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HomeMy WebLinkAbout12-16-2015 Steering Committee Agenda Packet.pdf Orange County Sanitation District Wednesday, December 16, 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1.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 November 18, 2015 meeting of the Steering Committee. 2. ADOPTION OF UPDATED RESOLUTION ON RULES OF PROCEDURE (Bob Ghirelli) RECOMMENDATION: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 15-XX, entitled, "A Resolution of the Board of Directors of Orange County Sanitation District Fixing and Establishing Rules of procedure for the Conduct of Business of the District, and Repealing Resolution No. OCSD 15-01." 12/16/2015 Sfeenng Committee Agenda Page 1 of 3 NON-CONSENT CALENDAR: 3. STRATEGIC PLAN UPDATE (Bob Ghirelli) RECOMMENDATION: Recommend to the Board of Directors to: A. Approve the Strategic Plan Update dated December 2015; and B. Direct staff to implement the goals and levels of service contained in the Plan. 4. AMENDMENT NO. 2 TO LOCAL SEWER FACILITIES TRANSFER AGREEMENT WITH EAST ORANGE COUNTY WATER DISTRICT (Nick Arhontes) RECOMMENDATION: Recommend to the Board of Directors to: Approve Amendment No. 2 to the Local Sewer Facilities Transfer Agreement (Transfer Agreement) with East Orange County Water District (EOCWD) regarding the transfer of local sewers in Service Area. INFORMATION ITEMS: None. CLOSED SESSION: During the course of conducting the business set forth on this agenda as a regular meeting of the Board, the Chair may convene the Board in closed session to consider matters of pending real estate negotiations,pending or potential litigation,or personnel matters,pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a)purchase and sale of real property; (b) matters of pending or potential litigation; (c)employment actions or negotiations with employee representatives;or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Board during a permitted closed session and are not available for public inspection. At such time as the Board takes final action on any of these subjects, the minutes will reflect all required disclosures of information. Convene in closed session. (1) CONFERENCE WITH LEGAL COUNSEL RE EXISTING LITIGATION (Government Code Section 54956.9(d)(1)) Number of Cases: 2 12/16/2015 Steenng Commiftee Agenda Page 2 of 3 Dan Nicolas v. Orange County Sanitation District, Workers' Compensation Appeals Board, Case No. ADJ9095059 Dan Nicolas v. Orange County Sanitation District, Workers' Compensation Appeals Board, Case No. ADJ9761079 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: To the Steering Committee meeting scheduled for Wednesday, January 27, 2016 at 5:00 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. Aaenda Posting: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, and on the Sanitation District's websim at www.ocsd.com, not less than 72 hours prior to the meeting dale and time above. All public records relating to each agenda item,including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board. Agenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A.Lore Clerk of the Board (714)593-7433 klore@omd.com For any questions on the agenda, Committee members may contact staff at: General Manager Jim Herberg (714)593-7300 iherberg(cDocsd.cem Assistant General Manager Bob Ghirelli (714)593-7400 rahirelli0locsd.com Director of Human Resources Celia Chandler (714)593-7202 cchandlerfdocsd.com Director of Engineering Rob Thompson (714)593-7310 rthompsonaocsd.com Director of Facilities Support Services Nick Arhontes (714)593-7210 namontes(nioesd.com Director of Finance and Lorenzo Tyner (714)593-7550 INner(&ocsd.cem Administrative Services Director of Operations& Maintenance Ed Torres 714 593-7080 etorres omd.com 12/16/2015 Steenng Committee Agenda Page 3 of 3 ITEM NO. 1 MINUTES OF THE STEERING COMMITTEE Orange County Sanitation District Wednesday, November 18, 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 Nielsen on Wednesday, November 18, 2015 at 5:02 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: John Nielsen, Chair Jim Herberg, General Manager Greg Sebourn, Vice-Chair Bob Ghirelli, Assistant General Manager Keith Curry, Administration Committee Rob Thompson, Director of Engineering Chair Nick Arhontes, Director of Facility John Withers, Operations Committee Support Services 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 None. Kelly A. Lore, Clerk of the Board Jennifer Cabral Jim Colston Norbert Gaia Al Garcia Lori Khajadourian OTHERS PRESENT: Kendra Carney, Associate General Counsel Bill Vanderwerff, EOCWD Doug Davert, EOCWD Lisa Ohlund, EOCWD Brian Lochrie, EOCWD Paul Cook, IRWD Carolyn Emery, OC LAFCO Donna Sutton, FCA Barbara Sabatino Debbie Knox, North Tustin resident Donal Bauer, North Tustin resident 11/1B/2015 Steering Committee Minutes Page 1 d4 PUBLIC COMMENTS: Donald Bauer, North Tustin Resident, spoke in support of Irvine Ranch Water District in regards to Item 3 and provided an agency comparison paper on OCSD Service Area 7. REPORTS Chair Nielsen provided an update from the Legislative and Public Affairs (LAPA) Committee including: educational outreach, tours and events. He also stated that Adam Link, Director of Government Affairs with CASA had presented the 2016 Legislative Platform of that agency to the Committee. General Manager Jim Herberg informed the Committee of the planned reorganization of the District including the departure of Director of Facilities Support Services, Nick Arhontes in March. CONSENT CALENDAR: Clerk of the Board Kelly Lore stated a correction to the minutes. 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Corrected Minutes of the October 28, 2015 Regular Steering Committee Meeting. AYES: Beamish; Kring; Nielsen; Seboum; Shawver and Withers NOES: None ABSTENTIONS Curry ABSENT: None 2. GENERAL MANAGER COMPENSATION AND BENEFITS (John Nielsen) MOVED, SECONDED, AND DULY CARRIED TO: 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." AYES: Beamish; Curry; Kring; Nielsen; Sebourn; Shawver and Withers NOES: None ABSTENTIONS: None ABSENT: None 1 V 18/2015 Steering committee Minutes Page 2 of 4 NON-CONSENT CALENDAR: 3. EXTENSION OF AGREEMENT WITH EAST ORANGE COUNTY WATER DISTRICT (Jim Herberg) RECOMMENDATION, Recommend to the Board of Directors to, A fhn:7e Cnnl't:pq T.ARsfei, A.......ment with Cant n.nnnn GOURh. Water n:.N.LN regard'ng the transfer of Innnln Coni no Area T Chair Nielsen provided a historical overviewof the current agreement and amendment with East Orange County Water District(EOCWD)and explained that due to inevitable delays, EOCWD has asked that the agreement by extended. Chair Nielsen went on to explain that there are now two agencies who have applied and are being evaluated by the Orange County Local Agency Formation Committee (LAFCO)for this transfer. He stated that the Board's focus should be only that the portion of the local sewer should transfer to an appropriate party that will maintain them and allow OCSD to continue receiving the wastewater flows in perpetuity. The Clerk of the Board distributed late correspondence from Lisa Ohlund, General Manager of EOCWD, regarding a proposed Amendment to the current agreement. General Manager Herberg added additional background regarding the expiration of the current term; LAFCO continuations; and the exclusivity structure of the agreement with EOCWD. A Substitute Motion was made by Director Beamish. Discussion ensued regarding: the exclusivity clause and flexibility to renegotiate the current contract; protection of flows; possibility to increase flows; bifurcation of issues; extending the contract with the removal of exclusivity; user rates; revenue sharing; EOCWD agreement processes and cost issues; local elected officials preferences; agency relationships; best service levels; consideration of applications to LAFCO; disposal of local systems; honoring agreements; and leverage of agreement expiration. Kendra Carney,Associate General Counsel clarified the validity of a substitute motion. Vice-Chair Seboum called for the question on the substitute motion. MOVED. SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Authorize the General Manager to negotiate with East Orange County Water District (EOCWD) regarding an extension to the existing agreement, to obtain terms to allow Orange County Sanitation District to negotiate with Irvine Ranch Water District (IRWD) or any other applicant 11/15/2015 Steering Committee Minutes Page 3 of 4 regarding the Local sewer facilities transfer agreement, and any other issues pertinent to the agreement, and return to the next Steering Committee meeting with the proposed terms. AYES: Beamish; Curry; Kring; Sebourn; and Withers NOES: Nielsen ABSTENTIONS Shawver ABSENT: None INFORMATION ITEMS: 4. STRATEGIC PLAN UPDATE BOARD WORKSHOP SUMMARY (Bob Ghirelli) Assistant General Manager Bob Ghirelli referred the Committee to the report on Book Page 43 and stated that the final Strategic Plan Update, including the information from the workshop, will be presented to the Steering Committee at next month's meeting. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: The Chair declared the meeting adjourned at 5:56 p.m. to the next Steering Committee meeting to be held on Wednesday, December 16, 2015 at 5:00 p.m. Submitted by: Kelly A. Lore Clerk of the Board 11/15/2015 Steering Committee Minutes Page 4 of 4 STEERING COMMITTEE Meeting Date TOBE.Or .Dir. 12/16/15 12/16/15 AGENDA REPORT ItemNumber Item Number z Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert Ghirelli, Assistant General Manager SUBJECT: ADOPTION OF UPDATED RESOLUTION ON RULES OF PROCEDURE GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 15-XX, entitled, "A Resolution of the Board of Directors of Orange County Sanitation District Fixing and Establishing Rules of procedure for the Conduct of Business of the District, and Repealing Resolution No. OCSD 15-01." SUMMARY The procedures are being updated at this time to reflect the new start time of 5:00 p.m. for the Administration Committee meetings and to include a Deputy Clerk of the Board to attend meetings in the absence of the Clerk of the Board. PRIOR COMMITTEE/BOARD ACTIONS January 2015 - The Board approved the latest Rules of Procedure Resolution on January 28, 2015, Resolution No. OCSD 15-01. June 2010 — The Board approved the latest Rules of Procedure Resolution on June 23, 2010, Resolution No. OCSD 10-06. ADDITIONAL INFORMATION N/A CEQA N/A ATTACHMENT The following attachment(s) is attached in hard copy and may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Resolution No. OCSD 15-XX Page 1 of 1 RESOLUTION NO. OCSD 15-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT FIXING AND ESTABLISHING RULES OF PROCEDURE FOR THE CONDUCT OF BUSINESS OF THE DISTRICT, AND REPEALING RESOLUTION NO. OCSD 15-01 WHEREAS it is necessary to establish rules of procedure to facilitate the orderly handling of business to come before the Orange County Sanitation District Board of Directors and Standing, Steering, Special and Ad Hoc Committees. NOW THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: Rules of Procedure. That the following rules of procedure be adopted for the conduct of business of the District: A. Regular Meetings. There shall be a regular monthly meeting of the Board of Directors of the District on the fourth Wednesday of every month at 6:00 p.m., in the Administrative Offices of the District, located at 10544 Ellis Avenue, Fountain Valley, California; provided, however, if the fourth Wednesday of the month falls upon a legal holiday, said monthly meeting shall be held on the next day thereafter, at the same time and place, unless the Board adjourns to a different date and time. The Board of Directors may adjourn any regular, special or adjourned special meeting to a time and place certain, as specified in the order of adjournment. B. Special Meetings. A special meeting of the Board of Directors may be called in either one of the following ways: (1) By the Chairperson of the Board of Directors; or (2) By the written request of a majority of the Steering Committee delivered to the Clerk of the Board. The call or notice for special meeting shall be in writing and delivered personally or by mail at least twenty-four (24) hours before the time of such meeting, as specified in the notice. Any notice deposited in the regular mail addressed to a Director at the address he or she has on file with the Clerk of the Board postage prepaid, sixty (60) hours in advance of any such meeting as specified in the notice, shall be presumed to have been delivered. OCSD XX-XX-1 The call or notice shall specify the time and place of the special meeting, a description of the business to be transacted, and copies of all pertinent written materials. Such written notice may be dispensed with as to any Director or Alternate Director who, at or prior to the time the meeting convenes, files with the Clerk of the Board a written waiver of notice. Such waiver may be given by facsimile or electronic mail. Such written notice may also be dispensed with as to any member who is actually present at the meeting at the time it convenes. The Clerk of the Board shall diligently attempt to notify each Director personally of the time, place and purpose of said meeting, not less than twenty-four(24) hours before the time of said meeting. The call or notice shall be posted in the administrative offices' public lobby at least twenty-four (24) hours prior to the special meeting. C. Meetings Adjourned by Clerk of the Board. If at any regular, adjourned regular, special, or adjourned special meeting, there is not a quorum of Directors present, the Clerk of the Board may declare the meeting adjourned to a stated time and place and shall cause written notice of the adjournment to be given in the same manner as for a special meeting, unless such notice is waived as provided for in special meetings. Within twenty-four (24) hours after the time of the adjournment, a copy of the order or notice of adjournment shall be conspicuously posted on or near the door of the place where the meeting was held. D. Notices to News Media. When any local newspaper of general circulation, radio or television station requests, in writing, notices of meetings of the Board of Directors, the Clerk of the Board shall thereafter, until receipt of a notice terminating said request, deliver notices of regular, regular adjourned, and special adjourned meetings to such newspapers, radio or television stations. Delivery shall be made in the same manner as delivery is made to the Directors. E. Conduct of Meetings. (1) Procedural Rules. The procedural rules for debate and action shall be as set forth in Table 1, attached hereto and adopted herein by reference. Robert's Rules of Order shall not be applicable or govern the procedures for the conduct of Sanitation District business. (2) Legal Officer. In any case of ambiguity or uncertainty in the interpretation or application of these Rules to any procedure, the presiding officer may direct such question for a ruling to the Board's General Counsel, who shall be the parliamentarian of the Board. (3) Obtaining the Floor and Making Motions. Any member of the Board wishing to speak, or any member of the public wishing to address the Board, must first be recognized by the Chairperson. The Chairperson must recognize any member of the Board who seeks the floor when appropriately entitled to address the Board. OCSD XX-XX-2 Any member of the Board, including the Chairperson, may bring a matter of business properly before the Board by making a motion. Any member, including the Chairperson, except the member making the motion, may second the motion. Once a motion is seconded, it may be opened for discussion and debate, in accordance with the procedures in Subsection (4) below. (4) Rules for Discussion. Debate. and Deliberation by the Board. The procedures for consideration and action on all matters to come before the Board shall be in compliance with the terms of this Section, as follows: (a) Each item on the Agenda will be introduced in a form of a report by either Staff or Counsel. (b) Upon completion of the report, the Chairperson will allow for direct questions regarding the item, by Directors, each in turn, and in the order as selected by the Chairperson. (c) Upon completion of the question period, the Chairperson will entertain a motion and second for consideration by the Board. (d) Discussion among the Directors will follow. Each Director will be recognized to address the Board in the order selected by the Chairperson, with a five (5) minute time limit for each Member wishing to speak on the Agenda item, unless the time limit is waived by the Chairperson. There will be no interruptions of the Director who has been recognized. Attempted interruptions will be declared out-of-order, and the Board Member attempting to interrupt will be asked to remain silent until recognized. (a) As an additional courtesy to everyone, repetition of comments will be discouraged in the interest of time, and at the discretion of the Chairperson, can be declared out-of-order. (f) After each Member who wishes to speak has been recognized and completed his/her remarks, a single three (3)minute period of rebuttal will be allowed any Director, unless the time limit is waived by the Chairperson. (g) If it appears to the Chairperson that any Director is pursuing a line of questioning or commentary due to lack of preparation or prior review with the District's Staff, the Director's time will be declared to have been used up, and no further inquiry will be allowed. (h) Upon adoption of a motion on an Agenda item, there will be no further discussion of that item. OCSD XX-XX-3 (5) Decorum in Debate. All Members shall address their remarks to the Chairperson and confine them to the business then pending and subject to discussion before the Board, avoiding personalities and reflections upon anyone's motives. (6) Closing or Limiting Debate. At all times the Board shall endeavor to allow free and open debate among Members of the Board. However, in the discretion of the Chairperson, it may become necessary to close or limit debate, so that action can be taken by the Board. An order by the Chairperson closing or limiting the debate can only be set aside by a majority vote of the Board. F. Quorum. A majority of the Directors shall constitute a quorum of the Board. G. Chairperson and Vice Chairperson of the Board. A Chairperson and Vice Chairperson of the Board shall be elected by a majority vote of Directors at the regular meeting in June of each year, and will assume office July 1st. The nominations for Chairperson and Vice Chairperson shall be made at the regular Board meeting in May of each year. Any person nominated for Chairperson shall be deemed to be nominated for Vice Chairperson in the event the person is not elected as Chairperson. Thereafter, the nominees shall prepare a statement setting forth their qualifications for the office sought. The statements shall be mailed to members of the Board of Directors with the Agenda and other meeting material for the June regular meeting. If only one individual is nominated for Chairperson at the regular Board meeting in May, that individual shall be deemed elected as Chairperson, no election shall be held in June, and the individual shall assume office July 181. If only one individual is nominated for Vice Chairperson at the regular Board meeting in May, that individual shall be deemed elected as Vice Chairperson, no election shall be held in June, and the individual shall assume office July is'. The Chairperson and Vice Chairperson shall serve at the pleasure of a majority of the Directors. In the event the office of Chairperson becomes vacant due to resignation or retirement of the incumbent prior to the expiration of the regular term, the Vice Chairperson shall automatically succeed to the office of the Chairperson and shall continue to serve through the remainder of the regular term unless sooner removed by action of a majority of the Directors. In the event the office of Vice Chairperson becomes vacant prior to the expiration of the regular term, nominations and the election of a Director to serve in that capacity shall be conducted at the next regular Board meeting. The person so elected shall serve the balance of the regularly-scheduled term unless sooner removed as a result of action by a majority of the Directors. The Chairperson shall not serve more than two consecutive one-year terms for which he/she has been elected to the office of Chairperson. The Vice Chairperson shall not serve more than two consecutive one-year terms for which he/she has been elected to the office of Vice Chairperson. OCSD XX-XX-4 H. Presiding Officer. The Chairperson of the Board shall preside during meetings of the Directors. In the absence of the Chairperson, the Vice Chairperson shall preside. I. Clerk of the Board and Minutes. The Board of Directors shall have a person designated to serve as Clerk of the Board. The Clerk of the Board will be appointed to the position by the General Manager and shall report to the General Manager or a Department Head as designated by the General Manager. The Clerk of the Board will be a regular full time employee, subject to all the rules and policies applicable to all regular full time employees. The Clerk of the Board shall attend all meetings of the Board of Directors, unless excused by the Chairperson, and shall prepare an accurate record of each meeting for submission to the Directors and subsequent approval at the following meeting; provided, however, that when an adjourned, special or special adjourned meeting of the Board of Directors immediately precedes a regular meeting, Minutes of said meeting shall be submitted for approval at the next meeting of the Board following said regular meeting. In the preparation of Official Minutes of a meeting of the Board of Directors, the Clerk of the Board will not record the name of the Director who moves or who seconds the adoption of a motion or Resolution, except the vote of any individual Director shall be recorded upon that Director's request. The Minutes will reflect the votes by name of Director when required by provisions of state law. In the absence of the Clerk of the Board, a Deputy Clerk of the Board shall be appointed to exercise the duties of the Clerk of the Board. J. Regular Business to Come Before the Board of Directors. Insofar as practicable, all items of business to be taken up at a regular meeting of the Board shall be submitted to the Clerk of the Board, who shall include on the Agenda all such items submitted by Directors, the General Manager and General Counsel, and all formal communications. The Clerk of the Board shall mail to each Director a notice of such regular meetings, together with a proposed Agenda, not later than the Friday immediately preceding such regular meetings. Said Agenda, insofar as possible, shall include copies of Resolutions, except as hereafter provided, and a description of all matters to be considered, together with any pertinent written materials. Agendas shall be posted in a location freely accessible to the public not less than seventy-two (72) hours in advance of the meeting. Resolutions designated as "standard" and adopted by the Board of Directors from time to time,and approved as to form and content, need not be included with said Agenda; provided, however,that the information completing said standard Resolutions shall be set forth on the Agenda listing, and copies of said standard Resolutions shall be on file with the Clerk of the Board at the meeting time and place. OCSD XX-XX-5 Items of business not known at the time the regular Agenda is mailed as herein provided, may be considered as supplemental Agenda items; provided that all requirements of the Ralph M. Brown Act (California Government Code Sections 54950 at sec.) are satisfied. No business, except with consent of two-thirds of the Directors present (a majority of Directors present for emergency actions), and only if permitted by the Ralph M. Brown Act, not appearing on the regular or supplemental Agendas may be brought before the Board of Directors. The meeting Agenda shall provide for an opportunity for members of the public to address the Board on items on the Agenda and non-Agenda items of public interest. As determined by the Chairperson, speakers may be deferred until the specific Agenda item is taken for discussion, and remarks may be limited to three (3) minutes. Speakers on non-Agenda items may address only items that are within the subject matter jurisdiction of the Board of Directors. Time allotted for such presentations is limited to three (3) minutes or less. Total time allotted for all public input on each non-Agenda item is limited to thirty (30) minutes to one (1) hour, taking into consideration the number of persons filing a request to address the Board. However, time allotments may be waived by a majority vote of the Board. K. Handling of Business and Voting. During the course of a Board meeting, routine matters listed on the Agenda for consideration will be referred to by Agenda Item Number only. Voting on all Resolutions shall be by roll call, except if waived by unanimous voice vote, in which event, the Chairperson may order a unanimous ballot cast in favor of the motion or Resolution under discussion. The name of each Director shall be called only once. On matters of considerable interest or on which there appears to be a controversy, the motion or Resolution shall be read by title or repeated by the Chairperson. The Chairperson shall thereafter call for discussion of the motion or Resolution, at which time any member may discuss the pending matter. Any person other than a Director present at the meeting may speak on the motion if recognized by the Chairperson. Sole discretion as to the extent of discussion outside of the membership of the Board shall rest with the Chairperson. At the close of discussion, the Chairperson may, at the Chairperson's discretion, repeat the motion or Resolution pending, and thereafter, call for a vote. The Clerk of the Board shall determine and state whether or not a motion or Resolution is adopted by roll call vote. On all other matters, the Chairperson shall determine the outcome of the voting. OCSD XX-XX-6 L. Committees. (1) Standing Committees. (a) Steering Committee: There shall be a permanent Committee designated as the Steering Committee, comprised of the Chairperson of the Board, the Vice Chairperson of the Board, the Chairperson of each of the Standing Committees, and three at-large members selected by the Chairperson of the Board. The Vice Chairperson of each of the two Standing Committees shall serve as the designated Alternate, in the absence or inability to serve by any Chairperson. The Committee shall also conduct an annual performance evaluation of the General Manager and submit recommendations on his/her compensation to the Board of Directors. The Committee shall also review the General Manager's evaluation and compensation of the executive management employees, based on established criteria, and executive management's goals and objectives for the following year. The Committee shall also conduct an annual performance evaluation of General Counsel and submit recommendations to the Board of Directors as provided by Resolution OCSD 12-03. The Committee shall receive written requests for a hearing, set hearings or deny the request for a hearing on appeals concerning permit suspension, revocation, or denial as provided by Ordinance OCSD-37. The Committee shall make recommendations to the Board of Directors on labor negotiations and other related activities as may be needed or appropriate. The Committee shall also be authorized to assign new subjects of significant importance to the appropriate Standing Committee for study, evaluation and recommendation. The Steering Committee shall meet on the fourth Wednesday of each month at 5:00 p.m. preceding the Board's meeting, or at the call of the Chairperson of the Board of Directors. (b) Administration Committee: There shall be a permanent Administration Committee (Finance, Human Resources and Information Technology) to advise the Staff and make recommendations on matters related to the financial, budgeting, administrative and personnel policies and programs of the District. The Committee shall review with the Staff the procedures for development, preparation and format of the annual budget and recommend appropriate change, and counsel the Staff during the budget process to assure the proper OCSD XX-XX-7 interpretation and implementation of the Board's policies and that the desired procedures have been followed. The responsibility for consideration and adoption of the District budget rests with the Board of Directors. The Committee shall periodically interview and recommend the selection of outside auditors. The Committee shall review the result of the annual audit of the District's accounts with representatives of the outside audit firm, including any comments received recommending improvements. The Committee shall review management's response to these comments and make appropriate recommendations for implementation. Periodically, the Committee shall recommend employment of an outside firm to audit internal control procedures to safeguard the assets of the District. The Committee shall interview and make recommendations on the employment of investment-banking firms, bond counsel, and if necessary or desired,financial advisors, to be used in connection with the District's financing programs. The Committee shall periodically coordinate recommendations on personnel audits of the District's operations or segments of the operations on an as-needed basis. The Committee shall make recommendations on personnel policies and procedures, insurers and coverage, procurement procedures, and such other related activities as may be needed or appropriate. The Chairperson of the Board of Directors shall appoint a Committee Chairperson and a Committee Vice Chairperson for the Administration Committee. The Committee Chairperson and Committee Vice Chairperson shall serve at the pleasure of the Chairperson of the Board of Directors. The Administration Committee shall consist of thirteen members, as follows: (1)The Chairperson of the Board of Directors; (2)The Vice Chairperson of the Board of Directors; (3)The Committee Chair of the Administration Committee; (4)The Committee Vice Chair of the Administration Committee; and OCSD XX-XX-8 (5) Nine additional Board members appointed by the Chairperson of the Board of Directors. Other than the Board Chairperson and the Board Vice Chairperson, no Director who serves on the Operations Committee shall be eligible to serve on the Administration Committee. The Administration Committee shall meet on the second Wednesday of each month at 5:00 p.m., or at the call of its Chairperson. (c) Operations Committee. There shall be a permanent Committee designated the Operations Committee (Engineering, Operations & Maintenance and Technical Services). With the goal of compliance with all public health and environmental laws and regulations, the Operations Committee shall review and submit appropriate recommendations on the matters pertaining to the operation of the District Treatment Works, including such matters as current and projected service/flow needs, level and quality of treatment, conservation, recycling and reuse activities, and air quality issues. The Committee shall also review issues pertaining to the District's NPDES Ocean Outfall Discharge Permit, including annual review of the contractor(s) performing the ocean monitoring and research programs required as a condition of said permit, and related issues regarding protection of the marine waters off metropolitan Orange County's coastline from impacts resulting from the District's operations and discharge of treated wastewater. The Committee shall also review matters pertaining to contractual arrangements by the District to provide sewerage services to areas outside the District's boundaries or approved spheres of influence. The Committee shall review plans for the future needs of the District, explore alternatives and make recommendations to the Board of Directors. The Operations Committee shall also review and submit appropriate recommendations on matters pertaining to capital projects which address operational needs, including the selection of professional consulting services to assist in studying, planning and designing needed District Treatment Works and support facilities, including computerized systems, in accordance with the Board's established policies and procedures for procuring such services; the Committee shall further review construction projects for said facilities in accordance with applicable public works laws and Board policies. Said oversight shall include the contracts for professional services and public works construction projects and addenda or change orders thereto. In carrying out its responsibilities, the Committee shall receive advance notice and regular status reports on the projects from Staff, and monitor, visit and observe the District Treatment Works' operational functions and major capital construction projects. OCSD XX-XX-9 The Chairperson of the Board of Directors shall appoint a Committee Chairperson and a Committee Vice Chairperson of the Operations Committee. The Committee Chairperson and Committee Vice Chairperson shall serve at the pleasure of the Chairperson of the Board of Directors. The Operations Committee shall consist of fourteen members, as follows: (1)The Chairperson of the Board of Directors; (2)The Vice Chairperson of the Board of Directors; (3)The Committee Chair of the Operations Committee; (4)The Committee Vice Chair of the Operations Committee; and (5)Ten (10)additional Board members appointed by the Chairperson of the Board of Directors. Other than the Board Chairperson and the Board Vice Chairperson, no Director who serves on Administration Committee shall be eligible to serve on the Operations Committee. The Operations Committee shall meet on the first Wednesday of each month at 5:00 p.m., or at the call of its Chairperson. (d) Legislative and Public Affairs Committee: There shall be a permanent Committee designated as the Legislative and Public Affairs Committee, comprised of the Chairperson of the Board, the Vice Chairperson of the Board, and five at-large members selected by the Chairperson of the Board. The Committee shall advise the Staff and make recommendations on matters related to the legislative and public affairs programs of the District. The Legislative and Public Affairs Committee shall meet on the second Monday of each month at 5:00 a.m. or at the call of the Board Chairperson. (2) Special and Ad Hoc Committees. In addition to the Standing Committees, the Chairperson of the Board of Directors, or the Chairperson of a Standing Committee, or a majority of the Directors, may appoint from time to time, Special or Ad Hoc Committees to study and report on specific matters. Such Committees shall be temporary in nature, and their assignments shall pertain to a current, specific issue. Upon completion of the assigned task, the Ad Hoc or Special Committee will be dissolved. The Chairperson and Vice Chairperson of Special and Ad Hoc Committees shall be appointed by the Chairperson of the appointing authority. OCSD XX-XX-10 Each Special and Ad Hoc Committee shall meet at the call of its Chairperson. M. Motion to Refer to a Standing Committee. Any Director at a Board meeting may move to have a policy or any other activity affecting the Sanitation District, or any one of the member Agencies, referred to a Standing Committee for study and report. This motion shall be a privileged motion, and when duly seconded, discussion thereof shall be limited to Directors only. Said motion shall receive an affirmative vote of a majority of the Directors for adoption. Section 2: Procedure for Consideration of Demands for Corrective Action. A. Requirement of Written Demand. Prior to any person commencing a judicial action for injunction or mandamus to declare any action taken by the Board void because of failure to observe Brown Act requirements, such person must first serve upon the Clerk of the Board a written demand describing the alleged violation and demanding corrective action. Such demand must be served upon the Clerk of the Board within thirty (30) days of the complained of action. Failure to serve any such demand within this thirty (30)day period shall result in the loss of any right to challenge any action to have been taken in violation of Sections 54953, 54954.2, or 54956 of the California Government Code. B. Consideration of Corrective Action. Upon receipt of such a demand, consideration of the demand shall immediately be placed on the Agenda for the next meeting of the Board of Directors. If the demand is received less than seventy-two (72) hours prior to the time set for the next meeting, the Board may determine that the notice constitutes the initiation of litigation, and that the need to take action on the threatened litigation arose subsequent to the posting of the Agenda, and may consider it at that meeting pursuant to Section 1(J) above. A description of any item so placed on the Agenda shall include both consideration of the demand, and the possibility of corrective action by the Board. In considering such demands, the Board shall first determine, by motion, whether corrective action should be taken. If no motion to take corrective action is carried, the Clerk of the Board shall inform the demanding party in writing of the Board's decision not to cure or correct the challenged action. C. Implementing Corrective Action. If a motion to take corrective action passes, the Chairperson may entertain a motion implementing corrective action. Any motion implementing corrective action shall address the concerns raised in the consideration of corrective action. The motion implementing corrective action may include a motion to rescind prior action taken, as appropriate. Passage of a motion to rescind invalidates prior action only as of the time of the passage of the motion, and not OCSD XX-XX-11 from the date of the initial action. A motion implementing corrective action resulting from a written demand is out-of-order if the action complained of(a)was in connection with the sale or issuance of notes, bonds, or other evidences of indebtedness, or any contract, agreement, or incident thereto; or (b) gave rise to a contractual obligation upon which a party has, in good faith, detrimentally relied. In any event, the Board shall notify the party making the demand in writing of its decision to take corrective action, and shall describe any corrective action taken. This notice shall be given to the demanding party as soon as possible after the meeting, but in no event more than thirty (30) days after receipt of the demand. Section 3: Resolution No. OCSD 15-01 is hereby repealed. Section 4: This Resolution shall become effective immediately. PASSED AND ADOPTED at a regular meeting held December 16, 2015. John Nielsen Board Chair ATTEST: Kelly A. Lore Clerk of the Board OCSD XX-XX-12 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-XX was passed and adopted at a regular meeting of said Board on the 161h day of December, 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_ day of December, 2015. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District OCSD XX-XX-13 TABLE 1 BOARD PROCEDURES AND ORGANIZATION SUMMARY OF MOTIONS A. PRIVILEGED MOTIONS Kind of Second Vote Motion Required Debatable Amendable Required Purpose Adjourn Yes No No Majority To end the meeting To Take a Yes No No Majority To interrupt a Recess meeting for a short time or to provide an intermission Raise a No No No None To obtain action Question of immediately in an Privilege emergency B. MAIN MOTION AND RELATED SUBSIDIARY MOTIONS Kind of Second Vote Motion Required Debatable Amendable Required Purpose Main Yes Yes Yes Majority To introduce new Motion business Amend Yes Yes Yes Majority To modify or alter Main a motion Motion Substitute Yes Yes Yes Majority To replace the Motion main motion entirely Previous Yes No No Majority To close debate Question on the main or OCSD XX-XX-14 Kind of Second Vote Motion Required Debatable Amendable Required Purpose amended motion immediately Continue to Yes Yes Yes Majority To defer action a Certain Time To Table Yes No No Majority To discontinue consideration until brought back by vote of the Board Take a Yes No No Majority To bring before Motion from the group a motion the Table previously tabled Limit or Yes No Yes Majority To limit or extend Extend limits of debate Limits of Debate Refer to a Yes Yes Yes Majority To place business Committee in hands of a Committee Withdraw a No No No None To withdraw a Motion motion before it is voted on Reconsider Yes Yes No Majority To secure a new must be by a vote on a motion Director who previously voted voted for the upon prevailing side on the original motion OCSD XX-XX-15 C. INCIDENTAL RULES NON-RANKING Kind of Second vote Motion Required Debatable Amendable Required Purpose Request to Yes No No Two-Thirds To facilitate Suspend business ordinarily the Rules contrary to the rules of the organization Override Yes No No Majority To have Board Order of the majority rule on Chair the order Point of No No No None To enforce the Order rules of the organization OCSD XX-XX-16 STEERING COMMITTEE MEETING MeeingDale TOBe.orDi,. JV16115 12/16/15 AGENDA REPORT Item Number Item Number 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert Ghirelli, Assistant General Manager SUBJECT: STRATEGIC PLAN UPDATE GENERAL MANAGER'S RECOMMENDATION A. Approve the Strategic Plan Update dated December 2015; and B. Direct staff to implement the goals and levels of service contained in the Plan. 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. Orange County Sanitation District (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 218' 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 November 2015: Steering Committee Summary of Strategic Plan Update Workshop. October 2015: Special Meeting 2015 Strategic Plan Update Board Workshop. October 2013: The Board of Directors participated in a second Strategic Planning Workshop to review recommended strategic goals. September 2013: The Board of Directors participated in a Strategic Planning Workshop to create a new Board Vision and review past strategic goals and progress. ADDITIONAL INFORMATION Based on the outcome of the Strategic Plan Update Interviews and Workshop, no modifications were made to the Levels of Service and two of the eight Strategic Goals were deemed to be complete: Page 1 of 2 Completed Strategic Goals: • Legislative Advocacy and Public Outreach - Develop a unified legislative advocacy and public outreach program. Target for completion in FY 13-14. • Disinfection of Ocean Discharge - Develop an implementation plan including the technical, financial, and societal factors associated with the decision to cease disinfection of the ocean discharge. Target for completion in FY 13-14. Following Board approval of the Strategic Plan Update, implementation of the remaining six Strategic Goals will occur through a series of recommended actions proposed by staff for Board consideration at future meetings. CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT The following attachment(s) are included in hard copy as a separate attachment, and may also be viewed on-line at the OCSD website(www.ocsd.com) with the complete agenda package and attachments: • December 2015 Strategic Plan Update Page 2 of 2 9 ' i O 1' 1+• 5 year strategic plan DECEMBER 2015 ORANGE COUNTY SANITATION DISTRICT ORANGE COUNTY SANITATION DISTRICT 5 year strategic plan DECEMBER 2015 � � o c � 0 ti 90 p � ate? 1"pr'a C_JE ENV\P t �a r air�r. 1 w; Jim I , Ilk 1 . r _ II � Yi _ I r / _ table of contents ■ OCSD Board of Directors.........................................................................................ii Message from the General Manager........................................................................iu Executive Summary.....................................................................................................1 The Strategic Planning Framework..........................................................................2 MissionStatement.......................................................................................................3 VisionStatement..........................................................................................................4 CoreValues...................................................................................................................5 RiskRegister.................................................................................................................6 Strategic Goals and Levels of Service......................................................................7 Appendix A: Issue Papers........................................................................................10 Appendix B: Summary of Accomplishments.......................................................13 AppendixC: Glossary...............................................................................................17 ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN[DECEMBER 2015) board of directors The strategic planning effort starts with the Board of Directors setting overall policy and priorities for the Sanitation District. Based on that policy direction,staff develops the annual operational plan and budget. Anaheim Los Alamitos Lucille Kong Richard Murphy Brea Member of the Board of Glenn Parker Supervisors Lisa Bartlett Buena Park Fred Smith Midway City Sanitary District Joy Neugebauer Costa Mesa Sanitary District James M. Ferryman Newport Beach Keith Curry Cypress Mariellen Yarc Orange Teresa Smith Fountain Valley Steve Nagel Placentia Chad Wanke Fullerton Greg Seboum Santa Ana (Board Vice Chair) Sal Tinajero Garden Grove Seal Beach Steve Jones Ellery Deacon Huntington Beach Stanton Jim Katapodis David Shawver Irvine Tustin Steven Choi John Nielsen (Board Chair) Irvine Ranch Water District John Withers Villa Park Greg Mills La Habra Tom Beamish Yorba Linda Water District Robert Kiley La Palma Peter Kim ■ ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN (DECEMBER 2015) message from the general manager In November 2013 the Orange County Sanitation District (OCSD) adopted a 5 Year Strategic Plan that envisioned an organizational culture that adheres to our core values and makes efficient and effective use of all available resources.The Strategic Plan centered our efforts on customer service, fiscal responsibility, protecting public health and the environment,communication, partnering with others and creating the best possible workforce. We committed to the execution of that plan and implementation of the eight strategic goals necessary to achieve success. Protecting public health and the environment is critical to our mission,and I am pleased to report that our ocean monitoring program reflects that the ocean is healthy around OCSD's ocean outfall.We also continue to be fiscally strong.This year OCSD received AAA bond ratings and we have reduced our long term pension liabilities,which in turn enabled us to reduce planned rate increases by 35 percent over the next three years. Two years into the five year Strategic Plan,I am pleased to report that we have completed two of the strategic goals and made strides towards accomplishing the remaining six.We held a Strategic Plan Update workshop,prepared two issue papers and updated our Summary of Accomplishments and the Risk Register.We remain committed to sustaining and improving our performance and meeting all of the established strategic goals. Under the direction of the Board of Directors,I am honored to be leading this effort and I look forward to working together to accomplish our goals in the years ahead and continuing our successes. The accomplishments laid out in this Strategic Plan Update would not be possible without the collective dedication and effort of our workforce and the commitment and support of our Board of Directors and the public we serve. Respectfully submitted, 12 & James D. Herberg General Manager ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN[DECEMBER 2015) executive summary The 2014—2019 5 year Strategic Plan is a guiding document that provides a framework that directs our work Every two years,the Strategic Plan will be reassessed,updated,and submitted for approval by the Board of Directors. This year's Strategic Plan Update began with a consultant retained by OCSD conducting confidential interviews with interested Board members to identify issues or concerns.The Strategic Plan Update continued with a workshop and presentation of two issue papers.The Update concluded with two Strategic Goals being identified as completed,no new goals being adopted and no modifications being made to OCSD's levels of service. Completed Strategic Goals: Disinfection of Ocean Discharge—Develop an implementation plan including the technical, financial and societal factors associated with cessation of disinfection of the ocean discharge. Legislative Advocacy and Public Outreach—Develop a unified legislative advocacy and public outreach program. Strategic Goals In Progress: 1.Odor Control—Completion of the Odor Control Master Plan. 2.Future Biosolids Management Options—Study biosolids management options including third party contracts and onsite capital facilifles. 3.Energy Efficiency—Continue to research new energy efficiency and energy conversion technologies. 4.Local Sewer Transfers—Complete the transfer of 174 miles of local sewers serving parts of Tustin and unincorporated areas north of Tustin and local sewer transfers in the City of Santa Ana. 5.Future Water Recycling—Determine partnerships,needs, strategies,benefits and costs associated with recycling of Plant No. 2 effluent water. 6.Workforce Planning and Workforce Development—This initiative is ongoing and part of a comprehensive workforce planning and development effort to ensure we have the right people with the right skills and abilities,in the right place,at the right time. ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN (DECEMBER 2015) strategic planning framework The planning framework illustrated below shows how OCSD staff and the Board of Directors play a critical role in strategic planning and resource allocation. Monitoring Strategic New or altered and Evaluation Planning Levels of Service Strategic Board AE) Planning Process Budget Operational \Goals and Planning Objectives Y III t - w ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN IDECEMBER 2015) our mission statement The Mission Statement is the basic foundation that defines why we exist. 1 1 1 I I 1 1 1 I 1 1 1 1 1 T�. ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN (DECEMBER 2015) vision statement The Vision Statement supports the Mission Statement by expressing a broad philosophy of what the Orange County Sanitation District strives to achieve in the delivery of services to our customers,vendors, other agencies,the general public,and each other. ORANGE COUNTY SANITATION DISTRICT WILL BE A LEADER IN: ■ Providing reliable, responsive and affordable services in line with customer needs and expectations. ■ Protecting public health and the environment utilizing all practical and effective means for wastewater, energy, and solids resource recovery. ■ Continually seeking efficiencies to ensure that the public's money is wisely spent. ■ Communicating our mission and strategies with those we serve and all other stakeholders. ■ Partnering with others to benefit our customers, this region, and our industry. ■ Creating the best possible workforce in terms of safety, productivity, customer service, and training. ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN[DECEMBER 2015) core values The Core Values support the Nfission and Vision Statements by expressing the values,beliefs,and philosophy that guides our daily actions.They help forna the firsurnework our organization and reinforce our professional work ethic. Honesty, Trust and Respect We aspire to the highest degree of integrity,honesty,trust, and respect is our interaction with each other,our suppliers, our customers,and our community. Teamwork and Problem Solving We strive to reach OCSD goals rhxough cooperative effotts and collaboration with each other and our constituencies. We work to solve problems in a creative,cost-effective and safe manner,and we acknowledge ream and individual efforts. Leadership and Commitment We lead by example,acknowledging[he value of our resources and using them wisely and safely to achieve our objectives and goals.We are committed to act in the best inrexes[of our employees,our organization, and our community. Learning/Teaching We continuously develop ourselves, enhancing our talents, skills, and abilities,knowing that only through personal growth and development will we continue to progress as an agency and as individuals. Recognition/Rewards We seek to recognize,acknowledge,and xewazd contributions to OCSD by our many talented employees. ORANGE risk register 2015 The Risk Register is a periodic compilation of the various risks facing the Orange County Sanitation District, as seen and determined by our management team. The 2015 Risk Register Update identified these as the top risks: • Pipelines damaged or severed after earthquake—focusing on the concern of liquefaction from an earthquake,that may cause movement of pipes or other system failures. • Attracting qualified applicants and enticing top candidates to join OCSD—reflecting the concern that as we lose talent due to retirements and staff movement,our lack of a comprehensive strategy to attract top talent and the existing pay and benefits program which is not competitive with other agencies may limit us from attracting tenured public sector employees. The top opportunities for the 2015 update are: • As employees leave,restructure staffing to become more efficient—referring to the many employees who are eligible for retirement,and the opportunity to look at staffing needs thereafter. • Focus on main mission without other endeavors leading to higher rates—an opportunity to stick to our core business so that costs are kept in line. The major underrated continuity challenges include: • Cyber-terrorist or hacker attacks on OCSD—related to the ever-changing risks and increased need to secure our computer network servers. • Emergency Preparedness—expressing concern that OCSD is unprepared to deal with disasters such as electrical outages and explosions. Staff is developing plans to mitigate the risks and continuity challenges,and to take advantage of the opportunities. OCSD's Risk Management division released a schedule of"table top exercises"designed to respond to the top risks and challenges,and held an exercise focused on the possible interruption of electrical power after a disaster.An exercise is also planned to consider how to respond to the potential damage to pipelines from an earthquake.As for opportunities,OCSD's General Manager has directed,as part of this Strategic Plan,that comprehensive workforce planning activities be designed and implemented. ■ ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN[DECEMBER 2015) strategic goals and levels of service OCSD has six outstanding strategic goals to support the vision of the Board of Directors and Executive Management Team.The levels of service are key performance indicators in achieving the overall vision. Providing Exceptional Customer Service • Providing reliable,responsive and affordable services in line with customer needs and expectations. 1. Odor Control-Completion of the Odor Control Master Plan to make sure the District's investment is current and,if needed,future process systems to produce the benefits intended. Target completion in FY 15-16. at Customer S fY 1415 Level of Results Service Target Odor complaint responsc: Treatment plants within 1 hour 100'% 100-/ Odor complaint response:Collection system within 1 working day 98% 100% Number of odor complaints: • Reclamation Plant No. 1 8 0 •Treatment Plant No. 2 9 0 • Collection System 27 12 *Under normal operating conditions Respond to public complaints or inquiries regarding construction 100% 100% projects within 1 working day New connection permits processed within 1 working day 100% 100% Respond to all biosolids contractor violations within a week of 100% 100% violation notice Protecting Public Health and the Environment • Protecting public health and the environment utilizing all practical and effective means for wastewater, energy, and solids resource recovery. 2. Future Biosolids Management Options—Study biosolids management options including third party contracts and onsite capital facilities for mid-term and long-term approaches beginning in 2016-2017. Target for mmpledon in FY 15-16. 3. Energy Efficiency—The District will research new energy efficiency and energy conversion technologies to maximize energy efficiency,reduce operating costs,minimize environmental impact, and replace assets that are at the end of their useful lives. Target for completion in FY 17-1%. T 0050 owns and operates$6.2 billion in infrasbuc[ure assets.Through these assets,Dean collects,treats,and either reuses or safely discharges 185 million gallons per day of wastewater. ORANGE COUNTY SANITATION DISTRICT—5 YEAR STRATEGIC PLAN[DECEMBER 2015) strategic goals and levels of service Protecting Public Health &The Environment FY 14-15 Level of Results Service Target Accept dry weather runoff diversion flows without imposing fees 1.2 mgd Up to 10 mgd Air emissions health risk to community and employees,per one 9 QO million people for each treatmentplant) Notices of violation (NOV) with air,land, and water permits 0 0 Respond to collections stems ills within 1 hour 100% 100% Sanitary sewer spills per 100 miles 1.2 < 2.1 Contain sani sewers ills within 5 hours 100% 100% Meet secondary treatment standards BOD 4.8 mg/L BOD 25 mg/L TSS 5.7 mg/L TSS 30 mg/L Thirty-day geometric mean of coliform bacteria in effluent after 881 <1000 initial dilution of 250:1 (MPN) Frequency of unplanned use of emergency one-mile (78-inch 0 0 diameter) outfall (per year during dry weather) Tons of biosolids to landfill through 2017 peak production period 60 100 Compliance with core industrial pretreatment requirements 100% 100% Managing and Protecting the Public's Funds Continually seeking efficiencies to ensure that the public's money is wisely spent. 4. Local Sewer Transfers—Complete transfer of 174 miles of local sewers serving pans of Tustin and unincorporated areas north of Tustin and local sewer transfers in the City of Santa Ana to be concluded by December 31,2016. Following those,no further local sewers to be transferred at the initiation of OCSD.If a local jurisdiction is interested in OCSD transferring sewers,each request will be considered on an individual basis assuming the sewers meet the requirements identified. Tagetfor completion in 6Y 16-17. Managing and Protecting the Public Funds FY 14-15 Level of Service Results Target Annual user fees sufficient to cover all O&M requirements 100% 100% Actual collection, treatment,and disposal costs per million gallons 3%under 5 10% of budget Maintain AAA Bond Rating 100% 100% ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN[DECEMBER 2015) strategic goals and levels of service Stakeholder Understanding and Support • Communicating our mission and strategies with those we serve and all other stakeholders. • Partnering with others to benefit our customers,this region and our industry. 5. Future Water Recycling Options—Determine partnerships,needs,strategies,benefits and costs associated with recycling of Plant No.2 effluent water. Tagetjor completion in FY 18-19. Stakeholder Understanding and Support FY 14-15 Level of Service Results Target Meet GW .S specification requirements for Plant No. 1 secondary 2.7 NTU 5 NTU effluent Provide specification effluent available to the Groundwater 100% 100% Replenishment System to maximize production of purified water Organizational Effectives • Creating the best possible workforce in terms of safety,productivity,customer service,and training. 6. Workforce Planning and Workforce Development-Thus initiative is ongoing and part of a comprehensive workforce planning and development effort to ensure we have the right people with the right skills and abilities,in the right place,at the right time.Target for completion is ongoing. Organizational Effectiveness IY 14-15 Level of Service Results Target Employee injury incident rate—per 100 employees 1 7 <3.3 Industry Average Meet mandatory OSHA training requirements 100% >95% Hours worked since last lost work day 430,000 >1,000,000 Achieve annual agency target of days away from work,days of restricted work activity,or job transferred as a result of a work- 0.8 <2.5 related injury or illness Avcxagrc cost per Workers Compensation claim $6,774 $13,545 Training hours per employee 45.23 45 per year ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN (DECEMBER 2015) appendix A: issue papers In preparation for the October 21,2015 Board of Directors Strategic Planning Workshop staff prepared two issue papers related to the new goals.The appendix includes issue papers on the following topics: 1. Odor Control level Of Service 2.Storrawater Capture .t 1 f� ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN[DECEMBER 2015) odor control Should OCSD change the level ofamcw1ma for od ontrol? Why is this issue important to the District? In 1989, OCSD began addressing collection system odor and corrosion concerns chemically by implementing a caustic soda shock-dosing program for some of the trunklines.In 2001,this program evolved to continuous chemical dosing in the collection system for odor control which utilized ferrous chloride,magnesium hydroxide,and calcium nitrate at rune different dosing locations.The program has proven to reduce odor and corrosion in the regional trunk system and suppress odors at the headworks of the treatment plants.It also helps condition the sewage arriving at the treatment plants. In 2007,the Board of Directors adopted the Five-Year Strategic Plan,which set the Level of Service standard at a goal of 34 or less odor complaints attributed to the OCSD collection system.At that time two categories were tracked;Attributed,and Not Attributed.The attributed category captured complaints attributed to OCSD as well as those whose source could not be determined.The complaints were classified by the OCSD responder. In 2009, a third category was created by staff to appropriately document odors of an undetermined source.With the addition of this category,odor complaints attributed to OCSD were reduced significantly.As a result,the goal was reduced in 2014 to 12 complaints or less attributed to OCSD. In 2014,the Odor Control Division revised its Odor Response Procedure to include a follow up investigation as a secondary response for each odor complaint.The objective was to minimize the unknown sources and ultimately better address the root causes of the odors.The complaints were classified by the secondary OCSD responder after the investigation was concluded. Our LOS goal for FY 14/15 was 12 or fewer. Due to the results of the detailed investigations,the number of OCSD attributed complaints has increased.We had 27 validated odor complaints in the collection facilities in FY 14/15 due to various causes. It is recommended that the Level of Service goals be changed to better reflect the current methodology used to investigate. Recommendation Increase our current level of service from 12 odor complaints to 28. A new goal of 28 or less odor complaints attributed to OCSD would reflect the success of the change in procedures in determining the true source or root cause of the odor complaints.This new LOS could also be achieved within the current budget/sewer fee structure. Staff does not foresee a reduction to the current number of complaints until the plant odor facilities modifications are completed.Any further reductions would also require modifications to Collections' Odor Control Program. Modifications could include items such as additional dosing facilities,additional siphon vents,and repairs to existing siphon vents within the collection system.The Collection Facilities Odor Control Master Plan Update expected in 2017 will help guide the future direction. The new goal of 28 or less odor complaints attributed to OCSD is an appropriate reflection of current Odor Control Program procedures.By continuing to better investigate the root causes of the odors,we can improve strategies for mitigation.The desired outcome may be to eventually reduce the number of attributable odor complaints to zero for those facilities that are a part of the continuous dosing or"sewage conditioning"program ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN (DECEMBER 2015) stormwater Should we capture stormwater? Why Is this Issue Important to the District? The Board of Directors has expressed interest in stormwater capture to augment water supplies and aquifer recharge for North Central Orange County. Background: OCSD has been active in stormwater capture for more than a decade with its urban runoff diversion program.This program is approved to accept up to ten million gallons per day of urban runoff, which is technically storrnwater. Expressed differently,this ten million gallon per day of flow is equivalent to 18 cubic feet per second.The program was originally begun to improve beach water quality by diverting river water laden with bacteria from reaching recreational beaches. OCSD has limited the flow to dry weather to protect its collection system and treatment plants from having overflows which are spills. OCSD's service area contains several dams to control wet weather stormwater flows.These include Prado Dam, Carbon Canyon Dam,Brea Dam,Fullerton Dam,Villa Park Dam,and Santiago Dam.These Dams are connected to rivers and channels which are designed to flow large volumes of silt laden water in order to protect regions from the damage associated with flooding events.Pmdo Dam is capable of releasing more than 30,000 cubic feet of water per second,or more than 19 billion gallons per day. The Orange County Water District is primarily responsible for recharging the aquifer in North Central Orange County.It controls more than 1,000 acres of river,ponds and percolation basins in Anaheim and 1,250 acres of surface water storage behind Prado Dam.The dam is controlled by the Army Corps of Engineers to protect from flooding and secondarily to store stormwater to recharge of Orange Counties' aquifer.The water is released at a rate that allows for diversion to the Anaheim recharge ponds and lakes usually less than 100 cubic feet per second. OCSD's systems are not designed to handle wet weather stotmwater volumes or content.Wet weather naturally increases flow through OCSD's system caused by inflow and infiltration.Inflow is direct flow into the system generally attributed to illegal connections,leaks through manholes and other openings to standing or flowing surface water. Infiltration is ground water that seeps into the sewer system through pipe and manhole defects.These flows can increase normal dry weather flows by 2.2 times. Recommendation Orange County Sanitation District must balance its mission to protect public health and to create usable products like potable water.Treatment Plant and collection system capacities are designed around normal system flow patterns.These sewers and plants are completely incapable of dealing with even minor rain event stormwater flows. Sewer pipes are a fraction of the size of storm drains,much less flood channels. Storms flows are not necessary for feeding the GWRS. Normal sewage flows, even in a historic drought,are feeding the system at near capacity.The greater risk TO OCSD's mission is the risk to public health that occurs with sewer overflows. Raw sewage in the streets or waterways is a completely unacceptable outcome. Stormwater capture is the purview of Orange County Water District,OC Flood, and the Army Corps of Engineers.They have the necessary infrastructure and available land. OCSD should continue to accept dry weather urban runoff to support water reuse and protect beach water quality. ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN[DECEMBER 2015) appendix B summary of accomplishments Goal Completed FY 07-08 FY 0809 FY 0910 FY 1011 FY 1112 FY 12-13 FY 13.14 FY 15-16 SARI Line Relocation-Work in conjunction with the County of Omnge and • the Federal Government to relocate the SARI Line by December 31,2013. Management System for Environmental Compliance-Implement a management control system for environmental • compliance information that incorporates a dashboard-style report. Contaminants of Potential Concern (CPC)-Complete three phase testing and analysis of 550+CPC, prepare report on • findings and recommendations,develop initial source control strategy if they are CPCs identified that require control. Climate Change/Greenhouse Gases Develop an overall strategy for respondingto climate change regulations and proactively adapting to the effects of climate change • including identification and mitigation of greenhouse gases and adapting to any impacts to our facilities and operations. Develop models to estimate greenhouse gas and traditional pollutant emissions for determination of our environmental • footprint.(Functional predictive greenhouse gas model completed) Engine Emission Compliance Complete study to evaluate alternatives for complying with lower emission limits in the South Coast Air Quality Management's Rule 1110.2.Initiate • planning and design of demonstration testing of most promising technology(s) identified in the study. Implement capital improvements or operational modifications in order to • achieve compliance. Providing Ongoing Leadership Development-Maximize the development of a pool of dedicated and talented • employees ready to lead OCSD into the future. ORANGE COUNTY SANITATION DISTRICT—5 YEAR STRATEGIC PLAN (DECEMBER 2015) summary of accomplishments Goal Completed FY 0708 FY 0809 FY 09-10 FY 1011 FY 1112 FY 12-13 FY 1314 FY 15-16 Fuel Cell Evaluation Start up 300kW demonstration unit. • Evaluate cost feasibility of replacing or supplementing CGS engines with fuel • cell. Reclaiming Santa Ana River Interceptor Line(SARI)Flows-Meet with stakeholders,develop a list of obstacles that need to be overcome to reclaim the • SARI Line and develop a strategy to obtain regulatory approval to reclaim SARI Line flows.This goal was canceled due to inability to obtain regulatory approval. Sewer Rate for Green Development- Submit for Board approval an amendment • to sewer rate Ordinance with incentives for green developments. Complete Facilities Master Plan Update - Complete a comprehensive update of • the Facilities Master Plan and obtain Board approval Enterprise Information Technology Strategic Plan - Complete a District-wide • Information Technology Strategic Plan. Updating OCSD's Risk Register- Review and update OCSD's risk register to include an assessment oftechnical, regulatory, • financial,and political risks(among others) and possible mitigation strategies Annex Unincorporated Areas-With Board concurrence,annex unincorporated • areas onto OCSD's service area. Review Interagency Agreements- Conduct a comprehensive review of agreements with the Santa Ana Watershed • Project Authority and Irvine Ranch Water District,and,if appropriate,reopen for discussion. Strategic Business Plan-With Board concurrence,annually update and • implement the Strategic Plan and Business Plan. Business Accountability Charters- Create Business Accountability Charters • for each department consistent with those developed by managers and supervisors ORANGE COUNTY SANITATION DISTRICT—5 YEAR STRATEGIC PLAN IDECEMBER 2015) summary of accomplishments Goal Completed FY07-08 FY 0809 FY 09-10 FY 100.11 FY 11-12 FY 12-13 FYS&14 FY 15-16 Chemical Supplies- Develop a Chemical Sustainability Plan that provides OCSD with options for obtaining wastewater treatment • chemicals during chemical shortages, emergencies or complete stoppages. Chemical Sustalnablllty-Ensure a reliable and sustainable chemical supply using multiple vendor contracts to reduce the • risk of supply disruption while benefiting from competitive pricing. Full-Cost Recovery 2010-11-Conduct a comprehensive review of the Sanitation • District's Urban Runoff Program to ensure a fair share recovery of costs for services. Full-Cost Recovery 2012-13-Implement a direct charging mechanism to recover the full cost of urban runoff treatment starting July 1,2013 when the new rate structure • is in place.This goal was canceled in FY 12-13 to allow additional urban runoff at no cost to the local jurisdiction. Groundwater Replenishment System- Maximize the production of GWR System product water to augment and protect the • Orange County groundwater basin with a goal of 70 mgd. Sustainable Biosolids Program Complete new in-county Compost Take- • Back Program Plan Strategy. Evaluate the feasibility of deep injection/ methane recovery including commissioning a study of the geological formations • below Plants 1 and 2,and availability and acceptability of any existing wells Evaluate option of processing some biosolids at the City of Los Angeles • Terminal Island demonstration well. Implement Energy Master Plan -After the completion of the plan,assess final • recommendations to ensure adequate power resources and energy management. Disinfection of Final Effluent-Develop a cost effective program to sustain protection of public health associated with • bacteria in the effluent and incorporate program elements into our NPDES Permit. ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN (DECEMBER 2015) summary of accomplishments Goal Completed FY 07-08 FY 0809 FY 0910 FY 1011 FY 11 J2 FY 12-13 FY 1114 FY 15 Sfi Ocean Protection - Undertake studies to determine the cause of benthic community changes near the ocean outfalI and take • corrective action to return affected areas to reference conditions. Space Planning Study Recommendations - Complete relocation of staff housed in Information Technology Trailers, • Administration Building,Control Center and Building 6. Improve the Sanitation District Security- Provide long-term security enhancements • at both treatment plants and within OCSD's Collection System. Safety and Health Strategic Plan - DevelopandimplementaSafetyand • Health Strategic Plan for all OCSD activities. Human Resources Strategic Plan- Design,develop and implement human resources policies, practices,systems and • tools to ensure OCSD has a workforce that meets future needs of OCSD and the public it serves. Succession Plan-Implement the Succession Management Plan including • management training and the creation of a Leadership Academy. North County Yard -Open the North County Maintenance Yard and complete the relocation of selected staff and equipment to the facility.Implement flex • space for added agency-wide needs as appropriate.This goal was canceled in FY 10-11 and the facility is currently being leased. Five-Year Rate Plan - Prepare an updated 5-year rate schedule for Board • consideration to go into effect July 1,2013 Sustainable Biosolids Program-Conduct research to reduce the amount of biosolids • produced and increase digester gas production Disinfection of Ocean Discharge-Develop an implementation plan includingthe technical,financial and societal factors • associated with cessation of disinfection of the ocean discharge Legislative Advocacy and Public Outreach- Develop a unified legislative advocacy and • public outreach program ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN(DECEMBER 2015) appendix C: glossary Activated-sludge process—A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen,and consume dissolved nutrients in the wastewater. Biochemical Oxygen Demand(BOD)—The amount of oxygen used when organic matter undergoes decomposition by microorganisms.Testing for BOD is done to assess the amount of organic matter in water. Biosolids—Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process.This high-quality product can be recycled as a soil amendment on farm land or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Business Accountability Charters—A business unit strategic plan. 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. colt are the most common bacteria in wastewater. Collections system—In wastewater,it is the system of typically underground pipes that receive and convey sanitary wastewater or Storm water. Certificate of Participation (COP)—A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Contaminants of Potential Concern (CPC)—Pharmaceuticals,hormones,and other organic wastewater contaminants. Dashboard—A computer based business tool used to visually track performance. Dilution to Threshold(D/T)—the dilution at which the majority of the people detect the odor becomes the D/T for that air sample. 1,4-DioxarI chemical used in solvents for manufacturing, fumigants and automotive coolant.Like NDMA,it occurs in the Groundwater Replenishment System water and is eliminated with hydrogen peroxide and additional ultra-violet treatment. 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 redamation project that proactively responds to Southem California's current and future water needs.This joint project between the Orange County Water District and the Orange County Sanitation District will provide 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. Million gallons per day(mgd)—A measure of flow used in the water industry. Most Probable Number(MPN)—Number of organisms per 100 ml that would yield a rest result or the observed test result with the greatest frequency. Commonly used for coliform bacteria. 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. ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN (DECEMBER 2015) appendix C: glossary Nephelometric Turbidity Units (NTU)—An instrument for measuring the concentration of suspended particles in a liquid. O&M—Operations and maintenance of the treatment plants facilities and collections system. Publicly owned Treatment Works (POTW)—Municipal wastewater treatment plant. Recycling—The conversion of solid and liquid waste into usable materials or energy. Risk Register—An internal document that describes vulnerabilities of the Sanitation District. 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 filtet—A biological secondary Treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media,consume nutrients in wastewater as it trickles over them. Urban runoff—Water from city streets and domestic properties that carry pollutants into the storm drains, rivers,lakes,and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed—A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed. i I Y ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN[DECEMBER 2015) i w t`� f- r�� r -tl�-• �. Y- C �G M h14 ORANGE COUNTY SANITATION DISTRICT-5 YEAR STRATEGIC PLAN (DECEMBER 2015) SAMITq T m '5� O m i 9 90l am2 fqf/N0 THE EMVVPoi Reclamation Plant No. 1 (Administration Offices) 10844 Ellis Avenue • Fountain Valley,California 92708 • 714.962.2411 Treatment Plant No. 2 22212 Brookhurst Street • Huntington Beach,California 92646 www.ocsewers.com ® You STEERING COMMITTEE Meeting Dare To Bd.Of Dir. 12/16/15 12/16/15 AGENDA REPORT Item Number Item Number a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Nick Arhontes, Director of Facilities Support Services SUBJECT: AMENDMENT NO. 2 TO LOCAL SEWER FACILITIES TRANSFER AGREEMENT WITH EAST ORANGE COUNTY WATER DISTRICT GENERAL MANAGER'S RECOMMENDATION Approve Amendment No. 2 to the Local Sewer Facilities Transfer Agreement (Transfer Agreement) with East Orange County Water District (EOCWD) regarding the transfer of local sewers in Service Area 7. SUMMARY EOCWD has requested that Orange County Sanitation District (OCSD) amend the Transfer Agreement a second time to extend the expiration date to December 31, 2016. At its regular November meeting, the Board authorized the General Manager to negotiate an amendment to the Transfer Agreement to extend the expiration date and to obtain authorization for OCSD to negotiate with other entities regarding the transfer of local sewer facilities. This extension provides added time for the OC LAFCO approval process by extending the agreement term by 12 months to December 31, 2016. The proposed language also strengthens the prohibition on 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) and to ensure that OCSD's regional sewer revenues and Flows are maintained. The Agreement has also been modified to allow OCSD to negotiate with other entities regarding the transfer of local sewer infrastructure. Finally, EOCWD requested reimbursement of costs should LAFCO approve the transfer of Area 7 local sewers to another entity. The amendment proposes to reimburse up to $225,000 in costs accumulated prior to this amendment, plus no more than $30,000 for post-amendment costs, all to be charged to Service Area 7 accumulated fund balances. ADDITIONAL INFORMATION OC LAFCO met on December 9 to continue their process. OCSD staff attended and a verbal update will be provided to the Steering Committee on December 16. OCSD entered into an agreement with 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 Page 1 d 2 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 submitted a letter to OC LAFCO 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. BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT The following attachment(s)are attached in hard copy and may also be viewed online at the OCSD website (www.ocsd.corn with the complete agenda package: • Proposed Second Amendment to Local Sewer Facilities Transfer Agreement with EOCWD • Current Agreement and First Amendment with EOCWD NJA:pe Page 2 d 2 SECOND AMENDMENT TO LOCAL SEWER FACILITIES TRANSFER AGREEMENT THIS SECOND 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 et 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 entered into that certain "First Amendment to Local Sewer Facilities Transfer Agreement," dated April 22, 2015 ("First Amendment') to, among other things, extend the timelines and termination date of the Agreement; and WHEREAS, the LAFCO process is ongoing, and will not be completed prior to the expiration of the Agreement, as extended by the First Amendment; and WHEREAS, the Parties therefore desire to amend the Agreement to again extend the timelines and termination date to reflect the current status of the LAFCO process; and WHEREAS, the Parties desire to amend the Agreement to eliminate exclusivity provisions prohibiting OCSD from engaging in negotiations with entities other than EOCWD regarding the transfer of the subject local sewer facilities; and WHEREAS, EOCWD expended significant funds to initiate the transfer process and requested reimbursement of costs should LAFCO approve the transfer of Service Area 7 local sewers to another entity. The Parties propose to 1128281.3 reimburse up to $255,000 in costs from the Annual Area 7 Sewer Service User Fee reserves attributable to Local Sewer Facilities; and WHEREAS, the Parties desire to amend the Agreement to supplement provisions concerning the diversion of waste water from Service Area 7. 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 subsection 2.a. shall be amended to read "December 31, 2016"; and "July 1, 2015" and "2014-2015 Fiscal Year" in subsection 31i. shall be amended to read, respectively, "July 1, 2017" and "2016-2017 Fiscal Year." 2. Amendment to Section 3. Subsection 3.d shall be amended to read as follows (deletions shown in StF kethFGugh; additions shown in italics): 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. €ukMermere, GGSB agrees that prior to December 1 2015 or such earlier time as the n itiAt nnn With nt6n• ^•Nit es " aFdgRn the tran^feF ^i th^ ^Cnngl nS^y.fer F^^ t ns 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. Notwithstanding the foregoing, this section shall not be construed to prohibit OCSD from negotiating with any other entity, at any time, regarding the transfer of the Local Sewer Facilities. 1128281.3 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, 2016. 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. Amendment to Section 20. Section 20 shall be amended 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 ("OCWD") for its OCWD and OCSD's joint Groundwater Replenishment System. The territory in Service Area 7 both fully contributes to and benefits from the Groundwater Replenishment System by contributing wastewater and by using groundwater from the groundwater basin that is replenished by the system. EOCWD agrees that all EOCWD territory to which EOCWD provides sewer service, including territory added through annexation or other change of organization or reorganization, shall be customers of OCSD, and that all wastewater flows from such territory, including any increase in wastewater flows,will continue to flow to OCSD for treatment in perpetuity. EOCWD shall send all flow, existing, new or increased, originating in EOCWD to OCSD and EOCWD shall not divert wastewater away from OCSD for any purpose, including but not limited to scalping wastewater for reuse. Furthermore, the OCSD reserves the right, in its sole and absolute discretion, to reroute to OCSD for treatment, any current or future wastewater flows that may flow outside of territory to which EOCWD provides sewer service. 5. New Section 21. Section 21 shall be added to read as follows: 21. Possible Reimbursement of EOCWD's Costs. Should LAFCO approve the transfer of the Local Sewer Facilities to an entity other than EOCWD prior to December 31, 2016, OCSD will reimburse EOCWD for the costs associated with its pursuit of the Proposal described in Section 3 of this Agreement. The total reimbursable amount for costs accumulated prior to the date of this Second Amendment shall not exceed $225,000. Any additional reimbursement for costs accumulated after the date of this Second Amendment, but prior to the expiration of the Agreement, shall be limited to fees paid by EOCWD to OCLAFCO, and shall not exceed $30,000. Any reimbursement shall only be charged to the Annual Area 7 Service User Fee reserves attributable to Local Sewer Facilities. In the 1128281.3 event such reimbursement occurs, EOCWD will provide OCSD with all studies, data, reports, and other work product generated in pursuit of the Proposal, excluding materials that are subject to the attorney-client privilege. 6. No other Amendments. Except as otherwise expressly set forth herein, all terms and conditions contained in the original Agreement, as modified by the First Amendment, are hereby incorporated herein by this reference as if fully set forth herein and shall remain in full force and effect. [Signatures on Following Page] 1128281.3 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the dates set forth below. ORANGE COUNTY SANITATION DISTRICT By Date James D. Herberg General Manager ATTEST: Kelly Lore Clerk of the Board APPROVED AS TO FORM: Brad Hogin General Counsel EAST ORANGE COUNTY WATER DISTRICT By Date Lisa Ohlund General Manager ATTEST: APPROVED AS TO FORM: Joan Arneson General Counsel 1128281.3 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 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 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 PCSA Professional Consultant Services Agreement POTW Publicly Owned Treatment Works ppm Parts per million PSA Professional Services Agreement RFP Request For Proposal Glossary of Terms and Abbreviations RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board SAW PA 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. Glossary of Terms and Abbreviations Certificate of Participation (COP) -A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Contaminants of Potential Concern (CPC) - Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (D!f) - the dilution at which the majority of the people detect the odor becomes the D(f for that air sample. Greenhouse gases - In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect"). Groundwater Replenishment (GWR) System - A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons a day of drinking quality water to replenish the local groundwater supply. Levels of Service (LOS)-Goals to support environmental and public expectations for performance. NOMA- N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP) - An alliance of the National Association of Clean Water Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S. Environmental Protection Agency (EPA). NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation in order to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume-A visible or measurable concentration of discharge from a stationary source or fixed facility. Publicly-owned Treatment Works (POTW)- Municipal wastewater treatment plant. Santa Ana River Interceptor (SARI) Line - A regional brine line designed to convey 30 million gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer - Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban run-off. South Coast Air Quality Management District (SCAQMD) - Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment - Biological wastewater treatment, particularly the activated-sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge - Untreated solid material created by the treatment of wastewater. Total suspended solids (TSS)-The amount of solids floating and in suspension in wastewater. Glossary of Terms and Abbreviations Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed —A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed.