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HomeMy WebLinkAbout11-18-2015 Steering Committee Agenda Packet.pdf Orange County Sanitation District Wednesday, November 18, 2015 Regular Meeting of the F, 5:00 P.M. STEERING COMMITTEE _ Administration Building Conference Rooms A& B 10844 Ellis Avenue Fountain Valley, CA 92708 (714) 593-7433 AGENDA DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to address the Board of Directors on any item, please complete a Speaker's Form (located at the table at the back of the room) and submit it to the Clerk of the Board or notify the Clerk of the Board the item number on which you want to speak. Speakers will be recognized by the Chairman and are requested to limit comments to three minutes. REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of genre/ interest to the Directors. These reports are for information only and require no action by the Directors. CONSENT CALENDAR: The Consent Calendar Items are considered to be routine and will be enacted, by the Committee, after one motion, without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1. APPROVAL OF MINUTES (Clerk of the Board) RECOMMENDATION: Approve Minutes of the October 28, 2015 meeting of the Steering Committee. 2. GENERAL MANAGER COMPENSATION AND BENEFITS (John Nielsen) RECOMMENDATION: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 15-24 entitled, "A Resolution of the Board of Directors of Orange County Sanitation District amending the salary increase, salary range adjustment, and changes to benefits for the General Manager for Fiscal Year 2015- 2016." 11/18/2015 Sfeenng Commiffee Agenda Page 1 of 3 NON-CONSENT CALENDAR: 3. EXTENSION OF AGREEMENT WITH EAST ORANGE COUNTY WATER DISTRICT (Jim Herberg) RECOMMENDATION: Recommend to the Board of Directors to: Authorize the General Manager to negotiate and execute an extension of the Local Sewer Facilities Transfer Agreement with East Orange County Water District regarding the transfer of local sewers in Service Area 7. INFORMATION ITEMS: 4. STRATEGIC PLAN UPDATE BOARD WORKSHOP SUMMARY (Bob Ghirelli) CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: To the Steering Committee meeting scheduled for Wednesday, December 16, 2015, at 5:00 P.M. 11/1812015 Steering Committee Agenda Page 2 of 3 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. Aaenda Postina: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, and on the Sanitation District's website at www.ocsd.com, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item,including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board. Aaenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A.Lore Clerk of the Board (714)593-7433 klore@ocsd.com For any questions on the agenda, Committee members may contact staff at: General Manager Jim Herberg (714)593-7300 iherberg0.ocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rohirelliaocsd.com Director of Human Resources Celia Chandler (714)593-7202 cchandlenc3ocsd.cem Director of Engineering Rob Thompson (714)593-7310 rlhompsomtDocsd.com Director of Facility Support Services Nick Amontes (714)593-7210 narhontes2Zocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 Itvner(aocsd.com Administrative Services Director of Operations& Ed Torres (714)593-7080 etorresCdocsd.cem Maintenance 11/18/2015 Steenng Committee Agenda Page 3 of 3 ITEM NO. 1 MINUTES OF THE STEERING COMMITTEE Orange County Sanitation District Wednesday, October 28, 2015 at 5:00 p.m. A regular meeting of the Steering Committee of the Orange County Sanitation District was called to order by Chair Beamish on Wednesday, October 28, 2015 at 5:05 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: John Nielsen, Chair Jim Herberg, General Manager Greg Sebourn, Vice-Chair Bob Ghirelli, Assistant General John Withers, Operations Committee Manager Chair Celia Chandler, Director of Human Tom Beamish, Member-At-Large Resources Lucille Kring, Member-At-Large Lorenzo Tyner, Director of Finance & David Shawver, Member-At-Large Administrative Services Ed Torres, Director of Operations & COMMITTEE MEMBERS ABSENT: Maintenance Keith Curry, Administration Committee Kelly A. Lore, Clerk of the Board Chair Jennifer Cabral Mark Esquer Dean Fisher Norbert Gaia Al Garcia Andrew Nau OTHERS PRESENT: Brad Hogin, General Counsel PUBLIC COMMENTS: None. REPORTS General Manager Jim Herberg introduced and welcomed the new Director of Human Resources, Celia Chandler. Chair Nielsen reported on the success of the 2015 State of the District event including the District's accomplishments and the Annual Report which provided the first communication piece that emphasized our"brand" as a resource recovery facility. 10/2a/2015 Steering Committee Minutes Page 1 d3 Director Withers commended the staff on the "5 minutes per month" information push that was initiated this month. Chair Nielsen also reported on the Strategic Plan Update session that was held on October 21. Staff will take the information received, make any necessary changes and bring it back in December for adoption. He also announced that Adam Hutchinson, OCWD's Recharge Planning Manager, will make a presentation on storm water capture to the OCSD Committees in November. Chair Nielsen then provided an update from the Legislative and Public Affairs (LAPA) Committee including: outreach and educational efforts; State and Federal Lobbyist contract renewals; and the upcoming presentation from Adam Link with CASA at the November LAPA Committee meeting. The Committee requested that the OCSD representatives on CASA's Legislative Committees provide any agendas and updates to the LAPA Committee. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the September 23, 2015 Regular Steering Committee Meeting. AYES: Beamish; Kring; Nielsen; Seboum; Shawver and Withers NOES: None ABSTENTIONS: None ABSENT: Curry NON-CONSENT CALENDAR: 2. GENERAL MANAGER COMPENSATION AND BENEFITS (John Nielsen) RECOMMENDATION: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 15-23 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving salary increase, salary range adjustment, and changes to benefits for the General Manager for Fiscal Year 2015-2016," authorizing the Board Chair to implement a base building salary increase and corresponding salary range adjustment of 7% retroactive to July 10, 2015, and changes to the benefits package for the General Manager, for a total amount not to exceed $41,107. AYES: Beamish; Kring; Nielsen; Sebourn; Shawver and Withers NOES: None 10/25/2015 Steering Committee Minutes Page 2 of 3 ABSTENTIONS: None ABSENT: Curry CLOSED SESSION: General Counsel, Brad Hogin announced that there will be no closed session this evening. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Director Shawver requested that OCSD supply a truckload of compost for use in the new community garden in the City of Stanton; the ribbon cutting to be held on November 16, 2015. Staff will look into the availability and logistics. ADJOURNMENT: The Chair declared the meeting adjourned at 5:24 p.m. to the next Steering Committee meeting to be held on Wednesday, November 18, 2015 at 5:00 p.m. Submitted by: Kelly A. Lore Clerk of the Board 10/25/2015 Steering Committee Minutes Page 3 of 3 STEERING COMMITTEE Meeting Date TOBE.Or .Dir. 11/18/15 11/18/15 AGENDA REPORT ItemNumber Item Number z Orange County Sanitation District FROM: John Nielsen, Board Chair SUBJECT: GENERAL MANAGER COMPENSATION AND BENEFITS GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 15-24 entitled, "A Resolution of the Board of Directors of Orange County Sanitation District amending the salary increase, salary range adjustment, and changes to benefits for the General Manager for Fiscal Year 2015-2016." SUMMARY The attached Resolution No. OCSD 15-24 amends Resolution No. OCSD 15-23. Under Resolution No. OCSD 15-23, adopted at the October 28, 2015 Board meeting, the Board authorized changes to the General Manager's salary. However, the paragraph describing the specific types and amounts of the General Manager's benefits was inadvertently omitted. Thus, Resolution No. OCSD 15-24 corrects the omission and authorizes the changes to the General Manager's benefits, as originally described the October 28, 2015 Board Agenda Report. Resolution No. OCSD 15-23 and the October 28, 2015 Agenda Report entitled "General Manager Compensation and Benefits" are also attached herein. PRIOR COMMITTEE/BOARD ACTIONS October 2015 — Board adopted Resolution No. OCSD 15-23, approving a base building salary increase for the General Manager of 7% of salary, to adjust the corresponding salary range by 7% for FY 2015-2016, and to implement changes to the General Manager's benefits package, effective July 10, 2015. August 2015 — Board authorized the Chair to initiate discussions with the General Manager regarding his compensation and benefits package in closed session. June 2015 — Steering Committee conducted the annual performance evaluation of the General Manager in closed session. November 2014 — Board approved Resolution No. OCSD 14-15, approving a base building salary increase for the General Manager of 3% of salary and to adjust the corresponding salary range by 3% for FY 2014-2015, effective July 11, 2014. June 2014 — Steering Committee conducted the annual performance evaluation of the General Manager in closed session. Page 1 of 2 1125603.1 February 2013 — Board approved appointment of James D. Herberg to the position of General Manager and approved the compensation and benefits package, effective April 1, 2013. ADDITIONAL INFORMATION N/A CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENTS The following attachment(s)are attached in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Resolution No. OCSD 15-24 • Resolution No. OCSD 15-23 • Board Agenda Report, October 28, 2015 Page 2 of 2 1125603.1 ATTACHMENT RESOLUTION NO. OCSD 15-24 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AMENDING THE SALARY INCREASE, SALARY RANGE ADJUSTMENT, AND CHANGES TO BENEFITS FOR THE GENERAL MANAGER FOR FISCAL YEAR 2015-2016 NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER that Section 1b be added and Section 2 be amended to Resolution 15-23 to read as follows: 1. That the Board of Directors hereby authorizes and approves the following changes to General Manager's salary, which shall become effective retroactively to the first pay period of July 2015: a. A base building salary increase for the General Manager of 7% of salary and to adjust the corresponding salary range by 7%. b. A benefits package that would include those benefits offered to represented and unrepresented employees, including medical, dental, vision, disability insurance and paid leave. The General Manager's benefits package also will include additional life insurance coverage at two times (2x) salary, $5,400 automobile allowance, 6% plus $1,250 investment incentive salary (IIS), a $5,000 employer-paid 457(b) deferred compensation contribution, and leave accruals at 250 hours per year, all such benefits projected to cost $25,606. 2. That the Board Chair, or his designee, is authorized to implement the changes to salary range and salary and benefits package approved herein. 1125326.1 0CSI) 15-24-1 PASSED AND ADOPTED at a regular meeting of the Board of Directors held November 18, 2015. John Nielsen Board Chair ATTEST: Kelly Lore, Clerk of the Board 1125326.1 DCSD 15-24-2 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 15-24 was passed and adopted at a regular meeting of said Board on the 181h day of November 2015, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 18'h day of November 2015. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District 1125326.1 OCSD 15-24-3 ATTACHMENT RESOLUTION NO. OCSD 15-23 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT APPROVING SALARY INCREASE, SALARY RANGE ADJUSTMENT,AND CHANGES TO BENEFITS FOR THE GENERAL MANAGER FOR FISCAL YEAR 2015-2016 WHEREAS, the General Manager provides organizational leadership, strategic direction, and District oversight for Orange County Sanitation District (OCSD); and WHEREAS,the General Manager serves an at-will employment status, which may be terminated at any time by the Board with or without cause with no liability; and WHEREAS, it is OCSD's philosophy to compensate employee classifications competitively, which currently can be achieved through alignment with the salary market; and WHEREAS, the July 1, 2014, At-Will Agreement with the General Manager provides that, "District's Steering Committee shall meet with General Manager in August of each year during the term of this Agreement to review and evaluate his performance over the prior year. The Steering Committee shall make its recommendation(s) to the Board concerning adjustment to the compensation and/or benefits paid or provided to General Manager, to be effective in July of the year of review. After consideration of the recommendation(s) of the Steering Committee, the Board shall determine and approve the compensation, including benefits, payable to General Manager, which generally becomes effective July of the fiscal year of the review"; and WHEREAS, the Steering Committee commenced its review of the General Managers performance in June 2015, finalized its review and made its recommendation to the Board on October 28, 2015. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: 1. That the Board of Directors hereby authorizes and approves the following changes to General Manager's salary, which shall become effective retroactively to the first pay period of July 2015: a. A base building salary increase for the General Manager of 7% of salary and to adjust the corresponding salary range by 7%. 2. That the Board Chair, or his designee, is authorized to implement the changes to salary range and salary approved herein. OCSD 15-23-1 PASSED AND ADOPTED at a regular meeting of the Board of Directors held October 28, 2015. Jo n Nielsen Bo d Chair ATTEST: O e ly Lor , Clibrk of Board OCSD 15-23-2 General Manager Pay Tables July 2014 and Proposed 2015 Orange County Sanitation District Classification and Compensation Plan Rates Effective July 1,2014 GENERAL MANAGER Classification Pay Grade Minimum I Midpoint I Control Point Maximum General Manager EMT120 $ 1]5,590 1 $ 220,739 1 $ 238,399 $ 284,58] Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 1,2015 GENERAL MANAGER Classification Pay Grade Minimum I Midpoint I Control Point Maximum General Manager EMT120 S 188.952 IS 236191 1 S 255.087 5 283429 OCSD 15-233 STATE OF CALIFORNIA ) as COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 15-23 was passed and adopted at a regular meeting of said Board on the 281h day of October 2015, by the following vote, to wit: AYES: Bartlett; Beamish; Deaton; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Nielsen; Ooten (Alternate); Parker; Schott (Alternate); Sebourn; Shawver, Tinajero; Wanke; Withers and Yarc NOES: None ABSTENTIONS: M. Murphy (Alternate); and Peotter (Alternate) ABSENT: Diep; Jones; and F. Smith IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 28th day of October 2015. Kell A. L r Cl k of t Board of Directors Orange County Sanitation District OCSD 15-23-4 ATTACHMENT STEERING COMMITTEE Meeting Date TOBE.Or .Dir. 10/28/15 10/28/15 AGENDA REPORT Item Item Number 2 16 Orange County Sanitation District FROM: John Nielsen, Board Chair SUBJECT: GENERAL MANAGER COMPENSATION AND BENEFITS BOARD CHAIR'S RECOMMENDATION Adopt Resolution No. OCSD 15-23 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving salary increase, salary range adjustment, and changes to benefits for the General Manager for Fiscal Year 2015-2016,"authorizing the Board Chair to implement a base building salary increase and corresponding salary range adjustment of 7% retroactive to July 10, 2015, and changes to the benefits package for the General Manager, for a total amount not to exceed $41,107. SUMMARY The General Manager is employed on an At-Will basis, and serves at the pleasure of the Board of Directors. Since the General Manager was appointed to this position in April 2013, the Board has approved one (1) base building salary increase of 3% and a corresponding salary range adjustment in Fiscal Year 2014-2015. The Board Chair is recommending a base building salary increase and corresponding salary range adjustment of 7%, at a total cost not to exceed $15,501, for Fiscal Year 2015-2016. The proposed 7% base building salary increase and the corresponding salary range adjustment would move the General Manager's salary range market position from the 20th percentile to the 26th percentile for Fiscal Year 2015-2016. Similarly, the proposed salary increase would move OCSD's General Manager's market position in terms of incumbents' (OCSD's comparison agencies) salaries and total compensation, from the tat percentile to 9th percentile of peers' salaries, and from the 3rd percentile to 15th percentile of peers' total compensation. The General Manager's market position will be revisited through the current comprehensive classification and compensation study, which will provide the Board with data for consideration on an organization-wide structural alignment of its pay systems. Pursuant to the understanding with the General Manager at the beginning of negotiations, the salary changes would take effect retroactively to July 10, 2015, the first pay period in the current fiscal year. The Board Chair also recommends implementing changes to the General Manager's benefits package to more closely align with those offered to represented and unrepresented employees, at a projected cost of$25,606. Page 1 d 3 The net total cost for all proposed compensation and benefit changes for the General Manager is not to exceed $41,107. PRIOR COMMITTEE/BOARD ACTIONS August 2015 — Board authorized the Chair to initiate discussions with the General Manager regarding his compensation and benefits package in closed session. June 2015 — Steering Committee conducted the annual performance evaluation of the General Manager in closed session. November 2014 — Board approved Resolution No. OCSD 14-15, approving a base building salary increase for the General Manager of 3% of salary and to adjust the corresponding salary range by 3% for FY 2014-2015, effective July 11, 2014. June 2014 — Steering Committee conducted the annual performance evaluation of the General Manager in closed session. February 2013 — Board approved appointment of James D. Herberg to the position of General Manager and approved the current compensation and benefits package, effective April 1, 2013. ADDITIONAL INFORMATION The General Manager provides leadership, strategic direction, and organizational oversight at OCSD. This position serves as the chief executive officer, and it is integral and critical to the success of the agency. During the past year, under the direction of the General Manager, the Sanitation District completed significant goals as set forth by the Board of Directors, including: • Reduced planned user fee increases; • Reaffirmed AAA credit ratings; • Paid down unfunded retirement liabilities, resulting in $6 million of annual savings; • $75 million in other operations savings identified over the next ten-year forecasting period; • No staff increases; • No additional debt; • Secured a $450,000 grant for future water recycling study; • Ceased bleach disinfection of our effluent saving $425,000 per year; • Completed phase 1 of the Newport Forcemain Replacement Project; • Increased flows to GWRS by 30% to 130 mgd; • Achieved labor agreements with bargaining units; • Relocation of Santa Ana River Interceptor from the flood plain (by County of Orange); and • Received numerous national awards including NAWCA Peak Performance Award for 100% compliance, US top 10 Fleets, Budget and Procurement Awards, WEF Plant Safety Award, to name a few. Page 2 d 3 The current At-Will Employment Agreement for General Manager James D. Herberg became effective July 1, 2014. The General Manager's current annual base salary is $221,449. Annually, the Steering Committee makes its recommendation to the Board concerning adjustments to the General Manager's compensation package. Section 6 of the At-Will Employment Agreement specifies the following: "District's Steering Committee shall meet with General Manager in August of each year during the term of this Agreement to review and evaluate his performance over the prior year. The Steering Committee shall make its recommendation(s) to the Board concerning adjustment to the compensation and/or benefits paid or provided to General Manager, to be effective in July of the year of review. After consideration of the recommendation(s) of the Steering Committee, the Board shall determine and approve the compensation, including benefits, payable to General Manager, which generally becomes effective July of the fiscal year of the review." OCSD is committed to maintaining a competitive compensation market position that attracts and retains top employment talent. It is OCSD's philosophy to compensate employees competitively and equitably, and understanding the relative market position assists in that determination. The proposed base building salary increase effective July 2015 will ensure OCSD maintains a competitive compensation market position to continue to attract and retain this critical positions. The proposed benefits package would include those benefits offered to represented and unrepresented employees, including medical, dental, vision, disability insurance and paid leave. The General Manager's benefits package also will include additional life insurance coverage at two times (2x) salary, auto allowance, 6% plus $1,250 investment incentive salary (IIS), and a $5,000 employer-paid 457(b) deferred compensation contribution. CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE The funds for this increase were included in the OCSD Operating Budget for FY 2015- 2016. ATTACHMENTS • Resolution No. OCSD 15-23 • General Manager Pay Table, July 2014 • Proposed General Manager Pay Table, July 2015 Page 3 of 3 STEERING COMMITTEE Meeting Date TOBd.of Dir. 111,81,5 11/19/15 AGENDA REPORT emNumber ItemNumbe B Orange County Sanitation District FROM: James D. Herberg, General Manager SUBJECT: EXTENSION OF AGREEMENT WITH EAST ORANGE COUNTY WATER DISTRICT GENERAL MANAGER'S RECOMMENDATION Authorize the General Manager to negotiate and execute an extension of the Local Sewer Facilities Transfer Agreement with East Orange County Water District regarding the transfer of local sewers in Service Area 7. SUMMARY Orange County Sanitation District (OCSD) entered into an agreement with East Orange County Water District (EOCWD) on February 27, 2014 to transfer ownership and the responsibility for the local sewers in Service Area 7 from OCSD to EOCWD. The Agreement was amended in April 2015, extending the agreement to December 31, 2015, and adding language to prohibit the diversion of wastewater from OCSD's service area. This provision is important to ensure that flows will continue to be routed to OCSD so we can continue to meet our contractual obligations to the Orange County Water District (OCWD). The proposed transfer of ownership of the local sewers requires an OC LAFCO approved reorganization. EOCWD initiated the OC LAFCO process in March 2014 by filing an application for reorganization. Irvine Ranch Water District (IRWD) has also submitted an application to assume the local sewer ownership in Service Area 7. At a community workshop on October 28, 2015, OC LAFCO staff presented a report with their preliminary recommendation that IRWD take on local sewer service rather than EOCWD. The transfer agreement with EOCWD, which expires on December 31, 2015 precludes OCSD from negotiating with any other entity regarding the transfer of Service Area 7 sewers. In accordance with the agreement, OCSD has not negotiated terms with IRWD. IRWD has submitted a letter to OC LAFCO (attached) indicating their commitment to language ensuring that sewer flows continue to be routed to OCSD for treatment, similar to provisions in the EOCWD transfer agreement. EOCWD has requested that OCSD amend the transfer agreement a second time to extend the timeline. Staff is seeking direction from the Board whether OCSD should proceed with extension of its agreement with EOCWD. Page 1 d 2 BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT The following attachment(s) are attached in hard copy and may also he viewed online at the OCSD wehsite(www.ocsd.coml with the complete agenda package: • Current Agreement and Amendment#1 with EOCWD • Letter from IRWD to OC LAFCO Page 2 d 2 ATTACHMENT LOCAL SEWER FACILITIES TRANSFER AGREEMENT THIS LOCAL SEWER FACILITIES TRANSFER AGREEMENT ("Agreement") is made this �'7 day of :f , - , 2014 ("Effective Date") by and between the ORANGE COUNTY SANITATION DISTRICT ("OCSD"), a duly organized County Sanitation District existing pursuant to California Health and Safety Code section 47000 et seq., and the EAST ORANGE COUNTY WATER DISTRICT ("EOCWD"), a duly organized County Water District existing pursuant to California Water Code section 30000 et seq. OCSD and EOCWD are sometimes hereinafter individually referred to as "Party' and hereinafter collectively referred to as "Parties". RECITALS WHEREAS, OCSD owns and operates regional wastewater collection, conveyance, treatment, and disposal facilities within its 471 square mile service area; WHEREAS, OCSD owns and operates the local wastewater collection and conveyance system, encompassing approximately 174 linear miles of sewer lines and serving more than 18,000 connections, within the area known as Service Area 7, which area is more particularly identified in Exhibit "A" attached hereto and incorporated herein by reference; WHEREAS, OCSD desires to transfer to EOCWD: (a) its ownership of certain local sanitary sewer lines and appurtenant facilities located in Service Area 7 ("Local Sewer Facilities"), which are more particularly described and delineated in attachments 1 and 2 of Exhibit "B" attached hereto and incorporated herein by reference, and (b) the responsibility for providing local sewer service to Service Area 7; WHEREAS, EOCWD desires to acquire ownership and assume responsibility for the Local Sewer Facilities and to accept responsibility for providing local sewer service to Service Area 7; WHEREAS, the transfer of ownership in and the assumption of responsibility for the Local Sewer Facilities to EOCWD will require the approval of the Orange County Local Agency Formation Commission ("LAFCO"); and WHEREAS, following the transfer to EOCWD of the Local Sewer Facilities, OCSD shall retain its power to provide regional sewer service within the entirety of Service Area 7. Page 1 of 10 985662.1 AGREEMENT NOW, THEREFORE, in consideration of the mutual promises set forth herein, the Parties agree as follows: 1. Recitals. The recitals set forth above are true and correct and are incorporated into this Agreement. 2. Cooperation. a. OCSD and EOCWD shall work cooperatively to complete the successful transfer from OCSD to EOCWD of the Local Sewer Facilities and the assumption of responsibility for ongoing operation and maintenance of the Local Sewer Facilities by EOCWD by no later than December 1, 2014. Both Parties shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form, necessary or appropriate to full the obligations imposed by this Agreement. 3. LAFCO Proposal. a. Initiation of Proceedings. EOCWD shall, within one month (30 days) from the Effective Date, initiate proceedings under the Cortese-Knox- Herzberg Local Government Reorganization Act of 2000, as amended, Government Code section 56000, at seq., requesting LAFCO approval of a reorganization proposal (the "Proposal"). The resolution of application enacted by EOCWD and submitted to LAFCO shall propose that LAFCO's approval of the Proposal shall be subject to the terms and conditions of this Agreement. EOCWD shall be solely responsible for the direct costs incurred in connection with the initiation and processing of the Proposal, and LAFCO approval thereof, including without limitation any LAFCO deposits, application or processing fees, and the cost of preparing any legal descriptions, boundary surveys or maps. The Proposal shall consist of the following: i. The annexation of certain territory within Service Area 7 that is not within the current boundaries of EOCWD; and ii. A proposal by EOCWD to provide a new or different service—"local" sewer service —within the entirety of Service Area 7. b. Public Outreach. EOCWD desires to proactively inform the ratepayers within Service Area 7, and the general public, of the Proposal and the process for implementing it, including opportunities for public involvement. In furtherance of that desire, OCSD agrees to provide EOCWD with a mailing list of the property owners in Service Area 7 (consistent with the format used for Proposition 218 notifications) in an Excel spreadsheet or an Access compatible (SQL) database format within 30 days of EOCWD's submittal of an application to LAFCO. In the written materials, EOCWD shall accurately and fairiy describe the Page 2 of 10 9856621 proposal and may indicate that the Proposal is jointly proposed and supported by EOCWD and OCSD. EOCWD shall provide OCSD an opportunity to review and approve the written material lt intends to mail to the property owners in Service Area 7 prior to such mailing. OCSD shall approve, or request changes to, the written materials within ten days of receipt. If OCSD fails to approve or request revisions within 10 days, it shall be deemed to have approved the materials. OCSD shall approve, or request changes to, revised written materials that incorporate or respond to OCSD's requests for changes within 5 days of receipt, or the materials shall be deemed approved. All costs of producing such material and mailing it will be paid by EOCWD. C. Letter of Support. OCSD shall cooperate with EOCWD and use its best efforts to support the Proposal in accordance with the terms of this Agreement. OCSD shall, within 45 days of EOCWD's filing of the Proposal with LAFCO, file with LAFCO a formal Letter of Support in favor of the Proposal executed by the General Manager ("Letter of Support'). The Letter of Support shall propose that LAFCO's approval of the Proposal shall be subject to the terms and conditions of this Agreement. OCSD shall execute such documents and take such other actions to support and facilitate the processing of the Proposal as may be reasonably requested by EOCWD, provided such actions shall not result in any cost or expense to OCSD (other than overhead and employee staff time). d. Continuing Support for Proposal. The Parties agree to support and not oppose the Proposal before and after it is initiated. Specifically, OCSD and EOCWD will cooperate and consult with one another in responding to questions and inquiries from LAFCO, the public and the press, appear in support of the Proposal at LAFCO hearings, and cooperate on a joint response in the event that LAFCO or LAFCO staff propose to alter the Proposal. Furthermore, OCSD agrees that, prior to December 1, 2014, or such earlier time as the LAFCO proceedings have been completed or disapproved, it will not engage in negotiations with other entities regarding the transfer of the Local Sewer Facilities. Both Parties shall support the conditioning of LAFCO's approval of the Proposal on the performance of the terms and conditions of this Agreement. If LAFCO or LAFCO staff propose an alteration to the Proposal that materially diverges from the terms and conditions of this Agreement, either Party may, after consultation with the other Party, oppose the alteration, and if necessary, withdraw its support, and actively oppose LAFCO's approval of the Proposal. e. Tax Exchange Negotiations and Consultations. The Parties shall cooperate in seeking to have the Board of Supervisors adopt a property tax exchange resolution pursuant to Revenue and Taxation Code section 99 exchanging property tax from OCSD to EOCWD. The Parties agree that in the tax exchange negotiation and consultation process they will jointly support and advocate for having all of the property tax associated with the Local Sewer Facilities be exchanged from OCSD to EOCWD. In Fiscal Year 2012-2013, the Page 3 of 10 99562.1 estimated property tax collected for the local sewers was $287,000.00 (two hundred eighty seven thousand dollars). f. Local Sewer Service User Fee. i. OCSD's Annual Local Sewer Service User Fee ('the Fee") shall be continued and following the effective date, to the extent feasible, shall be collected by EOCWD rather than by OCSD. OCSD collects the Fee by reporting it to the County of Orange, which collects it on the property tax roll, and EOCWD intends to do the same. Should it not be feasible, due to statutory or County requirements, for responsibility for collection of the Fee for the 2014-2015 Fiscal Year to be transferred to EOCWD, OCSD shall account for and transmit, within 5 business days of receipt, any such revenues it receives from the County that are attributable to the Fee imposed in Service Area 7. OCSD shall rescind the Fee, as it pertains to the Local Sewer Facilities, by no later than July 1, 2015, or at such earlier time as EOCWD may enact its own local sewer service user fees. ii. EOCWD shall indemnify, defend and hold harmless, OCSD, its officers, directors, employees and agents from and against any and all claims, actions, damages, liabilities, and expenses (including attorney's fees and reasonable expenses for litigation or settlement) in connection with or arising out of OCSD's assessment, distribution, and collection of the Fee, including without limitation any such claims asserting that the collection by OCSD and transfer of the Fee to EOCWD violates Proposition 218. 4. Transfer of Local Sewer Facilities. a. Upon the effective date of LAFCO's approval of the Proposal and the requested reorganization ("Date of Reorganization"), EOCWD shall accept ownership of the Local Sewer Facilities and all maintenance responsibilities, as well as the responsibility for all sewer spill notification, reporting, and related regulatory activities. Furthermore, EOCWD shall negotiate, execute and maintain its own contracts with third-party contractors for line- cleaning, CCTV, rehabilitation, repairs and replacement, engineering consultants, and similar services, and directly pay all costs for such contracts. b. Prior to the Date of Reorganization, EOCWD shall fully execute and deliver to OCSD the Quitclaim Deed, attached hereto as Exhibit"B", transferring ownership of the Local Sewer Facilities from OCSD to EOCWD. C. Within five (5) business days following the Date of Reorganization, OCSD shall submit the Quitclaim Deed for recordation in the Official Records, Orange County California. Upon recordation, OCSD shall transmit a conformed copy of the Quitclaim Deed to EOCWD. d. Within five (5) business days following the Date of Reorganization, OCSD shall transfer to EOCWD $15,000,000.00 (fifteen million Page 4 of 10 985662.1 dollars) via wire transfer of the Annual Sewer Service User Fee reserves attributable to the Local Sewer Facilities ("First Disbursement'). e. On July 1, 2018, OCSD shall transfer to EOCWD $10,000,000.00 (ten million dollars) via wire transfer of the Annual Sewer Service User Fee reserves attributable to the Local Sewer Facilities ("Second Disbursement'). f. If, after the Date of Reorganization and prior to July 1, 2018, EOCWD identifies the need for a major repair or replacement of the Local Sewer Facilities, OCSD shall release to EOCWD a mutually agreed upon portion of the Second Disbursement, as necessary to complete the required work in a timely manner. Any such release will result in a proportionate reduction of reserves transferred with the Second Disbursement g. If, prior to the Date of Reorganization, OCSD identifies the need for a major repair or replacement of the Local Sewer Facilities, and after notifying EOCWD of the identified need, OCSD conducts such major repair or replacement, the amount of reserves transferred with the First Disbursement, and if necessary, the Second Disbursement shall be reduced by the amount of costs incurred by OCSD in connection with the required work. h. After closing its books for the 2017-2018 Fiscal Year, and by no later than November 1, 2018, OCSD shall transfer to EOCWD the remainder of the Annual Sewer Service User Fee reserves, if any, attributable to the Local Sewer Facilities. 1. OCSD shall pay to EOCWD annual interest at the OCSD average rate of return on the amount of Annual Sewer Service User Fee reserves attributable to the Local Sewer Facilities retained by OCSD between the date of the First Disbursement and the Second Disbursement. OCSD shall make the annual interest payments after it has closed its books for each respective fiscal year, but by no later than November 1. j. Upon the Date of Reorganization, OCSD shall transfer ownership of the following vehicles to EOCWD: (a) a 2000 Sterling Vactor (OCSD vehicle 470, California license number 1067492, vehicle identification number (VIN) 2FZ6BJBB81AH61833), and (b) a 1995 FE42 Volvo Hydroflusher truck (OCSD vehicle 396, Califomia license number 356619, vehicle identification number (VIN) 4V52AFHDOSR474402). These vehicles shall be provided to EOCWD "as is" and with no warranties or representations whatsoever as to the condition of the vehicle, or the suitability of the vehicle for any purpose. EOCWD hereby acknowledges that it has/will be granted the opportunity to inspect the vehicles and their maintenance records and has/will do so prior to the Date of Reorganization. Page 5 of 10 985662.1 k. On or prior to the Date of Reorganization, OCSD shall allow EOCWD to review, reference and utilize OCSD established specifications for line-cleaning, CCTV, rehabilitation, repairs and replacement, and similar services, as mutually agreed by the Parties. 5. Environmental Review. EOCWD shall act as lead agency for purposes of the Proposal, and shall be solely responsible for the preparation of all environmental documentation required pursuant to the California Environmental Quality Act ("CEQA"). 6. Tenn. This Agreement shall commence on the Effective Date and continue in full force and effect through December 1, 2014. The Parties may mutually agree in writing to extend the tens of this Agreement. The Agreement shall automatically terminate if LAFCO disapproves the Proposal. 7. Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be personally delivered, sent by registered or certified mail, postage prepaid, return receipt requested, or delivered or sent by electronic transmission, and shall be deemed received upon the earlier of: (i) the date of delivery to the address of the person to receive such notice if delivered personally or by messenger or overnight courier; (ii) three (3) business days after the date of posting by the United States Post Office if by mail; or (iii) when sent if given by electronic transmission. Any notice, request, demand, direction, or other communication sent by electronic transmission must be confirmed within forty-eight (48) hours by letter mailed or delivered. Notices or other communications shall be addressed as follows: To OCSD: Orange County Sanitation District 10844 Ellis Avenue Post Office Box 8127 Fountain Valley, CA 92708-7018 Attn: General Manager To EOCWD: East Orange County Water District 185 North McPherson Road Orange, CA 92869-3720 Attn: General Manager Either Party may from time to time, by written notice to the other, designate a different address and/or person which shall be substituted for the one above specified, and/or specify additional parties to be notified. 8. Jurisdiction. In the event of a dispute regarding performance or interpretation of this Agreement, the venue for any action to enforce or interpret this Agreement shall lie in the Superior Court of California for Orange County. Page 6 of 10 995662.1 9. Governing Law. This Agreement shall be governed by the laws of the State of California. 10. Entire Agreement. This Agreement constitutes the entire understanding and agreement between the Parties and supersedes all previous negotiations between the Parties pertaining to the subject matter thereof. 11. Waiver. A waiver of a breach of the covenants, conditions or obligations under this Agreement by either Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, conditions or obligations of this Agreement. 12. Modification. Alteration, change or modification of this Agreement shall be in the form of a written amendment, which shall be signed by each Party. 13. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be invalid under the applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of that provision, or the remaining provisions of this Agreement. 14. No Obligation to Third Parties. Execution and delivery of this Agreement shall not be deemed to confer any rights upon others, directly, indirectly or by way of subrogation, and shall not obligate either of the Parties hereto to any person or entity other than each other and their respective affiliates. 15. Successors. This Agreement and the provisions contained herein shall be binding upon and inure to the benefit of OCSD, EOCWD, and their respective heirs, executors, administrators, personal representatives, successors and assigns. 16. Indemnification. a. EOCWD shall indemnify, defend and hold harmless OCSD, its officers, directors, employees and agents from and against any and all claims, actions, damages, liabilities and expenses (including attorney's fees and reasonable expenses for litigation or settlement) for any loss or damage, including death, bodily injury or damage to or loss of use of property, caused by negligent acts or omissions or willful misconduct by the EOCWD, its officers, directors, employees and agents in connection with or arising out of the performance of this Agreement. b. OCSD shall indemnify, defend and hold harmless EOCWD, its officers, directors, employees and agents from and against any and all claims, actions, damages, liabilities and expenses (including attorney's fees and Page 7 of 10 995662A reasonable expenses for litigation or settlement) for any loss or damage, including death, bodily injury or damage to or loss of use of property, caused by negligent acts or omissions or willful misconduct by OCSD, its officers, directors, employees and agents in connection with or arising out of the performance of this Agreement. C. The Parties acknowledge that LAFCO policy requires applicants to defend, indemnify, hold harmless, and release LAFCO, its agents, officers, attorneys, and employees from any claim, action, or proceeding brought against any of them, the purpose of which is to attack, set aside, void, or annul the approval of the application or the environmental document that accompanies it. The parties further acknowledge that this indemnification obligation will include, but not be limited to, damages, costs, expenses, attorney fees, or expert witness fees that may be asserted by any person or entity, including the applicant, arising out of or in connection with the approval of the application. As the applicant, EOCWD will be required to execute such an indemnification agreement with LAFCO, and, as a result, EOCWD may incur substantial costs paying for LAFCO's defense and indemnifying any liability. Notwithstanding anything to the contrary in the foregoing, If LAFCO does not approve the EOCWD Proposal, OCSD agrees to pay one-half of EOCWD's actual costs, associated with indemnifying LAFCO pursuant to the indemnification agreement it will be obligated to sign, as those costs are incurred; however, OCSD's payment hereunder shall not exceed $100,000.00 (one hundred thousand dollars) in total. Furthermore, if LAFCO approves the EOCWD Proposal, OCSD shall have no obligation to pay any of EOCWD's actual costs associated with indemnifying LAFCO. EOCWD shall promptly advise OCSD if the indemnification agreement it is obligated to sign as the applicant is materially different than described in this paragraph, and it shall notify OCSD if LAFCO notes EOCWD of a legal challenge covered by the indemnification agreement. 17. OCSD Board of Directors. The Parties acknowledge that nothing contained herein shall entitle EOCWD to a seat on the OCSD Board of Directors, and that any such change would require an amendment to Health and Safety Code section 4730.65, which governs the composition of the OCSD Board of Directors. 18, No Warranty of Title or Condition. OCSD makes not warranty or representation of any kind regarding its title to the Local Sewer Facilities, the condition of the Local Sewer Facilities, or the suitability of the Local Sewer Facilities for any purpose. EOCWD has been granted an opportunity to fully inspect the Loral Sewer Facilities and has done so as of the Effective Date. EOCWD accepts the Local Sewer Facilities "as is". 19. Authorization. Each of the undersigned represents and warrants that he or she is duly authorized to execute and deliver this Agreement and that such execution is binding upon the entity for which he or she is executing this document. Page 8 of 10 985662.1 (SIGNATURES ON FOLLOWING PAGE( Page 9 of 10 985662.1 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the dates set forth below. ORANGE COUNTY SANITATION DISTRICT i By Date 2 Troy Edgar, Chairman of the oard ATTEST: �p M ria Ayala C rk of the Board APPROVgp AS TO FORM: Brad ogin General Counsel EAST ORANGE COUNTY WATER DISTRICT By\_ C v �� Date William VanderWerff \ President of the Board of rectors ATTEST: APPROVED AS TO FORM: .JsarrAfnesafr—, C6_'_-�. Spece�..� �o�ths� Page 10 of 10 9856621 EXHIBIT "A" SERVICE AREA 7 985662.1 a 3556 31'A L3 3148 3149 31 0 M51 k5�2 I� e.3 32-. x -^.45 32aG 3249 3250 3 3252 x I0 p.H 3,343 33. 4� 3347 �_ 3349 3359 �'3 3352 I Pd s 53 34ZI 4 � I F ILI sJ4s" 8 � tY z35 - 30>5 52`i � 3 s S -✓� ) 3545 354E � 3�4T �� � ��SS .s„3o � 3652 I 3745 311461-� 'fZ � _ 3751 3 E 3851 38 cq� i 9 a_ s o y 7 3949 3950 S1 - 52 -4.�,'i 4048 ,405D 4 P 1 406 tea¢ 45• r a 4 4148 Local Service Area 7 #' Sewer Transfers Cffy 41N Key Map 4343 � 43 s FIRST MENT TO LOCAL SEWER FACILITIES ACILITIES V ORIGIN//'�� TRANSFER AGREEMENT "� THIS FIRST AMENDMENT TO LOCAL SEWER FACILITIES TRANSFER AGREEMENT ("Agreement") is made this°- day of 2015 ("Effective Date") by and between the ORANGE COUNTY SANITATION DISTRICT ("OCSD"), a duly organized County Sanitation District existing pursuant to California Health and Safety Code section 47000 et seq., and the EAST ORANGE COUNTY WATER DISTRICT ("EOCWD"), a duly organized County Water District existing pursuant to California Water Code section 30000 at seq. OCSD and EOCWD are sometimes hereinafter individually referred to as "Party" and hereinafter collectively referred to as "Parties". RECITALS WHEREAS, OCSD and EOCWD are Parties to that certain "Local Sewer Facilities Transfer Agreement," dated February 27, 2014 ("the Agreement"), in which the Parties set forth their intent to cooperate in the transfer of ownership in and the assumption of responsibility for certain local sewer facilities from OCSD to EOCWD; and WHEREAS, the transfer process requires the approval of the Orange County Local Agency Formation Commission ("LAFCO"), and, although that process commenced in a timely manner, the LAFCO process has taken longer than the Parties anticipated; and WHEREAS, the Parties therefore desire to amend the Agreement to extend the timelines and termination date to reflect the current status of the LAFCO process; and WHEREAS, the Agreement provides for two disbursements of Annual Sewer Service User Fee reserves from OCSD to EOCWD, totaling $25 million; and WHEREAS, the Parties desire to amend the Agreement to provide for a single disbursement of the $25 million Annual Service User Fee reserves from OCSD to EOCWD; and WHEREAS, the Agreement does not address the diversion of wastewater from Service Area 7; and WHEREAS, the Parties desire to amend the Agreement to prohibit the diversion of wastewater by EOCWD from Service Area 7. Page 1 of 4 AGREEMENT NOW, THEREFORE, in consideration of the mutual promises set forth herein, the Parties agree as follows: 1. Extension of Timelines. In order to reflect the changed circumstances with regard to the timeline for completion of the transfer, "December 1, 2014" in subsections 2.a. and 3.d. shall be amended to read "December 31, 2015"; and "July 1, 2015" and "2014-2015 Fiscal Year" in subsection 31i. shall be amended to read, respectively, "July 1, 2016" and "2015-2016 Fiscal Year." 2. Amendment to Section 4. i. Subsection 4.d. shall be amended to read as follows: d. Within five (5) business days following the Date of Reorganization, OCSD shall transfer to EOCWD $25,000,000.00 (twenty-five million dollars) via wire transfer of the Annual Sewer Service User Fee reserves attributable to the Local Sewer Facilities ("Disbursement"). ii. Subsections 4.e., 41, 4.g., 4.h. and 4.i. shall be deleted in entirety. III. New subsection 4.e. shall be added to read as follows: e. If, prior to the Date of Reorganization, OCSD identifies the need for a major repair or replacement of the Local Sewer Facilities, and after notifying EOCWD of the identified need, OCSD conducts such major repair or replacement, the amount of reserves transferred with the Disbursement shall be reduced by the amount of costs incurred by OCSD in connection with the required work. iv. New subsection 4.f. shall be added to read as follows: f. Within six (6) months following the date of Disbursement, OCSD shall reconcile its records and transfer to EOCWD the remainder of the Annual Sewer Service User Fee reserves in its possession, If any, attributable to the Loral Sewer Facilities. V. Subsections 4.j. and 4.k. shall be renumbered as 4.g. and 4.h. respectively. Page 2 of 4 3. Amendment to Section 6. Section 6 shall be amended to read as follows: 6. Term. This Agreement shall commence on the Effective Date and continue in full force and effect through December 31, 2015. The Parties may mutually agree in writing to extend the term of this Agreement. The Agreement shall automatically terminate if LAFCO disapproves the Proposal. 4. New Section 20. New Section 20 shall be added to read as follows: 20. Prohibition on Diversion of Wastewater. OCSD has planned and constructed regional conveyance and treatment facilities to serve Service Area 7. OCSD is contractually obligated to provide treated wastewater effluent from its entire service area, inclusive of Service Area 7, to Orange County Water District. EOCWD agrees that all parcels in Service Area 7 shall continue to be customers of OCSD, and that all wastewater flows from these parcels will continue to flow to OCSD for treatment. EOCWD shall not divert wastewater away from OCSD for any purpose, including but not limited to scalping wastewater for reuse. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the dates set forth below. ORANGE COUNTY SANITATION DISTRICT By V Date James D. Herberg General Manager ATT ST: Kel A. Lore Cle of the Board APPROVED AS TO FORM: Brad Hogin General Counsel Page 3 of 4 EAST ORANGE CO N TY WATER DISTRICT d By. Date Li Ohlund eneral Manager ATTEST: APPROVED AS TO FORM: ohn Bakker Special Counsel Page 4 of 4 I ATTACHMENT IRVINERPCD WATER DISTRICT 1560SWdCm�A.w-PnaWSM-Wm,.r� November 10,2015 The Honorable Todd Spitzer Mr. Derek McGregor Chairman,Orange County Board of Supervisors Chairman,OC LAFCO 333 W. Santa Ana Blvd, 2677 North Main Street, Suite 1050 Santa Ana,California 92701 Orange,California 92705 Subject: Irvine Ranch Water District's Application for Annexation of Sewer Service Area 7 Dear Chairman Spitzer and Chairman McGregor: Irvine Ranch Water District(IRWD),throughout the process conducted by the Orange County Local Agency Formation Commission(OC LAFCO) in developing and finalizing the Focused Municipal Services Review for Service Area 7, has repeatedly articulated, verbally and in writing, its commitment to ensuring that the sewage from Service Area 7 will continue to flow m it currently does. The IRWD Board has taken an additional step to allay any lingering concerns regarding the flow of sewage from Service Area 7,and we hope that this additional step will close this matter satisfactorily. In its October 28,2015 report OC LAFCO staff provided its proposed recommendations regarding Orange County Sanitation District's(OCSD)Sewer Service Area 7. Language on page 16 of the staff report specifically addressed the firture treatment of the sewage from Service Area 7, including the sewage that currently flows to OCSD for treatment and subsequent use for groundwater replenishment. The staff report noted that the Fast Orange County Water District (EOC W D)and OCSD added a condition in their sewer transfer agreement(Amendment No 1)to continue the existing arrangement for treated sewage to be used for groundwater replenishment. To ensure no impact to that groundwater replenishment program administered by the Orange County Water District(OC W D), the staff report recommended that the terms and conditions of approval by OC LAFCO would include a requirement for the continuation of the existing sewage treatment arrangement for groundwater replenishment. The IRWD Board of Directors considered this issue at its November 9,2015 meeting and authorized me to inform OC LAFCO and the Orange County Board of Supervisors that IRWD is committed to including a condition in any necessary agreements between IRWD, OCSD and the OC W D that would ensure the continuation of that existing sewage treatment arrangement. This offer is made in addition to the condition expressly made by the IRWD Board when it directed IRWD staff to submit the District's annexation application for entering into a transfer agreement between IRWD and OCSD and a regional sewage treatment agreement between IRWD,OCSD and OC W D. By unanimous agreement of the IRWD Board, the District agrees to include the following language including in its agreements with OC LAFCO, OCSD,and any other required agencies: The Honorable Todd Spitzer, Chairman, Orange County Board of Supervisors Mr. Derek McGregor, Chairman, OC LAFCO November 10,2015 Page 2 OCSD has planned and constructed regional conveyance and treatment facilities to serve Service Area 7. OCSD is contractually obligated to provide pealed wastewater effluent from its entire service area,inclusive of Service Area 7,to Orange County Water District. IR WD and OCSD agree that all parcels in Service Area 7 shall continue to be customers of OCSD,and that the wastewater flows from these parcels will continue to flow for treatment as they currently flow. IRWD shall not divert the wastewater currently flowing to OCSD from Service Area 7 away from OCSD for any purpose, including but not limited to scalping wastewater for reuse. Please note that this language was purposely constructed based on the language in the agreement between EOCWD and OCSD. This was done to facilitate the future potential approval of this term by the OCSD Board, who has already approved similar language in its agreement with EOCWD. IR WD truly hopes that this additional action will help clarify,once and for all,a matter that appears to have remained open to question for too long. Please feel free to call me if you or your respective staff members have any questions concerning this proposed condition or the issue of continuing the existing sewage treatment arrangement. Sincerely, Steven LaMar President Irvine Ranch Water District cc: LAPCO Commission STEERING COMMITTEE Meeting Dare TO ad.Of oil. 18115 — AGENDA REPORT Item Number Item Number a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert Ghirelli, Assistant General Manager SUBJECT: STRATEGIC PLAN UPDATE BOARD WORKSHOP SUMMARY GENERAL MANAGER'S RECOMMENDATION Information Only. SUMMARY In November 2013 the Board of Directors adopted the 2014-2019 Five-Year Strategic Plan. Each year, the Board of Directors go through a review and update of the Strategic Plan to make any necessary changes. In June, staff began the 2015 update. OCSD retained the consulting firm of K.E. Thalman & Associates to conduct a series of one-on-one confidential interviews with interested board members to identify issues of concern. On October 2151 a Strategic Plan Workshop was held with the Board of Directors. The Directors were briefed on the findings from the interviews, updated on completed goals/initiatives, and presented with two issue papers on Levels of Service for odor complaints and the potential of capturing storm water runoff. PRIOR COMMITTEE/BOARD ACTIONS October 2015: Special Meeting 2015 Strategic Plan Update Board Workshop ADDITIONAL INFORMATION As a result of the Strategic Plan Update Workshop with the Board of Directors: • Public Affairs staff will provide an informational presentation to the Board on their existing programs as well as future education/outreach initiatives. • Purchasing staff will provide an informational presentation on OCSD's procurement process. • Orange County Water District provided an informational presentation at the November Committee meetings on their storm water capture and recharge program. • No changes will be made to the current Strategic Plan Levels of Service. • The two completed Strategic Initiatives; Disinfection of Ocean Discharge and Legislative Advocacy and Public Outreach will be removed from the Strategic Plan. • Minor editorial edits will be made to the Strategic Plan. Page 1 d 2 • The final updated Strategic Plan will be presented at the December Board of Directors meeting for approval. CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT N/A Page 2 d 2 ORANGE COUNTY SANITATION DISTRICT Agenda Terminology Glossary Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOD Biochemical Oxygen Demand CARB California Air Resources Board CASA California Association of Sanitation Agencies CCTV Closed Circuit Television CEQA California Environmental Quality Act CRWQCB California Regional Water Quality Control Board CWA Clean Water Act CWEA California Water Environment Association EIR Environmental Impact Report EMT Executive Management Team EPA U.S. Environmental Protection Agency FOG Fats, Oils, and Grease FSSD Facilities Support Services Department gpd Gallons per day GWR System Groundwater Replenishment System (also called GWRS) ICS Incident Command System IERP Integrated Emergency Control Plan LOS Level of Service MGD Million gallons per day NACWA National Association of Clean Water Agencies NPDES National Pollutant Discharge Elimination System NWRI National Water Research Institute O&M Operations and Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District GOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration POTW Publicly Owned Treatment Works ppm Parts per million RFP Request For Proposal RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency Glossary of Terms and Abbreviations SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board SAWPA Santa Ana Watershed Project Authority SCADA Supervisory Control and Data Acquisition system SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SSMP Sanitary Sewer Management Plan SSO Sanitary Sewer Overflow SWRCB State Water Resources Control Board TDS Total Dissolved Solids TMDL Total Maximum Daily Load TSS Total Suspended Solids WDR Waste Discharge Requirements WEF Water Environment Federation WERF Water Environment Research Foundation Activated-sludge process — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved nutrients in the wastewater. Benthos— The community of organisms, such as sea stars, worms and shrimp, which live on, in, or near the seabed, also know as the benthic zone. Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farm land or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. Collections system — In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. Certificate of Participation (COP) —A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Glossary of Terms and Abbreviations Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (D!f) — the dilution at which the majority of the people detect the odor becomes the DrT for that air sample. Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect"). Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons a day of drinking quality water to replenish the local groundwater supply. Levels of Service (LOS)—Goals to support environmental and public expectations for performance. NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S. Environmental Protection Agency (EPA). NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation in order to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility. Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant. Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban run-off. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge—Untreated solid material created by the treatment of wastewater. Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater. Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Glossary of Terms and Abbreviations Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed —A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed.