HomeMy WebLinkAbout2009-08 MINUTES OF STEERING COMMITTEE MEETING
Orange County Sanitation District
Wednesday, August 26, 2009, at 5:30 p.m.
A meeting of the Steering Committee of the Orange County Sanitation District was held on
Wednesday, August 26, 2009, at 5:30 p.m., in the District's Administrative Office.
A quorum was declared present, as follows:
STEERING COMMITTEE MEMBERS: STAFF PRESENT:
DIRECTORS PRESENT: Bob Ghirelli, Assistant General Manager
Doug Davert, Chair Nick Arhontes, Director of Operations and
Larry Crandall, Vice Chair Maintenance
Mark Waldman, Administration Committee Jim Herberg, Director of Engineering
Chair Ed Torres, Director of Technical Services
Bill Dalton, Operations Committee Chair Lorenzo Tyner, Director of Finance
Jim Ferryman and Administrative Services
Phil Luebben Michael Gold, Legislative Affairs Liaison
David Shawver Penny Kyle, Clerk of the Board
Tod Haynes
DIRECTORS ABSENT:
None OTHERS PRESENT:
Brad Hogin, General Counsel
Ryal Wheeler
Drew Kolosky p
• • THEELCLLERK HppF TTHE BOARD
DRAM NEINTY.. ANITATI N!pISTRIC`
PUBLIC COMMENTS _
���y°�f�,1'2 SEP 2 3 2009
There were none �w,T- `J T
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COMMITTEE CHAIR REPORT
Chair Doug Davert reported a strategic planning workshop has been scheduled for October 21"
at 5:00 p.m. Vice Chair Crandall provided a brief report on the CASA conference he recently
attended in San Diego.
GENERAL MANAGER REPORT
Bob Ghirelli, Assistant General Manager, advised a brief presentation on asset management
would be given by Simon Watson, O&M Manager, at the Board of Directors' meeting that
evening. It was also noted that the Honor Walk bricks had been installed and an update on the
Honor Walk nomination process would be provided under the Public Affairs report.
. Minutes of the Steering Committee
August 26, 2009
Page 2
GENERAL COUNSEL REPORT
General Counsel, Brad Hogin, reported that the motion to dismiss filed in November 2008 on behalf
of the South Coast Air Quality Management District regarding emission offsets had been granted.
ACTION ITEMS
1. MOVED, SECONDED AND DULY CARRIED: Approve minutes of the July 22, 2009
Steering Committee meeting.
2. MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of Directors to:
a)Adopt Resolution No. OCSD 09-12, Approving an Amended and Restated Orange
County Council of Governments(OCCOG) Joint Powers Agreement, in a form approved
by General Counsel; and,
b)Approve annual membership dues to OCCOG in an amount not to exceed $5,000 per
year.
INFORMATION ITEMS
3. Public Affairs Monthly Update
Michael Gold, Public Affairs Manager, discussed the nomination process for Board
Members and staff for the Honor Walk. He also advised that a plaque will be installed
at the Honor Walk explaining what it is at the same time the first round of brick(s) are
engraved.
Mr. Gold also provided a brief update on the state budget status, as well as the CASA
conference held earlier that month.
CLOSED SESSION
CONVENE IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS
54956.9(c)AND 54957(b)(1): The Steering Committee convened in closed session at 5:50 p.m.
to discuss two matters. 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 6:15 p.m. in regular session.
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Distributed at the ae�/ �/�I Meeting Steering Committee g
Water districts have big loss on derivatives,OC treasurer warns
Posted by Teri Sforza, Register staff writer—September 18th,2009
Those who remember the name "Bob Citron"and the phrase"It's only a paper lossl"might have a
strange sense of deja vu.
Orange County Treasurer Chriss Street-who,for whatever other considerable troubles he's having
lately,sounded an early alarm about Citron's doomed investments in 1993(culminating in Orange
County's historic bankruptcy,and a loss of$1.6 billion,in 1994)-is ringing his warning bell anew.
Danger lurks in the more than$1 billion worth of interest rate swaps held by the mighty Metropolitan
Water District of Southern California,and the$82 million worth of swaps held by the Orange County
Water District,Street says.
These swaps are down some 35.5 percent,says Street-which translates into a$150 million-or-so hit to
Met,and a$12 million-or-so hit to OCWD.He believes new accounting rules will soon require them to
publicly disclose these losses next year-and that could mean lower credit ratings.
Who cares?Well,you might:Lower credit ratings could translate Into higher borrowing costs,and higher
borrowing costs could translate into more money being shelled out by you,the taxpayer,to repay debt.
But Met and OCWD say that Street is dead wrong.They don't agree with his numbers-the swaps aren't
down as much as he asserts,they say.They don't agree that the losses will have to be recorded as Street
says they will.And they are certain that none of this will impact their credit ratings,or borrowing costs,
or your water rates.
WE'LL WEATHER IT,AND IT'S NOT EVEN A STORM
"Our ratings are so good right now-we are the only water district west of the Mississippi River that has
a triple-A credit rating from Fitch,"said Randy Flck,chief financial officer for OCWD."All the rating
agencies know that we have a swap.They like it.It eases our exposure to the variable rate debt."
In August,OCWD sold bonds to convert$120 million of variable-rate debt to fixed-rate debt."It was
extremely successful," Fick said.
Met also boasts"one of the premier credits in the government sector."It has long-term debt ratings of
AAA from Standard and Poor's,AA+from Fitch,and Aa2 from Moody's."Each of these rating agencies
looks at Metropolitan's interest rate swap portfolio when they evaluate our creditworthiness,"said aid
Brian Thomas, Met's chief financial officer."As an example,Standard and Poor's rates our interest rate
swap portfolio as a 1.5 on a scale of 1 to 4,with 1 being the least risky."In its most recent review of Met,
S&P said,The overall risk of'1.5'reflects Standard&Poor's view that MWD's Interest rate swap
portfolio represents a very low credit risk at this time."
Met,meantime,has about$4.9 billion of long-term bonds outstanding.The average interest rate to pay
for that debt is about 3.9 percent."Part of the reason that the cost of debt is low is because
Metropolitan has a diversified debt portfolio that Includes a mix of fixed rate debt,variable rate debt
and interest rate swaps,"said Thomas.
1
a
UM,WHAT'S A SWAP?
Interest rate swaps are derivatives.The point is to trade one type of cash flow for another.So the party
who pays a fixed interest rate each month swaps with another party who pays a variable rate each
month. Each is betting it will pay less cash by entering the swap;each may be right from time to time.
(Thanks to our colleague Ronald Campbell for that English translation.)
MUCH ADO ABOUT NOTHING,SAYS MET
Metropolitan has about$1.3 billion of interest rate swaps with a current market value that's down$117
million,or about 8.3 percent,said Thomas-not the 15.5 percent that Street calculates.
"Since these swaps are fixed payer swaps,the mark-to-market value moves inversely to interest rates,"
he said."If interest rates rise over the next year-the mark-to-market value of the interest rate swap
portfolio will improve. Interest rates are difficult to predict, but many think that interest rates will rise
over the next several years. If that happens,the value of these interest rate swaps will increase. If
interest rates sink even lower,the mark-to-market will be lower. In either case, Metropolitan will
continue to receive the cash flow benefits envisioned when the contracts were executed."
And,furthermore,the new accounting rules won't require the overwhelming majority of Met's swaps to
be recorded on Met's income statement,Thomas said.That's because$1.1 billion of these swaps are
"qualified hedges"-which is to say,they're designed to reduce financial risk,by offsetting changes in
the cash flows of the outstanding debt.
"More importantly-much more importantly-is that the mark-to-market value of the gain or loss in a
given year on our interest rate swaps has no impact on our water rates," he said."We set water rates
based on actual receipts and disbursements in a given year."
Unless Met actually terminates one of the swaps before its time,there's no real loss,he said.It'sjust a
book loss.
McYs swaps refund outstanding capital debt that was at a higher interest rate.Since 2001,these
interest rates swaps have reduced the amount of debt service that Met's rate payers have had to pay by
over$61 million,Thomas said.
What's going to happen is that some of these swaps will"roll off'in the next year to 10 years,"and
they'll roll off at par.A lot of people are talking about interest rates rising. It will start to go positive,and
then we have an opportunity to realize a gain,"Thomas said.
2
OTHERS GOT OUT
The Orange County Sanitation District ditched its interest rate swaps last year.
"OCSD had two previous variable-to fixed- rate debt swaps that we terminated,"spokesman
Michael Gold told us in an email. "Overall,the result of these terminations was a net savings,
not a cost to OCSD.
"Last year, in September 2008,we terminated one debt series and there was a swap
termination fee of$3.1 million. However, using the Interest rate swap agreement as opposed
to issuing pure fixed debt saved us a net of$6.3 million, including the termination fees.
"In May 2008,we terminated another debt series and the swap termination fee was$S.7
million.Again, had we realized net savings versus financing at a fixed rate. Net savings to the
District,including the termination fee,was$5.S million.
"Overall,the District saved$11.8 million using this approach versus financing with fixed rate debt."
Supervisor John Moorlach-former county treasurer,and the other guy who rang the alarm bell about
Citron's investments before the bankruptcy- is thankful that officials managed to"stop that train"when
the toll road agencies were talking merger back in 2004.The Transportation Corridor Agencies wanted
to consolidate all the debt-and use interest rate swaps as a hedge.
"We saved the TCA from bankruptcy protection,"said Moorlach, who figures the savings could have
been$1 billion over the life of debt. "That's a good story for Orange County. In hindsight,isn't it great
we did that."
Interest rate swaps have a place,and they work, Moorlach said-when all the conditions are right."But
if you have a liquidity crisis-cops."
ONLY A PAPER LOSS....
Street,for his part,applauds the Sanitation District for ditching its swaps, but cringes at the explanations
he hears from the other agencies.
"I guess when Bob Citron made his bad investments and had losses,it was just paper losses,"Street said.
"When I disclosed Bob Citron's bad investments in September of 1993,the'paper loss'was$300-
something million. Fifteen months later it was$1.6 billion. Real losses.
"They've got losses,"Street said of Met and OCWD. "Mark-to-market is required on next years balance
sheet, I believe it's a material change. I ask them to have public hearings to publicly disclose the mark-
to-market losses. It continues to go up. It has more than doubled since October of last year."
3
It's worth noting that a lack of liquidity is a huge part of what went wrong when Citron made heavily-
leveraged,wrong-way bets on interest rates,and that's not an issue here.Citron had borrowed so much
money to pump up his returns that,when his bets went south and creditors started calling for cash, he
didn't have any on hand to weather the storm. In contrast, both Met and OCWD have access to
hundreds of millions in cash.
But that's not the whole story,at least not for Met,Street says. If Met's board approves a sweetened
pension formula for employees next month,the new accounting rules will require Met to record the
benefit's entire$70 million price tag on its books next year.
"They are doing the pension spike without making prior public disclosure of more than$100 million of
derivative losses they must take next year,"Street said. "Furthermore,there is no guarantee that the
counter parties that are on the other side of the interest swap will not default if interest rates go up.
Add in another$100 million loss from the pension spike and you have real trouble."
Again, Met disagrees.The matters are unrelated,Thomas said,but if Met's board does approve the
pension hike next month,accounting rules require it to disclose the new$70 million pension liability in
its annual report,and in the footnotes to its financial statements.It would cost some$9 million per year,
beginning in next fiscal year,and would show up on the books as an annual expense.
Well now.Who said municipal finance isn't fun?
4
Distributed at the QXloh
Steering committee Meefind
Interest Rate Swap
An interest rate swap is a derivative in which one parry exchanges a stream of interest payments for
another parry's stream of cash flows. Interest rote swaps can be used by hedgers to manage their fixed or
floating assets and liabilities.They can also be used by speculators to replicate unfunded bond exposures to
profit from changes in interest rates. Interest rate swaps are very popular and highly liquid instruments.
Structure
In an interest rate swap,each counterparty,agrees to pay either a fixed or floating rate denominated in a
particular currency to the other wunterparty.The fixed or floating rate is multiplied by a notional
principal amount(say,USD 1 million).This notional amount is generally not exchanged between
counterparties,but is used only for calculating the size of cash flows to be exchanged.
The most common interest rate swap is one where one munterparry A pays a fixed rate(the swap rate)
to counterparty B,while receiving a floating rate(usually pegged to a reference rate such as LIBOR).
A is currently paying"floating", but wants to pay"fixed". B is paying"fixed",buts wants to pay"floating".
By entering into an interest rate swap,the net result is that each parry can"swap"their existing
obligation for their desired obligation. Now,A pays fixed rate to B(A receives variable rate) B pays
variable rate to A(B receives fixed rate).
Consider the following swap in which Party A agrees to pay Parry B periodic fixed interest rate payments
of 5.20%,in exchange for periodic variable interest rate payments of LIBOR+70 bps(0.70%).Note that
there is no exchange of the principal amounts and that the interest rates are on a"notional"(i.e.
imaginary)principal amount.Also note that the interest payments are settled in net(e.g.Parry A pays
(LIBOR+1.50%)+5.20%-(LIBOR+0.70%)=S.RD%net.The fixed rate 15.20%in this example)is referred
to as the swap rate.
At the point of initiation of the swap,the swap is priced so that it has a net present value of zero.If one
party wants to pay 50 basis points(bps)above the par swap rate,the other party has to pay approximately
50 bps over LIBOR to compensate for this.
5.2%
A B
LIBOR+0.70% -
LIBOR+1.50% 5.1%
FLOATING i I FIXED
I
Net:5.80% NET:LIBOR
+ 0.60%
5
7 Performance
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District Long-Term Portfolio
8 - Merrill Lynch Corp / Govt 1-5
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Distributed at the Steering
Committee Meeting held on
D d
ORANGE COUNTY SANITATION DISTRICT
HONOR WALK NOMINEE FORM
Please complete this form and remm it to the OCSD Public Affairs Office.
Name of nominee
Relationship to OCSD
On a separate sheet,please describe:
• The length and nature of the nominee's relationship to OCSD;
• I low he or she has enhanced the quality of operations and/or leadership;and
• 1-low the nominee has made an exceptional contribution to the District or people served by
the District.
Please use the attached leadership competencies and resolution adopted by the Board of Directors
establishing the program,as reference.
Nominees should be past Board Members or retired employees.
Name of requestor
Phone/email address
Department head approval* Date
General manager approval Date
Steering Committee approval Yes No Date
'Rcquhcd for a nployce n,.inatloas only.
Nominees may not be current Board Nlembers or employees of OCSD.
RESOLUTION NO. OCSD 08-08
A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE
COUNTY SANITATION DISTRICT ESTABLISHING A POLICY FOR
NAMING FACILTIES AND THE PLACEMENT OF MONUMENTS AND
OTHER MEMORIALS
WHEREAS,the Orange County Sanitation District wishes to recognize individuals that
have provided meaningful and important service to the Sanitation District;
WHEREAS,the District recognizes the need for guidance in the naming of facilities and
placing of monuments and other memorials;
NOW THEREFORE, the Board of Directors of the Ora nge County Sanitation District
DOES HEREBY RESOLVE, DETERMINE AND ORDER:
Section 1: The naming of District facilities or the placement of monuments and other
memorials will be a rare event designed to honor an individual w ho has made distinct
and significant contributions to the District.
Section 2:To be recognized by the Di strict,the individual must have demonstrated or
performed the following:
• Have a long standing affiliation with and made an exceptional contribution to,the
Orange County Sanitation District
• Significantly enhanced the quality of operations and/or leadership directly
contributing to the well-being of the District and the people served by OCSD
Section 3: By a majority vote of the Steering Committee, an individual may be
recognized by the nam ing of a component, building, support facility,or through the
placement of a plaque, marker, or other memorial.
Section 4: Only new or unnam ad facilities will be named in honor of an ind ividual.
PASSED AND ADOPTED at a regular meeting held June 25, 2008.
Board Chair
ATTEST:
Clerk of the Board
Document version! Fabmery 2007
OCSD Leadership Competencies
COMPETENCY DESCRIPTION
Ability to communicate ideas,thoughts,and facts
Oral Communication orally.Speaking using correct grammar,appropriate
body language,proper tone and inflection,
recognizing non-verbal cues,and respecting the
audience to effectively communicate ideas.
Listening Attuning to a vocal or auditory message including
non-verbal cues. Body language/positioning and
eye contact of listener is considered.
Degree to which an individual can be trusted.
Operates in an ethical manner. Degree of
Integrity/Honesty trustworthiness and ethical behavior of an individual
with consideration for the knowledge one has of the
impact and consequences when making a decision
or taking action.
Interpersonal Skills(Working with Others) Extent to which an individual gets along and
interacts positively with co-workers. Degree and
style of understanding and relating to others.
Ability to effectively resolve disputes among others.
Conflict Management Manages disagreements. Methods and style of
dealing with disagreements. Requires the ability to
remain impartial and unbiased.
Team Leadership Ability to effectively manage and guide group
efforts. Includes providing appropriate level of
feedback concerning group process.
Teaching Others Overall concern for the developmental level of an
individual or group.Takes steps to explain and
provide guidance.
Degree to which an individual successfully
Decisiveness determines,follows,and persists with a timely
course of action. Requires the consideration of
multiple factors and influences in making decisions.
The concurrent management of projects,time,self,
and other resources including prioritizing,planning,
Planning and Evaluation goal setting,and coordinating with respect to goals
and objectives.Ability to create and follow a set
path in order to achieve a goal.Ability to determine
the effectiveness of a given plan.
The identification of various types of problems along
Problem Solving with the creating of workable solutions. Requires the
identification and analysis of problems,evaluation of
alternatives,and provision of solutions.
Vision Understanding of how an organization must change
in light of internal and external trends and
influences.
Organizational Awareness Understanding of the formal and informal structures
within an organization,and the ability to operate
effectively within them.
Extent to which an individual possesses and applies
Career Specific Expertise job-related knowledge in the completion of work
tasks and activities. Includes knowledge gained
through formal and informal education or training.
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 to be held on August 26, 2009,
was duly posted for public inspection in the main lobby of the District's offices on
August 20, 2009.
IN WITNESS WHEREOF, I have hereunto set my hand this 2& day of August
2009.
Lilia Kovac
Associate Clerk of the Board
Orange County Sanitation District
RUEPT AGENDAZTEERING COMMITTEEV009COMMITTEE POSTING CERTIFICATION FORM.DOCX
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ORANGE COUNTY SANITATION DISTRICT
W Tx[ Exo Penny Kyle
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WEDNESDAY, AUGUST 26, 2009 — 5:30 P.M.
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STEERING COMMITTEE AND BOARD
MEETING DATES
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
July 28, 2010
August 25, 2010
*Meetings being held the third Wednesday of the month.
STEERING COMMITTEE
(1) Roll Call:
Meeting Date: August 22, 2009 Meeting Time: 5:30 p.m.
Committee Members
Doug Davert, Board Chair................................................... ...........
_
Larry Crandall, Vice Chair................................................... ...........
_
Mark Waldman,Administration Committee Chair................ ...........
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, Public Affairs Manager.......................................
Penny Kyle, Clerk of the Board........................................... ._
Other Staff Present
AGENDA
REGULAR MEETING OF THE STEERING COMMITTEE
ORANGE COUNTY SANITATION DISTRICT
WEDNESDAY, AUGUST 26, 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. Approve minutes of the July 22, 2009 Steering Committee meeting.
2. Recommend to the Board of Directors to: a) Adopt Resolution No. OCSD 09-12,
Approving an Amended and Restated Orange County Council of Governments
(OCCOG) Joint Powers Agreement, in a form approved by General Counsel; and,
b)Approve annual membership dues to OCCOG in an amount not to exceed $5,000 per
year. (Book Page 6)
INFORMATION ITEMS
3. Public Affairs Monthly Update(Gold)(Book Page 24)
Book Pace I
August 26, 2009
CLOSED SESSION
During the wurse 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,pursuam to Government Code -
Sections 54956.8,54956.9. 54957 or 54957.6, as noted.
Reports relating to(a)purchase and sale of real property; (b)matters of pending or potential litigation;(c)
employment actions or negotiations with employee representatives;or which are exempt from public
disclosure under the California Public Records Act,may be reviewed by the Directors during a permitted
closed session and are not available for public inspection. At such time as final actions am 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
Significant exposure to litigation pursuant to subdivision (b)of Section 54956.9: One
case resulting from Project P1-102
5. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
(Government Code Section 54957(b)(1))
Title: General Manager
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 September 23, 2009 at 5:30 p.m.
Book Page 2
August 26, 2009
Agenda Postmg: 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, 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 unfit the
specific item is taken for discussion and remarks may be limited to three minutes.
Matters of interest addressed by a member of the public and not listed on this agenda cannot have action
taken by the Committee except as authorized by Section 54954.2(b).
Consent Calendar: All matters placed on the consent calendar are considered as not requiring discussion
or further explanation,and unless a particular item is requested to be removed from the consent calendar
by a Director of staff member, there will be no separate discussion of these items. All items on the
consent calendar will be enacted by one action approving all motions,and casting a unanimous ballot for
resolutions included on the consent calendar. All items removed from the consent calendar shall be
considered in the regular order of business.
The Committee Chair will determine if any items are to be deleted from the consent calendar.
Items Continued: Items may be continued from this meeting without further notice to a Committee
meeting held within five(5)days of this meeting per Government Code Section 54954.2(b)(3).
Meeting Adioumment: This meeting may be adjourned to a later time and items of business from this agenda
may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government
Code Section 54955(posted within 24 hours).
Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you
require any special disability related accommodations, please contact the Orange County Sanitation District
Clerk of the Board's office at(714)593-7130 at least 72 hours prior to the scheduled meeting. Requests must
specify the nature of the disability and the type of accommodation requested.
Notice to Committee Members:
For any questions on the agenda or to place any items on the agenda, Committee members should contact the
Committee Chair or Clerk 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: Rkvle@ocsd.com
Book Page 3
MINUTES OF STEERING COMMITTEE MEETING
Orange County Sanitation District
Wednesday, July 22, 2009, at 5:30 p.m.
A meeting of the Steering Committee of the Orange County Sanitation District was held on
Wednesday, July 22, 2009, at 5:30 p.m., in the District's Administrative Office.
A quorum was declared present, as follows:
STEERING COMMITTEE MEMBERS: STAFF PRESENT:
DIRECTORS PRESENT: Jim Ruth, General Manager
Doug Davert, Chair Bob Ghirelli,Assistant General Manager
Larry Crandall, Vice Chair Nick Arhontes, Director of Operations and
Mark Waldman,Administration Committee Maintenance
Chair Jim Herberg, Director of Engineering
Jim Ferryman Ed Torres, Director of Technical Services
Phil Luebben Lorenzo Tyner, Director of Finance
David Shawver and Administrative Services
Michael Gold, Legislative Affairs Liaison
DIRECTORS ABSENT: Lilia Kovac, Associate Clerk of the Board
Bill Dalton, Operations Committee Chair Juanita Skillman
OTHERS PRESENT:
Brad Hogin, General Counsel
Kristine Thalman
Bryan Starr
PUBLIC COMMENTS
Kristine Thalman of the Builders Industry Association spoke in support of continued payment
deferral of connection fees through June 30, 2010 to builders of large housing development projects.
COMMITTEE CHAIR REPORT
Chair Doug Davert briefly reported that he and Vice Chair Crandall attended the NACWA
Conference in Milwaukee, Wisconsin to receive an achievement award for the GWRS project.
GENERAL MANAGER REPORT
Jim Ruth, General Manager, reported on the internal reorganization of the Public Information
and Legislative Affairs offices; the offsite planning meeting; and the final insurance prices.
Book Page 4
Minutes of the Steering Committee
July 22, 2009
Page 2
GENERAL COUNSEL REPORT
General Counsel, Brad Hogin, reported that the insurance company has settled on the Andino
lawsuit for$750,000 on the Bushard trunk sewer project.
ACTION ITEMS
1. MOVED, SECONDED AND DULY CARRIED:Approve minutes of the June 24, 2009
Steering Committee meeting.
INFORMATION ITEMS
2. Public Affairs Monthly Update
Michael Gold, Public Affairs Manager, briefly reported on the status of the lobby display
upgrades and the honor walk. Mr. Gold also provided a brief update on the state budget
status.
CLOSED SESSION
There was no closed session.
ADJOURNMENT
The next Steering Committee meeting is scheduled for Wednesday, August 26, 2009, at 5:30 p.m.
The Chair declared the meeting adjourned at 5:55 p.m.
Submitted by:
Lilia I ovac
Associate Clerk of the Board
Book Page 5
STEERING COMMITTEE Meeting Date To ad,of Dir.
08/26/09 08/26/09
AGENDA REPORT nem Number Iem Number
z
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Michael Gold, Public Affairs Manager
SUBJECT: Approval of the Amended Joint Powers Agreement for the Orange County
Council of Governments
GENERAL MANAGER'S RECOMMENDATION
(1) Adopt Resolution No. OCSD 09-12, Approving an Amended and Restated Orange
County Council of Governments (OCCOG) Joint Powers Agreement, in a form approved
by General Counsel; and,
(2) Approve annual membership dues to OCCOG in an amount not to exceed $5,000
per year.
SUMMARY
The Orange County Council of Governments completed a comprehensive review of the
1996 Joint Powers Agreement that governed the organization. As a result of the review,
the document was revised and now includes a provision for member agencies to pay
dues.
PRIOR COMMITTEE/BOARD ACTIONS
July 1996 —Approval of Joint Powers Agreement establishing OCCOG.
ADDITIONAL INFORMATION
As a 40-member joint powers authority, OCCOG serves as an official subregion of the
Southern California Association of Governments (SCAG).
OCCOG —through its Board of Directors of elected Orange County representatives, its
representatives on SCAG's Governing Board and policy committees, and its Technical
Advisory Committee— provides a coordinated mechanism for Orange County technical
and policy recommendations to be issued on SCAG plans and programs and on behalf
of its member agencies.
Forty agencies are currently members of OCCOG, including all Orange County cities,
the County of Orange, Orange County Transportation Authority, the Transportation
Corridor Agencies, the Orange County Sanitation District and the Independent Special
Districts of Orange County.
Hook Page 6
OCCOG's Request
In 2009, the OCCOG Board of Directors completed an overdue and comprehensive
revision to the original 1996 OCCOG joint powers agreement provisions. The Board
recognized the need to amend and restate the original joint powers agreement to:
• Update its references to OCCOG's administration;
• Establish an executive director;
• Streamline and make consistent provisions relating to the joint powers
agreement and OCCOG bylaws; and
• Update the references to the member agencies and their voting on the OCCOG
Board.
Key provisions of the amended and restated OCCOG joint powers agreement include:
• Establishing annual membership dues to assist in financing its operation.
Previously, these costs were absorbed by certain volunteers and
• Broadening the powers of OCCOG to hire and retain staff and consultants to
conduct its responsibilities as a SCAG subregion.
On June 25, the OCCOG Board of Directors unanimously adopted the amended and
restated joint powers agreement. According to its bylaws, this agreement must now be
approved by all member agencies.
Currently, Mark Waldman serves as OCSD's representative to OCCOG with Jim
Ferryman as his alternate. In order for OCSD to retain its seat on the Board, we must
be a dues paying member.
Financial Impacts
Currently, OCCOG's dues would be capped at $5,000 per agency. In the past, OCCOG
did not charge dues but to hire and retain staff and recover costs, the new JPA allows
for dues. OCSD would pay the maximum $5,000. There are funds in the budget to
cover this cost.
Attachment:
Book Page 7
AMENDED AND RESTATED
JOINT POWERS AGREEMENT
ESTABLISHING THE
ORANGE COUNTY COUNCIL OF GOVERNMENTS
This presentation reflects the Amended and Restated Agreement made
between the Member Agencies (listed in Exhibit 1) hereinafter collectively or
individually referred to as "Member Agencies."
RECITALS
A. Chapter 5 of Division 7 of Title 1 (commencing with Section 6500)
of the California Government Code authorizes two (2) or more public agencies to
jointly exercise any power common to them.
B. Each Member Agency and party to this Agreement is a governmental
entity established by law with full powers of government in legislative,
administrative, financial and other related fields.
C. Member Agencies realize the urgent need for amawide planning and
coordination in order to provide advice to public entities on a range of issues that
affect multiple interests.
D. Member Agencies believe that the joint exercise of their powers will
provide an organization capable of conducting studies and projects designed to
improve and coordinate common governmental responsibilities and services on an
areawide and regional basis through the establishment of a council of governments.
E. Member Agencies wish to create a unified subregional organization
which will improve Orange County's abilities to be represented in the southern
California region, the State of California and the nation on issues and matters that
affect collective Orange County interests.
Book Page 8
F. Member Agencies believe that an Orange County Council of
Governments ("OCCOG") is best suited to accomplish the preparation of
subregional plan components mandated by state and federal law to conduct studies
and projects designed to improve and coordinate the common governmental
responsibilities and services on an areawide and regional basis through the
establishment of a council of governments, and explore areas of intergovernmental
cooperation and coordination of government programs and provide
recommendations and solutions to problems of common and general concern.
G. Between approximately April 1996 and January 1998, thirty (30)
Member Agencies adopted the original Joint Powers Agreement ("Original JPA' for
the OCCOG. Since that date, twelve (12) additional Orange County agencies have
signed the Original JPA to become Member Agencies.
H. The Member Agencies believe the OCCOG has been operating
effectively at accomplishing its purposes, as outlined in the Original JPA, and seeks
to have the Original JPA amended by this Amended and Restated JPA to better
comport with the present and anticipated future needs of the OCCOG.
NOW, THEREFORE, in consideration of the recitals and the mutual
obligations of the parties as herein expressed,Member Agencies agree as follows:
SECTION 1
ESTABLISHMENT
This Agreement amends and supersedes the Original JPA in its entirety.
There is hereby created an organization known and denominated as the Orange
County Council of Governments (OCCOG) which shall be a public entity, separate
and apart from any member city or county. The Orange County Council of
Governments shall be governed by the terms of this Joint Powers Agreement and
the Rules,duly passed and adopted by the Board.
2
Book Page 9
SECTION 2
PURPOSE AND FUNCTIONS
2.1 Functions
OCCOG established hereunder shall perform all necessary functions to fulfill
the purposes of this Agreement.The OCCOG sha1L
a. Serve as a fonun for consideration, study and
recommendation on area-wide and regional problems;
b. Assemble information helpful in the consideration of
problems peculiar to Orange County;
C. Explore practical avenues for intergovernmental cooperation,
coordination,and action in the interest of its members;
d. Seek economies of scale whenever practical in the
administration of governmental services;
C. Exercise jointly the common powers of its members to
manage and administer any implementation agreement or
program;
f. Make and enter into contracts;
g. Contract for the services of engineers, attorneys, planners,
financial consultants and others and employ such other
persons,as it deems necessary.
h. Adopt Hiles, regulations, policies, bylaws and procedures
governing the operation of OCCOG;
i. Apply for grants under any federal, state, regional or local
programs as needed to achieve member objectives;
j. Seek the adoption or defeat of any federal, state or local
legislation or regulation necessary or desirable to accomplish
the stated purposes and objectives of the OCCOG;
k Incur debts,liabilities or obligations;
1. Acquire,hold or dispose of property,
M. Receive gifts,contributions and donations of property, funds,
services and other forms of financial assistance from persons,
firms,corporations and any governmental entity;
3
Book Page 10
n. To the extent not specifically provided in this Agreement, to
exercise any powers authorized by the member agencies to
achieve the OCCOG's objectives and such further powers
not specifically mentioned herein, but common to Member
Agencies, and authorized by California Government Code
Section 6508.
2.2 Limitation of Powers
The manner in which the OCCOG may exercise its powers shall be
subject to any statutory limitations applicable to the Orange County
Transportation Authority.
SECTION 3
ORGANIZATION
3.1 Membership
The parties to OCCOG shall be each public entity which has executed or
hereafter executes this agreement, or any addenda, amendment, or supplement
thereto, and which has not, pursuant to provisions hereof, withdrawn from the
OCCOG.
Other entities within Orange County may petition to become a member of
the OCCOG by submitting to the Board of Directors ("Board") a resolution
adopted by its governing body. The Board shall review the petition
for membership and shall vote to approve or disapprove the petition. If the petition
is approved by a majority of the Board the petitioning entity shall become a
member of the OCCOG.
The names of the member parties at any time shall be shown on Exhibit
1,attached,as amended or supplemented from time to time.
3.2 Withdrawal from Membership
Any member of OCCOG may, at any time, withdraw from the OCCOG.
The withdrawal of a member agency shall become effective ninety (90) days after a
resolution adopted by its governing body which authorizes withdrawal is received by
the OCCOG.
4
Book Page I I
33 Successor Agency
The Orange County Council of Governments is hereby designated the
successor in interest to the Orange County Regional Advisory and Planning Council
(RAPC)-
SECTION 4
BOARD OF DIRECTORS
4.1 Board of Directors and Voting
All functions of the OCCOG shall be exercised by the Board. Recognizing
the provisions for formation in Section 9.1 of this agreement, the Board would be
composed of elected officials and exof6cio (non voting) representatives of the
following entities,as further provided in the OCCOG's Bylaws:
Ennro No, of
Members Voting
County of Orange 1
Orange County Transportation Authority I
Orange County Transportation Corridor Agencies 1
Orange County Sanitation District 1
Orange County ISDOC/Water Agencies Representative 1
Orange County Representative to SCAQMD 1
Orange County Delegates to SCAG 12
Orange County SCAG representative 1
At-large Orange County Cities Member I
Total Members 20 voting
Additionally, there shall be one Orange County Division, League of
California Cities Representative (non-voting Ex-Officio), one Private Sector
Representative (non-voting Ex-Of&io) and one University Representative (non-
voting Ex-Officio) on the OCCOG Board, but more may be established based on
needs and in accordance with the OCCOG's Bylaws.
3
Book Page 12
4.2 Terms/Removal
Board members serve at the pleasure of the appointing entity and Board, as
further set forth in the OCCOG Bylaws.
43 Vacancies/Alternates
If a person who has been appointed as a director ceases to serve as a member of the appointing entity or no longer qualifies to serve as a member of the appointing
entity,he/she shall no longer serve on the OCCOG Board. The appointing entity is
encouraged to fill vacancies as expeditiously as possible to ensure representation on
the voting Board.
Each Board member can designate one or two alternates, provided that said
alternates serve in a similar capacity in the entity as the Board member (i.e., elected
officials for voting members). Alternate directors shall receive all meeting notices
and written material sent to directors and shall have the right to participate and vote
at meetings of the Board in the absence of the director for whom the alternate
director serves.
All provisions of law relating to conflicts of interest that apply to a Board
member shall apply to alternate board members.
4.4 Ex-O(6cio Representatives
Such representatives shall receive all meeting notices, shall have the right to
participate in Board discussions, and shall have the right to place matters on the
agenda, but shall not be counted towards a quorum of the Board and shall have no
vote.
4.5 No Dual Representation
It is recognized that elected officials often represent various agencies by
serving on various boards, committees, etc. In instances where elected officials
represent more than one OCCOG member agency, the official will choose one
agency to represent. When an elected official is the sole representative of an agency,
the elected official shall represent that agency on the OCCOG Board. Procedures
6
Book Page 13
for filling open OCCOG member positions will follow those described in the
OCCOG's Bylaws.
4.6 06cers
Chair. The Chair of the Board shall be elected annually as further
provided in the OCCOG bylaws. Any Board member may be authorized to
represent the Board upon approval by the Chairman.
Vice Chair. The Vice Chair of the Board shall be elected annually,as further
provided in the OCCOG bylaws,and have all the powers to act in the place of the
Chair in the Chair's absence.
4.7 Quonrm
A majority of appointed voting directors shall constitute a quorum for acting
on the business of the Board. If such number of Board members is an even
number, a majority shall be one more than half the number of appointed directors
to the Board.
4.8 Meetings
Regular Meetings: Regular meetings of the Board shall be held every month
according to a schedule approved by the Board at its first meeting each calendar
year.
Special Meetings: Special meetings may be called by the Chairman or a
quorum of Board members.
Brown Act: All meetings shall be called and conducted in accordance
with the Ralph M.Brown Act.
4.9 Bylaws
Bylaws providing additional details pertaining to the conduct of OCCOG
and its support structure will be established and approved by the OCCOG Board.
7
Book Page 14
SECTION 5
STAFFING. FUNDING AND ADDITIONAL
RESPONSIBILITIES
5.1 Staffing,Consultants and Agents
The Board shall have the power to appoint, by employment or on a
contractual basis, and remove an administrative officer to serve as the Executive
Director of the Board. Such Executive Director shall have full authority and
responsibility to implement the purposes and objectives of the OCCOG, subject to
the general authority of the Board and specific definition of duties, responsibilities
and compensation by contract or employment terms as approved by the Board and
as provided by the OCCOG Bylaws. The duties of the Executive Director may be
delegated by the Executive Director to subordinate employees or performed through
contractual services.
The Board may appoint any additional staff,consultants or agents,as deemed
necessary or desirable by approval of the Board. Such additional officers may be
officers or employees of a Member Agency or the Board may approve entering into a
contractual agreement for services for any function necessary for the Board to carry
out its purpose, which additional officers or employees shall not be deemed
employees of the OCCOG.
Additional support to OCCOG may be provided through committees, as
established in the Bylaws.
5.2 Funding
Dues: Each Member of the OCCOG shall pay annual membership dues to
recover costs for staffing, legal services, equipment, materials, contract services,
office space and other capital and operational costs as stipulated by OCCOG's
annual adopted budget, which dues shall initially be set at the amount provided as
Exhibit "2" attached hereto and, thereafter, adjusted pursuant to OCCOG's annual
adopted budget. Said does structure shall be established by resolution of the Board
and shall be updated annually.
8
Book Page 15
Additional funding for the OCCOG's operation may be provided by monies
provided to Orange County from the Southern California Association of
Governments, member and/or non-member agency financial contributions, grants,
and other sources authorized and approved by the OCCOG Board.
53 Assignment of Additional Responsibilities
Additional responsibilities will be undertaken by OCCOG in accordance with
the following procedures.
Requests to Examine Issues and Provide Input/Recommendations:
Requests from non-member and member agencies may be made to OCCOG to
examine activities and provide recommendations. the OCCOG shall assign the
Executive Director or an OCCOG committee the task of examining staffing
needs and funding issues to undertake additional responsibilities, including the
need to establish a special assessment to fund any additional responsibility, and
providing recommendations to OCCOG on how and whether it might choose to
pursue the request. In addition to considering potential staffing/funding
constraints, the Executive Director or OCCOG committee will also base its
recommendations,and the OCCOG shall consider,on whether the request/issue has
strong countywide support among OCCOG members and can reduce or eliminate
duplication, improve efficiencies and otherwise achieve countywide consensus and
OCCOG objectives.
Assignment of Responsibilities to OCCOG: Should requests from member
and/or non-member agencies be made for the OCCOG to assume responsibility for
delivery of services, development of plans, programss or similar activities, the
OCCOG would assume said responsibilities upon approval of its Board, with
concurrence of the affected agency(ies).
9
Book Page 16
SECTION 6
FINANCES
6.1 Budget
Prior to July 1 at of each fiscal year,the Board shall adopt a budget.
62 Designation of Treasurer and Auditor/Controller
The Board shall,in accordance with applicable law,designate a Treasurer and
Auditor/Controller for the OCCOG. The Treasurer shall have charge of the
depositing and custody of all funds held by the OCCOG. The Treasurer shall
perform such other duties as may be imposed by provisions of applicable law,
including those duties described in Section 6505 and 6505.5 of the Government
Code and such duties as may be required by the Board. The Auditor/Controller shall
maintain the financial records of the OCCOG, and shall perform such functions as
may be required by previsions of applicable law, this Agreement and any OCCOG
bylaws and the direction of the Board.
6.3 Obligations of the OCCOG
As authorized by California Government Code Section 6508.1, the debts,
liabilities and obligations of the OCCOG shall be the debts, liabilities or obligations
of the OCCOG alone. No member of the OCCOG shall be responsible,directly or
indirectly, for any obligation, debt or liability of the OCCOG, whatsoever.
The debts,liabilities and obligations of the OCCOG shall be the debts,liabilities and
obligations of the OCCOG alone,and not of the Members.
6.4 Control and Investment of OCCOG Funds
The Board shall adopt a policy for the control and investment of its funds and
shall require strict compliance with such policy. The policy shall comply, in all
respects,with all provisions of applicable law.
10
Book Page 17
6.5 Funds and Properties
The Board shall appoint an entity to receive and have the custody of, and
disburse OCCOG funds and property and make disbursements as agreed to by its
members. The appointed entity shall invest OCCOG funds in accordance with the
general law. All interest collected on OCCOG funds shall be accounted for and
posted to the account of said funds.
6.6 Accoants and Reports
The OCCOG shall establish and maintain such records and accounts which
are deemed necessary to account for and report on the vatious sources of funds,
expenditures, grants, programs and projects and, as may be required by good
accounting practice, the State Controller or the United States Govemmera. The
books and records of the OCCOG shall be open to inspection by representatives of
the member agencies at all reasonable times.
SECTION 7
INDEMNITY
Each party hereto agrees to indemnify and hold the other parties harmless
from all liability for damage, actual or alleged, to persons or property arising out of
or resulting from negligent acts or omissions of the indemnifying party of its
employees.
The member agencies, and their employees, officers, members and directors
will not be liable to OCCOG (or anyone who may claim any right because of a
relationship with OCCOG) for any acts or omissions related to the service to
OCCOG. OCCOG and its members will indemnify and hold the members harmless
from any obligations,costs,claims,judgments,attorney's fees, and/or attachments in
any way connected with the services provided to OCCOG under this agreement.
11
Book Page 18
SECTION 8
TERMINATION AND)_DISSOLUTION
8.1 Termination
The OCCOG shall continue to exercise the joint powers herein until the
termination of this Agreement and any extension thereof or until the parties shall
have mutually rescinded this Agreement providing, however, that the OCCOG and
this agreement shall continue to exist for the purposes of disposing of all claims,
distribution of assets and all other functions necessary to conclude the affairs of the
OCCOG.Termination shall be accomplished by a majority action of the Board.
8.2 Distribution of property and Funds
In the event of the temrination of this Agreement, any property interest
remaining in OCCOG following the discharge of all obligations shall be disposed in
accordance with Government Code Section 6512.
SECTION 9
MISCELLANEOUS
9.1 Effective Date
This Agreement shall be effective and the Orange County Council of
Governments shall exist from and after such date as this Agreement has been
executed by 50 percent plus one of the cities or the County of Orange in Orange
County representing over 50 percent of the County's population.
12
Book Page 19
IN WITNESS WHEREOF,the parties hereto have executed this Agteement as
evidenced by the signatures below.
MEMBERAGENCY
By:
Date: Tide:
ATTEST:
By.
APPROVED AS TO FORM:
By.
Book Page 20
EXHIBIT 1
1
MEMBER AGENCIES LISTING
City of Aliso Viejo
City of Anaheim
City of Brea
City of Buena Park
City of Costa Mesa
City of Cypress
City of Dam Point
City of Fountain Valley 1
City of Fullerton
City of Garden Grove
City of Huntington Beach
City of Irvine
City of La Habra
City of La Palma
City of Laguna Beach
City of Laguna Hills
City of Laguna Niguel
City of Laguna Woods
City of Lake Forest
City of Los Alamitos
City of Mission Viejo
City of Newport Beach
City of Orange
City of Placentia
City of Rancho Santa Margarita
City of San Clemente
City of San Juan Capistrano
City of Santa Ana
City of Seal Beach
City of Stanton
City of Tustin
City of Villa Park
City of Westminster
Book Page 21
City of Yorba Linda
County of Orange
Orange County Independent Special Districts/Water Agencies
Orange County Transportation Authority
Foothill/Eastern Transportation Condor Agency
San Joaquin Hills Transportation Corridor Agency
Orange County Sanitation District
South Coast Air Quality Management District
Book Page 22
{
- i
4
EXHIBIT 2
i
PY2009 10 OCCOG M�IP DUES `
i
i
I.
1
Bonk Page 23
STEERING COMMITTEE Meeting Date To ad.ofob.
OB/26/2009 08/26/2009
AGENDA REPORT Item Numbe Item Number
3
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Michael Gold, Public Affairs Manager
SUBJECT: Public Affairs Monthly Update
GENERAL MANAGER'S RECOMMENDATION
Information Only
SUMMARY
This report is the monthly Public Affairs Division update that includes legislative and political
information from Washington, D.C. and Sacramento, lobbyists' activities, and outreach
education and communication programs to member cities, employees and the public.
PRIOR COMMITTEEIBOARD ACTIONS
None
ADDITIONAL INFORMATION
Federal Legislative Report
Eric Sapirstein, ENS Resources
Federal political update
Congress adjourned for the summer in August and its activities leading up to the recess focused
on health care reform and the confirmation of Judge Sotomayor. There are some remaining
issues Congress will consider before the end of the year, while others will carry into next year.
The House passed its version of the State Revolving Loan Fund program that includes
provisions related to water quality testing and sewer spills. There are differences between the
House and Senate versions and the outstanding matters remain funding allocation to the States
(ensuring California gets a greater proportion), BEACH act monitoring and water quality tests
and the Buy America mandate. Senator Boxer is chair of the committee considering the SRF
program and she is committed to increasing the amount of SRF funding coming to California.
Other issues of concern are the pending climate change bill, with the most controversial portion
being cap and trade of emission credits. As a result of these provisions, it is unlikely that a
climate change bill will pass this year. CASA and others continue to press the case that
wastewater treatment facilities should be exempt from the cap and trade provisions. Of most
concern, is including adaptation assistance(funding)for wastewater treatment plants in the bill.
Book Page 24
State Legislative Report
Christopher Townsend, Heather Dion and Casey Elliott, Townsend Public Affairs
State political highlights
After several weeks and numerous meetings, the Assembly and Senate finally passed a
State Budget on July 24. Some of main sticking points causing delay were local
government taking and borrowing, education funding and offshore oil drilling.
Ultimately, a deal was struck in which the gas tax taking/borrowing was removed from the
budget package, as was a redevelopment proposal that offered an alternative to Proposition
to borrowing. Finally, the offshore oil drilling proposal failed to gather enough votes on the
Assembly floor and was not included in the final package.
As a result of these actions, the budget package is $1.1 billion less than expected for the FY
2009-10 and $1 billion less for FY 2010-11 and will have to be closed by reducing the
State's reserve. There is already widespread discussion that the Legislature will have to
reconvene to discuss further budget actions before the end of the calendar year.
The Governor signed the package of budget bills on July 28 and used his line-item veto to
cut $656 million and retain a State reserve of$500 million. The bulk of the Governor's line-
item vetoes came in the area of health and human services. Additional cuts included:
• Funding reduction for the State Parks system
• The elimination of funding for the Williamson Act subventions
• Reductions in funding available for State employee compensation augmentation
• Elimination of funding for the Office of AIDS
• Reduction in funding for the Healthy Families Program
• Reduction in funding for the In-Home Support Services program
As has been reported, the State budget will shift 8 percent in property taxes from cities,
counties and special districts. OCSD will lose about $5 million. These shifts will occur
in late 2009 with half shifted in December-January and the other half shifted in early
2010.
The Legislature included a hardship provision for agencies on the verge of bankruptcy
but they also included a program allowing borrowing against their Proposition 1A shift.
As a result of the borrowing program, the hardship exemption will only be allowed in the
most extreme of circumstances. The State Department of Finance will make the
determinations for the hardship exemption.
The Legislature will be in session until September 11, 2009 and will have hundreds of
bills to consider in the final weeks.
Specific Activities for the Month:
• TPA worked with OCSD staff on a regular basis during July to provide budget
updates and detailed information on the provisions of the State Budget and Prop 1A
Book Page 25
borrowing. Specifically, we fought such a move but we also were working to ensure
that any borrowing provisions were spread equally among cities, counties and
special districts.
• TPA continues to monitor SB 565 (Pavley) legislation that would have mandated
stringent water recycling rules. The Planning and Conservation League and CASA
have offered amendments that the author is currently considering. Because the bill
did not meet one of its deadlines, it is now a two-year bill.
• TPA continues to hold regular conference calls with OCSD staff.
Outreach, Education and Communication Activities
Take a Kid to Work Day
On August 19 we held the bi-annual Take a Kid to Work Day where staff brought kids of all ages
to tour the plant and learn about wastewater treatment and the environment. New this year will
be a tour of GWRS so the kids will have the opportunity to learn about water recycling. We are
very pleased to report that 150 kids will attend the event.
Parts of the day's activities include contests and games(all educational)with prizes. Townsend
Public Affairs assisted this year by securing tickets to the Discovery Science Center.
Honor Walk Installed
The new Honor Walk bricks have been installed with blanks and a plaque commemorating and
describing the walk is in the works. The Honor Walk is at the entrance to the administration
building and once honorees have been selected, the blank bricks will be replaced by engraved
ones.
Staff has developed a nomination form to track nominees. Both staff and board members are
eligible to be nominated and the criterion developed on the form is based on the action taken by
the Steering Committee. The form will be distributed at the meeting.
Public Affairs Strategic Plan
The newly formed Public Affairs Division has completed a strategic plan for the fiscal year to
guide our activities. The new plan focuses staff on outreach and educational activities as well
as honing in on key messages for the year. As a result of the current economic climate,
materials coming out of Public Affairs will include messages discussing how OCSD is doing
more with less and being always mindful of spending public dollars.
Book Page 26
2009 Legislative Tracking
Bill Number Summary Position* Status
AS 815 (Mal This bill requires a public agency to provide full, complete and accurate plans and specifications Oppose In Senate Local
to bidders and that the agency assumes responsibility for the accuracy of those plans. A redo of Government
AS 983(Me)from 2008, which OCSD opposed.
AS 969 (Calderon) This bill modifies the Recycled Water Act of 1991 to establish goals for recycling an unspecified Watch Held in committee
percentage of water by 2020
AS 1100(Duvall) This bill allows the bottling of potable demonstration water for educational purposes and to Support Failed passage in
promote water recycling. (Note: this bill is aimed at allowing the bottling of GWRS water for committee/granted
demonstration and educational purposes only). OCWD is sponsor reconsideration
AS 1366 (Feuer) This bill allows a local agency that maintains a community sewer system,to control salinity from Support Passed first
residential water softeners, if the regional water quality control board makes findings that committee now in
reducing salinity would achieve water quality objectives. Senate Appr.
m
0
x SB 26(Slmitian) This bill would require the California State Board of Pharmacy to coordinate with local agencies Support Being held in
v and drug manufacturers to develop programs managing pharmaceutical wastes and disposal. Senate
Authorizes pharmacies to accept home-generated prescription drugs. appropriations
N
J
SB 261(Dutton) This bill requires an urban water supplier to develop a conservation plan or achieve high Watch In Assembly
efficiency water use and provide financial incentives to support water use efficiency and local Appropriations
water resources management measures.
SB 413 (Duchene) 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 (Pavlev) Requires the State Water Resources Control Board to develop a plan ensuring that 50% of Watch/Reouestine In Assembly Parks
wastewater discharged into the ocean would be recycled and put to beneficial use. Requires the Amendments and Wildlife
State Board to impose a fee on ocean discharges to implement the program.
58 7111Leno1 Requires the disclosure of written communications prior to entering into closed session Oppose Held in committee
regarding labor negotiations.
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
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GENERAL MANAGER'S
PROGRESS REPORTS TO THE STEERING
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AND
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PROPOSED 2009-2010 WORK PLAN
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1. Fiscal Year 2009-2010 Proposed Work Plan
2. Fiscal Year 2008-2009 Year-End Review of
Accomplishments
r 3. 2009 Executive Management Team Strategic
Planning Session
r 4. 2009-2010 Budget Update
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August 26,2009
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ORANGE COUNTY SANITATION DISTRICT
Memorandum
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DATE: July 22, 2009
TO: Chairman�and Members of the Steering Committee
FROM: JamesRYRuth, General Manager
SUBJECT: Fiscal Year 2009-2010 Proposed Work Plan
r
The enclosed reports cover the District's progress and accomplishments for FY 2008-09,
r provide an overview of the July 9 Executive Management Team strategic planning session, and
present the proposed work plan for 2009-10 Fiscal Year.
1. Fiscal Year 2008-09 Overview
The 2008-09 fiscal year presented many challenges to our staff as we addressed our
Board-approved work plan, setting forth our service levels incorporated in our Strategic
Plan, implementing an aggressive Capital Improvement Program (CIP) covering 73
projects valued at$280 million, and dealing with the fiscal uncertainty in a volatile
economic climate.
" Staff met or exceeded all of our proposed goals, managed the operating budget at 97%
of our authorized resource allocation plan, implemented operational efficiencies resulting
in a $2 million savings, reallocated personnel resources to areas of greater, need
actually reducing the number of authorized personnel from 644 to 641, while assuming
increased operating responsibilities.
r Continued assessment of our organizational structure resulted in the merging of our
Public Information Office and Government Affairs into a Public Affairs division under the
leadership of Michael Gold.
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The Safety and Health division has been permanently assigned to the Human
Resources division.
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Staff will continue to explore other possible mergers to create greater efficiencies in our
operations.
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r Chairman and Members of the Steering Committee
Page 2
July 22, 2009
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It. Executive Management Team Strategic Planning Meeting
The meeting focused on operational issues covering strategic goals, financial planning,
new regulatory requirements, risk assessment, labor relations, training, alternative
energy sources, hiring practices, succession management, public education and
r outreach, and our contractual agreements with outside agencies.
An overview of that meeting is enclosed.
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Ill. New Work Plan for Fiscal Year 2009-2010
1) Fiscal Management—Maintain our current AAA bond rating. Protect our
reserves maintaining at current levels, form an internal business analysis function
to assist departments in implementing greater efficiencies in our operations.
Explore options to reduce dependency on property tax revenues. Operate within
r the Board approved budget. Analyze cost-saving measures identified in the EMT
strategic planning session and seek board direction on those involving changes
in our approved level of service, for example, disinfection levels, chemical usage
for odor control, and environmental monitoring.
2) Capital Improvement Plan—Manage 82 projects at an estimated cost of$259
r million within budget at a change order rate of 5%.
3) Complete negotiations and seek Board approval of new contractual agreements
r with SAWPA and IRWD.
4) Develop a new operating agreement with OCWD relative to their proposed
Phase II Expansion Program.
5) SARI Line Relocation—Continue to work with the County of Orange, Army Corps
r of Engineers, and SAWPA to achieve approval of the EIR, EIS, prepare final
plans and bid documents, bid the project within the approved time schedule and
achieve completion by April 2012.
Work with our Congressional delegation to secure reimbursement funding for the
project.
6) Labor Relations—The 2009-2010 Fiscal Year will begin our labor negotiations
process with two of our six bargaining units. Our focus will be on cost
containment, with emphasis on our benefits package. The remaining four labor
r agreements will not expire until June 30, 2011.
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Chairman and Members of the Steering Committee
Page 3
July 22, 2009
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7) Strategic Plan Update—Staff will bring forward our proposed update of our 5-
year Strategic Plan in November 2009. The proposed new plan will address all
r service levels approved by the Board, consider new regulatory requirements,
evaluate our fiscal plan, review our risk register and identify possible mitigation
measures, and review our performance measures against our agreed upon work
r plan.
8) Transfer of local sewer assets to local agencies. Staff will continue to work with
r local cities and sanitation districts to transfer any non-regional assets over to
those agencies so that we can continue to focus on regional services and
reducing our operating costs.
r
9) North County Maintenance Yard—Staff has worked with an architectural firm to
determine the most economical and functional approach to utilizing this property
at 7311 Doig Drive, in Garden Grove. The property was acquired in 2006 to
`t provide badly needed workspace for approximately 50 staff, and to free up
workspace at Plant 2 needed because of facilities growth. A staff
recommendation will be presented to the Board by November 1, 2009.
r
10) Design Build—As a result of our aggressive legislative efforts, two projects have
now been approved for Design Build. The Magnolia Trunk Sewer Project ($19.5
million) and the Inter-Plant Natural Gas Pipeline Rehabilitation Project($2.5—
$3.5 million)should be bid and constructed during this fiscal year.
r 11) Safety—Staff will focus on achieving 100% compliance with OSHA training
requirements with the objective of further reducing our number of work related
accidents and lost work hours. During the past two years, we have achieved a
53% reduction in the work related accident rate.
12) Public Outreach—The focus of our outreach activities this year will be on
undertaking a branding initiative to provide continuity and a consistent message
in our public education efforts. In addition, we will be updating our collateral
materials and other media.
13) Training—We will focus on continuing to develop leadership skills, build our
bench, and prepare for the future. We will complete the final two sessions of our
Leadership Academy and lay out a program for the next generation of leadership
r development training for the organization.
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ORAKGE COUNTY SANITATION DISTRICT
Memorandum
DATE: June 24, 2009
TO: Chair and Members of the Board
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 24, 2009
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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.
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Board of Directors
a Page 3
June 24, 2009
r 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
r 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
r 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
r Washington, D.C. lobbyist, played an important role in raising Congressional
awareness of the importance of relocating the SARI line.
r 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
r 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
r completed the program. The program will develop leadership skills, build our
bench and prepare for the future.
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Board of Directors
Page 4
June 24, 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 firm 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-term 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-tens 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 alternative—land application in Arizona—
consistent with Board policy and our Lang 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
r 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 24, 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. r_�
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
r 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 24, 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.
d+ 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 $52,35B4O00 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
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Board of Directors
Page 7
June 24, 2009
r 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
r 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.
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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
r 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.
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Aecomplishmenla.doc
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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.
• EnerTec Operations The EnerTech synthetic coal production facility began accepting OCSD
biosolids November 2008 and is operating in test mode. The dedication
to officially open the site was held on Junel1, 2009.
• 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.
• Ocean Discharge Permit Application The application for the five year renewal of our Ocean Discharge
Process (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.
Page 1 of 9
Accomplishments FY2008-09
• 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
Quality October 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 C413 is one of the Enhanced Source Control Programs designed to
Partnership Program (C4P) protect the 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 stutters, 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
Page 2 of 9
Accomplishments FY2008-09
contact with almost 10,000 people. The number of tours and tour
guests has doubled from two years ago and 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 Developed and published a three year Information Technology Strategic
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.
Page 3 of 9
1 1 1 I l l l 1 t 1 1 I 1 1 1 1 I I t
Accomplishments FY2008-09
• Performance Dashboard The Performance Dashboard was automated by Information
Technology, and the responsible managers receive notifications through
a work-flow 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 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
Divisions Strategic Plans are in 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 firths, 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 In FY 2008-09, we completed roughly $280 Million in capital
projects 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,
Page 4 of 9
Accomplishments FY2008-09
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.
• 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 (EMC), 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.
Page 5 of 9
Accomplishments FY2008-09
• Fuel Cell Demonstration Project An agreement has been executed to participate in mufti-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, Temporary Upgrades to Plant Security Barriers. This project is in
design and is scheduled to be completed by the end of 2010.
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.
• Bushard Street Construction mediation The project work is complete and final settlement of pipe related claims
settlement was 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.
Page 6 of 9
Accomplishments FY2008-09
• 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 Last year, the Board authorized staff to sell air quality emission
Reduction Credits reduction 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
• 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
Award (OPAL) 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.
Page 7 of 9
I l l I t It 1 1 l / I 1 1 a 1 1
Accomplishments FY2008-09
Awards
• NACWA(National Association of Clean Presented to Source Control Division by NACWA along with Las
Water Agencies) Award Angeles 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 Presented to Financial Management for the Comprehensive Annual
in Financial Reporting Financial 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
Practices Award Systems Association of California (MISAC)
• The Best Vibration Analysis Program of Presented to Simon Watson, Manager of Mechanical and Reliability
the Year Maintenance (Division 850) by Uptime Magazine
• Government Engineer of Merit Presented to Nick Arhontes, Director of Operations and Maintenance, by
the American Society of Civil Engineers
Page 8 of 9
1 1 1 1 1 1 1 1 ! 1 I I 1 1 1 1 1 1 1
Accomplishments FY2008-09
• Construction Engineering Distinguished Presented to Engineering Supervisor Chris Cervellone by the
Owner Honoree Construction 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).
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Page 9 of 9
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ORANGE COUNTY SANITATION DISTRICT
Memorandum
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DATE: July 22, 2009
TO: Chairman and Members of the Steering Committee
r FROM: James D. Ruth, General Manager
SUBJECT: 2009 Executive Management Team Strategic Planning Session
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Summary
r� On July 9, 2009 the Executive Management Team (EMT) held a strategic planning session to
discuss goals for the coming year. Against the backdrop of a state budget crisis threatening to
raid OCSD's property taxes and ongoing anxiety about the economy, the day focused on
dealing with these uncertainties to not only keep OCSD functioning smoothly but also support
the diverse staff that helps make every day possible in Orange County.
This report provides a summary of the discussion and the follow-up items that will lead to the
2010 Strategic Plan and the 2009-2010 budget.
Attendance
The EMT retreat was held offsite at the Irvine Ranch Water District and was attend by the
following staff:
r
Jim Ruth General Manager
Bob Ghirelli Assistant General Manager
•+ Jim Herberg Director of Engineering
Lorenzo Tyner Director of Finance and Administrative Services
Nick Arhontes Director of Operations and Maintenance
r Ed Torres Director of Technical Services
Jeff Reed Human Resources Manager
Michael Gold Public Affairs Manager
r
Agenda
The agenda for the day covered a wide range of issues but focused on internal operations and
r staff support. This report will provide a summary of each agenda item:
. Implementing the fiscal year 2009-2010 budget
. 150 low cost ways to boost employee morale
. 2010 Strategic Plan update
. Succession management
. General management and organizational issues
r
r
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2009 Executive Management Team Strategic Planning Session
Page 2
July 22, 2009
r Implementing the fiscal year 2009-2010 budget
State budget uncerfainty
The EMT discussed the uncertainty of the state budget crisis and the possibility that OCSD's
property taxes could be borrowed by Sacramento to cover the $26 billion deficit. At the time,
the possibility of a property tax shift was still unknown, as was the amount. In recognition of the
r uncertainty, the group decided to focus on items they could control but be prepared for a range
of possibilities from Sacramento.
r Staffing reductions and consolidations
Despite a decrease in staffing from 644 FTE several years ago to 641 FTE today staff has done
a good job managing the$2.6 billion CIP and operating the treatment plants and collection
system. A focus of the next year will be on employee training and development and building the
bench for the future.
r Risk register recommendations
Lorenzo Tyner distributed the near final version of the risk register prepared by his staff. Tyner
explained that the register highlights perceived risks to OCSD and because of global financial
uncertainty along with other events there are more disparate risks than the same time last year.
The group discussed the risk register and concluded:
. The risk register presents an opportunity for OCSD to put a stronger focus on its core
mission;
. The recommendations in the register should be incorporated into the 2010 strategic plan
and
•" . The EMT and Board of Directors should be briefed by the District's Risk Manager.
Proposals for cost-saving measures
r The group discussed several ideas for cutting costs in the near-term and how these proposals
could impact levels of services. After discussing a number of ideas, the group narrowed the list
and identified an EMT member to follow-up:
r
. Biosolids—outsource a company to dewater biosolids onsite. (Ed Torres).
. Disinfection— improve the mixing of effluent to reduce chemical usage. (Nick Arhontes).
r • Secondary treatment—reduce mix of primary and secondary treated effluent sent to the
ocean to minimum permitted levels. (Nick Arhontes).
. Chemical usage—An in house team (headed by Mark Dubois) will study options to
,+ reduce, eliminate or replace current chemicals.
. Corrosion/Odor control—hire outside consultant to study cost and impacts of reducing
chemical dosing. (Nick Arhontes).
r . Effluent pumping—Shut off Ocean Ouffall Booster Station effluent pumping during low
flow periods. (Nick Arhontes).
. CIP—defer capital projects not yet under contract or construction. (Jim Herberg).
r . Environmental management—as part of budget process, reduce regulatory monitoring
and transfer associated staff to higher priority activities. (Ed Torres).
r
r
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2009 Executive Management Team Strategic Planning Session
a Page 3
July 22, 2009
r Safety—reevaluate level of safety training and equipment needed to meet OSHA
requirements. (Jeff Reed).
Long-term strategy to move OCSD off Property taxes
Recognizing the annual vulnerability OCSD faces with the $60 million collected in property taxes
because of the state's budget problems, the group discussed the concept of moving the District
r off property taxes.
• The EMT discussed a revenue neutral concept that for every dollar reduction in property
r tax collection there would be a dollar increase in sewer fee collection; thus removing the
funds vulnerable to the state.
• Jim Ruth agreed to discuss the concept with the county assessor and Lorenzo Tyner will
look more closely at the details.
Looking ahead to the upcoming two-year budget(2010-2012)
,r With a new two-year budget cycle beginning in one year,the group discussed preparing for the
new budget and how the process could be improved. The 2009-2010 budget update introduced
a new element—using budget analysts to assist each department. The suggested changes for
the coming year are:
• Training for the budget analysts and involving them in the process throughout the year,
not just during budget preparation time, so they area resource for each department. Set
forth our expectations for what we want the budget analysts to do.
• Creating an overall model of how the process will work then rolling it out to the agency
so there is better understanding of the analysts' role and the overall budget process.
• Utilizing existing staff or hiring business analysts to increase efficiencies throughout the
organization (change agents).
• Better management of the legal budget in the coming year by refreshing the procedures
for requesting legal advice and better tracking, possibly through a gatekeeper to log all
requests.
�+ 150 low cost ways to boost employee morale
Human resource and public affairs staff generated 150 low cost suggestions to boost employee
morale. These suggestions were further refined by HR staff and discussed by the EMT. Jeff
r Reed identified the top six items that could be implemented quickly:
• Staff BBOs with the managers cooking;
r • Birthday cards or calls from the general manager;
• Employee of the month or a spotlight on an employee;
• Lunch or coffee with the general manager;
r • Creating "onboard buddies' with newly hired staff. The onboard buddy is an existing
staff person who will assist the new person become more familiar with OCSD and
• Staff wellness programs.
r
2009 Executive Management Team Strategic Planning Session
Page 4
July 22, 2009
In addition to these suggestions, the group discussed additional ideas such as incorporating
some elements into the upcoming employee recognition program. Finally, the group discussed
additional morale boosting suggestions:
. The EMT discussed creating an OCSD shop with logo shirts, mugs, etc. that could be
purchased by employees;
. Creating an OCSD calendar with monthly themes and pictures of staff;
• Bring back an employee activity committee (or similar) and seek connections to the
employee recognition program;
. Hiring a space planning consultant to identify workplace upgrades (restrooms, cubicles,
etc.) and
. Looking into a gate or opening on the river levee so employees can take walks on the
bike path.
2010 strategic plan update
The group reviewed the status of current goals and levels of service and identified the elements
as either being completed or on track for completion by the target date. Two items the group
noted:
• The goal of"reclaiming the SARI line flows" will be put on hold (as opposed to canceling)
pending state review of water recycling policy.
. The level of service identifying odor complaints at P2 was off significantly and the group
discussed whether the target number should be higher when the plan is updated in
November.
Suggestions for new strategic coals
Looking ahead to the 2010 strategic plan update, the EMT brain stormed on ideas for new goals
and identified the division or person responsible.
Goal Lead Division or Person
RebrandingsQg§D, , ,.,, Public Affairs
Replacing ro tax revenue with rates Lorenzo Tyner
Rc5lugin Safety
Achieving C®IOSHA Voluntary Protection Program eligibility Safety
in three years
Mark Dub_qp,
Staff procedures Human Resources
• Succession management
• Core values
• Leadershi develo ment _
�.. Human R sowces
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2009 Executive Management Team Strategic Planning Session
Page 5
July 22, 2009
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Opportunities for greater efficiency Mark Dubois
• Being more competitive with the private sector
(simulated bids to understand costs)
• As identified in the budget process, seeking
opportunities to increase business efficiency
(industrial engineering)
Risk mitigatpn, Lorenzo Tyner
Strategic approach to labor relations and negotiations Lorenzo Tyner
• Dealing with the big issues: health care and
retirement costs
• Getting comparison data from other agencies
• Understanding the political and economic
environment
Process and timeline for the 2010 strategic Plan update
The 2010 strategic plan update will require a new set of goal statements and issue papers as
well as a draft plan and workshop materials for the Board of Directors and Steering Committee.
The EMT proposed the following schedule for the plan update:
Jul —August Review issues and goals with EMT managers and supervisors.
September Present proposed goals to steerirm commNtee.
November Board consideration of the 2010 strategic plan update
Succession management
Jeff Reed provided an update on the succession management program and the group
discussed the 13 leadership competencies. Following the discussion, the EMT decided to make
the following changes to the list of competencies:
r
2009 Executive Management Team Strategic Planning Session
Page 6
r July 22, 2009
• Collapsing oral communication and listening into one category;
• Adding to organizational awareness, working within organizational structure;
• Ability to perform under pressure and stressful situations and
r • Degree that an individual is a self-started, motivator and is a risk-taker.
Management and organizational issues
The EMT discussed a number of organizational issues, with a focus on human resources. The
HR related issues were:
r Personnel investigations—creating a step for HR to facilitate discussions between the
employee and their supervisor prior to a formal complaint investigation and reinforcing
the message with manager and supervisors that it is their responsibility to deal with the
issues and not just send to HR. If the supervisor cannot deal with the issue, HR will
intervene.
• Outreach —HR will play a more visible role in the organization with involvement in events
r (volunteers), staff meetings and bereavements. The overall goal is for HR to be more
transparent and humanistic. Also HR will also look into:
o Do a customer service satisfaction survey;
o Convene an employee advisory committee and
o Create service levels and a suggestion box.
Management compensation philosophv
r The EMT discussed the new management compensation philosophy:
• Compensation will be based on the market and tied to leadership, performance, core
values and strategic goals;
• Compensation is competitive: comparisons based on market median including base
pay, non-base pay, and benefits (total compensation package);
• There will be differentiations in compensation between the manager, supervisor and
their subordinates. The general manager committed to at least 5 percent distance
between the two.
r
Improving hiring practices
Jeff Reed explained that improvements to the District's hiring practices are an element of the
r new human resources strategic plan. In addition, with some good ideas coming from one of the
leadership academy project teams, HR committed to meeting with them to follow-up on their
suggestions for improving hiring practices. Reed also reemphasized HR's new onboard buddy
program (identified early).
Labor negotiations
r The EMT discussed upcoming labor negotiations and their approach. Some key points from the
discussion were:
• Overall goal is to have greater EMT involvement in the process;
• Inform the bargaining units that they need to provide specifics, not just a laundry list of
their wants;
r
2009 Executive Management Team Strategic Planning Session
r Page 7
July 22, 2009
r
• As mentioned earlier, negotiations should be more strategic, in the context of the current
political and economic climate and
• Managers need to be strategic as well thinking about the issues that need to be
r addressed in the upcoming SPMT negotiations.
Other issues
Finally, the EMT discussed a number of miscellaneous matters:
• Jim Herberg discussed a District-wide project management office (PMO)for all projects.
Herberg will assemble a team to identify the best way to make this happen and bring the
issue to a future EMT meeting for discussion.
• Ed Torres discussed the need to be prepared for possible Federal funding of a large-
scale fuel cell power generator. The group decided to ask staff or hire a consultant (not
to exceed $50,000)to prepare a conceptual plan demonstrating OCSD's ability to deploy
fuel cell power generation onsite.
r • Jim Herberg presenting information on growth and demographic changes in Orange
County and how it will impact capacity. Herberg explained that based on flow
projections, it appears OCSD has adequate capacity through 2030, with or without
SAWPA and IRWD
• Ed Torres raised the issue of treating urban runoff and how the county may request that
we remove the 4 mgd threshold. The group decided that this topic merits more
r discussion so Torres will bring forward an agenda report to a future EMT meeting.
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ORANGE COUNTY SANITATION DISTRICT
Memorandum
DATE: June 17, 2009
TO: Chair and Members of the Board of Directors
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Orange County Sanitation District
SUBJECT: 2009-10 Budget Update
I am pleased to submit this update to the Orange County Sanitation District (OCSD)
2009-10 approved operating budget and capital improvement program. This
document provides a framework for OCSD activities during the second year of the
adopted two-year budget for fiscal years 2008-09 and 2009-10 and serves as a
source of information for the OCSD's Board of Directors, and our employees and
ratepayers.
At the May and June Administration and Operation Committee meetings, staff
presented budget information that described the OCSD's overall budget, including its
revenues, expenditures as well as opportunities for significant re-budgeting and
operational efficiencies.
In addition to providing resources to support the processing of nearly 230 million
gallons of wastewater each day from 2.5 million residents and businesses, the
Strategic Plan focused on four distinct program areas: Biosolids, Air Quality, Odor
Control, Groundwater Replenishment (GWR) System.
This budget update also addresses rising treatment and chemical costs, aging
infrastructure and increased regulatory requirements. As a result, the operating
budget is increased by 5.9 percent above what was approved last year as the second
year of the adopted two-year budget.
Although the printed budget document was provided to the Board Members in June,
at the Committee meetings, I expressed my desire to include additional budget
adjustments. I believe that these adjustments prudently address the OCSD's lower
than anticipated revenues, specifically from capital capacity facilities charges,
property tax revenues and interest income.
r
Board of Directors
Page 2
June 17, 2009
r
In this memorandum, I will summarize three levels of budget adjustments I propose
to include in the budget update:
r
1) Re-budgeting efforts currently included in the printed budget update
2) Operational efficiencies included in the printed budget update
3) Additional proactive measures to further address declining revenues
1) Re-budgeting —$6.0million
After completing the budget process, staff identified areas where expenditures are
less than the budgeted amount. Although these expenditures have fluctuated in the
past, we now feel that there has been sufficient experience that allows us to reduce
the budget without significant risk to operations. These areas include:
a) Digester Cleaning —$1.6 million
r b) Chemical Purchases— $1.4 million
c) Solids Disposal—$1.4million
d) Utilities— $1.1 million
e) Repairs and Maintenance—$0.3 million
f) Professional Services and Administrative Expenses—$0.2 million
r 2) Operational Efficiencies —$2.0 million
As part of the annual budget process, staff is tasked with reviewing its existing
activities for opportunities to realize operational savings by changing existing
processes. Staff identified five major areas where operational efficiencies can be
implemented:
a) Professional/Contractual Services—$700,000
b) Staffing Efficiencies —$500,000
c) Training —$300,000
d) Computer Equipment and Service Agreements—$200,000
e) Other Expenditures—$200,000
3) Proactive Measures —$3.0 million
To ensure that the decline in revenue has been adequately addressed, I propose
additional reductions beyond those initially included in the budget presented to the
Board. These reductions include:
a) Reduction in Temporary Staffing —$1.0 million
.+ The budget is reduced from $1.5 million to 0.5 million.
Departments will be required to prioritize and absorb the existing workload.
b) Reduction in Vacancies—$1.0 million
The initial budget included an increase of seven full-time equivalent positions.
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Board of Directors
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June 17, 2009
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I propose to keep the current authorized staffing level flat by reallocating
existing vacancies to address new operation and maintenance workload.
r
c) Reduction in Professional Services—$0.7 million
The OCSD spends approximately $3.5 million in this area.
I propose a 20% reduction by eliminating various discretionary efforts.
d) Reduction in Other Expenditures— $0.3 million
Various supplies, materials and conferences will be reduced.
I believe that the budget, with these proposed adjustments, sets out a financial and
operational plan that provides efficiency and stability for OCSD.
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