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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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1.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. Page 2 of 4 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. Page 3 of 4 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 4 of 4 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.