HomeMy WebLinkAbout07-10-2013 Administration Committee Agenda Package Wednesday, July 10, 2013
5:30 P.M.
Orange County Sanitation District Administration Building
Regular Meeting of the Board Room
Administration Committee 10844 Ellis Avenue
Fountain Valley, CA
714 593-7130
AGENDA
PLEDGE OF ALLEGIANCE:
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 Committee Members. These reports are for information
only and require no action by the Committee.
REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES:
CONSENT:
1. Approve Minutes of the June 12, 2013 Administration Committee Meeting.
2. Recommend to the Board of Directors to:
Adopt Resolution No. OCSD 13-XX, Establishing the Annual Appropriations Limit
for Fiscal Year 2013-14, for the Sanitation District in accordance with the
Provisions of Division 9 of Title 1 of the California Government Code.
3. Recommend to the Board of Directors to:
Approve the Memorandum of Understanding with the County of Orange
regarding the use of ALERT OC, the Countywide Mass Notification System.
07/10/13 Administration Committee Agenda Page 1 of 3
NON-CONSENT:
4. Recommend to the Board of Directors to:
A. Approve a Professional Services Agreement for Specification CS-201 1-
499BD-Phase III with Total Resources Management, Inc. (TRM, Inc.),
effective July 25, 2013, for Phase 3 of the Implementation of the IBM-
Maximo Enterprise Asset Management System, for an amount not to
exceed $810,567; and
B. Approve a contingency in the amount of$81,057 (10%).
5. Recommend to the Board of Directors to:
Authorize the purchase of new atmospheric monitors from Mallory via US
Communities, for a total not to exceed $300,000, in accordance with Resolution
No. OCSD 07-04, Section 3.08: Cooperative Procurement.
6. Recommend to the Board of Directors to:
Authorize the General Manager to issue Revenue Refunding Certificate
Anticipation Notes, Series 2013A, as one-year fixed-rate obligations, in an
amount not to exceed $135.0 million to replace the $131.7 million Revenue
Refunding Certificate Anticipation Notes, Series 2012C maturing on October 30,
2013.
7. Recommend to the Board of Directors to:
Adopt Resolution No. OCSD 13-XX, Authorizing the Orange County Sanitation
District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's
Investment Policy Statement and Performance Benchmarks for FY 2013-14; and
Repealing Resolution No. OCSD 12-11.
INFORMATION ONLY:
None
0711 0113 Administration Committee Agenda Page 2 of 3
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA
ITEMS, IF ANY:
ADJOURNMENT:
The next Administration Committee meeting is scheduled for Wednesday, September
11, 2013, at 5:30 p.m.
Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability
related accommodations, please contact the Orange County Sanitation District Clerk of the Board's once 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 California Government Code Section 54954.2,this agenda
has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis
Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public
records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting
to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board.
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.
Mafia E.Ayala
Clerk of the Board
(714)593-7130
mavala(d)ocsd.com
For any questions on the agenda,Committee members may contact staff at:
714)
General Manager James Herberg (714)593-7110 iherbemOomd.com
Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli(o3ocsd.com
Director of Finance and Lorenzo Tyner (714)593-7550 Itvner0ocsd.com
Administrative Services
Director of Human Resources Jeff Reed (714)593-7144 ireed(gocsd.com
07/10/13 Administration Committee Agenda Page 3 of 3
ITEM 1
MINUTES OF THE REGULAR MEETING OF
THE ADMINISTRATION COMMITTEE
Orange County Sanitation District
Wednesday, June 12, 2013, at 5:30 P.M.
A regular meeting of the Administration Committee of the Orange County Sanitation
District was held on June 12, 2013, at 5:30 p.m., in the Sanitation District's
Administration Building.
Following the Pledge of Allegiance, a quorum was declared present, as follows:
COMMITTEE MEMBERS PRESENT: STAFF PRESENT:
Brad Reese, Chair Jim Herberg, General Manager
John Withers, Vice-Chair Bob Ghirelli, Assistant General Manager
David Benavides Lorenzo Tyner, Director of Finance
Steven Choi &Administrative Services
Tyler Diep Jeff Reed, Director of Human Resources
Jim Ferryman Nick Kanetis, Director of Engineering
Peter Kim Ed Torres, Director of Operations &
Prakash Narain Maintenance
Joe Shaw Maria Ayala, Clerk of the Board
Teresa Smith Norbert Gaia
Troy Edgar, Board Chair Al Garcia
John Anderson, Board Vice Chair Rich Leon
COMMITTEE MEMBERS ABSENT: OTHERS PRESENT:
Janet Nguyen Brad Hogin, General Counsel
PUBLIC COMMENTS:
Chair Reese announced that the public comment requests received would be heard at
the time Agenda Item 4 is addressed on the agenda.
REPORT OF COMMITTEE CHAIR:
Committee Chair Reese did not give a report.
REPORT OF GENERAL MANAGER:
Jim Herberg, General Manager, announced a retirement party for former General
Manager, Jim Ruth, will take place after the June Board meeting offsite. Mr. Herberg
also announced that the Orange County Water District will be hosting a breakfast
celebration in honor of their 80t" anniversary on June 21et at 9 a.m.
wi/ 13 Administration Committee Minutes Page 1 of 3
REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES:
Lorenzo Tyner did not give a report.
CONSENT CALENDAR:
1. MOVED, SECONDED, AND DULY CARRIED: Approve Minutes of the May 8,
2013 Administration Committee Meeting.
2. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of
Directors to:
Adopt Resolution No. OCSD 13-XX, Establishing Use Charges for the FY 2013-
14 pursuant to the Wastewater Treatment and Disposal Agreement with the
Santa Ana Watershed Project Authority.
ACTION ITEMS:
3. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of
Directors to:
Approve the proposed revisions to the Operating, Capital, Debt/COP Service and
Self-Insurance Budgets for FY 2013-14, as shown.
Lorenzo Tyner gave a brief PowerPoint on the proposed revisions to the FY
2013-14 budget and addressed questions by the committee.
Director Benavides left at 5:42 p.m. and was not present for the vote on Item 3.
Director Withers arrived at meeting at 5:44 p.m.
INFORMATION ITEMS
4. Cost Recovery for Urban Runoff Flows
Nick Kanetis, Director of Engineering, and Jim Colston, Environmental
Compliance and Regulatory Affairs Manager, provided information and a
PowerPoint on the Sanitation District's Urban Runoff policy.
Staff responded to various questions from the Committee. Mr. Herberg informed
the Committee that this item would be brought back for formal action to the Board
at a future meeting.
0611 V13 Administration Committee Minutes Page 2 of 3
Public Comment:
Amanda Carr (City of Irvine); Mary Ann Skorpanich (OC Watersheds Program,
Orange County); Travis Hopkins (City of Huntington Beach); and Ray Bennett
(Irvine Ranch Water District).
Each spoke on their respective agencies' shared interests with the Sanitation
District on the Urban Runoff program.
5. Permitting Process for Sewer Connections
Nick Kanetis gave a brief report in response to a recent issue regarding the
permitting process that was raised at the May Board Meeting (from public
speaker Mr. Barrios). Rich Leon, Engineer, gave a brief PowerPoint on the
Sanitation District's process.
The Committee discussed the issues such as those of Mr. Barrios with staff
responding to questions. The Committee reached consensus to bring this item
back for further discussion at a future meeting.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA
ITEMS, IF ANY:
None.
ADJOURNMENT:
Committee Chair Reese declared the meeting adjourned at 6:30 p.m.
Submitted by:
Maria E. Ayala, Clerk of the Board
OW V13 Administration Committee Minutes Page 3 of 3
ADMINISTRATION COMMITTEE "I'm,Date T1.1 IM.
07/10/13 7/24/13
AGENDA REPORT Item Number Item Number
z
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: GANN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2013-14
GENERAL MANAGER'S RECOMMENDATION
Adopt Resolution No. OCSD 13-XX, Establishing the Annual Appropriations Limit for
Fiscal Year 2013-14, for the Sanitation District in accordance with the Provisions of
Division 9 of Title 1 of the California Government Code.
SUMMARY
This routine annual action adopts a resolution establishing the spending limit for
"proceeds of taxes" in accordance with Article XIII B of the Constitution of the State of
California (Section 7910 of the Government Code). The Sanitation District's annual
appropriations are well below the limit.
In 1979, Proposition 4 (the Gann Initiative) was approved adding Article XIII B to the
State Constitution. The provisions of this article place limits on the amount of revenue
that can be appropriated by all entities of government. This initiative was designed to
constrain government expenditures by placing an annual limit on jurisdictions' revenue
and appropriation growth. The Appropriation Limit is based on actual appropriations
during the 1978-1979 fiscal year, as increased each year using specified population and
inflationary growth factors. This annual allowance growth is linked to changes in
population and cost of living. The passage of Proposition 111 in June 1990 amended
Article XIIIB, making changes in the base year upon which the appropriations limit is
based, establishing new cost of living factors and new population factors for use by local
governments, and increasing appropriations not subject to the limit (primarily qualified
capital outlay projects). The financial constraints of Article XIII B apply to the State, all
cities, counties, special districts and all other political subdivisions.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
Page 1 of 2
ADDITIONAL INFORMATION
N/A
ATTACHMENTS
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the
complete agenda package:
1. Resolution No. OCSD 13-XX
Page 2 of 2
Return to Mende Report
RESOLUTION NO. OCSD 13-XX
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE ORANGE COUNTY SANITATION DISTRICT
ESTABLISHING THE ANNUAL APPROPRIATIONS LIMIT
FOR FISCAL YEAR 2013-14 FOR THE DISTRICT IN
ACCORDANCE WITH THE PROVISIONS OF DIVISION 9
OF TITLE 1 OF THE CALIFORNIA GOVERNMENT CODE
WHEREAS, Article XIII B of the Constitution of the State of California as
proposed by the Initiative Measure approved by the people at the special statewide
election held on November 6, 1979, provides that the total annual appropriations limit of
each local government agency shall not exceed the appropriations limit of such entity
for the prior year, adjusted for changes in the cost of living and population, except as
otherwise specifically provided for in said Article; and,
WHEREAS, the State Legislature added Division 9 (commencing with Section
7900) to Title 1 of the Government Code of the State of California to implement Article
XIII B of the California Constitution; and,
WHEREAS, Section 7910 of the Government Code provides that each year the
governing body of each local jurisdiction shall, by resolution, establish its appropriations
limit for the following fiscal year pursuant to Article XIII B at a regularly-scheduled
meeting or a noticed special meeting and that fifteen (15) days prior to such meeting,
documentation used in the determination of the appropriations limit shall be available to
the public; and,
WHEREAS, Section 7902 (a) of the Government Code sets forth the method
for determining the appropriations limit for each local jurisdiction for the 2013-14 fiscal
year; and,
WHEREAS, the Board of Directors wishes to establish the appropriations limit
for fiscal year 2013-14 for the District.
NOW, THEREFORE, the Board of Directors of the Orange County Sanitation
District DOES HEREBY RESOLVE, DETERMINE AND ORDER:
Section 1: That it is hereby found and determined that the documentation used
in the determination of the appropriations limit for the Orange County Sanitation District,
for fiscal year 2013-14, was available to the public in the Finance Department of said
District at least fifteen (15) days prior to this date.
OCSD 13-XX-1
Return b Mende Report
Section 2: That the appropriations limit for fiscal year 2013-14 for the Orange
County Sanitation District, as established in accordance with Section 7902(b) of the
California Government Code is $90,880,000 which sum is within the maximum
authorized spending limitation for fiscal year 2013-14.
Section 3: That the Board of Directors of the Orange County Sanitation District,
has determined that the percent change in California per capita personal income from
the preceding year would be the cost of living factor to be used and the weighted
average population change of the cities within the District would be the population factor
to be used in calculating the Orange County Sanitation District's appropriations limit for
the Fiscal Year 2013-14.
Section 4: The determination of the appropriation limit is based upon the best
and most complete information available at this time. The District reserves the right to
review and re-establish a new and different limit in the event that it subsequently
determines that a modification of the limitation amount is appropriate.
PASSED AND ADOPTED at a regular meeting held , 2013.
Troy Edgar
Chairman of the Board
ATTEST:
Maria E. Ayala
Clerk of the Board
OCSD 13-XX-2
ADMINISTRATION COMMITTEE "I'm,Date T1.1 IM.
07/10/13 7/24/13
AGENDA REPORT Item Number Item Number
3
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: ALERT OC Memorandum of Understanding
GENERAL MANAGER'S RECOMMENDATION
Approve the Memorandum of Understanding with the County of Orange regarding the
use of ALERT OC the Countywide Mass Notification System.
SUMMARY
The County of Orange has a mass notification system, Alert OC, similar to the reverse
911 system. The County is allowing water and wastewater agencies to use the mass
notification system if they sign a Memorandum of Understanding (MOU). The County
would pay the fees for the system and maintain the contract with the vendor. If the
County was to end their contract the MOU has provisions that OCSD may enter a
contract with the vendor if it chose too. General Counsel recommends the Board be the
approver of the MOU based upon the Compensation section of the MOU, which doesn't
have a specific monetary amount if OCSD was to continue the contract with the vendor.
The mass notification system would give OCSD the ability to notify our users not to use
the system if there ever was a sewer failure. This could help reduce the Flow and the
amount of sewage that would have to be cleaned up.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ATTACHMENTS
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the
complete agenda package:
1. Memorandum of Understanding between the County of Orange and Participants
JH:LT:wb/jmf
Page 1 of 1
Return to Mende Report
MEMORANDUM OF UNDERSTANDING
BETWEEN
THE COUNTY OF ORANGE
AND
PARTICIPANTS
FOR USE OF COUNTYWIDE MASS NOTIFICATION SYSTEM
This Memorandum of Understanding, hereinafter referred to as "MOU,"
dated , which date is stated for purposes of reference only, is entered into by and
between the County of Orange, a political subdivision of the State of California, hereinafter
referred to as "COUNTY," and the undersigned municipalities, public universities and water
agencies responsible for protecting a resident population and maintaining a dedicated public safety
answering point (PSAP) within the County of Orange, hereinafter referred to individually as
"PARTICIPANT" or collectively as "PARTICIPANTS."
This MOU is intended to establish governance and terms of use for a Countywide Public
Mass Notification System.
RECITALS
WHEREAS, COUNTY is sponsoring a Countywide Public Mass Notification System
("System") for the primary intent of providing timely communication to the public during times
of emergency; and
WHEREAS, the County is making use of the System available to all cities and agencies
within the County of Orange who have the responsibility for protecting a resident population and
maintaining a dedicated public safety answering point (PSAP); and
WHEREAS, COUNTY entered into Orange County Agreement No. MA-060-13011688
("Agreement") with Blackboard Connect, Inc., for the provision of Public Mass Notification
System Services, on or about May 21, 2013, attached hereto as Exhibit A,to disseminate critical,
time-sensitive emergency information to COUNTY's citizens and businesses through phone and
e-mail devices for emergency notification purposes; and
WHEREAS, Blackboard Connect, Inc. agrees to provide to PARTICIPANTS the
services agreed to by Blackboard Connect, Inc. and COUNTY as contained under the Agreement
in exchange for abiding by the terms set forth in this MOU; and
WHEREAS, PARTICIPANTS agree to uphold the same terns and conditions of the
Agreement, to use the System in compliance with all usage agreements identified and
incorporated herein as Exhibit A (Orange County Agreement No. MA-060-13011688), Exhibit B
(Countywide Public Mass Notification System Policy and Guideline) and Exhibit C
(Nondisclosure Document), and the terms of this MOU to receive the benefits under the
Agreement.
Page 1 of 5
Return to Aaenda Report
NOW,THEREFORE, the parties agree as follows:
I. Definitions:
"Agreement" shall refer to Orange County Agreement No. MA-060-13011688 between
COUNTY and Blackboard Connect, Inc. The Agreement is attached to this MOU as
Exhibit A.
"Countywide" shall mean all geographic locations in Orange County, California.
"Contact information" shall mean PARTICIPANT and public contact data stored in the
System for the purpose of disseminating communication in accordance with this MOU
and its Exhibits.
"Emergency" shall include, but not be limited to, instances of fire, flood, storm,
epidemic, riots, or disease that threaten the safety and welfare of the citizens and property
located within the boundaries of the COUNTY and PARTICIPANTS' respective
jurisdictions.
"Emergency information" shall mean information relevant to the safety and welfare of
recipients in the event of an Emergency. Such information shall include but not be
limited to instructions and directions to alleviate or avoid the impact of an emergency.
"Emergency notification situation" shall mean instances when emergency information is
to be distributed through the System.
"Non-emergency information" shall refer to information that is not relevant to the safety
and welfare of recipients, but has been deemed to be of significant importance to a
PARTICIPANT's jurisdiction to justify the use of the System to distribute such
information.
"Non-emergency notification situation" shall mean instances when a PARTICIPANT
deems non-emergency information to be of significance to a PARTICIPANT'S
jurisdiction and the PARTICIPANT uses the System to distribute such information.
"System" shall mean the Public Mass Notification System as provided by Blackboard
Connect, Inc. to COUNTY under the Agreement. The System is designed to disseminate
information by utilizing common communications, i.e. telephone and e-mail
communications to citizens and businesses as permitted under the Agreement.
H. Hold Harmless: PARTICIPANT will defend, indemnify and save harmless COUNTY,
its elected officials, officers, agents, employees, volunteers and those special districts and
agencies which COUNTY's Board of Supervisors acts as the governing Board
("COUNTY INDEMNITIES") from and against any and all claims, demands, losses,
damages, expenses or liabilities of any kind or nature which COUNTY, its officers,
agents, employees or volunteers may sustain or incur or which may be imposed upon
Page 2 of 5
Return b Aaeada Report
them for injury to or death of persons, or damages to property as a result of, or arising out
of the acts, errors or omissions of PARTICIPANT, its officers, agents, employees,
subtenants, invitees, or licensees. COUNTY will defend, indemnify and save harmless
PARTICIPANT, its officers, agents, employees and volunteers from and against any and
all claims, demands, losses, damages, expenses or liabilities of any kind or nature which
PARTICIPANT, its officers, agents, employees or volunteers may sustain or incur or
which may be imposed upon them for injury to or death of persons, or damages to
property as a result of, or arising out of the acts, errors or omissions of COUNTY, its
officers, agents, employees, subtenants, invitees, or licensees.
III. Term: This MOU shall be in effect from July 1, 2013 and shall expire on June 30, 2017,
unless COUNTY funding of the System becomes unavailable at which time
PARTICIPANTS will be given six-month advance notice per the termination terms found
in Paragraph IX. Termination, below.
IV. Scope of Services: PARTICIPANTS shall receive from Blackboard Connect, Inc. the
same services provided by Blackboard Connect, Inc. to the COUNTY under the
Agreement. COUNTY's involvement in this MOU is limited only to extending the
availability of the terms and conditions of the Agreement to the PARTICIPANTS.
PARTICIPANTS and Blackboard Connect, Inc. acknowledge and agree that any actions
taken by Blackboard Connect, Inc. or any PARTICIPANT under the scope of the
Agreement and this MOU are the responsibility of Blackboard Connect, Inc. and the
respective PARTICIPANT.
V. Use: Use of the System and its data, including but not limited to contact information, is
governed by the terms, conditions and restrictions set forth in the terms provided in
Exhibit A, B and C. All PARTICIPANTS agree to the terms and conditions contained in
Exhibits A, B, and C. COUNTY retains the right to update Exhibits A, B, and C as
needed, in whole or in part, during the life of this MOU. Any and all revised Exhibits
will be distributed to PARTICIPANTS within five business days of the revision date and
shall be incorporated into this MOU. Such modifications to the Exhibits shall not be
deemed an amendment for the purposes of Paragraph X. Amendments,below.
PARTICIPANT, including each of its agents, officers, employees, and representatives
who are given access to the System, agrees to abide by the individual terms of each
agreement and the additional conditions incorporated herein. Breach of use may result in
individual user or PARTICIPANT access account termination.
The scope of services under the Agreement is limited to using the System to distribute
business communication to PARTICIPANT inter-departmental resources and/or
emergency information to the public in emergency notification situations.
PARTICIPANTS may arrange for the use of the System with Blackboard Connect, Inc.
to distribute non-emergency information. However, any agreement reached between
Blackboard Connect, Inc. and any PARTICIPANT for the use of the System for non-
emergency notification situations shall exist only between Blackboard Connect, Inc. and
Page 3 of 5
Return to Mande Report
the PARTICIPANT. In accordance with Paragraph H. Hold Harmless, above, COUNTY
shall be held harmless and indemnified by the PARTICIPANTS and Blackboard
Connect, Inc. from any actions whatsoever arising from any PARTICIPANT's use of the
System for non-emergency services.
All PARTICIPANTS have read and accept the terms and conditions found in COUNTY's
"Countywide Public Mass Notification System Policy and Guideline (June 30, 2008)",
attached hereto as Exhibit B.
VI. Compensation: All compensation owed by PARTICIPANTS to Blackboard Connect,
Inc. shall be made between PARTICIPANTS and Blackboard Connect, Inc.
VII. Notice: Any notice or notices required or permitted to be given pursuant to this MOU
shall be submitted in writing and delivered in person, via electronic mail or via United
States mail as follows:
COUNTY:
County of Orange—Sheriff-Coroner Department
Emergency Management Bureau
Attn: Donna Boston/Emergency Management
2644 Santiago Canyon Road
Silverado, CA 92676
PARTICIPANTS: Each PARTICIPANT shall provide to COUNTY a contact person
and notice information upon entering into this MOU.
Notice shall be considered tendered at the time it is received by the intended
recipient.
VIII. Confidentiality: Each party agrees to maintain the confidentiality of all related records
and information of the other party pursuant to all statutory laws relating to privacy and
confidentiality that currently exist or exist at any time during the term of this MOU. All
information and use of the System shall be in compliance with California Public Utilities
Code section 2872.
IX. Termination: The COUNTY or any PARTICIPANT may terminate its participation in
this MOU at any time for any reason whatsoever. If any PARTICIPANT chooses to
terminate its participation in this MOU, the terminating PARTICIPANT shall provide
written notification in accordance with Paragraph VII. Notice, above. Such notice shall
be delivered to the COUNTY 30 days prior to the determined termination date. A
terminating PARTICIPANT shall uphold the obligations contained in Paragraph II. Hold
Harmless in its entirety and Paragraph VIII. Confidentiality, above. Upon termination,
PARTICIPANT agrees to inform each PARTICIPANT user to stop using the System and
to relinquish all System access, user accounts, passwords and non-PARTICIPANT data
to COUNTY immediately. PARTICIPANT may choose to delete and/or export non-
public PARTICIPANT (aka inter-departmental) owned contact information, as well as,
export resident provided contact information prior to termination. Resident provided
Page 4 of 5
Return b Mende Report
contact information acquired through PARTICIPANT sources shall remain in the System
and available to the County for regional or multi jurisdictional notification use as needed.
Should COUNTY discontinue its funding for the System, which shall be grounds for
COUNTY's termination of its participation, COUNTY shall give PARTICIPANTS six-
month advance courtesy notice prior to terminating the Agreement. All other reasons for
terminating by COUNTY shall be valid upon providing notice to the PARTICIPANTS.
Upon termination by COUNTY, this MOU shall no longer be in effect.
Termination by a PARTICIPANT shall not be deemed an amendment to this MOU as
defined in Paragraph X. Amendments,below.
X. Amendments: This MOU may be amended only by mutual written consent of the parties
involved unless otherwise provided for in this MOU. The modifications shall have no
force and effect unless such modifications are in writing and signed by an authorized
representative of each party. Termination by a PARTICIPANT or adding a new
PARTICIPANT to this MOU shall not be deemed an amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Memorandum of Understanding
to be executed by their duly authorized representatives as of the dates opposite the signatures.
COUNTY OF ORANGE
By: Date:
Sandra Hutchens, Sheriff-Coroner
County of Orange
PARTICIPANT: ORANGE COUNTY SANITATION DISTRICT
By: Date:
Troy Edgar, Chair
Orange County Sanitation District
Page 5 of 5
ADMINISTRATION COMMITTEE Meeting Date To Bd.of Dir.
07/10/13 07/24/13
AGENDA REPORT Item Number Item Number
4
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: IMPLEMENTATION OF IBM-MAXIMO ENTERPRISE ASSET
MANAGEMENT SYSTEM, PHASE 3
GENERAL MANAGER'S RECOMMENDATION
A. Approve a Professional Services Agreement for Specification CS-2011-499BD-
PHASE III with Total Resources Management, Inc. (TRM, Inc.), effective July 25,
2013, for Phase 3 of the Implementation of the IBM-Maximo Enterprise Asset
Management System, for an amount not to exceed $810,567; and
B. Approve a contingency in the amount of$81,057 (10%).
SUMMARY
The Orange County Sanitation District (OCSD) currently owns the IBM-Maximo
Enterprise Asset Management software. To manage the risk of a large software
implementation effort, the implementation project is divided into independent phases.
Three firms were pre-qualified to negotiate and propose the best value for the
implementation of these phases. Phases 1 and 2 were awarded to TRM, Inc. At a cost
of $327,638, phase 1 performed a needs assessment to evaluate best practices and
develop an overall implementation strategy. Phase 2 cost $478,462 and migrated
inventory and warehouse functions from the JD Edwards Financial Information System
into Maximo. Phase 3 will replace the current Computerized Maintenance Management
System (CMMS) software and will adjust maintenance business practices to follow best
practices. This will be the largest effort in the implementation. Subsequent phases will
address asset management and depreciation, fleet management, and other
maintenance best practices and processes.
PRIOR COMMITTEE/BOARD ACTIONS
May 2012 — Approved Amendment No.2 to the Professional Services Agreement,
issued to TRM, Inc. for Phase 2 of the Implementation of IBM-Maximo Enterprise Asset
Management System.
October 2011 — Awarded a purchase contract to TRM, Inc. for Phase 1 of the
Implementation of IBM-Maximo Enterprise Asset Management System and authorized
the General Manager to select from proposers TRM, Inc., EMA, or Starboard
Page 1 of 3
Consulting, LLC to negotiate and obtain the best value for the implementation of
subsequent phases.
ADDITIONAL INFORMATION
The current Computerized Maintenance Management System (CMMS) software is used
by Operations & Maintenance staff to manage plant and sewer assets, plan/schedule
and perform work order management activities, and tracklmonitor maintenance related
regulatory issues. The software is obsolete and no longer supported. This phase of the
implementation will replace the CMMS, implement maintenance practices that are in
line with best practices, and configure Maximo to be used in an optimized planning &
scheduling environment.
On April 4, 2013, OCSD issued a Request for Proposal (RFP) to TRM, Inc., EMA, and
Starboard Consulting, LLC. On April 30, 2013, two proposals were received. A panel
consisting of seven OCSD staff reviewed and ranked each of the proposals in
accordance with Resolution No. OCSD 07-04, Section 5.07. This RFP used the
consensus scoring method. During consensus scoring sessions, the evaluation
facilitator directs the team's attention to each item in the specifications. The evaluation
team considers one proposal at a time, comparing the vendor's proposed offering
against the specifications in the underlying RFP. Consensus scoring sessions
encourage open discussions and questions among members of the evaluation team.
Evaluators discuss the relative strengths and weaknesses of a vendor's proposal in
each area. The following criteria/weights were used to evaluate the proposals:
Proposed Staffing and Project Organization (20%), Qualifications of Firm (25%), Work
Plan (20%), and Cost Evaluation (25%). The solution proposed by TRM, Inc. was rated
higher than the Starboard Consulting, LLC solution. Staff recommends awarding the
Professional Services Agreement to TRM, Inc. for a not-to-exceed amount of$810,567.
PROPOSAL EVALUATION TABLE
Criteria Weight Weighted Starboard TRM, Inc.
Score Consulting, LLC
Evaluator Consensus Consensus
Proposal Evaluation
Proposed Staffing & 20 200 140.0 160.0
Project Evaluation
Qualifications of Firm 25 250 175.0 200.0
Work Plan 20 200 150.0 160.0
Cost Evaluation 25 250 179.3 250.0
Total 6".3 770.0
nftialP Fee $1090,,2
Ne o $1, 0130000 11,206,692
$ 810,567
Page 2 of 3
CEQA
N/A
BUDGET/ DELEGATION OF AUTHORITY COMPLIANCE
This request complies with authority levels of the Orange County Sanitation District's
Delegation of Authority. This item has been budgeted under SP-100, Asset
ManagemenUCMMS System Replacement.
ATTACHMENTS
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the
complete agenda package:
1. Draft Agreement
Page 3 of 3
Return to Mende Report
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE ORANGE COUNTY SA T S I
ND O
Q � (N o ont to 0
0
0
0
Page 1 of 30
Return to Mende Report
TABLE OF CONTENTS
1. DEFINITIONS.......................................................................................................3
2. TERM OF THE CONTRACT................................................................................5
3. EXHIBITS.............................................................................................................5
4. ORDER OF PRECEDENCE.................................................................................6
S. SCOPE OF WORK...............................................................................................6
6. COMPENSATION AND TERMS OF PAYMENT..................................................8
7. PERSONNEL.................................................................................. ... ................9
S. INDEPENDENT CONTRACTOR ............................................. ... ... ..............11
9. NO SOLICITATION OF EMPLOYEES OR SUBCON J�bTCI ... .............. 11
10. WARRANTIES.................................................... .. .. .. .. ... ......... .. ............ 12
11. REGENERATION OF LOST OR DAMAG 16
12. SYSTEM ACCEPTANCE.... .. ..... . ........................ 16
13. COMPLETION DATES - DEA FO E USE.....................
14. CHANGES IN WORK..... ....... ... ... ....... ....... .................................... . ... 1
15. NOT .............. ... . ... ....... ... .... 8
1 . DISPUTE RE Ti�
17. FORCE ..... .... ....... ................................... ....... . .. . 20
18. IN N I .. ............................................. .. . ..Q.. . . 0
19. E I I .. .. . .................................. ... ... ... .. . ....9... . .. . ...........21
2 . OND ORMATION.............. .. ... .. 23
21 0 OF INTELLECTU OP . . ......... ................................24
22. I TO REVIEW SERVI E , FPfILITI N ORDS 25
23. URANCE............. .... ... ... . .. ........... ..............................................25
24. ATTORNEY'S F .. .. ... .. .............................................................25
25. WAIVER........... ..... ... . ... . ... ......................................................................25
26. SIEVE ITY. .. ...... .. .........................................................................26
27. 1 1 ...... ... ... ...................................................................................26
28. S N CON OL OF VENDOR............................................................26
29. A L LAW ...........................................................................................26
30. E C NTRACT.........................................................................................26
31. ELLANEOUS ............................................................................................26
EXHIBITA Statement of Work
EXHIBIT B Interface Control Document
EXHIBIT C Pricing Detail and Summary
EXHIBIT D Project Schedule
EXHIBIT E Payment Schedule
EXHIBIT F Faithful Performance/Warranty Bond
EXHIBIT I (Name of Vendor) Proposal dated
EXHIBIT J OCSD Request for Proposal dated
EXHIBIT K OCSD Safety and Accident Prevention Requirements
EXHIBIT L OCSD Acknowledgement of Insurance Requirements
Page 2 of 29
Return to Agenda Report
PROFESSIONAL SERVICES AGREEMENT
Implementation of IBM-Maximo
CS-2011.499BD
This Professional Services Agreement is effective this day of , 2011
between (enter name of Contractor, a (enter State Incorporated) Corporation with its principal
office at (enter Address) (hereinafter referred to as "Contractor') and the Orange County
Sanitation District (hereinafter referred to as "OCSD"), a special district organized under the
laws of the State of California with its principal offices at, 10844 Ellis Avenue, Fountain Valley,
California, (hereinafter referred to as "OCSD").
WHEREAS, OCSD desires to procure certain Services from Co tra r o facilitate the
successful implementation of IBM-MAXIMO; and,
WHEREAS, ofOCSD'sO General Manager has determi ut r ' id rvices is in
the best interestest of CSD; and (\�\
WHEREAS, on t oard a to of OCSD, by minute er,
authorized execution of this Contr d etw en SD a tractor; and
WHEREAS, Contract i tja]1fi t d ' as to provide the Sy th
Services necess n t I i m nt maintain the System; a , O
W A tftp e t nter into this Agreeme a h re a r s tvo
N T F r the considerations h afte h e ree as follows:
1. FI IONS
The following definitions o 's gr e e
1.1 A ree ant. he t gr a is defined as this Professional Services Agreement
It a hi 'ts In t e of any inconsistency between or among these documents,
t in n 'at n y she a resolved as stated in Section 4.0, Order of Precedence.
1.2 s it umentation. The term "As-Built Documentation" means the Baseline
entation for IBM-MAXIMO plus the Documentation for any Configuration
Changes, Interfaces and Customization Modifications provided by Contractor under this
Agreement. All "As-Built Documentation" from Contractor shall supplement and not
conflict with the terms of this Agreement. In the event of a conflict, the terms of this
Agreement shall prevail.
1.3 Baseline Documentation. The term "Baseline Documentation" refers to the
Documentation for the version of IBM-MAXIMO installed prior to any Configuration
Changes, Interfaces or Customization Modifications.
1.4 Configuration Changes. The term "Configuration Changes' is defined as any
modification or changes to IBM-MAXIMO software other than a Custom Modification.
Page 3 of 29
Return to Aaenda Report
1.5 Custom Modification. The term "Custom Modification" is defined as a modification of the
IBM-MAXIMO software developed by Contractor, which provides new or improved
functions or features to address specific requirements of this Agreement that cannot be
built through standard configuration tools or capabilities imbedded within the IBM-
MAXIMO software.
1.6 Defect. The term "Defect" is defined as any error, failure, deficiency, or any other
unacceptable variance or failure of the System or any component thereof to fully
conform to the warranties and requirements described in this Agreement ith respect to
Configuration Changes, Interfaces or Custom Modifications, the to ' f ct" is defined
as any error, failure, or deficiency or any other unacceptable ' nc r many required,
specified, or expected program behaviors as may be re u e y CS D r ecessary for
IBM-MAXIMO software to operate correctly and ' fu c li a wi t rms of this
Agreement. This includes expected program eha s s e !I ed ' any As-Built or
Baseline Documentation. In the e t of a c f e is Agreement and
Documentation provided by Co a to C D t t rms and conditions of
Agreement shall prevail.
1.7 Documentation eAr " ocu a ' " is defined as all wri I r ni , o
recorded ! ih(j I - u ocumemat1 n" that de t as
func at i p orm a standards, and reliabi ' rftr s , or
an s44y,,,b s e t, or Interface, and that ar b's or o e o SD by
on rto ntractors, including, w' o I ti n, 1 d s and system
ni. ttr t nuals, help files, trainin aids a s, r 'n Ind support guides,
o Ii ings, data models, flo art Iogi r , an other materials related to
r use with the System.
1.8 Final S stem Ac a T e t r 'n I System Acceptance" is defined as that date
on which: (1) a1 ter d tion of this Agreement have been successfully
comple Con a or pted by OCSD, and (2), after approval by OCSD
d o it ors, has executed a Final System Acceptance Document
ipd( all e s a onditions of this Agreement have been successfully completed
b o c
1.9 'x P k. The term "Fix Pack" is defined as a formal release of programming code and
d cumentation that provides corrections to any IBM-MAXIMO Software programs
including, but not limited to, bug fixes, error corrections and patches.
1.10 Functional. Performance and Reliability Specifications and Requirements. The term
"Functional, Performance and Reliability Specifications and Requirements" is defined as
all definitions, descriptions, requirements, criteria, warranties, and performance
standards relating to the System set forth in: (a) this Agreement; (b) any mutually
agreed upon Change Orders pursuant to Section 13.0, Changes in Work; and (c) any
functional and/or technical specifications which are published or provided by Contractor
or its licensors or suppliers from time to time with respect to the System or any Products.
1.11 Interfaces. The term "Interfaces" is defined as one or more of the specialized software
applications developed by Contractor and installed as a part of the Project for the
purpose of sharing information (data) between IBM-MAXIMO and any other software
Page 4 of 29
Return to Aaenda Report
program or device. Functional requirements for each Interface to be included as a part
of the System are provided in Exhibit B, Interface Control Document.
1.12 Project. The term "Project" is defined as the totality of Contractor's obligation under this
Agreement to develop, supply, install, configure, test, and implement the System.
1.13 Services. The term "Services" is defined as the implementation, development, training,
configuration, loading, testing, project management and other services to be provided by
Contractor under this Agreement, including, without limitation, the tasks detailed in
Exhibit A, Statement of Work.
1.14 Software. The term "Software" includes any one or more of the f o g components:
(a) IBM-MAXIMO application software; (b) Configur han s; (c) Custom
Modifications and (d) Interfaces.
1.15 Source Code. The term "Source Code" is of d t hu n dable form of all
Software components provided by clor in lu 'n , mited to, all algorithms
flow charts, logic diagrams, stru tur scri o r d ams, data format or I ut
descriptions, pseudo-cod ode is in (inc comments), and othe e a
Documentation rel t h pro a icient to enable a traine p og er
maintain and/o 'f; I e ft it undue experiments o .
1.16 S am" defined as the coIle ti o" ry be
ro idp r t er this Agreement. O
1. S t m- ' trator Documentation def a rt the Documentation
a d ing the operation and mai na func o t tem.
1.18 Third-Party Software. e e 'rd y Software" is defined as any software (other
than IBM-MAXI ) o e su I d by Contractor under separate Agreement
that is pur ased li s b D or use with or integration into the System.
1.19 t s. a arm d " is defined as modifications, improvements, additions, and
qq�e t I M-M MO software and/or related Documentation, including Fix Packs
aNdha o re releases, that IBM makes generally available to its customers with or
i u an a ditional fee.
1.20 Work Product. The term "Work Product" is defined as the Services and all other
programs, algorithms, reports, information, designs, plans and other items developed by
Contractor under this Agreement, including all partial, intermediate or preliminary
versions thereof.
2. TERM OF THE CONTRACT
This Agreement shall be effective from the date it is fully executed by OCSD and shall continue
through the 365 day Warranty Period, unless sooner terminated.
3. EXHIBITS
The following Exhibits are incorporated into this Agreement:
Page 5 of 29
Return to Mende Report
Exhibit A—Statement of Work (to be developed by OCSD upon award)
Exhibit B— Interface Control Document
Exhibit C—Pricing Detail and Summary
Exhibit D—Project Schedule
Exhibit E - Payment Schedule
Exhibit F — Contractor Proposal dated (enter date) (provided previously o OCSD under
separate cover)
Exhibit G - OCSD's Request for Proposal dated ( r rovid reviously to
Contractor under separate cover)
Appendices (RFP/the following to b ' lude�
Appendix 1 —Volume Estirl
Appendix 2— E"p n C ' ur ' and Network Diagram 0
Ap ix S Busi s Rules Q
pp ric ft SD Business Processe 0
x — Draft OCSD WorkFlo
ppendix 6— Draft OC ugetio I e ireme
4. ORDER OFPRECE N U
In the ev t o a Isis een the various documents that comprise this Agreement,
the er f de c she as follows: (i)the Agreement, (ii)the exhibits to the Agreement
in the r e in i th y appear in Section 3.0, Exhibits.
5. SC P F WORK
General requirements for the scope of this Project are listed below. A detailed list of tasks and
responsibilities are included in Exhibit A, Statement of Work.
5.1 Prime Contractor Responsibilities for Supply. Installation. and Implementation.
Contractor shall be the Prime Contractor for this Project. As such, Contractor will be
responsible for providing all design, development, installation, consulting, configuration,
integration, project management, training, technical and all other services necessary for
the successful installation and implementation of the System as described in Exhibit A,
Statement of Work. Contractor shall perform all tasks necessary to meet or exceed the
Functional Performance and Reliability Specifications and Requirements set forth in this
Agreement.
Page 6 of 29
Return to Mende Report
Phase 1 shall be completed with ninety-(90) days of Notice to Proceed. Phase 1 shall
include a kick-off meeting, a series of planning and training programs, a detailed site
analysis by Contractor, a review and update of Project requirements and the preparation
and delivery to OCSD of an OCSD-approved Site Analysis Report.
Phase 2 shall consist of deployment and implementation of IBM-MAXIMO. If OCSD, at
its sole discretion, decides that it is in the best interest of OCSD to move forward with
Phase 2. OCSD may negotiate with the current Contractor or elect to negotiate with the
next qualified proposers on subsequent phases.
Issuance of a Notice to Proceed does not affect OCSD's ability to r 'e a System in
whole or in part K Contractor does not successfully achieve th o it ns for Final
System Acceptance.
5.2 Modifications to Equipment and Facilities. Dur' se C r h identify any
deficiencies or problems that may impede C n t ility s essful implement
the System. OCSD shall be res 'ble r inpproved modifications
identified in the final, OCSD app v , ite A a e . Thereafter, Contract ill
be precluded from asse tha it i nabl erform its obligations is
Agreement becaus an r -exis 'n ition. During implements n, an h g
to the System Cos t rred in order to compI e so
this Cont ct e i nti ' in the Site Analysis oft, 'I s nd
ex c s e i o Cont actor. v
a n, ' t ystem is unable to meet t e 'o I, P rrQa e and Reliability
Sp ifi ' and Requirements in ' Agr amen i tified upgrades and
c a have been made, then ontr or wil p e, at its own expense, for
ing any further upgrade or c ecess ry chieve this result.
5.3 Training Plan. E i it n in lis the training classes and costs for user and
administr train g t t t will provide for the System. OCSD may add to or
deduc r t e tot u o ining time to be provided by giving Contractor written
o lat r an t i days prior to the affected training date. OCSD will receive
�e r erce (100%)fee credit for training not provided or otherwise cancelled
f#6 O the best qualified Contractor employees or approved subcontractors will
e r the training for this Project. If, within fifteen (15) days of a training session,
determines the training session has not been effective, and Contractor cannot
demonstrate that the ineffectiveness was the result of factors within OCSD's sole
control, then Contractor shall provide additional training at no cost to OCSD, not to
exceed a total of 100% of the training time budgeted per class type. All training shall be
scheduled at times mutually agreeable to both parties. Contractor will not schedule
training of any session concurrently or immediately following any other session without
the express written permission of OCSD. Contractor shall schedule training to occur no
sooner than (enter number of days) prior to go-live. If go-live is delayed by no fault of
OCSD longer than 10 days after completion of end user training, Contractor shall repeat
the training at no additional cost if deemed necessary and required by OCSD.
5.4 Training Materials. Contractor shall provide one (1) complete set of printed training
materials for the user and administrator training, including lesson plans for the courses,
in the form of reproducible black and white masters as well as in electronic format using
Page 7 of 29
Return to Aaenda Report
Microsoft Word 2010 or a higher version. OCSD will have the right to duplicate the
training materials for the sole and exclusive use of OCSD.
5.5 Shipment. Items shipped via commercial carrier are FOB destination at the fixed price
stated herein. OCSD is responsible for facility preparation (such as appropriate and
adequate power, janitorial services, air conditioning, space, all electrical drops, cabling,
OCSD furnished items, security, etc.) not provided in Exhibit C, Pricing Detail and
Summary, but necessary to accommodate equipment before, during, and after
installation.
5.6 User Qualifications. OCSD shall use its best efforts to ensure that pe so s operating the
System will be qualified, supervised, and trained in the use of e n c mputers and
normal police operations. Contractor will ensure that ai ing t e System or
System components will be conducted professio n ctiveI that each
operator trained by Contractor is proficient in it
5.7 Transition. Contractor will work wi SD ns r and efficient transitio
from OCSD's current systems to h Sys t inimize disruption to c nt
operations, even if it ne s itate wo g la ning, early morning,
hours. Any requir disr io s to O operations shall be sche d i d n
and approved SID
5.8 Pro' S t ctor agrees to complete t r 'e 't the
ch dp(I d d ' it D, Project Schedul rat a to asonable
( � fdr�O ed on OCSD's input, top s s i n to OCSD during
thi
thi r n the event OCSD in s a e o n f time allocated by
for for OCSD responsibili ' s is of su n itional time is required for
SD to complete OCSD Is r s nsibili ' s der this Agreement, the Project
Schedule will be ad'u c or n ly n at no additional cost to OCSD. Neither party
she unreasonab of ct or component thereof.
6. COMP EN A O AN T M O YMENT
6.1 s do . The t at price to be paid to Contractor in consideration for the Services
t b r ide for Phase 1 shall not exceed ( ) ($ ). This
n she I be the maximum price to be paid to Contractor by OCSD, unless modified
b tual Agreement through the Change Order process described in Section 13.0,
Changes in Work. All prices listed in Exhibit C, Pricing Detail and Summary are valid
until the end of the 365 day Warranty Period and subject to change only through the
change order process as described in Section 13, Changes in Work.
6.2 Terms of Payment. Upon completion of each milestone identified in Exhibit E, Payment
Schedule, Contractor will notify OCSD and request payment for the Services related to
the milestone in accordance with the Schedule. Upon receipt of Contractor's notification
and request for payment, OCSD will review in a timely manner the Services delivered by
Contractor that are associated with the milestone. If it appears to OCSD from the then
available information that the tasks and Services comply with the terms and conditions of
this Agreement, OCSD will provide written authorization for Contractor to invoice OCSD
for the Services related to the milestone. Should OCSD reject Contractor's request for
payment, OCSD will provide in writing the reasons for its rejection within thirty (30) days
of receipt of Contractor's request for payment. Authorization to invoice shall not
Page 8 of 29
Return to Aaenda Report
constitute a waiver of OCSD's right to reject the System, in whole or in part, if the
requirements for Final System Acceptance are not met.
OCSD shall pay all undisputed invoices within forty-five (45) days of receipt. Payment
shall be made by an electronic funds transfer to Contractor's account specked in writing,
or by a check made payable to "(enter Contractor's company name)." and delivered to
(enter Contractor's address), or by any other means mutually acceptable to the parties.
6.3 Retainage. OCSD will withhold twenty-five percent (25%) of each invoice amount
("Retainage"). Within forty-five (45) days after Final System Acceptance OCSD shall
pay Contractor the full Retainage amount. For pre-paid maintenance i s defined by
Contractor's Maintenance Agreement (Exhibit H), OCSD will wi h 50%) of each
invoice amount. Within forty-five (45) days after the e o t e m to ance period,
OCSD shall pay Contractor the full Retainage amoun
6.4 Audit. During the term for this Agra ment g0 iod t e (3) years after
Termination or expiration of this nt, C D a h to audit, either itself or
through a third party, the books n rds in i not limited to the tec al
records) of Contractor rel a to t is eme ontractor's performan to
ensure Contractor omp' n wit t ms and conditions of this a t. T
scope of the i ill e s t ' red to the circumstan dit,
will be c t 'n on ac ' normal business hours nsf, I ly
dis p or r i ontr ctor's normal busines o r t n . n a dits
ha t e c ing to generally accep a c u in to pr
7. ERS
7.1 tractor's Pro'ect Mane r. r ame in ' !dual), Project Manager, will be
Contractor's Project g r n ( n r name of individual), (enter title), will be
Contractor's bac u of a r r he Project. In addition to the specific duties
identifie the toe e t o k contained in Exhibit A, the general duties of
Con to roje a r ' ude, but are not limited to: (a) functioning as a
I a r b twee o ractor's staff and OCSD's staff; (b) coordinating the
o e t ontra or's resources; (c) working with OCSD's Project Manager to plan
a o ac' ities and tasks; (d) meeting on-site with OCSD's Project Manager as
e e tly as deemed necessary by OCSD, at no additional cost to OCSD, to report on
t ro'act's status and resolve outstanding issues; (a) preparing monthly status reports
and submitting each status report no later than five (5) business days prior to the next
scheduled monthly meeting; (f) ensuring Contractor's tasks identified in the Statement of
Work are performed in accordance with the Project Schedule; (g) acting as Contractor's
point of contact for all matters relating to the Project and this Agreement; (h) facilitating
meetings between OCSD and Contractor's executives, when scheduled or requested; (1)
ensuring OCSD's Project Manager or designee receive necessary information through
regular and called meetings, written Documentation, and formal and informal
communications; 0) ensuring only competent, qualified experts from Contractor and
Contractor's subcontractors are utilized on this Project; (k) responding in writing to any
written request from OCSD within five (5) business days from the date of request; and (1)
promptly responding when contacted by OCSD's Project Manager.
In each monthly status report, Contractor's Project Manager shall identify and document
any milestones missed, late deliverables, and any impediments that Contractor detects
Page 9 of 29
Return to Aaentle Report
that might interfere with the successful completion of this Project in the amount of time
allocated by this Agreement. Failure to comply with this requirement shall result in all
costs associated with remedy of the impediment to be the sole and exclusive
responsibility of the Contractor. The costs shall be deducted from the Retainage amount
held by OCSD at the remainder of the project.
7.2 OCSD's Project Manager. OCSD will assign (enter name) as OCSD's Project Manager
for this project. In addition to the specific duties identified in the Statement of Work
contained in Exhibit A, the general duties of OCSD's Project Manager are: (a)
coordinating the assignment of OCSD resources necessary to fulfill OCS 's obligations
under this Agreement; (b) acting as OCSD's point of contact for all m tte s elating to the
Project and this Agreement; and (c) responding in writing to ny n n request from
Contractor within five (5) business days from the date oft st.
7.3 Contractor's Key Personnel. If, at any ti r g lh Agreement,
Contractor is required to change the Projec Kftna an a Contractor will
replace the previous Project Mana h a Pr j r, acceptable to OCSD
within twenty (20) business days. ition, C a to ' Vice President (or a on
of equivalent or greater s 'on ithi ontra nd the new Project a it
meet on-site with D, add j 'o rge to OCSD, within five usi s da
of the chan e e p� a c ating the new Projecj_Ma s in
the Proje i u o ch ul ntil the new Project a,,:g�r s j ti 'ad
an is ull j t the roject, Contractor's a u 'v A4dn r tect
a ag(� e t 'll s the Project Manager' o si III tpfi e i greement.
c die i r anager will not be grou d C a r<]eer other change in
the t is Agreement or the d i es c n acne i it , Project Schedule.
7.4 contracting. Contract ma n t ubcon c ny of its obligations under this
Agreement without t I t n c sent of OCSD. Pursuant to Section 5.1,
Contractor shall a 'mno tra and shall remain fully responsible for the
perform of a o li at sllllffffn r this Agreement. Contractor shall also be fully
respo j t OC th a and omissions of any subcontractor and any persons
ire I o in it ctly to ed by the subcontractor to the same extent Contractor would
n 'b r the acts or omissions of its own agents or employees. Nothing in this
r c tes any contractual obligations by OCSD to any subcontractor($).
7.5 A as to Premises. OCSD shall provide Contractor with reasonable and timely access
to the sites and personnel necessary for Contractor to perform its obligations under this
Agreement. OCSD shall allow Contractor personnel reasonable access to OCSD site
and facilities (telephone, facsimile, parking, etc.) during normal business hours and at
other reasonable times as requested by Contractor and pre-approved by OCSD. The
assistance or presence of OCSD's personnel will not relieve Contractor of any
responsibilities under this Agreement.
7.6 Compliance with Work Rules. Contractor will ensure that, while they are on OCSD
premises, Contractor's personnel and subcontractors will comply with OCSD's working
rules and policies, including OCSD's safety and security policies and procedures.
7.7 Background Checks and Removal of Personnel. Prior to being allowed to perform any
work on this Project, all non-OCSD personnel assigned to the Project may be required to
submit to and pass a background check by California Police Department. In addition,
Page 10 of 29
Return to Mende Report
OCSD shall have the sole and exclusive right to require Contractor to immediately
remove any individual from the Project for any reason deemed to be in the best interests
of OCSD. Contractor shall replace any employee removed from the project within ten
(10) business days of said removal.
7.8 Drug-Free Workplace CONTRACTOR and all its employees and subcontractors must
adhere to the California Drug-Free Workplace Act, Sections 8350 through 8357.
8. INDEPENDENT CONTRACTOR
The relationship of CONTRACTOR to OCSD is that of an independent contra and nothing
herein shall be construed as creating an employment or agency relationshi
CONTRACTOR shall act independently and not as an offi o e Io ee of SD. OCSD
assumes no liability for CONTRACTOR's action and r an a e sponsibility
for taxes, funds, payments or other commitm ntg, i i or sed, by or for
CONTRACTOR. U
CONTRACTOR shall not be con d red n a t of for any purpose wha o
shall CONTRACTOR hav a ri t and h t, commit OCSD to any A e e tra t
or undertaking. CON T (*s I D's name in its pro ti I fo
any advertising p c rp as ith expressed written con .O
CO I o i to any benefits o s@'lPdi listed on
O rb1{ r r employees
Ies including, t i ti n, or compensation,
di bilit i ur acation, holiday or si ay. C R s be responsible for
prow t NTRACTOR's expense, isabi ' , work s o tion or other insurance as
well nses and permits usual nec s or con c i the Services hereunder.
CONTRACTOR shall be b' to o a a y all applicable local, state and federal payroll
and other tax am urred s a e f s hereunder. CONTRACTOR hereby indemnifies
OCSD for an c Ios s I , s, liabilities, damages or penalties suffered by OCSD
arisi u TO 's r ach of this provision.
CON O a of be eligible to join or participate in any benefit plans offered to those
individu Is is d on OCSD's payroll as regular employees. CONTRACTOR shall remain
ineligible such benefits or participation in such benefit plans even if a court later decides that
OCSD misclassified CONTRACTOR for tax purposes.
9. NO SOLICITATION OF EMPLOYEES OR SUBCONTRACTORS
CONTRACTOR agrees that it shall not, during the term of this Agreement and for a period of
one (1) year immediately following termination of this Agreement, or any extension hereof, call
on, solicit, or take away any of the employees or subcontractors about whom CONTRACTOR
became aware as a result of CONTRACTOR's Services to OCSD.
CONTRACTOR acknowledges that OCSD's employees are critical to its business.
CONTRACTOR agrees not to employ or otherwise engage OCSD's employees or
subcontractors during the term of this Agreement and for a period of one (1) year following
termination of this Agreement. Should CONTRACTOR violate this provision, CONTRACTOR
Page 11 of 29
Return to Aaenda Report
will pay OCSD fifty percent (50%) of the former employee's annual salary which payment is in
addition to OCSD's rights and remedies.
10.WARRANTIES
10.1 System Warranty. Contractor warrants that the System will meet the Functional,
Performance and Reliability Specifications and Requirements as defined in this
Agreement. The System and/or each of its subsystems, components and Interfaces will
be capable of operating fully and correctly in conjunction with System related network
and hardware components. Contractor warrants that for the term of this Agreement, the
System will perform as described in this Section 9.0 in material and wor manship and
will remain in good working order. In the event the System do s o meet these
warranties, Contractor shall provide, at no charge, the neces e c s required to
attain the levels or standards contained in these warrantee
10.2 Software Warranties. Contractor warrants that: (�
(a) All Software prepared by Contra der hi$ Air ree of known Defects
viruses, worms and Trojan ho e d an c e ad to disable the So re
because of the passa e o time, a e failu ake payments due, ' e
(except for docu a c 'ty such as password expirati n i
(b) During a th gr am , all Software will meet eexc io al,
P is ility ecifications and Requ e e t herai
1v111
T 1) store all date-related i f t n r c2s I ate Interfaces
Iv' es in a manner that big o n " s th century, for all date
I before, during and after e Y 200 , c , sort, report and otherwise
erate correctly and in a man r o all date information processed,
whether before, duri a e h Y a 000; ( calculate, sort, report and otherwise
operate correc o si e t ner and without interruption regardless of
wheth a dat o hi th S ftware is operated or executed is before, during or
after Y r 20 0; ) p and display all dates with a four-digit date so that the
c� t is n mbig o s dentified; and (5) handle all leap years correctly;
(e 1p,I S are rovided by Contractor have been fully tested in accordance with best
i u ry practices and are free of known Defects.
10.3 Work Quality Warranty. Contractor warrants that all work performed by Contractor
and/or its subcontractors under this Agreement will conform to best industry practices
and will be performed in a professional and workmanlike manner by staff with the
necessary skills, experience and knowledge to do so.
10.4 Warranty. Contractor warrants that, for the Term of this Agreement, the System will
comply with all processing and reporting requirements for State and Federal laws, and
regulations. If the Software requires updating due to a change in a State or Federal law,
or regulation, affecting OCSD, Contractor will provide these changes per a mutually
agreed to schedule at no additional charge to OCSD. Notwithstanding this provision, in
no event shall Contractor provide said update later than the date required by the State or
Federal law or regulation affecting OCSD. In the event OCSD is notified of a change in
State or Federal law or regulations that requires updating the Software, OCSD will notify
Contractor of that change as soon as reasonably possible.
Page 12 of 29
Return to Mende Report
10.5 Documentation Warranty. Contractor warrants that, for the Term of this Agreement, the
Documentation for all Software provided by Contractor will be complete and accurate in
all material respects. This includes documentation on any Custom Modification,
Interfaces or Configuration Changes made to the System by Contractor during the
installation process.
10.6 System Reliability Warranty. During the ninety (90) day Final System Acceptance Test
Period, Contractor warrants the System will be fully and properly operational for (enter
percentage required in text format) (enter percentage in numeric format %)of the time or
better with no reproducible Defects ("System Uptime Standard"). At the e d of this test
period, if the System availability has not met or exceeded this requ' a at, the Final
System Acceptance Test period will continue until this leve o e bi ty has been
demonstrated for at least sixty (60) consecutive calendar he S to shall not be
considered down if it is fully operational in a bac o via re I ement with
spares, pending the receipt of when Cont h d it the failed
component. Downtime will begin when Cont cRor�h b n n i f the Defect that
creates a violation of this warranty. U
The Mobile Workforce co ent 0 Syste not cause any matey' I in
network performan oOr dela blems with other equipm t n CS
network.
Co to r spon 1 le for delays cause d c n o Iic
e�s a n s s the transport mediu n a o al�c n e system
o t a1,pa of higher priority applica o o s ry re sts (as identified
by not be impacted by I prio y sys
10.7 ice Warrant . During e t f is Ag am t, Contractor warrants that it will
remedy any failure, m ti as o nonconformity in the System, as follows:
10.7.1 P It On P D c r purposes of this Warranty, a P1 Defect includes,
s of li it o, s data, data corruption, a System or subsystem abort,
a y ition a productive use of the System or any component thereof is
O r i it and no acceptable workaround is available. Examples of P1 Defects
ud but are not limited to:
(a) em is down
(b) Application, module or Interface is down or non-operational
(c) An Interface or application critical to System operation is substantially impaired or
problematic
(d) Loss of data or data corruption after data has been entered
(a) A subsystem or component thereof is non-functional
(f) Productive use is prohibited
(g) a Server or workstation goes down
Page 13 of 29
Return to Mende Report
(h) two or more workstations or mobile devices lockup or malfunction intermittently
(i) a user cannot log on to the System
Contractor shall respond with as many qualified and knowledgeable representatives as
necessary within thirty (30) minutes after notification by OCSD, to remedy a P1 Defect. The
representatives shall furnish uninterrupted, continuous efforts to remedy the P1 Defect on an
emergency basis. During this time, Contractor's representatives shall provide a verbal or written
status report to OCSD's Project Manager every two (2) hours until the P1 Defect is remedied. If
the P1 Defect is not remedied within eight (8) hours of its initial report, Con ractor's Vice
President of Customer Support or the Customer Support Manager shall cfacSD Director
of Information Technology (or his/her designee) and report on what e ongtaken to
resolve the P1 Defect and shall provide an expected time frame f ilure. If the
P1 Defect is not remedied within twenty-four (24) hours of for will take
all measures necessary to restore the System or the r ub t tn, including
sending technical support personnel to OCSD's inst la ' t ( 'm i and by the most
expeditious method, delivering tempora s ms r co p e is replace malfunctionin
systems or components, and take an othe n t OCSD determines e
necessary to return the System o ajo u tem t ce. OCSD shall not u sns,
require on-site resources if Q ct can a died via remote access.
10.7.2 P ' ri o 2 efe s. r purposes of this W rr t a i
u 1 1 its to, compromise of the 1 o h am,
Ns m ace to an external sy o u i e nd user is
Uub t n i impacted and an accepta k r n i of a lable. Examples
efacts include, but are imit o:
( software function does wo c rr ctly (e r a example, if possible)
(b) The user cann p c r p t it c rect calculations
(c) Syst � yst a ace performance is deemed unacceptable per the
(� tiohal, P rfor a e, nd Reliability Specifications and Requirements.
(d VnQor I crcro streets are displayed on a verified address or location
(a) �J of create a scheduled event
(f) A single workstation or mobile device locks up or malfunctions intermittently
Contractor shall respond to any request for service for a P2 Defect as soon as is reasonably
possible, but no later than one (1) hour after receipt of notification from OCSD. Contractor shall
provide a response by qualified and knowledgeable representative(s) and the representative(s)
shall furnish uninterrupted, continuous efforts to remedy the P2 Defect within twenty-four (24)
hours. If resolution requires more than twenty-four (24) hours, Contractor's representatives
shall provide an oral or written status report to OCSD's Project Manager every eight (8) hours.
If the P2 Defect is not remedied within forty-eight (48) hours of its initial report, Contractor's
Customer Support Manager shall contact OCSD's Director of Information Technology (or their
designee) and report on what efforts are being taken to resolve the P2 Defect and an expected
time frame for correcting the failure. If the P2 Defect is not remedied within seventy-two (72)
hours of its initial report, Contractor shall take all measures necessary to restore the System or
Page 14 of 29
Return to Mende Report
the major subsystem to operation, including sending technical support personnel to OCSD's
installation site(s) immediately and by the most expeditious method, delivering temporary
systems or components to replace malfunctioning systems or components, and take any other
actions OCSD determines to be necessary to return the System or the major subsystem to
service. OCSD shall not unreasonably require on-site resources if the Defects can be remedied
via remote access.
10.7.3 Priority Three (P3) Defects. For purposes of this Warranty, a P3 Defect includes,
but is not limited to, incomplete operation of a System component which impacts
productivity of staff but an acceptable workaround is gene!Ally available.
Examples of P3 Defects include but are not limited to:
(a) Single workstation or mobile device locks up intermittent t i freq ti
(b) Minor deficiencies occur intermittently in any /moo en t S
(c) A mapping function doesn't work a fail r doffs t ' re with the user's abilil
to perform required tasks �J
(d) A report does not Oil epo p s incorrect results
(e) An inco aaii re ant 'n a dialog box O 0
Co tor so r nd request for service for a f a yyo asonably
p , b t 160 r ight (8) hours after re i o 'fic ti frlfm D. If the P3
D e is t r e within three (3) day ontr c r n ti shall provide daily
statu e o OCSD's Project Manag . f t P3 D is edied within ten (10)days
of it 'nit report, Contractor's Vic r t f Cust ervices or the Customer Support
Manager shall contact OCSD' i o o n ation Ted nology (or his or her designee) and
report on what efforts ar i e t r m the P3 Defect and provide an expected time
frame for resolu ' n. If e e is not remedied within thirty (30) days, it shall be
reclassified a P fact a ursuant to Section 8.13.2 above.
'kB1. ri our Defects. For purposes of this Warranty, a P4 Defect consists
U thos problems deemed by OCSD to be mainly cosmetic. Examples of P4
e acts include, but are not limited to:
(a) A misspelled word in the header of a report or in a help file
(b) A minor error in output that does not interfere with the correct outputting of statistics
from the system
(c) Minor printing errors in a report that does not impede OCSD's ability to utilize the
report for the required purpose.
(d) Minor variances in text where the help file does not match the documentation
(a) Minor variances in text where the documentation doesn't match the functionality but
the System works properly
Page 15 of 29
Return to Aaende Report
(f) A print button doesn't work but the user can still print without opening or closing
multiple windows or loosing data or rebooting the system.
Contractor will make every reasonable effort to remedy P4 defects deemed problematic to
OCSD in the next Fix pack or immediately upon their commercial availability whichever occurs
first. If the volume of P4 Defects is deemed to be unreasonable by OCSD at any time during the
term of this Agreement, all outstanding P4 Defects will be prioritized by OCSD and submitted to
Contractor identifying those Defects that are deemed to be particularly onerous to OCSD.
Contractor agrees that those Defects identified, as being particularly onerous to OCSD, will then
be reclassified as a P3 Defect and remedied pursuant to Section 8.13.3 above.
10.7.5 Multiple Failures. Any situation involving multiple, co to n ous failures,
regardless of their individual priorities, will be reg a 'on One Defect
if, in OCSD's determination, the situation res i havin sentially no
productive use of the System or a majo to
10.7.6 Permanent Cure. If OCSD is a o ka r temporary cure as the
remedy for any reported f ontr t h II vide and install at no to
OCSD a germane rrec'on ure an (10) days after thent
cured becom as I
10.7.7 T - rr ove e. Third-party product r� s-
hr - the iginal manufacturer.
1 ST OR DAMAGED DAT O
If an to is lost or damaged a e r It of mired by Contractor or its
emp a agents, representative r s t ctors, o r for shall, at its own expense and
to the extent possible, promp e I e r e n rate the ate from OCSD's machine-readable
supporting material, or o t ' wn a pe a new machine-readable copy of the lost or
damaged data O D's a s rc s. Contractor shall not be responsible for any
expenses the a t re 1 O ' failure to maintain backup data in accordance with
gene r pt d f rmab n e ology practices.
12. 8 1 NICE
12.1 ���JJJ Ian. Within sixty (60) days of contract execution, Contractor shall deliver to OCSD
a draft test plan designed to adequately test all functions and components of the System
in a test environment and successfully demonstrate the System meets all Functional,
Performance and Reliability Specifications and Requirements as stated in this
Agreement. Upon receipt, OCSD shall review the proposed test plan and meet with
Contractor representatives to discuss and update the document to meet all OCSD
requirements. The test plan shall supplement and not conflict with the terms of this
Agreement. In the event of a conflict between the documents, the terms and conditions
of this Agreement shall prevail.
The parties will finalize the Test Plan thirty (30) days prior to the start date of the
functional test. As a prerequisite to identifying a start date for any test period, the
subsystem must pass functional, performance (load) and integration tests performed by
Contractor. The functional test will be to demonstrate to OCSD that the all Software
components operate in substantial compliance with the Contractor documentation and
Page 16 of 29
Return to Aaenda Report
are free of any known Defects. This test will be followed by a load test to test the
performance of the subsystem, followed by system integration tests to verify functional
and performance capabilities of all related Interfaces. The parties will then update the
Test Plan based on the results of each functional, performance, and integration test.
Upon successful completion of the functional, performance and integration tests, a start
date for live operations will be determined by mutual Agreement. Adjustments to the
Project Schedule, if required, will be made through OCSD-approved change order
process.
12.2 Final System Acceptance Test Period. Upon successful completion of all t sks identified
in this Agreement, a start date for the ninety (90) day Final Syste c ptance Test
Period for the System shall be determined by OCSD. The pur os a Final System
Acceptance Test is to verify that all P1, P2 and P3 D ave a successfully
repaired, all Functional, Performance and Reliability i 'c ti n and irements of
this Agreement been successfully completed t cto II s d conditions
of this Agreement have been successfully ac eyed,b act
During the Final System Accept t Pa 'o\ \1 S hall provide Contract ith
written notice of any S ste nd/o o re D Upon receiving the ti e y
P1 or P2 Defect, o nxx fect, for shall: (1) act diligent) co us
to correct t e ' e ie`QJD c s reasonably possibl a d i di tel
upon cc Is or do p de OCSD with written i Utr, n t t h i ti ad
De c a b . W ile the identified Defe i b it t its
le it, nt est and use the Syste . Q
Fo n 2 Defects reported, met al am Acceptance Test
r hall stop, Contractor sh re r the t, an notify OCSD that the
air has been completed O h verif hat a Defect has been repaired and
the ninety (90) day Fi st m to ce Test Period will restart at the beginning for
a new ninety (9V) SD
Sy t eptance Test Period. For any P3 Defects
reported nine i I ystem Acceptance Test Period will be "suspended"
until C n ct r repe (s). Upon receipt of notification that Contractor has
em th efe will verify the Defect has been repaired and the ninety
( c
I cceptance Test Period will "resume' for the remainder of the unexpired
i n o h st period but in no event, for a period of less than sixty (60) days. Not
s t n sixty (60) days of continuous operational use of the System without a
r rence of a P3 Defect must be achieved as a pre-requisite to filing application to
OCSD for Final System Acceptance of the System installed. OCSD will make
reasonable efforts to find and report all errors as they occur, and not unreasonably delay
Final System Acceptance. The process described herein will continue until all identified
P1, P2 and P3 Defects are remedied.
P4 Defects will not be a reason for OCSD to withhold Final System Acceptance unless
the volume of P4 Defects is deemed to be unreasonable by OCSD. In that event, all
outstanding P4 Defects will be prioritized by OCSD and submitted to Contractor
identifying those Defects that are deemed to be particularly onerous to OCSD.
Contractor agrees that those Defects identified as being particularly onerous to OCSD
will then be remedied within either a) ninety days or b) prior to and as a condition of Final
Acceptance, whichever is sooner.
Page 17 of 29
Return to Mende Report
OCSD is not obligated to allow Contractor to commence curative action with respect to
any P1, P2 or P3 Defect more than once. In the event OCSD determines the number or
extent of the Defects to be unacceptable, OCSD may initiate such additional tests, as
OCSD deems necessary in order to fully determine the extent of the problems and
whether the curative action by Contractor has resulted in a successful repair. Contractor
shall provide the necessary on-site support required by OCSD during the testing process
at no additional cost to OCSD.
13. COMPLETION DATES-DEADLINE FOR OPERATIONAL USE
13.1 Time is of the Essence. The parties acknowledge and agree that tim i the essence
in completing the Project and performing the obligations set fort in is g eement. The
term of this Agreement may not be extended except r vide 'n action 14.0,
Changes in Work.
13.2 Effect on Project Schedule. The time peri 0t,0 f q am s forth in System
Acceptance, Section 12.0, will not Co tr cto f o ing with the completio
dates set forth in the Project S e U t ' e specified, the com on
dates set forth in the Proj c Sch dull onstit dates by which Con st
complete the testin egu y thi ant and achieve Final S e4 an
of the System ' st I n
13.3 De i f r i Acceptance. The System us b u1 yl 0 ti at i full
WegbIld
a i System Acceptance r I®r nter date
h Contractor).
13 Acce tance. Onc he al Sys A ce Test Period has been
ompleted an C s eterrm d t all terms and conditions of this
Agreement have ben e f ly c mpleted, OCSD will execute and provide
Contractor with I y to ance Document. Should OCSD reject
Contrac requ t o I y m Acceptance, OCSD will provide in writing the
reaso f t eje 'o 'thi t 1 (30)days of receipt of Contractor's request.
14. Z K
If, in th u e of performing this Agreement, Contractor or OCSD proposes changes to the
Project, informal consultation with the other party indicates that a change in the terms and
conditions of this Agreement may be warranted, Contractor or OCSD may request a change in
this Agreement. The changes must be processed in the following manner: Contractor will
forward a letter outlining the proposed changes, including any changes in the fees, the
Statement of Work, the Project Schedule, or related documents, to OCSD. The parties will
meet to discuss and negotiate the requested change order documents. Upon completion of
those negotiations, the negotiated change order documents will be submitted to OCSD for
approval. Upon approval by OCSD, an "Order to Proceed" with the approved changes will be
submitted to Contractor. Any change order will not render ineffective or invalidate any other
portions of this Agreement.
15. NOTICES
All notices under this Agreement must be in writing. Written notice shall be sent by registered or
cert'fiied mail, postage prepaid, return receipt requested, or by any other overnight delivery
service which delivers to the noticed destination and provides proof of delivery to the sender.
Page 18 of 29
Return to Mende Report
Any facsimile notice must be followed within three (3)days by written notice. All notices shall be
effective when first received at the following addresses:
OCSD: Clarice M. Marcin
Senior Contracts Administrator
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, CA 92708-7018
CONTRACTOR: Company
16. DISPUTE RESOLUTION
If a dispute arises out of or relat o IN a men , the f lowing procedure will b ed t
resolve any questions of fat rp etati n. i the parties will each reduce t 's u a d
their respective positio rim� a h y wi an forward a copy to th a th
proposed resolut' i 1 erY(1 ) u ne ays, each party will re o r al.
commentin n solu ' and offering addiliona gs 'o s f re I ti , if
appr Hat a b I t is process does not result ' Ily r olution,
th i g d I be forwarded to OCS 1 o o I o chnology for
re o S or of Information Te olo y 'd r h s and resolutions
pro a ch party and may then dir a s utio Is . In such cases, the action
Of rector of Information will b S 's final position on the matter.
Nothing in this procedure pro ' 'ts h s r seek! emedies available to them at law.
In the event of a dispute s t e nStc0 on interpretation of this Agreement, or any rights
or obligationsterdispute
r, a arti s irst attempt, in good faith, to resolve the dispute by
median Tsha u select a mediator to facilitate the resolution of the dispute.
If th P ible agree on a mediator, the mediation shall be conducted in
actor aommercial Mediation Rules of the American Arbitration Agreement,
throng t resolution procedures of Judicial Arbitration through Mediation
Service o range County ("JAMS"), or any similar organization or entity conducting an
alternate dispute resolution process.
In the event the Parties are unable to timely resolve the dispute through mediation, the issues in
dispute shall be submitted to arbitration pursuant to California Code of Civil Procedure, Part 3,
Title 9, Sections 1280 at seq. For such purpose, an agreed arbitrator shall be selected, or in the
absence of Agreement, each party shall select an arbitrator, and those two arbitrators shall
select a third. Discovery may be conducted in connection with the arbitration proceeding
pursuant to California Code of Civil Procedure Section 1283.05. The arbitrator, or three
arbitrators acting as a board, shall take such evidence and make such investigation as deemed
appropriate and shall render a written decision on the matter in question. The arbitrator shall
decide each and every dispute in accordance with the laws of the State of California. The
arbitrator's decision and award shall be subject to review for errors of fact or law in the Superior
Court for the County of Orange, with a right of appeal from any judgment issued therein.
Page 19 of 29
Return to Mende Report
17. FORCE MAJEURE
Neither party shall be deemed to be in default of any provision of this Agreement or be liable for
any delay, failure in performance, or interruption of service resulting from ads of war, acts of
terrorism, ads of God, ads of civil or military authority, civil disturbance, or any other cause
beyond its reasonable control if both of the following conditions are satisfied: (1) the failure or
delay could not have been prevented by reasonable precautions, and cannot reasonably be
circumvented by the non-performing party through the use of OCSD-approved alternate
sources, OCSD-approved work-around plans, or other OCSD-approved means; and (2) the
failure or delay is caused, directly or indirectly, by fire, flood, earthquake, sto elements of
nature or ads of God, ads of war, terrorism, riots, civil disorders, rebellions r r v lutions, court
order, or other circumstances beyond the non-performing party's c ntr (`64cl ding ads or
omissions of the non-performing party's vendors or subcontractor .
Upon the occurrence of an event which satisfies both ov 'ti ce Majeure
Event"), the non-performing party will be excuse fyyy rth mance of those
obligations under this Agreement that are d by the Fttrc 'e vent for as long as (a
the Force Majeure Event continues; d the o - e o ng party continues t se
commercially reasonable efforts t r m an erfor whenever and to wha t
possible without delay.
Q
Upon the occurr c aje re nt, the non-performin rt wi i ify
the other rt by o e co irmed by written notic th f f ure
n u I e n r orce If Majeure Event 'll e r in?�a detail the
n u t e or re Event. If any Force e t van Contractor from
pe ormin i s ons for more than thi ) d s, y er mate this Agreement
with rt bligation or liability tc Co ract
Labor shortages, strikes, sl r)"rcl4ai
lockouts, industrial disturbances, and other
labor disputes do not n t Events" and are not excused under this
provision.
18. 1 E Fr(C�T N
18.1 n r �' tion. Contractor shall indemnify, defend and hold OCSD and its officers,
an , and employees harmless from and against any and all claims, losses, damages,
o igations, liabilities judgments, cost, demands and expenses (including attorney fees)
arising from:
(a) Any infringement of any copyright, trademark, patent, or other proprietary right,
or misappropriation of any trade secrets in connection with any Software,
Documentation, Services or other Products supplied by Contractor in connection with
this Agreement;
(b) Any act(s) of negligence, professional negligence, or willful misconduct by
Contractor or any of its agents, employees or subcontractors in relation to the rendition
of Services provided pursuant to this Agreement, including, but not limited to, any
liability caused by an accident or other occurrence resulting in bodily injury, death,
sickness or disease to any person(s) or damage or destruction to any property, real or
personal, excepting only claims or litigation arising from the sole negligence or willful
misconduct of OCSD; or
Page 20 of 29
Return to Mende Report
(c) OCSD's refusal to comply with a request under the California Public Records Act
for records that Contractor believes to contain confidential trade secret information after
being requested by Contractor not to produce it; or
(d) Any claims by any persons or entities supplying labor or material to Contractor in
connection with the performance of Contractors obligations under this Agreement.
Contractor agrees to reimburse OCSD for any expenditure, including reasonable
attorney's fees, OCSD may incur by reason of such matters, and, if requested by OCSD,
will defend any such suits at the cost and expense of Contractor.
18.2 Infringement Claims. Indemnity for infringement claims is contingent up OCSD: (a)
giving prompt notice to Contractor if Contractor is unaware of the cl 'm b) Contractor
having control over the defense of the claim, with input from n all matters
affecting OCSD; and (c) OCSD reasonably cooperating in a rose t claim.
If an infringement claim occurs, Contractor i y ) r e receipt of
OCSD's written notice of the claim or the dat h tra r becomes aware
of the claim, whichever is sooner ei er: ) ro u f D the right to contiu
using the affected Product, ervi e, yste o nt or Interface and deli or
provide the Product, S ubs to mpo , or Interface to OCSD I it
or replace the inf i n P u t, S i s bsystem, component, or a at 't
becomes n i ri r onnance of the Syat o s b t s,
compone is r rf s is of adversely affecte y�.(h r t or
mo ifi to n Contractor is unable to co y it it r '0 or(b)
f t i a r h 't ' irty (30) days, OCS t 'n tlt-s A r nt without
u er Ii n to Contractor. In the e a io 'n ition to any other
g I or ' s available to OCSD"Czhfyict0 will re d D ithin ten (10) days of
C ' notice of termination e i n fees O ai Contractor for the Product,
rvice, subsystem, com n t r n rface. inability to comply with either
subsection (a) or t i p ra r h a ses the System to fail to meet the Functional,
Performance an R i e if ati and Requirements or to otherwise become
ineffecti ontr t i e un OCSD all fees paid to Contractor under this
A ree ept�
19.T V IU
19.1 OCSD reserves the right to terminate this Agreement for its convenience, with or without
cause, in whole or in part, at any time, by written notice from OCSD, (delivered by
certified mail, return receipt requested) of intent to terminate. Upon receipt of a
termination notice, CONTRACTOR shall immediately discontinue all work under this
Agreement (unless the notice directs otherwise). OCSD shall thereafter, within thirty
(30) days, pay CONTRACTOR for work performed (cost and fee) to the date of
termination. CONTRACTOR expressly waives any claim to receive anticipated profits to
be earned during the uncompleted portion of this Agreement. Such notice of termination
shall terminate this Agreement and release OCSD from any further fee, cost or claim
hereunder by CONTRACTOR other than for work performed to the date of termination.
19.2 OCSD reserves the right to terminate this Agreement immediately upon OCSD'S
determination that CONTRACTOR is not meeting specification requirements, if the level
of service is inadequate, or any other default of this Agreement.
Page 21 of 29
Return to Mende Report
19.3 OCSD may also immediately cancel for default of this Agreement in whole or in part by
written notice to CONTRACTOR:
• if CONTRACTOR becomes insolvent or files a petition under the Bankruptcy Act; or
• if CONTRACTOR sells its business; or
• if CONTRACTOR breaches any of the terms of this Agreement; or if total amount of
compensation exceeds the amount authorized under this Agreement.
19.4 All OCSD property in the possession or control of CONTRACTOR at b returned by
CONTRACTOR to OCSD upon demand, or at the termin ion i Agreement,
whichever occurs first.
19.5 In addition to the above grounds, OCSD ins i t upon the
occurrence of the following events, each of w is a us urination:
(a) The System is unable to e e n In I, erformance and Rel ity
Specifications and R u e ant an is ins snot cured or Contra of
presented a plan c}}��r c ptab a SD within thirty (30) days e 0 D iv
Contractor w e otjde;
(b) C n ct r late ny material task, sub st m oro In e by
th @p I ti a cified in the Project S e, n s ig r e at failure
wi ihka ys after demand by OCSD o tr ct r so, vided that if any
s h cannot reasonably be died in t ( 0) ay period, OCSD will
n t inate this Agreement ' ont ctor co n remedying of that failure
ithin that ten (10) da pWrioddafter n ' es diligently and in good faith to
take such steps as a remedy that failure, and that failure is in fact
remedied 'ithi a 'on thirty (30) days, after which OCSD will be
entitle xerci e s 'gunder this subsection;
a or a s to ec all problems identified in a Defect notice as required by the
o greement.
19.6 u e Sion of Services. Notwithstanding any other provision of this Agreement, if
disputes an allegation of default by Contractor, Contractor shall not terminate this
Agreement, suspend or limit Services or warranties, or repossess, disable or render
unusable any Software supplied by Contractor, unless: (a)the parties agree in writing; or
(b)a court of competent jurisdiction determines otherwise.
19.7 Transition of Services. Upon termination or expiration of this Agreement, Contractor will
cooperate with OCSD to assist with the orderly transfer of services, functions, and
operations provided by Contractor under this Agreement to another provider or to OCSD
as determined by OCSD in its sole discretion. Prior to the termination or expiration of
this Agreement, OCSD may require Contractor to perform those transition services
described below that OCSD deems necessary to migrate Contractor's work to another
provider or to OCSD. Transition services may include, but are not limited to the
following:
19.7.1 Pre-Migration Services.
Page 22 of 29
Return to Aaenda Report
(a) Working with OCSD to jointly develop a mutually agreed upon Transition Services Plan
to facilitate the termination of the services;
(b) Notifying all affected vendors and subcontractors of Contractor; and
(c) Freezing all non-critical changes to the System.
19.7.2 Migration and Post-Migration.
(a) Performing the Transition Services Plan activities.
(b) Answering questions regarding the services performed by Contra o t e System on
an as-needed basis;
(c) Providing such other reasonable services ne t e u e ransition to
a new System.
OCSD agrees to pay Contractor for tran i i rvic o rate of $150 per hour s
reasonable out-of-pocket expens oft c d ten er t (10%) of the aggre o I
compensation paid.
19.8 Other R i Q iti to er remedies availabl I 't 'f he
CO i to mak elivery of the goods rQl e p i its
bli a io s e i ement, or if OCSD reed t o o qr--§e r revokes
p c f ds or Services, OCSD a ) t A e t; (2) recover
w ve a nt of the purchase 'ce s id or (3) cover" by
r a ing, or contracting to pur se, tit o r rvices for those due from
RACTOR. In the ev a cts to c er as described in (3), OCSD shall
be entitled to recover C as da gas the difference between the cost
of the substitute s r ice d contract price, together with any incidental or
conseque tial da ge
20. C E 1I FO
20.1 D on id tial Information. Contractor will regard all OCSD files and data as
e tia formation. Contractor will not disclose confidential information without the
i consent of OCSD.
CONTRACTOR agrees to maintain in confidence and not disclose to any person, firm, or
corporation, without OCSD's prior written consent, any information, knowledge or data relating
to the products, process, or operation of OCSD.
CONTRACTOR further agrees to maintain in confidence and not to disclose to any person, firm,
or corporation any data, information, technology, or material developed or obtained by
CONTRACTOR during the term of this Agreement.
CONTRACTOR agrees as follows:
• To use the Confidential Information only for the purposes described herein; to not
reproduce the Confidential Information; to hold in confidence and protect the Confidential
Information from dissemination to and use by anyone not a party to this Agreement; and
Page 23 of 29
Return to Aaenda Report
to not use the Confidential Information to benefit itself or others.
• To restrict access to the Confidential Information to its CONTRACTOR or personnel of
CONTRACTOR who (1) have a need to have such access and (2) have been advised of
and have agreed in writing to treat such information in accordance with the terms of this
Agreement.
• To return all Confidential Information in CONTRACTOR's possession upon termination
of this Agreement or upon OCSD's request, whichever occurs first.
• To hold in confidence information and materials, if any, developed pursuant to the
Services hereunder.
The provisions of this Section shall survive termination or expiration of this r ent and shall
continue for so long as the material remains confidential.
20.2 Contractor Confidential Information. OCSD and o a r' fi s and data,
Contractor's Application Software and ocu nn n ny nformation or data
provided by Contractor that is a id t is a al" or "proprietary' as
Contractor's confidential in mat n. SD 'I t i ose Contractor's con tia
information except t S s o ct rs a contractors, as iden ' is
Agreement, who v�o�ki or it a System who agree to ab' r s
this provisi it t t i ' e sent of Contractor
Th ab ve n o of apply to any informatio hi h:
I Ir he public domain at the f d c s r b mes available to
t is without a breach of ree ent;
Was, as between OC n t ctor, I in the possession of the recipient
without any o Iig ti no cc fi an 'a , prior to its receipt under this Agreement;
(c) Is ived d n tly fr a third party free who is free to disclose the
oy\ \t n;
(� In' ct of a judicial subpoena or similar process for disclosure in connection
t ction or proceeding, provided that notice of the demand is provided to
ow the interested party an opportunity to seek a protective order or other
appropriate remedy prior to disclosure; or
(e) Is independently developed.
21.OWNERSHIP OF INTELLECTUAL PROPERTY
CONTRACTOR agrees that all designs, plans, reports, specifications, drawings, schematics,
prototypes, models, inventions, and all other information and items made during the course of
this Agreement and arising from the Services (hereinafter referred to as "New Developments")
shall be and are assigned to OCSD as its sole and exclusive property.
CONTRACTOR agrees to promptly disclose to OCSD all such New Developments. Upon
OCSD's request, CONTRACTOR agrees to assist OCSD, at OCSD's expense, to obtain patents
or copyrights for such New Developments, including the disclosure of all pertinent information
and data with respect thereto, the execution of all applications, specifications, assignments, and
Page 24 of 29
Return to Mende Rom
all other instruments and papers which OCSD shall deem necessary to apply for and to assign
or convey to OCSD, its successors and assigns, the sole and exclusive right, title and interest in
such New Developments. CONTRACTOR agrees to obtain or has obtained written assurances
from its employees and contract personnel of their Agreement to the terms hereof with regard to
New Developments and Confidential Information.
CONTRACTOR warrants that CONTRACTOR has good title to any New Developments, and the
right to assign New Developments to OCSD free of any proprietary rights of any other party or
any other encumbrance whatever.
The originals of all computations, drawings, designs, graphics, studies re o , manuals,
photographs, videotapes, data, computer files, and other documents ep e r caused to be
prepared by CONTRACTOR or its subcontractors in connectio i ese a ices shall be
delivered to and shall become the exclusive property of D m tilize these
documents for OCSD applications on other projects or s ns t ' p s own risk.
22. RIGHT TO REVIEW SERVICES, FACT
OCSD reserves the right to re is ny p rti f the 'ces performed by CO T R
under this Agreement, a d �J TOR g s o cooperate to the fullest e t s ib .
CONTRACTOR a n t OC D ch reports, statistical n t a 'on
pertaining rvices as shall be reason e� t ry out
its rA a die iIi s er its Contracts with n o e or�n t s and any
of a re t a ' to the development of t e e ( n n c nection with the
iss n is statements and other act es wi e c to a offering, sale, and
issu o i onds and other obligat'o .
The right of OCSD to re is r a pr v d 'ngs, specifications, procedures, instructions,
reports, test results, al ti s ul , or other data that are developed by
CONTRACTOot li v C OR of any obligation set forth herein.
23. 1
CON �O I subcontractors shall purchase and maintain, throughout the life of this
Agree n a any periods of warranty or extensions, insurance in amounts equal to the
requirem s set forth in the signed Acknowledgement of Insurance Requirements, Exhibit "U.
CONTRACTOR shall not commence work under this Agreement until all required insurance is
obtained in a form acceptable to OCSD, nor shall CONTRACTOR allow any subcontractor to
commence service pursuant to a subcontract until all insurance required of the subcontractor
has been obtained. Failure to maintain required insurance coverage shall result in termination
of this Agreement.
24.ATTORNEY'S FEES
If any action at law or inequity or if any proceeding in the form of an Alternative Dispute
Resolution (ADR) is necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which he may be entitled.
25.WAIVER
Page 25 of 29
Return to Mende Report
The waiver by either party of any of its rights or remedies in enforcing any action for breach
under this Agreement in a particular instance shall not be considered as a waiver of any rights,
remedies, or actions for breach in subsequent instances.
26.SEVERABILITY
If any section, subsection, or provision of this Agreement, or any Agreement or instrument
contemplated hereby, or the application of such section, subsection, or provision is held invalid,
the remainder of this Agreement or instrument in the application of such section, subsection or
provision to persons or circumstances other than those to which it is held invalid shall not be
affected thereby, unless the effect of such invalidity shall be to substa tia y frustrate the
expectations of the Parties.
If any provision of this Agreement is void, voidable, unenforc le o e al but o Id not be so
if it were rewritten to eliminate the terms that were fou Vol I c le, or illegal
and such rewrite would not affect the intent of the pa is th ro 's all be rewritten to
be enforceable and legal. If it cannot be r n wi h ut h i bargain that the parties
have agreed to, then it shall be stricken f gre
27.ASSIGNMENT
Contractor shall e e an ub s n ssign any rights under t t e
prior writte s ny s attempted delegatio o a rye b o
2�\� §y OF VENDOR 0
In th n change !n Control of Co act , OCS II option of terminating this
Agr by written notice to Co c o rector tify OCSD within ten (10) days of
the occurrence of a change ' C nyfof, s s in this action, "Control' is defined as the
possession, direct or indi It e ,
(a) the in rs 'p or t the voting of fifty-one percent (51%) or more of the
i 1 to s, va o ling power in Contractor; or
(b `(h er direct or cause the direction of the management and policies of
t or, whether through ownership of voting securities, by contract, or otherwise.
29.APPLICABLE LAW
This Agreement and parties' performance hereunder shall be governed in accordance with the
laws of the State of California, County of Orange. Venue for any judicial proceedings relating to
the subject matter of this Agreement shall be in either the state or federal courts in Orange
County, California.
30.WHOLE CONTRACT
This Agreement sets forth the entire Agreement and understanding between the parties and
supersedes all other agreements, oral or written, between the parties.
31. MISCELLANEOUS
Page 26 of 29
Return to Agenda Report
31.1 No Rights in Third Parties. This Agreement is made for the benefit of OCSD and
Contractor and not for the benefit of any third parties.
31.2 Days:
• Calendar Days: Unless otherwise stated, all references in this Agreement to days refer
to calendar days.
• The term "workday'. Workdays are defined as all days that are not Saturday, Sunday, or
legally observed holidays. Meetings with OCSD staff shall be schedule rom Monday
through Thursday between the hours of SAM and 4PM (exception is a at ons staff who
maintain plant operations 24/7 and work a rotated 12-hour s 'ft) d h II conform to
OCSD work schedules. OCSD review periods shall lude g Ily observed
holidays.
31.3 Headings. The headings used in this Agree r o fo onvenience of the
parties. They are not intended to ct am a in o i t p tion of this Agreemen
31.4 Amendments. No a t or m ' is Lion is Agreement is vali a 's
contained in a wr i `ign b both as
31.5 A r vat i i �J I a Is or consents requ' 0p- o f t is
Ag e n i ing to be effective. v
31 6 a or si ns. This Agreement is i n n i as the benefit of the
s n air respective success a d as ' ns.
31.7 ease, n d Contractor h�e er o the e ce of this Agreement in any press
release, advertisin o er Is di tri ut d to prospective customers without the prior
written consent o
31.8 B in s e se a d�Oisr s. CONTRACTOR represents and warrants to OCSD that
Wb�,snII tic es permits, qualification and approvals of whatever nature that
ed to engage in this work. Any and all fees required by State, County,
cipal laws, codes and/or tariffs that pertain to work performed under the
eement will be paid by CONTRACTOR.
31.9 Construction of Agreement. This Agreement is the product of joint discussions and
negotiations at arms' length between the parties, both of whom are sophisticated and
knowledgeable in business matters and both of whom have relied on the advice of
independent legal counsel. Any rule of law which would require interpretation of this
Agreement against the party that drafted it shall have no application to this Agreement.
31.10 Survival of Provisions. All provisions of this Agreement that by their nature would
reasonably be expected to continue after the termination of this Agreement will survive
the termination of this Agreement, including, without limitation, the following Sections
and Paragraphs:
• 6.4 Audit
• 8.0 Independent Contractor
Page 27 of 29
Return to Mende Report
9.0 Warranties
17.0 Indemnification
• 18.4 Obligations Upon Expiration or Termination
• 18.5 Transition of Services
• 19.0 Confidential Information
• 20.0 Faithful Performance/Warranty Bond
• Limits on Liability
31.11 CONTRACTOR shall provide OCSD with all required premiums and/or overtime work at
no charge beyond the price provided in Exhibit "_
31.12 Except as expressly provided otherwise, OCSD accepts nohapili o y expenses,
losses, or action incurred or undertaken by CON as a r ult of work
performed in anticipation of purchases of said service b C
31.13 Conflict of Interest and Repo in
CONTRACTOR shall at all times avoid i f inte a oo a ance of conflict of intere
performance of this Agreement.
CONTRACTOR affirm t t b st its Wedge there exists no t nti
conflict between T ' f ies siness or financial int u er
this Agree t, t e of c ge in either its private 1 r star s is
Agra ant i II a h D any question regardin s ib co ' t which
m i �e hange. V
31. O OR's Representation t pe c f d s under this Agreement,
TRACTOR shall adher hest fi standards, ethical practices and
standards of care a to c CONT OR agrees to comply with all
applicable Feder , t e d oc 11 w a regulations.
31.15 Famili Wo e e ' this Agreement, CONTRACTOR warrants that: 1) it
'n e i t the a performed; 2) it has investigated the site of the work and
IS—a a of II con ' ns there; and 3) it understands the facilities, difficulties and
r$stpct s f e work under this Agreement. Should CONTRACTOR discover any
t r u own conditions materially differing from those inherent in the work or as
r pr ented by OCSD, it shall immediately inform OCSD of this and shall not proceed,
except at CONTRACTOR's risk, until written instructions are received from OCSD.
31.16 Authority to Execute The persons executing this Agreement on behalf of the Parties
warrant that they are duly authorized to execute this Agreement and that by executing
this Agreement, the Parties are formally bound.
31.17 Read and Understood. By signing this Agreement, Contractor represents that he has
read and understood the terms and conditions of the Agreement.
Page 28 of 29
Return to Mende Report
IN WITNESS WHEREOF, the Parties hereto have hereunto set their hands the day and year
indicated below.
ORANGE COUNTY SANITATION DISTRICT
Dated: By:
Chair Board of Directors
Dated: By:
Clerk of the Board
Dated: By: @ Contracts/Purch g
a r
COMPANY
Dated: y: 0
O Print Name and ' le f i
O
mp er's r
Oran;ovedas
SanitatiotDistri
Appr Form:CenciDate
Seni i istrator
Page 29 of 29
ADMINISTRATION COMMITTEE NeeUng Dare TOBA.Of DIr.
07/10/13 07/24/13
AGENDA REPORT Item Number Item Number
s
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: ATMOSPHERIC MONITOR PROCUREMENT
GENERAL MANAGER'S RECOMMENDATION
Authorize the purchase of new atmospheric monitors from Mallory via US Communities,
for a total not to exceed $300,000, in accordance with Resolution No. OCSD 07-04,
Section 3.08: Cooperative Procurement
SUMMARY
OCSD current atmospheric monitors are turning obsolete and the vendor will stop
supporting the equipment. OCSD needs to procure new atmospheric monitors to
ensure staff is protected while working in our facilities.
OCSD wishes to select Mallory Safety & Supplies as provider atmospheric monitors due
to Mallory Safety & Supplies US Communities Government Purchasing Alliance contract
pricing and breadth of product offerings.
PRIOR COMMITTEE/BOARD ACTIONS
None
ADDITIONAL INFORMATION
The Western States Contracting Alliance (WSCA) agreements are available to all State
of California governmental entities (State agencies, cities, counties, special districts,
school districts, universities, etc.) that expend public funds for the acquisition of both
goods and services.
The State of California purchases a wide variety of goods and services ranging from
pencils to temporary labor. Annual purchases total almost $10 billion. The
Procurement Division (PD) is the central purchasing authority for all State departments
and local government agencies. With a massive marketplace and billions of dollars in
purchasing power they are able to offer a lower procurement cost to California's State,
county, city, special district, education and other government entities through their
Leveraged Procurement Agreements (LPAs). LPAs allow entities/agencies to buy
directly from suppliers through existing contracts and agreements. One of the LPA's
that the state offers to California governmental agencies is the Western State
Contracting Alliance (WSCA) for Commodities, IT Goods & Services, and
Telecommunication Goods and Services.
JH:LT:wb/jmf
Page 1 or 1
ADMINISTRATION COMMITTEE Meath,Dare TOBA.Of Dir.
07/10/13 07/24/13
AGENDA REPORT Item Number Item Number
6
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES,
SERIES 2013A
GENERAL MANAGER'S RECOMMENDATION
Authorize the General Manager to issue Revenue Refunding Certificate Anticipation
Notes, Series 2013A, as one-year fixed-rate obligations, in an amount not to exceed
$135.0 million to replace the $131.7 million Revenue Refunding Certificate Anticipation
Notes, Series 2012C maturing on October 30, 2013.
SUMMARY
In March 2006, the Sanitation District issued $200 million of variable rate Certificates of
Participation (COP), Series 2006 (2006 COPS). Alternatively, the Sanitation District
could have issued debt at an estimated cost of 4.54% on a fixed rate basis in 2006.
From inception through August 2008, the average variable rate on the 2006 COPs was
2.95% or 0.22% less than the SIFMA index (weekly market index of tax-exempt variable
rate obligations). As the global financial crisis took hold in the late summer of 2008,
there was a significant increase in the variable rate borrowing cost of the Sanitation
District, including all municipal borrowers, as the 2006 COPS averaged 4.29% (or 1.56%
above the SIFMA index) for the period between September 2008 and December 2008.
The amount of the increase in variable rate cost above the SIFMA index can be
attributed to the weakened financial strength of the bank, DEPFA Bank plc, that was
providing liquidity support on the 2006 COPs.
In December 2008, the Sanitation District proactively refunded the 2006 COPS with the
Refunding COP Series 2008C Certificate Anticipation Notes (2008C CANS)to reduce its
exposure to then higher and more volatile variable rate costs. The yield on the 2008C
CANS was 0.98% for a one-year period. The issuance of the 2008C CANS allowed the
Sanitation District to redeem the 2006 COPs at an all-in cost of less than 1.25% and
avoid paying a bank rate of 4.75% which would have been effective starting a month
later. Since the 2008C CANs issuance, the Sanitation District completed four additional
one-year refinancings at yields of less than 0.37% as summarized below:
Principal Amo I-In Cost
2009E $ 165,865,000 0.370% 0.559%
2010E 154,665,000 0.360 0.525
2011E 143,205,000 0.225 0.399
2012C 131,700,000 0.210 0.410
The interest rate on the Revenue Refunding Certificate Anticipation Notes Series 2012C
(2012C CANS) was fixed for only one year and the entire $131.7 million plus interest
Page 1 of 5
becomes due and payable on October 30, 2013. The Sanitation District is responsible
for the total repayment, including interest, of $134.3 million or the Sanitation District
could choose to refinance the 2012C CANs. Staff does not recommend the use of over
$100 million of reserves to repay the 2012C CANS; therefore, there are a number of
refinancing options for consideration of the Sanitation District.
PRIOR COMMITTEE/BOARD ACTIONS
September 2012 — The Board adopted Resolution No. OCSD 12-12, authorizing the
execution and delivery by the District of an Installment Purchase Agreement, a Trust
Agreement and a Continuing Disclosure Agreement in connection with the execution
and delivery of Orange County Sanitation District Revenue Refunding Certificate
Anticipation Notes, Series 2012C, such Notes evidencing principal in an aggregate
amount of not to exceed $145,000,000, approving a Notice of Intention to Sell,
authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in
connection with the offering and sale of such Notes and authorizing the execution of
other necessary documents and related actions.
ADDITIONAL INFORMATION
Options Available to the Sanitation District
1. Refund the Maturing 2012C CANs with Fixed Rate Debt
The issuance of long-term fixed rate refunding debt will eliminate market access
risks (ability to issue debt to refinance maturing debt) and interest rate risk
(additional costs if rates reset higher or are higher upon a future refinancing). After
the issuance of fixed rate debt, the Sanitation District will no longer be exposed to
changing market conditions.
The issuance of long-term fixed rate debt in the current market would result in an
average borrowing yield of approximately 4.20%. Fixed rate debt would also remove
the interest rate hedge originally desired by the Sanitation District (in 2006) which
was intended to insulate the District from changes in short-term interest rates as the
variable rates on the 2006 COPS were expected to move in tandem with the
District's fluctuating investment portfolio earnings.
The following is a current market cost summary (subject to changing market
conditions) of Option 1. (Fixed Rate Debt) over the next year.
4.162% Assumed Average Fixed Rate
0.020 Costs of Issuance (amortized over life of COPs)
0.040 Underwriter Costs (amortized over life of COPS)
4.222% Fixed Rate Cost
2. Refund the Maturing 2012C CANS with Variable Rate Debt
Current variable rates for highly-rated California municipal borrowers (such as the
District) are extremely low at approximately 0.06% for traditional variable rate debt
backed by a commercial bank. However, the availability of bank support continues
Page 2 of 5
to be relatively expensive at approximately 6-7 times the cost of current variable
rates. The terms and conditions currently demanded by banks are also more
onerous than during the period prior to the global financial crisis. Recently, other
variable rate products have been developed that do not require bank support, but
these products are generally used by issuers to diversify among a portfolio
containing many different variable rate products, unlike the Sanitation District's
single issuance of short-term interest rate exposure (2012C CANS). In addition,
there are limited investors for these products and variable rate products, in general,
are less attractive when interest rates begin to rise from historic low levels.
The following is a current market cost comparison (subject to changing market
conditions) of traditional variable rate debt versus Option 1. (Fixed Rate Debt) over
the next year.
Variable% Average Variable Rate
0.400 Bank Liquidity Fee
0.075 Remarketing Fee
0.039 Costs of Issuance (amortized over life of COPS)
0.004 Underwriter Costs (amortized over life of COPs)
0.518% + Variable% (current total of approximately 0.58%) or
If compared to Option 1., average break-even variable rate of 3.704%
3. Refund the Maturing 2012C CANS with a New CANS issue
Since the issuance of the 2012C CANS, short-term interest rates have continue
to stay low as the current market yield for CANS is slightly lower than last year's
levels and presently about 0.19%. The issuance of refunding CANS will continue
to allow the Sanitation District to accrue savings at a rate that is fixed while
insulating the District from the possibility of short-term rates increasing over the
next year. The CANS structure will avoid the payment of high fees to liquidity
banks and eliminate the risk of interest rates resetting higher from historic low
levels during the course of the next year. Although current variable rates are low
(see Option 2. above), there is little room for rates to trend much lower.
The following is a current market cost summary (subject to changing market
conditions) of Option 3. (CANs) over the next year.
0.190% Assumed One-Year Rate
0.208 Costs of Issuance (amortized over one year)
0.020 Underwriter Costs (amortized over one year)
0.418% or
3.804% less than Option 1. (equal to $3.4 million of cash flow savings)
A comparison of the CANs refinancing structure to Option 2. above (Variable Rate
Debt) shows that future unknown variable rates must be less than zero for variable
rate debt to generate a better economic result.
The major risk with a CANs structure occurs if the Sanitation District does not have
market access to remarket the CANs at maturity (in 2014). However, the Sanitation
District (1) has successfully issued one-year CANs in each of the last five years and
Page 3 of 5
(2) is a AAA/AAA-rated entity, and (3) holds a substantial amount of reserves that
could (if the Board chooses) be used to redeem CANs if market access is not
available. Staff intends to build in safeguards to avoid the use of Sanitation District
reserves unless absolutely necessary: for example, beginning the process of
refinancing well in advance of the maturity date of the CANS.
To further reduce interest rate risk (additional costs if rates reset higher or are higher
upon a future refinancing) the Sanitation District could continue the Accelerated Rate
Management (ARM) program with the one-year CAN refinancing debt issuance.
Since 2006, the ARM program has used accrued savings (e.g., 0.399% cost on
2011 B CANs) compared to a fixed rate assumption (e.g., 2006 fixed rate of 4.54%)
to reduce the outstanding amount of debt on a yearly basis. As less debt is
outstanding, the Sanitation District significantly reduces its interest rate risk (if higher
interest rates occur, the negative effect is mitigated as the higher interest cost is
calculated on a smaller principal amount). The implementation of the ARM program
since the issuance of the 2006 COPS has decreased the interest rate risk to the
Sanitation District as the break-even rate (the average future interest rate for the
remaining debt from the 2006 COPs issuance) is now over 8.4%. If the Sanitation
District refinances the 2012C CANS with one-year CANS and current market
conditions do not change, the break-even rate will increase to over 9.0%. Since, the
original variable rate structure of the 2006 COPS and the five past CANS
refinancings have already saved the District over $30.2 million compared to the
alternative of the District issuing fixed rate debt in 2006. However, staff now
believes it could be time to suspend the ARM program as the break-even rate is
sufficiently high that it is unlikely that any future debt costs will negate the already
accrued savings. In addition, the Sanitation District is currently earning 0.85% on its
investment portfolio which hedges the variable-like rate of the CANs; therefore, the
Sanitation District benefits from not using its higher yielding cash to repay principal
on lower costing debt.
The Sanitation District could also extend beyond one year for a CANS issuance to
lock in rates for a longer period of time. The following table presents the current
market results for 2-5 year CANS periods:
nTotali5i'
o.500°/ 0.950°/ 1.300% 1.650%
0.114 0.082 0.062 0.049
0.038 0.033 0.031 0.030
0.751% 1.065% 1.393% 1.729%
Even as recent interest rates have been rising and volatile, short-term debt
continues to remain low and attractive, especially rates within one year. In addition,
short-term rates act as a hedge on the Sanitation District's cash reserves.
Therefore, staff is recommending Option 3., the refunding of the 2012C CANs with a
new one-year CAN that will again enable the Sanitation District to lock-in a low rate
for an additional year without (a) encumbering cash reserves; (b) exposing the
District to relatively high bank liquidity costs associated with variable rate debt; and,
(c) avoiding higher fixed rates which would increase near-term debt costs by
approximately $3.4 million per year. If the Sanitation District pursues Option 3, the
refunding CANS can be sold on a competitive basis in order to obtain the lowest
Page 4 of 5
financing cost possible.
Staff and consultants will be available to make a brief presentation and provide an
overview of the financing schedule at the Administration Committee meeting.
Following is a chart listing the remaining steps to be completed for the issuance of
the Revenue Refunding Certificate Anticipation Notes, Series 2013A debt issuance:
➢ Board approval of legal and disclosure documents
September ➢ Financing Corporation approval of legal and disclosure documents
➢ Receive ratings from Bond Rating Agencies
October ➢ Receive competitive bids
➢ Closing
CEQA
N/A
BUDGET / DELEGATION OF AUTHORITY COMPLIANCE
N/A
ATTACHMENTS
None
Page 5 of 5
ADMINISTRATION COMMITTEE Meeting Date TOBA.of M.
07/10/13 07/24/13
AGENDA REPORT Item Number Item Number
7
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: INVEST AND/OR REINVEST DISTRICT'S FUNDS
GENERAL MANAGER'S RECOMMENDATION
Adopt Resolution No. OCSD 13-XX, Authorizing the Orange County Sanitation District's
Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment
Policy Statement and Performance Benchmarks for FY 2013-14; and Repealing
Resolution No. OCSD 12-11.
SUMMARY
This agenda item presents the annual review of the Orange County Sanitation District's
Investment Policy Statement to the Administration Committee for consideration in the
Committee's capacity as the oversight committee for the Investment Policy (Section
16.2). With adoption of the Resolution, the Board of Directors would readopt the
Sanitation District's current Investment Policy Statement, portfolio performance
benchmarks, and monitoring and reporting requirements for FY 2013-14.
The Sanitation District's Investment Policy Statement is recommended for adoption for
FY 2013-14 with no changes made to the State Government Code since the adoption of
the FY 2012-13 Investment Policy.
Staff will continue to monitor pending legislative and regulatory proposals in the public
finance area for their potential impact on the Sanitation District's existing financial
programs.
The Sanitation District's Investment Policy Statement has received the Investment Policy
Certification of Excellence Award from the California Municipal Treasurer's Association.
PRIOR COMMITTEE/BOARD ACTIONS
July 2012 — Board adopted Resolution No. OCSD 12-11, Authorizing the Orange
County Sanitation District's Treasurer to Invest and/or Reinvest District's Funds;
Adopting District's Investment Policy Statement and Performance Benchmarks for FY
2012-13; and, Repealing Resolution No. OCSD 11-12.
Page 1 of 3
ADDITIONAL INFORMATION
Background
The Investment Policy governs the investment activities of Pacific Investment
Management Company (PIMCO), the Sanitation District's external money manager, on
behalf of the District. On December 11, 2012, the Sanitation District's Investment Policy
Statement received the Investment Policy Certification of Excellence Award from the
California Municipal Treasurer's Association. A copy of the letter of certification is
included each year in the annual Investment Policy document. The Sanitation District
received its first Award of Excellence for the Investment Policy Statement in December
1996.
The Investment Policy document itself consists of the Investment Policy Statement and
the following eight appendices:
A. Summary of Investment Authorization
B. Treasury Management Procedures
C. Investment Manager Certification
D. Investment Pool Questionnaire (LAIF)
E. Board Resolution No. OCSD-12-11
F. Sample Monthly & Quarterly Investment Program Monitoring Reports
G. Sections of the California Govemment Code Pertinent to Investing Public
Funds
H. Glossary of Investment Terms
This document will be updated and delivered to Administration Committee members
following the adoption of the Sanitation District's investment policy statement.
Annual Review of Investment Policv
The Investment Policy includes the requirement that the Sanitation District shall review
its Investment Policy annually (Sections 1.2 and 16.1).
Annual Delegation of Investment Authority
Effective January 1, 1997, Section 53607 of the Code states that governing boards of
local agencies may only delegate authority to invest and/or reinvest agency funds to the
agency's Treasurer for a one-year period.
With adoption of the Resolution, the Board of Directors would renew its delegation of
investment authority to the Director of Finance/Treasurer for a one-year period in
compliance with the requirements of Section 53607. Each year, the Board of Directors
will consider similar actions along with the annual reconsideration of the Sanitation
District's Investment Policy.
Page 2 of 3
CEQA
N/A
BUDGET / DELEGATION OF AUTHORITY COMPLIANCE
N/A
ATTACHMENTS
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the
complete agenda package:
1. Resolution
JDR:LT:MW:bg/jmf
Page 3 of 3
Return to Mende Report
RESOLUTION NO. OCSD-13-XX
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
ORANGE COUNTY SANITATION DISTRICT, AUTHORIZING THE
DISTRICT'S TREASURER TO INVEST AND/OR REINVEST
DISTRICT'S FUNDS, AND ADOPTING DISTRICT'S INVESTMENT
POLICY STATEMENT AND PERFORMANCE BENCHMARKS;
AND REPEALING RESOLUTION NO. OCSD 12-11
WHEREAS, on July 25, 2012, the Board of Directors adopted Resolution No. 12-11,
readopting the District's Investment Policy Statement, and establishing specific performance
benchmarks and objectives, together with a schedule of frequency of investment performance
reports; and,
WHEREAS, pursuant to California Government Code Section 53607, the Board of
Directors may delegate authority to invest and/or reinvest District's funds to the Treasurer for a
one-year period; and,
WHEREAS, pursuant to California Government Code Section 53646, the District is
required to review its Investment Policy annually and readopt its Policy at a public meeting,
which Policy will establish specific performance benchmarks and objectives, and specific
monitoring and reports.
NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District,
DOES HEREBY RESOLVE, DETERMINE AND ORDER:
Section 1: That the authority of the Board of Directors to invest or reinvest District's
surplus funds, or to sell or exchange securities so purchased, or to deposit for safekeeping the
funds and investments of the Districts with depositories, as provided for in California
Government Code Sections 53608 and 53630, is hereby delegated to the District's Treasurer for
a one-year period commencing on the date this Resolution is adopted, as authorized by
California Government Code Section 53607.
Section 2: That the Board of Directors hereby adopts the Investment Policy
Statement of the Orange County Sanitation District, as set forth in Exhibit "A", attached hereto
and incorporated herein by reference.
Section 3: That the Board of Directors hereby adopts the following specific
performance benchmarks for their two investment funds in accordance with Section 14.0 of the
District's Investment Policy:
LIQUID OPERATING MONIES: The Short-Term Operating Fund will be compared to
the three month T-Bill rate, and the Callan Active Cash Flow Income Style Group. The
Callan Active Cash Flow Income Style Group represents a peer group of managers who
operate with a maximum maturity of one year.
LONG-TERM OPERATING MONIES: The Long-Term Operating Fund will be compared
to the Merrill Lynch Government and Corporate One-to-Five Year Maturity Index and to
the Callan Defensive Fixed Income Style Group.
OCSD 13-XX-1
Return to Mende Rom
Section 4: That the Board of Directors hereby adopts a performance monitoring and
reporting schedule, as required by Section 15.0 of the District's Investment Policy, which
schedule is attached hereto as Exhibit"B", and incorporated herein by reference.
Section 5: That Resolution No. OCSD 12-11 is hereby repealed.
PASSED AND ADOPTED at regular meeting held July 24, 2013.
Troy Edgar
Chairman of the Board
ATTEST:
Maria E. Ayala
Clerk of the Board
OCSD 13-XX-2
Return to Mende Rom
Exhibit "A"
44,XtY 6XX1)I)/
4
�i?
b b
9of%N
M
ORANGE COUNTY SANITATION
DISTRICT
INVESTMENT
POLICY
STATEMENT
Proposed for
Review and Approval
By
Administration Committee
On
July 10, 2013
And for Adoption
By
Board of Directors
On
July 24, 2013
Return to Mende Report
TABLE OF CONTENTS
Section TODIC Pane
1.0 Policy ......................................................................................1
2.0 Scope......................................................................................1
3.0 Standard of Prudence.............................................................1
4.0 Investment Objectives.............................................................2
5.0 Delegation of Authority............................................................2
6.0 Ethics and Conflicts of Interest................................................3
7.0 Authorized Financial Dealers and Institutions.........................4
8.0 Authorized and Suitable Investments......................................5
9.0 Collateralization.......................................................................9
10.0 Safekeeping and Custody.......................................................9
11.0 Diversification..........................................................................9
12.0 Maximum Maturities.............................................................. 11
13.0 Internal Control...................................................................... 12
14.0 Performance Objectives and Benchmarks............................ 12
15.0 Reporting .............................................................................. 12
16.0 Investment Policy Adoption and Revision ............................. 13
Appendix
A. Summary of Investment Authorization
Return to Mende Report
ORANGE COUNTY SANITATION DISTRICT
INVESTMENT POLICY STATEMENT
1.0 Policy:
It is the policy of the Orange County Sanitation District (OCSD)to invest public funds in
a manner which ensures the safety and preservation of capital while meeting
reasonably anticipated operating expenditure needs, achieving a reasonable rate of
return and conforming to all state and local statutes governing the investment of public
funds.
1.1. This Investment Policy is set forth by OCSD for the following purposes:
1.1.1. To establish a clear understanding for the Board of Directors,
OCSD management, responsible employees and third parties of the
objectives, policies and guidelines for the investment of the OCSD's idle
and surplus funds.
1.1.2. To offer guidance to investment staff and any external
investment advisors on the investment of OCSD funds (see Appendix "A").
1.1.3. To establish a basis for evaluating investment results.
1.2. OCSD establishes investment policies which meet its current investment
goals. OCSD shall review this policy annually, and may change its
policies as its investment objectives change.
2.0 Scope:
This Investment Policy applies to all financial assets of OCSD; except for the proceeds
of OCSD's capital projects financing program, which are invested in accordance with
provisions of their specific bond indentures; and such other funds excluded by law or
other Board-approved covenant or agreement.
These funds are accounted for by OCSD as Enterprise Funds as represented in
OCSD's Comprehensive Annual Financial Report.
3.0 Standard of Prudence:
The standard of prudence to be used by OCSD internal staff, and any authorized
investment advisor(s), shall be as described in Section 53600.3 of the California
Government Code as follows: Except as provided in subdivision (a) of Section
27000.3, all governing bodies of local agencies or persons authorized to make
investment decisions on behalf of those local agencies investing public funds
Page 1 of 13
Return to Mende Report
pursuant to this chapter are trustees and therefore fiduciaries subject to
the prudent investor standard. When investing, reinvesting, purchasing,
acquiring, exchanging, selling, or managing public funds, a trustee shall act with
care, skill, prudence, and diligence under the circumstances then prevailing,
including, but not limited to, the general economic conditions and the anticipated
needs of the agency, that a prudent person acting in a like capacity and
familiarity with those matters would use in the conduct of funds of a like character
and with like aims, to safeguard the principal and maintain the liquidity needs of
the agency. Within the limitations of this section and considering individual
investments as part of an overall strategy, investments may be acquired as
authorized by law.
4.0 Investment Objectives:
The primary objectives of OCSDs investment activities, in priority order, and as
described in Section 53600.5 of the California Government Code, shall be:
4.1 Safety: The safety and preservation of principal is the foremost objective
of the investment program of OCSD. Investments shall be selected in a
manner that seeks to ensure the preservation of capital in OCSD's overall
portfolio. This will be accomplished through a program of diversification,
more fully described in Section 11.0, and maturity limitations, more fully
described in Section 12.0, in order that potential losses on individual
securities do not exceed the income generated from the remainder of the
portfolio.
4.2 Liquidity: The investment program will be administered in a manner that
will ensure that sufficient funds are available for OCSD to meet its
reasonably anticipated operating expenditure needs.
4.3 Return on Investments: The OCSD investment portfolio will be
structured and managed with the objective of achieving a rate of return
throughout budgetary and economic cycles, commensurate with legal,
safety, and liquidity considerations.
5.0 Delegation of Authority:
5.1 Authority to manage OCSD's investment program is derived from the
California Government Code Sections 53600 at seq. and Sections 53635
at seq. The Board of Directors hereby delegates management
responsibility for the OCSD investment program to its Director of Finance
and Administrative Services/Treasurer, who shall establish written
procedures for the operation of the investment program, consistent with
this Policy. The Controller/Assistant Treasurer shall be responsible for
day-to-day administration, monitoring, and the development of written
administrative procedures for the operation of the investment program,
consistent with this Policy. The current treasury management procedures
Page 2 of 13
Return to Mende Report
are presented in Appendix"B." No person may engage in an investment
transaction except as provided under the terms of this Policy and the
procedures established by the Treasurer. The Treasurer shall be
responsible for all transactions undertaken by OCSD internal staff, and
shall establish a system of controls to regulate the activities of internal
staff and external investment advisors engaged in accordance with
Section 5.3.
5.2 The administrative procedures for the operation of OCSD's investment
program will provide for, but not be limited to, the following:
5.2.1 Formats for monthly and quarterly reports to the Administration
Committee, and the Board of Directors.
5.2.2 Compliance with generally accepted accounting principles of
the Government Accounting Standards Board.
5.2.3 Establishment of benchmarks for performance measurement.
5.2.4 Establishment of a system of written internal controls.
5.2.5 Establishment of written procedures for competitive bids and
offerings of securities that may be purchased or sold by internal OCSD
staff.
5.2.6 Establishment of a Desk Procedures Manual for treasury
operations and management.
5.3 The Board of Directors of OCSD may, in its discretion, engage the
services of one or more registered investment advisors to assist in the
management of OCSD's investment portfolio in a manner consistent with
OCSD's objectives. Such external investment advisors, which shall be
selected through a competitive process, shall be granted discretion to
purchase and sell investment securities in accordance with this
Investment Policy. Such advisors must be registered under the
Investment Advisers Act of 1940, or be exempt from such registration.
6.0 Ethics and Conflicts of Interest:
6.1 Officers and employees of OCSD involved in the investment process shall
refrain from personal business activities that could conflict with proper
execution of OCSD's investment program, or which could impair their
ability to make impartial investment decisions. Employees and investment
officials shall disclose to the General Manager any material financial
interests in financial institutions that conduct business within OCSD's
boundaries, and they shall further disclose any large personal
financial/investment positions, the performance of which could be related
to the performance of positions in OCSD's portfolio.
Page 3 of 13
Return to Mende Report
Page 4 of 13
Return to Mende Report
7.0 Authorized Financial Dealers and Institutions:
7.1 For investment transactions conducted by OCSD internal staff, the
Treasurer will maintain a list of financial institutions authorized to provide
investment services to OCSD, including "primary" or regional dealers that
qualify under Securities and Exchange Commission Rule 15C3-1 (Uniform
Net Capital rule), and Federal or State of California chartered banks. No
public deposit shall be made except in a qualified public depository as
established by State law.
All financial institutions which desire to become qualified bidders for
investment transactions with OCSD must supply the following for
evaluation by the Treasurer:
7.1.1. Audited financial statements for the institution's three (3) most
recent fiscal years.
7.1.2. A statement, in the format prescribed by the Government
Finance Officers Association (GFOA), certifying that the institution has
reviewed OCSD's Investment Policy and that all securities offered to the
Districts shall comply fully and in every instance with all provisions of the
California Government Code and with this Investment Policy. The current
statement is presented in Appendix "C."
7.1.3. A statement describing the regulatory status of the dealer, and
the background and expertise of the dealer's representatives.
Selection of financial institutions, broker/dealers, and banks authorized to
engage in transactions with OCSD shall be made through a competitive
process. An annual review of the financial condition of qualified
institutions will be conducted by the Treasurer.
7.2 Selection of broker/dealers used by external investment advisors retained
by OCSD, shall be in compliance with contract provisions between OCSD
and any external investment advisors, and shall be in substantially the
following form:
Use of Securities Brokers: Neither the Investment Advisor nor any parent,
subsidiary or related firm shall act as a securities broker with respect to
any purchases or sales of securities which may be made on behalf of
OCSD, provided that this limitation shall not prevent the Investment
Advisor from utilizing the services of a securities broker which is a parent,
subsidiary or related firm, provided such broker effects transactions on a
"cost only" or"nonprofit" basis to itself and provides competitive execution.
The Investment Advisor shall provide the Districts with a list of suitable
independent brokerage firms (including names and addresses) meeting
the requirements of Government Code Section 53601.5, and, unless
otherwise directed by OCSD, the Investment Advisor may utilize the
Page 5 of 13
Return to Mende Report
service of any of such independent securities brokerage firms it deems
appropriate to the extent that such firms are competitive with respect to
price of services and execution.
8.0 Authorized and Suitable Investments:
All investments shall be made in accordance with the California Government Code
including Sections 16429.1 at seq., 53600 at seq., and 53684, and as described within
this Investment Policy. Permitted investments under this Policy shall include:
8.1 Securities, obligations, participations, or other instruments of, or
issued by, or fully guaranteed as to principal and interest by the US
Government, a federal agency, or a US Government-sponsored
enterprise pursuant to Section 53601 (a) of the California Government
Code. Investment in mortgage-backed bonds and CMOs is not governed
by this Section 8.1, even if such bonds are issued by agencies of the US
Government. See Section 8.2 for conditions of purchase of mortgage-
backed securities. See Section 8.12 for conditions of purchase of CMOs.
8.2 Mortgage-backed securities issued by an agency of the US
Government, which are backed by pools of mortgages guaranteed by the
full faith and credit of the U.S. Government, or an agency thereof.
Purchase of mortgage derivatives, which include interest-only payments
(IOs) and principal-only payments (POs); inverse floaters, and RE-
REMICs (Real Estate Mortgage Investment Conduits), is hereby
prohibited.
8.3 Commercial paper of"prime" quality and rated "P1" by Moody's Investor
Services (Moody's), and rated "At" by Standard & Poor's Corporation
(S&P), and issued by a domestic corporation organized and operating in
the United States with assets in excess of$500 million and having a rating
of"A" or better on its long-term debt as provided by Moody's or S&P.
Purchases of eligible commercial paper may not exceed 270 days to
maturity from the date of purchase. Purchases of commercial paper shall
not exceed 15% of the market value of the portfolio, except that a
maximum of 25% of the market value of the portfolio may be invested in
commercial paper, so long as the average maturity of all commercial
paper in the portfolio does not exceed 31 days. No more than 5% of the
market value of the portfolio, or 10% of the issuer's outstanding paper,
may be invested in commercial paper issued by any one (1) eligible
corporation.
8.4 Banker's acceptances issued by institutions, the short-term obligations of
which are rated a minimum of"P1" by Moody's, or"At" by S&P provided
that: (a)the acceptance is eligible for purchase by the Federal Reserve
System; (b)the maturity does not exceed 180 days; (c) no more than 40%
of the total portfolio may be invested in bankers acceptances; and (d) no
more than 30% of the total portfolio may be invested in the banker's
acceptances of any one (1) commercial bank.
Page 6 of 13
Return to Mende Report
8.5 Medium term (or corporate) notes of a maximum of five (5)years
maturity issued by corporations organized and operating within the United
States, or issued by depository institutions licensed by the United States,
or any state, and operating within the United States with assets in excess
of$500 million, and which is rated in a rating category of"A" or better on
its long-term debt as provided by Moody's or S&P. Notes eligible for
investment under this section shall be rated at least 'AY or better by
Moody's, or"A-"or better by S&P. If, at the time of purchase, an eligible
note is rated in a rating category of"A" or better by only one rating agency,
the note shall also be rated at least "BBB" by the other rating agency. If,
after purchase, the rating of an eligible note in a rating category of"A" or
better, is downgraded to "BBB," the external investment advisor shall
notify the District of the downgrade, and shall present an analysis and
recommendations as to the disposition of the note consistent with the
investment objectives of this Investment Policy. The above restrictions
pertain to the "direct issuer' and do not extend to the parent corporation of
the direct issuer. No more than 35% of the portfolio may be invested in
both medium term notes, as described here in 8.5, and notes, bonds, or
other obligations, as described in 8.6.
8.6 Notes, bonds, or other obligations that are at all times secured by a
valid first priority security interest in securities of the types listed by
California Government Code Section 53651 as eligible securities for the
purpose of securing local agency deposits having a market value at least
equal to that required by California Government Code Section 53652 for
the purpose of securing local agency deposits. The securities serving as
collateral shall be placed by delivery or book entry into the custody of a
trust company or the trust department of a bank that is not affiliated with
the issuer of the secured obligation, and the security interest shall be
perfected in accordance with the requirements of the Uniform Commercial
Code or federal regulations applicable to the types of securities in which
the security interest is granted. No more than 35% of the portfolio may be
invested in securities described in 8.5 and 8.6.
8.7 Shares of mutual funds investing in securities permitted under this policy
and under Section 53601 (k) of the California Government Code. Such
funds must either: (1) attain the highest ranking, or the highest letter and
numerical rating, provided by not less than two of the three largest
nationally recognized rating services; or(2) have an Investment Advisor
registered with the Securities and Exchange Commission with not less
than five (5) years of experience investing in the securities and obligations
authorized under this Policy and under California Government Code
Section 53601, and with assets under management in excess of$500
million. The purchase price of shares of beneficial interest purchased
pursuant to this policy, and the California Government Code may not
include any commission that the companies may charge, and shall not
exceed 15% of the District's surplus money that may be invested pursuant
Page 7 of 13
Return to Mende Report
to this section. However, no more than 10% of the District's surplus funds
may be invested in shares of beneficial interest of any one (1) mutual fund
pursuant to this section.
8.8 Certificates of deposit:
8.8.1 Secured (collateralized) time deposits issued by a nationally or
state-chartered bank or state or federal savings and loan association, as
defined by Section 5102 of the California Financial Code, and having a net
operating profit in the two (2) most recently completed fiscal years.
Collateral must comply with Chapter 4, Bank Deposit Law, Section 16500
at seq., and Chapter 4.5, Savings and Loan Association and Credit Union
Deposit Law, Section 16600 at seq., of the California Government Code.
8.8.2 Negotiable certificates of deposit (NCDs) issued by a nationally
or state-chartered bank or state of federal savings and loan association,
as defined by Section 5102 of the California Financial Code; and which
shall have a rating of"A" or better on its long-term debt as provided by
Moody's or S&P; or which shall have the following minimum short-term
ratings by at least two (2) rating services: "P1" for deposits by Moody's,
"At" for deposits by S&P, or comparably rated by a nationally recognized
rating agency which rates such securities; or as otherwise approved by
the District's Board of Directors.
8.8.3 To be eligible to receive local agency money, a bank, savings
association, federal association, or federally insured individual loan
company shall have received an overall rating of not less than
"satisfactory' in its most recent evaluation by the appropriate federal
financial supervisorial agency of its record of meeting the credit needs of
California's communities, including low and moderate income
neighborhoods, pursuant to Section 2906 of Title 12 of the United States
Code.
8.9 Taxable or tax-exempt municipal bonds issued by any of the 50 United
States. Such securities must be rated "AY or higher by Moody's, or "A-"
or higher by S&P; or as otherwise approved by the Districts' Board of
Directors.
8.10 The State of California Local Agency Investment Fund (LAIF). The
LAIF is an investment alternative for California's local governments and
special districts managed by the State Treasurer's Office. LAIF is more
fully described in the Glossary (See Appendix "H.") The District shall use
LAIF as a short-term cash management facility. Investment of District
funds in LAW shall be subject to investigation and due diligence prior to
investing, and on a continual basis to a level of review pursuant to Section
3.0, Standard of Prudence, of this Policy. See Appendix "D"for
investment pool questionnaire.
Page 8 of 13
Return to Mende Report
8.11 The Orange County Treasurer's Money Market Commingled
Investment Pool (OCCIP). The OCCIP is a money market investment
pool managed by the Orange County Treasurer's Office. OCCIP is more
fully described in the Glossary. (See Appendix "H.") The District has no
funds invested in OCCIP at this time. Investment of District funds in
OCCIP would be subject to investigation and due diligence prior to
investing, and on a continual basis to a level of review pursuant to Section
3.0, Standard of Prudence, of this Policy.
8.12 Collateralized mortgage obligations (CMOs) issued by agencies of the
US Government which are backed by pools of mortgages guaranteed by
the full faith and credit of the U.S. Government, or an agency thereof, and
asset-backed securities rated "Aaa" by Moody's and "AAA" by S&P.
Selection of mortgage derivatives, which include interest-only payments
(IOs) and principal-only payments (POs); inverse floaters, and RE-
REMICS (Real Estate Mortgage Investment Conduits), is hereby
prohibited. Securities eligible for purchase under this Section 8.11 shall
be issued by an issuer having a rating on its unsecured long-term debt of
"A" or higher. Combined purchases of mortgage-backed securities, CMOs
and asset-backed securities as authorized under within Section 8.0, may
not exceed 20% of the total Long-Term Operating Monies portfolio.
8.13 Repurchase agreements provided that:
8.13.1 All repurchase agreements shall be collateralized with
securities eligible for purchase under this Policy. In order to anticipate
market changes and to provide a level of security for all repurchase
agreement transactions, collateralization shall be maintained at a level of
at least 102% of the market value of the repurchase agreements, and
shall be adjusted no less than weekly.
8.13.2 All repurchase agreements must be the subject of a Master
Repurchase Agreement between OCSD and the provider of the
repurchase agreement. The Master Repurchase Agreement shall be
substantially in the form developed by The Bond Market Association.
8.14 Reverse repurchase agreements provided that:
8.14.1 No more than five percent (5%) of OCSD's portfolio shall be
invested in reverse repurchase agreements, and there shall be no long-
term reverse repurchase agreements unless otherwise authorized by the
Districts' Board of Directors.
8.14.2 The maximum maturity of reverse repurchase agreements shall
be ninety (90) days.
8.14.3 Reverse repurchase agreements shall mature on the exact
date of a known cash flow which will be unconditionally available to repay
the maturing reverse repurchase agreement.
Page 9 of 13
Return to Mende Report
8.14.4 Proceeds of reverse repurchase agreements shall be used
solely to supplement portfolio income or to provide portfolio liquidity, and
shall not be used to speculate on market movements.
8.14.5 All reverse repurchase agreements must be the subject of a
Master Repurchase Agreement between OCSD and the provider of the
reverse repurchase agreement. The Master Repurchase Agreement shall
be substantially in the form developed by The Bond Market Association.
8.15 Sales of OCSD-owned securities in the secondary market may incur
losses in order to improve the risk or return characteristics of the portfolio,
to prevent anticipated further erosion of principal, or when trading for
securities that result in an expected net economic gain to OCSD.
8.16 If securities owned by the OCSD are downgraded by either Moody's or
S&P to a level below the quality required by this Investment Policy, it shall
be OCSD's policy to review the credit situation and make a determination
as to whether to sell or retain such securities in the portfolio. If a decision
is made to retain the downgraded securities in the portfolio, their presence
in the portfolio will be monitored and reported monthly to the OCSD
General Manager, the Administration Committee and Board of Directors.
9.0 Collateralization:
Generally, the value to secure deposits under this Policy shall comply with Section
53652 of the California Government Code. Collateralization will be required for secured
time deposits, as more fully described in Section 8.8.1; and repurchase agreements, as
more fully described in Section 8.13.1. Collateral will always be held by an independent
third-party, as more fully described in Section 10.1. The right of collateral substitution is
granted.
10.0 Safekeeping and Custody:
10.1 All securities transactions, including collateral for repurchase agreements,
entered into by, or on behalf of OCSD, shall be conducted on a
delivery-versus-payment (DVP) basis. Securities will be held by
OCSD's third-party custodian bank, which shall be selected through a
competitive process, or that agent's representative, or in the agent's
account at the Federal Reserve Bank, or within clearing corporations in
the U.S., and evidenced by book entry statements.
11.0 Diversification:
OCSD will diversify its investments by security type, issuer, and financial institution in
accordance with the following:
Page 10 of 13
Return to Mende Report
11.1 There is no limit on investment in securities issued by or guaranteed by
the full faith and credit of the U.S. government.
11.2 No more than 20% of the portfolio may be invested in securities of a single
agency of the U.S. government, which does not provide the full faith and
credit of the U.S. government.
11.3 No more than 5% of the portfolio may be invested in securities of any one
issuer, other than the U.S. government or its agencies. Investment in
mutual funds is not governed by this Section 11.3. See Section 11.8 for
conditions of purchase of mutual funds.
11.4 No individual holding shall constitute more than 5% of the total debt
outstanding of any issuer.
11.5 No more than 40% of the portfolio may be invested in banker's
acceptances.
11.6 No more than 15% of the portfolio may be invested in commercial paper,
except that 25% of the portfolio may be so invested so long as the
average maturity of all commercial paper in the portfolio does not exceed
31 days.
11.7 No more than 30% of the portfolio may be invested in medium-term
(corporate) notes.
11.8 No more than 15% of the portfolio may be invested in mutual funds.
However, no more than 10% of the District's portfolio may be invested in
shares of beneficial interest of any one (1) mutual fund.
11.9 No more than 30% of the portfolio may be invested in negotiable
certificates of deposit.
11.10 No more than 10% of the portfolio may be invested in eligible municipal
bonds.
11.11 No more than 20% of the Long Term Operating Monies portfolio may be
invested in a combination of mortgage-backed securities, CMOs and
asset-backed securities. Mortgage-backed securities, CMOs and asset-
backed securities may only be purchased by the Districts' external money
managers, Pacific Investment Management Company (PIMCO), with prior
Board approval (authorized by Board Minute Order, January 22, 1997),
and may not be purchased by the District's staff.
11.12 No more than the lesser of 15% of the portfolio or the statutory maximum
may be invested in LAIF.
11.13 No more than 15% of the portfolio may be invested in the Orange County
Investment Pool.
Page 11 of 13
Return to Mende Report
11.14 No more than 20% of the portfolio may be invested in repurchase
agreements.
11.15 No more than 5% of the portfolio may be invested in reverse repurchase
agreements.
12.0 Maximum Maturities:
To the extent possible, OCSD will attempt to match its investments with reasonably
anticipated cash flow requirements. The Treasurer shall develop a five-year cash Flow
forecast, which shall be updated quarterly. Based on this forecast, the Treasurer shall
designate, from time-to-time, the amounts to be allocated to the investment portfolio.
OCSD monies invested in accordance with this Policy are divided into two (2)
categories:
12.1 Liquid Operating Monies. Funds needed for current operating and
capital expenditures are known as Liquid Operating Monies.
12.1.1 The maximum final stated maturity of individual securities in the
Liquid Operating Monies account portfolio shall be one (1) year from the
date of purchase.
12.1.2 The average duration of the Liquid Operating Monies account
portfolio shall be recommended by the Treasurer based on the Districts'
cash flow requirements, but may never exceed 180 days.
12.2 Long Term Operating Monies. Funds needed for longer term purposes
are known as the Long Term Operating Monies.
12.2.1 Except for the purchase of securities by the District's external
money manager, PIMCO, the maximum final stated maturity of individual
securities in the Long Tenn Operating Monies account portfolio shall be
five (5)years from the date of purchase. PIMCO may purchase any
security that is permitted under Section 8.0 of this policy, including those
which may have a stated maturity of more than five (5) years from the date
of purchase when, in the opinion of PIMCO, such an investment meets the
investment objectives of this portfolio and the duration requirements are
met below.
12.2.2 The duration of the Long Term Operating Monies account
portfolio shall be recommended by the Treasurer based on the Districts'
five-year cash flow forecast, but may never exceed 60 months.
12.2.3 The duration of the Long Term Operating Monies account
portfolio shall never exceed 120% of the duration as established in
accordance with Section 12.2.2.
12.2.4 The duration of the Long Term Operating Monies account
portfolio shall never be less than 80% of the duration as established in
accordance with Section 12.2.2
Page 12 of 13
Return to Mende Report
13.0 Internal Control:
13.1 The Treasurer shall establish an annual process of independent review by
an external auditor. This review will provide internal control by assuring
compliance with policies and procedures. The current treasury
management procedures are presented in Appendix "B."
14.0 Performance Objectives and Benchmarks:
14.1 Overall objective. The investment portfolio of OCSD shall be designed
with the overall objective of obtaining a rate of return throughout budgetary
and economic cycles, commensurate with investment risk constraints and
reasonably anticipated cash flow needs.
14.2 The Liquid Operating Monies. The investment performance objective
for the Liquid Operating Monies shall be to earn a total rate of return over
a market cycle which exceeds the return on a market index approved by
the Administration Committee, and by the District's Board of Directors,
when the duration of the portfolio is established. This market index is more
fully described in Board Resolution No. OCSD-00-16 (see Appendix "E").
14.3 The Long Term Operating Monies. The investment performance
objective for the Long Term Operating Monies shall be to earn a total rate
of return over a market cycle which exceeds the return on a market index
selected by the Administration Committee and approved by the Districts'
Board of Directors, when the duration of the portfolio is established. This
market index is more fully described in Board Resolution No. OCSD-00-16
(See Appendix"E").
15.0 Reuortina:
15.1 Quarterly investment reports shall be submitted by the Treasurer to the
Administration Committee which shall forward the reports to the District's
Board of Directors. The quarterly reports shall be submitted to the
Administration Committee within 30 days of the and of the month in
accordance with California Government Code Sections 53607, 53646, and
this Investment Policy. The quarterly reports shall provide clear and
concise status information on the District's portfolios at the end of each
reporting period, including performance measures using the benchmarks
described in Section 14.0 of this Investment Policy. Sample quarterly
reports are presented in Appendix "F." These reports shall contain listings
of individual securities held at the end of each reporting period, and shall
disclose, at a minimum, the following information about the risk
characteristics of OCSD's portfolio:
15.1.1 Cost and accurate and complete market value of the portfolio.
15.1.2 Modified duration of the portfolio compared to Benchmark.
Page 13 of 13
Return to Mende Report
15.1.3 Dollar change in value of the portfolio for a one-percent (1%)
change in interest rates.
15.1.4 Percent of portfolio invested in reverse repurchase
agreements, and a schedule which matches the maturity of such reverse
repurchase agreements with the cash flows which are available to repay
them at maturity.
15.1.5 For the Liquid Operating Monies account only, the percent of
portfolio maturing within 90 days.
15.1.6 Average portfolio credit quality.
15.1.7 Percent of portfolio with credit ratings below"A" by any rating
agency, and a description of such securities.
15.1.8 State that all investments are in compliance with this policy and
the California Government Code, or provide a listing of any transactions or
holdings which do not comply with this policy or with the California
Government Code.
15.1.9 Time-weighted total rate of return for the portfolio for the prior
three months, twelve months, year to date, and since inception compared
to the Benchmark returns for the same periods.
15.1.10 State that sufficient funds are available for OCSD to meet its
operating expenditure requirements for the next six months, or if not, state
the reasons for the shortfall.
15.2 OCSD's Treasurer shall meet quarterly with the Administration Committee
to review investment performance, proposed strategies and compliance
with this Investment Policy. External investment advisors may be required
to attend said meetings at the discretion of the Chairman of the
Administration Committee.
16.0 Investment Policy Adoption and Revision:
16.1 The Investment Policy of OCSD shall be reviewed by the Administration
Committee and shall be adopted by resolution of the Board of Directors of
OCSD. The Policy shall be reviewed on an annual basis in accordance
with California Government Code Section 53646, and this Investment
Policy, by the Administration Committee, which shall recommend
revisions, as appropriate, to the Board of Directors. Any modifications
made thereto shall be approved by the Board of Directors.
16.2 The Administration Committee shall serve as the oversight committee for
the District's Investment program and shall adopt guidelines for the
ongoing review of duration, quality and liquidity of the District's portfolio.
Page 14 of 13
Return to Mende Report
APPENDIX "A"
SUMMARY OF INVESTMENT AUTHORIZATION
INTERNAL AND EXTERNAL MANAGERS
SHORT TERM OPERATING FUND
INVESTMENT INTERNAL EXTERNAL
U.S. Treasuries OK OK
Federal Agencies Fixed coupon, fixed mat. OK
Mortgage-backed NO NO
Commercial paper OK OK
Banker's Accept. OK OK
Medium Term Notes Fixed coupon, fixed mat.* OK
Mutual Funds Money Market Only** Money Market Only
Negotiable CDs Fixed coupon, fixed mat.* OK
Municipal Bonds OK* NO
LAIF OK NO
OCIP OK NO
CMOs NO NO
Asset-backed NO NO
Repurchase Agree. OK OK
Reverse Repos OK* OK
LONG TERM OPERATING PORTFOLIO
INVESTMENT INTERNAL EXTERNAL
U.S. Treasuries OK OK
Federal Agencies Fixed coupon, fixed mat. OK
Mortgage-backed NO OK
Mutual Funds Money Market Only** OK
Negotiable CDs Fixed coupon, fixed mat.* OK
Municipal Bonds OK* OK
LAIF OK NO
OCIP OK NO
CMOs NO With Board Approval
Asset-backed NO With Board Approval
Repurchase Agree. OK OK
Reverse Repos OK* OK
*With prior approval of the Administration Committee.
**Using financial institutions approved by the Administration Committee.
H Wwtlb Ol0WdsUDMIN COMMITTEE BY MONTH 1013WULY 001TI tmn"iW BOD61313.d—
Return to Mende Report
Exhibit "B"
FY 2013-14 Performance Monitoring & Reporting Schedule
For the Administration Committee The Quarterly Investment
and Board of Directors meetings of: Management Program Report to be
resented for the period of:
July 2013
August Board only)
September April — June 2013
October
November Jul —Sept 2013
December
Janua '14 Board only)
February Oct— Dec 2013
March
April
May Jan — March 2014
June
Page 1 of 2
Return to Aaentla Report
EXHIBIT"B"
ORANGE COUNTY SANITATION DISTRICT
PERFORMANCE MONITORING &REPORTING SCHEDULE
FOR THE
DISTRICT'S INVESTMENT PROGRAM
POLICY
REFERENCE PERFORMANCE CHARACTERISTIC REPORTING PARTY*
PIMCO MELLON CALLAN
15.1.1 Cost and market value of the portfolio(monthly mark-to-market). M,Q M, Q Q
15.1.2 Modified duration of the portfolio compared to benchmark. M,Q Q
15.1.3 Dollar change in value of the portfolio for a 1%change in interest rate. M,Q Q
15.1.4 Percent of portfolio invested in reverse repurchase agreements,and a schedule which M,Q
matches the maturity of such reverse repurchase agreements with the cash flows which
are available to repay them at maturity.
15.1.5 For the Liquid Operating Monies account only,the percent of portfolio maturing within 90 M,Q Q
days.
15.1.6 Average portfolio credit quality. M,Q Q
15.1.7 Percent of portfolio with credit ratings below W'by any rating agency, and a description M,Q Q
of such securities.
15.1.8 Listing of any transaction or holdings which do not comply with this policy or with the M,Q
California Government Code.
15.1.9 Time-weighted total rate of return for the portfolio for the prior three months,twelve M,Q Q
months,year-to-date,and since inception compared to the benchmark returns for the
same periods.
ADDL" Comparison of portfolio performance to market index benchmark. M,Q Q
ADDL- Comparison of Manager's performance to peer group benchmark. Q
ADDL" Monitoring of organizational and structural changes of investment management firm. Q
ADDL- Audit portfolios for compliance with investment policy guidelines. Q
15.1.10 OCS0 will report if sufficient funds are available for it to meet operating expenditure requirements for the next six months,or if
not,state the reason for the shortfall.
Notes
'M =Monihty
=Quarterly
"ADDL=Monitoring of Additional Performance Characteristics
Page 2 of 2
ORANGE COUNTY SANITATION DISTRICT
Agenda
Terminology Glossary
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
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.
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.