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HomeMy WebLinkAbout01-23-2013 Steering Committee Agenda Packet.pdf January 16, 2013 NOTICE OF MEETING STEERING COMMITTEE ORANGE COUNTY SANITATION DISTRICT REGULAR MEETING—5:00 P.M. Wednesday, January 23, 2013 Administration Building 10844 Ellis Avenue Fountain Valley, California 92708 The Regular Meeting of the Steering Committee of the Orange County Sanitation District will be held at the above location, date and time. b p x CJ + !NE E STEERING COMMITTEE AND BOARD MEETING DATES January 23, 2013 February 27, 2013 March 27, 2013 April 24, 2013 May 22, 2013 June 28, 2013 July 24, 2013 August 28, 2013 September 25, 2013 October 23, 2013 *November 20, 2013 *December 18, 2013 *Meeting being held the third Wednesday of the month. STEERING COMMITTEE (1) Roll Call: Meeting Date: January 23, 2013 Meeting Time: 5:00 o.m. Committee Members Troy Edgar, Board Chair..................................................... ........... John Anderson, Board Vice Chair....................................... ........... Brad Reese, Administration Committee Chair..................... ........... Tom Beamish, Operations Committee Chair....................... ........... John Nielsen, Operations Committee Vice Chair................. ........... John Withers, Administration Committee Vice Chair........................ Others Brad Hogin, General Counsel ............................................. ........... Staff Jim Ruth, General Manager................................................... Bob Ghirelli, Assistant General Manager.................................. Jim Herberg, Assistant General Manager................................. Nick Arhontes, Director of Facilities Support Services.................... Jeff Reed, Director of Human Resources....................................... Ed Torres, Director of Operations & Maintenance....................... Lorenzo Tyner, Director of Finance &Administrative Services....... Michael Gold, Public Affairs Manager...................................... Maria Ayala, Clerk of the Board............................................... Other Staff Present Wednesday, January 23, 2013 Orange County Sanitation District 5:00 P.M. Regular Meeting of the Administration Building Steering Committee Conference Rooms A& B 10844 Ellis Avenue Fountain Valley, CA 92708 r, (714) 593-7130 AGENDA DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form and give it to the Clerk of the Board. Speakers are requested to limit comments to three minutes. REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Directors. These reports are for information only and require no action by the Directors. CONSENT CALENDAR: 1. Approve Minutes of the December 19, 2012 Steering Committee Meeting. ACTION ITEMS: 2. Recommend to the Board of Directors to: Adopt Resolution No. OCSD 13-XX, Setting Forth Terms and Conditions of Orange County Employees Retirement System (OCERS) Benefits in Compliance with the Requirements of the California Public Employees Pension Reform Act of 2013 (PEPRA). 3. Recommend to the Board of Directors to: Issue the final Remedial Plan to the Santa Ana Watershed Project Authority (SAWPA) to correct significant deficiencies in its pretreatment program. INFORMATION ITEMS: 4. Legislative Update 01/23/13 Steering Committee Agenda Page 1 of 3 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)) Case: Mladen Buntich v. OCSD, Riverside County Superior Court, Case No. RIC 1201005 (2) CONFERENCE WITH LEGAL COUNSEL RE. INITIATION OF LITIGATION (Government Code Section 54956.9(d)(2)) Number of Potential Cases: 1 —SAWPA Wastewater Discharge Enforcement Action (3) COMPLAINTS or CHARGES BROUGHT AGAINST EMPLOYEES by ANOTHER EMPLOYEE (Government Code Section 54957(b)(1)) (4) PUBLIC EMPLOYEE PERFORMANCE EVALUATION (Government Code Section 54957(b)(1)) (a) General Counsel Reconvene in regular session. Consideration of action, if any, on matters considered in closed session. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: 01/23/13 Steering Committee Agenda Page 2 of 3 ADJOURNMENT: The next Steering Committee meeting is scheduled for Wednesday, February 27, 2013, 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)593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Agenda Posting: In accordance with the requirements of Califomia Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board. 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. Maria E.Ayala Clerk of the Board (714)593-7130 mavalaaocsd.com For any questions on the agenda,Committee members may contact staff at: General Manager Jim Ruth (714)593-7110 iruth(alocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rahirelli(docsd.com Assistant General Manager Jim Herberg (714)593-7300 iherbsrg/clocsd.com Director of Facility Support Services Nick Amontes (714)593-7210 narhontes(Mocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 Itvner/clocsd.com Administrative Services Director of Human Resources Jeff Reed (714)593-7144 ireed/clocsd.com Director of Operations&Maintenance Ed Torres 714 593-7080 storres ocsd.com 01/23/13 Steering Committee Agenda Page 3 of 3 Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOO 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) 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 OOBS 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 SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board Glossary of Terms and Abbreviations 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. 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. Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (DR) — the dilution at which the majority of the people detect the odor becomes the D(f for that air sample. Glossary of Terms and Abbreviations 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. 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. STEERING COMMITTEE Mewing Date TOBd.of Dir. 01/23/13 O1/23/13 AGENDA REPORT Item Number Item Number z Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Jeff Reed, Director of Human Resources SUBJECT: AB 340—The California Public Employees Pension Reform Act of 2013 GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 13-XX, Setting Forth Terms and Conditions of Orange County Employees Retirement System (OCERS) Benefits in Compliance with the Requirements of the California Public Employees Pension Reform Act of 2013 (PEPRA). SUMMARY PEPRA, the statewide pension reform act passed by the Legislature and signed into law by the Governor in September 2012, mandates many changes to public retirement systems in California, including the Orange County Employees Retirement System (OCERS), of which the Orange County Sanitation District (OCSD) is a member agency. OCERS' actuary, the Segal Company, issued their analysis in October 2012, which concluded that the Sanitation District's Plan B benefit formula (1.667 @ 57.5") did not pass the PEPRA tests on the comparison of benefit factors under the benefit formula or the comparison of normal cost under the benefit formula. In fact, the Segal report stated that none of OCERS' General Members' benefit formulas passed these tests, with the exception of the retirement plan provided by the County of Orange. Therefore, OCSD is required to transition from its present "1.667% @ 57.5" (Tier II) formula for its employees to the PEPRA General Member benefit formula applicable to new employees/new members first hired on or after January 1, 2013, which is the "2% @ 62"formula. The change is the difference in the normal cost of each plan, which is projected to be a savings of 1.8% of covered payroll. OCSD has no discretion in this matter. The statutory language of PEPRA requires that new employees/new members (as defined by statute) hired on or after January 1, 2013 will be subject to the new formula and other mandates. It is noteworthy that PEPRA includes an exception for current employees/current members of reciprocal California public retirement systems, providing that these employees, if hired by a new agency within 180 days of leaving the current public employer, will come in at the hiring agency's pre-PEPRA retirement benefit formula, or"1.667% @ 57.5" (Tier II)for OCSD. Page 1 of 3 Despite PEPRA's mandates, other sections of the Government Code require the Board to adopt by Resolution terms and conditions of employment, for which the attached Resolution applying to OCSD represented classification/positions complies. PRIOR COMMITTEE/BOARD ACTIONS Board Adopted Resolution Number "OCSD 12-16" at the December 2012 meeting, applying PEPRA to OCSD unrepresented employees. ADDITIONAL INFORMATION OCERS executives provided confirmation that the District's current benefit formulas did not pass the PEPRA tests through electronic correspondence, which has been provided as an attachment for reference. OCERS also provided a summary of their interpretation of PEPRA, and how the legislation will be applied to both current and future members of the retirement system. Lastly, OCERS provided Pension Reform Conference Committee Legislative Language, which provides clarification on the impacts to OCERS and highlights the sections impacted by the legislation. In an effort to visualize the comparison of benefit factors under the benefit formula, staff is providing a table and a graph, each of which illustrates the benefit factors side by side. The table lists each of the multipliers for each benefit formula, and highlights the age and service requirements for normal retirement. The Normal Retirement Age (NRA) refers to the earliest date an individual can retire with unreduced pension benefits. Under the third tier, the NRA is 67; while the minimum retirement age is 52. For the plans in existence prior to December 31, 2012, the NRA is 55 and 57.5; while the minimum retirement age is 50. The graph illustrates how each of the benefit factors compare to one another. CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A ATTACHMENTS The following attachments are included in hard copy may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package and attachments: 1. Resolution No. 13-XX: A Resolution of the Board of Directors of the Orange County Sanitation District Adopting Requirements Set Forth by the Public Employees Pension Reform Act ("PEPRA") of 2013 for Represented Employees. 2. Confirmation Notice from Steve Delaney, Chief Executive Officer of OCERS. Page 2 of 3 3. Orange County Employees Retirement System a. Public Employees Pension Reform Update. September 21, 2012 b. Pension Reform Conference Committee Legislative Language, August 30, 2012 4. Orange County Sanitation District Plans a. Comparison of Benefit Factors under the Benefit Formula - Graph b. Comparison of Benefit Factors under the Benefit Formula - Table Page 3 of 3 RESOLUTION NO. 13-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT ADOPTING REQUIREMENTS SET FORTH BY THE PUBLIC EMPLOYEES PENSION REFORM ACT ("PEPRA") OF 2013 FOR REPRESENTED EMPLOYEES. WHEREAS, for purposes of this resolution, include employees represented by: The International Union of Operating Engineers Local 501 for the Operations and Maintenance Unit; Employees in the Supervisor Group; Employees in the Professional Group; and the Orange County Employees Association for the Administrative and Clerical Unit, Technical Services Unit, and Engineering Unit. In accordance with the provisions of California Government Code Sections 3500, et seq., and Resolution No. 99-24 of the Joint Board of Directors, the District's authorized representatives have met and conferred in good faith with representatives of each group, which resulted in each respective agreement. WHEREAS, on September 12, 2012, Governor Jerry Brown approved Assembly Bill 340 ("AB340"), The Public Employees' Pension Reform Act ("PEPRA"), which amends the County Employees Retirement Law("CERL") of 1937 that Orange County Sanitation District's pension plan administrator, Orange County Employees Retirement System (OCERS), is governed by. WHEREAS, PEPRA establishes a new retirement formula that cannot be exceeded by a public employer offering a defined benefit pension plan, setting the maximum benefit allowable for employees first hired on or after January 1, 2013, as a formula commonly known as 2.5% at age 67 for non-safety members. WHEREAS, PEPRA requires public employees who are first employed on and after January 1, 2013, and who contribute to a defined benefit plan to contribute at least one-half of the annual actuarially determined normal costs, and would prohibit a public employer from contributing in any fiscal year, in combination with employee contributions, less than the plan normal cost, except as specified. WHEREAS, the amount of pensionable compensation upon which a defined benefit for new members could be based would be limited to an amount determined under a specified provision of federal law for an employee whose service is included in the federal system (Social Security), which is $113,700 for 2013, and 120% of that amount for an employee whose service is not included in the federal system. These amounts would be adjusted annually, as specified. WHEREAS PEPRA prohibits a variety of payments, including unscheduled overtime, payments for unused vacation, sick leave, or compensatory time off, exceeding what may be earned and payable in each 12-month period during the final average salary period, and specified payments made at the termination of employment from being included in compensation earnable. The bill would require the board to establish a procedure for assessing and determining whether an element of compensation was paid to enhance a member's retirement benefit and would prohibit that compensation from being included in compensation earnable. WHEREAS, in addition to the previously noted mandates, PEPRA also establishes other mandates regarding public sector pension plan benefits that apply to the Orange County Sanitation District. NOW, THEREFORE, in consideration thereof, the Board of Directors of the Orange County Sanitation District, does hereby resolve declare, determine and order as follows: Section 1. The applicable aforementioned PEPRA legal requirements shall apply to individuals who become represented Orange County Sanitation District employees as of January 1, 2013. PASSED AND ADOPTED at a regular meeting held January 23, 2013. Troy Edgar, Chair ATTEST: Clerk of the Board Spencer, Richard From: Quintero, Marisa <mquintero@ocers.org> Sent: Friday,October 26,2012 3:53 PM Subject: Segal Letter on OCERS Plans Attachments: Segal letter on OCERS Plans and the PEPRA test.pdf Follow Up Flag: Follow up Flag Status: Flagged This message is being sent on behalf of Steve Delaney; OCERS actuary,The Segal Company,has concluded its review of the benefit formulas currently adopted by the plan sponsors to determine whether any of those formulas pass the test articulated in AB 340,which allows a plan sponsor to retain a benefit formula if it has both a lower normal cost and a lower benefit factor at normal retirement age instead of requiring implementation of the PEPRA formula. Only the 1.62%at 65 general member benefit formula passed the test. This means that any agency that has this benefit formula in place,or any agency that adopts this benefit formula prior to January 1,2013,may retain that formula for those employees hired on or after January 1, 2013. Please see Segal's letter,attached. Thankyoul Marisa Quintero Secretary I/legalDeyartment 2223 E. -Wellington Avenue Suite zoo Santa Ana, CA 927oz 2*14)569-4811 a 91714)569-4883 ®: _M<TT�uUlla_rpYOC'LT Sorel CCEKS THE INFORMATION CONTAINED IN THIS MESSAGE AND ANY ATTACHMENT MAYBE PRIVILEGED,CONFIDENTIAL,PROPRIETARY OR OTHERWISE PROTECTED FROM DISCLOSURE AND IS INTENDED FOR USE BY THE PERSONS)NAMED ABOVE.If the reader of this message is not the Intended recipient,you are hereby notified that any dissemination,distribution,copying or use of this massage and any allachmant Is strictly prohibited It you have received this message In error,please notify us Immediately by replying to the message and permanently delete It from your computer and destroy any printout thereof. 1 ORANGE COUNTY OCERS PUBLIC EMPLOYEES PENSION REFORM ACT (PEPRA) UPDATE Prepared by Julie Wyne, OCERS' Assistant CEO, External & Legal Operations September 21, 2012 Summary: On September 12, 2012, Governor Brown signed Assembly Bill 340 (Furutani), creating the Public Employees Pension Reform Act (PEPRA) and amending certain sections of the 1937 Act that OCERS' operates under. The new law creates a new benefit tier for new employees/members entering public agency employment and public retirement system membership for the first time on or after January 1, 2013. The new tier has a single general member benefit formula and three safety member benefit formulas that must be implemented by all public agency employers unless the formula in existence on December 31, 2012 has both a lower normal cost and a lower benefit factor at normal retirement age. The new tier requires that all new employees/members, hired on or after January 1, 2013, pay at least 50% of the normal cost contribution. The normal cost contribution is the contribution set by the retirement system's actuary to cover the cost of a current year of service. It does not include the unfunded liability portion of the contribution. The employer can negotiate with current and new employees/members for the payment of additional contributions including the employer's portion of normal cost and the unfunded liability. New employees/members have their compensation eamable, which OCERS' uses to calculate retirement benefits, limited to 120% of the Social Security level ($132,120 for 2012), adjusted annually based on changes to the Consumer Price Index for All Urban Consumers, and further limited to base pay. Current employees will not see a change in their compensation eannable. Retired members, on and after January 1, 2013, will have to wait at least 180 days before returning to work for an OCERS' covered employer on a limited time basis (960 hours or less a fiscal year). IMPORTANT NOTE: IF YOU ARE CURRENTLY RETIRED, YOUR BENEFITS WILL NOT CHANGE. IF YOU ARE ACTIVELY EMPLOYED ON 12-31-12,YOUR BENEFITS WILL NOT CHANGE. 1 ORANGE COUNTY CXEKS PUBLIC EMPLOYEES PENSION REFORM ACT (PEPRA) UPDATE Prepared by Julie Wyne, OCERS' Assistant CEO, External & Legal Operations September 21, 2012 Questions and Answers: Question 1: Will my monthly retirement allowance amount be affected by the Public Employees Pension Reform Act (PEPRA)? Answer 1: No, your monthly retirement allowance will not be affected by the provisions in the PEPRA. OCERS will NOT recalculate your benefit based upon any benefit formula contained in the new law. Your allowance will continue to be calculated in the same way it is calculated today. Question 2: Will my Cost of Living Adjustment (COLA) be affected by the PEPRA changes? Answer 2: No, your COLA will not be affected by the provisions in the PEPRA. OCERS will NOT recalculate your COLA benefit based upon any provisions of the new law. Your COLA will continue to be calculated in the same way it is calculated today. Question 3: Will my Supplemental Targeted Adjustment for Retirees Cost of Living Adjustment(STAR COLA) be affected by the PEPRA changes? Answer 3: No, your STAR COLA (for those of you who receive one) will not be affected by the provisions in the PEPRA. OCERS will NOT recalculate your STAR COLA benefit based upon any provisions of the new law. Your STAR COLA will continue to be calculated in the same way it is calculated today, and eligibility for the STAR COLA will continue to be determined by the OCERS' Board of Retirement each year. 2 E CGONTY OCERS PUBLIC EMPLOYEES PENSION REFORM ACT (PEPRA) UPDATE Prepared by Julie Wyne, OCERS' Assistant CEO, External & Legal Operations September 21, 2012 Question 4: Can I return to work for an OCERS' covered employer for 960 hours or less in a fiscal year, without becoming an active member of OCERS and having my retirement allowance suspended? Answer 4: Yes, you can return to work for an OCERS' covered employer for 960 hours or less in a fiscal year, without becoming an active member of OCERS and having your retirement allowance suspended, but after 1-1-13, you will have to wait at least 180 days from retirement before returning to work, unless special circumstances apply. 3 Pension Reform Conference Committee Legislative Language August 30, 2012 Sections affected: Amending Education Code §24214 and §24214.5 and adding§22119.3, §22164.5, §24202.7,and §24202.8. Amending Government Code §9355.4, §9355.41, §9355.45, §20281.5, §20516, §21076,and §31461. Amending and renumbering Government Code §1234(New§7522.70). Adding Government Code§20516.5, §20677.96, §20683.2, §20791, §21076.5, §31542, §31542.5, §31543, §31631 and§31631.5. Adding the following to the Government Code, a heading to Articles I, 2 and 3 and a new Article 4 to Chapter 21,Division 7,Title I. Adding and repealing Government Code§7522.66 and §21400 and repealing headings of Chapter 21.4 and 21.5 of Division 7,Title 1. IMPACT ON OCERS: CURRENT EMPLOYEES: The benefit formulas and limits on calculating compensation minable contained in the new Public Employees Pension Reform Act do NOT apply to current employees, HOWEVER the clarification of what is excluded from compensation eamable and the addition of a test the retirement system must perform and procedures it must adopt to ensure there is no pension spiking do. Also, provisions requiring a county or district to identify the pay period compensation was earned regardless of when it was reported and limiting the reporting of compensation to the retirement system to only compensation eamable apply. Finally, the retirement board is given the ability to audit a county or district and assess reasonable costs to cover the cost of audit, adjustment or correction when the board determines that the county or district knowingly failed to report compensation in accordance with the new provisions. In addition, the governing bodies of employers can collectively bargain with employees to require payment of all or part of the member and employer contributions as long as they are uniformly applied and do not violate laws in place as of December 31,2012. WHAT IT CHANGES: • Employers CANNOT adopt an enhanced benefit formula after 1-1-13 and apply it to past service • The retirement system must now determine whether compensation was paid to enhance a member's retirement benefit,which could include: o compensation that was previously paid in kind that was converted to cash during the member's final average salary measuring period (like furnishing a car, then converting that to an auto allowance), Pension Reform Legislative Language(8-30-12) Page I • one time or ad-hoc payments provided to a member but not all similarly situated members in the grade or class,and o payments made solely due to the termination of the member, with the exception of unused vacation, leave or compensatory time that does not exceed what the member could cam in each 12-month period during the final average salary measuring period • The member can challenge the board's determination that compensation was paid for the sole purpose of enhancing the pension including judicial review by writ of mandate • A county or district must report only compensation earnable to the retirement system,and must certify what pay period the compensation was earned regardless of when it was paid • If the county or district knowingly fail to report compensation correctly, the retirement system can audit and assess fees to cover the cost of the audit, correction or adjustment necessary and the county or district may not pass this cost on to employees • The retirement board may also audit the county or district to determine correctness of retirement benefits, reportable compensation, and enrollment in or reinstatement to the system WHAT IT DOESN'T CHANGE: • There will be NO benefit formula reductions • There will be NO changes in how OCERS calculates final average salary UNLESS a current employee terminates employment and becomes a "new employee" (defined below) under the new Act, OR a current employee receives compensation determined by the OCERS' Board to be paid to enhance the member's retirement benefit WHAT IT MIGHT CHANGE: • The Board of Supervisors or governing bodies of districts can negotiate with employees under collective bargaining to require that employees pay all or part of member and employer contributions (both normal cost and unfunded liability cost), as long as it is uniformly applied, agreed to in a memorandum of understanding,and does not violate the law in place as of 12-31-12 • The Board of Supervisors or governing bodies of districts may require that members pay 50 percent of normal cost of benefits, as long as it is no more than 14% above the normal rate established for general members, 33% of the normal rate established for safety members who are local police officers, firefighters and county peace officers and 37% above the normal rate established for safety Pension Reform Legislative Language(8-30-12) Page 2 i members other than local police officers, firefighters and county peace officers, as long as it does not violate the law in place as of 12-31-12 CURRENT RETIREES: There is no change in a retiree's benefits. There are changes to the ability to return to work after retirement but there is a question about whether this violates other provisions of the'37 Act. WHAT IT CHANGES: The Act restricts the ability of a retiree to return to work for a public employer in the same retirement system without reinstatement to active service and a suspension of the retirement benefit unless it is during an emergency to prevent stoppage of public business or because the retired person has skills needed to perform work of limited duration, as long as the retiree did not receive unemployment benefits arising from the prior employment. In either case, the work shall not exceed 960 hours in a calendar or fiscal year at a specific rate of pay and the retiree cannot come back to work before 180 days after retirement unless the employer certifies that the nature of employment and the appointment is necessary to fill a critically needed position sooner than I80 days and the employer's governing body approves it in a public meeting, or the retiree is a safety member. A retired member who received a retirement incentive must wait at least I80 days to return to work. Returning to work as a member of a state board or commission is also limited depending upon the circumstances of the appointment. WHAT IT DOESN'T CHANGE: There is no change to a retiree's benefit formula or final average salary used to calculate their retirement allowance, and no change to the Cost of Living Adjustment (COLA) provisions and supplemental COLA (STAR COLA) provisions. NEW EMPLOYEES HIRED ON OR AFCER 1-1-13: A "new employee" is defined as an employee who is first elected or appointed by any public employer on or after 1-1-13 and who was not employed by any other public agency prior to that date, unless they terminated from the other public employer and did not establish reciprocity with the new employer's retirement system. A "new member" of a retirement system is an employee who first becomes a member of a public retirement system on or after 1-1-13 who was not a member of a public retirement system prior to that date unless reciprocity is established or did not have a break in active membership for more than six months. WHAT IT CHANGES: For "new employees" who become "new members" of the retirement system, an employer must adopt a new defined benefit formula for both Pension Reform Legislative Language(8-30-12) Page 3 general and safety members unless that employer has a benefit formula in place (either defined benefit or defined contribution) that is equal to or lower than the formula described in the new Act. An employer cannot offer a supplemental defined benefit plan to new employees or new groups of employees not currently covered under an existing plan. • General member benefit formula that allows retirement at age 52 with 5 years of service at 1.0%, increasing to 2.5%at 67 • No disability retirement for general members contained in the legislative language, but there is a question about whether current '37 Act sections would apply • Limiting compensation for both general and safety members used to calculate the retirement benefit to 1000% of the Social Security level if covered by Social Security or 120%of the Social Security level if not covered, adjusted by changes in the Consumer Price Index for all Urban Consumers annually on January I" following the annual valuation. OCERS members are not covered by Social Security • Limiting "pensionable compensation" (what OCERS' calls "compensation eamable")to the normal monthly rate of pay or base pay paid to similarly situated members of the same group or class of employment for full-time services during normal working hours • Pensionable compensation does NOT include: o Any compensation determined by the board to be paid solely to enhance a member's retirement benefit o In kind benefits being converted to cash payments during the member's measuring period o One time or ad hoc payments o Severance payments paid in connection with separation from employment o All payments for unused vacation,annual leave, personal leave, sick leave, or compensatory time off, regardless of when reported or paid o Payment for services rendered outside of normal working hours o Overtime,unless FLSA o Employer provided allowances like housing,auto, or uniform o Employer contribution to deferred compensation or defined contribution plans o Any bonuses paid in additional to base pay,and o Any other compensation the retirement board determines is in excess of the member's monthly rate of pay or base pay as paid to similarly situated members of the same group or class for full-time services during normal working hours Pension Reform Legislative Language(8-30-12) Page 4 o Any other compensation the retirement board determines should not be pensionable compensation • Employers cannot offer any defined benefit, including those offered by private providers, on compensation in excess of the Social Security limit, but can offer contributions to a defined contribution plan, subject to limitations, if it conforms with federal law. This does not create a vested right to continue to receive the employer contribution • No new supplemental defined benefit plans can be offered to new employees or groups of employees not currently covered • Employers and employees must equally share normal cost and employees must pay at least 50%unless it is collectively bargained for the employee to pay more. The normal cost rate is the annual actuarially determined normal cost of the defined benefit plan expressed as a percentage of payroll • The normal cost provisions apply unless there is a collective bargaining agreement in place that applies on 1-1-13, until that agreement is renewed, amended or extended • Final average salary is measured over a three year period • Three safety member benefit formulas to choose from that each allows retirement at age 50 with 5 years of service. The Basic Safety Plan provides 1.426% at 50, increasing to 2%at 57 and over. The Safety Option One Plan provides 2%at 50, increasing to 2.5% at 57 and over. The Safety Option Two Plan provides 2% at 50, increasing to 2.7%at 57 and over • The safety employers choice between the three safety formulas is limited to the formula that provides a lower benefit at 55 years of age than the formula provided to safety members on December 31, 2012 • On or after 1-1-13 safety employer and employees can negotiate a change to a lower safety benefit formula for new employees of that bargaining unit hired on or after the effective date of the agreement if collectively bargained and agreed to in a memorandum of understanding • The safety employer who negotiates a lower benefit formula for new employees shall not provide different defined benefits to nonrepresented, managerial or supervisory employees than the employer provides for other employees in the same membership classifications • Safety members can receive a service connected disability retirement equal to the greater of 50%of final compensation attributable to the defined benefit plan plus an annuity purchased with accumulated member contributions, or a service retirement if qualified, or an actuarially reduced factor determined by the actuary for each quarter year that his/her service age is less than 50 years of age, Pension Reform Legislative Language(8-30-12) Page 5 multiplied by years of safety service. This section is repealed as of 1-1-18 unless there is a later enacted statute extending its provisions . Internal Revenue Code Section 401(a)(17) limits apply to the compensation that can be considered when calculating a retirement benefit, like they do now. An employer cannot make contributions to any qualified retirement plan on compensation in excess of the limit.The 2012 limit is$250,000 . An employer cannot establish a replacement benefit plan for benefits that are limited by Internal Revenue Code Section 415. The 2012 limit is $200,000 for age 62,adjusted downward the earlier a member retires,unless certain rules apply . Officers elected or appointed to a city council or board of supervisors on or after 1-1-13 will have their retirement benefit based on highest average annual pensionable compensation earned by the member during the period of each elective office . Changes to felony conviction provisions requiring forfeiture of benefits . Precludes the purchase of nonqualifed service credit under Section 415(n)(3)(C) of the Internal Revenue Code unless the purchase began prior to 1-1-13. In OCERS' this would be air-time, which is not approved in Orange County presently . Prohibits employers from contributing less than normal cost unless the plan is funded above 1200% per the system's actuary, the actuary determines that continuing to accrue excess earnings could result in disqualification of the plam's tax exempt status under the Internal Revenue Cade, and the board determines that receipt of any additional contributions would conflict with its state constitutional fiduciary duties Pension Reform Legislative language(8-30-12) Page 6 Comparison of Benefit Factors Under the Benefit Formula 3.00% 2.50% 2.00% t Plan H 2.5%@ 55 1.50% �(—Plan B 1.667%@ 57.5 --)N—PEPRA Plan 2.0%@ 62 1.00% 0.50% 0.00% 50 51 52 53 54 55 56 57 57.5 58 59 60 61 62 63 64 65 66 67 Comparison of Benefit Factors Under the Benefit Formula Plan H Plan B PEPRA Plan Age 2.5% @ 55 1.667% @ 57.5 2.0% @ 62 50 2.00% 1.18% N/A 51 2.10% 1.24% N/A 52 2.20% 1.30% 1.00% 53 2.30% 1.36% 1.10% 54 2.40% 1.43% 1.20% 55 2.50% 1.49% 1.30% 56 2.50% 1.56% 1.40% 57 2.50% 1.64% 1.50% 57.5 2.50% 1.67% 1.55% 58 2.50% 1.73% 1.60% 59 2.50% 1.82% 1.70% 60 2.50% 1.92% 1.80% 61 2.50% 1.99% 1.90% 62 2.50% 2.09% 2.00% 63 2.50% 2.20% 2.10% 64 2.50% 2.31% 2.20% 65 2.50% 2.43% 2.30% 66 2.50% 2.43% 2.40% 67 W09 2.50% 2.43% 2.50% STEERING COMMITTEE Mewing Date TOBd.of Dir. 01/23/13 O1/23/13 AGENDA REPORT Item Number Item Number 3 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Jim Herberg, Assistant General Manager SUBJECT: SAWPA AUDIT RESPONSE: REMEDIAL PLAN GENERAL MANAGER'S RECOMMENDATION Issue the final Remedial Plan to the Santa Ana Watershed Project Authority (SAWPA) to correct significant deficiencies in its pretreatment program. SUMMARY On December 19, 2012, the Steering Committee reviewed the draft Remedial Plan, found the draft acceptable in concept, and directed staff to work on the plan with SAWPA. Staff has incorporated additional details into the Remedial Plan and sent a copy to SAWPA for review. On January 9, 2013, staff met with SAWPA and reviewed the audit findings. Staff also reviewed the draft Remedial Plan, answered SAWPA's questions about the plan, and outlined the expectations (requirements and timeline) of SAWPA under the Remedial Plan. Based on that meeting, staff is finalizing the Remedial Plan, and SAWPA is required to respond to each audit finding by February 15, 2013. Staff will provide the final draft of the Remedial Plan to the Steering Committee for issuance. PRIOR COMMITTEE/BOARD ACTIONS December 2012 - The Steering Committee reviewed the draft Remedial Plan, found the draft acceptable in concept, and directed staff to work on the plan with SAWPA. November 2012 - The Steering Committee reviewed the SAWPA Audit and directed staff to prepare a Remedial Plan for issuance to SAWPA. ADDITIONAL INFORMATION N/A CEQA N/A Page 1 of 2 BUDGET/DELEGATION OF AUTHORITY COMPLIANCE N/A ATTACHMENTS Remedial Plan to be forthcoming, and will be posted online. JC:jb:gc Page 2 of 2 STEERING COMMITTEE NeedngDate To ad.of Di, 0 23/13 -- AGENDA REPORT Item Number Item Number a Orange County Sanitation District FROM: James Herberg, Assistant General Manager Originator: Michael Gold, Public Affairs Manager SUBJECT: LEGISLATIVE UPDATE GENERAL MANAGER'S RECOMMENDATION Information Only SUMMARY This report is the monthly legislative update that includes legislative and political information from Washington, D.C. and Sacramento, lobbyists' activities, and other information ADDITIONAL INFORMATION 2013 Draft Legislative Platform Attached to this report is the Draft 2013 Legislative Platform. This document guides staff on how to take a position on legislation in Sacramento and Washington, D.C. so that we may act quickly, when necessary. Generally all bills being tracked by staff are listed in a matrix that is included in the monthly report to the Steering Committee. When a bill is controversial or requires additional attention, staff will report these to the Steering Committee for information or direction. The platform also includes draft goals for the year for the legislative program. This year's proposed goals are: • Federal Goals • Support CASA's Federal Legislative program and goals; • Work with Congress and the EPA on the Sunshine on Conflicts Act to ensure passage or implement rule changes; • Work with Congress on legislative and regulatory changes related to the Clean Water Act; • Seek Federal Funding for projects, including infrastructure funding, ecosystem restoration and alternative energy projects. Page 1 of 6 • State Goals • Monitor pertinent legislation and take positions as appropriate, based on Steering Committee direction and the adopted Legislative Platform; • Continue to monitor the State Budget and aggressively protect local property taxes; • Monitor pension reform legislation for clean-up bills; • Seek state funding through grants Please review the draft legislative platform and provide comments and input to staff prior to next month's meeting. The platform and goals will be presented in February for adoption by the Board of Directors. Federal Legislative Update Legislative Advocate: Eric Sapirstein, ENS Resources The 113•' Congress convened on January 3, 2013 after a record setting 112`" Congress remained busy with fiscal issues until New Years Eve, meaning that for returning Members there was only a twenty-four hour respite between sessions. The key challenge for the new Congress will be to address the unfinished fiscal issues, including the debt ceiling, fiscal year 2013 spending bills, and avoiding a governmental shutdown in March when the present continuing resolution expires. Congress only has about sixty days to focus on both fiscal and organizational issues (deciding committees, subcommittees and rules). Because solutions must be developed and enacted into law, the first sixty days are likely to center on these fiscal matters as well as organizing congressional committees and subcommittees. Once these matters are addressed, Congress may be in a position to consider other matters, including items of interest to OCSD such as funding or regulatory streamlining. Second Obama Term Ushers in New Challenges and New Faces Obama will continue the tradition of other second term presidents of reenergizing the administration with new appointments. Obama's USEPA administrator, Lisa Jackson, has already announced her departure and the President will name Washington State Governor Christine Gregoire for the post. The current Deputy Administrator, Robert Perciasepe, is serving as the acting administrator, and it is unclear if he will stay or open the door for a new deputy. Key Policy Issues Remain to be addressed in the 113T" Congress Assuming that Congress resolves the fiscal issues within the next two months, they can turn their attention to other matters of interest to OCSD, including: • Final guidance defining waters of the U.S. that are subject to Clean Water Act permitting mandates should be issued followed by formal rulemaking; Page 2 of 6 • USEPA is expected to implement an aggressive enforcement program of permitting violations and compliance with TMDLs; • Alternative water infrastructure funding approaches such as infrastructure banks and other low interest loans and credit enhancements will be developed and debated as part of the budget process; • Buy America mandates as a condition for federal assistance is expected to be a key debate within the development of any fiscal year 2014 budget; • Water infrastructure funding needs will become entwined in the debate over climate change and the need to develop a policy to address both deteriorated infrastructure and resiliency issues; and • Alternative energy programs and funding are expected to remain a top Administration and congressional priority from both a program and oversight basis. This means that even in the austere budget climate, these kinds of programs may offer project-funding opportunities. Finally, the ongoing debate related to tax reform, if legislation is drafted, could impact the use and availability of tax-exempt financing. Congressional Delegation and Committee Assignments OCSD's congressional delegation will change as the result of losing Representative Gary Miller to a new region. However, Miller will continue to serve as the senior Californian on the Transportation and Infrastructure Committee and will remain an important Member as the committee addresses infrastructure-funding policy, Clean Water Act and WRDA issues. With redistricting, OCSD picked up freshman Democrat Alan Lowenthal. Representatives Dana Rohrabacher, Loretta Sanchez, Ed Royce and John Campbell remain as delegation members. In the Senate, both Senators will continue in their senior roles. Senator Dianne Feinstein will rise to the number five slot on the Committee on Appropriations. She will continue to chair the Subcommittee on Energy and Water Development Appropriations and with this duty manages the budgets of most water programs and related flood protection. Senator Barbara Boxer will retain her chairmanship of the Committee on Environment and Public Works that develops federal policies on water quality and infrastructure matters. As such, she will likely use the new Congress to press forward on measures to reform infrastructure financing and block efforts to streamline the regulatory process. Boxer's committee will also have the responsibility to approve or any USEPA and U.S. Army Corps of Engineers nominations for office that the President seeks. Page 3 of 6 Looking Ahead On March 27, 2013, the continuing resolution maintaining governmental operations expires. If no final deal is reached on how to address the remaining months of fiscal year 2013, a government shutdown could happen. Regulatory reforms, including citizen suits under the Clean Water Act, will gain attention in the new Congress. Members in both chambers have signaled a desire to stop the unreasonable use of laws and regulations. Along these lines, we expect Representative Miller will reintroduce his Sunshine on Conflicts Act. State Legislative Update Legislative Advocates: Christopher Townsend, Heather Dion and Casey Elliott, Townsend Public Affairs With the swearing-in of the new legislature on December 3, 2012, Democratic leaders were quick to play down expectations of their new supermajority power, signaling that they will not seek to raise taxes this year. However, Democrats did indicate their desire to seek changes in Proposition 13 to lower local tax increase thresholds and to explore new revenue by closing certain tax loopholes. The full Democratic legislative supermajority will not effectively be in place until special elections to fill the seats of two state senators who went to Congress. Democratic Assemblyman Ben Hueso, the current Chair of Assembly Parks, Water and Wildlife Committee, has already announced his candidacy to replace State Senator Juan Vargas and Assemblywoman Norma Torres of Pomona is running for the seat of former State Senator Gloria Negrete-McLeod. These special elections will take place in March and a runoff will occur in May if no candidate wins more than 50 percent of the vote. Adding to the dynamics, two current assembly members may run for open seats on the Los Angeles City Council. In addition to this shuffling, 39 new members were sworn in, the largest freshman class since 1966. With the recent changes in term limits, freshman legislators are allowed to serve a cumulative 12 years in the Assembly and/or State Senate. Democratic legislators, like Assemblywoman Nancy Skinner (D-Berkeley), are signaling that 2013 will be a "season of education" for legislators, which will lay the groundwork for significant changes in 2014. The Legislature reconvened on January 7 and the Governor will release his budget on January 10. With the new legislative session, President Pro Tern Steinberg announced the following Senate chairs: President pro Tem ore Darrell Steinberg D-Sacramento Majority Leader Ellen Corbett D-Fremont Rules Committee Chair Darrell Steinberg D-Sacramento Appropriations Kevin de Leon (D-Los Angeles) Banking and Finance Jerry Hill (D-Palo Alto Budget Mark Leno (D-San Francisco Page 4 of 6 Budget Sub. No. 2 Resources and Trans Jim Beall (D-San Jose Energy, Utilities and Communications Alex Padilla (D-San Fernando Valle Environmental Quality Michael Rubio D-Bakersfield Judiciary Noreen Evans D-Na a Natural Resources and Water Fran Pavle D-Thousand Oaks Public Employees and Retirement Jim Beall (D-San Jose Transportation and Housing Mark DeSaulnier (D-Walnut Creek Assembly Speaker Perez announced the following Assembly chairs: Speaker pro Tem ore Nora Campos (D-San Jose Assistant Speaker pro Tem ore Kevin Mullin (D-San Mateo Majority Floor Leader Toni Atkins (D-San Diego) Assistant Majority Floor Leader AnthonyRendon D-Lakewood MajorityWhip Chris Holden D-Pasadena Rules Committee Chair Nancy Skinner D-Berkeley) Accountability and Admin. Review Jim Frazier D-Oakley) Appropriations Mike Gatto (D-Los Angeles) Banking and Finance Roger Dickinson D-Sacramento Budget Bob Blumenfield (D-Los Angeles) Budget Sub. No. 3 Resources and Trans. Richard Bloom (D-Santa Monica Budget Sub. No. 4 State Administration Tom Dal D-Anaheim Enviro. Safety and Toxic Materials Luis Ale'o D-Salinas Judiciary Bob Wieckowski D-Fremont Local Government Katcho Achad'ian (R-San Luis Obispo) Natural Resources Wesley Chesbro (D-North Coast Public Employees, Retirement Rob Bonta D-Oakland Revenue and Taxation Raul Bocane ra D-S mar Water, Parks and Wildlife Ben Hueso (D-San Diego) Select Comm. On State Waters Crisis Rudy Sales D-Bakersfield 2013 Legislative Calendar— Major Events January 7 Legislature Reconvenes February 22 Last Day for Bills to be Introduced March 21-A ril 1 Spring Recess May 31 Last Day for bills to be Passed out of the House of Origin June 15 Budget Deadline Jul 12-Au ust 12 Summer Recess September 6 Last Day to Amend Bills on the Floor September 13 Last Day for Each House to Pass Bills October 13 Last day for Governor to sign or veto bills passed by Le islature Page 5 of 6 Grant Activity During the past month: • Staff submitted an application to the State of California for the Tire-derived grant program for landscaping around Plant 1. • Staff is researching grant opportunities for alternative-fueled vehicles. PRIOR COMMITTEE/BOARD ACTIONS N/A CEQA N/A BUDGET/DELEGATION OF AUTHORITY COMPLIANCE N/A ATTACHMENTS The following attachments are included in hard copy may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package and attachments: 1. 2013 Legislative Platform 2. OCSD Legislative Matrix Page 6 of 6 Orange County Sanitation District Draft 2013 Legislative Platform NO 1 2 �F O Orange County Sanitation District 2013 Legislative Platform Legislative Affairs Team OCSD Staff Michael Gold Ph: (714)593-7529 mgold@ocsd.com Public Affairs Manager Cell: (714)552-3801 James ColstonEnvironrmental Compliance& (714)593-7450 rjcolston@ocsd.com Regulatory Affairs Manager James Herberg (714)593-7110 jherberg@ocsd.som General Manager Federal Lobbying Team Eric Sapirstein (202)466-3755 esap@ ENS Resources ensresources.com Sacramento Lobbying Team r Townsend Public Affairs Christopher Townsend (949) 399-9050 ctownsend@ TownsendPA.com Heather Stratman (949) 399-9050 ' hstratman@ TownsendPA.com 2 Originally Adopted December,2005 January 2013 Orange County Sanitation District 2013 Legislative Platform Introduction The Orange County Sanitation District(OCSD) recognizes the need for an active State and Federal legislative advocacy program to ensure the interests of the ratepayer and Board of Directors are protected.Towards that end,the legislative affairs team monitors activities in Sacramento and Washington,D.C. and takes appropriate action in support or opposition of legislative initiatives. Each year,the Board of Directors adopts a Legislative Platform,which is a summary of goals, key issues and OCSD's policy position.The following legislative policies have been developed by OCSD staff and legislative advocates in consideration of OCSD service area cities'and policy needs.These Board- approved policies serve as OCSD's official positions of support or opposition on issues of importance to the agency.The Legislative Platform is a dynamic document,adopted annually and changing to the needs of the Board. The legislative affairs team, in conjunction with the Board, may take appropriate action consistent with the Legislative Platform, including, but not limited to,drafting letters, lobbying legislators and staff and crafting bills. Procedure for Taking Positions on Bills 1. Staff will track bills of greatest interest to the District,particularly those that fall within the goals and objectives identified by the Board of Directors.Staff will monitor bills being watched by similar agencies in Orange County(OCWD, MWDOC,etc.)as well as State Agencies such as California Association of Sanitation Agencies(CASA),the California Special Districts Association (CSDA)and the Association of California Water Agencies(ACWA). 2. For those bills that are being tracked where there is clear policy direction stated in the Board- adopted Legislative Platform or adopted goals,staff can send letters and give direction to the lobbyists to advocate that position. 3. Where a particular issue is not urgent,all legislative letters will be hand-signed by the Chair or Vice-Chair. If a matter is urgent, staff may use the signature stamp,so long as a clear policy direction exists. 4. A summary of bills being tracked will be presented to the Steering Committee monthly. 5. When a bill does not fall within the scope of the Legislative Platform or is a politically controversial issue,staff will seek direction from the Steering Committee. 6. If a bill does not fall within the scope of the Legislative Platform, but the California Association of Sanitary Agencies(CASA),the California Special Districts Association (CSDA)or the National Association of Clean Water Agencies(NACWA) has an adopted position,staff may follow this position but must inform the Steering Committee of such action at the next regularly scheduled meeting. 3 Originally Adopted December,2005 January 2013 Orange County Sanitation District 2013 Legislative Platform Legislative Goals for 2013 • Federal Goals o Support CASA's Federal Legislative program and goals. o Work with Congress and the EPA on the Sunshine on Conflicts Act to ensure passage or implement rule changes. o Work with Congress on legislative and regulatory changes related to the Clean Water Act. o Seek Federal Funding for projects,including infrastructure funding,ecosystem restoration and alternative energy projects. • State Goals o Monitor pertinent legislation and take positions as appropriate, based on Steering Committee direction and the adopted Legislative Platform. o Continue to monitor the State Budget and aggressively protect local property taxes. o Monitor pension reform legislation for clean-up bills. o Seek state funding through grants Federal and State Legislative Policies 1. Air Quality:OCSD is committed to complying with federal,state,and local air quality laws and rules.OCSD is further committed to establishing an odor policy to assure that the district is a good neighbor to the surrounding communities. a. Support air quality legislation that emphasizes the use of advance technologies and applicable market incentives, and incentives for the use of alternative fuels and the development of the infrastructure for alternative fuel vehicles. b. Support measures that maintain and enhance local decision-making authority,where appropriate, in the development and implementation of air quality attainment strategies. c. Support legislation to ensure greater consistency between the California and Federal Clean Air Acts; including the need to demonstrate cost-effective public health or environmental benefit if California elects to exceed federal standards. d. Support strategies that clearly demonstrate and provide for the most cost-effective means for meeting air quality goals. e. Support, in concept, legislation that would utilize incentives and pricing strategies as a preferred alternative to traditional command and control regulations for meeting emission reduction objectives for all sources. f. Oppose actions that preclude implementation of the Air Quality Management Plan (AQMP)to the extent that such actions could subject the basin to sanction or conformity penalties. 2. Biosolids:OCSD strives to beneficially use biosolids through multiple management options performed at reasonable costs that are protective of public health and the environment. 4 Originally Adopted December,2005 January 2013 Orange County Sanitation District 2013 Legislative Platform a. Support legislation that supports the use of biosolids as on non-food production agricultural lands. b. Support policies that encourage biosolids product use by horticulture and retail consumers. c. Oppose legislation that bans the use of biosolids for land application in any region, county,or state. d. Support science-based legislation that establishes a state-wide regulatory system for biosolids management. 3. Grant Funding:OCSD is committed to offsetting its research,special projects and wastewater infrastructure project and construction costs by obtaining funding through grants and cooperative agreements. a. Support appropriations legislation, bonds,programs,and projects that provide funding for infrastructure construction and rehabilitation,special studies and research or projects relating to security,environmental education,water quality,wastewater processing,urban runoff,water conservation,and water recycling. b. Support projects that provide for public benefit,over projects that are primarily intended for private benefit or gain. c. Support continued federal funding for protecting and realigning the Santa Ana River Interceptor project and for secondary treatment upgrades. d. Oppose proposals placing further requirements on grant recipients that return low value for high administrative costs. 4. Labor Relations:OCSD is committed to the exercise of and provision of orderly procedures for the administration of employer-employee relations,including,but not limited to, meeting and conferring in good faith with recognized employee organizations regarding the wages, hours of work, and other terms and conditions of employment. a. Support measures to reform current workers compensation formulas to rely on higher thresholds for compensation or proportionate exposure formula. b. Support health insurance reform that does not create additional financial burdens on special districts. c. Support measures to ease applicability of the Fair Labor Standards Act(FLSA)on public agencies. d. Oppose any measure imposing compulsory and binding arbitration with respect to public employees. e. Oppose any measure that imposes upon local government mandated employee benefits that are more properly decided at the local bargaining table. f. Oppose efforts reducing local control over public employee disputes and imposing regulations on an outside agency. 5 Originally Adopted December,2005 January 2013 Orange County Sanitation District 2013 Legislative Platform g. Oppose any measure granting public employees the right to strike. h. Oppose a new mandatory Social Security tax for public employers and public employees. 5. Planning:OCSD ensures the long-range planning of capital improvement programs in order to deliver the highest quality facilities. a. Support reform of existing state, regional,and local planning processes only if directly linked to reforms in the current revenue and tax structure of state and local governments. b. Support measures that provide new revenues for growth management and the public facilities necessary to support expected growth. c. Support proposals encouraging regional, sub-regional or countywide cooperation in planning urban development strategies, especially those that provide funding for effective implementation of agreed upon goals. d. Oppose legislation consolidating special districts that fail to address the concerns of cities affected by the proposed consolidation. e. Oppose measures that prevent or restrict the ability of cities or special districts to participate in the Southern California Association of Governments'(SLAG)sub-regional process. 6. Public Health: Protection of public health is OCSD's core mission. OCSD will work cooperatively with county and state health officers to assure local health protection. a. Support hazard mitigation,emergency response,planning and recovery through direct legislation, policy directives and funding toward floodplain security within the Santa Ana River watershed. b. Support (generally) measures that provide for improved public health through regulation. C. Support the protection of public health through the construction and implementation of advanced wastewater treatment technology. 7. Public Works:OCSD is committed to the achievement of effective and efficient projects that provide wastewater treatment services that benefit its ratepayers. a. Support measures that provide funding and support to publicly owned treatment works and sewerage collection systems. b. Support legislation that allows public agencies to procure goods and services in manners similar to private industry,thereby reducing overall costs of delivery. c. Support legislation that improves the Utility Underground Service Alert Program in order to improve coordination, identification, minimize damage, minimize environmental risks and minimize cost exposure to publicly owned facilities when contractors are performing sub-surface work. 6 Originally Adopted December,2005 January 2013 Orange County Sanitation District 2013 Legislative Platform d. Support a comprehensive response to the State's electricity and natural gas shortages that provide a stable energy supply, respects the ability of municipalities to provide power, recognizes that infrastructure(i.e.emergency and standby generators) exists that could be employed temporarily during weak periods with minimal air quality impact and protects ratepayers(including cities and special districts) against dramatic rate increases and statewide power outages. e. Support legislation that allows OCSD to utilize the Best Value Design/Build option for the construction of public works projects. 8. Revenue and Taxation:Track pending legislation to ensure OCSD remains in compliance with the government code as it pertains to wastewater system user fees and property tax revenues and the investment of public funds. a. Support measures leading to a greater financial independence from the state and would result in greater stability and predictability in local government budgeting. b. Oppose measures that impose mandated costs for which there is no guarantee of local reimbursement or offsetting benefits. c. Oppose legislation that shifts tax revenues away from local governments without the adequate provision of a constitutionally guaranteed backfill to offset the lost revenues of those local governments. d. Oppose measures that allow state retention of existing local revenue sources, including the special district share of property tax,sales tax,vehicle license fees and rate payer fees. e. Oppose the use of revenues traditionally used to fund the delivery of municipal services to fund programs for which the state is responsible,particularly the courts, health,and welfare programs. 9. Special Districts:OCSD supports the maintenance of special districts to provide specific services, in response citizen's demands, in a cost effective manner. a. Support outreach to local, regional,and state elected officials to foster a greater understanding regarding the critical relationship between adequate reserves and the successful short-and-long-term operation of water and wastewater agencies. b. Support the work of the Association of California Water Agencies(ACWA), California Association of Sanitation Agencies(CASA),and California Special Districts Association (CSDA) in any future discussions or negotiations pertaining to the legislative and budget issues relative to preserving control of members'reserves. c. Oppose further state regulations that adversely impact special district financing and operations. d. Oppose measures that create or grant powers to sub-regional or regional bodies that would result in an infringement on clearly local concerns. 7 Originally Adopted December,2005 January 2013 Orange County Sanitation District 2013 Legislative Platform e. Oppose any administrative or legislative efforts to access or transfer any reserve funds held by water and wastewater districts. f. Oppose the imposition of unfunded, mandated programs on local governments. g. Oppose efforts that diminish OCSD's ability to govern efficiently and effectively, including expanding the size of the Board of Directors. 10. Water Quality and Supply:OCSD is committed to participating collaboratively in the protection of regional water resources for the benefit of the people we serve. a. Support continued federal and state funding for the Santa Ana River Interceptor Relocation project. b. Support(generally) measures to increase water supply and improve water quality in the region. c. Support measures that would increase funding for water reuse technologies, including support for the Groundwater Replenishment System project by the Orange County Water District and OCSD to create new water supplies through recycling. d. Support U.S.Army Corps of Engineers projects for Orange County regarding watershed and water quality protection and sand replenishment. e. Support measures that promote and provide for the use of reclaimed water. f. Support"watershed-based" solutions, including cost-shared studies with the US Army Corps of Engineers of water quality impairments that reflect state-of-the-art science. g. Support policy development,funding, and research for addressing urban runoff and beach closures, including funding for studies that identify the sources of bacterial,viral and other contaminants and human pathogens. h. Support measures to evaluate water quality standards,as needed,to ensure the objectives are appropriately protecting the designated use. I. Support measures to develop a state-wide consistent policy for total maximum daily load(TMDL) listing and delisting. j. Support State General Fund subventions and Bond revenue to special districts for local and regional efforts that educate the public on urban runoff,which provide for long- term capital improvements(like storm drain diversions and filters),and encourage municipalities to implement Urban Runoff Best Management Practices at the local level. k. Support legislation that would retain any Regional Board fines levied against a permit violator within the Region of the fine. I. Support legislation that provides"amnesty"from administrative civil liability(ACL)fines from Regional Boards for agencies participating in comprehensive watershed studies that will,when complete,address the problem that resulted in the ACL fine. m. Support efforts,including legislation,clarifying that Regional Water Quality Control Board rules that require spending funds are unfunded mandates. 8 Originally Adopted December,2005 January 2013 Orange County Sanitation District 2013 Legislative Platform n. Support measures addressing non-point source pollution in order to protect our ocean water quality and provide funding to mitigate its effects. o. Support measures for alternative energy sources. p. Support efforts to reduce the toxic and non-reusable waste load. q. Support legislation and regulations that promote improved water use efficiency in construction of water efficient buildings and communities. r. Support legislation that promotes improved water use efficiency through state and federal assistance in evaluating and implementing new programs and technologies and increasing public awareness of water use efficiency. s. Support legislation that provides for groundwater management on a local level,with respect to coordination of programs, extraction and production rights, long-term protection and groundwater quality protection. t. Support legislation that provides for the development of the watershed approach, including watershed management plans and watershed based permitting. u. Oppose proposed environmental constraints on government agencies that would result in economic damage to the region while providing only minimal protections. v. Oppose efforts to make all NPDES permits the same. Requirements of other permits may be too onerous or not applicable. OCSD's permit should be tailored to the Orange County region and watershed. w. Oppose the imposition of statewide/nationwide fees for environmental cleanup that is privately caused or regional in nature (e.g., when the nexus between those responsible for environmental abuse and those required to pay for cleanup or mitigation is absent). x. Support measures supporting urban runoff studies and urban runoff reduction. y. Support Coastal Water Quality efforts to ensure that clean beach projects remain a top priority for the state,whether through negotiations on upcoming resources bonds, in setting of legislative priorities, implementation of funding programs,and in any other relevant process. 9 Originally Adopted December,2005 January 2013 OCSD Legislative Matrix 12/14/2012 AD 21 (Aleio D) Safe Drinking Water Small Community Grant Fund. Current Text: Introduced: 12/3/2012 h�l Introduced: 12/3/2012 Is Fiscal: Y Location: 12/3/2012-A. PRINT _ 2Vear Desk Policy Fiscal Floor Desk Policy -iscal Floor Conf. Enrolled Vetoed Chaptered Dead 1st House 2nd House Conc . Summary: Existing law establishes the Safe Drinking Water State Revolving Fund, which is continuously appropriated to the department for the provision of grants and revolving fund loans to provide for the design and construction of projects for public water systems that will enable suppliers to meet safe drinking water standards. Existing law requires the department to establish criteria to be met for projects to be eligible for consideration for this funding. This bill would authorize the department to assess a specified annual charge in connection with loans for water projects made pursuant to the Safe Drinking Water Small Community Grant Fund, which the bill would create In the State Treasury. The bill would require the proceeds generated from the imposition of the annual charge, along with other moneys, to be deposited in the grant fund. The bill would authorize the department to expend the money, upon appropriation of the Legislature, for grants for specified water projects that serve disadvantaged and severely disadvantaged communities. Position AB 27 (Peres D) Environmental quality: California Environmental Quality Act: record of proceedings. Current Text: Introduced: 12/3/2012 e f h,mi Introduced: 12/3/2012 Is Fiscal: Y Location: 12/3/2012-A. PRINT 2Vear Desk Policy Fiscal Floor Desk Policy Fiscal Floor Conf. Enrolled Vetoed Chaptered Dead 1st House 2nd House Conc. Summary: The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report (EIR) on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment. CEQA establishes a procedure for the preparation and certification of the record of proceedings upon the filing of an action or proceeding challenging a lead agency's action on the grounds of noncompliance with CEQA. This bill would require, until January 1, 2017, the lead agency, at the request of a project applicant, to, among other things, prepare a record of proceedings concurrently with the preparation of negative declarations, mitigated negative declarations, EIRs, or other environmental documents for specified projects. Because the bill would require a lead agency to prepare the record of proceedings as provided, this bill would Impose a state-mandated local program. This bill contains other related provisions and other existing laws. Position S8 24 (Waiters R) Public employees' retirement: benefit plans. Current Text: Introduced: 12/3/2012 =L ptml Introduced: 12/3/2012 Is Fiscal: Y Location: 12/3/2012-5. PRINT 2Vear Desk Policy Fiscal Floor Desk Policy Fiscal Floor Conf. Enrolled Vetoed Chaptered Dead 1st House 2nd House Conc. Summary: Existing law regulates state and local public retirement systems and generally requires public employees who are new members, as defined, of those systems, on and after January 1, 2013, to participate in specified benefit plans. Existing law permits a public employer that, before January 1, 2013, offers a defined benefit pension plan that provides a defined benefit formula with a lower benefit factor at normal retirement age, and results in a lower normal cost, than the defined benefit formula required for new employees on and after January 1, 2012, to continue to offer that defined benefit formula and excepts the employer from specified requirements regarding pensionable compensation. Existing law requires, in the case of these plans, if a new defined benefit formula is Page 1/2 adopted on or after January 1, 2013, that the formula meet certain requirements and, among other things, be approved by the Legislature. Existing law prescribes the same requirements for a retirement benefit plan that consists solely of a defined contribution plan if the employer, on or after January 1, 2013, adopts a new defined benefit pension plan or defined benefit formula, as specified. This bill would eliminate the requirement that the Legislature approve the changes in the instances described above. This bill would also authorize a local agency public employer or public retirement system that offers a defined benefit pension plan to offer a benefit formula with a lower benefit factor at normal retirement age and that results in a lower normal cost than the benefit formulas that are currently required, for purposes of addressing a fiscal necessity. Position SB 36 (Rubio D) Safe, Clean, and Reliable Drinking Water Supply Act of 2012. Current Text: Introduced: 12/4/2012 rr ntm Introduced: 12/4/2012 Is Fiscal: N Location: 12/4/2012-S. PRINT 2Year Desk I Policy I Fiscal I Floor Deskj Policy Fiscal Floor Conf. Enrolled Vetoed Chaptered Dead 1st House 2nd House Conc. Summary: Existing law creates the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, which, if approved by the voters, would authorize the issuance of bonds in the amount of $11,140,000,000 pursuant to the State General Obligation Bond Law to finance a safe drinking water and water supply reliability program. Existing law provides for the submission of the bond act to the voters at the November 4, 2014, statewide general election. This bill would declare the intent of the Legislature to amend the Safe, Clean, and Reliable Drinking Water Supply Act of 2012 for the purpose of reducing the amount of the $11,140,000,000 bond. Position SB_40 (Pavlev D) Safe, Clean, and Reliable Drinking Water Supply Act of 2012. Current Text: Introduced: 12/10/2012 ¢ f nsml Introduced: 12/10/2012 Is Fiscal: N Location: 12/10/2012-S. PRINT 2Year Desk Policy Fiscal Floor Desk Polity Fiscal Floor Conf. Enrolled Vetoed Chaptered Dead 1st House 2nd House Conc. Summary: Existing law creates the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, which, if approved by the voters, would authorize the issuance of bonds in the amount of $11,140,000,000 pursuant to the State General Obligation Bond Law to finance a safe drinking water and water supply reliability program. Existing law provides for the submission of the bond act to the voters at the November 4, 2014, statewide general election. This bill would declare the intent of the Legislature to amend the Safe, Clean, and Reliable Drinking Water Supply Act of 2012 for the purpose of reducing and potentially refocusing the $11,140,000,000 bond. Position SB 42 (Wolk D) The California Clean, Secure Water Supply and Delta Recovery Act of 2014. Current Text: Introduced: 12/11/2012 �f n�mi Introduced: 12/11/2012 Is Fiscal: Y Location: 12/11/2012-S. PRINT 2Year Desk Policy Fiscal Floor Desk POlity Fiscal Floor Conf. Enrolled Vetoed Chaptered Dead at House 2nd House CO^C Summary: Existing law creates the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, which, if approved by the voters, would authorize the issuance of bonds in the amount of $11,140,000,000 pursuant to the State General Obligation Bond Law to finance a safe drinking water and water supply reliability program. Existing law provides for the submission of the bond act to the voters at the November 4, 2014, statewide general election. This bill would repeal these provisions. This bill contains other related provisions and other existing laws. Position Total Measures: 6 Total Tracking Forms: 6 Paget/2