HomeMy WebLinkAbout07-24-2013 Steering Committee Agenda Packet.pdf Wednesday, July 24, 2013
Orange County Sanitation District 5:30 P.M.
Regular Meeting of the Administration Building
Steering Committee Conference Rooms A R B
10844 Ellis Avenue
Fountain Valley, CA 92708
„
(714) 593-7130
AGENDA
DECLARATION OF QUORUM:
PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form and give it to the
Clerk of the Board. Speakers are requested to limit comments to three minutes.
REPORTS: The Committee Chair and the General Manager may present verbal reports on
miscellaneous matters of general interest to the Directors. These reports are for information only and
require no action by the Directors.
• General Manager's Year-End Report and 2013/14 Work Plan
• Low-flow Rate Alternative
CONSENT CALENDAR:
1. Approve Minutes of the June 26, 2013 Steering Committee Meeting.
2. Approve the placement of a Memorial Plaque at Plant No. 2, Headworks "D"
facilities, in recognition of Pamela Koester for her contributions to the Orange
County Sanitation District.
ACTION ITEMS:
3. A. Consideration of John Collins, past Board Member, as an Honor Walk
Brick Recipient for the year 2013.
B. Approve nominated retired employees, Ron Wade and Mohammed
Babaielivari, as Honor Walk Brick Recipients for the year 2013.
07/24/13 Steering Committee Agenda Page 1 of 4
4. Recommend to the Board of Directors to:
A. Declare the Orange County Sanitation District's position on the changes to
the Orange County Retirement System (OCERS) Unfunded Actuarial
Accrued Liability (UAAL) Amortization Period; and
B. Provide direction to the General Manager on measures to be taken in
representing declared Board position.
INFORMATION ITEMS:
5. Legislative Update
CLOSED SESSION:
During the course of conducting the business set forth on this agenda as a regular meeting of the
Board, the Chair may convene the Board in closed session to consider matters of pending real estate
negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code
Sections 54956.8, 54956.9, 54957 or 54957.6, as noted.
Reports relating to (a) purchase and sale of real property, (b) matters of pending or potential litigation;
(c) employment actions or negotiations with employee representatives;or which are exempt from public
disclosure under the California Public Records Act, may be reviewed by the Board during a permitted
closed session and are not available for public inspection. At such time as the Board takes final action
on any of these subjects, the minutes will reflect all required disclosures of information.
Convene in closed session.
1. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION
(Government Code Sections 54956.9(d)(2), 54956.9(e)(3))
Significant Exposure to Litigation
Number of Potential Cases: 1
Kiewit Claim re. P1-102
2. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION
(Government Code Section 54956.9(d)(4))
Initiation of Litigation
Number of Potential Cases: 2
o SAW PA Enforcement/Cost Recovery Action
o Disclosure of Information
3. CONFERENCE WITH LEGAL COUNSEL RE. EXISTING LITIGATION
07/24/13 Steering Committee Agenda Page 2 of 4
(Government Code Section 54956.9(d)(1))
Number of Potential Cases: 1
City of Anaheim v. Matosantos, Sacramento County Superior Court, Case No.
2013-80001529
Reconvene in regular session.
Consideration of action, if any, on matters considered in closed session.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA
ITEMS, IF ANY:
ADJOURNMENT:
The next Steering Committee meeting is scheduled for Wednesday, August 28, 2013,
at 5:30 p.m.
Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability
related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at
714 593-7130 at least 72 hours prior to the scheduled meeting. Requests mustspecify the nature of the disability
07/24/13 Steering Committee Agenda Page 3 of 4
and the type of accommodation requested.
Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2,this agenda
has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis
Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public
records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting
to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board.
NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the
Clerk of the Board 14 days before the meeting.
Maria E.Ayala
Clerk of the Board
(714)593-7130
mavala(d)ocsd.com
For any questions on the agenda,Committee members may contact staff at:
General Manager Jim Herberg (714)593-7110 iherbemaocsd.com
Assistant General Manager Bob Ghirelli (714)593-7400 rghireIII(Qocsd.com
Director of Engineering Nick Kanstis (714)593-7310 nkanetis0locsd.cem
Director of Facility Support Services Nick Arhontes (714)593-7210 narhontesGDocsd.com
Director of Finance and Lorenzo Tyner (714)593-7550 Itynenfilocsd.com
Administrative Services
Director of Human Resources Jeff Reed (714)593-7144 ireedlglocsd.com
Director of Operations&Maintenance Ed Torres 714 593-7080 etorres ocsd.com
07/24/13 Steering Committee Agenda Page 4 of 4
ITEM 1
MINUTES
STEERING COMMITTEE MEETING
Orange County Sanitation District
The Steering Committee meeting convened on Wednesday, June 26, 2013, at
5:30 p.m. in the Administration Building of the Orange County Sanitation District.
A quorum was declared present, as follows:
COMMITTEE MEMBERS STAFF PRESENT
PRESENT: Jim Herberg, General Manager
Troy Edgar, Chair Bob Ghirelli, Assistant General
John Anderson, Vice-Chair Manager
Tom Beamish, Operations Committee Nick Arhontes, Director of Facilities
Chair Support Services
Brad Reese, Administration Committee Nick Kanetis, Director of Engineering
Chair Jeff Reed, Director of Human
John Nielsen Resources
John Withers Ed Torres, Director of Operations &
Maintenance
COMMITTEE MEMBERS ABSENT: Lorenzo Tyner, Director of Finance &
Administrative Services
None. Maria Ayala, Clerk of the Board
Janine Aguilar
Jennifer Cabral
Al Garcia
Norbert Gaia
Michael Gold
Denise Martinez
Rich Spencer
OTHERS PRESENT:
Brad Hogin, General Counsel
Jim Ruth, Consultant
PUBLIC COMMENTS:
None.
COMMITTEE CHAIR REPORT:
Chair Edgar reported on the Sanitation District's Strategic Plan planning process.
Part of the process may also include a potential legislative leadership group working
with the District's lobbyists in the future.
Minutes of the Steering Committee
June 26, 2013
Page 2 of 3
GENERAL MANAGER REPORT:
General Manager, Jim Herberg, announced that his monthly report includes
information on the Sanitation District's outreach program. He also announced that
next week's Operations Committee Meeting will be held at Plant 2; and a walking
tour will be given to the Committee prior to the meeting.
CONSENT CALENDAR:
1. MOVED, SECONDED, AND DULY CARRIED: Approve Minutes of the
May 22, 2013 Steering Committee Meeting.
ACTION ITEMS:
None.
INFORMATION ITEMS:
2. Legislative Update
Michael Gold provided a legislative update on various bills that may pose a
significant impact to the District.
CLOSED SESSION
CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE
SECTIONS: 54957.6, 54956.9(d)(4), and 54956.9(d)(2).
The Committee convened in closed session at 5:41 p.m. to discuss five items.
Confidential Minutes of the closed Session have been prepared in accordance
with the above Government Code Sections and are maintained by the Clerk of the
Board in the Official Book of Confidential Minutes of Board and Committee Closed
Meetings.
RECONVENE IN REGULAR SESSION: The Committee reconvened in regular
session at 6:27 p.m.
Minutes of the Steering Committee
June 26, 2013
Page 3 of 3
CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN
CLOSED SESSION:
None.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA
ITEMS, IF ANY:
None.
ADJOURNMENT:
The Chair declared the meeting adjourned at 6:27 p.m.
Submitted by:
Maria E. Ayala
Clerk of the Board
STEERING COMMITTEE Meeting Dare To ad.of Di,
07,24/13 --
AGENDA REPORT Item Number Item Number
2
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Nick Kanetis, Director of Engineering
SUBJECT: PAMELA KOESTER RECOGNITION
GENERAL MANAGER'S RECOMMENDATION
Approve the placement of a Memorial Plaque at Plant No. 2, Headworks "D" facilities, in
recognition of Pamela Koester for her contributions to the Orange County Sanitation
District.
SUMMARY
Pamela (Pam) Koester was an Orange County Sanitation District (OCSD) employee
from 2002 until her untimely death in June 2013. For three years prior to this period,
she worked at OCSD as a Consultant Project Manager through a technical staffing
agency.
Pam Koester was completely devoted to OCSD, its mission, and in performing an
exemplary job. She committed herself to being the best Project Manager she could be
and led project teams by example displaying a strong sense of character and working
hard to do whatever needed to be done for the successful completion of her projects.
She worked on large and complex projects, some of the most difficult OCSD has ever
undertaken, and these projects were a remarkable success in large part due to her
detailed planning and her commitment to excellence.
Among her many accomplishments as a Project Manager at OCSD, being the Project
Manager of Headworks Improvements at Plant No. 2, Project P2-66, was the main
focus during her tenure. The project is the largest and most complicated project ever
completed by OCSD.
Pam spent a significant portion of her life making the new Headworks Facility at Plant
No. 2 the best it could be and led a team that transformed a concept on a page to the
completed facility in operation today. To recognize Pam for her accomplishments, this
item requests the placement of a plaque in her memory on the Headworks Facility at
Plant No. 2 pursuant to Board Resolution OCSD 08-08.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
Page 1 of 2
ADDITIONAL INFORMATION
The proposed memorial will consist of a brass plaque recognizing Pamela Koester,
Project Manager, to be placed at the entrance to the headworks electrical building,
Distribution Center "H." This location was chosen since there is an existing brass
plaque at this location with the name of the project including the names of the Designers
and Contractors for the project. This proposed memorial would be placed adjacent to
this existing plaque.
CEQA
N/A
BUDGET/DELEGATION OF AUTHORITY COMPLIANCE
This request complies with authority levels of the Orange County Sanitation District's
Delegation of Authority. This item has been budgeted.
ATTACHMENT
None.
DF:dm:gc
Page 2 of 2
STEERING COMMITTEE Meeting Date To ad.of W.
07,24,13 --
AGENDA REPORT Item Number Item Number
3
Orange County Sanitation District
FROM: James D. Herberg, General Manager
SUBJECT: SELECTION OF HONOR WALK RECIPIENTS
GENERAL MANAGER'S RECOMMENDATION
A. Consideration of John Collins, past Board Member, as an Honor Walk Brick
Recipient for the year 2013.
B. Approve nominated retired employees, Ron Wade and Mohammed Babaielivari,
as Honor Walk Brick Recipients for the year 2013.
SUMMARY
The Steering Committee is being asked to consider and act on the nomination of two
retired employees and one past Board Member to receive Honor Walk bricks in 2013.
PRIOR COMMITTEE/BOARD ACTIONS
June 2008 — Board adopted Resolution No. OCSD 08-08 establishing a policy for
naming facilities and placing of monuments and other memorials.
ADDITIONAL INFORMATION
In 2008 the Steering Committee adopted a resolution that provided a framework for
recognizing past Board Members and retired staff for their outstanding contributions.
One of the results of this resolution and the discussions that followed was the creation
of the Honor Walk in front of the Administration Building in 2009 with the first honoree
recognized in 2010. This year, the Steering Committee is being asked to consider
nominees to receive an Honor Walk brick in 2013.
In late July 2009, the Honor Walk bricks were installed in front of the Administration
Building and staff circulated a form to accept nominations for the Walk. Honorees could
be past board members or retired staff who made significant contributions to OCSD and
the people it serves.
The policy and procedures developed by the Steering Committee stipulate that the
General Manager makes recommendations to the Steering Committee for retired staff
nominees and the Steering Committee will deliberate and decide on past Board
Members.
Page 1 of 2
The criteria adopted by the Board of Directors for selecting an Honor Walk are:
• Have a long standing affiliation with the Orange County Sanitation District.
• Enhanced the quality of operations and/or leadership directly contributing to the
well-being of the District and people served by the District.
• Made an exceptional contribution to the community through their leadership,
involvement or substantial commitment of time or improvement of the quality of
life.
PAST BOARD MEMBER NOMINEE
This year, past Board Member John Collins was nominated for an Honor Walk brick by
current Board Member James Ferryman.
Attached is the nomination form for past Board Member John Collins submitted for
consideration by the Steering Committee.
RETIRED STAFF NOMINEES
Seven employees were nominated for Honor Walk bricks this year; however, a
committee of five employees from different divisions representing various years of
service, reviewed the seven candidates and made recommendations to the Executive
Management Team (EMT).
The employee committee carefully reviewed the nominations, interviewed current staff
and took additional comments. Based on the complete review the committee is
recommending two employees. The two employees collectively have provided over 50
years of service to the public; and have made significant, unique, and outstanding
contributions to OCSD.
The EMT unanimously accepted these two recommendations and the General Manager
is recommending both for an Honor Walk brick this year.
ATTACHMENT
The following attachment(s) is provided in hard copy and may be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
• Honor Walk Recipient Nomination Submittal for John Collins
Page 2 of 2
Return to Mende Report
July 10, 2013
Honor Walk Nomination for John Collins
Submitted by James Ferryman, OCSD Board Member
John Collins of Fountain Valley served the Orange County Sanitation District as a
member of the Board of Directors from 1990 through 1999 and from 2002 through 2004.
During this time, he served as:
• Chairman,Joint Board of Directors (1996 through 1998)
• Chairman,District 2 Board of Directors (1993-1996)
• Chairman,Planning,Design, and Construction Committee (1994-1996)
• Chairman,Ad Hoc Strategic Plan Committee (1998-1999)
• Member, Steering Committee (1998-1999)
• Member, Groundwater Replenishment System Committee (1998-1999;2004);Vice
Chairman (1999)
John Collins played an integral role in the Development of the 1999 Strategic
Plan/Master Plan,both as a concerned member of the Board and as Chair of the Ad Hoc
Committee that guided development of the Strategic Plan/Master Plan. As a member of
that Committee, he was instrumental in working with the Rate Advisory Committee
and the Planning Advisory Committee. The Committees were two of the District's most
successful public-outreach efforts; they helped ensure an equitable sewer service rate
structure and the development of a Strategic Plan/Master Plan that met Orange
County's wastewater treatment needs into the 2P'century. He also served on the Board
when those needs changed after the vote to proceed to full secondary treatment and
disinfection of the effluent in July 2002.
As Chairman of the Planning, Design, and Construction Committee, he was also
instrumental in reducing the number of change orders for the Capital Improvement
Program. He took the responsibilities of Chairman very seriously and spent many
hours preparing for committee and board meetings and meeting with staff on issues
that came before the Board of Directors.
With the passage of special legislation that John helped design, the consolidation of the
County Sanitation Districts of Orange County was realized in 1998; nine individual
districts were consolidated into one agency. He worked tirelessly for over a year with
Sacramento lawmakers and the Local Agency Formation Commission (LAFCO) to gain
Return to Mende Report
passage of AB 769, a bill signed into law by Governor Pete Wilson that helped
streamline the Orange County Sanitation District governance system, guaranteeing
,one city, one vote'.
John firmly believed in the concept of the Groundwater Replenishment System and was
a member of the Joint Groundwater Replenishment System Cooperative Committee
that included members from the Sanitation District and the Orange County Water
District. He was an early advocate and actively promoted the project by personally
detailing the benefits of the project to some who, at the time, did not see the need for the
project, and to some who did not believe the benefits of the project were worth the cost.
Through John's leadership, and the support of many others, the project was built and is
world-renowned. The expansion project currently under construction will increase
production from 70 million gallons per day to 100 million per day.
As Chairman of the Board, John frequently used his interpersonal skills to assist the
General Manager in promoting positive relationships among the members of the Board
and District staff. He took great pride in the positive feedback from staff for his work in
helping to make the Committee and Board meetings a venue for transparency and
respect in sharing information for the benefit of the District.
John Collins made an exceptional contribution to the Orange County Sanitation District
through his tireless efforts to seek passage of the consolidation legislation, his
unwavering support of the GWRS project, and his commitment of countless hours of his
time for the benefit of OCSD and its ratepayers. I am pleased to nominate former Board
member and Chairman of the Board John Collins for recognition on the OCSD Honor
Walk.
James Ferryman, Board Member
STEERING COMMITTEE Meeting Date TOBA.Of Dir.
07/24/13 07/24/13
AGENDA REPORT Item Number Item Number
4
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative
Services
SUBJECT: ORANGE COUNTY RETIREMENT SYSTEM (OCERS)
UNFUNDED ACTUARIAL ACCRUED LIABILITY (UAAL) AMORTIZATION
PERIOD
GENERAL MANAGER'S RECOMMENDATION
A. Declare the Orange County Sanitation District's position on the changes to the
Orange County Retirement System (OCERS) Unfunded Actuarial Accrued
Liability (UAAL) Amortization Period; and
B. Provide direction to the General Manager on measures to be taken in
representing declared Board position.
SUMMARY
The Sanitation District is a member agency of the Orange County Retirement System
(OCERS). Based on the composition of our staff, the Sanitation District makes annual
payments to OCERS to ensure there are sufficient funds to support our portion of the
system.
Currently, as a result of recent investment performance and future economic
projections, OCERS has reported an Unfunded Actuarial Accrued Liability (UAAL), a
gap between the funds collected and amount required to support the system.
OCERS has developed a plan to fund this liability using a 30-year amortization
schedule. As a result, all member agencies are required to increase their payments to
OCERS during this period. Continuation of the use of this 30-year period was
recommended by the OCERS actuarial and approved by the OCERS Board in June.
However, the OCERS Board will be reconsidering the 30-year period and potentially
shorten the amortization period, perhaps to 25 years or less. Reducing the amortization
period would reduce interest costs over the amortization period, but result in increased
payments by all member agencies, including the Sanitation District.
Page 1 of 2
As a result of OCERS changes to its economic assumptions, the Sanitation District will
incur additional payment costs of $2.6 million in 2014 and an additional $2.6 million
2015. As these assumption changes were approved after the completion of our five-
year rate program, these impacts are not included in our current cash flow model. It will
be necessary to identify expenditure/service/revenue adjustments beyond the planned
reserve reduction to accommodate these costs. The shortening of the amortization
period from 30 years to 25 years will require additional adjustments beyond that.
PRIOR COMMITTEE/BOARD ACTIONS
None
ADDITIONAL INFORMATION
None
CEQA
None
BUDGET / DELEGATION OF AUTHORITY COMPLIANCE
None
ATTACHMENT
The rollowing attachment(s) are provided in hard copy and may be viewed on-line at the OCSD website
(www.ocsd.coml with the complete agenda package:
• Actuarial Summary
• OCERS Actuarial Report
Page 2 of 2
Return to Aoenda Reporl
ORANGE COUNTY
CCERS
FMPL nYEFs RETIREMENT SYSTEM
sRTw.gmm�rnPH.rra April 30,2013
awnMd n+.NmaR r �
CI CANNOREAR,
CAeISIRANO
COUNTY OF ORANGE James Herberg, P.E.
OR.NOECOGNOw Orange County Sanitation District
CEmEIERYolsmEt 10844 Ellis Avenue
Fountain Valley, CA 92708-7018
ORANGE COUNTY
CHILDREN NFAmIpE6
COMM16610N '
ORANGE COUNTY Dear Mr. Herberg,
DEPARTMENTOF
EDUCATION(CLOaDTO I am writing to provide your agency with some background to an issue that has been
NEW MEMREPS)
under consideration for several months by the Board of Retirement of the Orange County
ORANGECDUNIv EmployeesEMPOYES Retirement System (OCERS) With changes to public pension plan reporting
g
REEMGMRNTSY.. requirements coming into effect next year due to the implementation of GASB
ORANGE COUNTY FIRE (Governmental Accounting Standards Board) 67, it is necessary for OCERS to pull its
AurmoM Y existing actuarial funding policy together into a single policy document. OCERS'
CHANGE 00mN IY iN-Home actuary, The Segal Company, is taking this opportunity to review current policy and
SUPFORTIVE SERVICE6
PUHUCA TORITY recommend some modifications.
ORANGECOINI Y LOCAL h
AGENCY I The Segal gal Company finds that the majority of OCERS' current funding policies are well
within the scope of model practices, and Segal is making only minor change
onn^vnncowTY P'T L recommendations. One key modification Segal is recommending is that OCERS change
`A`°`E"'RY how long it amortizes future unfunded liabilities caused by changes in actuarial
oHANOL COUNTe assumptions. Similar to a home mortgage, an amortization period determines how long it
IgRl11,ON OISINCT
is going to take for an employer participating in OCERS to pay off its unfunded
°x''NG"R`UDN" liabilities...Let's saythat OCERS assumed our members would live another 20 ears
'AIAl L'ORTA1ION Y
AU[IIO"LL" following retirement, but experience turns out to be different and we have to increase the
SUF,:RmR couRT GF ! years we assume a retired member will live causing an increase in liability to the fund.
Gi L FORv]A,COUNTY
Or ORANn Presently we would take 30 years to pay off that liability. The Segal Company, working
with the California Actuarial Advisory Panel suggests that the Board lower the
faCL,ELL.L A, -
corcnmon nGErvass amortization period to 25 years for those future liabilities. Please note that because[hose
ua M.O,rAT(INTER AND are future liabilities Segal cannot estimate what the cost impact might be as it has not yet
CAN II-((Lareo TO occurred.
MR,E,)
ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM ♦2223 E. Wellington Avenue,Suite 100,Santa AND. CA 92701 _
Telephone(714)558-6200 Fax(714)558-6234
While Segal has not made a recommendation to change the period for amortizing current
liabilities [presently standing at $4.5 billion], questions have been posed to Segal during
the discussions as to the impact of either lengthening the amortization period by more
than its present 30 year limit, as well as the impact of shortening it even further than the
recommended 25 years. Of course taking a longer time to pay (lengthening the
amortization period) would lower employer's contribution rates, though it would cost
more in total interest over the long term, while shortening the amortization period would -
cause employer contribution rates to rise in absolute dollars, though it would save total
interest costs over that shortened period of time.
The OCERS Board voted at their monthly meeting held on April 15, to return to this
topic when they meet on June 17 to allow our various stakeholders time to further study
this issue and share their thoughts or recommendations with the OCERS Board at that
later date.
Please feel free to contact me should you have any questions, comments or concerns
regarding this material.
Sincerely,
Steve Delaney _
CEO
Orange County Employees Retirement System
2
Funding Policy
Actuarial Funding Policy
June 17 , 2013
ANDY YEUNG , ASA, MAAA, FCA, EA
Vice President and Associate Actuary
The Segal Company
52540810
_T�_ SEGAL I OCERS - Actuarial Funding Policy
Funding Policy Components
➢ Actuarial Cost (Funding) Method — allocates
costs to time periods , past vs . future
➢ Asset Smoothing Method — assigns a value to
assets for determining contribution requirements
➢ UAAL Amortization Policy — how, and how long
to fund difference between liabilities and assets
➢ Interest crediting and excess earnings policy
Unique to 1937 Act county systems
Generally separate from funding policy
Slide 2
SEGAL I OCERS - Actuarial Funding Policy Retum to Agenda Report
Funding Policy and Annual Cost
Amortization of Unfunded
Actuarial Accrued Liability
Actuarial Unfunded
Value of Actuarial Accrued
Assets Liability
Mesent Value of
Future Normal Costs
Normal Cost
Slide 3
� SEGAL I OCERS - Actuarial Funding Policy
General Policy Objectives
1 . Future contributions plus current assets sufficient
to fund all benefits for current members
y Contributions = Normal Cost + full UAAL payment
2 . Reasonable allocation of cost to years of service
y Both expected costs and variations from expected
costs
3 . Reasonable management and control of future
employer contribution volatility
Consistent with other policy objectives
Slide 4
� SEGAL OCERS - Actuarial Funding Policy Mu.to Aaende Report
General Policy Objectives
4 . Support public policy goals of accountability and
transparency
➢ Clear in intent and effect
➢ Allow assessment of whether, how and when sponsor
will meet funding requirements
➢ Enhance credibility and objectivity of cost calculations
Slide 5
'� SEGAL I OCERS — Actuarial Funding Policy
General Policy Objectives
➢ Policy objectives 2 and 3 reflect two aspects of the
general policy objective of "interperiod equity" ( IPE ) .
➢ Objective 2 promotes "demographic matching"
intergenerational interperiod equity
➢ Objective 3 promotes "volatility management"
�, period-to-period interperiod equity
➢ These two aspects of IPE tend to move funding
policy in opposite directions .
policy objectives 2 and 3 combine to seek to balance
intergenerational and period-to-period IPE
demographic matching vs. volatility management Slide 6
'� SEGAL OCERS - Actuarial Funding Policy Retum to Agenda Reoort
OCERS Current Funding Policy
➢ Cost method
Entry Age Normal (EAN)
➢ Asset smoothing method
5-year smoothing period without a market value corridor
Reaffirmed by the Board in 2009
➢ UAAL amortization policy
Layered approach for UAAL established after 12/31 /2004
15 years for gains or losses and plan amendments
30 years for assumption changes
UAAL prior to 12/31 /2004 combined and amortized over 30 years
22 years left as of 12/31 /2012
Level percent of pay amortization
Slide 7
_T�_ SEGAL I OCERS - Actuarial Funding Policy
Funding Policy Recommendations
➢ No change to Entry Age Normal cost method
Used by other California public retirement systems
➢ No change to asset smoothing method
Most California public retirement systems use 5 years
y Sacramento CERS & two City of LA plans use 7 years
Use the same period to smooth investment gains and
losses
Slide 8
'T- SEGAL OCERS - Actuarial Funding Policy Ret ` `°AaedaReoort
Funding Policy Recommendations
➢ Focus of today's discussion is on amortization policy
➢ Separate decisions on future versus current UAAL
➢ Emerging model practices for (future) UAAL amort.
Shorter than 30 years for assumption changes
Plan Amendments
Shorter periods than for other sources of UAAL
r Particularly for Early Retirement Incentive Programs
Surplus
Longer periods than for UAAL
Allows consideration of other Surplus management tools
Slide 9
_T�_ SEGAL OCERS — Actuarial Funding Policy
Funding Policy Recommendations
➢ Amortization periods for current UAAL
Equivalent single amortization period : between 19
and 20 years as of 12/31 /2012
No compelling actuarial reasons for shortening or
lengthening the amortization periods for current
UAAL
Unless goal is to accelerate or decelerate plan's
progression to 100% funding
• With a corresponding increase or decrease in
current employer contributions
Slide 10
SEGAL OCERS — Actuarial Funding Policy Realm to Agenda Report
Amortization Policy
➢ Component of Annual Contribution
Normal cost plus amortization of unfunded liability
➢ Sources of Unfunded Liability
Plan changes
Assumption or method changes
Gains / losses
➢ Amortization policy includes :
Structure: Single UAAL or in layers
Also: fixed (closed) or rolling (open) amortization
Payment pattern : level dollar or level percent of pay
Periods: how long to fund the UAAL Slide 11
_T�_ SEGAL OCERS — Actuarial Funding Policy
Amortization Structure
➢ OCERS amortizes UAAL in layers
➢ Model approach : multiple amortization layers
First layer is the combined UAAL as of December 31 , 2004
Each year, new layer of UAAL for gain/loss,
assumption/method changes, plan amendments
Can use different periods for different sources of UAAL
v OCERS: 15 years for gains or losses and plan amendments
v 30 years for assumption or method changes
➢ Key issue: current UAAL layers as of December 31 , 2013
(proposed effective date)
Current net amortization equivalent to about 19-20 years
Could simply continue current declining amortization periods
Or adopt a shorter/longer period — with immediate cost impact
Slide 12
SEGAL I OCERS - Actuarial Funding Policy Return to Agenda Reoon
Illustration of Amortization Methods
7.25% interest 30 years 30 years 25 years 20 years 15 years
3.75% salary incr. Flat dollar % of pay % of pay % of pay % of pay
Increase in AAL 1,000,000 1 ,000,000 1 ,000,000 1 ,000,000 1 ,000,000
Amortization factor 12.1037 18.0116 16.1061 13.8568 11.2017
(first year) 0.082620 0.055520 0.062088 0.072167 0.089272
Amortization amount
Year $ 82,620 $ 55,520 $ 62,088 $ 72,167 $ 89,272
Year15 $ 82,620 $ 92,957 $ 103,954 $ 120,828 $ 149,469
Year20 $ 82,620 $ 111 ,743 $ 124,963 $ 145,248 $ 0
Year30 $ 82,620 $ 161 ,474 $ 0 $ 0 $ 0
Total amount paid
Principal $ 1 ,000,000 $ 1 ,000,000 $ 1 ,000,000 $ 1 ,000,000 $ 1 ,000,000
Interest 1 ,478,589 1 ,986,918 1 ,500,357 1 ,094,084 754,709
Total $ 2,478,589 $ 2,986,918 $ 2,500,357 $ 2,094,084 $ 1 ,754,709
Slide 13
_T�_ SEGAL OCERS - Actuarial Funding Policy
Illustration of Amortization Periods - Annual Payment ($ in 000s)
$200
—C-30 Years Level Dollar t30 Years Level Percent
—A�25 Years Level Percent t20 Years Level Percent
t15 Years Level Percent
$150
N
0
0
c_
w
c
E $100
m
a
m
3
c
c
Q
$50
Annual Payment on
$1 Million UAAL
$o
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Beginning of Year
Slide 14
SEGAL OCERS - Actuarial Funding Policy Return to Aaentla Reootl
Negative Amortization
➢ $ 1 , 000 , 000 liability, 7 .25% interest
➢ First year interest only is $72 , 500
➢ With level dollar payments , payments are always
greater than interest
➢ With level percentage payments , early payments
can be less than interest
UAAL increases (but not as a percentage of payroll ! )
Eventually larger payments cover interest plus
increased UAAL
With current assumptions, negative amortization if
amort. period is longer than about 20 years Slide 15
'� SEGAL OCERS - Actuarial Funding Policy
Illustration of Amortization Periods —
Outstanding UAAL Balance ($ in 000s)
$1,500
—C-30 Years Level Dollar t30 Years Level Percent
—A�25 Years Level Percent t20 Years Level Percent
t15 Years Level Percent
$1 Million Initial
UAAL Balance
H
c $1,000
C_
N
U
C
N
m3
C
C $500
A
N
3
° Outstanding
UAAL Balance
$o
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Beginning of Year
Slide 16
SEGAL I OCERS - Actuarial Funding Policy Return to Agenda Reoon
Model Fixed Layer Periods
➢ Tradeoff between demographic matching and
volatility management
Two aspects of Interperiod equity"
Constraint: consideration of negative amortization
Exception : volatility generally N/A for plan changes
➢ Under 15 years : too volatile
➢ Over 20 (25?) years : too much neg . amortization
s 25 is the new 30 : "out of bounds marker"
s 30 years reserved for surplus
r Normal Cost requires UAAL/surplus "asymmetry"
Slide 17
_T�_ SEGAL OCERS — Actuarial Funding Policy
Model Amortization Periods
➢ Gains and losses : 15 to 20 years
y Volatility management, but avoid too long a period
➢ Assumption and method changes : 20 to 25 years
y Long term remeasurements , so could justify longer
amortization than for gains and losses
To illustrate impact, what if assumption changes
approved in the last 6 years were amortized over
25 year instead of 30 years?
(see Segal's April 4 , 2013 letter)
r 0 . 3% to 0.9% of payroll , depending on Rate Group
Slide 18
SEGAL OCERS - Actuarial Funding Policy Return to Agenda ReQoN
Model Amortization Periods
➢ Plan amendments : demographic ( 15 yrs . or less)
y Avoid any negative amortization since changes are
within control of plan sponsor
s Demographic matching for actives or inactives
s Much shorter for Early Retirement Incentives (< 5 yrs)
Slide 19
_T�_ SEGAL OCERS - Actuarial Funding Policy
Contributions when Plan has surplus
➢ Usual contribution is NC plus UAAL amortization
➢ Surplus : contribute NC minus Surplus amortization
➢ Short surplus amortization periods means
contribution holidays , even with modest surplus
See late 1990s for real life examples
➢ Recommended approach : minimum contribution
30 year amortization of surplus
➢ CaIPEPRA further limits amortization of surplus
Funded ratio has to be > 120%
Slide 20
'� SEGAL I OCERS - Actuarial Funding Policy Return to AgendaReootl
Alternative Periods for Future UAALs
➢ Applies only to future changes in UAAL
No immediate impact to contribution rates
Any changes would be implemented in 12/31 /2013 valuation and
would apply to any new changes in UAAL on or after 1 /1 /2013
Source Current Alt #1 Alt #2 Alt #3
Actuarial Gains or 15 15 20 15
Losses
Assumptions or 30 20 20 25
Method Changes
Plan Amendments 15 15 or less 15 or less 15 or less
ERIPs 15 Up to 5 Up to 5 Up to 5
Actuarial Surplus 15 30 30 30
Slide 21
'� SEGAL I OCERS — Actuarial Funding Policy
Alternative Periods for Future UAALs
➢ Option discussed at February 19 meeting
Source Current Option
Actuarial Gains or 15 20
Losses
Assumptions or 30 30
Method Changes
Plan Amendments 15 15 or less
ERIPs 15 Up to 5
Actuarial Surplus 15 30
Balance policy objective 2 (demographic matching) vs
objective 3 (volatility management)
Need to consider balance between intergenerational and
period-to-period IPE Slide 22
_T�_ SEGAL OCERS - Actuarial Funding Policy ReW m to Agenda Report
Q U E S T 10 N S
Slide 23
'� SEGAL I OCERS — Actuarial Funding Policy
Alternative Periods for Current UAA1
➢ Board may consider shorter (or longer) amortization
period for current UAAL
➢ Most clear and direct actuarial policy action to
accelerate plan 's progression to 100% funding
➢ Impact of shorter amortization for current UAAL
s Any change would not be implemented until 12/31 /13
valuation
s Re-amortize UAAL from 12/31 /12
s Re-amortize change in investment return assumption
r Would already have been included in UAAL as of
12/31 /12, with 30 year amortization
Slide 24
'� SEGAL I OCERS — Actuarial Funding Policy Return to Agenda Report
Alternative Periods for Current UAAL
➢ Impact of shorter amortization for current UAAL on
employer rate:
UAAL Change in ER Rate (% of Pay)*
Dollar 10 Yrs 15 Yrs 20 Yrs
Amount
12/31/12 UAAL excl. $4,741 .1 M +13.5% +3.6% -1 .3%
Assumption Changes
12/31/12 $934.6 M +3.9% +1 .9% +0.9%
Assumption Changes
Total $5,675.7 M +17.4% +5.5% -0.4%
" Does not include adjustment for 18-month delay in contribution rate implementation.
Slide 25
'� SEGAL OCERS — Actuarial Funding Policy
Alternative Periods for Current UAAL
➢ Other amortization periods for current UAAL discussed at
February 19 meeting — shorter than current:
UAAL Change in ER Rate (% of Pay)*
Dollar 16 Yrs 17 Yrs 18 Yrs 19 Yrs
Amount
12/31/12 UAAL
excl. Assumption $4,741 .1 M +2.4% +1 .3% +0.3% -0.5%
Changes
12/31/12
Assumption $934.6 M +1 .7% +1 .4% +1 .3% +1 .1 %
Changes
Total $5,675.7 M +4.1 % +2.7% +1 .6% +0.6%
Does not include adjust. for 18-month delay in contribution rate implementation. Slide 26
SEGAL I OCERS — Actuarial Funding Policy Return to Agenda Report
Alternative Periods for Current UAAL
➢ Other amortization periods for current UAAL discussed at
February 19 meeting — longer than current:
UAAL Change in ER Rate (% of Pay)*
Dollar 25 Yrs 30 Yrs
Amount
12/31/12 UAAL
excl. Assumption $4,741 .1 M -4.2% -6.0%
Changes
12/31/12
Assumption $934.6 M +0.4% +0.0%
Changes
Total $5,675.7 M -3.8% -6.0%
Does not include adjust. for 18-month delay in contribution rate implementation. Slide 27
'� SEGAL OCERS — Actuarial Funding Policy
Alternative Periods for Current UAAL
➢ Other amortization period for current UAAL discussed at
February 19 meeting — future working lifetime:
Funding the UAAL over the years the current active
employees are expected to work before receiving benefit
Referred to as average future working lifetime, average future
service years, average remaining service lifetime, etc.
No universal agreement on terminology or method of calculation
Under one definition used for corporate pension plan:
About 11 years for OCERS
➢ Balance policy objective 2 (demographic matching) vs
objective 3 (volatility management)
➢ Need to consider balance between intergenerational and
period-to-period IPE
Slide 28
SEGAL I OCERS - Actuarial Funding Policy Return to Agenda Reoort
Alternative Periods for Current UAAL
➢ Reverse pickups by certain employees
y Agreement between employer and employee to pay
for the past and/or future cost of benefit
enhancements
s Use at Orange County and some other California
public retirement systems
y Terms of agreement not under purview of the board
of retirement
Slide 29
_T�_ SEGAL OCERS — Actuarial Funding Policy
Funding Policy Recommendations
➢ EAN Cost method
No changes recommended
➢ Asset smoothing method
No changes recommended
➢ UAAL amortization policy
For (current) UAALs established prior to 12/31 /2012
No changes recommended unless the Board wishes to
accelerate or decelerate progress to 100% funding
For (future) UAALs established after 12/31 /2012
Consider one of the alternative sets of amortization
period (Alt #1 , #2 or #3)
Slide 30
SEGAL I OCERS — Actuarial Funding Policy Return to Agenda Report
Future Discussion Topics
➢ Aggregation of Tier 1 and Tier 2 normal cost
➢ Employer/member sharing of the cost of annual payoffs
➢ Anticipated COLA as an assumption in determining optional
forms of retirement benefit
➢ GASB 67/68
Slide 31
� SEGAL OCERS - Actuarial Funding Policy
Q U E S T 10 N S
Slide 32
STEERING COMMITTEE Neebngoate To ad.of W.
07,24/13 --
AGENDA REPORT Item Number Item Number
s
Orange County Sanitation District
FROM: Nick Kanetis, Director of Engineering
Originator: Jim Colston, Environmental Compliance Manager
SUBJECT: LEGISLATIVE UPDATE
GENERAL MANAGER'S RECOMMENDATION
Information Only
SUMMARY
This report is the monthly legislative update that includes legislative and political
information from Washington, D.C. and Sacramento, lobbyists' activities, and other
information.
ADDITIONAL INFORMATION
Grants Activity for the Month
Staff is reviewing the California State Coastal Conservancy Climate Ready Grant to
determine if we have any projects that might be eligible for funding. Projects will be
funded from $50,000 to $200,000.
Staff is in the process of submitting invoices for grant funding of project P1-101, new
solids drying facilities.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
CEQA
N/A
BUDGET / DELEGATION OF AUTHORITY COMPLIANCE
N/A
ATTACHMENTS
The following attachment(s) are provided in hard copy and may also be viewed on-line at the OCSD
website(www.ocsd.coml with the complete agenda package:
• Legislative Updates: State and Federal
Page 1 of 1
Return to Mende Report
L1i 1WV/
RESOVRCES
MEMORANDUM
TO: Jim Colston
FROM: Eric Sapirstein
DATE:J July 11, 2013
SUBJECT: Washington Update
The House and Senate continued to spar over fiscal year 2014 funding issues and
agriculture policy rewrites. At the same time,progress,albeit slow, is being made on
core issues of interest to the District. Generally,the next few weeks appear to be
shaping up as weeks that will define the final months of the legislative session and set
the stage for the second session that begins in January. Among the issues that we
anticipate grabbing congressional attention are:WRDA,fiscal year 2014 budget and
sequestration resolution,a Farm Bill with provisions to support POTW watershed
management needs, continued availability of tax-exempt financing at the local level of
government, and renewal of the SRF program and authorization of innovative funding
of wastewater infrastructure. Additionally, Representative Gary Miller and a number of
his colleagues,including Representatives Rohrabacher and Sanchez, continue to work
to advance the District's priority to revise the appointment process to select officials to
sit on a regional water board.
The following summarizes the status of pending policy issues of interest to the District.
House Committee Continues to Develop WRDA Rewrite
The Committee on Transportation and Infrastructure staff continues, on a bipartisan
basis,to develop a base WRDA bill that can be considered and marked up. Chairman
Bill Shuster(R-PA) continues to make this a priority. Once a core bill is agreed upon,
the chair is expected to seek committee members' input on issues to address within any
rewrite.
For the District,when the call for Member input is made,it presents an opportunity to
seek clarification on the wisdom of mandating further expenditures by the District to
remove riprap along the stretch of the Santa Ana River. We have had preliminary
discussions with committee staff on the issue. We recommend that the District
consider the economic and environmental impacts of the mandate to restore segments
of the river and develop a formal request to the congressional delegation for
programmatic language to provide equitable treatment of any regulatory mandate
related to riverbank improvements.
ENS Resources,Inc.
110114th Street.N.W.,Suite 350
Washington,D.C.20005
More 202.466.3755/Telefax 202.466.3787
Return b Mende Report
USEPA Administrator Nominee Set to Be Considered by Senate
Gina McCarthy,the President's nominee to be USEPA Administrator,is expected to be
considered for confirmation by the Senate before the August Recess begins. Senate
Majority Leader Harry Reid (D-NV) has filed cloture on the nomination to eliminate
endless debate. It appears that McCarthy may enjoy the critical threshold of 60 votes
to break any filibuster. However,Senator Roy Blunt(R-MO) continues to maintain a
"hold" on the nomination and it is unclear whether this would thwart an actual vote.
Additionally,the delay on the McCarthy vote (along with other nominations) has led
to an effort to reform the rules governing filibusters. Reid is preparing to go
"nuclear" and rule that the Senate rules governing filibusters of nominations can be
changed by a simple majority of 51 rather than 60 votes. If Reid pulls the trigger on
this change, it will likely mean that the pending presidential nominations will sail
through the Senate after years of delays.
For the District, this is an important development. If the Senate changes the rules
governing votes on nominees,it could mean that Kenneth Kopocis,Assistant
Administrator for Water—Nominee could be approved swiftly. Kopocis has been
receptive to the District's priority to revise the USEPA rule governing appointments
to water boards. His approval might lead to timely revisions of the rule and avoid the
need to secure legislative directives.
Sunshine on Conflicts Act(H.R. 836)
We continued to advocate for the District's priority to bring about equitable criteria to
govern the selection of appointees to state water boards. Representative Gary Miller's
staff informed us that the legislation remains a high priority and are hopeful for
movement in the coming months.
Over the past month,we met with Committee on Transportation and Infrastructure
staff to discuss next steps. Staff indicated that they are drafting an SRF
reauthorization measure. As part of this effort,they are open to considering the
incorporation of the Miller language into the legislation. This is a major step in
progress as it indicates that the committee appreciates the importance of the policy
objective. We continue to work with Miller's staff to ensure that the language is
incorporated into the SRF rewrite. This rewrite could become available for review by
stakeholders later this summer with a goal for committee consideration in the fall.
In addition to legislative actions,we continue to monitor USEPA's anticipated
regulatory notice seeking comments on how to revise the current standard of conflict.
We expect the notice to be issued in late summer. When the notice is available,the
District will need to provide comments on the priority to revise the existing rule.
ENS Resources,Inc.
110114th street.N.W.,Suite 350
Washington,D.C.20005
More 202.466.3755/Telefax 202.466.3787
Return to Mende Report
Tax Reform and Municipal Bonds
As noted in the last update, congressional tax policy committees are
aggressively taking steps to establish a framework for tax reform in the
coming year. The recent news that the federal deficit is anticipated to
shrink dramatically,due to economic growth,tax increases and
sequestration,has only served to enhance prospects for reform of the tax
code. This is the case since the ability to preserve tax expenditures
improves as the deficit shrinks and lost revenues do not impose as large
an impact on the federal treasury.
One area that remains a continued priority for review by both Congress
and the White House is state and local governmental tax-exempt
financings. The threat to eliminate or significantly curtail the use and
availability of this funding tool is real. Therefore,it is strongly
recommended that the District transmit a letter of concern to the
congressional delegation outlining the impacts of any restrictions to the
cost of financing water infrastructure needs at the District.
House Approves Farm Bill
After a failed effort to pass a House Farm Bill,the House Republican
Leadership brought a pared back agriculture program rewrite (excluding
nutrition programs) to the House Floor and secured passage of the
measure by the slimmest of margins. The measure now must be
reconciled with the Senate-passed bill that addresses all elements of
agriculture policy issues including nutrition programs.
For the District,the House and Senate will need to find common ground
on Senate approved provisions that would make funding available to
support wastewater watershed management projects that are
collaborations with agricultural interests. The program within the Senate
bill would provide$100 million in grants assistance.
Alternative Energy and Wastewater Agencies
Both the House and Senate Committees on Appropriations have finalized
their respective versions of spending bills for the Department of Energy.
Within both bills is language that directs the DOE to refocus its priorities
for the biomass energy program. Specifically,the Department is directed
to consider the value of projects that rely on the use of"municipal
biosolids"to generate alternative energy. Current DOE biomass program
policy discriminates against such noncelluosic biomass energy techniques
and the language offers the chance to leverage DOE programs in support
of developing alternative energy technologies as part of the DOE energy
efficiency agenda.
The action is important to the District because it could lead to enhancing
the District's green energy program.
ENS Resources,Inc.
110114th Street.N.W.,Suite 350
Washington,D.C.20005
More 202.466.375S/Telefax 202.466.3787
Return to Mende Report
T 0 W N S E N D
PU BLIC 1, S
— TPA
MEMORANDUM
TO: Orange County Sanitation District
FROM: Townsend Public Affairs, Inc.
Christopher Townsend, President
Heather Stratman, Senior Director
Casey Elliott, State Capitol Director
DATE: July 15, 2013
SUBJECT: Monthly Status Report
On June 27t', the Governor signed the FY 2013-14 budget. The budget plan outlines $96.3
billion in General Fund spending with a $1.1 billion budget reserve. The Governor characterized
the budget as an investment in education and health care that brings the state finances in very
solid shape.
Despite the appearance that state revenues are on a continued upward trend, the budget plan
takes a somewhat modest approach in its proposals. Budget provisions take into account that
future General Fund revenues may trail off due to the anticipated drop in capital gains tax
receipts and federal spending cuts. The budget does not include the Governor's original
proposal to eliminate the state's Enterprise Zone Program. While not technically part of the
budget, the Governor was also able to work with the Legislature to pass a new economic
development program which is intended to attract and retain jobs in California. This program
will take the place of several existing economic development programs, including the Enterprise
Zone program.
Other Major components of the FY 13-14 budget include:
• Increases funding for the Governor's effort to reform K-12 education finance;
• Implements the Local Control Funding Formula that directs more revenues to school
districts with higher numbers of low-income and English learning students;
• A state-based approach to implement Medi-Cal expansion under the federal Patient
Protection and Affordable Care Act;
• $500 million in additional Medi-Cal spending;
• Enacting the Middle Class Scholarship Program;
• Major spending augmentation in mental health services.
The Assembly recessed with the 4' of July holiday and the Senate recessed for the summer on
July 12'". Both Houses return to session in August and will have a quick sprint to the end of
session, which is on September 13". Prior to their summer recesses, both Houses were
focused on conducting policy committee hearings for measures which are currently in the
Return to Mende Report
Second House. The Senate's policy committee deadline is this Friday (July 12th) while the
Assembly's deadline is August 16". Any measure that has not been passed out of the Second
House policy committee before those deadlines will not be eligible for consideration until
January 2014.
The Legislature has begun to look ahead to modifying the water bond, which is currently
scheduled to appear on the November 2014 ballot. The Assembly Democrats, headed by
Assemblyman Anthony Rendon, has developed a set of guiding principles that they will try to
follow for any upcoming negotiations over the provisions of the water bond. At this point, it is
unclear if the Legislature will be able to agree on the provisions of an amended water bond or if
they will negotiate over the interim and act on a revised measure in early 2014. TPA will
continue to monitor and engage where appropriate on behalf of the OCSD.
OCSD Specific Legislation of Interest
AB 371 (Sales)
This bill is intended to address the dumping of sewage (sludge) and its effects on the health,
safety and water quality in rural areas of Kern County. It is intended to clarify the original
legislative objective to protect the rights of local communities to adopt environmental protection
standards. According to Assembly Member Sales, "Uncontrolled dumping of sewage sludge
threatens our water and the public health of our communities. The recent court interpretation of
California law is an unacceptable outcome for the residents of Kern County".
Conversely, according to the California Association of Sanitation Agencies, "The type of ban
which Kern County has previously sought to enforce, and which could be authorized by AB 371,
is in conflict with the Integrated Waste Management Act (IWMA), in conflict with the regional
welfare doctrine, and contrary to the overwhelming weight of scientific evidence that land
application of bio-solids is a safe and beneficial practice. This bill would circumvent the legal
process and establish a one-off rule for Kern County that has already been rejected by the
courts".
OCSD took an oppose position on the bill. The bill was heard in the Assembly Local
Government committee and was held on the suspense file. AB 371 will not be able to be
heard or modified before January 2014, and has become a two-year bill.
AB 690 (Campos)
The Assembly on Local Government Committee received overwhelming opposition to AB 690,
arguing that the bill would unfairly divert necessary property tax revenues from districts. In
response to the immense amount of opposition, the bill has now been amended to be aligned
with current law requiring local agencies' consent prior to property tax revenue diversion for the
creation of a Jobs and Infrastructure District (JID) program.
OCSD took an oppose unless amended position on the bill. The bill was set to be heard
on April 151h but was postponed. The bill will not be eligible to be heard again prior to the
legislature adjourning in September. The bill will be eligible to be taken back and/or
amended when the Legislature reconvenes in January 2014.
SIB 785 (Wolk)
2
Return to Aaenda Report
The bill makes three substantive changes to current law: (1) Lowering, from $2.5 million to $1
million, the value of projects that counties can construct using design-build; (2) Eliminating the
sunset dates that would have automatically repealed some statutes authorizing the use of the
design-build method; (3) Eliminates the cap on the number of projects that the state can
construct using the design-build method for specked types of projects.
According to the California Legislative Analyst's Office, this bill is intended to "...rewrite design-
build statutes to eliminate inconsistencies in existing law and consolidate state and local
agencies' statutory authority to develop projects using design-build. By consolidating statutes
and creating more uniform requirements, SB 785 makes the state laws governing the design-
build method clearer, more flexible, and easier to use".
OCSD took a support in concept position on the bill. Senator Wolk pulled the bill just
prior to the last committee hearing and placed it on the inactive file. The bill will not be
eligible to be taken back up or amended prior to January 2014. SB 785 was facing
significant opposition from the labor unions, and Senator Wolk decided to continue
working on the bill to determine if the opposition's concerns could be rectified.
SB 691 (Hancock)
This bill is intended to narrowly target one-day violations that affect great numbers of individuals
affected by air quality violation with higher civil penalties. Senator Hancock stated that current
single-day violations of air quality regulations that affect entire communities lack adequate
financial consequences. He also stated that having adequate penalties for non-compliance is
essential to protecting public health and safety.
However, opponents of the bill stated that immensely increasing the penalties would impose a
penalty based simply on allegations of annoyance, whether or not the actual emissions are
harmful or in violation of an existing permit standard or requirement.
OCSD took an oppose position on the bill, and TPA has been working with OCSD on
amendments to the bill to carve out Sanitation Districts from the bill's intent. Senator
Hancock amended the bill to explicitly exempt nuisance odors from the penalty.
However, the District still has concerns regarding the Title V language, because the
District could still technically get fined if they did something beyond a nuisance odor.
TPA will continue to work with OCSD staff to determine what other language
modifications can be made to the bill so it is acceptable. The bill is scheduled to be heard
in Assembly Natural Resources on August 12th.
Specific Activities of the Month:
• TPA is continually monitoring legislation that could have any potential impact on the
District.
• TPA is working with the OCSD on language to modify SB 691 (Hancock) to ensure it
does not have the potential to negatively impact the District.
• TPA is working with OCSD staff to create a FY 13-14 Legislative activity plan for
consideration by the Steering Committee and Board. This plan will include outreach and
advocacy activities by appropriate Board Members.
3
ORANGE COUNTY SANITATION DISTRICT
Agenda
Terminology Glossary
AQMD Air Quality Management District
ASCE American Society of Civil Engineers
BOO Biochemical Oxygen Demand
CARB California Air Resources Board
CASA California Association of Sanitation Agencies
CCTV Closed Circuit Television
CEQA California Environmental Quality Act
CRWQCB California Regional Water Quality Control Board
CWA Clean Water Act
CWEA California Water Environment Association
EIR Environmental Impact Report
EMT Executive Management Team
EPA U.S. Environmental Protection Agency
FOG Fats, Oils, and Grease
FSSD Facilities Support Services Department
gpd Gallons per day
GWR System Groundwater Replenishment System (also called GWRS)
LOS Level of Service
MGD Million gallons per day
NACWA National Association of Clean Water Agencies
NPDES National Pollutant Discharge Elimination System
NWRI National Water Research Institute
O&M Operations and Maintenance
OCCOG Orange County Council of Governments
OCHCA Orange County Health Care Agency
OCSD Orange County Sanitation District
OCWD Orange County Water District
OOBS Ocean Outfall Booster Station
OSHA Occupational Safety and Health Administration
POTW Publicly Owned Treatment Works
ppm Parts per million
RFP Request For Proposal
RWQCB Regional Water Quality Control Board
SARFPA Santa Ana River Flood Protection Agency
SARI Santa Ana River Inceptor
SARWQCB Santa Ana Regional Water Quality Control Board
SAWPA Santa Ana Watershed Project Authority
SCADA Supervisory Control and Data Acquisition system
SCAP Southern California Alliance of Publicly Owned Treatment Works
SCAQMD South Coast Air Quality Management District
SOCWA South Orange County Wastewater Authority
SSMP Sanitary Sewer Management Plan
SSO Sanitary Sewer Overflow
SWRCB State Water Resources Control Board
TDS Total Dissolved Solids
TMDL Total Maximum Daily Load
TSS Total Suspended Solids
WDR Waste Discharge Requirements
WEF Water Environment Federation
WERF Water Environment Research Foundation
Activated-sludge process — A secondary biological wastewater treatment process where bacteria
reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved
nutrients in the wastewater.
Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes
decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in
water.
Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the
wastewater treatment process. This high-quality product can be recycled as a soil amendment on
farm land or further processed as an earth-like product for commercial and home gardens to improve
and maintain fertile soil and stimulate plant growth.
Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets.
Also includes treatment improvements, additional capacity, and projects for the support facilities.
Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also
occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common
bacteria in wastewater.
Collections system — In wastewater, it is the system of typically underground pipes that receive and
convey sanitary wastewater or storm water.
Certificate of Participation (COP) — A type of financing where an investor purchases a share of the
lease revenues of a program rather than the bond being secured by those revenues.
Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic
wastewater contaminants.
Dilution to Threshold (DR) — the dilution at which the majority of the people detect the odor
becomes the D(f for that air sample.
Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane,
nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse
effect').
Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively
responds to Southern California's current and future water needs. This joint project between the
Orange County Water District and the Orange County Sanitation District provides 70 million gallons a
day of drinking quality water to replenish the local groundwater supply.
Levels of Service (LOS)—Goals to support environmental and public expectations for performance.
NOMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been
found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide
with extra ultra-violet treatment.
National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water
Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S.
Environmental Protection Agency (EPA). NBP is committed to developing and advancing
environmentally sound and sustainable biosolids management practices that go beyond regulatory
compliance and promote public participation in order to enhance the credibility of local agency
biosolids programs and improved communications that lead to public acceptance.
Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility.
Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant.
Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million
gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the
ocean for disposal, after treatment.
Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial
wastewater. Combined sewers carry both wastewater and urban run-off.
South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that
develops plans and regulations designed to achieve public health standards by reducing emissions
from business and industry.
Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process,
where bacteria and other microorganisms consume dissolved nutrients in wastewater.
Sludge—Untreated solid material created by the treatment of wastewater.
Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater.
Trickling filter — A biological secondary treatment process in which bacteria and other
microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in
wastewater as it trickles over them.
Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm
drains, rivers, lakes, and oceans.
Wastewater—Any water that enters the sanitary sewer.
Watershed —A land area from which water drains to a particular water body. OCSD's service area is
in the Santa Ana River Watershed.