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HomeMy WebLinkAbout06-12-2019 Administration Committee Meeting Agenda06/05/19 Administration Committee Agenda Page 1 of 5 Orange County Sanitation District Regular Meeting of the ADMINISTRATION COMMITTEE Wednesday, June 12, 2019 5:00 P.M. Administration Building Board Room 10844 Ellis Avenue Fountain Valley, CA (714) 593-7433 UUAGENDA UUCALL TO ORDER: UUPLEDGE 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1.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 May 8, 2019 Administration Committee Meeting. 2. FY 2019-20 USE CHARGES FOR SANTA ANA WATERSHED PROJECT AUTHORITY (Lorenzo Tyner) RECOMMENDATION: 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 Establishing Use Charges for the 2019-20 Fiscal Year Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority (“SAWPA”)”. 06/05/19 Administration Committee Agenda Page 2 of 5 3. ENVIRONMENTAL REGULATORY REPORTS (Lan Wiborg) RECOMMENDATION: Recommend to the Board of Directors to: Receive and file environmental regulatory reports: Biosolids Management Compliance Report 2018; Annual Pretreatment Program Report Fiscal Year 2017-2018; Semi-Annual Pretreatment Program Report Fiscal Year 2018-2019 (July-December); Annual Greenhouse Gas Emissions Report 2018; Annual Emission Report 2018; and Marine Monitoring Annual Report 2017/2018. 4. PHYSICAL SECURITY ACCESS SYSTEM (Lorenzo Tyner) RECOMMENDATION: Authorize an additional $108,980 to Purchase Order No. 106467-OB with Maxim Security Systems to service the card access, surveillance cameras, and intercom systems, and to maintain physical security systems in accordance with the terms and conditions of Bid Specification No. S-2018-983, for a total amount not to exceed $198,980 for the period ending October 22, 2019. NON-CONSENT: 5. 2019-20 OPERATIONAL PROPERTY-LIABILITY INSURANCE RENEWALS (Celia Chandler) RECOMMENDATION: Recommend to the Board of Directors to: Approve the Orange County Sanitation District FY 2019-20 Operational Property-Liability Insurance Renewals for the not-to-exceed amounts specified below: • Excess General Liability Insurance – Not to Exceed $515,371; • Property and Boiler & Machinery – Not to Exceed $837,230; • Earthquake Insurance – Not to Exceed $86,585; and • Excess Workers’ Compensation Insurance - a rate of $0.3120 per $100 of payroll – Not to Exceed $218,000. 6. FLEET MANAGEMENT INFORMATION SYSTEM (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to: A. Award a Professional Consultant Services Agreement to Total Resource Management, Inc. for the procurement of software and services to implement and configure the Transportation Module for Enterprise Asset Management System (IBM Maximo), Specification No. CS-2018-1003BD, for a total amount not to exceed $424,101; and B. Approve a contingency of $42,410 (10%). 06/05/19 Administration Committee Agenda Page 3 of 5 7. INLAND EMPIRE REGIONAL COMPOSTING AUTHORITY CONTRACT – BIOSOLIDS MANAGEMENT (Lan Wiborg) RECOMMENDATION: Recommend to the Board of Directors to: A. Approve Agreement number 4600002709-HD with the Inland Empire Regional Composting Authority (IERCA) for the Orange County Sanitation District (Sanitation District) to pay IERCA to receive and compost up to approximately 50 wet tons per day of the Sanitation District’s biosolids at a base fee (tipping fee) of $56 per wet ton, plus an administrative fee of $2 per wet ton, and an annual base fee increase of $1 per fiscal year, with a term of the Agreement of five (5) years and, upon mutual written agreement, an option to extend on a year-to-year basis with up to two (2) annual extensions in a total annual amount not to exceed $820,000 per year; and B. Approve a 10% contingency of $400,000 in the event the Sanitation District needs to send additional loads to this compost option. INFORMATION ITEMS: 8. DIGESTER GAS FACILITIES REHABILITATION, PROJECT NO. J-124 (Kathy Millea) Staff will present information regarding the Preliminary Design Report cost estimate and its anticipated impact to the FY 2019-20 Budget. NON-CONSENT: 9. PROPOSED FY 2019-20 BUDGET UPDATE (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to: Approve proposed Operating, Capital, Debt/COP Service, and Self-Insurance Budgets for FY 2019-20 as follows: Adopted Budget Proposed Budget FY 2019-20 FY 2019-20 Operations & Maintenance $160,204,370 $168,216,487 Net Capital Improvement Program 137,027,258 153,377,431 Allocation for Rehabilitation/Replacement 0 200,000,000 Debt/COP Service 79,956,000 76,775,000 General Liability and Property Self-Insurance 780,000 780,000 Worker's Compensation Self Insurance 1,750,000 1,750,000 Intra-District Joint Equity Purchase/Sale(1) 3,500,000 5,000,000 TOTAL $383,217,628 $605,848,918 (1)Cash to/from Revenue Area 14 (RA14) in exchange for capital assets to/from Consolidated Revenue Area 15 (RA15). 06/05/19 Administration Committee Agenda Page 4 of 5 10. GANN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2019-20 (Lorenzo Tyner) RECOMMENDATION: 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 Establishing the Annual Appropriations Limit for Fiscal Year 2019-20 for the District in accordance with the Provisions of Division 9 of Title 1 of the California Government Code”. INFORMATION ITEMS: 11. ORANGE COUNTY SANITATION DISTRICT ENVIRONMENTAL SERVICES RESOURCE PROTECTION (Lan Wiborg) Each month, staff provides an informational presentation on topics of interest to the Board of Directors. This month’s topic: Orange County Sanitation District Environmental Services Resource Protection: Protecting Water, Biosolids, and Gas for Reuse. DEPARTMENT HEAD REPORTS: OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: UUADJOURNMENT: The next Administration Committee meeting is scheduled for Wednesday, July 17, 2019 at 5:00 p.m. 06/05/19 Administration Committee Agenda Page 5 of 5 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 32T32TUUklore@ocsd.comUU32T For any questions on the agenda, Committee members may contact staff at: General Manager James Herberg (714) 593-7300 32T32Tjherberg@ocsd.com Assistant General Manager Lorenzo Tyner (714) 593-7550 ltyner@ocsd.com Assistant General Manager Rob Thompson (714) 593-7310 32T32Trthompson@ocsd.com32T Director of Environmental Services Lan Wiborg (714) 593-7450 32T32T2T lwiborg@ocsd.com Director of Human Resources Celia Chandler (714) 593-7202 32T32Tcchandler@ocsd.com32T32T 05/08/2019 Administration Committee SPECIAL MEETING Minutes Page 1 of 5 MINUTES OF THE SPECIAL ADMINISTRATION COMMITTEE MEETING Orange County Sanitation District Wednesday, May 8, 2019, 4:00 p.m. A meeting of the Administration Committee was called to order by Committee Chairman Wanke on Wednesday, May 8, 2019 at 4:00 p.m. in the Operations and Training Conference Room located at Plant No. 2 Operations Center, 22212 Brookhurst Street, Huntington Beach, CA 92646. The meeting was recessed to a tour of Plant No. 2 beginning at 4:06 p.m. The meeting reconvened at 5:08 p.m. 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 Steve Nagel Glenn Parker Erik Peterson Christina Shea David Shawver, Board Chairman COMMITTEE MEMBERS ABSENT: Andrew Nguyen John Withers, Board Vice-Chairman STAFF PRESENT: Jim Herberg, General Manager Lorenzo Tyner, Assistant General Manager Celia Chandler, Director of Human Resources Kathy Millea, Director of Engineering Lan Wiborg, Director of Environmental Services Kelly Lore, Clerk of the Board Jennifer Cabral Damien Fabrizio Al Garcia Tina Knapp Jeff Mohr Wally Ritchie John Swindler Thomas Vu Eros Yong OTHERS PRESENT: Brad Hogin, General Counsel Alternate Directors: Marshall Goodman (La Palma); Bob Ooten (CMSD); Patrick Harper (Fountain Valley); Dean Grose (Los Alamitos); Steve Vargas (Brea); and Carol Warren (Stanton). PUBLIC COMMENTS: None. ITEM NO. 1 05/08/2019 Administration Committee SPECIAL MEETING Minutes Page 2 of 5 REPORT OF GENERAL MANAGER: General Manager Jim Herberg introduced Director of Environmental Services Lan Wiborg. Assistant General Manager Lorenzo Tyner announced that escrow for the sale of the Doig Drive property in Garden Grove closed on Friday, May 3rd. REPORT OF COMMITTEE CHAIR: Committee Chair Wanke did not provide a report. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO:U Approve Minutes of the April 10, 2019 Administration Committee Meeting. AYES: Ferryman, Iglesias (Alternate), Kim, R. Murphy, Nagel, Parker, Peterson, Shawver, and Wanke NOES: None ABSTENTIONS: M. Murphy and Shea ABSENT: Nguyen and Withers 2. IBM TIVOLI MAXIMO AND WEBSPHERE (ENTERPRISEONE) ANNUAL SUBSCRIPTION AND SUPPORT (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve an Annual Purchase Order Contract with Dataskill, Inc. for the renewal of software licensing and maintenance for IBM Maximo and WebSphere, for an amount not to exceed $173,774, for the period beginning July 1, 2019 through June 30, 2020, with four (4) one-year renewal options; and B. Approve a contingency of $26,066 (15%). AYES: Ferryman, Iglesias (Alternate), Kim, R. Murphy, Nagel, Parker, Peterson, Shawver, Shea and Wanke NOES: None ABSTENTIONS: M. Murphy ABSENT: Nguyen and Withers 05/08/2019 Administration Committee SPECIAL MEETING Minutes Page 3 of 5 3. LAPTOP AND DESKTOP COMPUTER REPLACEMENT (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: A. Award a Purchase Order Contract to Zones, Inc. for the purchase of 131 HP computers, Specification No. E-2019-1051BD, for a total amount not to exceed $113,783; and B. Approve a contingency of $11,378 (10%). AYES: Ferryman, Iglesias (Alternate), Kim, R. Murphy, Nagel, Parker, Peterson, Shawver, Shea and Wanke NOES: None ABSTENTIONS: M. Murphy ABSENT: Nguyen and Withers 4. 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 January 1, 2019 to March 31, 2019; and B. Approve the following additions to the pre-approved OEM Sole Source List for the period of January 1, 2019 to March 31, 2019: • DME - Expansion Joints • DRAKE CONTROLS - On-site Training for Woodward Governor Controls • ENVIRONMENTAL RESOURCES ASSOCIATES (ERA) - Quality Control Standards • ORANGE COUNTY SHERIFF’S DEPARTMENT - Law Enforcement and Security Services • OVIVO - Trickling Filter Clarifier Assessment and Repairs • SDT NORTH AMERICAN - On-site Training for Ultrasound Detectors • TPC TRAINING - On-site Electricity Training AYES: Ferryman, Iglesias (Alternate), Kim, M. Murphy, R. Murphy, Nagel, Parker, Peterson, Shawver, Shea and Wanke NOES: None ABSTENTIONS: None ABSENT: Nguyen and Withers 05/08/2019 Administration Committee SPECIAL MEETING Minutes Page 4 of 5 5. CONSOLIDATED FINANCIAL REPORT FOR THIRD QUARTER ENDED MARCH 31, 2019 (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District Third Quarter Financial Report for the period ended March 31, 2019. AYES: Ferryman, Iglesias (Alternate), Kim, M. Murphy; R. Murphy, Nagel, Parker, Peterson, Shawver, Shea and Wanke NOES: None ABSTENTIONS: None ABSENT: Nguyen and Withers NON-CONSENT: None. INFORMATION ITEMS: 6. CAPITAL IMPROVEMENT PROGRAM BUDGET FOR FY 2019-20 (Kathy Millea) Director of Engineering Kathy Millea provided a PowerPoint presentation that reviewed total Capital Improvement Program Budget authority, new projects, top budget increases and decreases, project cancellations/closures, projected FY 2019-20 net CIP outlays by project phase, projected FY 2019-20 net CIP outlays by project driver, and 10-year net CIP outlay: $2.8 billion, and 20-year net CIP outlay: $5.5 billion. 7. FY 2019-20 BUDGET UPDATE (Lorenzo Tyner) Assistant General Manager Lorenzo Tyner introduced this item and Wally Ritchie, Controller, gave a PowerPoint presentation that provided an overview of the budget, revenue, expenses, operating expenses, Capital Improvement Program, and debt service. Mr. Ritchie and Mr. Tyner responded to questions from the Committee. DEPARTMENT HEAD REPORTS: None. CLOSED SESSION: None. 05/08/2019 Administration Committee SPECIAL MEETING Minutes Page 5 of 5 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. UBOARD OF DIRECTORS INITIATED ITEMS FOR A FUTURE MEETING: None. ADJOURNMENT Committee Chairman Wanke declared the meeting adjourned at 5:35 p.m. to the meeting to be held on Wednesday, June 12, 2019 at 5:00 p.m. Submitted by, ______________________ Kelly A. Lore, MMC Clerk of the Board Page 1 of 2 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 To Bd. of Dir. 06/26/19 AGENDA REPORT Item Number 2 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: FY 2019-20 USE CHARGES FOR SANTA ANA WATERSHED PROJECT AUTHORITY GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 19-XX, entitled: “A Resolution of the Board of Directors of the Orange County Sanitation District Establishing Use Charges for the 2019-20 Fiscal Year Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority (“SAWPA”)”. BACKGROUND Currently, the Orange County Sanitation District (Sanitation District) invoices the Santa Ana Watershed Project Authority (SAWPA) on a quarterly basis for the wastewater discharge received from the SARI line. Annually, the rates for flow, biochemical oxygen demand (BOD), and total suspended solids (TSS) are calculated based upon the fiscal year budget for treatment and disposal costs and the 1996 Wastewater Treatment and Disposal agreement. The rates calculated for each constituent for FY 2019-20 for wastewater discharge are: FLOW $221.03 BOD $319.73 TSS $471.81 The FY 2019-20 rates result in approximately an 18.1% increase in the Flow rate, a 12.4% increase in the BOD rate, and a 15% increase in the TSS rate. These increases are due to a combination of a 6% increase in the Operations & Maintenance budget and changes to the allocation parameters between discharge constituents and the change in equivalent usage per EDU for each constituent as a result of the 2017 Rate Study that was adopted in December 2017. Staff has worked with SAWPA over the past several months and officially communicated the exact rates in May 2019. These rates are separate from the rates charged for additional capacity purchases by SAWPA. RELEVANT STANDARDS •Comply with OCSD Policy – Establishing annual SAWPA treatment and disposalrates •Supports 1996 Treatment and Disposal agreement with SAWPA Page 2 of 2 TIMING CONCERNS Rates should be effective for July 1 of FY 2019-20. RAMIFICATIONS OF NOT TAKING ACTION Rates would not be established for FY 2019-20 for cost recovery for treatment and disposal of SAWPA’s wastewater discharge. PRIOR COMMITTEE/BOARD ACTIONS A Resolution is adopted annually in June pursuant to the Wastewater Treatment and Disposal Agreement with SAWPA. ATTACHMENT The following attachment(s) is available in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Draft Resolution No. OCSD 19-XX OCSD 19-XX-1 RESOLUTION NO. OCSD 19-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT ESTABLISHING USE CHARGES FOR THE 2019-20 FISCAL YEAR PURSUANT TO THE WASTEWATER TREATMENT AND DISPOSAL AGREEMENT WITH THE SANTA ANA WATERSHED PROJECT AUTHORITY (“SAWPA”) WHEREAS, the Board of Directors has approved the Wastewater Treatment and Disposal Agreement with the SANTA ANA WATERSHED PROJECT AUTHORITY (“SAWPA”); and, WHEREAS, said agreement provides for payment of Disposal Costs for the measured and sampled flow of Wastewater discharged from SAWPA’s SARI Service Area to Districts’ facilities; and, WHEREAS, said agreement provides for adjustment of said Disposal Costs on an annual basis. NOW, THEREFORE, The Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: Section 1. That pursuant to Section C4 of the Wastewater Treatment and Disposal Agreement, the 2019-20 fiscal year charges for Disposal Costs are hereby established as follows: For Flow: $ 221.03 per million gallons of flow For Biochemical Oxygen Demand: $ 319.73 per thousand pounds For Total Suspended Solids: $ 471.81 per thousand pounds PASSED AND ADOPTED at a regular meeting of the Board of Directors held June 26, 2019. ___________________________ David John Shawver Board Chairman ATTEST: ___________________________ Kelly A. Lore, MMC Clerk of the Board OCSD 19-XX-2 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 19-XX was passed and adopted at a regular meeting of said Board on the 26th day of June 2019, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 26th day of June 2019. Kelly A. Lore, MMC Clerk of the Board of Directors Orange County Sanitation District Page 1 of 4 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 To Bd. of Dir. 06/26/19 AGENDA REPORT Item Number 3 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lan Wiborg, Director of Environmental Services SUBJECT: ENVIRONMENTAL REGULATORY REPORTS GENERAL MANAGER'S RECOMMENDATION Receive and file environmental regulatory reports: Biosolids Management Compliance Report 2018; Annual Pretreatment Program Report Fiscal Year 2017-2018; Semi-Annual Pretreatment Program Report Fiscal Year 2018-2019 (July-December); Annual Greenhouse Gas Emissions Report 2018; Annual Emission Report 2018; and Marine Monitoring Annual Report 2017/2018. BACKGROUND The Orange County Sanitation District (Sanitation District) is subject to environmental regulatory oversight by the U.S. Environmental Protection Agency (EPA), Regional Water Quality Control Board (Santa Ana Region), California Air Resources Board (CARB), and South Coast Air Quality Management District (SCAQMD). These regulatory bodies require routine reporting, which is prepared by the Sanitation District’s Environmental Services Department. These reports include: 1. Annual Biosolids Report (40 CFR Part 503) required by the Sanitation District’s NPDES permit for ocean discharge. Due February 19th of every year. 2. Annual and Semi-Annual Pretreatment Program Reports required by the Sanitation District’s NDPES permit. Due October 31st and March 31st, respectively, of every year. 3. Annual Mandatory Reporting of Greenhouse Gas Emissions required by CARB. This report uses an online portal for report preparation and submission. Due April 10th of every year. 4. Annual Emission Report required by SCAQMD. Due early-mid March of every year. 5. Annual Marine Monitoring Report required by the Sanitation District’s NPDES ocean discharge permit. Due March 15th of every year. RELEVANT STANDARDS • Comply with environmental permit requirements Page 2 of 4 ADDITIONAL INFORMATION Environmental regulatory reporting is routinely required by local, state, and federal regulatory bodies to ensure protection of water, air, and land resources. Some of the reporting is required to be completed using online reporting portals, which perform calculations based on user input of operational data. The following regulatory reports were filed recently. The Biosolids Annual Report contains details about the volume, quality, and locations of management of the Sanitation District’s biosolids. The Sanitation District produced about 799 tons per day of biosolids, including digester cleanings, in 2018. The biosolids are anaerobically digested and dried to about 20% solids. The biosolids are managed via composting and land application. The Biosolids Annual Report was submitted electronically as required by EPA’s Electronic Reporting Rule. Under its ocean discharge permit, the Sanitation District is required to establish and implement an approved pretreatment program to control the level of pollutants discharged into the sewer system. The Sanitation District is also required to submit Pretreatment Program Annual and Semi-Annual Reports detailing the status of the approved program. The reports identified herein contain information about all industrial dischargers permitted by both the Sanitation District and the Santa Ana Watershed Project Authority (SAWPA). The Annual and Semi-Annual reports were successfully completed and submitted prior to the October 31, 2018 and March 31, 2019 respective deadlines. The SCAQMD’s Annual Emissions Report (AER) represents a facility's annual inventory of criteria pollutants (VOC, NOx, SOx, CO, PM) and toxic air emissions. The emissions are calculated based on throughput volume and emissions measured at applicable process areas and emission units. The report assesses fees based on a facility's emissions of air contaminants for the reportable year, as specified in SCAQMD Rule 301. The AER reports for both Plants Nos.1 and 2 are prepared and submitted using SCAQMD's web-based emission reporting tool. For calendar year 2018, Plant No. 1 emitted approximately 32 tons of criteria pollutants and paid total fees in the amount of $12,914.04; Plant No. 2 emitted approximately 25 tons of criteria pollutants and paid total fees in the amount of $8,465.03. The reports were successfully completed and submitted on March 13, 2019, prior to the March 19 deadline. In accordance with the California Global Warming Solutions Act [Assembly Bill 32, 2006], the California Air Resources Board (CARB) requires all major sources that directly emit Greenhouse Gases (GHG) to annually calculate and submit on a calendar year basis their GHG emissions resulting from their combustion of fuel and importation of electrical power. The GHG inventory report focuses primarily on the emissions of carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). Similar to SCAQMD's AER reporting portal, the GHG report is electronically prepared and submitted via CARB's Cal e-GGRT reporting system. For calendar year 2018, Plant No. 1 reported roughly 26,802 metric tons of CO2 emissions, while Plant No. 2 reported approximately 31,352 metric tons of CO2 emissions. The reports were successfully completed and Page 3 of 4 electronically submitted on April 9, 2019 and are pending third party verification due by August 10, 2019. The Sanitation District has completed its annual report for the marine monitoring program, required by the USEPA and the Santa Ana Regional Water Quality Control Board under our NPDES permit. This report summarizes and presents data collected from July 2017 through June 2018, and was successfully completed and electronically submitted on March 14, 2018, in advance of the March 15 deadline. This report evaluates and measures potential impacts to water quality, sediment chemistry, fish and invertebrate community, fish health, and sediment toxicity. The Sanitation District’s ocean monitoring has three required components: Core Monitoring, Regional Monitoring, and Strategic Process Studies. Components of these monitoring activities include: monitoring of benthic sediments for chemical deposition, changes in biological communities, and the health of fish living near the Sanitation District’s ocean outfall. In addition to profiling plume dynamics from the Sanitation District’s effluent discharge, water chemistry, oxygen availability, and physical conditions throughout the water column are monitored to ensure the Sanitation District’s continued compliance with permit requirements and mission. As the Sanitation District continues to make advancements to the wastewater treatment processes, our marine monitoring program continues to show improvement of environmental health around the outfall and outer monitoring area. Water quality measurements demonstrate no negative environmental impacts due to the Sanitation District’s effluent and brine discharge. Sediment quality concentrations of metals and organic contaminants were well below established guidelines that might result in biological concerns. Marine invertebrates and fish have shown comparable abundances near the outfall and non-outfall stations alike. Monitoring of fish tissue for trace metals and chlorinated pesticides in muscles and/or livers were also low and comparable at outfall and non-outfall stations. These results were also well below federal and state human consumption guidelines. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Biosolids Management Compliance Report 2018 (separate electronic file) • Annual Pretreatment Program Report Fiscal Year 2017-2018 (separate electronic file) Page 4 of 4 • Semi-Annual Pretreatment Program Report Fiscal Year 2018-2019 (July-December) (separate electronic file) • Annual Greenhouse Gas Emissions Report 2018 (separate electronic file) • Annual Emission Report 2018 (separate electronic file) • Marine Monitoring Annual Report 2017/2018 (separate electronic file) Page 1 of 2 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 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: PHYSICAL SECURITY ACCESS SYSTEM GENERAL MANAGER'S RECOMMENDATION Authorize an additional $108,980 to Purchase Order No. 106467-OB with Maxim Security Systems to service the card access, surveillance cameras, and intercom systems, and to maintain physical security systems in accordance with the terms and conditions of Bid Specification No. S-2018-983, for a total amount not to exceed $198,980 for the period ending October 22, 2019. BACKGROUND In 2018, the Orange County Sanitation District (Sanitation District) upgraded its card access system to improve physical security. During the upgrade project, the required card readers were discontinued by the manufacturer and the replacement product was not available in time to purchase and install before the existing blanket purchase order expired. The new card readers are now available and have been tested and the Sanitation District is ready to complete the project. The current blanket Purchase Order for $90,000 was awarded by a competitive bid process, Specification No. S-2018-983. The Sanitation District received responses from Maxim Security Systems and Secsol, Inc. The most responsive and responsible bidder was Maxim Security Systems. RELEVANT STANDARDS • Protect Orange County Sanitation District assets • Ensure the public’s money is wisely spent PROBLEM The current ID cards can be cloned, allowing unauthorized access to Sanitation District facilities. To replace the existing ID cards also requires replacing 289 card readers. PROPOSED SOLUTION Replace all the ID cards with smart cards, and all card readers that are not compatible with smart cards. Page 2 of 2 TIMING CONCERNS N/A RAMIFICATIONS OF NOT TAKING ACTION Unauthorized people could clone Sanitation District ID cards and gain access to Sanitation District facilities. Examples of these areas include electrical generator and distribution, plant operations centers, data centers, and process control areas. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. (FY2018-19 Budget, Section 6, Page 36, Line item: Repairs & Maintenance). 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 4 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 To Bd. of Dir. 06/26/19 AGENDA REPORT Item Number 5 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: 2019-20 OPERATIONAL PROPERTY-LIABILITY INSURANCE RENEWALS GENERAL MANAGER'S RECOMMENDATION Approve the Orange County Sanitation District FY 2019-20 Operational Property-Liability Insurance Renewals for the not-to-exceed amounts specified below: • Excess General Liability Insurance – Not to Exceed $515,371; • Property and Boiler & Machinery – Not to Exceed $837,230; • Earthquake Insurance – Not to Exceed $86,585; and • Excess Workers’ Compensation Insurance - a rate of $0.3120 per $100 of payroll – Not to Exceed $218,000. BACKGROUND The Risk Management Division of Human Resources (Risk Management) provides the Administration Committee an annual status update regarding the upcoming annual renewals of the Orange County Sanitation District’s (Sanitation District) major insurance policies for the upcoming year. Risk Management staff and the Sanitation District’s operational insurance broker, Alliant, began the renewal process in January and received final quotes in June. After successfully negotiating with the insurance carriers, Alliant was able to secure competitive rates for the Sanitation District without compromising the quality of coverage provided. The insurance market has been in a state of flux due to events around the world and in the state of California. Insurers have taken losses for previous years and, as a result, insurance costs will increase to absorb the losses. The cost of insurance coverage will increase by 11.5%, or $170,294, for a total cost of $1,657,186 for FY 2019-20. The four major lines of insurance, which are included in the Sanitation District’s budget, are: 1) Excess General Liability Insurance 2) All-Risk Property and Flood insurance (includes Boiler & Machinery insurance) 3) Earthquake Insurance 4) Excess Workers’ Compensation Page 2 of 4 RELEVANT STANDARDS • Protect Orange County Sanitation District assets PROBLEM Insurance is necessary to protect the Sanitation District’s assets and financial well-being. PROPOSED SOLUTION Approve the insurance renewals as described above to ensure continued coverage of the Sanitation District’s assets. TIMING CONCERNS Board approval is necessary since current insurance will expire June 30, 2019. RAMIFICATIONS OF NOT TAKING ACTION Without Board approval, the Sanitation District cannot finalize the contracts with the insurance carriers, and the Sanitation District’s insurance will lapse. PRIOR COMMITTEE/BOARD ACTIONS April 2019 - Informational presentation to the Administration Committee detailing each of the five major insurances for the Sanitation District operations, and the status of the insurance market. ADDITIONAL INFORMATION 1) Excess General Liability Insurance Program The Sanitation District’s Excess General Liability Insurance Program is currently provided through the California Municipal Excess Liability Program (CAMEL) and its sister program, the Alliant National Municipal Liability Program (ANML). The Sanitation District has participated in the CAMEL program since FY 1996-97. This program currently provides the Sanitation District with a $40 million dollar policy of comprehensive coverage for municipal liability, bodily injury and property damage, and personal injury. The program was structured to also include Employment Practices and Public Officials Errors & Omissions coverage. The $40 million dollar coverage has a self-insured deductible of $500,000. Since 1997, the Employment Practices portion of coverage has been enhanced from a $2 million dollar sub-limit to the full policy limit of $40 million dollars. Page 3 of 4 2) All-Risk Property and Flood Insurance The All-Risk Property and Flood Insurance Program (Property Insurance) provides for comprehensive coverage for much of the Sanitation District’s real and personal property regarding virtually all perils including fire, flood, and business interruption. Current Property Insurance limits are $1 billion dollars for most perils other than flood and earthquakes, and $300 million dollars for flood, with many sub-limits for various situations. In order to reach $1 billion dollars in limits, the broker had to arrange for more than a dozen different insurers. The Self-insured Retention (SIR), or deductible, is $250,000 per occurrence for most types of losses. Since the late 1990’s, the Property Insurance has been with a nationwide joint purchase property insurance program called Public Entity Property Insurance Program (PEPIP), one of the world’s largest property programs. It is important to note that this joint purchase property insurance program offers the purchasing power of numerous large public entities without the pooling or sharing of coverage or losses. The Boiler & Machinery insurance program, part of the property insurance, provides comprehensive coverage for loss caused by machinery breakdown and explosion of steam boilers or other covered process equipment, including damage to the equipment itself and damage to other property caused by covered accident. The current Boiler & Machinery insurance program provides coverage of $100 million dollars per occurrence with deductibles ranging from $25,000 to $350,000 for losses caused by covered machinery breakdown (e.g., motors, steam turbines, digesters, co-gen engines). Damages to the equipment, as well as damages to other property and improvements caused by the machinery breakdown, are covered by the Boiler & Machinery insurance. This program augments the Sanitation District’s all-risk property insurance that covers perils such as fire and flood. 3) Earthquake Insurance The Sanitation District previously carried earthquake insurance as part of its Property Insurance, but in the last 15 years earthquake insurance proved difficult to obtain or not cost-effective. The Sanitation District asked its insurance broker each year to survey the market to see if rates have changed. Finally, in 2015 a plan was created to insure several key Sanitation District structures identified by Engineering, thus keeping the cost in line. The insurance is a high deductible plan with a limit of $25 million dollars in total. 4) Excess Workers’ Compensation Insurance The Excess Workers’ Compensation insurance coverage is with the California State Association of Counties Excess Insurance Authority (CSAC EIA). The Sanitation District has participated in this program or its predecessor since 2003. The Excess Workers’ Compensation program currently provides “Statutory” (unlimited) coverage with a SIR of Page 4 of 4 $1 million dollars. The use of Excess Workers’ Compensation Insurance dates back to the late 1980’s. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. 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 3 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 To Bd. of Dir. 06/26/19 AGENDA REPORT Item Number 6 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: FLEET MANAGEMENT INFORMATION SYSTEM GENERAL MANAGER'S RECOMMENDATION A. Award a Professional Consultant Services Agreement to Total Resource Management, Inc. for the procurement of software and services to implement and configure the Transportation Module for Enterprise Asset Management System (IBM Maximo), Specification No. CS-2018-1003BD, for a total amount not to exceed $424,101; and B. Approve a contingency of $42,410 (10%). BACKGROUND The current Fleet Management Information System (FMIS) was implemented in 2007 and provides basic Fleet asset tracking, motor pool management, and maintenance management capabilities for the Orange County Sanitation District (Sanitation District). Fleet assets are comprised of vehicles, mobile/portable equipment, and shop equipment, totaling more than 700 assets. IBM Maximo was implemented in January 2013 and is used by the Sanitation District’s Warehouse and Operations and Maintenance Department in the lifecycle management of the treatment plants’ physical assets. The system provides real-time visibility into asset performance and enables staff to proactively control and optimize asset performance. RELEVANT STANDARDS • Protect Orange County Sanitation District assets • Maintain a proactive asset management program • Maintain a culture of improving efficiency to reduce the cost to provide the current service level or standard PROBLEM The current FMIS operates as a stand-alone system and does not integrate with other systems including the Financial Management (JD Edwards), IBM Maximo, Time Card (WorkForce Software), Outlook, and SharePoint. Page 2 of 3 Having the Plant Asset in one system and the Fleet Asset in another system has created a significant operational scheduling complexity and inefficiency for the Sanitation District. The current FMIS does not allow maintenance planners to directly schedule Fleet equipment for use in plant maintenance activities. The coordination of Fleet equipment is performed using a manual process by phone. Additionally, the current FMIS is based on an outdated technology which requires additional support and maintenance efforts. PROPOSED SOLUTION To properly maintain, repair, and manage the Sanitation District’s Fleet Assets, the Information Technology (IT) and Fleet Services divisions request to purchase the IBM Maximo Transportation module and related professional services to install and configure the system. This will allow the Sanitation District to consolidate Fleet Asset with the Plant Asset and leverage the existing IBM Maximo integration with our other Enterprise Systems. The result for the Sanitation District will be improved asset and labor productivity, better optimization of maintenance resources, improved efficiency in inventory management, and prevention of asset failure. The Maximo Transportation module will add required functionality for Fleet vehicles and portable/mobile equipment. This module also provides required support for Fleet Motor Pool management and equipment reservations. TIMING CONCERNS Proper maintenance and performance of fleet assets is imperative for the continued support and safety of plant operations. RAMIFICATIONS OF NOT TAKING ACTION The decision not to purchase the IBM Maximo Transportation Module and related professional services will result in continued inefficiencies. This will negatively impact the Maintenance organization’s planned maintenance environment. PRIOR COMMITTEE/BOARD ACTIONS December 2017 - Approved a Professional Services Agreement for Specification No. S-2017-871BD with Total Resource Management, Inc. for IBM-Maximo Enterprise Asset Management Phase IV – Lock Out Tag Out (LOTO) Software. ADDITIONAL INFORMATION On December 18, 2018, the Sanitation District issued a Request for Proposal (RFP) for the Fleet Management Information System; the RFP closed on January 31, 2019. The Sanitation District received responses from Total Resource Management, Inc.; Fields Consulting; CCG Systems Inc.; and AssetWorks LLC. A panel consisting of four Sanitation District staff reviewed and ranked the proposals. This RFP used the individual scoring method. Evaluators discussed the relative strengths and weaknesses of the vendor’s proposal in each area. Staff recommends selection of Total Resource Page 3 of 3 Management, Inc. to provide software licensing, implementation, and configuration services of the IBM Maximo Transportation Module for a not-to-exceed amount of $424,101. PROPOSAL EVALUATION TABLE Firm Evaluator # 1 Evaluator # 2 Evaluator # 3 Evaluator # 4 Total Weighted Score (Points)/ Ranking Total Resource Management, Inc. 675.00 672.50 690.00 322.50 590.00 Rank: 1 AssetWorks, LLC 602.50 365.00 400.00 212.50 395.00 Rank: 2 Fields Consulting 490.00 250.00 350.00 92.50 295.63 Rank: 3 CCG Systems Inc. 417.50 300.00 280.00 185.00 295.63 Rank: 3 Initial Proposed Fee $531,603 Negotiated Fee $424,101 CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. (FY2018-19 Budget, Section 8, Page 10, EAM Software & Process Implementation (SP-100)). ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Consultant Services Agreement Orange County Sanitation District 1 of 20 Specification No. CS-2018-1003BD Version 032018 PROFESSIONAL CONSULTANT SERVICES AGREEMENT Fleet Management Information System Specification No. CS-2018-1003BD THIS AGREEMENT 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 Total Resource Management, Inc. with a principal place of business at 510 King Street, Suite 200, Alexandria, VA 22314 (hereinafter referred to as "Consultant") collectively referred to as the “Parties”. W I T N E S S E T H WHEREAS, based on Consultant’s expertise and experience, OCSD desires to temporarily engage Consultant to provide Fleet Management Information System "Services” as described in Exhibit “A”; and WHEREAS, Consultant submitted its Proposal, dated January 31, 2019; and WHEREAS, on June 26, 2019, the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and Consultant; and WHEREAS, OCSD has chosen Consultant to conduct Services in accordance with Ordinance No. OCSD-52; and NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agree as follows: 1. Definitions 1.1. As-Built Documentation. The term “As-Built Documentation” means the Baseline Documentation plus the Documentation for any Configuration Changes and Customization Modifications. All “As-Built Documentation” shall supplement and not conflict with the terms of this Agreement. In the event of a conflict, the terms of this Agreement shall prevail. 1.2. Configuration Changes. The term “Configuration Changes” is defined as any modification or changes other than a Custom Modification. 1.3. Consultant Application Software. The term “Consultant Application Software” is defined as any Software owned or sublicensed, installed and/or configured by Consultant as a component of the Project, whether in machine readable or printed form, including, but not limited to any applications, modules, subsystems, Interfaces, Configuration Changes, Custom Modifications, Updates and Documentation. 1.4. Custom Modification. The term “Custom Modification” is defined as a modification of the Consultant Application Software Source Code or data base structure, which provides new or improved functions or features to address specific requirements of this Agreement. Orange County Sanitation District 2 of 20 Specification No. CS-2018-1003BD Version 032018 1.5. Defect. The term “Defect” is defined as any error, failure, deficiency, or any other unacceptable variance or failure of the System or any component thereof to fully conform to the warranties and requirements described in this Agreement. With respect to the Consultant Application Software, the term “Defect” is defined as any error, failure, or deficiency or any other unacceptable variance from any required, specified, or expected program behaviors as may be required by OCSD or necessary for the Consultant Application Software to operate correctly and in full compliance with the terms of this Agreement. This includes expected program behaviors as described in any Consultant Application Software Documentation. In the event of a conflict between this Agreement and Documentation provided by Consultant to OCSD, the terms and conditions of this Agreement shall prevail. 1.6. Documentation. The term “Documentation” is defined as all written, electronic, or recorded works including all “As-Built Documentation” that describe the uses, features, functional capabilities, performance standards, and reliability standards of the System, or any subsystem, component, or Interface, and that are published or provided to OCSD by Consultant or its subcontractors, including, without limitation, all end user and System administrator manuals, help files, training aids and manuals, training and support guides, program listings, data models, flow charts, logic diagrams, and other materials related to or for use with the System. 1.7. Final System Acceptance. The term “Final System Acceptance” shall be defined as that date on which all Services under Section Titled “Project Scope and Deliverable” of Exhibit “A” Scope of Work have been successfully completed by Consultant and accepted by OCSD. 1.8. Fix Pack. The term “Fix Pack” is defined as a formal release of programming code and Documentation that provides corrections to any Consultant Application Software programs including, but not limited to, bug fixes, error corrections and patches. 1.9. Functional, Performance and Reliability Specifications and Requirements. The term “Functional, Performance and Reliability Specifications and Requirements” is defined as all definitions, descriptions, requirements, criteria, warranties, and performance standards relating to the System set forth in: (a) this Agreement; (b) any mutually agreed upon Change Orders pursuant to Section 4, Modification to Exhibit “A” Scope of Work; and (c) any functional and/or technical specifications which are published or provided by Consultant or its licensors or suppliers from time to time with respect to the System or any Products. 1.10. Interfaces. The term “Interfaces” is defined as one or more of the specialized software applications developed or sublicensed by Consultant and installed as a part of the Project for the purpose of sharing information (data) between Consultant and/or Consultant Application Software and any other software program or device. Functional requirements for each Interface to be included as a part of the System are provided Exhibit “A”, Scope of Work. 1.11. Products. The term “Products” is defined as all Software listed in the “Exhibit “A” Scope of Work, Exhibit “B” Consultant’s Best and Final Offer (BAFO) Proposal and Exhibit “B-1” Consultant’s BAFO Cost Proposal Form respectively. 1.12. Project. The term “Project” is defined as the totality of Consultant’s obligation under this Agreement to develop, supply, install, configure, test, implement and maintain the System. Orange County Sanitation District 3 of 20 Specification No. CS-2018-1003BD Version 032018 1.13. Services. The term “Services” is defined as the implementation, development, training, configuration, loading, testing, project management and other services to be provided by Consultant under this Agreement, including, without limitation, the tasks detailed in Exhibit “A”, Scope of Work. 1.14. Software. The term “Software” includes the following components provided and licensed by Consultant under this Agreement: (a) Consultant Application Software; (b) Third-Party Software; (c) Custom Modifications and (d) Interfaces. 1.15. System. The term “System” is defined as the collective whole of all Products and Services to be purchased, developed, licensed, supplied, installed, configured, tested and implemented by Consultant under this Agreement. 1.16. System Administrator Documentation. Is defined as that portion of the Documentation addressing the operation and maintenance functions of the System. 1.17. Third-Party Software. The term “Third-Party Software” is defined as any Software to be supplied under this Agreement that is purchased or licensed directly from any source external to Consultant for use with or integration into the System. 1.18. Updates. The term “Updates” is defined as modifications, improvements, additions, and corrections to the Products and/or related Documentation, including functional and/or product enhancements, bug fixes, patches, new releases, new versions, and replacement modules or products that Consultant makes generally available to its customers with or without an additional fee. 1.19. Go-Live Support. The term “Go-live Support” is as described in “Exhibit “A” Scope of Work, Exhibit “B” Consultant’s BAFO Proposal and Exhibit “B-1” Consultant’s BAFO Cost Proposal Form of this Agreement. 1.20. Work Product. The term “Work Product” is defined as the Products and Services and all other programs, algorithms, reports, information, designs, plans and other items developed by Consultant under this Agreement, including all partial, intermediate or preliminary versions thereof. 2. Miscellaneous 2.1. Access to Premises. OCSD shall provide Consultant with reasonable and timely access to the sites and personnel necessary for Consultant to perform its obligations under this Agreement. OCSD shall allow Consultant personnel reasonable access to OCSD site and facilities (telephone, facsimile, parking, etc.) during normal business hours and at other reasonable times as requested by Consultant and pre-approved by OCSD. The assistance or presence of OCSD’s personnel will not relieve Consultant of any responsibilities under this Agreement. 2.2. Amendments. No amendment or modification to this Agreement is valid unless it is contained in a writing signed by both parties. 2.3. Approvals in Writing. All approvals or consents required or contemplated by this Agreement must be in writing to be effective. Orange County Sanitation District 4 of 20 Specification No. CS-2018-1003BD Version 032018 2.4. Background Checks and Removal of Personnel. Prior to being allowed to perform any work on this Project, all non-OCSD personnel assigned to the Project may be required to submit to and pass a background check by the Fountain Valley, California Police Department. In addition, OCSD shall have the sole and exclusive right to require Consultant to immediately remove any individual from the Project for any reason deemed to be in the best interests of OCSD. Consultant shall replace any employee removed from the project within ten (10) business days of said removal. 2.5. Compliance with Work Rules. Consultant will ensure that, while they are on OCSD premises, Consultant’s personnel and subcontractors will comply with OCSD’s working rules and policies, including OCSD’s security and safety procedures, and the Human Resources Policies specified in Exhibit “F”. 2.6. Successors and Assigns. This Agreement is binding on and inures to the benefit of the parties and their respective successors and assigns. 2.7. Advertising. Consultant shall not refer to the existence of this Agreement in any press release, advertising or materials distributed to prospective customers without the prior written consent of OCSD. 2.8. This Agreement and all Exhibits hereto (called the "Agreement") is made by OCSD and Consultant. The terms and conditions herein exclusively govern the purchase of Services as described in the Scope of Work Exhibit “A”. 2.9. Exhibits to this Agreement are incorporated by reference and made a part of this Agreement as though fully set forth at length herein. Exhibits to this Agreement are as follows: Exhibit “A” Scope of Work Exhibit “B” Consultant’s BAFO Proposal Exhibit “B-1” Consultant’s BAFO Cost Proposal Form Exhibit “C” Acknowledgement of Insurance Requirements Exhibit “D” OCSD Safety Standards Exhibit “E” Not Used Exhibit “F” Human Resources Policies 2.10. In the event of any conflict or inconsistency between the provisions of this Agreement and any of the provisions of the Exhibits hereto, the provisions of this Agreement shall in all respects govern and control. 2.11. This Agreement may not be modified, changed or supplemented, nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by both Parties. 2.12. The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any Paragraph or provision hereof. 2.13. The term "workday". Workdays are defined as all days that are not Friday, Saturday and Sunday, or legally OCSD observed holidays. Meetings with OCSD staff shall be scheduled from Monday through Thursday between the hours of 6:30AM and 4PM PST and shall conform to OCSD work schedules. OCSD review periods shall not include legally OCSD observed holidays. Orange County Sanitation District 5 of 20 Specification No. CS-2018-1003BD Version 032018 2.14. OCSD holidays (non-working days) are as follows: New Year’s Day, Lincoln’s Birthday, Presidents’ Day Monday, Memorial Day Monday, Independence Day, Labor Day Monday, Veterans Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, and Christmas Day. 2.15. The term "days", when used in the Agreement, shall mean calendar days, unless otherwise noted as workdays. 2.16. Work Hours: The work required under this Agreement may include normal Business hours, evenings, and weekends. 2.17. Consultant shall provide OCSD with all required premiums and/or overtime work at no charge beyond the price provided under "Compensation" below. 2.18. Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by Consultant as a result of work performed in anticipation of purchases of said services by OCSD. 2.19. Goods and Services, whether stated separately or in conjunction with each other, shall mean Fleet Management Information System and the services related to the provision of such as described in Exhibit “A" 2.20. Construction of Agreement. This Agreement is the product of joint discussions and negotiations at arms’ length between the parties, both of whom are sophisticated and knowledgeable in business matters and both of whom have relied on the advice of independent legal counsel. Any rule of law which would require interpretation of this Agreement against the party that drafted it shall have no application to this Agreement. 3. Scope of Work: General requirements for the scope of this Project are listed below. A detailed list of tasks and responsibilities are included in Exhibit “A”, Scope of Work. 3.1. Scope of Work. Subject to the terms of this Agreement, Consultant shall perform the Services identified in Exhibit “A” Scope of Work. Consultant warrants that all of its Services shall be performed in a competent, professional and satisfactory manner. 3.2. Modifications to Equipment and Facilities. OCSD shall be responsible for making OCSD-approved modifications identified in an OCSD approved, Site Analysis Report. Thereafter, Consultant will be precluded from asserting that it is unable to perform its obligations under this Agreement because of any pre-existing condition. During implementation, any changes to the System or any costs that may be incurred in order to complete the requirements of this Agreement but were not identified in the Site Analysis Report will be the sole and exclusive responsibility of Consultant. In addition, if the System is unable to meet the Functional, Performance and Reliability Specifications and Requirements in this Agreement after the identified upgrades and changes have been made, then Consultant will be responsible, at its own expense, for making any further upgrades or changes necessary to achieve this result. 3.3. User Qualifications. OCSD shall use its best efforts to ensure that persons operating the System will be qualified, supervised, and trained in the use of personal computers and normal operations. Consultant will ensure that all training on the System or System components will be conducted professionally and effectively so that each operator trained by Consultant is proficient in its use. Orange County Sanitation District 6 of 20 Specification No. CS-2018-1003BD Version 032018 3.4. Transition. Consultant will work with OCSD to ensure a smooth and efficient transition from OCSD’s current systems to the new System and to minimize disruption to current operations, even if it necessitates working late evening, early morning, or weekend hours. Any required disruptions to OCSD’s operations shall be scheduled in advance and approved by OCSD. 4. Modifications to Scope of Work: Requests for modifications to the Exhibit “A” Scope of Work can be made by OCSD at any time. All modifications must be made in writing and signed by both Parties. A review of the time required for the modification will be made by OCSD and Consultant and the Agreement period adjusted accordingly. 5. License 5.1. Grant of License. 5.1.1. OCSD shall have the right to use all Consultant Application Software as may be necessary in order to operate the System purchased under this Agreement. In addition, OCSD shall have the right to use the Consultant Application Software as necessary to (a) operate the System (b) conduct internal training and testing, and (c) perform disaster recovery, backup, archive and restoration testing and implementation as may be required in OCSD’s judgment. This license shall apply to all commercially available Updates throughout the term of this Agreement. OCSD shall have the right to use all Consultant Application Software licensed under this Agreement on any equipment at any facility and at any location and may make as many copies of the Software as it desires to support its authorized use of the Software, provided the copies include Consultant’s or the third-party owner’s copyright or other proprietary notices. 5.1.2. Not Used. 5.1.3. The approval of Consultant to use Consultant Application Software and Third Party Software and OCSD’s use of it shall not constitute a waiver of OCSD’s right to reject the System, in whole or in part, if the requirements for Final System Acceptance are not met. 5.2. Limitations on License. Except as licensed to OCSD, Consultant retains all of its current rights, title, and interest in the Consultant Application Software, including Derivative Works, Custom Modifications, Configuration Changes and Updates. Unless authorized by Consultant or required by law, OCSD will not: (1) make available or distribute all or part of the Software to any third party by assignment, sublicense or any other means; or (2) disassemble, decompile, or reverse engineer the Software, or allow any third party to do so. 5.3. Security. Certain Software Packages are required to operate in conjunction with a hardware lock device or in conjunction with license administration Software and a license authorization key provided by Consultant or its representative. OCSD shall take no steps to avoid or defeat the purpose of any required lock device or authorization key. Use of any Software Package without a required lock device or authorization key shall be unlicensed under this Agreement. Orange County Sanitation District 7 of 20 Specification No. CS-2018-1003BD Version 032018 5.4. Restricted Access. OCSD shall use every reasonable method to restrict access to the Consultant Application Software, or Documentation related thereto, to persons not authorized to use the Consultant Application Software under the terms of this Agreement. OCSD shall not copy the Consultant Application Software or Documentation except as necessary for use under this Agreement. OCSD shall not decrypt, reverse compile or disassemble the Consultant Application Software. OCSD shall not export or re-export the Consultant Application Software or Documentation. Furthermore, OCSD shall abide by all applicable Federal and State Trademark and Copyright laws. 6. Compensation: Compensation to be paid by OCSD to Consultant for the Services provided under this Agreement shall be a total amount not to exceed Four Hundred Twenty-Four Thousand One Hundred One Dollars ($424,101.00). 7. California Department of Industrial Relations (DIR)Registration and Record of Wages 7.1. To the extent Consultant’s employees and/or subconsultants who will perform work under this Agreement for which Prevailing Wage Determinations have been issued by the DIR and as more specifically defined under Labor Code Section 1720 et seq, Consultant and subconsultants 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. 7.2. The Consultant and subconsultants 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. 7.3. Pursuant to Labor Code Section 1776, the Consultant and subconsultants 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. 7.4. The Consultant and Subconsultant shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulation Section 16461(e). 8. Payment and Invoicing 8.1. OCSD shall pay, net thirty (30) days, upon receipt and approval, by OCSD’s Project Manager or designee, of itemized invoices submitted for Services completed in accordance with Exhibit “A”. OCSD, at its sole discretion, shall be the determining party as to whether the Services have been satisfactorily completed. 8.2. Invoices shall be emailed by Consultant to OCSD Accounts Payable at APStaff@OCSD.com and “INVOICE” with the Purchase Order Number and Specification No. CS-2018-1003BD shall be referenced in the subject line. Orange County Sanitation District 8 of 20 Specification No. CS-2018-1003BD Version 032018 9. Audit Rights: Consultant agrees that, during the term of this Agreement 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 Consultant relating to the invoices submitted by Consultant pursuant to this Agreement. 10. Term: The Services to be provided by Consultant under this Agreement shall commence on the effective date of the Notice to Proceed. 11. Extensions: The term of this Agreement may be extended only by written instrument signed by both Parties. 12. Performance: Time is of the essence in the performance of the provisions hereof. 13. Termination 13.1. OCSD reserves the right to terminate this Agreement for its convenience, with or without cause, in whole or in part, at any time, by written notice from OCSD. Upon receipt of a termination notice, Consultant shall immediately discontinue all work under this Agreement (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Consultant for work performed (cost and fee) to the date of termination. Consultant expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Agreement. Such notice of termination shall terminate this Agreement and release OCSD from any further fee, cost or claim hereunder by Consultant other than for work performed to the date of termination. 13.2. OCSD reserves the right to terminate this Agreement immediately upon OCSD’s determination that Consultant is not complying with the Scope of Work requirements, if the level of service is inadequate, or any other default of this Agreement. 13.3. OCSD may also immediately terminate for default of this Agreement in whole or in part by written notice to Consultant: • if Consultant becomes insolvent or files a petition under the Bankruptcy Act; or • if Consultant sells its business; or • if Consultant breaches any of the terms of this Agreement; or • if total amount of compensation exceeds the amount authorized under this Agreement. 13.4. All OCSD property in the possession or control of Consultant shall be returned by Consultant to OCSD on demand, or at the termination of this Agreement, whichever occurs first. In addition, Consultant will deliver to OCSD all Work Product currently in existence and for which payment has been made. 13.5. Upon termination or expiration of this Agreement, Consultant will cooperate with OCSD to assist with the orderly transfer of services, functions, and operations provided by Consultant under this Agreement to another provider or to OCSD as determined by OCSD in its sole discretion. Prior to the termination or expiration of this Agreement, OCSD may require Consultant to perform those transition services described below that OCSD deems necessary to migrate Consultant’s work to another provider or to OCSD. Transition services may include, but are not limited to the following: Orange County Sanitation District 9 of 20 Specification No. CS-2018-1003BD Version 032018 13.5.1 Pre-Migration Services. 13.5.1.1 Working with OCSD to jointly develop a mutually agreed upon Transition Services Plan to facilitate the termination of the services; 13.5.1.2 Notifying all affected vendors and subcontractors of Consultant; and 13.5.1.3 Freezing all non-critical changes to the System. 13.5.2 Migration and Post-Migration. 13.5.2.1 Performing the Transition Services Plan activities. 13.5.2.2 Answering questions regarding the services performed by Consultant or the System on an as-needed basis; 13.5.2.3 Providing such other reasonable services needed to effectuate an orderly transition to a new System. 14. Indemnification and Hold Harmless Provision: Consultant 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 Consultant's services under this Agreement, or by its subconsultant(s) or by anyone directly or indirectly employed by Consultant, and whether such damage or injury shall accrue or be discovered before or after the termination of the Agreement. Except as to the sole active negligence of or willful misconduct of OCSD, Consultant 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 Consultant's performance under the Agreement, 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 Agreement, and/or (c) on account of any goods and services provided under this Agreement. This indemnification provision shall apply to any acts or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of Consultant or anyone employed by or working under Consultant. To the maximum extent permitted by law, Consultant'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 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. Consultant agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD. This section shall survive the expiration or early termination of the Agreement. 15. Insurance: Consultant and all subconsultants shall purchase and maintain, throughout the life of this Agreement and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements, Exhibit “C“. Consultant shall not commence work under this Agreement until all required insurance is obtained in a form acceptable to OCSD, nor shall Consultant allow any subconsultant to commence service pursuant to a subcontract until all insurance required of the subconsultant has been obtained. Failure to maintain required insurance coverage shall result in termination of this Agreement. Orange County Sanitation District 10 of 20 Specification No. CS-2018-1003BD Version 032018 16. Warranty 16.1. System Warranty. Consultant warrants that the System will meet the Functional, Performance and Reliability Specifications and Requirements as defined in this Agreement. The System and/or each of its subsystems, components and Interfaces will be capable of operating fully and correctly in conjunction with the System Hardware. Consultant warrants that for the term of this Agreement, the System will perform as described in Exhibit “A” Scope of Work, Exhibit “B” Consultant’s BAFO Proposal and Exhibit “B-1” Consultant’s BAFO Cost Proposal Form, respectively and in material and workmanship and will remain in good working order. In the event the System does not meet these warranties, Consultant shall provide, at no charge, the necessary software, hardware, and/or services required to attain the levels or standards contained in these warranties. 16.2. Application Software 16.2.1 All Consultant Application Software licensed under this Agreement is free of known Defects, viruses, worms and Trojan horses, or otherwise (except for documented security measures such as password expiration functions); 16.2.2 During the term of the Agreement; the Consultant Application Software will meet or exceed the Functional, Performance and Reliability Specifications and Requirements herein; 16.2.3 Not Used. 16.2.4 Consultant Application Software is and will be general release versions that have been fully tested at Consultant's site in accordance with best industry practices, and are not beta or pre-release versions (unless agreed to in writing by OCSD); and, 16.2.5 Custom Modifications and Interfaces have been fully tested in accordance with best industry practices and are free of known Defects. Consultant further agrees that during the term of this Agreement, Consultant will provide OCSD, if OCSD so desires, with any Updates at no additional cost (including any and all costs associated with the installation of those Updates) immediately upon their commercial availability to any other entity. 16.3. Work Quality Warranty. Consultant warrants that all work performed by Consultant and/or its subcontractors under this Agreement will conform to best industry practices and will be performed in a professional and workmanlike manner by staff with the necessary skills, experience and knowledge to do so. 16.4. Regulatory Warranty. Consultant warrants that, for the Term of this Agreement, the System will comply with all processing and reporting requirements for State and Federal laws, and regulations. If the Software requires updating due to a change in a State or Federal law, or regulation, affecting OCSD, Consultant will provide these changes per a mutually agreed to schedule at no additional charge to OCSD. Notwithstanding this provision, in no event shall Consultant provide said update later than the date required by the State or Federal law or regulation affecting OCSD. In the event OCSD is notified of a change in State or Federal law or regulations that requires updating the Software, OCSD will notify Consultant of that change as soon as reasonably possible. Orange County Sanitation District 11 of 20 Specification No. CS-2018-1003BD Version 032018 16.5. Documentation Warranty. Consultant warrants that, for the Term of this Agreement, the Documentation for all licensed Consultant Application Software will be complete and accurate in all material respects. The Documentation will be revised to reflect all Updates and Interfaces provided by Consultant under this Agreement. This includes Documentation on any Custom Modification or Configuration Changes made to the System by Consultant during the installation process. 16.6. Service Warranty. During the term of this Agreement, Consultant warrants that it will remedy any failure, malfunction, Defect or nonconformity in the System, as follows: 16.6.1. Priority One (P1) Defects. For purposes of this Warranty, a P1 Defect includes, but is not limited to, loss of data, data corruption, a System or subsystem abort, any condition where productive use of the System or any component thereof is prohibited and no acceptable workaround is available. Examples of P1 Defects include, but are not limited to: 16.6.1.1. System is down 16.6.1.2. Application, module or Interface is down or non-operational 16.6.1.3. An Interface or application critical to System operation is substantially impaired or problematic 16.6.1.4. Loss of data or data corruption after data has been entered 16.6.1.5. A subsystem or component thereof is non-functional 16.6.1.6. Productive use is prohibited 16.6.1.7. a Server goes down 16.6.1.8. two or more workstations or mobile devices lock up or malfunction intermittently 16.6.1.9. a user cannot log on to the System 16.6.2. Priority Two (P2) Defects. For purposes of this Warranty a P2 Defect includes, but is not limited to, compromise of the primary purpose of the System, subsystem or Interface to an external system. Productive use by the end user is substantially impacted and an acceptable workaround is not available. Examples of P2 Defects include, but are not limited to: 16.6.2.1. a Software function does not work correctly (enter an example, if possible) 16.6.2.2. The user cannot produce a report with correct calculations 16.6.2.3. System, subsystem or an Interface performance is deemed unacceptable per the Functional, Performance, and Reliability Specifications and Requirements. 16.6.2.4. Incorrect cross streets are displayed on a verified address or location 16.6.2.5. Cannot create a scheduled event 16.6.2.6. A single workstation or mobile device locks up or malfunctions intermittently 16.6.3. Priority Three (P3) Defects. For purposes of this Warranty, a P3 Defect includes, but is not limited to, incomplete operation of a System component which impacts productivity of staff but an acceptable workaround is generally available. Examples of P3 Defects include but are not limited to: Orange County Sanitation District 12 of 20 Specification No. CS-2018-1003BD Version 032018 16.6.3.1. Single workstation or mobile device locks up intermittently but infrequently 16.6.3.2. Minor deficiencies occur intermittently in any component of the System 16.6.3.3. A mapping function doesn’t work but the failure does not interfere with the user’s ability to perform required tasks 16.6.3.4. A report does not function or report provides incorrect results 16.6.3.5. An incorrect message is presented in a dialog box 16.6.4. Priority Four (P4) Defects. For purposes of this Warranty, a P4 Defect consists of those problems deemed by OCSD to be mainly cosmetic. Examples of P4 Defects include, but are not limited to: 16.6.4.1. A misspelled word in the header of a report or in a help file 16.6.4.2. A minor error in output that does not interfere with the correct outputting of statistics from the system 16.6.4.3. Minor printing errors in a report that does not impede OCSD’s ability to utilize the report for the required purpose. 16.6.4.4. Minor variances in text where the help file does not match the Documentation 16.6.4.5. Minor variances in text where the Documentation doesn’t match the functionality but the System works properly 16.6.4.6. A print button doesn’t work but the user can still print without opening or closing multiple windows or loosing data or rebooting the System. 16.6.5. Multiple Failures. Any situation involving multiple, contemporaneous failures, regardless of their individual priorities, will be regarded as a Priority One Defect if, in OCSD’s determination, the situation results in OCSD having essentially no productive use of the System or a major subsystem. 16.6.6. Permanent Cure. If OCSD accepts a workaround or other temporary cure as the remedy for any reported Defect, Consultant shall provide and install at no cost to OCSD a permanent correction or cure and installation support within ten (10) days after the permanent cure becomes available. 16.6.7. Third-party Warranty Coverage. Third-party products are provided with a pass-thru-warranty from the original manufacturer. 17. Key Personnel: Personnel, as provided in Exhibit “B”, are considered “key” to the work under this Agreement and will be available for the term of the Agreement. No person designated as key under this Agreement shall be removed or replaced without prior written consent of OCSD. If OCSD asks Consultant to remove a person designated as key under this Agreement, Consultant agrees to do so immediately regardless of the reason, or the lack of reason, for OCSD's request. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. 18. Confidentiality and Non-Disclosure 18.1. Consultant acknowledges that in performing the Services hereunder, OCSD may have to disclose to Consultant orally and in writing certain confidential information that OCSD considers proprietary and has developed at great expense and effort. Orange County Sanitation District 13 of 20 Specification No. CS-2018-1003BD Version 032018 18.2. Consultant agrees to maintain in confidence and not disclose to any person, firm, or corporation, without OCSD's prior written consent, any trade secret or confidential information, knowledge or data relating to the products, process, or operation of OCSD. 18.3. Consultant further agrees to maintain in confidence and not to disclose to any person, firm, or corporation any data, information, technology, or material developed or obtained by Consultant during the term of this Agreement. 18.4. Consultant agrees as follows: • To use the confidential information only for the purposes described herein; to not reproduce the confidential information; to hold in confidence and protect the confidential information from dissemination to and use by anyone not a party to this Agreement; and to not use the confidential information to benefit itself or others. • To restrict access to the confidential information to its Consultant or personnel of Consultant who (1) have a need to have such access and (2) have been advised of and have agreed in writing to treat such information in accordance with the terms of this Agreement. • To return all confidential information in Consultant's possession upon termination of this Agreement or upon OCSD's request, whichever occurs first. • To hold in confidence information and materials, if any, developed pursuant to the Services hereunder. 18.5. The provisions of this section shall survive termination or expiration of this Agreement and shall continue for so long as the material remains confidential. 19. Ownership of Documents: All drawings, specifications, reports, records, documents, memoranda, correspondence, computations, and other materials prepared by Consultant, its employees, subconsultants, and agents in the performance of this Agreement shall be the property of OCSD and shall be promptly delivered to OCSD upon request of OCSD’s Project Manager or designee, or upon the termination of this Agreement, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by OCSD of its full rights of ownership of the documents and materials hereunder. Any use of such completed documents for other projects and/or use of incomplete documents without specific written authorization by the Consultant will be at OCSD's sole risk and without liability to Consultant. Consultant shall ensure that all its subconsultants shall provide for assignment to OCSD of any documents or materials prepared by them. 20. Ownership of Intellectual Property 20.1. Consultant agrees that all designs, plans, reports, specifications, drawings, schematics, prototypes, models, inventions, and all other information and items made during the course of this Agreement and arising from the Services (hereinafter referred to as "New Developments") shall be and are assigned to OCSD as its sole and exclusive property. 20.2. Consultant agrees to promptly disclose to OCSD all such New Developments. Upon OCSD's request, Consultant agrees to assist OCSD, at OCSD's expense, to obtain Orange County Sanitation District 14 of 20 Specification No. CS-2018-1003BD Version 032018 patents or copyrights for such New Developments, including the disclosure of all pertinent information and data with respect thereto, the execution of all applications, specifications, assignments, and all other instruments and papers which OCSD shall deem necessary to apply for and to assign or convey to OCSD, its successors and assigns, the sole and exclusive right, title and interest in such New Developments. Consultant agrees to obtain or has obtained written assurances from its employees and contract personnel of their agreement to the terms hereof with regard to New Developments and confidential information. 20.3. Consultant warrants that Consultant has good title to any New Developments, and the right to assign New Developments to OCSD free of any proprietary rights of any other party or any other encumbrance whatever. 20.4. The originals of all computations, drawings, designs, graphics, studies, reports, manuals, photographs, videotapes, data, computer files, and other documents prepared or caused to be prepared by Consultant or its subconsultants in connection with these Services shall be delivered to and shall become the exclusive property of OCSD. OCSD may utilize these documents for OCSD applications on other projects or extensions of this project, at its own risk. 21. Infringement Claims: If an infringement claim occurs, Consultant has thirty (30) days after the receipt of OCSD’s written notice of the claim or the date on which Consultant first becomes aware of the claim, whichever is sooner, to either: (a) procure for OCSD the right to continue using the affected Product, Service, subsystem, component or Interface and deliver or provide the Product, Service, subsystem, component, or Interface to OCSD; or (b) repair or replace the infringing Product, Service, subsystem, component, or Interface so that it becomes non-infringing, provided the performance of the System or any subsystems, components, or Interfaces is not adversely affected by the replacement or modification. In the event Consultant is unable to comply with either subsection (a) or (b) of this paragraph within thirty (30) days, OCSD may terminate this Agreement without any further obligation to Consultant. In the event of termination, in addition to any other legal remedies available to OCSD, Consultant will refund OCSD within ten (10) days of OCSD’s notice of termination, the license fees OCSD paid to Consultant for the Product, Service, subsystem, component or Interface. If the inability to comply with either subsection (a) or (b) of this paragraph causes the System to fail to meet the Functional, Performance and Reliability Specifications and Requirements or to otherwise become ineffective, Consultant will refund OCSD all fees paid to Consultant under this Agreement. 22. No Solicitation of Employees 22.1. Consultant agrees that it shall not, during the term of this Agreement and for a period of one (1) year immediately following termination of this Agreement, or any extension hereof, call on, solicit, or take away any of the employees whom Consultant became aware of as a result of Consultant's Services to OCSD. 22.2. Consultant acknowledges that OCSD’s employees are critical to its business and OCSD expends significant resources to hire, employ, and train employees. Should Consultant employ or otherwise engage OCSD’s employees during the term of this Agreement and for a period of one (1) year following termination of this Agreement, Consultant will pay OCSD fifty percent (50%) of the former employee’s most recent annual salary earned at OCSD to accurately reflect the reasonable value of OCSD’s time and costs. This payment is in addition to any other rights and remedies OCSD may have at law. Orange County Sanitation District 15 of 20 Specification No. CS-2018-1003BD Version 032018 23. Independent Contractor Capacity 23.1. The relationship of Consultant to OCSD is that of an independent contractor and nothing herein shall be construed as creating an employment or agency relationship. 23.2. Consultant shall act independently and not as an officer or employee of OCSD. OCSD assumes no liability for Consultant’s action and performance, nor assumes responsibility for taxes, funds, payments or other commitments, implied or expressed, by or for Consultant. 23.3. Consultant shall not be considered an agent of OCSD for any purpose whatsoever, nor shall Consultant have the right to, and shall not, commit OCSD to any agreement, contract or undertaking. Consultant shall not use OCSD’s name in its promotional material or for any advertising or publicity purposes without expressed written consent. 23.4. Consultant shall not be entitled to any benefits accorded to those individuals listed on OCSD’s payroll as regular employees including, without limitation, worker's compensation, disability insurance, vacation, holiday or sick pay. Consultant shall be responsible for providing, at Consultant’s expense, disability, worker's compensation or other insurance as well as licenses and permits usual or necessary for conducting the Services hereunder. 23.5. Consultant shall be obligated to pay any and all applicable Federal, State and local payroll and other taxes incurred as a result of fees hereunder. Consultant hereby indemnifies OCSD for any claims, losses, costs, fees, liabilities, damages or penalties suffered by OCSD arising out of Consultant's breach of this provision. 23.6. Consultant shall not be eligible to join or participate in any benefit plans offered to those individuals listed on OCSD's payroll as regular employees. Consultant shall remain ineligible for such benefits or participation in such benefit plans even if a court later decides that OCSD misclassified Consultant for tax purposes. 24. Licenses, Permits: Consultant represents and warrants to OCSD that it has obtained all licenses, permits, qualification 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 work performed under the terms of this Agreement will be paid by Consultant. 25. Consultant's Representations: In the performance of duties under this Agreement, Consultant shall adhere to the highest fiduciary standards, ethical practices and standards of care and competence for their trade/profession. Consultant agrees to comply with all applicable Federal, State and local laws and regulations. 26. Familiarity with Work: By executing this Agreement, Consultant 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 Agreement. Should Consultant 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 Consultant’s risk, until written instructions are received from OCSD. Orange County Sanitation District 16 of 20 Specification No. CS-2018-1003BD Version 032018 27. Right to Review Services, Facilities, and Records 27.1. OCSD reserves the right to review any portion of the Services performed by Consultant under this Agreement, and Consultant agrees to cooperate to the fullest extent possible. 27.2. Consultant shall furnish to OCSD such reports, statistical data, and other information pertaining to Consultant's Services as shall be reasonably required by OCSD to carry out its rights and responsibilities under its agreements with its bondholders or noteholders and any other agreement relating to the development of the project(s) and in connection with the issuance of its official statements and other prospectuses with respect to the offering, sale, and issuance of its bonds and other obligations. 27.3. The right of OCSD to review or approve drawings, specifications, procedures, instructions, reports, test results, calculations, schedules, or other data that are developed by Consultant shall not relieve Consultant of any obligation set forth herein. 28. 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 Agreement. 29. Severability: If any section, subsection, or provision of this Agreement, or any agreement or instrument contemplated hereby, or the application of such section, subsection, or provision is held invalid, the remainder of this Agreement 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. 30. Waiver: The waiver of either party of any breach or violation of, or default under, any provision of this Agreement, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. Any breach by Consultant 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. 31. Survival: All provisions of this Agreement that by their nature would reasonably be expected to continue after the termination of this Agreement will survive the termination of this Agreement, including, without limitation, the following Sections and Paragraphs: • Payment • License • Audit • Independent Contractor • Warranties • Indemnification • Obligations Upon Expiration or Termination • Transition of Services • Confidentiality and Nondisclosure • Forum for Enforcement Orange County Sanitation District 17 of 20 Specification No. CS-2018-1003BD Version 032018 32. Remedies: In addition to other remedies available in law or equity, if the Consultant fails to make delivery of the goods or Services or repudiates its obligations under this Agreement, or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services, OCSD may (1) terminate the Agreement; (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 Consultant. In the event OCSD elects to “cover” as described in (3), OCSD shall be entitled to recover from Consultant as damages the difference between the cost of the substitute goods or Services and the Agreement price, together with any incidental or consequential damages. 33. Governing Law: This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. 34. Applicable Laws and Regulations: Consultant shall comply with all applicable federal, state, and local laws, rules, and regulations. Consultant also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of Consultant's noncompliance therewith. Any permission required by law to be included herein shall be deemed included as a part of this Agreement whether or not specifically referenced. 35. 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 Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which it may be entitled. 36. Dispute Resolution 36.1. In the event of a dispute as to the construction or interpretation of this Agreement, 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. 36.2. 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. Orange County Sanitation District 18 of 20 Specification No. CS-2018-1003BD Version 032018 37. Damage to OCSD's Property: Any OCSD property damaged by Consultant will be subject to repair or replacement by Consultant at no cost to OCSD. 38. OCSD Safety Standards: OCSD requires Consultant and its subconsultants 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 Agreement it is discovered that OCSD Safety Standards do not comply with Federal, State or local regulations, then the Consultant is required to follow the most stringent regulatory requirement at no additional cost to OCSD. Consultant and all of its employees and subconsultants, shall adhere to all applicable OCSD Safety Standards attached hereto in Exhibit “D” and the Human Resources Policies (Exhibit “F”). 39. Freight (F.O.B. Destination): Consultant assumes full responsibility for all transportation, transportation scheduling, packing, handling, insurance, and other services associated with delivery of all products deemed necessary under this Agreement. 40. Assignments: Consultant shall not delegate any duties nor assign any rights under this Agreement without the prior written consent of OCSD. Any such attempted delegation or assignment shall be void. 41. Changes In Control of Consultant 41.1. In the event of a change in Control of Consultant, OCSD shall have the option of terminating this Agreement by written notice to Consultant. Consultant shall notify OCSD within ten (10) days of the occurrence of a change in Control. As used in this Section, “Control” is defined as the possession, direct or indirect, of either: 41.1.1. the ownership or ability to direct the voting of fifty-one percent (51%) or more of the equity interests, value, or voting power in Consultant; or 41.1.2. the power to direct or cause the direction of the management and policies of Consultant, whether through ownership of voting securities, by contract, or otherwise. 42. Conflict of Interest and Reporting 42.1. Consultant shall at all times avoid conflicts of interest or appearance of conflicts of interest in performance of this Agreement. 42.2. Consultant affirms that to the best of its knowledge there exists no actual or potential conflict between Consultant’s families, business or financial interest or its Services under this Agreement, and in the event of change in either its private interests or Services under this Agreement, it will raise with OCSD any question regarding possible conflict of interest which may arise as a result of such change. 43. Third Party Rights: Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than OCSD and Consultant. 44. Non-Liability of OCSD Officers and Employees: No officer or employee of OCSD shall be personally liable to Consultant, or any successor-in-interest, in the event of any default or breach by OCSD or for any amount which may become due to Consultant or to its successor, or for breach of any obligation of the terms of this Agreement. Orange County Sanitation District 19 of 20 Specification No. CS-2018-1003BD Version 032018 45. Authority to Execute: The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement and that by executing this Agreement, the Parties are formally bound. 46. Read and Understood: By signing this Agreement, Consultant represents that it has read and understood the terms and conditions of the Agreement. 47. Entire Agreement: This Agreement 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. 48. Notices: All notices under this Agreement 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. Any facsimile notice must be followed within three (3) days by written notice. 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: OCSD: Jackie Lagade Principal Buyer Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Consultant: Garner Bennet CEO/President Total Resource Management, Inc. 510 King Street, Suite 200 Alexandria, VA 22314 Each party shall provide the other party written notice of any change in address as soon as practicable. Orange County Sanitation District 20 of 20 Specification No. CS-2018-1003BD Version 032018 IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this Agreement to be signed by the duly authorized representatives. ORANGE COUNTY SANITATION DISTRICT Dated: _________________ By: ___________________________________ David John Shawver Board Chairman Dated: _________________ By: ___________________________________ Kelly A. Lore Clerk of the Board Dated: _________________ By: ___________________________________ Lorenzo Tyner Assistant General Manager TOTAL RESOURCE MANAGEMENT, INC. Dated: _________________ By: ___________________________________ ______________________________________ Print Name and Title of Officer Page 1 of 3 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 To Bd. of Dir. 06/26/19 AGENDA REPORT Item Number 7 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lan C. Wiborg, Director of Environmental Services SUBJECT: INLAND EMPIRE REGIONAL COMPOSTING AUTHORITY CONTRACT – BIOSOLIDS MANAGEMENT GENERAL MANAGER'S RECOMMENDATION A. Approve Agreement number 4600002709-HD with the Inland Empire Regional Composting Authority (IERCA) for the Orange County Sanitation District (Sanitation District) to pay IERCA to receive and compost up to approximately 50 wet tons per day of the Sanitation District’s biosolids at a base fee (tipping fee) of $56 per wet ton, plus an administrative fee of $2 per wet ton, and an annual base fee increase of $1 per fiscal year, with a term of the Agreement of five (5) years and, upon mutual written agreement, an option to extend on a year-to-year basis with up to two (2) annual extensions in a total annual amount not to exceed $820,000 per year; and B. Approve a 10% contingency of $400,000 in the event the Sanitation District needs to send additional loads to this compost option. BACKGROUND The Sanitation District continues to actively pursue biosolids management options to maintain a long-term, sustainable program that promotes beneficial use of biosolids. In accordance with the principles of its biosolids management policy (Resolution No. OCSD 13-03), the Sanitation District maintains a diverse portfolio of biosolids management options that utilize multiple contractors, markets, and facilities including the use of local/regional facilities and markets while maintaining fail-safe, back-up options. In 2015, the Los Angeles County Sanitation District and Inland Empire Utilities Agency - collectively known as the joint power authority, Inland Empire Regional Composting Authority (IERCA), offered the option to compost the Sanitation District’s biosolids at their Inland Empire Regional Composting Facility (IERCF) located in the City of Rancho Cucamonga. The Sanitation District saw the benefits of this regional composting option located within our local [air] basin and executed an agreement with IERCA. This agreement expires on June 30, 2019. To continue service, IERCA offers a new agreement to receive and compost up to 50 wet tons of the Sanitation District’s biosolids per day (five days a week) at their composting facility, at a tipping fee of $56 per ton of biosolids and an administrative fee of $2 per wet ton. The tipping fee may be subject to an annual increase of $1 per fiscal year, which Page 2 of 3 would be implemented only in the event IERCA increases the Standard Biosolids Recycling Rate in that same fiscal year. The term of the Agreement is for five (5) years and, upon mutual written agreement, extends the duration of the Agreement on a year-to-year basis with up to two (2) annual extensions. The total annual amount will not exceed $820,000 per year (reference attachment). With a hauling fee of approximately $15.50 per ton (services provided by Denali Contract effective 5/12/19), the total cost is about $72.50 per ton during the first year. RELEVANT STANDARDS • Comply with Resolution No. OCSD 13-03, Biosolids Recycling Policy • 2017 Biosolids Master Plan • Safe, beneficial reuse of Biosolids PROBLEM The existing biosolids management contract between IERCA and the Sanitation District expires on June 30, 2019. If the Sanitation District does not execute the contract, the Sanitation District’s biosolids management diversity will be lessened. There are no other local government operated facilities within a 50-mile radius. PROPOSED SOLUTION Approve the Agreement to continue biosolids management diversity and sustainability while supporting a local, in-basin management option. TIMING CONCERNS The existing biosolids management contract between IERCA and the Sanitation District expires on June 30, 2019. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District will not be able to utilize this local biosolids management option that is within the basin. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A Page 3 of 3 CEQA CEQA Analysis Reference: November 28, 2012 Agenda Report - Waste Disposal Agreement with Orange County Waste and Recycling and May 27, 2015 Agenda Report - Composting Agreement with Inland Empire Regional Composting Authority. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. (FY 18/19 Budget Line Item: Section 5, Page 6). Project contingency funds will not be used for this contract. 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: • Inland Empire Regional Composting Authority Agreement Number 4600002709 for the Reuse of Biosolids • Cost Breakdown AGREEMENT NUMBER 4600002709 FOR THE REUSE OF BIOSOLIDS This Agreement, for the Reuse of Biosolids ("Agreement"), dated July 1, 2019 ("Effective Date"), is between the Inland Empire Regional Composting Authority (IERCA, or "the Authority") and the Orange County Sanitation District ("the District"). The Authority and the District are referred to, in this Agreement, collectively, as "the Parties." The Authority is a Joint Powers Authority formed by and between the Inland Empire Utilities Agency (IEUA), a Municipal Water District organized and operating pursuant to the California Water Code Sections 71000, et seq., and County Sanitation District No. 2 of Los Angeles County (LACSD), a special district organized and operating pursuant to the California Health and Safety Code Sections 4700, et seq. The Authority operates the Inland Empire Regional Composting Facility (IERCF) located at 12645 Sixth Street, Rancho Cucamonga, CA 91739 ("the Site"). The Authority has all permits and approvals necessary for operation of the Site and desires to reuse Biosolids produced at the District's facilities. 1.DEFINITIONS 1.1 Biosolids means municipal sewage sludge resulting from the treatment of wastewater at the District's facilities that is digested and meets Class B and Table 3 quality standards for land application under Part 503 of Title 40 of the Code of Federal Regulations, "Standards for the Use and Disposal of Sewage Sludge" ("Part 503 Rule"), and dewatered to an annual average of approximately 15% total solids or greater. 1.2 State Certified Weigh Station means any truck weigh station permitted by the State of California to certify weights for commerce. 1.3 Weighmaster's Certificates means certificates obtained in accordance with weighing procedures prescribed in Chapter 7 (commencing with Section 12700) of Division 5 of the California Business and Professions Code administered by the Division of Measurement Standards of the California Department of Food and Agriculture. ________________________________________________________________________________________ 4600002709 HD Page 1 of 8 06/26/2019 2.BIOSOLIDS TRANSPORTATION AND REUSE 2.1 The District shall transport up to approximately 250 wet tons per week, or 50 wet tons per day of Biosolids from its facilities to the Site for composting, Monday through Friday. This quantity may be adjusted by agreement of the Parties. 2.2 Site delivery hours are from 6:30AM to 2:30PM, Monday through Friday. Hours may change at the sole discretion of the Authority. 2.3 In event the District wishes to deliver to the Site sewage sludge that does not meet the Part 503 Rule Class B Biosolids Pathogen Reduction Requirements specific to mean cell residence time and temperature for anaerobic digestion, the District shall notify the Authority within reasonable time and request approval to deliver for compost such material in accordance with applicable legal requirements as detailed in Section 3 of this Agreement. The Authority reserves the right not to accept and process such sewage sludge material at the Site. 2.4 The District shall use farm bed trailers to transport Biosolids to the Site. Trailers delivering Biosolids to the Site must meet the following clearance specifications to off-load material into the biosolids hoppers: 2.4.1 All live bottom belt type trailers require a minimum clear distance of 15" between the ground surface and any trailer structure beyond or past the rear tires. This requirement does not apply to any flexible structure like a mud flap. Flexible structures may be removed or re-positioned to allow adequate clearance. 2.5 The Authority shall compost all Biosolids in accordance with applicable legal requirements as detailed in Section 3 of this Agreement. The Authority may not use any other method of reuse for the Biosolids without the prior written agreement of the District. 2.6 The Authority shall determine and record the total tonnage delivered to the Site. The truck weigh station at the Site is certified by the State and will be used to issue a Weighmaster's Certificate for each load measured. The Authority shall use the Site's measured tonnage for its billing to the District. Weighmaster's Certificates submitted by the Authority will show the certified gross weight of each load in each billing and the certified tare weight of each vehicle. 3.PERMITS AND REGULATORY COMPLIANCE 3.1 The Authority shall obtain and maintain in effect all necessary licenses, Permits, and other approvals legally required in order to perform all activities and operations provided for in this Agreement. The Authority and all processes utilized at the Site shall comply with all applicable local, state, and federal laws, rules, regulations, and pronouncements, including but not limited to the following: ________________________________________________________________________________________ 4600002709 HD Page 2 of 8 06/26/2019 3.1.1 The Authority shall perform all activities and operations in accordance with the requirements, as applicable, of the Santa Ana Regional Water Quality Control Board, California State Water Resources Control Board, including the General Order (General Waste Discharge Requirements for the Discharge of Biosolids to Land for Use in Agricultural, Silvicultural, Horticultural, and Land Reclamation Activities), Parts 257 and 503 of Title 40 of the Code of Federal Regulations (Criteria for Classification of Solid Waste Disposal Facilities and Practices and Standards for the Use and Disposal of Sewage Sludge, respectively), South Coast Air Quality Management District Rule 1133.2. 3.1.2 The Authority shall also operate in compliance with all current waste discharge requirements contained in the NPDES permits for the District's facility(s) that serves as the source(s) of Biosolids delivered to the Authority. District shall make their NPDES permit available to the Authority upon request. 3.1.3 The Authority acknowledges that Part 503 of Title 40 of the Code of Federal Regulations is a self-implementing rule and that the Authority's activities and operations performed at the Site must comply with all applicable general requirements of the rule, including, but not limited to: pollutant limits, management practices, operational standards, monitoring, recordkeeping, and reporting. The Authority shall provide all information relevant to the activities and operations at the Sites that the District may need or request to complete NPDES or other permit applications or reports. 3.2 The District shall obtain and maintain in effect all necessary licenses, permits, and other approvals legally required in order to perform all activities and operations provided for in this Agreement. The District and Biosolids-generating processes at its facilities shall comply with all applicable local, state, and federal laws, rules, and regulations and orders, including but not limited to Part 503 of Title 40 of the Code of Federal Regulations. The District may transport to the Site only Biosolids that meet the Class B pathogen reduction requirements of 503.32(b), vector attraction reduction requirements of 503.33(b)(l), and metals concentration limits of Table 3 in 503.13(b)(3), unless other arrangement are made per Section 2.3. 4.SITE INSPECTION, MONITORING, RECORDKEEPING, AND REPORTS 4.1 The Authority shall grant the District and it’s representatives access to the Site during normal business hours to conduct inspections of the composting activities. The District shall likewise grant the Authority and it’s representatives access to its treatment facilities during normal business hours. 4.2 The Authority shall keep complete and correct daily records of all composting activities, including: the date, the origin, and quantity of each load of Biosolids composted; site management practices; and any sampling and laboratory test results regarding the composting program. The Authority shall grant the District timely access to all such records. Likewise, the Authority shall have timely access to the District's Biosolids records and data demonstrating compliance with all federal, state, and local laws, regulations and orders. ________________________________________________________________________________________ 4600002709 HD Page 3 of 8 06/26/2019 4.3 The Authority shall submit monthly reports to the District that demonstrate compliance with all required permits and authorizations. The Authority shall submit the reports within 30 days after the close of each reporting period. The reports must include, at a minimum, a description of all activities and operations performed during the reporting period, the items described in Section 4.2, and a certification that all activities and operations were performed in compliance with all applicable regulations. The Authority shall forward to the District, within five days of receipt or transmission, copies of all correspondence with regulatory agencies in regards to the activities or operations performed at the Site. Similarly, the District shall furnish monthly, annual, and other periodic reports to the Authority detailing and certifying compliance with permits and applicable regulations. The District shall provide all information relevant to its operations that the Authority may need or request to complete regulatory reports or permits. 4.4 The Parties agree to notify one another by no later than the next business day of its receipt of any notice, whether formal or informal, of a legal, governmental, judicial, administrative, or similar proceeding, action, or enforcement, pending or threatened, that may affect its ability to lawfully fulfill obligations of this Agreement. The District shall forward to the Authority, within 5 days of receipt or transmission by the District, copies of all correspondence with regulatory agencies in regards to its Biosolids operations. 4.5 The District shall perform all sampling for any monitoring and laboratory analyses of Biosolids required by any federal, state, or local laws, regulations or orders prior to transporting such Biosolids to the Authority. The Authority shall perform all other monitoring and laboratory analyses required by any federal, state, or local laws, regulations, or orders including, but not limited to, any monitoring or laboratory analysis of Biosolids after receipt by the Authority. 5.COMPOSITION OF BIOSOLIDS The District warrants that all Biosolids released to the Authority will be non-hazardous under Title 22, Division 4.5, Chapter 1l, Article 3 of the California Code of Regulations. Neither the District nor the Authority shall add any material to the Biosolids that is classified as hazardous, or which creates by-products or residues classified as hazardous, under federal or state laws, regulations, or orders. 6.INCLEMENT WEATHER 6.1 The Parties shall each provide any facilities necessary to ensure their ability to remove, transport, and compost Biosolids during typical inclement weather. 6.2 The Parties acknowledge that severe weather conditions may reduce or suspend the Parties' abilities to deliver and/or compost Biosolids. If either Party reasonably determines that a reduction or suspension is necessary, the Party shall provide the other Party, to the extent reasonably possible: l) a 24-hour notice of reduction or cessation of operations; and 2) an estimate of when the operations will resume. See also Section 1l, Force Majeure. ________________________________________________________________________________________ 4600002709 HD Page 4 of 8 06/26/2019 7.FEE FOR BIOSOLIDS REUSE 7.1 The District shall pay, to the Authority, for Biosolids received and processed a base fee of $56.00 per wet ton (beginning July 1, 2019), plus an administrative fee of $2.00 per wet ton. The Authority may increase the base fee by (up to) $1.00 per fiscal year, of the Contract term; such fee increases taking effect on July 1st of each fiscal year. The annual base fee increase shall be implemented only in the event that the Authority increases the Standard Biosolids Recycling Rate in that same fiscal year, and shall be no greater than the increase in the Standard Biosolids Recycling Rate. The administrative fee shall remain at $2.00 per wet ton for the duration of this contract, unless revised by a mutually agreed-upon Contract Amendment. The District shall pay all hauling and transportation-related costs. 7.2 The Authority shall submit invoices to the District on a monthly basis and the District shall make payment to the Authority within thirty (30) days of receipt. 7.3 If the term of this Agreement extends beyond the initial five-year term provided for in Section 12 below, either the District or the Authority may request an additional adjustment in the fee. 8.OWNERSHIP OF BIOSOLIDS 8.1 The District shall retain ownership of all Biosolids during transport, up to and including off-loading of the Biosolids from the District's trucks. The District shall at all times manage, direct, oversee, and/or conduct operations during transport, and is responsible for leakage prevention and spill mitigation, and compliance with all applicable environmental regulations. 8.2 The Authority shall become the owner of all Biosolids delivered to the Site after off- loading and acceptance of the Biosolids from the District's trucks. The Authority shall compost all Biosolids in accordance with this Agreement. The Authority may not use or dispose of the Biosolids in any other manner without written consent from the District. The Authority shall comply with all applicable laws and regulations in connection with the marketing, use, and sale of the composted Biosolids. 9. INSURANCE 9.1 The District shall require its contractors transporting Biosolids to the Site to obtain and keep in force during the term of this Agreement, at their sole expense, comprehensive general liability insurance with endorsements naming the Authority as an additional insured, covering the transportation of Biosolids in any vehicle whether owned or leased, whether liability is attributable to the District or the Authority. The policy or policies must insure the Authority, its directors, officers, employees, and agents against all claims arising out of or in connection with the activities and operations relating to the transportation and delivery of Biosolids to the Facility. The coverage must provide the following minimum limits, which may be increased during the term of this Agreement as requested by the Authority in writing and agreed to in writing by the District: ________________________________________________________________________________________ 4600002709 HD Page 5 of 8 06/26/2019 Automobile Liability: Bodily Injury $5,000,000 each person $5,000,000 each occurrence Property Damage General Liability: Bodily Injury $5,000,000 each occurrence $5,000,000 aggregate $5,000,000 each occurrence $5,000,000 aggregate products and completed operations Property Damage $5,000,000 each occurrence $5,000,000 aggregate Coverage must be provided by an insurer that has at least an "A" Policy Holder's Rating and "X" Financial Rating in accordance with the current Best's Key Rating Guide. 9.2 The Contractor shall provide the Authority with evidence of coverage by providing certificates of insurance and endorsements and, at the Authority's request, copies of all required policies plus all attached endorsements for the Authority's review. 9.3 The Contractor shall demonstrate to the Authority that it carries Workers Compensation Insurance in accordance with legal requirements and Waiver of Subrogation. 10.INDEMNITY In contemplation of the provisions of Section 895.2 of the California Government Code imposing certain tort liability jointly upon public entities solely by reason of such entities being parties to an agreement as defined by Section 895 of the Government Code, each Party, pursuant to the authorization contained in Sections 895.4 and 895.6 of the Government Code, hereby agrees to and shall indemnify and hold harmless the other Party, and its elected officials, officers, agents, and employees from and against any and all losses, liability, damages, claims, suits, actions, and administrative proceedings or demands (including reasonable attorney's fees) relating to acts or omissions of the indemnitor, its officers, agents, or employees arising out of or incidental to the performance of any of the provisions of this Agreement. Neither Party assumes liability for the acts or omissions of persons other than each Party's respective officers, agents, or employees. In the event judgment is entered against the Parties because of joint or concurrent negligence of the Parties, or their officers, agents, or employees, an apportionment of liability to pay such judgment shall be made by a Court of competent jurisdiction. This section shall survive termination of the Agreement. 11.FORCE MAJEURE Neither the Authority nor the District shall be responsible or liable for failure to meet their respective obligations under this Agreement if such failure is due to causes beyond the Authority's or the District's control. Such causes include, but are not limited to: strikes, fire, flood, civil disorder, acts of God or of a public enemy, acts of the federal government, or any unit of state or local ________________________________________________________________________________________ 4600002709 HD Page 6 of 8 06/26/2019 government in either its sovereign or contractual capacity, epidemics, freight embargoes or delays in transportation, and changes in federal, state, or local law that renders the District's Biosolids impermissible for transportation or composting. Each Party shall immediately notify the other Party via email to administrative staff and in writing, in accordance with Section 15, of the occurrence of any condition believed to constitute a force majeure under this section. If a condition of force majeure exists for 30 days or more, either Party may terminate this Agreement by giving notice in writing in accordance with Section 15. The notice will become effective 24 hours after receipt. 12.DURATION OF AGREEMENT This Agreement will be effective on the Effective Date and will continue in effect for a period of five years. The Parties may, upon mutual written agreement, extend the duration of the Agreement on a year to year basis with up to two annual extensions. 13.SUSPENSION, TERMINATION, AND EARLY TERMINATION 13.1 Suspension. The Authority may suspend its receipt of Biosolids if it determines that the District can no longer timely and legally perform the required obligations of this Agreement. Likewise, the District may suspend shipments of Biosolids if it determines that the Authority can no longer timely or legally perform the required services, or if unacceptable conditions exist at the Site. The suspending Party may lift the suspension and allow operations to resume if it determines that any unacceptable conditions have been corrected. 13.2 Termination. Either Party may terminate this Agreement by providing the other Party with a 90-day notice in writing in accordance with Section 15. 13.3 Early Termination. The Authority and the District, by written agreement, may terminate this Agreement at any time. 14.ADDITIONAL PROVISIONS 14.1 Entire Agreement. This Agreement represents the entire agreement and understanding between the Authority and the District as to those matters stated in this Agreement. No prior oral or written understanding is of any force or effect in regard to any matter covered by this Agreement. 14.2 Assignment. Neither the Authority nor the District may sell, assign, or subcontract its interest and/or obligations in this Agreement without the prior written and mutual agreement of the Parties. 14.3 Governing Law. The provisions of this Agreement will be interpreted and enforced in accordance with the laws of the State of California. 14.4 Counterparts. This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. ________________________________________________________________________________________ 4600002709 HD Page 7 of 8 06/26/2019 ________________________________________________________________________________________ 4600002709 HD Page 8 of 8 06/26/2019 15.NOTICE Except as otherwise required, any notice, payment, or instrument required or permitted to be given under this Agreement will be deemed received upon a signed receipt of personal delivery or 72 hours after deposit in any United States Post Office, registered or certified, postage prepaid and addressed to the Party for whom intended, as follows: TO THE AUTHORITY: Inland Empire Regional Composting Authority Attn: Jeff Ziegenbein 12645 Sixth Street Rancho Cucamonga, CA 91739 TO THE DISTRICT: Orange County Sanitation District Attn: General Manager Post Office Box 8127 Fountain Valley, CA 92728-8127 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT By:___________________________________ ATTEST: By:____________________________ Kelly Lore Clerk of the Board APPROVE AS TO FORM: By:_____________________________ Bradley R. Hogin General Counsel INLAND EMPIRE REGIONAL COMPOSTING AUTHORITY _____________________________ Jeff Ziegenbein Project Manager David John Shawver Board Chairman Current and Proposed IERCF Contract Costs - June 2015 to June 2024 Cost Breakdown Fiscal Year IERCF Contract Proposal (Tip fee + Admin fee $2)with Hauling Annual Cost - 25 tpd (tip only) HISTORIC, CURRENT & MOST LIKELY SCENARIO Annual Cost - 50 tpd (tip only) Annual Cost - 75 tpd (tip only) Annual Cost - 100 tpd (tip only) 15-16 56.00$ 62.05$ 364,000$ 728,000$ 1,092,000$ 1,456,000$ 16-17 57.00$ 69.57$ 370,500$ 741,000$ 1,111,500$ 1,482,000$ 17-18 58.00$ 72.62$ 377,000$ 754,000$ 1,131,000$ 1,508,000$ 18-19 58.00$ 74.02$ 377,000$ 754,000$ 1,131,000$ 1,508,000$ 19-20 59.00$ 75.50$ 383,500$ 767,000$ 1,150,500$ 1,534,000$ 20-21 60.00$ 76.83$ 390,000$ 780,000$ 1,170,000$ 1,560,000$ 21-22 61.00$ 77.83$ 396,500$ 793,000$ 1,189,500$ 1,586,000$ 22-23 62.00$ 78.83$ 403,000$ 806,000$ 1,209,000$ 1,612,000$ 23-24 63.00$ 79.83$ 409,500$ 819,000$ 1,228,500$ 1,638,000$ Average annual cost of new contract 77.76$ NTE 4,361,500$ 396,500.00$ (10% CONTIN.) \\share01\ocsd\dept\es\630\Compliance\Biosolids\Distribution_Management\Contracts\04_IERCA_IERCF\2019_New_contract\CPI-2-reserve.xlsx Current and Proposed IERCF Contract Costs - June 2015 to June 2024 Fiscal Year IERCF Contract Proposal (Tip fee + Admin fee)with Hauling Annual Cost - 25 tpd (tip only) HISTORIC, CURRENT & MOST LIKELY SCENARIO Annual Cost - 50 tpd (tip only) Annual Cost - 75 tpd (tip only) Annual Cost - 100 tpd (tip only) 15-16 56.00$ 62.05$ 364,000$ 728,000$ 1,092,000$ 1,456,000$ 16-17 57.00$ 69.57$ 370,500$ 741,000$ 1,111,500$ 1,482,000$ 17-18 58.00$ 72.62$ 377,000$ 754,000$ 1,131,000$ 1,508,000$ 18-19 58.00$ 74.02$ 377,000$ 754,000$ 1,131,000$ 1,508,000$ 19-20 59.00$ 75.50$ 383,500$ 767,000$ 1,150,500$ 1,534,000$ Annual Price Riser 20-21 60.00$ 76.83$ 390,000$ 780,000$ 1,170,000$ 1,560,000$ $1.00 21-22 61.00$ 77.83$ 396,500$ 793,000$ 1,189,500$ 1,586,000$ 22-23 62.00$ 78.83$ 403,000$ 806,000$ 1,209,000$ 1,612,000$ 23-24 63.00$ 79.83$ 409,500$ 819,000$ 1,228,500$ 1,638,000$ Average annual cost of new contract 77.76$ NTE 4,361,500$ 396,500.00$ (10% CONTIN.) \\share01\ocsd\dept\es\630\Compliance\Biosolids\Distribution_Management\Contracts\04_IERCA_IERCF\2019_New_contract\CPI-2-reserve.xlsx Page 1 of 3 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 To Bd. of Dir. -- AGENDA REPORT Item Number 8 Item Number -- Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Kathy Millea, Director of Engineering SUBJECT: DIGESTER GAS FACILITIES REHABILITATION, PROJECT NO. J-124 GENERAL MANAGER'S RECOMMENDATION Information Only. BACKGROUND Orange County Sanitation District (Sanitation District) maintains a system of digester gas handling facilities including compressors, holders, filters, piping, flares, and a building for the compressors. These facilities must operate safely and reliably in order to capture, store, and transport digester gas (methane) generated during the wastewater treatment process so that the methane can be used as fuel for the Sanitation District’s electrical generation facilities. Digester Gas Facilities Rehabilitation, Project No. J-124, will rehabilitate or replace digester gas handling facilities at Plant Nos. 1 and 2, which were installed in the 1980s. The need for the project and the general configuration of the facilities were defined in the Digester Gas Facilities Study for Plant Nos. 1 and 2, Project No. SP-141, completed in 2015. The current $53 million construction cost budget was based on the 2015 study’s cost estimate. RELEVANT STANDARDS • Use all practical and effective means for resource recovery • 24/7/365 treatment plant reliability PROBLEM On May 13, 2019, the design consultant submitted the Preliminary Design Report cost estimate. Based on this updated cost estimate, the project cost is estimated to increase from $96.5 million to $156.5 million, a $60 million increase. A higher construction cost estimate was anticipated as the Fiscal Year 2019-20 budget was being developed, so $40 million was reserved for that purpose in the future rehabilitation and replacement line item. A comparison of the two estimates indicates that the difference is primarily due to the planning study’s underestimation of construction costs. The project Scope of Work Page 2 of 3 remains the same. The facility described in the Preliminary Design Report is largely consistent with the planning study recommendations. PROPOSED SOLUTION Staff recommends a project budget increase of $60 million, $40 million of which is included in the $200 million allocation for future rehabilitation and replacement projects in the proposed Fiscal Year 2019-20 Budget Update. An additional $20 million will also be funded from this allocation. This increase will not affect the remaining rate schedule. Since the estimate was received on May 13, the Capital Improvement Program Budget information item presented at the May 1 Operations Committee meeting and the May 8 Administration Committee meeting did not address this issue. ADDITIONAL INFORMATION A Value Engineering team reviewed the Preliminary Design Report recommendations the week of April 29, 2019. Value engineering is a formal process for an independent team to review the proposed project and identify potential options to lower cost, expedite construction, or improve the design. The Value Engineering team was provided through the Supplemental Engineering and Staff Support Services contract with Jacobs. The project team is currently working with the design consultant to review which of the Value Engineering recommendations are viable and consistent with the project objectives. The recommendations, however, are small compared to the magnitude of the construction cost increase. PRIOR COMMITTEE/BOARD ACTIONS November 2017 - Approved a Professional Design Services Agreement with Brown and Caldwell to provide engineering design services for the Digester Gas Facilities Rehabilitation, Project No. J-124, for an amount not to exceed $11,770,000; and approved a contingency of $1,177,000 (10%). CEQA A Notice of Exemption (NOE) was filed at the County Clerk’s office on November 20, 2017. A revised NOE will need to be filed due to changes in the project, however, the project will remain exempt from CEQA under the Class 1 and 2 categorical exemptions set forth in California Code of Regulations sections 15301 and 15302. Section 15301 (Class 1) exempts from CEQA the operation, repair, maintenance or minor alteration of existing public or private structures, facilities involving negligible or no expansion of use beyond that existing at the time of the lead agency’s determination including “(b) Existing facilities of both investor and publicly-owned utilities used to provide electric power, natural gas, sewerage, or other public utility services.” Page 3 of 3 Section 15302 (Class 2) exempts from CEQA the replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced, including “(c) Replacement or reconstruction of existing utility systems and/or facilities involving negligible or no expansion of capacity.” FINANCIAL CONSIDERATIONS The $60 million increase will come from funds allocated for future rehabilitation and replacement. This will not affect the remaining rate schedule. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: N/A JM:sa:gc Page 1 of 3 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 To Bd. of Dir. 06/26/19 AGENDA REPORT Item Number 9 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: PROPOSED FY 2019-20 BUDGET UPDATE GENERAL MANAGER'S RECOMMENDATION Approve proposed Operating, Capital, Debt/COP Service, and Self-Insurance Budgets for FY 2019-20 as follows: Adopted Budget Proposed Budget FY 2019-20 FY 2019-20 Operations & Maintenance $160,204,370 $168,216,487 Net Capital Improvement Program 137,027,258 153,377,431 Allocation for Rehabilitation/Replacement 0 200,000,000 Debt/COP Service 79,956,000 76,775,000 General Liability and Property Self-Insurance 780,000 780,000 Worker's Compensation Self Insurance 1,750,000 1,750,000 Intra-District Joint Equity Purchase/Sale(1) 3,500,000 5,000,000 TOTAL $383,217,628 $605,848,918 (1)Cash to/from Revenue Area 14 (RA14) in exchange for capital assets to/from Consolidated Revenue Area 15 (RA15). The proposed budget includes 4 new staff positions, bringing the total authorized FTE’s from 636 to 640. Subsequent to the printing of the FY 2019-20 Budget Update, changes were made to the project budget of the Digester Gas Facilities Rehabilitation project (Project J-124). See the attached Errata sheet for details. BACKGROUND The FY 2019-20 Proposed Budget Update represents known revisions to the second year of the two-year budget and is enclosed for the Committee's consideration. The Budget has been presented to the Operations Committee at the regular June meeting in order to allow each Standing Committee an opportunity to review the proposal prior to the June Board meeting. Although each Committee has had an opportunity to review the proposal, it remains the responsibility of the Administration Committee to recommend approval. Page 2 of 3 The Administration Committee is requested to recommend that the Board of Directors approve this budget at the June 26, 2019 Board meeting. RELEVANT STANDARDS • Produce Operations and CIP budgets every two years, with annual update PROBLEM The Orange County Sanitation District (Sanitation District) cannot maintain and monitor its financial condition, operations, and future capital improvements without examination and transparency into its resources, revenues, reserves, and outlays. PROPOSED SOLUTION Providing the Board with an understanding of the Sanitation District’s resources will assist in the approval of the proposed two-year budget. TIMING CONCERNS The proposed two-year budget, effective July 1 of this year, will be finalized and presented to the Board for adoption in June. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District will not be able to carry out its financial fiduciary duties beyond June 30, 2019. PRIOR COMMITTEE/BOARD ACTIONS The FY 2018-19 and 2019-20 biennium budget was adopted on June 27, 2018. ADDITIONAL INFORMATION The proposed FY 2019-20 operating and capital improvement budget totals $321.5 million, or $24.3 million (8.1 percent), above what was approved last year as the second year of the adopted two-year budget. The increase in the FY 2019-20 budget is primarily attributable to $16.3 million of delays in construction start dates where spending has been deferred and an increase of $8.0 million in operating budget. The 4 new staff positions are a Lead Heavy Equipment Mechanic, Senior Heavy Equipment Mechanic (2), and a Senior Regulatory Specialist. The mechanic positions are to support the Maintenance efforts of the Sanitation District and the regulatory specialist will assist in the efforts of the Environmental Services Division. $200 million has been set aside for Rehabilitation and Replacement of assets. This amount will be updated in future years as the funds are expended. Page 3 of 3 The proposed amounts for Debt Service, Self-Insurance, and Intra-District Transfers total $84.3 million, which approximate the originally adopted FY 2019-20 budget. ATTACHMENTS 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: • Budget Update Fiscal Year 2019-20 (separate electronic and printed document) • Errata Sheet Errata Sheet for Orange County Sanitation District FY 2019-20 Budget Update A list of changes made to the Fiscal Year 2019-20 Budget Update following the printing of the book. Page Reads Should Read Changes resulting from increase in Project J-124 Budget 24 Second Paragraph – Project Budget is $96.5 million Project Budget is $156.5 million. A-8 Digester Gas Facilities Rehab J-124 96,500,000 96,500,000 Digester Gas Facilities Rehab J-124 96,500,000 156,500,000 A-8 Utility Systems Total 373,918,000 411,771,111 Utility Systems Total 373,918,000 471,771,111 A-10 Total Treatment & Disposal Projects 3,007,360,000 3,078,695,000 Total Treatment & Disposal Projects 3,007,360,000 3,138,695,000 A-10 Total $4,010,422,700 $3,965,967,153 Total $4,010,422,700 $4,025,967,153 • The Cash Flow Projection pages A-2 and A-3 have been updated. The replacement sheets are attached. Errata Sheet (cont.) Page Reads Should Read Director of Operations and Maintenance should be listed as Director of Engineering 34 Staffing – Engineering Services = 120.00 Staffing – Engineering Services = 121.00 34 Staffing – Operations and Maintenance = 285.00 Staffing – Operations and Maintenance = 284.00 35 Staffing – Engineering Services = 120.00 Staffing – Engineering Services = 121.00 35 Staffing – Operations and Maintenance = 285.00 Staffing – Operations and Maintenance = 284.00 45 Staffing – Managers = 6.00 Staffing – Managers – 7.00 45 Staffing – Total = 120.00 Staffing – Total = 121.00 47 Staffing – Managers = 5.00 Staffing – Managers = 4.00 47 Staffing – Total = 285.00 Staffing – Total = 284.00 A-25 Engineering Administration = 2.0 Engineering Administration = 3.0 A-25 Engineering Department Subtotal = 120 Engineering Department Subtotal = 121 A-25 Operations and Maintenance Administration = 3.0 Operations and Maintenance Administration = 2.0 A-25 Operations and Maintenance Department Subtotal = 285.00 Operations and Maintenance Department Subtotal = 284.00 A-29 Director of Engineering = 0.00 Director of Engineering = 1.00 A-29 Total Engineering Administration = 2.00 Total Engineering Administration = 3.00 A-30 Total Engineering Department = 120.00 Total Engineering Department = 121.00 A-30 Director of Operations and Maintenance = 1.00 Director of Operations and Maintenance = 0.00 A-30 Total Operations and Maintenance Administration = 3.00 Total Operations and Maintenance Administration = 2.00 A-32 Total Operations and Maintenance – 285.00 Total Operations and Maintenance = 284.00 Cash Flow Projection Orange County Sanitation District Consolidated Cash Flow Projections Preliminary Preliminary Preliminary Preliminary Prelim lnary Preliminary Ref Description 19-20 20-21 21-22 22-23 23-24 ~ Revenues: General User Fees 298,144,000 302,790,000 307,461,000 312,156,000 320,617,000 329,125,000 2 Pernitted User Fees 9,917,000 10,034,000 10,151,000 10,268,000 10,502,000 10,736,000 3 IRWD Assessments 17,658,560 21,891,050 19,349,190 19,181,450 19,495,280 20,386,140 4 SAVI/PA Assessments 2,654,000 2,760,000 2,870,000 2,985,000 3,104,000 3,228,000 5 Froperty Taxes 96,354,000 99,967,000 103,716,000 107,605,000 111,371,000 115,269,000 6 New COP Issues 7 Interest Revenues 6,747,000 6,666,000 6,828,000 6,413,000 5,823,000 7,957,000 8 C,apital Facilities Capacity Charges 18,000,000 18,612,000 18,673,000 19,441,000 19,517,000 19,597,000 9 Other Revenues 18,880,498 26,866,640 28,019,005 36,652,981 18,505,375 15,795,381 10 Revenues 468,355,058 489,586,690 497,067,195 514,702,431 508,934,655 522,093,521 Raquirem ents: 11 Oper & Mtce Exp (4.0% yr) 168,216,487 164,816,541 171,409,000 178,265,000 185,396,000 192,812,000 12 Capital hrprovement Frogram (Cl~ 176,325,000 209,328,000 313,739,000 346,067,000 335,302,000 306,508,000 13 Less: CIP Savings & Ceferrals (22,997,569) (24,759,882) (34,039,257) (29,748,929) (22,387,544) (14,548,981) 14 Allocation for Future Rehabilitation/I 140,000,000 1f? COP Service (5.0%, 30 yrs) 76,775,000 72,838,000 72,211,000 72,206,000 72,212,000 72,206,000 16 Reduction of Long-Term Liabilites 1,7 Other Requirements 7,530,000 6,030,000 2,530,000 2,530,000 2,530,000 2,530,000 18 Requirements 545,848,918 428,252,659 525,849,743 569,319,071 573,052,456 559,507,019 19 Revenues-Requirem ants (77,493,860) 61,334,031 (28,782,548) (54,616,640) (64,117,801) (37,413,498) Accunulated Funds: 20 Beginning of Year 716,802,309 639,308,449 700,642,480 671,859,932 617,243,292 553,125,491 21 End of Year 639,308,449 700,642,480 671,859,932 617,243,292 553,125,491 515,711,993 ~2 Consolidated Reserve Policy 529,777,000 522,032,000 523,366,000 525,208,000 527,105,000 515,025,000 23 Over (Under) Reserve Policy* 109,531,449 178,610,480 148,493,932 92,035,292 26,020,491 686,993 Sewer Service User Fees: 24 Avg SFR Annual User Fee $339 $343 $347 $351 $359 $367 25 Percentage Change 1.19% 1.18% 1.17% 1.15% 2.28% 2.23% 26 Equivalent D,v elling Units 923,730 926,501 929,281 932,069 934,865 937,670 27 SFR Connection Fee $4,601 $4,973 $5,346 $5,719 $5,736 $5,753 28 Cuts'tfln®g GIB $940,050,000 $909,620,000 $876,655,000 $840,715,000 $803,320,000 $764,285,000 Reserve Policy 29 50% Next Year Operating 84,108,000 82,408,000 85,705,000 89,133,000 92,698,000 96,406,000 30 10% Next Year Operating 16,822,000 16,482,000 17,141,000 17,827,000 18,540,000 19,281,000 31 100% Next Year AUG COP Svc. 76,775,000 72,838,000 72,211,000 72,206,000 72,212,000 72,206,000 32 50% average ten-year CIP Bal, 137,302,000 137,302,000 137,302,000 137,302,000 137,302,000 137,302,000 33 DSR@ 10% Outstanding COPs 94,005,000 90,962,000 87,666,000 84,072,000 80,332,000 76,429,000 34 SFl@$57mm 57,000,000 57,000,000 57,000,000 57,000,000 57,000,000 57,000,000 35 Repl & Refurb@ 2%/yr 63,765,000 65,040,000 66,341,000 67,668,000 69,021,000 70,401,000 36 *Reserve Reduction (in accordance with Board action allowing a $40M reduction to total res (14,000,000) 37 Total 529,777,000 522,032,000 523,366,000 525,208,000 527,105,000 515,025,000 COP Ratios 38, Sr Lien Coverge, Mn 1.25 3.67 4.20 4.25 4.39 4.21 4.29 A-2 ~ i»scrl(!tron Revenues: General User Fees 2 Pernitted User Fees 3 IRWD Assessrrents 4 SAWPA Assessrrents 5 Property Taxes 6 New COP Issues 7 Interest Revenues 8 Capital Facilities Capacity Charges 9 Other Revenues 10 Revenues Requirements: U Oper & Mice Exp (4.0% yr) 12 Capital lmproverrent Program (CIP) 3 Less: CIPSavings & Deferrals -4 Allocation for Future Rehabilitation/Rep tll COP Service 16 Reduction of Long-Term Liabilites 17 Other Requirerrents 1S Requirements 19 Revenues-Requirements Accumulated Funds: 20 Beginning of Year :u End of Year 22 Consolidated Reserve Fblicy 23 Over (Under) Reserve Policy* Sewer Service User Fees: 24 Avg SFR Annual User Fee 25 Percentage Change 2f. Equivalent DN elling Units 27 SFR Connection Fee 28 Oi.Jtstand'a'tg1 COPr; Res~nreB?roJ 2.9 50% Next Year Operating 30 10% Next Year Operating 31 100% Next Year AUG COP Svc. 32 50% average ten-year CIP Bal. 33 DSR@ 10% Outstanding COPs 3/l SFl@$57mm 35 Repl & Refurb@ 2%/yr 36 *Reserve Reduction 37 Total COP Ratios 38 Sr Lien Coverge, Mn 1.25 2019-20 Budget Update Orange County Sanitation District Consolidated Cash Flow Projections Preliminary Preliminary Preliminary 25-26 ~ 27-28 337,681,000 346,285,000 354,938,000 10,970,000 11,204,000 11,438,000 19,727,490 19,108,870 18,531,800 3,357,000 3,491,000 3,630,000 118,727,000 122,289,000 125,958,000 --. 7,827,000 8,366,000 9,374,000 19,673,000 19,749,000 19,830,000 16,124,000 16,464,000 16,813,000 534,086,490 546,956,870 560,512,800 200,524,000 208,545,000 216,887,000 245,664,830 219,403,850 188,966,888 (6,904,105) (4,155,277) (3,719,338) --- 72,210,000 68,414,000 72,563,000 ~ -- 2,530,000 2,530,000 2,530,000 514,024,725 494,737,573 477,227,550 20,061,765 52,219,297 83,285,250 515,711,993 535,773,758 587,993,055 535,773,758 587,993,05~ 671,278,305 513,250,000 510,138,000 514,617,000 22,523,758 77,855,055 156,661,305 $375 $383 $391 2.18% 2.13% 2.09% 940,483 943,304 946,134 $5,770 $5,787 $5,804 $546,150,000 $490,485,000 $429,090,000 100,262,000 104,273,000 108,444,000 20,052,000 20,855,000 21,689,000 72,210,000 68,414,000 72,563,000 137,302,000 137,302,000 137,302,000 54,615,000 49,049,000 42,909,000 57,000,000 57,000,000 57,000,000 71,809,000 73,245,000 74,710,000 513,250,000 510,138,000 514,617,000 4.35 4.66 4.46 A -3 Preliminary I 10-Year _28-29 Total 363,640,000 3,272,837,000 11,672,000 106,892,000 18,420,770 193,750,600 3,776,000 31,855,000 129,737,000 1,130,993,000 -. 8,837,000 74,838,000 19,906,000 192,998,000 17,169,000 211,289,880 573,157,770 5,215,453,480 225,562,000 1,912,433,028 130,544,028 2,471,848,596 (2,550,881) (165,811,763) 300,000,000 440,000,000 72,557,000 724,192,000 . - 2,530,000 33,800,000 728,642,147 5,416,461,861 (155,484,377) (201,008,381) 671,278,305 716,802,309 515,793,928 515,793,928 513,681,001 513,681,001 2,112,927 2,112,927 $399 2.05% 948,972 $5,821 $352,805,000 112,781,000 22,556,000 72,557,000 137,302,000 35,281,000 57,000,001 76,204,000 513,681,001 4.52 Page 1 of 2 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 To Bd. of Dir. 06/26/19 AGENDA REPORT Item Number 10 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: GANN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2019-20 GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 19-XX, entitled: “A Resolution of the Board of Directors of the Orange County Sanitation District Establishing the Annual Appropriations Limit for Fiscal Year 2019-20 for the District in accordance with the Provisions of Division 9 of Title 1 of the California Government Code.” BACKGROUND This routine annual action adopts a resolution establishing the spending limit for “proceeds of taxes” in accordance with Article XIII B of the Constitution of the State of California (Section 7910 of the Government Code). The Orange County Sanitation District’s (Sanitation District) annual appropriations are well below the limit. In 1979, Proposition 4 (the Gann Initiative) was approved adding Article XIII B to the State Constitution. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. This initiative was designed to constrain government expenditures by placing an annual limit on jurisdictions' revenue and appropriation growth. The Appropriation Limit is based on actual appropriations during the 1978-1979 fiscal year, as increased each year using specified population and inflationary growth factors. This annual allowance growth is linked to changes in population and cost of living. The passage of Proposition 111 in June 1990 amended Article XIIIB, making changes in the base year upon which the appropriations limit is based, establishing new cost of living factors and new population factors for use by local governments, and increasing appropriations not subject to the limit (primarily qualified capital outlay projects). The financial constraints of Article XIII B apply to the State, all cities, counties, special districts, and all other political subdivisions. RELEVANT STANDARDS • Produce Operations and CIP budgets every two years, with annual update PROBLEM Article XIII B of the State Constitution places limits on the amount of revenue that can be appropriated by all entities of government. Page 2 of 2 PROPOSED SOLUTION Approval of the proposed resolution establishing the annual appropriations limit for fiscal year 2019-20 in accordance with the provisions of Division 9 of Title 1 of the California Government Code. TIMING CONCERNS The proposed budget update, effective July 1 of this year, will be finalized and presented to the Board for adoption in June. The appropriations limit resolution needs to be approved in conjunction with the budget. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District will not be able to carry out its financial fiduciary duties beyond June 30, 2019. ATTACHMENTS 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: • Draft Resolution No. OCSD 19-XX OCSD 19-XX-1 RESOLUTION NO. OCSD 19-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT ESTABLISHING THE ANNUAL APPROPRIATIONS LIMIT FOR FISCAL YEAR 2019-20 FOR THE DISTRICT IN ACCORDANCE WITH THE PROVISIONS OF DIVISION 9 OF TITLE 1 OF THE CALIFORNIA GOVERNMENT CODE WHEREAS, Article XIII B of the Constitution of the State of California as proposed by the Initiative Measure approved by the people at the special statewide election held on November 6, 1979, provides that the total annual appropriations limit of each local government agency shall not exceed the appropriations limit of such entity for the prior year, adjusted for changes in the cost of living and population, except as otherwise specifically provided for in said Article; and WHEREAS, the State Legislature added Division 9 (commencing with Section 7900) to Title 1 of the Government Code of the State of California to implement Article XIII B of the California Constitution; and WHEREAS, Section 7910 of the Government Code provides that each year the governing body of each local jurisdiction shall, by resolution, establish its appropriations limit for the following fiscal year pursuant to Article XIII B at a regularly-scheduled meeting or a noticed special meeting and that fifteen (15) days prior to such meeting, documentation used in the determination of the appropriations limit shall be available to the public; and WHEREAS, Section 7902 (a) of the Government Code sets forth the method for determining the appropriations limit for each local jurisdiction for the 2018-19 fiscal year; and WHEREAS, the Board of Directors wishes to establish the appropriations limit for fiscal year 2019-20 for the District. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District DOES HEREBY RESOLVE, DETERMINE AND ORDER: USectionU 1: That it is hereby found and determined that the documentation used in the determination of the appropriations limit for the Orange County Sanitation District, for fiscal year 2019-20, was available to the public in the Finance Department of said District at least fifteen (15) days prior to this date. Section 2: That the appropriations limit for fiscal year 2019-20 for the Orange County Sanitation District, as established in accordance with Section 7902(b) of the OCSD 19-XX-2 California Government Code is $114,427,648 which sum is within the maximum authorized spending limitation for fiscal year 2019-20. Section 3: That the Board of Directors of the Orange County Sanitation District, has determined that the percent change in California per capita personal income from the preceding year would be the cost of living factor to be used and the weighted average population change of the cities within the District would be the population factor to be used in calculating the Orange County Sanitation District's appropriations limit for the Fiscal Year 2019-20. Section 4: The determination of the appropriation limit is based upon the best and most complete information available at this time. The District reserves the right to review and re-establish a new and different limit in the event that it subsequently determines that a modification of the limitation amount is appropriate. PASSED AND ADOPTED at a regular meeting of the Board of Directors held June 26, 2019. David John Shawver Chair, Board of Directors Orange County Sanitation District ATTEST: Kelly A. Lore, MMC Clerk of the Board OCSD 19-XX-3 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 19-XX was passed and adopted at a regular meeting of said Board on the 26th day of June 2019, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 26th day of June 2019. Kelly A. Lore, MMC Clerk of the Board of Directors Orange County Sanitation District Page 1 of 1 ADMINISTRATION COMMITTEE Meeting Date 06/12/19 To Bd. of Dir. -- AGENDA REPORT Item Number 11 Item Number -- Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lan Wiborg, Director of Environmental Services SUBJECT: ORANGE COUNTY SANITATION DISTRICT ENVIRONMENTAL SERVICES RESOURCE PROTECTION 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 Environmental Services Resource Protection: Protecting Water, Biosolids, and Gas for Reuse. RELEVANT STANDARDS • Comply with the Clean Water Act • Safe, beneficial reuse of Biosolids • 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 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.