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HomeMy WebLinkAbout07-11-2018 Administration Committee Agenda07/11/2018 Administration Committee Agenda Page 1 of 3 Orange County Sanitation District Regular Meeting of the ADMINISTRATION COMMITTEE Wednesday, July 11, 2018 5:00 P.M. Administration Building Board Room 10844 Ellis Avenue Fountain Valley, CA (714) 593-7433 AGENDA CALL TO ORDER: PLEDGE OF ALLEGIANCE: DECLARATION OF QUORUM: (Clerk of the Board) PUBLIC COMMENTS: If you wish to address the Committee on any item, please complete a Speaker’s Form (located at the table outside of the Board Room) and submit it to the Clerk of the Board or notify the Clerk of the Board the item number on which you want to speak. Speakers will be recognized by the Chairman and are requested to limit comments to three minutes. REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Committee Members. These reports are for information only and require no action by the Committee. CONSENT CALENDAR: The Consent Calendar Items are considered to be routine and will be enacted, by the Committee, after one motion, without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1. APPROVAL OF MINUTES (Clerk of the Board) RECOMMENDATION: Approve Minutes of the June 13, 2018 Administration Committee Meeting. 2. ENTERPRISE DATA STORAGE UPGRADE (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to: A. Authorize a Purchase Order Contract with Nth Generation Computing for Nimble Equipment Upgrade and Support Specification Number E-2018-953BD for a total amount not to exceed $568,127; and B. Approve a contingency of $113,625 (20%). 07/11/2018 Administration Committee Agenda Page 2 of 3 3. VMWARE ENTERPRISE LICENSE AGREEMENT FOR SERVER AND DESKTOP VIRTUALIZATION (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to: A. Authorize a Purchase Order Contract with Nth Generation Computing for VMware Licenses and Support, Specification Number S-2018-954BD-R, for a total amount not to exceed $595,272; and B. Approve a contingency of $119,054 (20%). NON-CONSENT: 4. REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES, SERIES 2018A (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to: Authorize the General Manager to issue Revenue Refunding Certificate Anticipation Notes, Series 2018A, as fixed-rate obligations maturing in February 2022, subject to market conditions, in an amount not to exceed $109,875,000 to replace the $109,875,000 Revenue Refunding Certificate Anticipation Notes, Series 2016B maturing on December 15, 2018. 5. 2019 BENEFITS INSURANCE RENEWAL (Celia Chandler) RECOMMENDATION: Recommend to the Board of Directors to: Approve the Orange County Sanitation District 2019 Benefits Insurance Renewal for the not-to-exceed amounts specified below: A. WORKTERRA, formerly Employee Benefit Specialists (medical, dental, and vision plans; Health Savings Accounts [HSA]; and Employee Assistance Program [EAP]) – Not to Exceed $10,983,125; B. Life Insurance & Disability Carrier TBD* (basic life, short- and long-term disability) – Not to Exceed $709,394; C. The Standard (EMT & Manager disability) – Not to Exceed $30,000; and D. Approve a contingency of $1,172,251 (10%). *Prudential is the Sanitation District’s current carrier for life and disability insurance. However, there may be a change in carrier for the upcoming plan year, which would result in a decrease in insurance premiums, pending renewal negotiation results. 07/11/2018 Administration Committee Agenda Page 3 of 3 INFORMATION ITEMS: 6. LABORATORY, MONITORING, AND COMPLIANCE DIVISION UPDATE (Jim Colston) DEPARTMENT HEAD REPORTS: CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: The next Administration Committee meeting is scheduled for Wednesday, September 12, 2018 at 5:00 p.m. Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board’s office at (714) 593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted outside the main gate of the Sanitation District’s Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all, or a majority of the Board of Directors, are available for public inspection in the office of the Clerk of the Board. Agenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A. Lore Clerk of the Board (714) 593-7433 klore@ocsd.com For any questions on the agenda, Committee members may contact staff at: General Manager James Herberg (714) 593-7300 jherberg@ocsd.com Assistant General Manager Bob Ghirelli (714) 593-7400 rghirelli@ocsd.com Assistant General Manager Rob Thompson (714) 593-7310 rthompson@ocsd.com Director of Finance and Administrative Services Lorenzo Tyner (714) 593-7550 ltyner@ocsd.com Director of Human Resources Celia Chandler (714) 593-7202 cchandler@ocsd.com 06/13/2018 Administration Committee Minutes Page 1 of 5 MINUTES OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, June 13, 2018 at 5:00 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Board Chairman Sebourn on June 13, 2018 at 5:08 p.m. in the Administration Building of the Orange County Sanitation District. Director Tinajero led the Flag Salute. A quorum was declared present as follows: COMMITTEE MEMBERS PRESENT: James Ferryman Peter Kim Richard Murphy Steve Nagel Erik Peterson Teresa Smith Sal Tinajero Greg Sebourn, Board Chairman David Shawver, Board Vice-Chairman COMMITTEE MEMBERS ABSENT: Chad Wanke, Chairman Donald P. Wagner, Vice-Chairman Charlie Nguyen Glenn Parker STAFF PRESENT: Jim Herberg, General Manager Bob Ghirelli, Assistant General Manager Rob Thompson, Assistant General Manager Celia Chandler, Director of Human Resources Jim Colston, Director of Environmental Services Lorenzo Tyner, Director of Finance & Administrative Services Tina Knapp, Deputy Clerk of the Board Jennifer Cabral Pongsakdi Cady Rod Collins Ron Coss Al Garcia Lina Hsiao Randall Kleinman Mark Manzo Laura Maravilla Ddaze Phuong John Swindler OTHERS PRESENT: Brad Hogin, General Counsel PUBLIC COMMENTS: None. REPORTS: General Manager Jim Herberg reminded the Committee that there will not be a meeting in the month of August. Board Chair Sebourn did not provide a report. ITEM NO. 1 06/13/2018 Administration Committee Minutes Page 2 of 5 CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the May 9, 2018 Administration Committee Meeting. AYES: Ferryman, Murphy, Peterson, Sebourn, Shawver, T. Smith, and Tinajero NOES: None ABSTENTIONS: None ABSENT: Kim, Nagel, Nguyen, Parker, Wagner, and Wanke 2. LABORATORY INFORMATION MANAGEMENT SYSTEM (LIMS) UPGRADE AND ENHANCEMENTS (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Professional Services Agreement to LabWare for the upgrade of LIMS to the latest version and the implementation of enhancements for facilitating compliance with changing regulations, Specification No. CS-2017-893, for a total amount not to exceed $629,000; and B. Approve a contingency of $125,800 (20%). AYES: Ferryman, Murphy, Peterson, Sebourn, Shawver, T. Smith, and Tinajero NOES: None ABSTENTIONS: None ABSENT: Kim, Nagel, Nguyen, Parker, Wagner, and Wanke 3. FY 2018-19 USE CHARGES FOR SANTA ANA WATERSHED PROJECT AUTHORITY (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 18-XX, entitled: “A Resolution of the Board of Directors of the Orange County Sanitation District Establishing Use Charges for the 2018-19 Fiscal Year Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority (“SAWPA”).” AYES: Ferryman, Murphy, Peterson, Sebourn, Shawver, T. Smith, and Tinajero NOES: None ABSTENTIONS: None ABSENT: Kim, Nagel, Nguyen, Parker, Wagner, and Wanke 06/13/2018 Administration Committee Minutes Page 3 of 5 NON-CONSENT: 4. ADOPTION OF INTEGRATED REGIONAL WATER MANAGEMENT PLAN AND MOU (Jim Colston) Jim Colston, Director of Environmental Services, introduced this item and provided background information about the plan and MOU. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Adopt The OC Plan for Integrated Regional Water Management in North and Central Orange County dated March 2018; B. Approve participation in a Memorandum of Understanding between the Orange County Sanitation District, the Orange County Water District, and the County of Orange for Integrated Regional Water Management in North and Central Orange County Watershed Management Areas; and C. Authorize staff to submit applications for State Integrated Regional Water Management Grants under California Proposition 1 for projects prioritized within the Plan. AYES: Ferryman, Murphy, Peterson, Sebourn, Shawver, T. Smith, and Tinajero NOES: None ABSTENTIONS: None ABSENT: Kim, Nagel, Nguyen, Parker, Wagner, and Wanke Board Chair Sebourn called Item No. 6 out of order. 6. PROPOSED FY 2018-19 AND 2019-20 BUDGET (Lorenzo Tyner) Director Kim arrived at 5:13 p.m. Director of Finance & Administrative Services Lorenzo Tyner provided an informative PowerPoint presentation on this item that reviewed the activity related the following: budget presentations to the committees and Board of Directors, proposed budget summary, major revenue components, comparison of single family residential rates, property tax revenue, OCSD outlay categories, proposed operating expense summary, biosolids removal decrease and power costs increase due to centrifuge project coming online, major cost components, chemicals as 85% of operating materials and supplies expenses, departmental operating summary, salaries and benefits as percentage of total budget, four distinct type of CIP components, and CIP program 10-year annual outlays. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Approve proposed Operating, Capital, Debt/COP Service, and Self- Insurance Budgets for FY 2018-19 and 2019-20 as follows: 06/13/2018 Administration Committee Minutes Page 4 of 5 2018-19 2019-20 Net Operations, Maintenance & Working Capital Worker's Compensation Self Insurance General Liability and Property Self-Insurance Net Capital Improvement Program Debt/COP Service Intra-District Joint Equity Purchase/Sale(1) TOTAL $161,173,160 760,000 1,700,000 174,541,876 80,464,000 3,700,000 $ 422,339,036 $160,204,370 780,000 1,750,000 137,027,258 79,956,000 3,500,000 $ 383,217,628 (1)Cash to/from Revenue Area 14 (RA14) in exchange for capital assets to/from Consolidated Revenue Area 15 (RA15). AYES: Ferryman, Kim, Murphy, Peterson, Sebourn, Shawver, T. Smith, and Tinajero NOES: None ABSTENTIONS: None ABSENT: Nagel, Nguyen, Parker, Wagner, and Wanke 5. GANN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2018-19 (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 18-XX, entitled: “A Resolution of the Board of Directors of the Orange County Sanitation District Establishing the Annual Appropriations Limit for Fiscal Year 2018-19 for the District in accordance with the Provisions of Division 9 of Title 1 of the California Government Code.” AYES: Ferryman, Kim, Murphy, Peterson, Sebourn, Shawver, T. Smith, and Tinajero NOES: None ABSTENTIONS: None ABSENT: Nagel, Nguyen, Parker, Wagner, and Wanke Director Nagel arrived at 5:25 p.m. INFORMATION ITEMS: None. DEPARTMENT HEAD REPORTS: None. CLOSED SESSION: 06/13/2018 Administration Committee Minutes Page 5 of 5 CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.8: The Committee convened in closed session at 5:26 p.m. to discuss one item. Confidential minutes of the Closed Session have been prepared in accordance with the above Government Code Section and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Session Meetings. RECONVENED IN REGULAR SESSION: The Committee reconvened in regular session at 5:44 p.m. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: General Counsel Brad Hogin did not provide a report. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: Board Chair Sebourn declared the meeting adjourned at 5:44 p.m. to the next regularly scheduled meeting of Wednesday, July 11, 2018 at 5:00 p.m. Submitted by: _____________________ Tina Knapp, CMC Deputy Clerk of the Board Page 1 of 3 ADMINISTRATION COMMITTEE Meeting Date 07/11/18 To Bd. of Dir. 07/25/18 AGENDA REPORT Item Number 2 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: ENTERPRISE DATA STORAGE UPGRADE GENERAL MANAGER'S RECOMMENDATION A. Authorize a Purchase Order Contract with Nth Generation Computing for Nimble Equipment Upgrade and Support Specification Number E-2018-953BD for a total amount not to exceed $568,127; and B. Approve a contingency of $113,625 (20%). BACKGROUND The Orange County Sanitation District (Sanitation District) uses Nimble Storage Array systems for production data storage and backup in the office and process control networks. The original arrays were purchased in 2012 and have reached their end of service life and will become unsupported by the manufacturer November 2019. Storage needs have increased, especially for video surveillance. Increased security has resulted in additional surveillance cameras with higher resolutions. Also, California Government Code requires video data to be stored for a minimum of one year. RELEVANT STANDARDS • Protect OCSD assets • Comply with California Government Code, Title 5, Division 2, Part 1, Chapter 1, Article 9, Section 53160 • Ensure the public’s money is wisely spent PROBLEM The existing data storage system used for primary storage and critical disaster recovery processes has reached the end of its expected service life. Legislation requires we maintain one year of camera data (security and operational data) which dictates the need for increased storage capacity. Also, the increased need for security and new construction projects increase the number of cameras needed to protect the Sanitation Districts facilities. Page 2 of 3 PROPOSED SOLUTION Increase data storage capabilities at Plant No. 1, Plant No. 2, and the off-site disaster recovery center by replacing the nearly obsolete equipment with the current model and increasing capacity to accommodate increased storage needs. TIMING CONCERNS The existing storage arrays will be unsupported by the manufacturer in November 2019. RAMIFICATIONS OF NOT TAKING ACTION Not taking this action will prevent the Sanitation District from effectively executing the disaster recovery section of its Continuity of Operations Plan in the event of an emergency. Also, this would leave the Sanitation District uncompliant with California Government Code, Title 5, Division 2, Part 1, Chapter 1, Article 9, Section 53160 which requires all recorded video to be kept for at least one year. PRIOR COMMITTEE/BOARD ACTIONS September 2016 - Authorized the purchase of a production storage system to accommodate future system performance and capacity needs with Nimble Storage Array system, using the approved U.S. General Services Agreement (GSA) IT Schedule 70 for a total amount not to exceed $284,941.49, in accordance with the Sanitation District’s Purchasing Ordinance, Section 2.03(8) Cooperative Purchases; and approved a contingency of $28,494 (10%). May 2016 - Authorized purchases of information technology hardware, software, services, and licensing & maintenance agreements using the U.S. General Services Agreement (GSA) IT Schedule 70. May 2012 - Approved a Purchase Order Contract with Scale Datacom, LLC, for the purchase of the Storage Area Network (SAN), Specification S-2011-511BD-R, for an amount not to exceed $389,790; and approved a contingency in the amount of $19,490. ADDITIONAL INFORMATION In June 2012, the Sanitation District purchased a Nimble Storage Array with 60 Terabytes (TB) of usable capacity to be divided between Plant Nos. 1 and 2. In September 2016, the Sanitation District purchased new Nimble Storage Arrays with 120 TB to replace the existing Nimble arrays at Plant No. 1 and repurposed the existing Plant No. 1 arrays to be used as backup arrays at Plant No. 2. The new arrays will be used to add 500TB of storage needed at Plant No. 1 to support increased video retention requirements. This will bring Plant No. 1 to 620 TB of storage. New arrays with 700 TB of storage will be used at Plant No. 2 to replace the arrays originally bought in 2012 and increase capacity to support storage replication including video. An array with 60 TB of storage will be installed in the offsite disaster recovery data center. The new arrays will be the same Page 3 of 3 product family as the arrays purchased in September 2016. These arrays are in production use and fully supported by the manufacturer with an expected useful life of five years. The total storage being purchased is 1,260 TB For this purchase, the Sanitation District’s Purchasing Division, in collaboration with the IT division, administered a bidding process for this purchase (Bid# E-2018-953BD), obtaining a competitive sealed bid from vendors in accordance with Section 2.02 of the Sanitation District's Purchasing Ordinance. The Sanitation District received one response from Nth Generation. Nth Generation was found to be lowest responsive and responsible with a bid of $568,126.49. Staff recommends selection of Nth Generation to provide Nimble Equipment Upgrade and Support. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. ATTACHMENTS 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 07/11/18 To Bd. of Dir. 07/25/18 AGENDA REPORT Item Number 3 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: VMWARE ENTERPRISE LICENSE AGREEMENT FOR SERVER AND DESKTOP VIRTUALIZATION GENERAL MANAGER'S RECOMMENDATION A. Authorize a Purchase Order Contract with Nth Generation Computing for VMware Licenses and Support, Specification Number S-2018-954BD-R, for a total amount not to exceed $595,272; and B. Approve a contingency of $119,054 (20%). BACKGROUND The Orange County Sanitation District (Sanitation District) relies on server virtualization technologies to maximize server resources, application, and data availability. Cybersecurity threats, and risks from environmental interruptions such as power outages, pose risks to complex systems used to improve the Sanitation District’s ability to provide services and comply with government regulations. The current virtualization system limits the Sanitation District’s ability to provide reliable systems with the ability to avoid or minimize operational disruptions. VMware, the virtualization system industry leader, will allow information technology to improve its ability to manage multiple data centers and Continuity of Operations functions, with enhanced capabilities that improve operational resiliency, security, and productivity. The Sanitation District implemented a pilot system in October 2017, and has been running 15% of its servers under VMware since February 2018. Due to the success of the pilot, staff wants to purchase additional VMware licenses and expand the VMware environment to the rest of the production environment. RELEVANT STANDARDS • Protect OCSD assets • Sound engineering and accounting practices, complying with local, state, and federal laws • Maintain a culture of improving efficiency to reduce the cost to provide the current service level or standard Page 2 of 3 PROBLEM The existing server virtualization platform does not consistently move applications and data between servers or datacenters in the event of a hardware failure, datacenter outage (power, flood, etc.), or major cybersecurity attack. This inconsistency limits the ability to automate the Sanitation District’s Continuity of Operations Plan. Also, staff is required to use four different tools to manage the existing platform. Automating system backups and network management is time consuming because the existing platform has little integration with these tools. Monthly, Information Technology staff need to shut down each application while critical patches are applied to the physical server, reducing availability. PROPOSED SOLUTION Complete the implementation of VMware in both the office and process networks. The increased capabilities of VMware will improve the Sanitation District’s ability to replicate applications and data from Plant No. 1 to Plant No. 2 and the offsite datacenter in Nevada while making more efficient use of staff time. In the event of a hardware failure, or datacenter outage, VMware will allow applications to automatically run from the Plant No. 2 secondary datacenter. In the event of an outage effecting both plants, VMware will increase the Sanitation District’s ability and reduce the time needed to implement the Sanitation District’s Continuity of Operations plan and run applications from the offsite datacenter. During monthly server patching, VMware will allow host servers to be patched and restarted without impacting application servers. TIMING CONCERNS Operational Resiliency is in the General Manager’s workplan. VMware will help to ensure the Sanitation District’s applications and data are secure and available in an emergency. VMware is also needed to ensure the required technology is available to execute the Sanitation District’s Continuity of Operations Plan. RAMIFICATIONS OF NOT TAKING ACTION Not taking this action will prevent the Sanitation District from effectively executing its Continuity of Operations Plan in an emergency. It will also limit the Sanitation District’s ability to provide a more reliable infrastructure, while improving security and productivity, and more efficiently managing the server environment PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The cost to purchase these VMware licenses and five years of maintenance without the ELA would be $825,468, saving the Sanitation District $230,196.05, or 28%. Page 3 of 3 For this purchase, the Sanitation District’s Purchasing Division, in collaboration with the IT division, administered a bidding process for this purchase (Bid# S-2018-954BD-R), obtaining competitive sealed bids from vendors in accordance with Section 2.02 of the Sanitation District's Purchasing Ordinance. The Sanitation District received responses from Nth Generation Computing ($595,271.95), Agilis Group, Inc. ($606,647.75), Miracle Software Systems ($621,003.10), and Hypertec USA Inc. ($2,677,848.50). Nth Generation Computing was found to be the lowest responsive and responsible with a bid of $595,271.95. Staff recommends selection of Nth Generation Computing to provide a VMware enterprise license agreement and support. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. ATTACHMENTS 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 7 ADMINISTRATION COMMITTEE Meeting Date 07/11/18 To Bd. of Dir. 07/25/18 AGENDA REPORT Item Number 4 Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES, SERIES 2018A GENERAL MANAGER'S RECOMMENDATION Authorize the General Manager to issue Revenue Refunding Certificate Anticipation Notes, Series 2018A, as fixed-rate obligations maturing in February 2022, subject to market conditions, in an amount not to exceed $109,875,000 to replace the $109,875,000 Revenue Refunding Certificate Anticipation Notes, Series 2016B maturing on December 15, 2018. BACKGROUND In March 2006, the Orange County Sanitation District (Sanitation District) issued $200 million of variable rate Certificates of Participation (COP), Series 2006 (2006 COPs). Alternatively, the Sanitation District could have issued debt, at an estimated cost of 4.54%, on a fixed rate basis in 2006 (“2006 Fixed Rate”). For the initial 29 months, from inception through August 2008, the average variable rate on the 2006 COPs was 2.95% or 0.22% less than the SIFMA index (weekly market index of tax-exempt variable rate obligations). As the global financial crisis took hold of the markets in the late summer of 2008, there was a significant increase in the variable rate borrowing cost to the Sanitation District, including many other municipal variable rate borrowers, as the 2006 COPs averaged 4.29% (or 1.56% above the SIFMA index) for the period between September 2008 and December 2008. The amount of the increase in variable rate cost above the SIFMA index can be attributed to the weakened financial strength of the bank, DEPFA Bank plc, that was providing liquidity support on the 2006 COPs. Even with the increase in interest rates during this period of unprecedented stress, the 4.29% average cost was still lower than the 2006 Fixed Rate of 4.54%. In December 2008, the Sanitation District proactively refunded the 2006 COPs with the fixed rate Refunding COP Series 2008C Certificate Anticipation Notes (2008C CANs) to reduce its exposure to then higher and more volatile variable rate costs and to avoid relying on liquidity support from weakening banks. The yield on the 2008C CANs was 0.98% for a one-year period. The issuance of the 2008C CANs allowed the Sanitation District to redeem the 2006 COPs at an all-in cost of less than 1.25% and avoid paying a bank rate of 4.75% which would have been effective starting a month later. Since the 2008C CANs issuance, the Sanitation District completed five additional one-year refinancings at progressively lower yields, followed by two subsequent two-year refinancings starting in 2014 in anticipation of rising short-term rates, as summarized below: Page 2 of 7 Series Principal Amount Yield All-In Cost 2009B $ 165,865,000 0.370% 0.559% 2010B 154,665,000 0.360 0.525 2011B 143,205,000 0.225 0.399 2012C 131,700,000 0.210 0.410 2013A 129,625,000 0.170 0.390 2014B 120,850,000 0.320 0.523 2016B 109,875,000 0.840 1.002 The interest rate on the currently outstanding Revenue Refunding Certificate Anticipation Notes Series 2016B (2016B CANs) was fixed for two years and the entire $109,875,000 plus interest becomes due and payable on December 15, 2016. The Sanitation District is responsible for the total repayment, including interest due, of $110,973,750 or the Sanitation District could choose to refinance the 2016B CANs. Due to the expected relatively attractive tax-exempt cost of refinancing CANs (compared to investing reserves), staff does not recommend the use of $110 million of reserves to repay the 2016B CANs; therefore, there are a number of refinancing options for consideration of the Sanitation District. RELEVANT STANDARDS • Comply with OCSD Debt Policy - Financial Management Policy and Procedure No. 201-3-1; Restructuring debt is deemed to be desirable PROBLEM The 2016B CANs are due and payable on December 15, 2018 in the amount of $110,973,750. The 2016B CANs were issued with a low-cost, two-year rate with the expectation that upon maturity the issue would be refinanced. PROPOSED SOLUTION The issuance of up to $109,875,000 of Revenue Refunding Certificate Anticipation Notes Series 2018A (2018A CANs) would allow the Sanitation District to repay the 2016B CANs and avoid using $110 million of reserves for such purpose. TIMING CONCERNS The Sanitation District must complete a refinancing by no later than December 15, 2018; otherwise, $110 million of reserves will be required to repay the 2016B CANs. RAMIFICATIONS OF NOT TAKING ACTION Not taking action by December 15, 2018 would cause the Sanitation District to use its reserves to repay the 2016B CANs or cause an Event of Default due to the lack of repayment to lenders. The economic ramification of an Event of Default would result in a downgrade in credit ratings, reduced access to capital, and higher costs of borrowing. Page 3 of 7 PRIOR COMMITTEE/BOARD ACTIONS December 2016 - The Board adopted Resolution No. OCSD16-32, authorizing the execution and delivery by the District of an Installment Purchase Agreement, a Trust Agreement and a Continuing Disclosure Agreement in connection with the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2017A, authorizing the execution and delivery of such Revenue Obligations evidencing principal in an aggregate amount not to exceed $91,620,000, approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in connection with the offering and sale of such Revenue Obligations and authorizing the execution of necessary documents and related actions. ADDITIONAL INFORMATION Financing Considerations 1. Fixed Rate Refunding The issuance of long-term fixed rate debt to refund the 2016B CANs will eliminate any future market access risks (ability to issue debt to refinance maturing debt) and interest rate risk (additional costs if rates reset higher or are higher upon a future refinancing). After the issuance of fixed rate debt, the Sanitation District will no longer be exposed to changing market conditions. Although current fixed rates are historically low, a fixed rate refunding would result in borrowing yields approximately double (depending on duration) the current short-term borrowing yields. Fixed rate debt would also remove the interest rate hedge originally desired by the Sanitation District (in 2006) which was intended to insulate the Sanitation District from changes in the Sanitation District’s fluctuating investment portfolio earnings as the variable rates on the 2006 COPs were expected to move in tandem with changes in short-term interest rates. Since 2006, the 2006 COPs and subsequent CANs refinancings have mirrored short-term tax-exempt variable rate costs. 2. Variable Rate Refunding Current variable rates for highly-rated California municipal borrowers (such as the Sanitation District), although higher than the recent low rates, continue to be relatively low at approximately 1.20% for traditional variable rate debt supported by a commercial bank. However, the additional cost of bank support continues to be a significant part of an issuer’s overall variable rate borrowing costs. The terms and conditions currently demanded by banks are also more onerous than during the period prior to the global financial crisis. Alternative variable rate products have been developed in the marketplace that do not require bank support, but these products are generally used by issuers to diversify among a portfolio containing many different variable rate products, unlike the Sanitation District’s single Page 4 of 7 issuance of short-term interest rate exposure (2016B CANs). In addition, there are limited investors for these alternative products. 3. CANs Refunding Since the issuance of the 2016B CANs on November 1, 2016, short-term interest rates have increased, but still remain low compared to a long-term fixed rate refunding option. The issuance of refunding CANs will continue to allow the Sanitation District to accrue savings for a fixed period of time while insulating the Sanitation District from the possibility of short-term rates increasing over that time period. There is a strong correlation between traditional tax-exempt variable rates and short-term tax-exempt fixed rates, as shown below in an historical comparison between 1-year tax-exempt MMD (Municipal Market Data) fixed rates and the SIFMA index: In addition, the CANs structure will avoid the payment of high fees to liquidity banks and eliminate the risk of interest rates resetting higher from current low levels during the course of a fixed period of time. The major risk with any CANs structure occurs if the Sanitation District does not have market access to refinance the CANs at maturity. However, the Sanitation District (1) has successfully issued CANs on eight occasions starting in 2008 without issue, (2) is the highest rated entity possible (AAA/Aaa/AAA) which should always have the greatest market access, and (3) holds a substantial amount of reserves that could (if the Board chooses) be used to redeem CANs in the unexpected situation where market access is not available. Staff intends to build in safeguards to avoid the use of Sanitation District reserves unless absolutely necessary: for example, beginning the process of refinancing early to allow for added timing flexibility and structuring the CANS with a short optional call right which will allow the Sanitation District to redeem the CANs in advance of the maturity date. 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 1-Year MMD vs. 1-Year SIFMA Rolling Average 1-Year MMD 1-Year SIFMA Rolling Average Page 5 of 7 The following table presents the current market costs for 1-7 year CANs: One Year Two Years Three Years Four Years Five Years Six Years Seven Years Yield 1.17% 1.36% 1.51% 1.60% 1.70% 1.82% 1.94% All-In Cost 1.49 1.53 1.64 1.71 1.80 1.91 2.02 4. Accelerated Rate Management Program To further reduce interest rate risk (additional costs if rates reset higher or are higher upon a future refinancing) the Sanitation District could continue the Accelerated Rate Management (ARM) program with a CANs refinancing debt issuance. Between 2006 and 2012 and in 2016, the ARM program used accrued savings (e.g., 0.41% cost on 2012C CANs) compared to the 2006 Fixed Rate of 4.54% to reduce the outstanding amount of debt on a yearly basis. With less debt outstanding, the Sanitation District significantly reduces its interest rate risk (if higher interest rates occur, the negative impact is mitigated as the higher interest cost is calculated on a smaller principal amount). The implementation of the ARM program since the issuance of the 2006 COPs has (1) reduced the outstanding principal by more than $38 million compared to a fixed rate amortization and (2) decreased the interest rate risk to the Sanitation District as the break-even rate (the average future interest rate for the remaining debt from the 2006 COPs issuance) is currently over 13.2%. The original variable rate structure of the 2006 COPs and the past seven CANs refinancings have already saved the Sanitation District over $51.3 million compared to the alternative of the Sanitation District issuing fixed rate debt in 2006. Since the Federal Reserve Bank has signaled to the markets it will continue to raise short-term interest rates, it may be appropriate to continue the ARM program as a method of mitigating interest rate risk associated with any short-term borrowings. Even as long-term interest rates have been volatile, short-term debt continues to remain relatively low and attractive. Short-term borrowing costs are also lower than, and act as a hedge against, the Sanitation District’s cash reserves which are currently earning approximately 2.00%. Although the current one- and two-year rates for CANs are the lower than longer maturities, the associated upfront costs of refinancing the CANs have a greater impact on shorter CANs. The Sanitation District has also significantly reduced the amount of CANs outstanding to $110 million, as $200 million was originally issued in 2006, which makes every dollar of upfront costs more impactful. To reduce future issuance costs, the Sanitation District can target a maturity for the new 2018A CANs to coincide with the next expected debt issuance. The Sanitation District has no expectation of borrowing new money to fund capital expenditures over the next ten years; however, there are potential future refunding opportunities as shown below: Page 6 of 7 Staff is recommending the refunding of the 2016B CANs with a CAN with a February 2022 maturity date that will enable the Sanitation District to lock-in a low rate for slightly over three years without (a) encumbering cash reserves, (b) exposing the Sanitation District to relatively high bank liquidity costs associated with variable rate debt, and (c) avoiding higher fixed rates which are currently over 3%. In addition, by targeting a February 2022 maturity, the Sanitation District will be able to combine the future refinancing of the 2018A CANs with the expected refunding of the $61,575,000 of 2011A COPs (with a February 1, 2022 call date). Staff also recommends continuing the ARM program to be structured against the fixed rate at the time of the 2018A CANs refinancing. Assuming that staff receives approval to pursue a refinancing, staff will return to the Administration Committee in September with financing documents to complete the refinancing. There is the possibility that interest rates may change before September and, at the time of approval of the financing documents and based on market conditions at that time, staff may recommend a different refinancing term (e.g. one-year CANs). The refunding CANs can be sold on a competitive basis in order to obtain the lowest financing cost possible. Staff and consultants will be available to make a brief presentation and provide an overview of the financing schedule at the Administration Committee meeting. Following is a chart listing the remaining steps to be completed for the issuance of the Revenue Refunding Certificate Anticipation Notes, Series 2018A debt issuance: September  Board approval of legal and disclosure documents  Financing Corporation approval of legal and disclosure documents October  Receive ratings from Bond Rating Agencies  Receive competitive bids November  Closing Page 7 of 7 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 07/11/18 To Bd. of Dir. 07/25/18 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 BENEFITS INSURANCE RENEWAL GENERAL MANAGER'S RECOMMENDATION Approve the Orange County Sanitation District 2019 Benefits Insurance Renewal for the not-to-exceed amounts specified below: A. WORKTERRA, formerly Employee Benefit Specialists (medical, dental, and vision plans; Health Savings Accounts [HSA]; and Employee Assistance Program [EAP]) – Not to Exceed $10,983,125; B. Life Insurance & Disability Carrier TBD* (basic life, short- and long-term disability) – Not to Exceed $709,394; C. The Standard (EMT & Manager disability) – Not to Exceed $30,000; and D. Approve a contingency of $1,172,251 (10%). *Prudential is the Orange County Sanitation District’s current carrier for life and disability insurance. However, there may be a change in carrier for the upcoming plan year, which would result in a decrease in insurance premiums, pending renewal negotiation results. SUMMARY The Orange County Sanitation District (Sanitation District) provides healthcare and welfare insurance benefits as a provision contained in its Memoranda of Understanding (MOU’s) and personnel policies. The Human Resources (HR) Department and Sanitation District’s operational insurance broker, Alliant, began the renewal process in March and received initial quotes in June. After successfully negotiating with the insurance carriers, Alliant was able to secure competitive rates for the Sanitation District without compromising the level of benefits provided to employees and eligible dependents. The cost of insurance coverage will increase by 4.1%, or $462,247, for a total cost of $11,722,519 for 2019, which is proportionally shared as follows: • Sanitation District cost: $9,555,269 • Employee cost: $2,167,250 Page 2 of 4 Additionally, a contingency budget in the amount of $1,172,251, or 10% of the total cost for benefits insurance, is requested. This contingency budget may be utilized in the event that the actual cost for benefits insurance exceeds the not-to-exceed amounts requested due to fluctuations such as changes in the Sanitation District’s number of employees, changes in employees’ eligibility for District-paid benefits, and other factors. BACKGROUND In May 2015, the Board of Directors approved moving the Sanitation District’s medical insurance from direct contract with the carriers to joining the insurance risk sharing pool under California State Association of Counties – Excess Insurance Authority (CSAC-EIA). The association with CSAC-EIA resulted in immediate and future cost savings to the Sanitation District in medical insurance premiums and dictated a change from fiscal to calendar-based plan year, from January through December. Staff typically presents the benefits renewal information to the Board of Directors annually every July, for an effective date of January 1st of the year therafter. For the 2019 Plan Year, the Sanitation District is still in negotiations and may transition from Prudential to a different life and disability insurance provider within the insurance risk sharing pool (CSAC-EIA) in an effort to achieve a competitive rate, and take advantage of a 2-year rate guarantee. RELEVANT STANDARDS • Offer competitive compensation and benefits • Comply with OCSD Policy 4.1 – Insurance PROBLEM The Sanitation District’s healthcare and welfare insurance benefits renew on an annual basis, with carrier quotes typically received by June of every year. Through its association with CSAC-EIA, the Sanitation District is required to hold an annual benefits open enrollment period every October to provide employees and eligible dependents the opportunity to make changes to their benefit elections, for an effective date of January 1st of the year thereafter. PROPOSED SOLUTION Approve the benefits insurance renewals as described above with the respective carriers to ensure continued coverage for employees and eligible dependents. TIMING CONCERNS Board approval is necessary in July 2018 to ensure that the Sanitation District meets its insurance renewal deadlines, to finalize preparations for the October benefits open enrollment, and for continued coverage for Sanitation District employees and eligible dependents, in accordance with MOU’s and personnel policies. Page 3 of 4 RAMIFICATIONS OF NOT TAKING ACTION Without Board approval, the Sanitation District cannot finalize the contracts with the insurance carriers for the 2019 Plan Year, resulting in the interruption of medical, dental, vision, EAP, life, and disability coverage and services to employees and eligible dependents; and the Sanitation District would not be meeting its obligation to provide these benefits as provided for in MOU’s and personnel policies. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Medical Insurance The Sanitation District’s medical benefits are designed to help maintain wellness and protect employees and their families from major financial hardship in the event of illness or injury. The Sanitation District offers a choice of medical plans through Anthem Blue Cross and Kaiser Permanente. HMO (Health Maintenance Organization) plans offer comprehensive coverage. Employees have a choice between the Anthem Blue Cross HMO or the Kaiser HMO plan. PPO (Preferred Provider Organization) plan offers a network of doctors and healthcare facilities that provide services to plan members at special discounted rates. The PPO plan is with Anthem Blue Cross. Dental Insurance The Sanitation District provides the Delta Dental plan to all benefit eligible employees. Vision Insurance The Sanitation District currently provides vision insurance to all benefit eligible employees through Vision Service Plan (VSP). Basic Life Insurance Life insurance provides protection for an employee’s beneficiary in the event of death. All benefit eligible full-time and part-time employees automatically receive Basic Life and Accidental Death & Dismemberment insurance coverage. The benefit amount is $50,000 for employees, and three times salary for managers and executives. Coverage is offered through Prudential. Short-Term Disability Insurance The short-term disability insurance plan protects employees when non-work related illness or injury makes it impossible for them to work for a short period of time. Under the plan, income may be continued for up to 26 weeks. The Sanitation District pays the entire cost of coverage for regular full-time and part-time employees. Coverage is offered through Prudential. Page 4 of 4 Long-Term Disability Insurance The long-term disability insurance plan protects employees when an illness or injury makes it impossible for them to work for an extended period of time. Under the plan, employees who are disabled for more than 90 days are eligible to receive a benefit of 67% of their basic monthly pay up to $5,000/month. The Sanitation District pays the entire cost of coverage for regular full-time and part-time employees with five or more years of service. Coverage is offered through Prudential. Executive Disability The additional long-term disability insurance plan provides increased income protection for executives and managers. Under the plan, eligible employees who are disabled for more than 90 days due to a non-work related illness or injury are eligible to receive an additional benefit of $3,100/month. The first $5,000/month is covered by the Sanitation District group long-term disability plan benefit. Coverage is offered through The Standard. Employee Assistance Program The EAP plan protects employees and family members when they need help with personal problems such as marital and relationship problems; stress, anxiety and depression; grief and loss; or substance abuse. Coverage is offered through ComPsych. CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE The funds for the renewal of these insurances are derived from the Sanitation District Operating Budget. 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 2 ADMINISTRATION COMMITTEE Meeting Date 07/11/18 To Bd. of Dir. -- AGENDA REPORT Item Number 6 Item Number -- Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: James Colston, Director of Environmental Services SUBJECT: LABORATORY, MONITORING, AND COMPLIANCE DIVISION UPDATE GENERAL MANAGER'S RECOMMENDATION Information Only. BACKGROUND The Laboratory, Monitoring, and Compliance Division became part of the Environmental Services Department in July 2016 and achieved national accreditation in 2017. Staff will present an informational overview on the Division’s new and on-going programs in order to update the Board with the Division’s activities and achievements over the past year and planned future efforts. RELEVANT STANDARDS • Maintain a culture of improving efficiency to reduce the cost to provide the current service level or standard • Comply with environmental permit requirements • Ensure the public’s money is wisely spent • Cultivate a highly qualified, well-trained, and diverse workforce ADDITIONAL INFORMATION The Laboratory, Monitoring, and Compliance Division (Division 630) is composed of 54 positions and has an operating budget of $10,734,730. Division 630 supports several internal customers including Operations, Engineering, Resource Protection, the Orange County Sanitation District’s (Sanitation District) Research Technical Advisory Group and Capital Projects, in addition to performing cooperative support for and studies with outside agencies such as the Orange County Water District (OCWD), the Southern California Coastal Water Research Project (SCCWRP) and the South Orange County Wastewater Agency (SOCWA). In July 2016, the Sanitation District reorganized to form the Environmental Services Department, and the Compliance section with its 11 positions was added to the Environmental Laboratory and Ocean Monitoring Division. This change has brought together the analytical expertise of the laboratory staff and the regulatory reporting expertise of the compliance staff. Page 2 of 2 The Environmental Laboratory performs analysis for nearly 110,000 samples per year, approximately 48% are in support of Operational Optimization and Compliance Monitoring, roughly 34% are in support of Permit Compliance, about 9% are in support of pretreatment monitoring and investigations, and nearly 8.5% are primarily in support of the Ocean Monitoring Program. In 2014, the California Environmental Laboratory Accreditation Program (ELAP) lost its standing as a nationally recognized accreditation program, resulting in a complete revision of the regulations governing environmental laboratories in California. The former accreditation standards had not been revised in nearly 30 years and were largely out of date. The Sanitation District took the initiative and became the first municipal laboratory in California to become nationally accredited through the National Environmental Laboratory Accreditation Program (NELAP), which guarantees the Sanitation District’s laboratory full accreditation in California and 13 other states through reciprocity. Currently, ELAP is only approving interim accreditation to laboratories, while the Sanitation District received full accreditation. 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.