HomeMy WebLinkAbout03-08-2017 Administration Committee Agenda Orange County Sanitation District Wednesday, March 8, 2017
Regular Meeting of the 5:00 P.M.
ADMINISTRATION - Administration Building
COMMITTEE Board Room
10844 Ellis Avenue
Fountain Valley, CA
714 593-7433
AGENDA
CALL TO ORDER:
PLEDGE OF ALLEGIANCE:
DECLARATION OF QUORUM: (Clerk of the Board)
PUBLIC COMMENTS: If you wish to address the Committee on any item, please complete a
Speaker's Form (located at the table outside of the Board Room) and submit it to the Clerk of the Board or
notify the Clerk of the Board the item number on which you want to speak. Speakers will be recognized by
the Chairman and are requested to limit comments to three minutes.
REPORTS: The Committee Chair and the General Manager may present verbal reports on
miscellaneous matters of general interest to the Committee Members. These reports are for information
only and require no action by the Committee.
REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES:
CONSENT CALENDAR: The Consent Calendar Items are considered to be routine and will be
enacted, by the Committee, after one motion, without discussion. Any items withdrawn from the Consent
Calendar for separate discussion will be considered in the regular order of business.
1. APPROVAL OF MINUTES (Clerk of the Board)
RECOMMENDATION: Approve Minutes of the February 8, 2017 Administration
Committee Meeting.
03/08/2017 Administration Committee Agenda Page 1 of 3
2. PURCHASE OF RADIO COMMUNICATION EQUIPMENT AND SERVICES
(Lorenzo Tyner)
RECOMMENDATION: Authorize the purchase of equipment and services from
ComSerCo, Inc. for Motorola radio systems, for a total amount not to exceed
$161,000.00, to include all tax and freight in accordance with Ordinance No.
OCSD-47, Section 2.03(B) Cooperative Purchases.
NON-CONSENT:
None.
INFORMATION ITEMS:
3. FY 2017-18 ORANGE COUNTY SANITATION DISTRICT BUDGET UPDATE
(Lorenzo Tyner)
4. STATUS OF 2017-18 PROPERTY LIABILITY INSURANCE RENEWALS
(Celia Chandler)
5. ORANGE COUNTY SANITATION DISTRICT COLLECTIONS, OPERATIONS
AND MAINTENANCE OF OCSD FACILITIES (Ed Torres)
CLOSED SESSION:
None.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS,
IF ANY:
ADJOURNMENT:
The next Administration Committee meeting is scheduled for Wednesday, April 12, 2017
at 5:00 P.M.
0 3/0 812 01 7 Administration Committee Agenda Page 2 at 3
Accommodations for the Disabled: Meeting Rooms are 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)593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability
and the type of accommodation requested.
Aaenda Postino: In accordance with the requirements of California Government Code Section 54954.2,this agenda
has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis
Avenue, Fountain Valley, California, 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 the Board of Directors,are available for public inspection in the office of the Clerk of the Board.
Aaenda Description: The agenda provides a brief general description of each item of business to be considered or
discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take
any action which is deemed appropriate.
NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to
the Clerk of the Board 14 days before the meeting.
Kelly A.Lore
Clerk of the Board
(714)593-7433
klorefplocsd.com
For any questions on the agenda, Committee members may contact staff at:
General Manager James Herberg (714)593-7300 iherberait0esd.com
Assistant General Manager Bob Ghirelli (714)593-7400 rohirelliamsd.com
Director of Finance and Lorenzo Tyner (714)593-7550 Itvner0ocsd.com
Administrative Services
Director of Human Resources Celia Chandler 714 593-7202 cchandler ocsd.com
03/0e/2017 Administration Committee Agenda Page 3 of 3
ITEM NO. 1
MINUTES OF THE
ADMINISTRATION COMMITTEE
Orange County Sanitation District
Wednesday, February 8, 2017 at 5:00 P.M.
A regular meeting of the Administration Committee of the Orange County Sanitation
District was called to order by Committee Chairman Wanke on February 8, 2017 at
5:04 p.m. in the Administration Building of the Orange County Sanitation District.
Board Chair Sebourn led the Flag Salute.
A quorum was declared present, as follows:
COMMITTEE MEMBERS PRESENT: STAFF PRESENT:
Chad Wanks, Chair Jim Herberg, General Manager
Robert Collacott Bob Ghirelli, Assistant General Manager
Barbara Delgleize Celia Chandler, Director of Human Resources
Jim Ferryman Jim Colston, Director of Environmental Services
Peter Kim Rob Thompson, Director of Engineering
Al Krippner Ed Torres, Director of Operations & Maintenance
Teresa Smith Lorenzo Tyner, Director of Finance &
Scott Peotter Administrative Services
Sal Tinajero Tina Knapp, Deputy Clerk of the Board
Greg Seboum, Board Chair Curtis Buonacorsi
David Shawver, Board Vice-Chair Jennifer Cabral
Rhea de Guzman
COMMITTEE MEMBERS ABSENT: Al Garcia
Donald P. Wagner, Vice-Chair Mark Kawamoto
Glenn Parker Mark Manzo
Roya Sohanaki
John Swindler
Mike White
OTHERS PRESENT:
Denise Barnes, Director, Anaheim
Brad Hogin, General Counsel
Bill Dennehy, Chandler Asset Management
PUBLIC COMMENTS:
None.
REPORT OF COMMITTEE CHAIR:
Committee Chairman Wanke did not provide a report.
02/0a/2017 Administration Committee Minutes Page 1 d5
REPORT OF GENERAL MANAGER:
General Manager Jim Herberg indicated that staff would like to pull Item 3 from the
Consent Calendar so that staff could provide additional information and an overview of
the item. Chair Wanke indicated he also intended to pull the item.
REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES:
Director of Finance and Administrative Services Lorenzo Tyner introduced John Swindler
and congratulated Mr. Swindler on his promotion to IT Manager.
Director T. Smith arrived at the meeting at 5:06 p.m.
CONSENT CALENDAR:
1. APPROVAL OF MINUTES (Clerk of the Board)
MOVED, SECONDED AND DULY CARRIED TO: Approve Minutes of the
November 9, 2016 Administration Committee Meeting.
AYES: Collacott, Delgleize, Ferryman, Kim, T. Smith, Tinajero,
Sebourn, and Wanke
NOES: None
ABSTENTIONS: Shawver and Peotter
ABSENT: Krippner, Parker, and Wagner
2. GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE
PRE-APPROVED OEM SOLE SOURCE LIST (Lorenzo Tyner)
MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of
Directors to: Receive and file the Orange County Sanitation District purchases
made under the General Manager's authority and additions to the pre-approved
OEM Sole Source List for the period of October 1, 2016 - December 31, 2016.
AYES: Collacott, Delgleize, Ferryman, Kim, Peotter, Shawver,
T. Smith, Tinajero, Sebourn, and Wanke
NOES: None
ABSTENTIONS: None
ABSENT: Krippner, Parker, and Wagner
Item No. 3 was pulled for separate consideration.
3. MID-YEAR CONSOLIDATED FINANCIAL REPORT FOR THE PERIOD ENDED
DECEMBER 31, 2016 (Lorenzo Tyner)
MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of
Directors to: Receive and file Orange County Sanitation District Mid-Year Report
for the period ended December 31, 2016.
02/0a/2017 Administration Committee Minutes Page 2 of 5
Controller Mike White provided an overview of the Mid-Year Financial Report and
indicated that copies of the Report are available for Directors who would like a
copy. Mr. White and Mr. Tyner responded to questions from the Committee
regarding economy of scale as to how the Sanitation District compares to other
like-agencies.
AYES: Collacott, Delgleize, Ferryman, Kim, Peotter, Shawver,
T. Smith, Tinajero, Sebourn, and Wanke
NOES: None
ABSTENTIONS: None
ABSENT: Krippner, Parker, and Wagner
INFORMATION ITEMS:
4. INVESTMENT PERFORMANCE RESULTS (Lorenzo Tyner)
Mr. Tyner introduced this item and invited Bill Dennehy, Chandler Asset
Management, to provide further information on this item. Mr. Dennehy distributed
an Investment Report document to the Committee and reviewed the document
with the Committee, providing a brief overview of each page of the document. This
overview included an overview of ChandlerAsset Management, the account profile
long term portfolio, and the account profile liquid portfolio. Mr. Dennehy responded
to questions from the Committee regarding the long term portfolio. Mr. White
responded to a question from the Committee regarding the State of California
Local Agency Investment Fund (LAIF).
NON-CONSENT:
5. CONSIDERATION OF BUDGET ASSUMPTIONS AND BUDGET CALENDAR
FOR PREPARATION OF THE FY 2017-18 BUDGET UPDATE (Lorenzo Tyner)
Mr. Tyner introduced this item and Mr. White provided an informative PowerPoint
presentation. Mr. White's presentation reviewed the development of the budget
assumptions; the comparison of single family residential rates; assumptions made
regarding operations, staffing, capital improvement program, and debt financing; a
budget summary; and key meeting dates in the budget calendar.
Mr. Tyner and Mr. White responded to questions regarding Certificates of
Participation and aspects of the Capital Improvement Program (CIP) as related to
acquisitions. Staff indicated that the CIP and future revenues will be reviewed in
the near future. Mr. Herberg indicated that the current rate structure expires in
July 2018. At the request of the Committee, information pertaining to reserves and
how reserves are allocated will be presented in the near future.
MOVED. SECONDED AND DULY CARRIED TO: Recommend to the Board of
Directors to: Approve the FY 2017-18 budget assumptions and direct staff to
incorporate these parameters in preparing the FY 2017-18 budget update.
02/Oa/2017 Administration Committee Minutes Page 3 of 5
AYES: Collacott, Delgleize, Ferryman, Kim, Peotter, Shawver,
T. Smith, Tinajero, Sebourn, and Wanke
NOES: None
ABSTENTIONS: None
ABSENT: Krippner, Parker, and Wagner
6. COOPERATIVE PROCUREMENT AGREEMENTS WITH U.S. COMMUNITIES
GOVERNMENT PURCHASING ALLIANCE AND NATIONAL ASSOCIATION OF
STATE PROCUREMENT OFFICIALS VALUEPOINT COOPERATIVE
PURCHASING ORGANIZATION (Lorenzo Tyner)
Mr. Tyner provided an overview of this item and indicated that this would typically
be presented on the Consent Calendar; however, due to the dollar amount felt it
warranted separate explanation. This agreement allows a larger economy of
scale; however, if items of this nature are purchased, the required processes,
including Committee and Board review, are followed.
MOVED. SECONDED AND DULY CARRIED TO: Recommend to the Board of
Directors to: Authorize the purchasing of information technology products,
services, and solutions utilizing the U.S. Communities Government Purchasing
Alliance and National Association of State Procurement Officials ValuePoint
Cooperative Purchasing Organization (NASPO ValuePoint)for the period of March
1, 2017 through February 29, 2020 for a total amount not to exceed $6,000,000,
in accordance with Ordinance No. OCSD47, Section 2.03(B) Cooperative
Purchases.
AYES: Collacott, Delgleize, Ferryman, Kim, Peotter, Shawver,
T. Smith, Tinajero, Sebourn, and Wanks
NOES: None
ABSTENTIONS: None
ABSENT: Krippner, Parker, and Wagner
INFORMATION ITEMS:
7. ORANGE COUNTY SANITATION DISTRICT ENVIRONMENTAL SERVICES
RESOURCE PROTECTION (Jim Colston)
Director of Environmental Services Jim Colston provided an informative
PowerPoint presentation on the Sanitation District's Environmental Services
department, including a review of OCSD's resources, the Clean Water Act,
managing sources of pollutants throughout Orange County before they enter the
sewage collection system, industrial users, effectiveness of the permit program,
non-industrial source control, diversion locations, protection of the Groundwater
Replenishment System, and awards received by OCSD for its efforts in
environmental protection. Mr. Colston responded to questions from the Committee
regarding dental practice regulations and requirements and how sewage spills are
handled. Ed Torres, Director of Operations and Maintenance, provided specifics
regarding a recent sewage spill in Newport Beach. Director Shawver provided
02/Oa/2017 Administration Committee Minutes Page 4 of 5
additional information regarding the spill, indicating that the line is scheduled for
repair and staff is awaiting the permit from CalTrans.
Director Krippner arrived at the meeting at 5:50 p.m.
8. ORANGE COUNTY SANITATION DISTRICT STORM UPDATE (Ed Torres)
Director of Operations and Maintenance Ed Torres provided a PowerPoint
presentation that provided an overview of the wastewater collection system, high
flow color code system, and the recent rain events and OCSD's response to the
events.
CLOSED SESSION:
None.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS,
IF ANY:
None.
ADJOURNMENT:
Committee Chair Wanke declared the meeting adjourned at 6:33 p.m.to the next regularly
scheduled meeting of Wednesday, March 8, 2017 at 5:00 p.m.
Submitted by:
Tina Knapp
Deputy Clerk of the Board
02/Oa/2017 Administration Committee Minutes Page 5 of 5
ADMINISTRATION COMMITTEE Meeting Dare To ad.ofDir.
0308,17
AGENDA REPORT ItemNumber Item Number
z -
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance &Administrative Services
SUBJECT: PURCHASE OF RADIO COMMUNICATION EQUIPMENT AND
SERVICES
GENERAL MANAGER'S RECOMMENDATION
Authorize the purchase of equipment and services from ComSerCo, Inc. for Motorola
radio systems, for a total amount not to exceed $161,000, to include all tax and freight in
accordance with Ordinance No. OCSD47, Section 2.03(B) Cooperative Purchases.
BACKGROUND
In 2015, mobile phones were issued to several Orange County Sanitation District
(Sanitation District) maintenance staff in lieu of handheld radios. Not all maintenance
staff at both treatment plants have access to handheld radios and, as such, cannot
communicate directly with operations staff in support of the normal and emergency
operations of the treatment plants. During normal maintenance activities, staff
communicate with operations staff via mobile phone to an Operations Center staff, where
requests for operations support are relayed via handheld radio to the operator in the field.
During emergency conditions, maintenance staff utilize cell phones or runners, instead of
direct radio-to-radio communication, to communicate and coordinate maintenance
activities with operations staff.
RELEVANT STANDARDS
• Efficiency efforts reduce the cost to provide the current service level or standard
• Maintain a proactive asset management program
• Maintain a culture of improving efficiency
PROBLEM
The limited number of radios issued to maintenance staff is an impediment to directly
communicating with operations staff during normal business hours, and especially during
an emergency. While mobile phones have been issued to maintenance staff,
communicating from a mobile device to a handheld radio is not possible, causing delay
and a high probability of communication breakdown.
Page 1 of 3
PROPOSED SOLUTION
Procure and distribute 114 digital handheld radios to maintenance staff located at both
treatment plants for continuous radio-to-radio communication among staff during normal
business activities and in the event of emergency conditions.
TIMING CONCERNS
As part of the Operations & Maintenance (O&M) department's transition to combined
operator and maintenance craft Area Teams in January 2017, efficient communication
plays an important role in improving the department's efficiency while addressing
maintenance activities in both treatment plants. Area Teams are expected to coordinate
planned activities during each shift across multiple plant locations. The continued
practice of relaying messages by cell phone and then on to an operator by radio will inhibit
the expected efficiency gains through direct maintenance technician to operator
communication.
RAMIFICATIONS OF NOT TAKING ACTION
A communications bottleneck will limit the efficiency of combined maintenance and
operator Area Team collaboration (messages relayed through the Operations Center)
during the normal operation of the treatment plants. During emergency operation of the
treatment plant, communication between maintenance and operations staff is severely
limited and relying on "runners" to communicate between staff members may cause
potential communication breakdown and delayed response to calls.
PRIOR COMMITTEE/BOARD ACTIONS
December 2016 - Board approved Minute Order, Item No. 7; Motorola identified as
authorized sole source vendor for the procurement of radios.
July 2014 - Administration Committee approved Minute Order, Item No. 4; Cooperative
Purchase Agreement with Motorola.
ADDITIONAL INFORMATION
Motorola digital radio handsets can be configured to provide safety features to
maintenance staff members in the field who operate individually or in remote locations.
Such features include "man down' notification, GPS & geofencing, and emergency call
features, to list a few. The optional safety features of the Motorola digital radio system
provide an additional layer of safety to staff members.
FINANCIAL CONSIDERATIONS
This request complies with authority levels of the Sanitation District's Purchasing
Ordinance. A budget transfer from Division 870 to Division 250 will be executed to fund
this procurement.
Page 2 of 3
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the
complete agenda package:
N/A
Page 3 of 3
ADMINISTRATION COMMITTEE Meeting Dare To ad.of DV
03/08,17 —
AGENDA REPORT Item Number Item Number
3 —
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance &Administrative Services
SUBJECT: FY 2017-18 ORANGE COUNTY SANITATION DISTRICT BUDGET
UPDATE
GENERAL MANAGER'S RECOMMENDATION
Information Only.
SUMMARY
For continued discussion on the development of the Orange County Sanitation District's
(Sanitation District) Proposed Update to the Fiscal Year 2017-18 Budget; detail of the
Sanitation District's revenues is provided below.
The Proposed Budget Update will be presented for adoption at the June 28, 2017 Board
of Directors meeting.
ATTACHMENT
The following attachments)are included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.coml with the complete agenda package:
• FY 2017-18 Budget Development Revenue Detail
• Reserve Summary— FY 2017-18
Page 1 of 1
FY 2017-18 Budget Development Revenue Detail
Revenue Summary (in millions)
Category 2015-16 2016-17 2017-18
Actual Adopted Adopted
Revenues:
Service Fees 283.7 286.6 291.2
Permit User Fees 12.9 11.3 11.4
Capital Facility Capacity Charge 18.0 13.5 18.1
Property Taxes 84.4 87.0 91.4
Interest 9.1 8.6 8.8
Other Revenue 33.4 28.5 25.5
Debt Proceeds 0.0 0.0 0.0
Total Revenue $441.5 $435.5 $446.4
The District has a variety of revenue sources available for operating and capital
expenses.
The major revenue sources are as follows:
• General Sewer Service Fees
Industrial Waste Permit User Fees
Capital Facilities Capacity Charges (CFCC)
• Property Taxes
• Interest Earnings
Other Miscellaneous Revenue
Debt Proceeds
2016-17 2017-18
General Service Fees— $286.6M $291.2M
User fees are ongoing fees for service paid by customers
connected to the sewer system. A property owner, or user,
does not pay user fees until connected to the sewer system
and receiving services. Once connected, a user is
responsible for his share of the system's costs, both fixed
and variable, in proportion to his demand on the system.
These fees are for both Single Family Residences (SFR)
and Multiple Family Residences (MFR).
FY 2017-18 is the last year of the most recent five-year
sewer service fee rate schedule approved by the Board.
The SFR rate (the underlying basis for all sewer rates) will
increase by 1.2 percent ($4) to $331 in FY 2017-18. These
rates are still well below the average annual sewer rate
currently being charged throughout the state.
1
2016-17 2017-18
Industrial Waste Permit User Fees— $11.3M $11AM
Fees paid by large industrial and commercial properties
owners connected to the sewer system. These fees are for
the owner's share of the system's costs, both fixed and
variable, in proportion to his demand on the system.
Since the inception of the Permit User Fee program in
1970, users of the District's system that discharge high
volumes or high strength wastewater are required to obtain
a discharge permit and pay for the full cost of service.
Capital Facilities Capacity Charges (CFCC)— $13.5M $18.1M
Capital Facilities Capacity Charge is a one-time, non-
discriminatory charge imposed at the time a building or
structure is newly connected to the District's system,
directly or indirectly, or an existing structure or category of
use is expanded or increased. This charge pays for District
facilities in existence at the time the charge is imposed, or
to pay for new facilities to be constructed in the future, that
are of benefit to the property being charged.
Property Taxes — $87.OM $91AM
The County is permitted by State law (Proposition 13)to
levy taxes at 1% of full market value (at time of purchase)
and can increase the assessed value no more than 2% per
year. The District receives a share of the basic levy
proportionate to what was received in the 1976 to 1978
period less $3.5 million, the amount that represents the
State's permanent annual diversion from special districts to
school districts that began in 1992-93. The District's share
of this revenue is dedicated for the payment of debt service.
Interest Earnings— $8.6M $8.8M
Interest earnings are generated from the investment of
accumulated reserves consisting of a cash
flow/contingency, a capital improvement, a
renewal/replacement, and a self-insurance reserve.
Other Revenue — $28.5M $25.5M
Other revenue includes $11.6 million and $3.9 from the
Irvine Ranch Water District (IRWD)for capital and O&M
charges, respectively; and $3.3 million sewer services
provided to the Santa Ana Watershed Protection Authority
(SAWPA) and the Sunset Beach Sanitary District,
respectively.
2
2016-17 2017-18
Debt Proceeds— $O.OM $O.OM
Certificates of Participation (COPS) are the District's
primary mechanism for financing capital projects. COPs
are repayment obligations based on a lease or installment
sale agreement. COPs are viewed by the State of California
as a share in an installment arrangement where the District
serves as the purchaser. No new debt issuances are
projected in the near-term.
Financing
If is necessary that the District utilize debt financing to meet its total obligations and to
meet projected construction schedules, the District uses long-term borrowing (Certificates
of Participation (COP)) for capital improvements that cannot be financed from current
revenue. Before any new debt is issued, the impact of debt service payments on total
annual fixed costs is analyzed. No new debt issuance is currently being planned.
The District Maintains its AAA Rating
The District maintains ratings of"AAA" from Standards and Poor and "AA"from Fitch. A
triple A rating is the highest obtainable for any governmental agency. In order to maintain
this rating, the District adheres to its 2001 Debt Policy and coverage ratios requirements.
This Board-adopted policy serves as the agency's guide in the management of existing
debt and in the issuance of future debt.
OCSD Has Contractual Covenants
The District does have contractual covenants within the existing COP agreements which
require minimum coverage ratios of 1.25. The minimum coverage ratio is the ratio of net
annual revenues available for debt service requirements to total annual debt service
requirements for all senior lien COP debt. The coverage ratio for senior lien COP debt
was approved at 3.05 and 3.14 for FY 2014-15 and 2015-16, respectively.
3
ORANGE COUNTY SANITATION DISTRICT— RESERVE SUMMARY— FY 2017-18
A) Next Year's Dry Period (Cash Flow Reserve)—50% of the Operating Budget $75 Million
"A cash flow reserve factor will be established to fund operations, maintenance and certificates of
participation expenses for the first half of the fiscal year, prior to the receipt of the first installment
of the property tax allocation and the sewer service user fees which are collected as a separate line
item on the property tax bill. The level of this reserve will be established as the sum of an amount
equal to six months' operations and maintenance expenses and the total of the annual debt(COP)
service payments due in August each year."
B) Operating Contingencies— 10% of Operating Budget $15 Million
"An operating contingency reserve factor will be established to provide for non-recurring
expenditures that were not anticipated when the annual budget and sewer service fees were
considered and adopted. The level of this reserve will be established at an amount equal to ten
percent of the annual operating budget."
C) Next Year's Dry Period Debt Service Req.
100% of August COP Debt Service $83 Million
"A cash flow reserve factor will be established to fund operations, maintenance and certificates of
participation expenses for the first half of the fiscal year, prior to the receipt of the first installment
of the property tax allocation and the sewer service user fees which are collected as a separate line
item on the property tax bill. The level of this reserve will be established as the sum of an amount
equal to six months operations and maintenance expenses and the total of the annual debt (COP)
service payments due in August each year."
D) Capital Improvement Reserve— 50%of average CIP balance to 2020 $118 Million
"A capital improvement reserve factor will be maintained to fund annual increments of the capital
improvement program. The long-term target is for one-half of the capital improvement program to
be funded from borrowing and for one-half to be funded from current revenues and reserves. With
this program in mind,the target level of this reserve has been established at one-half of the average
annual capital improvement program through the year 2020."
E) Debt Service Reserve—10% of the Outstanding COPS $103 Million
"Provisions of the various Certificates of Participation (COP) issues require debt service reserves
to be under the control of the Trustee for that issue. These reserve funds are not available for the
general needs of the District and must be maintained at specified levels."
F) Operating &Capital Share of Catastrophe Funds $57 Million
"Catastrophic loss, or self-insurance, reserve factor will be maintained for property damage
including fire, flood and earthquake; for general liability; and for workers' compensation. These
reserves are intended to work with purchased insurance policies, FEMA disaster reimbursements
and State disaster reimbursements." The potential infrastructure loss from a major earthquake has
been estimated at $495 million. The level of this reserve has been set to fund the District's non-
reimbursed costs, estimated to be $57 million.
G) Replacement and Refurbishment—2% Per Year $67Million
"A capital replacement/renewal reserve policy has been established to provide thirty percent of the
funding to replace or refurbish the current collection and treatment and disposal facilities at the end
of their useful economic lives. The current replacement value of these facilities is estimated to be
$6.2 billion. The initial reserve level was established at $50 million, which will be augmented by
interest earnings and a small portion of the annual sewer userfees,to meet projected needs through
the year 2030."
TOTAL $518 Million
ADMINISTRATION COMMITTEE Meeting Dare To ad.ofDir.
03/08,17 —
AGENDA REPORT Item Number Item Number
4 —
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Celia Chandler, Director of Human Resources
SUBJECT: STATUS OF 2017-18 PROPERTY-LIABILITY INSURANCE RENEWALS
GENERAL MANAGER'S RECOMMENDATION
Information Only.
BACKGROUND
The Risk Management Division of Human Resources (Risk Management) provides the
Administration Committee an annual status update regarding the renewals of the Orange
County Sanitation District's (Sanitation District) major insurance policies for the upcoming
year. Risk Management and the operational insurance broker begin the process of
renewal each January, and final quotes are typically received in June, shortly before the
beginning of the new fiscal year.
The Sanitation District's budget provides funds for the renewal of the following five major
insurances for Sanitation District operations:
1) Excess General Liability Insurance
2) Excess Workers' Compensation
3) All-Risk Property and Flood insurance
4) Boiler& Machinery insurance
5) Earthquake Insurance
The Sanitation District's operational insurance broker will be present at the March
Administration Committee meeting to give a short informational presentation about this
year's insurance outlook.
RELEVANT STANDARDS
Protection of Orange County Sanitation District assets
TIMING CONCERNS
Current insurance expires June 30, 2017.
RAMIFICATIONS OF NOT TAKING ACTION
None at this time because this is informational only; however, action must be taken before
June 30, 2017 or the Sanitation District's insurance will lapse.
Page 1 of 4
PRIOR COMMITTEE/BOARD ACTIONS
May 2016 -The Board approved renewal of the above policies for the period July 1, 2016
through June 30, 2017.
ADDITIONAL INFORMATION
1) Excess General Liability Insurance Program
The Sanitation District's Excess General Liability Insurance Program is currently
provided through the California Municipal Excess Liability Program (CAMEL) and its
sister program, the Alliant National Municipal Liability Program (ANML). The
Sanitation District has participated in the CAMEL program since FY 1996-97.
This program currently provides the Sanitation District with a $40 million dollar policy
of comprehensive coverage for municipal liability, bodily injury and property damage,
and personal injury. The program was structured to also include Employment
Practices and Public Officials Errors & Omissions coverage. The $40 million dollar
coverage has a self-insured deductible of $500,000. Since 1997, the Employment
Practices portion of coverage has been enhanced from a $2 million dollar sub-limit to
the full policy limit of$40 million dollars.
The premium cost, approved by the Board (May 2016), forthe current fiscal year, July
2016 June 2017, was $414,927.
2) Excess Workers' Compensation Insurance
The Excess Workers' Compensation insurance coverage is with the California State
Association of Counties Excess Insurance Authority (CSAC EIA). The Sanitation
District has participated in this program or its predecessor since 2003. The Excess
Workers' Compensation program currently provides "Statutory" (unlimited) coverage
with a self-insured retention (SIR), or deductible, of$1 million dollars.
The use of Excess Workers' Compensation Insurance dates back to the late 1980's.
The renewal of the Excess Workers' Compensation Insurance for the period
July 1, 2016 through June 30, 2017 was approved by the Board (May 2016) and was
at an estimated premium of$208,825 based on the estimated 2016-17 payroll. Since
the premium itself is based on final payroll, the Sanitation District will not know the
exact final premium until the year is over.
3) All-Risk Property and Flood Insurance
The All-Risk Property and Flood Insurance Program (Property Insurance) provides for
comprehensive coverage for much of the Sanitation District's real and personal
property regarding virtually all perils including fire, flood, and business interruption.
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Current Property Insurance limits are $1 billion dollars for most perils other than flood
and earthquakes, and $300 million dollars for flood, with many sub-limits for various
situations. In order to reach $1 billion dollars in limits, the broker had to arrange for
more than a dozen different insurers. The SIR is $250,000 per occurrence for most
types of losses.
Since the late 1990's, the Property Insurance has been with a nationwide joint
purchase property insurance program called Public Entity Property Insurance
Program (PEPIP), one of the word's largest property programs. It is important to note
that this joint purchase property insurance program offers the purchasing power of
numerous large public entities without the pooling or sharing of coverage or losses.
The renewal of All-Risk Property and Flood Insurance (excluding Boiler& Machinery)
for the period July 1, 2016 through June 30, 2017 was approved by the Board (May
2016) at a premium of$641,956.23.
4) Boiler& Machinery Insurance
The Boiler& Machinery insurance program provides comprehensive coverage for loss
caused by machinery breakdown and explosion of steam boilers or other covered
process equipment, including damage to the equipment itself and damage to other
property caused by covered accident.
The current Boiler& Machinery insurance program provides coverage of$100 million
dollars per occurrence with deductibles ranging from $25,000 to $350,000 for losses
caused by covered machinery breakdown (e.g., motors, steam turbines, digesters, co-
gen engines). Damages to the equipment, as well as damages to other property and
improvements caused by the machinery breakdown, are covered by the boiler &
machinery insurance. This program augments the Sanitation District's all-risk property
insurance that covers perils such as fire and flood.
The renewal of the Boiler& Machinery Insurance Program was approved by the Board
(May 2016)for the period July 1, 2016 through June 30, 2017 $23,857.
5) Earthquake Insurance
The Sanitation District previously carried earthquake insurance as part of its Property
Insurance, but in the last 15 years earthquake insurance proved difficult to obtain or
not cost-effective. The Sanitation District asked its insurance broker each year to
survey the market to see if rates have changed. Finally, in 2015 a plan was created
to insure several key Sanitation District structures identified by Engineering, thus
keeping the cost in line. The insurance is a high deductible plan with a limit of $25
million dollars in total.
The cost of the Earthquake Insurance was approved by the Board (May 2016) for
fiscal year 2016-17 for nine key structures at $79,448 dollars.
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ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the
complete agenda package:
N/A
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ADMINISTRATION COMMITTEE neebng Date To ad.of Dir.
03,08,17 --
AGENDA REPORT Item Number Item Number
s
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Ed Torres, Director of Operations & Maintenance
SUBJECT: ORANGE COUNTY SANITATION DISTRICT COLLECTIONS,
OPERATIONS AND MAINTENANCE OF OCSD FACILITIES
GENERAL MANAGER'S RECOMMENDATION
Information Only.
BACKGROUND
Each month, staff provides an informational presentation on topics of interest to the Board
of Directors. This month's topic: Orange County Sanitation District operations and
maintenance of collection systems, treatment plants and resource recovery.
RELEVANT STANDARDS
• 24/7/365 treatment plant reliability
• Operate and maintain facilities to minimize impacts on surrounding communities,
including odor, noise, and lighting
• Meet volume and water quality needs to support GW RS System
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (MD .ocsd.corn with the
complete agenda package:
N/A
Page 1 of 1
ORANGE COUNTY SANITATION DISTRICT
Agenda
Terminology Glossary
Glossary of Terms and Abbreviations
AQMD Air Quality Management District
ASCE American Society of Civil Engineers
BOD Biochemical Oxygen Demand
CARB California Air Resources Board
CASA California Association of Sanitation Agencies
CCTV Closed Circuit Television
CEQA California Environmental Quality Act
CIP Capital Improvement Program
CRWQCB California Regional Water Quality Control Board
CWA Clean Water Act
CWEA California Water Environment Association
EIR Environmental Impact Report
EMT Executive Management Team
EPA U.S. Environmental Protection Agency
FOG Fats, Oils, and Grease
gpd Gallons per day
GWR System Groundwater Replenishment System (also called GWRS)
ICS Incident Command System
IERP Integrated Emergency Control Plan
LOS Level of Service
MGD Million gallons per day
NACWA National Association of Clean Water Agencies
NPDES National Pollutant Discharge Elimination System
NWRI National Water Research Institute
O&M Operations and Maintenance
OCCOG Orange County Council of Governments
OCHCA Orange County Health Care Agency
OCSD Orange County Sanitation District
OCWD Orange County Water District
COBS Ocean Outfall Booster Station
OSHA Occupational Safety and Health Administration
PCSA Professional Consultant Services Agreement
POTW Publicly Owned Treatment Works
ppm Parts per million
PSA Professional Services Agreement
RFP Request For Proposal
Glossary of Terms and Abbreviations
RWQCB Regional Water Quality Control Board
SARFPA Santa Ana River Flood Protection Agency
SARI Santa Ana River Inceptor
SARWQCB Santa Ana Regional Water Quality Control Board
SAWPA Santa Ana Watershed Project Authority
SCADA Supervisory Control and Data Acquisition system
SCAP Southern California Alliance of Publicly Owned Treatment Works
SCAQMD South Coast Air Quality Management District
SOCWA South Orange County Wastewater Authority
SRF State Revolving Fund
SSMP Sanitary Sewer Management Plan
SSO Sanitary Sewer Overflow
SWRCB State Water Resources Control Board
TDS Total Dissolved Solids
TMDL Total Maximum Daily Load
TSS Total Suspended Solids
WDR Waste Discharge Requirements
WEF Water Environment Federation
WERF Water Environment Research Foundation
WIFIA Water Infrastructure Financing and Innovation Act
Activated-sludge process — A secondary biological wastewater treatment process where bacteria
reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved
nutrients in the wastewater.
Benthos—The community of organisms, such as sea stars, worms, and shrimp, which live on, in, or
near the seabed, also known as the benthic zone.
Biochemical Oxygen Demand (BOD) —The amount of oxygen used when organic matter undergoes
decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in
water.
Blogas — A gas that is produced by the action of anaerobic bacteria on organic waste matter in a
digester tank that can be used as a fuel.
Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the
wastewater treatment process. This high-quality product can be recycled as a soil amendment on
farm land or further processed as an earth-like product for commercial and home gardens to improve
and maintain fertile soil and stimulate plant growth.
Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets.
Also includes treatment improvements, additional capacity, and projects for the support facilities.
Coliform bacteria —A group of bacteria found in the intestines of humans and other animals, but also
occasionally found elsewhere used as indicators of sewage pollution. E. coil are the most common
bacteria in wastewater.
Glossary of Terms and Abbreviations
Collections system — In wastewater, it is the system of typically underground pipes that receive and
convey sanitary wastewater or storm water.
Certificate of Participation (COP) — A type of financing where an investor purchases a share of the
lease revenues of a program rather than the bond being secured by those revenues.
Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic
wastewater contaminants.
Dilution to Threshold (D/T) — the dilution at which the majority of the people detect the odor
becomes the D/T for that air sample.
Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane,
nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse
effect").
Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively
responds to Southern California's current and future water needs. This joint project between the
Orange County Water District and the Orange County Sanitation District provides 70 million gallons a
day of drinking quality water to replenish the local groundwater supply.
Levels of Service(LOS)—Goals to support environmental and public expectations for performance.
NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been
found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide
with extra ultra-violet treatment.
National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water
Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S.
Environmental Protection Agency (EPA). NBP is committed to developing and advancing
environmentally sound and sustainable biosolids management practices that go beyond regulatory
compliance and promote public participation in order to enhance the credibility of local agency
biosolids programs and improved communications that lead to public acceptance.
Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility.
Publicly-owned Treatment Works(POTW)— Municipal wastewater treatment plant.
Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million
gallons per day of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean
for disposal, after treatment.
Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial
wastewater. Combined sewers carry both wastewater and urban run-off.
South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that
develops plans and regulations designed to achieve public health standards by reducing emissions
from business and industry.
Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process,
where bacteria and other microorganisms consume dissolved nutrients in wastewater.
Sludge— Untreated solid material created by the treatment of wastewater.
Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater.
Glossary of Terms and Abbreviations
Trickling filter — A biological secondary treatment process in which bacteria and other
microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in
wastewater as it trickles over them.
Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm
drains, rivers, lakes, and oceans.
Wastewater—Any water that enters the sanitary sewer.
Watershed —A land area from which water drains to a particular water body. OCSD's service area is
in the Santa Ana River Watershed.