HomeMy WebLinkAbout11-14-2018 Administration Committee Agenda11/14/2018 Administration Committee Agenda Page 1 of 4
Orange County Sanitation District
Regular Meeting of the ADMINISTRATION COMMITTEE
Wednesday, November 14, 2018 5:00 P.M. Administration Building Board Room
10844 Ellis Avenue Fountain Valley, CA (714) 593-7433
AGENDA CALL TO ORDER:
PLEDGE OF ALLEGIANCE: DECLARATION OF QUORUM: (Clerk of the Board)
PUBLIC COMMENTS: If you wish to address the Committee on any item, please complete a
Speaker’s Form (located at the table outside of the Board Room) and submit it to the Clerk of the Board or notify the Clerk of the Board the item number on which you want to speak. Speakers will be recognized by
the Chairman and are requested to limit comments to three minutes. REPORTS: The Committee Chair and the General Manager may present verbal reports on
miscellaneous matters of general interest to the Committee Members. These reports are for information
only and require no action by the Committee.
CONSENT CALENDAR: The Consent Calendar Items are considered to be routine and will be
enacted, by the Committee, after one motion, without discussion. Any items withdrawn from the Consent
Calendar for separate discussion will be considered in the regular order of business. 1. APPROVAL OF MINUTES (Clerk of the Board)
RECOMMENDATION: Approve Minutes of the October 10, 2018 Administration
Committee Meeting. 2. UPGRADE OF TIMECARD SOFTWARE (WORKFORCE) (Lorenzo Tyner)
RECOMMENDATION: A. Authorize a Purchase Order Contract to WorkForce Software for the upgrade of WorkForce, for a total amount not to exceed $119,475; and
B. Approve a contingency of $23,895 (20%).
11/14/2018 Administration Committee Agenda Page 2 of 4
3. MICROSOFT ENTERPRISE LICENSE AGREEMENT (ELA) FOR MICROSOFT ENTERPRISE SOFTWARE LICENSES (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to:
A. Authorize a Purchase Order for a three-year contract to purchase Microsoft
Enterprise licenses under the Microsoft ELA in accordance with Microsoft Volume Enterprise Enrollment – for State and Local government, Riverside County Master Licensing Agreement 01E73970, payable annually and with a contract expiration date of December 31, 2021, for a total amount not to
exceed $1,335,952; and
B. Approve a contingency of $200,393 (15%).
4. GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to:
A. Receive and file Orange County Sanitation District purchases made under
the General Manager’s authority for the period of July 1, 2018 to September
30, 2018; and
B. Approve the following additions to the pre-approved OEM Sole Source List for the period of July 1, 2018 to September 30, 2018:
• EVOQUA WATER TECHNOLOGIES - Evoqua DI Water System Service
• INTERNATIONAL SOCIETY OF AUTOMATION (ISA) - On-site
Instrumentation Technician Training
• POLYCHEM SYSTEMS - Gearboxes
NON-CONSENT: 5. CONTRACTED INTERNAL AUDITS TO REVIEW ORANGE COUNTY SANITATION DISTRICT’S PROCUREMENT CARD PROGRAM (Lorenzo Tyner)
RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the October 1, 2018 agreed-upon procedures review of the Orange County Sanitation District’s Procard program for fiscal years 2015-2016
and 2016-2017 performed by the White Nelson Diehl Evans, Certified Public Accountants.
11/14/2018 Administration Committee Agenda Page 3 of 4
6. ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FOR THE YEAR END JUNE 30, 2018. (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to:
Receive and file the Orange County Sanitation District’s Comprehensive Annual Financial Report for the year ended June 30, 2018, prepared by staff and audited by Macias Gini & O’Connell LLP (MGO), Certified Public Accountants, along with the following reports prepared by MGO:
A. Report to the Board of Directors; and B. Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets.
7. CONSOLIDATED FINANCIAL REPORT FOR FIRST QUARTER ENDED SEPTEMBER 30, 2018 (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to:
Receive and file the Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2018. INFORMATION ITEMS:
8. ORANGE COUNTY SANITATION DISTRICT RESEARCH PROGRAM (Rob Thompson) DEPARTMENT HEAD REPORTS:
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY:
ADJOURNMENT:
The next Administration Committee meeting is scheduled for Wednesday,
December 12, 2018 at 5:00 p.m.
11/14/2018 Administration Committee Agenda Page 4 of 4
Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board’s office at (714) 593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted outside the main gate of the Sanitation District’s Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all, or a majority of the Board of Directors, are available for public inspection in the office of the Clerk of the Board. Agenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A. Lore, MMC Clerk of the Board (714) 593-7433 klore@ocsd.com For any questions on the agenda, Committee members may contact staff at: General Manager James Herberg (714) 593-7300 jherberg@ocsd.com Assistant General Manager Lorenzo Tyner (714) 593-7550 ltyner@ocsd.com Assistant General Manager Rob Thompson (714) 593-7310 rthompson@ocsd.com Director of Environmental Services James Colston (714) 593-7450 jcolston@ocsd.com Director of Human Resources Celia Chandler (714) 593-7202 cchandler@ocsd.com
10/10/2018 Administration Committee Minutes Page 1 of 5
MINUTES OF THE ADMINISTRATION COMMITTEE
Orange County Sanitation District Wednesday, October 10, 2018 at 5:00 P.M.
A regular meeting of the Administration Committee of the Orange County Sanitation
District was called to order by Committee Chairman Wanke on October 10, 2018 at
5:02 p.m. in the Administration Building of the Orange County Sanitation District. Committee Chairman Wanke led the Flag Salute.
A quorum was declared present as follows:
COMMITTEE MEMBERS PRESENT: Chad Wanke, Chairman Donald P. Wagner, Vice-Chairman Peter Kim
Al Krippner (Alternate)
Richard Murphy Steve Nagel Glenn Parker Erik Peterson
Sal Tinajero
Teresa Smith Greg Sebourn, Board Chairman David Shawver, Board Vice-Chairman
COMMITTEE MEMBERS ABSENT:
James Ferryman
STAFF PRESENT: Rob Thompson, Assistant General Manager Lorenzo Tyner, Assistant General Manager Celia Chandler, Director of Human Resources
Jim Colston, Director of Environmental Services
Kelly Lore, Clerk of the Board Stephanie Barron Jennifer Cabral Rod Collins
Al Garcia
Tom Grant Lori Karaguezian Laura Maravilla Kathy Millea
Jeffrey Mohr
Andrew Nau Adam Nazaroff Man Nguyen Sang Paik
Ddaze Phuong
John Swindler Tyler Ramirez
OTHERS PRESENT:
Brad Hogin, General Counsel
PUBLIC COMMENTS:
None.
ITEM NO. 1
10/10/2018 Administration Committee Minutes Page 2 of 5
REPORTS: Assistant General Manager Lorenzo Tyner did not provide a report.
CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board)
MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the September 12, 2018 Administration Committee Meeting. AYES: Kim, Murphy, Nagel, Nguyen, Parker, Peterson, Sebourn, Shawver, T. Smith, Wagner and Wanke
NOES: None
ABSTENTIONS: None ABSENT: Ferryman and Tinajero
2. PHYSICAL AND BIOGEOCHEMICAL MODELING SUPPORT PROJECT (James Colston) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of
Directors to: Approve a Service Agreement to the Southern California Coastal Water Research Project (SCCWRP) to provide physical and biogeochemical modeling of the Orange County Sanitation District’s ocean discharge for the period of October 1,
2018 to September 30, 2021, for a total amount not to exceed $248,000, in a form approved by General Counsel. AYES: Kim, Murphy, Nagel, Nguyen, Parker, Peterson, Sebourn, Shawver, T. Smith, Wagner and Wanke
NOES: None
ABSTENTIONS: None ABSENT: Ferryman and Tinajero
3. RENEWAL OF ESRI GIS ENTERPRISE LICENSE AGREEMENT SUBSCRIPTION AND SUPPORT (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of
Directors to:
A. Approve the renewal of the ESRI GIS Enterprise License Agreement for a three-year period commencing December 31, 2018 through December 30, 2021 for a total amount not to exceed $317,000; and B. Approve a contingency of $15,850 (5%).
AYES: Kim, Murphy, Nagel, Nguyen, Parker, Peterson, Sebourn, Shawver, T. Smith, Wagner and Wanke
10/10/2018 Administration Committee Minutes Page 3 of 5
NOES: None
ABSTENTIONS: None ABSENT: Ferryman and Tinajero NON-CONSENT:
4. 2018 BENEFITS PROGRAM – ONE-TIME FUND REALLOCATION
(Celia Chandler) Director of Human Resources Celia Chandler provided information as to the additional amount requested due to: account administration fees billed since 2015,
employee enrollment changes, and retirement benefit costs (rates not determined
until after the budget approval). Mr. Tyner and Ms. Chandler responded to questions from the committee regarding the failure to bill, Benefit Administrator RFP, retiree benefit costs and the number of retirees, providing a more accurate analysis and conservative estimate in the future, and offsetting the costs within
other salary and benefit line items. Mr. Tyner will add the actual fund balance
adjustments in the information that will be provided to the Board of Directors. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Approve a one-time reallocation from the 2018 operating budget in
the amount of $1,360,000 to be transferred to group health insurance benefits,
resulting in a change in the total cost from $11,135,903 to $12,495,903. The reallocation would not result in an increase to the overall 2018 budget. AYES: Kim, Murphy, Nagel, Nguyen, Parker, Peterson, Sebourn,
Shawver, T. Smith, Wagner and Wanke NOES: None
ABSTENTIONS: None
ABSENT: Ferryman and Tinajero
Director Sal Tinajero arrived at the meeting at 5:21 p.m. during discussion on Item No. 5. 5. RIGHT OF WAY AND PROPERTY MANAGEMENT SERVICES (Lorenzo Tyner)
Committee Chairman Wanke and Mr. Tyner provided a brief overview to the item and the need for this specialized service. In response to questions, Mr. Tyner will look into the possibility of partnering with other agencies to share the cost of services; and will provide an analysis of the use of this contract to the Board of
Directors at the end of the contract. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to:
A. Approve Amendment No. 1 to the Professional Consultant Services
Agreement with Paragon Partners Ltd. for Right of Way and Property Management Services, for a total amount not to exceed $205,000;
10/10/2018 Administration Committee Minutes Page 4 of 5
B. Approve the amended, not to exceed amount of $205,000 to be carried into the existing Agreement’s two (2) six-month renewal options; and C. Approve a total contingency of $20,500 (10%).
AYES: Kim, Murphy, Nagel, Nguyen, Parker, Peterson, Sebourn, Shawver, T. Smith, Tinajero, Wagner and Wanke NOES: None ABSTENTIONS: None ABSENT: Ferryman Board Vice Chairman Shawver stepped out of the meeting at 5:22 p.m.
6. SOLE SOURCE CHANGE ORDER REQUEST (Celia Chandler) Ms. Chandler provided a brief overview of the requested item.
MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Approve an increase to an existing contractual sole source agreement with Payne & Fears LLP in the amount of $110,000, resulting in a change in the total cost from $90,000 to $200,000.
AYES: Kim, Murphy, Nagel, Nguyen, Parker, Peterson, Sebourn, T. Smith, Tinajero, Wagner and Wanke NOES: None
ABSTENTIONS: None ABSENT: Ferryman and Shawver
Board Vice Chairman Shawver re-entered the meeting at 5:24 p.m.
INFORMATION ITEMS:
7. CYBER SECURITY UPDATE (Lorenzo Tyner) John Swindler, IT Systems & Operations Manager; Sang Paik, Principal IT Analyst;
and Man Nguyen, IT Analyst III, provided an informative PowerPoint presentation regarding Cyber Security including: Cyber Trends, IT Security in the Public Sector, Risk and Security Assessments, Threat Intelligence, OCSD Security Awareness & Training Program, Incident Response, and best practices.
Chair Wanke stated that he had recently attended DEF CON and had previewed a hack attack and described infrastructure and smart cities. He thanked staff for their efforts and acknowledged their thoroughness. 8. ORANGE COUNTY SANITATION DISTRICT SAFETY AND SECURITY
(Celia Chandler) Rod Collins, Safety and Risk Management Supervisor, provided an informative PowerPoint presentation regarding the programs of OCSD safety and security
10/10/2018 Administration Committee Minutes Page 5 of 5
including: Risk Identification, Facility Wide Safety Assessment and Improvements Made, OSHA Required Training, Voluntary Protection Program, Physical Security, Contract Security Services, and Centralized Monitoring Station.
Mr. Collins and Ms. Chandler responded to questions and concerns from the Committee including: obtaining Fire Authority and building permits prior to building changes and security measures at the Orange County Water District.
9. HEADQUARTERS COMPLEX, SITE AND SECURITY, AND ENTRANCE REALIGNMENT PROGRAM, PROJECT NO. P1-128 (Rob Thompson) Assistant General Manager Rob Thompson provided a PowerPoint presentation depicting the concept layout of the Complex and noted the Laboratory will not be
included in this complex. Mr. Thompson responded to questions and suggestions
from the Committee including: ADA compliance; inclusion of all staff to provide feedback and input into the design; Mt. Langley property 5-year plan and long-term use; and concerns over the Boardroom glass window.
Board Chairman Sebourn announced that an Ad Hoc Committee had been created
to review the design of the Headquarters Complex. CLOSED SESSION:
None.
DEPARTMENT HEAD REPORTS: None.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None.
ADJOURNMENT: Chair Wanke declared the meeting adjourned at 6:12 p.m. to the next regularly scheduled meeting of Wednesday, November 14, 2018 at 5:00 p.m.
Submitted by:
_____________________ Kelly A. Lore, MMC Clerk of the Board
Page 1 of 3
ADMINISTRATION COMMITTEE Meeting Date
11/14/18
To Bd. of Dir.
--
AGENDA REPORT Item Number 2 Item Number --
Orange County Sanitation District
FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: UPGRADE OF TIMECARD SOFTWARE (WORKFORCE)
GENERAL MANAGER'S RECOMMENDATION A. Authorize a Purchase Order Contract to WorkForce Software for the upgrade of WorkForce, for a total amount not to exceed $119,475; and
B. Approve a contingency of $23,895 (20%). BACKGROUND
WorkForce Software is a Time and Attendance application used by all Orange County
Sanitation District (Sanitation District) employees. The software was installed in 2006 and has gone through minor upgrades. The system provides employees with direct access to their online timesheets and the ability to request time off. The system also reduces payroll errors and improves accuracy, provides attendance tracking, and
compliance with labor laws such as the Family and Medical Leave Act. The Sanitation
District’s current version of the software is near the end of it product life cycle. To properly maintain support and stay current, the IT division is required to upgrade to the latest version of WorkForce. The new version will provide the Sanitation District with
multiple benefits:
• Support for latest browser and database systems for enhanced security
• New layouts to view timesheets, schedule, and leave bank balances
• Visual indicator to identify the specific items that cause exceptions
• Integration with the Outlook calendar to facilitate Maximo Planning and Scheduling
The total costs to upgrade are listed below, as quoted by WorkForce Software:
• $32,400 Milestone #1 – Kickoff Meeting
• $21,600 Milestone #3 – Delivery of Configuration Package and Documentation
• $32,400 Milestone #5 – Acceptance Testing Completed
• $21,600 Milestone #6 – First End of Period Processing
• $11,475 Enhancements
• $119,475 Total Costs
Page 2 of 3
RELEVANT STANDARDS
• Maintain a culture of improving efficiency to reduce the cost to provide the current
service level or standard
• Comply with Resolution No. OCSD 18-18; Policy Section 3.0 – Attendance & Leave Time
PROBLEM The support for the Sanitation District’s current version of the software will expire on December 31, 2018. Extended support is available for an additional year, but at an
additional cost. There is no charge for extended support if the Sanitation District is in contract with WorkForce to upgrade the current system. PROPOSED SOLUTION
Upgrade to the latest version of the software to maintain continued support and software
enhancements from WorkForce Software. TIMING CONCERNS
The upgrade must be started prior to December 31, 2018 to prevent the Sanitation District
from going into extended support at an additional cost. RAMIFICATIONS OF NOT TAKING ACTION
Not upgrading the software will cause the Sanitation District to lose support and software
enhancements from WorkForce Software and consequently negatively impact the stated relevant standards. PRIOR COMMITTEE/BOARD ACTIONS
December 2016 - Board of Directors approved Workforce – Time Entry as a pre-approved proprietary service provider.
November 2005 - Board of Directors authorized the General Manager to finalize
negotiations and subsequently award a contract to WorkForce Software for Time Entry, Specification No. CS-2005-216BD, for technical consulting, implementation support and software purchase in the amount of $146,625, and a contingency of $28,375, for a total amount not to exceed $175,000.
ADDITIONAL INFORMATION N/A
Page 3 of 3
CEQA N/A
FINANCIAL CONSIDERATIONS
This request complies with authority levels of the Sanitation District's Purchasing Ordinance. The items are budgeted in the FY18/19 annual budget Section 8, Page 10.
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the
complete agenda package:
N/A
Page 1 of 3
ADMINISTRATION COMMITTEE Meeting Date 11/14/18 To Bd. of Dir. 11/28/18
AGENDA REPORT Item Number 3 Item Number
Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: MICROSOFT ENTERPRISE LICENSE AGREEMENT (ELA) FOR
MICROSOFT ENTERPRISE SOFTWARE LICENSES GENERAL MANAGER'S RECOMMENDATION A. Authorize a Purchase Order for a three-year contract to purchase Microsoft
Enterprise licenses under the Microsoft ELA in accordance with Microsoft Volume Enterprise Enrollment – for State and Local government, Riverside County Master Licensing Agreement 01E73970, payable annually and with a contract expiration date of December 31, 2021, for a total amount not to exceed $1,335,952; and
B. Approve a contingency of $200,393 (15%). BACKGROUND The Orange County Sanitation District (Sanitation District) relies on various Microsoft
products for key components of its software architecture, for example: Windows desktop and server operating systems, email and calendaring, Office suite, web servers, databases, and cyber defense software. Renewal of the Microsoft ELA ensures that the Sanitation District receives the best pricing
on software purchases and subscriptions while staying compliant with software license agreements and copyright law. Other benefits include access to the latest security patches and feature updates as well as centralized license management, records management, and tools to fulfill public records act requests.
Staff is requesting a contingency of 15% to cover any additional Microsoft licensing required during this three-year contract. Additional licenses may be required to comply with contractor staffing changes and new system implementations. This contingency level is consistent with past requests for Microsoft agreements.
RELEVANT STANDARDS
• Protect Orange County Sanitation District assets
• Sound engineering and accounting practices, complying with local, state, and federal laws
Page 2 of 3
PROBLEM The existing Microsoft ELA expires December 31, 2018. The Sanitation District needs
the licensing to stay current on the latest supported and secure versions of the software. PROPOSED SOLUTION Renew the Sanitation District’s Microsoft ELA for three years.
TIMING CONCERNS Renewal of the Microsoft ELA should occur prior to December 31, 2018 to maintain compliance of the software license agreement with Microsoft.
RAMIFICATIONS OF NOT TAKING ACTION Access to Office365 and e-mail would lapse, and updates would become unavailable for the rest of the licensed software.
PRIOR COMMITTEE/BOARD ACTIONS
November 2015 - Board of Directors authorized a Purchase Order with a three-year contract to purchase Microsoft Enterprise licenses under the Microsoft ELA in accordance
with Microsoft Volume Enterprise Enrollment – for State and local government, Riverside
County Master Licensing Agreement 01E73134, payable annually and with contract expiration date of December 31, 2018 for a total amount not to exceed $874,556.22; and approved a contingency of 15% ($131,183.43).
ADDITIONAL INFORMATION
The County of Riverside negotiated a contract for an ELA with Microsoft to be used by any government agency in the State of California. There are over 100 public agencies in
California currently using this contract. The cost to purchase the licenses needed by the Sanitation District without the ELA would be an additional $546,455, for a total of $1,882,407.
CEQA N/A BUDGET / PURCHASING ORDINANCE COMPLIANCE
This request complies with authority levels of the Sanitation District's Purchasing Ordinance. The items are budgeted in the FY18/19 annual budget Section 8, Page 10.
Page 3 of 3
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package:
• Insight MS EA Quote Request
11/7/2018 Page 1 of 2
Orange County Sanitation District
August 15, 2018
MA-017-17011185
Microsoft Enterprise Agreement - Government (USD)
Enrollment Renewal Preliminary
MFG Part Number Product Name Product Type Price Qty Extended
Price ERP
Enterprise Products 1AAA-11984 M365 E3 FromSA GCC ShrdSvr ALNG SubsVL MVL PerUsr Monthly Subscription 249.09$ 640 159,417.60$ 372.00$ AAA-11982 M365 E3 GCC ShrdSvr ALNG SubsVL MVL PerUsr Monthly Subscription 303.14$ 60 18,188.40$ 432.00$ T2N-00005 O365GCCE5 ShrdSvr ALNG SU MVL O365GCCE3 PerUsr Monthly Subscription 147.92$ 700 103,544.00$ 204.00$ 269-05623 OfficeProPlus ALNG LicSAPk MVL License/Software Assurance Pack 160.24$ 110 17,626.40$ 231.00$ Additional Products076-01912 Prjct ALNG SA MVL Software Assurance 97.23$ 70 6,806.10$ 141.00$ H30-00238 PrjctPro ALNG SA MVL w1PrjctSvrCAL Software Assurance 162.05$ 5 810.25$ 232.00$ D87-01159 VisioPro ALNG SA MVL Software Assurance 83.18$ 44 3,659.92$ 121.00$ D86-01253 VisioStd ALNG SA MVL Software Assurance 43.03$ 116 4,991.48$ 62.00$ MX3-00117 VSEntSubMSDN ALNG SA MVL Software Assurance 976.03$ 6 5,856.18$ 1,287.00$ 77D-00111 VSProSubMSDN ALNG SA MVL Software Assurance 279.52$ 2 559.04$ 369.00$ 9GS-00135 CISSteDCCore ALNG SA MVL 2Lic CoreLic Software Assurance 151.32$ 258 39,040.56$ 200.00$ 9GA-00310 CISSteStdCore ALNG SA MVL 16Lic CoreLic Software Assurance 249.54$ 39 9,732.06$ 324.00$ 7JQ-00341 SQLSvrEntCore ALNG LicSAPk MVL 2Lic CoreLic License/Software Assurance Pack 4,775.21$ 8 38,201.68$ 6,295.00$ H04-00268 SharePointSvr ALNG SA MVL Software Assurance 1,011.99$ 3 3,035.97$ 1,459.00$ 7JQ-00343 SQLSvrEntCore ALNG SA MVL 2Lic CoreLic Software Assurance 2,046.53$ 12 24,558.36$ 2,698.00$ 7NQ-00302 SQLSvrStdCore ALNG LicSAPk MVL 2Lic CoreLic License/Software Assurance Pack 1,245.31$ 2 2,490.62$ 1,642.00$ 7NQ-00292 SQLSvrStdCore ALNG SA MVL 2Lic CoreLic Software Assurance 533.71$ 4 2,134.84$ 704.00$ 126-00196 VSTeamFndtnSvrCAL ALNG SA MVL UsrCAL Software Assurance 66.37$ 8 530.96$ 88.00$ 6VC-01254 WinRmtDsktpSrvcsCAL ALNG SA MVL UsrCAL Software Assurance 19.58$ 150 2,937.00$ 26.00$ J5U-00001 AzureMntryCmmtmntG ShrdSvr ALNG SubsVL MVL Cmmt Monthly Subscription 1,195.80$ 1 1,195.80$ 1,200.00$
Annual Total:445,317.22$
Three Year Total:1,335,951.66$
True Up Pricing:
MFG Part Number Product Name Product Type Year 1 Year 2 Year 3
Enterprise Products269-05623 OfficeProPlus ALNG LicSAPk MVL License/Software Assurance Pack 443.44$ 368.86$ 294.34$ Additional Products076-01776 Prjct ALNG LicSAPk MVL License/Software Assurance Pack 578.44$ 481.22$ 383.99$ H30-00237 PrjctPro ALNG LicSAPk MVL w1PrjctSvrCAL License/Software Assurance Pack 964.03$ 801.99$ 639.94$ D87-01057 VisioPro ALNG LicSAPk MVL License/Software Assurance Pack 494.76$ 411.58$ 328.41$ D86-01175 VisioStd ALNG LicSAPk MVL License/Software Assurance Pack 256.01$ 212.98$ 169.95$ MX3-00115 VSEntSubMSDN ALNG LicSAPk MVL License/Software Assurance Pack 5,805.56$ 4,829.52$ 3,853.49$
EA Renewal Thank you for the opportunity to quote.
11/7/2018 Page 2 of 277D-00110 VSProSubMSDN ALNG LicSAPk MVL License/Software Assurance Pack 817.25$ 537.74$ 258.22$ 9GS-00495 CISSteDCCore ALNG LicSAPk MVL 2Lic CoreLic License/Software Assurance Pack 983.56$ 832.24$ 680.93$ 9GA-00308 CISSteStdCore ALNG LicSAPk MVL 16Lic CoreLic License/Software Assurance Pack 1,622.00$ 1,372.47$ 1,122.93$ H04-00232 SharePointSvr ALNG LicSAPk MVL License/Software Assurance Pack 6,577.68$ 5,565.69$ 4,553.71$ 7JQ-00341 SQLSvrEntCore ALNG LicSAPk MVL 2Lic CoreLic License/Software Assurance Pack 13,302.36$ 11,255.83$ 9,209.29$ 7NQ-00302 SQLSvrStdCore ALNG LicSAPk MVL 2Lic CoreLic License/Software Assurance Pack 3,469.06$ 2,935.35$ 2,401.65$ 126-00169 VSTeamFndtnSvrCAL ALNG LicSAPk MVL UsrCAL License/Software Assurance Pack 431.17$ 364.80$ 298.43$ 6VC-01252 WinRmtDsktpSrvcsCAL ALNG LicSAPk MVL UsrCAL License/Software Assurance Pack 127.37$ 107.79$ 88.21$
Step UpsH30-00910 PrjctPro ALNG SASU MVL PrjctStd w1PrjctSvrCAL License/Software Assurance Pack 385.60$ 320.77$ 255.95$ D87-02227 VisioPro ALNG SASU MVL VisioStd License/Software Assurance Pack 238.75$ 198.60$ 158.45$ 9GS-00131 CISSteDCCore ALNG SASU MVL 16Lic CISStdCore CoreLic License/Software Assurance Pack 6,246.90$ 5,285.90$ 4,324.91$ 7JQ-00448 SQLSvrEntCore ALNG SASU MVL 2Lic SQLSvrStdCore CoreLic License/Software Assurance Pack 9,833.30$ 8,320.48$ 6,807.64$
Additional Monthly Subscriptions:
MFG Part Number Product Name Product Type Monthly Price (Reference)
Enterprise Products 1
AAA-11982 M365 E3 GCC ShrdSvr ALNG SubsVL MVL PerUsr Monthly Subscription 25.26$
T2N-00005 O365GCCE5 ShrdSvr ALNG SU MVL O365GCCE3 PerUsr Monthly Subscription 12.33$
Additional Products
J5U-00001 AzureMntryCmmtmntG ShrdSvr ALNG SubsVL MVL Cmmt Monthly Subscription 99.65$
3GU-00001 O365ATPGCC ShrdSvr ALNG SubsVL MVL PerUsr Monthly Subscription 1.34$
GLN-00001 O365ThreatIntelligenceGCC ShrdSvr ALNG SubsVL MVL PerUsr Monthly Subscription 5.33$
EA Renewal Thank you for the opportunity to quote.
Page 1 of 5
ADMINISTRATION COMMITTEE Meeting Date 11/14/18 To Bd. of Dir. 11/28/18
AGENDA REPORT Item Number 4 Item Number
Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO
THE PRE-APPROVED OEM SOLE SOURCE LIST GENERAL MANAGER'S RECOMMENDATION A. Receive and file Orange County Sanitation District purchases made under the
General Manager’s authority for the period of July 1, 2018 to September 30, 2018; and B. Approve the following additions to the pre-approved OEM Sole Source List for the
period of July 1, 2018 to September 30, 2018:
• EVOQUA WATER TECHNOLOGIES - Evoqua DI Water System Service
• INTERNATIONAL SOCIETY OF AUTOMATION (ISA) - On-site Instrumentation Technician Training
• POLYCHEM SYSTEMS - Gearboxes BACKGROUND Orange County Sanitation District staff provides the Administration Committee and the Board of Directors quarterly reports of General Manager approved and executed purchases between $50,000 and $100,000; maintenance and repair Services Task
Orders between $50,000 and $300,000; and additions to the pre-approved OEM Sole Source List. The list of additions to the pre-approved OEM Sole Source List displays the original equipment manufacturers (OEM) added this quarter that require sole source procurement
to maintain, service, or replace equipment currently in operation at District facilities, because the parts and/or service can only be provided by the OEM or their designated representative. RELEVANT STANDARDS
• Quarterly Financial Reporting
• Ensure the public’s money is wisely spent
Page 2 of 5
PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Board of Directors authorized the General Manager to ratify additions
or deletions to the OEM Sole Source list on the General Manager’s quarterly approved
purchases agenda report. ADDITIONAL INFORMATION
In accordance with Board purchasing policies, Ordinance No. OCSD-52, the General Manager has authority to approve and execute purchases between $50,000 and $100,000. Below is a summary of General Manager approved purchases, in amounts exceeding $50,000, for the first quarter of fiscal year 2018-19:
Vendor Name Amount Department Description/Discussion
ADVANCED ELECTRICAL AND MOTOR
CONTROLS
$71,950.00 Operations & Maintenance
Critical Breaker Replacements for Lido, Bitter Point, and Slater Pump Stations (MP-425)
Specification No. E-2018-948
ARCADIS U.S. INC. $53,299.00 Human Resources
CalOSHA Voluntary Protection Program Readiness Assessment 7/10/18 to 7/9/19 with 4 Optional 1-year Renewal Periods Specification No. CS-2018-945
BLAIS & ASSOCIATES, INC. $87,600.00 General Manager's Office
Grant Services 7/10/18 to 7/9/19 with 4 Optional 1-year Renewal Periods
Specification No. CS-2018-920
CINTAS FIRE PROTECTION $95,000.00 Human Resources
District Wide Safety Training 7/1/18 to 3/31/19 US Communities Contract 12JLH-011C, in accordance with Ordinance OCSD-52, Section 2.03 (B) Cooperative Purchases
DYNTEK SERVICES INC $60,000.00 Administrative Services
Technology Consulting Services 10/14/18 to 10/13/19 GSA Contract GS-35F-0025N, in accordance with Ordinance OCSD-52, Section 2.03 (B) Cooperative Purchases
Page 3 of 5
Vendor Name Amount Department Description/Discussion
E&M ELECTRIC AND MACHINERY INC. $60,812.00 Administrative
Services
Annual Renewal for Premium-Level Support for the SCADA Computer System (Supervisory Control and Data Acquisition)
11/16/18 to 11/15/19 Board Approved OEM Sole Source List M.O. 12/14/16, Item 12
FIRE SERVICE
CORP. $69,251.50 Operations &
Maintenance
Maintenance, Inspection, and Repair of
Fire Sprinklers, Extinguishers, and Alarms 7/1/18 to 6/30/19 with 4 Optional 1-year Renewal Periods
Specification No. S-2018-894
KEENAN &
ASSOCIATES $90,000.00 Human
Resources
Third-Party Administrator for Workers'
Compensation Claims 7/1/18 to 6/30/19 with 4 Optional 1-year Renewal Periods
Specification No. S-2018-931
LIEBERT CASSIDY
WHITMORE $60,000.00 Human
Resources
Confidential Studies for Human Resources 7/1/18 to 6/30/19
Sole Source Justification 2018-1085 Reason: Unique Product/Service
MICROSOFT
CORPORATION $86,725.00 Administrative
Services
Premier Support for Software,
Maintenance, and Technical Support 9/17/18 to 9/16/19 Board Approved OEM Sole Source List
M.O. 12/14/16, Item 12
NORTH AMERICAN
CRANE COMPANY $55,583.00 Operations &
Maintenance
Plant No. 2 Dewatering Building Crane System Urgent Repairs
Sole Source Justification 2012 Reason: Time Sensitive Procurement
NORTH AMERICAN
CRANE COMPANY $69,047.00 Operations &
Maintenance
Recurring Inspection, Certification, and
Testing of Hoists and Cranes 7/1/18 to 6/30/19 with 4 Optional 1-year Renewal Periods
Specification No. S-2018-930-R
Page 4 of 5
Vendor Name Amount Department Description/Discussion
PMWEB, INC. $66,500.00 Administrative
Services
Annual Support and Maintenance for Project Management Information System (J-128)
8/1/18 to 7/31/19 Sole Source Justification 1977 Reason: Unique Product/Service
SPARKLETTS-
DALLAS $60,000.00 Administrative
Services
Convenience Blanket PO for Water Delivery to Plant 1 and 2
7/1/18 to 6/30/20 GM Article 2, Section 2.2 (b) (1)
TITUS INDUSTRIAL
GROUP, INC. $76,489.20 Operations &
Maintenance
Composite Water-Resistant Manhole Cover and Frame
Board Approved OEM Sole Source List M.O. 12/14/16, Item 12
Additionally, in accordance with Board purchasing policies, Ordinance No. OCSD-52, the General Manager has authority to approve and execute maintenance and repair Services
Task Orders between $50,000 and $300,000. Below is a summary of General Manager approved maintenance and repair Services Task Orders, in amounts exceeding $50,000, for the first quarter of fiscal year 2018-19:
Vendor Name Amount Department Description/Discussion
J R FILANC CONSTRUCTION $143,000.00 Operations & Maintenance
Plant 1 Central Generation Elevator Repair Task Order Bid TOB-2018-979 of
Master Service Contract S-2015-700-1
JAMISON
ENGINEERING CONTRACTORS INC
$55,054.00 Engineering Digester R Valves Replacement at Plant 2 Task Order Bid TOB-2018-966 of
Master Service Contract S-2015-700-4
SHIMMICK CONSTRUCTION
CO INC
$153,076.00 Operations & Maintenance
Plant 1 Primary Clarifier Hatch Seal
Replacement (MP-292) Task Order Bid TOB-2018-976 of Master Service Contract S-2015-700-8
Page 5 of 5
FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing
Ordinance. The items are budgeted in the FY 2018-2019 Annual budget. ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package:
N/A
Page 1 of 3
ADMINISTRATION COMMITTEE Meeting Date 11/14/18 To Bd. of Dir. 11/28/18
AGENDA REPORT Item Number 5 Item Number
Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: CONTRACTED INTERNAL AUDITS TO REVIEW ORANGE COUNTY
SANITATION DISTRICT’S PROCUREMENT CARD PROGRAM GENERAL MANAGER'S RECOMMENDATION Receive and file the October 1, 2018 agreed-upon procedures review of the Orange
County Sanitation District’s Procard program for fiscal years 2015-2016 and 2016-2017 performed by the White Nelson Diehl Evans, Certified Public Accountants. BACKGROUND
At the direction of the Administration Committee’s Audit Ad Hoc Committee, contracted internal auditors from White Nelson Diehl Evans (WNDE) were engaged by the Orange County Sanitation District (Sanitation District) to apply agreed-upon procedures in reviewing the Sanitation District’s purchasing policies and procedures as they relate to purchases utilizing the Procard, including authorizations required to obtain a Procard,
records required to substantiate Procard purchases, and authorizations required for purchases. Attached is the Independent Accountant’s Report from WNDE along with staff’s responses to the auditor’s findings and recommendations pertaining to their review.
In summary, review of the Procurement Card performed by WNDE resulted in no exceptions. However, WNDE did note seven recommendations. Staff concurred with all recommendations and have completed six remedies to date, with the seventh in progress. These recommendations were subsequently presented to the Audit Ad Hoc Committee.
ADDITIONAL INFORMATION Summary of recommendations:
1) Standard Operating Procedures Consistency Add all transaction and monthly limits information to the Procard SOP to be consistent with the Desktop Procedures. The Sanitation District should update the policies, so the two documents agree. District Concurs – Policy and Procedure have been updated.
Page 2 of 3
2) Exceptions District should either require Division 230 to follow the Procard SOP List of Exceptions or modify the Procard SOP to include this exclusion. The District concurs and has
excluded Division 230 from the List of Exceptions and updated its policies.
3) Furniture Purchase Ambiguity To remove the ambiguity of the definition of office furniture, the District should add some additional language to the Procard SOP that will provide a specific definition of
office furniture. The District concurs and has updated its policies and procedures.
4) Reconciliation Process Step 12b of this process describes items that should be uploaded by the Procard user during the monthly reconciliation process. Included in those items are the “receipt and
packing slip (if applicable) matching the description”. This statement indicates the
requirement to electronically attach invoices and packing slips for all purchases. It is recommended that the District require formal invoices for all purchases. The District concurs and has updated its policies and procedures.
5) Reconciliation Process
Step 12b describes “receipt and packing slip (if applicable) matching the description”. This statement indicates the requirement to electronically attach packing slips for all applicable purchases. During our review, some employees neither attached a packing slip nor indicated a reason for the lack of a packing slip in the expense description.
To confirm the receipt of internet orders and to follow the District’s policies and
procedures, we recommend that employees attach packing slips or indicate a reason for a lack of a packing slip for all internet purchases. The District concurs and has updated its policies and procedures.
6) Acronym Use
When reviewing the expense descriptions, it was noted that many acronyms are utilized, especially for various conferences and memberships. While it is possible to search for these acronyms on the internet and identify the entity or certification to which it was referring, it did take some time and research. For ease of employees
reviewing the Procard purchases made in different Divisions, the District should
consider requiring acronyms to be identified in the expense descriptions. The District concurs and has updated its policies and procedures. 7) Auditor Finding/Recommendation – Movie Ticket Purchases
There are no guidelines or policies directing the tracking or use of movie tickets. A
best practice would be for the District to have policies and procedures regarding the tracking and use of movie tickets. The District concurs, and Finance Staff will assist Human Resources in developing new policies and procedures.
Overall, the Audit Ad Hoc Committee concluded that no significant concerns regarding
the Procard program were uncovered by agreed-upon procedures performed by WNDE.
Page 3 of 3
RELEVANT STANDARDS
• Internal auditing conducted, approximately three per year
ATTACHMENT
The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package:
• Staff Report to Ad Hoc Audit Committee, “Responses to Agreed-Upon Procedures Review of the Procurement Card (ProCard) Program”
• “Agreed Upon Procedures Review – Procard Program” report from WNDE
OCSD ♦ P.O. Box 8127 ♦ Fountain Valley, CA 92728-8127 ♦ (714) 962-2411
October 1, 2018 STAFF REPORT TO: Ad Hoc Audit Committee FROM: Lorenzo Tyner, Assistant General Manager SUBJECT: Responses to Agreed-Upon Procedures Review of the Procurement Card
(ProCard) Program On October 1, 2018, White Nelson Diehl Evans (WNDE) issued their report on procedures they performed to review OCSD’s use of the Procurement Card (ProCard)
Program. Below is a listing of the auditors’ findings contained within their report, along with staff responses. 1) Auditor Finding/Recommendation – Standard Operating Procedures Consistency
Add all transaction and monthly limits information to the Procard SOP to be consistent with the Desktop Procedures. District should update the policies so the two documents agree. Staff Response – District Concurs Action – Update Policy and Procedure – Completed 2) Auditor Finding/Recommendation – Exceptions District should either require Division 230 to follow the Procard SOP List of
Exceptions or modify the Procard SOP to include this exclusion. Staff Response – The District concurs to exclude Division 230 from the List of Exceptions in the Procard SOP. Action – Update Policy and Procedure – Completed
Response to Contracted Internal Auditors Report on Search for Fictitious Employees
October 1, 2018
Page 2 of 3
3)Auditor Finding/Recommendation – Furniture Purchase AmbiguityTo remove the ambiguity of the definition of office furniture, the District should addsome additional language to the Procard SOP that will provide a specific definition of
office furniture.
Staff Response – The District concurs Action – Update Policy and Procedure – Completed
4)Auditor Finding/Recommendation – Reconciliation ProcessStep 12b of this process describes items that should be uploaded by the Procarduser during the monthly reconciliation process. Included in those items are the“receipt and packing slip (if applicable) matching the description”. This statement
indicates the requirement to electronically attach invoices and packing slips for all
purchases. It is recommended that the District require formal invoices for allpurchases.
Staff Response – The District concurs
Action – Update Policy and Procedure – Completed
5)Auditor Finding/Recommendation – Reconciliation ProcessStep 12b describes “receipt and packing slip (if applicable) matching the
description”. This statement indicates the requirement to electronically attach
packing slips for all applicable purchases. During our review, some employeesneither attached a packing slip nor indicated a reason for the lack of a packing slip inthe expense description. To confirm the receipt of internet orders and to follow theDistrict’s policies and procedures, we recommend that employees attach packing
slips or indicate a reason for a lack of a packing slip for all internet purchases.
Staff Response – The District concurs Action – Update Policy and Procedure – Completed
6)Auditor Finding/Recommendation – Acronym UseWhen reviewing the expense descriptions, it was noted that many acronyms areutilized, especially for various conferences and memberships. While it is possible tosearch for these acronyms on the internet and identify the entity or certification to
which it was referring, it did take some time and research. For ease of employees
reviewing the Procard purchases made in different Divisions, the District shouldconsider requiring acronyms to be identified in the expense descriptions.
Staff Response – The District concurs
Action – Update Policy and Procedure – Completed
Response to Contracted Internal Auditors Report on Search for Fictitious Employees
October 1, 2018
Page 3 of 3
7)Auditor Finding/Recommendation – Movie Ticket PurchasesThere are no guidelines or policies directing the tracking or use of movie tickets. A
best practice would be for the District to have policies and procedures regarding the
tracking and use of movie tickets.
Staff Response – The District concurs Action – Pending - Finance Staff will assist Human Resources in developing
ORANGE COUNTY SANITATION DISTRICT
AGREED-UPON PROCEDURES REVIEW
PROCARD PROGRAM
FOR FISCAL YEARS 2015-2016 AND 2016-2017
Pre
l
i
m
i
n
a
r
y
Dra
f
t
- 1 -
INDEPENDENT ACCOUNTANTS’ REPORT ON
APPLYING AGREED-UPON PROCEDURES
Board of Directors
Orange County Sanitation District
Fountain Valley, California
We have performed the procedures set forth in this report, which were agreed to by the management of
the Orange County Sanitation District, Fountain Valley, California (the District), for the fiscal years
2015-2016 and 2016-2017. The District’s management is responsible for establishing and maintaining
internal controls over the Procard program to ensure appropriate purchases are made in accordance
with the District’s policies and procedures. The sufficiency of these procedures is solely the
responsibility of the management of the District. Consequently, we make no representations regarding
the sufficiency of the procedures described below either for the purpose for which this report has been
requested or for any other purpose.
The procedures performed and the results of those procedures are as follows:
1. We will review the District’s purchasing policies and procedures as they relate to purchases
utilizing the Procard, including authorizations required to obtain a Procard, records required to
substantiate Procard purchases, and authorizations required for purchases.
Results:
We inspected the following policies and procedures provided by the District:
A. Contracts, Purchasing and Materials Management Standard Operating Procedure: Procurement
Cardholder Policy 401-1-06, hereafter referred to as the Procard SOP, and
B. Purchasing Desktop Procedure, OCSD Procard Administrator Procedures, hereafter referred to
as the Desktop Procedures.
Summary of Policies and Procedures
These policies and procedures included the following elements:
Authorization requirements for an employee to obtain a Procard
Procard dollar limits for single transactions and total monthly transactions by employee
category
Authorization requirements for Procard users to exceed the limits noted above, which
includes the following:
o Email of approval sent by the Division Head to the Procard Administrator
o Approval by the Contract, Purchasing, and Material Management Manager
Pre
l
i
m
i
n
a
r
y
Dra
f
t
- 2 -
Results (Continued):
Summary of Policies and Procedures (Continued)
Specifically prohibited purchases with a Procard unless approved, in writing, by the
Director of Finance and Administrative Services, which included the following: o Travel-related meals and incidentals (represents IRS per diem) o Cash advancements o Tuition reimbursements o Computer hardware or software (except by Division 250, Information Technology) o Office furniture o Fixed asset purchases o Capital equipment o Items currently stocked in the District’s warehouses o Facilities maintenance and repair services or parts or supplies o Professional services agreements o Public works contracts or agreements o Items established on an active blanket purchase order
Requirements for each Procard user’s monthly reconciliation of the Procard statements
utilizing the Procard online software including, but not limited to, the following: o Electronically attaching invoices and packing slips o Completing the expense description that should contain who, what, when, where,
and how o Completing the expense account coding
Procedure for the Procard Administrator’s (employee in the Contract, Purchasing, &
Material Management Division) review of Procard user’s monthly reconciliation, which
includes verification that appropriate supporting documentation was attached for each
transaction and all required data fields were completed by the Procard user
We noted that no specific approvals, such as invoice manual or electronic signatures, were required
for purchases made utilizing the Procard.
We utilized these policies and procedures when performing procedures 2 and 3 below.
Differences between the District’s Procard SOP and the District’s Desktop Procedures
During our review of the District’s policies and procedures over the Procard program, we noted
that the Procard SOP states that Procards have a $5,000 limit per transaction and a $5,000 limit per
month (per employee). However, the District’s Desktop Procedures states that the standard limits
are $5,000 per transaction and $5,000 per month (per employee), but also notes the following
exceptions to this policy:
IT staff have a $10,000 single transaction limit and a $50,000 monthly limit
Buyers and Directors have no single transaction limit and a $200,000 monthly limit
For the purposes of performing these procedures, we utilized the higher limits noted in the
District’s Desktop Procedures. To eliminate confusion between the Procard SOP and the Desktop
Procedures, we recommend the District update the policies so the two documents agree.
Pre
l
i
m
i
n
a
r
y
Dra
f
t
- 3 -
2. We will review the authorization documents pertaining to Procard issuance and verify all
employees who hold a Procard have received the required signatures indicating the appropriate
authorization has occurred.
Results:
Before acquiring a Procard, the user signs the District’s Procard agreement, which is required to be
approved by the employee’s Supervisor, Manager, Division Head, and Contract, Purchasing, and
Material Management Manager. A template of the District’s Procard agreement is included in
Attachment A.
Attachment B includes a list of employees and the corresponding single transaction and monthly
transaction limits held by District employees as of June 30, 2017. We inspected the authorization
documents for all employees included in this listing with no exceptions. In addition, the Procard
agreement indicates the single transaction and monthly transaction limits. We compared the limits
on the Procard agreement to the limits in the District’s Desktop procedures and noted four Procard
users that had limits in excess of the District’s Desktop procedures. However, these Procard limit
overages were approved in accordance with the District’s policies and procedures. Therefore, we
had no exceptions in performing this procedure.
3. We will select a sample of Procard purchases, based on sample size guidance from the American
Institute of Certified Public Accountants (AICPA), and test each purchase for key internal controls
related to authorization of Procard purchases. We will also review the purchase for compliance
with the District’s policies and procedures regarding Procard use.
Statistics of Sample Selected
We selected 40 monthly Procard statements from each fiscal year for a total sample size of
80 monthly Procard statements. The sample of 40 monthly Procard statements from fiscal year
2015-2016 resulted in testing 231 individual credit card transactions that totaled $88,898. The
sample of 40 monthly Procard statements from fiscal year 2016-2017 resulted in testing
345 individual credit card transactions that totaled $116,053.
Key Internal Controls and Compliance Items Tested
From our review of the District’s policies and procedures over Procard usage, noted in step 1, we
reviewed the following elements for each item selected:
Compared the single transaction and monthly transaction limits noted in the Desktop
Procedures and in the employee’s signed Procard agreement to the sample transactions.
Reviewed the goods or services purchased for propriety given the nature of the District’s
business.
Inspected invoices and packing slips (in the case of internet purchases) that supported the
purchase and verified the vendor, amount, and goods or services purchased agreed to the
monthly reconciliation performed by the employee and the monthly Procard statement.
Reviewed the expense description included by the Procard user to determine if it was
sufficiently description, which, according to the District’s Desktop Procedures requires
indication of who, what, when, where, and how.
Reviewed the expense account selected for reasonableness given the goods or services
purchased.
Verified the purchase was not one of the items specifically prohibited by the District’s
policies and procedures as noted in procedure 1.
Pre
l
i
m
i
n
a
r
y
Dra
f
t
- 4 -
Key Internal Controls and Compliance Items Tested (Continued)
One key control we noted was the Procard Administrator’s review of Procard user’s monthly
reconciliation, which includes verification that appropriate supporting documentation was attached
for each transaction and all required data fields were completed by the Procard user. This review is
documented electronically in the District’s online software. The Procard user prepares the monthly
reconciliation and places a checkmark in a box that communicates the transaction is ready for
review. Once the Procard Administrator reviews the transaction, they checkmark a box indicating it
has been reviewed. Once all transactions have been checked as prepared by the Procard user and
reviewed by the Procard Administrator, the file is electronically forwarded to the Finance Division
for payment. The electronic file cannot be forwarded to the Finance Division unless all transactions
have the box checked as prepared and reviewed, which is an automated control of the software
ensuring that all transactions have bene reviewed by the Procard Administrator. Once the file has
been forwarded to the Finance Division and the payment has been processed, the screen showing
the checkmark for preparation and review is no longer able to be inspected. Therefore, we were
unable to inspect the specific electronic checkmark indicating the Procard Administrator’s review
for the sample selected. This control was considered performed since the electronic file was able to
be forwarded to the Finance Division for processing the payment. We did perform a walkthrough
with the Purchasing Division and inspected this process occurring on a current credit card
transaction.
The remainder of this section will address any issues we noted when performing the tests noted on
the previous page.
Results - Exceptions:
Division 230 Excluded from the Procard Policy
The District’s Procard SOP identifies certain items that cannot be purchased with the Procard as
listed in procedure 1, which includes parts and supplies for plant maintenance. During our review
of the Procard transactions we noted such purchases made by the Contract, Purchasing, and
Material Management Division, Division 230. There were 10 transactions totaling $5,269 noted in
fiscal year 2015-2016 and no transactions noted in fiscal year 2016-2017. We inquired with
Division 230 if these purchases met the definition of the exception noted in procedure 1 for
“facilities maintenance and repair services or parts or supplies”. Division 230 notified us that their
Division was excluded from the rules of the Procard SOP and, therefore, they could purchase parts
and supplies for plant maintenance. However, during our review of the Procard SOP, we did not
note an exclusion of Division 230 to these policies and procedures. We recommend the District
either require Division 230 to follow the Procard SOP or modify the Procard SOP to include this
exclusion.
Purchase of Furniture
As noted in the procedure 1, Procards cannot to be used for the purchase of office furniture. During
our review of the Procard transactions, we noted the purchase of an awards cabinet for the Plant 2
operations reception area in an amount of $598, which appeared to be office furniture. Per our
discussion with the Division 230, the awards cabinet is considered minor furniture and not office
furniture and is, therefore, allowable by the Procard policies and procedures. To remove the
ambiguity of the definition of office furniture, we recommend the District add some additional
language to the Procard SOP that will provide a specific definition of office furniture.
Pre
l
i
m
i
n
a
r
y
Dra
f
t
- 5 -
Results - Exceptions (Continued):
Lack of Supporting Documents - Invoices
The District’s Desktop Procedures, Section C, step 12b describes items that should be uploaded by
the Procard user during the monthly reconciliation process. Included in those items are the “receipt
and packing slip (if applicable) matching the description”. This statement indicates the requirement
to electronically attach invoices and packing slips for all purchases. During our review of ProCard
purchases, we noted two different circumstances in which an invoice was not attached as support
for a purchase:
One employee had two identical purchases from Amazon of $161.70 each that were
charged on the same day. We inspected one invoice and one packing slip for one of the
purchases, but a second invoice and packing slip was not available for the second
purchase. Per our inquiry with the District, there was no refund in future credit card
statements for the second charge of $161.70. We were unable to inspect the supporting
documentation for the second charge.
One employee made a purchase from Orange County Fast Print for $845.84 for vehicle
inspection books for the collections Division. The support for this charge was an email
from the vendor containing a quote for the purchase; however, a formal invoice from
the vendor was not obtained and retained in the District’s records. This purchase also
did not contain a packing slip to verify receipt of the goods. We recommend the District
require formal invoices for all purchases.
Results - Observations:
General Overall Comment Regarding Expense Descriptions
The Desktop Procedures require that expense descriptions include who, what, when, where, and
how. We did note that all of these items were well documented for purchases that could be
considered more sensitive and subject to scrutiny, such as training registrations and purchases for
District events and meetings; however, most descriptions for other purchases do not include all of
these items.
When considering the divisions making the purchases and the items purchased, it may not be
necessary to include all of the elements of who, what, when, where, and how in order for the
description to be sufficient as noted in some of the more significant areas below.
The Information Technology Division often purchases various parts and licenses and do
not indicate for whom these items are for or how the items are to be used. Considering that
various users could benefit from licenses and parts could be used for various employees,
including whom or how the items are to be used may not be necessary.
The Plant Operations 1 and 2 Divisions purchase parts and supplies for plant operations
maintenance and often did not include where the item was utilized (for which piece of
equipment). When taking into account the Division is Plant Operations 1 or 2, this may be
sufficient to describe the location.
Pre
l
i
m
i
n
a
r
y
Dra
f
t
- 6 -
Results - Observations (Continued):
General Overall Comment Regarding Expense Descriptions (Continued)
Another example is when various supplies are purchased for a Division, such as spoons,
forks, and other miscellaneous items and how these items would be used for business
purposes was not included in the expense description. Given the nature of the items
purchased, it could be assumed that they are for employee use in break rooms or kitchens
and the how may be self-explanatory.
In addition, when reviewing the expense descriptions we noted that many acronyms are utilized,
especially for various conferences and memberships. While we were able to search for these
acronyms on the internet and identify the entity or certification to which it was referring, it did take
some time and research. For ease of employees reviewing the Procard purchases made in different
Divisions, the District should consider requiring acronyms to be identified in the expense
descriptions.
Movie Tickets for the Benefit of Employees
During our review of the ProCard transactions we noted the District purchases discounted movie
tickets for the benefit of employees to procure these at the cost to the District and to be distributed
for award purposes. In the sample selected, we noted six purchases of bulk movie tickets that
totaled $8,914 (for 1,020 movie tickets). Per our inquiry with the District, there are no guidelines or
policies directing the tracking or use of movie tickets. A best practice would be for the District to
have policies and procedures regarding the tracking and use of movie tickets.
Lack of Supporting Documents - Packing Slips
The District’s Desktop Procedures, Section C, step 12b describes items that should be uploaded by
the Procard user during the monthly reconciliation process. Included in those items are the “receipt
and packing slip (if applicable) matching the description”. This statement indicates the requirement
to electronically attach packing slips for all applicable purchases. During our review of ProCard
purchases, we noted that some employees were diligent in either attaching a packing slip for
internet orders or including a reason for a lack of a packing slip in the expense description.
However, some employees neither attached a packing slip nor indicated a reason for the lack of a
packing slip in the expense description. We noted 151 internet purchases that did not have packing
slips electronically attached or contain a reason for the lack of a packing slip in the expense
description. To confirm the receipt of internet orders and to follow the District’s policies and
procedures, we recommend that employees attach packing slips or indicate a reason for a lack of a
packing slip for all internet purchases.
Summary of Results and Disclaimer
To our knowledge, an external review of the Procard program has not been performed prior to this
engagement. We have no significant concerns regarding the Procard program. The items we noted in
this report are ways to provide clarification to existing policies and procedures and to improve a
program that already contains good processes and controls.
Pre
l
i
m
i
n
a
r
y
Dra
f
t
- 7 -
Summary of Results and Disclaimer (Continued)
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. We were not engaged to and did
not conduct an examination or review, the objective of which would be the expression of an opinion or
conclusion, respectively, on the Procard program. Accordingly, we do not express such an opinion or
conclusion. Had we performed additional procedures, other matters might have come to our attention
that would have been reported to you.
Restriction on the Use of This Report
This report is intended solely for the information and use of the Orange County Sanitation District
Board of Directors and management of the District, and is not intended to be, and should not be, used
by anyone other than those specified parties.
Irvine, California
DATE
Pre
l
i
m
i
n
a
r
y
Dra
f
t
ORANGE COUNTY SANITATION DISTRICT
AGREED-UPON PROCEDURES REVIEW
PROCARD PROGRAM
FOR FISCAL YEARS 2015-2016 AND 2016-2017
ATTACHMENT A
PROCARD USER AGREEMENT
PROCEDURE #2
Pre
l
i
m
i
n
a
r
y
Dra
f
t
Eff: 11/5/2015
Orange County Sanitation District
Employee Procurement Card Agreement
1. This agreement outlines the responsibilities I have as a holder of Orange County Sanitation District’s (OCSD) Procurement Card
(Procard).
2. I understand that the Procard is intended to facilitate the purchase and payments of goods and services for the conduct of OCSD
business, and is not for my personal use.
3. I understand that I will be responsible for the use of my Procard as outlined in the Contracts, Purchasing and Materials
Management Standard Operating Procedure (SOP) and misuse of the Procard, on my part, is grounds for (a) disciplinary measures that
may include termination and/or legal action, (b) permanent revocation of the Procard, and/or (c) direct payroll deduction for any
unauthorized or personal charges made on the Procard.
4. I understand that all charges will be billed directly to and paid directly by OCSD. I understand that -JPMorgan Chase, NA cannot
accept any payment from me directly.
5. I understand the Procard is issued in my name. I will not loan my Procard or Procard number to anyone else. I understand my
assigned Procard shall not leave OCSD premises unless utilizing card for District business. I understand that failure to adhere to this
requirement will result in removal of the card.
6. I understand that the Procard is the property of the OCSD and, therefore, I may be periodically required to comply with internal
control procedures designed to protect OCSD assets. This may include being asked to produce the Procard to verify its existence and
providing assistance in an audit review of its use.
7. I understand that I will receive a statement of purchase activity for the statement period. I am responsible for all charges on the
Procard (but not for payment), and I will resolve any discrepancies by either contacting the merchant/supplier or -JPMorgan Chase, NA.
I understand that I will be required to (i) obtain and retain a copy of the cash register receipt or packing slip, (ii) verify the receipt against
the statement, (iii) reconcile online and upload all receipts / packing slips for each transaction for the Procard Administrator, or
designated staff member, as determined by the Procard Administrator’s review.
8. I agree to code charges to budget accounts consistent with the types of purchases authorized by the manager(s) for those budget
accounts. If by doing so, additional budget authorization becomes necessary, I understand that I am responsible for obtaining any
additional budgetary authorization BEFORE the completion of monthly reconciliation.
9. I understand that the Procard must be surrendered if requested by OCSD for any reason and/or upon my termination of
employment from OCSD, or change of Division/Department.
My signature below indicates that my Supervisor, Manager, Department Head and I have read and understand my responsibilities as a
Procard holder, and that I agree to adhere to the guidelines established for the program as outlined in the Financial Management Policy
and Procedures, Procard Instruction Manual and this agreement. I also agree to be responsible for my Procard use (as intended by
OCSD) and authorize OCSD to deduct charges resulting from my misuse of the Procard, from my paycheck.
Employee Name Dept/Div:
(Please Print)
Employee Signature Date
Supervisor Name Dept/Div:
(Please Print)
Supervisor Signature Date
Manager Name ________ Dept/Div:
(Please Print)
Manager Signature Date
Dept. Head Name Dept/Div:
(Please Print)
Dept. Head Signature Date
Purchasing Manager Name Dept/Div:
(Please Print)
Purchasing Manager Signature Date
*NTE Transaction Limit: $5,000.00 *NTE Monthly Limit: $5,000.00
*In accordance with OCSD’s Procurement Card (Procard) Program Policy.
Pre
l
i
m
i
n
a
r
y
Dra
f
t
Employee Title Division Monthly Limit
Single Transaction
Limit
Executive Assistant Administrative Services 5,000 5,000
Office Assistant Board Services 5,000 5,000
Administrative Assistant Civil & Mechanical Engineering 5,000 5,000
Administrative Assistant Civil & Mechanical Engineering 5,000 5,000
Office Assistant Collection Facilities O&M 5,000 5,000
Materials Control Supervisor Contract, Purchasing, & Material Management 200,000 -
Buyer Contract, Purchasing, & Material Management 200,000 -
Buyer Contract, Purchasing, & Material Management 200,000 -
Administrative Assistant Contract, Purchasing, & Material Management 5,000 5,000
Purchasing Supervisor Contract, Purchasing, & Material Management 200,000 -
Senior Buyer Contract, Purchasing, & Material Management 200,000 -
Senior Buyer Contract, Purchasing, & Material Management 200,000 -
Buyer Contract, Purchasing, & Material Management 200,000 -
Contract/Purchasing Assistant Contract, Purchasing, & Material Management 5,000 5,000
Director of Environmental Svcs Environmental Services - *2,000 *
Executive Assistant Environmental Services 5,000 5,000
Lead Mechanic Fleet Services 5,000 5,000
General Manager General Management - *2,000 *
Secretary to General Manager General Management 5,000 5,000
Human Resources Assistant Human Resources 10,000 *10,000 *
Program Assistant Information Technology 50,000 10,000
Administrative Assistant Information Technology 50,000 10,000
Administrative Assistant Laboratory & Ocean Monitoring 5,000 5,000
Administrative Assistant Plant 1 Operations 5,000 5,000
Administrative Assistant Plant 2 Maintenance 5,000 5,000
Administrative Assistant Plant 2 Operations 5,000 5,000
Administrative Assistant Project Management Office 5,000 5,000
Public Affairs Supervisor Public Affairs 5,000 5,000
Administrative Assistant Public Affairs 10,000 *5,000
Administrative Assistant Resource Protection 5,000 5,000
Administrative Assistant Risk Management/Safety/Security 5,000 5,000
Occupational Health Nurse Risk Management/Safety/Security 5,000 5,000
Employee Title Approval by Division Head
Director of Environmental Svcs Director of Environmental Svcs
General Manager General Manager
Human Resources Assistant Director of Human Resources
Administrative Assistant Assistant General Manager
FISCAL YEAR 2015-2016 AND 2016-2017
PROCUREMENT CARD (PROCARD) PROGRAM
AGREED-UPON PROCEDURES REVIEW
ORANGE COUNTY SANITATION DISTRICT
* The limit exceeding the thresholds included in the District's "Purchasing Desktop Procedure: OCSD ProCard Administrator Procedures"
was approved in accordance with the District's "Contracts, Purchasing and Materials Management Standard Operating Procedure (SOP):
Procurement Cardholder Policy" 401-1-06 as follows:
PROCEDURE #2
LIST OF EMPLOYEES AND PROCARD LIMITS
ATTACHMENT B
The following employees held ProCards during fiscal year 2015-2016 and 2016-2017 and had the following limits as of June 30, 2017:
Yes
Approval by Contract, Purchasing, and
Material Management Manager
Yes
Yes
Yes
Pre
l
i
m
i
n
a
r
y
Dra
f
t
Page 1 of 1
ADMINISTRATION COMMITTEE Meeting Date 11/14/18 To Bd. of Dir. 11/28/18
AGENDA REPORT Item Number 6 Item Number
Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL
FINANCIAL REPORT (CAFR) FOR THE YEAR END JUNE 30, 2018 GENERAL MANAGER'S RECOMMENDATION Receive and file the Orange County Sanitation District’s Comprehensive Annual Financial Report for the year ended June 30, 2018, prepared by staff and audited by Macias Gini & O’Connell LLP (MGO), Certified Public Accountants, along with the following reports prepared by MGO:
A. Report to the Board of Directors; and B. Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets.
BACKGROUND The Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2018 is enclosed for the Committee's consideration. Included within the report are the Orange County Sanitation District’s financial statements for the year ended June 30, 2018, along
with the Independent Auditor’s Report that includes their unmodified opinion.
RELEVANT STANDARDS
• Produce appropriate financial reporting - Annual financial report and audit letter ATTACHMENT
The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website
(www.ocsd.com) with the complete agenda package:
• Report to the Board of Directors
• Independent Accountants’ Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets
• Comprehensive Annual Financial Report for the Year Ended June 30, 2018 (separately bound document & separate electronic file)
www.mgocpa.com
Macias Gini & O’Connell LLP 4675 MacArthur Court, Suite 600 Newport Beach, CA 92660
1
November 5, 2018
To the Board of Directors
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, California
We have audited the basic financial statements of the Orange County Sanitation District (the District) for
the year ended June 30, 2018. Professional standards require that we provide you with information about
our responsibilities under generally accepted auditing standards, as well as certain information related to
the planned scope and timing of our audit. We have communicated such information in our letter to you
dated June 6, 2018. Professional standards also require that we communicate to you the following
information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the District are described in Note 1 to the basic financial statements. As
described in Note 1 to the basic financial statements, the District implemented GASB Statement No. 75,
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (OPEB). The
implementation of GASB No. 75 resulted in a restatement of net position as of July 1, 2017, as listed in
Note 9 to the basic financial statements. Our opinion was not modified with respect to this matter. In
addition, the District implemented GASB Statement No. 81, Irrevocable Split Interest Agreements; GASB
Statement No. 85, Omnibus 2017; and GASB Statement No. 86, Certain Debt Extinguishment Issues.
However, implementation of these Standards did not materially impact the District. The District also early
adopted GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction
Period. Implementation of GASB Statement No. 89 resulted in a higher interest expense on the District’s
Statement of Revenues, Expenses and Changes in Net Position for the year ended June 30, 2018. The
application of existing policies was not changed during 2018.
We noted no transactions entered into by the District during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based
on management’s knowledge and experience about past and current events and assumptions about future
events. Certain accounting estimates are particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting them may differ significantly from
those expected. The most sensitive estimates affecting the District’s financial statements were:
Valuations of actuarially determined contributions, deferred outflows of resources, deferred
inflows of resources, and net pension liability for the District’s employee pension plan and
additional retiree benefit account plan are based on actuarial calculations, which incorporate
actuarial methods and assumptions adopted by the Board of Directors.
2
Valuations of actuarially determined contributions, deferred outflows of resources, deferred
inflows of resources, and net OPEB liability for the District’s employee OPEB plan are based on
actuarial calculations, which incorporate actuarial methods and assumptions adopted by the Board
of Directors.
Management’s estimates of workers’ compensation and general liability are based on reports
prepared by third party actuarial valuations. We evaluated the key factors and assumptions used to
develop the estimate liability in determining that they are reasonable in relation to the financial
statements taken as a whole.
Management’s estimate of the allowance for uncollectible accounts receivable is based on
evaluating individual customer accounts receivable at least one year past due and considering the
customer’s financial condition, credit history and current economic conditions.
Management’s estimate of depreciation is based on the useful-lives of the capital assets. We
evaluated the key factors and assumptions used to develop the useful-lives of the capital assets in
determining that it is reasonable in relation to the financial statements taken as a whole.
Fair values of investments are based on quoted market prices or significant other observable inputs
from independent published sources. We evaluated the key factors and assumptions used to develop
the fair value of investments in determining that it is reasonable in relation to the financial
statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The most sensitive disclosures affecting the financial statements were:
The disclosure of net pension liability and OPEB benefits in Note 5 and 6 to the financial statements,
respectively, are based on actuarial valuations.
Transactions with Irvine Ranch Water District – Revenue Area No. 14 as disclosed in Note 7.
Restatement-Adoption of New Accounting Standard as disclosed in Note 9.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management. There
were no misstatements detected as a result of audit procedures and corrected by management which were
material, either individually or in the aggregate, to the financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing
matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or
the auditor’s report. We are pleased to report that no such disagreements arose during the course of our
audit.
3
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated October 29, 2018.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application
of an accounting principle to the District’s financial statements or a determination of the type of auditor’s
opinion that may be expressed on those statements, our professional standards require the consulting
accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge,
there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the District’s auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a
condition to our retention.
Other Matters
We applied certain limited procedures to the Management’s Discussion and Analysis, Schedule of
Proportionate Share of Net Pension Liability (Asset) – OCERS Pension Plan, Schedule of District
Contributions – OCERS Pension Plan, Schedule of Total Pension Liability – Additional Retiree Benefit
Plan, Schedule of Changes in Total Pension Liability - Additional Retiree Benefit Plan, Schedule of Total
OPEB Liability – Post Employment Medical Benefits Plan, and Schedule of Changes in Total OPEB
Liability – Post Employment Medical Benefits Plan, which are required supplementary information (RSI)
that supplements the basic financial statements. Our procedures consisted of inquiries of management
regarding the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion
or provide any assurance on the RSI.
We were engaged to report on the “Combining Area” financial statements, which accompany the financial
statements but are not RSI. With respect to this supplementary information, we made certain inquiries of
management and evaluated the form, content, and methods of preparing the information to determine that
the information complies with accounting principles generally accepted in the United States of America,
the method of preparing it has not changed from the prior period, and the information is appropriate and
complete in relation to our audit of the financial statements. We compared and reconciled the supplementary
information to the underlying accounting records used to prepare the financial statements or to the financial
statements themselves.
We were not engaged to report on the introductory and statistical sections, which accompany the financial
statements but are not RSI. Such information has not been subjected to the auditing procedures applied in
the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on it.
4
Restriction on Use
This information is intended solely for the information and use of the Board of Directors and management
of the District and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
Newport Beach, California
Orange County Sanitation District
Independent Accountant’s Report on Applying
Agreed-Upon Procedures Related to
Appropriations Limit Calculation
Year Ended June 30, 2018
www.mgocpa.com
Macias Gini & O’Connell LLP 4675 MacArthur Court, Suite 600 Newport Beach, CA 92660
1
Independent Accountant’s Report on
Applying Agreed-Upon Procedures
To the Honorable Members of the Board
Orange County Sanitation District
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Worksheet of the Orange County Sanitation District (the District) for the year ended June 30, 2018. These
procedures, which were agreed to by the District and the League of California Cities (as presented in the
publication titled Agreed-Upon Procedures Applied to the Appropriations Limitation Prescribed by Article
XIII-B of the California Constitution), were performed solely to assist the District in meeting the
requirements of Section 1.5 of Article XIII-B of the California Constitution. The District’s management is
responsible for the accompanying Appropriations Limit Worksheet. The sufficiency of these procedures is
solely the responsibility of those parties specified in this report. Consequently, we make no representation
regarding the sufficiency of the procedures described below either for the purpose for which this report has
been requested or for any other purpose.
The procedures performed and our findings are as follows:
1. We obtained the completed worksheets setting forth the calculations necessary to establish the
District’s appropriations limit and compared the limit and annual adjustment factors included in
those worksheets to the limit and annual adjustment factors that were adopted by resolution of the
District Board of Directors. We also compared the population and inflation options included in the
aforementioned worksheets to those that were selected by a recorded vote of the District Board of
Directors.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Calculation, we added Line A, last year’s limit, to
Line E, total adjustments, and compared the resulting amount to Line F, current year’s limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the current year information presented in the accompanying Appropriations Limit
Calculation to the appropriate supporting calculations described in item 1 above.
Finding: No exceptions were noted as a result of our procedures.
4. We compared the prior year Appropriations Limit presented in the accompanying Appropriations
Limit Calculation to the prior year Appropriations Limit adopted by the Board of Directors for the
prior year.
Finding: No exceptions were noted as a result of our procedures.
2
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. We were not engaged to, and did not
conduct an examination or review, the objective of which would be the expression of an opinion or
conclusion, respectively, on the accompanying Appropriations Limit Calculation of the District.
Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures,
other matters might have come to our attention that would have been reported to you. No procedures have
been performed with respect to the determination of the appropriations limit for the base year, as defined
by Article XIII-B of the California Constitution.
This report is intended solely for the information and use of the Board of Directors and management of the
District, and is not intended to be, and should not be, used by anyone other than these specified parties.
However, this report is a matter of public record and its distribution is not limited.
Newport Beach, California
October 29, 2018
Orange County Sanitation District
Appropriations Limit Calculation
Year Ended June 30, 2018
3
Amount Source
A. Last year’s limit 101,768,666 $
B. Adjustment factors:
1. Population change 1.00450000 State Finance
2. Per capita change 1.03690000 State Finance
Total adjustments [(B.1 x B.2)-1.0]0.04156605
C. Annual adjustment 4,230,121 (BxA)
D. Other adjustments:
1. Lost responsibility (-) -
2. Transfer to private (-) -
3. Transfer to fees (-) -
4. Assumed responsibility (+) -
Subtotal -
E. Total adjustments 4,230,121 (C+D)
F. This year’s limit 105,998,787 $ (A+E)
Page 1 of 3
ADMINISTRATION COMMITTEE Meeting Date 11/14/18 To Bd. of Dir. 11/28/18
AGENDA REPORT Item Number 7 Item Number
Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Assistant General Manager SUBJECT: CONSOLIDATED FINANCIAL REPORT FOR FIRST QUARTER ENDED
SEPTEMBER 30, 2018 GENERAL MANAGER'S RECOMMENDATION Receive and file the Orange County Sanitation District First Quarter Financial Report for
the period ended September 30, 2018. BACKGROUND Included in this consolidated report are the following quarterly financial reports for the
period ended September 30, 2018:
• First Quarter Budget Review The Budget Review Summary provides the Directors, staff, and general public with a
comprehensive overview of the financial results of the Orange County Sanitation
District (Sanitation District) through the first quarter ended September 30, 2018.
• Quarterly Treasurer’s Report
This section reports on financial portfolio performance with respect to the Sanitation District’s funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the U.S. and global economic outlook from the Sanitation District’s investment manager, Chandler Asset Management.
• Certificates of Participation Quarterly Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history.
RELEVANT STANDARDS
• Quarterly financial reporting
ADDITIONAL INFORMATION The quarterly treasurer’s report contained within the Consolidated Financial Reports for
the First Quarter Ended September 30, 2018 is being submitted in accordance with the
Sanitation District’s investment policy that requires the report be submitted to the governing body following the end of each quarter and includes the following information:
Page 2 of 3
• Performance results in comparison with the ICE BAML 3-month treasury bill index for the liquid operating portfolio; and the ICE BAML Corp./Govt. 1-5 Year Bond index for
the long-term portfolio as identified in the investment policy; and the time-weighted
total rate of return for the portfolio for the prior three months, six months, nine months, twelve months, and since inception compared to the Benchmark returns for the same periods:
• A listing of individual securities held at the end of each reporting period (see the
detailed listings of each security contained within the report).
• Cost and market values of the portfolios:
Liquid Operating Long-Term Cost $74.8 M $467.2 M Market Value $75.2 M $462.1 M
• Modified duration of the portfolio compared to Benchmark:
Liquid Operating Long-Term District Policy < 0.50 < 5.00 Benchmark 0.16 2.54
Portfolio 0.22 2.37
• Dollar change in value of the portfolio for a one-percent (1%) change in interest rates:
Liquid Operating – $164,600 Long-Term – $10,953,640
• None of the portfolios are currently invested in reverse repurchase agreements.
• The percent of the Liquid Operating Monies portfolio maturing within 90 days:
48.8%
Portfolio Performance Summary As of September 30, 2018
Liquid Operating Monies (%) Long-Term Operating Monies (%)
Total Rate of Return Benchmark Total Rate of Return Benchmark
3 Months 0.52 0.49 0.27 0.20
6 Months 0.97 0.95 0.52 0.37
9 Months 1.32 1.30 0.19 -0.08
12 Months 1.61 1.59 -0.05 -0.40
Annualized Since inception 30 Nov 2014 0.76 0.66 0.90 0.78
Page 3 of 3
• Average portfolio credit quality:
Liquid Operating – AA+/Aa1
Long-Term – AA/Aa1
• Percent of portfolio with credit ratings below "A" by any rating agency, and a
description of such securities: Liquid Portfolio – no exceptions Long-Term Portfolio – Percent of portfolio – 0.7%
Cost Maturity Date Moody S&P Fitch
SLMA 2008-9 A $ 26,770.35 4/25/2023 Baa3 A B
AMRESCO Residential Securities 1999-1 $ 100,432.85 6/25/2029 Not Rated A+ BBB
Morgan Stanley Note $3,200,848.00 7/28/2021 A3 BBB+ A
• All investments are in compliance with this policy and the California Government
Code, except for the following Lehman Brother holdings that the Sanitation District
is pursuing collection through the bankruptcy court: Lehman Brothers Note-Defaulted $ 600,000 par value purchased 9/19/2008 Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008
• Sufficient funds are available for the Sanitation District to meet its operating expenditure requirements for the next six months. CEQA
N/A FINANCIAL CONSIDERATIONS
N/A ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the
complete agenda package:
• Consolidated Financial Report for the First Quarter Ended September 30, 2018 (separate electronic file)
Page 1 of 1
ADMINISTRATION COMMITTEE Meeting Date 11/14/18 To Bd. of Dir. --
AGENDA REPORT Item Number 8 Item Number --
Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Assistant General Manager SUBJECT: ORANGE COUNTY SANITATION DISTRICT RESEARCH PROGRAM
GENERAL MANAGER'S RECOMMENDATION Information Only.
BACKGROUND Each month, staff provides an information presentation on topics of interest to the Board of Directors. This month’s topic: Orange County Sanitation District Research Program.
RELEVANT STANDARDS
• Maintain a culture of improving efficiency
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the
complete agenda package:
N/A
ORANGE COUNTY SANITATION DISTRICT
COMMON ACRONYMS
ACWA Association of California
Water Agencies LAFCO Local Agency Formation
Commission RWQCB Regional Water Quality
Control Board
APWA American Public Works
Association LOS Level Of Service SARFPA Santa Ana River Flood
Protection Agency
AQMD Air Quality Management
District MGD Million Gallons Per Day SARI Santa Ana River
Interceptor
ASCE American Society of Civil Engineers MOU Memorandum of Understanding SARWQCB Santa Ana Regional Water Quality Control Board
BOD Biochemical Oxygen Demand NACWA National Association of Clean Water Agencies SAWPA Santa Ana Watershed Project Authority
CARB California Air Resources
Board NEPA National Environmental
Policy Act SCADA Supervisory Control And
Data Acquisition
CASA California Association of Sanitation Agencies NGOs Non-Governmental Organizations SCAP
Southern California
Alliance of Publicly Owned
Treatment Works
CCTV Closed Circuit Television NPDES National Pollutant Discharge
Elimination System SCAQMD South Coast Air Quality
Management District
CEQA California Environmental
Quality Act NWRI National Water Research
Institute SOCWA South Orange County
Wastewater Authority
CIP Capital Improvement
Program O & M Operations & Maintenance SRF Clean Water State
Revolving Fund
CRWQCB California Regional Water
Quality Control Board OCCOG Orange County Council of
Governments SSMP Sewer System
Management Plan
CWA Clean Water Act OCHCA Orange County Health Care Agency SSO Sanitary Sewer Overflow
CWEA California Water Environment
Association OCSD Orange County Sanitation
District SWRCB State Water Resources
Control Board
EIR Environmental Impact Report OCWD Orange County Water District TDS Total Dissolved Solids
EMT Executive Management Team OOBS Ocean Outfall Booster Station TMDL Total Maximum Daily Load
EPA US Environmental Protection
Agency OSHA Occupational Safety and
Health Administration TSS Total Suspended Solids
FOG Fats, Oils, and Grease PCSA
Professional
Consultant/Construction Services Agreement WDR Waste Discharge
Requirements
gpd gallons per day PDSA Professional Design Services
Agreement WEF Water Environment
Federation
GWRS Groundwater Replenishment
System POTW Publicly Owned Treatment
Works WERF Water Environment &
Reuse Foundation
ICS Incident Command System ppm parts per million WIFIA Water Infrastructure
Finance and Innovation Act
IERP Integrated Emergency
Response Plan PSA Professional Services
Agreement WIIN
Water Infrastructure
Improvements for the
Nation Act
JPA Joint Powers Authority RFP Request For Proposal WRDA Water Resources
Development Act
ORANGE COUNTY SANITATION DISTRICT
GLOSSARY OF TERMS
ACTIVATED SLUDGE PROCESS – A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen and consume dissolved nutrients in the wastewater.
BENTHOS – The community of organisms, such as sea stars, worms, and shrimp, which live on, in, or near the seabed, also known as the benthic zone.
BIOCHEMICAL OXYGEN DEMAND (BOD) – The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water.
BIOGAS – A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used
as a fuel.
BIOSOLIDS – Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farmland or further processed as an earth-like product for
commercial and home gardens to improve and maintain fertile soil and stimulate plant growth.
CAPITAL IMPROVEMENT PROGRAM (CIP) – Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities.
COLIFORM BACTERIA – A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere, used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater.
COLLECTIONS SYSTEM – In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water.
CERTIFICATE OF PARTICIPATION (COP) – A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues.
CONTAMINANTS OF POTENTIAL CONCERN (CPC) – Pharmaceuticals, hormones, and other organic wastewater contaminants.
DILUTION TO THRESHOLD (D/T) – The dilution at which the majority of people detect the odor becomes the D/T for that air sample.
GREENHOUSE GASES (GHG) – In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming (“greenhouse effect”).
GROUNDWATER REPLENISHMENT SYSTEM (GWRS) – A joint water reclamation project that proactively responds to Southern California’s current and future water needs. This joint project between the Orange County Water District and the Orange County
Sanitation District provides 70 million gallons per day of drinking quality water to replenish the local groundwater supply.
LEVEL OF SERVICE (LOS) – Goals to support environmental and public expectations for performance.
N-NITROSODIMETHYLAMINE (NDMA) – A N-nitrosamine suspected cancer-causing agent. It has been found in the
Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment.
NATIONAL BIOSOLIDS PARTNERSHIP (NBP) – An alliance of the National Association of Clean Water Agencies and Water Environment Federation, with advisory support from the US Environmental Protection Agency. NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance.
PLUME – A visible or measurable concentration of discharge from a stationary source or fixed facility.
PUBLICLY OWNED TREATMENT WORKS (POTW) – A municipal wastewater treatment plant.
SANTA ANA RIVER INTERCEPTOR (SARI) LINE – A regional brine line designed to convey 30 million gallons per day of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment.
SANITARY SEWER – Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban runoff.
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT (SCAQMD) – Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry.
SECONDARY TREATMENT – Biological wastewater treatment, particularly the activated sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater.
SLUDGE – Untreated solid material created by the treatment of wastewater.
TOTAL SUSPENDED SOLIDS (TSS) – The amount of solids floating and in suspension in wastewater.
TRICKLING FILTER – A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them.
URBAN RUNOFF – Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans.
WASTEWATER – Any water that enters the sanitary sewer.
WATERSHED – A land area from which water drains to a particular water body. The Orange County Sanitation District’s service area is in the Santa Ana River Watershed.