HomeMy WebLinkAbout11-12-2015 Administration Committee Agenda Orange County Sanitation District Thursday, November 12, 2015
Regular Meeting of the F' 5:30 P.M.
ADMINISTRATION Administration Building
COMMITTEE Board Room
10844 Ellis Avenue
Fountain Valley, CA
714 593-7433
AGENDA
PLEDGE OF ALLEGIANCE:
DECLARATION OF QUORUM:
PUBLIC COMMENTS: If you wish to address the Board of Directors on any item, please complete a
Speaker's Form (located at the table 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.
REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES:
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 Any items withdrawn from the Consent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 conserved in the regular order of business.
1. APPROVAL OF MINUTES (Clerk of the Board)
RECOMMENDATION: Approve Minutes of the October 14, 2015, Administration
Committee Meeting.
11/1 W15 Administration Committee Agenda Page 1 of 4
2. VAX EMULATOR FOR PROCESS CONTROL SYSTEM, MODERNIZATION &
SECURITY IMPROVEMENTS PROJECT (Lorenzo Tyner)
RECOMMENDATION: Recommend to the Board of Directors to:
A. Authorize a Purchase Order Contract with Quayle Consulting, Inc. for the
procurement of Charon-VAX permanent licenses and maintenance in the
amount of$338,401; and
B. Approve a contingency of 10% ($33,840).
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 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
B. Approve a contingency of 15% ($131,183.43).
4. ENTERPRISE INFORMATION MANAGEMENT (EIM) STAFFING SUPPORT
(Lorenzo Tyner)
RECOMMENDATION: Recommend to the Board of Directors to:
A. Approve a Service Contract with Project Partners, Inc. for Enterprise
Information Management On-Call Staffing, Specification No.
5-2015-72513D, for a period of January 1, 2016 through
December 31, 2016, for a total annual amount not to exceed $121,800 with
four one-year renewal options; and
B. Approve a contingency of 20% ($24,360).
1111 W15 Administration Committee Agenda Page 2 of 4
5. REPROGRAPHICS AND RELATED SERVICES (Lorenzo Tyner)
RECOMMENDATION: Recommend to the Board of Directors to:
A. Authorize a Purchase Order Contract with ARC Document Solutions, LLC
for reprographics services per County of Orange Master Contract #RCA
MA-017-16010366, for one 3-year period (11/04/15 — 11/03/18) for an
aggregate amount not to exceed $200,000 per year; and
B. Approve the option of two additional one-year renewals for an amount not
to exceed $200,000 per year.
6. CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER ENDED
SEPTEMBER 30, 2015 (Lorenzo Tyner)
RECOMMENDATION: Recommend to the Board of Directors to: Receive and
file Orange County Sanitation District First Quarter Financial Report for the period
ended September 30, 2015.
NON-CONSENT CALENDAR:
7. ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL
FINANCIAL REPORT (CAFR) FOR THE YEAR END JUNE 30, 2015.
(Lorenzo Tyner)
RECOMMENDATION: Recommend to the Board of Directors to:
Receive and file the Sanitation District's Comprehensive Annual Financial Report
for the year ended June 30, 2015, prepared by staff and audited by McGladrey,
Certified Public Accountants, along with the following reports prepared by
McGladrey:
A. Report to the Administration Committee; and
B. Report on Internal Controls; and
C. Independent Accountants' Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets.
8. OWNER CONTROLLED INSURANCE PROGRAM EXTENSION
(Celia Chandler)
RECOMMENDATION: Recommend to the Board of Directors to: Approve the
purchase of a multi-year extension of the Owner Controlled Insurance Program at
a total cost of$725,612 for five policies covering three layers of liability coverage,
workers compensation coverage, and pollution coverage, through December 31,
2017.
1111 W15 Administration Committee Agenda Page 3 of 4
INFORMATION ITEMS:
9. STORM WATER CAPTURE (Bob Ghirelli)
Presentation by Adam Hutchinson, Recharge Planning Managerat Orange County
Water District.
CLOSED SESSION:
None.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS,
IF ANY:
ADJOURNMENT:
The next Administration Committee meeting is scheduled for Wednesday, December 9,
2015 at 5:30 p.m.
Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability
related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at
(714)593-7433 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 majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board.
Agenda Description: The agenda provides a brief general description of each item of business to be considered or
discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take
any action which is deemed appropriate.
NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to
the Clerk of the Board 14 days before the meeting.
Kelly A.Lore
Clerk of the Board
(714)593-7433
klore(docsd.com
For any questions on the agenda, Committee members may contact staff at:
General Manager James Herberg (714)593-7300 iherbero(rpocsd.com
Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli6ocsd.com
Director of Finance and Lorenzo Tyner (714)593-7550 Itvner(rpomd.com
Administrative Services
Director of Human Resources Celia Chandler 714 593-7202 cchandler omd.com
11/12J15 Administration Committee Agenda Page 4 of 4
ITEM NO. 1
MINUTES OF THE
ADMINISTRATION COMMITTEE
Orange County Sanitation District
Wednesday, October 14, 2015, at 5:30 P.M.
A regular meeting of the Administration Committee of the Orange County Sanitation
District was called to order by Committee Chair Curry on October 14, 2015, at 5:30 p.m.,
in the Administration Building of the Orange County Sanitation District.
Board Vice-Chair Sebourn led the Flag Salute.
A quorum was declared present, as follows:
COMMITTEE MEMBERS PRESENT: STAFF PRESENT:
Keith Curry, Chair Jim Herberg, General Manager
Lucille Kring, Vice-Chair Bob Ghirelli, Assistant General Manager
Steven Choi Lorenzo Tyner, Director of Finance
Tyler Diep Rob Thompson, Director of Engineering
James Ferryman Kelly Lore, Clerk of the Board
Jim Katapodis Jennifer Cabral
Peter Kim Jim Colston
Greg Mills Alfred Garcia
Glenn Parker Norbert Gaia
John Nielsen, Board Chair Kathy Millea
Greg Sebourn, Board Vice-Chair Sharon Yin
COMMITTEE MEMBERS ABSENT:
Teresa Smith
Sal Tinajero OTHERS PRESENT:
Brad Hogin, General Counsel
PUBLIC COMMENTS:
None.
REPORT OF COMMITTEE CHAIR:
Committee Chair Curry did not provide a report.
REPORT OF GENERAL MANAGER:
General Manager, Jim Herberg did not provide a report.
10/14/2015 Administration Committee Minutes Page 1 of
REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES:
Director of Finance and Administrative Services, 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 9, 2015, Administration Committee Meeting.
AYES: Choi, Diep, Ferryman, Katapodis, Kim, Kring, Mills, Parker,
and Sebourn
NOES: None
ABSTENTIONS: Curry
ABSENT: Nielsen, T. Smith and Tinajero
2. COOPERATIVE PROCUREMENT WITH ADMIN MINNESOTA MATERIALS
MANAGEMENT DIVISION MINNESOTA WSCA-NASPO MASTER
AGREEMENT (Lorenzo Tyner)
MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of
Directors to:
Authorize purchases of information technology computer and peripheral
equipment using the Admin Minnesota Department of Administration, Materials
Management Division, Minnesota WSCA-NASPO Master Agreement number
MNWNC-115 through the contract expiration date, March 31, 2017 for a total
amount not to exceed $500,000, in accordance with Ordinance OCSD47, Section
2.03(B) Cooperative Purchases.
AYES: Choi, Curry, Diep, Ferryman, Katapodis, Kim, Kring, Mills,
Parker, and Seboum
NOES: None
ABSTENTIONS: None
ABSENT: Nielsen, T. Smith and Tinajero
3. ELECTRONIC RECORDING MEMORANDUM OF UNDERSTANDING COUNTY
OF ORANGE CLERK-RECORDER'S OFFICE (Bob Ghirelli)
MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of
Directors to:
A. Approve the Electronic Recording Memorandum of Understanding (MOU)
between the County of Orange and Orange County Sanitation District for
10/14/2015 Administration Committee Minutes Page 2 of
the use of the Secure Government to Government (G2G) Portal for a term
of five (5) years; and
B. Authorize the Clerk of the Board, or her designee, to transmit/record any
and all required Orange County Sanitation District real property documents
in an electronic format.
AYES: Choi, Curry, Diep, Ferryman, Katapodis, Kim, Kring, Mills,
Parker, and Seboum
NOES: None
ABSTENTIONS: None
ABSENT: Nielsen, T. Smith and Tinajero
4. GENERAL MANAGER APPROVED PURCHASES (Lorenzo Tyner)
MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of
Directors to:
Receive and file District purchases made under the General Manager's authority
for the period of July 1, 2015—September 30, 2015.
AYES: Choi, Curry, Diep, Ferryman, Katapodis, Kim, Kring, Mills,
Parker, and Seboum
NOES: None
ABSTENTIONS: None
ABSENT: Nielsen, T. Smith and Tinajero
NON-CONSENT CALENDAR:
None.
INFORMATION ITEMS:
5. BIOSOLIDS PROGRAM (Rob Thompson)
Environmental Compliance Manager Jim Colston presented a PowerPoint and a video
providing an overall description of the OCSD Biosolids Program; composting facilities and
operations; and the history, management and production trends of biosolids.
Mr. Colston responded to questions regarding: chemical additives to biosolids; heavy
metals in sludge; EPA recycling rules; testing biosolids twice a month for metals;
pharmacutical removal in liquid phase; choices of land application farming locations;
volumes of solids produced and consumed at IRWD v. OCSD; possibilities of acquiring a
land application farm or exporting to another country; crop yields; and classes of biosolids.
10/14/2015 Administration Committee Minutes Page 3 of4
Director Diep departed the meeting at 5:44 p.m.
Board Chair Nielsen arrived at the meeting at 5:44 p.m.
Engineering Manager, Kathy Millea completed the presentation with a Capital
Improvement Update regarding biosolids handling facilities,the Biosolids Master Plan and
new opportunities for generating products and more efficient technologies to generate
higher quality biosolids. Both referenced a Biosolids display in the Board room, and had
buckets of composted biosolids available for the Committee and public to sample.
Discussion ensued regarding organic food and the possibility of adding food waste to the
digesters, producing gas, that will turn into electricity. Mr. Herberg stated that OCSD has
completed bench scale testing to possibly add food waste to the digesters when capacity
allows in the future.
CLOSED SESSION:
None.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS,
IF ANY:
Dr. Choi invited everyone to attend the U.S. Department of Energy Solar Decathlon 2015
at the Great Park in Irvine, October 15-18 from 11 a.m. to 7 p.m.
ADJOURNMENT:
Committee Chair Curry declared the meeting adjourned at 6:18 p.m. to the next regularly
scheduled meeting of THURSDAY November 12, 2015 at 5:30 p.m.
Submitted by:
Kelly A. Lore
Clerk of the Board
10/14/2015 Administration Committee Minutes Page 4 of 4
ADMINISTRATION COMMITTEE Meeting Date TOBE.Or .Dir.
11/12/15 11/18/15
AGENDA REPORT ItemNumber Item Number
z
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: VAX EMULATOR FOR PROCESS CONTROL SYSTEM,
MODERNIZATION & SECURITY IMPROVEMENTS PROJECT
GENERAL MANAGER'S RECOMMENDATION
A. Authorize a Purchase Order Contract with Quayle Consulting, Inc. for the
procurement of Charon-VAX permanent licenses and maintenance in the amount
not to exceed $338,401; and
B. Approve a contingency of 10% ($33,840).
SUMMARY
The Operations and Maintenance Department utilizes Supervisory Control and Data
Acquisition (SCADA) systems to provide real-time plant monitoring, automation, alarming
and control of treatment processes. SCADA is a highly complex mission critical hardware
and software system used to monitor and control the day-to-day operations of the
treatment plants and outlying pump stations.
Additional Charon VAX software licenses are needed to support the integration of the
process control software that are being developed for CIP projects and for adding
additional SCADA workstations for staff to better monitor the plants and treatment
systems. The software licenses are exclusively distributed through Quale Consulting,
Inc. Additional Charon VAX licenses will be procured to support projects and the existing
SCADA systems as follows:
• A pair of SCADA servers will be added to support the integration of the Sludge
Dewatering and Odor Control project at Plant No. 1 (Job No. P1-101), currently in
construction.
• A pair of SCADA servers will be added to support the integration of a future project,
the SCADA System and Network Upgrade project at Plant No. 2 (Job No. P2-107).
• Additional SCADA proxy servers will be added to support additional workstations,
for current and future projects, that will be added to make the SCADA systems
more readily available to staff for better monitoring of the plant treatment processes
and pump stations.
Page 1 of 3
PRIOR COMMITTEE/BOARD ACTIONS
In 2011 - Established the Charon-VAX emulator software product as Orange County
Sanitation District's standard for VAX emulators.
In 2011 - Awarded a contract to purchase Charon-VAX permanent licenses under
Specification No. S-2011-504 for an amount not to exceed $292,217.
ADDITIONAL INFORMATION
The SCADA system that OCSD utilizes for automation and control of plant treatment
processes and collection systems runs on specialized software. Previously, the SCADA
software ran on obsolete DEC workstations and servers using the VAX/VMS operating
system which were no longer produced; OCSD has addressed the hardware
obsolescence issue in 2011 and replaced the obsolete DEC hardware servers and
SCADA workstations with of-the-shelf servers and workstations with the use of the
CHARON-VAX emulator software. The Charon VAX emulator software application
enabled OCSD to preserve the existing SCADA application software and emulate the
SCADA software on modern computer equipment.
In February 2010, Operations and Maintenance commissioned a study to recommend a
solution that will address SCADA server hardware obsolescence. The 'VAX Emulation
Product Study" was performed by DLT&V Systems Engineering and recommended the
Charon-VAX product. Based on this study, sole source procurements for software
licenses were awarded through the CIP process to Quayle Consulting. The software was
tested in the commissioning and start-up of the new Plant No. 2 Headworks Replacement
Project (Job No. P2-66). The test was successful and additional licenses, servers and
workstations were procured to replace the Plant No. 1, Plant No. 2 and Pump Station
SCADA systems.
Below is a summary of the major procurements of the Charon-VAX licenses in support of
the SCADA systems:
• Six licenses were procured to support the replacement of obsolete SCADA server
hardware.
• Two licenses were procured to support the treatment processes installed by the
Plant No. 1 Activated Sludge Facility No. 2 project (Job No. P1-102).
• Two licenses were procured to support the Solids Thickening and Processing
Upgrades at Plant 2 (Job No. P2-89).
• Two licenses were procured to support the Electrical SCADA systems added by
the Power Monitoring Control system project (Job No. J-33-3).
• Ten proxy server licenses were procured to support the replacement of
approximately 100 obsolete SCADA workstations for the Plant No. 1, Plant No. 2
and Pump Station SCADA systems.
Page 2 of 3
CEQA
N/A
BUDGET / PURCHASING ORDINANCE COMPLIANCE
This request complies with authority levels of the Sanitation District's Purchasing
Ordinance. The requested items have been budgeted as follows:
• Budget Update FY 2015-16, Section A-20, Capital Equipment Budget detail
under Information Technology
• Budget Update FY 2015-16, Section A-10, under Project No. P1-101
• Budget Update FY 2015-16, Section A-9, under Project No. P2-107, future
projects
ATTACHMENT
N/A
Page 3 of 3
ADMINISTRATION COMMITTEE Meeting Date TOBE.Or .Dir.
11/12/15 11/18/15
AGENDA REPORT Item Item Number
3
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: MICROSOFT ENTERPRISE LICENSE AGREEMENT (ELA)for
MICROSOFT ENTERPRISE SOFTWARE LICENSES
GENERAL MANAGER'S RECOMMENDATION
A. Authorize 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 01 E73134, payable annually and with contract expiration date
of December 31, 2018 for a total amount not to exceed $874,556.22; and
B. Approve a contingency of 15% ($131,183.43).
SUMMARY
OCSD invests in technology to efficiently and economically support OCSD's mission and
vision. Each year, plant design and operations become more complex due to changing
needs as well as more stringent state and federal regulations and increased risk from
security threats. These changes drive an increase in the use of technologies.
OCSD's Information Technology division utilizes Microsoft products to run various
systems of the plant. These products are under the Microsoft ELA, a volume licensing
program for government, education, healthcare, and nonprofit organizations that offer
flexible and affordable solutions tailored by organization size and purchasing preference
while providing access to technology.
Availing of the Microsoft ELA ensures that OCSD receives the best pricing on software
purchases and subscriptions while remaining compliant with software license agreements
and copyright law. Other benefits include access to the latest versions of software as they
are released and centralized license management.
The MS ELA includes Windows, MS Office, Server, database, and system management
software. By bundling these packages, OCSD receives the lowest possible costs and
benefits from a wide range of productivity and system management tools.
Staff is requesting contingency of 15% to cover any additional Microsoft licensing during
this three-year contract.
Page 1 of 2
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
OCSD is adding Disaster Recovery/Business Continuity and additional security software
licensing to this agreement. The Master Agreement allows yearly additions to the base
contract. In the event additional licensing is required during the term of this agreement,
the requested contingency funds will be used.
CEQA
N/A
BUDGET / PURCHASING ORDINANCE COMPLIANCE
This request complies with authority levels of the Sanitation District's Purchasing
Ordinance. The items purchased through the process are budgeted in the yearly Joint
Operating Budget.
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the
complete agenda package:
Insight MS EA Quote Request
Page 2 of 2
Microsoft Enterprise Agreement
Date 10/20/2015 ECS + G4 Step Up- Including Yr 3 TU +Visio& Project On Prem
Issued
Quantity Part# Description Unit Price Ext. Price
Subscriptions
640 AAA-11984 EntCloudSuiteGovFromSA ShrdSvr ALNG SubsVL MVL PerUsr $249.96 $ 159,974.40
640 U9S-00019 O365GovE4 ShrdSvr ALNG SU MVL O365GovE3 PerUsr $21.48 $ 13 747.20
1 J51-1-00004 AzureMntryCmmtmntG ShrdSvr ALNG SubsVL MVL Commit 0 $
Provision
Additonal Products $
6 MX3-00117 VSEntwMSDN ALNG [SAI MVL $979.46 $ 5,876.76
2 77D-00111 VSProwMSDN ALNG [SAI MVL $280.50 $ 561.00
2 395-02504 Exch SvrEnt ALNG ISAI MVL $605.06 $ 1,210.12
6 312-02257 Exch SvrStd ALNG rSAJ MVL $105.67 $ 634.62
3 5HU-00216 Sf6Svr ALNG SA MVL $544.57 $ 1,633.71
3 H04-00268 SharePointSvr ALNG SAI MVL $1015.54 $ 3046.62
12 7JQ-00343 SQLSvrEntCore ALNG SA MVL 2Lic CoreLic $2,053.72 $ 24,644.64
4 7NQ-00292 SQLSvrStdCore ALNG ISAI MVL 21-ic CoreLic $535.58 $ 2,142.32
8 126-00196 V$TeamFndtn$vrCAL ALNG SA MVL UsrCAL $66.60 $ 532.80
150 6VC-01254 WlnRmtDskt SrvcsCAL ALNG [SAJ MVL UsrCAL $19.65 $ 2,947.50
43 YJD-01077 CISStd ALNG SA MVL 2Proc $250.42 $ 10,768.06
33 FUD-00938 CISDataCtr ALNG SA MVL 2Proc $1,214.78 $ 40,087.74
50 076-01912 Prjct ALNG SA MVL $97.57 $ 4878.50
5 H30-00238 Pr'ctPro ALNG SA MVL wl Pr'ctSvrCAL $162.62 $ 813.10
15 D87-01159 VisioPm ALNG [SAI MVL $83.47 $ 1,252.05
150 D86-01253 VisioStd ALNG SA MVL $43.18 $ 6,477.00
640 KF5-00002 Offce365 ATP per user $16.08 $ 10291.20
Product-total $291,518.74
Sub-Total
Tax $-
Shipping No Charge
Total Annual Payment $291,518.74
3 Year Total $874 556.22
ADMINISTRATION COMMITTEE Meeting Date TOBE.Or .Dir.
11/12/15 11/18/15
AGENDA REPORT ItemNumber Item Number
4
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: ENTERPRISE INFORMATION MANAGEMENT (EIM) STAFFING
SUPPORT
GENERAL MANAGER'S RECOMMENDATION
A. Authorize a Service Contract with Project Partners, Inc. for Enterprise Information
Management On-Call Staffing, Specification No. S-2015-72513D, for a period of
January 1, 2016 through December 31, 2016, for a total annual amount not to
exceed $121,800 with four one-year renewal options; and
B. Approve a contingency of 20% ($24,360).
SUMMARY
This procurement provides the use of skilled Geographic Information Systems (GIS)
Technicians and CAD drafters to Enterprise Information Management's (EIM) CAD and
GIS group. EIM group is a division of OCSD's Information Technology Department
responsible for facility records management and maintenance. These records include all
facility engineering drawings, baseline models in Computer Aided Drafting (CAD) and
Geographic Information Systems (GIS) format, specifications, shop drawings, and other
project-related documents and data. The EIM group is also responsible for providing
technical support in GIS and CAD.
Staff is requesting a contingency of 20% due to the number of unplanned work activities
that are requested from EIM. One of the primary support functions of EIM is to support
the CIP program. Staff resources are allocated based on the schedule of project
submittals however, there are many other requests that cannot be planned for and may
require extra human resources to complete including field discrepancies, phased CIPs,
topographical survey of Treatment Plant No. 1, and sewer transfer support.
PRIOR COMMITTEE/BOARD ACTIONS
On December 21, 2011 a contract was awarded to Project Partners in the NTE amount
of$211,000 with the option to renew for 3 additional one-year periods for on-call GIS and
CAD services.
Page 1 of 2
ADDITIONAL INFORMATION
This procurement was competitively bid with 4 bid packages received. The responsive
bids and the bid amounts are listed below.
Purchase of Enterprise Information Management (EIM) Staffing Support
Bid Date— October 8, 2015 @ 2:00 PM (Pacific)
Specification No. S-2015-725BD
Bidder Amount of Bid
Project Partners, Inc. $121,800.00
International Star $122,400.00
Staff recommends Project Partners, Inc. be awarded a purchase order for providing staff
support to EIM CAD and GIS efforts the lowest responsible and responsive bidder.
CECIA
N/A
BUDGET/PURCHASING ORDINANCE COMPLIANCE
This request complies with authority levels of the OCSD's Purchasing Ordinance. This
item has been budgeted in Capital Improvement Project SP-15 (Geographic Information
System). Project contingency funds will be used for this bid.
Date of Approval Contract Amount Continaencv
11/18/2015 $121,800 $24,360
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the
complete agenda package:
• Service Contract
Page 2 of 2
SERVICES CONTRACT
Enterprise Information Management(EIM)Staffing Support
5-2015.725BD
THIS CONTRACT is made and entered into, to be effective the date fully executed below by and between
ORANGE COUNTY SANITATION DISTRICT having a principal place of business at 10844 Ellis Avenue,
Fountain Valley, California, 92708 (hereinafter referred to as "OCSD") and PROJECT PARTNERS, INC.
having a principal place of business at 23195 La Cadena Drive, Suite 101, Laguna Hills, CA 92653
(hereinafter referred to as"SERVICE PROVIDER"),collectively referred to as the"Parties".
WHEREAS, OCSD desires to retain the services of SERVICE PROVIDER for Enterprise Information(EIM)
On-Call Staffing Services as stated in the Scope of Work (attached hereto and incorporated herein by
reference as Exhibit"A")"Services"; and
WHEREAS, SERVICE PROVIDER represents that it has expertise providing EIM On-Call Staffing services
("Services"). Based on SERVICE PROVIDER's expertise and experience, OCSD wishes to temporarily
engage the Services of SERVICE PROVIDER; and
WHEREAS, OCSD has chosen SERVICE PROVIDER to conduct Services in accordance with Ordinance
No. OCSD-47; and
WHEREAS, on November 12, 2015, Administration Committee of the Board of Directors of OCSD, by
minute order, authorized execution of this CONTRACT between OCSD and SERVICE PROVIDER; and
NOW THEREFORE, in consideration of the promises and mutual benefits exchanged between the Parties,
it is mutually agreed as follows:
1. Engagement of SERVICE PROVIDER
a. OCSD hereby engages SERVICE PROVIDER to provide Assigned Employees to perform
Services and SERVICE PROVIDER accepts the engagement, and agrees to provide the
Assigned Employees to perform Services upon the terms and conditions set forth herein.
OCSD agrees that it is responsible for managing the work assigned to the Assigned
Employees. Notwithstanding the foregoing, the Assigned Employees shall be employees
of SERVICE PROVIDER,and SERVICE PROVIDER shall remain the legal employer of the
Assigned Employees placed with OCSD for all purposes, including responsibility for (i)
hiring,evaluating,rewarding,terminating or disciplining the Assigned Employees; (ii)paying
all federal, state, and local labor and employment taxes; and (if)calculation of wages, and
unemployment and workers compensation insurance.
b. SERVICE PROVIDER, all its employees, officers, independent Service Providers, and/or
agents shall only be entitled to the compensation provided for in this CONTRACT and shall
not be eligible to receive any other benefits from OCSD.
e: SERVICE PROVIDER shall be responsible for providing, at SERVICE PROVIDER's
expense,worker's compensation or other insurance as well as all licenses and permits usual
or necessary for conducting the Services hereunder. SERVICE PROVIDER hereby
indemnifies OCSD for any claims, losses, costs, fees, liabilities, damages or penalties
suffered by OCSD arising out of SERVICE PROVIDER's breach of this provision.
2. Assigned Employees
a. Assigned Employees are defined as the person or persons employed by the SERVICE
PROVIDER and temporarily assigned to OCSD to perform temporary Services as described
under this CONTRACT.
b. SERVICE PROVIDER shall be responsible for assigning employees as exempt or
nonexempt per the Guidelines set by the Federal Government. Exempt employees will not
be eligible for overtime nor will their pay be deducted for absences of less than one day.
Orange County Sanitation District 1 of 8 Specification No. S-2015-725BD
c. OCSD reserves the right to require Assigned Employees to sign an acknowledgement as to
their understanding that they are employees of the SERVICE PROVIDER and not of OCSD
and that they shall not be entitled to any benefits accorded to those individuals listed on
OCSD'S payroll.
3. Work Hours
SERVICE PROVIDER's assigned staff will be required to work on site at OCSD's facilities located
in Fountain Valley, California. However, at time,fieldwork and/or presentations and meetings may
be required at other OCSD facilities or at job site locations away from OCSD. Firm's assigned staff
may work up to 8 to 10 hours per day, and up to 4 to 5 days per week.
OCSD will only pay for the hours actually worked on site. OCSD does not pay travel time to or
from work or time taken for lunch breaks.
4. SERVICE PROVIDER's Representations
In the performance of the Services under this CONTRACT, SERVICE PROVIDER shall adhere to
the highest fiduciary standards, ethical practices and standards of care and competence.
SERVICE PROVIDER agrees to comply with all applicable Federal, State and local laws and
regulations.
5. California Department of Industrial Relations(D/R)Rea/strafion and Record of Waves
a. To the extent SERVICE PROVIDER's employees and/or SubService Providers who will
perform Work during the Contract for which Prevailing Wage Determinations have been
issued by the DIR and as more specifically defined under Labor Code Section 1720 at seq,
SERVICE PROVIDER and SubService Providers shall comply with the registration
requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section 1771.4,
the Work is subject to compliance monitoring and enforcement by the DIR.
b. The SERVICE PROVIDER and SubService Providers shall maintain accurate payroll
records and shall comply with all the provisions of Labor Code Section 1776, and shall
submit payroll records to the Labor Commissioner pursuant to Labor Code 1771.4(a)(3).
Penalties for non-compliance with the requirements of Section 1776 may be deducted from
progress payments per Section 1776.
c. Pursuant to Labor Code Section 1776, the SERVICE PROVIDER and SubService
Providers shall furnish a copy of all certified payroll records to OCSD and/or general public
upon request, provided the public request is made through OCSD, the Division of
Apprenticeship Standards or the Division of Labor Enforcement of the Department of
Industrial Relations.
d. The SERVICE PROVIDER and SubService Provider shall comply with the job site notices
posting requirements established by the Labor Commissioner per Title 8, California Code
of Regulation Section 16461(e).
6. Billing Rates
a. Billing Rates shall be in accordance with the hourly rate as stated in the Bid results(attached
hereto and incorporated herein by reference as Exhibit"B".)
For purposes of calculating hourly rates, salaries of SERVICE PROVIDER employees
performing services under the CONTRACT shall be adjusted annually based on the
November CPI of LA-Orange County Index of each year. This rate is from the U.S
Department of Labor Statistic, Consumer Price Index — Los Angeles/Orange County
Metropolitan Area. The annual salary figures used in calculating hourly rates shall not
otherwise be adjusted, regardless of whether any SERVICE PROVIDER employee may
have received a salary increase from SERVICE PROVIDER that exceeds the increase in
Orange County Sanitation District 2 of 8 Specification No. S-2015-725BD
CPI. The first hourly rate escalation will occur January 1, 2017.
7. Invoicing and Payment
a. SERVICE PROVIDER shall submit invoices to OCSD'S IT Systems and Operations
Manager on a monthly basis for Services performed. SERVICE PROVIDER shall support
each invoice with time sheets, approved by OCSD, for Services performed. Invoices shall
include the Purchase Order Number and shall be submitted for approval to OCSD at the
above-referenced address. After OCSD has approved the invoice, payment will be due
within thirty(30)days of receipt of the invoice.
b. OCSD shall have fifteen (15) days after the date of invoice receipt to contest in good faith
the amounts and items charged. If uncontested amounts remain unpaid for thirty(30)days
or more, SERVICE PROVIDER may discontinue Services until such amounts are paid.
c. OCSD is required to withhold 7% on all payments made to non-California resident service
providers for professional services, rents, leases or royalties paid.
Any funds withheld shall be remitted to the California Franchise Tax board on a quarterly
basis. Service providers may be exempt from this requirement by their exemption status
and submitting the California Form 590 to OCSD's Financial Management Division via
regular mail or email to APStaff@ocsd.com.
8. CONTRACT Period
a. Services to be provided by SERVICE PROVIDER under this CONTRACT shall commence
on January 1, 2016 and run through December 31, 2016.
b. OCSD reserves the right to renew this CONTRACT annually for up to four(4)additional one
year terms upon approval and written CONTRACT of OCSD and SERVICE PROVIDER.
OCSD makes no obligation to extend or renew. All renewals may be exercised through the
Amendment or Purchase Order process.
9. Billing Reports
SERVICE PROVIDER shall be required to submit a report each month to OCSD'S Manager of the
Information Technology that includes Assigned Employee(s) name(s), project number(s), bill
rate(s), pay rate(s)and hours worked.
10. Expenses
OCSD shall reimburse SERVICE PROVIDER for reasonable out-of-pocket expenses incurred by
Assigned Employees required and actually incurred in performing services, provided the SERVICE
PROVIDER and/or Assigned Employees have obtained OCSD's prior written approval and submits
supporting documentation satisfactory to OCSD. If Assigned Employees are required to travel,
they must first obtain SERVICE PROVIDER and OCSD'S written consent.Time spent in local travel
to and from home to OCSD'S plant sites shall not be considered time worked and shall not be
compensated.
11. Audit Rights
SERVICE PROVIDER agrees that,during the term of this CONTRACT and for a period of three(3)
years after its termination, OCSD shall have access to and the right to examine any directly
pertinent books, documents, and records of SERVICE PROVIDER relating to the invoices
submitted by SERVICE PROVIDER pursuant to this CONTRACT.
12. Ownership of Intellectual Property
a. SERVICE PROVIDER agrees that all designs, plans, reports, specifications, drawings,
schematics,prototypes,models,inventions,and all other information and items made during
Orange County Sanitation District 3 of 8 Specification No. S-2015-725BD
the course of this CONTRACT and arising from the Services(hereinafter referred to as"New
Developments") shall be and are assigned to OCSD as its sole and exclusive property.
SERVICE PROVIDER agrees to promptly disclose to OCSD all such New Developments.
Upon OCSD'S request,SERVICE PROVIDER agrees to assist OCSD,at OCSD'S expense,
to obtain patents or copyrights for such New Developments, including the disclosure of all
pertinent information and data with respect thereto, the execution of all applications,
specifications, assignments, and all other instruments and papers which OCSD shall deem
necessary to apply for and to assign or convey to OCSD, its successors and assigns, the
sole and exclusive right, title and interest in such New Developments. SERVICE
PROVIDER agrees to obtain or has obtained written assurances from its employees and
Contract personnel of their CONTRACT to the terms hereof with regard to New
Developments and Confidential Information.
b. SERVICE PROVIDER warrants that SERVICE PROVIDER has good title to any New
Developments,and the right to assign New Developments to OCSD free of any proprietary
rights of any other party or any other encumbrance whatever.
13. Confidentiality and Non-Disclosure
a. SERVICE PROVIDER acknowledges that in performing the Services hereunder, OCSD
may have to disclose to SERVICE PROVIDER orally and in writing certain confidential
information that OCSD considers proprietary and has developed at great expense and
effort. As used herein,the term "Confidential Information"means any scientific or technical
data, marketing, operating, financial, business or any other information, design, process,
procedure, formula or improvement in written, printed, graphic, or electronically recorded
materials, that is commercially valuable to OCSD and not generally known in the industry.
SERVICE PROVIDER further acknowledges that the Services and any deliverables may
incorporate Confidential Information. SERVICE PROVIDER agrees that all items of
Confidential Information are proprietary to OCSD and shall remain the sole property of
OCSD.
b. SERVICE PROVIDER agrees as follows:
I. To use the Confidential Information only for the purposes described herein;to not
reproduce the Confidential Information; to hold in confidence and protect the
confidential Information from dissemination to and use by anyone not a party to
this CONTRACT; and to not use the Confidential Information to benefit itself or
others.
ii. To restrict access to the Confidential Information to personnel of SERVICE
PROVIDER who (i) have a need to have such access and (it) have been advised
of and have agreed in writing to treat such information in accordance with the terms
of this CONTRACT.
iii. To return all Confidential Information in SERVICE PROVIDER's possession upon
termination of this CONTRACT or upon OCSD'S request,whichever occurs first.
iv. To hold in confidence information and materials, if any,developed pursuant to the
Services hereunder.
c. The provisions of this Paragraph shall survive termination or expiration of this CONTRACT
and shall continue for so long as the material remains confidential.
14. Safety
OCSD's Safety and Accident Prevention Requirements are located in Appendix A to Exhibit"A".
15. Insurance
SERVICE PROVIDER shall purchase and maintain, throughout the life of this CONTRACT,
disability insurance as well as other insurance as defined in the Acknowledgement of Insurance
Requirements (attached hereto and incorporated herein as Exhibit "C"). SERVICE PROVIDER
shall not commence work under this CONTRACT until all required insurance is obtained in a form
Orange County Sanitation District 4 of 8 Specification No. S-2015-725BD
acceptable to OCSD. Failure to maintain required insurance coverage shall result in termination of
this CONTRACT.
16. Indemnification
SERVICE PROVIDER shall assume all responsibility for damages to property and/or injuries to
persons, including accidental death, which may arise out of or be caused by SERVICE
PROVIDER's services under this CONTRACT, and/or by its SubService Providers or by anyone
directly or indirectly employed by SERVICE PROVIDER, and whether such damage or injury shall
accrue or be discovered before or after the termination of the CONTRACT. Except as to the sole
active negligence of or willful misconduct of OCSD,SERVICE PROVIDER shall indemnify, protect,
defend and hold harmless OCSD, its elected and appointed officials, officers, agents and
employees, from and against any and all claims, liabilities, damages or expenses of any nature,
including attorneys' fees: (a) for injury to or death of any person or damage to property or
interference with the use of property, arising out of or in connection with SERVICE PROVIDER's
performance under the CONTRACT, and/or (b) on account of use of any copyrighted or
uncopyrighted material, composition, or process, or any patented or unpatented invention, article
or appliance, furnished or used under the CONTRACT, and/or (c) on account of any goods and
services provided under this CONTRACT. This indemnification provision shall apply to any acts or
omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of
SERVICE PROVIDER of or anyone employed by or working under SERVICE PROVIDER. To the
maximum extent permitted by law, SERVICE PROVIDER's duty to defend shall apply whether or
not such claims, allegations, lawsuits, or proceedings have merit or are meritless, or which involve
claims or allegations that any of the parties to be defended were actively, passively,or concurrently
negligent, or which otherwise assert that the parties to be defended are responsible, in whole or in
part, for any loss, damage, or injury. SERVICE PROVIDER agrees to provide this defense
immediately upon written notice from OCSD, and with well qualified, adequately insured, and
experienced legal counsel acceptable to OCSD. This section shall survive the expiration or early
termination of the CONTRACT.
To the fullest extent permitted by law, SERVICE PROVIDER shall indemnify, defend, protect and
hold harmless OCSD and all of OCSD's officials, officers, directors, employees, SERVICE
FROM DERs, and agents(collectively the"Indemnified Parties"),from any and against any and all
claims, damages, liabilities, causes of action, suit, arbitration award, losses, judgments, fines,
penalties, costs and expenses (including, without limitation, reasonable attorneys' fees,
disbursements and court costs;individually,a"Claim";collectively, "Claims")which may arise from,
result from, or are related to SERVICE PROVIDER's negligence, recklessness, or willful
misconduct in performing the Services,or any breach or failure of SERVICE PROVIDER to perform
its Services contained in this CONTRACT. Notwithstanding the foregoing, nothing herein shall be
construed to require SERVICE PROVIDER to indemnify the Indemnified Parties from any Claim
arising solely from:
(A) the active negligence or willful misconduct of the Indemnified Parties;or
(B) a natural disaster or other act of God, such as an earthquake.
Exceptions (A) through (B) above shall not apply, and SERVICE PROVIDER shall, to the fullest
extent permitted by law, indemnify the Indemnified Parties,from Claims arising from more than one
cause if any such cause taken alone would otherwise result in the obligation to indemnify
hereunder."
17. Smoking
Smoking is only allowed in designated areas. Smoking is not allowed in any building, electrically
classified area or process area where methane gas may be present. Lack of compliance with
OCSD Smoking policy will be cause for removal of offending personnel from the site, termination
of the CONTRACT,or both.
Orange County Sanitation District 5 of 8 Specification No. S-2015-725BD
is. Wamantees
There are no warranties,expressed or implied, except as expressly set forth herein.
19. Conflict of Interest
SERVICE PROVIDER affirms that to the best of its knowledge there exists no actual or potential
conflict between SERVICE PROVIDER's families, business or financial interest or its Services
under this CONTRACT, and in the event of change in either its private interests or Services under
this CONTRACT, it will raise with OCSD any question regarding possible conflict of interest which
may arise as a result of such change.
20. No Solicitation of Employees
No referral fee will be paid to SERVICE PROVIDER for a referral which leads to the employment
of the candidate with the OCSD if such employment commences more than ninety(90)days after
the date stamp appearing on the candidate's resume submitted by or through SERVICE
PROVIDER, unless written extension has been given by OCSD'S Human Resources Department.
21. Termination
a. OCSD reserves the right to terminate this CONTRACT, in whole or in part, without cause,
at anytime, by written notice to SERVICE PROVIDER. Upon receipt of a termination notice,
SERVICE PROVIDER shall immediately discontinue all work under this CONTRACT
(unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay
SERVICE PROVIDER for work performed (cost and fee) to the date of termination.
SERVICE PROVIDER expressly waives any claim to receive anticipated profits to be earned
during the uncompleted portion of the CONTRACT. Such notice of termination shall
terminate this CONTRACT and release OCSD from any further fee,cost or claim hereunder
by SERVICE PROVIDER other than for work performed to the date of termination.
b. OCSD reserves the right to end an assignment with Assigned Employee(s), without or
without cause, at any time by notifying SERVICE PROVIDER and SERVICE PROVIDER
shall replace the assigned employee if requested by OCSD. In terminating an assignment
with one or more Assigned Employee(s), OCSD shall not discriminate on the basis of race,
religion, national origin, gender or other unlawful basis. In the event such termination is
effected, the Assigned Employee shall immediately discontinue all work under this
CONTRACT(unless the notice directs otherwise).
c. OCSD may also immediately cancel for default of this CONTRACT in whole or in part by
written notice to SERVICE PROVIDER:
I. if SERVICE PROVIDER becomes insolvent orfiles a petition underthe Bankruptcy
Act;or
it. if SERVICE PROVIDER sells its business; or
!it. if SERVICE PROVIDER breaches any of the terms of this CONTRACT; or
iv. if such breach is capable of cure and if the SERVICE PROVIDER fails to cure the
default within thirty(30)days.
d. All OCSD property in the possession or control of SERVICE PROVIDER shall be returned
by SERVICE PROVIDER to OCSD on demand, or at the termination of this CONTRACT,
whichever occurs first.
22. Damage to OCSD's Property
Any OCSD property damaged by SERVICE PROVIDER will be subject to repair or replacement by
SERVICE PROVIDER at no cost to OCSD.
Orange County Sanitation District 6 of 8 Specification No. S-2015-725BD
23. Drug-Free Workplace
SERVICE PROVIDER and all its employees and sub-SERVICE PROVIDERS must adhere to the
California Drug-Free Workplace Act, Sections 8350 through 8357.
24. Governing Law
a. This CONTRACT shall be governed by and interpreted under the laws of the State of
California and the Parties submit to jurisdiction in Orange County, in the event any action is
brought in connection with this CONTRACT or the performance thereof.
b. In the event of a dispute as to the construction or interpretation of this CONTRACT, or any
rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the
dispute by mediation. The Parties shall mutually select a mediator to facilitate the resolution
of the dispute. If the Parties are unable to agree on a mediator, the mediation shall be
conducted in accordance with the Commercial Mediation Rules of the American Arbitration
CONTRACT, through the alternate dispute resolution procedures of Judicial Arbitration
through Mediation Services of Orange County("JAMS'),or any similar organization or entity
conducting an alternate dispute resolution process.
In the event the Parties are unable to timely resolve the dispute through mediation, the
issues in dispute shall be submitted to arbitration pursuant to California Code of Civil
Procedure, Part 3, Title 9, Sections 1280 at seq. For such purpose, an agreed arbitrator
shall be selected, or in the absence of CONTRACT, each party shall select an arbitrator,
and those two arbitrators shall select a third. Discovery may be conducted in connection
with the arbitration proceeding pursuant to California Code of Civil Procedure Section
1283.05. The arbitrator, or three arbitrators acting as a board, shall take such evidence
and make such investigation as deemed appropriate and shall render a written decision on
the matter in question. The arbitrator shall decide each and every dispute in accordance
with the laws of the State of California. The arbitrator's decision and award shall be subject
to review for errors of fact or law in the Superior Court for the County of Orange, with a
right of appeal from any judgment issued therein.
25. Modifications
This CONTRACT may not be modified, changed or supplemented, nor may any obligations
hereunder be waived or extensions of time for performance granted, except by written instrument
signed by both Parties.
26. Assignment
This CONTRACT and the rights, duties, and obligations hereunder may not be assigned by
SERVICE PROVIDER without the prior written consent of OCSD.
27. Partial Invalidity
Any provision of this CONTRACT which is found to be invalid or unenforceable shall be ineffective
to the extent of such invalidity or unenforceability, and the invalidity or unenforceability of such
provision shall not affect the validity or enforceability of the remaining provisions hereof.
28. Nonexclusive CONTRACT
This CONTRACT is not exclusive to SERVICE PROVIDER. OCSD reserves the right to enter into
similar or like CONTRACTS with other companies. OCSD also makes no guarantee of work to
SERVICE PROVIDER.
Orange County Sanitation District 7 of 8 Specification No. S-2015-725BD
29. Entire CONTRACT
This CONTRACT constitutes the entire CONTRACT of the Parties and supersedes all prior written
or oral and all contemporaneous oral CONTRACTS, understandings,and negotiations between the
Parties with respect to the subject matter hereof. This CONTRACT is intended by the Parties as
the final expression of their CONTRACT and may not be contradicted by evidence of any prior or
contemporaneous CONTRACT.
30. Notices
All notices under this CONTRACT must be in writing. Written notice shall be delivered by personal
service or sent by registered or certified mail, postage prepaid, return receipt requested, or by any
other overnight delivery service which delivers to the noticed destination and provides proof of
delivery to the sender. Rejection or other refusal to accept or the inability to deliver because of
changed addressed or which no notice was given as provided hereunder shall be deemed to be
receipt of the notice, demand or request sent. All notices shall be effective when first received at
the following addresses:
OCSD: Natasha Dubrovski
Principal Contracts Administrator
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, CA 92708
SERVICE PROVIDER: Kimo Look
CEO
Project Partners, Inc.
23195 La Cadena Drive
Laguna Hills, CA 92653
IN WITNESS WHEREOF, the Parties have executed this CONTRACT effective as of the date first written
above at Fountain Valley, Califomia.
ORANGE COUNTY SANITATION DISTRICT
Dated: By:
Chair Board of Directors
Dated: By
Clerk of the Board
Dated: By
Contracts/Purchasing Manager
Dated: By
Print Name and Title
IRS Employers I.D. Number
Orange County Sanitation District 8 of 8 Specification No. S-2015-725BD
ADMINISTRATION COMMITTEE Meeting Date TOBE.Of Dir.
11/12/15 11/18/15
AGENDA REPORT ItemNumber Item Number
s
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: REPROGRAPHICS AND RELATED SERVICES
GENERAL MANAGER'S RECOMMENDATION
A. Authorize a Purchase Order Contract with ARC Document Solutions, LLC for
reprographics services per County of Orange Master Contract #RCA MA-017-
16010366, for one 3-year period (11/04/15— 11/03/18)for an aggregate amount not
to exceed $200,000 per year; and
B. Approve the option of two additional one-year renewals for an amount not to exceed
$200,000 per year.
SUMMARY
OCSD uses a reprographics fine for the reproduction of plans, scanning and indexing
documents to be loaded into the engineering SharePoint site, and a filing and distribution
system for the ordering and tracking of plans and specifications for bidding of projects.
These tools have enabled OCSD to maintain an optimal bid process incorporating a set
of agreed upon procedures and minimum requirements to ensure a smooth bid process.
To effectively maintain a smooth bid process for upcoming projects, as well as
maintaining reprographics and related services for documentation of construction phase
records and engineering specifications, staff recommends that a new purchase order be
established with ARC Document Solutions, LLC. Pricing is based on a competitively
bid/negotiated Regional Cooperative Agreement (RCA) for Reprographic Services. This
contract is available for use in accordance with the terms and conditions and scope of
work set forth.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
N/A
CEQA
N/A
Page 1 of 2
BUDGET / PURCHASING ORDINANCE COMPLIANCE
This request complies with authority levels of the Sanitation District's Purchasing
Ordinance. The items purchased through the process are budgeted in the yearly Joint
Operating Budget.
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the
complete agenda package:
N/A
Page 2 of 2
ADMINISTRATION COMMITTEE Meeting Date TOBE.Or .Dir.
11/12/15 11/18/15
AGENDA REPORT Item Item Number
6
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER
ENDED SEPTEMBER 30, 2015
GENERAL MANAGER'S RECOMMENDATION
Receive and file Orange County Sanitation District First Quarter Financial Report for the
period ended September 30, 2015.
SUMMARY
Included in this consolidated report are the following quarterly financial reports for the
period ended September 30, 2015:
First Quarter Budget Review
The Budget Review Summary provides the Directors, staff, and the general public
with a comprehensive overview of the financial results of the Sanitation District
through the first quarter ended September 30, 2015.
• 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.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
Page 1 of 3
ADDITIONAL INFORMATION
The Quarterly treasurers report section of the Consolidated Quarterly Financial Report is
being submitted in accordance with the 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:
• Performance results in comparison with the 3-month treasury bill index for the
liquid operating portfolio (and the Merrill Lynch 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, twelve
months, year to date, and since inception compared to the Benchmark returns for
the same periods:
Portfolio Performance Summary
Quarter Ended September 30,2015
Liquid Operating Monies(%) Long-Term Operating Monies(%)
Total Rate Total Rate of
of Return Benchmark') Return Benchmark')
3 Months 0.06 0.01 0.52 0.68
6 Months 0.11 0.02 0.36 0.67
9 Months 0.18 0.02 1.18 1.84
12 Months 0.19 0.02 1.74 2.12
Since inception 30 Sept.95 2.84 2.61 4.71 4.42
• 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 Oper. Long-Term
Cost $43.8 M $261.5 M
MV $43.9 M $262.8 M
• Modified duration of the portfolio compared to Benchmark:
Liquid Oper. Long-Term
B.M. 0.16 2.58
Port. 0.28 2.50
• Dollar change in value of the portfolio for a one-percent (1 %) change in interest
rates:
Liquid Oper.- $124,376
Long-Term- $6,553,148
• None of the portfolios are currently invested in reverse repurchase agreements.
Page 2 of 3
• The percent of the Liquid Operating Monies portfolio maturing within 90 days:
54.0%
• Average portfolio credit quality:
AA+/Aa 1
• 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— 1.2%
One security-AMRESCO Residential Securities 1999-1 maturing in 6/25/2029.
Rated AA+ by S&P, but only BBB by Fitch Ratings.
• All investments are in compliance with this policy and the California Government
Code, except for the following Lehman Brother holdings that the District is pursuing
collection through the bankruptcy court:
Lehman Brothers Note-Defaulted $600,000 par value purchased 9/18/2008
Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008
Sufficient funds are available for OCSD to meet its operating expenditure requirements
for the next six months.
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the
complete agenda package:
• Consolidated Financial Reports for the First Quarter Ended September 30, 2015.
NOTE: The Executive Summary from the Comprehensive Quarterly Financial Report for the first quarter
ended September 30, 2015 is included in hard copy, the entire report is available on-line at the OCSD
website(mn .ocsd.com) with the complete agenda package.
Page 3 of 3
Executive Summary
Consolidated Financial Reports
For the First Quarter Ended
September 30, 2015
Included in this consolidated report are the following quarterly financial reports for the
period ended September 30, 2015:
• First Quarter Budget Review:
The Budget Review Summary provides the Directors, staff, and the general public
with a comprehensive overview of the financial results of the Sanitation District
through the first quarter ended September 30, 2015.
Contained within this Budget Review is the budget-to-actual status of the
Collections, Treatment and Disposal Operations, the Capital Improvement
Program, the Self-Insurance Program, and Debt Service Outlays. Also included is
a Capital Assets Schedule as of September 30, 2015.
Various detail information can be found in this report. In summary:
a) Most major expense categories are anticipated to be at or below budget.
b) Total revenues are at 3.1 percent mainly due to the timing of property tax and
sewer fee distribution from the County that occurs mostly in the second and
fourth quarters. These two revenue sources make up 88.6 percent of the
District's total budgeted revenue. Except for Service Fees, Permit Fees, and
Property Taxes, all other major revenue sources are currently tracking close to
or exceeding revenue estimates. Overall, total revenues are projected to
approximate budget at year-end. More detailed information on District
revenues is provided within Section 1 — Pages 3 through 5.
c) Collection, Treatment and Disposal Costs:
As indicated within the Budget Review Summary of this report, the net
operating requirements through the first quarter of $34.0 million is currently
tracking at 22.8 percent of the $149.3 million budget. In addition, net operating
expenses have decreased $1.6 million or 4.5 percent in comparison with the
same period last year. Overall, staff expects the total operating costs to remain
at budget throughout the remainder of the year. More detailed information on
District operating expenses is provided within Section 1- Pages 1 through 3.
The total cost per million gallons is approximately $1,974.7 based on flows of
187.1 million gallons per day. This is $70.3 per million gallons, or 3.4 percent
lower than the budgeted cost per million gallon per day. A further description
of these costs and benchmarking with other agencies is contained within
Section 1 — Pages 6 through 8.
Page 1
2015-16 First Quarter Review
d) The total projected capital outlay cash flow of the Capital Improvement
Program (CIP) for FY 2015-16 has been revised to $139.8 million, or 76.8
percent of the board approved cash outlay of$181.9 million. The actual cash
outlay spending through the first quarter is $32.0 million, or 17.6 percent of the
total budgeted outlay. More detailed information on the CIP budget review can
be found in Section 3.
• 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 national economic outlook from the
Sanitation District's money manager, Chandler Asset Management (Chandler).
Chandler reported that the Long-Term Portfolio returned 52 basis points over the
quarter, underperforming the Bank of America Merrill Lynch 1-5 year AAA U.S.
Corporate and Government Index by 16 basis points, while the Liquid Operating
Monies Portfolio returned 6 basis over the quarter, outperforming its benchmark,
the three-month Treasury Bill index return of 5 basis points.
Chandler further notes that Nonfarm payrolls rose by 142,000 in September, below
the consensus forecast of 201,000. Meanwhile, the PCE price index is still running
well below the Fed's 2.0% target, at just 0.3% on a year-over-year basis in August.
In their view, a rate hike is still possible before year-end, but depending on domestic
and global economic data, as well as any potential financial market volatility fueled
by a US debt ceiling debate over the next few months, it could be pushed out to
2016. Fed funds futures currently imply that the Fed could remain on hold until
March or even June of next year. The Federal Open Market Committee (FOMC)
left policy rates unchanged at its September meeting. The Committee cautioned
that "recent global economic and financial developments may restrain economic
activity."Overall,the Fed's September policy statement was dovish and the outlook
for future monetary policy changes remains uncertain.
US economic data has been mixed. Over the past three months, payrolls have
increased by an average of 167,000 per month, compared to the trailing six-month
average of 199,000. In September the unemployment rate was unchanged at 5.1%,
but the participation rate edged down and wages were flat. Meanwhile, housing still
appears to be a growing source of strength for the US economy. In addition,
consumer confidence remains strong, which should bode well for fourth quarter
holiday shopping. The manufacturing sector, on the other hand, remains under
pressure, largely due to the strength of the US dollar. Second quarter GDP growth
was revised upward to an annualized rate of 3.9% from the second estimate of
3.7%. Market participants currently expect annualized GDP growth of about 2.4%
in the third quarter, and 2.7% growth in the fourth quarter.
Interest rate volatility remains elevated due to continued uncertainty regarding the
outlook for global economic growth and the timing of the first fed funds rate hike.
Page 2
Executive Summary
Yields on 2-year and 10-year Treasury notes declined in September, offsetting
increases in August. Mixed US economic data, divergent central bank monetary
policies, and concerns about weakening economic growth in China and other
emerging markets have influenced interest rates.
Economic Outlook
The domestic and global economic outlook modestly deteriorated during the third
quarter of 2015. On the domestic front the unemployment rate continued to contract
and is currently at 5.1% however broader measures of unemployment, as well as
the participation rate, remain at levels inconsistent with full employment. The pace
of job growth also contracted with the three month moving average of nonfarm
payrolls currently at 167k versus 231k at the end of the prior quarter. Second
quarter GDP was revised higher to 3.9%, versus 0.6% reading in the first quarter,
however the outlook for GDP growth over the balance of the year is tepid. The
global economic backdrop remains challenging as the growth outlook in Europe,
Japan, and China continues to underwhelm. Commodity prices remain weak
placing further downward pressure on inflation metrics, complicating the messaging
of the Federal Reserve on normalizing monetary policy.
Chandler is forecasting market volatility to remain elevated through the balance of
the year. The Federal Reserve will continue to be a contributor to investor angst as
Fed communication on a desire to tighten monetary policy conflict with the Fed's
dual mandate of full employment and stable prices. Even if the Federal Reserve is
able to raise rates later this year or early in 2016, the overall increase in rates will
be low and the pace very gradual given the divergence in developed market central
bank policies. The recent dislocation in markets, with investment grade credit
spreads widening, will likely present some compelling investment opportunities in
the coming months.
• Quarterly Certificates of Participation (COP) Report
The report includes a summary of each outstanding debt issuance and a
comparative chart illustrating the COP rate history.
Page 3
2015-16 First Quarter Review
This Page Intentionally Left Blank
Page 4
ADMINISTRATION COMMITTEE Meeting Date TOBd.of Dir.
11/12/15 11/la/15
AGENDA REPORT em Number Iem Numbe
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL
FINANCIAL REPORT (CAFR) FOR THE YEAR END JUNE 30, 2015.
GENERAL MANAGER'S RECOMMENDATION
Receive and file the Sanitation District's Comprehensive Annual Financial Report for the
year ended June 30, 2015, prepared by staff and audited by McGladrey, Certified Public
Accountants, along with the following reports prepared by McGladrey:
A. Report to the Administration Committee; and
B. Report on Internal Controls; and
C. Independent Accountants' Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets.
SUMMARY
The Sanitation District's independent auditors, McGladrey, have completed their
examination of the Sanitation District's financial statements for the year ended
June 30, 2015, and have issued an unmodified opinion. Each year, the Administration
Committee reviews the results of the audit and the corresponding Auditor's report. During
their audit, McGladrey, noted no matters involving the internal control over financial
reporting and its operations that they consider to be material weakness. McGladrey will
attend the meeting to respond to any questions of Directors.
Staff has prepared the Comprehensive Annual Financial Report, including the audited
financial statements. As the Sanitation District has consistently earned the Certificate of
Achievement for Excellence in Financial Reporting from the Government Finance Officers
Association (GFOA), this year's report will be submitted to GFOA for their review.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
N/A
Page 1 of 2
ATTACHMENTS
The following attechment(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 and attachments:
• Report to the Administration Committee
• Report on Internal Controls
• Response to Recommendation from Auditor's Internal Control Report
• Independent Accountants' Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets
• Comprehensive Annual Financial Report for the Year Ended June 30, 2015.
(Separately bound document)
Page 2 of 2
Orange County Sanitation
District
Report to the Administration Committee
October 23, 2015
McGladrey Assurance-Tax•Consulting
McGladrey LLP
18401 Von Kaonan,5"Floor
Irvine,CA 92612-8531
• M cG l a d rey 09492556500 F949255.5091
Muw.mcglatlrey.com
October 23,2015
Members of the Administration Committee
Orange County Sanitation District
Fountain Valley, California
We are pleased to present this report related to our audit of the financial statements of the Orange
County Sanitation District(the District)as of and for the year ended June 30, 2015. This report
summarizes certain matters required by professional standards to be communicated to you in your
oversight responsibility for the District's financial reporting process.
This report is intended solely for the information and use of the Administration Committee,the Board of
Directors and management, and is not intended to be, and should not be, used by anyone other than
these specified parties. It will be our pleasure to respond to any questions you have about this report. We
appreciate the opportunity to continue to be of service to the District.
llle- l «11�
MemLvr 0 the PSM InbmMlonal neMork of Ind[ neon anounllnq lae and mnmklg fi,nf.
Contents
Required Communications 1-2
Summary of Significant Accounting Estimates 3-4
Summary of Uncorrected Misstatements 5
Exhibit—Significant Written Communications Between Management and Our Firm
Required Communications
Generally accepted auditing standards (AU-C 260, The Auditor's Communication With Those Charged
With Governance) require the auditor to promote effective two-way communication between the auditor
and those charged with governance. Consistent with this requirement,the following summarizes our
responsibilities regarding the financial statement audit as well as observations arising from our audit that
are significant and relevant to your responsibility to oversee the financial reporting process:
Area Comments
Our Responsibilities With Our responsibilities under auditing standards generally accepted in
Regard to the Financial the United States of America have been described to you in our
Statement Audit arrangement letter dated July 27, 2015. Our audit of the financial
statements does not relieve management or those charged with
governance of their responsibilities,which are also described in that
letter.
Overview of the Planned We have issued a separate communication regarding the planned
Scope and Timing of the scope and timing of our audit and have discussed with you our
Financial Statement Audit identification of, and planned audit response to, significant risks of
material misstatement.
Accounting Policies and Preferability of Accounting Policies and Practices
Practices Under generally accepted accounting principles, in certain
circumstances, management may select among alternative
accounting practices. In our view, in such circumstances,
management has selected the preferable accounting practice.
Adoption of,or Change in,Accounting Policies
Management has the ultimate responsibility for the appropriateness of
the accounting policies used by the District. Following is a description
of a significant accounting policy or its application that was either
initially selected or changed during the year:
• Implementation of Government Accounting Standards Board
(GASB)Statement No. 68,Accounting and Financial Reporting
for Pensions—an amendment of GASB Statement No. 27, and
GASB Statement No. 71, Pension Transition for Contributions
Made Subsequent to the Measurement Date—an amendment to
GASB Statement No. 68.
Significant or Unusual Transactions
We did not identify any significant or unusual transactions or
significant accounting policies in controversial or emerging areas for
which there is a lack of authoritative guidance or consensus.
Management's Judgments and Accounting Estimates
Summary information about the process used by management in
formulating particularly sensitive accounting estimates and about our
conclusions regarding the reasonableness of those estimates is in the
attached Summary of Significant Accounting Estimates.
1
Area Comments
Audit Adjustments There were no audit adjustments made to the original trial balance
presented to us to begin our audit.
Uncorrected Misstatements Uncorrected misstatements are summarized in the attached Summary
of Uncorrected Misstatements.
Disagreements With We encountered no disagreements with management over the
Management application of significant accounting principles,the basis for
management's judgments on any significant matters,the scope of the
audit or significant disclosures to be included in the financial
statements.
Consultations With Other We are not aware of any consultations management had with other
Accountants accountants about accounting or auditing matters.
Significant Issues No significant issues arising from the audit were discussed with or
Discussed With were the subject of correspondence with management.
Management
Significant Difficulties We did not encounter any significant difficulties in dealing with
Encountered in Performing management during the audit.
the Audit
Significant Written Copies of material written communications between our Firm and the
Communications Between management of the District, including the representation letter
Management and Our Firm provided to us by management, are attached in the Exhibit.
2
Orange County Sanitation District
Summary of Significant Accounting Estimates
Year Ended June 30, 2015
Accounting estimates are an integral part of the preparation of financial statements and are based upon
management's current judgment.The process used by management encompasses its knowledge and
experience about past and current events, and certain assumptions about future events.You may wish to
monitor throughout the year the process used to determine and record these accounting estimates. The
following describes the significant accounting estimates reflected in the District's June 30, 2015 financial
statements:
Basis for Our
Conclusions on
Management's Reasonableness of
Estimate Accounting Policy Estimation Process Estimate
Useful Lives of Long- The estimated useful Management We tested the
Lived Assets lives of assets determines useful lives reasonableness of
generally have the based on past information underlying
following ranges: experience, engineer management's
sewage collection estimates and industry estimate. Based on our
facilities, 50 years; norms. Management procedures,we have
sewage treatment reviews for changes in concluded that the
facilities,40 years; the useful lives of long- assigned useful lives of
sewage disposal lived assets by capital assets are
facilities,40 years; and evaluating prominent reasonable.
general plant and changes in
administrative facilities, circumstances affecting
11.5 years. These capital assets to
assets are depreciated determine whether
using the straight-line impairment or change
method. Construction in the useful life of a
in progress is not capital asset has
depreciated until ready occurred.
for intended use.
A capital asset is
considered impaired if
both the decline in the
service utility of the
capital asset is large in
magnitude and the
event or change in
circumstances is
outside the normal life
cycle of the capital
asset.
3
Basis for Our
Conclusions on
Management's Reasonableness of
Estimate Accounting Policy Estimation Process Estimate
Net Pension Liability Pension plans that Management utilizes We tested the
meet the criteria for Orange County reasonableness of the
recognition in Employees' Retirement information underlying
accordance with GASB System's (OCERS) the actuarial
Statement No. 68 are actuaries for its defined evaluations. Based on
measured at the net of benefit plan. our procedures,we
actuarially determined Management reviewed concluded that the net
total pension liabilities and approved the pension liability
and fiduciary net plan actuarial assumptions recorded is reasonable.
assets. If the total and calculations used
pension liabilities to determine the net
exceed the fiduciary pension liability and
net plan assets, it related components.
results in a net pension
liability,whereas a net
pension asset is
recorded if the total
pension liability is less
than the fiduciary net
plan assets.
4
Orange County Sanitation District
Summary of Uncorrected Misstatements
Year Ended June 30, 2015
Effect-0ebit(Credit)
Descdpdon Assets Liabilities Net Position Revenues Expenses
Reversed opening equity misstatements $ - $ - $ 2,065,248 $ (869,384) $ (1,195,864)
• Unamortized goodwill amortization related
to IRWD excess purchase price (905,439) - 1,563,148 - (657,709)
• Effects of additional capitalized interest
from the prior year 605,875 - (622,250) - 16,375
• Variance in amortization of premium and
discounts betyeen straight-line and effective
interest methods - 656,595 (1,691,460) - 1,034,865
• Contingent liability for existing lifigadon - (500,000) - 500.000
Total affect (1,171,717) $ (869,384) $ (302,333)
Statement of net position effect $ (299,51if4) $ 166,595 $ 142,969
5
Exhibit—Significant Written Communications Between Management and Our Firm
Orange County Sanitation District
Sawing: 10844 Ellis Avenue,Fountain Valley,0192708
Anaheim 714.962.2411 www.oaewers.com
Brea October 23, 2015
Buena Park
Cypress McGladrey LLP
18401 Von Kaman Avenue, 5th Floor
FountainValley Irvine, CA 92612
Fullerton
Garden Grove This representation letter is provided in connection with your audit of the financial
statements of the Orange County Sanitation District(the District)as of and for the year
Huntington Beach ended June 30, 2015 for the purpose of expressing an opinion on whether the financial
rvine statements are presented fairly, in all material respects, in accordance with accounting
L.Habra principles generally accepted in the United States of America(U.S. GAAP).
We confirm, to the best of our knowledge and belief, that as of October 23, 2015:
La Palma
Los Alamitos Financial Statements
Newport Beach 1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement
letter dated July 27, 2015, for the preparation and fair presentation of the financial
Orange statements referred to above in accordance with U.S. GAAP.
Placentia 2. We acknowledge our responsibility for the design, implementation and maintenance
Santa Ana of internal control relevant to the preparation and fair presentation of financial
SealBeach statements that are free from material misstatement,whether due to fraud or error.
Stanton 3. We acknowledge our responsibility for the design, implementation and maintenance
of internal control to prevent and detect fraud.
Tustin
4. Significant assumptions used by us in making accounting estimates, including those
Villa Park measured at fair value, are reasonable and reflect our judgment based on our
.e knowledge and experience about past and current events, and our assumptions
about conditions we expect to exist and courses of action we expect to take.
CostaSanit District 5. All events subsequent to the date of the financial statements, and for which U.S.
Midway City GAAP requires adjustment or disclosure, have been adjusted or disclosed.
sanitary District
6. The effects of all known actual or possible litigation and claims have been accounted
Irvine Ranch for and disclosed in accordance with U.S. GAAP.
Water District
Yorba Linda 7. There are no capital assets that have experienced permanent impairment as
Water District indicated in Governmental Accounting Standards Board (GASB)Statement No. 42,
Accounting and Financial Reporting for Impairment of Capital Assets and for
Insurance Recoveries.
8. The amounts due to the Irvine Ranch Water District of$2,869,329 have been
accurately calculated based on the applicable agreements.
F' 9. There are no unasserted claims or assessments that our lawyer has advised us are
probable of assertion and must be disclosed in accordance with GASB Statement
No. 10 or GASB Statement No. 62.
To protect public health and the environment by providing
effective wastewater collection, treatment,and recycling.
McGladrey LLP
October 23, 2015
Page 2
10. We have no direct or indirect, legal or moral obligation for any debt of any organization,
public or private, that is not disclosed in the financial statements.
e r^4e dE Ex+�"c
11, We have complied with all aspects of Contractual agreements that would have a material
effect on the financial statements in the event of noncompliance. In connection
therewith, we specifically represent that we are responsible for determining that we are
not subject to the requirements of the Single Audit Act and U.S. Office of Management
and Budget Circular No. A-133, because we have not received, expended or otherwise
been the beneficiary of the required amount of federal awards during the period of this
audit.
12. We have provided all amendments to the Orange County Employer Retirement
System's pension plan, and there were no amendments to the pension plan subsequent
to December 31, 2013 valuation date.
13. We have implemented GASB Statement No. 68, Accounting and Financial Reporting for
Pensions—an amendment of GASB Statement No. 27, and GASB Statement No. 71,
Pension Transition for Contributions Made Subsequent to the Measurement Date—an
amendment of GASB Statement No. 68, as discussed in Note 1 to the financial
statements. The District has accurately disclosed the effect of adopting the guidance
had on its financial position and the changes in net position.
14, We have Completed the process of evaluating the effect that would result from the
implementation of GASB pronouncements that were effective for the fiscal year ended
June 30, 2015. We believe that the effect on the District's net position and the changes
in net position for any new pronouncements would be insignificant.
15. We have informed you of all uncorrected misstatements.
As of and for the year ended June 30, 2015, we believe that the effects of the
uncorrected misstatements aggregated by you and summarized below are immaterial,
both individually and in the aggregate,to the financial statements. For purposes of this
representation, we consider items to be material, regardless of their size, if they involve
the misstatement or omission of accounting information that, in light of surrounding
circumstances, makes it probable that the judgment of a reasonable person relying on
the information would be changed or influenced by the omission or misstatement.
Effect—Debit(Credit)
Description Assets Liabilities Net Position Revenues Expenses
Reversed opening equity misstatements $ - $ - $ 2.065,248 $ (869.384) $ (1,195,864)
• Unamod¢ed goadW,ll amortization related
to IRM excess purchase price (905,439) - 1,563,148 - (657.709)
• Effects of additional capitalized interest
from the prior year 605,875 - (622,250) - 16,375
•Variance in amortization of premium am
discounts beevaen straight-line and effective
interest methods - 656,595 (1,fi91,460) - 1.034.865
• Contingent liability for existing litigation - (500,000) - 500,000
Total effect (1,171,717)
statement of net position effect $ (299.564) $ 156,595 $ 142,959
McGladrey LLP
October 23, 2015
Page 3
_ Information Provided
16. We have provided you with:
a. Access to all information of which we are aware that is relevant to the preparation
and fair presentation of the financial statements such as records, documentation and
other matters.
b. Additional information that you have requested from us for the purpose of the audit.
c. Unrestricted access to persons within the District from whom you determined it
necessary to obtain audit evidence.
d. Minutes of the meetings of the governing board and committees, or summaries of
actions of recent meetings for which minutes have not yet been prepared.
17. All transactions have been recorded in the accounting records and are reflected in the
financial statements.
18. We have disclosed to you the results of our assessment of risk that the financial
statements may be materially misstated as a result of fraud.
19. We have no knowledge of allegations of fraud or suspected fraud affecting the District's
financial statements involving:
a. Management.
b. Employees who have significant roles in internal control.
c. Others where the fraud could have a material effect on the financial statements.
20. We have no knowledge of any allegations of fraud or suspected fraud affecting the
District's financial statements received in communications from employees, former
employees, analysts, regulators, short sellers or others.
21. We have no knowledge of noncompliance or suspected noncompliance with laws or
regulations whose effects were considered when preparing financial statements.
22. We have disclosed to you all known actual or possible litigation and claims whose
effects should be considered when preparing the financial statements.
23. We have disclosed to you the identity of the District's related parties and all the related-
party relationships and transactions of which we are aware.
24. We are aware of no significant deficiencies, including material weaknesses, in the
design or operation of internal controls that could adversely affect the District's ability to
record, process, summarize or report financial data.
25. We are aware of no communications from regulatory agencies concerning
noncompliance with,or deficiencies in, financial reporting practices.
26, There were no transactions with related parties during the year ended June 30, 2015.
McGladrey LLP
October 23, 2015
Page 4
a� Supplementary Information
INE E1"P
27. With respect to supplementary information presented in relation to the financial
statements as a whole:
a. We acknowledge our responsibility for the presentation of such information.
b. We believe such information, including its form and content, is fairly presented in
accordance with U.S. GAAP.
c. The methods of measurement or presentation have not changed from those used in
the prior period.
28. With respect to management's discussion and analysis, Proportionate Share of the Net
Pension Liability, Schedule of District Contributions,and Schedules of Funding Progress
presented as required by GASB to supplement the basic financial statements:
a. We acknowledge our responsibility for the presentation of such required
supplementary information.
b. We believe such required supplementary information is measured and presented in
accordance with guidelines prescribed by U.S. GAAP.
c. The methods of measurement or presentation have not changed from those used in
the prior period.
29. During the course of your audit,you may have accumulated records containing data that
should be reflected in our books and records.All such data have been so reflected.
Accordingly, copies of such records in your possession are no longer needed by us.
ORANGE COUNTY SANITATION DISTRICT
James Merberg, General Manager
Lorenzo Tyner, Q y ctor of Finance and
Administrative ervices
/ r
i
Mi a White, Controller
j
Orange County Sanitation District
10844 Pis Avenue,Fountain Valley,CA92708
Anaheim 714.962.2411Buena Park vxm.acsewers.com
Brea
October 23, 2015
Cypress
FountainValley McGladrey LLP
FuVerton 18401 Von Karman Avenue, 5th floor
Irvine, CA 92612
Garden Grow
Huntington Beach In connection with your engagement to perform, in accordance with attestation standards
Irvine established by the American Institute of Certified Public Accountants, specified agreed-
upon procedures with respect to certain records and transactions of Orange County
La Habra Sanitation District(the District)for the year ended June 30, 2015, for the purpose of
determining as to whether the District's appropriation limitation calculation was computed
La Palma in accordance with Article XIII-B of the Constitution of the State of California, we confirm,
LosAlamitos to the best of our knowledge and belief the following representations made to you during
the course of your engagement:
Newport Beach
1. We understand that we have the responsibility for the appropriation limitation
Orange Calculation.
Placentia
2. We understand that we have the responsibility for determining that such criteria are
Santa Ana i appropriate for our purposes.
SealBeach 3. There are no known matters contradicting the appropriation limitation calculation nor
Stimton any communication from regulatory agencies affecting the appropriation limitation
calculation.
Tustin
Vila Park 4. We have made available to you all records and related data relevant to the subject
matter and the agreed-upon procedures.
County of Orange
5. There has been no knowledge of fraud or suspected fraud affecting the entity
Costa involving:
DistrictSanitary
MidwayCity a. Management.
IrvineSanitary District
Ranch b. Employees who have significant roles in internal control.
DistrictWater
c. Others where fraud could have a material effect on the appropriation limitation
Yoma calculation.
District
Water
6. We acknowledge our responsibility for the design and implementation of programs
and controls to provide reasonable assurance that fraud is prevented and detected.
7. We have no knowledge of any allegations of fraud or suspected fraud affecting the
Company received in communications from employees, former employees,analysts,
�y regulators or others.
8. We have responded fully to all inquiries made to us by you during your engagement.
9. During the course of your engagement, you may have accumulated records
containing data that should be reflected in our books and records. All such data have
" been so reflected.Accordingly, copies of such records in your possession are no
longer needed by us.
To protect public health and the environment by providing
effective wastewater collection,treatment,and recycling.
McGladrey LLP
October 23, 2015
Page 2
ORANGE COUNTY SANITATION DISTRICT
rF,�� IXf ENJP �n '//`/'/
James I erberg General Manager
Lotenzo Tyner,qWbctor of Finance and
Administrativ Services
/u-
M!*White, r er
M6ladrey LLP
18401 Van Kaman, 5m Floor
Irvine,CA 92612-8531
O 949.255.6500 F 949.255,5091
= McGladrey wv nncgladnayxom
Independent Accountant's Report on
Applying Agreed-Upon Procedures
Board of Directors
Orange County Sanitation District
Fountain Valley, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Calculation of the Orange County Sanitation District(the District)for the year ended June 30, 2015. These
procedures, which were agreed to by the District and the League of California Cities (as presented in the
publication entitled 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 Appropriations Limit Calculation.
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. 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 were as follows:
1. We obtained the completed internal calculations from management and compared the limit and annual
adjustment factors included in those calculations to the limit and annual adjustment factors that were
adopted by a resolution of the 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 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, this years 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 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.
1
MenLerolrl,e PSM IMemubnalnerworkol urlgzrdeM rrmuMryu »dmnfuhlrgfirmi.
We were not engaged to and did not conduct an audit, the objective of which would be the expression of
an opinion on the accompanying Appropriations Limit Calculation of the District. Accordingly, we do not
express such an opinion. 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.
/r/C.�[waecy LGP
Irvine, California/
October 23, 2015
2
Orange County Sanitation District
Appropriations Limit Calculation
Year Ended June 30,2015
Amount Source
A. Last year's limit $ 90,878,266
B. Adjustment factors
1. Population change 1.0070 State Finance
2. Per capita change 0.9977 State Finance
Total adjustment[(B.1 x S.2)-1.0) 0.0047 (B.1xB.2)
C. Annual adjustment 425,665 (BxA)
D. Other adjustments:
1. Loss responsibility(-) -
2. Transfer to private(-) -
3. Transfer to fees(-) -
4. Assumed responsibility(+)
Subtotal -
E. Total adjustments 425,665 (C+D)
F. This year's limit $ 91.303,931 (A+E)
3
ADMINISTRATION COMMITTEE Meeting Dare TOBA.of Dir.
11/12/15 11/1811S
AGENDA REPORT Item Number Item Number
e
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Celia Chandler, Director of Human Resources
SUBJECT: OWNER CONTROLLED INSURANCE PROGRAM EXTENSION
GENERAL MANAGER'S RECOMMENDATION
Approve the purchase of a multi-year extension of the Owner Controlled Insurance
Program at a total cost of $725,612 for five policies covering three layers of liability
coverage, workers compensation coverage, and pollution coverage, through
December 31, 2017.
SUMMARY
The Sanitation District began an Owner Controlled Insurance Program (OCIP) in 2008
in order to save money on the insurance costs for large construction projects. The
OCIP covers approximately 20 projects. The most recent estimate by the Sanitation
District's OCIP Administrator, Aon Risk Services, is that the OCIP is saving the
Sanitation District approximately $3 million by buying in bulk as compared to the
alternative, which would involve the cost of the contractors and subcontractors each
purchasing their own insurance separately.
The OCIP will expire in December 31, 2015. Because three large projects have not yet
finished, another extension is needed. The OCIP insurers have quoted $725,612 for
that extension. That quote includes $100 million in liability limits, and also workers
compensation coverage. In addition, pollution insurance is included.
The bulk of the construction which is not finished is connected with the project: Sludge
Thickening, Dewatering and Odor Control at Plant 1 (P1-101), (almost 90% of the
remaining OCIP construction), while much smaller amounts are connected with
projects: Sludge Digester Rehabilitation at Plant No. 1 (P1-100) and Solids Thickening
and Processing Upgrades (P2-89). Project P1-101, expected to have $124 million in
construction value when completed, was started in January 2013.
Staff agrees with Aon's belief that there are no options balancing cost effectiveness and
risk better than purchasing the extension from the existing insurers. Aon estimates that
the cost to the District for contractors to take over the insurance would be over $1
million, if carriers would even agree to do so for projects in progress.
Page 1 of 3
PRIOR COMMITTEE/BOARD ACTIONS
June 2013 — The Board approved a Professional Services Agreement with Aon Risk
Services, Inc. to continue acting as the Broker/Administrator for the OCIP.
March 2008 — The Board approved the purchase of insurance policies for a five-year
"rolling OCIP", comprising a variety of large Capital Improvement Projects beginning in
the following five years.
October 2007 — The Board approved a Professional Services Agreement with Aon Risk
Services, Inc. to act as the Broker/Administrator for the OCIP.
ADDITIONAL INFORMATION
In recent years many governmental agencies have started OCIPs as a way of saving
money on construction. The Sanitation District hired a consultant in 2007 who
recommended that a 'rolling OCIP" would be feasible, and later in 2007 the Sanitation
District chose Aon to administer the OCIP. The Board approved a package of
insurance policies for the OCIP in 2008, costing around $4 million.
The OCIP has contained approximately 20 different Capital Improvement Projects over
the years, and the total paid construction value of the projects is approximately $250
million so far. The total projected construction value at the conclusion of the OCIP is
expected to be roughly $330 million. Three of the projects, including the largest one of
the 20, have not yet finished.
Since the OCIP was developed in 2008 the Sanitation District has adjusted its lineup of
OCIP projects, including changes to the cost and timing of projects.
The OCIP was extended in 2013, through 2015, for $25,000. Insurance companies are
very reluctant to write long-term insurance policies because of regulatory restrictions
and because of restrictions placed on them by their reinsurers. As a result, the
extension was only through 2015. Now another extension is needed.
Staff and Aon have explored other options, including the Sanitation District completely
self-insuring this risk, partly self-insuring this risk, getting quotes from other insurers,
and requiring contractors and subcontractors to supply insurance after December 31,
2015. It is in general very difficult to change insurers for construction that is over 50%
complete, and the cost tends to be very high. Staff agrees with Aon that none of these
options is as feasible as extending the OCIP as Aon suggests with the existing insurers.
CEQA
N/A
Page 2 of 3
BUDGET/PURCHASING ORDINANCE COMPLIANCE
This request complies with authority levels of the Sanitation District's Purchasing
Ordinance. This item is not budgeted. As the OCIP supports the Capital Improvement
Program (CIP), funds will be identified and transferred from unexpended funds within
the total budget.
ATTACHMENT
The following attachments) maybe viewed on-line at the OCSD website (wwwocsd.corn with the
complete agenda package:
N/A
Page 3 of 3
ADMINISTRATION COMMITTEE Meeting Dare To ad.of DV
12/15 —
AGENDA REPORT Item Number Item Number
9 —
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Bob Ghirelli, Assistant General Manager
SUBJECT: STORM WATER CAPTURE
GENERAL MANAGER'S RECOMMENDATION
Information Only.
SUMMARY
At the Orange County Sanitation District's Strategic Planning Session on October 21, one
of the topics brought up was the possibility of capturing and recycling storm water. After
discussion regarding OCSD's capacity limits, the various agencies that are responsible
for storm water capture and recharge, and a brief update on OCSD's dry weather urban
runoff program, it was suggested that the Orange County Water District attend a future
meeting to provide a presentation on OCWD's storm water capture efforts. Adam
Hutchinson, OCWD's Recharge Planning Manager will be providing an informational
presentation at this month's committee meetings.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
N/A
CEQA
N/A
BUDGET/PURCHASING ORDINANCE COMPLIANCE
N/A
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the
complete agenda package:
N/A
Page 1 of 1
ORANGE COUNTY SANITATION DISTRICT
Agenda
Terminology Glossary
Glossary of Terms and Abbreviations
AQMD Air Quality Management District
ASCE American Society of Civil Engineers
BOD Biochemical Oxygen Demand
CARB California Air Resources Board
CASA California Association of Sanitation Agencies
CCTV Closed Circuit Television
CEQA California Environmental Quality Act
CRWQCB California Regional Water Quality Control Board
CWA Clean Water Act
CWEA California Water Environment Association
EIR Environmental Impact Report
EMT Executive Management Team
EPA U.S. Environmental Protection Agency
FOG Fats, Oils, and Grease
FSSD Facilities Support Services Department
gpd Gallons per day
GWR System Groundwater Replenishment System (also called GWRS)
ICS Incident Command System
IERP Integrated Emergency Control Plan
LOS Level of Service
MGD Million gallons per day
NACWA National Association of Clean Water Agencies
NPDES National Pollutant Discharge Elimination System
NWRI National Water Research Institute
O&M Operations and Maintenance
OCCOG Orange County Council of Governments
OCHCA Orange County Health Care Agency
OCSD Orange County Sanitation District
OCWD Orange County Water District
GOBS Ocean Outfall Booster Station
OSHA Occupational Safety and Health Administration
POTW Publicly Owned Treatment Works
ppm Parts per million
RFP Request For Proposal
RWQCB Regional Water Quality Control Board
SARFPA Santa Ana River Flood Protection Agency
Glossary of Terms and Abbreviations
SARI Santa Ana River Inceptor
SARWQCB Santa Ana Regional Water Quality Control Board
SAWPA Santa Ana Watershed Project Authority
SCADA Supervisory Control and Data Acquisition system
SCAP Southern California Alliance of Publicly Owned Treatment Works
SCAQMD South Coast Air Quality Management District
SOCWA South Orange County Wastewater Authority
SSMP Sanitary Sewer Management Plan
SSO Sanitary Sewer Overflow
SWRCB State Water Resources Control Board
TDS Total Dissolved Solids
TMDL Total Maximum Daily Load
TSS Total Suspended Solids
WDR Waste Discharge Requirements
WEF Water Environment Federation
WERF Water Environment Research Foundation
Activated-sludge process — A secondary biological wastewater treatment process where bacteria
reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved
nutrients in the wastewater.
Benthos — The community of organisms, such as sea stars, worms and shrimp, which live on, in, or
near the seabed, also know as the benthic zone.
Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes
decomposition by microorganisms. Testing for BOO is done to assess the amount of organic matter in
water.
Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the
wastewater treatment process. This high-quality product can be recycled as a soil amendment on
farm land or further processed as an earth-like product for commercial and home gardens to improve
and maintain fertile soil and stimulate plant growth.
Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets.
Also includes treatment improvements, additional capacity, and projects for the support facilities.
Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also
occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common
bacteria in wastewater.
Collections system — In wastewater, it is the system of typically underground pipes that receive and
convey sanitary wastewater or storm water.
Certificate of Participation (COP) —A type of financing where an investor purchases a share of the
lease revenues of a program rather than the bond being secured by those revenues.
Glossary of Terms and Abbreviations
Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic
wastewater contaminants.
Dilution to Threshold (D1T) — the dilution at which the majority of the people detect the odor
becomes the DrT for that air sample.
Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane,
nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse
effect").
Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively
responds to Southern California's current and future water needs. This joint project between the
Orange County Water District and the Orange County Sanitation District provides 70 million gallons a
day of drinking quality water to replenish the local groundwater supply.
Levels of Service (LOS)—Goals to support environmental and public expectations for performance.
NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been
found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide
with extra ultra-violet treatment.
National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water
Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S.
Environmental Protection Agency (EPA). NBP is committed to developing and advancing
environmentally sound and sustainable biosolids management practices that go beyond regulatory
compliance and promote public participation in order to enhance the credibility of local agency
biosolids programs and improved communications that lead to public acceptance.
Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility.
Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant.
Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million
gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the
ocean for disposal, after treatment.
Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial
wastewater. Combined sewers carry both wastewater and urban run-off.
South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that
develops plans and regulations designed to achieve public health standards by reducing emissions
from business and industry.
Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process,
where bacteria and other microorganisms consume dissolved nutrients in wastewater.
Sludge—Untreated solid material created by the treatment of wastewater.
Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater.
Trickling filter — A biological secondary treatment process in which bacteria and other
microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in
wastewater as it trickles over them.
Glossary of Terms and Abbreviations
Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm
drains, rivers, lakes, and oceans.
Wastewater—Any water that enters the sanitary sewer.
Watershed —A land area from which water drains to a particular water body. OCSD's service area is
in the Santa Ana River Watershed.