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HomeMy WebLinkAbout03-13-2019 Administration Committee Meeting Agenda03/13/2019 Administration Committee Agenda Page 1 of 2 Orange County Sanitation District Regular Meeting of the ADMINISTRATION COMMITTEE Wednesday, March 13, 2019 5:00 P.M. Administration Building 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. 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1.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 13, 2019 Administration Committee Meeting. 2. INDUSTRIAL HYGIENE SERVICES (Celia Chandler) RECOMMENDATION: Recommend to the Board of Directors to: Approve a Professional Services Agreement for Arcadis U.S., Inc. to provide Industrial Hygiene Services, Specification No. S-2018-1008, for a total amount not to exceed $500,000 for a one-year period beginning May 1, 2019 through April 30, 2020, with four (4) one-year renewal options. NON-CONSENT: None. 03/13/2019 Administration Committee Agenda Page 2 of 2 INFORMATION ITEMS: 3. ORANGE COUNTY SANITATION DISTRICT OPERATIONS & MAINTENANCE DEPARTMENT PRESENTATION (Rob Thompson) Each month, staff provides an informational presentation on topics of interest to the Board of Directors. This month’s topic: Orange County Sanitation District wastewater treatment basics. 4. FY 2018-19 AND FY 2019-20 ORANGE COUNTY SANITATION DISTRICT BUDGET UPDATE (Lorenzo Tyner) Staff will present an update of the Orange County Sanitation District’s Proposed Fiscal Year 2019-20 Budget. Detail of the Sanitation District’s revenues and reserves will be discussed. DEPARTMENT HEAD REPORTS: OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: The next Administration Committee meeting is scheduled for Wednesday, April 10, 2019 at 5:00 p.m. 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. Agenda Posting: 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. Agenda 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, MMC Clerk of the Board (714) 593-7433 klore@ocsd.com For any questions on the agenda, Committee members may contact staff at: General Manager James Herberg (714) 593-7300 jherberg@ocsd.com Assistant General Manager Lorenzo Tyner (714) 593-7550 ltyner@ocsd.com Assistant General Manager Rob Thompson (714) 593-7310 rthompson@ocsd.com Director of Environmental Services VACANT Director of Human Resources Celia Chandler (714) 593-7202 cchandler@ocsd.com 02/13/2019 Administration Committee Minutes Page 1 of 6 MINUTES OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, February 13, 2019 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 13, 2019 at 5:01 p.m. in the Administration Building of the Orange County Sanitation District. Chairman Wanke led the Flag Salute. A quorum was declared present as follows: COMMITTEE MEMBERS PRESENT: Chad Wanke, Chairman Richard Murphy, Vice-Chairman James Ferryman Cecilia Iglesias (Alternate) Peter Kim Mark Murphy (Alternate) Steve Nagel Andrew Nguyen Glenn Parker Erik Peterson David Shawver, Board Chairman John Withers, Board Vice-Chairman COMMITTEE MEMBERS ABSENT: Donald P. Wagner STAFF PRESENT: Jim Herberg, General Manager Rob Thompson, Assistant General Manager Lorenzo Tyner, Assistant General Manager Celia Chandler, Director of Human Resources Kelly Lore, Clerk of the Board Jennifer Cabral Rhea De Guzman Al Garcia Ddaze Phuong Rob Michaels Kathy Millea Adam Nazaroff Tyler Ramirez John Swindler Thomas Vu OTHERS PRESENT: Brad Hogin, General Counsel Bill Dennehy, Chandler Asset Management PUBLIC COMMENTS: None. REPORTS: Chair Wanke did not provide a report. General Manager Jim Herberg reminded the Committee of the upcoming Special Board meeting on February 20, 2019 at 3:00 p.m. for the purpose of Board Orientation. He also introduced the new Sanitation District Controller, Wally Ritchie. ITEM NO. 1 02/13/2019 Administration Committee Minutes Page 2 of 6 Mr. Herberg introduced Assistant General Manager Rob Thompson who provided a brief update on a minor spill at the Sanitation District’s Main Street Pump Station in Irvine. Mr. Thompson stated that staff had contained the spill and was in the process of assessing the situation and necessary repairs. He estimated that approximately 20 gallons entered the storm drain. Mr. Thompson stated he is working closely with IRWD to reduce their flow and has notified all affected agencies of lane closures and other impacts. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the December 11, 2018 Administration Committee Meeting. AYES: Ferryman, Kim, R. Murphy, Nagel, Nguyen, Parker, Peterson, Shawver, Wanke and Withers NOES: None ABSTENTIONS: M. Murphy (Alternate) ABSENT: Iglesias (Alternate) and Wagner 2. DESIGNATION OF APPLICANT’S AGENT FOR DISASTER RELIEF (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 19-XX, entitled, “A Resolution of the Board of Directors of the Orange County Sanitation District authorizing the General Manager, or either one of the Assistant General Managers, to Execute State Office of Emergency Services and/or Federal Emergency Management Agency Documents and Relevant Permit Applications for Present and Future Disaster Relief Applications; and Repealing Resolution No. OCSD 16-08.” AYES: Ferryman, Kim, M. Murphy (Alternate), R. Murphy, Nagel, Nguyen, Parker, Peterson, Shawver, Wanke and Withers NOES: None ABSTENTIONS: None ABSENT: Iglesias (Alternate) and Wagner 3. ENGINEERING AND GIS CONSULTING SERVICES SPECIFICATION NO. CS-2018-982BD (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Award a Professional Consultant Services Agreement to Psomas for Engineering and Consulting services, Specification No. CS-2018-982BD, 02/13/2019 Administration Committee Minutes Page 3 of 6 for a total amount not to exceed $319,080; and B. Approve a contingency of $31,908, (10%). AYES: Ferryman, Kim, M. Murphy (Alternate), R. Murphy, Nagel, Nguyen, Parker, Peterson, Shawver, Wanke and Withers NOES: None ABSTENTIONS: None ABSENT: Iglesias (Alternate) and Wagner 4. DEFERRED COMPENSATION ADVISORY COMMITTEE’S NOTIFICATION OF VENDOR SELECTION (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: A. Award a Professional Consultant Services Agreement to NFP Retirement, Inc. (NFP) to provide Deferred Compensation Program 457(b) Investment Consulting Services, Specification No. CS-2018-973-R, for a term of three years, in an amount not to exceed $160,000 for the period beginning April 1, 2019 through March 31, 2022, with two one-year renewal options; and B. Approve a contingency of $16,000 (10%) AYES: Ferryman, Kim, M. Murphy (Alternate), R. Murphy, Nagel, Nguyen, Parker, Peterson, Shawver, Wanke and Withers NOES: None ABSTENTIONS: None ABSENT: Iglesias (Alternate) and Wagner 5. 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: A. Receive and file Orange County Sanitation District purchases made under the General Manager’s authority for the period of October 1, 2018 to December 31, 2018; and B. Approve the following additions to the pre-approved OEM Sole Source List for the period of October 1, 2018 to December 31, 2018: • POLYCHEM (BRENTWOOD) - Sludge Collection System Parts and Components • HYDRO GATE - Weir Gates and Parts AYES: Ferryman, Kim, M. Murphy (Alternate), R. Murphy, Nagel, Nguyen, Parker, Peterson, Shawver, Wanke and Withers NOES: None 02/13/2019 Administration Committee Minutes Page 4 of 6 ABSTENTIONS: None ABSENT: Iglesias (Alternate) and Wagner 6. MID-YEAR CONSOLIDATED FINANCIAL REPORT FOR THE PERIOD ENDED DECEMBER 31, 2018 (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District Mid-Year Financial Report for the period ended December 31, 2018. AYES: Ferryman, Kim, M. Murphy (Alternate), R. Murphy, Nagel, Nguyen, Parker, Peterson, Shawver, Wanke and Withers NOES: None ABSTENTIONS: None ABSENT: Iglesias (Alternate) and Wagner Committee Chair Wanke announced that the Information items would be heard prior to the Non-Consent items. INFORMATION ITEMS: Alternate Director Cecilia Iglesias arrived at the meeting at 5:13 p.m. during the informational presentations. 9. RESERVES AND INVESTMENTS POLICIES (Lorenzo Tyner) Assistant General Manager Lorenzo Tyner provided a PowerPoint presentation regarding the Sanitation District’s Reserves and Investments, focusing on the seven non-discretionary and discretionary reserve criteria. He then provided information on the three investment objectives of the District. 10. INVESTMENT PERFORMANCE RESULTS (Lorenzo Tyner) Mr. Tyner introduced Bill Dennehy, Senior Portfolio Manager from Chandler Asset Management, who provided a PowerPoint presentation which included an overview of their firm, an economic update, and our account profile. Mr. Dennehy and Mr. Tyner responded to questions from the Committee. NON-CONSENT: 7. TRANSFER 8.5 MILES OF SEWERS TO THE CITY OF SANTA ANA (Lorenzo Tyner) Mr. Tyner provided a brief introduction to the item, stating that this item was approved by the City of Santa at their recent Council meeting. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: 02/13/2019 Administration Committee Minutes Page 5 of 6 A. Approve a Quitclaim Sewer Transfer Agreement between Orange County Sanitation District and the City of Santa Ana; B. Approve Quitclaim Deed to the City of Santa Ana transferring ownership and associated property rights for sewers; and C. Authorize a transfer of $23,229,000 to the City of Santa Ana for projected necessary repairs due to the age and condition of the facilities. AYES: Ferryman, Iglesias (Alternate), Kim, M. Murphy (Alternate), R. Murphy, Nagel, Nguyen, Parker, Peterson, Shawver, Wanke and Withers NOES: None ABSTENTIONS: None ABSENT: Wagner 8. CONSIDERATION OF BUDGET ASSUMPTIONS AND BUDGET CALENDAR FOR PREPARATION OF THE FY 2019-20 BUDGET UPDATE (Lorenzo Tyner) Mr. Tyner introduced Controller Wally Ritchie who provided a PowerPoint presentation that outlined budget development assumptions, detailing: rates, plant operations, staffing level expectations, Capital Improvement Program, debt financing, budget summary, and key meeting dates for the budget preparation. Mr. Ritchie and Mr. Tyner responded to questions from the Committee regarding the useage of the reserves. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Approve the FY 2019-20 budget assumptions and direct staff to incorporate these parameters in preparing the FY 2019-20 budget update. AYES: Ferryman, Kim, M. Murphy (Alternate), R. Murphy, Nagel, Nguyen, Parker, Peterson, Shawver, Wanke and Withers NOES: None ABSTENTIONS: Iglesias (Alternate) ABSENT: Wagner CLOSED SESSION: (1) CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section 54956.8) The Board convened in closed session at 5:45 p.m. to discuss one item. Confidential minutes of the Closed Sessions have been prepared in accordance with the above Government Code Section and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Session Meetings. RECONVENED IN REGULAR SESSION: The Board reconvened in regular session at 5:54 p.m. 02/13/2019 Administration Committee Minutes Page 6 of 6 CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: General Counsel Brad Hogin did not provide a report. DEPARTMENT HEAD REPORTS: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Board Chair Shawver acknowledged the appointment of Director Richard Murphy as the Administration Committee Vice-Chair. He also reminded the Committee to attend the Board Orientation next week. ADJOURNMENT: Committee Chairman Wanke declared the meeting adjourned at 5:56 p.m. to the next regularly scheduled meeting of Wednesday, March 13, 2019 at 5:00 p.m. Submitted by: _____________________ Kelly A. Lore, MMC Clerk of the Board Page 1 of 4 ADMINISTRATION COMMITTEE Meeting Date 03/13/19 To Bd. of Dir. 03/27/19 AGENDA REPORT Item Number 2 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: INDUSTRIAL HYGIENE SERVICES GENERAL MANAGER'S RECOMMENDATION Approve a Professional Services Agreement for Arcadis U.S., Inc. to provide Industrial Hygiene Services, Specification No. S-2018-1008, for a total amount not to exceed $500,000 for a one-year period beginning May 1, 2019 through April 30, 2020, with four (4) one-year renewal options. BACKGROUND The Orange County Sanitation District (Sanitation District) utilizes a third-party industrial hygiene services vendor to conduct chemical exposure monitoring and lead and asbestos surveys. Under the Occupational Safety & Health Administration (OSHA) law, employers are required to provide a safe workplace for employees and to regularly monitor the workplace for recognized hazards. The required monitoring and assessments are ordinarily achieved through this service contract and are used for Capital Improvement Projects (CIP) and organization-wide, as needed. In March 2014, the Sanitation District’s Board of Directors approved entering into a contract with ARCADIS U.S. for Industrial Hygiene Services for a one-year period, with four one-year renewal options. The final renewal option will expire April 13, 2019. The Risk Management Division solicited bids to evaluate the list of vendors available to provide industrial hygiene services and the bids were evaluated by a selection committee through the request for proposal (RFP) process and in accordance with the Sanitation District’s procurement process. RELEVANT STANDARDS • Commitment to safety & reducing risk in all operations • Meet OSHA training requirements PROBLEM OSHA requires that employers assess the workplace for hazards periodically. The hazards include, but are not limited to, asbestos, lead, mold, and airborne chemicals. In addition, OSHA requires surveys of structures prior to rehabilitation or demolition. The surveys may indicate the need for hazardous materials abatement and waste Page 2 of 4 characterization. OSHA also requires environmental assessments on property that is purchased to identify any environmental liabilities associated with the purchase. PROPOSED SOLUTION Contracting with an industrial hygiene services vendor will provide the expertise needed to ensure that required assessment and related permitting and reporting is conducted periodically and during CIP projects. These firms provide expertise in industrial hygiene monitoring, asbestos and mold inspection, and environmental geology. TIMING CONCERNS The existing industrial hygiene services contract will lapse on April 13, 2019. Board approval is needed to ensure these services continue to ensure compliance with OSHA. RAMIFICATIONS OF NOT TAKING ACTION If action is not taken as proposed, the ability to conduct industrial hygiene surveys for rehabilitation or demolition projects containing hazardous materials will be delayed since the assessment must be conducted prior to beginning work. The Sanitation District relies on the expertise of the industrial hygiene services vendor to conduct the assessments and ensure compliance with OSHA. PRIOR COMMITTEE/BOARD ACTIONS March 2014 - Approved Industrial Hygiene Services Specification No. S-2013-590BD. ADDITIONAL INFORMATION The evaluation and selection process of the recommended firm is based on procedures pursuant to California Government Code requiring the Sanitation District to select “the best qualified firm” for services and to negotiate a “fair and reasonable” fee with that firm for those services. A Request for Proposal (RFP) was issued on November 29, 2018 via PlanetBids and closed on January 3, 2019. The Sanitation District received eight (8) responsive proposals. The estimate for this procurement was $500,000. The following is a list of the firms that submitted a responsive proposal: Company Name A-Tech Consulting, Inc. Aurora Industrial Hygiene Bureau Veritas North America, Inc. Global Environmental Network, Inc. Health Science Associates Arcadis U.S., Inc. Page 3 of 4 Ninyo & Moore Terracon Consultants, Inc. EVALUATION: On February 6, 2019, the buyer met with pre-selected members of the evaluation committee to discuss the policies and procedures for the evaluation process. The members of the evaluation committee consisted of the following staff: NAME TITLE Lucien Mauge Safety & Health Specialist Jeremy Stone Sr. Safety & Health Representative Rodney Collins Safety & Health Supervisor John Frattali (Advisor / Non-scoring) Sr. Safety & Health Representative Individual scoring was the chosen method of evaluation for this procurement. Members of the committee performed an independent review of the proposals and later met as a group with the buyer to discuss their preliminary scores and discuss any questions/concerns they had. Proposals were evaluated based on the following criteria: CRITERION WEIGHT Qualifications & Experience of Firm 30 Proposed Staffing & Project Organization 20 Work Plan 20 Oral Interviews (Optional-Forgone) 10 Cost and Price 20 All proposals were accompanied by a sealed cost proposal, none of which were opened until all proposals were evaluated. Below are the proposal evaluation results: Evaluator Arcadis U.S., Inc. Bureau Veritas North America, Inc. Health Science Associates Aurora Industrial Hygiene 1 770 626.66 645.32 578.48 2 760 631.66 630.32 593.48 3 725 601.66 530.32 543.48 TOTAL WEIGHTED SCORE (Points)/ RANKING 751.67/1 619.99/2 601.99/3 571.81/4 Evaluator Ninyo & Moore Terracon Consultants, Inc. Global Environmental Network, Inc. A-Tech Consulting, Inc. 1 612.50 544.78 513.36 503.06 2 597.50 604.78 603.36 523.06 Page 4 of 4 3 492.50 504.78 453.36 473.06 TOTAL WEIGHTED SCORE (Points)/ RANKING 567.50/5 551.44/6 523.36/7 499.73/8 Based on these results, staff recommends awarding the Contract to Arcadis U.S., Inc. The term of this Contract will begin May 1, 2019 through April 30, 2020 with four (4) optional one-year renewals. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. (Line item: Section 5, Page 7). Project contingency funds will not be used for this agreement. Date of Approval Contract Amount Contingency 03/27/2019 $500,000 N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Draft Professional Services Agreement Orange County Sanitation District 1 of 10 Specification No. S-2018-1008 Version 032018 SERVICE CONTRACT Industrial Hygiene Services Specification No. S-2018-1008 THIS CONTRACT is made and entered into as of the date fully executed below, by and between Orange County Sanitation District, with a principal place of business at 10844 Ellis Avenue, Fountain Valley, CA 92708 (hereinafter referred to as "OCSD") and [COMPANY] with a principal place of business at [ADDRESS] (hereinafter referred to as "Contractor") collectively referred to as the “Parties”. W I T N E S S E T H WHEREAS, OCSD desires to temporarily retain the services of Contractor for various industrial hygiene studies “Services” as described in Exhibit “A”; and WHEREAS, OCSD has chosen Contractor to conduct Services in accordance with Ordinance No. OCSD-52; and WHEREAS, as of the date fully executed below, the Contracts, Purchasing and Materials Management Manager authorized execution of this Contract between OCSD and Contractor; and WHEREAS, Contractor is qualified by virtue of experience, training, and expertise to accomplish such Services, NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agree as follows: 1. Introduction 1.1 This Contract and all exhibits hereto (called the "Contract") is made by OCSD and the Contractor. The terms and conditions herein exclusively govern the purchase of Services as described in Exhibit “A”. 1.2 Exhibits to this Contract are incorporated by reference and made a part of this Contract as though fully set forth at length herein. Exhibit “A” Scope of Work Exhibit “B” Proposal Exhibit “C” Acknowledgement of Insurance Requirements Exhibit “D” OCSD Safety Standards Exhibit “E” Not Used Exhibit “F” Human Resources Policies 1.3 In the event of any conflict or inconsistency between the provisions of this Contract and any of the provisions of the exhibits hereto, the provisions of this Contract shall in all respects govern and control. 1.4 The provisions of this Contract may be amended or waived only by a writing executed by authorized representatives of both Parties hereto. Orange County Sanitation District 2 of 10 Specification No. S-2018-1008 Version 032018 1.5 The various headings in this Contract are inserted for convenience only and shall not affect the meaning or interpretation of this Contract or any paragraph or provision hereof. 1.6 The term “days”, when used in the Contract, shall mean calendar days, unless otherwise noted as business days. 1.7 OCSD holidays (non-working days) are as follows: New Year’s Day, Lincoln’s Birthday, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, and Christmas Day. 1.8 Work Hours: The work required under this Contract may include normal business hours, evenings, and weekends. OCSD will not pay for travel time. 1.9 Contractor shall provide OCSD with all required premiums and/or overtime work at no charge beyond the price provided under “Compensation” below. 1.10 Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by Contractor as a result of work performed in anticipation of purchases of said services by OCSD. 2. Compensation Compensation to be paid by OCSD to Contractor for the Services provided under this Contract shall be a total amount not exceed [Total Written Amount] Dollars ($ Amount). 3. California Department of Industrial Relations (DIR) Registration and Record of Wages 3.1 To the extent Contractor’s employees and/or its subcontractors who will perform Work during the design and preconstruction phases of a construction contract for which Prevailing Wage Determinations have been issued by the DIR and as more specifically defined under Labor Code Section 1720 et seq, Contractor and its subcontractors shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section 1771.4, the work is subject to compliance monitoring and enforcement by the DIR. 3.2 The Contractor and its subcontractors shall maintain accurate payroll records and shall comply with all the provisions of Labor Code Section 1776, and shall submit payroll records to the Labor Commissioner pursuant to Labor Code 1771.4(a)(3). Penalties for non-compliance with the requirements of Section 1776 may be deducted from progress payments per Section 1776. 3.3 Pursuant to Labor Code Section 1776, the Contractor and its subcontractors shall furnish a copy of all certified payroll records to OCSD and/or general public upon request, provided the public request is made through OCSD, the Division of Apprenticeship Standards or the Division of Labor Standards Enforcement of the Department of Industrial Relations. 3.4 The Contractor and its subcontractors shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulation Section 16461(e). Orange County Sanitation District 3 of 10 Specification No. S-2018-1008 Version 032018 4. Payments and Invoicing 4.1 Contractor shall be paid monthly by OCSD upon approval of invoices by OCSD’s Project Manager or designee, for Services rendered as required in Exhibit “A”. OCSD, at its sole discretion, shall be the determining party as to whether the Services have been satisfactorily completed. 4.2 Invoices shall be emailed by Contractor to OCSD Accounts Payable at APStaff@OCSD.com and “INVOICE” with the Purchase Order Number and Specification No. S-2018-1008 shall be referenced in the subject line. 5. Audit Rights Contractor agrees that, during the term of this Contract and for a period of three (3) years after its termination, OCSD shall have access to and the right to examine any directly pertinent books, documents, and records of Contractor relating to the invoices submitted by Contractor pursuant to this Contract. 6. Scope of Work Subject to the terms of this Contract, Contractor shall perform the Services identified in Exhibit “A”. Contractor shall perform said Services in accordance with generally accepted industry and professional standards. 7. Modifications to Scope of Work Requests for modifications to the Scope of Work hereunder can be made by OCSD at any time. All modifications must be made in writing and signed by both Parties. 8. Contract Term The Services provided under this Agreement shall be for the period of one (1) year commencing on April 15, 2019 and continuing through April 14, 2020. 9. Renewals 9.1 OCSD may exercise the option to renew this Contract for up to four (4) one-year periods based upon the criteria set forth in Exhibit “A”, under the terms and conditions contained herein. OCSD shall make no obligation to renew nor give reason if it elects not to renew. 9.2 This Contract may be renewed by OCSD Purchase Order. 10. Extensions The term of this Contract may be extended only by written instrument signed by both Parties. 11. Performance Time is of the essence in the performance of the provisions hereof. 12. Termination 12.1 OCSD reserves the right to terminate this Contract for its convenience, with or without cause, in whole or in part, at any time, by written notice from OCSD of intent to terminate. Upon receipt of a termination notice, Contractor shall immediately discontinue all work under this Contract (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Contractor for work performed (cost and fee) to the date of termination. Contractor expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Contract. Such Orange County Sanitation District 4 of 10 Specification No. S-2018-1008 Version 032018 notice of termination shall terminate this Contract and release OCSD from any further fee, cost or claim hereunder by Contractor other than for work performed to the date of termination. 12.2 OCSD reserves the right to terminate this Contract immediately upon OCSD’s determination that Contractor is not complying with the Scope of Work requirements, if the level of service is inadequate, or any other default of this Contract. 12.3 OCSD may also immediately cancel for default of this Contract in whole or in part by written notice to Contractor:  if Contractor becomes insolvent or files a petition under the Bankruptcy Act; or  if Contractor sells its business; or  if Contractor breaches any of the terms of this Contract; or  if total amount of compensation exceeds the amount authorized under this Contract. 12.4 All OCSD property in the possession or control of Contractor shall be returned by Contractor to OCSD upon demand, or at the termination of this Contract, whichever occurs first. 13. Insurance Contractor and all subcontractors shall purchase and maintain, throughout the life of this Contract and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements (attached hereto and incorporated herein as Exhibit “C“). Contractor shall not commence work under this Contract until all required insurance is obtained in a form acceptable to OCSD, nor shall Contractor allow any subcontractor to commence service pursuant to a subcontract until all insurance required of the subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Contract. 14. Bonds Not Used. 15. Indemnification and Hold Harmless Provision Contractor shall assume all responsibility for damages to property and/or injuries to persons, including accidental death, which may arise out of or be caused by Contractor's services under this Contract, or by its subcontractor(s) or by anyone directly or indirectly employed by Contractor, and whether such damage or injury shall accrue or be discovered before or after the termination of the Contract. Except as to the sole active negligence of or willful misconduct of OCSD, Contractor shall indemnify, protect, defend and hold harmless OCSD, its elected and appointed officials, officers, agents and employees, from and against any and all claims, liabilities, damages or expenses of any nature, including attorneys' fees: (a) for injury to or death of any person or damage to property or interference with the use of property, arising out of or in connection with Contractor's performance under the Contract, and/or (b) on account of use of any copyrighted or uncopyrighted material, composition, or process, or any patented or unpatented invention, article or appliance, furnished or used under the Contract, and/or (c) on account of any goods and services provided under this Contract. This indemnification provision shall apply to any acts or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of Contractor of or anyone employed by or working under Contractor. To the maximum extent permitted by law, Contractor's duty to defend shall apply whether or not such claims, allegations, lawsuits, or proceedings have merit or are meritless, or which involve claims or allegations that any of Orange County Sanitation District 5 of 10 Specification No. S-2018-1008 Version 032018 the parties to be defended were actively, passively, or concurrently negligent, or which otherwise assert that the parties to be defended are responsible, in whole or in part, for any loss, damage, or injury. Contractor agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD. 16. OCSD Safety Standards OCSD requires Contractor and its subcontractor(s) to follow and ensure their employees follow all Federal, State, and local regulations as well as OCSD Safety Standards while working at OCSD locations. If during the course of the Contract it is discovered that OCSD Safety Standards do not comply with Federal, State, or local regulations, then the Contractor is required to follow the most stringent regulatory requirement at no additional cost to OCSD. Contractor and all of its employees and subcontractors, shall adhere to all applicable OCSD Safety Standards attached hereto in Exhibit “D” and the Human Resources Policies (Exhibit “F”). In addition to the requirements stated above, Contractor shall adhere to the following OCSD Safety requirements: SOP-106 Hearing Conservation Program, SOP-121 Lead, Asbestos and Mold, and SOP-207 Hexavalent Chromium. These OCSD Safety requirements are available at: OCSD.com, click open “ABOUT US” (top of page), under “Transparency” click open “Safety and Human Resources Policy”, click open “Safety Policies”. 17. Warranties In addition to any warranties stated in Exhibit "A", the following shall apply: 17.1 Not Used. 17.2 Contractor's Warranty (Guarantee): If within a one (1) year period of completion of all work as specified in Exhibit “A”, OCSD informs Contractor that any portion of the Services provided fails to meet the standards required under this Contract, Contractor shall, within the time agreed to by OCSD and Contractor, take all such actions as are necessary to correct or complete the noted deficiency(ies) at Contractor's sole expense. 18. Liquidated Damages Not Used. 19. Force Majeure Neither party shall be liable for delays caused by accident, flood, acts of God, fire, labor trouble, war, acts of government or any other cause beyond its control, but said party shall use reasonable efforts to minimize the extent of the delay. Work affected by a Force Majeure condition may be rescheduled by mutual consent or may be eliminated from the Contract. 20. Freight (F.O.B. Destination) Contractor assumes full responsibility for all transportation, transportation scheduling, packing, handling, insurance, and other services associated with delivery of all products deemed necessary under this Contract. 21. Familiarity with Work By executing this Contract, Contractor warrants that: 1) it has investigated the work to be performed; 2) it has investigated the site of the work and is aware of all conditions there; and 3) it understands the facilities, difficulties and restrictions of the work under this Contract. Should Contractor discover any latent or unknown conditions materially differing from those inherent in the work or as represented by OCSD, it shall immediately inform OCSD of this and shall not proceed, except at Contractor’s risk, until written instructions are received from OCSD. Orange County Sanitation District 6 of 10 Specification No. S-2018-1008 Version 032018 22. Regulatory Requirements Contractor shall perform all work under this Contract in strict conformance with applicable Federal, State, and local regulatory requirements including, but not limited to, 40 CFR 122, 123, 124, 257, 258, 260, 261, and 503, Title 22, 23, and California Water Codes Division 2. 23. Licenses, Permits, Ordinances and Regulations Contractor represents and warrants to OCSD that it has obtained all licenses, permits, qualifications, and approvals of whatever nature that are legally required to engage in this work. Any and all fees required by Federal, State, County, City and/or municipal laws, codes and/or tariffs that pertain to the work performed under the terms of this Contract will be paid by Contractor. 24. Applicable Laws and Regulations Contractor shall comply with all applicable Federal, State, and local laws, rules, and regulations. Contractor also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of Contractor's noncompliance therewith. Any permission required by law to be included herein shall be deemed included as a part of this Contract whether or not specifically referenced. 25. Contractor’s Employees Compensation 25.1 Davis-Bacon Act – Contractor will pay and will require all subcontractors to pay all employees on said project a salary or wage at least equal to the prevailing rate of per diem wages as determined by the Secretary of Labor in accordance with the Davis-Bacon Act for each craft or type of worker needed to perform the Contract. The provisions of the Davis-Bacon Act shall apply only if the Contract is in excess of two thousand dollars ($2,000.00) and when twenty-five percent (25%) or more of the Contract is funded by Federal assistance. If the aforesaid conditions are met, a copy of the provisions of the Davis-Bacon Act to be complied with are incorporated herein as a part of this Contract and referred to by reference. 25.2 General Prevailing Rate – OCSD has been advised by the State of California Director of Industrial Relations of its determination of the general prevailing rate of per diem wages and the general prevailing rate for legal holiday and overtime work in the locality in which the work is to be performed for each craft or type of work needed to execute this Contract, and copies of same are on file in the Engineering Department. The Contractor agrees that not less than said prevailing rates shall be paid to workers employed on this Contract as required by Labor Code Section 1774 of the State of California. Per California Labor Code 1773.2, OCSD will have on file copies of the prevailing rate of per diem wages at its principal office and at each project site, which shall be made available to any interested party upon request. 25.3 Forfeiture For Violation – Contractor shall, as a penalty to OCSD, forfeit fifty dollars ($50.00) for each calendar day or portion thereof for each worker paid (either by the Contractor or any subcontractor under it) less than the prevailing rate of per diem wages as set by the Director of Industrial Relations, in accordance with Sections 1770-1780 of the California Labor Code for the work provided for in this Contract, all in accordance with Section 1775 of the Labor Code of the State of California. Orange County Sanitation District 7 of 10 Specification No. S-2018-1008 Version 032018 25.4 Apprentices – Sections 1777.5, 1777.6, 1777.7 of the Labor Code of the State of California, regarding the employment of apprentices are applicable to this Contract and the Contractor shall comply therewith if the prime contract involves thirty thousand dollars ($30,000.00) or more or twenty (20) working days or more; or if contracts of specialty contractors not bidding for work through the general or prime Contractor are two thousand dollars ($2,000.00) or more or five (5) working days or more. 25.5 Workday – In the performance of this Contract, not more than eight (8) hours shall constitute a day’s work, and the Contractor shall not require more than eight (8) hours of labor in a day from any person employed by it hereunder. Contractor shall conform to Article 3, Chapter 1, Part 7 (Section 1810 et seq.) of the Labor Code of the State of California and shall forfeit to OCSD as a penalty, the sum of twenty-five dollars ($25.00) for each worker employed in the execution of this Contract by Contractor or any subcontractor for each calendar day during which any worker is required or permitted to labor more than eight (8) hours in any one (1) calendar day and forty (40) hours in any one (1) week in violation of said Article. Contractor shall keep an accurate record showing the name and actual hours worked each calendar day and each calendar week by each worker employed by Contractor in connection with the project. 25.6 Record of Wages; Inspection – Contractor agrees to maintain accurate payroll records showing the name, address, social security number, work classification, straight-time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker or other employee employed by it in connection with the project and agrees to require that each of its subcontractors do the same. All payroll records shall be certified as accurate by the applicable Contractor or subcontractor or its agent having authority over such matters. Contractor further agrees that its payroll records and those of its subcontractors shall be available to the employee or employee’s representative, the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards and shall comply with all of the provisions of Labor Code Section 1776, in general. Penalties for non-compliance with the requirements of Section 1776 may be deducted from project payments per the requirements of Section 1776. 26. South Coast Air Quality Management District’s (SCAQMD) Requirements It is Contractor’s responsibility that all equipment furnished and installed be in accordance with the latest rules and regulations of the South Coast Air Quality Management District (SCAQMD). All Contract work practices, which may have associated emissions such as sandblasting, open field spray painting or demolition of asbestos containing components or structures, shall comply with the appropriate rules and regulations of the SCAQMD. 27. Governing Law This Contract shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in the County of Orange, in the event any action is brought in connection with this Contract or the performance thereof. 28. Breach The waiver of either party of any breach or violation of, or default under, any provision of this Contract, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Contract or default thereunder. Any breach by Contractor to which OCSD does not object shall not operate as a waiver of OCSD’s rights to seek remedies available to it for any subsequent breach. Orange County Sanitation District 8 of 10 Specification No. S-2018-1008 Version 032018 29. Remedies In addition to other remedies available in law or equity, if the Contractor fails to make delivery of the goods or Services or repudiates its obligations under this Contract, or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services, OCSD may (1) cancel the Contract; (2) recover whatever amount of the purchase price OCSD has paid, and/or (3) “cover” by purchasing, or contracting to purchase, substitute goods or Services for those due from Contractor. In the event OCSD elects to “cover” as described in (3), OCSD shall be entitled to recover from Contractor as damages the difference between the cost of the substitute goods or Services and the Contract price, together with any incidental or consequential damages. 30. Dispute Resolution 30.1 In the event of a dispute as to the construction or interpretation of this Contract, or any rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the dispute by mediation. The Parties shall mutually select a mediator to facilitate the resolution of the dispute. If the Parties are unable to agree on a mediator, the mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Agreement, through the alternate dispute resolution procedures of Judicial Arbitration through Mediation Services of Orange County ("JAMS"), or any similar organization or entity conducting an alternate dispute resolution process. 30.2 In the event the Parties are unable to timely resolve the dispute through mediation, the issues in dispute shall be submitted to arbitration pursuant to California Code of Civil Procedure, Part 3, Title 9, Sections 1280 et seq. For such purpose, an agreed arbitrator shall be selected, or in the absence of agreement, each party shall select an arbitrator, and those two (2) arbitrators shall select a third. Discovery may be conducted in connection with the arbitration proceeding pursuant to California Code of Civil Procedure Section 1283.05. The arbitrator, or three (3) arbitrators acting as a board, shall take such evidence and make such investigation as deemed appropriate and shall render a written decision on the matter in question. The arbitrator shall decide each and every dispute in accordance with the laws of the State of California. The arbitrator's decision and award shall be subject to review for errors of fact or law in the Superior Court for the County of Orange, with a right of appeal from any judgment issued therein. 31. Attorney’s Fees If any action at law or in equity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Contract, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 32. Survival The provisions of this Contract dealing with Payment, Warranty, Indemnity, and Forum for Enforcement, shall survive termination or expiration of this Contract. 33. Severability If any section, subsection, or provision of this Contract, or any agreement or instrument contemplated hereby, or the application of such section, subsection, or provision is held invalid, the remainder of this Contract or instrument in the application of such section, subsection or provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby, unless the effect of such invalidity shall be to substantially frustrate the expectations of the Parties. Orange County Sanitation District 9 of 10 Specification No. S-2018-1008 Version 032018 34. Damage to OCSD’s Property Any of OCSD’s property damaged by Contractor, any subcontractors or by the personnel of either will be subject to repair or replacement by Contractor at no cost to OCSD. 35. Disclosure Contractor agrees not to disclose, to any third party, data or information generated from this project without the prior written consent from OCSD. 36. Independent Contractor The legal relationship between the parties hereto is that of an independent contractor, and nothing herein shall be deemed to make Contractor an OCSD employee. During the performance of this Contract, Contractor and its officers, employees, and agents shall act in an independent capacity and shall not act as OCSD's officers, employees, or agents. Contractor and its officers, employees, and agents shall obtain no rights to any benefits which accrue to OCSD’s employees. 37. Limitations upon Subcontracting and Assignment Contractor shall not delegate any duties nor assign any rights under this Contract without the prior written consent of OCSD. Any such attempted delegation or assignment shall be void. 38. Third Party Rights Nothing in this Contract shall be construed to give any rights or benefits to anyone other than OCSD and Contractor. 39. Non-Liability of OCSD Officers and Employees No officer or employee of OCSD shall be personally liable to Contractor, or any successor-in-interest, in the event of any default or breach by OCSD or for any amount which may become due to Contractor or to its successor, or for breach of any obligation for the terms of this Contract. 40. Read and Understood By signing this Contract, Contractor represents that he has read and understood the terms and conditions of the Contract. 41. Authority to Execute The persons executing this Contract on behalf of the Parties warrant that they are duly authorized to execute this Contract and that by executing this Contract, the Parties are formally bound. 42. Entire Contract This Contract constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. 43. Notices All notices under this Contract must be in writing. Written notice shall be delivered by personal service or sent by registered or certified mail, postage prepaid, return receipt requested, or by any other overnight delivery service which delivers to the noticed destination and provides proof of delivery to the sender. Rejection or other refusal to accept or the inability to deliver because of changed address for which no notice was given as provided hereunder shall be deemed to be receipt of the notice, demand or request sent. All notices shall be effective when first received at the following addresses: Orange County Sanitation District 10 of 10 Specification No. S-2018-1008 Version 032018 OCSD: Jennifer Martin Buyer Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 Contractor: Contact Name Contact Title Company Name Street Address City, State, Zip Code Each party shall provide the other party written notice of any change in address as soon as practicable. IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this Contract to be signed by the duly authorized representatives. ORANGE COUNTY SANITATION DISTRICT Dated: _________________ By: ___________________________________ Marc Dubois Contracts, Purchasing and Materials Management Manager COMPANY Dated: _________________ By: ___________________________________ ___________________________________ Print Name and Title of Officer ___________________________________ IRS Employer’s I.D. Number Page 1 of 1 ADMINISTRATION COMMITTEE Meeting Date 03/13/19 To Bd. of Dir. -- AGENDA REPORT Item Number 3 Item Number -- Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Assistant General Manager SUBJECT: ORANGE COUNTY SANITATION DISTRICT OPERATIONS & MAINTENANCE DEPARTMENT PRESENTATION 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 wastewater treatment basics. 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 for the GWRS ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: N/A Page 1 of 1 ADMINISTRATION COMMITTEE Meeting Date 03/13/19 To Bd. of Dir. -- AGENDA REPORT Item Number 4 Item Number -- Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: FY 2018-19 AND FY 2019-20 ORANGE COUNTY SANITATION DISTRICT BUDGET UPDATE GENERAL MANAGER'S RECOMMENDATION Information Only. SUMMARY For continued discussion on the update of the Orange County Sanitation District’s Proposed Fiscal Year 2019-20 Budget, detail of the Sanitation District’s revenues and reserves is attached. The Proposed Budget will be presented for adoption at the June 26, 2019 Board of Directors meeting. ATTACHMENT The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • FY 2019-20 Budget Update Revenue Detail • Reserve Summary - FY 2018-19 1 FY 2019-20 Budget Update Revenue Detail Revenue Summary (in millions) Category 2017-18 Actual 2018-19 Adopted 2019-20 Adopted Revenues: Service Fees 288.3 294.4 299.1 Permit User Fees 18.5 18.3 18.5 Capital Facility Capacity Charge 15.6 14.0 14.5 Property Taxes 94.2 99.6 104.5 Interest 4.2 6.5 7.2 Other Revenue 23.7 38.1 34.1 Debt Proceeds 0.0 0.0 0.0 Total Revenue $444.5 $470.9 $477.9 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 2018-19 2019-20 General Service Fees – 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 2019-20 is the second 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 $339 in FY 2019-20. These rates are still well below the average annual sewer rate currently being charged throughout the state. $294.4M $299.1M 2 2018-19 2019-20 Industrial Waste Permit User Fees – 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. $18.3M $18.5M Capital Facilities Capacity Charges (CFCC) – 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. $14.0M $14.5M Property Taxes – 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. $99.6M $104.5M Interest Earnings – 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. $6.5M $7.2M Other Revenue – Other revenue includes solids handling and capital assessments from the Irvine Ranch Water District (IRWD); and O&M sewer services provided to IRWD, the Santa Ana Watershed Protection Authority (SAWPA), and the Sunset Beach Sanitary District. $38.1M $34.1M 3 2018-19 2019-20 Debt Proceeds – 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. $0.0M $0.0M 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 has 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 3.68 for FY 2018-19. Orange County Sanitation District Reserve Summary - FY 2018-19 Orange County Sanitation District (OCSD) has a Board of Directors Reserve Policy that sets forth seven criteria to be used to determine its reserve level. As part of the OCSD financial and operating process, we have developed a Reserve Policy which governs the establishment of our reserve level and the use of those funds. To ensure an adequate and diverse reserve policy, we have established seven different criteria. These are not seven different reserves, but seven criteria used to set the total reserve level. Reserves can only be used with the approval of the Board of Directors. Below is a brief summary of the OCSD Reserve Criteria. Reserve Policy Summary Non-Discretionary 1) Debt Covenants and Other Requirements – Required by OCSD bondholders – $97 million – RESTRICTED This level is set by various bond covenants. As OCSD issues debt, it is required to maintain certain levels of reserves held specifically for repayment of that debt and cannot be reduced or used prior to repayment of all outstanding debt issuances. 2) “Dry Period” – Property Tax Payments – 50% of Operating Costs – $81 million The largest portion of OCSD revenues are user fees, approximately $300 million. These fees are listed on and collected through the County property tax bill. Since we receive payments twice each year, we hold funds in reserve specifically to pay operating expenses pending receipt of those payments. 3) “Dry Period” – Property Tax Payments – 100% of August Debt Service Costs – $80 million The largest portion of OCSD revenues are user fees, approximately $300 million. These fees are listed on and collected through the County property tax bill. Since we receive payments twice each year, we hold funds in reserve specifically to pay debt service pending the receipt of those payments. Discretionary 4) Operating Budget – 10% of the total Operating Budget as a Contingency – $16 million We hold ten percent of our operating budget as an operating contingency for non-recurring and unanticipated expenditures. 5) Capital Improvement Budget – 5% of the total $2 billion Program – $133 million OCSD currently has a ten-year, $2 billion Capital Improvement effort. We hold the equivalent of 5% of that total as a contingency specifically related to these Capital Improvement Program efforts. 6) Rehabilitation and Refurbishment – $64 million In 2002, OCSD established a reserve level related to rehabilitation efforts at $50 million based on the rehabilitation or replacement costs at that time. Although the total costs for rehabilitation or replacement has increased substantially since 2002 as a result of the move to Full Secondary Treatment and the Construction of GWRS, this reserve guideline has only been increases 2% annually, making it potentially under-funded. 7) Catastrophic loss / Self-insurance – $57 million OCSD is Self-Insured for Catastrophic Loss. $57 million of the District’s total reserves are related to holding funds for this category. Although OCSD now has more than $10 billion in asset replacement value, this level has not been increased since its establishment more than 10 years ago, making it potentially under- funded. Current 2018-19 Reserve Policy Requirement $528 million July 1, 2018 beginning of Year Reserve Balance $630 million ORANGE COUNTY SANITATION DISTRICT COMMON ACRONYMS ACWA Association of California Water Agencies LAFCO Local Agency Formation Commission RWQCB Regional Water Quality Control Board APWA American Public Works Association LOS Level Of Service SARFPA Santa Ana River Flood Protection Agency AQMD Air Quality Management District MGD Million Gallons Per Day SARI Santa Ana River Interceptor ASCE American Society of Civil Engineers MOU Memorandum of Understanding SARWQCB Santa Ana Regional Water Quality Control Board BOD Biochemical Oxygen Demand NACWA National Association of Clean Water Agencies SAWPA Santa Ana Watershed Project Authority CARB California Air Resources Board NEPA National Environmental Policy Act SCADA Supervisory Control And Data Acquisition CASA California Association of Sanitation Agencies NGOs Non-Governmental Organizations SCAP Southern California Alliance of Publicly Owned Treatment Works CCTV Closed Circuit Television NPDES National Pollutant Discharge Elimination System SCAQMD South Coast Air Quality Management District CEQA California Environmental Quality Act NWRI National Water Research Institute SOCWA South Orange County Wastewater Authority CIP Capital Improvement Program O & M Operations & Maintenance SRF Clean Water State Revolving Fund CRWQCB California Regional Water Quality Control Board OCCOG Orange County Council of Governments SSMP Sewer System Management Plan CWA Clean Water Act OCHCA Orange County Health Care Agency SSO Sanitary Sewer Overflow CWEA California Water Environment Association OCSD Orange County Sanitation District SWRCB State Water Resources Control Board EIR Environmental Impact Report OCWD Orange County Water District TDS Total Dissolved Solids EMT Executive Management Team OOBS Ocean Outfall Booster Station TMDL Total Maximum Daily Load EPA US Environmental Protection Agency OSHA Occupational Safety and Health Administration TSS Total Suspended Solids FOG Fats, Oils, and Grease PCSA Professional Consultant/Construction Services Agreement WDR Waste Discharge Requirements gpd gallons per day PDSA Professional Design Services Agreement WEF Water Environment Federation GWRS Groundwater Replenishment System POTW Publicly Owned Treatment Works WERF Water Environment & Reuse Foundation ICS Incident Command System ppm parts per million WIFIA Water Infrastructure Finance and Innovation Act IERP Integrated Emergency Response Plan PSA Professional Services Agreement WIIN Water Infrastructure Improvements for the Nation Act JPA Joint Powers Authority RFP Request For Proposal WRDA Water Resources Development Act ORANGE COUNTY SANITATION DISTRICT GLOSSARY OF TERMS 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. BIOGAS – 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 farmland 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. coli are the most common bacteria in wastewater. 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 people detect the odor becomes the D/T for that air sample. GREENHOUSE GASES (GHG) – 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 SYSTEM (GWRS) – 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 per day of drinking quality water to replenish the local groundwater supply. LEVEL OF SERVICE (LOS) – Goals to support environmental and public expectations for performance. N-NITROSODIMETHYLAMINE (NDMA) – A N-nitrosamine 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 and Water Environment Federation, with advisory support from the US Environmental Protection Agency. NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation 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) – A 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 runoff. 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. 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. The Orange County Sanitation District’s service area is in the Santa Ana River Watershed.