2002, was duly posted for public inspection in the main lobby of the Districts' offices on June 18, 2009. IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of June, 2004, Penny M.6yle Clerk of the Boar Board of Directors Orange County Sanitation District �� 'CAS JUL 222909 H:\DEPT\GMO\150\1510S\FORMS\AGENDA CERTIFICATION-SUPPLEMENTAL.STEERING.DOC SUPPLEMENTAL AGENDA REGULAR MEETING OF THE STEERING COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JUNE 24, 2009 AT 5:30 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California www.ocsd.com CLOSED SESSION(4) During the course of conducting the business set forth on this agenda as a regular meeting of the Steering Committee,the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations,pending or potential litigation,or personnel matters,pursuant to Government Code Sections 54956.8.54956.9,54957 or 54957 6,as noted. Reports relating to(a)purchase and sale of real property;(b)matters of pending or potential litigation;(c) employment actions or negotiations with employee representatives;or which are exempt from public disclosure under the California Pudic Records Act, may be reviewed by the Directors during a permitted closed session and are not available for pudic inspection. At such time as final actions are taken by the Board on any of these subjects,the minutes will reflect all required disclosures of information. Convene in closed session, if necessary. 4. CONFERENCE WITH LEGAL COUNSEL RE.ANTICIPATED LITIGATION (Government Code Section 54956.9(b)) Significant Exposure to Litigation Number of Potential Cases: 1 - Re. Jan Semiconductor—Jan Semiconductor has taken the position that Jan is legally entitled to Conexanfs SCFCC baseline Reconvene in regular session. Consideration of action, if any, on matters considered in closed session. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY ADJOURNMENT The next Steering Committee meeting is scheduled for July 22, 2009 at 5:30 p.m. June 24, 2009 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 public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all, or a majority of all, of the members of District's Board,are available for public inspection in the office of the Clerk of the Board,located at 10844 Ellis Avenue, Fountain Valley, California. Items Not Posted: In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion andlor 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 Steering 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). Meetino Adiournment: 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. Nofice to Committee Members: For any questions on the agenda or to place any items on the agenda, Committee members should contact the Committee Chair or Clerk of the Board ten days in advance of the Committee meeting. Committee Chair: Doug Daven (714)318-9550 General Manager: James D. Ruth (714)593-7110 General Counsel: Brad Hogin (714)415-1006 Clerk of the Board: Penny Kyle (714)593-7130 E-mail: pkvle@ocsd.wm STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Notice and the Agenda for the Steering Committee meeting to be held on was duly posted for public inspection in the main lobby of the District's offices on �` / �f a M O IN WITNESS WHEREOF, I have hereunto set my hand this day of �cNt �d�du9 Penny M. K e, Clefk of the Board Board of Directors Orange County Sanitation District H:NEPrGM01150\751SS\FORMSWGENOA CERTIFICATION.STEERING COMMITTEE.00C ORANGE COUNTY SANITATION DISTRICT Memorandum DATE: June 17, 2009 TO: Chair and Members of the Steering Committee Orange County Sanitation District FROM: James D. Ruth General Manager, Orange County Sanitation District SUBJECT: Fiscal Year 2008-2009 Year-End Review of Accomplishments The 2008-09 fiscal year brought many challenges to our organization; however, through the strong leadership of our Board and the standing committees, we achieved substantial progress. While we achieved much progress during this past year, the Orange County Sanitation District faces many new challenges as we address the state fiscal crisis, critical operational and capital needs and potential new regulatory requirements. Once again, we demonstrated our resolve to achieving optimal operating efficiencies while continuing to implement a very aggressive Capital Improvement Program as part of our adopted $2.5 billion plan to protect the health and safety of the 2.5 million residents in our service area. The OCSD team manages assets with an estimated replacement value of over$6.25 billion. Our work plan for FY 2008-09 incorporated an aggressive program of continued fiscal prudence while meeting our consent decree obligations, implementing our$280 million capital program and carrying out our Board approved strategic plan. Under the Board of Directors strong leadership, OCSD actually improved its bond rating with Standard & Poor s from AA to AAA, with Fitch and Moody's holding our rate at AA. The Board's approval of our five-year rates in 2008 contributed significantly to this excellent rating. We are making great strides to become more results-oriented. In addition to the accomplishments described below, I have attached a listing of other staff achievements and awards received this past year that reflect the high degree of professionalism and excellence within our organization. Board of Directors Page 2 June 17, 2009 The following report reviews our organization's progress this past fiscal year against our approved work plan presented to the Steering Committee at our July 2008 meeting. I am pleased to report the status of the following work plan items: 1. Strategic Plan Update—With the adoption of our Strategic Plan in November 2008, the Board of Directors gave specific policy direction to staff for implementation. Goals and objectives and performance measures were developed to monitor progress against our agreed upon work plan. Status—Staff completed 15 of 37 (40%) strategic goals contained in the strategic plan. We are also meeting or exceeding nearly all of the level of service targets approved by the Board in the plan. Significant achievements during this fiscal year include completion of the Steve Anderson Lift Station, significant progress on the relocation of the SARI line and a newly updated strategic plan. Please refer to pages 10-16 of the OCSD Fiscal Year 2009-10 Budget Update for a comprehensive listing of the strategic plan accomplishments. Staff created a computer-based performance dashboard to monitor and track progress on each of the strategic plan elements. 2. SAWPA Agreement— Our staff continues to meet with SAWPA management to consolidate five existing agreements into one document and to clarify existing language as well as addressing several operational issues. Staff will present final documents to our Board early in the 2008 fiscal year for your review, consideration and action. Status—OCSD staff presented a draft agreement in November 2008 to SAWPA staff for their review. We continue to meet to resolve outstanding issues and it is my hope that we can present a revised agreement to the Board for consideration by the end of calendar year 2009. 3. IRWD — Staff held numerous meetings with IRWD executive and operational staff to address operational and financial issues between our respective agencies. We exchanged considerable information and we are nearing agreement on all outstanding issues. Cooperation has been excellent in our collective efforts to complete this project. Status: We reached agreement on all issues and we are now in the process of working up a revised agreement for consideration by our respective boards of directors. We expect to present a draft agreement to the Board in summer 2009. Board of Directors Page 3 June 17, 2009 4. Budget— Staff continues to follow the state financial crisis in an effort to minimize any fiscal impacts it might have on local government and specifically special districts. We are working closely with CASA, CSDA and the League of Cities as well as our own Sacramento lobbyist to protect our interests. Status: Staff is aggressively working to prevent a shift in local property taxes. We are also looking for every opportunity to reduce costs within our agency. This year we were able to achieve $2 million in cost savings through the concerted efforts of our staff. A description of these cost savings is contained in a separate memorandum to the Board of Directors accompanying the budget document. 5. SARI Line—With the certification of the EIR in July and the completion of design work in early 2010, the bidding, award, and construction of the $100 million SARI relocation project should take place in February 2010. Estimated construction completion is February 2012. A financing agreement is in place with the County of Orange, OCSD, and SAWPA. OCSD will continue to pursue federal and state funding to reimburse our agencies for this project. Status: The SARI relocation project is on schedule to go out to bid for construction in March 2010. The Army Corps of Engineers received $27 million in the President's FY 2010 budget to expedite completion of work on the Santa Ana Mainstem Project including Prado Dam and the SARI line. Moreover, the Army Corps of Engineers made the significant decision to tie the relocation of the SARI line to Mainstem improvements and increased storage behind Prado Dam. This decision should help expedite federal funding to the project. Board leadership and staff, working with our Washington, D.C. lobbyist, played an important role in raising Congressional awareness of the importance of relocating the SARI line. 6. Capital Improvement Plan 2008-2009— During the 2008-2009 fiscal year staff will manage seventy-three (73) projects with an annual expenditure of 360 million dollars. Our goal is to meet all schedules, stay within Board approved budget, and to manage change orders at 5% or less. Status: We are on track to spend $280 million (80%) of the $360 million budgeted for this year. The change order rate for projects completed since 2004 dropped to 7.4% and will further drop to 5% as current construction projects are completed. 7. Training —The third session of our Leadership Academy training program completed in May 2009. Nearly 60 EMT, managers and supervisors have completed the program. The program will develop leadership skills, build our bench and prepare for the future. Board of Directors Page 4 June 17, 2009 Status: The fourth Leadership Academy session will start in July 2009. A fifth and final session will occur later in the year. 8. Internal Audit—At the direction of the Administration Committee's Audit Oversight Subcommittee, the auditing fine of Lance Soil and Lunghard reviewed the collection and remittance of capital facilities capacity charges (CFCC) by member agencies during FY 2007-08. LSL found that while there were problems calculating CFCC fees owed to the Sanitation District, the amount was less than $20,000. Status: The audit was completed and results presented to the Administration Committee in June 2009. 9. Biosolids— In accordance with our Strategic Plan, staff will prepare an RFP to explore long-tens alternatives for the remaining one third of our biosolids production that is not committed to long-term contracts. Through this process, staff will also look at new markets and new technologies to deal with our long- term needs. Status: Staff is monitoring the availability of sustainable cost-effective alternatives for the remaining one third of our biosolids that is currently not committed to a long-term contract. With the downturn in the economy, the impetus for private sector vendors to bring new technologies into the marketplace has slowed considerably. In addition, there has been no opposition to land application of biosolids in Arizona. Therefore, staff is holding off on the RFP for the time being and is managing the remaining one third through the lowest-cost altemative—land application in Arizona— consistent with Board policy and our Long Range Biosolids Master Plan. 10. Safety and Security— Final design of our facility security and alert systems is in progress with project completion estimated to take twelve (12)to eighteen (18) months. Staff is pursuing federal funding to help in this endeavor. Staff will work with OCWD to develop a comprehensive, coordinated security plan between our respective agencies. Status: Design of a new security Fence along the North perimeter of Plant No. 1 is currently underway with Phase 1 of the project scheduled to begin construction later this year. We are in the process of upgrading plant emergency alarm and PA systems to insure 100% coverage of our facilities. The Department of Homeland Security conducted a vulnerability assessment of Plant 1 and offered a $194,000 grant to OCSD to help pay for upgrades to our security systems. Board of Directors Page 5 June 17, 2009 11. Design Build —With the approval of SB645 in 2008, staff selected rehabilitation of the Magnolia trunk sewer line as our first design build project. With the assistance of an outside consultant, documents are being prepared to solicit proposals for the project. Status: Draft design-build documents were completed and solicitation of Statements of Qualifications for Design-Build teams is on track for June 2009, Staff submitted to the State of California under legislation passed in 2009 a request to pursue a second design-build project to rehabilitate the interplant digester gas line. 12. GWRS —The Joint Steering Committee comprised of OCWD and OCSD Board members reduced the number of meetings during the fiscal year. OCSD is committed to meeting our contractual obligations and is investigating ways in which our respective agencies could possibly reduce operating costs through cooperative purchasing, training, security, and maintenance agreements. The Steve Anderson Lift Station (SALS) is on line and completing startup testing. SALS provides additional flow to the GWRS system, increasing the volume of reclaimed water by up to 20 mgd. Status: OCSD O&M staff work daily with OCWD staff on routine coordination issues and the management teams meet monthly. We made enhancements to increase the level of security around the GWRS facility and our security staffs meet regularly to ensure a safe and secure work environment throughout our joint campus. 13. Employee Recognition Program —Our Human Resources division is working with our management team to develop a comprehensive employee recognition program designed to recognize exceptional performance and create a positive work environment. Status: We made significant progress during the past year including creation of a staff advisory committee to guide the development of the program. The first recognitions are occurring in June 2009 as we honor with "Safety Performer" awards six divisions that achieved perfect safety records during the past year. EMT approved a revitalized IDEA (Incentives for District Employee Achievements) Program to recognize employees who suggest cost-effective ideas for improving and enhancing employee safety, working conditions and work methods. 14. Air Quality— Staff is evaluating alternatives for meeting new stringent air emission standards established by the SCAQMD. Staff will identify a Board of Directors Page 6 June 17, 2009 technology, start the planning, and design process to demonstrate its feasibility in order to meet a July 2010 regulatory deadline. Status: Staff completed an evaluation of potentially feasible alternatives for meeting new stringent air emission standards established by the SCAQMD. Planning and design for demonstration testing of the most promising technology—a dual catalyst system—is underway in order to meet a July 2010 regulatory deadline. 15. Odor Control — Since 2002, OCSD has expended $36.558,000 on odor control improvements, with an additional $1,220,000 budgeted for the next two years. We are planning an additional $52,358,000 of odor control projects over the next eight years in accordance with our strategic plan and Board policy direction. Status: In June 2009, the Board of Directors will consider awarding an interim construction project to modify existing odor control scrubbers at Plant No. 1. 16. Cost Savings — Staff will continue to look for cost savings in all areas of our operations, with a focus on cost containment in our health benefits programs. Status: Despite a projected $13 million decrease in FY 2009-10 anticipated revenues, we are able to present a balanced budget for consideration by the Board of Directors. Deferrals in our capital construction program and lower debt financing costs offset the revenue shortfall. With the state poised to take away a portion of local government property taxes, staff proposes additional budget adjustments of$3 million in FY 2009-10 to help close the budget gap, including the elimination of vacant positions and the reduction of various professional and contractual services. Additionally, staff identified $2 million in operational cost saving measures during FY 2008-09. Details regarding these measures are contained in a separate memorandum accompanying the budget document. 17. Public Outreach— Staff will continue to expand our public outreach efforts and ways to inform a variety of audiences about the critical services we provide. Status: To upgrade OCSD's outreach efforts, in the past year, our Public Information Office produced an eight-minute "Making Every Day Possible" overview video and a series of public service announcements for airing on local cable channels, launched a formal Speakers Bureau and directed more resources to community events and tours. As a result, in FY 2008-09, we hosted or participated in more than 190 tours, speaking engagements, and Board of Directors Page 7 June 17, 2009 community events, resulting in face-to-face contact with almost 10,000 people. The number of tours and tour guests doubled from two years ago and volunteer hours by employees rose by 50 percent from the preceding year as well. Work is underway on a "Wastewater 101" video that will help educate the public and tour groups about the processes involved in the wastewater treatment process. In conclusion, I am pleased with the progress we achieved this past year and I look forward to working with the Board of Directors in the coming year as we take on new challenges facing this agency. With the continuing strong leadership of the Steering Committee and our Board of Directors, and the dedicated support of our strong executive management team and staff, we are ready to meet the challenge. JDR:gg H:Wep80moV10N19AEminVtlRH JAMEMMIus RepoNto Eoem 09GM Slates reports@008.1009 YeervEnd Review of A mpllehments.dw Accomplishments FY2008-09 Operational • Strategic Planning At a workshop in July 2008, the Executive Management Team began the Strategic Plan update process. After revising the Levels of Service and updating strategic goals, the EMT presented the Strategic Plan to the Board on October 15. The Strategic Plan was updated with Board recommendations and the board of directors unanimously adopted the 5-year strategic plan update in November 2008 • Legislative Advocacy Staff worked with state and federal legislative consultants on a number of key legislative issues and aggressively advocated seven bills. . On the three highest priority issues, staff was successful in either passing the bill or securing a veto. The Legislative Advocacy consulting contracts were renewed at a reduced cost for an annual savings of$36,000 • EnerTech Operations The EnerTech synthetic coal production facility began accepting OCSD biosolids November 2008 and is operating in test made. The dedication to officially open the site was held on June 11, 2009 • North County Maintenance Yard The Board approved acquisition of property in Garden Grove to serve as a maintenance yard for the sewer maintenance division. An architect was hired to develop a plan to upgrade the existing building on the site and yard area. Staff is in the process of reviewing alternative layouts and will recommend a final design to the board this summer. • PIO, H&S, HR Strategic Plans Three divisions completed work during the year on strategic plans for their areas of responsibility: Public Information Office, Health & Safety, and Human Resources. The plans outline a strategic direction for these business units focused on a responsive, customer service based action plan for delivering services to their respective stakeholders. • Reclaim SARI flows When the GWRS Independent Panel met in October, there were several concerns about bringing the SARI Line to Plant 1 to increase water production for GWRS, primarily because of Stringfellow. Based on discussions with OCWD, our partner on this project, it was decided to discontinue the project in light of adverse comments from the GWRS technical advisory committee. Page 1 of 9 Accomplishments FY2008-09 scri lion • Ocean Discharge Permit Application Process The application for the five year renewal of our Ocean Discharge (NPDES) Permit was submitted to the Regional Water Quality Control Board and EPA on April 1, 2009. The current permit will expire October 30, 2009. A public hearing will be held in our Board Room on Friday, July 10, 2009 • GWRS operation OCSD has sent approximately 63 MGD to the GWRS during FY2008-09 and the flow will increase after the Steve Anderson Lift Station is operating. OCSD plans to send 104 MGD specification water to GWRS, the Level of Service contained in the Strategic Plan • Effluent Disinfection Staff investigated opportunities to optimize the disinfection system, which has included field tests and development of options and testing plans. The NWRI Blue Ribbon Panel will meet again this July and after receiving input from OCSD staff will make recommendations on our proposals • Secondary Treatment and Final Effluent August/September 2008, P1 moved to 100% secondary treatment. In October Quality 2008, the District averaged final effluent with the lowest TSS and BOD in its history, 25 mg/I and 33 mg/I respectively • Countywide Pollution Prevention Partnership C4P is one of the Enhanced Source Control Programs designed to protect the Program (C4P) drinking water resources of Orange County by reducing the discharge of emerging pollutants of concern from residential and commercial sources through public outreach. OCSD partnered with our 25 member agencies and held a kick off meeting in June 2009. The program includes dissemination of outreach materials through the cities' existing media outlets, such as bill stuffers, public service announcements, and newsletters. In comparison with direct mailing of outreach materials to residences, the use of the cities' existing media outlets will save OCSD approximately a million dollars a year • Public Information Office(PIO) To upgrade OCSD's outreach efforts, in the past year, PIO produced an eight minute"Making Every Day Possible" overview video and a series of public service announcements, launched a formal Speakers Bureau and directed more resources to community events and tours. As a result, in FY 2008-09, we hosted or participated in more than 190 tours, speaking engagements, and community events, resulting in face-to-face contact with almost 10,000 people. The number of tours and tour guests has doubled from two years ago and Page 2 of 9 Accomplishments FY2008-09 Description El volunteer hours by employees has also risen by 50 percent from the preceding year as well. Work is underway on a "Wastewater 101" video for the coming year that will help educate the public about the processes involved in the wastewater treatment process • OCWD security Staff is working with Orange County Water District staff on the level of security for our joint campus and treatment facilities. The agencies reached agreement on access controls throughout the campus • Management System for Environmental Compliance obligations have been populated and a dashboard created. Compliance ECAP Hazardous waste and auditing have been added to the site now totaling nine compliance areas. • Enterprise Information Technology Strategic Developed and published a three year Information Technology Strategic Plan Plan based on the master OCSD strategic plan to guide acquisition and management of hardware and software • IT Equipment Consolidation Information Technology consolidated over 50% of the server hardware resulting in substantial hardware and energy savings and faster disaster recovery times • Engine Emission Compliance Completed a study to evaluate alternatives for complying with lower emission limits in the South Coast Air Quality Management's Rule 1110.2 • Records Management In FY0809, Records Management handled 183 Public Records Act Requests and 5 Subpoenas for Records. E-mail Management Training was given to employees in each Division and workgroup. Records Management Compliance Audits were completed for the General Managers and Administrative Services Departments • Performance Dashboard The Performance Dashboard was automated by Information Technology, and the responsible managers receive notifications through a work-Bow process every quarter to update the Levels of Service and Goals from the Strategic Plan • Succession Management Succession Plan - Implement the succession management plan including Page 3 of 9 Accomplishments FY2008-09 management training and the creation of a Leadership Academy which has successfully trained.56 staff. • Employee Recognition Program Human Resources is developing a recognition program that will include all current and future programs, such as the Incentives (for) District Employees Achievements (IDEA) Program, the Volunteer Incentive Program (VIP), and the safety Incentive Program • Human Resources and Safety and Health The Human Resources and Safety and Health Divisions Strategic Plans are in Divisions Strategic Plans draft form and will be completed in FY2008-09 • Deferred compensation A focus group of staff and a consulting firm evaluated deferred compensation programs and several financial advisory firms, and selected ING Life Insurance Annuity Company as the new deferred compensation provider. All deferred compensation accounts will migrate to ING Capital • CIP Program Number and value of projects In FY 2008-09, we completed roughly$280 Million in capital expenditures which is 80% of the CIP budget for the Fiscal Year. The District managed a total of 80 large and small active CIP projects during the Fiscal Year • Other completed projects on-line Six large CIP projects were successfully completed and closed-out during the Fiscal Year, with a combined value of over$150 Million. These projects include: Effluent Pump Station Annex, Activated Sludge Plant Rehabilitation at Plant No. 1, Bushard Trunk Sewer Rehabilitation, Rehabilitation of District Siphons by Adding Air Jumpers, Fire Suppression for Servers and Equipment, and Santa Ana River Interceptor Protection/Repairs. In addition, nineteen small projects were either completed or in construction during the Fiscal Year • Santa Ana River Interceptor(SARI) Line A$400,000 emergency repair to protect the SARI Line with rock was performed in November 2008. In January 2009, TetraTech was awarded the design contract for relocating the line for a project managed by the Army Corps of Engineers, the County of Orange Flood Control Division. The preliminary design is proceeding and the Environmental Certification work is nearing completion. The relocation will be complete in 2012 Page 4 of 9 Accomplishments FY2008-09 Accomplishment _ Description • SALS completion and dedication The Steve Anderson Lift Station is in the commissioning process. The station was dedicated on April 17, 2009 in honor of our former Board Chair and long- term Board member • Space Planning Study Recommendations O&M Staff moved out of Administration second floor area into the newly constructed office area in the Control Center and into the Laboratory Building, IT moved into the Administration second floor area in May. ADA required work in the Control Center and walk areas around the Laboratory are in progress. • Facilities Master Plan update Engineering and Operations and Maintenance completed several modules of the Facilities Master Plan. It is in draft form and is scheduled for Board Approval in December 2009 • CIP Exchange Program with Korea In June 2008, two engineers from OCSD participated in the International Wastewater Symposium organized by Environmental Management Corporation, a Korean government agency, held In Seoul, Korea. In August, two engineers from EMC were at OCSD for two months observing OCSD's organization and practices • Fuel Cell Demonstration Project An agreement has been executed to participate in multi-agency/private Partnership to provide a test that will use Digester Gas to create electricity for the facility and Hydrogen as an automobile fuel from a clean source. This fuel cell is scheduled to be installed by December 2009 • Security and Safety Improvements A new security wall along Ellis Street will be installed as part of Project J-108, Upgrades to Plant Security Barriers. This project is in design and is scheduled to be completed by the end of 2010. Another project is underway to upgrade the emergency alarm system at both plants. Financial • Debt issue and refinancing Despite the economy, Financial Management issued $200 Million of"new money" debt at a true interest cost of 4.72 percent, 28 basis points below target generating savings of$7 million. In addition, $196.6 million of previously issued debt was refinanced at a lower rate generating first year savings of$6.9 million Page 5 of 9 Accomplishments FY2008-09 m lishment Descri lion • Bushard Street Construction mediation The project work is complete and final settlement of pipe related claims was settlement finalized in March of 2009 • Grant funding/appropriations- The District received $300,000 in funding for the secondary treatment CIP bringing the total amount received to just over$2 million. All funds will be spent in 2009. An additional $5 million has been appropriated for secondary treatment through the office of Senator Barbara Boxer • Interagency agreements The Irvine Ranch Water District is working with District staff on several outstanding issues with financial impacts: solids costs; reserves; flume adjustment calculations; and cash balances. The Santa Ana Water Watershed Project Agency staff and District staff have been working for over a year to negotiate the terms of a new agreement. A user rate study was performed to provide financial data • Sell 1,808 acres in Kings Country The property has been listed and several inquiries have been fielded by OCSD staff. No offer to purchase has been made. Efforts to sell the property are still on-going • Sale of Excess Air Quality Emission Reduction Last year, the Board authorized staff to sell air quality emission reduction Credits credits (ERC)that the District has maintained for several years. To date, the District has sold -$4.2M worth of ERCs • Research Strategic Plan A five year Research Strategic Plan was completed which included the input of an outside expert panel. Work has begun on the highest priority projects identified in the Plan Groundwater Replenishment System Awards • Stockholm Industry Water Award International award presented by the Stockholm International Water Institute that honors and encourages business sector contributions to sustainable development in the water sector • Coastal Preservation Award Presented by Orange County Coastkeeper • Board President of the Year Presented by California Special Districts Association Page 6 of 9 Accomplishments FY2008-09 Accomplishment • Toshiba Green Innovation Award Presented at the Innovation and Globalization Conference • 2009 ASCE Outstanding Civil Engineering One of six finalists of the ASCE Outstanding Projects and Leader(OPAL) Award Awards, GWRS won the prestigious Outstanding Civil Engineering Award (OCEA). This is the highest honor that ASCE bestows on a project • 2009 ACEC Grand Conceptor Award Consultant CDM was awarded the 2009 ACEC Grand Conceptor Award signifying the year's best engineering achievement for GWRS-among the 168 projects honored at the Engineering Excellence Awards Gala Awards • NACWA (National Association of Clean Water Presented to Source Control Division by NACWA along with Los Angeles Agencies)Award County Sanitation District and City of Los Angeles "2008 National Environmental Achievement Award"for their collaborative and innovative work on the"No Drugs Down the Drain Program" • The 2008 Achievement of Excellence in The national award recognizes organizational excellence in government Procurement(AEP)award procurement and contracting in the United States against a set of nationally recognized professional standards that define procurement excellence • Distinguished Budget Presentation Award Presented to Financial Management for exceptional budget by the Government Financial Officers Association • Certificate of Achievement for Excellence in Presented to Financial Management for the Comprehensive Annual Financial Financial Reporting Report (CAFR) by the Government Finance Officers Association • Gold Peak Performance Award For treatment plants' 100% permit compliance by the National Association of Clean Water Agencies • Excellence in Information Technology Presented to Information Technology by the Municipal Information Systems Practices Award Association of California (MISAC) • The Best Vibration Analysis Program of the Presented to Simon Watson, Manager of Mechanical and Reliability Year Maintenance (Division 850) by Uptime Magazine Page 7 of 9 Accomplishments FY2008-09 • Government Engineer of Merit Presented to Nick Arhontes, Director of Operations and Maintenance, by the American Society of Civil Engineers • Construction Engineering Distinguished Owner Presented to Engineering Supervisor Chris Cervellone by the Construction Honoree Management Association of America (CMAA), Southern California Chapter • Operator of the Year Presented to Doug Hauser, P2 Senior Plant Operator, by the California Water Environment Federation (Santa Ana River Basin Section). H:ldeptl9mo\i t OYI10 AdminIRUTH JAMEMStalus Reports to Board\2009 GM Status reportsl2009 0617 Ac pllshments In Table FY200809 FINAL per RPG.do. Page 8 of 9 ORANGE COUNTY SANITATION DISTRICT I rho H�1a R.44 Ell Amnue Fnan Vln u4 June 17, 2009 927M same 7016 PI] Snx 81"7 F.,ann VA, i✓ BP]Peb1v wmu..ad...m Phone 1/14)96224'1 NOTICE OF MEETING F. (114)962t]3Fi6 STEERING COMMITTEE Serving A,ahertn a"'a ORANGE COUNTY SANITATION DISTRICT a�a,na pan. LyNnaa F[lalll . Vanay Fllnr.,e N WEDN ESDAY, JUE 24, 2009 - 5:30 P.M. u Ganlan r nvn Ha,mnquaiea."h ADMINISTRATIVE OFFICES kr,. 10844 ELLIS AVENUE La Hah„3 FOUNTAIN VALLEY, CALIFORNIA 92708 L.P.M. WWW.00SD.COM Lea Ala s U-ange A regular meeting of the Steering Committee of the Orange penenea County Sanitation District will be held at the above location, date Sane Am s,al aaann and time. Sane, 1,aun Villa park Wata Linde adam"ads Sane 11a '. MAN ay Ury 5enrta ,IHam,t wne Ranch Ga"y ul Uenl,e We pmm=pubkc health and Me enmonmenr bypmwding ehecwe waarewarar c.11ecuen. "a"am.. and radydhing. STEERING COMMITTEE AND BOARD MEETING DATES July 22, 2009 August 26, 2009 September 23, 2009 October 28, 2009 *November 18, 2009 *December 16, 2009 January 27, 2010 February 24, 2010 March 24, 2010 April 26, 2010 May 26, 2010 June 23, 2010 -Meetings being held the third Wednesday of the month. STEERING COMMITTEE (t) Roll Call: Meeting Date: June 24, 2009 Meeting Time: 5:30 pm. Committee Members Doug Davert, Board Chair................................................... ........... _ Larry Crandall, Vice Chair................................................... ........... _ Mark Waldman,Administration Committee Char................ ........... Bill Dalton, Operations Committee Chair........................................ JimFerryman................................................................................._ PhilLuebben....................................................................... ........... DavidShamer.................................................................... ........... Others Brad Hogin, General Counsel............................................. ........... Staff Jim Ruth, General Manager.................................................... Bob Ghirelli, Assistant General Manager.................................. . Nick Arhontes, Director of Operations&Maintenance................. Jim Herberg, Director of Engineering....................................... . Ed Torres, Director of Technical Services.................................._ Lorenzo Tyner, Director of Finance&Administrative Services........ Michael Gold, Legislative Affairs Liaison.................................... Penny Kyle, Clerk of the Board........................................... ._ Other Staff Present AGENDA REGULAR MEETING OF THE STEERING COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JUNE 24, 2009 AT 5:30 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California www.ocsd.com DECLARATION OF QUORUM PUBLIC COMMENTS REPORT OF COMMITTEE CHAIR REPORT OF GENERAL MANAGER REPORT OF GENERAL COUNSEL ACTION ITEMS (1) 1. Approve minutes of the May 20, 2009 Steering Committee meeting. INFORMATION ITEMS (2 - 3) 2. Supplemental Capital Facilities Capacity Charge— Baseline (Book Page 7) 3. Legislative Affairs Report(Gold) (Book Page 17) Book Page I June 24, 2009 CLOSED SESSION During the course of conducting the business set forth on this agenda as a regular meeting of the Steering Committee,the Chair may convene the Committee in closed session to consider matters of pending real ! estate negotiations, pending or potential litigation,or personnel matters, pursuant to Government Code ',. Sections 54956.8,54956.9,54957 or 54957.6,as noted. Reports relating to(a)purchase and sale of real property; (b)matters of pending or potential litigation; (c) employment actions or negotiations with employee representatives;or which are exempt from publicI, disclosure under the California Public Records Act,may be reviewed by the Directors during a permitted closed session and are not available for public inspection. At such time as final actions are taken by the Board on any of these subjects,the minutes wil reflect all required disclosures of information. Convene in closed session, if necessary. Reconvene in regular session. Consideration of action, if any, on matters considered in closed session. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY ADJOURNMENT The next Steering Committee meeting is scheduled for July 22, 2009 at 5:30 p.m. Book Page 2 June 24, 2009 Aaenda 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 public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all, or a majority of all, of the members of District's Board,are available for public inspection in the office of the Clerk of the Board,located at 10844 Ellis Avenue, Fountain Valley, California. 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, R 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 Steering 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 hems 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 hems 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 Adiournmen[: 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 priorto the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Notice to Committee Members: For any questions on the agenda or to place any items on the agenda, Committee members should contact the Committee Chair or Clerk of the Board ten days in advance of the Committee meeting. Committee Chair: Doug Davert (714)318-9550 General Manager: James D. Ruth (714)593-7110 General Counsel: Brad Hogin (714)415-1006 Clerk of the Board: Penny Kyle (714)593-7130 E-mail: pkyle(dpcsd.corn Book Page 3 MINUTES OF STEERING COMMITTEE MEETING Orange County Sanitation District Wednesday, May 20, 2009, at 5:30 p.m. A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, May 20, 2009, at 5:30 p.m., in the District's Administrative Office. A quorum was declared present, as follows: STEERING COMMITTEE MEMBERS: Ed Torres, Director of Technical Services DIRECTORS PRESENT: Lorenzo Tyner, Director of Finance and Doug Davert, Chair Administrative Services Larry Crandall, Vice Chair Michael Gold, Legislative Affairs Liaison Bill Dalton, Operations Committee Chair Bret Colson, Public Information Office Manager Mark Waldman, Administration Committee Jeff Reed, Human Resources Manager Chair Penny Kyle, Clerk of the Board Jim Ferryman Jim Burror Phil Luebben Ryal Wheeler David Shawver Juanita Skillman STAFF PRESENT: DIRECTORS ABSENT: Jim Ruth, General Manager NIA Bob Ghirelli,Assistant General Manager Nick Arhontes, Director of Operations and OTHERS PRESENT: Maintenance Brad Hogin, General Counsel Jim Herberg, Director of Engineering Christopher Townsend PUBLIC COMMENTS There were no public comments COMMITTEE CHAIR REPORT Vice Chair Larry Crandall presided over the meeting due to the expected late arrival of Chair Doug Davert. Vice Chair Crandall reminded the Steering Committee members to RSVP for the EnerTech Open House that was being held on June 11'". Book Page 4 Minutes of the Steering Committee May 20, 2009 Page 2 GENERAL MANAGER REPORT Jim Ruth, General Manager, reported on a recent meeting held with the Orange County Water regarding security issues and reported that the Water District immediately implemented some of the requested safety measures. A security assessment was conducted at Plant 1 by the Department of Homeland Security along with California Emergency Management Agency, Orange County Sheriff, San Diego Explosive Ordinance Disposal Unit and Fountain Valley Fire and Policy to evaluate the facility's security and determine if improvements need to be made to the critical infrastructure security. A report will be issued comparing the sanitation district to like agencies throughout the nation and may contain recommendations on security improvements. Mr. Ruth advised the Committee on steps taken to absorb the expected impacts to the budget as a result of the state budget crisis, and was confident that additional reductions in the budget would result in not touching reserves, as well as maintain levels of service. GENERAL COUNSEL REPORT There was no report. ACTION ITEMS 1. MOVED, SECONDED AND DULY CARRIED: Approve minutes of the April 22, 2009 Steering Committee meeting. 2. MOVED, SECONDED AND DULY CARRIED: Authorize one year renewals to the following agreements for state and federal advocacy: a) Approve Amendment No. 1 to P.O. 103000 issued to Townsend Public Affairs for State Lobbying Services, Specification No. CS-2007-3518D, in an amount not to exceed $7,500 per month,from July 1, 2009 through June 30, 2010, and three one-year renewal options remaining; and, b) Approve Amendment No. 1 to P.O. 103001 issued to ENS Resources for Federal Lobbying Services, Specification No. CS-2007-35213D, in an amount not to exceed $7,000 per month and $6,000 per year in reimbursable travel expenses, from July 1, 2009 through June 30, 2010, and three one-year renewal options remaining. 3. MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to: a) Authorize staff to annex 1716 acres to Orange County Sanitation District(OCSD) in the vicinity of Rancho Santiago Boulevard, within the City of Orange and unincorporated areas of Orange County; b) Adopt Resolution No. OCSD 09-05, authorizing initiation of proceedings to annex said territory to OCSD (Proposed Annexation No. OCSD-63—Rancho Santiago Annexation); and, Book Page 5 Minutes of the Steering Committee May 20, 2009 Page 3 c) Defer collection of associated fees for proposed Annexation No. OCSD-63— Rancho Santiago Annexation until a sewer connection is permitted. INFORMATION ITEMS 4. Legislative Affairs Report—Gold Christopher Townsend and Heather Dion updated the Committee on the May le election and its implications to the state budget. Michael Gold reported that Senator Boxer is carrying a $5 million request for secondary treatment upgrades. CLOSED SESSION There was no closed session. ADJOURNMENT The next Steering Committee meeting is scheduled for Wednesday, June 24, 2009, at 5:30 p.m. The Chair declared the meeting adjourned at 6:18 p.m. Submitted by: Penny M. Kyl§ Clerk of the Board Book Page 6 STEERING COMMITTEE Meeting Date roea.war. W 29/D9 AGENDA REPORT IMM Numt Item Numeer z Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Robert P. Ghirelli, Assistant General Manger; Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: JAZZ SEMICONDUCTOR'S REQUEST TO REEVALUATE THE APPLICATION OF THE STANDARD BASELINE FOR SUPPLEMENTAL FACILITIES CAPACITY CHARGES (SCFCC) TO EXISTING INDUSTRIAL DISCHARGE PERMIT GENERAL MANAGER'S RECOMMENDATION Informational Item. SUMMARY The Supplemental Facilities Capacity Charge (SCFCC) was established in January 2000. Existing industrial dischargers were granted a baseline based upon their 1998-99 discharge. Users discharging under a permit issued after January 1, 2000, receive a standard baseline of 25,000 gallons per day for flow. A change in company ownership requires a new permit and therefore the application of the standard 25,000 gallon per day baseline, even if the operation has not changed. The fact that the prior permittee may still own the property and buildings is irrelevant. In 2002, Conexant (an existing industrial discharger) submitted an application for an industrial discharge permit for Newport Fab, LLC. The application was submitted as a new permit and the standard baseline of 25,000 gallons per day was applied. The cover letter accompanying the permit application stated that Conexant is "transferring the ownership of the wafer manufacturing operations" to Newport Fab, LLC, and the permit application "reflects the new ownership." Newport Fab, LLC, doing business as Jazz Semiconductor, requested a review of the applicability of the standard baseline to their industrial discharge permit in 2004. Jazz Semiconductor asserted that they should be allowed to use Conexant's baseline because (1) the operation was unchanged; (2) Conexant still owned the property and the buildings; and, (3) Conexant still held a 38% ownership interest in Jazz Semiconductor. At the September 28, 2005 Board meeting, a motion was approved to receive and file the letter from Newport Fab, LLC dated November 29, 2004, requesting a transfer of the flow baseline established by Conexant; but to deny the request to transfer the flow baseline established by Conexant to Newport Fab, LLC. Page 1 Book Page 7 Jazz Semiconductor is asking that the Board reconsider its 2005 decision and transfer the flow baseline from Conexant to Jazz Semiconductor. Staff has determined that while the company name has remained the same, 100% ownership has changed twice since the 2005 Board Meeting. Therefore, Conexant, the original permittee, no longer holds any ownership interest in Jazz Semiconductor, the current permittee. Thus, in order for the Board to allow Jazz Semiconductor to utilize Conexant's baseline, the Board would have to repeal the existing ordinance and approve a new ordinance changing the definition of"Existing User"for purposes of the SCFCC. PRIOR COMMITTEE/BOARD ACTIONS 09/28/05 - Board approved motion to receive and file the letter from Newport Fab, LLC dated November 29, 2004, requesting a transfer of the flow baseline established by Conexant; and denied the request to transfer the flow baseline established by Conexant to Newport Fab, LLC. ADDITIONAL INFORMATION None. ATTACHMENTS 1. Letter dated 6/11109 2. Board Agenda Report dated 9/28105 JDR:RPG:LT:lc Page 2 Book Page 8 ATTORNEYSATLAW 1' NOSSAMAN LLP 18101 Von Karman Avenoo .. . Suite 1800 Irvine,CA 92612 T 949.833.7800 F 949.833.7878 Dick Ackerman D 949A77.7616 dackennan@nossaman.com Refer To File N:400173-0001 June 11, 2009 Chairman Doug Davert Orange County Sanitation District 10844 Ellis Ave. Fountain Valley, CA 92728 Dear Mr. Chairman: This office represents Newport Fab LLC (dba Jazz Semiconductor) ("Jazz"). This business has been operating in Orange County for many years and has a history of dealing with the Orange County Sanitation District ("District"). We are requesting the District reconsider its imposition of its surcharge and reinstatement of Jazis baseline discharge rate of 1.8 million gallons per day. The basis for this request is as follows: 1. The Application Filed By Jazz In February 26, 2002 Contained Misstatements Of Facts. The application said that this was a new operation;that it did not have an existing discharge permit, and that they had not previously discharged in the system. The true facts were that Conexant had been in operation on this facility for many years and had a permit and had discharged into the system before. The creation of Jazz was part of a corporate reorganization of Conexant that would eventually spin off the Jazz operations. At the time of the application, Conexant, through Jazz Semiconductors Systems, Inc. and later Specialty Systems, Inc., was the sole owner of Jazz. The answers reflected in the application did not correctly set forth the facts to the District. 2. The Intent Of The Supplemental Discharge Regulation Is Not Applicable To Jazz. It appears that the scope and purpose of the Capital Facilities Connection charge is in general terms to provide the District funds to support the construction of a new facility or existing facilities that expand or significantly increase flow to the system. The intent clearly spells out the creation of a new facility or an existing facility that expands or significantly increases burden to the system. In our case, we do not have a new facility, as Jazz merely continued to operate the facility previously operated by Conexant. As shown in the attached chart, the usage over the years has significantly declined from the original baseline usage. Also, Jazz is not producing any additional or new pollutants into the discharge stream. 292427_1.130C Book Page 9 Chairman Doug Davert June 11.2009 Page 2 3. This Transaction Does Not Constitute A Change Of Ownership Under Ordinance 37, Section 104C. An analysis of Proposition 13 "Definition of Change of Ownership" is useful in this current discussion. Proposition 13, which deals with changes in ownership of real property, states that "when a corporation, partnership, limited liability company or other legal entity or any other person obtains control through direct or indirect ownership or control of more than 50% of the voting stock . . .the purchase or transfer of that stock shall be a change in ownership of the real property." It is clear that when Proposition 13 was drafted, it clearly intended to cover all transactions no matter how far removed from the base transaction looking at the traditional grandparent-parent subsidiary situation. Contrast the section used by the District which was not officially passed and adopted until May 28, 2008. This section states merely that"the previous owner retains an ownership interest greater than 50%." The commonly used definition of previous is preceding as in right before. I believe it is clear that the drafters of the District rule did not anticipate the broad "direct or indirect" language used in Proposition 13, or they could have easily included that in their definition. Previous means that which immediately goes before, which would be the parent owner, namely Jazz Semiconductor, Inc. of Newport Fab and not other owners higher up in the corporate ownership. It is further described in the staff Agenda Report forwarded to the Board of Directors on September 8, 2005, which stated that"the District's Ordinance No. OCSD-26 does not contain specific guidance as to what corporate organizational changes transform an existing user into a new user and, therefore, subject to the new user baseline." Based on the statement of facts, the staff at that time recommended that the original baseline be renewed and also that the District consider clarifying the ownership position in future regulation or legislation which was ultimately done in 2008. In discussions with District staff, it is clear that the District had no definitive policy in 2002 or 2005 regarding what constitutes a "change of ownership." This situation would make it very difficult, if not impossible, for a new permittee to evaluate the impact of any corporate restructuring on their contractual relationship with the District. Further, it is our information that the District's Source-Controlled Department analysis stales that even if a parent or grandparent corporation ownership changes more than 50%, a permit would not be necessary if the subsidiary retains more than 50% responsibility for those liabilities. In this particular case, Jazz has remained fully liable for all of its liabilities from the day that it was formed through the present date. 4. A Court of Law Would Interpret the Statute to Find No Change Of Ownership. If courts were to interpret the District statute and found it to be unclear or ambiguous, the court would likely find no change of ownership. In reviewing the statutory interpretation, the court will attempt to find the plain meaning of the statute if an ambiguity occurs. If the statute can be construed reasonably to have more than one meaning, the courts will look to the enacting body's intent, apparent purpose of the statute, and the statutory scheme of which the statute is part of an overall public policy. In other words, if the statute lacks the clear direction of Proposition 13's reference to direct or indirect, but merely makes a reference to a previous 292427_1.130C Book Page 10 Chairman Doug Davert June 11.2009 Page 3 rh owner, the court would reasonably interpret the District's intent to mean the immediate prior owner of the subsidiary in question. I am enclosing two charts; one showing the history of ownership of RockwelllConexanttJazz Semiconductor, and one showing the system usage of Jazz for the past ten years. As can be noted, the overall usage has dramatically declined since the 1998 level, and starting in 2002. the surcharge amount has gone dramatically up. This is in addition to the amount that Jazz would have normally paid without the adjustment to the baseline. Based on the above, it is therefore our request that the original baseline usage be reinstated and that, henceforth, the surcharge rate be terminated. Thank you for your consideration. `IVee'ry_ truly yours, !, Dick Ackerman State Senator (Ret.) of Nossaman LLP RCA/mI Enclosures cc: Jim Ruth Brad Hogin 292427 1,DOC Book Page II ttee Ownership History JdZL In Pu Vatr Gl; `_it issued on 2/26/02, effective 3/8/02 %.'snN7ac;ured -121911999 t219I1999 211912002 >2J1512002 a11212002 May42 Oc1-02 VIW2007 >2M912G07 9110/2008 >9119MPB OPERATINGENTITY STRUCTURE 1 OlWsbn of a public compary Pn.lecoapany� Wh.U,omred s.bs duel pl.public company CONTROLLING Carlyle Cadyle(55%) INTEREST x. - SHAREHOLDERS r Conexant ----- -- -------- AcqukgrcNn9ed ik name Tower Semicardutlor,Lld.^ MINORITY Conezar0 to Jazz Technologln' INTEREST I� Conexanl (35%) Rrl O(1G-)i CORPORATE ENTITY ISemrcbnaudor SPe lalry- ,t«aa.= __-_cr. I-.. (Managing member el Newport fah LLC) Sys rs,Ir bey CoReXaNt Newport Fab LLC, a OPERATING ENTITY Y (pe"a o.:7-l-tqp) Single member LLC, dba as Jazz (OCSD Pennittee) ) O SCFCC baseline: 1.8 million gallons perday Semiconductor (Permit No.:57-1-292) SCFCC baseline:25,000 gallons per day N TR 7952 BILK LOT I UN 31i-.: {'S Conexant (Parcel No:S 5-131-02) OWNERTTss1f� am .. nip _.., � LEASEHDLD We Lag krm lease wtlh Carexanl Matwrsk2017,and oplionkexlend the kase for N.a[nnsewln�L. .-; period%,k 2027. •AMEI(:JAZ$lock&cornenlble bond h.wb,. "NYSE:TSEM Stale&JAL ca Mble bond bolftM Maly ai r.sepamle SEC ON uMer Jazz Te nol Jazz Semiconductor, Inc. Has Been, and is, our Owner i e Permittee SCFCC Discharge & Cost � udactured Evaluating a 25% further reduction in discharge 700 $600,000 - - - - - - - - - - - - - - - - - - - 600 $500,000 500 y _ rawn Discharge Total $400,000 c400 �SCFCC $300.000 w 300 �y $200,000 200 100 $100,000 $0 98 to 99 99 to 00 00 to 01 01 to 02 02 to 03 03 to 04 04 to 05 05 to 06 06 to 07 07 to 08 08 to 09 Est. Discharge Is Lower, Yet Fee is Significantly Higher....Equivalent of More than 10 Jobs FAHR COMMITTEE Madinooate Tcad.a0i' 09114/05 O9128105 AGENDA REPORT 'ceiiNoinbe 10a Nan be FAHROS-78 19(al Orange County Sanitation District FROM: Robert P. Ghirelli, D. Env., Director of Technical Services Originator: Mahin Talebi, Source Control Manager SUBJECT: RESPONSE TO NEWPORT FAB, LLC'S (DOING BUSINESS AS JAZZ SEMICONDUCTOR) REQUEST, QUESTIONING THE APPLICABILITY OF THE SUPPLEMENTAL CAPITAL FACILITIES CAPACITY CHARGE GENERAL MANAGER'S RECOMMENDATION FAHR Committee Recommendation: (1) Receive and file letter from Newport Fab, LLC dated November 29, 2004, requesting a transfer of the flow baseline established by Conexant; and, (2) Deny request to transfer the flow baseline previously established by Conexant to Newport Fab, LLC. Staffs Recommendation to FAHR Committee: (1) Authorize the General Manager to transfer to Newport Fab, LLC, the flow baseline as defined by Ordinance No. OCSD-26 previously established at the same discharge location by a company known as Conexant; and, (2) to initiate the process to amend Ordinance No. OCSD-26 to clarify the policy for transferring baselines from an Existing User to a New User. SUMMARY A. Policy In an effort to ensure that every property owner paid its fair share for capital facilities (e.g. pipes, pumps, and structures) that were built to treat the waste generated by each parcel, it was necessary to adopt an ordinance that set charges for all dischargers: domestic, commercial, and industrial. In addition to the capital charges, a supplemental charge was applied to those commercial and industrial users permitted by the District that had significant industrial loadings of flow, biochemical oxygen demand and suspended solids. In the circumstances further described in this document, flow is the only issue. Effective on January 1, 2000, the District adopted an ordinance requiring Significant Commercial-Industrial Users (SCIU) to pay annually a Supplemental Capital Facilities Capacity Charge (SCFCC) if their loadings exceeded a baseline established for each permitted company. To establish a baseline, the existing companies which were connected and discharging prior to January 1, 2000, were grandfathered in and allowed a baseline established upon the loadings discharged for fiscal year 1998-99, For those r we.,we^neea,ee<ma com wmeevaos,movmam z yea s.mm,a.aoren z aor.. aw.ee. oaro9ros Page 1 Book Page 14 existing companies that had flows which were less than 25,000 gallons per day, a minimum baseline flow was set at 25,000 gallons per day. The flow baseline for companies which obtained a discharge permit after January 1, 2000, is also set at 25,000 gallons per day. B. Facility Background and Request In February 2002, Conexant, which is located in Newport Beach, submitted a wastewater discharge permit application for approval to continue to discharge to the sewer system under the name, Newport Fab, LLC. The application was presented to the District as if Newport Fab would be an entirely new company under different ownership. The District, believing Newport Fab to be a new company then issued on March 8, 2002 a new discharge permit to Newport Fab, LLC with the baseline flow of 25,000 gallons per day, in accordance with the policy previously summarized. This action had the result of increasing Newport Fab, LLC's financial obligation to pay a significantly higher SCFCC to the District. Subsequently, it was revealed to the District that Conexant retained 38% ownership of the fabrication facility and the Carlyle Group (51%) and RF Micro Devices (11%) own the remaining percentage. Conexant also maintains 100% ownership of the 25-acre parcel, the sewer connection, and the two buildings currently occupied by Newport Fab. Newport Fab believes that the baseline of 1.7876 million gallons per day previously established by Conexant should be retained by Newport Fab and requested the District reestablish the previous baseline and revise the SCFCC applied to Newport Fab on the basis of: 1)the transaction did not result in the creation of new facilities or the expansion of the existing facilities, and 2) the Newport Fab manufacturing operation is identical in terms of wastewater discharge quantity and quality as it was under the name Conexant. C. Financial Impact The table below shows the estimated financial impact of not granting the Conexant baseline to Newport Fab as a New User vs. allowing the previously established baseline as an Existing User. Fiscal Years W/O Baseline With Baseline Difference 2001 —02 (partial) $54,971 $21,161 $33,809 2002 — 03 $215,724 $77,472 $138,252 2003- 04 $242,531 $102,023 $140,509 2004- 05 $432,569 $185,816 $246,753 2005- 06 $450,114 $203,361 $246,753 2006- 07 $471,614 $224,861 $246,753 STAFF RECOMMENDATION The District's Ordinance No. OCSD-26 does not contain specific guidance as to what corporate organizational changes transform an Existing User into a New User and, therefore, subject to the New User Baseline. Staffs recommendation to the FAHR Committee supported granting the existing baseline to Newport Fab, LLC, based on: HtleplNpwWl51eam0(' Uee �iO3Ylen,Les Sam'mnEW.2 ao.,e.a oarow, Page 2 Book Page 15 1) Although Newport Fab is an independent corporation, Conexant as a partner still owns 38% of the manufacturing operation. Conexant also maintains the entire ownership of the two buildings currently occupied by Newport Fab and the sewer connection which was connected and discharging to the sewer system prior to January 1, 2000. 2) Newport Fab has not changed or increased the manufacturing processes and therefore, no additional impact has been imposed on the District's sewer facilitates. Moreover, the complex corporate changes that Conexant/Jazz Semiconductor/Newport Fab underwent appear to be a novel situation that was not contemplated when the SCFCC was adopted. The FAHR Committee listened to the presentation by staff, reviewed the information in the staff report, and after a lengthy discussion recommended that the request by Newport Fab LLC be denied based upon: 1) Jazz applied for a new permit under new ownership and the ordinance does not allow transferability to a new company. 2) Conexant retained less than 51% ownership, thus Jazz is a new user. Staff will work on an amendment to the ordinance to clarify the ownership question in accordance with direction provided by the FAHR committee and will bring that back to the board at a future date. PRIOR COMMITTEE/BOARD ACTIONS Ordinance No. OCSD-26 Adoption. PROJECT/CONTRACT COST SUMMARY N/A BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION N/A ALTERNATIVES N/A CEQA FINDINGS N/A ATTACHMENTS None. H-.w,m gm Slwmng Ummffl m mWMQm 2 J= zda. naiad. aawroa Page 3 Book Page 16 STEERING COMMITTEE "'�tlng/2009 TOBd of D AGENDA REPORT Ihm Number PN Number a Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Michael Gold, Government Affairs SUBJECT: Legislative, Policy and Political Update GENERAL MANAGER'S RECOMMENDATION Information Only SUMMARY This report is the monthly update from Washington, D.C. and Sacramento highlighting lobbyists' activities, OCSD legislative priorities and other information of interest to the Steering Committee. PRIOR COMMITTEEIBOARD ACTIONS None ADDITIONAL INFORMATION Federal Legislative Report Eric Sapirstein, ENS Resources Federal political update During the month of May, the District's activities centered upon the appropriations process, renewal of the Clean Water Act infrastructure assistance program, climate change, and chemical security issues related to POTW vulnerabilities and security upgrades. In general, Congress and the Administration continue to move at a breakneck pace. The all-important issue of selecting and confirming the second and third tier political appointees is moving at a steady, but slow pace. For water programs, former State Water Board Member Pete Silva's nomination to become the Assistant Administrator for Water Programs is nearing a final vote. He has received his Senate confirmation hearing before the Committee on Environment and Public Works that subsequently voted its approval. It is anticipated that he will receive Senate confirmation by July 4. The guessing game about who will be the Deputy Administrator of EPA is over. The White House has settled on Bob Perciasepe. This would be a second tour of duty for Perciasepe. He served as the Assistant Administrator for Water during the Clinton Administration. If oonfrmed by the Senate, he will assume the day-to-day management of the Agency on behalf of the Administrator, Lisa Jackson. Finally, it appears that the Senate energy bill (expected to be amended to a climate change bill) will include incentives to support alternative energy. Among the kinds of projects eligible for assistance would be biomass projects. If enacted into law, it could jump start alternatives to existing biosolids management options. Fom No.° 10?1 t..Ractl-SC P Iw 01Nb07 Page 1 Book Page 17 Efforts to move climate change legislation continued when the House Committee on Energy and Commerce approved the American Clean Energy and Security Act(H.R. 2454). This sets the stage for five other committees to consider the climate bill prior to House floor debate that the Speaker hopes to schedule for July. As part of a collaborative effort, we worked with Representative Lois Capps (D-CA) and key water and wastewater associations to develop an amendment that would make adaptive management funding for infrastructure available to support POTW needs. We expect the language to be finalized in the coming weeks. This will allow for it to be debated as part of the overall climate bill later this summer in the House. If adopted and enacted into law, it would set aside a portion of any cap and trade program's revenues to become available to fund infrastructure needs. Congress also continues to remain on schedule to approve fiscal year 2010 spending bills that would put in place funding by October. The Senate Committee on Environment and Public Works continues to seek to finalize the report detailing provisions of the Water Infrastructure Financing Act(S. 1005)that authorizes $38 billion to be available for water and wastewater infrastructure assistance over the next five years through the SRF program. Senate floor debate could occur in July. Finally, after years of intractable debate over how to define a water of the U.S. for purposes of regulation under the Clean Water Act, a compromise appears near. Specifically, the District's concern over whether its facilities could face additional permitting mandates under any new definition has been removed. The proposed compromise explicitly retains the waste treatment exemption thereby eliminating any potential impact to the District. In general matters, we continued to monitor developments related to the implementation of ARRA and specifically Buy American mandate. The Office of Water issued its first two substantive national waivers from the mandate. It agreed to waive the mandate for projects that have been bid between October 1, 2008 and February 17, 2009. Second, it decided that de- minimis components used in a project would be exempt from the mandate, provided the costs do not exceed five percent of the materials used in the project. While the District has not received any stimulus assistance at this time, if it does receive assistance at a later date, it will need to comply with the mandate and the waivers may play a role. State Legislative Report Christopher Townsend and Heather Dion,Townsend Public Affairs Political Highlights Last week the Governor addressed a joint session of the Legislature to discuss the State's current fiscal situation. The Governor's address was not focused on the specific details of the May Revise, but instead took the tone of a motivational speech. Mr. Schwarzenegger briefly explained that the State's revenues have dropped over 25 percent to the level it was in the late 1990s, which has resulted in a projected budget deficit of$24 billion. The Governor explained that this crisis was an opportunity to fundamentally reform State government by reducing regulations and bureaucracy, changing the relationship with local government, and realigning programmatic oversight and revenue sources. Schwarzenegger acknowledged that the Legislature must streamline government if it is to ask Californians to accept dramatic cutbacks. In the end, the Governor reminded the Legislature that they were elected to make tough decisions. FOM No.Dw ID21 PgeMa Re -SC R naOl 01,0&07 Page 2 Book Page 18 Following the Governor's address, Assembly Speaker Bass and Senate President Pro Tem Steinberg provided the Democratic response. The majority leaders acknowledged that deep cuts will have to be made but they disagree with the Governor's proposals to eliminate safety net programs such as CalWorks, CalGrants, and Healthy Families. The Speaker and Pro Tern did agree with the Governor about the need for government reform. Since the release of the Governor's May Revise and speech, local government leaders have jumped on the proposal to borrow 8 percent of the property taxes. The League of California Cities and the California Special Districts Association have held press conferences and lobby days in Sacramento to oppose any property tax borrowing. OCSD has joined the statewide coalition of local government agencies in this fight. Further complicating the picture for local government is a proposal by the non-partisan Legislative Analyst Office (LAO) recommending that water and wastewater special districts contribute more than 8 percent of their property taxes because of their ability to raise rates. At the moment, the local government coalition is united in its opposition but could splinter as discussions about property taxes continue. On June 10, Senator Steinberg released a framework budget proposal that would not borrow property taxes from local government and instead pull $4.5 billion from reserves. Mr. Steinberg (a former Sacramento City Council Member) expressed his opposition to borrowing from local government. With the Stale poised to run out of cash in July,the Governor and legislative leadership have stated their commitment to complete the budget by the end of June. At the time of this report, it does appear likely that the State budget will be done on time. TPA is working with local government associations and the legislature to fight any proposed shift of property taxes. This work includes a discussion of how property tax shifts would negatively impact OCSD. Form No IWI Page 3 Book Page 19 2009 Legislative Tracking Bill Number Summary Position* Status AB 815(Mal This bill requires a public agency to provide full, complete and accurate plans and specifications to Oppose Amended and bidders and that the agency assumes responsibility for the accuracy of those plans. A redo of AB passed the 983(Ma)from 2008, which OCSD opposed. Senate. A8 969 (Calderon) This bill modifies the Recycled Water Act of 1991 to establish goals for recycling an unspecified Watch Held in percentage of water by 2020 committee AB 11001Duvall) This bill allows the bottling of potable demonstration water for educational purposes and to Support Passed promote water recycling. (Note: this bill is aimed at allowing the bottling of GWRS water for Assembly now demonstration and educational purposes only). OCWD is sponsor in Senate. All 1366(Feuer) This bill allows a local agency that maintains a community sewer system,to control salinity from Support Passed residential water softeners, if the regional water quality control board makes findings that reducing Assembly now gsalinty would achieve water quality objectives. in Senate. v `P0 SB 26(Simitianl This bill would require the California State Board of Pharmacy to coordinate with local agencies Support Being held in No and drug manufacturers to develop programs managing pharmaceutical wastes and disposal. Senate Authorizes pharmacies to accept home-generated prescription drugs. appropriations 5B 413 (Duchenv) This bill imposes fees on wastewater dischargers for the purpose of preparing regional water Oppose Being held in quality control plans. Senate appropriations SB 565 (Pavlevl Requires the Slate Water Resources Control Board to develop a plan ensuring that 50%of Watch/Requesting Passed Senate wastewater discharged into the ocean would be recycled and put to beneficial use. Requires the Amendments now in State Board to impose a fee on ocean discharges to implement the program. Assembly SB 7111Leno) Requires the disclosure of written communications prior to entering into closed session regarding Oppose Held in labor negotiations. committee Form No.Dwt02-0 Apenda N,,a1-lit RW-1 01 d Page 4 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 l • v� � 7) n2Z I 4 . Jgm � a _ so N J N OI C J_ w J OE 0 J N J .Ji p • n Ns `gym 3fO =0 s o m m c w �.�_ OC10 do O SN'yN O d N O if n < w J N aw _ O • N ry J O n J O 6 6t0 0 J 63 v $� OS NAn� • :30m w 31 41 2 T J N 40 C J O L..) 2 W yN •�.. w_10 •b //��� J Q A S w� m • 3 p� cA N v y CD �/ y y ry O N N ` + � nn � n m I! se = ma zr9w^ w m� 3 r ' •• o - Mo- '° _ =� � t0 F w - 0 3 m m Y':�• O c y m \ QagN a Y:y H �. ^� ee (`4 o � n 3 o �( t IN `�f N — N n O, O Q N = m pe0 Cy T � WOzq � o to N °' V � N 3 IJ 0 OL- stm c O o Our Global Infrastructure ' , muvatfon Over 150 Customers Depend on Us AZ Manufactured -70K WP ' Europe - ------ -- Santa Clara,CA • Sales reps-_ • Sales office ----- - - - Shanghai. China I I I I --I I • HHNEC. 10'� owncrshq I '_---� • ASMC: suppy.�gmomonl i � Korea _♦ I ♦ UK , • Sales office I • Sales office ♦ � I I Newport Beach, CA t ' • Factory - Seismic proof to >8.0 Ricker scale !_ • Key UC Irvine EE Grad School partner I------------I I �________ I I I Hsinchu,Taiwan I 1 • Sales office I ' Migdal HaEmek, Israel .al . Tokyo,Japen ( • Sales office r . I � 200K WPY Total WW capacity of Peaked at >800 employees, "' ..—� ly now -500. Many advanced degree engineers & hundreds of IBEW union operators r Innovation Awards )> Now Producla; 11lComprehensive 0.18Nm Process Platform from Jau b lutions, Incvvi�••nwue isro°°a•rice °°°°°°'°' External Foundry wb"�bJ^•WM works Solutions . • Iyp.a•In NryMMrtfm'�omo \ . . . . . . . . . ry. I 301 micro Linear Flex your Supplier of 2005 POM 4WC, 9Y Efficiency CONTROL 2005 Editor's Choice Award ENGINEERING for Jazz Semiconductor's ••••••••••• '= 17GHz Vertical PNP Module Frost00 the Year award The Only • • Tier Pure-Play • • Foundry in the U.S. ur Markets 7Innovation - _ L Manufactured High Definition TVs Optical Laptops Sony PSP Securi p-4. ) Ad Hoc WLAN ty Transceivers r,>. � ,` [�. (802.11 big) ® I PDAs WLAN Access RAW Camera Phones 0 � (802.11a/b/g)!� Xbox Game 3 e Q f a . 2.4/5GHz Consoles I� s Cordless Switches, Routers gi Phones . Digital Cameras e� Satellite Set Top Boxes 9k Cellular Phones h ®I ROICs (Read Out 0 j LCD Automotive Monitors Integrated Circuits) J DVD Players Networking Modems♦` Infrastructure Soon to be the Only 8" Pure-play Trusted Foundry in the U.S. for Aerospace & Defense Work rdm ittee Ownership History 7 Innovation L Manufactured i issued on 2/26/02, effective 3/8/02, while 100% owned by Conexant <129It99S 129I199B &152002 >&151:NK2 WIMO02 I f4yO2 Gqm 2/1fi200> POERATI-1E.11-STRUCTURE > 620m I Division olaq-0lio comperry R'N0b d0r0PadY WMya'weU wOsidiary olaptdicmnpatry CONTROLLING INTEREST CaOyb Catlle(55%) SHAREHOLDERS CmexaO Actoj p0 its reme Tozer SemmrtlAJdr.IIQ•• MINORITY Cwnexwt bJau Tphn.ecnnobgies' INTEREST Conexant OOnBOq I3R%) RFMD(10%) JauCORPORATE ENTITY Semlconducl0! SPedaltYSemI.IM Oecame_. Joss Semiconductor.Inc. (Managing morn pl Newi Fab LLC) Systems lrc. oecame. CD Newport Fab LLC, a OPERATING ENTITY Y (PermitNoxant140) single member LLC, dba as Jazz (OCSD Permittee) O SCFCC baseline: 0.8 million gallons per day Semiconductor (Permit Ni 57-1-292) Si baseline:25,000 gallons per day TITLE N TR 7959 BLK LOT I UN wNER I ante (Parcel No:445-1]1-U) cAepp� tpg brm bPIn w1h Conexant PWt Ions to 2017,aM option to extend tine b86a bM1q COfKBg4a9 R.P�az "AMEKOJ Si A come:mie oond holders NYSE:TSFJA$bq[✓L JAZ comerti0b 00rq Nd0ers. Maintains separate SEC filing uMer Jau Temr Jazz Semiconductor, Inc. Has Been, and is, our Owner Application 7 Innovation R- //..lw/wJ,L/[L Manufactured r We are the original occupant P Are you th f this facility for which you are applying for a permit? ❑ Ye If the answer is o, p ease provide the name (if known) of the previous business which operated this acility: Conexant Systems, Inc . 0 For Metal Finishing Industries only: Based on the amount of area plated at this facility, do you own more than 50% of the materials undergoing metal finishing? ❑ Yes ❑ No IA WA Had Existing Permit (# 7-1-140) with 1 .8 million gallons baseline flow Discharge Information R Do you currently have ar existin Class I Wastew Discharge Penn@ issued by Orange County Sanitation Districts at the sewer address indicated. ❑ Yes No If Yes, Permit No. - We were S Do y Wend ischarge wastewater from the sewer address indicated? ❑ Yes discharging No If the answer is No, indicate the date you plan to commence discharge: March, 2002 then Indicate approximate, anticipated, or actual industrial discharge: 1 , 152,000 gallons/day Provide data or calculations used to determine this rate in Attachment B. Erroneous Answers Prevented the Flow Transfer Permittee SCFCC Discharge & Cost llnnovaManufactured Evaluating a 25% further reduction in discharge 600 $500,000 Discharge Total $400,000 ti tSCFCC m o $300,000 $200,000 100 $100,000 $0 98 to 99 99 to 00 00 to 01 01 to 02 02 to 03 03 to 04 04 to 05 05 to 06 06 to 07 07 to 08 08 to 09 Est. Discharge Is Lower, Yet Fee is Significantly Higher....Equivalent of about 11 Jobs Employment Profile RZ Mnnovalou In n n a io red 2007, 2008 and 2009 May YTD BiWeekly Employee # 800 750 700 650 600 550 500 450 Need Your Help to Maintain American Ingenuity & Preserve Our Competitiveness Our Economic & Fiscal Impact l nnovactu red Five Year Cumulative Impact Conducted by SCE • Taxes & Fees - State: $133M - County: $15M - City: $13M • Affects 1 ,158 jobs and a population of 2,220 - 2/3 of our employees live in the 24 OCSD cities - We are committed to invest heavily on employee training & development with the ETP • More than 10 public/private sector entities are supporting us through various efforts by our Retention Economic Development (RED) Team We have Reduced $90M of Expenses in Recent Years to Fend off Severe Pricing Pressure Exerted by the Asian Foundries Who are Our Principal Competitors S141f Of ( 11IFOR\I1 7 Innovation BUSINESS, TRANSPORTATION & NN THE N luuov . Manulaclu,ed HOUSING AGENCY EDISON CAMSOR CALIF NIA , Retention Team Business I P Supporting US — we Investment I ,„ , Services t vow to remain competitive EMPLOYMENTRAINING against Asian Foundries' ` A N E ` Pricing Pressure Sempra Energy' Orange • Sanitation District 00 ti 'l /_> ORANGE COUNTY ®® BUSINESS COUNCILo-s TNF MWFR OF CONSUI TINC.^ 1bI C' s o, o 0 0 0 0 0 0 0 9� T ro)d� tiG os oCD of. rd 0 o9ro .y;os °e� d 9dddph CD pG°rd •��°'�� r nCD 03 dp Thy cn �d o c� 2e� srdd�,� rF droCD p�d0dc� y Al \ , G;j d U) 0 0, ;�d 2ra p�� _. �p�y RP r . ldy y (�• l lo,A 6�d CD d o' sPdi�rps �� 9 Gad dO4 a �v a Permittee' s Request (AZ Innovation Manufactured • We erred on our February 26, 2002 application. Our incorrect answers to Sections P, R & S led OCSD to conclude erroneously that the existing permit should not be continued. Had we answered these Sections correctly, we believe OCSD would have allowed continuation of the existing permit and transfer of the original SCFCC flow baseline. — P: We are "the original occupants of this facility" — R: We had "an existing Class I Wastewater Discharge Permit issues by OCSD at the sewer address indicated", with a 1 .8 million gallons baseline flow — S: We were "currently discharging wastewater from the sewer address indicated" Please Allow Us to Redeem Our Administrative Error IrAdrr"P. • ittee s Request (Continue. . nnovactu Manu/acfured • Newport Fab LLC has been continuously owned and managed by Jazz Semiconductor, Inc. throughout the last seven years • Transfer of original SCFCC flow baseline established by Conexant is justified as the Permittee has been continuously managed by the same immediate owner — Jazz Semiconductor Inc., and has not changed the mix or increased the quantity of the discharge requiring any additional expenditure by the OCSD. • We contend that the intent of SCFCC was to cover the costs of impacts to OCSD, and not to regulate or tax the free market transferring by shareholders of the company or parent company when such activity does not have any adverse impact to the discharge Transfer Baseline Flow