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HomeMy WebLinkAbout04-08-2015 Administration Committee Agenda Orange County Sanitation District Wednesday, April 8, 2015 Regular Meeting of the a 5:30 P.M. Administration Committee - Administration Building Board Room 10844 Ellis Avenue Fountain Valley, CA 714 593-7433 AGENDA PLEDGE OF ALLEGIANCE: DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form and give it to the Clerk of the Board. Speakers 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: 1. Approve Minutes of the March 11, 2015, Administration Committee Meeting. INFORMATION ITEMS: 2. Procurement Process 3. OCSD Budget Update FY 2015-16 4. Capital Improvement Program (CIP) Update 041OW15 Administration Committee Agenda Page 1 of 2 5. Status Update of 2015-16 Insurance Renewals CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: The next Administration Committee meeting is scheduled for Wednesday, May 13, 2015 at 5:30 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. 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 Acting Clerk of the Board (714)593-7433 kloreeocsd.com For any questions on the agenda,Committee members may contact staff at: General Manager James Herberg (714)593-7300 iherbem(rpocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli0ocsd.00m Director of Finance and Lorenzo Tyner (714)593-7550 ItwentDomd.com Administrative Services 041OW15 Administration Committee Agenda Page 2 of 2 ITEM NO. 1 MINUTES OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, March 11, 2015, at 5:30 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Committee Vice-Chair Curry on March 11, 2015, at 5:30 p.m., in the Administration Building of the Orange County Sanitation District. Committee Vice-Chair Curry led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: John Withers, Chair Jim Herberg, General Manager Keith Curry, Vice-Chair Bob Ghirelli, Assistant General Manager Steven Choi Lorenzo Tyner, Director of Finance Tyler Diep &Administrative Services James Ferryman Rob Thompson, Director of Engineering Jim Katapodis Nick Arhontes, Director of Facility Support Peter Kim Services Greg Mills Kelly Lore, Acting Clerk of the Board Glenn Parker Mike White Teresa Smith Cindi Ambrose Sal Tinajero Jennifer Cabral Tom Beamish, Board Chair Marc Dubois John Nielsen, Board Vice-Chair Anne Marie Feery Norbert Gaia COMMITTEE MEMBERS ABSENT: Al Garcia None. Randy Kleinman Jackie Santos Cori Voss OTHERS PRESENT: Brad Hogin, General Counsel PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Committee Vice-Chair Curry did not provide a report. ON11/2015 Administration Committee Minutes Page 1 of 5 REPORT OF GENERAL MANAGER: General Manager, Jim Herberg, did not provide a report. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: Director of Finance and Administrative Services, Lorenzo Tyner reported on two violations that were received from Cal/OSHA. The first was an employee who injured their finger while working on some fan belts. Because of the injury, OSHA fined us and we appealed that fine, however we were unsuccessful in the appeal. The exposure is about $22,000 and is considered a serious violation. If there is a second violation, it could be considered willful, with a fine of about $70,000 and other possible assessments. Mr. Tyner stated that he does not anticipate that being an issue as we have used this particular procedure over the last 20 years with no injuries. However, we do take the OSHA report and the health of our employees seriously, and for prevention, have done additional training, will be putting in additional guards, and will do what is known as a safety stand-down where we will meet with the managers and supervisors impacted by that area, making sure they are aware of the injury and the additional safeguards. Mr. Tyner stated that the second violation involved the use of a crane about 18 months ago. This involved a procedural issue, there was no injury or potential injury, however, OSHA found that we might not have been in complete compliance with our Standard Operating Procedures (SOP). They found a technical variance in the way we used, or planned for the use of the crane. We are in the process of looking at that item with OSHA and anticipate the item be settled shortly. This violation contains three items; a procedural item with exposure in the $100-400 fine range, the second item should be vacated as there is not enough evidence to support the violation, and the third is a technical procedural item with exposure in the $5000 fine range. CONSENT CALENDAR: 1. MOVED, SECONDED and DULY CARRIED TO: Approve Minutes of the February 11, 2015, Administration Committee Meeting. AYES: Beamish, Choi, Curry, Ferryman, Katapodis, Kim, Mills, Nielsen, and Parker NOES: None ABSTENTIONS: None ABSENT: Diep, Smith, Tinajero and Withers 03/11/2015 Administration Committee Minutes Page 2 of 5 2. MOVED, SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: Approve the Senior Human Resources Analyst Lending Agreement between Orange County Sanitation District (OCSD) and Costa Mesa Sanitary District (CMSD), to contract an OCSD Senior Human Resources Analyst as the Interim Human Resources Manager from March 21, 2015 through June 30, 2015, as a workforce development opportunity. AYES: Beamish, Choi, Curry, Ferryman, Katapodis, Kim, Mills, Nielsen, and Parker NOES: None ABSTENTIONS: None ABSENT: Diep, Smith, Tinajero and Withers NON-CONSENT CALENDAR Mr. Tyner provided a brief overview of this item. Director Parked requested information regarding what controls are in place to provide compliance for this Ordinance. Mr. Herberg stated the information would be provided at the next Board meeting. 3. MOVED, SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: A. Introduce Ordinance No. OCSD-47, entitled "An Ordinance of the Board of Directors of the Orange County Sanitation District, Establishing Requirements and Procedures for the Purchase of Goods, Services, and Public Works Projects' for first reading at the March 2015 Board meeting." and B. Motion to read Ordinance No. OCSD-47 by title only and waive reading of said entire Ordinance on March 25, 2015; and C. Set April 22, 2015, as the date for the second reading and adoption of Ordinance No. OCSD-47; and D. Direct the Clerk of the Board to publish summaries of the Ordinance as required by law. AYES: Beamish, Choi, Curry, Ferryman, Katapodis, Kim, Mills, Nielsen, and Parker NOES: None ABSTENTIONS: None 03/11/2015 Administration Committee Minutes Page 3 of 5 ABSENT: Diep, Smith, Tinajero and Withers INFORMATION ITEMS: Director Theresa Smith arrived at 5:36 p.m. Director Diep arrived at 5:37 p.m. 4. Status of 2015-16 Insurance Renewals Director of Finance and Administrative Services, Lorenzo Tyner stated that insurance renewals are brought to the Board twice during the budget process. These preliminary assumptions are being brought to the committee prior to the actual action needed in June. Dennis Mulqueeny, Senior Vice President of Alliant insurance provided a brief presentation regarding each of OCSD's four major insurances (General Liability, Workers' Compensation; Property and Flood, and Boiler & Machinery) with coverages designed for government entity operations and the renewal costs of each. The possibility of earthquake insurance was also discussed. Mr. Mulqueeny then answered questions from the Committee regarding: marketing processes to provide quotations; earthquake insurance estimates; previous earthquake damage; California admitted/non-admitted carriers; and minimum standards for a carrier which is AT Director Choi requested a rate comparison and Director Parker requested information on non-admitted carriers and further analysis prior to required action. Mr. Herberg and Mr. Tyner stated that the information requested would be provided in the near future. Committee Chair Withers arrived at 5:50 p.m. Director Diep left the meeting at 5:50 p.m. 5. FY 2015-16 District Budget Update Controller, Mike White provided an informative PowerPoint Presentation on the budgeted revenue update for fiscal years 2014-15 and 2015-16, including fees and charges, which represent the largest component of revenues, property taxes and single family residential fees which represent OCSD's largest revenue. Mr. White stated that there is no new money debt issuance projected. Director Tinajero arrived at 6:00 p.m. ON11/2015 Administration Committee Minutes Page 4 of 5 6. Workforce Planning Human Resources Manager, Rich Spencer provided an informative PowerPoint Presentation on Workforce Planning, which includes: organizational structure; organizational overview; recognized employee organizations; unrepresented employee groups; importance of workforce planning development efforts; and workforce analysis, planning and development. Questions were answered from Mr. Spencer regarding: percentage of internal promotions; entry level hiring; internships; licensing; attracting higher level employees; anticipated retiree costs; technical programs such as Santiago Canyon College and transition and succession plans. Director Choi left the meeting at 6:20 p.m. Vice-Chair John Nielsen left the meeting at 6:25 p.m. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Mr. Herberg, stated that an update on budgeted expenditures will be provided next month. ADJOURNMENT: Committee Chair Withers declared the meeting adjourned at 6:34 p.m., to the next regularly scheduled meeting of April 8, 2015 at 5:30 p.m. Submitted by: Kelly A. Lore Acting Clerk of the Board 03/11/2015 Administration Committee Minutes Page 5 of 5 ADMINISTRATION COMMITTEE Neebng Dare TO ad.of Dir. 04,08,15 -- AGENDA REPORT Item Number Item Number z Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert D. Ghirelli, Assistant General Manager SUBJECT: PROCUREMENT PROCESS GENERAL MANAGER'S RECOMMENDATION Information Only. SUMMARY Staff will present an informational overview on the Procurement Process. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT N/A Page 1 of 1 ADMINISTRATION COMMITTEE Meeting Date To ad.of Dir. 04/08/15 -- AGENDA REPORT em Number Item Number 3 Orange County Sanitation District FROM: James Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: FY 2015-16 BUDGET UPDATE GENERAL MANAGER'S RECOMMENDATION Information Only. SUMMARY Discussion of the OCSD FY 2015-16 Budget was initiated at the February 11, 2015 Administration Committee meeting. Additional materials are now being provided to further this discussion (attached). Included in the materials being provided are line-item expense details for the Operating Budget. The Budget will be presented for re-adoption at the June 24, 2015 Board meeting. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A BUDGET / PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENTS The following attachment(s) are attached and may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package and attachments: • FY 2015-16 Budget Summary • FY 2015-16 Budget Development-Additional Detail Page 1 of 1 2015-16 Budget Update Development - Expenditure Summary 2015-16 2014-15 2015-16 Proposed Description Projected Adopted Revision 1 Salaries &Wages 62.2 64.2 65.4 2 Benefits 31.1 36.4 28.6 3 Operating Materials & Supplies 16.0 16.3 17.4 4 Contractual Services 22.8 24.5 23.8 5 Repairs & Maintenance 12.6 12.9 12.3 6 Utilities 7.7 7.8 7.8 7 Professional Services 2.5 3.1 3.5 8 Other Operating Supplies 1.6 1.8 1.7 9 Administrative Expenses 1.4 1.6 1.6 10 Research & Monitoring 0.8 0.8 0.8 11 Other Non-Operating Expenses 0.1 1.0 1.0 12 Training & Meetings 0.9 1.1 1.1 13 Printing & Publication 0.4 0.4 0.4 14 Cost Allocation (16.5) (16.9) (16.9) Net Operating Requirements $143.6 $155.0 $148.5 2015-16 BUDGET UPDATE DEVELOPMENT - ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 1) SALARIES AND WAGES $62.2 $64.2 $65.4 1a) Regular Salaries $49.6 $50.5 $52.1 Salaries for 626.0 full-time equivalent (FTE) positions in FY 2014-15 projected and FY 2015-16 proposed are included in this line item, and equals the FTE approved positions authorized in the FY 2013-14 adopted budget. The increase is attributable to salary increases per adopted bargaining agreements. The Vacancy Factor was set at 3 percent based on trend information. 1 b) Leave Payoffs $ 2.1 $ 2.3 $ 2.2 Leave Payoffs for retirements are anticipated to be in line with recent history reflecting a surge in retirements of long-term employees. 1c) Overtime $ 1.7 $ 1.6 $ 1.8 Overtime is proposed to remain flat at $1,776,000 in FY 2015-16. Of this total, $1.4 million is budgeted in Operations and Maintenance primarily for required overtime as the plants are in operation 24/7 (vacation, sick, shift overlap), emergencies, unscheduled maintenance, backlog and off-shift construction support. The remaining $300,000 is budgeted in other divisions and has remained essentially the same. 2) BENEFITS $31.1 $36.4 $28.6 2a) Orange County Emp. Ret. System $18.4 $23.2 $13.9 District employees are members of the Orange County Employees' Retirement System (OCERS). The employer's required contribution rate has decreased from 36.57 percent (Plans G & H), from 34.87 percent (Plan B), and from 33.52 percent (Plan U) in FY 2014-15 to 20.75 percent, 18.39 percent, and 17.52 percent, respectively, in FY2015-16, a total proposed revised budget decrease of $9.3 million, as a result of the $125 million unfunded actuarial accrued liability pay down by the District in November of last year. 2b) Group Insurance $ 8.8 $ 9.4 $ 9.8 Includes Medical, Dental, Vision, Life Insurance, Medicare, Disability. In FY 2015-16, the proposed group insurance budget includes approximately $15,677 per employee (626 proposed full time equivalent positions), an estimated 4.3 percent increase over the previously budgeted amount for FY 2015-16. 2c) Benefits, Other $ 3.9 $ 3.8 $ 4.9 Includes Workers' Compensation, Tuition Reimbursement, Development Pay and Uniform Rental. Workers' Compensation ($0.8 million in FY 2014-15 and $1.5 million 1 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 in FY 2015-16) is used to maintain the level of accumulated reserves within the Workers' Compensation self-insurance funds. The Development Pay Program ($294,000) is intended to promote employee efforts that increase job knowledge, skills, and abilities. 3) OPERATING MAT'LS & SUPPLIES $16.0 $16.3 $17.4 3a) Chemical Coagulants $ 6.0 $ 6.1 $ 6.2 Anionic Polymer — Anionic polymer is added to the primary clarifiers in combination with ferric chloride to enhance primary clarifier performance. The projected usage will remain approximately the same at 125600 active pounds with an estimated 5% rate increase. The anionic polymer budget for FY 2015-16 is $392,000. Cationic Polymer— Cationic polymer is added to digested sludge prior to dewatering in order to improve the sludge and water separation process. Cationic polymer is also added to the waste activated sludge dissolved air Flotation thickeners (DAFTs) to improve solid(s) coagulation. During FY 2015-16, the rate is projected to be 5% higher and usage to decrease 4% to 630,000 active pounds at a cost of$1,680,000. Ferric Chloride — Ferric chloride is an iron salt which is used to increase the solids removal efficiencies in the primary treatment process and to control digester hydrogen sulfide. As the amount of ferric chloride is optimized in primary treatment, additional amounts of ferric chloride are added to the digesters to control hydrogen sulfide. The proposed ferric chloride usage for FY 2015-16 is 6,880 dry tons, at an estimated cost of$4,140,000. 3b) Odor Control $ 7.3 $ 7.3 $ 8.0 Hydrogen Peroxide — Hydrogen peroxide is used in the foul air scrubbers at the treatment facilities to control hydrogen sulfide. Usage for FY 2015-16 is estimated to be 453,000 gallons at a cost of$959,000. The budget increase is due to an estimated 5% rate increase. Sodium Hydroxide (Caustic Soda) — Caustic soda (25%) is used in the foul air scrubbers and in the District's main trunk lines (50%) tributary to the treatment plants. For FY 2015-16, staff proposes the usage for the scrubbers to be 235 dry tons with a budget of$130,500. The collection system usage is estimated to be 650 dry tons with a budget of$343,000. The total caustic soda budget for FY2015-16 is $473,500. Muriatic Acid — Muriatic Acid (hydrochloric Acid) is used to backwash the media in the foul air scrubbers, associated piping and pumps. This cleans deposits caused by hard water, sulfides from the reaction with the foul air, and caustic soda used in the scrubbing process. Muriatic Acid is also used as a method for cleaning polymer tanks. 2 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 The projected usage for FY 2015-16 is 20,400 gallons with a budgeted cost of $35,000. Odor Neutralizers — Odor neutralizers are used in the solids processing facilities of both plants to mask the odors from the processed biosolids as they are loaded into the trucks for reuse. In FY 2015-16, the projected budgets are $2,700 for approximately 22.5 drums of highly concentrated solution. Magnesium Hydroxide, Trunklines — Magnesium hydroxide reduces the formation of hydrogen sulfide in the collection system which causes odor and corrosion. Contract services include supply, tanks and delivery equipment, operational monitoring, sampling, reporting and on-going maintenance services for odor control chemical dosing systems within the wastewater collection and conveyance system. The budget for FY2015-16 is $1,782,000. Ferrous Chloride, Trunklines — Ferrous Chloride is used in the trunks to reduce hydrogen sulfide generation. This contract provides supply, tanks and delivery equipment, operational monitoring, sampling, reporting and on-going maintenance services for odor control chemical dosing systems within the wastewater collection and conveyance system. The usage is projected to be 5,900 dry tons in FY 2015-16, and the proposed budget is $3,821,000. Calcium Nitrate, Trunklines — Calcium nitrate is a biological approach to controlling odors in wastewater. It provides the naturally occurring bacteria with an alternate source of oxygen which, when metabolized, produces nitrogen gas as a byproduct rather than the sulfides produced by the naturally occurring sources of oxygen. This contract provides supply, tanks and delivery equipment, operational monitoring, sampling, reporting and on-going maintenance services for odor control chemical dosing systems within the wastewater collection and conveyance system. The FY 2015-16 proposed usage is estimated to be 34,000 gallons with a budget of$792,000. Bleach, Treatment Plant Odor Control — Bleach is used in treatment plant odor control scrubbers and has replaced more expensive chemicals. For FY 2015-16, staff proposes the usage for the scrubbers to be 331,000 gallons with an estimated budget of$178,000. 3c) Disinfection $ 0.4 $ 0.4 $ 0.2 Sodium Hypochlorite (Bleach) — As of March 17, 2015, the District was no longer required to disinfect the effluent. However, there will be continue to be effluent disinfection bleach storage on-site. There are ten possible power shut-downs, at Plant 1 to support the Groundwater Replenishment System along with primary bleach addition at Plant 2 for sludge settling enhancement which may require disinfection. The Bacteria Reduction Bleach budget for FY 2015-16 is $111,000 with a rate 3 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 increase of 5% and an estimated use of 202,700 gallons. The other treatment plant bleach usage is for disinfection of plant water and the control of filamentous organisms in activated sludge in the secondary treatment process. It is anticipated that the District will use approximately 69,400 gallons of process bleach in FY 2015-16 at a budgeted amount of$38,000. Sodium Bisulfite — Sodium bisulfite is used for dechlorination of outfall effluent at Plant 2 to ensure that no residual chlorine is discharged into the ocean. Sodium bisulfite usage will significantly decrease in FY 2015-16 because of the major decreases in outfall bleach disinfection. It is anticipated that the District will use 7,000 gallons of sodium bisulfite at a cost of$5,000 in FY 2015-16. 3d) Tools and Safety Equipment/Tools $ 0.9 $ 0.8 $ 0.8 O&M and Facilities Support Services uses 78% of these budgets with the remaining 22% budgeted in Risk Management. Costs include various personal protective equipment items required for job safety. Reflective vests are now required in the working treatment plants and collection system, increasing expenses for safety equipment. 3e) Laboratory Chemicals and Supplies $ 0.6 $ 0.7 $ 0.6 Over 88% of this budget supports the Environmental Laboratory purchases of glassware, filtration supplies, solvents used for organic extractions, acids and bases used in metals digestion and glassware cleaning, reagents, a variety of standards used in quality assurance of the tests, specialty gases, microbiology supplies and growth media, chromatography columns, test organisms for bioassay, toxicity, and various other laboratory supplies. 3f) Gas, Diesel and Oil $ 0.6 $ 0.7 $ 0.7 Gasoline, compressed natural gas, diesel, and oil used in the operation of the mobile equipment, within generators and other operating equipment. The future price of gasoline and natural gas are the major impacts to these budgets. 3g) Other $ 0.2 $ 0.3 $ 0.9 Other smaller operating expenses are collectively reported within this one line item such as janitorial supplies, miscellaneous operating supplies, and property tax fees. 4) CONTRACTUAL SERVICES $22.8 $24.5 $23.8 4a) Solids Removal $17.7 $18.6 $17.5 4 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 Biosolids — For FY 2015-16, biosolids production is estimated to be 276,000 wet tons. Primary sludge will continue to be diverted to Plant 2. Approximately half of the biosolids produced will be sent to Arizona. Contracted testing for those biosolids must meet the State of Arizona requirement for analyses to be performed in an Arizona certified laboratory. 4b) Other Residual Solids and Waste $ 1.0 $ 0.9 $ 0.9 The other residual solids and waste category includes disposal costs for grit and screening waste, digester cleaning waste, and hazardous materials. The Grit and Screening budget includes supplying bins to collect then haul and dispose of grit, screenings, and drying bed material to a landfill. The grit is generated from the grit chambers, and the screenings is the material collected off the bar screens. Drying bed material is typically made up of the material cleaned out of pipes in the collection system by District's crews and other city crews in the District's service area. The budget for disposal of grit, screenings and other waste is $732,000 in FY 2015-16. 4c) Grounds keeping/Janitorial/Security $ 0.7 $ 0.7 $ 0.7 Security Services, Grounds-keeping, and Janitorial services are all proposed in the FY 2015-16 budget update as the original amounts previously approved. 4d) County Service Fee $ 0.7 $ 0.7 $ 0.7 The County Service Fee is the fee charged by the County of Orange for the inclusion of the District's sanitation fees on the County of Orange Property Tax Bill and for the collection of these fees by the County on behalf of the District. 4e) Oxygen Plant Operations $ 0.5 $ 0.7 $ 0.3 The District Oxygen Plant was demolished and currently the activated sludge plant operates solely with purchased oxygen. There will be less flow treated at Plant 2 because of the increase in flow to GWRS. There will also be a decrease in oxygen usage in FY 2015-16 because of the decrease in flow through the oxygen activated sludge plant and an increase in flow through the tricking filter. The budget will decrease accordingly to $274,000 4f) Temporary Services $ 0.4 $ 0.4 $ 0.4 Temporary Services are proposed to remain flat in FY 2015-16 due to the reduction in temporary services beginning in FY 2012-13 through the elimination of long-term temporary help and finding alternative solutions in-house (reallocation of labor and work as required, essential overtime). 5 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 4g) Outside Lab Services $ 0.2 $ 0.2 $ 0.3 The District contracts out certain laboratory services that are not cost-efficient to perform in-house. Examples include air quality analyses, oil analyses for transformers and internal combustion engines, contaminants of potential concern, and hi-resolution mass spectroscopy. Approximately half of biosolids are used in Arizona; contracted testing for those biosolids must meet the State of Arizona requirement for analyses to be performed in an Arizona certified laboratory. 4h) Contracted Services, Other $ 1.6 $ 2.3 $ 3.0 Over 95% of contracted services are in support of operating and maintaining the collection system and the treatment plants. These services include line cleaning, closed circuit television of lines, manhole rehabilitation and replacement, and tunnel cleaning. 5) REPAIRS AND MAINTENANCE $12.6 $ 12.9 $ 12.3 5a) Materials & Services $10.9 $ 10.9 $ 10.3 8.9% Over 98.9% of these budgets support the maintenance of the collection system and the treatment plants. O&M Contracted materials and services for FY 2015-16 include: Digester Cleaning Contract; CenGen Overhaul); Plant 2 Gas Compressor Overhaul ; Interplant Gas Line Inspection and Maintenance Program; CenGen Generator Rehabilitation; Maintenance Painting Contract ($350K); and Electric Protective Relay Calibration and Testing. Facilities Support Services contracted services include services to maintain the District fleet ($369.5K); scale repairs; crane repairs; root and pest control; street overlays/manhole raising; manhole cover purchases; surveying services; easement improvements and other materials and services$642K. The budget for basic scheduled, predictive, and preventive maintenance and emergency maintenance are included in these budgets which are proposed based on historical experience and cost trends. 5b) Service Agreements $ 1.7 $ 2.0 $ 2.0 Approximately 36% and 64% of service contracts are computer-related or O&M maintenance-related respectively. Major contracts for Information Technology include IBM Software Maintenance; Microsoft Enterprise License Agreements; Oracle support; and various smaller service agreements3M). Contractor Support Services in the Facilities Support Services Department manages nearly all service contracts for the maintenance of the collection system and treatment plants. The service agreements include:; crane certification; polymer tank cleaning; Dig Alert; Operations Divisions manage service agreements for tree trimming; fire extinguisher and fire sprinkler certification; Uninterruptible Power Supply electrical maintenance; filter carbon media 6 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 exchanges; and various other plant maintenance and service maintenance agreements covering various equipment located throughout the District and the carbon changes for Steve Anderson Lift Station (SALS) odor control and the Plant 2 Trickling Filter Solids Contact odor control. 6) UTILITIES $ 7.7 $ 7.8 $ 7.8 6a) Power $ 6.3 $ 6.2 $ 6.3 Electricity— The estimated consumption and resulting costs for electrical energy purchased from Southern California Edison for the 2015-16 fiscal year are shown below and total $5,574,000. This budgetary number contains no contingency and excludes the electricity requirements of all outlying pump stations. FY 2015-16 Item Estimated Cost per kWh Proposed Budget Consumption Value (kWh/year) Plant No. 1 Energy 24,000,000 @$0.083 $2,000,000 Charges Plant No. 1 Demand ----- ---- $ 450,000 Charges Plant No. 1 Fixed Charges ---- ----- $ 550,000 Centrifuge Startup Energy 0 @$0.083 $ 0 Charges Centrifuge Startup ----- ----- $ 0 Demand Charges Total for Plant 1 24,000,000 $3,000,000 Plant No. 2 Energy 15,300,000 @$0.083 $1,270,000 Charges Plant No. 2 Demand $ 420,000 Charges Plant No. 2 Fixed Charges ----- ----- $ 310,000 Total for Plant 2 15,300,000 $2,000,000 Plant 1 Control Center 28,000 @$0.21 $ 6,000 P1 Contracts Adm. Trailers 120,000 @$0.21 $ 26,000 Total Plants 39,448,000 $5,032,000 Laboratory 3,000,000 @$0.14 $ 406,000 Administration Building 850,000 @$0.16 $ 136,000 Total 43,298,000 E5,574,000 7 2015-16 BUDGET UPDATE DEVELOPMENT— ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 6b) Water $ 0.5 $ 0.7 $ 0.6 Green Acres Project (Gap) Water — GAP water is made up of secondary treated effluent from the District that is further treated by the Orange County Water District. GAP water is significantly less expensive than potable water and is used in the process wherever possible. The major uses of GAP water include cooling water, solids handling, and landscaping. The proposed total GAP water cost for FY 2015-16 is $10,000. Potable Water — The potable water budget includes the water supplied by the City of Fountain Valley for Plant No. 1 and the City of Huntington Beach for Plant No. 2. Approximately 5% of the potable water at Plant No. 1 is used for domestic uses and less than 1% is used for irrigation. The majority of the irrigation at both plants uses reclaimed water. Less than 1 percent of the potable water used at Plant No. 2 is for domestic uses due to the relatively small number of employees at Plant No. 2. The projected expense for FY 2014-15 is $523,000 and the proposed budget for FY 2015-16 is$529,000. 6c) Natural Gas $ 0.5 $ 0.4 $ 0.5 Natural Gas —The total FY 2015-16 gas estimate is $500,000. The estimated natural gas to be purchased from Southern California Gas Company and gas marketer Constellation Energy for Plants 1 and 2 for fiscal year 2015-16 is shown below. FY 2015-16 Estimates User Estimated Cost Per Total Cost Consum lion Therm P1 Cen Gen Normal 200,000 therms $0.52/therm $104,000 Operation P1 Can Gen Peak Shaving 210,000 therms $0.52/therm $109,000 P1 Core Subscription 220,000 therms $0.68/therm $150,000 P2 Cen Gen Normal 238,000 therms $0.52/therm $124,000 Operation P2 Can Gen Peak Shaving None $0.52/therm $0 P2 Core Subscription 20,000 therms $0.64/therm $13,000 Total 888,005 therms $500,000 The total FY 2015-16 gas estimate is slightly higher than last year. The Plant 1 Central Generation actual gas usage was higher with operation of Engine 1 for peak shaving during last summer; this will be done again this summer peak season as long as gas prices remain favorable. 8 2015-16 BUDGET UPDATE DEVELOPMENT— ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 The "core subscription" is natural gas purchased directly from The Gas Company and used mainly for building heating and supplemental process heating. The natural gas used for Central Generation is purchased from a gas marketer, Constellation Energy, and transported through The Gas Company conveyance system at stipulated cost of$0.11/therm. This FY 2015-16 budget is somewhat higher than last year's two-year estimate for FY15/16 reflecting anticipated higher consumption in the CenGens and P1 Core Subscription. 9 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 7) PROFESSIONAL SERVICES $ 2.5 $ 3.1 $ 3.5 7a) Legal Services ($1.0M) Legal services are the services provided by General Counsel for general legal support, hours at the District, hours attending committee and board meetings, and for legal support provided by other legal counsel. The 2015-16 budget is proposed to increase to $973,200 from $882,900 as a result of increased expenses for arbitration, contracts and employee relations. 7b) Engineering Services ($0.8111 These services provide technical support that in-house staff cannot provide or do not have the time to provide. In FY 2015-16 requested engineering services include support for writing technical procedures, biofilter operation and compliance, an arc flash consultant, and 37.5% of the Enginering budget will support the Civil Assets Management Program (CAMP). 7c) Advocacy Efforts ($0.2M) These are consultant services for promoting the District's interests in Sacramento and Washington D.0 concerning legislation and funding. 7d) Audit and Accounting ($0.2M) These services represent the cost for the District's independent annual financial audit and contracted internal auditing services. 7e) Software Program Consultant ($0.3M) These support costs are required to supplement programming staff as new software versions and new programs are implemented and revised; they are also in support of the SCADA/ (supervisory control and data acquisition) system for process monitoring and controlling. 7f) Other ($1.0M) Professional services also include labor and industrial hygiene services. Collectively reported within the one line item "Other' are various smaller services including: succession planning, pre-employment testing, actuarial services, performance management consultant, local sewer service fee rate study, strategic outsourcing, development of lock-out — tag-out procedures, stratus environmental groundwater extraction, OCHCA inspections, and grant applications, and an analysis of the business practices of the of maintenance support services. Costs are anticipated to increase $220K. 10 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 8) OTHER OPERATING SUPPLIES $ 1.6 $ 1.8 $ 1.7 8a) Property and General Liability Insurance ($0.5M) The District's outside excess general liability insurance coverage is $30 million with a self- insurance retention of $250,000. The District's property insurance coverage of $1 billion for perils other than flood and $300 million for flood is subject to self- insurance retention of$250,000 and $100,000 respectively. The District is self-insured for all property damage from the perils of earthquake. The proposed appropriation is needed to fund insurance premiums, claims, and maintain the recommended level of reserve within the general liability and property self-insurance fund. 8b) Regulatory Operating Fees ($0.7M) Payments to the Regional Water Quality Control Board for the NPDES Permit and to the South Coast Air Quality Management District for permit fees. 8c) Other ($0.5M) Other material, supplies, and services collectively reported within this one line item. 9) ADMINISTRATIVE EXPENSE $ 1.4 $ 1.6 $ 1.6 9a) Small Computer Items ($0.7M) New Computers/Notebooks/Tablets, printers, monitors, Networking equipment, Computer peripherals, Digital equipment, PDAs, Digital Cameras, etc. 9b) Memberships ($0.6M) OCSD's largest membership costs are for District-wide participation in groups such as the National Association of Clean Water, the National Water Research Institute, the Water Environment Research Foundation, the California Association of Sanitation Agencies, the Southern California Alliance of Publicly Owned Treatment Works, the Association of California Water Agencies, and the Center for Demographic Research. A minor portion of these expenses is for staff memberships in professional associations. 9c) Office Supplies ($0.1M) Office supplies include such items as envelopes, letterhead, notebooks, calendars, etc. 9d) Other ($0.2M) Other smaller administrative expenses collectively reported within this one line item. 11 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 10) RESEARCH AND MONITORING $ 0.8 $ 0.8 $ 0.8 10a) Environmental Monitoring ($0.3M) The budget line item for "Environmental Monitoring" includes costs associated with the District's National Pollution Discharge Elimination System (NPDES) permit-required ocean monitoring program. In addition to the funds needed to conduct the permit-required ocean monitoring program, Environmental Monitoring also includes operating funds and insurance fees for the District's ocean monitoring vessel, the MN Nerissa. 10b)Air Quality Monitoring ($0.1M) Periodic monitoring and analysis of air emissions requires testing from various sources including the central generation facilities, validation of emissions from continuous monitoring equipment, source testing after CIP installation/modification (i.e. P1 trickling filters, P1 primary basin install and modifications, etc.). Periodically, there is a requirement to test the waste gas flares. 10c) Other Research ($0.4M) OCSD contributes annually to research organizations such as the Southern California Coastal Water Research Project. 11) OTHER NON-OPERATING EXPENSE $ 0.1 $ 1.0 $ 1.0 11a) General Manager Contingency ($0.6M) These funds are centrally budgeted and expended through the direct discretion and specific approval of the General Manager to support unanticipated District needs or requests of the Board. 11 b)Prior year Appropriations ($0.3M) Since the operating budget lapses at the end of each fiscal year, funds need to be set aside for contacts, purchases, commitments, and other legal obligations that have been incurred prior to June 30 in the prior year but goods or services have not been delivered until after June 30 in the new budget year. (Projected FY 2014-15 budget reflects application of these funds.) 11c) Other ($0.1M) Other non-operating expenses and obsolete inventory are in this group of expenses. 12 2015-16 BUDGET UPDATE DEVELOPMENT — ADDITIONAL DETAIL Previously Projected Adopted Proposed 2014-15 2015-16 2015-16 12) TRAINING AND MEETINGS $ 0.9 $ 1.1 $ 1.1 12a)Training ($.9M) This category includes ongoing technical and safety training and materials for staff, required training for computerized plant monitoring and control systems and training to allow for a more adaptive and flexible work force. Cost savings have been achieved in part through increased use of on-line training. 12b)Meetings ($0.2M) The General Manager has reviewed all meeting request budgets for necessity, duplication, and redundancy and has limited this amount to a responsible level. 13) PRINTING AND PUBLISHING $ 0.4 $ 0.4 $ 0.4 13a) In-House Publishing ($0.4M) Although the budget provides for some outside reproduction, the majority of OCSD printing activities are completed In-house, reflecting an expanded management information system and administrative requirements. As well as continuing demand by the public and regulatory agencies for information. These activities including printing of District's maps, brochures, Board reports and agenda items, budget materials, etc. 13b)Other ($O.OM) Other printing and publishing expenses collectively reported within this one line item. 14) COST ALLOCATION ($16.5) ($16.9) ($16.9) This represents direct and indirect labor, benefits, materials, and services charged to the Capital Improvement Program (CIP)where the related work was performed. 13 ADMINISTRATION COMMITTEE Neebng Date To ad.of Dir. 04/0 8 /15 -- AGENDA REPORT Item Number Item Number a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: CAPITAL IMPROVEMENT PROGRAM UPDATE GENERAL MANAGER'S RECOMMENDATION Information Only. SUMMARY Staff will present an informational overview on the status and performance of the Capital Improvement Program (CIP) over the fiscal year to date. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT N/A MP:dm:gc Page 1 of 1 ADMINISTRATION COMMITTEE Neebng Dare To ad.of Dir. 04,08,15 -- AGENDA REPORT Item Number Item Number s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance &Administrative Services SUBJECT: STATUS UPDATE OF 2015-16 INSURANCE RENEWALS GENERAL MANAGER'S RECOMMENDATION Information Only. SUMMARY Staff will provide an update to the Administration Committee's request for additional information regarding the renewals of major insurance policies. PRIOR COMMITTEE/BOARD ACTIONS March 2015 - The Committee was provided information regarding: Excess General Liability Insurance Program, Excess Workers' Compensation Insurance; All-Risk Property and Flood Insurance and Boiler & Machinery Insurance. June 2014 - The Board approved renewal of the above four policies for the period July 1, 2014 through June 30, 2015. ATTACHMENT • Letter from Alliant Insurance Services • OCSD Schedule of Insurers Page 1 of 1 •A4/liant March 30, 2015 Mr. Randall Kleinman Risk Management-Division 260 Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 Property and Casualty Insurance Schedule of OCSD Carriers Dear Randy: As requested, we have forwarded the schedule of OCSD's insurers by line of coverage showing each carriers' A.M. Best Rating, and their California regulatory status. This material is being presented as a result of some of the "Q&A" discussion at the March 11' Administration Committee meeting. The discussion centered on identifying the financial strength of carriers on the program, as well as the regulatory rules under which the carriers operate in California. Because of this interest, beyond just the schedule, I thought I should offer some commentary on these issues as they relate to the current OCSD coverage program. The "A.M. Best Company Key Rating Guide" is the most commonly used tool to independently evaluate a carriers' financial strength. In their credit rating system, the A.M. Best Company assigns letter and numeric grades to insurers with the letter grade (A through F) essentially corresponding to the "quality' of a carriers' assets (investments) and the roman numeral (I through XV) corresponding to the amount of policyholder surplus (equity)a company owns. In building a complex commercial insurance coverage program, such as that which is in place for OCSD, brokers and risk managers seek to create a broad and competitively priced program utilizing the financially strongest carriers possible. In the OCSD program, only one carrier is rated below "A-X", and many carry the highest rating of AXV. All carriers used in the program meet Alliant's minimum corporate guideline for utilization, which is set at "A-VII". The "lowest" rated carrier in the OCSD program, Maxum Indemnity, is rated A-VIII by AM Best, meaning their asset base is considered "excellent", and they have between $100MM and $250MM of policyholder surplus. In the OCSD property program, Maxum provides $4,500,000 of capacity out of a $1,000,000,000 coverage limit. Their capacity is provided excess of $75,000,000. As respects a carriers' regulatory status, insurers are regulated at the State level rather than either the national or local level. When an insurer incorporates, it will have a State (or country) of domicile, and it subsequently chooses which States it wishes to operate in on either an "admitted" or "non-admitted" basis. When choosing "admitted" status in one or more States, it agrees to not only be subject to the insurance regulations of its State of domicile, but also to the regulations of those States when transacting business within them. A carrier can legally operate in a State that it has "non-admitted" status in, as long as it follows the less stringent rules for a "non-admitted"carrier,and pays State taxes on the business it transacts within the State. Alliant Insurance Services,Inc.• 1301 Dove St.,Ste 200 Newport Beach,CA 92658 PHONE(949)756-0271 •www.alliantinsorance.com•License No.OC36861 •A4/liant Page 2 Randall Kleinman March 30, 2015 The key benefit to an insurer operating as "admitted" in California is that its policyholders have access to the California Insurance Guarantee Association (CIGA) fund which is intended to pay policyholder claims in the event of carrier insolvency. This is normally viewed as a competitive advantage in the market, as policyholders generally prefer such additional protection when it can be had. The key detriment to operating as an admitted carrier is the lack of flexibility in pricing and designing coverage terms for policyholders as rates and coverage terms for admitted carriers are regulated by the State. Given this, what one normally finds in the open insurance market is that "simple' or `vanilla" risks will generally obtain their coverage from "admitted" carriers where a high degree of standardization is the norm. However, those risks that are more complex, or less desirable from an insurer's perspective, will normally have at least some mix of admitted and non-admitted carriers in their program. Lloyd's of London is the most noteworthy non- admitted market operating in California, being primarily known for their flexibility and willingness to underwrite unconventional risks. In the public entity insurance space, due to the complex and non-standard risks involved, issues of scope and price of coverage in carrier selection more often than not take precedence over a carriers' regulatory status. Usually, as long as a policyholder can assure themselves that a carrier is financially strong, and further, knowing that carrier insolvency is raze, brokers and risk managers will prefer carriers that offer the broadest and most competitively priced terms. Further, many (probably most) carriers operating as "admitted" in California, will not consider writing insurance for public entities at the terms or levels desired, thereby effectively eliminating a choice based on this selection criteria. For OCSD's coverage program, in consultation with the District, we have assembled a panel of insurers (and one joint powers insurance authority) utilizing both admitted and non-admitted carriers, as this mix, at least in the current term, resulted in the broadest terms available at the most competitive pricing. Our scope of work for OCSD calls upon us to negotiate the best terms and conditions of coverage available, and OCSD's coverage program is vigorously marketed to interested insurers around the globe annually. To obtain the best coverage and competitive pricing terms demanded by the District, some non-admitted carriers must be utilized. For example, OCSD participates in the Alliant Public Entity Property Insurance Program (PEPIP). At some $400,000,000,000 in total insured values, PEPIP is the single largest property insurance placement in the world, and to get the most competitive pricing for the program, numerous non-admitted carriers are utilized. The majority of California public entities obtain their property coverage either in PEPIP or in other programs that are very similar to it. Coverage limits are provided on a "layered and quota share" basis where a carriers' capacity is optimized at that carriers' most financially efficient level resulting therefore in a low cost program to policyholders. As the largest provider of insurance brokerage services to public entities in California, we are confident that the program constructed for OCSD is the broadest and most competitive available. Alliant Insurance Services,Inc.• 1301 Dove St.,Ste 200 Newport Beach,CA 92658 PHONE(949)756-0271 •www.allian6nsorance.com•License No.OC36861 •A4/liant Page 3 Randall Kleinman March 30, 2015 I hope that this discussion assist the Committee in understanding these topics, and of course we are happy to continue to discuss this, or any other topic in as much detail as is desired. As always,we appreciate the opportunity to be of service to the District. V ry ly, L� Dennis Mu eeney, A, CPCU Senior Vice Preside (415)403-1421 work (415) 309-9926 mobile dmuloueenevAalliant.com Alliaot Insurance Services,Inc.• 1301 Dove St.,Ste 200 Newport Beach,CA 92658 PHONE(949)756-0271 •www.allian6nsurance.com•License No.OC36861 Orange County Sanitation District Schedule of Insurers July 1, 2014 to July 1, 2015 ProRerty Insurance ACE—Btinois Onion Insurance Company A++,Superior; nmrAdmitted Financial Siff Category 15; $2,0(As o of 411 or greater (As f /I1114) ACE European Group Limited A++,Superior; Non-Admitted Financial Stu Category 14; $1,500,0110,000 to$2,",000,000 (As of 5/2/14) Arch Spreialty Insurance A+,Superior, Non-Admitted Company Finanoial Size Category 11; $250,00 ,000 to$500,000,000 (As of 3/20I14) Axis Surplus Insurance A+,Superior, Non-Admitted Company Financial Size Category 15; $2,M,000,000 or groaner (As o17925/13) Axis Specialty Europe Ltd A+,Superior; Non-Admitted Financial Siff Category 15; $2,000,000,000 or greater (As of9/35/13) Endurance Worldwide Insurance Limited A.Exeellent; Non-Admitted Financial St.Category 15; $2,000,000,000 or greater (As of 5/6/14) Essex lasutance Company A,Excellent; Non-Admitted Financial Siu Category 14; $1,500,000,000 to$2,000,000,000 (As n173mn4) Hanford Steam Boiler Inspec&Ina(Inspections A++,Superior; Admitted Only) Financial Size Category 10 $500,000,000 to$750,000,000 (As of 10/25/13) Homeland Insurance Company of New York A,Excellent; Non-Admitted Financial Siff Category 11; $750,000,000 to$1,000,000,W0 (As of 10/4/13) Ironshore Specialty Insurance Company A.Exeellent; Admitted Financial Stu Category 14; $1,500,0110,000 to$2,",000,000 (Asof6 5/13) Ironshore Indemnity Ina(AZ only) A,Excellent; Noo-Admitted Financial Siu Category 14; $1,500,000,000 to$2,000,000,000 (As o176MV13) Lancashiu Insurance Company(UK)Ltd. A,Excellent, Non-Admitted Financial Siu Category 13; $1,250,000,000 to$1,500,000,000 (As of 6/19/13) Lexington Ins,Company A,Excellent; Non-Admitted Financial Siff Category 15; $2,000,000,000mgmwer (As fMO/14) Page 1 of 3 Cnn,pau, A.M. Rest's(46cle Rating CA loan.tunne Reg.l.tocy Status Lloyd's of London A, Excellent; NnlrAdmaled Financial Sis Category 15; $2,000,000,000 or Greater (As of9/19/13) Maxum Indemnity A-,Excellent; Non-Admitted Company Financial Sis Category 8; $100,000,000 to$250,000,000 (As o176/14/13) Scottsdale Surylus Lines Insurance Company A+,Superior; Non-Admitted Financial Sine Category 15; $2,000,000,000 or greater (AID of4/2/14) XL Insurance America Inc. A,Excellent; Admitted Financial Siff Category 15; $2,000,000,000 or greater, (As of 10/29/13) Liability Insurance Compa., A.M. Best',(;,rule Rating is Ins,nance Rv,Uh1tOt s Str1tUx AmTrust—Smurity National Insurance Company A,Excellent; Admitted Financial Sis Category 12; $1,000,000,000 to$1,250,M0,000 (As of 5/30/14) Bedeley National Insurance Company A+,Superior; Admitted Financial Sis Category 15; S2,M0,000,000 on Greater (AID of 1/22/15) Great American Insurance Company A+,SuperlOr Admincd Financial Sis Category 13; $1,250,000,000 to$1,500,000 (As ofMl/14) Workers' Compensation Insurance ( 4)1111)1111� 1 A.M.Best's Guide Rating CA Insurance Regulatory Status CSAC Excess Insurance Authority None N/A-Gevermnent Cede Regulates National Union Fire Insurance Cra of Faittsbwgh,PA A,Excellent; Admitted (AIG) Financial Sis Category 15; S2,M0,000,000 or Greater (As o172/29/15) Note "Admitted" companies are regulated by the California Department of Insurance. Non-Admitted callers are known as "excess and surplus lines carriers"and are regulated by their individual State ofdonneile.In the case of insolvency,policyholders of admitted carriers have access to the California Insurance Guarantee Association (CIGA). Beyond cost, there are various reasons why a policyholder may choose to do business an admitted carrier vs. a non-admitted carrier. Non-admitted carriers are usually more flexible with their rate structure and terms and conditions of coverage. In the public entity space, the general thinking is that the flexibility of non- admitted carriers, if well rated by rating agencies such as A.M. Best, outweighs the advantage meaccess to CIGA in the case of insolvency. Page 2 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 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 FSSD Facilities Support Services Department 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 GOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration POTW Publicly Owned Treatment Works ppm Parts per million RFP Request For Proposal RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency Glossary of Terms and Abbreviations 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 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 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 know 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. 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. 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. Glossary of Terms and Abbreviations Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (D!f) — the dilution at which the majority of the people detect the odor becomes the DrT 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 (MGD) 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. 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. Glossary of Terms and Abbreviations 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.