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HomeMy WebLinkAbout09-23-2015 Steering Committee Agenda Packet.pdf Orange County Sanitation District Wednesday, September 23, 2015 Regular Meeting of the F, 5:00 P.M. STEERING COMMITTEE _ Administration Building Conference Rooms A& B 10844 Ellis Avenue Fountain Valley, CA 92708 (714) 593-7433 AGENDA DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to address the Board of Directors on any item, please complete a Speaker's Form (located at the table at the back of the 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 Directors. These reports are for information only and require no action by the Directors. 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1.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 August 26, 2015 meeting of the Steering Committee. 2. GENERAL MANAGER'S FY 2015-2016 WORK PLAN (Jim Herberg) RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the General Manager's FY 2015-16 Work Plan. 09/23/15 Steering Committee Agenda Page 1 of 5 3. SALES TAXES FOR CHEMICAL PURCHASES (Brad Hogin) RECOMMENDATION: Recommend to the Board of Directors to: Approve Sole Source Agreements for Tax Consulting and Advocacy Services with Equity Recovery Solutions and Reed Smith regarding pursuit of refunds for sales tax paid on chemical purchases. NON-CONSENT CALENDAR: 4. LOCAL 501 MOU REOPENERS FOR ARTICLE 19 — STANDBY PAY, ARTICLE 26 — SHIFT DIFFERENTIAL, & ARTICLE 49.2 — RELIEF OPERATOR (Bob Ghirelli) RECOMMENDATION: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 15-19, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Approving Standby Pay Changes Identified through the International Union of Operating Engineers Local 501 (Local 501)2015 Reopener Negotiations." 5. EXECUTIVE MANAGEMENT TEAM COMPENSATION AND BENEFITS AND MANAGER GROUP COMPENSATION (Jim Herberg) RECOMMENDATION: Recommend to the Board of Directors to: A. Adopt Resolution No. OCSD 15-20 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving salary increases, salary range adjustments, performance-based increases, the distribution of any remaining funds based on changes to scope, duties or responsibilities and changes to benefits for At-Will Executive Management Team employees for Fiscal Year 2015-2016," authorizing the General Manager to implement a base building salary increase and corresponding salary range adjustment of 2% retroactive to July 10, 2015; a performance- based base building increase at the discretion of the General Manager; the distribution of any remaining funds, as a non-base building payment, to specific Executive Management Team incumbents based on changes to scope, duties or responsibilities; and a one-time irrevocable election for the Executive Management Team to transition from Executive Benefits to Organizational Benefits, for a total NTE amount of$78,688. B. Adopt Resolution No. OCSD 15-21 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving changes to the salary schedule, salary increases, performance-based increases, and the distribution of any remaining funds based on changes to scope, duties or responsibilities for unrepresented management employees for Fiscal Year 2015-2016," authorizing the General Manager to implement changes to the Manager Group salary schedule that eliminates the control point and 09/23/15 Steering Committee Agenda Page 2 of 5 reduces the range maximum; a base building salary increase of 2% retroactive to July 10, 2015; a performance-based base building increase at the discretion of the General Manager and Department Head; and the distribution of any remaining funds, as a non-base building payment, to specific Manager Group incumbents based on changes to scope, duties or responsibilities, for a total NTE amount of$114,000. 6. CLASSIFICATION & COMPENSATION STUDIES - COMPARISON AGENCIES (Bob Ghirelli) RECOMMENDATION: Recommend to the Board of Directors to: Approve the list of 17 comparison agencies selected by OCSD in collaboration with stakeholder groups, and begin the next phase of the Classification & Compensation Studies, which includes a labor market survey. INFORMATION ITEMS: None. 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 potentiallifigation,orpersonnel 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 RE EXISTING LITIGATION (Government Code Section 54956.9(d)(1)) Number of Cases: 3 Klean Waters, Inc. v. Orange County Sanitation District, United States District Court, Central District of California, Southern Division, Case No. 8:15-cv-00627-JVS-FFM. Alex Shaaban v. Orange County Sanitation District, Orange County Superior Court, Case No. 30-2014-00714555 09/23/15 Steering committee Agenda Page 3 of 5 Kelly Ross v. Orange County Sanitation District, Orange County Superior Court, Case No. 30-2014-00714553 (2) CONFERENCE WITH LABOR NEGOTIATORS (Government Code Section 54957.6) Agency Designated Representatives: John Nielsen Unrepresented Employees: General Manager Reconvene in regular session. CONSIDERATION OF ACTION ON MATTERS CONSIDERED IN CLOSED SESSION, IF ANY: OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS IF ANY: ADJOURNMENT: To the Steering Committee meeting scheduled for Wednesday, October 28, 2015, at 5:00 P.M. 09/23/15 Steering Committee Agenda Page 4 of 5 Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at(714) 593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, and on the Sanitation District's website at www.ocsd.com, not less than 72 hours prior to the meeting dale 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@oced.com For any questions on the agenda, Committee members may contact staff at: General Manager Jim Herberg (714)593-7300 iherbem(a)ocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 mhirelli(a)ocsd.00m Director of Engineering Rob Thompson (714)593-7310 rthompson2Zocsd.com Director of Facility Support Services Nick Arhontes (714)593-7210 narhontesQocsd.cem Director of Finance and Lorenzo Tyner (714)593-7550 Itvner(rpoosd.com Administrative Services Director of Operations& Ed Torres (714)593-7080 etorres(Wocsd.com Maintenance 09/23/15 Steering Committee Agenda Page 5 of 5 ITEM NO. 1 MINUTES OF THE STEERING COMMITTEE Orange County Sanitation District Wednesday, August 26, 2015 at 5:00 p.m. A regular meeting of the Steering Committee of the Orange County Sanitation District was called to order by Chair Beamish on Wednesday, August 26, 2015 at 5:02 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: John Nielsen, Chair Jim Herberg, General Manager Keith Curry, Administration Committee Bob Ghirelli, Assistant General Chair Manager John Withers, Operations Committee Rob Thompson, Director of Chair Engineering Tom Beamish, Member-At-Large Lorenzo Tyner, Director of Finance & Lucille Kring, Member-At-Large Administrative Services David Shawver, Member-At-Large Ed Torres, Director of Operations & Maintenance COMMITTEE MEMBERS ABSENT: Nick Arhontes, Director of Facility Greg Sebourn, Vice-Chair Support Services Kelly A. Lore, Clerk of the Board Jennifer Cabral Norbert Gaia Al Garcia Laura Maravilla Richard Spencer OTHERS PRESENT: Brad Hogin, General Counsel Anna Laliberte, Alliant Insurance PUBLIC COMMENTS: None. REPORTS: Chair Nielsen provided a report on the recent 60" annual CASA conference and stated that OCSD was a main topic of conversation in many areas. He and General 08/28/2015 Steering Committee Minutes Page 1 d 5 Manager accepted the California Association of Sanitation Agencies (CASA) Achievement Award on behalf of OCSD, OCWD and Black & Veatch for the initial expansion of the GWRS. He provided information of topics discussed at the conference including: product producer agencies as opposed to treatment agencies; digestion that creates biogas; fertilizer and composting projects; recent regulations regarding food waste; agency overlap regarding storm water recapture; CASA legislative platform including SB350 and suggested that we review the platform through our Legislative and Public Affairs Committee. Finally, the chair stated that many new technologies including Aqua Critox were discussed at the conference. General Manager Jim Herberg announced the receipt of several awards including: the Gold Peak Performance Award from NACWA; the National Safety Award from the Water Environment Federation; recognition from NOAA for TsunamiReady and Storm Ready; OCSD intern Danny Mejia received a $5000 scholarship from the CASA Education Foundation; and the Excellence in Procurement Award. Mr. Herberg announced recent outreach efforts, including an OCSD facility tour for Senator John Moorlach which was attended by Chair Nielsen and Directors Beamish, Kiley and Withers. Mr. Herberg updated the Committee on the progress of the GWRS expansion which is operating at a 30 mgd. increase and also informed the Committee that the General Manager Draft Work plan in included in tonight's information and provided a brief overview of the plan. Mr. Herberg announced the SAWPA tour on September 3, 2015 from 8:00 a.m.-3:30 p.m. and the State of the District Event on October 16, 2015 at 9:00 a.m. Director Shawver arrived at meeting 5:13 p.m. The committee discussed the possible linkage between the CASA Legislative Committee and OCSD's Legislative and Public Affairs Committee. Director Kring commended Mr. Herberg on his work plan, particularly the succession planning and the employee engagement survey. Director Shawver asked if Mr. Herberg would provide an overview as to the working relationship between OCSD and the OC Waste and Recycling facilities and the vision for the future. Chair Nielsen commented that he recently visited the CR& R anaerobic digesters in Perris, CA, which are gearing up for food and green waste creating biogas, to fuel their trucks. Mr. Herberg stated that currently there is no available digester space, therefore we are not in a position to accept food waste, but pilot testing has concluded that it would be beneficial and he anticipates the target date in 2017 for completion. 08/28/2015 Steering Committee Minutes Page 2 of 5 Director of Engineering, Rob Thompson notified the Committee that a presentation of the Biosolids Master Plan will be provided to the committees in October. Discussion ensued. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the July 22, 2015 Regular Steering Committee Meeting. AYES: Beamish; Curry; Kring; Nielsen; Shawver and Withers NOES: None ABSTENTIONS: None ABSENT: Seboum NON-CONSENT: Assistant General Manager Robert Ghirelli provided a brief introduction and short presentation of Item 2. 2. OCSD MEDICAL INSURANCE REOPENER (Robert Ghirelli) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 15-17, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Approving Medical Insurance Changes Identified Through the 2015 Medical Reopener Negotiations." AYES: Beamish; Curry; Kring; Nielsen; Shawver and Withers NOES: None ABSTENTIONS: None ABSENT: Seboum Questions were answered by Human Resources Manager, Richard Spencer and Anna Laliberte, Alliant Insurance regarding: Union participation; deductibles; PPO plans; lower premiums and pretax Health Savings Account. Assistant General Manager Robert Ghirelli provided a brief introduction and short presentation of Item 3, stating the report contains the final list of 18 agencies which will be used in the comparison study; 12 are the same from the previous study and six are new. He further stated that the consultant will review and normalize the data. 08/28/2015 Steering Committee Minutes Page 3 of 5 Concerns were raised by the Committee regarding the proposed list of agencies, particularly the Bay area agencies, where they expressed that the cost of living is much higher and may possibly drive up the comparisons. Mr. Spencer explained the process of normalization of the data in detail and the challenges of finding similar size and specialized agencies that compare to OCSD. Suggestions were made to possibly run two comparisons, one with all proposed agencies and one with only local agencies. In response to a question, Mr. Spencer clarified that the current MOU's, recently approved by the Board, commit us to completing this class and compensation study. The studies are typically completed every 5 years. The consensus of the Committee was that they were not in favor of bay area comparables and asked for alternate economic and geographic areas such as: San Bernardino, Riverside, Central Valley, Imperial County, and the Inland Empire be considered. 3. CLASSIFICATION & COMPENSATION STUDIES — COMPARISON AGENCIES (Robert Ghirelli) MOVED, SECONDED, AND DULY CARRIED TO: Direct staff to come back to the Steering Committee with the 12 comparable agencies from the previous list; add additional comparison agencies from other economic and geographic areas; and eliminate some of the bay area comparables. A.....eye the Anal IiSt Of GGFAPaFi6GA ageAGieS tO 4.8g R the ASS market survey. AYES: Beamish; Curry; Kring; Nielsen; Shawver and Withers NOES: None ABSTENTIONS: None ABSENT: Seboum CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS: 54956.9(d)(1); 54957.6 The Committee convened in closed session at 5:45 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 08/26/2015 Steering Committee Minutes Page 4 of 5 in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. RECONVENED IN REGULAR SESSION: The Committee reconvened in regular session at 6:10 p.m. 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 6:11 p.m. to the next Steering Committee meeting to be held on Wednesday, September 26, 2015 at 5:00 p.m. Submitted by: Kelly A. Lore Clerk of the Board 08/26/2015 Steering Committee Minutes Page 5 of 5 STEERING COMMITTEE Melting D310 TOBE.Or Dir. 09/23/15 09/23/15 AGENDA REPORT ItemNumber Item Number z Orange County Sanitation District FROM: James D. Herberg, General Manager SUBJECT: GENERAL MANAGER'S FY 2015-2016 WORK PLAN GENERAL MANAGER'S RECOMMENDATION Receive and File the General Managers FY 2015-2016 Work Plan. SUMMARY Each year, the General Manager prepares a work plan of activities for the coming fiscal year and presents the draft work plan to the Steering Committee. PRIOR COMMITTEE/BOARD ACTIONS August 2015: Presented the proposed General Manager's FY 2015-16 Work Plan to the Steering Committee for review. ADDITIONAL INFORMATION N/A CEQA N/A BUDGET /PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT The following 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: General Manager's FY 2015—2016 Work Plan Page 1 of 1 ,.., ORANGE COUNTY SANITATION DISTRICT Memorandum September 15,2015 TO: Chairman and Members of the Board of Directors FROM: lames D. Herberg,General Manager SUBJECT: Fiscal Year 2015-2016 General Manager's Work Plan I am pleased to present to you my work plan for Fiscal Year 2015-2016. 1 have identified five main areas that I will focus on during the next year including: 1) Safety and Security; 2) Succession Planning; 3) Resource Recovery; 4) Reliability; and 5) Operational Optimization. This work plan was reviewed with the Steering Committee in August. 1. Safety and Security— Implement measures to reduce risk, protect our regional infrastructure and provide a secure and safe workplace for our employees. • Implement Administrative Controls and address high priority items identified in the Safety Study by December 31,2015. • Complete a feasibility analysis about obtaining VPP certification from OSHA by December 31, 2015. • Implement remaining high priority physical site security improvements as identified by recent surveys and reports regarding OCSD's facilities by June 30,2016. • Work with Department of Homeland Security to assess and implement recommended mitigations to reduce cyber security risk by June 30,2016. • Enhance security awareness training, proactive identification and protection of Personally Identifiable Information (Pill on our network and add additional layers of protection on OCSD servers and employee workstations by December 31,2015. 2. Succession Planning — Review, modify, improve and enhance OCSD's workforce planning and workforce development strategic initiative to develop and implement tools to expand labor force capacity and staff skill levels. • Employee Engagement Survey— Conduct an agency wide employee engagement survey to assist in measuring the staff satisfaction levels. Use the results of the survey to develop an action plan by June 30,2016. • Classification and Compensation Study — Complete all phases of the classification and compensation study by February 28,2016 • Workforce Vulnerability Assessment— Identify vulnerable positions based on retention, criticality, and difficulty to fill. Develop a workforce planning action plan for each position identified in the vulnerability analysis. Identify workforce needs for the upcoming budget process by December 31,2015 • Talent Readiness Assessments — Identify key talent, as well as possible development efforts. Develop guidelines and forms for this tool by December 31, 2015. Conduct two assessments by June 30, 2016. 3. Resource Recovery — Move towards 100 percent water recycling and expand from treatment to resource recovery. • Research—Present findings and recommendations on Super Critical Water Oxidation and how to more efficiently clean digester gas to the Board of Directors by June 30, 2016. • Planning Studies—Receive a draft Effluent Reuse report by June 30,2016. Retain a consultant to conduct anew biosolids master plan by June 30, 2016. 4. Reliability — Move towards future sustainability and resiliency of operations by implementing best practices for managing infrastructure maintenance and replacement and timely adoption of operational and technology improvements. • Civil Assets Management Plan(CAMP)—Finalize the data management structure for collecting, storing and retrieving all civil asset related data; implement the operational housekeeping program to enhance the availability and reliability of our civil assets and develop a 5-year program implementation plan for prioritizing, resourcing and integrating civil assets into existing maintenance programs • Planned Maintenance—Ensure that critical process units and equipment are readyto operate and are receiving preventive maintenance in advance of the 2015-16 rainy season (El Nino). Develop and apply planning and scheduling key performance indicator reports to measure success by June 30,2016. Page 2 of 3 • Operational Resiliency— Present the results of the business continuity plan to the Board of Directors identifying the most critical functions to keep OCSD operating in the event of a major event by December 31, 2015. 5. Operational Optimization—Evaluate and optimize operations at OCSD to increase efficiency. • Energy Efficiency—Evaluate the energy savings opportunities identified by The Energy Network (TEN). Present findings and implementation recommendations to the Board of Directors by March 31,2016. • Shared Services—Continue to explore the six areas identified as potential opportunities where shared services can improve performance and reduce costs for OCSD rate payers by consolidating functions while also monitoring other opportunities regionally and statewide. Implement at least one shared service contract by June 30,2016. • Odor Control Master Plan— Develop a recommendation on odor treatment technologies and levels of service goals for both plant facilities and complete Odor Control Master Plan by June 30,2016. • OCSD Headquarters Building Advertise request for proposal to retain a consultant to design the replacement of the Headquarters Complex Project P3-128 by January 31, 2016. Page 3 of 3 STEERING COMMITTEE Needng Dare To ad.of Di, 09/23/15 09/23/15 AGENDA REPORT Item Nu bar em Number 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: SALES TAXES FOR CHEMICAL PURCHASES GENERAL MANAGER'S RECOMMENDATION Approve Sole Source Agreements for Tax Consulting and Advocacy Services with Equity Recovery Solutions and Reed Smith regarding pursuit of refunds for sales tax paid on chemical purchases. SUMMARY The District uses certain chemicals to treat wastewater, including ferric chloride, anionic polymer, and cationic polymer. Under state law, there are certain exemptions that apply to the purchase of chemicals used in manufacturing. In some circumstances, on specific facts,the state Board of Equalization has determined thatthe purchase of chemicals used to treat wastewater are covered by one of the exemptions. Equity Recovery Solutions and the law firm of Reed Smith have proposed to pursue, on the District's behalf, (1) a determination from the Board of Equalization that the District need not pay sales tax on the purchase of the chemicals that the District uses to treat wastewater, and (2)reimbursement of past taxes paid within the limitations period. Equity Recovery Solutions and Reed Smith would perform the work on a strict contingency basis — that is, they would not receive any compensation unless and until they successfully convince the Board of Equalization that the District's purchase of treatment chemicals is exempt from sales tax. If successful, Equity Recovery Solutions and Reed Smith would each receive 19.5% of the monies reimbursed for past tax years, and the monies saved in future tax years, up to a maximum of five past and/or future year's total. PRIOR COMMITTEE/BOARD ACTIONS None. ADDITIONAL INFORMATION From 2009 to 2014, the District paid an average of $665,561 dollars in sales tax on the purchase of chemicals used to treat wastewater. CEQA N/A Page 1 of 2 1113925.1 BUDGET/PURCHASING ORDINANCE COMPLIANCE This request complies with the authority levels in the Sanitation District's Purchasing Ordinance. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Agreements for Tax Consulting and Advocacy Services Page 2 of 2 1113925.1 AGREEMENT FOR TAX CONSULTING AND ADVOCACY SERVICES This Agreement for Tax Consulting and Advocacy Services ("Agreement") is made and entered into this day of , 2015 (the"Effective Date"), by and between the Orange County Sanitation District(the"District"), a County Sanitation District organized and existing pursuant to California Health&Safety Code Section 4700 et seq, and Equity Recovery Solutions,Inc., a ("ERS"). The District and ERS are sometimes referred to herein as each "Party,"and collectively referred to as the"Parties." RECITALS A. The District regularly purchases chemicals that are used to treat wastewater at the District's two treatment plants. The District currently pays sales tax on the purchase of these chemicals. B. A portion of the District's treated effluent is discharged to the Pacific Ocean. The balance of the District's treated effluent is provided to the Orange County Water District ("OCWD") for further treatment through the Groundwater Replenishment System("GWRS"). The GWRS purifies the District's effluent,transforming it into near-distilled quality water that exceeds all state and federal drinking water standards. OCWD uses the treated water, along with other sources,to replenish the large groundwater basin underlying northern and central Orange County. Ultimately, cities and water districts pump the basin's groundwater and sell it to consumers within their jurisdictions. C. The District desires to retain ERS on the terms and conditions set forth in this Agreement. AGREEMENT In consideration of the foregoing recitals and the mutual covenants contained in this Agreement,the parties agree as follows: 1. Scope of Services. On the District's behalf, ERS shall, at ERS' sole expense, (a) seek to persuade the California State Board of Equalization(`BOE")that,under existing law, the District is not obligated to pay sales tax on the purchase of chemicals used to treat wastewater; and(b) seek reimbursement of sales tax that the District has paid on the purchase of chemicals used to treat wastewater by filing refund claims with the BOE covering all past years within the applicable statute of limitations period. The scope of services does not include any litigation in the event that BOE ultimately denies the administrative claim for refund. 2. Contingency Fees. ERS will only be compensated under this Agreement if (a) ERS successfully persuades BOE that the District is not obligated to pay sales tax on the 1 1113508.1 purchase of chemicals in future tax years, and/or(2)ERS obtains a refund of sales taxes paid by the District in the past. ERS will receive 19.5%of any sales taxes that are either refunded by BOE,or avoided in future years through the efforts of ERS,up to a maximum of five (5) years total. If, for example, ERS recovers $1,000 per year for each of the two past years, and the District avoids future sales taxes on the purchase of chemicals into the future indefinitely, ERS shall receive 19.5% of$5,000 ($2,000 for two past years+$3,000 for three future years). 3. No Other Fees or Costs. ERS shall not receive any compensation under this Agreement other than the contingency fees described above in paragraph 2. ERS shall not receive reimbursement for any costs incurred in performing services under this Agreement, including but not limited to travel expenses. 4. Commencement.Term, and Termination. 4.1. The term of this Agreement shall commence on the Effective Date and continue until all matters are resolved with the Board of Equalization up to a maximum of 5 years. 4.2. ERS may terminate this Agreement at any time for convenience or any other reason,by written notice to the District. 4.3. The District may terminate this Agreement at any time for convenience or any other reason,by written notice to ERS. Upon receipt of a termination notice, ERS shall immediately discontinue all work under this Agreement(unless the notice directs otherwise). 4.4. In the event that(a)the District terminates this Agreement pursuant to Section 4.3, (b)the BOE later approves a claim for refund filed and pursued by ERS, and (c)the efforts of ERS under this Agreement were instrumental to the recovery, then ERS shall be entitled to a reasonable fee in proportion to the value of the services performed by ERS and the contribution of ERS to the successful result. 5. Approval Necessary for Settlement. ERS shall not settle or compromise the District's claim for refund of taxes paid without the District's prior approval. The District shall seriously consider any offer recommended by ERS, but the District reserves the right to accept or reject any settlement in the District's sole and absolute discretion. 6. Standards. In performing its obligations under this Agreement, ERS shall adhere to the highest fiduciary standards,ethical practices and standards of care and competence for its profession. 7. Compliance with Laws. In performing its obligations under this Agreement, ERS shall comply with all applicable Federal, State and local laws and regulations. 2 1113508.1 8. No Delegation or Assi ng ment. ERS shall not delegate any obligations under this Agreement,nor assign any rights under this Agreement,without the prior written consent of the District. Any such attempted delegation or assignment shall be void. 9. Client. The District is ERS' sole client in this matter. ERS does not represent any affiliated persons or entities. 10. Execution and Acknowledanent of Documents. Each Party shall execute and, if appropriate, acknowledge any and all additional documents, instruments and writings which may be reasonably requested by the other Party in order to fully carry out the intent and purpose of this Agreement. 11. Independent Contractor. The relationship of ERS to the District is that of an independent contractor. Nothing herein shall be construed as creating an employment or agency relationship. ERS shall act independently and not as an officer or employee of the District. 12. No Benefits. ERS shall not be entitled to any benefits accorded to those individuals listed on the District's payroll as regular employees including, without limitation, worker's compensation, disability insurance,vacation,holiday or sick pay. ERS shall be responsible for providing,at ERS's expense, disability, worker's compensation or other insurance as well as licenses and permits usual or necessary for conducting the Services hereunder. 13. All Modifications in Writine. This Agreement may not be modified, changed or supplemented,nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by both Parties. 14. Waiver. The waiver of either Party of any breach or violation of, or default under, any provision of this Agreement, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. Any breach by ERS to which the District does not object shall not operate as a waiver of the District's rights to seek remedies available to it for any subsequent breach. 15. Governine Law. This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. 16. Conflicts of Interest. ERS shall at all times avoid conflicts of interest or appearance of any conflict of interest in performance of this Agreement. ERS affirms that, to the best of its knowledge,there exists no actual or potential conflict between ERS's business or financial interests and the performance of its Services under this Agreement. In the event any such conflict arises, ERS shall inform the District and take all appropriate action. 3 1113508.1 17. No Third Party Rights. Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the District and ERS. 18. Agreement Not Construed Against Either Party. The language appearing in all parts of this Agreement shall not be strictly construed for or against either Party. This Agreement has been prepared jointly by the Parties after arms-length negotiations. Any uncertainty or ambiguity contained in this Agreement shall not be interpreted or construed against either Party,but according to its fair meaning applying the applicable rules of interpretation and construction of contracts. Each Party hereby waives the benefit of any statute or rule of law or judicial decision, including without limitation California Civil Code § 1654, which would otherwise require that the provisions of this Agreement be construed or interpreted most strongly against the Party responsible for the drafting thereof. 19. Entire Agreement. This Agreement constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. IN WITNESS WHEREOF, the Parties hereto have hereunto set their hands the day and year indicated below. ORANGE COUNTY SANITATION DISTRICT Dated: By: Chair Board of Directors Dated: By: Clerk of the Board Approved as to Form Dated: By: General Counsel EQUITY RECOVERY SOLUTIONS Dated: By: Jacob Bholat Managing Partner 4 1113508.1 AGREEMENT FOR TAX CONSULTING AND ADVOCACY SERVICES This Agreement for Tax Consulting and Advocacy Services ("Agreement") is made and entered into this day of , 2015 (the"Effective Date"), by and between the Orange County Sanitation District(the"District"), a County Sanitation District organized and existing pursuant to California Health&Safety Code Section 4700 et seq, and Reed Smith, a ("Reed Smith"). The District and Reed Smith are sometimes referred to herein as each"Party,"and collectively referred to as the"Parties." RECITALS A. The District regularly purchases chemicals that are used to treat wastewater at the District's two treatment plants. The District currently pays sales tax on the purchase of these chemicals. B. A portion of the District's treated effluent is discharged to the Pacific Ocean. The balance of the District's treated effluent is provided to the Orange County Water District ("OCWD") for further treatment through the Groundwater Replenishment System("GWRS"). The GWRS purifies the District's effluent,transforming it into near-distilled quality water that exceeds all state and federal drinking water standards. OCWD uses the treated water, along with other sources,to replenish the large groundwater basin underlying northern and central Orange County. Ultimately, cities and water districts pump the basin's groundwater and sell it to consumers within their jurisdictions. C. The District desires to retain Reed Smith on the terms and conditions set forth in this Agreement. AGREEMENT In consideration of the foregoing recitals and the mutual covenants contained in this Agreement,the parties agree as follows: 1. Scoue of Services. On the District's behalf,Reed Smith shall, at Reed Smith' sole expense, (a) seek to persuade the California State Board of Equalization("BOE")that,under existing law, the District is not obligated to pay sales tax on the purchase of chemicals used to treat wastewater; and(b) seek reimbursement of sales tax that the District has paid on the purchase of chemicals used to treat wastewater by filing refund claims with the BOE covering all past years within the applicable statute of limitations period. The scope of services does not include any litigation in the event that BOE ultimately denies the administrative claim for refund. 2. Contingency Fees. Reed Smith will only be compensated under this Agreement if (a) Reed Smith successfully persuades BOE that the District is not obligated to pay sales tax on 1 1113508.1 the purchase of chemicals in future tax years, and/or(2)Reed Smith obtains a refund of sales taxes paid by the District in the past. Reed Smith will receive 19.5%of any sales taxes that are either refunded by BOE, or avoided in future years through the efforts of Reed Smith,up to a maximum of five(5)years total. If, for example,Reed Smith recovers $1,000 per year for each of the two past years, and the District avoids future sales taxes on the purchase of chemicals into the future indefinitely,Reed Smith shall receive 19.5%of$5,000($2,000 for two past years+ $3,000 for three future yews). 3. No Other Fees or Costs. Reed Smith shall not receive any compensation under this Agreement other than the contingency fees described above in paragraph 2. Reed Smith shall not receive reimbursement for any costs incurred in performing services under this Agreement, including but not limited to travel expenses. 4. Commencement,Term, and Termination. 4.1. The tern of this Agreement shall commence on the Effective Date and continue until all matters are resolved with the Board of Equalization up to a maximum of 5 years. 4.2. Reed Smith may terminate this Agreement at any time for convenience or any other reason,by written notice to the District. 4.3. The District may terminate this Agreement at any time for convenience or any other reason,by written notice to Reed Smith. Upon receipt of a termination notice,Reed Smith shall immediately discontinue all work under this Agreement (unless the notice directs otherwise). 4.4. In the event that(a)the District terminates this Agreement pursuant to Section 4.3, (b) the BOE later approves a claim for refund filed and pursued by Reed Smith, and(c)the efforts of Reed Smith under this Agreement were instrumental to the recovery, then Reed Smith shall be entitled to a reasonable fee in proportion to the value of the services performed by Reed Smith and the contribution of Reed Smith to the successful result. 5. Approval Necessary for Settlement. Reed Smith shall not settle or compromise the District's claim for refund of taxes paid without the District's prior approval. The District shall seriously consider any offer recommended by Reed Smith, but the District reserves the right to accept or reject any settlement in the District's sole and absolute discretion. 6. Standards. In performing its obligations under this Agreement,Reed Smith shall adhere to the highest fiduciary standards, ethical practices and standards of care and competence for its profession. 2 1113508.1 7. Compliance with Laws. In performing its obligations under this Agreement, Reed Smith shall comply with all applicable Federal, State and local laws and regulations. 8. No Delegation or Assignment. Reed Smith shall not delegate any obligations under this Agreement, nor assign any rights under this Agreement, without the prior written consent of the District. Any such attempted delegation or assignment shall be void. 9. Client. The District is Reed Smith' sole client in this matter. Reed Smith does not represent any affiliated persons or entities. 10. Execution and Acknowledgment of Documents. Each Party shall execute and, if appropriate, acknowledge any and all additional documents, instruments and writings which may be reasonably requested by the other Party in order to fully carry out the intent and purpose of this Agreement. 11. Independent Contractor. The relationship of Reed Smith to the District is that of an independent contractor. Nothing herein shall be construed as creating an employment or agency relationship. Reed Smith shall act independently and not as an officer or employee of the District. 12. No Benefits. Reed Smith shall not be entitled to any benefits accorded to those individuals listed on the District's payroll as regular employees including, without limitation, worker's compensation, disability insurance,vacation,holiday or sick pay. Reed Smith shall be responsible for providing,at Reed Smith's expense,disability,worker's compensation or other insurance as well as licenses and permits usual or necessary for conducting the Services hereunder. 13. All Modifications in Writing. This Agreement may not be modified, changed or supplemented,nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by both Parties. 14. Waiver. The waiver of either Party of any breach or violation of, or default under, any provision of this Agreement, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. Any breach by Reed Smith to which the District does not object shall not operate as a waiver of the District's rights to seek remedies available to it for any subsequent breach. 15. Governing Law. This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. 3 1113508.1 16. Conflicts of Interest. Reed Smith shall at all times avoid conflicts of interest or appearance of any conflict of interest in performance of this Agreement. Reed Smith affirms that, to the best of its knowledge, there exists no actual or potential conflict between Reed Smith's business or financial interests and the performance of its Services under this Agreement. In the event any such conflict arises,Reed Smith shall inform the District and take all appropriate action. 17. No Third Party Rights. Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the District and Reed Smith. 18. Agreement Not Construed Against Either Party. The language appearing in all parts of this Agreement shall not be strictly construed for or against either Party. This Agreement has been prepared jointly by the Parties after arms-length negotiations. Any uncertainty or ambiguity contained in this Agreement shall not be interpreted or construed against either Party,but according to its fair meaning applying the applicable rules of interpretation and construction of contracts. Each Party hereby waives the benefit of any statute or rule of law or judicial decision, including without limitation California Civil Code § 1654, which would otherwise require that the provisions of this Agreement be construed or interpreted most strongly against the Party responsible for the drafting thereof. 19. Entire Agreement. This Agreement constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. IN WITNESS WHEREOF, the Parties hereto have hereunto set their hands the day and year indicated below. ORANGE COUNTY SANITATION DISTRICT Dated: By: Chair Board of Directors Dated: By: Clerk of the Board Approved as to Form Dated: By: General Counsel 4 1113508.1 REED SMITH Dated: By: Mardiros H. Dakessian 5 1113508.1 STEERING COMMITTEE NeetlOgDate TOBd 011Di,. 091231 5 Og/23/15 AGENDA REPORT Item Number Item Number a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert P. Ghirelli, Assistant General Manager SUBJECT: LOCAL 501 MOU REOPENERS FOR ARTICLE 19—STANDBY PAY, ARTICLE 26 — SHIFT DIFFERENTIAL, &ARTICLE 49.2 — RELIEF OPERATOR GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 15-19, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Approving Standby Pay Changes Identified through the International Union of Operating Engineers Local 501 (Local 501) 2015 Reopener Negotiations." SUMMARY The proposed resolution authorizes an increase to the weekly standby pay amount from $355/week to $400/week and provides 2 hours of straight-time pay for employees assigned to standby during a recognized District holiday. PRIOR COMMITTEE/BOARD ACTIONS August 2015 — The Board of Directors provided direction to labor negotiators regarding a tentative agreement proposed as a result of the Local 501 reopener. April 2015 — The Board adopted Resolution No. OCSD 15-10, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Approving the Memorandum of Understanding between the Orange County Sanitation District and the International Union of Operating Engineers, Local 501 (Local 501), for Fiscal Years 2014/2015 & 2015/2016." This resolution included reopeners on Article 19 — Standby, Article 26 — Shift Differential, and Article 49.2 — Relief Operator, that were set to begin upon ratification of the contract. ADDITIONAL INFORMATION The Board authorized labor negotiators to engage in discussions with the International Union of Operating Engineers Local 501 (Local 501) bargaining unit regarding a reopener on standby pay, shift differential, and relief operator pay beginning in May 2015. Based on reopener discussions, a tentative agreement was reached with Local 501. The Board of Directors authorized negotiation and provided direction on the proposed offer in closed session on August 26, 2015. Subsequently the offer was presented to and accepted by Local 501, as described below. Page 1 of 2 Agreement was reached with Local 501 on Article 19 - Standby Pay, to include clarification allowing management to staff standby shifts appropriately in the event that there are not a minimum number of volunteers. Additionally, employees assigned to standby will receive an increase from $355/week to $400/week, and be provided two (2) hours of straight-time pay when assigned to standby during a recognized District holiday. The total cost for increasing standby pay is approximately $25,000, which includes roll- up costs. Agreement was also reached on the remaining articles for Article 26 - Shift Differential and Article 49.2 Relief Operator, with both parties agreeing that they remain status quo (no change, no cost). CEQA N/A BUDGET / PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. ATTACHMENT The following attachment(s) is attached in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.com) with the complete agenda package: • Resolution No. OCSD 15-19 Page 2 of 2 RESOLUTION NO. OCSD 15-19 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT APPROVING STANDBY PAY CHANGES IDENTIFIED THROUGH THE INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 501 (LOCAL 501) 2015 REOPENER NEGOTIATIONS. WHEREAS, on August 26, 2015, the Board of Directors ("Directors") of the Orange County Sanitation District (the "District") authorized the General Manager to negotiate with the International Union of Operating Engineers Local 501 (Local 501), employee organization to discuss changes to District standby pay per the agreed upon reopener; WHEREAS, pursuant to Government Code Section 3500, et seq., representatives of the Local 501 represented employee group have met and conferred, in good faith, with the representatives of the District and have reached an understanding with regard to certain terms and conditions relative to employment; WHEREAS, during commencement of negotiations the parties agreed that any changes would take effect the first full pay period following approval by the District's Board; and WHEREAS, the parties have modified the Standby Pay, Shift Differential, and Relief Operator articles of the Memorandum of Understanding, pursuant to the Agreement to reopen authorized under Board Resolution NO. OCSD 15-10, to reflect the parties' understanding regarding certain terms and conditions as set forth in the OCSD Local 501 MOU Reopeners agenda report, which include: Standby Pay: clarification allowing management to staff standby shifts appropriately in the event that there are not a minimum number of volunteers. Additionally, employees assigned to standby will receive an increase from $355/week to $400/week, and be provided two (2) hours of straight-time pay when assigned to standby during a recognized District holiday. Shift Differential: Employees who are assigned to work a night shift that consists of 50% or more of the hours between 6:OOPM and 6:OOAM and who actually work that shift will receive a shift differential of$3.00 per hour (status quo). Relief Operator: When Plant Operators, Senior Plant Operators or Power Plant Operator series are assigned to Relief Operator positions,they will be entitled to$1.75 per hour premium (status quo). NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. The aforementioned standby pay, shift differential, and Relief Operator changes as outlined herein are hereby approved and may be implemented effective the next full pay period following approval by the District's Board. 1113710.1 OCSD 15-19-1 PASSED AND ADOPTED at a regular meeting of the Board of Directors held September 23, 2015. John Nielsen, Board Chair ATTEST: Kelly A. Lore Clerk of the Board 1113710.1 OCSD 15-19-2 STEERING COMMITTEE Melting D310 TOBE.Or Dir. 09/23/15 09/23/15 AGENDA REPORT ItemNumber Item Number s Orange County Sanitation District FROM: James D. Herberg, General Manager SUBJECT: EXECUTIVE MANAGEMENT TEAM COMPENSATION AND BENEFITS AND MANAGER GROUP COMPENSATION GENERAL MANAGER'S RECOMMENDATION A. Adopt Resolution No. OCSD 15-20 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving salary increases, salary range adjustments, performance-based increases, the distribution of any remaining funds based on changes to scope, duties or responsibilities and changes to benefits for At-Will Executive Management Team employees for Fiscal Year 2015- 2016," authorizing the General Manager to implement a base building salary increase and corresponding salary range adjustment of 2% retroactive to July 10, 2015; a performance-based base building increase at the discretion of the General Manager; the distribution of any remaining funds, as a non-base building payment, to specific Executive Management Team incumbents based on changes to scope, duties or responsibilities; and a one-time irrevocable election for the Executive Management Team to transition from Executive Benefits to Organizational Benefits, for a total NTE amount of$78,688. B. Adopt Resolution No. OCSD 15-21 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving changes to the salary schedule, salary increases, performance-based increases, and the distribution of any remaining funds based on changes to scope, duties or responsibilities for unrepresented management employees for Fiscal Year 2015-2016," authorizing the General Manager to implement changes to the Manager Group salary schedule that eliminates the control point and reduces the range maximum; a base building salary increase of 2% retroactive to July 10, 2015; a performance-based base building increase at the discretion of the General Manager and Department Head; and the distribution of any remaining funds, as a non-base building payment, to specific Manager Group incumbents based on changes to scope, duties or responsibilities, for a total NTE amount of$114,000. SUMMARY Executive Management Team The Executive Management Team has received one 3% across the board salary increase over the past five (5) years. Currently, the Executive Management Team's market position is at the 25th percentile. Page 1 d 6 The General Manager is recommending a base building salary increase and corresponding salary range adjustment of 2%, at a total cost not to exceed $18,353, for Fiscal Year 2015-16. This change aligns with the salary increases received by the represented groups in the current MOUs. The proposed 2% base building salary increase and the corresponding salary range adjustment would move the Executive Management Team market position from the 251h percentile to the 33rd percentile for FY 2015- 16. Additionally, a base building performance-based increase ranging from 2.1% to 4.2% is being recommended to recognize and reward those executives meeting and exceeding performance standards based on their performance review outcomes for FY 2014-15, at a cost not to exceed $39,647 annually. The General Manager recommends a non-base building payment from any remaining funds, for specific Executive Management Team members based on changes to their scope, duties and responsibilities. Pursuant to the understanding with the Executive Management Team members at the beginning of negotiations, the salary changes would take effect retroactively to July 10, 2015, the first pay period in the current fiscal year. The total proposed compensation adjustments for the Executive Management Team members (excluding the General Manager) are not to exceed $58,000. Lastly, the General Manager recommends implementing a one-time irrevocable election to transition the Executive Management Team from Executive Benefits providing a value of 37%of an incumbent's compensation to Organizational Benefits that more closely align with those offered to represented and unrepresented employees, at a projected cost of $20,688. The net total cost for all proposed compensation and benefit changes for the Executive Management Team is not to exceed $78,688. Manager Group The 13 managers at OCSD oversee staff within a particular division and align performance with the goals of the agency. Over the past 5 years, OCSD has reduced the number of managers from 19 to 13, resulting in significant cost savings and increased efficiencies, and broader scopes of responsibilities. Managers are not represented by a bargaining unit and represent themselves as a group in discussions with the General Manager regarding wages, benefits and other conditions of employment. The General Manager recommends a base building 2% salary increase at a total estimated cost of $36,238 for Fiscal Year 2015-16. This change aligns with the salary increases for the represented groups in the current MOUs. It is also recommended that changes be implemented to the Manager Group salary schedule by eliminating the control point and reducing the range maximums. The proposed salary schedule changes will address compaction in the salary ranges compared with the supervisor classification by establishing a manager/supervisor differential of at least 10%. Additionally, a base building performance-based increase ranging from 2.1% to 4.2% is being recommended to recognize those managers who have produced exceptional results for OCSD based on their performance review outcomes for FY 2014-15 at a cost not to exceed $77,762 Page 2 d 6 annually. The General Manager recommends distributing any remaining funds, as a non- base building payment, to specific Manager Group incumbents based on changes to their scope, duties and responsibilities. Pursuant to the understanding with the Manager Group at the beginning of the discussions, the salary changes would take effect retroactively to July 10, 2015, the first pay period of the current fiscal year. The proposed compensation adjustments are not to exceed $114,000. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Executive Management Team Executive Management Team members are employed on an At-Will basis, and serve at the pleasure of the General Manager.The General Manager is authorized per the Board's Personnel Policies and Procedures to periodically adjust the rate of compensation for Executive Management Team members who have signed At-Will agreements so long as no adjustment exceeds the compensation permitted by the applicable salary range. The six (6) At-Will employees of the Orange County Sanitation District's (OCSD) Executive Management Team are relied upon heavily to provide leadership, strategic direction, and department oversight at OCSD. These individuals serve in key leadership positions that are critical to the success of the agency. These Executive Management Team members hold the following classifications: Executive Management Team Classifications Assistant General Manager Director of Finance &Administrative Services Director of Engineering Director of Facilities Support Services Director of Operations & Maintenance Director of Human Resources (Vacant) During the past year, under the direction of the Executive Management Team and the Manager Group, the Sanitation District staff have completed significant goals as set forth by the Board of Directors, including: Reduced planned user fee increases; Reaffirmed AAA credit ratings; Paid down unfunded retirement liabilities, resulting in $6 million of annual savings; $75 million in other operations savings identified over the next ten-year forecasting period; Page 3 d 6 • No staff increases; • No additional debt; • Secured a $450,000 grant for future water recycling study; • Ceased bleach disinfection of our effluent saving $425,000 per year; • Completed phase 1 of the Newport Forcemain Replacement Project; • Increased flows to GWRS by 30% to 130 mgd; • Achieved labor agreements with bargaining units; • Relocation of Santa Ana River Interceptor from the Flood plain (by County of Orange); Received numerous national awards including NAWCA Peak Performance Award for 100% compliance, US top 10 Fleets, Budget and Procurement Awards, WEF Plant Safety Award, to name a few. OCSD is committed to maintaining a competitive compensation market position that attracts and retains top employment talent. It is OCSD's philosophy to compensate employees competitively and equitably, and understanding the relative market position assists in that determination. For Executive Management Team level classifications, a consultant conducts an annual market update to assess OCSD compensation relative to its established labor market. The 2015 market study revealed that the Executive Management Team salaries for all classifications, are below the 75th percentile. Over the past four (4) years, the group's aggregate market position has declined from the 6011 percentile in 2011 to its current position at the 251h percentile in 2015. The proposed 2% base building salary increase and corresponding salary range adjustment would move the group's market position from the 25th percentile to the 33rd percentile for FY 2015-2016, as illustrated below. Percentile w/2% Classification Graup Current Percentile Increase Assistant General Manager EMT 42 56 Director of Engineering EMT 34 36 Director of Facilities Support Services EMT 14 26 Director of Finance &Administrative Services EMT 28 31 Director of Operations & Maintenance EMT 9 16 Group Market position 25 33 The Executive Management Team members' market position will be revisited through the current comprehensive classification and compensation study, which will provide the Board with recommendations for moving forward. The net cost to transition Executive Management Team members from Executive Benefits providing a value of 37% of an incumbent's compensation to Organizational Benefits that more closely aligns with those offered to represented and unrepresented employees, at a projected cost of $20,688. Changing OCSD's approach in providing benefits for the Executive Management Team would bring about greater transparency and uniformity in the application of benefits, and emphasizes a benefit structure that is fair and sustainable. Page 4 d 6 The Organizational Benefits offered to current Executive Management Team members who elect to transition and those hired/promoted into the group following Board approval, will be comprised of the same benefits offered to represented and unrepresented employees, including medical, dental, vision, and disability insurance and paid leave. The Executive Management Team benefits package will also include additional life insurance at 2x's salary, and 6% plus $1,250 investment incentive salary (IIS). Manager Group The 13 incumbents that comprise the Orange County Sanitation District's (OCSD) Manager Group are relied upon heavily to provide day-to-day leadership to support strategic direction, and division management oversight at OCSD. This represents a decrease in six (6) manager positions since 2011. These individuals serve in key leadership positions that are critical to the success of the agency. Manager Group members hold the following classifications: Manager Group Classifications Contracts & Purchasing Manager Controller Engineering Manager (4) Environmental Compliance & Regulatory Affairs Manager Environmental Lab & Ocean Monitoring Manager Human Resources Manager/ Risk Manager Information Technology Manager IT Systems & Operations Manager Maintenance Manager Operations Manager Annually, the Board considers changes to compensation for the Manager Group. Over the past five (5) years, the Board approved two (2) base building salary increases and corresponding range adjustments for the Manager Group; specifically, 2% in FY 2011-12 and 3% in FY 2014-15, and a one-time non-base building payment of up to $1,000 per manager allocated based on job performance. The Manager Group market position has declined from the 701h percentile in 2011 to its current position at the 61s' percentile in 2015. The proposed 2% base building salary increase would move the Manager Group market position from the 618' percentile to approximately the 75th percentile for FY 2015-16. The Manager Group market position will be revisited through the current comprehensive classification and compensation study, which will provide the Board with recommendations for moving forward. OCSD is committed to maintaining a competitive compensation market position that attracts and retains talented employees. It is OCSD's philosophy to compensate employees competitively and equitably, and understanding the relative market position assists in that determination.The proposed Manager Group base-building salary increase effective July 2015 will ensure OCSD maintains a competitive compensation market position to continue to attract and retain these critical employees. Page 5 d 6 CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE The funds for this increase are included in the OCSD Operating Budget for FY 2015- 2016. ATTACHMENTS The following affachment(s)are attached in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Draft Resolution No. OCSD 15-20 (Executive Management Team) • Executive Management Team Pay Table, July 2014 • Proposed Executive Management Team Pay Table, July 2015 • Draft Resolution No. OCSD 15-21 (Manager Group) • Manager Group Pay Table, July 2014 • Proposed Manager Group Pay Table, July 2015 Page 6 d 6 RESOLUTION NO. OCSD 15-20 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT APPROVING SALARY INCREASES, SALARY RANGE ADJUSTMENTS, PERFORMANCE-BASED INCREASES, THE DISTRIBUTION OF ANY REMAINING FUNDS BASED ON CHANGES TO SCOPE, DUTIES OR RESPONSIBILITIES, AND CHANGES TO BENEFITS FOR AT-WILL EXECUTIVE MANAGEMENT TEAM EMPLOYEES FOR FISCAL YEAR 2015-2016 WHEREAS, there are five (5) executive management team employees who provide executive leadership, strategic direction, and department oversight for OCSD; and WHEREAS, executive management team employees serve in at-will employment status, which may be terminated at any time by either the General Manager or an executive management team employee with or without cause with no liability; and WHEREAS, salary adjustments for EMT members have not kept pace with those of the organization or the Consumer Price Index (CPI) over the past six (6) years; and WHEREAS, it is OCSD's philosophy to compensate employee classifications competitively, which currently can be achieved through alignment with the salary market; and WHEREAS, executive management team employees' salary ranges have remained constant since 2009 in recognition of economic times; and WHEREAS, at the beginning of negotiations the parties agreed that the salary changes would take effect retroactively to July 10, 2015, the first pay period in the current fiscal year. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER: 1. That the Board of Directors hereby authorizes and approves the following changes to salaries for Executive Management Team members, which shall become effective retroactively to the first pay period of July 2015: a) A base building salary increase and corresponding salary range adjustment of 2% for Executive Management Team (EMT) members. b) A base building performance-based increase, ranging from 2.1% to 4.2%, for Executive Management Team members at the discretion of the General Manager based on performance outcomes. OCSD 15-20-1 c) A non-base building payment for specific Executive Management Team members at the discretion of the General Manager based on changes to scope, duties or responsibilities. d) A one-time irrevocable election for current Executive Management Team employees to transition from Executive Benefits to Organizational Benefits, and implementation of Organizational Benefits for those hired or promoted into the group following Board approval. 2. That the General Manager, or his designee, is authorized to implement the changes to salary ranges, salaries and the non-base building payment approved herein. PASSED AND ADOPTED at a regular meeting of the Board of Directors held September 23, 2015. John Nielsen, Board Chair ATTEST: Kelly Lore, Clerk of the Board OCSD 15-20-2 Orange County Sanitation District Classification and Compensation Plan Rates Effective July 1,2014 EXECUTIVE MANAGEMENT GROUP Classification Pay Grade Minimum I Midpoint Control Point Maximum Assistant General Manager EMT114 $ 160,537 $ 200,672 $ 216,726 $ 240,807 Director of Engineering EMT109 $ 145,943 $ 182,429 $ 197,024 $ 218.915 Director of Human Resources EMT109 $ 145,943 $ 182,429 $ 197,024 $ 218,915 Director of Finance and Administrative Services EMT109 $ 145,943 $ 182,429 $ 197,024 $ 218.915 Director of Facility Support Services EMT108 $ 132,675 $ 165,844 $ 179,112 $ 199,014 Director of Operations and Maintenance EMT108 $ 132,675 $ 165,844 $ 179,112 $ 199.014 6/23/15 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 1, 2015 EXECUTIVE MANAGEMENT GROUP Classification Pay Grade Minimum I Midpoint Control Point Maximum Assistant General Manager EMT114 $ 163,748 $ 204,685 $ 221,061 $ 245,623 Director of Engineering EMT109 $ 148,862 $ 186,078 $ 200,964 $ 223,293 Director of Human Resources EMT109 $ 148,862 $ 186,078 $ 200,964 $ 223,293 Director of Finance and Administrative Services EMT109 $ 148,862 $ 186,078 $ 200,964 $ 223.293 Director of Facility Support Services EMT108 $ 135,329 $ 169,161 $ 182,694 $ 202,994 Director of Operations and Maintenance EMT108 $ 135,329 $ 169,161 $ 182,694 $ 202.994 6/23/15 RESOLUTION NO. OCSD 15-21 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT APPROVING CHANGES TO THE SALARY SCHEDULE, SALARY INCREASES, PERFORMANCE-BASED INCREASES AND THE DISTRIBUTION OF ANY REMAINING FUNDS BASED ON CHANGES TO SCOPE, DUTIES OR RESPONSIBILITIES FOR UNREPRESENTED MANAGEMENT EMPLOYEES FOR FISCAL YEAR 2015-2016 WHEREAS, there are thirteen (13) employees in the management employees job classifications at the Orange County Sanitation District ("OCSD") who serve as organizational leaders and oversee staff within particular divisions and/or workgroups to align performance outcomes with the strategic goals of the agency; and WHEREAS, management employees are unrepresented and meet directly with the General Manager about terms and conditions of employment; and WHEREAS, it is OCSD's philosophy to compensate employee classifications competitively, which can be currently achieved through alignment with the salary market; and WHEREAS, salary adjustments for management employees have not kept pace with those of the organization or the Consumer Price Index (CPI) over the past six (6) years; and WHEREAS, management employees' salaries have forgone salary increases since 2009, in all years except a 2% increase in 2011, and a 3% increase in 2014, in recognition of economic times; and WHEREAS, the General Manager recently entered into discussions with the management employees and completed negotiations in August 2015, which resulted in agreed upon proposed changes to wages; and WHEREAS, at the beginning of negotiations the parties agreed that the salary changes would take effect retroactively to July 10, 2015, the first pay period in the current fiscal year. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER: 1. That the Board of Directors hereby authorizes and approves the following changes to salaries for management employees, which shall become effective retroactively to the first pay period of July 2015: OCSD 15-21-1 a) Changes to the salary schedule for unrepresented management employees. b) A base building salary increase of 2% for Manager Group members. c) A base building performance-based increase, ranging from 2.1% to 4.2%, for Manager Group members at the discretion of the General Manager and Department Head based on performance outcomes. d) A non-base building payment for specific Manager Group members at the discretion of the General Manager and Department Head based on changes to scope, duties or responsibilities. 2. That the General Manager, or his designee, is authorized to implement the changes to salary ranges, salaries and the non-base building payment approved herein. PASSED AND ADOPTED at a regular meeting of the Board of Directors held September 23, 2015. John Nielsen, Board Chair ATTEST: Kelly Lore, Clerk of the Board OCSD 15-21-2 Orange County Sanitation District Classification and Compensation Plan Rates Effective July 1,2014 MANAGERS GROUP Classification IPayGradel Minimum I Midpoint I Control Point Maximum Information Technology Manager I MGR 92 $ 105,890 $ 132,363 $ 142,952 $ 158,836 Maintenance Manager I MGR94 $ 111,900 $ 139,875 $ 151,065 $ 167,850 Operations Manager I MGR94 1 $ 111,900 $ 139,875 $ 151,065 $ 167,850 Contracts&Purchasing Manager MGR94 $ 111,900 $ 139,875 $ 151,065 $ 167,850 Environmental Lab&Ocean Monitoring Manager MGR94 $ 111,900 $ 139,875 $ 151,065 $ 167,850 Human Resources Manager MGR94 $ 111,900 $ 139,875 S 151,065 $ 167,850 Environmental COmpl&Reg Affairs Manager MGR95 $ 115,500 S 144,375 $ 155,925 $ 173,250 IT Systems&Operations Manager MGR96 $ 118,250 S 147,813 $ 159,638 $ 177,375 Controller MGR96 1 $ 118,250 S 147,813 $ 159,638 $ 177,375 Engineering Manager MGR96 1 $ 118,250 $ 147,813 $ 159,638 $ 177,375 1 6/23/15 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 1, 2015 MANAGERS GROUP Classification jPayGradej Minimum I Midpoint Maximum Information Technology Manager I MGR 92 $ 101,725 $ 127,127 $ 152,588 Maintenance Manager I MGR94 $ 106,811 $ 133,514 $ 160,217 Operations Manager I MGR94 $ 106,811 $ 133,514 $ 160,217 Contracts&Purchasing Manager I MGR94 $ 106,811 $ 133,514 $ 160,217 Environmental Lab&Ocean Monitoring Manager I MGR94 $ 106,811 $ 133,514 $ 160,217 Human Resources Manager I MGR94 $ 106,811 $ 133,514 $ 160,217 Environmental Coni & Reg Affairs Manager I MGR95 $ 109,482 $ 136,852 $ 164,223 IT Systems&Operations Manager MGR96 $ 112,152 $ 140,190 $ 168,228 Controller MGR96 1 $ 112,152 $ 140,190 $ 168,228 Engineering Manager MGR96 1 $ 112,152 $ 140,190 $ 168,228 1 6/23/15 STEERING COMMITTEE Meeting Date TOed.O(Dir. 09/23/15 09/23/15 AGENDA REPORT Item Number Item Number 6 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert P. Ghirelli, Assistant General Manager SUBJECT: CLASSIFICATION & COMPENSATION STUDIES — COMPARISON AGENCIES GENERAL MANAGER'S RECOMMENDATION Approve the list of 17 comparison agencies selected by OCSD in collaboration with stakeholder groups, and begin the next phase of the Classification & Compensation Studies, which includes a labor market survey. SUMMARY The Orange County Sanitation District (OCSD) initiated its periodic Classification and Compensation Studies in March 2015 with Gallagher Benefit Services, Inc., ("Consultant"). As part of the study's compensation phase, OCSD has collaborated with stakeholder groups to review the current list of comparison agencies that comprise its labor market, and discuss any changes recommended by the Consultant. The criteria utilized by the Consultant in the process of identifying the appropriate labor market for OCSD included: • Retention: agencies from/to which OCSD gains/ loses employees • Geography: agencies within the same area/ region/ state • Size/ Service Area: agencies from twice as large to half as big • Operations: agencies with similar operations and water processed • Continuity: agencies previously surveyed ensure continuity The consultant recommends the final list contain 15-20 agencies to ensure there is a sufficient number of job matches among the comparison agencies. Based on feedback obtained from discussions with labor, management, and the Steering Committee, staff recommends the following list for consideration and approval by the Board of Directors: Recommended Comparison A encies: Current 13 Agencies+4 New City of Anaheim City of Los Angeles Bureau of Sanitation Central Contra Costa Sanitary District Los Angeles County Department of Public Works County Sanitation Districts of Los Angeles County Orange County Water District East Bay Municipal Utilities District City of San Diego Eastern Municipal Water District NEW City of Garden Grove Inland Empire Utilities Agency* City of Huntington Beach Western Municipal Water District(Riverside)* City of Irvine Las Virgenes Municipal Water District' Irvine Ranch Water District Metropolitan Water District of Southern California' denotes an addition to OCSD's current comparison agency list Page 1 of 3 PRIOR COMMITTEE/BOARD ACTIONS August 2015—An Agenda Report was presented to the Steering Committee with a list of 18 comparison agencies for consideration. July 2015—An informational Agenda Report was presented to the Board of Directors with a list of 20 comparison agencies from the Consultant. February 2014 — The Administration Committee authorized the General Manager to advertise a request for proposal and subsequently award a Consultant Services Agreement for an OCSD-wide Classification and Compensation Study, for a total amount not to exceed $100,000. ADDITIONAL INFORMATION Classification and Compensation Studies are conducted periodically by organizations to obtain information on how other agencies structure their positions and compensate employees in similar positions. Such benchmark data is critical feedback regarding how an agency compares to its labor market, providing information for organizational decisions on classification and compensation of its jobs. The selection of an appropriate labor market is important to all stakeholders, including the Board of Directors, management, bargaining units, employees, and the public. It ensures that OCSD compares its classification and compensation systems to similar organizations. OCSD's current list of 13 comparison agencies was established during the Classification and Compensation Studies conducted in 2002 by Johnson & Associates. A list of 20 comparison agencies recommended by the Consultant for OCSD was presented to the Board of Directors on July 22, 2015 as an informational item. It included 12 of the existing comparison agencies, plus 8 additional agencies. The list of 20 comparison agencies was distributed to OCSD's unrepresented groups (Executive Management Team, Manager Group, and Confidential Group) and all represented bargaining units. OCSD solicited feedback and worked collaboratively with all stakeholders to review and evaluate the proposed comparison agencies during a meeting on August 3, 2015, and through subsequent discussions. It was also presented to the Executive Management Team (EMT) for discussion. On August 7, 2015, the bargaining units provided additional feedback and proposed changes to the list, which were subsequently reviewed and considered by the Consultant and the EMT. The list of 18 comparison agencies that resulted from this review process was presented to the Steering Committee in August 2015. The Steering Committee asked staff to reevaluate the list and focus it more on agencies located in Southern California, rather than the Bay area. Based on that feedback, staff prepared the list of 17 comparison agencies, including four additional agencies from Southern California. The review and evaluation phase of the proposed comparison agencies has concluded. Upon the Board of Directors' approval of the list of comparison agencies, the Consultant Page 2 d 3 will begin the next phase of the Classification and Compensation Studies, which will include: • Developing and deploying a survey to the selected comparison agencies; • Collecting market data for OCSD's benchmark positions; • Reviewing the labor market data to confirm it is reliable and sufficiently comparable; and • Analyzing the data to ensure skewing impacts are mitigated. The market data collection process will generate information on an agency's actual pay and/or pay ranges, pay practices, and benefits. The Consultant will review each organization's data and apply a cost of labor geographic pay differential to pay data based on the Economic Research Institute (ERI) quarterly update figure, which is useful in understanding the economic differences between different locations. This method is a standard compensation practice, and will be used to adjust the survey data to OCSD's labor market. CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE The funds for this project were included in the OCSD Operating Budget for FY 2014-15 and FY 2015-16. Page 3 d 3 ORANGE COUNTY SANITATION DISTRICT Agenda Terminology Glossary Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOD Biochemical Oxygen Demand CARB California Air Resources Board CASA California Association of Sanitation Agencies CCTV Closed Circuit Television CEQA California Environmental Quality Act CRWQCB California Regional Water Quality Control Board CWA Clean Water Act CWEA California Water Environment Association EIR Environmental Impact Report EMT Executive Management Team EPA U.S. Environmental Protection Agency FOG Fats, Oils, and Grease FSSD Facilities Support Services Department gpd Gallons per day GWR System Groundwater Replenishment System (also called GWRS) ICS Incident Command System IERP Integrated Emergency Control Plan LOS Level of Service MGD Million gallons per day NACWA National Association of Clean Water Agencies NPDES National Pollutant Discharge Elimination System NWRI National Water Research Institute O&M Operations and Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District GOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration POTW Publicly Owned Treatment Works ppm Parts per million RFP Request For Proposal RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency Glossary of Terms and Abbreviations SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board SAWPA Santa Ana Watershed Project Authority SCADA Supervisory Control and Data Acquisition system SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SSMP Sanitary Sewer Management Plan SSO Sanitary Sewer Overflow SWRCB State Water Resources Control Board TDS Total Dissolved Solids TMDL Total Maximum Daily Load TSS Total Suspended Solids WDR Waste Discharge Requirements WEF Water Environment Federation WERF Water Environment Research Foundation Activated-sludge process — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved nutrients in the wastewater. Benthos— The community of organisms, such as sea stars, worms and shrimp, which live on, in, or near the seabed, also know as the benthic zone. Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farm land or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. Collections system — In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. Certificate of Participation (COP) —A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Glossary of Terms and Abbreviations Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (D!f) — the dilution at which the majority of the people detect the odor becomes the DrT for that air sample. Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect"). Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons a day of drinking quality water to replenish the local groundwater supply. Levels of Service (LOS)—Goals to support environmental and public expectations for performance. NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S. Environmental Protection Agency (EPA). NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation in order to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility. Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant. Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban run-off. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge—Untreated solid material created by the treatment of wastewater. Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater. Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Glossary of Terms and Abbreviations Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed —A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed.