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HomeMy WebLinkAbout04-25-2018 Board Meeting Agenda packet Orange County Sanitation District Wednesday, April 25, 2018 Regular Meeting of the 6:00 P.M. BOARD OF DIRECTORS Board Room ` 10844 Ellis Avenue Fountain Valley, CA 92708 (714) 593-7433 AGENDA CALL TO ORDER INVOCATION AND PLEDGE OF ALLEGIANCE (Scott Peotter, City of Newport Beach) ROLL CALL (Clerk of the Board) DECLARATION OF QUORUM (Clerk of the Board) PUBLIC COMMENTS: If you wish to address the Board of Directors on any item, please complete a Speaker's Form (located at the table outside of the Board Room) and submit it to the Clerk of the Board or notify the Clerk of the Board the item number on which you wish to speak. Speakers will be recognized by the Chairperson and are requested to limit comments to three minutes. SPECIAL PRESENTATIONS: Public Service Announcement Contest Award Winners REPORTS: The Board Chairperson and the General Manager may present verbal reports on miscellaneous matters of general interest to the Directors. These reports are for information only and require no action by the Directors. CONSENT CALENDAR: Consent Calendar Items are considered to be routine and will be enacted, by the Board of Directors,after one motion,without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1. APPROVAL OF MINUTES (Clerk of the Board) RECOMMENDATION: Approve the minutes of the Regular Meeting of the Board of Directors held on March 28, 2018 and the Special Meeting of the Board of Directors held on April 11, 2018. 04/25/2018 OCSD Board of Directors Agenda Page 1 of 7 RECEIVE AND FILE: These items require no action; and without objection, will be so ordered by the Board Chair. 2. COMMITTEE MINUTES (Clerk of the Board) RECOMMENDATION: Receive and file the approved minutes of the following committees: A. GWRS Steering Committee Meeting of January 8, 2018 B. Steering Committee Meeting of February 28, 2018 C. Operations Committee Meeting of March 7, 2018 D. Legislative and Public Affairs Meeting of March 12, 2018 E. Administration Committee Meeting of March 14, 2018 3. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF MARCH 2O18 (Lorenzo Tyner) RECOMMENDATION: Receive and file the report of the Investment Transactions for the month of March 2018. OPERATIONS COMMITTEE: 4. COSTA MESA SANITARY DISTRICT ALTERNATE DISTRICT ENGINEER CONTRACT (Rob Thompson) RECOMMENDATION: Approve an employee lending agreement between the Orange County Sanitation District and the Costa Mesa Sanitary District so the Orange County Sanitation District can provide Alternate District Engineer services, effective May 25, 2018 through May 24, 2019, with one 12-month extension as approved by the General Manager. 5. INLAND EMPIRE REGIONAL COMPOSTING AUTHORITY CONTRACT AMENDMENT 2018-2019 (Jim Colston) RECOMMENDATION: Approve Contract Amendment number 4600001879-003 with Inland Empire Regional Composting Authority to receive and compost up to an average of 50 wet tons per day of the Orange County Sanitation District's biosolids at a base fee (tipping fee) of$57 per wet ton, plus an administrative fee of $2 per wet ton and any other adjustments provided for in the original agreement. This contract amendment shall serve as the third and final annual renewal of three one- year renewal options in a total annual amount not to exceed $900,000/year. 6. HEADWORKS REHABILITATION AND EXPANSION AT PLANT NO. 1, PROJECT NO. P1-105 (Rob Thompson) RECOMMENDATION: Approve a contingency increase of$2,103,104 (12%)to the Professional Design Services Agreement with Carollo Engineers for the Headworks Rehabilitation and Expansion at Plant No. 1, Project No. P1-105, for a total contingency amount of$3,856,000 (22%). 04/25/2018 OCSD Board of Directors Agenda Page 2 of 7 7. BATTERY STORAGE SYSTEM AT PLANT NO. 1, PROJECT NO. FE17-03 (Rob Thompson) RECOMMENDATION: A. Approve a ten-year Energy Management Services Agreement with Advanced Microgrid Solutions, Inc. to provide, install, and operate a battery energy storage system at Plant No. 1; and B. Approve an Installation Agreement with Advanced Microgrid Solutions, Inc. to upgrade the power feed cables from the Central Generation Building to Power Building 6 at Plant No. 1 for a total amount not to exceed $393,000. 8. REGIONAL ODOR AND CORROSION CONTROL SERVICES (ROCCS) PROGRAM, SPECIFICATION NO. C-2107-899BD (Ed Torres) RECOMMENDATION: A. Receive and file bid tabulation and Notice of Intent to Award dated March 12, 2018 for the Regional Odor and Corrosion Control System (ROCCS) Program, Specification No. C-2017-899BD; B. Receive and file Pencco award protest statement dated March 12, 2018 for Specification No. C-2017-899BD; C. Receive and file Orange County Sanitation District's Protest Determination Letter dated March 15, 2018; D. Receive and file Pencco's Determination Response letter dated March 19, 2018; E. Award a Chemical Supplier Agreement to Hill Brothers Chemical Co, for the ROCCS Program, Specification No. C-2017-89913D, for the following chemical supply and dosing services for the period July 1, 2018 through June 30, 2019,with four (4) one-year renewal options, for the: 1. Supply and delivery of Ferrous Chloride at the unit price of $508.82/dry ton delivered (plus applicable sales tax); with Application Services at a unit price of $25/per site per day and Field Services at a unit price of $25/per site per day for an estimated total annual amount of$2,001,263; 2. Supply and delivery of Magnesium Hydroxide at a unit price of $498.62/dry ton delivered (plus applicable sales tax) with Application Services of $80/per site per day; Field Services of $80/per site per day and demurrage (Special Circumstances)of$635/dry ton (plus applicable sales tax) with a dosing fee of $190/hour for an estimated total annual amount of$2,505,152; 3. An annual not to exceed agreement allowance of $50,000 for mobilization and demobilization services; 04/25/2018 OCSD Board of Directors Agenda Page 3 of 7 F. Award a Chemical Supplier Agreement to US Peroxide, LLC dba USP Technologies, for the ROCCS Program, Specification No. C-2017-89913D, for the period July 1, 2018 through June 30, 2019, with four (4) one-year renewal options for the supply and delivery of Calcium Nitrate at the unit price of $1.975/gallon delivered (plus applicable sales tax) with Application Services at a unit price of$25/per site per day; Field Services at a unit price of $25/per site per day; a Crystal Cove delivery fee of$175 per delivery for an estimated annual amount of$498,794: 1. With an annual not to exceed agreement allowance of $50,000 for mobilization and demobilization services; and G. Approve an annual unit price and program price contingency of 15%, per agreement. ADMINISTRATION COMMITTEE: 9. 2018 CONFLICT OF INTEREST CODE (Clerk of the Board) RECOMMENDATION: Adopt Resolution No. OCSD 18-04 entitled, "A Resolution of the Board of Directors of Orange County Sanitation District adopting a Conflict of Interest Code which supersedes all prior Conflict of Interest Codes and amendments previously adopted." LEGISLATIVE & PUBLIC AFFAIRS COMMITTEE: 10. AB 967: DISPOSAL OF HUMAN REMAINS VIA WATER CREMATION (Jim Colston) RECOMMENDATION: Direct staff to prepare amendments to the Orange County Sanitation District's (Sanitation District) Wastewater Discharge Regulations Ordinance No. OCSD-48 for consideration by the Board of Directors prohibiting the direct or indirect receipt of hydrolysate into the Sanitation District's sewerage system. STEERING COMMITTEE: 11. TEMPORARY EMPLOYMENT SERVICES (Celia Chandler) RECOMMENDATION: Authorize the General Manager to increase the current Temporary Employment Services (Specification No.CS-2009-421BD) funding of $1,187,190 by $80,000 with temporary service firms for a new total amount not to exceed $1,267,190 for the remainder of the fiscal year (through June 30, 2018). 04/25/2018 OCSD Board of Directors Agenda Page 4 of 7 NON-CONSENT: 12. PROPOSED PURCHASING ORDINANCE NO. OCSD-52 (Lorenzo Tyner) RECOMMENDATION: A. Introduce Ordinance No. OCSD-52, entitled "An Ordinance of the Board of Directors of the Orange County Sanitation District, Establishing Requirements and Procedures for the Purchase of Goods, Services, and Public Works Projects and Repealing Ordinance No. OCSD-47"; B. Motion to read Ordinance No. OCSD-52 by title only and waive reading of said entire Ordinance on April 25, 2018; C. Set May 25, 2018, as the date for the second reading and adoption of Ordinance No. OCSD-52; and D. Direct the Clerk of the Board to publish summaries of the Ordinance as required by law. AB 1234 DISCLOSURE REPORTS: This item allows Board members to provide a brief oral report regarding the disclosure of outside committees, conferences, training, seminars, etc. attended at the Agency's expense, per Government Code§53232.3(d). CLOSED SESSION: During the course of conducting the business set forth on this agenda as a regular meeting of the Board, the Chair may convene the Board in closed session to consider matters of pending real estate negotiations,pending or potential litigation,or personnel matters,pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a)purchase and sale of real property; (b) matters of pending or potential litigation; (c)employment actions or negotiations with employee representatives;or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Board during a permitted closed session and are not available for public inspection. At such time as the Board takes final action on any of these subjects, the minutes will reflect all required disclosures of information. CONVENE IN CLOSED SESSION. (1) CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section 54956.8) Property: 10950 Virginia Cir. Fountain Valley, CA- APN No.156-165-05; 10870 Spencer Ave. Fountain Valley, CA -APN No.156-163-07; 18480 Pacific St. Fountain Valley, CA -APN No.156-165-04; 18430 Pacific St. Fountain Valley, CA -APN No.156-165-06; 18370 Pacific St. Fountain Valley, CA -APN No.156-165-08; 18429 Pacific St. Fountain Valley, CA -APN No.156-163-09; 04/25/2018 OCSD Board of Directors Agenda Page 5 of 7 18410 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-10; 18368 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-11; 10700 Spencer St. Fountain Valley, CA-APN No.156-163-16; 10700 Spencer Ave. Fountain Valley, CA -APN No.156-154-07; 18386 Mt. Langley St. Fountain Valley, CA-APN No.156-154-06; 18385 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-12; 18401 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-13; 18424 Mt. Langley St. Fountain Valley, CA-APN No.156-154-05; 18435 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-14; 18475 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-15; 10725 Ellis Ave. Fountain Valley, CA -APN No.156-154-04; and 10540 Talbert Ave. Fountain Valley, CA -APN No.156-151-03 Agency negotiators: General Manager, Jim Herberg; Assistant General Manager, Bob Ghirelli; Assistant General Manager, Rob Thompson; Director of Finance and Administrative Services, Lorenzo Tyner; Engineering Managers, Kathy Millea and Jeff Mohr; CIP Project Manager, Tom Grant; Kevin Turner and John Gallivan, Cushman and Wakefield. Negotiating parties: Valley Business Park, APN Nos. 156-165-05, 156-165-06, 156-163-07; DK-USA LLC, APN No.156-165-04; Fountain Valley Industrial Parcel 13, APN No.156-165-08; Sukut Real Properties LLC, APN Nos. 156-163-09, 156-163-10, 156-163-11; The Ins Trust Shabtai, Nevon, APN No. 156-163-16; The Ins Trust, APN No. 156-154-07; Fountain Valley Star LLC, APN No. 156-154-06; TN Sheet Metal Inc., APN No. 156-163-12; 18401 Bandilier LLC, APN No. 156-163-13; Phone Lilly Lin-Lin TR, APN No. 156-154-05; JDK Partners, APN No. 156-163-14; Chandler Real Properties, APN No. 156-163-15; Ellis Avenue LLC, APN No. 156-154-04; and SFII Fountain Valley LLC, APN No. 156-151-03 Under negotiation: Instruction to negotiator will concern price and terms of payment. (2) CONFERENCE WITH LEGAL COUNSEL RE EXISTING LITIGATION (Gov. Code Section 54956.9(d)(1))—2 cases Melissa Forman-Woodbridge v. Orange County Sanitation District, Superior Court of California, County of Orange, Case No. 30-2017-00934699 Melissa Forman-Woodbridge—Workers Compensation Appeals Board, Case No. ADJ9906373 04/25/2018 OCSD Board of Directors Agenda Page 6 of 7 (3) CONFERENCE WITH LEGAL COUNSEL —ANTICIPATED LITIGATION Significant exposure to litigation (Government Code Section 54956.9(2)) Claim of Carlos Quiroz RECONVENE IN REGULAR SESSION. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: Adjourn the Board meeting until the Regular Meeting of the Board of Directors on May 23, 2018 at 6:00 p.m. Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations,please contact the Orange County Sanitation District Clerk of the Board's once at(714)593-7433 at least 72 hours priorto 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, and on the Sanitation District's wel ite at www.ocsd.com,not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors,are available for public inspection in the once of the Clerk of the Board. Agenda Description: The agenda provides a brief general description of each Rem of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for a Committee or Board Meeting,items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A.Lore Clerk of the Board (714)593-7433 klore(mocsd.com For any questions on the agenda,Committee members may contact stag sl: General Manager Jim Herberg (714)593-7300 'herbem(dgciii Assistant General Manager Bob Ghimili (714)593-7400 rghirellifraooed.com Assistant General Manager Rob Thompson (714)593-7310 rthomoson(ftesd.com Director of Environmental Services Jim Colston (714)593-7450 ioolston(docsd.com Director of Finance and Lorenzo Tyner (714)593-7550 Itvner(dloced.com Administrative Services Director of Human Resources Celia Chandler (714)593-7202 cchandlendocsd.com Director of Operations 8 Maintenance Ed Torres 714 593-7080 stannO.cad.com 04/25/2018 OCSD Board of Directors Agenda Page 7 of 7 ITEM NO. 1 Orange County Sanitation District MINUTES BOARD MEETING March 28, 2018 ANITAT� 9 U N 2 ,y t o � ftwowm0i THE ENV�Q, Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 0 312 812 01 8 Minutes of Board Meeting Page 1 of 13 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was called to order by Board Chairman Greg Sebourn on March 28, 2018, at 6:03 p.m., in the Administration Building. Director Peter Kim delivered the invocation and led the Pledge of Allegiance. Chair Sebourn stated that the addition to the OCSD Board of Directors is a receive and file item and requires no action; and if no objection, is so ordered. RECEIVED AND FILE MINUTE EXCERPTS OF MEMBER AGENCIES RELATING TO APPOINTMENTS TO THE OCSD BOARD OF DIRECTORS (Clerk of the Board) AGENCY DIRECTOR ALT. DIRECTOR Huntington Beach Erik Peterson Mike Posey The Clerk of the Board declared a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X Gregory Sebourn, Chair Jesus Silva X Denise Barnes Lucille Kring X Allan Bernstein Chuck Puckett X Robert Collacott Diana Fascenelli X Ellery Deaton Sandra Massa-Lavitt X James M. Ferryman Bob Ooten A Phil Hawkins Brooke Jones X Steven Jones Kris Beard X Peter Kim Marshall Goodman X Charlie Nguyen Al Krippner X Richard Murphy Warren Kusumoto X Steve Nagel Cheryl Brothers X Glenn Parker Cecilia Hupp X Scott Peotter Brad Avery X Erik Peterson Mike Posey Tim Shaw X Michael Blazey X David Shawver Carol Warren X Fred Smith Virginia Vaughn X Teresa Smith Mark Murphy A Michelle Steel Shawn Nelson A Sal Tinajero David Benavides X Donald Wagner Lynn Schott A Chad Wanke Ward Smith X John Withers Douglas Reinhart X Mariellen Yarc Stacy Berry 03/28/2018 Minutes of Board Meeting Page 2 of 13 STAFF MEMBERS PRESENT: Jim Herberg, General Manager; Bob Ghirelli, Assistant General Manager; Rob Thompson, Assistant General Manager; Celia Chandler, Director of Human Resources; Ed Torres, Director of Operations & Maintenance; Jim Colston, Director of Environmental Services; Lorenzo Tyner, Director of Finance & Administrative Services; Kelly Lore, Clerk of the Board; Angela Brandt; Jennifer Cabral; Donald Cutler; Rhea DeGuzman; Mike Dorman; Dean Fisher; Lisa Frigo; Al Garcia; Tina Knapp; Jackie Lagade; Mark Manzo; Gerry Matthews; Kathy Millea; Jeff Mohr; Man Nguyen; Heather Park; Lori Shimomura; Roya Sohanaki; Jim Spears; Eros Yong. OTHERS PRESENT: Brad Hogin (General Counsel); Gary Weisberg (Assistant General Counsel); Alternate Director Bob Ooten (CMSD); Mitch Christinsen (Patriot Wastewater); Mirio Chua; Anders Darryl (Patriot Wastewater); Gregorio Estrada (HDR); James Guziak; Roy McCord; Helen Phillips; Carlos Quiroz; Lilian &Sergio Ramor; Al Sandrig; Norma and Donna Schlitz; Ted Tardie; Rich ten Bosch (Black & Veatch); Matt Thomas (Black & Veatch). PUBLIC COMMENTS: Bob Ooten stated that he would be running for Alternate member of OCLAFCO in the upcoming election. The Clerk of the Board presented late communication to the Directors regarding Item No. 1 and Item No. 4. SPECIAL PRESENTATIONS: None. REPORTS: Chair Seboum reminded the Directors that the annual Conflict of Interest Form 700 Filing is due no later than Monday, April 2. General Manager Herberg stated that outreach regarding tonight's proposed rate increases was presented to the Orange County Business Council, OCTax, and the Building Industry Association, and positive feedback was received for the fiscal management of OCSD. Mr. Herberg announced the following awards were received by the agency: Certificate of Achievement for Excellence in Financial Reporting for the 25th consecutive year and the Award of Financial Reporting Achievement by the Government Finance Officers Association of the United States and Canada. In addition, individual awards at the local section of the California Water Environment Association (CWEA), Santa Ana River Basin Section were received by: Larry Andresen, Sr. Plant Operator, received Plant Operator of the Year; Jonathon Powell, Associate Engineer, won the Pretreatment, Pollution Prevention and Stormwater (P3S) Person of the Year Award; Michelle Hetherington and Vicki Francis, Sr. Engineers, received the CWEA Quarter Century Recognition. 03/28/2018 Minutes of Board Meeting Page 3 of 13 CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve the minutes of the Regular Meeting of the Board of Directors held on February 28, 2018. AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke RECEIVE AND FILE: These items require no action; and without objection, will be so ordered by the Board Chair. 2. COMMITTEE MINUTES (Clerk of the Board) Received and filed the approved minutes of the following committees: A. Steering Committee Meeting of January 24, 2018 B. Legislative and Public Affairs Meeting of February 5, 2018 C. Operations Committee Meeting of February 7, 2018 D. Administration Committee Meeting of February 14, 2018 3. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF FEBRUARY 2018 (Lorenzo Tyner) Received and filed the report of the Investment Transactions for the month of February 2018. Chair Seboum announced the order of action on Agenda Items No. 4-6: 1. General Manager Jim Herberg will provide a brief PowerPoint presentation prior to the opening of the first Public Hearing. 2. Proceed to Open the Public Hearing, receive public comment, and then close the public hearing. Each item will be heard separately. 3. During public comment, the Clerk of the Board will call upon the speakers for each public hearing in the order their cards were received. Each speaker will have three minutes to speak. 4. After the public hearing, discussion will begin and staff will answer questions of the Directors. 5. After discussion on Item No. 4, the Clerk of the Board would report the number of protests received on this Item, and announce whether or not there is a majority protest. 6. Ask the Board of Directors for a motion for the item. 03/28/2018 Minutes of Board Meeting Page 4 of 13 7. Clerk of the Board will read the Ordinance title and a roll call vote will be taken on each item separately. PUBLIC HEARING — REGIONAL SEWER SERVICE CHARGES 4. PROPOSED ORDINANCE NO. OCSD-49 ADOPTING REGIONAL SEWER SERVICE CHARGES (Lorenzo Tyner) A. Public Hearing under Proposition 218 for Proposed Multi-Year Regional Sewer Service Charges and under Health and Safety Code section 5473.1 for collection of charges on the tax roll. Mr. Herberg provided an informative PowerPoint presentation regarding the proposed rate structure including the information used to plan and proactively forecast the setting of the rates. He focused on the District's strong financial plan with no new debt issuances and the ability to maintain a AAA bond rating. Mr. Herberg reviewed the operational efficiency and presented a pie chart describing where the money comes from and where the money is distributed. A bar chart was also shown which compared OCSD's Single Family Residential Rate to the same of other agencies throughout the state. Mr. Herberg provided information and comparisons for Industrial Users, Capital Facilities Capacity Charges, and Supplemental Charges and Waste Hauler fees. Finally, Mr. Herberg stated that the commitments of the agency are to be fiscally responsible, maximize Resource Recovery, and rehabilitation and replacement of the Regional Wastewater Infrastructure. Chair Seboum opened the Public Hearing at 6:30 p.m. Public Comments were received in opposition from the following: Kevin McPherson, Bob Lockhart, Ron Bowme, Anthony Trujillo, and James Guziak. At the request of the Chairman, Mr. Herberg briefly responded to the questions and comments from the public. Chair Seboum closed the Public Hearing at 6:47 p.m. B. The Clerk of the Board tabulated the results of the protests received and reported to the Board of Directors that there were 86 written protests and five speakers in opposition this evening. There was not a majority protest. Chair Sebourn framed the discussion by stating that the rate proposal for consideration will increase the rate paid by a homeowner in Orange County an average of$4 per year ($0.33/month)to maintain over $10 billion in infrastructure, cover the inflationary cost of maintaining this system, and pay down the outstanding debt. He stated the importance of having a safe and reliable sewage treatment system to maintain a clean and healthy environment. 03/28/2018 Minutes of Board Meeting Page 5 of 13 Chair Sebourn provided examples of OCSD's achievements over the last 20 years, which he stated have been delivered on time and on budget. He studied the proposed rates, worked directly with staff, and stated that he is confident the proposed rates are prudent and necessary. Chair Sebourn stated that OCSD is consistently trying to reduce costs, streamline processes, and hold the line on staffing, while still increasing the level of wastewater treatment, and further stated that the recommended rate program is less than half of the projected rate of inflation. He also commented on consequences of not approving the proposed rate increases. Director Wagner stated that this action is not being taken based only on tonight's presentation; that the item has been read and worked through at the Committee and Board meetings several times, and thanked the administration for the education. In response to a question from Director Wagner, Mr. Tyner explained the rationale of a single rate vs. varied rates based on flow. He stated that OCSD operates within multiple water systems and data and it would be cost prohibited, at approximately $1,000 to $2,000 per residence, to determine and charge based on the individual flow for each. MOVED. SECONDED, AND DULY CARRIED TO: C. Motion to read Ordinance No. OCSD-49 by title only and waive second reading of said entire ordinance. D. Adopt Ordinance No. OCSD-49 entitled: "An Ordinance of the Board of Directors of Orange County Sanitation District Adopting Regional Sewer Service Charges and Repealing Ordinance No. OCSD-41 and Ordinance No. OCSD-46'; and E. Adopt Resolution No. OCSD 18-03 entitled, "A Resolution of the Board of Directors Directing the County Tax Collector-Treasurer to include Regional Sanitary Sewer Service Charges on the Tax Roll for Fiscal Years 2018-2019 through 2022-2023." Mr. Tyner responded to various questions from the Directors regarding the customer service process of the rebate program. General Counsel Brad Hogin responded to an inquiry regarding reduced rates for special interest groups or hardships, stating that Proposition 218 requires that the agency charge each user his or her fair share, based on the benefit the user gets or puts on the system. Vice-Chair Shawver stated support for the revised rebate program. 03/28/2018 Minutes of Board Meeting Page 6 of 13 The Clerk of the Board read the Ordinance title and proceeded with a roll call vote: AYES: Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: Barnes; and Sebourn ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke PUBLIC HEARING — CAPITAL FACILITIES CAPACITY CHARGES 5. PROPOSED ORDINANCE NO. OCSD-50 ADOPTING CAPITAL FACILITIES CAPACITY CHARGES A. Public hearing conducted for Capital Facilities Capacity Charges Chairman Sebourn opened the Public Hearing at 7:03 p.m. There were no public comments provided. Chair Seboum closed the Public Hearing at 7:04 p.m. MOVED. SECONDED, AND DULY CARRIED TO: B. Motion to read Ordinance No. OCSD-50 by title only and waive second reading of said entire ordinance; C. Adopt Ordinance No. OCSD-50 entitled: "An Ordinance of the Board of Directors of Orange County Sanitation District Adopting Capital Facilities Capacity Charges and Repealing Ordinance No. OCSD40 and Ordinance No. OCSD-42". MOVED, SECONDED, AND DULY CARRIED TO: Reopen the Public Hearing. Chairman Sebourn reopened the Public Hearing at 7:06 p.m. Public Comment was received in opposition from Bob Lockhart. Chairman Sebourn closed the Public Hearing at 7:10 p.m. At the request of Director Parker, Mr. Tyner explained that connection fees are calculated when a City building permit is pulled, not when the certificate of occupancy is completed. He further described the process. The Clerk of the Board read the Ordinance title and proceeded with a roll call vote: AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None 03/28/2018 Minutes of Board Meeting Page 7 of 13 ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke PUBLIC HEARING — MISCELLANEOUS CHARGES AND FEES RELATING TO INDUSTRIAL DISCHARGERS, SOURCE CONTROL PERMITTEES AND WASTEHAULERS 6. PROPOSED ORDINANCE NO. OCSD-51 ADOPTING MISCELLANEOUS CHARGES AND FEES RELATING TO INDUSTRIAL DISCHARGERS, SOURCE CONTROL PERMITTEES AND WASTEHAULERS A. Public Hearing for Proposed Miscellaneous Charges and Fees relating to Industrial Dischargers, Source Control Permittees, and Wastehaulers. Chairman Sebourn opened the Public Hearing at 7:13 p.m. There were no public comments provided. Chair Sebourn closed the Public Hearing at 7:13 p.m. MOVED. SECONDED, AND DULY CARRIED TO: B. Motion to read Ordinance No. OCSD-51 by title only and waive second reading of said entire ordinance; and C. Adopt Ordinance No. OCSD-51 entitled: "An Ordinance of the Board of Directors of Orange County Sanitation District Adopting Miscellaneous Charges and Fees Relating to Industrial Dischargers, Source Control Permittees and Wastehaulers and Repealing Ordinance No. OCSD-40 and Ordinance No. OCSD-42." The Clerk of the Board read the Ordinance title and proceeded with a roll call vote: AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke Chair Sebourn recessed the meeting at 7:16 p.m. Chair Sebourn reconvened the meeting at 7:22 p.m. 03/28/2018 Minutes of Board Meeting Page 8 of 13 OPERATIONS COMMITTEE: 7. RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT PLANT NO. 2, PROJECT NO. P2-123 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Professional Design Services Agreement with Spec Services, Inc. for the Return Activated Sludge Piping Replacement at Plant No. 2, Project No. P2-123, for an amount not to exceed $668,217; and B. Approve a contingency of$66,822 (10%). AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke 8. SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO. 1, PROJECT NO. P1-101 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a contingency increase of $856,800 (12%) to the Professional Consultant Services Agreement with HDR Engineering, Inc. to provide construction support services for Sludge Dewatering and Odor Control at Plant No. 1, Project No. P1-101, for a total contingency amount of $2,142,000 (30%); and B. Direct staff to prepare a detailed report describing the project including significant design, construction and commission issues, and how the issues were resolved (i.e. lessons learned). AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke 03/28/2018 Minutes of Board Meeting Page 9 of 13 9. EAST BASIN DISTRIBUTION BOX REPAIR, PROJECT NO. FE16-10 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Award a construction contract to Howard Ridley Co. Inc. for the East Basin Distribution Box Repair, Project No. FE16-10, for a total amount not to exceed $529,350; and B. Approve a contingency of$52,935 (10%). AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke 10. PLANT NO. 2 CENTRAL GENERATION STEAM TURBINE REHABILITATION (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Sole Source Purchase Order to Dresser-Rand for the assessment and standard overhaul of the Steam Turbine at Plant No. 2, for an amount not to exceed $245,424, including applicable tax and freight; and B. Approve a contingency of$49,085 (20%). AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke 11. SITE ACCESS AND LICENSE AGREEMENT— BREA DOSING STATION (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a new Site Access and License agreement with Pacific Quality Partners to lease property for the purpose of installing, maintaining, and operating a chemical dosing station at 1355 West Imperial Highway in the city of Brea, for a term of 36 months, at the following lease terms, in a form approved by General Counsel: April 22, 2018 through April 21, 2019, $2,500 per month 03/28/2018 Minutes of Board Meeting Page 10 of 13 • April 22, 2019 through April 21, 2020, $2,560 per month • April 22, 2020 through April 21, 2021, $2,620 per month; and B. Authorize the General Manager or designee to negotiate and subsequently award an option for an additional 36-month lease renewal period beginning April 22, 2021. AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke 12. SCADA SYSTEM AND NETWORK UPGRADES, PROJECT NO. P2-107 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Approve a contingency increase of$211,365 (7.5%)to the Professional Design Services Agreement with Brown and Caldwell for SCADA System and Network Upgrades, Project No. P2-107,for a total contingency amount of$493,185 (17.5%). AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke 13. OCEAN OUTFALL SYSTEM REHABILITATION, PROJECT NO. J-117 AND SCADA SYSTEM AND NETWORK UPGRADES, PROJECT NO. P2-107 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a budget increase of $19,000,000 for Ocean Outfall System Rehabilitation, Project No. J-117, for a total budget amount of$166,000,000; and B. Approve a budget reduction of$19,100,000 for SCADA System and Network Upgrades, Project No. P2-107, for a total budget amount of$5,000,000. AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None 03/28/2018 Minutes of Board Meeting Page 11 of 13 ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke 14. SOLE SOURCE LOAD SHEDDING AND PROTECTIVE RELAY SYSTEM (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Authorize staff to specify Schweitzer Engineering Laboratories as the sole source provider for current and future projects equipment, materials, and services for electrical power system protective relays and load-shedding systems at Plant Nos. 1 and 2; B. Authorize staff to negotiate service agreements for services related to protective relays and load-shedding systems for current and future projects, and for on-going operations and maintenance at Plant Nos. 1 and 2; and C. Ratify the addition of Schweitzer Engineering Laboratories to the list of pre-approved Original Equipment Manufacturers for procurements under $100,000 for equipment, materials, and services for electrical power system protective relays and load-shedding systems. AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke ADMINISTRATION COMMITTEE: None. LEGISLATIVE & PUBLIC AFFAIRS COMMITTEE: None. STEERING COMMITTEE: None. NON-CONSENT: None. AB 1234 DISCLOSURE REPORTS: Director Ferryman provided information regarding recently attended meetings of NWRI and OCCOG. 03/28/2018 Minutes of Board Meeting Page 12 of 13 CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54956.8 & 54956.9(2): The Board convened in closed session at 7:28 p.m. to discuss two items. Confidential minutes of the Closed Session have been prepared in accordance with the above Government Code Sections and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Session Meetings. RECONVENED IN REGULAR SESSION: The Board reconvened in regular session at 8:32 p.m. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: Mr. Hogin reported that the Board took the following action in Closed Session: MOVED, SECONDED,AND DULY CARRIED TO: Deny the claim of Carlos Quiroz. AYES: Barnes; Bernstein; Blazey (Alternate); Collacott; Deaton; Ferryman; Jones; Kim; R. Murphy; Nagel; Nguyen; Parker; Peotter; Peterson; Sebourn; Shawver; F. Smith; T. Smith; Wagner; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Steel; Tinajero; and Wanke OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: In response to a request, Chair Sebourn inquired whether the Board of Directors were interested in holding a Budget Workshop. With sufficient interest, staff was instructed to proceed with scheduling. ADJOURNMENT: At 8:33 p.m., Chair Sebourn adjourned the meeting in memory of Marie Herberg, mother of General Manager Jim Herberg, until the Regular Meeting of the Board of Directors to be held on April 25, 2018 at 6:00 p.m. Submitted by: Kelly A. Lore, MMC Clerk of the Board 03/28/2018 Minutes of Board Meeting Page 13 of 13 Orange County Sanitation District MINUTES SPECIAL BOARD MEETING April 11 , 2018 O NS ANITgr� 9 U N ? ,y t O ti l�A,N THE NV�� Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 04/11/2018 Minutes of Special Board Meeting Page 1 of 3 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was called to order by Board Chairman Greg Sebourn on April 11, 2018, at 5:48 p.m., in the Administration Building. The Clerk of the Board declared a quorum was present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X Gregory Sebourn, Chair Jesus Silva X Denise Barnes Lucille Kring X Allan Bernstein Chuck Puckett X Robert Collacott Diana Fasoenelli X Ellery Deaton Sandra Massa-Lavitt X James M. Ferryman Bob Ooten X Phil Hawkins Brooke Jones Steven Jones X Kris Beard X Peter Kim Marshall Goodman X Charlie Nguyen Al Krippner X Richard Murphy Warren Kusumoto X Steve Nagel Cheryl Brothers X Glenn Parker Cecilia Hupp X Scott Peotter Brad Avery X Erik Peterson Mike Posey A Tim Shaw Michael Blazey X David Shawver X Carol Warren X Fred Smith Virginia Vaughn X Teresa Smith Mark Murphy A Michelle Steel Shawn Nelson A Sal Tinajero David Benavides X Donald Wagner Lynn Schott A Chad Wanke Ward Smith X John Withers Douglas Reinhart X Mariellen Yarc Stacy Berry STAFF MEMBERS PRESENT: Jim Herberg, General Manager; Bob Ghirelli, Assistant General Manager; Rob Thompson, Assistant General Manager; Jim Colston, Director of Environmental Services; Ed Torres, Director of Operations and Maintenance; Lorenzo Tyner, Director of Finance & Administrative Services; Kelly Lore, Clerk of the Board; Janine Aguilar; Bob Bell; Jennifer Cabral; Rod Collins; Rhea De Guzman; Mike Dorman; Marc Dubois; Mark Esquer; At Garcia; Stephanie Good; Line Hsiao; Randall Kleinman; Tina Knapp; Jackie Lagade; Mark Manzo; Laura Maravilla; Kathy Millea; Riaz Moinuddin; Jeff Mohr; Andrew Nau; Heather Park; Ddaze Phuong; Roya Sohanaki; and Eros Yong. 04/11/2018 Minutes of special Board Meeting Page 2 of 3 OTHERS PRESENT: None. PUBLIC COMMENTS: None. WELCOME & OPENING REMARKS: Board Chairman Seboum and General Manager Jim Herberg welcomed everyone to the workshop. BUDGET INTRODUCTION: 1. FY 2018-19 AND FY 2019-20 BUDGET WORKSHOP (Lorenzo Tyner) Director of Finance and Administrative Services Lorenzo Tyner provided an overview of the budget process. An informative PowerPoint presentation, including an overview of each department's major expenditures, was provided by the following Directors: Finance &Administrative Services.................................................Lorenzo Tyner General Manager's Office............................................................Bob Ghirelli Human Resources.....................................................................Celia Chandler Environmental Services...............................................................Jim Colston Operations & Maintenance...........................................................Ed Torres Engineering..............................................................................Rob Thompson ADJOURNMENT: At 7:17 p.m. the Special Board Meeting was adjourned until the Regular Board Meeting on April 25, 2018 at 6:00 p.m. Kelly A. Lore, MMC Clerk of the Board 04/11/2018 Minutes of Special Board Meeting Page 3 of 3 ITEM NO. 2 MINUTES OF THE MEETING GROUNDWATER REPLENISHMENT SYSTEM STEERING COMMITTEE Monday, January 8, 2018 OCWD Director Yoh called the Groundwater Replenishment System Steering Committee meeting to order in the Boardroom at the District office. Following the Pledge of Allegiance to the flag, the Secretary called the roll and reported a quorum. Committee Members Greg Seboum- Chair Roger Yoh James Ferryman (Absent) Cathy Green Steve Jones (Absent) Phil Anthony (Absent) Alternates Donald Wagner Phil Hawkins (Absent) Tim Shaw Denis Bilodeau James Vanderbilt (Absent) Dina Nguyen (Absent) OCWD Director Bruce Whitaker was in attendance. OCWD Staff OCSD Staff Eleanor Torres Jim Herber Mehul Patel, Jason Dadakis Christina Fuller, Assistant District Secretary Annual Reorganization of GWRS Steering Committee Officers GWRS Steering Committee member Greg Seboum stated the Steering Committee reorganizes on an annual basis. It was a consensus of the Committee members present to approve the following nominations: 2018 GWRS Steering Committee Chair—OCWD Director Roger Yoh • 2018 GWRS Steering Committee Vice Chair—OCSD Director Greg Seboum CONSENT CALENDAR The Consent Calendar was approved upon motion by Director Sebourn, seconded by Director Green and carried [5-0] as follows. Yes— Seboum, Yoh, Green, Shaw, Bilodeau 1. Minutes of Previous Meeting The minutes of the GWRS Steering Committee meeting held July 10, 2017 are approved as presented. Director Wagner arrived during discussion of the following item. 2. AB 967: Disposal of Human Remains via Water Cremation Executive Director Jason Dadakis stated that the Governor of California signed Assembly Bill (AB) 967 into law in October 2017, creating a regulatory and permitting framework to allow alkaline hydrolysis of human remains (i.e., water cremation) effective July 1, 2020. ,I,,, ' :I ' i t t, eiving a license to operate; any facility performing water cremation n,.i �:m p:. -rits fr om rc appropriate local agency to properly dispose of the liquefied Is „ Ali J.alakis pro. (J an overview of water cremation, AB 967 and key law language iegardng s� disposal I I a presented three primary options for managing water cremation discharges. Upon motion by Director Green, seconded by Director Wagner and carried (6-0) the Comnuttee recommended that OCSD modify its Wastewater Ordinance to prohibit the receipt of hydrolysate through the sewer system. Yes— Sebourn, Yoh, Green, Wagner, Shaw, Bilodeau INFORMATIONAL ITEMS 3. GWRS Operations Update Director of Water Production/GWRS Mehul Patel reported that the average daily average production for the quarter, October through December 2017, was 93.1 mgd. He stated that as of December 30, 2017, the GWRS Fiscal Year to Date production is 52,907.87 acre feet (at) which is 978.57 of above the target production of 51,923.30 of for the first quarter of the 17/18 fiscal year. He reported that OCWD is planning to complete installation of new Reverse Osmosis (RO) membranes in three out of the 21 RO units. He advised the installation of the new RO membranes is anticipated to start in the spring of 2018, 4. Update on GWRS Final Expansion Mr. Patel reported that OCWD has entered into an agreement with Black & Veatch for the design of the remaining four GWRS Final Expansion Projects, He stated that OCSD/OCWD applied for USBR Title XVI grant for P2-122, the P2 Headworks Modification Project and that the application received some of the highest ratings and will be awarded $1,325,000 in grant funding, Mr. Patel advised that this project is being managed through design/construction by OCSD, but costs incurred by OCSD will be reimbursed by OCWD. He recalled that in April 2017 staff submitted a Letter of Interest (LOP for an EPA WIFIA loan in the amount of $123.9 million or 49% of the estimated project cost. Mr. Patel reported that OCWD was selected to submit an application as a result of the LOI. He reported that staff is currently preparing the application and will submit it in spring 2018 and advised this loan would recover approximately 49% of the projects design and construction cost. if received. 5. GWRS 10"ANNIVERSARY UPDATE Director of Public Affairs Eleanor Torres provided an update and tentative schedule of the 10"" anniversary event to be held on February 16, 6. Quarterly Outreach Report fOctober— December 20171 Ms. Torres stated the report and media clips are included in the packet. ADJOURNMENT There being no further business to come before the Committee, the meeting was a journed at 5:45 p.m. OCWD Director Roger Yoh, Chair 2 MINUTES OF THE STEERING COMMITTEE Orange County Sanitation District Wednesday, February 28, 2018 at 5:00 p.m. A regular meeting of the Steering Committee of the Orange County Sanitation District was called to order by Chair Sebourn on Wednesday, February 28, 2018 at 5:04 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Greg Sebourn, Board Chair Jim Herberg, General Manager David Shawver, Board Vice-Chair Bob Ghirelli, Assistant General Manager John Withers, Operations Committee Rob Thompson, Assistant General Chair Manager Ellery Deaton, Member-At-Large Celia Chandler, Director of Human Resources COMMITTEE MEMBERS ABSENT: Ed Torres, Director of Operations & Chad Wanke, Administration Committee Maintenance Chair Lorenzo Tyner, Director of Finance & Tim Shaw, Member-At-Large Administrative Services Donald Wagner, Member-At-Large Kelly Lore, Clerk of the Board Jennifer Cabral Ron Coss Mike Dorman Al Garcia Tina Knapp Kathy Millea Jeff Mohr Ddaze Phuong Tyler Ramirez Jim Spears OTHERS PRESENT: Brad Hogin, General Counsel Jose Zepeda, (IRWD) PUBLIC COMMENTS: No public comments were provided. =2812018 Steering Committee Minutes Page 1 of 4 REPORTS: Chairman Seboum stated that he would provide a report on the GWRS 10'^ Anniversary Celebration at the Board of Directors Meeting and that Director Withers and Vice-Chair Shawver will also report on their recent trip to Sacramento under AB 1234. General Manager Jim Herberg announced that the selection of two Assistant General Managers (AGM) had been made: Rob Thompson was appointed as the AGM overseeing the Operations&Maintenance and Engineering departments and Lorenzo Tyner will be the new AGM overseeing the Administrative Services and Environmental Services Departments. Mr. Herberg stated that Mr. Tyner's appointment will become effective upon the retirement of Assistant General Manager Bob Ghirelli at the end of August. Mr. Herberg provided information regarding the Honor Walk program, explained the nomination and selection procedures, and stated that the ceremony will be held on May 23 prior to the May Board Meeting. Mr. Herberg informed the Committee of the recent Proposition 218 outreach that has taken place; informational presentations were provided to the City of Tustin City Council, OC Tax, and the Orange County Building Association and will be provided to the Orange County Business Council regarding the rate increases. Mr. Herberg stated the receipt of a certificate of appreciation for our annual contribution to the CASA Education Foundation, which helps ensure clean water for Californians by awarding scholarships to promising students on a path to working in a water or sanitation agency. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the Regular Meeting of the Steering Committee held on January 24, 2018. AYES: Deaton; Sebourn, Shawver; and Withers NOES: None ABSTENTIONS: None ABSENT: Shaw; Wagner; and Wanke NON-CONSENT: 2. ESTABLISH PROJECT NO. J-131 FOR 18350 MT. LANGLEY ST. (Rob Thompson) Assistant General Manager Rob Thompson provided a verbal report and responded to questions as to the necessity of this item and capitalization of the OW812018 Sleenng Commdee MinW Page 2 of 4 project. General Manager Herberg also stated that the payment obligations were explained in the agenda report under financial consideration. MOVED. SECONDED. AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Establish 18350 Mt. Langley St. Building Purchase and Improvement Project, Project No. J-131, for the purchase and needed improvements of 18350 Mt. Langley Street, Fountain Valley, with a budget of $11,000,000; and B. Approve a supplemental appropriation of $11,000,000 from available reserves to the Net Capital Improvement Program Budgeted Outlays for FY 2017-18, from $148.061,000 to $159,061,000. AYES: Deaton; Sebourn; Shawver; and Withers NOES: None ABSTENTIONS: None ABSENT: Shaw; Wagner; and Wanke 3. PROPERTY MAINTENANCE SERVICES FOR 18350 MT. LANGLEY STREET, FOUNTAIN VALLEY (Lorenzo Tyner) Mr. Tyner provided a brief overview of the item. MOVED. SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to:Approve a sole source agreement with The Muller Company for Property Management Services, for the period March 1, 2018 through August 31, 2018, for a management fee of $4,200 per month plus other incurred expenses, including two additional renewal periods of six months each. i AYES: Deaton; Sebourn; Shawver; and Withers NOES: None ABSTENTIONS: None ABSENT: Shaw; Wagner; and Wanke Director Wagner arrived at 5:14 p.m. INFORMATION ITEMS: None. CLOSED SESSION: General Counsel Brad Hogin stated that Committee would not convene in closed session. 02/28/2018 Steering Committee Minutes Page 3 of 4 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: Chair Sebourn declared the meeting adjourned at 5:17 p.m. to the next Steering Committee meeting to be held on Wednesday, March 28, 2018 at 5:00 p.m. Submitted by: ell A. , MM Cler oft Board 0212MO18 Steering Committee Minutes Page 4 of 4 MINUTES OF THE OPERATIONS COMMITTEE Orange County Sanitation District Wednesday, March 7, 2018, 5:00 p.m. A regular meeting of the Operations Committee was called to order by Committee Chair Withers on Wednesday, March 7, 2018 at 5:02 p.m. in the Administration Building. Director Collacott led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: John Withers, Chair Jim Herberg, General Manager Ellery Deaton, Vice-Chair Bob Ghirelli, Assistant General Manager Denise Barnes Rob Thompson, Assistant General Manager Robert Collacott Celia Chandler, Director of Human Resources Phil Hawkins Jim Colston, Director of Environmental Services Steve Jones Ed Torres, Director of Operations & Maintenance Scott Peotter Lorenzo Tyner, Director of Finance & Fred Smith Administrative Services Michelle Steel Tina Knapp, Deputy Clerk of the Board Mariellen Yarc Don Cutler Greg Seboum, Board Chair Jacob Dalgoff David Shawver, Board Vice-Chair Mike Dorman Dean Fisher COMMITTEE MEMBERS ABSENT: Alfredo Garcia Allan Bernstein Larry Johnson Tim Shaw Anni Larkins Kathy Millea Jeff Mohr Man Nguyen Victoria Pilko Roya Sohanaki Jim Spears OTHERS PRESENT: Kendra Carney, Assistant General Counsel PUBLIC COMMENTS: None REPORT OF COMMITTEE CHAIR: Committee Chair Withers did not provide a report. OW07=8 Operations Committee Minutes Page 1 of 7 REPORT OF GENERAL MANAGER: General Manager Jim Herberg did not provide a report. Director Peotter arrived at 5:03 p.m. Item No. 3 was removed from the Consent Calendar for separate consideration due to the large dollar amount. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED SECONDED, and DULY CARRIED TO: Approve Minutes of the February 7, 2018 Operations Committee Meeting. AYES: Barnes, Collacott, Deaton, Hawkins, Sebourn, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: Peotter ABSENT: Bernstein, S. Jones, and Shaw 2. RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT PLANT NO. 2, PROJECT NO. P2-123 (Rob Thompson) MOVED. SECONDED, and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Professional Design Services Agreement with Spec Services, Inc. for the Return Activated Sludge Piping Replacement at Plant No. 2, Project No. P2-123, for an amount not to exceed $668,217; and B. Approve a contingency of$66,822 (10%). AYES: Barnes, Collacott, Deaton, Hawkins, Peotter, Seboum, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, S. Jones, and Shaw 4. NEWHOPE-PLACENTIA TRUNK REPLACEMENT, PROJECT NO. 2-72 (Rob Thompson) MOVED. SECONDED. and DULY CARRIED TO: Authorize the General Manager to execute a Cooperative Agreement between the Orange County Sanitation District and the City of Anaheim for traffic signal improvements on State College Boulevard along portions of the Newhope-Placentia Trunk Replacement, Segment B, Project No. 2-72B, for an estimated amount of$175,000, in a form approved by General Counsel. 03/072018 Operations Commdee Minutes Page 2 of 7 AYES: Barnes, Collacott, Deaton, Hawkins, Peotter, Sebourn, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, S. Jones, and Shaw 5. EAST BASIN DISTRIBUTION BOX REPAIR, PROJECT NO. FE16.10 (Rob Thompson) MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Award a construction contract to Howard Ridley Company, Inc. for the East Basin Distribution Box Repair, Project No. FE16-10, for a total amount not to exceed $529,350; and B. Approve a contingency of$52,935 (10%). AYES; Barnes, Collacott, Deaton, Hawkins, Peotter, Sebourn, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, S. Jones, and Shaw 6. PURCHASE OF LATHE FROM REPUBLIC LAGUN MACHINE TOOL COMPANY, TO REPLACE ACRA FEL-31200 LATHE (Ed Torres) MOVED. SECONDED, and DULY CARRIED TO: A. Approve the purchase of an American Turnmaster Power One, 40 series lathe from Republic Lagun Machine Tool Co., Specification E-2017-904, for an amount not to exceed $145,559; and B. Approve a contingency of$4,370 (3e/%). AYES: Barnes, Collacott, Deaton, Hawkins, Peotter, Sebourn, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, S. Jones, and Shaw 7. PLANT NO. 2 CENTRAL GENERATION STEAM TURBINE REHABILITATION (Ed Torres) MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Sole Source Purchase Order to Dresser-Rand for the assessment and standard overhaul of the Steam Turbine at Plant No. 2, for an amount not to exceed $245,424, including applicable tax and freight; and B. Approve a contingency of$49,085 (20%). 03/07=8 Operations Committee Minutes Page 3 of 7 AYES: Barnes, Collacott, Deaton, Hawkins, Peotter, Sebourn, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, S. Jones, and Shaw 8. SITE ACCESS AND LICENSE AGREEMENT — BREA DOSING STATION (Ed Torres) MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a new Site Access and License agreement with Pacific Quality Partners to lease property for the purpose of installing, maintaining, and operating a chemical dosing station at 1355 West Imperial Highway in the city of Brea, for a term of 36 months, at the following lease terms, in a form approved by General Counsel: • April 22, 2018 through April 21, 2019, $2,500 per month • April 22, 2019 through April 21, 2020. $2,560 per month • April 22, 2020 through April 21, 2021, $2,620 per month; and B. Authorize the General Manager or designee to negotiate and subsequently award an option for an additional 36-month lease renewal period beginning April 22, 2021, AYES: Barnes, Collacott, Deaton, Hawkins, Peotter, Sebourn, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, S. Jones, and Shaw Director Steve Jones arrived at 5:06 p.m. Item No. 3 was removed from the Consent Calendar for separate consideration due to the large dollar amount. 3. SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO. 1, PROJECT NO. P1-101 (Rob Thompson) Assistant General Manager Rob Thompson provided background information pertaining to this item and the complexities of the project. Engineering Manager Jeff Mohr provided a PowerPoint presentation on this item which included a more detailed of the project, current progress, schedule update, staffing challenges, consultant costs, and budget considerations. The Committee requested that staff prepare a detailed report describing the project including significant design, construction and commission issues, and how the issues were resolved (i.e. lessons learned). 0 3/0 712 01 6 Operations Committee Minutes Page 4 of 7 MOVED. SECONDED. and DULY CARRIED TO Recommend to the Board of Directors to: Approve a contingency increase of $856,800 (12%) to the Professional Consultant Services Agreement with HDR Engineering, Inc. to provide construction support services for Sludge Dewatering and Odor Control at Plant No. 1, Project No. P1-101, for a total contingency amount of $2,142,000 (30%) and prepare a detailed report describing the project including significant design, construction and commission issues, and how the issues were resolved (i.e. lessons learned). AYES: Barnes, Collacott, Deaton, Hawkins, S. Jones, Peotter, Sebourn, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein and Shaw NON-CONSENT CALENDAR: Engineering Manager Mike Dorman gave a presentation pertaining to Item Nos. 9, 10, and 11, The presentation included elements of Project No. P2-107, an overview of the load shedding system, information about arc flash events and methods to reduce arc flash levels, an overview of Project No. J-117, and specific information pertaining to the load shedding sole source. 9. SCADA SYSTEM AND NETWORK UPGRADES, PROJECT NO. P2-107 (Rob Thompson) MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: Approve a contingency increase of $211,365 (7.5%) to the Professional Design Services Agreement with Brown and Caldwell for SCADA System and Network Upgrades, Project No. P2-107, for a total contingency amount of$493,185 (17.5%). AYES: Barnes, Collacott, Deaton, Hawkins, S. Jones, Peotter, Sebourn, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein and Shaw 10. OCEAN OUTFALL SYSTEM REHABILITATION, PROJECT NO. J-117 AND SCADA SYSTEM AND NETWORK UPGRADES, PROJECT NO. P2-107 (Rob Thompson) MOVED. SECONDED. and DULY CARRIED T0: Recommend to the Board of Directors to: A. Approve a budget increase of $19,000,000 for Ocean Outfall System Rehabilitation, Project No. J-117, for a total budget amount of $166,000,000; and OW0712018 Operations Committee Minutes Page 5 of B. Approve a budget reduction of $19,100,000 for SCADA System and Network Upgrades, Project No. P2-107, for a total budget amount of $5,000,000. AYES: Barnes, Collacott, Deaton, Hawkins, S. Jones, Peotter, Seboum, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein and Shaw 11. SOLE SOURCE LOAD SHEDDING AND PROTECTIVE RELAY SYSTEM (Rob Thompson) MOVED, SECONDED, and DULY CARRIED TO: Recommend to the Board of Directors to: A. Authorize staff to specify Schweitzer Engineering Laboratories as the sole source provider for current and future projects equipment, materials, and services for electrical power system protective relays and load-shedding systems at Plant Nos. 1 and 2; B. Authorize staff to negotiate service agreements for services related to protective relays and load-shedding systems for current and future projects, and for on-going operations and maintenance at Plant Nos. 1 and 2; and C. Ratify the addition of Schweitzer Engineering Laboratories to the list of pre-approved Original Equipment Manufacturers for procurements under $100,000 for equipment, materials, and services for electrical power system protective relays and load-shedding systems. AYES: Barnes, Collacott, Deaton, Hawkins, S. Jones, Peotter, Sebourn, Shawver, F. Smith, Steel, Withers, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein and Shaw Chair Withers and Director Peotter departed the meeting at 5:45 p.m. INFORMATION ITEMS: 12. SEAL BEACH PUMP STATION REHABILITATION, PROJECT NO. 3-62, AND REHABILITATION OF THE WESTERN REGIONAL SEWERS, PROJECT NO. 3-64 (Rob Thompson) Mr. Thompson provided a brief overview of this item and Mr. Mohr provided a PowerPoint presentation that provided an overview of the Western Regional Sewer Area; an overview of the Seal Beach West Side Pump Station, Seal Beach Pump Station, Westminster Blvd. Force Mains, and the Seal Beach Interceptor; and an alternative approach to addressing key questions facing these assets. Director Hawkins departed the meeting at 5.59 p.m. 03/ 7=8 Operations CommHtee Minutes Page 6 of 7 Director S. Jones departed the meeting at 6:01 p.m. DEPARTMENT HEAD REPORTS: Board Vice-Chair Shawver provided a brief report on the recent lobby days in Sacramento. Director of Finance & Admin Services Lorenzo Tyner reported that, for the 2511 consecutive year, OCSD earned the Certificate of Achievement for Excellence in Financial Reporting (CGFO). The Board Chair reminded the Committee of the importance of attendance at all Board and Committee meetings and asked that the Directors coordinate with their Alternates should they be unable to attend a meeting. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT Committee Vice-Chair Deaton declared the meeting adjourned at 6:09 p.m. to the next scheduled meeting of Wednesday, April 4, 2018 at 5:00 p.m. Submitted by, Tl/IneU�vt �� Tina Knapp, CMC Deputy Clerk of the Board ON072018 Operations Committee Minutes Page 7 of 7 MINUTES OF THE LEGISLATIVE AND PUBLIC AFFAIRS COMMITTEE Orange County Sanitation District Monday, March 12, 2018 at 12:00 p.m. A meeting of the Legislative and Public Affairs Committee was called to order by Chair Sebourn on Monday, March 12, 2018 at 12:01 p.m. in the Administration Building of the Orange County Sanitation District. Director Donald Wagner led the pledge of allegiance. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Greg Sebourn, Board Chair Jim Herberg, General Manager David Shawver, Board Vice-Chair Bob Ghirelli, Assistant General Manager Allan Bernstein, Member-At-Large Rob Thompson, Assistant General Manager Peter Kim, Member-At-Large Celia Chandler, Director of Human Resources Donald P. Wagner, Member-At-Large Jim Colston, Director of Environmental Services Chad Warlike, Member-At-Large Ed Torres, Director of Operations & John Withers, Member-At-Large Maintenance Lorenzo Tyner, Director of Finance & COMMITTEE MEMBERS ABSENT: Administrative Services None Tina Knapp, Deputy Clerk of the Board Kathryn Beechinor Jennifer Cabral At Garcia Rebecca Long Kelly Newell Man Nguyen OTHERS PRESENT: Brad Hogin, General Counsel Eric O'Donnell, Townsend Public Affairs David French, ENS Resources (via teleconference) PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Board Vice-Chair Shawver reported on the recent honor of receiving recognition in Sacramento for the loth anniversary of the Groundwater Replenishment System. Vice- Chair Shawver also reported that it was a successful lobbying trip and contact was made with key legislators. Vice-Chair Shawver indicated that he will be departing the meeting early. 0311212018 Legislative and Public Affairs Committee Minutes Page 1 of REPORT OF GENERAL MANAGER: General Manager Jim Herberg reported on outreach made pertaining to the proposed rate increase and perceived responses to same. Director Withers suggested writing an op-ed piece providing the reasoning for the rate increase and what services OCSD provides to the public that can be further achieved through the increase. Vice-Chair Shawver suggested doing this after the proposed rates are adopted. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED. SECONDED. and DULY CARRIED TO: Approve minutes for the Committee meeting held on February 5, 2018. Bernstein, Kim, Seboum, Shawver, Wagner, Wanke, AYES: and Withers NOES: None ABSTENTIONS: None ABSENT: None Board Vice-Chair Shawver departed the meeting at 12:07 p.m. NON-CONSENT CALENDAR: None. INFORMATION ITEMS: 2. LEGISLATIVE AFFAIRS UPDATE (Rebecca Long) Rebecca Long, Senior Public Affairs Specialist, reported on the CASA Federal legislative meeting in Washington, DC that she and Jim Colston, Director of Environmental Services, recently attended. Mr. Colston reported on a couple of items that he learned during the meeting: the EPA continues to work towards a better rule pertaining to effluent toxicity testing and has also been focusing on the science and tools needed to support the land application of biosolids and the screening needed. Ms. Long introduced David French, ENS Resources, who reported on the following items: Senator Feinstein's staff asked OCSD to consider submitting programmatic appropriations requests in support of OCSD priorities and activities for further review in the next round of appropriations, work continues on last year's appropriations process and developing an omnibus spending bill which should allow for grant funding for grants that were previously awarded, and this past week 0112 18 Legislative aM Public Affairs Commillee Minutes Page 2 of 4 Representative Napolitano introduced the Water Recycling Investment and Improvement Act (H.R. 5127). Mr. French continued by summarizing the key elements of H.R. 5127 that are of interest to OCSD. Mr. French indicated that meetings are being scheduled for the lobby days in Washington, DC in April. Eric O'Donnell,Townsend PublicAffairs(TPA), provided an informative PowerPoint presentation that began with reviewing the key dates of the 2018 legislative session and other general information pertaining to this legislative session and recent activity regarding long term water conservation regulations (SB 606/AB 1668). Board Chair Sebourn expressed the importance of the legislature acknowledging the differences between potable reuse and recycling for irrigation use as it pertains to these water conservation regulations and credits offered. Mr. O'Donnell continued his presentation by reviewing SB 212 (Jackson) which would define home-generated pharmaceutical waste in an effort to reduce harmful disposal practices. OCSD supports SB 212 (Jackson) and will be part of working group that will be convened regarding this legislation. Mr. O'Donnell's presentation also provided an update on SB 831 (Wieckowski) which would eliminate all local agency, school district, special district, and water corporation fees for an Accessory Dwelling Unit (ADU). The Committee discussed components of this bill and indicated it would be appropriate for OCSD to oppose this bill, action which is consistent with the Legislative and Regulatory Plan adopted by the Board of Directors. Mr. O'Donnell continued by providing an update on AB 2003 (Daly) which is the legislation sponsored by OCSD. This legislation should be heard in April. Mr. O'Donnell also reviewed the advocacy strategy pertaining to this legislation and support and opposition received thus far. The Board Chair reordered the agenda and Item No. 4 was presented prior to Item No. 3. 4. GROUNDWATER REPLENISHMENT SYSTEM 10TM ANNIVERSARY RECAP (Rebecca Long) Ms. Long provided a PowerPoint presentation that recapped the GWRS 101h anniversary event, Winter Fast, and the Guinness world record setting. A video pertaining to this event was also shown. Director Withers departed the meeting at 12:41 p.m. 3. PUBLIC AFFAIRS UPDATE (Jennifer Cabral) Jennifer Cabral, Public Affairs Supervisor, reminded the Committee that Honor Walk nominations are due this week and provided an overview of outreach events and activities. 0311=018 Legislative aM Public:Affairs Cemmieee Minutes Page 3 of 4 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: Chair Seboum declared the meeting adjoumed at 12:52 p.m. to the next Legislative and Public Affairs Committee meeting, Monday, April 9, 2018 at 3:30 p.m. Submitted by: T pr-ft- Tina Knapp, CIVIC Clerk of the Board GW12/ 016 Legislative and Public Affairs Committee Minutes Page 4 of 4 MINUTES OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, March 14, 2018 at 5:00 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Committee Chairman Wanke on March 14, 2018 at 5:00 p.m. in the Administration Building of the Orange County Sanitation District. Committee Chairman Wanks led the Flag Salute. A quorum was declared present as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Chad Wanke, Chairman Bob Ghirelli, Assistant General Manager Donald P. Wagner, Vice-Chairman Rob Thompson, Director of Engineering Jim Ferryman Celia Chandler, Director of Human Resources Peter Kim Jim Colston, Director of Environmental Richard Murphy Services Steve Nagel Lorenzo Tyner, Director of Finance & Charlie Nguyen Administrative Services Glenn Parker Kelly Lore, Clerk of the Board Erik Peterson (Alternate) Jennifer Cabral Teresa Smith Mike Dorman Greg Sebourn, Board Chairman At Garcia David Shawver, Board Vice-Chairman Randall Kleinman Man Nguyen COMMITTEE MEMBERS ABSENT: Ddaze Phuong Sal Tinajero Roya Sohanaki Richard Spencer Mike White OTHERS PRESENT: Brad Hogin, General Counsel PUBLIC COMMENTS: None. REPORTS: Director of Finance and Administrative Services, Lorenzo Tyner stated that for the 25th consecutive year, Orange County Sanitation District received the Certificate of Achievement for Excellence in Financial Reporting for the FY 2017 CAFR. Committee Chair Wanke did not provide a report. 03114/2018 AEminisMiun Committee Minutes Page 1 of 3 CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the February 14, 2018 Administration Committee Meeting. AYES: Ferryman, Kim, Nagel, Parker, Sebourn, Shawver, T. Smith, Wanke and Wagner NOES: None ABSTENTIONS: Murphy and Peterson (Alternate) ABSENT: Nguyen and Tinajero INFORMATION ITEMS: 2. SUPERVISORY CONTROL AND DATA ACQUISITION (SCADA) SYSTEM AT PLANT NO. 1, PLANT NO. 2, AND PUMP STATION (Rob Thompson) Assistant General Manager Rob Thompson introduced Engineering Manager Mike Doran who provided an informative PowerPoint presentation regarding the SCADA system including: Network architecture; processes; logic controllers; maintainability plan, Human Machine Interface system; network equipment and the future implementation and upgrade schedules. Director Nguyen arrived at 5:15 p.m. 3. BUSINESS CONTINUITY PROGRAM UPDATE (Celia Chandler) Principal Financial Analyst Randall Kleinman provided a PowerPoint presentation regarding the necessity of a continuity of operations in the event of an emergency, the planning efforts completed by staff in preparation of the plan, and the essential functions of the plan. 4. FY 2018-19 AND FY 2019-20 ORANGE COUNTY SANITATION DISTRICT BUDGET UPDATE (Lorenzo Tyner) Mr. Tyner introduced Controller Mike White who provided a PowerPoint presentation regarding the revenues and reserves for Fiscal Years 2018-19 and 2019-20 including: Four major categories of revenues; Fees and charges; General User Fees; Ten largest Industrial user; Property tax rise with continuing economic recovery; debt proceeds; reserve policy summary and criteria summary. Mr. White, Mr. Tyner and Mr. Assistant General Manager Rob Thompson responded to questions regarding the reserve factors, planning for catastrophic events, protection of assets and fee determination. 0311412018 Administration committee Minutes Page 2 of 3 DEPARTMENT HEAD REPORTS: None. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Board Chairman Sebourn announced that General Manager Jim Herberg is absent due to the passing of his mother. ADJOURNMENT: Committee Chair Wanke declared the meeting adjourned in memory of Mrs. Marie Herberg, at 5:46 p.m. to the next regularly scheduled meeting of Wednesday, April 11, 2018 at 5:00 p.m. Submitted by: 4KeWeo 03/142018 Administration Committee Minutes Page 3 of 3 BOARD OF DIRECTORS Meeting Date TOBd.Of Dk. -- oa/zs/IB AGENDA REPORT Item Item 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF MARCH 2O18 GENERAL MANAGER'S RECOMMENDATION Receive and file the report of the Investment Transactions for the month of March 2018. BACKGROUND The CA Government Code requires that a monthly report of investment transactions be provided to the legislative body. Attached is the monthly report of investment transactions for the month ended March 31, 2018. RELEVANT STANDARDS CA Government Code Section 53607 PRIOR COMMITTEE/BOARD ACTIONS N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following aftachment(s)is included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: Report of the Investment Transactions for the month ended March 31, 2018 Page 1 of 1 U.S. Bank Transaction History 03/01/2018 Thru 03/31/2018 Post Date CUSIP Id Explanation Units Prios Net Cash Amt Cost Gain/Loss ACQUISITIONS 03/01/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 33,330.0000 1.000000 -33,330,00 33,330.00 0,00 03/01/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 9,391.5400 1.000000 -9,391.54 9,391.54 0.00 03/02/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 28,746.2800 1.000000 -28,746.28 28,746.28 0.00 03/05/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 29,375.0000 1.000000 -29,375.00 29,375.00 0.00 03/07/2018 31846VS67 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 5,021.875.0000 1.000000 5,021.875.00 5,021.875.00 0.00 03/08/2018 31846V567 PURCHASED UNITS OF FIRST AM GONT OB FD CL Z 56,250.0000 1.000000 -56.250.00 56.250.00 0.00 03/09/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 7,551,562.5000 1.000000 -7,551,562.50 7,551,562.50 0.00 03/12/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 24,380.0000 1.000000 -24,380.00 24,380.00 0.00 03/13/2018 06538CFD8 PURCHASED PAR VALUE OF BANK OF TOKYO MITSUBIS C P 6/131181MUFG UNION 8,240.000.0000 0.994633 -8,195.778.67 8,195.778.67 0.00 BK NA/MMI/PIMS/IPA/8,240,000 PAR VALUE AT 99.46333337% 03/13/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,031,357.4000 1.000000 -2,031,357.40 2,031,357.40 0.00 03/13/2018 44932HAH6 PURCHASED PAR VALUE OF IBM CREDIT CORP 3.000% 2/06123/BARCLAYS 1,680,000.0000 0.990310 -1,663,720.80 1,663,720.80 0.00 CAPITAL INC.FIXED IN/1,680,000 PAR VALUE AT 99.031 % 03/13/2018 44932HAH6 PURCHASED PAR VALUE OF IBM CREDIT CORP 3.000% 2/06123/PERSHING 2.985,000.0000 0.990130 -2,955.538.05 2.955.538.05 0.00 LLC/2,985,000 PAR VALUE AT 99,013% 03/14/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 56,875.0000 1.000000 -56,875.00 56,875.00 0.00 03/15/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 157.572.1800 1.000000 -157.572.18 157.572.18 0.00 03/15/2018 31846V567 PURCHASED UNITS OF FIRST AM GONT OB FD CL Z 907,675.5500 1.000000 -907.675.55 907.675.55 0.00 03/16/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 58,529.5700 1.000000 -58,529.57 58,529.57 0.00 03/19/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3,001,500.0000 1.000000 3,001,500.00 3,001,500.00 0.00 03/19/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 4.161.5000 1.000000 3,161.50 4.161.50 0.00 03/20/2018 4042BOBFS PURCHASED PAR VALUE OF HSBC HOLDINGS PLC 2.650% 1/05/22/PERSHING 1.500,000.0000 0.971560 -1,457.340.00 1,457.340.00 0.00 LLC/1,500,000 PAR VALUE AT 97.156% 03/20/201847788CAB8 PURCHASED PAR VALUE OF JOHN DEERE OWNER 2.420%10/15120/MITSUBISHI 1,800,000.0000 0.997969 -1,796,343.75 1,796,343.75 0.00 UFJ SECURITIES USA/1,800,000 PAR VALUE AT 99.796875% 03/21/2018 313385VE3 PURCHASED PAR VALUE OF F H L B DISC NTS 4/06118/JEFFERIES 4,350,000.0000 0.999244 .4,346.713.33 4.346.713.33 0.00 LLC/4,350,000 PAR VALUE AT 99,92444437% 03/21/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 5,000,000.0000 1.000000 5,000,000.00 5,000,000.00 0.00 03/22/2018 89233HE75 PURCHASED PAR VALUE OF TOYOTA MOTOR CREDIT CO C P 5/07/18/DBTC 8,000.000.0000 0.997585 -7,980.680.00 7,980.680.00 0.00 AMERICAS/COMMERCIAL PAPER18,000,000 PAR VALUE AT 99.7585% 03/26/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3,188.2500 1,000000 -3,188.25 3,188.25 0.00 03/26/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 28,467.4000 1.000000 -28,467.40 28,467.40 0.00 03/28/2018 313385VZ6 PURCHASED PAR VALUE OF F H L B DISC NTS 4/25/18/GOLDMAN SACHS 8 10,000.000.0000 0.998689 -9,986.894.44 9,986,894.44 0.00 CO.LLC/10,000,000 PAR VALUE AT 99.8689444% 1 of 7 U.S. Bank Transaction History 03/01/2018 Thru 03/31/2018 Post Date CUSIPId Explanation Units Price Net Cash Anat Cost Gain/Loss 03/28/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 522,070.4200 1.000000 -522,070 42 522,07042 0.00 03/28/2018 69353RFB9 PURCHASED PAR VALUE OF PNC BANK NA MTN 2.625% 2/17/22/GOLDMAN 1,000.000.0000 0.974940 -974,940.00 974.940.00 0.00 SACHS&CO.LLC/1,000,000 PAR VALUE AT 97.494% 03/29/2018 3135GOT94 PURCHASED PAR VALUE OF F N M A DEB 2.375% 1/19/23/J.P.MORGAN 3,000,000.0000 0.985470 -2,956,410.00 2,956,410.00 0.00 SECURITIES LLC/3,000,000 PAR VALUE AT 98.547% 03/29/2018 4581XOCS5 PURCHASED PAR VALUE OF INTER AMERICAN DEVEL 1.875% 3115/21 /BMO 1,500,000.0000 0.979470 -1,469,205,00 1,469,205.00 0,00 CAPITAL MARKETS CORP/BONDS/1,500,000 PAR VALUE AT 97.947% TOTAL ACQUISITIONS 68,581,307.5900 -68,309,871.63 68,309,871.63 0.00 DISPOSITIONS 03/07/2018 3137EADP1 MATURED PAR VALUE OF F H L M C 0,875% 3/07/18 5,000,000 PAR VALUE AT -5,000,000.0000 1.000000 5,000,000.00 -4,974,100.00 25,900.00 100% 03/09/2018 31337BA43 MATURED PAR VALUE OF F H L B DEB 1.375% 3/09118 7,500,000 PAR VALUE AT -7,500,000.0000 1.000000 7,500.000.00 -7,544.850.00 .44,850.00 100% 03/13/2018 06538CCD1 MATURED PAR VALUE OF BANK OF TOKYO MITSUBIS C P 3/13/18 6,665,000 PAR -6,665,000.0000 1.000000 6,631,443.58 -6,631,443.58 0.00 VALUE AT 100% 03/19/2018 025816AY5 MATURED PAR VALUE OF AMERICAN EXPRESS 7.000% 3119/182,900.000 PAR -2,900,000.0000 1.000000 2,900.000.00 -3,377.385.79 477,385.79 VALUE AT 100% 03/21/2018 3133851,144 MATURED PAR VALUE OF F H L B DISC NTS 3/21/18 5,000,000 PAR VALUE AT 5,000,000.0000 1.000000 4,995,722.22 -4,995,722.22 0.00 100% 03/28/2018 313385UV6 MATURED PAR VALUE OF F H L B DISC NTS 3/28118 1,500,000 PAR VALUE AT -1.500.000.0000 1.000000 1,498.223.75 -1,498.223.75 0.00 100% 03/01/2018 83162CLJO PAID DOWN PAR VALUE OF S B A GTD DEV PART 6.340% 3/01/21 -7,901.1200 6.581345 7,901.12 -7,901.12 0.00 03/15/2018 31348SWZ3 PAID DOWN PAR VALUE OF F H L M C#786064 3.426% 1101/28 FEBRUARY FHLMC -15.9200 0.000000 15.92 -15.53 0.39 DUE 3/15118 03/15/2018 3133TCE95 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 3.391% 8/15/32 -998.4000 0.000000 998.40 -999.44 -1.04 03/15/2018 43814QAC2 PAID DOWN PAR VALUE OF HONDA AUTO 1.390% 4115120 -120,198.7300 5.962096 120,198.73 -120.196.40 2.33 03/15/2018 47788NAB4 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.090% 2/15119 CMO FINAL -140,599.4700 0.000000 140,599.47 -140.590.89 8.58 PAYDOWN 03/15/2018 47788MAC4 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.360% 4/15120 -153,535.6900 4.667556 153,535.69 -153,511.52 24.17 03/15/201847787XAB3 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.500%10/15/19 -114.499.8800 6.258839 114,499.88 -114.499.42 0.46 03/15/2018 47788BABO PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.590% 4115120 -81.819.1800 8.758782 81,819.18 -81.812.07 7.11 03/15/2018 65478WAB1 PAID DOWN PAR VALUE OF NISSAN AUTO 1.070% 5/15119 -130,358.1600 5.497442 130,358.16 -130,353.02 5.14 03/15/2018 654747ABO PAID DOWN PAR VALUE OF NISSAN AUTO 1.470% 1/15/20 -96,424.3500 7.432110 96,424.35 -96,423.86 0.49 03/15/201889236WAC2 PAID DOWN PAR VALUE OF TOYOTA AUTO 1.120% 2/15/19 -127.480.7100 5.621528 127.480.71 -127.461.43 19.28 03/16/2018 3837144NX9 PAID DOWN PAR VALUE OF G N M A GTD REMIC 2.088% 2/16/30 -997.9800 0.000000 997.98 -997.98 0.00 2 of U.S. Bank Transaction History 03/01/2018 Thru 03/31/2018 Post Date CUSIPId Explanation Units Price Net Cash Anat Cost Gain/Loss 03/20/2018 36225CAZ9 PAID DOWN PAR VALUE OF G N M A I I#OB0023 3.125%12/20/26 FEBRUARY GNMA -195.9000 0.000000 195.90 -199.14 -3 24 DUE 3120118 03/20/2018 36225CC20 PAID DOWN PAR VALUE OF G N M A 119080088 2.625% 6120127 FEBRUARY GNMA -1.035.7600 0.000000 1.035.76 -1.058.42 -22.66 DUE 3120118 03/20/2018 36225CNM4 PAID DOWN PAR VALUE OF G N M A 11#080395 2.625% 4/20130 FEBRUARY GNMA 53.2300 0.000000 53.23 52.75 0.48 DUE 3120118 03/20/2018 36225CN28 PAID DOWN PAR VALUE OF G N M A 119080408 2.625% 5120130 FEBRUARY GNMA -398.4400 0.000000 398.44 -394.39 4.05 DUE 3120118 03/20/2018 36225DCB8 PAID DOWN PAR VALUE OF G N M A 11#080965 2.750% 7/20134 FEBRUARY GNMA -1,256.2000 0.000000 1,256.20 -1,255.41 0.79 DUE 3120118 03/21/2018 43814TAB8 PAID DOWN PAR VALUE OF HONDA AUTO 1.420% 7122119 -143.873.4200 0.000000 143,873.42 -143.869.98 3.44 03/2612018 31394JY35 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 6.500% 9/25/43 -2,756.8100 0.000000 2,756.81 -3,12.2.09 -365.28 03/26/2018 31371NUC7 PAID DOWN PAR VALUE OF F N M A#257179 4.500% 4/01128 FEBRUARY FNMA -160.2000 0.000000 160.20 -169.43 -9.23 DUE 3125118 03/26/2018 31376KT22 PAID DOWN PAR VALUE OF F N M A#357969 5.000% 9101135 FEBRUARY FNMA -1,812.7400 0.000000 1.812.74 -1.948.70 -135.96 DUE 3125118 03/26/2018 31381 PDA3 PAID DOWN PAR VALUE OF F N M A#466397 3.1733%11/01/20 FEBRUARY FNMA -788.7000 0.000000 788.70 -771.63 17.07 DUE 3125/18 03/26/2018 31403DJZ3 PAID DOWN PAR VALUE OFF N M A#745580 5.000% 6101136 FEBRUARY FNMA -1,994.3100 0.000000 1.994.31 -2.143.88 -149.57 DUE 3125118 03/26/2018 31403GXF4 PAID DOWN PAR VALUE OF F N M A#748678 5.000%10/01/33 FEBRUARY FNMA -15.0700 0.000000 15.07 -16.20 -1.13 DUE 3125/18 03/26/2018 31406PQYB PAID DOWN PAR VALUE OF F N M A#815971 5.000% 3101135 FEBRUARY FNMA -934.7900 0.000000 934.79 -1.004.90 -70.11 DUE 3125118 03/26/2018 31406XWT5 PAID DOWN PAR VALUE OF F N M A#823358 3.484% 2/01135 FEBRUARY FNMA -480.5200 0.000000 480.52 476.77 3.75 DUE 3125118 03/26/2018 31407BXH7 PAID DOWN PAR VALUE OF F N M A#826080 5.000% 7101135 FEBRUARY FNMA .86.9900 0.000000 86.99 -93.51 .6.52 DUE 3125118 03/26/2018 31410F4V4 PAID DOWN PAR VALUE OF F N M A#888336 5.000% 7/01136 FEBRUARY FNMA -4,357.7600 0.000000 4,357.76 -4,684.59 -326.83 DUE 3125118 03/26/2018 3138EG6F6 PAID DOWN PAR VALUE OF F N M A#AL0869 4.500% 6101129 FEBRUARY FNMA -185.9700 0.000000 185.97 -196.68 -10.71 DUE 3125118 03/26/2018 31417YAY3 PAID DOWN PAR VALUE OF F N M A#MA0022 4.500% 4/01/29 FEBRUARY FNMA -257.4300 0.000000 257.43 -272.26 -14.83 DUE 3125118 03/26/2018 31397QREO PAID DOWN PAR VALUE OF F N M A GTD REMIC 1.113% 2125/41 .4.565.1100 0.000000 4.565.11 .4.563.68 1.43 03/13/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -8,195,778.6700 1,000000 8,195,778.67 -8,195,778.67 0.00 03/20/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -3,261,019.4400 1.000000 3,261,019.44 -3,261,019.44 0.00 03/21/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,201.698.4300 1.000000 4,201.698.43 -4,201.698.43 0.00 3 of U.S. Bank Transaction History 03/01/2018 Thru 03/31/2018 PostDate CUSIPId Explanation Units Price Net Cash Amt Cost Gain/Loss 03/22/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -7,980,680.0000 1,000000 7,980,680.00 -7,980,680,00 0.00 03/28/2018 31846V567 SOLD UNITS OF FIRST AM GOUT OB FD CL Z -9,986,894.4400 1.000000 9,986,894.44 -9,986,894.44 0.00 03/29/2018 31846V567 SOLD UNITS OF FIRSTAM GOVTOB FD CLZ -4,439,771.2500 1.000000 4,439,771.25 -4,439,771.25 0.00 TOTAL DISPOSITIONS -67,770,881.1700 67,731,270.72 -68,228,624.66 497,353.94 OTHER TRANSACTIONS 03/13/2018 912828WUO BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 26416.00 0.0000 0.000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 03/28/2018 912828WUO BOOK VALUE OF U S TREASURY I P S 0.125% 7/15124 ADJUSTED BY 30368.00 0.0000 0.000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 03/13/2018 912828WUO FED BASIS OF U S TREASURY 1 PS 0.125% 7/15/24 ADJUSTED BY 26416.00 UNITS 0.0000 0.000000 0.00 26,416.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 03/28/2018 912828WUO FED BASIS OF U S TREASURY I PS 0.125% 7115124 ADJUSTED BY 30368.00 UNITS 0.0000 0.000000 0.00 30.368.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 03/19/2018 025B16AY5 INTEREST EARNED ON AMERICAN EXPRESS 7.000% 3119/18$1 PV ON 0.0000 0.000000 101,500.00 0.00 0.00 2900000.0000 SHARES DUE 3/19/2018 03/26/2018 03215PFN4 INTEREST EARNED ON AMRESCO 2.38996% 6126/29$1 PV ON 266.3700 0.0000 0.000000 266.37 0.00 0.00 SHARES DUE 3/25/2018$0.00199/PV ON 133,743.29 PV DUE 3/25/18 03/12/2018 06406HCW7 INTEREST EARNED ON BANK NY MELLON MTN 2.300% 9/11/19$1 PV ON 0.0000 0.000000 24,380.00 0.00 0.00 2120000.0000 SHARES DUE 3/11/2018 03/13/2018 06538CCD1 INTEREST EARNED ON BANK OF TOKYO MITSUBIS C P 3113118$1 PV ON 0.0000 0.000000 33.556.42 0.00 0.00 6665000.0000 SHARES DUE 3/13/2018 6,665,000 PAR VALUE AT 100% 03/15/2018 532457BF4 INTEREST EARNED ON ELI LILLY CO 1.950% 3/15119$1 PV ON 4000000.0000 0.0000 0.000000 39,000.00 0.00 0.00 SHARES DUE 3/1 512 01 8 03/01/2018 30231GAV4 INTEREST EARNED ON EXXON MOBIL 2.222% 3/01121 $1 PV ON 3000000.0000 0.0000 0.000000 33.330.00 0.00 0.00 SHARES DUE 3/1/2018 03/09/2018 313378A43 INTEREST EARNED ON F H L B DEB 1.375% 3/09/18$1 PV ON 7500000.0000 0.0000 0.000000 51,562.50 0.00 0.00 SHARES DUE 3/9/2018 03/08/2018 3133782M2 INTEREST EARNED ON F H L B DEB 1.500% 3/08/19$1 PV ON 7500000.0000 0.0000 0.000000 56.250.00 0.00 0.00 SHARES DUE 3/8/2018 03/21/2018 313385UN4 INTEREST EARNED ON F H L B DISC NITS 3/21/18$1 PV ON 5000000.0000 0.0000 0.000000 4,277.78 0.00 0.00 SHARES DUE 3/21/2018 5,000,000 PAR VALUE AT 100% 03/28/2018 313385UV6 INTEREST EARNED ON F H L B DISC NITS 3128/18$1 PV ON 1500000.0000 0.0000 0.000000 1.776.25 0.00 0.00 SHARES DUE 3/28/2018 1,500,000 PAR VALUE AT 100% 03/07/2018 3137EADP1 INTEREST EARNED ON F H L M C 0.875% 3107/18$1 PV ON 5000000.0000 0.0000 0.000000 21,875.00 0.00 0.00 SHARES DUE 377/2018 03/15/2018 31348SWZ3 INTEREST EARNED ON F H L M C#786064 3.426% 1/01128$1 PV ON 6.2100 SHARES 0.0000 0.000000 6.21 0.00 0.00 DUE 3/15/2018 JANUARY FHLMC DUE 3/15/18 4 of U.S. Bank Transaction History 03/01/2018 Thru 03/31/2018 Post Date CUSIPId Explanation Units Price Net Cash Anat Cost Gain/Loss 03/15/2018 3133TCE95 INTEREST EARNED ON F H L M C MLTCL MTG 3.391% 8115/32$1 PV ON 63.4700 0.0000 0.000000 63.47 0.00 0.00 SHARES DUE 3/15/2018$0D0283/PV ON 22,461.00 PV DUE 3115/18 03/26/2018 31398VJ98 INTEREST EARNED ON F H L M C MLTCL MTG 4.251% 1125120$1 PV ON 900000.0000 0.0000 0.000000 3.188.25 0.00 0.00 SHARES DUE 3/2 512 01 8 03/26/2018 31394JY35 INTEREST EARNED ON F H L M C MLTCL MTG 6.500% 9125/43$1 PV ON 4676.0200 0.0000 0.000000 4,676.02 0.00 0.00 SHARES DUE 3/25/2018$0.00542/PV ON 863,264.52 PV DUE 3125/18 03/26/2018 31371NUC7 INTEREST EARNED ON F N M A#257179 4.500% 4/01128$1 PV ON 77.1600 0.0000 0.000000 77.16 0.00 0.00 SHARES DUE 3125/2018 FEBRUARY FNMA DUE 3/25118 03/26/2018 31376KT22 INTEREST EARNED ON F N M A#357969 5.000% 9/01/35$1 PV ON 545.0700 0.0000 0.000000 545.07 0.00 0.00 SHARES DUE 3/2 512 01 8 FEBRUARY FNMA DUE 3125/18 03/26/2018 31381 PDA3 INTEREST EARNED ON F N M A#466397 3.1733%11/01/20$1 PV ON 927.4500 0.0000 0.000000 927.45 0.00 0.00 SHARES DUE 3125/2018 FEBRUARY FNMA DUE 3/25118 03/26/2018 31403DJZ3 INTEREST EARNED ON F N M A#745580 5.000% 6/01/36$1 PV ON 527.9100 0.0000 0.000000 527.91 0.00 0.00 SHARES DUE 312 512 01 8 FEBRUARY FNMA DUE 3125/18 03/26/2018 31403GXF4 INTEREST EARNED ON F N M A#748678 5.000%10/01/33$1 PV ON 11.9400 0.0000 0.000000 11.84 0.00 0.00 SHARES DUE 3125/2018 FEBRUARY FNMA DUE 3/25118 03/26/2018 31406POY8 INTEREST EARNED ON F N M A#815971 5.000% 3/01/35$1 PV ON 910.5800 0.0000 0.000000 910.58 0.00 0.00 SHARES DUE 312 512 01 8 FEBRUARY FNMA DUE 3125/18 03/26/2018 31406XWT5 INTEREST EARNED ON F N M A#823358 3.484% 2/01/35$1 PV ON 379.7000 0.0000 0.000000 379.70 0.00 0.00 SHARES DUE 3125/2018 FEBRUARY FNMA DUE 3125118 03/26/2018 31407BXH7 INTEREST EARNED ON F N M A#826080 5.000% 7/01/35$1 PV ON 100.3200 0.0000 0.000000 100.32 0.00 0.00 SHARES DUE 3/2 512 01 8 FEBRUARY FNMA DUE 3125/18 03/26/2018 31410F4V4 INTEREST EARNED ON F N M A#888336 5.000% 7/01/36$1 PV ON 1025.4100 0.0000 0.000000 1.025.41 0.00 0.00 SHARES DUE 3125/2018 FEBRUARY FNMA DUE 3/25118 03/26/2018 3138EG6F6 INTEREST EARNED ON F N M A#AL0869 4.500% 6/01/29$1 PV ON 52.5500 0.0000 0.000000 52.55 0.00 0.00 SHARES DUE 312 512 01 8 FEBRUARY FNMA DUE 3125/18 03/26/2018 31417YAY3 INTEREST EARNED ON F N M A#MA0022 4.500% 4101129$1 PV ON 86.6900 0.0000 0.000000 86.69 0.00 0.00 SHARES DUE 3125/2018 FEBRUARY FNMA DUE 3/25118 03/26/2018 31397OREO INTEREST EARNED ON F N M A GTD REMIC 1.113% 2/25/41 $1 PV ON 483.9300 0.0000 0.000000 483.93 0.00 0.00 SHARES DUE 3/25/2018$0.00192/PV ON 252,410.26 PV DUE 3125/18 03/01/2018 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE 0.0000 0.000000 28.746.28 0.00 0.00 2/2812018 INTEREST FROM 211/18 TO 2/28118 03/20/2018 36225CAZ9 INTEREST EARNED ON G N M A 11#080023 3.125%12/20126$1 PV ON 54.6900 0.0000 0.000000 54.69 0.00 0.00 SHARES DUE 3/20/2018 FEBRUARY GNMA DUE 3/20/18 03/20/2018 36225CC20 INTEREST EARNED ON G N M A 11#080088 2.625% 6/20/27$1 PV ON 50.9700 0.0000 0.000000 50.97 0.00 0.00 SHARES DUE 3120/2018 FEBRUARY GNMA DUE 3120/18 03/20/2018 36225CNM4 INTEREST EARNED ON G N M A 11#080395 2.625% 4/20/30$1 PV ON 18.8500 0.0000 0.000000 18.85 0.00 0.00 SHARES DUE 3/20/2018 FEBRUARY GNMA DUE 3/20/18 50f7 U.S. Bank Transaction History 03/01/2018 Thru 03/31/2018 Post Date CUSIPId Explanation Units Price Net Cash Anat Cost Gain/Loss 03/20/2018 36225CN28 INTEREST EARNED ON G N M A 11#0804082.625% 5/20/30$1 PV ON 147.9800 0.0000 0.000000 147.98 0.00 0.00 SHARES DUE 3/20/2018 FEBRUARV GNMA DUE 3/20/18 03/20/2018 36225DCBB INTEREST EARNED ON G N M A 11#0809652.750% 7/20134$1 PV ON 153.5400 0.0000 0.000000 153.64 0.00 0.00 SHARES DUE 3120/2018 FEBRUARV GNMA DUE 3120/18 03/16/2018 3837144NX9 INTEREST EARNED ON G N M A GTD REMIC 2.088% 2/16/30$1 PV ON 31.5900 0.0000 0.000000 31.59 0.00 0.00 SHARES DUE 3/16/2018$0.001741PV ON 18,155.33 PV DUE 3116/18 03/19/2018 43814RACO INTEREST EARNED ON HONDA AUTO 1.210%12/18/20$1 PV ON 2875000.0000 0.0000 0.000000 2,898.96 0.00 0.00 SHARES DUE 3/1 BJ2018 31181181NT PVMT 03/15/2018 43814OAC2 INTEREST EARNED ON HONDA AUTO 1.390% 4/15/20$1 PV ON 1739.8000 0.0000 0.000000 1,739.80 0.00 0.00 SHARES DUE 3/15/2018$0.00116/PV ON 1,501,981.94 PV DUE 3115118 03/21/2018 43814TAB8 INTEREST EARNED ON HONDA AUTO 1.420% 7/22119$1 PV ON 1141.4800 0.0000 0.000000 1,141.48 0.00 0.00 SHARES DUE 3121/2018$0.00118/PV ON 964.634.08 PV DUE 3/21/18 03/19/2018 43814PAB6 INTEREST EARNED ON HONDA AUTO 1.570% 1/21/20$1 PV ON 1262.5400 0.0000 0.000000 1,262.54 0.00 0.00 SHARES DUE 3/18/2018$0.00131/PV ON 965,000.00 PV DUE 3118118 03/05/2018 40428HPR7 INTEREST EARNED ON HSBC USA INC 2.350% 3105120$1 PV ON 2500000.0000 0.0000 0.000000 29.375.00 0.00 0.00 SHARES DUE 3/5/2018 03/14/2018 4581XOCZ9 INTEREST EARNED ON INTER AMER DEV BK 1.750% 9/14/22$1 PV ON 0.0000 0.000000 56,875.00 0.00 0.00 6500000.0000 SHARES DUE 3/14/2018 03/15/2018 4581XOCS5 INTEREST EARNED ON INTER AMERICAN DEVEL 1.875% 3/15/21 $1 PV ON 0.0000 0.000000 32,812.50 0.00 0.00 3500000.0000 SHARES DUE 3/1 512 01 8 03/16/2018 24422ESS9 INTEREST EARNED ON JOHN DEERE CAP MTN 2.300% 9/16/19$1 PV ON 0.0000 0.000000 57,500.00 0.00 0.00 5000000.0000 SHARES DUE 3/1612018 03/15/2018 47788NAB4 INTEREST EARNED ON JOHN DEERE OWNER 1.090% 2/15/19$1 PV ON 0.0000 0.000000 127.71 0.00 0.00 140599.4700 SHARES DUE 3/15/2018 03/15/2018 47788MAC4 INTEREST EARNED ON JOHN DEERE OWNER 1.360% 4/15/20$1 PV ON 2049.4800 0.0000 0.000000 2,049.48 0.00 0.00 SHARES DUE 3/15/2018$0.001131PV ON 1.808,360.38 PV DUE 3/15118 03/15/2018 47787XAB3 INTEREST EARNED ON JOHN DEERE OWNER 1.500%10/15/19$1 PV ON 1311.5000 0.0000 0.000000 1,311.50 0.00 0.00 SHARES DUE 3115/2018$0.00125/PV ON 1,049,196.07 PV DUE 3/15118 03/15/2018 47788BABO INTEREST EARNED ON JOHN DEERE OWNER 1.590% 4/15/20$1 PV ON 1272.0000 0.0000 0.000000 1,272.00 0.00 0.00 SHARES DUE 3/1 512 01 8$0.001331PV ON 960,000.00 PV DUE 3115/18 03/15/2018 47788BAD6 INTEREST EARNED ON JOHN DEERE OWNER 1.820%10/15/21 $1 PV ON 0.0000 0.000000 1,023.75 0.00 0.00 675000.0000 SHARES DUE 3/15/2018 03/15/2018 65478WAB1 INTEREST EARNED ON NISSAN AUTO 1.070% 5115/19$1 PV ON 382.4500 0.0000 0.000000 382.45 0.00 0.00 SHARES DUE 3/15/2018$0.00089/PV ON 428,914.27 PV DUE 3115/18 03/15/2018 65478VAD9 INTEREST EARNED ON NISSAN AUTO 1.320% 1/15121 $1 PV ON 2200.0000 0.0000 0.000000 2.200.00 0.00 0.00 SHARES DUE 3115/2018$0.00110/PV ON 2,000,000.00 PV DUE 3/15118 03/15/2018 654747ABO INTEREST EARNED ON NISSAN AUTO 1.470% 1/15/20$1 PV ON 1270.4200 0.0000 0.000000 1,270.42 0.00 0.00 SHARES DUE 3/15/2018$0.00123/PV ON 1,037,080.94 PV DUE 3115118 6 of U.S. Bank Transaction History 03/01/2018 Thru 03/31/2018 Post Date CUSIPId Explanation Units Price Net Cash Anat Cost Gain/Loss 03/15/2018 65477UAD2 INTEREST EARNED ON NISSAN AUTO 1.500% 9/15/21 $1 PV ON 2250.0000 0.0000 0.000000 2,250.00 0.00 0.00 SHARES DUE 3/15/2018$0.00125/PV ON 1,800,000.00 PV DUE 3/15118 03/01/2018 83162CLJO INTEREST EARNED ON S B A GTD DEV PART 6.340% 3/01/21 $1 PV ON 1490.4200 0.0000 0.000000 1.490.42 0.00 0.00 SHARES DUE 311/2018$0.03170/PV ON 47,016.48 PV DUE 3/1/18 03/15/2018 89236WAC2 INTEREST EARNED ON TOYOTA AUTO 1.120% 2/15/19$1 PV ON 236.7000 0.0000 0.000000 236.70 0.00 0.00 SHARES DUE 3/15/2018$0.00093/PV ON 253,608.20 PV DUE 3115118 03/15/2018 89238BAB8 INTEREST EARNED ON TOYOTA AUTO 2.100%10/15/20$1 PV ON 5170000.0000 0.0000 0.000000 13.571.25 0.00 0.00 SHARES DUE 3/15/2018 03/29/2018 3135GOT94 PAID ACCRUED INTEREST ON PURCHASE OF F N M A DEB 2.375% 1/19123 0.0000 0.000000 -13,062.50 0.00 0.00 03/20/2018 40428OBF5 PAID ACCRUED INTEREST ON PURCHASE OF HSBC HOLDINGS PLC 2.650% 0.0000 0.000000 -8.281.25 0.00 0.00 1105122 03/13/2018 44932HAH6 PAID ACCRUED INTEREST ON PURCHASE OF IBM CREDIT CORP 3.000% 2106/23 0.0000 0.000000 5,180.00 0.00 0.00 03/13/2018 44932HAH6 PAID ACCRUED INTEREST ON PURCHASE OF IBM CREDIT CORP 3.000% 2106/23 0.0000 0.000000 -9,203.75 0.00 0.00 03/29/2018 4581XOCS5 PAID ACCRUED INTEREST ON PURCHASE OF INTER AMERICAN REVEL 1.875% 0,0000 0,000000 -1,093.75 0.00 0.00 3/15/21 03/20/2018 47788CAB8 PAID ACCRUED INTEREST ON PURCHASE OF JOHN DEERE OWNER 2.420% 0.0000 0.000000 -2.420.00 0.00 0.00 10/15/20 03/28/2018 69353RFB9 PAID ACCRUED INTEREST ON PURCHASE OF PNC BANK NA MTN 2,625% 2/17122 0.0000 0.000000 -2,989.58 0.00 0.00 03/13/2018 912828W UO PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 26416.0000 26.416.0000 0.000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 03/28/2018 912828WUO PAR VALUE OF U S TREASURY I P S 0.125% 7/15124 ADJUSTED BY 30368,0000 30,368,0000 0,000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 03/13/2018 912828W UO STATE COST OF U S TREASURY I P S 0.125% 7115124 ADJUSTED BY 26416.00 0.0000 0.000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 03/28/2018 912828WUO STATE COST OF U S TREASURY I P S 0,125% 7115/24 ADJUSTED BY 30368.00 0.0000 0.000000 0.00 0.00 0,00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI TOTAL OTHER TRANSACTIONS 56,784.0000 5 1 56,784.00 0.00 7 of OPERATIONS COMMITTEE Meng Dat0 TOBE. Dir. 04/ltiO4/18 oa/zs/1OrB AGENDA REPORT ItemNumber Item Number z a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Assistant General Manager SUBJECT: COSTA MESA SANITARY DISTRICT ALTERNATE DISTRICT ENGINEER CONTRACT GENERAL MANAGER'S RECOMMENDATION Approve an employee lending agreement between the Orange County Sanitation District and the Costa Mesa Sanitary District so the Orange County Sanitation District can provide Alternate District Engineer services, effective May 25, 2018 through May 24, 2019, with one 12-month extension as approved by the General Manager. BACKGROUND The Orange County Sanitation District (Sanitation District) currently provides ongoing sewer-related project design and approval services to Costa Mesa Sanitary District (CMSD) by permitting an employee to serve as Alternate District Engineer on an as-needed basis. The prior agreement for these services will terminate on May 24, 2018. Services are limited to five hours per month, performed at the Sanitation District location, and the Sanitation District invoices CMSD on a project-basis. RELEVANT STANDARDS Maintain collaborative and cooperative relationships with neighboring agencies PROBLEM The current CMSD District Engineer, Rob Hangers, also provides professional consulting and design of sewer services for private development within the City of Costa Mesa. Design reviews of such plans would create a conflict of interest situation for CMSD since only the District Engineer reviews private development sewer design submittals for CMSD. PROPOSED SOLUTION Enter into an employee lending agreement with CMSD so services of a Sanitation District engineer can be provided to CMSD for up to 12 months. TIMING CONCERNS The Sanitation District can no longer provide existing services after May 24, 2018 since the current agreement will expire. Page 1 of 2 RAMIFICATIONS OF NOT TAKING ACTION No impacts to the Sanitation District, however CMSD would need to seek an Alternate District Engineer elsewhere. PRIOR COMMITTEE/BOARD ACTIONS May 2016 - Approved Employee Lending Agreement Extension. ADDITIONAL INFORMATION On May 25, 2016, the Sanitation District Board of Directors authorized the contract of a Sanitation District Engineer as the Alternate District Engineer to the CMSD for a period of up to 12 months, with the option to extend the agreement for an additional 12 months. Sanitation District and CMSD General Managers authorized the extension of this agreement for the allotted 12 months. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: Employee Lending Agreement RD:sa Page 2 of 2 OCSD-CMSD Lending Agreement Page 1 of 5 EMPLOYEE LENDING AGREEMENT This Agreement is made this day of April, 2018, by and between Orange County Sanitation District, a special district, (hereinafter, "OCSD") with Costa Mesa Sanitary District, a special district, (hereinafter, "CMSD"). A. CMSD is a special district formed under the Sanitary District Act of 1923 (Health& Safety Code §§ 6400 et seq.).The District boundaries encompass all of the City of Costa Mesa and portions of Newport Beach and unincorporated Orange County. The District provides wastewater collection and transmission to Orange County Sanitation District facilities for treatment and disposal; B. OCSD is a special district formed under the County Sanitation District Act of 1939(Health&Safety Code§§4700 et seq.)that provides wastewater collection,treatment,and disposal services for central and northwest Orange County. C. CMSD and OCSD desire to enter into an agreement wherein OCSD will permit employee Rudy Davila, RE ("Alternate") to serve as Alternate District Engineer ('Position") for CMSD on an as- needed basis for up to 12 months as a workforce development opportunity; D. The workforce development opportunity arrangement will provide a public benefit to both Parties as it will allow CMSD to provide ongoing sewer-related project design and approval when conflicts of interest exist with current CMSD employees as well as providing ongoing opportunities beneficial to OCSD and its employees;and E. The purpose of this Agreement is to set forth the terms and conditions governing the understanding between the Parties. THE PARTIES AGREE AS FOLLOWS: 1. GENERALTERMS A. This Agreement shall be effective for services performed by Alternate on behalf of CMSD from May 25,2018 through May 24,2019,unless terminated earlier or extended as provided below. B. The beginning date and ending date of the Position shall be mutually agreed by the parries prior to the Alternate beginning in the Position. C. The Parties may mutually agree to extend the term of this Agreement for a subsequent 12 months.The General Manager for OCSD shall have authority to exercise the 12-month extension on behalf of OCSD.The General Manager of the CMSD shall have the authority to exercise the 12-month extension on behalf of CMSD. D. Either party may terminate this Agreement without cause for any reason at any time upon giving at least thirty(30)days prior written notice to the other party.Such notice shall state the termination date. The General Manager for OCSD shall have authority to terminate this Agreement on behalf of OCSD. The General Manager for the CMSD shall have the authority to terminate this Agreement on behalf of CMSD. 1155073.1 1297403.1 OCSD-CMSD Lending Agreement Page 2 of 5 E. Either Party may immediately terminate this Agreement for cause including,but not limited to,the failure of the other Party to satisfy its obligations under this Agreement. The General Manager for OCSD shall have authority to terminate this Agreement on behalf of OCSD. The General Manager of the CMSD shall have the authority to terminate this Agreement on behalf of CMSD. F. In the event of termination of this Agreement,Alternate shall immediately cease all activities in the Position. Additionally, any payments owed by either party to the other will immediately become due and outstanding. G. Both Parties agree not to subcontract, assign,or otherwise transfer the Agreement or any part of the services to be performed under this Agreement without prior written consent and approval from the other Party. H. The Alternate shall provide services to CMSD through the OCSD on a project-basis and shall be for all purposes, an independent contractor working through the OCSD to provide services to CMSD. No employment relationship between Alternate and CMSD is expressed or implied by this Agreement. E. CMSD'S RIGHTS AND RESPONSIBILITIES A. CMSD shall pay to OCSD based on the time worked by Alternate in the Position and at the rate of $89.63 per hour and any fraction thereof Should the Alternate's pay structure at OCSD increase, CMSD agrees to engage in good faith discussions with OCSD to adjust the above pay rate to reflect any increase to Alternate's OCSD-based wage rate.In no event shall Alternate provide services in the Position in excess of five hours per month without the express written approval of OCSD. B. OCSD shall be the sole and exclusive Party responsible for determining Alternate's rate of pay and amount of salary,wages,and benefits payable to Alternate during the period Alternate works in the Position. Should OCSD need to increase the rate of compensation due to increases in contractually obligated cost increases (e.g. merit increases,cost of living, health benefits, etc.), CMSD agrees to negotiate with OCSD on such matter upon receiving proper notice from OCSD ofthe need to discuss increases to the reimbursement rate above$89.63 per hour. C. OCSD shall serve as the location for Alternate to provide all services for CMSD in the Position. CMSD shall not require Alternate to provide services at any CMSD location without the express written approval of OCSD. D. CMSD shall pay all invoices within thirty(30)days of invoice date. E. CMSD agrees not to enter into any contract or agreement with any other party,agency,entity,or person which may have the effect of obligating OCSD in any way,except with the prior written consent of OCSD. F. CMSD,at its sole cost and expense,shall obtain,keep in force,and maintain any policy of insurance necessary or appropriate to provide coverage, defense, or indemnification of OCSD as it relates to Alternate or Altemate's performance during the period Alternate works in the Position. G. CMSD shall inform Alternate of all CMSD policies,procedures,rules,and regulations applicable to Alternate and notify Alternate that they are responsible for complying with CMSD's policies, procedures,rules,and regulations during the period Employee works in the Position. 1155073.1 1297403.1 OCSD-CMSD Lending Agreement Page 3 of 5 H. CMSD agrees and covenants that they will maintain a work environment free from unlawful discrimination and/or harassment in compliance with federal and state law. I. CMSD may stop Alternate from serving in the Position in its sole discretion and for any reason. Should CMSD remove Alternate from the Position prior to the agreed termination date,CMSD shall notify OCSD of the removal and this Agreement will be deemed terminated upon said notice and any payments owed by either party to the other will immediately become due and outstanding. III. OCSD'S RIGHTS AND RESPONSIBILITIES A. Alternate is an employee of OCSD and primarily engaged in work duties, tasks, and support for OCSD.Alternate will provide contract services for CMSD in Position as time is available.Should OCSD determine that CMSD's requests or demands of OCSD or Alternate unreasonably interferes with Alternate's regular and expected work duties at OCSD, OCSD shall have the authority to terminate the Agreement for cause. B. OCSD shall assume sole and exclusive responsibility for the payment of Alternate's salary,wages, and benefits during the period Alternate works in the Position. OCSD shall be the sole and exclusive Party responsible for determining Alternate's rate of pay and amount of salary,wages, and benefits payable to Alternate during the period Alternate works in the Position. C. OCSD shall be solely responsible for the payment of any payroll taxes, withholdings, and any other insurance premiums and benefits of any kind owed to Alternate. D. OCSD shall invoice CMSD on a project-basis for all amounts incurred by Alternate for time spent working in Position. E. OCSD shall be responsible for counseling and disciplining Alternate. CMSD may provide input on Alternate's performance to OCSD and may request OCSD take disciplinary action against Alternate. OCSD shall maintain Alternate records, including but not limited to, personnel file, medical file,and discipline file. IV. INDEMNIFICATION. A. CMSD agrees to defend all claims of loss, indemnify and hold harmless OCSD and its officers, officials, agents, volunteers and employees from any and all claims for damage to property, personal injury,wrongful death or other losses and costs, including but not limited to reasonable attorney fees and defense costs, arising out of the negligent acts or omissions or willful misconduct of CMSD or its agents, employees, officers, officials, or volunteers in the performance of this Agreement. B. OCSD agrees to defend all claims of loss, indemnify and hold harmless CMSD and its officers, officials, agents, volunteers and employees from any and all claims for damage to property, personal injury,wrongful death or other losses and costs,including but not limited to reasonable attorney fees and defense costs, arising out of the negligent acts or omissions or willful misconduct of OCSD or its agents,employees,officers,officials,or volunteers in the performance of this Agreement. C. No employee benefits shall be available to Alternate from CMSD in connection with work performed under this Agreement. Except for the hourly rates paid by CMSD to OCSD as provided in this 1155073.1 1297403.1 OCSD-CMSD Lending Agreement Page 4 of 5 Agreement, CMSD shall not pay any other form of compensation to OCSD or Alternate for performing services hereunder. CMSD is not responsible for any taxes or government withholdings on behalf of Alternate. OCSD agrees to defend, indemnify, and hold CMSD harmless against any claims for wages, salary,benefits,or withholdings made by or on behalf of Alternate or any government entity for work performed under this Agreement. D. CMSD agrees to defend all claims of loss, indemnify,and hold harmless OCSD and its officers, officials, agents, volunteers and employees from any and all claims for damage to property, personal injury,wrongful death or other losses and costs, including but not limited to reasonable attorney fees and defense costs, arising out of the negligent acts or omissions or willful misconduct of the Alternate during the period Alternate works in the Position. E. CMSD hereby releases,waives, and discharges OCSD its officers,officials,agents,volunteers and employees from, and covenants not to sue OCSD for, any and all claims for damage to property, personal injury, wrongful death or other losses and costs, including but not limited to reasonable attorney fees and defense costs,arising out of the negligent acts in omissions or willful misconduct of the Alternate during the period Alternate works in the Position. F. In the event that it is determined by a Court or similar judicial body that Alternate was subjected to discrimination, harassment, or retaliation under any local, state, or federal law during the time Alternate was performing work in the Position,CMSD shall pay the costs of OCSD's legal defense and fully indemnify OCSD against any and all claims asserted against OCSD or its officers,officials, agents,volunteers or employees per the terms of all indemnification provisions in this Agreement. G. In the event that it is determined by a Court or similarjudicial body that Alternate discriminated, harassed, or retaliated anyone in violation of any local, state, or federal law during the time Alternate was performing work in the Position,OCSD shall pay the costs of CMSD's legal defense and fully indemnify CMSD against any and all claims asserted against CMSD or its officers, officials, agents, volunteers or employees per the terns of all indemnification provisions in this Agreement H. CMSD expressly agrees that the foregoing Indemnification and Release provisions are intended to be as broad as possible and inclusive as is permitted by the laws of the State of California and that if any portion is held invalid, it is agreed that the balance shall,notwithstanding,continue in full legal force and effect. V. MISCELLANEOUS PROVISIONS A. Captions and headings in this Agreement are solely for the convenience of the parties, are not a part of this Agreement, and shall not be used to interpret or determine the validity of this Agreement or any of its provisions. B. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original,but all such counterparts together shall constitute one and the same instrument. C. This Agreement is the entire agreement between the parties.No other agreements,oral or written, have been entered into with respect to the subject matter of this Agreement. 1155073.1 1297403.1 OCSD-CMSD Lending Agreement Page 5 of 5 D. The validity, interpretation, and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of California. VI. EXECUTION By signing below,each of the following represent that they have authority to execute this Agreement and to bind the party on whose behalf their signature is made. COSTA MESA SANITARY DISTRICT ORANGE COUNTY SANITATION DISTRICT By: By: Name: Name: Title: Title: Date: Date: 1155073.1 1297403.1 OPERATIONS COMMITTEE Melting D310 TOBE.Of Dir. 0 04118 o4/zs/I8 AGENDA REPORT Item Item Number 3 5 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: James E. Colston, Director of Environmental Services SUBJECT: INLAND EMPIRE REGIONAL COMPOSTING AUTHORITY CONTRACT AMENDMENT 2018-2019 GENERAL MANAGER'S RECOMMENDATION Approve Contract Amendment number 4600001879-003 with Inland Empire Regional Composting Authority to receive and compost up to an average of 50 wet tons per day of the Orange County Sanitation District's biosolids at a base fee (tipping fee)of$57 per wet ton, plus an administrative fee of$2 per wet ton and any other adjustments provided for in the original agreement. This contract amendment shall serve as the third and final annual renewal of three one-year renewal options in a total annual amount not to exceed $900,000/year. BACKGROUND On June 1, 2015, Orange County Sanitation District (Sanitation District) executed a biosolids management contract with Inland Empire Regional Composting Authority (IERCA) to receive and compost up to 50 wet tons per day of biosolids at a tipping fee of $54 per wet ton and an administrative fee of $2 per wet ton exclusive of trucking costs. The agreement term was for one-year, commencing on the date of execution of the agreement, with three one-year renewal options in a total annual amount not to exceed $900,000/per year. In July 2016, IERCA exercised the first renewal and adjusted the tipping fee from $54 per wet tons of biosolids to $55, which is an increase of $1 per ton. In May 2017, IERCA exercised the second renewal and adjusted the tipping fee from $55 per wet ton of biosolids to $56, which is an increase of$1 per ton. Presently, IERCA intends to exercise its final renewal and has adjusted the tipping fee from $56 per wet ton of biosolids to $57, which is an increase of$1 per ton. The administrative fee of $2 per wet ton of biosolids has remained the same. Thus, with a hauling fee of$14.79 per ton (services provided by Denali contract executed on May 3, 2016), the total cost is $73.79 per wet ton of biosolids (plus fuel surcharge for Denali). RELEVANT STANDARDS • Ocean Discharge Permit, NPDES CA0110604 §VI.C.4.1b Sludge (Biosolids) Requirements • Resolution No. OCSD 13-03 Biosolids Recycling Policy • Safe beneficial reuse of Biosolids Page 1 of 3 PROBLEM The existing biosolids management contract between IERCA and the Sanitation District expires on June 1, 2018. If the Sanitation District does not renew the contract, the Sanitation District's biosolids management diversity will be lessened. PROPOSED SOLUTION Approve the contract amendment to continue biosolids management diversity and sustainability while supporting a local in-basin management option. TIMING CONCERNS The existing biosolids management contract between IERCA and the Sanitation District expires on June 1, 2018. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District will not be able to utilize this local biosolids management option that is within the basin. PRIOR COMMITTEE/BOARD ACTIONS May 2017 - Approved Contract Amendment number 4600001879-002 with IERCA and the Sanitation District. July 2016 - Approved Contract Amendment number 4600001879-001 with IERCA and the Sanitation District. May 2015 - Approved an Agreement with IERCA to receive and compost up to 50 wet tons per day of the Sanitation District's biosolids. ADDITIONAL INFORMATION N/A CEQA CEQA Analysis Reference: November 7, 2012 Agenda Report - Waste Disposal Agreement with Orange County Waste and Recycling and May 27, 2015 Agenda Report - Composting Agreement with Inland Empire Regional Composting Authority. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. (Line item: Section 5, Page 6). Page 2 d 3 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: • Contract Amendment number 4600001879-003 • Original Contract—46000018792017 and Contract Amendments 4600001879-001 &4600001879-002 Page 3 d 3 INLAND EMPIRE REGION,, COMPOSTING A U T ti O R I T Y CONTRACT AMENDMENT NUMBER: 4600001879-003 TO CONTRACT NUMBER: 4600001879 FOR THE REUSE OF BIOSOLIDS THIS CONTRACT AMENDMENT NUMBER 4600001879-003, is made and entered into this day of 2018, by and between the Inland Empire Regional Composting Authority, a Joint Powers Authority, organized and existing in the County of San Bernardino under and by virtue of the laws of the State of California (hereinafter referred to as "Authority"or"IERCF"), and the Orange County Sanitation District("the Districf')shall revise the Contract as follows: REVISE SECTION 7, FEE FOR BIOSOLIDS REUSE, ADDING A PARAGRAPH, TO READ: 7.6 Commencing on July 1, 2018, the District shall pay to the Authority for Biosolids, received and processed, ate base fee of$57.00 per wet ton, plus an administrative fee of $2.00 per wet ton, and any other adjustments provided for in this Agreement. The District shall pay all hauling and transportation-related costs. REVISE SECTION 12, DURATION OF AGREEMENT, ADDING A PARAGRAPH, TO READ: Effective with full execution of Contract Amendment Number 4600001879-003, this Agreement will continue in effect for a period of one (more) year; until June 30, 2019. The Parties may, upon mutual written agreement, extend the duration of the Agreement on a year-to-year basis with up to one more annual extension. The parties hereto have caused the Contract to be entered as of the day and year written above. INLAND EMPIRE REGIONAL ORANGE COUNTY SANITATION DISTRICT: COMPOSTING AUTHORITY: Jeff Ziegenbein (Date) Gregory C. Sebourn, PLS (Date) Project Manager Chair of the Board of Directors Kelly A. Lore, MMC (Date) Clerk of the Board Contract Amendment Number 4600001879-003 HD 1 of 1 2/21/2018 � 1 INLAND EMPIRE REGIONAL COMPOSTING A U T H O R I T Y AGREEMENT NUMBER 4600001879 FOR THE REUSE OF BIOSOLIDS This Agreement, for the Reuse of Biosolids ("Agreement"), dated �,nne (1 2or5. 2015 ("Effective Date"), and is between the Inland Empire Regional Composting Authority (IERCA, or 'the Authority") and the Orange County Sanitation District ("the District"). The Authority and the District are referred to in this Agreement collectively as "the Parties." The Authority is a Joint Powers Authority formed by and between the Inland Empire Utilities Agency (IEUA), a Municipal Water District organized and operating pursuant to the California Water Code Sections 71000, er seq., and County Sanitation District No. 2 of Los Angeles County (LACSD), a special district organized and operating pursuant to the California Health and Safety Code Sections 4700,el seq. The Authority operates the Inland Empire Regional Composting Facility(IERCF) located at 12645 Sixth Street, Rancho Cucamonga, CA 91739 ("the Site").The Authority has all permits and approvals necessary for operation of the Site and desires to reuse Biosolids produced at the District's facilities. I. DEFINITIONS 1.1 Biosolids means municipal sewage sludge resulting from the treatment of wastewater at the District's facilities that is digested and meets Class B and Table 3 quality standards for land application under Part 503 of Title 40 of the Code of Federal Regulations, "Standards for the Use and Disposal of Sewage Sludge" ("Part 503 Rule"), and dewatered to an annual average of approximately 15%total solids or greater. 1.2 State Certified Weigh Station means any truck weigh station permitted by the State of California to certify weights for commerce. 1.3 Weighmaster's Certificates means certificates obtained in accordance with weighing procedures prescribed in Chapter 7(commencing with Section 12700)of Division 5 of the California Business and Professions Code administered by the Division of Measurement Standards of the California Department of Food and Agriculture. 1 2. BIOSOLIDS TRANSPORTATION AND REUSE 2.1 The District shall transport up to approximately 250 wet tons per week, or 50 wet tons per day of Biosolids from its facilities to the Site for composting, Monday through Friday. This quantity is subject to change and may be adjusted by agreement of the Parties. 2.2 Site delivery hours are from 6:30AM to 2:30PM, Monday through Friday. Hours may change at the sole discretion of the Authority. 2.3 In event the District wishes to deliver to the Site sewage sludge that does not meet the Part 503 Rule Class B Biosolids Pathogen Reduction Requirements specific to mean cell residence time and temperature for anaerobic digestion, the District shall notify the Authority within reasonable time and request approval to deliver for compost such material in accordance with applicable legal requirements as detailed in Section 3 of this Agreement. The Authority reserves the right not to accept and process such sewage sludge material at the Site. 2.4 The District shall use end dump trailers or fans beds to transport Biosolids to the Site. End dumps may not have extended aprons on the rear of the trailers. Trailers delivering Biosolids to the Site must meet the following clearance specifications to off-load material into the biosolids hoppers: 2.4.1 All live bottom belt type trailers require a minimum clear distance of 15" between the ground surface and any trailer structure beyond or past the rear tires. This requirement does not apply to any flexible structure like a mud flap. Flexible structures may be removed or re-positioned to allow adequate clearance; 2.4.2 All end dump trailers must possess the required belt trailers clearance in addition to having a minimum clearance of 19" between the ground surface and any fixed trailer structure when the trailer is in the fully raised or in the dumping position. 2.5 The Authority shall compost all Biosolids in accordance with applicable legal requirements as detailed in Section 3 of this Agreement. The Authority may not use any other method of reuse for the Biosolids without the prior written agreement of the District. 2.6 The Authority shall determine and record the total tonnage delivered to the Site. The truck weigh station at the Site is certified by the State and will be used to issue a Weighmaster's Certificate for each load measured. The Authority shall use the Site's measured tonnage for its billing to the District. Weighmaster's Certificates submitted by the Authority will show the certified gross weight of each load in each billing and the certified tare weight of each vehicle. 3. PERMITS AND REGULATORY COMPLIANCE 3.1 The Authority shall obtain and maintain in effect all necessary licenses, Permits, and other approvals legally required in order to perform all activities and operations provided for in this Agreement. The Authority and all processes utilized at the Site shall comply with all applicable local, state, and federal laws, rules, regulations, and pronouncements, including but not limited to the following: 2 3.1.1 The Authority shall perform all activities and operations in accordance with the requirements, as applicable, of the California Regional Water Quality Control Board- Santa Ana Region, California State Water Resources Control Board, including the General Order (General Waste Discharge Requirements for the Discharge of Biosolids to Land for Use in Agricultural, Silvicultural, Horticultural, and Land Reclamation Activities), Parts 257 and 503 of Title 40 of the Code of Federal Regulations (Criteria for Classification of Solid Waste Disposal Facilities and Practices-Application to Land Used for the Production of Food Chain Crops and Standards for the Use and Disposal of Sewage Sludge, respectively), South Coast Air Quality Management District Rule 1133.2. The Authority shall also operate in compliance with all current waste discharge requirements contained in the NPDES permits for the District's facility(s)that serves as the source(s)of Biosolids delivered to the Authority. District shall make their NPDES permit available to the Authority upon request. 3.1.2 The Authority acknowledges that Part 503 of Title 40 of the Code of Federal Regulations is a self-implementing rule and that the Authority's activities and operations performed at the Site must comply with all applicable general requirements of the rule, including, but not limited to: pollutant limits, management practices, operational standards, monitoring,recordkeeping, and reporting.The Authority shall provide all information relevant to the activities and operations at the Sites that the District may need or request to complete NPDES or other permit applications or reports. 3.2 The District shall obtain and maintain in effect all necessary licenses,permits,and other approvals legally required in order to perform all activities and operations provided for in this Agreement. The District and Biosolids-generating processes at its facilities shall comply with all applicable local, state, and federal laws, rules, and regulations and orders, including but not limited to Part 503 of Title 40 of the Code of Federal Regulations. The District may transport to the Site only Biosolids that meet the Class B pathogen reduction requirements of 503.32(b), vector attraction reduction requirements of 503.33(b)(1), and metals concentration limits of 503.13(b)(3)Table 3, unless other arrangement are made per Section 2.3. 4. SITE INSPECTION, MONITORING,RECORDKEEPING,AND REPORTS 4.1 The Authority shall grant the District and its representatives access to the Site during normal business hours to conduct inspections of the composting activities. The District shall likewise grant the Authority and its representatives access to its treatment facilities during normal business hours. 4.2 The Authority shall keep complete and correct daily records of all composting activities, including: the date, the origin, and quantity of each load of Biosolids composted; site management practices; and any sampling and laboratory test results regarding the composting program. The Authority shall grant the District timely access to all such records. Likewise, the Authority shall have timely access to the District's Biosolids records and data demonstrating compliance with all federal,state,and local laws,regulations and orders. 3 4.3 The Authority shall submit monthly reports to the District that demonstrate compliance with all required permits and authorizations. The Authority shall submit the reports within 30 days after the close of each reporting period.The reports must include, at a minimum, a description of all activities and operations performed during the reporting period, the items described in Section 4.2, and a certification that all activities and operations were performed in compliance with all applicable regulations. The Authority shall forward to the District, within five days of receipt or transmission, copies of all correspondence with regulatory agencies in regards to the activities or operations performed at the Site. Similarly, the District shall furnish monthly, annual, and other periodic reports to the Authority detailing and certifying compliance with permits and applicable regulations. The District shall provide all information relevant to its operations that the Authority may need or request to complete regulatory reports or permits. 4.4 The Parties agree to notify one another by no later than the next business day of its receipt of any notice, whether formal or informal, of a legal, governmental, judicial, administrative, or similar proceeding, action, or enforcement, pending or threatened, that may affect its ability to lawfully fulfill obligations of this Agreement. The District shall forward to the Authority, within 5 days of receipt or transmission by the District, copies of all correspondence with regulatory agencies in regards to its Biosolids operations. 4.5 The District shall perform all sampling for any monitoring and laboratory analyses of Biosolids required by any federal, state, or local laws, regulations or orders prior to transporting such Biosolids to the Authority. The Authority shall perform all other monitoring and laboratory analyses required by any federal, state, or local laws, regulations, or orders including, but not limited to, any monitoring or laboratory analysis of Biosolids after receipt by the Authority. 5. COMPOSITION OF BIOSOLIDS The District warrants that all Biosolids released to the Authority will be non-hazardous under Title 22, Division 4.5, Chapter 11, Article 3 of the California Code of Regulations. Neither the District nor the Authority shall add any material to the Biosolids that is classified as hazardous, or which creates by-products or residues classified as hazardous, under federal or state laws,regulations,or orders. 6. INCLEMENT WEATHER 6.1 The Parties shall each provide any facilities necessary to ensure their ability to remove, transport,and compost Biosolids during typical inclement weather. 6.2 The Parties acknowledge that severe weather conditions may reduce or suspend the Parties' abilities to deliver and/or compost Biosolids. If either Party reasonably determines that a reduction or suspension is necessary, the Party shall provide the other Party, to the extent reasonably possible: 1)a 24-hour minimum notice of reduction or cessation of operations; and 2) an estimate of when the operations will resume. See also Section 11,Force Majeure. 4 7. FEE FOR BIOSOLIDS REUSE 7.1 The District shall pay to the Authority for Biosolids received and processed at a base fee of$54.00 per wet ton, plus an administrative fee of$2.00 per wet ton, and any other adjustments provided for in this Agreement. The District shall pay all hauling and transportation-related costs. 7.2 The Authority shall submit invoices to the District on a monthly basis and the District shall make payment to the Authority within thirty(30)days of receipt. 7.3 If the term of this Agreement extends beyond the initial one-year term provided for in Section 12 below,either the District or the Authority may request an adjustment in the fee. 7.4 If during the tern of this Agreement, the Authority incurs a new and unforeseen fee or other cost not previously paid by the Authority, the Authority may request an adjustment in the fee. The Authority shall provide written documentation to the District verifying the increased cost. Rate increases during the current tern will not exceed the annual Consumer Price Index for the Los Angeles-Orange County Metropolitan Area for all urban consumers (CPI-U) available as of the date of the requested rate increase. The annual CPI-U will not be justification for any rate reduction. 8. OWNERSHIP OF BIOSOLIDS 8.1 The District shall retain ownership of all Biosolids during transport, up to and including off-loading of the Biosolids from the District's trucks. The District shall at all times manage, direct, oversee, and/or conduct operations during transport, and is responsible for leakage prevention and spill mitigation, and compliance with all applicable environmental regulations. 8.2 The Authority shall become the owner of all Biosolids delivered to the Site after off-loading and acceptance of the Biosolids from the District's trucks. The Authority shall compost all Biosolids in accordance with this Agreement. The Authority may not use or dispose of the Biosolids in any other manner without written consent from the District. The Authority shall comply with all applicable laws and regulations in connection with the marketing,use,and sale of the composted Biosolids. 9. INSURANCE The District shall require its contractors transporting Biosolids to the Site to obtain and keep in force during the term of this Agreement, at their sole expense, comprehensive general liability insurance with endorsements naming the Authority as an additional insured, covering the transportation of Biosolids in any vehicle whether owned or leased, whether liability is attributable to the District or the Authority. The policy or policies must insure the Authority, its directors, officers, employees, and agents against all claims arising out of or in connection with the activities and operations relating to the transportation and delivery of Biosolids to the 5 Facility. The coverage must provide the following minimum limits, which may be increased during the term of this Agreement as requested by the Authority in writing and agreed to in writing by the District: Automobile Liability: Bodily Injury $5,000,000 each person $5,000,000 each occurrence Property Damage $5,000,000 each occurrence $5,000,000 aggregate General Liability: Bodily Injury $5,000,000 each occurrence $5,000,000 aggregate products and completed operations Property Damage $5,000,000 each occurrence $5,000,000 aggregate Coverage must be provided by an insurer that has at least an "A" Policy Holder's Rating and"X" Financial Rating in accordance with the current Best's Key Rating Guide. 9.1 The Contractor shall provide the Authority with evidence of coverage by providing certificates of insurance and endorsements and,at the Authority's request, copies of all required policies plus all attached endorsements for the Authority's review. 9.2 The Contractor shall demonstrate to the Authority that it carries Workers Compensation Insurance in accordance with legal requirements and Waiver of Subrogation. 10. INDEMNITY In contemplation of the provisions of Section 895.2 of the California Government Code imposing certain tort liability jointly upon public entities solely by reason of such entities being parties to an agreement as defined by Section 895 of the Government Code,each Party,pursuant to the authorization contained in Sections 895.4 and 895.6 of the Government Code, hereby agrees to and shall indemnify and hold harmless the other Party,and its elected officials,officers, agents, and employees from and against any and all losses, liability, damages, claims, suits, actions, and administrative proceedings or demands (including reasonable attorney's fees) relating to acts or omissions of the indemnitor, its officers, agents, or employees arising out of or incidental to the performance of any of the provisions of this Agreement. Neither Party assumes liability for the acts or omissions of persons other than each Party's respective officers, agents,or employees. In the event judgment is entered against the Parties because of joint or concurrent negligence of the Parties, or their officers, agents, or employees, an apportionment of liability to pay such judgment shall be made by a Court of competent jurisdiction. This section shall survive termination of the Agreement. 6 11. FORCE MAJEURE Neither the Authority nor the District shall be responsible or liable for failure to meet their respective obligations under this Agreement if such failure is due to causes beyond the Authority's or the District's control. Such causes include, but are not limited to: strikes, fire, flood,civil disorder,acts of God or of a public enemy,acts of the federal government,or any unit of state or local government in either its sovereign or contractual capacity,epidemics,freight embargoes or delays in transportation, and changes in federal, state,or local law that renders the District's Biosolids impermissible for transportation or composting. Each Party shall immediately notify the other Party via email to administrative staff and in writing, in accordance with Section 15,of the occurrence of any condition believed to constitute a force majeure under this section. If a condition of force majeure exists for 30 days or more, either Party may terminate this Agreement by giving notice in writing in accordance with Section 15. The notice will become effective 24 hours after receipt. 12. DURATION OF AGREEMENT This Agreement will be effective on the Effective Date and will continue in effect for a period of one year. The Parties may, upon mutual written agreement,extend the duration of the Agreement on a year to year basis with up to three annual extensions. 13. SUSPENSION,TERMINATION, AND EARLY TERMINATION 13.1 Suspension. The Authority may suspend its receipt of Biosolids if it determines that the District can no longer timely and legally perform the required obligations of this Agreement. Likewise, the District may suspend shipments of Biosolids if it determines that the Authority can no longer timely or legally perform the required services, or if unacceptable conditions exist at the Site.The suspending Party may lift the suspension and allow operations to resume if it determines that any unacceptable conditions have been corrected. 13.2 Termination. Either Party may terminate this Agreement by providing the other Party with a 90-day notice in writing in accordance with Section 15. 13.3 Early Termination. The Authority and the District, by written agreement, may terminate this Agreement at any time. 14. ADDITIONAL PROVISIONS 14.1 Entire Agreement. This Agreement represents the entire agreement and understanding between the Authority and the District as to those matters stated in this Agreement. No prior oral or written understanding is of any force or effect in regard to any matter covered by this Agreement. 7 14.2 Assignment. Neither the Authority nor the District may sell, assign, or sub- contract its interest and/or obligations in this Agreement without the prior written and mutual agreement of the Parties. 14.3 Governing Law. The provisions of this Agreement will be interpreted and enforced in accordance with the laws of the State of California. 14.4 Counterparts. This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 15. NOTICE Except as otherwise required, any notice,payment, or instrument required or permitted to be given under this Agreement will be deemed received upon a signed receipt of personal delivery or 72 hours after deposit in any United States Post Office, registered or certified, postage prepaid and addressed to the Party for whom intended,as follows: TO THE AUTHORITY: Inland Empire Regional Composting Authority Attn:Jeff Ziegenbein 12645 Sixth Street Rancho Cucamonga,CA 91739 TO THE DISTRICT: Orange County Sanitation District Attn:General Manager Post Office Box 8127 Fountain Valley,Ca 92728-8127 [SIGNATURE PAGE FOLLOWS] 8 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT By: Tom B amish air fthe Board Directors By: elly Wore Cie 4f the Board of Directors APPROVED AS TO FORM: By: G ral o sel INLAND EMPIRE REGIONAL COMPOSTING AUTHORITY C-2n, Jeff Ziegen ei Project Manager 9 INLAND EMPIRE REGIONAL COMPOSTING ry A U T H O R I T Y CONTRACT AMENDMENT NUMBER: 460000187MOI TO CONTRACT NUMBER:4600001879 FOR THE REUSE OF BIOSOLIDS THIS S CONTRACT AMENDMENT NUMBER 4600001879-001, is made and entered into this day of 2016, by and between the Inland Empire Regional Composting Authority, a nt Powers Authority, organized and existing in the County of San Bernardino under and by rtue of the laws of the State of California (hereinafter referred to as "Authority"or"IERCF"),and the Orange County Sanitation District('the District")shall revise the Contract as follows: REVISE SECTION 2. BIOSOLIDS TRANSPORTATION AND REUSE, TO READ: Strike all of the current text of Section 2.4; replacing it with: "2A The District shall use farm bed trailers to transport Biosolids to the Site. Trailers delivering Biosolids to the Site must meet the following clearance specifications to off-load material into the biosolids hoppers:" Strike all of the current text of Section 2.4.2 (because it is specific to end dump trailers). REVISE SECTION 7. FEE FOR BIOSOLIDS REUSE, TO READ: Strike all of the current text of Section 7.1; replacing it with: "7.1 The District shall pay to the Authority for Biosolids, received and processed, at a base fee of$55.00 per wet ton, plus an administrative fee of $2.00 per wet ton, and any other adjustments provided for in this Agreement. The District shall pay all hauling and transportation-related costs." REVISE SECTION 12, DURATION OF AGREEMENT, ADDING A PARAGRAPH TO READ: Effective with full execution of Contract Amendment Number 4600001879-001, this Agreement will continue in effect for a period of one (more)year; until June 1, 2017. The Parties may, upon mutual written agreement, extend the duration of the Agreement on a year-to-year basis with up to two more annual extensions. contract Amendment Number 4600001879.001 HD 1 of 2 611012016 AS WITNESS HEREOF, the parties hereto have caused the Contract to be entered as of the day and year written above. INLAND EMPIRE REGIONAL ORANGE CO TY SANITATION DISTRICT: COMPOSTING AUTHORITY: Jeff Zi ?ga b6in (Date) 411ore on (Date) Project Manager Board o Directors `1 (Date) card Contract Amendment Number 4600001879-001 HD 2 of 2 6/10/2016 INLAND EMPIRE l2EGION�aL COMPOSTING A U T H O R I T Y CONTRACT AMENDMENT NUMBER: 4600001879-002 TO CONTRACT NUMBER: 4600001879 FOR THE REUSE OF BIOSOLIDS THIS CONTRACT AMENDMENT NUMBER 4600001879-002, is made and entered into this day of , 2017, by and between the Inland Empire Regional Composting Authority, a Joint Powers Authority, organized and existing in the County of San Bernardino under and by virtue of the laws of the State of California (hereinafter referred to as "Authority" or"IERCF"), and the Orange County Sanitation District("the District') shall revise the Contract as follows: REVISE SECTION 7, FEE FOR BIOSOLIDS REUSE, ADDING A PARAGRAPH, TO READ: 7.5 Commencing on July 1, 2017, the District shall pay to the Authority for Biosolids, received and processed, at a base fee of$56.00 per wet ton, plus an administrative fee of $2.00 per wet ton, and any other adjustments provided for in this Agreement. The District shall pay all hauling and transportation-related costs. REVISE SECTION 12, DURATION OF AGREEMENT, ADDING A PARAGRAPH, TO READ: Effective with full execution of Contract Amendment Number 4600001879-002, this Agreement will continue in effect for a period of one (more)year; until June 1, 2018. The Parties may, upon mutual written agreement, extend the duration of the Agreement on a year-to-year basis with up to one more annual extension. The parties hereto have caused the Contract to be entered as of the day and year written above. INLAND EMPIRE REGIONAL ORANGE COUNTY SANITATION DISTRICT: COMPOSTING AUTHORITY: & � SQL j, Jeff Zl nbein (Date) Gy6gory C. ebourn, PLS (Date) Project Manager Chair of the Board of Directors Kel A. a (Date) Clekoft Board Contract Amendment Number 4600001879-002 HD 1 of 1 4/6/2017 OPERATIONS COMMITTEE Melting Date TOBE.Or Dir. B4/o4/18 oa/zs/1B AGENDA REPORT emNumber IemNumber 5 6 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Assistant General Manager SUBJECT: HEADWORKS REHABILITATION AND EXPANSION AT PLANT NO. 1, PROJECT NO. P1-105 GENERAL MANAGER'S RECOMMENDATION Approve a contingency increase of$2,103,104 (12%)to the Professional Design Services Agreement with Carollo Engineers for the Headworks Rehabilitation and Expansion at Plant No. 1, Project No. P1-105, for a total contingency amount of$3,856,000 (22%). BACKGROUND The Headworks facilities at Orange County Sanitation District (Sanitation District) Plant No. 1 include the original facilities built and modified between the 1950s and 1960s (used for emergencies), and the normally operated facilities which entered service in 1989. Headworks Rehabilitation and Expansion at Plant No. 1, Project No. P1-105, is a complete renovation of the existing headworks, including demolition of obsolete portions. The project must maintain wastewater flow in active portions of the headworks while rehabilitation work is performed. There are 83 isolation/diversion gates which must be used to isolate or redirect flow during construction. Due to their age and severely corrosive conditions, the existing gates may be compromised to the point that many are either no longer operable or could become stuck in the wrong position if moved. If, during construction, an essential gate could not be operated to accommodate safe personnel entry or to divert flow during construction, the Sanitation District would be at risk for the cost to work around the problem, potentially long schedule delays, associated stand-by equipment and crews, as well as extended overhead charges from the contractor. For a construction contract of this size, delay costs could be significant. To determine which gates will be usable for construction isolation, and which ones will require prior repair, an inspection program is recommended before the larger construction project is advertised for bids. This inspection program requires complex confined space entries and, in some cases, a complete shutdown of the Headworks facilities. Since the majority of the cost to inspect the gates is to safely access the gates(isolate, pump down, clean the gate and surrounding structure, and monitor the atmosphere) during the inspection, it would also be highly advisable to perform any spot repairs that can be conducted during the short window when the gate has been isolated. This inspection program would involve both professional services to plan the inspection and Contractor services to execute the plan and support confined space entries and perform spot repairs. Page 1 d 3 Additionally, the information gathered during the inspection effort will be used to improve the future contract drawings and entry procedures. RELEVANT STANDARDS • Ensure the public's money is wisely spent • 24/7/365 treatment plant reliability PROBLEM A significant risk of unknown condition change orders and potential project delays exist as these gates have not been regularly operated. The gate inspection program is not part of the Design Consultant's Scope of Work and the cost is estimated to be approximately $1.6 million, which is well beyond what the original Professional Design Services Agreement (PDSA) contingency was intended to cover. There is no other practical contractual mechanism to perform this work since the active involvement of the design consultant is critical. PROPOSED SOLUTION Utilize the PDSA contract to perform this inspection and evaluation during the design phase, including additional funding for minor maintenance or repairs while access to the gates is available. Performing this work early will reduce the risk associated with potential delays during the large-scale P1-105 construction effort due to unknown conditions. TIMING CONCERNS The condition assessment will evaluate what work is needed to assure the gates are in operating condition and will also make minor repairs to extend the gate life. Completing this work prior to the construction contract being bid for construction will provide the Sanitation District with a greater confidence that the gates are operable, reducing potential risk of costly delays and change orders during construction. RAMIFICATIONS OF NOT TAKING ACTION Not approving this contingency increase will prevent the gate assessment work from being completed prior to construction contract being advertised for bids, which will increase the risk of change orders for unknown conditions and increase operational risk of gate failures. PRIOR COMMITTEE/BOARD ACTIONS May 2015 - Approved a Professional Design Services Agreement (PDSA) with Carollo Engineers to provide engineering design services for the Headworks Rehabilitation and Expansion at Plant 1, Project No. P1-105, for an amount not to exceed $17,528,957, and approved a contingency of$1,752,896 (10%). Page 2 d 3 ADDITIONAL INFORMATION N/A CEQA This project was originally determined to be Categorically Exempt and a Notice of Exemption was filed on April 29, 2014. Following completion of evaluation studies by the design consultant, changes were made to the proposed project which warranted conducting an Initial Study to verify the appropriate CEQA documentation requirement. An Initial Study is nearing completion. The preliminary conclusion is that an addendum to the 1999 Strategic Plan Environmental Impact Report (SCH #97101065) will be required. FINANCIAL CONSIDERATIONS This item has been budgeted (FY 2017-18 Update, Page A-9), and the budget is sufficient for the recommended action. Date of Aooroval Contract Amount Contlnaencv 05/27/15 $17,528,957 $1,752,896 (10%) 04/25/18 $2,103,104(12%) ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: Presentation from April 4, 2018 Operations Committee meeting DC:dm:gc Page 3 of 3 Headworks Rehabilitation and Expansion at Plant No. 1 Project • 1 Operations 4oJN1V SAN,,,T ON Committee row PDSA Increase for Gate Assessment April 4, 2018 THEEN `"�� Headworks Facilities at Plant 1 1P001 -OfA.0 .V $241M construction ..I-P cost; $25M District r costs; E0AM ®, $11M Consultant costs MM" ®nriraoiuoam SARR • 6+ years construction S1N00°r-0' ,O sanaoiomuo duration • Complex sequencing constraints • Significant resources throughout /� ® construction Gate Assessment Reduces Risk • Gates are corroded and unreliabley " • Costly construction impacts if gates are not performing ' • Schedule delays • Standby costs a • Extended overhead costs • Assessment confirms scope of work for replacement ,'���- lr OE 1 .,,� � �5 s�:k ya ?r i1 '.. ,. ..v' �! �� 6 ..'�. ` � 4 ' f -. }'tc>s- : ,r .` t 1. �y ' • ` rr .� �n/� `� ��t1�� � Isolation is Critical to Construction Access • Major shutdowns and - 7 flow diversions • Reliable gate seal to -. maintain facilities dewatered for confined space entry - • Work delay could ' extend costly bypass pumping _ ($30,000/day) �" • . • vwr+ohly � ■I��ri�wrh�r.lr+ • - • . . ro �1 r7 ir�€wwwr.+� - o Problem With Not Assessing Gates • Increased risk of construction change orders • Increased operational risk of gate failure • Impact to critical path work IMA6 • Several critical path items require complete isolation ofwork area• Some work can only beperformed during dry-weather months Benefits to Performing Work by Consultant • Contractor is required for assessment MR JOINT BUILD WT. SEE W-] EMSTONT RLLR In' DIA TYPE 316 SST F(OAKUM GRWT PACK) IXPANSION MICHOR BY M SIKADUR 31 SlNN11:S5. LLS W/ 3' MIN yltgpU. COMBIFIEI( • Confined space entry support BI Ox =c —E (� (� /� COMBIfl£% CWCRETE WALL • In-situ repairs and maintenance 9KAOUR31 SIKAOUR31 3/B' f[ ttPE EpSi 3ANCW • Assessment should be "86� OC.ACURES WNPE oCURES (ILID performed during design-phase B MiN • Expertise of consulting engineer DETAIL AT WALLS SKd M1Dm • Develop inspection plan in conjunction with confined space entry plan • Rehabilitation detailed in final design Gate Assessment During 2018 Dry-Weather Season Keeps Project on Schedule Gate Gate Assessment Assessment Final Design Start Completion Final Design Advertise Construction Start Completion for Bids NTP 1 1 1 1 Dry Weather Dry Weather r 2018 2019 2020 Recommended Action • Approve a contingency increase of $2 , 103 , 104 ( 12% ) to the Professional Design Services Agreement with Carollo Engineers for the Headworks Rehabilitation and Expansion at Plant No . 1 , Project No. P1 - 105 , for a total contingency amount of $3, 856 , 000 (22% ) a� Headworks Rehabilitation and Expansion at Plant No. 1 Project • 1 Operations 4oJN1V SAN,,,T ON Committee row PDSA Increase for Gate Assessment April 4, 2018 THEEN `"�� OPERATIONS COMMITTEE Meng Date TOBE. Dir. B4/etio4118 o4/zs/1OrB AGENDA REPORT Item Item Number 6 7 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Assistant General Manager SUBJECT: BATTERY STORAGE SYSTEM AT PLANT NO. 1, PROJECT NO. FE17-03 GENERAL MANAGER'S RECOMMENDATION A. Approve a ten-year Energy Management Services Agreement with Advanced Microgrid Solutions, Inc. to provide, install, and operate a battery energy storage system and upgrade the assoG ated power feed cables at Plant No. 1=Lnd B. Approve an Installation Agreement with Advanced Microgrid Solutions, Inc. to upgrade the power feed cables from the Central Generation Building to Power Building 6 at Plant No. 1 for a total amount not to exceed $393,000. BACKGROUND The Orange County Sanitation District (Sanitation District) generates electricity and also purchases electricity from Southern California Edison on a time-of-use tariff. The tariff for purchased electricity includes an energy component measured in kilowatt-hours and a demand component measured in kilowatts. The demand charge is based on the highest 15-minute power demand in a calendar month for various times of day. The on-peak demand charge in the summer can be 25 to 40 percent of the total monthly bill. The Sanitation District minimizes peak demand charges by reducing power usage and generating more power during peak periods by using natural gas. Southern California Edison has a Local Capacity Requirements incentive program that incentivizes two preselected and competing vendors to install battery energy storage systems downstream of power meters for large customers to reduce peak-hour demands by using power stored during off-peak periods. Staff solicited proposals from the two competing vendors to install a battery energy storage system at Plant No. 1. The system would be installed by the vendor at no cost to the Sanitation District. The vendor would recover their investment through Southern California Edison subsidies, and by Sanitation District reimbursement of a negotiated fraction of the power savings actually realized. RELEVANT STANDARDS • Efficiency efforts reduce the cost to provide the current service level or standard • Ensure the public's money is wisely spent Page 1 d 4 PROBLEM Southern California Edison charges can be reduced by installing a battery energy storage system to supply power during peak rate periods, and recharge during off-peak periods. The Sanitation District could install a system itself, but Southern California Edison Local Capacity Requirements subsidies would not be available. PROPOSED SOLUTION Approve an Energy Management Services Agreement with Advanced Microgrid Solutions, Inc. (AMS) to provide, install, maintain, and operate a battery energy storage system at Plant No. 1. The size of the proposed system would require replacement of two existing power feeder cables, which the vendor would replace under an installationthis agreement. The Sanitation District would pay ^ sePvice-the installation fee-costs for theseis cables based at the time the system s- ables are put into service, based on a negotiated unit rate of cable replaced. 1n1 This in'..,�. sP.,e^^•^^^•'^^ installation fee would not exceed $393,000 and -his ^ `^ ^ '^^ would be charged to the Battery Storage System at Plant No. 1, Project No. FE17-03. The existing cables that would be replaced are approximately 25 years old and are nearing the end of their useful life. Other than the ;n t al sery ^able replacement costsfee, the Sanitation District would incur no obligation to compensate AMS until a specified threshold savings of $392,702 per year has been realized. The Sanitation District would pay AMS 50% of any actual savings beyond the threshold. TIMING CONCERNS Southern California Edison's Local Capacity Requirements incentive program for AMS requires that the system be operational by the end of 2018. Without these subsidies, the terms of this agreement would be much less favorable. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District would not realize energy savings resulting from battery energy storage. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The Sanitation District requested proposals for the Battery Storage System at Plant No. 1, Project No. FE17-03, on January 19, 2018,from AMS and Stronghold Engineering, Page 2 of 4 Inc. teamed with Stem, Inc. AMS and Stem are the two vendors selected by Southern California Edison for the Local Capacity Requirements incentive program. Proposals from both vendors were received on March 7, 2018. Proposals were reviewed by the following Sanitation District staff: Mike Dorman Engineering Manager Natasha Dubrovski Principal Contract Administrator Negotiation conference calls were conducted with each vendor to answer the Sanitation District's questions and better understand how the vendors sized their battery energy storage system, agreement terms, and projected savings. The two vendors provided very different payment terms. AMS proposed a system where the Sanitation District would receive all the savings from the battery system up to the expected annual savings threshold value and share half of the actual power savings with AMS above the threshold value. Thus, if only expected savings were realized, there would be no payment due to AMS from the Sanitation District. AMS can offer this arrangement because of Southern California Edison subsidies. The AMS proposal includes two battery system sizing options, one sized at 2,600 kW and another at 4,550 kW. The larger system would result in greater savings, but requires more space on the site and replacement of the existing power feeder cables from Central Generation to Power Building 6 due to age, since they are over 25 years old, and need for a larger size. In contrast, the Stronghold/Stem proposal includes a fixed annual service fee, with a provision that if actual savings are less than the service fee, Stronghold/Stem would reduce their fee to the actual amount saved. The following table shows the range of battery system sizes proposed by AMS, annual service fees, and estimated annual net savings for the Sanitation District. Vendor System Annual Estimated Comments Size Service Sanitation District Kw Fee Net Savings AMS 2,600 $0 $287,000 50/50 split above estimated savings AMS 4,550 $0 $393,000 50/50 split above estimated savings AMS's proposal, with the 4,550-kW battery system option, provides the largest estimated net savings to the Sanitation District. Their proposed expected annual savings threshold provides them with an incentive to exceed their net savings estimates to obtain the 50/50 split. Staff recommends that AMS be selected based on their battery system size and agreement, which provides the most value to the Sanitation District. Page 3 of 4 CEQA The project is exempt from CEQA under the Class 3 categorical exemption set forth in California Code of Regulations section 15303 and the Class 11 categorical exemption set forth in California Code of Regulations section 15311. Section 15303 (Class 3) exempts from CEQA the "construction and location of limited numbers of new, small facilities or structures: installation of small new equipment and facilities in small structures" and "Examples of this exemption include but are not limited to: (d) Water main, sewage, electrical, gas and other utilities (a) Accessory structures including garages, carports, patios, swimming pools, and fences." Section 15311 (Class 11)exempts from CEQA the "construction, or placement of minor structures accessory to (appurtenant) existing commercial, industrial, or institutional facilities:" The project involves the installation of a battery energy storage backup system to serve as a backup power source at Plant No. 1. The new system can be characterized as a small facility or structure under the Class 3 categorical exemption, or as a minor structure appurtenant to existing industrial facilities under the Class 11 categorical exemption. The project, therefore, qualifies for an exemption under CEQA Guidelines section 15303 (Class 3 categorical exemption) and CEQA Guidelines section 15311 (Class 11 categorical exemption) and no further action is required. A Notice of Exemption will be filed with Orange County Clerk-Recorder following the Board approval of the Energy Management Services Agreement. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. The Sanitation District's costs to implement the project include the initial service fee along with staff time to manage and inspect implementation, and some minor legal costs. These costs will be charged to the sub-project titled Battery Storage System at Plant No. 1, Project No. FE17-03 which was created under the master budget for Facilities Engineering Program - Plant, (Budget Update FY 2017-18, Appendix A-9, M-FE-Plant) and the budget is sufficient for the recommended action. Once the system is in service, any payments made to AMS resulting from savings exceeding the contractual threshold values would be offset by those savings. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: •—Energy Management Services Agreement • Installation Agreement MD:JM:dm:gc Page 4 d4 ENERGY MANAGEMENT SERVICES AGREEMENT This ENERGY MANAGEMENT SERVICES AGREEMENT ("Agreement") is made as of April 25, 2018 (the "Effective Date"), by and between Orange County Sanitation District, a ("Host"), and Advanced Microgrid Solutions, Inc., a Delaware corporation ("Provider') and, together with Host, the"Parties,"and each a"TaM'),on the following terms and conditions. Capitalized terns not otherwise defined shall have the meanings in Schedule 5,Defined Terns. 1. Energy Storage System. Provider will install an electric energy storage system, together with all associated meters, switches, conduits, foundations, and other technology, equipment, software, and related components (an "Energy Storage System'), at the Premises to provide Energy Management Services (defined in Section 2 below) to Host at a location owned by Host (each a"Prove "). The size and location of the Energy Storage System are identified in Schedule 1 (Energy Storage System, Premises,and Property). 2. Energv Management Services. Following the Commercial Operation Date and continuing for the remainder of the Term, Provider will provide the following services (collectively, the "Energy Management Services")to Host at the Property: 2.1 Cost Savings. Provider will utilize the Energy Storage System to provide Cost Savings, including, as applicable, by capturing the differential between high-cost and low-cost energy prices,reducing demand charges, and other similar services that Provider has agreed to provide using the Energy Storage System; 2.2 Energy Analvtics and Portfolio Planning. Using historic, current, and forecasted load data, Provider will use its software platform to analyze energy and equipment data at the Property where the Energy Storage System is in operation to identify opportunities and recommend strategies to (a) improve energy efficiency, (b) optimize energy resources, and (c) reduce greenhouse gas emissions. Provider may implement such recommendations upon mutual agreement with Host; 2.3 Network Operations Center Monitoring. Provider will provide Host with access to an energy management web portal that will display Host's energy usage, kWh throughput for the Energy Storage System,peak demand reduction enabled by the Energy Storage System, and estimated Cost Savings on a billing period and annual basis;and 2.4 24/7 System Monitoring. Provider will,at its own expense,install an internet connection and/or telephone line for remote monitoring of the Energy Storage System, and will monitor the operation and performance of the Energy Storage System,24 hours per day and 7 days per week in a manner compliant with Host's IT security policy and standards. 3. Fees and Payments. In consideration for the Energy Management Services,following the Commercial Operation Date and continuing for the remainder of the Term, Host will pay Provider the amounts set forth in Schedule 2 (Cost Savings and Service Fees), attached to this Agreement. 4. Term. The initial term of this Agreement ("Initial Term") will commence on the Effective Date and will continue for a period of ten (10) years following the Commercial Operation Date, unless sooner terminated pursuant to the terms and conditions of this Agreement; provided, however, by written notice delivered to Host prior to the expiration of the Initial Term, Provider shall have the right to extend the Initial Term by up to six(6)months(the"Short-Term Extension")as necessary for Provider to align the expiration of the Initial Tenn with the expiration of the tern under any Utility Services FE17-03 ENERGY MANAGEMENT SERVICES AGREEMENT Page 1 Agreement. If Host does not exercise its Purchase Option as provided in Section 7 below,the Parties may mutually agree to extend the term of the Agreement for two (2) additional terms of five(5)years each(each an"Extension Term");provided that any such Extension Term may be agreed between the Parties upon written notice of extension pursuant to the terms of this Section 4 from either Party to the other Party no later than thirty (30) days prior to the expiration of the Initial Tern or first Extension Term, as applicable, and acknowledgement from the Party receiving such notice of its agreement to such Extension Tenn delivered to the other Party prior to the expiration of the Initial Tenn or the first Extension Term,as applicable. As used herein,the"Term"means the Initial Term(as may be extended by the Short-Term Extension)together with each applicable Extension Term 5. Utility Services. In addition to providing the Energy Management Services to Host,Provider will have the right to utilize the Energy Storage System to provide Utility Services to a Local Electric Utility, Control Area Operator, or other Person, shared between the Parties pursuant to a written agreement, separate and apart from this Agreement. Provider agrees that the provision of the Utility Services will not unreasonably impact or disrupt the Property,or excuse Provider from its obligation to provide the Energy Management Services,and Host agrees that during the Term,it will not sell,assign,subscribe, pledge,provide,or commit the electrical load of the Property(including by participation in any demand response programs) to any Person other than Provider, sell any Utility Services or participate in any Utility Services programs other than with Provider,or engage or utilize any Person other than Provider to provide services that are the same as or similar to the Energy Management Services at the Property. Notwithstanding the foregoing to the contrary,Provider will be solely entitled to all income and benefits from, and will be solely responsible for all costs and obligations for, any Utility Services sold or provided under any Utility Services Agreement entered into by Provider prior to the Effective Date, including the DRESAs 6. Incentives. The Parties shall cooperate in applying for any grants, credits, or other Incentives (including, without limitation, SGIP) that Provider elects to pursue and are (or during the Term, may become)available and are applicable to the Energy Storage System(or any part thereof),the electrical load at the Property, or otherwise applicable to the provision of the Energy Management Services. Unless otherwise agreed by the Parties in writing,Provider shall be solely responsible for the cost and expense of applying for,and shall be entitled to all revenue,credits,and benefits from, any Incentives, and to the extent Host or its Affiliates acquires any right, title, interest, or possession in or to such Incentives, Host and/or its Affiliates agree to promptly transfer, assign, and deliver the same to Provider. 7. Purchase Option. Upon at least one(1)year prior written notice to Provider, so long as Host is not in breach or default of this Agreement,effective as of the expiration of the Initial Term,Host may purchase all(and not less than all)of the Energy Storage System by paying the Purchase Option Price to Provider (the "Purchase Option'). If Host exercises the Purchase Option pursuant to this Section 7, then upon Provider's receipt of the Purchase Option Price, title to the Energy Storage System shall transfer to Host as of the expiration of the Initial Tenn pursuant to a written agreement, separate and apart from this Agreement, on an "as is, where is" basis without any warranty or guaranty for, or obligation to operate or support,the Energy Storage System or the performance of the Energy Storage System from Provider,except that Provider will assign any unexpired manufacturer's warranties associated with the Energy Storage System to Host to the extent assignable. Upon the completion of the purchase of the Energy Storage System by Host, this Agreement shall terminate, and Provider will have no further obligations under this Agreement, except for such obligations arising prior to the date of such termination. Following Hoses purchase of the Energy Storage System pursuant to this Section 7,Host may engage Provider to continue to operate and support the Energy Storage System on behalf of Host pursuant to a written agreement, separate and apart from this Agreement, on terns and conditions acceptable to both Host and Provider. FE17-03 ENERGY MANAGEMENT SERVICES AGREEMENT Page 2 8. Assianment. Neither Party may assign this Agreement without the prior written consent of the other Party,which such consent shall not be unreasonably withheld,conditioned,or delayed, except that no consent shall be required in the following circumstances: (a)Provider assigns its rights and obligations under this Agreement to its Affiliate; (b) Host assigns its rights under this Agreement to any Person that becomes the fee title owner of the Property; or (c) Provider assigns any of its rights under this Agreement to any Provider Financing Party or to any Person in connection with a change of control of Provider(or its Affiliates)or any merger,sale of substantially all of Provider's assets,or other similar transaction undertaken by Provider and/or its Affiliates. Any assignment described in the foregoing clauses(a),(b),and(c)of this Section 8 shall be effective only if(i)the assigning Party provides written notice of such assignment to the other Party, and (ii) the assignee or transferee agrees in writing to perform and assume all obligations of the assigning Party under this Agreement. Any attempted assignment in violation of the foregoing shall be null and void. In the event of any assignment undertaken in accordance with this Section 8, the assigning Party will be released from all of its liabilities and other obligations under this Agreement. This Agreement shall be binding on and inure to the benefit of the successors and permitted assignees. 9. Schedules. The following schedules are incorporated into this Agreement by this references: (a) Schedule 1 (Energy Storage System,Premises,and Property),(b)Schedule 2(Cost Savings and Service Fees), (c) Schedule 3 (Insurance), (d) Schedule 4 (General Terms and Conditions), (e) Schedule 5 (Defined Terms), (f) Schedule 6 (Prohibited Resources Attestation) and Schedule 7 (Host's General Requirements, Scope of Work, Technical Specifications and General Conditions Provisions). To the extent there is any conflict between the terms and conditions of any of the schedules and exhibits,and the terms of the main body of this Agreement, the terms and conditions of the main body of this Agreement shall control. 10. Notices. Provider's address for Notices: Advanced Microgrid Solutions,Inc. c/o Kenzel Hagman 25 Stillman Street, Suite 200 San Francisco,CA 94107 Email: noticesAinivmicroaid.com Host's address for Notices: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 Attention:Natasha Dubrovski,Principal Contracts Administrator Copy:Michael Dorman,Engineering Manager Email constructionaocsd.com FE17-03 ENERGY MANAGEMENT SERVICES AGREEMENT Page 3 IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Energy Management Services Agreement as of the day and year first above written. PROVIDER: ADVANCED MICROGRID SOLUTIONS,INC. a Delaware Corporation By: Date Printed Name&Title HOST: ORANGE COUNTY SANITATION DISTRICT By: Gregory C. Seboum,PLS Date Chair,Board of Directors By: Kelly Lore Date Clerk of the Board By: Marc Dubois Date Contracts,Purchasing and Materials Management Manager MTD:NKD:yp FE17-03 ENERGY MANAGEMENT SERVICES AGREEMENT Page 4 INSTALLATION AGREEMENT This Agreement is made as of April 25,2018,between the Host: and the Provider: Orange County Sanitation District Advanced Microgrid Solutions,Inc. 10844 Ellis Avenue 25 Stillman Street,Suite 200 Fountain Valley,CA 92708 San Francisco, CA 94107 for the Project: at the Site: FE17-03 Cable Replacement Orange County Sanitation District,Plant 1 10844 Ellis Avenue Fountain Valley,CA 92708 Recitals: Whereas, Host is a public agency that provides wastewater collection, treatment, and disposal services for approximately 2.6 million people in central and northwest Orange County, with a mission to protect public health and the environment by providing effective wastewater collection, treatment, and recycling; and Whereas, Host, in Request For Proposals dated January 29, 2018, solicited proposals for Project No. FE17-03 Battery Storage System in order to install, operate, and maintain a behind-the-meter battery energy storage system at Orange County Sanitation District("OCSD')Plant No. 1 in Fountain Valley;and Whereas, Provider was awarded the contract for Project No. FE17-03 to provide Host benefits including but not limited to cost savings, energy analytics and portfolio planning, web portal monitoring, around-the-clock network operations center, and grid support for the local community via Southern California Edison's Local Capacity Resource Program; and Whereas,on April 25, 2018,Host and Provider entered into a Service Agreement and determined it was preferential for Host to increase the size of its battery storage system;and Whereas, for Provider to safely and effectively provide its services, Host's two existing power feeder cables connecting Plant No. 1,Building 6 with the l2kV Service Center,which are near the end of their existing life and have limited amperage,must be replaced; Now,therefore,in consideration of the mutual promises set forth herein,the Parties hereto agree as follows: Article 1 Scope of Work 1.1 The Provider shall perform and provide (or cause to be performed and provided by a licensed contractor)all of the Work described in this Service Agreement,including,but not limited to: 1. Review Client-provided as-built plans,records,and electrical surveys. FE17-03 CABLE REPLACEMENT-INSTALLATION AGREEMENT Page 1 2. Conduct electrical survey of existing facility to include: a. Assess existing electrical rooms)and exterior of site of existing transmission line to be replaced. b. Identification of termination points and necessary replacements. c. Identification of electrical conduit pathways. d. Submit cable and material submittals to the Host for review. 3. Prepare a preliminary electrical Single Line Diagram including: a. Size new transmission line from CenGen to PB6 to supply the existing PB6 load and the new BESS on two feeds(A&B). b. Size new cable termination and cable splices. c. Voltage drop calculations will be performed by the Host. d. Short circuit calculations will be performed by the Host. e. Protective relay setting changes will be performed by the Host. 4. Submit documentation for review and approval by Host. 5. Replace and test all required electrical upgrade replacement cables required in compliance with the Hoses General Requirements. 1.2 The Provider shall provide adequate man power for the completion of Work within the Installation Agreement Time,and may subcontract portions of the Work and services to be provided hereunder in compliance with any relevant requirements in the Service Agreement. 1.3 The Energy Storage Cable System shall be furnished and installed in compliance with the Host's General Requirements and Specifications. All materials and equipment required for installation of the Energy Storage Cable System shall be delivered to OCSD site. 1.4 Provider shall replace existing 12kV switchgear current transformers as required based on increased cable ampacity. 1.5 The Work performed shall be performed in accordance with prudent industry practices. Work performed shall have a one (1) year workmanship warranty from the date of installation or performance, whichever is later. Any manufacturer's warranties held or controlled by Provider shall be transferred to Host upon fund payment for the Work, and Provider agrees to provide reasonable and diligent efforts to assist Host with advancing reasonable claims for warranties supplied by the respective manufacturer,to the extent necessary.The Energy Storage Cable System will be installed in compliance with the Host's General Requirements and Specifications (which are attached hereto as Exhibit A, applicable laws, and applicable governmental approvals in all material respects. FE17-03 CABLE REPLACEMENT-INSTALLATION AGREEMENT Page 2 Article 2 Installation Agreement Price 2.1 The Installation Agreement Price is: Project Installation Agreement Price FE17-03 Cable Replacement Not to exceed$393,000 * *Final price to be determined after a site walk based on actual measurements of the site and will include a linear per foot price. Payment for the material will be based on actual quantity,with quantity supported by the supplier invoice, and including reasonable markup. 2.2 The Installation Agreement Price is inclusive of all Work and services of Provider and includes any and all services performed or remaining to be performed under the Notice to Proceed. Provider shall have no claim to additional sums for the Work and services under this Agreement or under the Notice to Proceed,except as otherwise provided herein. 2.3 The Installation Agreement Price is based upon the following Alternates (if any), which are described in the Contract and accepted by the Host: None. 2.4 The Installation Agreement Price includes the following Allowances(if any),which are described in the Contract: None. 2.5 The Installation Agreement Price includes the following Unit Prices (if any), which are described in the Contract: None. 2.6 Adjustments of the Installation Agreement Price on account of additional services provided by the Provider's personnel or subcontractors shall be documented and presented to the Host by Provider, and upon agreement between the Parties, shall become part of this Installation Agreement. 2.7 Provider shall invoice Host 35%of Installation Agreement Price at Mobilization. For purposes of this Installation Agreement, "Mobilization" shall mean the staging area is set up with fencing in place and Construction is ready to start. After the initial invoice,Provider shall also invoice Host (i) each month for the Work completed during the month, and (ii) promptly upon ordering Equipment. Host shall review the invoice,and if acceptable,shall pay the invoiced amount no later than thirty(30) days following receipt by Host of the invoice for Work completed, or in the case of Equipment Procurement, Host shall pay the invoice no later than fifteen (15) days following receipt by Host of the invoice for such Equipment. If Host delays payment due to no fault of Provider, such invoice shall accrue the lawful rate of interest on outstanding balances for each day of delayed payment. FE17-03 CABLE REPLACEMENT-INSTALLATION AGREEMENT Page 3 Article 3 Installation Agreement Time 3.1 The Installation Agreement Time is: Project Installation Agreement Time FE17-03 Cable Replacement Prior to COD of Project FE17-03 Battery Energy Storage System. 3.2 The Provider must achieve Substantial Completion of all of the Work within the Installation Agreement Time. 3.3 The Host will establish the Date of Commencement in a Notice to Proceed which the Host will issue to the Provider. Article 4 Schedule-Related Damages and Credit 4.1 Liquidated Damages. If the Provider fails to achieve Substantial Completion of all of the Work within the Installation Agreement Time, it would be difficult, if not impossible, to determine the Host's resulting damages. Therefore,if the Provider fails to achieve Substantial Completion of all of the Work within the Installation Agreement Time,unless such delay is attributable to the utility or entity responsible for completing interconnection of the Work,the Provider must(at the Host's option)pay to or credit the Host the following liquidated-damages,which are not penalties(gaily Liquidated Damages"). The Daily Liquidated Damages shall accrue for each day after the expiration of the Contract Time that the Provider fails to achieve Substantial Completion: Project Daily Liquidated Damages FE17-03 Cable Replacement $500 per day In no event shall the Daily Liquidated Damages be greater in the aggregate than an amount equal to 25%of the Installation Agreement Price. Additionally,if such delay is attributable to the utility or entity responsible for completing delay in completing interconnection of the Work, Provider shall not be required to pay Daily Liquidated Damages for the delay. 4.1.1 In addition to other rights the Host may have relative to liquidated damages,the Host may deduct liquidated damages from the Installation Agreement Price as the damages accrue. 4.1.2 The liquidated damages described in this Article 4 are only intended to compensate the Host for the direct damages it incurs as a result of the Provider's failure to achieve Substantial Completion of all Work within the Installation Agreement Time. 4.13 NO CONSEQUENTIAL DAMAGES. EXCEPT WITH RESPECT TO (A) DAILY LIQUIDATED DAMAGES, (B) DAMAGES ARISING FROM A PARTY'S INDEMNIFICATION OBLIGATIONS OR FROM CONTRACTOR'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, (C) ANY PAYMENT REQUIRED UNDER THIS AGREEMENT IN CONNECTION WITH ANY TERMINATION, OR (D) ANY CONTRACT PRICE ADJUSTMENT PURSUANT TO A CHANGE ORDER, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, SPECIAL,EXEMPLARY,PUNITIVE,INDIRECT,OR INCIDENTAL DAMAGES. FE17-03 CABLE REPLACEMENT-INSTALLATION AGREEMENT Page 4 4.2 Cancelation of Projects. 4.2.1 In the event that Host elects to terminate this Agreement due to no fault of Provider, Host agrees to pay to Provider its reasonable documented costs associated with Work performed through the date of termination and Provider's reasonable demobilization costs. Article 5 Party Representatives 5.1 The parties designate the individuals listed below as their respective representatives: Host's Senior Representative: Provider's Senior Representative: Michael Dorman Mark Tholke Engineering Manager Chief Development Officer Host's Project Manager: Provider's Project Manager: Jeffrey Mohr Amy Shanahan, Sr.Project Manager Engineering Manager 25 Stillman St., Suite 200 San Francisco,CA 94107 5.2 The Provider's Senior Representative and Project Manager are each authorized to bind the Provider with respect to all matters concerning the Project. 5.2.1 The Provider may not replace the Provider's Senior Representative or Project Manager without the Host's prior written consent unless the Senior Representative or Project Manager(as applicable)(1)is no longer employed by the Provider or(2)is unable through mental or physical disability to continue to work on the Project. If the Provider replaces its Senior Representative or Project Manager for any reason, the replacement(1)must be of at least equivalent experience and ability and (2) is subject to the Hoses prior written approval. 5.3 The Host's Senior Representative is authorized to bind the Host with respect to all matters concerning the Project. The Host's Project Manager will serve as the Host's day-to-day point of contact with the Provider,but is not authorized to bind the Host to any contract or to any contract modification except an Order for a Minor Change. 5.3.1 The Host may replace its representatives or change the scope of their authority at any time by giving written notice of the change to the Provider. 5.3.2 The Provider is not entitled to rely on communications from anyone on behalf of the Host except the Host's Senior Representative and Project Manager. Article 6 Taxes 6.1 The Provider must withhold and pay all federal, state, and local taxes due or payable with respect to wages, salaries,commissions, and any other income as required under Applicable Law. .Article 7 Enumeration of Documents 7.1 This Agreement includes OCSD General Requirements provided in Exhibit A. FE17-03 CABLE REPLACEMENT-INSTALLATION AGREEMENT Page 5 IN WITNESS WHEREOF,the Parties hereto have caused this Agreement to be executed as of the day and year first above written. PROVIDER: ADVANCED MICROGRID SOLUTIONS,INC. By: Date Printed Name&Title HOST: ORANGE COUNTY SANITATION DISTRICT By: Gregory C. Seboum,PLS Date Chair,Board of Directors By: Kelly Lore Date Clerk of the Board By: Marc Dubois Date Contracts,Purchasing and Materials Management Manager MTD:NKD:yp FE17-03 CABLE REPLACEMENT-INSTALLATION AGREEMENT Page 6 OPERATIONS COMMITTEE Meng Date TOBd. Dir. a4/etlo4118 o4/zs/IofB AGENDA REPORT ItemNumber Item Number s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations and Maintenance SUBJECT: REGIONAL ODOR AND CORROSION CONTROL SERVICES (ROCCS) PROGRAM, SPECIFICATION NO. C-2017-899BD GENERAL MANAGER'S RECOMMENDATION A. Receive and file bid tabulation and Notice of Intent to Award dated March 12, 2018 for the Regional Odor and Corrosion Control System (ROCCS) Program, Specification No. C-2017-899BD; B. Receive and file Pencco award protest statement dated March 12, 2018 for Specification No. C-2017-899BD; C. Receive and file Orange County Sanitation District's Protest Determination Letter dated March 15, 2018; D. Receive and file Pencco's Determination Response letter dated March 19, 2018; E. Award a Chemical Supplier Agreement to Hill Brothers Chemical Co, for the ROCCS Program, Specification No. C-2017-899BD, for the following chemical supply and dosing services for the period July 1, 2018 through June 30, 2019, with four (4) one-year renewal options, for the: 1. Supply and delivery of Ferrous Chloride at the unit price of$508.82/dry ton delivered (plus applicable sales tax);with Application Services at a unit price of$25/per site per day and Field Services at a unit price of$25/per site per day for an estimated total annual amount of$2,001,263; 2. Supply and delivery of Magnesium Hydroxide at a unit price of$498.62/dry ton delivered (plus applicable sales tax)with Application Services of$80/per site per day; Field Services of$80/per site per day and demurrage (Special Circumstances)of$635/dry ton (plus applicable sales tax)with a dosing fee of$190/hour for an estimated total annual amount of$2,505,152; 3. An annual not to exceed agreement allowance of $50,000 for mobilization and demobilization services; F. Award a Chemical Supplier Agreement to US Peroxide, LLC dba USP Technologies, for the ROCCS Program, Specification No. C-2017-89913D, for the period July 1, 2018 through June 30, 2019, with four(4) one-year renewal options for the supply and delivery of Calcium Nitrate at the unit price of $1.975/gallon delivered (plus applicable sales tax) with Application Services at a unit price of $25/per site per day; Field Services at a unit price of$25/per site per day; a Crystal Page 1 of 5 Cove delivery fee of $175 per delivery for an estimated annual amount of $498,794: 1. With an annual not to exceed agreement allowance of $50,000 for mobilization and demobilization services; and G. Approve an annual unit price and program price contingency of 15%, per agreement. BACKGROUND The Orange County Sanitation District (Sanitation District) utilizes two programs for controlling odor and corrosion in the collection system: the first is ROCCS which utilizes continuous dosing sites; and the second is intermittent dumping of caustic soda. Since 2003, the primary strategy has been the ROCCS program for which current agreements expire on June 30, 2018. These agreements provide continuous chemical dosing within the regional trunk system and major tributary sewers using a variety of staff recommended chemical applications. This serves to not only reduce odors in our service area and extend the life of the sewer pipes, but also reduce odors at both treatment plants. Staff maintains oversight and daily interaction with outsourced service providers. In addition to supplying the chemicals, the Suppliers will provide all necessary equipment including tanks, containment, pumps, piping, secure fencing, and equipment monitoring to determine tank levels, leaks, and pump rates. Under the ROCCS program, the Sanitation District currently operates 11 continuous chemical dosing sites located in nine member-agency cities. Staff anticipates adding at least two additional dosing sites over the next five-year agreement. RELEVANT STANDARDS • 12 or fewer odor complaints per year under normal operating conditions in the collections system • Zero odor incidents/events under normal operating conditions for Plant Nos. 1 and 2 • Operate and maintain facilities to minimize impacts on surrounding communities, including odor, noise, and lighting PROBLEM The transport of wastewater in the collection system has the potential for causing odor nuisance complaints in the surrounding community, as well as producing acids that degrade concrete and metal structures, reducing their useful life. Page 2 d 5 PROPOSED SOLUTION Providing continuous chemical feed odor control facilities in the wastewater collection system minimizes odor complaints and extends the life of the sewer pipes. TIMING CONCERNS N/A RAMIFICATIONS OF NOT TAKING ACTION Increased odor complaints which could possibly lead to organized public protest, as well as increased costs associated with more frequent rehabilitation of Sanitation District assets. PRIOR COMMITTEE/BOARD ACTIONS May 2013 -Approved agreements with Hill Brothers Chemical Company& U.S. Peroxide, LLC for Regional Odor and Corrosion Control Services, Specification No. C-2013-5656D, with an annual unit price and service price contingency of 15%, per agreement. ADDITIONAL INFORMATION Table 1: compares the summary from current budget FY 2017-18 to the Bid procurement effective beginning FY 2018-19. Table 1: Chemical FY 2017-18 FY 2018-19 Ferrous Chloride $3,320,500 $2,001,263 Magnesium Hydroxide $2,079,100 $2,505,152 Calcium Nitrate $866,500 $498,794 Total $6,266100 $5 005 209 Cost Savings $1,260,892 Field Services — includes routine field vapor and liquid phase sampling and analysis that includes total and dissolved sulfide, wastewater pH, temperature, residual iron and nitrate, and hydrogen sulfides. Application Services— includes maintenance of chemical storage tanks and feed system for each facility, chemical inventory, set and adjust dosing system profile, and maintain performance standard. Magnesium Hydroxide Special Circumstances (demurrage fee)— Magnesium Hydroxide is supplied and delivered at a unit price of$635/dry ton (plus applicable sales tax)with a dosing fee of $190/hour. This service includes chemical, labor, services, storage, and mobile feeding systems. For special circumstances, such as power outages, engineering Page 3 d 5 projects, corrosion assessments, and/or repairs, the Sanitation District will use mobile dosing of the non-hazardous Magnesium Hydroxide to prevent public odor complaints. SOLICITATION INFORMATION The Sanitation District conducted a two-step bid process that involved (1) a Request for Qualifications (RFQ) which was issued on December 27, 2017 followed by (2) a Notice Inviting Bids (NIB)issued on February 21, 2018 via PlanetBids, Inc. Four responses/RFQ to Step 1 were received and evaluated by Staff. EVALUATION (for the RFQ) On February 5, 2018, the Buyer met with pre-selected members of the evaluation committee to discuss the policies and procedures for the evaluation process. The members of the evaluation committee consisted of technical subject matter expert staff. Scoring was done on a Pass/Fail basis for this procurement. Members of the committee performed an independent review of the proposals and later met as a group with the buyer to discuss their preliminary scores and discuss any questions/concerns they had. Proposals were evaluated based on the following criteria: Qualifications of the Firm, Staffing and Project Organization, and Work Plan. All four Suppliers who submitted a response were found to be qualified and were invited to Step 2 — NIB. Bid items were categorized by each of the three (3) chemicals and the award was split amongst two (2) Suppliers based on the lowest cost for that chemical category. BID TABULATION Table 2 displays the bid tabulation from the Suppliers who submitted a responsive bid. The bid amounts for each chemical category include pricing for chemical supply, delivery, and all associated services and fees. Table 2: HILL U.S. PEROXIDE, Chemical Type EVOQUA WATER BROTHERS LLC dba USP PENCCO TECHNOLOGIES CHEMICAL TECHNOLOGIES COMPANY Ferrous $3,435,003.90 $2,001,262.60 $2,028,940.00 $2,996,922.95 Chloride Magnesium NO BID $2,505,151.46 $3,773,211.60 $4,047,495.70 Hydroxide Calcium Nitrate $652,719.80 $711,701.96 $498,793.60 $1,020,037.24 TOTAL $4,087,723.70 $5,218,116.02 $6,300,945.20 $8,064,455.89 *Allowance of$50,000 added to each contract for mobilization &demobilization services. Page 4 of 5 PROTEST INFORMATION The Sanitation District received an official protest statement from Pencco on March 13,2018 following the issuance of the Notice of Intent to Award. Pencco requested the Sanitation District declare the other bidders non-responsive for the service portion of the bid, and thereby award all six (6) service sections to Pencco. The Sanitation District reviewed the protest statement submitted by Pencco and has rejected its request for the following reasons: 1) Pencco failed to provide any evidence of their claims that the other bidders were not qualified to provide the services; 2) Pennco's claim was submitted after the protest period ended after Step 1 — RFQ; and 3) The ROCCS program is for a complete turn-key service and the intent is for this award to be made to a Supplier(s)who can provide supply and delivery of the three (3) chemicals in addition to the dosing services. CEQA N/A FINANCIAL CONSIDERATIONS This complies with authority levels of the Sanitation Districfs Purchasing Ordinance. This item has been budgeted in the FY 17-18 Budget, Division 820 (Line item: Supplies, Section 6, page 76). Date of Approval Contract Amount Contingency 0412512018 $5,155,209 15%(Unit Price) ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Bid Tabulation Report from PlanetBids, Inc. • Notice of Intent to Award dated March 12, 2018 • Pencco Protest Statement dated March 12, 2018 • Sanitation District Protest Determination Letter dated March 15, 2018 • Pencco Response to Determination Letter dated March 19, 2018 • Chemical Supplier Agreements • Presentation from April 4, 2018 Operations Committee meeting Page 5 of 5 Orange County Sanitation District Pape 1 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM POWdl call V2018 Bid Results 4 Bid Results Bidder Details Vendor Name US PEROXIDE,LLC Address 900 Circle 75 Parkway,Suite 1330 ATLANTA,GA 30339 United Stales Respondee Andrew Nangano Respondee Title Assistant Secretary Phone 404-352-6070 Ext. 101 Email anangano@usptechnologies.com Vendor Type Bid Detail Bid Format Electronic Submitted March 8,2018 10:43:55 AM(Pacific) Delivery Method NIA Bid Responsive Yes Bid Status Submitted Confirmation# 1M332 Ranking 0 Respondee Comment Thank you for the opportunity to submit a bid during Step 2. Buyer Comment Attachments File Title File Name File Type Exhibit G-USP Technologies USP Exhibit G-Executed.pdf Response File Line Items Discount Terms nodismunt Type Item Code UOM city Unit Price Line Total Discount Comment Ferrous Chloride 1 Ferrous Chloride Unit Price Dry Ton 3500 S415.0000 $1,452,500.0000 $1,452,500.0000 2 CA Sales Tax(7.75%) Dry Ton 3500 $32.1600 $112,560.0000 $112,560.0000 3 Freight(non-taxable) Dry Ton 3500 $100.0000 $350,000.0000 $350,000.0000 4 Application Services(non-taxable) Per Site/Per 2190 $26.0000 $56,940.0000 $56,940.0000 Day PlanetBids,Inc. Orange County Sanitation District Pape 2 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM Prin4xl 0311 V2018 Bid Results Type Item Code UOM Qry Unit Price Line Total Discount Comment 5 Field Services(non-taxable) Per SilelPer 2190 $26.0000 $56,940.0000 $56,940.0000 Day Subtotal $2,028,940.0000 $2,028,940.0000 Magnesium Hydroxide 6 Magnesimum Hydroxide Unit Price DryTon 4200 $706.6700 $2,968,014.0000 $2,968,014.0000 7 CA Sales Tax(7.75%) DryTon 4200 $54.7700 $230,034.0000 $230,034.0000 8 Freight(non-taxable) DryTon 4200 $93.3300 $391,986.0000 $391,986.0000 9 Application Services(non-taxable) Per SilelPer 1095 $30.0000 $32.850.0000 $32,850.0000 Day 10 Field Services(non-taxable) Per Site/Per 1095 $30.0000 $32.850.0000 $32,850.0000 Day 11 Demurrage fee for mobile dosing Hour 8 $150.0000 $1,200.0000 $1,200.0000 12 Demurrage chemical unit pace DryTon 120 $812.6700 $97,520.4000 $97,520A000 13 Demurrage CA Sales Tax(7.75) DryTon 120 $62.9800 $7,557.6000 $7,557.6000 14 Demurrage Freight(non-taxable) DryTon 120 $93.3300 $11,199.6000 $11,199.6000 Subtotal $3,773,211.6000 $3,773,211.6000 Calcium Nitrate 15 Calcium Nitrate Unit Price Gallon 200400 $1.7300 $346,692.0000 $346,692.0000 16 CA Sales Tax(7.75k) Gallon 200400 $0.1340 $26,853.6000 $26,853.6000 17 Freight(non-taxable) Gallon 200400 $0.2450 $49,098.0000 $49,098.0000 18 Application Services(non-taxable) Per Site/Per 1460 $25.0000 $36,500.0000 $36,500.0000 Day PlanetBids,Inc. Orange County Sanitation District Page 3 Regional Odor and Corrosion Control System(ROCCS)Progmm(C-2017-899BD),bidding on March 8,2018 2:00 PM Pnn4xl 0311V2018 Bid Results Type Item Code UOM tlry Unit Price Line Total Discount Comment 19 Field Servloes(non-taxable) Per SltelPer 1460 $25.0000 $36.500.0000 $36,500.0000 Day 20 Crystal Cove Pump Station Delivery Delivery 18 $175.0000 $3.150.0000 $3,150.0000 Subtotal $498,793.6000 $498,793.6000 Total $6,300,945.2000 $6,300,945.2000 PlanetBids,Inc. Orange County Sanitation District Pa9c4 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM Primal 0311 V2018 Bid Results Bidder Details Vendor Name Evoqua Water Technologies LLC Address 2650 Tellevast Road Sarasota,FL U243 United States Respondee Jennifer R.Miller Respondee Title V.P.&G.M.-Municipal Services Phone 941-359-7930 Ext. Email municipalwmims@evoqua.com Vendor Type Bid Detail Bid Format Electronic Submitted March 8,201B 1:34:36 PM(Pacific) Delivery Method Truck/Per bid spec Bid Responsive yes Bid Status submitted Confirmation# 134342 Ranking 0 Respondee Comment Buyer Comment Attachments File Title File Name File Type Exhibit G Non-Collusion Affidavll.pdf Response File Line Items Discount Terms nodiscount Type Item Code UOM Dry Unk Price Line Total Discount Comment Famous Chloride 1 Ferrous Chloride Unit Price Dry Ton 3500 $757.0000 $2,649,500.0000 $2,649,500.0000 2 CA Sales Tax(7.75 k) Dry Ton 3500 $58.6700 $205,345.0000 $205,345.0000 3 Freight(non-taxable) DryTm 3500 $108.0000 $378,000.0000 $378,000.0000 4 Application Services(non-taxable) Per SilelPer 2190 $92.3100 $202,158.9000 $202,158.9000 Price is per site/per day Day 5 Field Services(non-taxable) Per SilelPer 2190 no bid Is not a no bid,Price is Day Included In Application Services Subtotal $3,435,003.9000 $3,435,003.9000 PlanetBids.i Orange County Sanitation District peas 5 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM Printed 0311 V2018 Bid Results Type Item Code UQM Qty Unit Price Line Total Discount Comment Magnesium Hydroxide 6 Magncsimum Hydroxide Unit Price Dry Ton 4200 no bid No Bid 7 CA Sales Tax(7,75) Dry Ton 4200 no bid No Bid 8 Freight(non-taxable) Dry Ton 4200 no bid No Bid 9 Application Services(non-taxable) Per Site/Per 1095 no bid No Bid Day 10 Field Services(non-taxable) Per Site/Per 1095 no bid No Bid Day 11 Demurrage fee for mobile dosing Hour 8 no bid No Bid 12 Demurrage chemical unit price Dry Ton 120 no bid No Bid 13 Demurrage CA Sales Tax(7.75) Dry Ton 120 no bid No Bid 14 Demurrage Freight(non-taxable) Dry Ton 120 no bid No Bid Subtotal 0 0 Calcium Nitrate 15 Calcium Nitrate Unit Price Gallon 200400 $1.9700 $394,788.0000 $394,788.0000 16 CA Sales Tax(7.75%) Gallon 200400 $0.1500 $30,060.0000 $30,060.0000 17 Freight(non-taxable) Gallon 200400 $0.2320 $46,492.8000 $46,492.8000 18 Application Services(non-taxable) Per Site/Per 1460 $121.1500 $176,879.0000 $176,879.0000 Price is per site/per day Day 19 Field Services(non-taxable) Per Site/Per 1460 no bid Is not a no bid,Price is Day included in Application Services PlanetBids,Inc. Orange County Sanitation District Page 6 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM Printed 0311 V2018 Bid Results Type Item Code UOM City Unit Price Line Total Discount Comment 20 Crystal Cove Pump Station Delivery Delivery 18 $250.0000 $4,500.0000 $4,500.0000 Subtotal $652,719.8000 $652,719.8000 Total $4,087,723.7000 $4,087,723.7000 PlanctBids. nc. Orange County Sanitation District Page 7 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM Printed call V2018 Bid Results Bidder Details Vendor Name Hill Brothers Chemical Company Address 3000 E.Birch Street Su#e 108 Brea,CA 92821 United States Responds* Ed Gunderson Respondee Title District Representative Phone 714-323-4528 Ext. Email ed@hillbrothem.com Vendor Type Bid Detail Bid Format Electronic Submitted March 8,2018 1:18:43 PM(Pacific) Delivery Method Bid Responsive Yes Bid Slatus Submitted Confirmation# 134328 Ranking 0 Respondee Comment Buyer Comment Attachments File Title File Name File Type Hill Brothers C-2017-899BD Non-Collusion Affidavit HIII Brothers C-2017-899BD Non-Collusion Aftidavit.pdf Response File Line Items Discount Terms nodiscount Type Item Code UOM Qy Unit Price Line Total Discount Comment Ferrous Chloride 1 Ferrous Chloride Unit Price Dry Ton 3500 S408.8200 $1,430,870.0000 $1,430,870.0000 7.9 cat min per delivery 2 CA Sales Tax(7.75 k) Dry Ton 3500 $31.6836 $110,892.6000 $110,892.6000 3 Freight(non-taxable) Dry Ton 3500 $100.0000 $350,000.0000 $360,000.0000 7.9dslminperdelivery 4 Application Services(non-taxable) Per SilelPer 2190 $25.0000 $54,750.0000 $54,750.0000 Day 5 Field Services(non-taxable) Per SilelPer 2190 $25.0000 $54,750.0000 $54,750.0000 Day Subtotal $2,001,262.6000 $2,001,262.6000 PlanetBids,Inc. Orange County Sanitation District paae 8 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM printed 0311 V2018 Bid Results Type Item Code UOM Qty Unit Price Line Total Discount Comment Magnesium Hydroxide 6 Magncsimum Hydroxide Unit Price Dry Ton 4200 $468.9200 $1,969,464.0000 $1,969,464.0000 14 dst min per delivery ] CA Sales Tax(7]5 b) Dry Ton 4200 $36.3413 $152,633.4600 $152,633.4600 8 Freight(non-taxable) Dry Ton 4200 $29.7000 $124,740.0000 $124,740.0000 14 call min per delivery 9 Application Services(non-taxable) Per Site/Per 1095 $80.0000 $87,600.0000 $87,600.0000 Day 10 Field Services(non-taxable) Per Site/Per 1095 $80.0000 $87,600.0000 $87,600.0000 Day 11 Demurrage fee for mobile dosing Hour 8 $190.0000 $1,520.0000 $1,520.0000 12 Demurrage chemical unit price Dry Ton 120 $580.0000 $69.600.0000 $69,600.0000 7 dst min per delivery 13 Demurrage CA Sales Tax(7.75) Dry Ton 120 $44.9500 $5,394.0000 $5,394.0000 14 Demurrage Freight(non-taxable) Dry Ton 120 $55.0000 $6,600.0000 $6,600.0000 based on 14 diet Subtotal $2,505,151.4600 $2,505,151.4600 Calcium Nitrate 15 Calcium Nitrate Unit Price Gallon 200400 $2.4500 $490,980.0000 $490,980.0000 3900 gal min per delivery 16 CA Sales Tax(7.75%) Gallon 200400 $0.1899 $38,055.9600 $38,055.9600 17 Freight(non-taxable) Gallon 200400 $0.1650 $33,066.0000 $33,066.0000 3900 gal min per delivery 18 Application Services(non-taxable) Per Site/Per 1460 $50.0000 $73,000.0000 $73,000.0000 Day 19 Field Services(non-taxable) Per Site/Per 1460 $50.0000 $73,000.0000 $73,000.0000 Day PlanetBids,Inc. Orange County Sanitation District Page 9 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM Printed 0311 V2018 Bid Results Type Item Code UOM City Unit Price Line Total Discount Comment 20 Crystal Cove Pump Station Delivery Delivery 18 $200.0000 $3,600.0000 $3,600.0000 2000 gal min per delivery Subtotal $711,701.9600 $711,701.9600 Total $5,218,116.0200 $5,218,116.0200 PlanetBids,Inc. Orange County Sanitation District Ps9c 10 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM Prima]0311 V2018 Bid Results Bidder Details Vendor Name PENCCO Address P.O.BOX 600 SAN FELIPE,TX 77473 United States Respondee Sarah Duffy Respondee Title Bid Sec, Phone 979-885-0005 Ext. 111 Email Sarah@pencco.com Vendor Type CADIR Bid Detail Bid Format Electronic Submitted March 8,2018 12:18:10 PM(Pacific) Delivery Method Per Bid Bid Responsive Yes Bid Status Submitted Confirmation# 134337 Ranking 0 Respondee Comment Buyer Comment Attachments File Title File Name File Type Non Collusion OCSD NON COLLUSION.pdf Response File Line Items Discount Terms nodiscount Type Item Code UOM Dry Unk Price Line Total Discount Comment Ferrous Chloride 1 Ferrous Chloride Unit Price Dry Ton 3500 5495.0000 $1,732,500.0000 $1,732,500.0000 2 CA Sales Tax(7.75 k) Dry Ton 3500 $38.3625 $134,268.7500 $134,268.7500 3 Freight(non-taxable) Dry Ton 3500 $70.0000 $245,000.0000 $245,000.0000 4 Application Services(non-taxable) Per SilelPer 2190 $230.9600 $505,802.4000 $505,802.4000 Day 5 Field Services(non-taxable) Per SilelPer 2190 $173.2200 $379,351.8000 $379,351.8000 Day Subtotal $2,996,922.9500 $2,996,922.9500 PlanetBids,Inc. Orange County Sanitation District Pass 11 Regional Odor and Corrosion Control System(ROCCS)Progmm(C-2017-899BD),bidding on March 8,2018 2:00 PM Printed 0311 V2018 Bid Results Type Item Code UCiM City Unit Price Line Total Discount Comment Magnesium Hydroxide 6 Magncsimum Hydroxide Unit Price DryTon 4200 $573.0000 $2,406.600.0000 $2,406,600.0000 ] CA Sales Tax(7]5 b) DryTon 4200 $44.4075 $186,511.5000 $186,511.5000 8 Freight(non-taxable) DryTon 4200 $100.0000 $420,000.0000 $420,000.0000 9 Application Services(non-taxable) Per Site/Per 1095 $461.9200 $506,802.4000 $505,802.4000 Day 10 Field Services(non-taxable) Per Site/Per 1095 $346.4400 $379,351.8000 $379,351.8000 Day 11 Demurrage fee for mobile dosing Hour 8 $125.0000 $1,000.0000 $1,000.0000 12 Demurrage chemical unit price DryTon 120 $1,100.0000 $132.000.0000 $132,000.0000 13 Demurrage CA Sales Tax(7.75) DryTon 120 $85.2500 $10,230.0000 $10,230.0000 14 Demurrage Freight(non-taxable) DryTon 120 $50.0000 $6,000.0000 $6,000,0000 Subtotal $4,047,495.7000 $4,047,495.7000 Calcium Nitrate 15 Calcium Nitrate Unit Price Gallon 200400 $2.3500 $470,940.0000 $470,940.0000 16 CA Sales Tax(7.75%) Gallon 200400 $0.1821 $36,492.8400 $36,492.8400 17 Freight(non-taxable) Gallon 200400 $0.3000 $60,120.0000 $60,120.0000 18 Application Services(non-taxable) Per Site/Per 1460 $173.2200 $252,901.2000 $252,901.2000 Day 19 Field Services(non-taxable) Per Site/Per 1460 $129.9200 $189,683.2000 $189,683.2000 Day PlanetBids,Inc. Orange County Sanitation District Pape 12 Regional Odor and Corrosion Control System(ROCCS)Program(C-2017-899BD),bidding on March 8,2018 2:00 PM Printed 0311 V2018 Bid Results Type Item Code UOM City Unit Price Line Total Discount Comment 20 Crystal Cove Pump Station Delivery Delivery 18 $550.0000 $9,900.0000 $9,900.0000 Subtotal $1,020,037.2400 $1,020,037.2400 Total $8,064,455.8900 $8,064,455.8900 PlanetBids.Inc. Serving. Orange County Sanitation District Anaheim 10844 Ellis Avenue,Fountain Valley,CA 92708 714.962.2411 • www.ocs i.com Brea Buena Park cypess March 12, 2018 Fountain Valley Fullerton SUBJECT: Notice of Intent to Award for Specification No. C-2017-899BD Regional Odor and Corrosion Control System Garden Grove (ROCCS) Program Huntington Beach irvi In conformance with Orange County Sanitation District's (OCSD) La HabJPurchasing Ordinance No. OCSD-47, a contract for Ferrous Chloride and La Hab Magnesium Hydroxide, Specification No. C-2017-899BD Regional Odor La Palma and Corrosion Control System (ROCCS) Program, is being awarded to Hill Brothers Chemical Company, subject to approval by the Board of Los Alamitos Directors. Newport Beach A contract for Calcium Nitrate, Specification No. C-2017-899BD Regional Orange Odor and Corrosion Control System (ROCCS) Program, is being awarded to U.S. Peroxide, LLC dba USP Technologies, subject to approval by the Placentia Board of Directors. Santa Ana The bid tabulation for each chemical is as follows: Seal Beach Stanton EVOOUA HILLS BRO. LISP TECH PENCCO Ferrous Chloride $3 435 003.90 $2 001 262.60 $2 028 940.00 $2 996 922.95 Tustin Mactresiurn Hydroxide NO BID $2 505 151.46 $3 773 211.60 $4 047 495.70 Villa Pam Calcium Nitrate $852 719.80 $711 701.96 $498 793.60 $1 020 037.24 County of Orange TOTAL $4 087 723.70 $5 218116.02 $6 300 945.20 $e 064 55.89 Costa Mesa Thank you for your participation in the procurement process. OCSD Sanitary District regards your firm as an important and valuable services provider. If I can Midway city answer any further questions, please feel free to contact me during normal Sanitary District business hours. Irvine Ranch Water District Yorba Linda Water District Jackie Lagade Contracts, Purchasing & Materials Management c: Procurement File Our Mission: To protect public health and the environment by providing effective wastewater collection, treatment, and recycling. penocio PO Box 600 San Felipe,Texas 77473 (979)885.0005 Fax: (979)885-3208 March 12,2018 Ms.Jackie Wgade Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,CA 92708 RE: Contract Recommendation and Offer ROCCS C-2017-899-BD Dear Ms. Lagade: Pencco provided our bid to provide the scope of work and to meet the spirit of the specifications. In evaluating the scope of service,we responded in part 1 with our philosophy and an estimate of the manpower and quality of personnel required to meet the specifications. We also presumed that the other bidders that qualified,were offering similar levels and quality of service. Additionally,it was very clear in the specification that each line item would be evaluated and each line item could be selected in a way that was in the best interest of the District. Pencco reviewed the bid numbers of each bidder for the application and mechanical services. The bid numbers are less than 25%to 40%of our cost.Whereas per specification state that they are standalone bid items and that there is not enough physical money to complete the work,we conclude the other bidders are non-responsive for the service portions of this bid. Pencco believes that the District specifications,step 1 and 2, presented a specified desire to have a world class odor control program that would provide your customers the most cost efficient and effective odor control program. The service bids from the other bidders did not reflect the requirements of the specifications. We respectfully request that the 6 service sections be awarded to Pencco as the only responsive bidder for those sections. Pencco is willing to provide a detailed enumeration of each Item in our service bid for the County to review. Pencco would be proud to continue to service the District. nc ely, Jo Everil General Manager Serving: Orange County Sanitation District Anaheim 10844 Ellis Avenue,Fountain Valley,CA 92708 714.962.2411 • www.ocsd.com Brea Buena Park Cypress March 15, 2018 Fountain Valley Via email& U.S. Mail Fullerton Jon Everill Garden Grove Pencco, Inc. Huntington Beach PO Box 600 San Felipe, TX 77473 Irvine Sarah@pencco.com La Habra SUBJECT: Protest Response - C-2017-899BD Notice Inviting Bid (NIB) Step 2 La Palma Los Alamitos The Orange County Sanitation District ("District") received an official protest Newport Beach from Penccc to Specification C-2017-899BD Regional Odor and Corrosion Control System (ROCCS) Program on March 13, 2018. The District has Orange reviewed the protest document submitted by Pencco and has denied the Placentia claims made by Pencco for the following reasons: Santa Ana First, the letter states "...that each line item would be evaluated and each Seal Beach line item could be selected in a way that was in the best interest of the District." The District disagrees with this statement of evaluating and Stanton selecting for award line by line as Section 3.1 in the Contract Provisions, titled Award Recommendation states, "OCSD reserves the right to award its Tustin total requirements to the lowest responsible, responsive Bidder or to Villa Park apportion those requirements among several Suppliers as OCSD deems to be in its best interest." The District made it clear in its Exhibit/Attachment County of Orange "A", Scope of Work, Sections 2 and 3, that it was seeking a Supplier to Costa Mesa "provide complete turn-key services..."which includes not just providing field Sanitary District & application services but the supply and delivery of the specified chemicals. MidwaCity Therefore, the District fully intended to award the contract to a Supplier(s) Sanitary District that was capable of not just providing field & application services but supply and delivery of the chemicals and has no intention of splitting those two Irvine Ranch contract elements apart. Water District yorba Linda Secondly, Pencco states that"...there is not enough physical money to Water District complete the work, we conclude the other bidders are non-responsive for the service portions of this bid." Pencco has provided no evidence of this claim. Third, Pencco states, 'The service bids from other bidders did not reflect the requirements of the specifications." Pencco has provided no evidence of this claim. Furthermore, the District evaluated all responses submitted during Our Mission: To protect public health and the environment by providing effective wastewater collection, treatment, and recycling. SM, o° ae Jon Everill, General Manager Page 2 March 14,2018 •9 f NE Step 1 and found each bidder qualified to perform all aspects of the contract. By submitting a response to the Request for Qualifications (RFQ) in Step 1 of this procurement, Pencco agreed to comply with Exhibit"D" of the RFQ for filing protests. The protest period for Step 1 concluded on February 23, 2018 per Section B.2 of Exhibit "D". As a result, the District denies Pencco's request to award the six (6) service sections to Pencco and deem the other bidders non-responsive. The District shall proceed with the intent to award this contract to Hill Brothers Chemical Company and U.S. Peroxide, LLC dba USP Technologies as the Suppliers for the subject contract. All affected parties shall be notified in writing of the District's determination of the protest. Should Pencco wish to appeal this notice of determination of its award protest, Pencco may submit a written appeal to Lorenzo Tyner, Director of Administrative Services and Ed Torres, Director of Operations & Maintenance in accordance with the procedures listed in Exhibit "D" Section B4. Pencco must also immediately send copies of its appeal to all Affected Parties. The appeal must be submitted via email to Purchasing gnOCSD.com no later than 4:00 p.m. (Pacific Time zone) within seven (7) days after the date of this notice. l Marc Dubois Contracts, Purchasing & Materials Management Manager C: Hill Brothers Chemical Company U.S. Peroxide, LLC dba USP Technologies Attachments: Award Recommendation Protest Email/Letter— Pencco, dated March 12, 2018 pen�xAai, PO Box 600 San Felipe,Texas 77473 (979)885-0005 Fax:(979)885-3208 March 19,2018 Marc Dubois Jackie Lagade Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,CA 92708 Via email: mdubois(@ocsd.com ilaeade(&ocsd.com Dear Marc and Jackie, Thank you for reviewing our letter in detail. Our intention was not to protest the award but to provide a general sense that the dollar value of the service is inadequate to meet the specification. It is apparent that we misinterpreted the intent of Section 3.1 where the District could "accept or reject any portion of each individual Bid" and could "apportion the requirements to the lowest responsive biddee. Since the bid form was broken down to separate the service from the chemical,we interpreted the"portions" and "requirements" could be broken down as chemical and service separately.As such,we offered to provide the service portion Independent of the chemical and equipment. In that event, at your sole discretion, per 3.1,we believed you could have accepted our offer if you felt it was in the best interest of the District. In response to your second and third points in your response letter, I am providing a list of the items that were included in our bid that leads us to believe that the amount that the other bidders allotted to the service is below the cost of the scope of work presented in the bid and their response to Step one of the subject bid. Manpower:As we did a detailed estimate of the scope of work and looked at the overall logistics to meet the specification requirements, we realized that the actual number hours was greater than originally thought when we put together Step 1 of the subject bid. As we stated in Step 1,we were going to form a Pencco OCSD department that included dedicated people that would not be used on other Pencco projects. Splitting people's time causes inefficiency and missed provision of scope when a company gets busy. Dedicated Personnel 1. Program Manager— between step 1 and 2, we talked to a 25-year veteran working for a local municipality that had an impressive resume. 2. Applications Engineer—between step 1 and 2 we interviewed an 18-yearveteran in odor control applications. 3. 2 of Equipment Maintenance—between step 1 and 2 we identified 2 people that have 5 and 12 years'experience in equipment maintenance in advanced chemical dosing equipment. 4. Hybrid Process and Equipment—a floater dedicated to the program Other Personnel 1. Lam Nguyen-600to 800 hours of his time peryear 2. Kim Marano—600 to 800 hours of her time per year 3. Website maintenance and integration of controls Into the District SCADA per specification—800 hours(one-time cost),ongoing 100 hours per year The daily maintenance of equipment and escort of the deliveries can be coordinated together to a certain level but realistically,to provide maintenance at 11 sites and escort deliveries,with Orange County traffic requires 2 dedicated personnel and 1 floater.Of course,just walking in and looking at the equipment to see if it is running, maybe you can do it for less. For that matter, the specified equipment has self- diagnostics, so the sites really don't need any maintenance. My point is that it is specified with reports, and we would do it properly every day of the week. The process work of calibrating and changing out OdaLog's, can take a full-time person per week with traffic control,le.up to 15 Oda Logs in manholes at a given time at 3 per day. In addition,there is at least 12 Intense studies required by specification,liquid and vapor. In addition,odor complaint investigation is not limited and takes time and resources. No matter how you look at it, it will take at least 2 people to properly administrate the Application service plus additional manpower resources for safe traffic control. It is not just the time of the activities,it is the set-up time,and the logistics. Due to the scope of work and level of logistics and coordination, permits,and odor complaint follow-up, a full time very experienced person is needed to run this program. In addition,this person is the liaison between the District and the team and is responsible forthe daily,weekly,monthly,quarterly,and annual reporting in the specification. I have been providing full service odor control programs for over 27 years and this is my judgement of manpower required to just meet the scope of work in the specifications. In addition,the specification is written clearly to express the District's intent for the vendor to manage the entire odor control program and meet the level of service. I believe this validates my estimate. You can adjust it but consider this, Pencco's manpower cost in wages and benefits only for the dedicated people without their expenses, corporate overhead and profit would exceed the value of other bidders. Other Serviu Expenses: 1. Vehicles for the dedicated personnel(leased or purchased plus expenses): • 2—F250 level service trucks(similar to the Districts maintenance vehicles)with tools and spares • 1—F350 level service truck(similar to the Districts maintenance vehicles)with tools and spares and a portable crane for safely lifting the large metering pumps and towing the arrow board. • 1—FI50 level truck with the process analytic tools and Oda Log storage and calibration kit. • 1—FISO level truck for the Supervisor 2. Training of personnel 3. OdaLogs • 15 per specification plus 5 spares. Per our step 1,we will use the RTX style to be able to incorporate the data into the website with the dose curves 4. Arrow Board and light trailer(rent or purchase) • Required for permitted traffic control(Bay Bridge requires it for deliveries) • Required for manhole access and Oda Log retrieval at certain locations • Required for Odor Control investigation(unknown locations) 5. Safety Devices • Harnesses • Personnel gas meters for manhole opening • Other tools • Lights for night testing and proper road set-up 6. Repair Parts • Standard 3%of Equipment Value 7. Consumables • Equipment Consumables • Analytic Test Consumables • Wash-up and spill prevention/clean-up 8. Lab tests • Per Specifications such as BOO • Auto-Samplers per specification(rent or buy) I would like to reiterate that this is not a protest but a letter providing follow up information as you requested. We appreciate your current business and look forward to continuing this relationship we have developed over the past several years. We accept your decision and ask you to contact us If we can be of service in the future. Sincerely, VU'c- Yi'1"�/ Vincent Marano Sales Manager CHEMICAL SUPPLIER AGREEMENT Regional Odor and Corrosion Control System (ROCCS) Program Specification No. C-2017-899BD THIS AGREEMENT is made and entered into as of the date fully executed below, by and between Orange County Sanitation District, with a principal place of business at 10844 Ellis Avenue, Fountain Valley, CA 92708 (hereinafter referred to as "OCSD") and Hill Brothers Chemical Company with a principal place of business at 3000 East Birch Street, Suite 108, Brea, CA 92821 (hereinafter referred to as "Supplier") collectively referred to as the "Parties". WITNESSETH WHEREAS, OCSD desires to temporarily engage Supplier to provide Ferrous Chloride and Magnesium Hydroxide as described in Exhibit"A"; and WHEREAS, Supplier submitted its Bid dated March 8, 2018; and WHEREAS, on April 25, 2018, the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and Supplier; and WHEREAS, OCSD has chosen Supplier to provide Ferrous Chloride and Magnesium Hydroxide in accordance with Ordinance No. OCSD-47; and NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agreed as follows: 1. Introduction 1.1 This Agreement and all exhibits hereto (called the "Agreement") is made by OCSD and the Supplier. The terms and conditions herein exclusively govern the purchase of Ferrous Chloride and Magnesium Hydroxide as described in Exhibit"A". 1.2 Exhibits to this Agreement are incorporated by reference and made a part of this Agreement as though fully set forth at length herein. Exhibit"A" Scope of Work Exhibit"B" Bid Exhibit"C' Acknowledgement of Insurance Requirements Exhibit"D" OCSD Safety Standards Exhibit"E" Not Used 1.3 In the event of any conflict or inconsistency between the provisions of this Agreement and any of the provisions of the exhibits hereto, the provisions of this Agreement shall in all respects govern and control. 1.4 This Agreement may not be modified, changed, or supplemented, nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by both Parties. 1.5 The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any section or provision hereof. Orange County Sanitation District 1 of 8 Specification No. C-2017-899BD W1415 1.6 The term "days", when used in the Agreement, shall mean calendar days, unless otherwise noted as workdays. 1.7 The term "workday'. Workdays are defined as all days that are not Saturday, Sunday, or OCSD observed holidays. Meetings with OCSD staff shall be scheduled from Monday through Thursday between the hours of 8 a.m. and 4 p.m. (exception is Operations staff who maintain plant operations 24 hours per day 7 days per week and work a rotated 12- hour shift) and shall conform to OCSD work schedules. 1.8 OCSD holidays (non-working days) are as follows: New Year's Day, Lincoln's Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, and Christmas Day. 1.9 Work Hours: The work required under this Agreement may include normal business hours, evenings, and weekends. 1.10 Supplier shall provide OCSD with all required premiums and/or overtime work at no charge beyond the total amount of the Agreement. 1.11 Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by Supplier as a result of work performed in anticipation of purchases of said services by OCSD. 2. Delivery 2.1 LOCATIONS: Deliveries shall be made in accordance with the Scope of Work, Exhibit"A". 2.2 OCSD will pay only for the actual quantity of Ferrous Chloride and Magnesium Hydroxide delivered, based upon certified tare weight and net weight.The quantity invoiced by Supplier and payable by OCSD will be for the total net weight of Ferrous Chloride and Magnesium Hydroxide delivered (loaded gross weight minus the tare weight). Tare weight shall be determined immediately after each delivery and prior to cleaning, emptying or clearing the delivery tank. 2.3 A bill of lading shall accompany all shipments in accordance with Exhibit"K. 3. Possession Ownership and control of all Ferrous Chloride and Magnesium Hydroxide delivered pursuant to this Agreement shall remain solely and exclusively with Supplier, until complete transfer of possession by delivery to OCSD at the designated locations is made by Supplier. 4. Quart 4.1 OCSD makes no guarantee to actual use or quantity of Ferrous Chloride and Magnesium Hydroxide purchased. Use may be sporadic based on the wastewater treatment requirements unique to each treatment plant. 4.2 OCSD will, through the term of this Agreement, purchase Ferrous Chloride and Magnesium Hydroxide from Supplier exclusively, except when OCSD determines Supplier cannot make delivery within the time specified, with the quality and quantity specified, at the Agreement price, the level of Service is inadequate, OCSD unapproved increase in active dry pound rate orfor any other default or breach of this Agreement. In such event,OCSD may purchase Ferrous Chloride and Magnesium Hydroxide elsewhere and charge Supplier any difference in the delivered price to OCSD from that provided in this Agreement, or alternatively, OCSD Orange County Sanitation District 2 of 8 Specification No. C-2017-899BD W1415 may terminate the Agreement based on said breach or failure to deliver the specified product. Quality control tests will be performed by OCSD on the delivered Ferrous Chloride and Magnesium Hydroxide to ensure it is consistent with the requirements specified in Exhibit "A". 5. Pricing and Invoicing 5.1 Supplier will invoice for Ferrous Chloride and Magnesium Hydroxide delivered in accordance with Exhibit "A", and in accordance with the unit prices) listed in Exhibit "B". Prices shall include all cartage and taxes except California State Sales Tax. The sales tax will be paid by OCSD. 5.2 OCSD shall pay, net thirty (30) days, upon receipt and approval by OCSD of itemized invoices, submitted in a form acceptable to OCSD to enable audit of the charges thereon. Supplier shall email invoices to OCSD Accounts Payable at APStaff(LDOCSD.com and "INVOICE" with the Purchase Order Number and Ferrous Chloride and Magnesium Hydroxide shall be referenced in the subject line. All invoices shall include a description of the delivery location, the delivery date and the unit price(s). 6. Modifications 6.1 This Agreement may be modified or changed only by written instrument in the form of an amendment to this Agreement signed by both Parties. 6.2 Pricing modifications: The prices established in this Agreement shall remain firm for the one- year Agreement term. Quarterly pricing will not be accepted. Any adjustments made will allow for increases or decreases in the manufactured cost of the Ferrous Chloride and Magnesium Hydroxide and will be based upon OCSD validated information furnished by Supplier and OCSD sources. Adjustments will only be reviewed on an annual basis. OCSD reserves the right to agree with or reject the proposed unit price increase or decrease. 6.3 Price changes may be made through the OCSD Purchase Order Process. 7. Agreement Term The Services provided under this Agreement shall be for the period of one (1) year commencing on July 1, 2018 and continuing through June 30, 2019. 6. Renewals 8.1 OCSD may exercise the option to renew the Agreement for up to four (4) one-year periods based upon the criteria set forth in Exhibit "A", if mutually acceptable terms can be negotiated.OCSD shall make no obligation to renew nor give reason if it elects not to renew. The prices established in the original Agreement may be adjusted.The adjustment will allow for any increase or decrease in the manufactured cost of the Ferrous Chloride and Magnesium Hydroxide and will be based upon OCSD validated information furnished by Supplier and OCSD sources. Adjustments will only be reviewed on an annual basis. OCSD reserves the right to agree with or reject the proposed unit price increase or decrease. 8.2 Renewals may be made through the OCSD Purchase Order Process. 9. Termination 9.1 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. Upon receipt of a termination notice, Supplier shall immediately discontinue all work under this Agreement (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Supplier for work performed (cost and fee) to the date of termination. Supplier expressly Orange County Sanitation District 3 of 8 Specification No. C-2017-899BD W1415 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 Supplier other than for work performed to the date of termination. 9.2 OCSD reserves the right to terminate this Agreement immediately upon OCSD's determination that Supplier is not meeting specification requirements for delivery of quantities needed, the level of service is inadequate, for poor quality of product, for OCSD unapproved increase in unit price(s), or any other default or breach of this Agreement. 9.3 OCSD may also immediately terminate for default of this Agreement in whole or in part by written notice to Supplier: • if Supplier becomes insolvent or files a petition under the Bankruptcy Ad; or • if Supplier sells its business; or • if Supplier breaches any of the terms of this Agreement; or • if total amount of compensation exceeds the amount authorized under this Agreement. 9.4 All OCSD property in the possession or control of Supplier shall be returned by Supplier to OCSD upon demand, or at the termination of this Agreement, whichever occurs first. 10. Indemnification and Hold Harmless Supplier shall assume all responsibility for damages to property and/or injuries to persons, including accidental death, which may arise out of or be caused by Supplier's services under this Agreement,or by its subcontractor or by anyone directly or indirectly employed by Supplier, and whether such damage or injury shall accrue or be discovered before or after the termination of the Agreement. Except as to the sole active negligence of or willful misconduct of OCSD, Supplier shall indemnify, protect, defend and hold harmless OCSD, its elected and appointed officials, officers, agents and employees, from and against any and all claims, liabilities, damages or expenses of any nature, including attomeys' fees: (a) for injury to or death of any person or damage to property or interference with the use of property, arising out of or in connection with Supplier's performance under this Agreement, and/or (b) on account of any goods and services provided under this Agreement. This indemnification provision shall apply to any ads or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of Supplier of or anyone employed by or working under Supplier. To the maximum extent permitted by law, Supplier's duty to defend shall apply whether or not such claims, allegations, lawsuits, or proceedings have merit or are meritless, or which involve claims or allegations that any of the parties to be defended were actively, passively, or concurrently negligent, or which otherwise assert that the parties to be defended are responsible, in whole or in part, for any loss, damage, or injury. Supplier agrees to provide this defense immediately upon written notice from OCSD,and with well qualified,adequately insured, and experienced legal counsel acceptable to OCSD. This section shall survive the expiration or early termination of the Agreement. 11. Insurance Supplier shall purchase and maintain, throughout the life of this Agreement and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements, Exhibit"C". Supplier shall not commence work under this Agreement until all required insurance is obtained in a form acceptable to OCSD, nor shall Supplier 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. Orange County Sanitation District 4 of 8 Specification No. C-2017-899BD W1415 12. Equipment Loss OCSD will be responsible for any loss or damage to Supplier-owned equipment, when OCSD determines OCSD is at fault, only to the extent of OCSD's fault, and will reimburse Supplier for such loss or damage upon receipt of invoices, minus a deduction for any amount determined to be the fault of Supplier or its subcontractor or a third party. 13. Conflict of Interest and Reporting Supplier shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement. 14. Supplier's Relationship to OCSD Supplier's relationship to OCSD in the performance of this Agreement is that of an independent contractor. The personnel performing Services under this Agreement shall, at all limes, be under Supplier's exclusive direction and control, and shall be employees of Supplier and not employees of OCSD. Supplier shall pay all wages, salaries and other amounts due its employees in connection with this Agreement, and shall be responsible for all legal reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation,worker's compensation and similar matters. 15. Safety and Accident Prevention General: In addition to the requirements set forth in Exhibit "A", Supplier shall meet with personnel from OCSD'S Risk Management Division prior to providing Services to OCSD to review safety and accident prevention policies and procedures. All subcontractors should be present at this meeting. Supplier is responsible to inform all subcontractors of the items discussed at this meeting. Supplier shall not be permitted to provide Services to OCSD prior to this meeting. 16. Drug-Free Workplace All employees of Supplier who will perform work under this Agreement must adhere to the California Drug-Free Workplace Act, Government Code Sections 8350 through 8357. 17. Assignments Neither this Agreement nor any interest herein or any claim hereunder may be assigned by Supplier either voluntarily or by operation of law, nor may all or substantially all of this Agreement be further subcontracted by Supplier without the prior written consent of OCSD. 16. Attorney's Fees If any action at law or inequity 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 it may be entitled. 19. Permits. Ordinances and Regulations Any and all fees required by Federal, State, County, City and/or municipal laws,codes and/or tariffs that pertain to work performed under the terms of this Agreement shall be paid by Supplier. Fees demanded for obtaining certificates, including associated inspection fees and expenses of regulatory inspectors shall be paid by Supplier. 20. Training Certification When required by regulation, certificates of training shall be maintained on-site for the duration of the activity that requires an employee of Supplier to be certified. Certificates shall be current. Lack of certificates when required will be cause for removal of offending personnel from the site, termination of the Agreement, or both. 21. Compliance with Law Supplier warrants that under the performance of this Agreement, it shall comply with all applicable Federal, State, and local laws, and all lawful orders rules and regulations thereunder. In connection with the execution of this Agreement, Supplier Orange County Sanitation District 5 of 8 Specification No. C-2017-899BD W1415 shall not discriminate against employees or an applicant for employment because of race, religion, color, sex or national origin. Supplier shall take affirmative action to ensure that applicants are employed and employees are treated during their employment without regard to their race, religion, color, sex or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; lay-off or termination; rate of pay, or other forms of compensation; and selection for training, including apprenticeship. 22. Disputes 22.1 This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. Pending final resolution of a dispute hereunder, Supplier shall proceed diligently with the performance of this Agreement and in accordance with OCSUS decision. 22.2 In the event of a dispute as to the construction or interpretation of this Agreement, or any rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the dispute by mediation.The Parties shall mutually select a mediator to facilitate the resolution of the dispute. If the Parties are unable to agree on a mediator, the mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Agreement, through the alternate dispute resolution procedures of Judicial Arbitration through Mediation Services of Orange County("JAMS'), or any similar organization or entity conducting an alternate dispute resolution process. 22.3 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(2)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 (3) 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. 23. Rinht to Review Services. Facilities. and Records 23.1 OCSD reserves the right to review any portion of the Services performed by Supplier under this Agreement, and Supplier agrees to cooperate to the fullest extent possible. Supplier shall furnish to OCSD such reports, statistical data, and other information pertaining to Supplier's Services as shall be reasonably required by OCSD to carry out its rights and responsibilities under its agreements with its bondholders or noteholders and any other agreement and in connection with the issuance of its official statements and other prospectuses with respect to the offering, sale, and issuance of its bond and other obligations. 23.2 The right of OCSD to review or approve specifications, procedures, instructions, reports, test results, calculations, schedules, or other data that are developed by Supplier shall not relieve Supplier of any obligation set forth herein. Orange County Sanitation District 6 of 8 Specification No. C-2017-899BD W1415 24. Severability Any provision of this Agreement which is found to be invalid or unenforceable shall be ineffective to the extent of such invalidity or unenforceability, and the invalidity or unenforceability of such provision shall not affect the validity or enforceability of the remaining provisions hereof. 25. Waiver The waiver of either Party of any breach or violation of, or default under, any provision of this Agreement, shall not be deemed a continuing waiver by such Parry of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. 26. Breach Any breach by Supplier to which OCSD does not object shall not operate as a waiver of OCSD to seek remedies available to it for any subsequent breach. 27. South Coast Air Quality Management District's (SCAQMD) Requirements It is Supplier's responsibility that all equipment furnished and installed be in accordance with the latest rules and regulations of the South Coast Air Quality Management District(SCAQMD). All work practices, which may have associated emissions such as sandblasting, open field spray painting or demolition of asbestos containing components or structures, shall comply with the appropriate rules and regulations of the SCAQMD. 26. Performance Time is of the essence in the performance of the provisions hereof. 29. Familiarity with Work By executing this Agreement, Supplier warrants that: 1) it has investigated the work to be performed; 2) it has investigated the site(s) of the work and is aware of all conditions there; and 3) it understands the facilities, difficulties and restrictions of the work under this Agreement. Should Supplier discover any latent or unknown conditions materially differing from those inherent in the work or as represented by OCSD, it shall immediately inform OCSD of this and shall not proceed, except at Supplier's risk, until written instructions are received from OCSD. 30. Damage to OCSD'S Progerfv Any OCSD property damaged by Supplier, any subcontractor, or by the personnel of either will be subject to repair or replacement by Supplier at no cost to OCSD. 31. Third Party Rights Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than OCSD and Supplier. 32. 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. 33. Read and Understood By signing this Agreement, Supplier represents that it has read and understood the terms and conditions of the Agreement. 34. Entire Agreement This Agreement constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. Orange County Sanitation District 7 of 8 Specification No. C-2017-899BD W1415 35. Notices All notices under this Agreement must be in writing.Written notice shall be sent by registered or certified mail, postage prepaid, return receipt requested, or by any other overnight delivery service which delivers to the noticed destination and provides proof of delivery to the sender. 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: Jackie Lagade Buyer Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 Supplier: Edward Gunderson District Representative 3000 East Birch Street, Suite 108 Brea, CA 92821 IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this Contract to be signed by the duly authorized representatives. ORANGE COUNTY SANITATION DISTRICT Dated: By: Chair, Board of Directors Dated: By: Clerk of the Board Dated: By: Contracts, Purchasing and Materials Management Manager HILL BROTHERS CHEMICAL COMPANY Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 8 of 8 Specification No. C-2017-899BD W1415 CHEMICAL SUPPLIER AGREEMENT Regional Odor and Corrosion Control System (ROCCS) Program Specification No. C-2017-899BD THIS AGREEMENT is made and entered into as of the date fully executed below, by and between Orange County Sanitation District, with a principal place of business at 10844 Ellis Avenue, Fountain Valley, CA 92708 (hereinafter referred to as"OCSD") and U.S. Peroxide LLC dba USP Technologies with a principal place of business at 900 Circle 75 Parkway, Suite 330, Atlanta, GA 30339 (hereinafter referred to as "Supplier")collectively referred to as the"Parties". WITNESSETH WHEREAS, OCSD desires to temporarily engage Supplier to provide Calcium Nitrate as described in Exhibit"A"; and WHEREAS, Supplier submitted its Bid dated March 8, 2018; and WHEREAS, on April 25, 2018, the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and Supplier; and WHEREAS, OCSD has chosen Supplier to provide Calcium Nitrate in accordance with Ordinance No. OCSD-47; and NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agreed as follows: 1. Introduction 1.1 This Agreement and all exhibits hereto (called the "Agreement') is made by OCSD and the Supplier. The terms and conditions herein exclusively govern the purchase of Calcium Nitrate as described in Exhibit"A". 1.2 Exhibits to this Agreement are incorporated by reference and made a part of this Agreement as though fully set forth at length herein. Exhibit"A" Scope of Work Exhibit"B" Bid Exhibit"C' Acknowledgement of Insurance Requirements Exhibit"D" OCSD Safety Standards Exhibit"E" Not Used 1.3 In the event of any conflict or inconsistency between the provisions of this Agreement and any of the provisions of the exhibits hereto, the provisions of this Agreement shall in all respects govern and control. 1.4 This Agreement may not be modified, changed, or supplemented, nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by both Parties. 1.5 The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any section or provision hereof. 1.6 The term "days", when used in the Agreement, shall mean calendar days, unless otherwise Orange County Sanitation Distdct 1 of 8 Specification No. C-2017-899BD N1415 noted as workdays. 1.7 The term "workday". Workdays are defined as all days that are not Saturday, Sunday, or OCSD observed holidays. Meetings with OCSD staff shall be scheduled from Monday through Thursday between the hours of 8 a.m. and 4 p.m. (exception is Operations staff who maintain plant operations 24 hours per day 7 days per week and work a rotated 12- hour shift) and shall conform to OCSD work schedules. 1.8 OCSD holidays (non-working days) are as follows: New Years Day, Lincoln's Birthday, Presidents' Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, and Christmas Day. 1.9 Work Hours: The work required under this Agreement may include normal business hours, evenings, and weekends. 1.10 Supplier shall provide OCSD with all required premiums and/or overtime work at no charge beyond the total amount of the Agreement. 1.11 Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by Supplier as a result of work performed in anticipation of purchases of said services by OCSD. 2. Defivery 2.1 LOCATIONS: Deliveries shall be made in accordance with the Scope of Work, Exhibit'W'. 2.2 OCSD will pay only for the actual quantity of Calcium Nitrate delivered, based upon certified tare weight and net weight. The quantity invoiced by Supplier and payable by OCSD will be for the total net weight of Calcium Nitrate delivered (loaded gross weight minus the tare weight). Tare weight shall be determined immediately after each delivery and prior to cleaning, emptying or clearing the delivery tank. 2.3 A bill of lading shall accompany all shipments in accordance with Exhibit"A". 3. Possession Ownership and control of all Calcium Nitrate delivered pursuant to this Agreement shall remain solely and exclusively with Supplier, until complete transfer of possession by delivery to OCSD at the designated locations is made by Supplier. 4. Quart 4.1 OCSD makes no guarantee to actual use or quantity of Calcium Nitrate purchased. Use may be sporadic based on the wastewater treatment requirements unique to each treatment plant. 4.2 OCSD will, through the term of this Agreement, purchase Calcium Nitrate from Supplier exclusively, except when OCSD determines Supplier cannot make delivery within the time specified,with the quality and quantity specified, at the Agreement price,the level of Service is inadequate, OCSD unapproved increase in active dry pound rate or for any other default or breach of this Agreement. In such event,OCSD may purchase Calcium Nitrate elsewhere and charge Supplier any difference in the delivered price to OCSD from that provided in this Agreement, or alternatively, OCSD may terminate the Agreement based on said breach or failure to deliver the specified product. Quality control tests will be performed by OCSD on the delivered Calcium Nitrate to ensure it is consistent with the requirements specified in Exhibit "A". Orange County Sanitation District 2 of 8 Specification No. C-2017-899BD N1415 5. Pricina and Invoicing 5.1 Supplier will invoice for Calcium Nitrate delivered in accordance with Exhibit "A", and in accordance with the unit price(s) listed in Exhibit "B". Prices shall include all cartage and taxes except California State Sales Tax. The sales tax will be paid by OCSD. 5.2 OCSD shall pay, net thirty (30) days, upon receipt and approval by OCSD of itemized invoices, submitted in a form acceptable to OCSD to enable audit of the charges thereon. Supplier shall email invoices to OCSD Accounts Payable at APStaff(20CSD.com and "INVOICE"with the Purchase Order Number and Calcium Nitrate shall be referenced in the subject line. All invoices shall include a description of the delivery location,the delivery date and the unit price(s). 6. Modifications 6.1 This Agreement may be modified or changed only by written instrument in the form of an amendment to this Agreement signed by both Parties. 6.2 Pricing modifications: The prices established in this Agreement shall remain firm for the one- year Agreement term. Quarterly pricing will not be accepted. Any adjustments made will allow for increases or decreases in the manufactured cost of the Calcium Nitrate and will be based upon OCSD validated information furnished by Supplier and OCSD sources. Adjustments will only be reviewed on an annual basis. OCSD reserves the right to agree with or reject the proposed unit price increase or decrease. 6.3 Price changes may be made through the OCSD Purchase Order Process. 7. Agreement Term The Services provided under this Agreement shall be for the period of one (1)year commencing on July 1, 2018 and continuing through June 30, 2019. 8. Renewals 8.1 OCSD may exercise the option to renew the Agreement for up to four (4) one-year periods based upon the criteria set forth in Exhibit "A", if mutually acceptable terns can be negotiated.OCSD shall make no obligation to renew nor give reason if it elects not to renew. The prices established in the original Agreement may be adjusted. The adjustment will allow for any increase or decrease in the manufactured cost of the Calcium Nitrate and will be based upon OCSD validated information furnished by Supplier and OCSD sources. Adjustments will only be reviewed on an annual basis. OCSD reserves the right to agree with or reject the proposed unit price increase or decrease. 8.2 Renewals may be made through the OCSD Purchase Order Process. 9. Termination 9.1 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. Upon receipt of a termination notice, Supplier shall immediately discontinue all work under this Agreement (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Supplier for work performed (cost and fee) to the dale of termination. Supplier 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 Supplier other than for work performed to the date of termination. Orange County Sanitation District 3 of 8 Specification No. C-2017-899BD N1415 9.2 OCSD reserves the right to terminate this Agreement immediately upon OCSD's determination that Supplier is not meeting specification requirements for delivery of quantities needed, the level of service is inadequate, for poor quality of product, for OCSD unapproved increase in unit price(s), or any other default or breach of this Agreement. 9.3 OCSD may also immediately terminate for default of this Agreement in whole or in part by written notice to Supplier: • if Supplier becomes insolvent or files a petition under the Bankruptcy Act; or • if Supplier sells its business; or • if Supplier breaches any of the terms of this Agreement; or • if total amount of compensation exceeds the amount authorized under this Agreement. 9.4 All OCSD property in the possession or control of Supplier shall be returned by Supplier to OCSD upon demand, or at the termination of this Agreement, whichever occurs first. 10. Indemnification and Hold Harmless Supplier shall assume all responsibility for damages to property and/or injuries to persons, including accidental death, which may arise out of or be caused by Supplier's services under this Agreement,or by its subcontractor or by anyone directly or indirectly employed by Supplier, and whether such damage or injury shall accrue or be discovered before or after the termination of the Agreement. Except as to the sole active negligence of or willful misconduct of OCSD, Supplier shall indemnify, protect, defend and hold harmless OCSD, its elected and appointed officials, officers, agents and employees, from and against any and all claims, liabilities, damages or expenses of any nature, including attorneys' fees: (a) for injury to or death of any person or damage to property or interference with the use of property, arising out of or in connection with Supplier's performance under this Agreement, and/or (b) on account of any goods and services provided under this Agreement. This indemnification provision shall apply to any ads or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of Supplier of or anyone employed by or working under Supplier. To the maximum extent permitted by law, Supplier's duty to defend shall apply whether or not such claims, allegations, lawsuits, or proceedings have merit or are meritless, or which involve claims or allegations that any of the parties to be defended were actively, passively, or concurrently negligent, or which otherwise assert that the parties to be defended are responsible, in whole or in part, for any loss, damage, or injury. Supplier agrees to provide this defense immediately upon written notice from OCSD, and with well qualified,adequately insured, and experienced legal counsel acceptable to OCSD. This section shall survive the expiration or early termination of the Agreement. 11. Insurance Supplier shall purchase and maintain, throughout the life of this Agreement and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements, Exhibit"C". Supplier shall not commence work under this Agreement until all required insurance is obtained in a form acceptable to OCSD, nor shall Supplier 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. 12. Eauinment Loss OCSD will be responsible for any loss or damage to Supplier-owned equipment, when OCSD determines OCSD is at fault, only to the extent of OCSD's fault, and will reimburse Supplier for such loss or damage upon receipt of invoices, minus a deduction for any amount determined to be the fault of Supplier or its subcontractor or a Orange County Sanitation District 4 of 8 Specification No. C-2017-899BD N1415 third party. 13. Conflict of Interest and Reporting Supplier shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement. 14. Supplier's Relationship to OCSD Supplier's relationship to OCSD in the performance of this Agreement is that of an independent contractor. The personnel performing Services under this Agreement shall, at all times, be under Supplier's exclusive direction and control, and shall be employees of Supplier and not employees of OCSD. Supplier shall pay all wages, salaries and other amounts due its employees in connection with this Agreement, and shall be responsible for all legal reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation,worker's compensation and similar matters. 15. Safety and Accident Prevention General: In addition to the requirements set forth in Exhibit "A", Supplier shall meet with personnel from OCSD'S Risk Management Division prior to providing Services to OCSD to review safety and accident prevention policies and procedures. All subcontractors should be present at this meeting. Supplier is responsible to inform all subcontractors of the items discussed at this meeting. Supplier shall not be permitted to provide Services to OCSD prior to this meeting. 16. Drug-Free Workplace All employees of Supplier who will perform work under this Agreement must adhere to the California Drug-Free Workplace Act, Government Code Sections 8350 through 8357. 17. Assignments Neither this Agreement nor any interest herein or any claim hereunder may be assigned by Supplier either voluntarily or by operation of law, nor may all or substantially all of this Agreement be further subcontracted by Supplier without the prior written consent of OCSD. 18. Attorney's Fees If any action at law or inequity 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 it may be entitled. 19. Permits. Ordinances and Regulations Any and all fees required by Federal, State, County, City and/or municipal laws, codes and/or tariffs that pertain to work performed under the terms of this Agreement shall be paid by Supplier. Fees demanded for obtaining certificates, including associated inspection fees and expenses of regulatory inspectors shall be paid by Supplier. 20. Training Certification When required by regulation, certificates of training shall be maintained on-site for the duration of the activity that requires an employee of Supplier to be certified. Certificates shall be current. Lack of certificates when required will be cause for removal of offending personnel from the site, termination of the Agreement, or both. 21. Compliance with Law Supplier warrants that under the performance of this Agreement, it shall comply with all applicable Federal, State, and local laws, and all lawful orders rules and regulations thereunder. In connection with the execution of this Agreement, Supplier shall not discriminate against employees or an applicant for employment because of race, religion, color, sex or national origin. Supplier shall take affirmative action to ensure that applicants are employed and employees are treated during their employment without regard to their race, religion, color, sex or national origin. Such action shall include, but not be Orange County Sanitation District 5 of 8 Specification No. C-2017-899BD N1415 limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; lay-off or termination; rate of pay, or other forms of compensation; and selection for training, including apprenticeship. 22. Disputes 22.1 This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. Pending final resolution of a dispute hereunder, Supplier shall proceed diligently with the performance of this Agreement and in accordance with OCSD'S decision. 22.2 In the event of a dispute as to the construction or interpretation of this Agreement, or any rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the dispute by mediation.The Parties shall mutually select a mediator to facilitate the resolution of the dispute. If the Parties are unable to agree on a mediator, the mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Agreement, through the alternate dispute resolution procedures of Judicial Arbitration through Mediation Services of Orange County("JAMS"), or any similar organization or entity conducting an alternate dispute resolution process. 22.3 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(2)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 (3) 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. 23. Ripht to Review Services. Facilities. and Records 23.1 OCSD reserves the right to review any portion of the Services performed by Supplier under this Agreement, and Supplier agrees to cooperate to the fullest extent possible. Supplier shall furnish to OCSD such reports, statistical data, and other information pertaining to Supplier's Services as shall be reasonably required by OCSD to carry out its rights and responsibilities under its agreements with its bondholders or noteholders and any other agreement and in connection with the issuance of its official statements and other prospectuses with respect to the offering, sale, and issuance of its bond and other obligations. 23.2 The right of OCSD to review or approve specifications, procedures, instructions, reports, test results, calculations, schedules, or other data that are developed by Supplier shall not relieve Supplier of any obligation set forth herein. 24. Severability Any provision of this Agreement which is found to be invalid or unenforceable shall be ineffective to the extent of such invalidity or unenforceability, and the invalidity or unenforceability of such provision shall not affect the validity or enforceability of the remaining provisions hereof. Orange County Sanitation District 6 of 8 Specification No. C-2017-899BD N1415 25. Waiver The waiver of either Party of any breach or violation of, or default under, any provision of this Agreement, shall not be deemed a continuing waiver by such Party of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. 26. Breach Any breach by Supplier to which OCSD does not object shall not operate as a waiver of OCSD to seek remedies available to it for any subsequent breach. 27. South Coast Air Quality Management District's (SCAQMD) Requirements It is Supplier's responsibility that all equipment furnished and installed be in accordance with the latest rules and regulations of the South Coast Air Quality Management District(SCAQMD). All work practices, which may have associated emissions such as sandblasting, open field spray painting or demolition of asbestos containing components or structures, shall comply with the appropriate rules and regulations of the SCAQMD. 28. Performance Time is of the essence in the performance of the provisions hereof. 29. Familiarity with Work By executing this Agreement, Supplier warrants that: 1) it has investigated the work to be performed; 2) it has investigated the site(s) of the work and is aware of all conditions there; and 3) it understands the facilities, difficulties and restrictions of the work under this Agreement. Should Supplier discover any latent or unknown conditions materially differing from those inherent in the work or as represented by OCSD, it shall immediately inform OCSD of this and shall not proceed, except at Supplier's risk, until written instructions are received from OCSD. 30. Damage to OCSD'S Property Any OCSD property damaged by Supplier, any subcontractor, or by the personnel of either will be subject to repair or replacement by Supplier at no cost to OCSD. 31. Third Party Rights Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than OCSD and Supplier. 32. 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. 33. Read and Understood By signing this Agreement, Supplier represents that it has read and understood the terms and conditions of the Agreement. 34. Entire Agreement This Agreement constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. Orange County Sanitation District 7 of 8 Specification No. C-2017-899BD N1415 35. Notices All notices under this Agreement must be in writing.Written notice shall be sent by registered or certified mail, postage prepaid, return receipt requested, or by any other overnight delivery service which delivers to the noticed destination and provides proof of delivery to the sender. 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: Jackie Lagade Buyer Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 Supplier: Andrew Nangano Assistant Secretary 900 Circle 75 Parkway, Suite 330 Atlanta, GA 30339 IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this Contract to be signed by the duly authorized representatives. ORANGE COUNTY SANITATION DISTRICT Dated: By: Chair, Board of Directors Dated: By: Clerk of the Board Dated: By: Contracts, Purchasing and Materials Management Manager USP TECHNOLOGIES Dated: By: Print Name and Title of Officer IRS Employers I.D. Number Orange County Sanitation District 8 of 8 Specification No. C-2017-899BD N1415 i � • • • • • • • • f _xH Odor Control Program -- 9 *0010 6' Regional T,. •P.rlt w.lq vanrer, Odor Ppvle.. ram uma oror conva Srallan Isglron trMnrenr Bwuwcer Control ' Program p'•f•GSD TNnY Pf o;. Pf14 '..•y^ora Z.a AF•'- rIWnN CRY Good Neighbor ■ ^�°� •le«xua `n Reduce Odors "' rd,r.°s •M a,I,.nw,.,,° Minimize Corrosion B. Bdp Pf CaRinati Dosed Sewers. BausWam(Airbase) Knott Interceptor Miller-Holder • CrymiCo,.pf �Newport SARI(Bio-Snubber) Dosing Sue Chemical: Ferrous Chloride e Calcium Nitrate N Magnesmm HydroxMe Caustic Slug Dosing Sites(27 total ' OCSD Sewers Collection System Odor Control Program 36- ins +i. M� � nl oiiia- - inn s�� - � Optimization Tools y Ou -ct rz_ 1a 1 �' � I 1� Reduced M LA RA 9NEA Odor and H LLE ON PLAC A MBA LINDA Better M H" YPREM ANAHEIM NLIA Neighbor PA"" NiGN L SNAWIiDS CHANGE • OEN GflOVE •. � • BEACH hN I y SpNiA •• ANA STIJ Odor Complaints I�.AI Before 75-100 / year I,I! TO BEAC . I E CGS MES After < 12 / year Odor Complaints by Year N ART Ir ti 201 • 2016 • 2015 • 2014 0 . 2015 Miles . 2012 — OCSD Sewers Reduced Corrosion rr Exposed Concrete, Detail M 3 ' �.- Reduced Corrosion Rehabilitation t I / O Liner Termination, t" Detail .� t � Recommendations • Award a $4,506,415 contract to Hill Brothers Chemical Company for Magnesium Hydroxide and Ferrous Chloride Chemicals and Application Services : • Award a $498,794 contract to USP Technologies for Calcium Nitrate Chemical and Application Services : ADMINISTRATION COMMITTEE Meng Dat0 TOBE. Dir. B4/lti11118 oa/zs/1OrB AGENDA REPORT Item Item Number 2 9 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Kelly A. Lore, Clerk of the Board SUBJECT: 2018 CONFLICT OF INTEREST CODE GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 18-04 entitled, "A Resolution of the Board of Directors of Orange County Sanitation District adopting a Conflict of Interest Code which supersedes all prior Conflict of Interest Codes and amendments previously adopted:' BACKGROUND The last biennial review, and formal amendment, to the Orange County Sanitation District's Conflict of Interest Code was completed in March of 2017. Although the Political Reform Act requires that every local agency review its Conflict of Interest Code biennially (which would bring forth the next amendment in 2019), staff is proposing this new amendment in order to reflect the current positions of those designated employees that are required to file statements of economic interests RELEVANT STANDARDS • Political Reform Act, Government Code Sections 81000, at seq. • California Government Code Sections 87300-87306 • Fair Political Practices Commission (2 Cal. Code of Regs. Section 18100, at seq.) PROBLEM The position of Principal Financial Analyst has been eliminated and all employees within that position have been reclassified to Principal Staff Analyst. These positions are required to file statements of economic interest. PROPOSED SOLUTION Staff recommends that the Board of Directors adopt the updated 2018 Conflict of Interest Code to reflect the following changes: • Deletion of Principal Financial Analyst (reclassified to Principal Staff Analyst) • Addition of Principal Staff Analyst (deletion of Principal Financial Analyst) If approved by the Board, the newly approved code will be forwarded to the County of Orange for amendment approval. Page 1 of 2 TIMING CONCERNS The changes in position control have taken place and therefore cannot wait until a future meeting. RAMIFICATIONS OF NOT TAKING ACTION Non-compliance with state law. PRIOR COMMITTEE/BOARD ACTIONS March 2017 - Board of Directors amended the Conflict of Interest Code and approved Resolution No. OCSD 17-03. BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENTS The following attachments)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: Resolution No. OCSD 18-04 2018 DRAFT Conflict of Interest Code Page 2 d 2 RESOLUTION NO. OCSD 18-04 A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ADOPTING A CONFLICT OF INTEREST CODE WHICH SUPERSEDES ALL PRIOR CONFLICT OF INTEREST CODES AND AMENDMENTS PREVIOUSLY ADOPTED WHEREAS, the Political Reform Act of 1974, Government Code Section 81000 et seq. ("the Act"), requires a local government agency to adopt a Conflict of Interest Code pursuant to the Act; and WHEREAS, the Orange County Sanitation District ("District") has previously adopted a Conflict of Interest Code and that Code now requires updating; and WHEREAS, amendments to the Act have in the past and foreseeably will in the future require conforming amendments to be made to the Conflict of Interest Code; and WHEREAS, the Fair Political Practices Commission has adopted a regulation, 2 California Code of Regulations, Section 18730, which contains terms for a standard model Conflict of Interest Code, which, together with amendments thereto, may be adopted by public agencies and incorporated by reference to save public agencies time and money by minimizing the actions required of such agencies to keep their codes in conformity with the Political Reform Act; and WHEREAS, the reorganization of the District workforce resulted in the reclassification of a position; and WHEREAS, the District's existing Conflict of Interest Code must be amended in order to reflect the current positions of those designated employees that are required to file statements of economic interests. OCSD 18-04-1 1303343.1 NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. The terms of 2 California Code of Regulations, Section 18730, any amendments to it duly adopted by the Fair Political Practices Commission, and all additional guidance by the Fair Political Practices Commission, are hereby incorporated by reference and, together with the 2017 Conflict of Interest Code for the Orange County Sanitation District, including Exhibits A and B in which members and employees are designated and disclosure categories are set forth, constitute the Conflict of Interest Code of the Orange County Sanitation District. Section 2. The provisions of all Conflict of Interest Codes and Amendments thereto previously adopted by the Orange County Sanitation District are hereby superseded. Section 3. The Filing Officer is hereby authorized to forward a copy of this Resolution to the Clerk of the Orange County Board of Supervisors for review and approval by the Orange County Board of Supervisors as required by California Government Code Section 87303. PASSED AND ADOPTED at a regular meeting of the Board of Directors held April 25, 2018. Gregory C. Sebourn, PLS Board Chairman ATTEST: Kelly A. Lore, MMC Clerk of the Board OCSD 18-04-2 1303343.1 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 18-04 was passed and adopted at a regular meeting of said Board on the 25th day of April 2018, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 25th day of April 2018. Kelly A. Lore, MMC Clerk of the Board of Directors Orange County Sanitation District OCSD 18-04-3 1303343.1 i 2018 CONFLICT OF INTEREST CODE FOR THE ORANGE COUNTY SANITATION DISTRICT The Political Reform Act, Government Code Sections 81000, at seq., requires state and local government agencies to adopt and promulgate Conflict of Interest Codes. The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs. Section 18730) which contains the terms of a standard Conflict of Interest Code, which may be incorporated by reference in an agency's code. After public notice and hearing, it may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730, any amendments to it duly adopted by the Fair Political Practices Commission, and all additional guidance by the Fair Political Practices Commission, are hereby incorporated by reference. This regulation and the attached Appendix designating officials and employees and establishing disclosure categories, shall constitute the Conflict of Interest Code of the Orange County Sanitation District. Il....ioRated employees shall file state MPRtS Of P iRtPF Sts W th the D str nt'q Clerk nf the Board who w 11 make the statements eve lable for pub! c nspect on the Orange County Santat'e net:et onard of Dreetorn Orange County Santate District F nanc ng Corporation, General Manager, General Counsel, Ass stant General Manager, D reGtor of Eng near ng, D rector of F nAnnp. R,,.A,dm n strAt ve Sery ces, D recta Resources, and the Clark of the Board the F 1 g Off'n shall make and rate n uzMM OCSD 17-03-18-XX-4 Supervisors. State ments for all other des gnated employees wil be retained by the F 1 ng 9u Ger. The following designated employees shall file statements of economic interests electronically with the Clerk of the Orange County Board of Supervisors: Orange County Sanitation District Board of Directors, Orange County Sanitation District Financing Corporation, General Manager, General Counsel, Assistant General Manager, Director of Finance and Administrative Services, Director of Engineering, Director of Finance & Administrative Services, Director of Operations& Maintenance, Director of Environmental Services, Director of Human Resources, and the Clerk of the Board. The District's Filing Officer (Clerk of the Orange County Sanitation District Board of Directors) will thereafter verify the completion of the filing statements. If the District's Filing Officer receives any statements of economic interests by other means, the Filing Officer shall make and retain a copy and forward the original of these statements to the Clerk of the Orange County Board of Supervisors. Statements for all other designated employees will be retained by the District's Filing Officer. M803.1 OCSD 47 02 1818=XX--5 EXHIBIT A ORANGE COUNTY SANITATION DISTRICT LIST OF DESIGNATED POSITIONS CONFLICT OF INTEREST CODE Disclosure Designated Positions Categories Accounting Supervisor OC-05 Assistant General Manager OC-01 Buyer OC-05 Capital Improvement Program Project Manager OC-41 Chief Plant Operator OC-05 Clerk of the Board OC-05 Construction Inspection Supervisor OC-05 Construction Inspector OC-10 Consultant OC-30 Contracts & Purchasing Manager OC-05 Contracts Administrator OC-05 Contracts Supervisor OC-05 Controller OC-05 Deputy Clerk of the Board OC-05 Director of Engineering OC-41 Director of Environmental Services OC-41 Director of Finance &Administrative Services OC-41 Director of Human Resources OC-41 Director of Operations & Maintenance OC-41 Engineer OC-29, OC-41 Engineering Manager OC-05 Engineering Supervisor OC-05 Environmental Laboratory & Ocean Monitoring Manager OC-05 Environmental Supervisor OC-29 Facilities Manager OC-05 General Counsel OC-01 General Manager OC-01 Human Resources & Risk Manager OC-11 Human Resources Supervisor OC-11 Information Technology Manager OC-08 Information Technology Su ervisor OC-08 Information Technology Systems & Operations Manager OC-08 Laboratory Supervisor OC-21 Maintenance Manager OC-05 Maintenance Superintendent OC-05 M803.t OCSD 47 02 1818=XX--6 Maintenance Supervisor OC-05 Materials Control Supervisor OC-05 Operations Manager OC-05 Operations Supervisor OC-05 Orange County Sanitation District Financing Corporation Board OC-01 of Directors Principal Accountant OC-41 Principal Contracts Administrator OC-05 PFne pal Finarc al (deletion) (reclassified as Principal Staff Analyst) Principal Human Resources Analyst OC-11 *Princi al Staff Analyst addition OC-05; OC-12 Public Affairs Supervisor OC-05 Purchasing Supervisor OC-05 Safety & Health Supervisor OC-05 Secretary of the Orange County Financing Corporation OC-05 Senior Buyer OC-05 Senior Construction Inspection Supervisor OC-05 Senior Construction Inspector OC-10 Senior Contracts Administrator OC-05 Senior Engineer OC-05 Senior Scientist OC-21 Source Control Supervisor OC-29 Treasurer of the Oran a Count FinancingCo oration OC-41 *The following amendments are made: Principal Staff Analyst (OC-05; OC-12) ADDITION Principal Financial Analyst (OC-12) DELETE(Reclassified to Principal Staff Analyst) M803.1 OCSD 47-02 1818=XX--7 EXHIBIT B ORANGE COUNTY SANITATION DISTRICT DISCLOSURE CATEGORIES CONFLICT OF INTEREST CODE Disclosure Category Disclosure Description OC-01 All interests in real property in Orange County or the District, as well as investments, business positions and sources of income (including gifts, loans and travel pa ments). OC-05 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that provide services, supplies, materials, machinery, equipment (including training and consulting services) used by the department or District, as applicable. OC-08 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that develop or provide computer hardware/software, voice data communications, or data processing goods, supplies, equipment, or services (including training and consulting services) used by the department or District, as applicable. OC-10 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that are engaged in any real estate activity including, but not limited to real estate appraisal, development, construction, planning/architectural design, engineering, sales, brokerage, leasing, lending, insurance, rights of way, and/or studies; and/or property or facilities management/maintenance/custodial and utility services as used by the department or provides capital for the purchase of property used or sold by Orange County or the District. OC-11 All interests in real property in Orange County or located entirely or partly within District boundaries, as well as investments in, business positions with and income (including gifts, loans and travel payments) from sources that are engaged in the supply of equipment related to (i) recruitment, employment search & marketing, classification, training, or negotiation with personnel; (ii) employee benefits; and (iii) health and welfare benefits. OC-12 All interests in real property in Orange County, as well as investments in, business positions with and income (including gifts, loans and travel payments)from sources that invest funds or engage in the business of insurance including, but not limited to insurance companies, carriers, holding companies, underwriters, brokers, solicitors, agents, adjusters, claims managers and actuaries; from financial institutions including but not limited to, banks, savings & loan associations and credit unions or sources that have filed a claim, or have a claim pending, against Orange County. M803.1 OCSD 47-&3-1818=XX--8 EXHIBIT B ORANGE COUNTY SANITATION DISTRICT DISCLOSURE CATEGORIES CONFLICT OF INTEREST CODE Disclosure Category Disclosure Description OC-21 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that provide laboratory or chemical — related goods, supplies, equipment, or services (including training and cons Iting services). OC-29 All investments in, business positions with and income (including gifts, loans and travel payments)from sources that are subject to inspection or re ulation b the department. OC-30 Consultants shall be included in the list of designated employees and shall disclose pursuant to the broadest category in the code subject to the following limitation: The Department Head/Director/General Manager/SuperintendenUetc. may determine that a particular consultant, although a "designated position," is hired to perform a range of duties that is limited in scope and thus is not required to fully comply with the disclosure requirements in this section. Such written determination shall include a description of the consultant's duties and, based upon that description, a statement of the extent of disclosure required. The determination of disclosure is a public record and shall be filed with the Form 700 and retained by the Filing Officer for public inspection. OC41 All interests in real property in Orange County or the District, as applicable, as well as investments in, business positions with and income (including gifts, loans and travel payments)from sources that provide services, supplies, materials, machinery, vehicles, or equipment (including training and consulting services) used by the department or District, as applicable. M803.1 OCSD 17 03-18-XX-9 LEGISLATIVE AND PUBLIC AFFAIRS COMMITTEE Megq�gDale Toa%isilar AGENDA REPORT Item Item Number s 10 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: James E. Colston, Director of Environmental Services SUBJECT: AB 967: DISPOSAL OF HUMAN REMAINS VIA WATER CREMATION GENERAL MANAGER'S RECOMMENDATION Direct staff to prepare amendments to the Orange County Sanitation District's (Sanitation District) Wastewater Discharge Regulations Ordinance No. OCSD-48 for consideration by the Board of Directors prohibiting the direct or indirect receipt of hydrolysate into the Sanitation District's sewerage system. BACKGROUND Assembly Bill 967 (2017), herein referred to as AB 967, creates a regulatory and permitting framework to allow alkaline hydrolysis of human remains (i.e., "water cremation') effective July 1, 2020. Prior to receiving a license to operate, any facility performing water cremation must obtain permits from the appropriate local agency or agencies to properly dispose of the liquefied remains into the local or regional sewerage system. On January 8, 2018, the GWRS Steering Committee voted unanimously to recommend to the Sanitation District to modify its Wastewater Discharge Regulations Ordinance No. OCSD-48 to prohibit the receipt of hydrolysate through the sewer system. Under AB 967, receipt of such waste is entirely voluntary and at the discretion of the local agency. The law also explicitly recognizes that the promotion of advanced water recycling systems as an example basis for prohibiting hydrolysate discharges to the sewer. Wastewater agencies may accept the hydrolysate directly through the sewer system or indirectly via trucked waste to the wastewater treatment plant. RELEVANT STANDARDS • Use all practical and effective means for recovering wastewater for reuse • Maintain collaborative and cooperative relationships with neighboring agencies • Build brand, trust, and support with policy makers and community leaders • Listen to and seriously consider community input on environmental concerns • AB 967— Human remains disposal: alkaline hydrolysis: licensure and regulation • Sanitation District Ordinance No. OCSD-48 Page 1 d 4 PROBLEM AB 967 states in the Business and Professions Code Article 2.7, 7639.10, (8)(D), "Authorization for disposal of hydrolysate using a sewer collection system shall be voluntary and at the discretion of each public agency.... Each public agency has the discretion to authorize or to prohibit the discharge of hydrolysate into a sewer collection system for any reason, including for purposes of promoting advanced water recycling systems". However, after considering three options, the GWRS Steering Committee unanimously voted to recommend that the Sanitation District prohibit all discharges from alkaline hydrolysis of human remains into its sewerage system, whether or not the flows are tributary to the Groundwater Replenishment System. PROPOSED SOLUTION Modify the Sanitation District's Ordinance No. OCSD48 to prohibit the receipt of hydrolysate directly or indirectly into the Sanitation District's sewerage system. TIMING CONCERNS Commencing July 1, 2020, AB 967 would require the Cemetery and Funeral Bureau within the Department of Consumer Affairs to license and regulate hydrolysis facilities. The bill would require an applicant for a hydrolysis facility license to present to the bureau any state or locally required permits for business operations, prove that it has the appropriate permits and contracts for the disposal of hydrolysate, and employ a hydrolysis chamber approved by the State Department of Public Health, as specified. Staff recommends resolving this matter via ordinance amendment by January 1, 2020 in order to allow planning and permitting by July 1, 2020. RAMIFICATIONS OF NOT TAKING ACTION 1. The Sanitation District would not be in step with the GWRS Steering Committee recommendation. 2. GWRS's ability to beneficially reuse the reclaimed water may be compromised by the public's hesitation due to cultural repugnance over drinking water that contains hydrolysate resulting from alkaline hydrolysis of human remains. 3. The Sanitation District will need to provide guidance to potential hydrolysate dischargers and to issue a control mechanism, such as a wastehauler or sewer discharge permit and provided additional safety and spill training and personal protective equipment to on-site staff. PRIOR COMMITTEE/BOARD ACTIONS In January 2016, Sanitation District staff previously submitted a similar but more comprehensive alkaline hydrolysis prohibition before the Sanitation District Board of Directors when updating Ordinance No. OCSD-39. The Sanitation District had proposed to prohibit the discharge of alkaline hydrolysis Wastes or Wastewater resulting from both Page 2 d 4 pet and human alkaline hydrolysis to the sewer. However, the Board of Directors decided against adopting the proposed prohibition at that time. The discussion included consideration of the lack of science demonstrating a threat to the treatment process or wastewater recycling as well as the fact that there were existing pet cremation facilities that would have been impacted by the proposed ban. ADDITIONAL INFORMATION Alkaline hydrolysis of human remains (also known as water cremation, flameless cremation, or biocremation) is marketed as an alternative to traditional flame cremation or burial. It exposes the body to a strong alkaline solution of earth metal salts (e.g., potassium hydroxide) and water at elevated temperature and pressure, generating a liquid waste known as "hydrolysate." Proponents of water cremation claim it is more "environmentally-friendly" than traditional options, due to its lower energy and/or space requirements. The final law states in the Business and Professions Code Article 2.7, 7639.10, (8)(D), "Authorization for disposal of hydrolysate using a sewer collection system shall be voluntary and at the discretion of each public agency.... Each public agency has the discretion to authorize or to prohibit the discharge of hydrolysate into a sewer collection system for any reason, including for purposes of promoting advanced water recycling systems". AB 967 also specifically defined "hydrolysate" as "the resultant liquid from the hydrolysis of human remains...". Sanitation District and OCWD staff considered three primary options for managing water cremation discharges: 1) Modify the Sanitation District's Wastewater Ordinance to prohibit the receipt of hydrolysate through the sewer system. Under the law, receipt of such waste is entirely voluntary and at the discretion of the local agency. The law also explicitly recognizes that the promotion of advanced water recycling systems as an example basis for prohibiting hydrolysate discharges to the sewer. Any discharges through the sewer collection system may become tributary to the GWRS based on connection location and diversion structure settings. 2) Modify the Sanitation District's Wastewater Ordinance to recognize hydrolysate as a category for the purposes of wastehauling to the Sanitation District. Hydrolysate could be accepted such that it would not contribute to GWRS. Hydrolysate wastes could be permitted to be received only via the Sanitation District's Wastehauling Station, which is segregated from and not tributary to the GWRS. Additional waste streams currently segregated from GWRS include the SARI Line, as well as filtrate and centrate from the solids digestion process. These segregations are being maintained as a part of the ongoing GWRS Final Expansion design process. 3) Permit or certify for discharge hydrolysate discharge facilities under existing Sanitation District standard industrial discharge requirements. It is likely that such a facility could be permitted if it can demonstrate proper pH control. Permits would also require that non-human parts, such as artificial joints, pace-makers, etc. are removed prior to discharge. Page 3 of 4 The GWRS Steering committee unanimously voted to pursue Option 1 in response to the adoption of AB 967 and to recommend that the Sanitation District prohibit the discharge of hydrolysate to the sewerage system. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENTS The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: • Final text of California Assembly Bill 967— Human remains disposal: alkaline hydrolysis: licensure and regulation • Presentation from 4/9/18 Legislative & Public Affairs Committee meeting Page 4 of 4 V AU�pNE uu�wime� Assembly Bill No.967 CHAPTER 846 An act to amend,repeal,and add Sections 7611.9,7672,7672.1,7672.2, 7672.3, 7672.4, 7672.6, 7672.7, 7673.1, and 7685.2 of, to add Sections 7611.12,7653.35,7653.36,7712.11,and 7730.11 to,and to add Article 2.7 (commencing with Section 7639)to Chapter 12 of Division 3 of,the Business and Professions Code,and to amend,repeal,and add Sections 7003,7010.3, 7010.7,7011,7011.2,7015,7016,7051,7051.5,7052,7052.5,7054,7054.1, 7054.6,7055,7116,7117, 103055, 103060,and 103080 of,to add Sections 7002.5, 7006.1, 7006.4,7006.6,7006.8, 7010.1, 7017, and 7054.8 to, and to add Article 8(commencing with Section 8370)to Chapter 2 of Part 3 of Division 8 of, the Health and Safety Code, relating to disposal of human remains,and making an appropriation therefor. [Approved by Governor OMober 15,2017.Filed with Secretary of State Odober 15,2017.] LEGISLATIVE COUNSEL'S DIGEST AB 967,Gloria.Human remains disposal:alkaline hydrolysis:lice tsure and regulation. The Cemetery and Funeral Act provides for the licensure and regulation of cemeteries, crematoria, funeral establishments, and their personnel by the Cemetery and Funeral Bureau within the Department of Consumer Affairs. Existing law creates the Cemetery and Funeral Fund, which is continuously appropriated for the purpose of implementing the act.Under existing law,the violation ofthe act is a misdemeanor.Existing law requires a local registrar of births and deaths to issue permits for the disposition of cremated remains. This bill,commencing July 1,2020,would require the bureau to license and regulate hydrolysis facilities, as defined, and hydrolysis facility managers,and would enact requirements applicable to hydrolysis facilities substantially similar to those applicable to crematoria. By expanding the definition of crimes relating to the disposition of human remains and creating new crimes, this bill would impose a state-mandated local program. The bill would require an applicant for a hydrolysis facility license to present to the bureau any state or locally required permits for business operations, prove that it has the appropriate permits and contracts for the disposal of hydrolysate, and employ a hydrolysis chamber approved by the State Department of Public Health, as specified. The bill would require the application for a hydrolysis facility license to be made in writing on the form prescribed by the bureau and accompanied by a licensing fee,which would be deposited into the Cemetery and Funeral Fund.The bill also would authorize the bureau to impose an additional charge to be fixed at not more 89 Ch.846 —2— than$8.50 per hydrolysis made during the preceding quarter.By depositing moneys in a continuously appropriated fund, this bill would make an appropriation.The bill would require a local registrar of births or deaths to issue permits for the disposition ofhydmlyzed human remains.By increasing the duties of local agencies,this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for specified reasons. Appropriation:yes. The people of the State of California do enact as follows: SECTION 1. Section 7611.9 of the Business and Professions Code is amended to read: 7611.9. (a) A"cremated remains disposer"is a person who,for his or her own account or for another,disposes of,or offers to dispose of,cremated human remains by scattering over or on land or sea. (b) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC.2. Section 7611.9 is added to the Business and Professions Code, to read: 7611.9. (a) A"cremated remains disposer'is a person who,for his or her own account or for another,disposes of,or offers to dispose of,cremated human remains or hydrolyzed human remains by scattering over or on land or sea. (b) This section shall became operative on July 1,2020. SEC.3. Section 7611.12 is added to the Business and Professions Code, to read: 7611.12. (a) "Licensed hydrolysis facility" means a corporation, partnership,or natural person licensed pursuant to Article 2.7(commencing with Section 7639). A licensed hydrolysis facility shall be considered a cemetery licensee for purposes of disciplinary action pursuant to Article 6 (commencing with Section 7686). (b) This section shall become operative on July 1,2020. SEC.4. Article 2.7(commencing with Section 7639)is added to Chapter 12 of Division 3 of the Business and Professions Code,to read: Article 2.7. Hydrolysis Facilities 7639. A corporation, partnership, or natural person may operate, establish, or maintain a hydrolysis facility with a valid hydrolysis facility license issued by the bureau. 89 -3— Ch.846 7639.02. A change in the ownership of a hydrolysis facility shall be reported to the bureau. A transfer in a single transaction or related transactions of more than 50 percent of the equitable interest in a licensed hydrolysis facility shall constitute a change of ownership.When a change in ownership in a licensed hydrolysis facility occurs,the existing hydrolysis facility license shall lapse and the new owner shall obtain a license from the bureau as otherwise provided in this act. The bureau shall not require an applicant under this section to obtain any new permit or license from any other governmental agency when the existing permit or license is valid. 7639.04. The application for a hydrolysis facility license shall be made in wrifing on the form prescribed by the bureau and filed at the principal office of the bureau.The application shall be accompanied by the fees. 7639.06. (a) The bureau shall require an applicant for a hydrolysis facility license to prove compliance with all applicable laws, rules, regulations,ordinances,and orders,and shall not issue a hydrolysis facility license until the bureau is satisfied that the public interest,human health, and environmental quality will be served by the applicant. (b) The applicant for a hydrolysis facility license shall present to the bureau any state or locally required permits for business operations, including,but not limited to,any permits required by the following,to the extent applicable: (1) The local public health department. (2) The city, county, special district, joint powers authority, or other public agency that provides wastewater treatment services where the licensed hydrolysis facility is to be located. (3) The Department of Toxic Substances Control for the creation, collection, treatment,or transport of hazardous waste. (4) Any other state or locally required permit. (c) The applicant for a hydrolysis facility license shall prove to the bureau that it has the appropriate permits and contracts for the disposal of hydrolysate and which of the following models the facility will be using for the disposal: (1) Discharge to the sewer collection system. (2) Containment, collection, and transport to an appropriate treatment facility. (d) When applying to renew a hydrolysis facility license, an applicant shall present to the bureau records of annual maintenance of the hydrolysis chamber. 7639.08. (a) The bureau shall adopt,and may from time to time amend, rules and regulations prescribing standards for applicants for hydrolysis facility licenses.In reviewing an application for a hydrolysis facility license, the bureau may consider acts of the applicant, including acts of the incorporators,officers,directors,and stockholders of the applicant,which shall constitute grounds for the denial of a hydrolysis facility license pursuant to Division 1.5 (commencing with Section 475). (b) Hydrolysis chamber manufacturers may apply to the State Department of Public Health for approval of a hydrolysis chamber upon finding that the 89 Ch.846 —4— hydrolysis chamber causes the destruction of pathogenic micro-organisms pursuant to paragraph(3)of subdivision(a)of Section 118215 ofthe Health and Safety Code. (c) In its approval, the State Department of Public Health shall specify the minimum parameters of pH,time,temperature,and pressure that must be used by each hydrolysis chamber to destroy all pathogenic micro-organisms. The department may use the guidance of the hydrolysis chamber operations and maintenance manual and biologic indicator spore testing to determine this,among other factors. (d) The hydrolysis chamber manufacturer shall pay to the State Department of Public Health,the application and evaluation fee as outlined in Section 118245 of the Health and Safety Code. (e) Every five years, licensed hydrolysis facilities that discharge hydrolysate to a sewer collection system shall submit to the Department of Public Health the results of biological indicator spore testing as well as the last 30 days of archived electronic hydrolysis chamber data which includes the pH,time,temperature,and pressure at which the chamber was operated. Based upon this information, the Department shall evaluate whether the chamber continues to destroy pathogens. The licensee shall include this evaluation in its application to renew its license.If the chamber is determined not to destroy pathogens, the Bureau shall not renew its license until this has been remedied. The Department may charge a fee sufficient to cover the actual hourly costs of staff conducting its five year review of the alternative technology. (f) Once a hydrolysis chamber has been approved pursuant to subdivision (b), it may be employed by a licensed hydrolysis facility for the final disposition of human remains. (g) The bureau shall grant hydrolysis facility licenses only to applicants that will employ a hydrolysis chamber approved by the State Department of Public Health pursuant to subdivision(b). (h) A hydrolysis facility shall ensure or conduct annual maintenance of the hydrolysis chamber. (i) The bureau shall not renew a hydrolysis facility license without proof of annual maintenance of the hydrolysis chamber. 7639.10. (a) A licensed hydrolysis facility shall not conduct hydrolysis unless all of the following requirements are met: (1) The licensee has a written contract with the person or persons entitled to custody of the remains clearly stating the location,manner, and time of disposition of the remains,in which the person or persons entitled to custody of the remains agree to pay the licensee's regular fee for hydrolysis, disposition,and other services rendered,and any other contractual provisions required by the bureau. (2) Hydrolysis of remains occurs not more than 24 hours after delivery of the remains to the licensee unless the remains have been preserved in the interim by refrigeration or embalming. (3) The licensee has a contractual relationship with a licensed cemetery authority for final disposition of hydrolyzed human remains by burial, 89 -5— Ch.846 entombment, or inumment of any and all remains that are not lawfully disposed of or that are not called for or accepted by the person or persons entitled to the custody and control of the disposition of those remains within 90 days of date of death. (4) The licensee contains and collects all hydrolysate.Hydrolysate shall not be disposed of using a sewer collection system,except as prescribed in paragraph(8). (5) The licensee ensures that any hydrolysate is transported by a state-licensed biomatenals handler to apublicly owned wastewater treatment plant or licensed industrial anaerobic digestion facility or waste-to-energy or biomass facility for the beneficial use or disposal of that hydrolysate, unless disposing ofhydrolysate using a sewer collection system as prescribed in paragraph(8). (6) Acceptance of hydrolysate from a licensed hydrolysis facility and a state-licensed biomaterials handler shall be voluntary and at the discretion of each individual facility described in paragraph(5). (7) Acceptance ofhydrolysate by a licensed industrial anaerobic digestion, waste-to-energy,or biomass facility,if the facility has an industrial process sewer connection to a sewer collection system,shall only be allowed with the consent of the publicly owned treatment works to which the sewer collection system is tributary. (8) A licensed hydrolysis facility may dispose of hydrolysate using a sewer collection system only if all of the following conditions are met: (A) The city, county, special district,joint powers authority, or other public agency that provides wastewater treatment and disposal services to the licensed hydrolysis facility expressly authorizes the disposal of hydrolysate into the sewer collection system. If issuance of a permit is required by another city, county,special district,joint powers authority,or other public agency that provides sewer collection services where the licensee is located,authorization from both agencies must be obtained. (B) If the licensee receives the appropriate permissions required by subparagraph (A), the licensee shall comply with all local ordinances, pretreatment requirements, permitting requirements, waste discharge requirements, and all other applicable federal, state, and local laws, ordinances, and regulations governing the protection of water quality and public health,promotion of water recycling,and discharge into the sewer system. (C) The licensee shall demonstrate compliance as deemed appropriate by the public agency or agencies authorizing the disposal of hydrolysate into the sewer collection system.At a minimum this should include annual water quality testing as prescribed by the public agency or agencies authorizing the disposal of hydrolysate into the sewer collection system. (D) Authorization for disposal of hydrolysate using a sewer collection system shall be voluntary and at the discretion of each public agency described in subparagraph (A). Each public agency described in subparagraph(A)has the discretion to authorize or to prohibit the discharge 99 Ch.846 —6— of hydrolysate into a sewer collection system for any reason,including for purposes of promoting advanced water recycling systems. (b) Existing alkaline hydrolysis facilities utilized by medical schools for the purpose of anatomical gifting shall not be subject to paragraphs(1)to (3), inclusive,of subdivision(a), and shall continue to be regulated under the guidelines of the state's anatomical gifting regulations. 7639.12. A licensed hydrolysis facility shall not prohibit relatives or the responsible party from viewing the hydrolysis process. 7639.16. It is a misdemeanor for any person, firm, or corporation to hydrolyze human remains, or to engage in the disposition of hydrolyzed human remains,without a valid,unexpired hydrolysis Facility license.Each hydrolysis carried out in violation of this section is a separate violation. 7639.18. A licensed hydrolysis facility shall be subject to,and shall be disciplined by the bureau in accordance with,Article 6(commencing with Section 7686). 7639.19. This article shall become operative on July 1,2020. SEC.5. Section 7653.35 is added w the Business and Professions Code, to read: 7653.35. (a) The bureau shall inspect the books,records,and premises of any hydrolysis facility licensed under this chapter. In making those inspections, the bureau shall have access to all books and records, the hydrolysis facility,the hydrolysis chamber,and the storage areas for human remains before and after hydrolysis,during regular office hours or the hours the hydrolysis facility is in operation.No prior notification of the inspection is required to be given to the hydrolysis facility licensee. If any hydrolysis facility licensee fails to allow that inspection or any part thereof,it shall be grounds for the suspension or revocation of a license or other disciplinary action against the licensee. All proceedings under this section shall be conducted in accordance with the provisions of this chapter relating to disciplinary proceedings. (b) This section shall become operative on July 1,2020. SEC.6. Section 7653.36 is added to the Business and Professions Code, to read: 7653.36. (a) The bureau shall annually conduct a minimum of one unannounced inspection of each licensed hydrolysis Facility. (b) This section shall become operative on July 1,2020. SEC.7. Section 7672 of the Business and Professions Code is amended to read: 7672. (a) A person shall not dispose of or offer to dispose of any cremated human remains unless registered as a cremated remains disposer by the bureau. This article shall not apply to any person, partnership, or corporation holding a certificate of authority as a cemetery, crematory license,cemetery broker's license,cemetery salesperson's license,or funeral director's license,nor shall this article apply to any person having the right to control the disposition of the cremated remains of any person or that person's designee if the person does not dispose of or offer to dispose of more than 10 cremated human remains within any calendar year. 89 -7— Ch.846 (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.8. Section 7672 is added to the Business and Professions Code,to read: 7672. (a) A person shall not dispose of or offer to dispose of any cremated human remains or hydrolyzed human remains unless registered as a cremated remains disposer by the bureau.This article shall not apply to any person,partnership,or corporation holding a certificate of authority as a cemetery, crematory license, hydrolysis facility license, cemetery broker's license,cemetery salesperson's license,or funeral director's license, nor shall this article apply to any person having the right to control the disposition of the cremated remains or hydrolyzed human remains of any person or that person's designee if the person does not dispose of or offer to dispose of more than 10 cremated human remains or hydrolyzed human remains within any calendar year. (b) This section shall become operative on July 1,2020. SEC.9. Section 7672.1 of the Business and Professions Code is amended to read: 7672.1. (a) Registration shall be on the form prescribed by the bureau and shall include, but not be limited to, the full name of the registrant, business and residence addresses,description and identification of aircraft or boats which may be used in dispensing cremated human remains, and the area to be served. Each registration application shall be accompanied by the cremated remains disposer fee. (b) Every registered cremated remains disposer who dispenses human remains by air&ball post a copy of his or her current pilot's license,and the address of the cremated remains storage area at his or her place of business. Every registered cremated remains disposer who dispenses human remains by boat shall post a copy of his or her current boating license and the address of the cremated remains storage area at his or her place of business. (c) This section shall remain in effect only until July 1, 2020, and as of that date is repealed. SEC. 10. Section 7672.1 is added to the Business and Professions Code, to read: 7672.1. (a) Registration shall be on the form prescribed by the bureau and shall include, but not be limited to, the full name of the registrant, business and residence addresses,description and identification of aircraft or boats which may be used in dispensing cremated human remains or hydrolyzed ban= remains, and the area to be served. Each registration application shall be accompanied by the cremated remains disposer fee. (b) Every registered cremated remains disposer who dispenses human remains by air shall post a copy of his or her current pilot's license,and the address of the cremated remains or hydrolyzed human remains storage area at his or her place of business.Every registered cremated remains disposer who dispenses human remains by boat shall post a copy of his or her current boating license and the address of the cremated remains or hydrolyzed human remains storage area at his or her place of business. 99 Ch.846 —8— (c) This section shall become operative on July 1,2020. SEC. 11. Section 7672.2 of the Business and Professions Code is amended to read: 7672.2. (a) The bureau shall prepare and deliver to each registered cremated remains disposer a booklet that includes,but is not limited to,the following information: details about the registration and renewal requirements for cremated remains disposers; requirements for obtaining state permits to dispose of cremated human remains; state storage requirements, if any; statutory duties pursuant to this article, and other applicable state laws. (b) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC. 12. Section 7672.2 is added to the Business and Professions Code, to read: 7672.2. (a) The bureau shall prepare and deliver to each registered cremated remains disposer a booklet that includes,but is not limited to,the following information: details about the registration and renewal requirements for cremated remains disposers; requirements for obtaining state permits to dispose of cremated human remains or hydrolyzed human remains;state storage requirements,if any;statutory duties pursuant to this article,and other applicable state laws. (b) This section shall become operative on July 1,2020. SEC. 13. Section 7672.3 of the Business and Professions Code is amended to read: 7672.3. (a) All aircraft used for the scattering of cremated human remains shall be validly certified by the Federal Aviation Administration. All boats or vessels used for the scattering of cremated human remains shall be registered with the Department of Motor Vehicles or documented by a federal agency, as appropriate. The certification or registration shall be available for inspection by the bureau. (b) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC. 14. Section 7672.3 is added to the Business and Professions Code, to read: 7672.3. (a) All aircraft used for the scattering of cremated human remains or hydrolyzed human remains shall be validly certified by the Federal Aviation Administration.All boats or vessels used for the scattering of cremated human remains or hydrolyzed human remains shall be registered with the Department of Motor Vehicles or documented by a federal agency, as appropriate. The certification or registration shall be available for inspection by the bureau. (b) This section shall become operative on July 1,2020. SEC. 15. Section 7672.4 of the Business and Professions Code is amended to read: 7672.4. (a) A cremated remains disposer who scatters any cremated human remains without specific written instructions from the person having the right to control the disposition of the remains or who scatters any remains 89 -9— Ch.946 in a manner not in accordance with those instructions shall be subject to disciplinary action. (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC. 16. Section 7672.4 is added to the Business and Professions Code, in read: 7672.4. (a) A cremated remains disposer who scatters any cremated human remains or hydrolyzed human remains without specific written instructions from the person having the right to control the disposition of the remains or who scatters any remains in a manner not in accordance with those instructions shall be subject to disciplinary action. (b) This section shall become operative on July 1,2020. SEC. 17. Section 7672.6 of the Business and Professions Code is amended to read: 7672.6. (a) Every cremated remains disposer shall do both of the following: (1) Dispose of cremated remains within 60 days of the receipt of those remains,unless a written signed reason for a delay is presented to the person with the right to control the disposition of the remains under Section 7100 of the Health and Safety Code. (2) Provide the bureau with the address and telephone number of any storage facility being used by the registrant to store cremated remains. Cremated remains shall be stored in a place free from exposure to the elements, and shall be responsibly maintained until disposal. The bureau and its representatives shall conduct,on an annual basis,random inspections of the operations of 5 to 10 percent of the registered cremated remains disposers,and is authorized to inspect any place used by a cremated remains disposer for the storage of cremated remains without notice to the cremated remains disposer. (b) A violation of the requirements of this section is grounds for disciplinary action. (c) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC. 18. Section 7672.6 is added to the Business and Professions Code, to read: 7672.6. (a) Every cremated remains disposer shall do both of the following: (1) Dispose of cremated remains or hydrolyzed human remains within 60 days of the receipt of those remains,unless a written signed reason for a delay is presented to the person with the right to control the disposition of the remains under Section 7100 of the Health and Safety Code. (2) Provide the bureau with the address and telephone number of any storage facility being used by the registrant to store cremated remains or hydrolyzed human remains.Cremated remains or hydrolyzed human remains shall be stored in a place free from exposure to the elements,and shall be responsibly maintained until disposal. The bureau and its representatives shall conduct,on an annual basis,random inspections of the operations of 89 Ch.846 —10- 5 to 10 percent of the registered cremated remains disposers, and is authorized to inspect any place used by a cremated remains disposer for the storage of cremated remains or hydrolyzed human remains without notice to the cremated remains disposer. (b) A violation of the requirements of this section is grounds for disciplinary action. (c) This section shall become operative on July 1,2020. SEC. 19. Section 7672.7 of the Business and Professions Code is amended to read: 7672.7. (a) Each cremated remains disposer shall file, and thereafter maintain an updated copy of,an annual report on a form prescribed by the bureau. The report shall include, but not be limited to, the names of the deceased persons whose cremated remains were disposed of, the dates of receipt of the cremated remains, the names and addresses of the persons who authorized disposal of those remains,the dates and locations of disposal of those remains,and the means and manner of disposition.The report shall cover the fiscal year ending on June 30 and shall be filed with the bureau no later than September 30 of each year. (b) Any cremated remains disposer that makes a willful and material false statement regarding the disposal of cremated remains in the annual report filed or updated pursuant to subdivision (a) shall be subject to disciplinary action. (c) Any cremated remains disposer that makes a willful and material false statement in the annual report filed or updated pursuant to subdivision (a)shall be guilty of a misdemeanor. (d) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.20. Section 7672.7 is added to the Business and Professions Code, to read: 7672.7. (a) Each cremated remains disposer shall file, and thereafter maintain an updated copy of,an annual report on a form prescribed by the bureau. The report shall include, but not be limited to, the names of the deceased persons whose cremated remains or hydrolyzed human remains were disposed of,the dates of receipt of the cremated remains or hydrolyzed human remains, the names and addresses of the persons who authorized disposal of those remains, the dates and locations of disposal of those remains, and the means and manner of disposition. The report shall cover the fiscal year ending on June 30 and shall be Sled with the bureau no later than September 30 of each year. (b) Any cremated remains disposer that makes a willful and material false statement regarding the disposal of cremated remains or hydrolyzed human remains in the annual report filed or updated pursuant to subdivision (a)shall be subject to disciplinary action. (c) Any cremated remains disposer that makes a willful and material false statement in the annual report filed or updated pursuant to subdivision (a)shall be guilty of a misdemeanor. (d) This section shall become operative on July 1,2020. 89 -11— Ch.846 SEC. 21. Section 7673.1 of the Business and Professions Code is amended to read: 7673.1. (a) Any cremated remains disposer who stores cremated remains in a reckless manner that results in either of the following is guilty of a public offense punishable by imprisonment in a county jail not exceeding one year or by a fine not to exceed five thousand dollars ($5,000), or by both that fine and imprisonment: (1) Loss of all or part of the cremated remains. (2) Inability to individually identify the cremated remains. (b) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC.22. Section 7673.1 is added to the Business and Professions Code, to read: 7673.1. (a) Any cremated remains disposerwho stores cremated remains or hydrolyzed human remains in a reckless manner that results in either of the following is guilty of a public offense punishable by imprisonment in a countyjail not exceeding one year why a fine not to exceed five thousand dollars($5,000),or by both that fine and imprisonment: (1) Loss of all or part of the cremated remains or hydrolyzed human remains. (2) Inability to individually identify the cremated remains or hydrolyzed human remains. (b) This section shall become operative on July 1,2020. SEC. 23. Section 7685.2 of the Business and Professions Code is amended to read: 7685.2. (a) No funeral director shall enter into a contract for furnishing services or property in connection with the burial or other disposal of human remains until he or she has first submitted to the potential purchaser of those services or property a written or printed memorandum containing the following information,provided that information is available at the time of execution of the contract (1) The total charge for the funeral director's services and the use of his or her facilities,including the preparation of the body and other professional services, and the charge for the use of automotive and other necessary equipment. (2) An itemization of charges for the following merchandise as selected: the casket,an outside receptacle,and clothing. (3) An itemization of fees or charges and the total amount of cash advances made by the funeral director for transportation,flowers,cemetery or crematory charges, newspaper notices, clergy honorarium, transcripts, telegrams,long distance telephone calls,music,and any other advances as authorized by the purchaser. (4) An itemization of any other fees or charges not included above. (5) The total of the amount specified in paragraphs(1)to(4),inclusive. If the charge for any of the above items is not known at the time the contract is entered into, the funeral director shall advise the purchaser of the charge therefor,within a reasonable period after the information becomes 89 Ch.846 —12— available. All prices charged for items covered under Sections 7685 and 7685.1 shall be the same as those given under such sections. (b) A funeral establishment shall obtain from the person with the right to control the disposition pursuant to Section 7100 of the Health and Safety Code, or the person prearranging the cremation and disposition of his or her own remains,a signed declaration designating specific instructions with respect to the disposition of cremated remains. The bureau shall make available a form upon which the declaration shall be made.The form shall include, but not be limited to, the names of the persons with the right to control the disposition of the cremated remains and the person who is contracting for the cremation services;the name of the deceased;the name of the funeral establishment in possession of the remains;the name of the crematorium;and specific instructions regarding the manner,location,and other pertinent details regarding the disposition of cremated remains. The form shall be signed and dated by the person arranging for the cremation and the funeral director,employee,or agent of the funeral establishment in charge of arranging or prearranging the cremation service. (c) A funeral director entering into a contract to furnish cremation services shall provide to the purchaser of cremation services,either on the first page of the contract for cremation services,or on a separate page attached to the contract,a written or printed notice containing the following information: (1) A person having the right to control disposition of cremated remains may remove the remains in a durable container from the place of cremation or interment,pursuant to Section 7054.6 of the Health and Safety Code. (2) If the cremated remains container cannot accommodate all cremated remains of the deceased, the crematory shall provide a larger cremated remains container at no additional cost, or place the excess in a second container that cannot easily come apart from the first,pursuant to Section 8345 of the Health and Safety Code. (d) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.24. Section 7685.2 is added to the Business and Professions Code, to read: 7685.2. (a) No funeral director shall enter into a contract for famishing services or property in connection with the burial or other disposal of human remains until he or she has first submitted to the potential purchaser of those services or property a written or printed memorandum containing the following information,provided that information is available at the time of execution of the contract: (1) The total charge for the funeral director's services and the use of his or her facilities,including the preparation of the body and other professional services, and the charge for the use of automotive and other necessary equipment. (2) An itemization of charges for the following merchandise as selected: the casket,an outside receptacle,and clothing. (3) An itemization of fees or charges and the total amount of cash advances made by the funeral director for transportation,flowers,cemetery, 99 -13— Ch.846 crematory, or hydrolysis facility charges, newspaper notices, clergy honorarium, transcripts, telegrams, long distance telephone calls, music, and any other advances as authorized by the purchaser. (4) An itemization of any other fees or charges not included above. (5) The total of the amount specified in paragraphs(1)to(4),inclusive. If the charge for any of the above items is not known at the time the contract is entered into, the funeral director shall advise the purchaser of the charge therefor,within a reasonable period after the information becomes available. All prices charged for items covered under Sections 7685 and 7685.1 shall be the same as those given under such sections. (b) A funeral establishment shall obtain from the person with the right to control the disposition pursuant to Section 7100 of the Health and Safety Code,or the person prearranging the cremation or hydrolysis and disposition of his or her own remains, a signed declaration designating specific instructions with respect to the disposition of cremated remains or hydrolyzed human remains. The bureau shall make available a form upon which the declaration shall be made.The form shall include,but not be limited to,the names of the persons with the right to control the disposition of the cremated remains or hydrolyzed human remains and the person who is contracting for the cremation or hydrolysis services;the time of the deceased;the name of the funeral establishment in possession of the remains; the name of the crematorium or hydrolysis facility; and specific instructions regarding the manner, location, and other pertinent details regarding the disposition of cremated remains or hydrolyzed human remains.The form shall be signed and dated by the person arranging for the cremation or hydrolysis and the funeral director,employee,or agent of the funeral establishment in charge of arranging or prearranging the cremation or hydrolysis service. (c) A funeral director entering into a contract to furnish cremation or hydrolysis services shall provide to the purchaser of cremation or hydrolysis services,either on the first page of the contract for cremation or hydrolysis services,or on a separate page attached to the contract,a written or printed notice containing the following information: (1) A person having the right to control disposition of cremated remains or hydrolyzed human remains may remove the remains in a durable container from the place of cremation,hydrolysis,or interment,pursuant to Section 7054.6 of die Health and Safety Code. (2) If the cremated remains container or hydrolyzed human remains container cannot accommodate all cremated remains or hydrolyzed human remains of the deceased,the crematory or hydrolysis facility shall provide a larger cremated remains container or hydrolyzed human remains container at no additional cost,or place the excess in a second container that cannot easily come apart from the first,pursuant to Section 8345 of the Health and Safety Code. (3) This section shall become operative on July 1,2020. SEC.25. Section 7712.11 is added to the Business and Professions Code, to read: 89 Ch.846 —14- 7712.11. (a) Each hydrolysis facility for which a hydrolysis facility license is required shall be operated under the supervision of a manager qualified in accordance with rules adopted by the bureau. A licensed crematory manager may be designated as a hydrolysis facility manager with appropriate certification upon demonstrating an understanding of the applicable provisions of this code and of the Health and Safety Code, as determined by the bureau. (b) A person shall not engage in the business of, act in the capacity of, or advertise or assume to act as, a hydrolysis facility manager without a valid crematory manager license and obtaining a certification from the bureau. (c) This section shall become operative on July 1,2020. SEC.26. Section 7730.11 is added to the Business and Professions Code, to read: 7730.11. (a) The bureau shall establish the fee to obtain or renew a hydrolysis facility license, which shall not exceed the reasonable cost of license administration. (b) Every licensee operating a hydrolysis facility pursuant to a license issued pursuant to this article shall pay an additional charge to be fixed by the bureau of not more than eight dollars and fifty cents ($8.50) per hydrolysis made during the preceding quarter, which charges shall be deposited into the Cemetery and Funeral Fund. (c) This section shall become operative on July 1,2020. SEC.27. Section 7002.5 is added to the Health and Safety Code,to read: 7002.5. (a) "Hydrolyzed human remains"means bone fragments of a human body that are left after hydrolysis in ahydrolysis facility."Hydrolyzed human remains" does not include foreign materials, pacemakers, or prostheses. (b) This section shall become operative on July 1,2020. SEC. 28. Section 7003 of the Health and Safety Code is amended to read: 7003. (a) "Cemetery"means either of the following: (1) Any of the following that is used or intended to be used and dedicated for cemetery purposes: (A) A burial park,for earth interments. (B) A mausoleum,for crypt or vault intemrents. (C) A crematory and columbarium,for cinerary interments. (2) A place where six or more human bodies are buried. (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.29. Section 7003 is added to the Health and Safety Code,to read: 7003. (a) "Cemetery"means either of the following: (1) Any of the following that is used or intended to be used and dedicated for cemetery purposes: (A) A burial park,for earth interments. (B) A mausoleum,for crypt or vault interments. 89 -15— Ch.946 (C) A crematory and columbarium, for interment of cremated remains or hydrolyzed human remains. (2) A place where six or more human bodies are buried. (b) This section shall become operative on July 1,2020. SEC.30. Section 7006.1 is added to the Health and Safety Code,to read: 7006.1. (a) "Hydrolysis facility"means a building or structure containing one or more chambers for the reduction of bodies of deceased persons by alkaline hydrolysis. (b) This section shall become operative on July 1,2020. SEC.31. Section 7006.4 is added to the Health and Safety Code,to read: 7006.4. (a) "Hydrolysis chamber" means the enclosed space within which the hydrolysis of human remains is performed and any other attached, nonenclosed, mechanical components that are necessary for the safe and proper functioning of the equipment.Allowable hydrolysis chambers for the disposition of human remains shall meet or exceed State Department of Public Health and federal Centers for Disease Control and Prevention requirements applicable for destruction of human pathogens, specified in the hydrolysis chamber approval issued pursuant to Section 7639.08 of the Business and Professions Code. (b) This section shall become operative on July 1,2020. SEC.32. Section 7006.6 is added to the Health and Safety Code,to read: 7006.6. (a) "Hydrolysis container"means ahydrolyzable body wrapping into which the body of a deceased person is placed prior to insertion into a hydrolysis chamber.The wrapping must consist of 100-percent protein-based material,such as silk,suede, leather,feather,fur,or wool. (b) This section shall become operative on July 1,2020. SEC.33. Section 7006.8 is added to the Health and Safety Code,to read: 7006.8. (a) "Hydrolyzed human remains container"means a receptacle in which hydrolyzed human remains are placed after hydrolysis. (b) This section shall become operative on July 1,2020. SEC.34. Section 7010.1 is added to the Health and Safety Code,to read: 7010.1. (a) "Hydrolysis"means the process by which the following two steps are taken: (1) The reduction of the body of a deceased person to its essential organic components and bone fragments by alkaline hydrolysis. Alkaline hydrolysis"is a process using heat or heat and applied pressure,water,and potassium hydroxide or sodium hydroxide in a hydrolysis chamber. (2) The processing of the remains after removal from the hydrolysis chamber pursuant to Section 7010.3. (b) This section shall become operative on July 1,2020. SEC. 35. Section 7010.3 of the Health and Safety Code is amended to read: 7010.3. (a) "Processing"means the removal of foreign objects,pursuant to Section 7051,and the reduction of the particle size of cremated remains by mechanical means including,but not limited to,grinding,crashing,and pulverizing to a consistency appropriate for disposition. 89 Ch.846 —16— (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.36. Section 7010.3 is added to the Health and Safety Code,to read: 7010.3. (a) `Processing"means the removal of foreign objects,pursuant to Section 7051,and the reduction of the particle size of cremated remains or hydrolyzed human remains by mechanical means including, but not limited to,grinding,crushing,and pulverizing to a consistency appropriate for disposition. (b) This section shall become operative on July 1,2020. SEC. 37. Section 7010.7 of the Health and Safety Code is amended to read: 7010.7. (a) "Scattering" means the authorized dispersal of cremated remains at sea,in other areas of the state,or commingling in a defined area within a dedicated cemetery,in accordance with this part. (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.38. Section 7010.7 is added to the Health and Safety Code,to read: 7010.7. (a) "Scattering" means the authorized dispersal of cremated remains or hydrolyzed human remains at sea,in other areas of the state,or commingling in a defined area within a dedicated cemetery,in accordance with this part. (b) This section shall become operative on July 1,2020. SEC. 39. Section 7011 of the Health and Safety Code is amended to read: 7011. (a) "Inumment"means placing cremated remains in a cremated remains container suitable for placement,burial,or shipment_ (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.40. Section 7011 is added to the Health and Safety Code,to read: 7011. (a) `Tnurnment"means placing cremated remains or hydrolyzed human remains in a cremated remains container or hydrolyzed human remains container suitable for placement,burial,or shipment. (b) This section shall become operative on July 1,2020. SEC.41. Section 7011.2 of the Health and Safety Code is amended to read: 7011.2. (a) `Placement" means the placing of a container holding cremated remains in a crypt,vault,or niche. (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.42. Section 7011.2 is added to the Health and Safety Code,to read: 7011.2. (a) `Theement" means the placing of a container holding cremated remains or hydrolyzed human remains in a crypt,vault,or niche. (b) This section shall become operative on July 1,2020. SEC. 43. Section 7015 of the Health and Safety Code is amended to read: 7015. (a) "Crypt'or"vault"means a space in a mausoleum of sufficient size,used or intended to be used,to entomb uncremated human remains. 99 -17— Ch.846 (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.44. Section 7015 is added to the Health and Safety Code,to read: 7015. (a) "Crypt'or"vault'means a space in a mausoleum of sufficient size,used or intended to be used,to entomb human remains that have been neither cremated nor hydrolyzed. (b) This section shall become operative on July 1,2020. SEC. 45. Section 7016 of the Health and Safety Code is amended to read: 7016. (a) "Niche"means a space in a columbarium used, or intended to be used,for the placement of cremated human remains. (b) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC.46. Section 7016 is added to the Health and Safety Code,to read: 7016. (a) "Niche"means a space in a columbarium used, or intended to be used, for the placement of cremated human remains or hydrolyzed human remains. (b) This section shall become operative on July 1,2020. SEC.47. Section 7017 is added to the Health and Safety Code,to read: 7017. (a) "Hydmlysate"means the resultant liquid from the hydrolysis of human remains, which liquid is a sterile, benign, micronutrient-rich solution consisting of sugars,salts,peptides,and amino acids.Hydrolysate and calcium phosphate "ashes" are the two end results from the alkaline hydrolysis process. (b) This section shall become operative on July 1,2020. SEC. 48. Section 7051 of the Health and Safety Code is amended to read: 7051. (a) Every person who removes any part of any human remains from any place where it has been interred, or from any place where it is deposited while awaiting interment or cremation,with intent to sell it or to dissect it,without authority of law,or written permission of the person or persons having the right to control the remains under Section 7100,or with malice or wantonness,has committed a public offense that is punishable by imprisonment pursuant to subdivision(h)of Section 1170 of the Penal Code. (b) This section shall not prohibit the removal of foreign materials, pacemakers, or prostheses from cremated remains by an employee of a licensed crematory prior to final processing of ashes.Dental gold or silver, jewelry, or mementos, to the extent that they can be identified, may be removed by the employee prior to final processing if the equipment is such that it will not process these materials.However,any dental gold and silver, jewelry, or mementos that are removed shall be returned to the urn or cremated remains container, unless otherwise directed by the person or persons having the right to control the disposition. (c) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.49. Section 7051 is added to the Health and Safety Code,to read: 89 Ch.846 —18- 7051. (a) Every person who removes any part of any human remains from any place where it has been interred, or from any place where it is deposited while awaiting interment, cremation, or hydrolysis, with intent to sell it or to dissect it,without authority of law,or written permission of the person or persons having the right to control the remains under Section 7100,or with malice or wantonness,has committed a public offense that is punishable by imprisonment pursuant to subdivision(h)of Section 1170 of the Penal Code. (b) This section shall not prohibit the removal of foreign materials, pacemakers, or prostheses from cremated remains or hydrolyzed human remains by an employee of a licensed crematory or licensed hydrolysis facility prior to final processing of remains. Dental gold or silver,jewelry, or mementos,to the extent that they can be identified,may be removed by the employee prior to final processing if the equipment is such that it will not process these materials. However, any dental gold and silver,jewelry, or mementos that are removed shall be returned to the um,cremated remains container,or hydrolyzed human remains container,unless otherwise directed by the person or persons having the right to control the disposition. (c) This section shall become operative on July 1,2020. SEC. 50. Section 7051.5 of the Health and Safety Code is amended to read: 7051.5. (a) Everyperson who removes orpossesses dental gold or silver, jewelry, or mementos from any human remains without specific written permission of the person or persons having the right to control those remains under Section 7100 is punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code. The fact that residue and any unavoidable dental gold or dental silver,or other precious metals remain in the cremation chamber or other equipment or any container used in a prior cremation is not a violation of this section. (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.51. Section 7051.5 is added to the Health and Safety Code,to read: 7051.5. (a) Every person who removes or possesses dental gold or silver, jewelry, or mementos from any human remains without specific written permission of the person or persons having the right to control those remains under Section 7100 is punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code. The fact that residue and any unavoidable dental gold or dental silver,or other precious metals remain in the cremation chamber, hydrolysis chamber, or other equipment or any container used in a prior cremation or hydrolysis is not a violation of this section. (b) This section shall become operative on July 1,2020. SEC. 52. Section 7052 of the Health and Safety Code is amended to read: 7052. (a) Every person who willfully mutilates,disinters,removes from the place of interment, or commits an sot of sexual penetration on,or has sexual contact with,any remains known to be human,without authority of 89 -19— Ch.946 law, is guilty of a felony. This section does not apply to any person who, under authority of law,removes the remains for reintennent,or performs a cremation. (b) For purposes of this section,the following definitions apply: (1) "Sexual penetration" means the unlawful penetration of the vagina or anus,however slight,by any part of a person's body or other object, or any net of sexual contact between the sex organs of a person and the mouth or anus of a dead body, or any oral copulation of a dead human body for the purpose of sexual arousal,gratification,or abuse. (2) "Sexual contact" means any willful touching by a person of an intimate part of a dead human body for the purpose of sexual arousal, gratification,or abuse. (c) This section shall remain in effect only until July 1,2020,and as of that date is repealed SEC.53. Section 7052 is added to the Health and Safety Code,to read: 7052. (a) Every person who willfully mutilates,disinters,removes from the place of interment, or commits an act of sexual penetration on,or has sexual contact with,any remains known to be human,without authority of law, is guilty of a felony. This section does not apply to any person who, under authority of law,removes the remains for reinterment,or performs a cremation or hydrolysis. (b) For purposes of this section,the following definitions apply: (1) "Sexual penetration" means the unlawful penetration of the vagina or anus,however slight,by any part of a person's body or other object, or any act of sexual contact between the sex organs of a person and the mouth or anus of a dead body, or any oral copulation of a dead human body for the purpose of sexual arousal,gratification,or abuse. (2) "Sexual contact' means any willful touching by a person of an intimate part of a dead human body for the purpose of sexual arousal, gratification,or abuse. (c) This section shall become operative on July 1,2020. SEC. 54. Section 7052.5 of the Health and Safety Code is amended to read: 7052.5. (a) Notwithstanding the provisions of Section 7052,cremated remains may be removed from the place of interment for disposition as provided in Section 7054.6 or for burial at sea as provided in Section 7117. (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.55. Section 7052.5 is added to the Health and Safety Code,to read: 7052.5. (a) Notwithstanding the provisions of Section 7052,cremated remains or hydrolyzed human remains may be removed from the place of interment for disposition as provided in Section 7054.6 or for burial at sea as provided in Section 7117. (b) This section shall become operative on July 1,2020. SEC. 56. Section 7054 of the Health and Safety Code is amended to read: 89 Ch.846 —20- 7054. (a) (1) Except as authorized pursuant to the sections referred to in subdivision (b), every person who deposits or disposes of any human remains in any place,except in a cemetery,is guilty of a misdemeanor. (2) Every licensee or registrant pursuant to Chapter 12 (commencing with Section 7600)of Division 3 of the Business and Professions Code and the agents and employees of the licensee or registrant, or any unlicensed person acting in a capacity in which a license from the Cemetery and Funeral Bureau is required, who, except as authorized pursuant to the sections referred to in subdivision(b), deposits or disposes of any human remains in any place,except in a cemetery,is guilty of a misdemeanor that shall be punishable by imprisonment in a county jail not exceeding one year,by a fine not exceeding ten thousand dollars($10,000),or both that imprisonment and fine. (b) Cremated remains may be disposed of pursuant to Sections 7054.6, 7116,7117,and 103060. (c) Subdivision(a)of this section shall not apply to the reburial of Native American remains under an agreement developed pursuant to subdivision (0 of Section 5097.94 of the Public Resources Code,or implementation of a recommendation or agreement made pursuant to Section 5097.98 of the Public Resources Code. (d) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC.57. Section 7054 is added to the Health and Safety Code,to read: 7054. (a) (1) Except as authorized pursuant to the sections referred to in subdivision (b), every person who deposits or disposes of any human remains in any place,except in a cemetery,is guilty of a misdemeanor. (2) Every licensee or registrant pursuant to Chapter 12 (commencing with Section 7600)of Division 3 of the Business and Professions Code and the agents and employees of the licensee or registrant, or any unlicensed person acting in a capacity in which a license from the Cemetery and Funeral Bureau is required, who, except as authorized pursuant to the sections referred to in subdivision(b), deposits or disposes of any human remains in any place,except in a cemetery,is guilty of a misdemeanor that shall be punishable by imprisonment in a county jail not exceeding one year, by a fine not exceeding ten thousand dollars($10,000),or both that imprisonment and fine. (b) Cremated remains or hydrolyzed human remains may be disposed of pursuant to Sections 7054.6,7116,7117,and 103060. (c) Subdivision(a)of this section shall not apply to the reburial of Native American remains under an agreement developed pursuant to subdivision (1)of Section 5097.94 of the Public Resources Code,or implementation of a recommendation or agreement made pursuant to Section 5097.98 of the Public Resources Code. (d) This section shall become operative on July 1,2020. SEC. 58. Section 7054.1 of the Health and Safety Code is amended to read: 89 -21— Ch.946 7054.1. (a) No cremated remains shall be removed from the place of cremation, nor shall there be any charge for the cremation, unless the cremated remains have been processed so that they are suitable for monument within a cremated remains container or an urn.Every contract for cremation services shall include specific written notification of the processing to the person having the right to control the disposition of the remains under Section 7100. (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.59. Section 7054.1 is added to the Health and Safety Code,to read: 7054.1. (a) No cremated remains or hydrolyzed human remains shall be removed from the place of cremation or hydrolysis, nor shall there be any charge for the cremation or hydrolysis,unless the cremated remains or hydrolyzed human remains have been processed so that they are suitable for inumment within a cremated remains container, hydrolyzed human remains container, or an um. Every contract for cremation or hydrolysis services shall include specific written notification of the processing to the person having the right to control the disposition of the remains under Section 7100. (b) This section shall become operative on July 1,2020. SEC. 60. Section 7054.6 of the Health and Safety Code is amended to read: 7054.6. (a) Except as provided in subdivision (b), cremated remains may be removed in a durable container from the place of cremation or interment and kept in or on the real property awned or occupied by a person described in Section 7100 or any other person,with the permission of the person with the right to disposition, or the durable container holding the cremated remains may be kept in a church or religious shrine, if written permission of the church or religious shrine is obtained and there is no conflict with local use permit requirements or zoning laws, if the removal is under the authority of a permit for disposition granted under Section 103060.The placement,in any place,of six or more cremated remains under this section does not constitute the place a cemetery,as defined in Section 7003. (b) Notwithstanding any other provision of law,cremated remains may be placed in one or more keepsake runs. Keepsake tons shall be kept as authorized by the person or persons with the right to control disposition pursuant to Section 7100,provided that a permit for disposition of human remains pursuant to Section 103060 is issued by the local registrar for each keepsake urn designating the home address of each person receiving a keepsake urn and a permit fee pursuant to Section 103065 is paid. No keepsake um shall be subject to Section 8345.For purposes of this section, a keepsake um shall mean a closed durable container that will accommodate an amount of cremated remains not to exceed one cubic centimeter. (c) Prior to disposition of cremated remains,every licensee or registrant pursuant to Chapter 12 (commencing with Section 7600)of Division 3 of 89 Ch.846 —22— the Business and Professions Code, and the agents and employees of the licensee or registrant shall do all of the following: (1) Remove the cremated remains from the place of cremation in a durable container. (2) Keep the cremated remains in a durable container. (3) Store the cremated remains in a place free from exposure to the elements. (4) Responsibly maintain the cremated remains. (d) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC.61. Section 7054.6 is added to the Health and Safety Code,to read: 7054.6. (a) Except as provided in subdivision(b),cremated remains or hydrolyzed human remains may be removed in a durable container from the place of cremation,hydrolysis, or interment and kept in or on the real properly owned or occupied by a person described in Section 7100 or any other person,with the permission of the person with the tight to disposition, or the durable container holding the cremated remains or hydrolyzed human remains may be kept in a church or religious shrine, if written permission of the church or religious shrine is obtained and there is no conflict with local use permit requirements or zoning laws, if the removal is under the authority of a permit for disposition granted under Section 103060. The placement, in any place, of six or more cremated remains or hydrolyzed human remains under this section does not constitute the place a cemetery, as defined in Section 7003. (b) Notwithstanding any other provision of law, cremated remains or hydrolyzed human remains may be placed in one or more keepsake urns. Keepsake urns shall be kept as authorized by the person or persons with the tight to control disposition pursuant to Section 7100,provided that a permit for disposition of human remains pursuant to Section 103060 is issued by the local registrar for each keepsake urn designating the home address of each person receiving a keepsake urn and a permit fee pursuant to Section 103065 is paid. No keepsake um shall be subject to Section 8345. For purposes of this section,a keepsake um shall mean a closed durable container that will accommodate an amount of cremated remains or hydrolyzed human remains not to exceed one cubic centimeter. (c) Priorto disposition of cremated remains mhydrolyzed human remains, every licensee or registrant pursuant to Chapter 12 (commencing with Section 7600)of Division 3 of the Business and Professions Code,and the agents and employees of the licensee or registrant shall do all of the following: (1) Remove the cremated remains or hydrolyzed human remains from the place of cremation or hydrolysis in a durable container. (2) Keep the cremated remains or hydrolyzed human remains in a durable container. (3) Store the cremated remains or hydrolyzed human remains in a place free from exposure to the elements. 89 -23— Ch.846 (4) Responsibly maintain the cremated remains or hydrolyzed human remains. (d) This section shall become operative on July 1,2020. SEC.62. Section 7054.8 is added to the Health and Safety Code,to read: 7054.8. (a) Except with the express written permission of the person entitled to control the disposition of the remains,no person shall do any of the following: (1) Hydrolyze the remains of more than one person at the same time in the same hydrolysis chamber,or introduce the remains of a second person into a hydrolysis chamber until dissolution of any preceding remains has been terminated and reasonable efforts have been employed to remove all fragments of the preceding remains. The fact that there is residue in the hydrolysis chamber or other equipment or any container used in a prior hydrolysis is not a violation of this section. (2) Dispose of or scatter hydrolyzed human remains in a manner or in such a location that the remains are commingled with those of another person.This paragraph shall not apply to the scattering of hydrolyzed human remains at sea from individual containers or to the disposal in a dedicated cemetery of accumulated residue removed from processing equipment. (3) Place hydrolyzed human remains or other remains of more than one person in the same container or the same interment space.This paragraph shall not apply to the following: (A) Interment of members of the same family in a common container designed for the hydrolyzed human remains of more than one person. (B) Interment in a space or container that has been previously designated at the time of sale as being intended for the interment of remains of more than one person. (C) Disposal in a dedicated cemetery of residue removed from processing equipment. (b) Written acknowledgment from the person entitled to control the disposition of the hydrolyzed human remains shall be obtained by the person with whom arrangements are made for disposition of the remains on a form that includes,but is not limited to,the following information:"The human body is hydrolyzed with organic protein-based material such as wool,silk, cotton, or other protein-based material in the hydrolysis chamber. Bone fragments are not hydrolyzable and,as a result,remain in the chamber.The hydrolyzed remains will be dried and crashed, pulverized, or ground to facilitate inumment or scattering."The acknowledgment shall be filed and retained,for at least five years,by the person who disposes of or inters the remains. (c) A person,including any corporation or partnership,that violates any provision of this section is guilty of a misdemeanor. (d) This section shall become operative on July 1,2020. SEC. 63. Section 7055 of the Health and Safety Code is amended to read: 7055. (a) Everyperson,who frrhimselfor herself or for anollwrperson, inters or incinerates a body or permits the same to be done,or removes any 89 Ch.846 —24— remains,other than cremated remains,from the primary registration district in which the death or incineration occurred or the body was found except a removal by a funeral director in a funeral director's conveyance or an officer of a duly accredited medical college engaged in official duties with respect to the body of a decedent who has willfully donated his or her body to the medical college from that registration district or county to another registration district or county, or within the same registration district or county, without the authority of a burial or removal permit issued by the local registrar of the district in which the death occurred or in which the body was found;or removes interred human remains from the cemetery in which the interment occurred, or removes cremated remains from the premises on which the cremation occurred without the authority of removal permit is guilty of a misdemeanor and punishable as follows: (1) For the first offense,by a fine of not less than ten dollars($10)nor more than five hundred dollars($500). (2) For each subsequent offense,by a fine of not less than fifty dollars ($50) nor more than five hundred dollars ($500) or imprisonment in the county jail for not more than 60 days,or by both. (b) Notwithstanding subdivision (a), a funeral director of a licensed out-of-state funeral establishment may transport human remains out of this state without a removal permit when he or she is acting within the requirements specified in subdivision(b)of Section 103050. (c) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC.64. Section 7055 is added to the Health and Safety Code,to read: 7055. (a) Every person,who forhimselfor herself or for anotherperson, inters, cremates, or hydrolyzes a body or permits the same to be done, or removes any remains, other than cremated remains or hydrolyzed human remains,from the primary registration district in which the death,cremation, or hydrolysis occurred or the body was found,except a removal by a funeral director in a funeral director's conveyance or an officer of a duly accredited medical college engaged in official duties with respect to the body of a decedent who has willfully donated his or her body to the medical college from that registration district or county to another registration district or county, or within the same registration district or county, without the authority of a burial or removal permit issued by the local registrar of the district in which the death occurred or in which the body was found; or removes interred human remains from the cemetery in which the interment occurred, removes cremated remains from the premises on which the cremation occurred, or removes hydrolyzed human remains from the premises on which the hydrolysis occurred without the authority of a removal permit is guilty of a misdemeanor and punishable as follows: (1) For the first offense,by a fine of not less than ten dollars($10)nor more than five hundred dollars($500). (2) For each subsequent offense,by a fine of not less than fifty dollars ($50) nor more than five hundred dollars ($500) or imprisonment in the county jail for not more than 60 days,or by both. 99 -25— Ch.946 (b) Notwithstanding subdivision (a), a funeral director of a licensed out-of-state funeral establishment may transport human remains out of this state without a removal permit when he or she is acting within the requirements specified in subdivision(b)of Section 103050. (c) This section shall become operative on July 1,2020. SEC. 65. Section 7116 of the Health and Safety Code is amended to read: 7116. (a) Cremated remains may be scattered in areas where no local prohibition exists,provided that the cremated remains are not distinguishable to the public, are not in a container, and that the person who has control over disposition of the cremated remains has obtained written permission of the property owner or governing agency to scatter on the property. A state or local agency may adopt an ordinance, regulation, or policy, as appropriate, authorizing, consistent with this section, or specifically prohibiting, the scattering of cremated human remains on lands under the agency's jurisdiction.The scattering of the cremated remains of more than one person in one location pursuant to this section shall not create a cemetery pursuant to Section 7003 or any other provision of law. (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC.66. Section 7116 is added to the Health and Safety Code,to read: 7116. (a) Cremated remains or hydrolyzed human remains may be scattered in areas where no local prohibition exists, provided that the cremated remains or hydrolyzed human remains are not distinguishable to the public,are not in a container,and that the person who has control over disposition of the cremated remains or hydrolyzed human remains has obtained written permission of the property owner or governing agency to scatter on the property. A state or local agency may adopt an ordinance, regulation,or policy,as appropriate,authorizing,consistent with this section, or specifically prohibiting, the scattering of cremated human remains or hydrolyzed human remains on lands under the agency's jurisdiction. The scattering of the cremated remains or hydrolyzed human remains of more than one person in one location pursuant to this section shall not create a cemetery pursuant to Section 7003 or any other provision of law. (b) Tbis section shall become operative on July 1,2020. SEC. 67. Section 7117 of the Health and Safety Code is amended to read: 7117. (a) Cremated remains may be taken by boat from any harbor in this state,orby air,and scattered at sea.Cremated remains shall be removed from their container before the remains are scattered at sea. (b) Any person who scatters at sea, either from a boat or from the air, any human cremated remains shall,file with the local registrar of births and deaths in the county nearest the point where the remains were scattered, a verified statement containing the name of the deceased person,the time and place of death,the place at which the cremated remains were scattered,and any other information that the local registrar ofbirths and deaths may require. The first copy of the endorsed permit shall be filed with the local registrar 89 Ch.846 —26— of births and deaths within 10 days of disposition.The third copy shall be returned to the office of issuance. (c) For purposes of this section,the phrase"at sea" includes the inland navigable waters of this state,exclusive of lakes and streams,provided that no such scattering may take place within 500 yards of the shoreline.Nothing in this section shall be construed to allow the scattering of cremated human remains from a bridge or pier. (d) Notwithstanding any other provision of this code, the cremated remains of a deceased person may be scattered at sea as provided in this section and Section 103060. (e) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC.68. Section 7117 is added to the Health and Safety Code,to read: 7117. (a) Cremated remains or hydrolyzed human remains maybetaken by boat from any harbor in this state,or by air,and scattered at sea.Cremated remains or hydrolyzed human remains shall be removed from their container before the remains are scattered at sea. (b) Any person who scatters at sea, either from a boat or from the air, any human cremated remains or hydrolyzed human remains shall file with the local registrar of births and deaths in the county nearest the point where the remains were scattered,a verified statement containing the name of the deceased person,the time and place of death,the place at which the cremated remains or hydrolyzed human remains were scattered, and any other information that the local registrar of births and deaths may require. The first copy of the endorsed permit shall be filed with the local registrar of births and deaths within 10 days of disposition. The third copy shall be returned to the office of issuance. (c) For purposes of this section, the phrase"at sea" includes the inland navigable waters of this state,exclusive of lakes and streams,provided that no such scattering may take place within 500 yards of the shoreline.Nothing in this section shall be construed to allow the scattering of cremated human remains or hydrolyzed human remains from a bridge or pier. (d) Notwithstanding any other provision of this code, the cremated remains or hydrolyzed human remains of deceased person may be scattered at sea as provided in this section and Section 103060. (e) This section shall become operative on July 1,2020. SEC.69. Article 8(commencing with Section 8370)is added to Chapter 2 of Part 3 of Division 8 of the Health and Safety Code,to read: Article 8. Hydrolysis Facilities 8370. All hydrolyzed human remains not disposed of in accordance with this chapter,within one year,shall be interred. 8372. A hydrolysis facility shall not make or enforce any rules requiring that human remains be placed in a casket before hydrolysis or that human remains be hydrolyzed in a casket,nor shall a hydrolysis facility refuse to 99 -27— Ch.846 accept human remains for hydrolysis for the reason that they are not in a casket.Every director,officer,agent,or representative of a hydrolysis facility who violates this section is guilty of a misdemeanor.Nothing in this section shall be construed to prohibit the requiring of some type of container or disposal unit,as specified in Section 7006.6. 8374. (a) A hydrolysis facility shall maintain on its premises,or other business location within the state, an accurate record of all hydrolyses performed,including all of the following information: (1) Name of the referring funeral director,if any. (2) Name of the deceased. (3) Date of the hydrolysis. (4) Name of the hydrolysis chamber operator. (5) Disposition of the hydrolyzed human remains. (6) Time and date that the body was inserted into the hydrolysis chamber. (7) Time and date that the body was removed from the hydrolysis chamber. (8) Time and date that final processing of the hydrolyzed human remains was complete. (9) Name and address of the authorizing agent. (10) Identification number assigned tothe deceased,pursuant to Section 8376. (11) A photocopy of the disposition permit filed in connection with the disposition. (12) Any documentation of compliance with appropriate environmental and safety laws. (13) Body mass of the deceased,along with temperature,time duration, and pressure at which the hydrolysis was performed. (b) A hydrolysis facility shall maintain on its premises,or other business location within the state, records of the maintenance performed on the hydrolysis chamber. (c) Information described in this section shall be maintained for at least 10 years after the hydrolysis is performed and shall be subject to inspection by the Cemetery and Funeral Bureau. 8376. (a) A hydrolysis facility shall maintain an identification system allowing identification of each decedent beginning from the time the hydrolysis facility accepts delivery of human remains until the point at which it releases the hydrolyzed human remains to a third party. After hydrolysis,an identifying disk,tab,or other permanent label shall be placed with the urn or hydrolyzed human remains container before the hydrolyzed human remains are released from the hydrolysis facility.Each identification disk,tab,or label shall contain the license number of the hydrolysis facility and shall have a unique number that shall be recorded on all documents regarding the decedent and in the hydrolysis log. Each hydrolysis facility shall maintain a written procedure for identification of remains. The identification requirements pertaining to an identifying disk, tab, or other label to be placed within the um or hydrolyzed human remains container 89 Ch.846 —28— shall not apply to hydrolyzed human remains placed in a keepsake um pursuant to subdivision(b)of Section 7054.6 if space does not permit (b) A hydrolysis facility that fails, when requested by an official of the Cemetery and Funeral Bureau, to produce a written procedure for identification of remains shall have 15 working days from the time of the request to produce an identification procedure for review by the chief of the Cemetery and Funeral Bureau.The license of the hydrolysis facility shall be suspended pursuant to Chapter 5 (commencing with Section 11500)of Part 1 of Division 3 of Title 2 of the Government Code,if no identification procedure is produced for review after 15 working days have elapsed. 8378. Within two hours after a licensed hydrolysis facility takes custody of a body that has not been embalmed, it shall refrigerate the body at a temperature not greater than 50 degrees Fahrenheit, unless the hydrolysis process will begin within 24 hours of the time that the hydrolysis facility took custody. 8380. (a) The hydrolysis facility licensee, or its authorized representatives,shall provide instruction to all hydrolysis facility personnel involved in the hydrolysis process. This instruction shall lead to a demonstrated knowledge on the part of an employee regarding identification procedures used during hydrolysis,operation of the hydrolysis chamber and processing equipment,safe work practices and procedures for the handling of corrosive materials, and all laws relevant to the handling of a body and hydrolyzed human remains. This instruction shall be outlined in a written plan maintained by the hydrolysis facility licensee for inspection and comment by an inspector of the Cemetery and Funeral Bureau. (b) No employee shall be allowed to operate any hydrolysis equipment until the employee has demonstrated to the certified manager of a licensed hydrolysis facility or authorized representative of the licensee that the employee understands the procedures required to ensure that health and safety conditions are maintained at the hydrolysis facility and that hydrolyzed human remains are not commingled other than for acceptable residue, as defined.The hydrolysis facility licensee shall maintain a record to document that an employee has received the training specified in this section. (c) A hydrolysis facility that fails,when requested by an official of the bureau,to produce a written employee instruction plan or record of employee training for inspection shall have 15 working days from the time of the request to produce a plan or training record for review by the chief of the Cemetery and Funeral Bureau.The license of a hydrolysis facility shall be suspended,pursuant to Chapter 5(commencing with Section 11500)of Pan 1 of Division 3 of Title 2 of the Government Code, if no plan or training record is produced for review after 15 working days have elapsed. 8382. This article shall become operative on July 1,2020. SEC.70. Section 103055 of the Health and Safety Code is amended to read: 103055. (a) If the certificate of death is properly executed and complete, the local registrar of births and deaths shall issue a permit for disposition that,in all cases,shall specify any one of the following: 89 -29— Ch.946 (1) The name of the cemetery where the remains shall be interred. (2) Burial at sea ae provided in Section 7117. (3) The address or description of the place where remains shall be buried or scattered. (4) The address of the location where the cremated remains will be kept, as provided in Section 7054.6,under the conditions the state registrar may approve, including, but not limited to, conditions in keeping with public sensibilities,applicable laws,and reasonable assurances that the disposition will be carried out in accordance with the prescribed conditions and will not constitute a private or public nuisance. (b) Notwithstanding any other provisions of this part relative to issuance of a permit for disposition, whenever the death accursed from a disease declared by the state department to be infectious, contagious, or communicable and dangerous to the public health, no permit for the disposition of the body shall be issued by the local registrar,except under those conditions as may be prescribed by the state department and local health officers. (c) This section shall remain in effect only until July 1,2020,and as of that date is repealed. SEC. 71. Section 103055 is added to the Health and Safety Code, to read: 103055. (a) If the certificate of death is properly executed and complete, the local registrar of births and deaths shall issue a permit for disposition, that in all cases,shall specify any one of the following: (1) The name of die cemetery where the remains shall be interred. (2) Burial at sea as provided in Section 7117. (3) The address or description of the place where remains shall be buried or scattered. (4) The address of the location where the cremated remains or hydrolyzed human remains will be kept, as provided in Section 7054.6, under the conditions the state registrar may approve, including, but not limited to, conditions in keeping with public sensibilities, applicable laws, and reasonable assurances that the disposition will be carried out in accordance with the prescribed conditions and will not constitute a private or public nuisance. (b) Notwithstanding any other provisions of this part relative to issuance of a permit for disposition, whenever the death accursed from a disease declared by the state department to be infectious, contagious, or communicable and dangerous to the public health, no permit for the disposition of the body shall be issued by the local registrar,except under those conditions as may be prescribed by the state department and local health officers. (c) This section shall become operative on July 1,2020. SEC.72. Section 103060 of the Health and Safety Code is amended to read: 103060. (a) A permit for disposition for the purpose of removing cremated remains from the place of cremation or interment shall include a 99 Ch.846 —30— description of the final place of disposition sufficient to identify the place and shall be issued by the local registrar to the person having the right to control the disposition of the remains under Section 7100 upon the application of that person. (b) A permit for disposition shall be issued under this section only upon the signed acknowledgment by the person making application that trespass and nuisance laws apply to the disposition and that the permit gives no right of unrestricted access to property not owned by the person for the purpose of disposing of the remains. (c) The person to whom the permit for disposition was issued shall sign the permit,endorse upon it the date of final disposition and,within 10 days, return the first copy of the permit so endorsed to the local registrar of the district in which the disposition took place. The third copy of the permit shall be returned to the office of issuance.After one yew,the local registrar may destroy any original or duplicate permit retained by him or her pursuant to this section. (d) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC. 73. Section 103060 is added to the Health and Safety Code, to read: 103060. (a) A permit for disposition for the purpose of removing cremated remains orhydrolyzed human remains from the place of cremation, hydrolysis, or interment shall include a description of the final place of disposition sufficient to identify the place and shall be issued by the local registrar to the person having the right to control the disposition of the remains under Section 7100 upon the application of that person. (b) A permit for disposition shall be issued under this section only upon the signed acknowledgment by the person making application that trespass and nuisance laws apply to the disposition and that the permit gives no right of unrestricted access to property not owned by the person for the purpose of disposing of the remains. (c) The person to whom the permit for disposition was issued shall sign the permit,endorse upon it the date of final disposition and,within 10 days, return the first copy of the permit so endorsed to the local registrar of the district in which the disposition took place. The third copy of the permit shall be returned to the office of issuance.After one year,the local registrar may destroy,any original or duplicate permit retained by him or her pursuant to this section. (d) This section shall become operative on July 1,2020. SEC.74. Section 103080 of the Health and Safety Code is amended to read: 103080. (a) The person in charge of the place of interment,or the funeral director or person acting as funeral director if no person is in charge,shall sign the permit, endorse upon it the date of interment or cremation, and, within 10 days,return the first copy of the permit so endorsed to the local registrar of the district in which the interment took place.The third copy of the permit shall be returned to the office of issuance.After one yew, the 89 -31— Ch.946 local registrar may destroy any original or duplicate permit retained by the local registrar pursuant to this section. (b) This section shall remain in effect only until July 1,2020, and as of that date is repealed. SEC. 75. Section 103080 is added to the Health and Safety Code, in read: 103080. (a) The person in charge of the place of interment,or the funeral director or person acting as funeral director if no person is in charge,shall sign the permit, endorse upon it the date of interment, hydrolysis, or cremation,and,within 10 days,return the first copy of the permit so endorsed to the local registrar of the district in which the interment took place. The third copy of the permit shall be returned to the office of issuance.After one year, the local registrar may destroy any original or duplicate permit retained by the local registrar pursuant to this section. (b) This section shall become operative on July 1,2020. SEC.76. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges,fees,or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction,eliminates a crime or infraction,or changes the penalty for a crime or infraction,within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIB B of the California Constitution. O 89 l-=III � - i�Li ..•'��� , _ T lei AB 967 : DISPOSAL OF HUMAN REMAINS VIA WATER CREMATION Water Cremation : What is it? • Alternative to flame cremation or burial of human remains • Marketed as a "green;' environmentally-friendly option • Uses strong alkaline solution under high pressure to dissolve body parts into a liquid hydrolysate • Bones unaffected typically crushed & returned to family as "ashes" • Other names for this process : Flameless Cremation, Bio- cremation, Alkaline Hydrolysis Alkaline Hydrolysis of Animals Pollutant _q"MM Concentration • ' 311000 312 71340 362 12 7.8 SAW lS H � 9 90 C ��Wi Inspection date: 02/23/2017 >N THE EN�SP AB 967 (2017 ) ( Gloria , D -San Diego) • Allows hydrolysate from human remains to be disposed of to wastewater systems via permit • CASA amendments on discretionary authority were accepted into the legislation Key Language Regarding Hydrolysate Disposal • "Authorization for disposal of hydrolysate using a sewer collection system shall be voluntary and at the discretion of each public agency . . . • Each public agency has the discretion to authorize or to prohibit the discharge of hydrolysate into a sewer collection system for any reason, including for purposes of promoting advanced water recycling systems ." Options for OCSD Under the New Law 1 . Prohibit fl 2 . Allow via wastehauler only ( Not tributary to GWRS) 3 . Allow to sewer via permit GWRS Steering Committee Recommendation • On January 8, 2018, the GWRS Steering Committee voted unanimously to recommend to OCSD to modify its Wastewater Ordinance to prohibit the acceptance of hydrolysate from human remains into the wastewater syste m . Current Staff Recommendation and Options Staff Recommendation 1 . Implement GWRS Steering Committee decision ( Requires Ordinance amendment to include Prohibition ) Other Options 2 . Allow the discharge via wastehauler ( Requires Ordinance amendment to recognize new category of waste) 3 . No change to current permitting scheme z-,.� •l►lam/_II/ Questions ? WATER REPIENISpu:.. ': �.a - STEERING COMMITTEE Meeting Date To Bd.Of Dir. 04,25,18 0Z5/18 AGENDA REPORT I em Number Rem Number z u Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: TEMPORARY EMPLOYMENT SERVICES GENERAL MANAGER'S RECOMMENDATION Authorize the General Manager to increase the current Temporary Employment Services (Specification No.CS-2009421BD) funding of $1,187,190 by $80,000 with temporary service firms for a new total amount not to exceed $1,267,190 for the remainder of the fiscal year (through June 30, 2018). BACKGROUND Temporary workers are hired,for a limited duration,through third-party staffing firms when regular employees are not available to cover for employee absences due to illness, vacation, and leave of absence; or for unforeseen circumstances such as increased work demands. In addition, temporary workers are also used for approved special projects and budgeted capital improvement projects that are non-engineering related. In June 2017, the Board of Directors approved $1,187,190 for temporary employment services. Due to unanticipated leaves, retirements, and unforeseen circumstances such as increased work demands within Operations and Maintenance and Environmental Services, staff projected that in March 2018 costs were likely to exceed the approved dollar amount. After careful consideration, the Executive Management Team decided that temporary staffing assignments would come to an end on March 30, 2018. At that time, temporary employment service firms were asked to provide final invoices for services rendered, which resulted in an overage of $70,000. An additional $10,000 is being requested for unanticipated temporary services that may be required through May 30, 2018. RELEVANT STANDARDS • Ensure the public's money is wisely spent PROBLEM Unanticipated leaves, retirements, and unforeseen circumstances such as increased work demands within Operations and Maintenance and Environmental Services has exhausted the approved funds, and an additional authorization of$80,000 is required. Page 1 of 2 PROPOSED SOLUTION Authorize the General Manager to increase the Temporary Employment Services fund by $80,000 to allow Orange County Sanitation District (Sanitation District) to pay for temporary services that have been utilized through March 30, 2018, including $10,000 for unanticipated temporary services that may be required through May 30, 2018. Going forward, staff will be tracking the overall budget status and notifying Divisions earlier than originally planned to ensure funds are not exhausted, and Board-approved thresholds are notexceeded. TIMING CONCERNS Board approval is necessary to ensure that the Sanitation District is able to pay vendors for temporary services provided through March 30, 2018. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District will not be able to pay the outstanding invoices beyond the original Board approved $1,187,190. PRIOR COMMITTEE/BOARD ACTIONS June 2017 - Board approved entering into agreements for Temporary Services with 11 temporary service firms for a total amount not to exceed $1,187,190. October 2016 - Board approved entering into contracts for Temporary Services with 11 temporary service firms for a total amount not to exceed $814,400. May 2014 - Board approved entering into contracts for Temporary Employment Services (Specification No.CS-2009-421BD) for a one-year period (July 1, 2014 through June 30, 2015), for a total amount not to exceed $550,000 per year, with a 5% annual aggregate escalation factor, with four one-year renewal options. FINANCIAL CONSIDERATIONS There is sufficient remaining funding in the 2017-18 Operating Budget to cover the $80,000 request. This request complies with authority levels of the Sanitation District's Purchasing Ordinance. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (i w .ocsd.corn with the complete agenda package: N/A Page 2 of 2 ADMINISTRATION COMMITTEE Meng D310 TOBE. Dir. 04/lti11/18 o4/zs/1Or8 AGENDA REPORT Item Item Number 3 12 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance &Administrative Services SUBJECT: PROPOSED PURCHASING ORDINANCE NO. OCSD-52 GENERAL MANAGER'S RECOMMENDATION A. Introduce Ordinance No. OCSD-52, entitled "An Ordinance of the Board of Directors of the Orange County Sanitation District Establishing Requirements and Procedures for the Purchase of Goods, Services, and Public Works Projects; and Repealing Ordinance No. OCSD-47"; B. Motion to read Ordinance No. OCSD-52 by title only and waive reading of said entire Ordinance on April 25, 2018; C. Set May 23, 2018 as the date for the second reading and adoption of Ordinance No. OCSD-52; and D. Direct the Clerk of the Board to publish summaries of the Ordinance as required by law. BACKGROUND The proposed Purchasing Ordinance sets forth the requirements that apply to the Orange County Sanitation District's (Sanitation District) purchase of goods and services. These requirements are currently set forth in Ordinance No. OCSD-47. The proposed Ordinance updates and reorganizes the requirements set forth in Ordinance No. OCSD-47 and clarifies several individual requirements and procedures. The Ordinance, for example, modifies procedures whereby an aggrieved bidder or proposer may protest the solicitation process and/or the award of a contract and permits the Sanitation District more flexibility to award master contracts best suited to the Sanitation District's needs. Purpose. The Ordinance is designed to ensure that (1) the Sanitation District complies with state law requirements governing procurement; (2) the Sanitation District obtains quality goods and services at the lowest price and/or the best overall value; (3)purchasing decisions are transparent for the public; and (4) the procurement process is fair to prospective contractors while serving the interests of the Sanitation District's ratepayers. The Ordinance also delegates spending authority to the Standing Committees and the General Manager within specified limits. Competitive Selection in General. Depending on the nature of the procurement, the Ordinance generally requires the Sanitation District to select contractors based on either Page 1 of 6 1310048.1 competitive bids or competitive proposals. Under a competitive bid process, the Sanitation District issues a notice inviting bids. Prospective contractors then submit sealed bids and the Sanitation District awards the contract to the lowest responsive, responsible bidder. Under a competitive proposal process, the Sanitation District issues a request for proposals. Prospective contractors then submit sealed proposals and the Sanitation District awards the contract to the proposal that best meets the criteria specified in the request for proposals. The winning proposal may or may not be the proposal that offered the lowest price. Exceptions to Competitive Selection. In exceptional circumstances,the Ordinance allows the Sanitation District to select contractors without any competitive process. The Ordinance allows the Sanitation District, for example, to award a contract on a "sole source" basis when the goods or services in question are unique or only available from one source. The Ordinance also allows the Sanitation District to award contracts without any competitive process as may be necessary to respond to an emergency. Types of Procurements. The Ordinance sets forth different requirements for four types of procurements: (1) goods and services (other than professional services); (2) professional services (other than professional design services); (3) professional design services; and (4) public works construction. The Ordinance generally requires the Sanitation District to purchase goods and services, other than professional design services, based on the lowest price. In contrast, however, the Ordinance generally requires the Sanitation District to award professional design service contracts to the most qualified firm, so long as the proposed price is fair and reasonable. Finally, pursuant to State law, the Ordinance generally requires the Sanitation District to award contracts for public works construction to the lowest responsive, responsible bidder. Master Contracts. The Ordinance revises the procedures to award master contracts to pre-qualified firms to allow the Sanitation District increased flexibility to identify a variety of disciplines and categories of services required and enable the Sanitation District to select a single firm due to a unique qualification or circumstance, subject to the best interests of the Sanitation District. This Ordinance also increases the task order dollar limits to maximize the effectiveness of this procurement tool and establishes a lower threshold of$25,000 below which the Director of Engineering may solicit a proposal from a single firm for low cost and/or specialized work. Bid Protests. The Ordinance requires procedures whereby a bidder or proposer may challenge the Sanitation Districfs solicitation process and/or the proposed award of a contract. A bidder or proposer may challenge the solicitation process on the grounds that a free and open competition has not taken place, or cannot take place, and/or that a particular specification or requirement is impractical, unduly restrictive, or ambiguous. A bidder or proposer may also challenge the proposed award of a contract on the grounds that a free and open competition has not taken place. Delegation of Spending Authority. In the interest of efficiency, the Ordinance delegates specified spending authority to the General Manager for task orders. The Ordinance increases the threshold at which the General Manager may approve task orders to $300,000, including contingencies. Page 2 of 6 1310048.1 General Manager Policies and Procedures. Under the proposed Ordinance, the General Manager will continue to adopt detailed policies and procedures governing procurement in order to implement the requirements of the Ordinance. The proposed revisions to the existing policies and procedures are also provided for the Board's review. RELEVANT STANDARDS • CA Public Contract Code Section 20783 • CA Government Code Section 4526; 54202 • Ensure the public's money is wisely spent PROBLEM The Sanitation District last updated its Purchasing Ordinance in 2015 and now requires amendments to the existing requirements to improve its efficiency to purchase goods and services required by the Sanitation District. PROPOSED SOLUTION Adopt an Ordinance with the new proposed purchasing requirements and authority based on Sanitation District's staff thorough review and analysis of the limitations of the existing ordinance. TIMING CONCERNS April 2018 - Presentation to Operations Committee. April 2018 - Introduction of the Ordinance to Administration Committee. April 2018 - Introduction and first reading of the Ordinance to the Board of Directors. May 2018 - Second Reading and Adoption of the Ordinance. June 23, 2018 - Ordinance takes effect. RAMIFICATIONS OF NOT TAKING ACTION Existing Purchasing Ordinance will remain in effect without modifications. PRIOR COMMITTEE/BOARD ACTIONS April 2018 - Informational presentation to Operations Committee. ADDITIONAL INFORMATION Under Government Code Section 54202, the Sanitation District must adopt policies and procedures governing the purchase of supplies and equipment. Government Code Section 4526 applies to the purchase of professional services from private architects, landscape architects, engineers, environmental professionals, land surveyors, and construction managers. Under Section 4526, the Sanitation District must select the specified professionals based on demonstrated competence and the professional qualifications necessary for the satisfactory performance of the services required. Page 3 of 6 1310048.1 Section 4526 allows the Sanitation District to adopt, by Ordinance, procedures ensuring that the specified services are engaged based on demonstrated competence and professional qualifications at fair and reasonable prices. Under Public Contract Code Section 20783, the Sanitation District must award contracts for public works construction worth more than $35,000 to the lowest responsive, responsible bidder. The Public Contract Code otherwise imposes a variety of requirements on the award of public works construction contracts. PURCHASING ORDINANCE UPDATES: • Proposed Purchasing Ordinance changes provide clarity on roles and responsibilities creating additional efficiency and effectiveness. Some changes include adding specific language that delegates authority to the Purchasing Manager for award and execution of Contracts, Amendments, Change Orders, Renewals, Time Extensions and Assignments. Another change further clarifies the usage of contingency release for Contracts. Please see the attached "Ordinance Matrix"for more information regarding these changes. • There will be no direct impact to any internal or external audits as a result of the proposed changes. However, as Buyers are assigned by division, Buyers will continue to proactively audit all purchases to ensure policy compliance and balance of vendor selection. • In the past 20 years, professional design service master contracts' thresholds were as follows: 0 1999 —Task Order$50,000 or less—Annual Cap $100,000 0 2004 —Task Order$75,000 or less—Annual Cap $200,000 0 2014 —Task Order$100,000 or less —Annual Cap $250,000 0 2015—Task Order$200,000 or less —Annual Cap $400,000 • Maintenance and repair master service contracts were not established until 2015. This is the first threshold increase since its onset. GOODS AND SERVICES BID AND AWARD THRESHOLD INCREASE: • The current bidding threshold for goods and services is $5,000, and the proposed change is to increase the threshold to $10,000. o With an operating budget of$160 million, it makes good business sense. • Contracts and Purchasing on average processes over 5,600 contracts, blanket orders, and one-time purchases in a fiscal year. o It aligns OCSD with other agencies of a similar size and scope. Some agencies include Irvine Ranch Water District, Orange County Fire Authority, and County of Orange. o It allows the Planning and Scheduling Maintenance Program to expedite scheduled work. Page 4 of 6 1310048.1 o Purchasing will continue to use cooperative contracts and establish multi- year contracts to streamline purchases of goods and services frequently utilized. Currently, OCSD uses: • Over 30 national, state, and local cooperative contracts • Over 30 inventory price contracts • Over 200 blanket purchase order contracts MASTER CONTRACTS AND TASK ORDER THRESHOLD INCREASE: • Master contracts cover repair, some maintenance, and professional design services. The bid and award threshold change will provide relief for goods and services (non-master contracts.) In other areas, we have adequate levels of authority. This does not affect other areas, such as recurring maintenance, general and professional services, goods and equipment. • Master Contracts are procured through RFP/RFQ process to establish a list of the most qualified vendors, who also meet safety and insurance requirements. There is no specific detailed final scope to be bid on at the Master Contract procurement stage. This is why the RFP/RFQ solicitation process is chosen. • The basis for the proposed increases is focused on utilizing a more time- effective, competitive process that attracts our consultant and contractor community due to the larger project opportunities. • Maintenance and Repair Task Orders: a. Task orders (similar to work orders) are competitively bid and awarded based on the lowest bid received from the list of qualified contractors. b. Repair work can be bid and awarded approximately 70% faster than the typical procurement time—4 weeks instead of 13 weeks. c. The current award threshold is $100,000, and the proposed change is to increase the threshold to $300,000. i. Currently there are 22 identified projects that can benefit from this update immediately. ii. Since 1999, the local CPI has increased by 58% and a general journeymen labor rate has increased by 93%. iii. Takes into account over 200 repair and maintenance projects forecasted over the next 5 years. iv. Projected savings or benefits of the Ordinance update is maximized speed and efficiency to address the need of capital asset repairs, rather than running the asset to failure, which can result in a larger, more complex CIP project. v. Bidding thresholds will remain unchanged. vi. The Board of Directors will continue to receive the bid awards in an agenda report, as required in the Ordinance. Page 5 of 6 1310048.1 • Professional Design Service Task Orders: a. State law (Mini-Brooks) prohibits cost as a factor in Architect & Engineer consultants for design task orders. b. The current annual master contract limit is $400,000, and the task order threshold is $200,000. The proposed annual master contract limit is $600,000, and the proposed task order threshold is $300,000. vii. The requested increase is not based solely on cost increases, but increases in capacity for a firm to compete for multiple opportunities for an engineering contract. viii. Once a firm nears the limit of its annual capacity, it is no longer eligible to compete; thus, the District is unable to utilize the firm's services going forward. ix. The lower the threshold for task orders, the less opportunity consultants will have to recover its proposal preparation costs. Engineering firms are more attracted to high-threshold contracting opportunities. c. Staff report all professional design task orders to the Board of Directors in the quarterly CIP Contract Performance Report. CEQA Adoption of the Ordinance is not a "project' subject to CEQA because it constitutes general policy and procedure making that will not result in any physical impact on the environment. FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Ordinance No. OCSD-52 • Ordinance Matrix • Presentation from 4/11/18 Administration Committee meeting Page 6 of 6 1310048.1 ORDINANCE NO. 00SD-52 AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT ESTABLISHING REQUIREMENTS AND PROCEDURES FOR THE PURCHASE OF GOODS, SERVICES, AND PUBLIC WORKS PROJECTS; AND REPEALING ORDINANCE NO. OCSD-47 1298720.1 CONTENTS Article 1. General Provisions .....................................................................................5 Section 1.01. Purpose and Scope.....................................................................5 A. Purpose..........................................................................................5 B. Scope.............................................................................................5 Section1.02. Title ..............................................................................................5 Section 1.03. Definitions....................................................................................5 Section 1.04. Rules and Guidelines...................................................................5 Section 1.05. Budgeted Funds ..........................................................................6 Section 1.06. The Purchasing Manager............................................................6 A. Duties................................................................................................ 6 B. Requests for Procurement. ............................................................6 Section 1.07. Exceptions to Competitive Selection ...........................................6 A. Sole Source Procurement............................................................. 6 B. Emergency Procurement. ..............................................................7 Section 1.08. Evaluation Committees................................................................7 Section 1.09. Severability...................................................................................7 Article 2. Goods and Services ....................................................................................7 Section 2.01. Purpose and Scope .................................................................... 7 A. Purpose. ....................................................................................... 7 B. Scope. .............................................................................................7 Section 2.02. Selection Process ........................................................................8 A. Competitive Sealed Bids................................................................8 B. Equal Bids.......................................................................................8 C. Multi-Step Sealed Bidding...............................................................8 D. Request for Proposals....................................................................9 Section2.03. Exceptions....................................................................................9 A. Small Procurements.......................................................................9 B. Cooperative Purchases..................................................................9 C. Critical Time-Sensitive Procurements............................................ 10 D. Renewals.......................................................................... 10 1288720.1 OCSD-52-2 E. Sole Source and Emergency Procurements............................... 10 F. Master Contracts; Maintenance and Repair Services Less Than or Equal to $300,000.......................................................... 10 Article 3. Professional Services............................................................................... 11 Section 3.01. Purpose and Scope................................................................... 11 A. Purpose ....................................................................................... 11 B. Scope.......................................................................................12 Section 3.02. Selection Process...................................................................... 12 A. Request for Proposals................................................................. 12 B. Evaluation and Ranking of Proposals.......................................... 12 C. Negotiation of Contract................................................................ 12 Section 3.03. Exceptions................................................................................. 12 A. Sole Source and Emergency Procurements ............................... 12 B. Contractors Reporting to the Board............................................. 13 C. Procurements of $10,000 or less ................................................ 13 D. Master Contracts; Professional Services Less Than or Equal to $100,000.................................................................................. 13 E. Master Contracts: Professional Services Qualified Lists.............. 13 Article 4. Professional Design Services ................................................................... 14 Section 4.01. Purpose and Scope ................................................................... 14 A. Purpose........................................................................................ 14 B. Scope........................................................................................15 Section 4.02. Selection Process...................................................................... 15 A. Competitive Selection .................................................................. 15 B. Professional Design Services Greater Than $300,000 ............... 15 C. Master Contracts: Professional Design Services Less Than or Equal to $300,000.................................................................... 17 Section 4.03. Exceptions.................................................................................. 18 A. Sole Source and Emergency Procurements................................ 18 B. Continuation of Services .............................................................. 18 C. Procurements of $10,000 or less................................................. 19 Article 5. Public Works Projects ............................................................................... 19 Section 5.01. Purpose and Scope ................................................................... 19 A. Purpose........................................................................................ 19 1288720.1 OCSD-52-3 B. Scope Section 5.02. Selection Process..........................................................................19 A. Design-Bid-Build.................................................................................. 19 B. Design-Build ........................................................................................21 C. Prequalification....................................................................................21 Section 5.03. Exceptions ...................................................................................22 A. Emergencies and Calamities............................................................. 22 B. Specification of Brand or Trade Name.......................................... 23 Article6. Protests.............................................................................................................23 Section 6.01. Solicitation Protests..................................................................... 23 Section 6.02. Award Protests............................................................................ 24 Section 6.03. Delay in Award ............................................................................ 24 Section 6.04. Remedies.................................................................................... 25 Section 6.05. Public Documents........................................................................ 25 Article 7. Delegation of Authority to Award Contracts ................................................26 Section 7.01. Award Authorization.....................................................................26 A. Delegation by General Manager ...................................................26 B. Original Contracts and Contingencies ...........................................26 C. Amendments,Change Orders, Renewals, Time Extensions & Assignments.................................................................................27 Section 7.02. Contingency Release ..................................................................27 Section 7.03. Task Orders.................................................................................27 Article8. Ethics.................................................................................................................29 Section 8.01. Unlawful Consideration Prohibited .................................................29 Section 8.02. Conflicts of Interest......................................................................29 A. Compliance with the Political Reform Act. .....................................29 B. Compliance with Government Code§ 1090..................................29 C. RequirementsApplicableto Consultants .......................................30 Article9. Definitions..........................................................................................................30 Article 10. Miscellaneous.............................................................................................34 Section 10.01. Noncompliance................................................................................34 Section 10.02. Effective Date ............................................................................34 Section 10.03. Repeal of Ordinance No. OCSD-47.......................................... 34 Section 10.04. Certification and Publication...................................................... 34 1288720.1 OCSD-52-4 NOW, THEREFORE,the Board of Directors of the Orange County Sanitation District does hereby ORDAIN: ARTICLE 1. General Provisions Section 1.01. Purposeand Scope A. Purpose. This Ordinance is intended to: (1)Comply with certain provisions of State law requiring the District to adopt written purchasing procedures; (2) Ensure that the District complies with State law governing the award of Contracts for Goods, Services, and Public Works Projects; (3) Establish procedures to ensure that the District obtains quality goods and competent services at the best price and/or the best value; (4) Delegate certain spending authority to District employees in the interest of efficient administration; (5) Ensure that purchasing decisions are transparent for the public; and (6) Ensure that Contracts are awarded through a process that is fair to prospective Contractors and in the best interests of the District. B. Scope. This Ordinance governs the purchase of Goods, Services and the award of Contracts for Public Works Projects. Section 1.02. Title This Ordinance may be referred to as the District's "Purchasing Ordinance." Section 1.03. Definitions As used throughout this Ordinance, the terms set forth in Article 9 shall have the meanings as defined therein, unless the context in which they are used clearly requires a different meaning, or a different definition is prescribed for a particular Article or provision. Section 1.04. Rules and Guidelines The General Manager shall implement the requirements of this Ordinance through policies, rules, and guidelines governing the purchase of Goods and Services, and the award of Contracts for Public Works Projects. 1288720.1 OCSD-52-5 Section 1.05. Budgeted Funds No Contract for the purchase of Goods, Services, or Public Works Projects shall be awarded unless and until the General Manager identifies funds in the current budget that are allocated to the purchase. Section 1.06. The Purchasing Manager A. Duties. Consistent with the provisions of this Ordinance, the Purchasing Manager shall: (1) Conduct the procurement of all Goods, Services, and Public Works Projects purchased by the District; and receive from Contractor all bids, proposals or other solicitation results; (2) Supervise and control inventories of supplies and materials. (3) Determine the type of procurement, term of the contract including number of renewals and any other contractual provisions necessary and in the best interest of the District. B. Requests for Procurement. When a Department desires to procure Goods and/or Services, the Department Director shall file a written Requisition, in advance of a procurement process, with the Purchasing Manager. The Requisition shall describe the Goods and/or Services to be acquired. Public Works procurements require a complete Engineering Budget Approval Form or equivalent document. Section 1.07. Exceptions to Competitive Selection Depending on the nature of the Contract and/or the circumstances, certain provisions of this Ordinance require that Contracts for Goods and/or Services be awarded based on Competitive Sealed Bids or Competitive Sealed Proposals. This Section 1.07 establishes certain general exceptions to competitive selection requirements for the procurement of Goods and Services. The exceptions set forth in this Section 1.07 do not apply to the award of Contracts for the construction of Public Works Projects. A. Sole Source Procurement. Notwithstanding any other provision of this Ordinance, a Contract for Goods and/or Services may be awarded based on Sole Source Procurement, without soliciting bids or proposals as might otherwise be required, if the General Manager or his designee determines in writing that it is in the best interest of the District to award the Contract because the Goods and/or OCSD-52-6 Services are (1) of a unique nature based on their quality, durability, availability, fitness or qualifications for a particular use; or (2) only available from one source. B. Emergency Procurement. Notwithstanding any other provision of this Ordinance, a Contract for Goods and/or Services may be awarded through Negotiated Procurement, without soliciting bids or proposals as might otherwise be required, if the General Manager or his designee determines in writing that the District urgently needs the Goods and/or Services in order to respond effectively to an emergency. For purposes of this Section 1.07, emergency procurements are those purchases that are required to prevent immediate interruption or cessation of necessary services or to safeguard life, property, or the public health and welfare. In addition, emergency procurements as used in this Section also include critical time sensitive purchases where time is of the essence, and the District does not have sufficient time to solicit bids or proposals. For emergency procurements greater than $100,000, the General Manager shall obtain the concurrence of the Chair of the District's Board of Directors or, if the Chair is unavailable, the Vice Chair, and such action shall be ratified by the Board of Directors at its next regular meeting. Section 1.08. Evaluation Committees Evaluation committees convened in connection with procurements under this Ordinance shall generally be composed of District employees. In exceptional circumstances, however, the General Manager may appoint one or more persons not employed by the District to an evaluation committee if the General Manager determines that (1)evaluating proposals in connection with a particular procurement requires specialized expertise not available among District employees; (2) the procurement will impact another agency, and that agency desires to place a representative on the evaluation committee; or (3) it is otherwise in the District's interest to do so. Section 1.09. Severability If any provision of this Ordinance, or any application thereof to any person or circumstance, is held invalid, such invalidity shall not affect any other provision of this Ordinance or application to any person or circumstance which can be given effect without the invalid provision or application. The provisions of this Ordinance are declared to be severable. OCSD-52-7 ARTICLE 2. Goods and Services Section 2.01. Purpose and Scope A. Purpose. California Government Code Sections 54202 et seq. requires the District to adopt written policies and procedures, including bidding requirements, governing the purchase of Goods and Services. This Article is intended to comply with Section 54202. B. Scope. The provisions of this Article 2 apply to Contracts for the purchase of Goods and Services other than Contracts for Professional Services (governed by Article 3) Professional Design Services (governed by Article 4), and Contracts for Public Works Projects (governed by Article 5). Section 2.02. Selection Process Subject to the exceptions set forth in Section 2.03, the award of Contracts for the purchase of Goods and Services shall be based on the competitive procurement methods set forth below. A. Competitive Sealed Bids For each procurement, the Purchasing Manager shall: (1) Publish a Notice Inviting Bids that contains (a) a description of the Goods and/or Services required, (b) a description of the selection process, (c) bidder's security requirement, if applicable, (d) performance bond requirements, if applicable, and (e) such provisions, renewals, terms, and conditions, consistent with this Ordinance, that the Purchasing Manager determines are necessary, desirable, and/or advantageous to the District; (2) Receive the Competitive Sealed Bids publicly at the time and place designated in the Notice Inviting Bids, and record the amount of each bid; and (3) Determine whether the bids are responsive to the Notice Inviting Bids. (4) Award: After the bids are opened, take one of the following actions: i. Award the Contract to the lowest Responsive and Responsible Bidder, ii. Reject any and all bids presented and/or re-advertise the bid; or iii. Declare that the Goods and/or Services may be acquired at a lower cost by negotiation in the open market and authorize the procurement in that manner. OCSD-52-8 B. Equal Bids If two or more Responsible Bidders submit the same lowest bid, the District may, in its discretion, accept either bid or a lower bid, if any, as may be obtained from one of the bidders through negotiation. C. Multi-Step Sealed Bidding. The Purchasing Manager may determine that a prequalification process is necessary and desirable for a particular procurement. The multi-step sealed bidding process requires the Purchasing Manager to (1) issue a Request for Qualifications requesting the submission of qualifications; and (2) issue a subsequent Notice Inviting Bids for priced offers from those Contractors whose initial submissions were deemed qualified under the criteria set forth in the initial Request for Qualifications. Award under this process shall be based on the lowest Responsive and Responsible Bidder. D. Request for Proposals. If the Purchasing Manager determines in writing that the Competitive Sealed Bids procedure is not practical and/or not advantageous for the District in a particular case, one or more Contracts subject to this Article may be awarded based on Competitive Sealed Proposals. The Request for Proposals process may be used (1) for Goods and/or Services that prove difficult to quantify or describe, where proposers are provided the opportunity to offer different approaches or solutions; and/or (2) for critical, routine or recurring goods or services that require consideration of the broadest possible range of competing services, products and materials available, fitness of purpose, performance reliability, standardization, life cycle costs, delivery timetables, reliable supply, support logistics, diversification of available sources and/or other similarfactors in addition to the price in the award of these contracts. Award under this process shall be based upon criteria that provide the best value for the District, wherein best value is not solely determined by price. Section 2.03. Exceptions A. Small Procurements. (1) Procurements of$10,000 or Less. Contracts subject to this Article 2 with an estimated value of $10,000 or less may be awarded without Competitive Sealed Bids if the Purchasing Manager determines that a Competitive Sealed Bids process would not result in a lower overall cost to the District. (2) Procurements of$50,000 or Less. Contracts subject to this Article 2 with an estimated value of $50,000 or less may be awarded by (a) soliciting at least three bids from identified vendors, and (b) awarding the Contract OCSD-52-9 to the lowest Responsive and Responsible Bidder. If the Purchasing Manager cannot obtain at least three bids, the Contract may be awarded to the lowest Responsive and Responsible Bidder as long as the Purchasing Manager determines that the bid amount is fair and reasonable. (3) Piecemealing Prohibited. Procurements shall not be artificially divided into different individual Contracts so as to keep each Contract amount below one of the monetary thresholds set forth in this Part A. B. Cooperative Purchases. When another public agency or government purchasing cooperative organization has awarded a Contract for Goods and/or Services based on Competitive Sealed Bids or Competitive Sealed Proposals, and the agency or organization followed a process substantially similar to the process described in Section 2.02, the District may acquire Goods and/or Services under that Contract without obtaining Competitive Sealed Bids or Competitive Sealed Proposals. The District may enter into Contracts with other public agencies, government purchasing cooperative organizations within the United States, and/or Contractors for this purpose. C. Critical Time-Sensitive Procurements. The Purchasing Manager may purchase Goods and/or Services through Negotiated Procurement if the Purchasing Manager determines that time is of the essence in the purchase of the Goods and/or Services. For critical time-sensitive procurements valued at more than $100,000, the General Manager shall obtain the concurrence of the Chair of the District's Board of Directors or, if the Chair is unavailable, the Vice Chair. D. Renewals. The Purchasing Manager may exercise any options to renew as may be included in existing Contracts without observing the bidding procedures prescribed in Section 2.02 and Section 2.03 E. Sole Source and Emergency Procurements. A Contract for the purchase of Goods and/or Services may be awarded without soliciting competitive bids if any of the exceptions set forth in Section 1.07 apply. F. Master Contracts: Maintenance and Repair Services Less Than or Equal to 300 000. The Purchasing Manager may purchase maintenance and repair Services estimated to cost less than or equal to $300,000 through the master contract procedures set forth below. OCSD-52-10 (1) Request for Qualifications. If a master contract is let for maintenance and repair Services, then at least once every three (3) years, the Purchasing Manager shall prepare and distribute a Request for Qualifications for the maintenance and repair Services required by the District. Each Request for Qualifications shall describe the selection criteria that will be used to determine whether suppliers or firms are eligible for the prequalified list. The Request for Qualifications shall require the following information, at a minimum, from proposers: (a)The firm's demonstrated competence and specialized expertise necessary to perform the type of Service needed; (b)The experience, training, and skills of the key personnel that will perform and manage the work for the District; (c)The firm's capacity and resources to perform the Services required within the specified period of time. The firm must demonstrate that it will provide a sufficient number of qualified staff, equipment, and facilities as applicable. (2) Evaluation Committee. The Purchasing Manager shall convene an evaluation committee to evaluate the responses to each Request for Qualifications. The Purchasing Manager shall chair the committee, and the Director of the Department requesting the Procurement shall appoint the remaining members. Each evaluation committee shall determine whether each supplier or firm has the demonstrated competence and qualifications to provide the Services necessary for the satisfactory performance of the Services required. (3) Lists. Based on the recommendations of the evaluation committee, with the concurrence of the Department Director, the Purchasing Manager shall establish a list of at least three (3) prequalified Contractors. If the District uses its best efforts to outreach to potential Contractors, and cannot obtain the minimum of three (3) prequalified Contractors, the Purchasing Manager shall document the outreach and responses received. The District may then proceed with award to fewer than three (3) prequalified firms. Each list shall be used for a maximum of three (3) years. No later than three (3) years after establishing a prequalified list, the Purchasing Manager must issue a new Request for Qualifications and establish a new list, if such goods and/or services are required. (4) Master Contract. Master Contracts with firms on the prequalified list shall be awarded by the Board of Directors in the amount not to exceed the program budget approved by the Board of Directors. The original term of such Contracts shall be for one (1)year, with an option to renew each Contract for up to two (2) additional one-year renewal periods. (5) Task Orders. The Department Director shall notify the Purchasing Manager when Services subject to this subsection 2.03(F) are required OCSD-52-11 for a maintenance or repair project. Proposals shall be solicited from all the firms on the prequalified list and one of the firms shall be selected pursuant to the process set forth in Section 2.02. Individual Task Orders in an amount not to exceed $300,000 will be awarded for each project. ARTICLE 3. Professional Services Section 3.01. Purpose and Scope A. Purpose. This Article 3 is intended to ensure that the District retains Professional Services at fair and reasonable prices based on demonstrated competence and the professional qualifications necessary for the satisfactory performance of the services required. B. Scope. The provisions of this Article 3 apply to the award of Contracts for Professional Services and incidental services that members of a Professional Service firm, and those in their employ, may logically perform. The provisions of this Article 3 do not apply to the award of Contracts for Professional Design Services (governed by Article 4). Section 3.02. Selection Process Contracts for Professional Services shall be awarded pursuant to the following procedures: A. Request for Proposals. The Purchasing Manager shall prepare a Request for Proposals in consultation with the Director of the Department requesting the Procurement. The Purchasing Manager, with the concurrence of the Director of the Department requesting the Procurement, may select a limited number of Professional Service firms to receive the Request for Proposals. The Purchasing Manager may issue a Request for Qualifications to prospective Contractors as a means of identifying prospective recipients. The Purchasing Manager may publish notice of the Request for Proposals or Request for Qualifications. B. Evaluation and Ranking of Proposals. All responsive proposals shall be evaluated and ranked, from most qualified to least qualified, based on each firm's demonstrated competence and professional qualifications necessaryforthe satisfactory performance of the services required. OCSD-52-12 The Purchasing Manager may establish a committee to conduct the evaluation. The Purchasing Manager or evaluation committee, if any, may discuss each proposal with its author to seek clarification or otherwise obtain relevant information. C. Negotiation of Contract. The Purchasing Manager shall negotiate a Contract with the firm deemed to be most qualified at a price that the Purchasing Manager, with the concurrence of the Director of the Department requesting the Procurement, deems to be fair and reasonable. If the Purchasing Manager determines that it is in the best interest of the District to enter into Contracts with two or more firms, the Purchasing Manager shall negotiate with the desired number of firms starting with the most qualified. The Purchasing Manager shall proceed down the list from most to least qualified until he or she has concluded negotiations with the desired number of firms at fair and reasonable prices. The District may, in its sole discretion, reject all proposals. Section 3.03. Exceptions A. Sole Source and Emergency Procurements. A Contract for Professional Services may be awarded without soliciting Competitive Sealed Proposals if the Purchasing Manager makes one of the determinations set forth in Section 1.07. B. Contractors Reporting to the Board. The provisions of this Article 3 shall not apply to the retention of Professional Service firms or individuals that are selected by the Board and report directly to the Board. For such Contracts, the Board shall determine the method of selection, consistent with the requirements of applicable law. C. Procurements of$10,000 or less. Contracts subject to this Article 3 with an estimated value of $10,000 or less may be awarded without following the Request for Proposal/Request for Qualifications process if the Purchasing Manager determines that a RFP/RFQ process would not result in a lower overall cost to the District. D. Master Contracts: Professional Services Less Than or Equal to $100,000. The Purchasing Manager may purchase Professional Services estimated to cost less than or equal to $100,000 through the master contract procedures set forth in Section 2.03(F), provided that individual task orders shall not exceed $100,000 for each project. OCSD-52-13 E. Master Contracts: Professional Services Qualified Lists The Purchasing Manager may establish qualified lists of Professional Services through the master contract procedures set forth below. (1) Request for Qualifications. If a master contract is let for Professional Services, the Purchasing Manager shall prepare and distribute a Request for Qualifications for the Professional Services required by the District. Each Request for Qualifications shall describe the selection criteria that will be used to determine whether firms are eligible for the qualified list. The Request for Qualifications shall require the following information, at a minimum, from proposers: (a) The firm's demonstrated competence and specialized expertise necessary to perform the type of Service needed; (b) The experience, training, and skills of the key personnel that will perform and manage the work for the District; (c) The firm's capacity and resources to perform the Services required within the specified period of time. The firm must demonstrate that it will provide a sufficient number of qualified staff, equipment, facilities or other requirements as applicable. (2) Evaluation Committee. The Purchasing Manager shall convene an evaluation committee to evaluate the responses to each Request for Qualifications. The Purchasing Manager shall chair the committee, and the Director of the Department requesting the Procurement shall appoint the remaining members. Each evaluation committee shall determine whether each firm has the demonstrated competence and qualifications to provide the Services necessary for the satisfactory performance of the Services required. (3) Lists. The Purchasing Manager in conjunction with the Department Director shall determine the number of firms needed on the list based on anticipated work. If the District uses its best efforts to outreach to potential Contractors, and cannot obtain the minimum number of firms specified in the RFQ,the Purchasing Manager shall document the outreach efforts and responses to the procurement file. The District may proceed with award to fewer firms. No later than three (3) years after establishing a qualified list, the Purchasing Manager must issue a new Request for Qualifications and establish a new list, if such services are still required. (4) Master Contract. Master Contracts with firms on the qualified list shall be awarded by the Board of Directors in the amount not to exceed the program budget approved by the Board of Directors. The original term of such Contracts shall be for one (1) year, with an option to renew each Contract for up to two (2) additional one-year renewal periods. (5) Task Orders. The Department Director shall notify the Purchasing Manager when Services subject to this subsection 3.03(E). The Purchasing Manager shall follow a competitive selection process or cycle OCSD-52-14 through on a rotation basis to one firm at a time. The Request for Qualifications shall specify any competitive process and/or rotation selection process, including selection of a single fine due to a unique qualification or circumstance, subject to the best interests of the District in any particular case. F. Renewals. The Purchasing Manager may exercise any options to renew as may be included in existing Contracts without initiating the procurement procedures prescribed in Section 3.02 and Section 3.03. ARTICLE 4. Professional Design Services Section 4.01. Purpose and Scope A. Purpose. This Article 4 is intended to ensure that the District retains Professional Design Services at fair and reasonable prices based on demonstrated competence and the professional qualifications necessary for the satisfactory performance of the services required. B. Scope. This Article 4 applies to the selection of Contractors for Professional Design Services. Section 4.02. Selection Process A. Competitive Selection. All Professional Design Services estimated to be greater than $300,000 shall be awarded based on Competitive Sealed Proposals. All Professional Design Services with an estimated value of $300,000 or less shall have a separate selection process based upon a master contract procedure whereby the District shall solicit Competitive Sealed Proposals and award one or more master contracts not to exceed $600,000 per year. B. Professional Design Services Greater Than $300,000. The requirements set forth in this subsection 4.02(B) shall apply to the purchase of Professional Design Services estimated to cost more than $300,000. (1) Annual List. Each Director of a Department that utilizes Professional Design Services shall file annually with the Purchasing Manager a list of specific disciplines for which Professional Design Services may be required. The Purchasing Manager may from time to time prepare and distribute a Request OCSD-52-15 for Qualifications for the professional disciplines or project design services required by the District subject to this Part B. For each Request for Qualifications issued, the Purchasing Manager shall evaluate the responses, identify qualified firms, and maintain the responses of the qualified firms on file to be used in the Request for Proposals process described below. (2) Reguest for Proposals. The Purchasing Manager, in consultation with the Director of Engineering, shall issue a Request for Proposals for the Professional Design Services requested. Multiple projects may be bundled into one Request for Proposals such that multiple Contract awards may result from one Request for Proposals and selection may be based upon specialized services. (3) Content of Request for Proposals. Each Request for Proposals shall describe the Professional Design Services required and the selection process. Each Request for Proposals shall also set forth such provisions, terms, and conditions, consistent with this Ordinance, that the Purchasing Manager, in consultation with the Director of Engineering, determines are necessary, desirable, and/or advantageous to the District. Each Request for Proposals shall require that proposals contain, at a minimum, the following information: (a)The firm's qualifications for performing the proposed work. (b)The firm's relevant experience and performance on similar projects. (c) The firm's ability to complete the work within the time allotted. (d)The personnel that will be assigned to the project. (a)The estimated number of hours that each member of the team will spend on the project. (f) A statement that the firm's engagement for the project would not create a conflict of interest. (g)Any other information required to properly evaluate the firm's qualifications and experience with similar projects. (h) Proposals for construction management services shall demonstrate that the designated personnel have expertise and experience in construction project design review and evaluation, construction mobilization and supervision, bid evaluation, project scheduling, cost- benefit analysis, claims review and negotiation, and general management and administration of construction project. (i) A fee proposal, based on the method of compensation specified in the Request for Proposal, and an estimate of total fees, enclosed in a separately sealed envelope. Commonly used methods of OCSD-52-16 compensation for Professional Design Service Contracts include (i) cost plus fixed fee with a maximum amount; (ii) per diem rate(s) with a maximum amount; (iii) a lump sum (fixed)fee; and (iv) cost of time and materials. (4) Publication of Request for Proposals. The District shall publicize each Request for Proposals by two or more of the following methods: (a) Advertising in print or electronic media; and/or (b) Mailing the Request for Proposals to each Contractor who has submitted a Statement of Qualifications; and/or (c) Mailing the Request for Proposals to each vendor registered in the applicable category, based on the services identified in the Request for Proposals, inthe District's on-line vendordatabase. (5) Staff Evaluation Committee. The Purchasing Manager shall convene an evaluation committee to evaluate the proposals. (a) Management and Composition. The Purchasing Manager shall serve as chair of the evaluation committee. The Director of Engineering shall appoint the other members of the committee. (b) Ranking of Firms. All proposals shall be evaluated and ranked, from most qualified to least qualified, based on each firm's demonstrated competence and professional qualifications necessary for the satisfactory performance of the services required. (c) Interviews. At its discretion, the evaluation committee may interview one or more ofthe firms that have submitted proposals. (d) Report. The evaluation committee shall prepare a written report for the Purchasing Manager and the Director of Engineering setting forth, at a minimum, the ranking of firms from most qualified to leastqualified. (6) Negotiations. The Purchasing Manager and the Director of Engineering shall negotiate a Contract with the firm that the evaluation committee deems to be most qualified. Fee proposals shall not be opened until the highest ranked proposer is identified. Only the highest ranked proposer's fee proposal will be opened. If those negotiations fail, the Purchasing Manager shall negotiate with the second most qualified firm, and so on, until an agreement is reached. The Purchasing Manager shall proceed down the list from most to least qualified until he or she has concluded negotiations with the desired number of firms at fair and reasonable prices. The Director of Engineering shall make a written determination that the negotiated fee is fair and reasonable. All unopened price proposals will be returned to the firm that submitted it. The District may, in its sole discretion, reject all proposals. OCSD-52-17 C. Master Contracts: Professional Design Services Less Than or Equal to $300,000. The requirements set forth in this subsection 4.02(C) shall apply to the purchase of Professional Design Services estimated to cost less than or equal to $300,000 for each individual project. (1) Reguest for Qualifications. At least once every three (3) years, the Purchasing Manager shall prepare and distribute a Request for Qualifications for each professional discipline or project design service required by the District subject to this subsection. Each Request for Qualifications shall describe the selection criteria that will be used to determine whether firms are eligible for the prequalified list. The Request for Qualifications shall require the following information, at a minimum, from proposers: (a) The firm's demonstrated competence and specialized expertise necessary to perform the type of services needed; (b) The education, experience, training, and skills of the key personnel that will perform and manage the work forthe District; (c) The firm's capacity and resources to deliver the services required within the specified period of time, including but not limited to a sufficient number of qualified staff, computer hardware, computer software, special equipment and facilities as applicable, and (d) The proximity of the firm's office(s)to the District, the specific location of key personnel, and the firm's experience and familiarity with the operation of local government. (2) Evaluation Committee. The Purchasing Manager shall convene an evaluation committee to evaluate the responses to each Request for Qualifications. The Purchasing Manager shall chair the committee, and the Director of Engineering shall appoint the remaining members. Each evaluation committee shall determine whether each firm has the demonstrated competence and professional qualifications necessary for the satisfactory performance of the services required. (3) Lists. Based on the recommendations of the evaluation committee, with the concurrence of the Director of Engineering, the Purchasing Manager shall establish a list of prequalified Contractors within each discipline/category. The RFQ will identify the number of anticipated firms on the prequalified list. The Purchasing Manager in conjunction with the Director of Engineering shall determine the number of firms needed on the list based on anticipated work. If the District cannot obtain the minimum number of firms specified in the RFQ, the Purchasing Manager shall record the outreach efforts and responses to the procurement file. The District may proceed with award to fewer firms. Each list shall be used for a maximum of 3 years. No later than 3 years after establishing a prequalified list for each service, the Purchasing Manager shall OCSD-52-18 issue a new Request for Qualifications and establish a new list if such services are still required. (4) Master Contract. Master Contracts with firms on the prequalified list shall be awarded by the Board of Directors in an amount not to exceed $600,000 per year. The original term of such Contracts shall be for one year, with an option to extend each Contract for up to two (2)additional one-year renewal periods. (5) Task Orders. The Director of Engineering shall notify the Purchasing Manager when Professional Design Services subject to this subsection are required for a project. Proposals shall be solicited, with price proposals submitted in a separate sealed envelope, from at least two firms on the prequalified list and one of the firms shall be selected pursuant to the process set forth in subsection 4.02(B)(6). In determining which firms will be invited to submit proposals, the Purchasing Manager shall follow the selection or rotation process, if any, set forth in the Request for Qualifications, subject to the best interests of the District in any particular case. For Task Orders estimated to cost $25,000 or less, the Director of Engineering, with concurrence of the Purchasing Manager, may solicit a proposal from 1 (one) firm on the prequalified list. The price proposal shall be submitted in a separate sealed envelope. The Director of Engineering shall issue a written determination that (1) identifies the basis for selection, including but not limited to the specialized qualifications of the 1 (one)firm, and (ii) states that the negotiated price is fair and reasonable. Individual Task Orders in an amount not to exceed $300,000 will be awarded for each project. The Director of Engineering shall make a written determination that the negotiated fee isfair and reasonable for the task. Section 4.03. Exceptions A. Sole Source and Emergency Procurements. Contracts for Professional Design Services may be awarded without soliciting Competitive Sealed Proposals if the Purchasing Manager makes one of the determinations setforth in Section 1.07. B. Continuation of Services. A new contract for additional services related to work already performed under an existing Contract for Professional Design Services may be awarded without observing the bidding procedures prescribed in subsection 4.02(B)or subsection 4.02(C), as applicable. In connection with any such new contract, the Director of Engineering shall determine in writing that (1)it is in the Districfs best interests to have the original firm perform additional, related services, and (2) the negotiated price isfairand reasonable. OCSD-52-19 C. Procurements of$10,OOOorless. Contracts subject to this Article 4 with an estimated value of $10,000 or less may be awarded without following the Request for Proposal/Request for Qualifications process if the Purchasing Manager determines that a RFP/RFQ process would not result in a lower overall cost to the District. Article 5. Public Works Projects Section 5.01. Purpose and Scope A. Purpose. This Article 5 is intended to implement state statutes that govern the District's award of construction Contracts for Public Works Projects. B. Scope. This Article 5 applies to the District's award of Contracts for the construction of Public Works Projects exceeding $35,000 other than sewerage maintenance or repair projects pursuant to Public Contract Code section 20783 (Projects estimated at $35,000 or less, and sewerage maintenance or repair projects, may be processed pursuant to Article 2). Section 5.02. Selection Process A. Design-Bid-Build. (1) Competitive Sealed Bids. For projects subject to Public Contracts Code section 20783, the District shall select firms for Public Works Projects pursuant to the process described in this subsection 5.02(A). (a) Notice Inviting Bids. For each prospective Contract, the Purchasing Manager shall publish a Notice Inviting Bids as required by Public Contract Code Section 20783. (i) Manner of Publication. Each Notice Inviting Bids shall be published in a newspaper of general circulation, on industry bulletin boards, and/or on the District's website at least 10 days before the date for the opening of bids consistent with the requirements set forth in Public Contracts Code section 20783, as may be amended or superseded from time to time. (ii) Contents. Each Notice Inviting Bids shall: 1. Establish a deadline for the receipt of bids that is at least 10 calendar days after the first publication of the Notice Inviting Bids. OCSD-52-20 2. Provide that the District, in its sole discretion, may reject any and all bids; 3. Set forth a procedure that shall be followed in the event of a tie between the lowest Responsive and Responsible bidders; 4. Require bidderstoposta bidder's security; 5. State that if a Contract is awarded to the bidder, a payment bond is required pursuantto Civil Code section 9550; 6. Contain detailed plans and specifications for the project. Subject to the exceptions set forth in subsection 5.03(B), the specifications shall not call for a designated material, product, thing, or service by specific brand or trade name unless the District complies with the requirements under California Public Contract Code section 3400 etseq.; and 7. Contain whatever provisions, consistent with this Ordinance, the Purchasing Manager determines are necessary, desirable, and/or advantageous to the District. (b) Bid Opening. The Purchasing Manager shall open the bids publicly in the presence of one or more witnesses at the time and place designated in the Notice Inviting Bids. The Purchasing Manager shall record the amount of each bid together with the name of each bidder. This record, and each bid, shall be considered public records and shall be available to the public at the point in time specified in the Notice Inviting Bids and consistentwith the Public Records Act. (c) Refection of Bids. The District may reject all bids received for a particular project and: (i) Re-advertise for bids;or (ii) Authorize construction of the project through a Negotiated Procurement of day labor and/or materials or supplies, if the Board adopts a resolution by a four-fifths vote declaring that (i) the work can be performed more economically by day labor, and/or (ii) the materials or supplies can be obtained at a lower price in the open market. (d) No Bids. If the District does not receive any bids for a particular project, the District's Board of Directors may authorize the Purchasing Manager to conduct a Negotiated Procurement, and present his or her recommendation to the Board for approval. (e)Award to Lowest Responsive and Responsible Bidder. Unless the OCSD-52-21 District rejects all bids, the Contract shall be awarded to the lowest Responsive and Responsible Bidder. If two or more Responsible Bidders submit the same lowest bid, the District may, in its discretion, accept either bid or a lower bid, if any, as may be obtained from one of the lowest bidders through negotiation. If the lowest Responsive and Responsible Bidder refuses to enter into a Contract, then the lowest Responsive and Responsible Bidder shall forfeit its bidder's security, and the Contract shall be awarded to the next lowest Responsive and Responsible Bidder. B. Design-Build. As may be authorized by the Public Contract Code or other statute, the District may utilize a design-build selection process for the award of Public Works Contracts. C. Prequalification. The Purchasing Manager may limit the field of prospective bidders for Public Works Contracts by prequalifying Contractors pursuant to California Public Contract Code Section 20101 and the requirements of this subsection 5.02(C). Prequalification shall only be required when the Purchasing Manager or the Director of Engineering determines that prequalification is necessary or desirable. The Purchasing Manager may (i) prequalify a list of Contractors for the right to bid on any specific Public Works Project, and/or (ii) prequalify lists of Contractors for the right to bid on unspecified projects of a certain type or size pursuant to Public Contracts Code section 20101(c). If the Purchasing Manager elects to prequalify lists of Contractors for the right to bid on unspecified projects of a certain type or size, he or she shall conduct a prequalification process quarterly, and all qualifications shall be valid for one year. For each prequalified list of either type, the Purchasing Manager shall evaluate and prequalify Contractors pursuant to the following procedures: (1) Questionnaires and Rating Criteria. The Purchasing Manager shall develop a questionnaire and rating criteria for each prequalification. All criteria shall be relevant and objective. The Purchasing Manager may rely on the Department of Industrial Relations model guidelines, questionnaires, and forms, and/or establish additional or modified criteria. (2) Statements of Qualifications. The Purchasing Manager shall solicit Statements of Qualifications from prospective bidders. (3) Evaluation Committee. The Purchasing Manager shall convene an evaluation committee to evaluate each Statement of Qualifications. The Purchasing Manager shall chair the committee, and the Director of Engineering shall appoint the remaining committee members. The evaluation committee shall review each Statement of Qualifications, rate the Contractors according to their qualifications and objective criteria, and determine which Contractors are qualified and which Contractors OCSD-52-22 are not qualified. (4) Notice of Determination. When the evaluation committee completes its review, the Purchasing Manager shall send each Contractor written notice of the committee's determinations regarding that Contractor. If the evaluation committee determines that a Contractor is not qualified, the written notice shall also set forth the basis for that determination and any relevant supporting evidence that the evaluation committee considered. (5)Appeal Process. (a) Notice of Appeal. Any Contractor may appeal to the General Manager any determination of the evaluation committee, including any rating assigned to the Contractor and any decision to disqualify the Contractor, by filing a written notice of appeal within seven (7) working days after the Purchasing Manager mails the notice described in subsection 5.02(C)(4). (b) Hearing. Within five (5) working days of the receipt of an appeal, the General Manager, or a designee of the General Manager who has not been involved in the evaluation of qualifications of Contractors for the project, shall conduct a hearing on the appeal. During the hearing, the affected Contractor or subcontractor shall have the opportunity to rebut any evidence used as a basis for disqualification and to present evidence to the General Manager or the General Manager's designee as to why the prospective bidder should be found qualified. (c) Decision. Within five (5) working days of the conclusion of the hearing, the General Manager or the General Manager's designee shall issue a written decision on the appeal. The decision of the General Manager or the General Manager's designee shall be final. Section 5.03. Exceptions A. Emergencies and Calamities. (1) The provisions of this subsection 5.03(A) apply in the event of an emergency or calamity involving a sudden, unexpected occurrence that poses a clear and imminent danger requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services. In the event of such an emergency or calamity, the District may, through Negotiated Procurement, award Contracts to repair or replace facilities, take any directly related and immediate action required by the emergency or calamity, and procure the necessary equipment, services, and supplies for those purposes. OCSD-52-23 (2) The General Manager may take the actions described in subdivision (1) above, with the concurrence of the Chair of the Board of Directors and/or the Vice Chair, without obtaining prior approval of the District's Board of Directors. In taking any such action, the General Manager shall follow the procedures set forth in Public Contracts Code Section 22050. (3) In the alternative, the District's Board of Directors may, by resolution adopted by a four-fifths vote, take the actions described in subdivision above. In taking any such action, the District shall follow the procedures set forth in Public Contracts Code 22050. B. Specification of Brand or Trade Name. Notwithstanding subsection 5.02(A)(1)(a)(ii)(6), the specifications for a Public Works Contract may call for a designated material, product, thing, or service by specific brand or trade name without inserting the words "or equal" if the District complies with the requirements of the California Public Contract Code section 3400 at seq. The General Manager is authorized to make the findings required under California Public Contract Code section 3400 at seq. The Notice Inviting Bids or Request for Proposals shall state that a particular material, product, thing, or service is necessary or desirable for any of the following purposes: (1)In order that a field test or experiment may be made to determine the product's suitability for future use; (2)In order to match other products in use on a particular public improvement either completed or in the course of completion; (3)In order to obtain a necessary item that is only available from one source; (4)In order to respond to an emergency declared by the District, but only if the declaration is approved by a four-fifths vote of the District's Board of Directors; or (5)In order to respond to an emergency declared by the state, a state agency, or political subdivision of the state, but only if the facts setting forth the reasons for the finding of the emergency are contained in the public records of the District. ARTICLE 6. Protests The District shall afford Interested Parties an opportunity to protest the solicitation of bids and proposals and the award of contracts as set forth in this Article 6. The General Manager shall adopt detailed protest procedures consistent with this Article 6. The protest procedures governing any particular procurement shall be set forth in the Notice Inviting Bids or the Request for Proposals, as applicable. OCSD-52-24 Section 6.01. Solicitation Protests A. Interested Parties may file a Solicitation Protest Statement with the Purchasing Manager on the grounds that a free and open competition has not taken place, or cannot take place, and/or that a particular specification or requirement is impractical, unduly restrictive, or ambiguous. Each Notice Inviting Bids and Request for Proposals shall identify the date and time that the Solicitation Protest Statement is due, the information required to be included in the Solicitation Protest Statement, the evaluation process, and the types of remedies available. B. The Purchasing Manager shall evaluate each Solicitation Protest Statement and determine what actions, if any, will be taken to remedy any deficiency. The decision of the Purchasing Manager shall be final. Section 6.02. Award Protests A. In connection with any competitive selection process, any Interested Party may file an Award Protest Statement with the Purchasing Manager on the ground that a free and open competition has nottaken place in connection with the award recommendation. The Purchasing Manager shall not, however, consider any protest based on a finding that a bid or proposal is not responsive. B. Each Notice Inviting Bids and Request for Proposals shall identify the deadline for Award Protest Statements and describe the information required to be included in any Award Protest Statement, the evaluation process,the appeal process, and the types of remedies available. C. The Purchasing Manager shall evaluate each Award Protest Statement and determine what actions, if any,will be taken to remedy any deficiency. D. If the Protestor wishes to appeal, the Purchasing Manager's decision on an Award Protest Statement, the appeal shall be submitted to the Director of Finance and Administrative Services and the Director of the Department requesting the Procurement. The Director of Finance and Administrative Services and the Directorof the Department requesting the Procurement shall evaluate each Award Protest Statement and determine whether to uphold or reject the Purchasing Manager's determination. For Contracts to be awarded by District staff, the decision of the Director of Finance and the Director of the Department requesting the Procurement shall be final. For Contracts to be awarded by the Board of Directors, the Board may consider any Award Protest Statements in connection with its consideration of the Contract. OCSD-52-25 Section 6.03. Delay in Award A. Execution of any proposed contract shall be delayed pending resolution of any protests unless one or more of the following conditions is present: (1)The items orservices being procured are urgently required; (2) Delivery or performance will be unduly delayed by failure to make an award promptly; or (3) Failure to make prompt award will otherwise cause undue harm to the District. Section 6.04. Remedies A. If the final decision maker determines that the award or proposed award was not made in accordance with applicable statutes, regulations, policies and/or procedure, the District, in its sole discretion, may grant any of the following remedies orany other remedy itdeems appropriate: (1) Prior to award, the District may issue a new solicitation, make a new selection/award recommendation, or award a contract consistent with applicable statutes, regulations,policiesand procedures; (2)Take nofurther action;or (3)Take any other action that is permitted by law to promote compliance with applicable statutes, regulations, policies and/or procedure. B. In determining the appropriate remedy, if any, the District shall consider all the circumstances surrounding the Notice Inviting Bids or Requests for Proposal and/or award, including, but not limited to: (1) The seriousness of any deficiency found to exist in the contracting process; (2) The effect of the action on the competitive process; (3)Any urgency surroundingthe contract requirement;and (4) The effect that implementing the remedy will have on the District. C. Nothing contained herein shall be construed to act as a limitation on the District's choice of remedies or confer any right upon any Interested Party oraffected party to a remedy. Section 6.05. Public Documents Solicitation Protest Statements and Award Protest Statements are public documents. The District will notify the affected parties when a protest has been submitted, and will provide copies of the Protest Statements to the affected parties uponwritten request. OCSD-52-26 ARTICLE 7. Delegation of Authority to Award Contracts This Article 7 applies to all Contracts for Goods, Services, and Public Works Projects entered into bythe District. Section 7.01. Award Authorization A. Delegation by General Manager. The General Manager shall establish written procedures governing the delegation of authority to the Purchasing Manager to award and execute Contracts, Amendments, Change Orders, Renewals, Time Extensions and Assignments consistent with this Ordinance. Upon delegation of authority by the General Manager each Department Director may further delegate authority to initiate a written Requisition consistentwith the General Managers written procedures. B. Original Contracts.Contingencies and Renewals The Board of Directors hereby delegates the authority to award Contracts within specified limitsasfollows: Delegated Authorized Action Authority General Manager/ (1) Authorization to approve and execute Contracts and Assistant General Manager applicable Renewals for budgeted procurements less than or equal to $100,000. (2) All new procurements between $50,000 and $100,000 are to be reported to the Board of Directors on a quarterlybasis. Standing Committees (1)Authorization to approve and execute Contracts and applicable Renewals for budgeted procurements greater than$100,000 and up to or equal to$200,000. (2)Authorization to approve Contingency up to 50%, for a total spending authority of up to $300,000 for each Contract. Board of Directors Authorization to approve and execute Contracts and applicable Renewals for budgeted procurements up to or greater than $200,000, including Contingency. C. Amendments,Change Orders, Renewals, Time Extensions and Assignments The Board of Directors hereby delegates the authority to approve Amendments, Change Orders, Renewals, Time Extensions and Assignments in any amount as follows: OCSD-52-27 Delegated Authorized Action Authority General Manager/ (1)Authorization to approve and execute Amendments and Assistant General Change Orders as long as the Amendment o r Change Manager Order is recommended by the applicable Department Director, and (a) the Amendment or Change Order does not change the contract price or the new contract price is within the delegated authority, or (b) the Amendment or Change Order is within the approved contingency. l (2) Authorization to approve and execute any Renewals that were originally approved by the General Manager, Standing Committee and/or Board of Directors. (3) Authorization to approve and execute Amendments and Change Orders for Contract Time Extensions (a) without any increase in Contract price; or (b) with an increase in Contract price within the approved Contingency originally approved by the General Manager, Standing Committee and/or Board of Directors. (4) Authorization to approve and execute all Assignments unless determined by the General Manager that the assignment contains material changes and requires approval of the awarding authority. (5) Authorization to approve and execute Amendments to chemical Contracts unless the Contract unit price has increased beyond the unit price contingency approved by the District's Standing Committee and/or Board of Directors. (6) Authorization to approve and execute chemical contract Renewals including changes to the unit price, increases or decreases to the estimated annual / or specified term amount. Increases that cause the contract amount to exceed the General Managers delegated authority shall be approved by the Standing Committee and/or Board of Directors. Section 7.02. Contingency Release The General Manager/Assistant General Manager shall manage the release of all contingency funds for use in all amendments and change orders within the approved contingency amounts. OCSD-52-28 Section 7.03. Task Orders The Board of Directors hereby delegates the authority to award Task Orders within specified limits as follows: Delegated Authorized Action Authority General Manager/ (1) For Task Orders covered under Article 2. Goods and Assistant General Services, authorization to approve and execute Task Manager Orders and/or Amendments to the Task Orders provided the cumulative total of the Task Order and Amendments thereto does not exceed $300,000, upon the recommendation of the Department Director (2) For Task Orders covered under Article 2. Goods and Services, all new Task Order procurements between $50,000 and $300,000 are to be reported to the Board of Directors on a quarterly basis, in arrears. (3) For Task Orders covered under Article 3. Professional Services of this Ordinance, authorization to approve and execute Task Orders and/or Amendments to the Task Orders provided the cumulative total of the Task Order and Amendments thereto does not exceed $100,000, upon the recommendation of the Department Director. (4) For Task Orders covered under Article 4. Professional Design Services, authorization to approve and execute Task Orders and/or Amendments to the Task Orders provided the cumulative total of the Task Order and Amendments thereto does not exceed $300,000, upon the recommendation of the Department Director. (5) For Task Orders covered solely under Article 4, Professional Design Services of this Ordinance, the General Manager may delegate authorization to approve and execute Professional Design Service Master Contract Task Orders up to or equal to $100,000, which is inclusive of amendments to Task Orders, to the Director of Engineering. This authorization may not be sub delegated further. This authorization does not apply to Master Contracts covered underArticle 2 or Article 3 of this Ordinance. OCSD-52-29 Standing Committees (1) For Task Orders covered under Article 3. Professional Services of this Ordinance, authorization to approve Amendments to the Task Orders where the cumulative value exceeds $100,000 provided the cumulative total of the Task Order and Amendments does not exceed $200,000, upon the recommendation of the General Manager/Assistant General Manager. Board of Directors (1) For Task Orders covered under Article 2. Goods and Services, all Task Orders and/or amendments where the cumulative value exceeds $300,000 shall be approved by the Board of Directors. (2) For Task Orders covered under Article 3. Professional Services, all Task Orders and/or amendments that exceed $200,000 shall be approved by the Board of Directors. (3) For Task Orders covered under Article 4. Professional Design Services, all Task Orders and/or Amendments that exceed $300,000 shall be approved by the Board of Directors. ARTICLE 8. Ethics Section 8.01. Unlawful Consideration Prohibited District Officials shall neither solicit nor receive bribes, rebates, kickbacks, and/or any other unlawful consideration from any contracting party, or any party seeking a Contract with the District, in exchange for favorable treatment or any other action. Section 8.02. Conflicts of Interest A. Compliance with the Political Reform Act. District Officials shall not make any Contracts, participate in the making of any Contracts, or in any way attempt to use their official positions to influence any decision on any Contracts, in violation of Government Code Sections 87100 et seq. B. Compliance with Government Code&1090. Without limiting the requirements of PartA above, no District Official shall make any Contract, participate in the making of any Contract, or in any way attempt to use his or her official position to influence any decision on a Contract, in violation of California Government Code Section 1090. OCSD-52-30 C. Requirements Applicable to Consultants. Consultants designated by the District's Conflict of Interest Code shall comply in all respects with Government Code Section 87100 et seq., and it's implementing regulations. Article 9. Definitions Amendment means a properly executed written agreement entered into and between the District and the Contractor, or issued by the District, covering modifications to the original Contract and which may result in adjustments to provisions of the Contract, including, but not limited to, terms, scope of work, compensation,and/or period of performance. Assianment means to revise Contracts and related records to reflect changes such as the sale, transfer, or reorganization of a Contractor's business, or a change in the Contractor's name for doing business, as long as all other terms and conditions of the original Contract remain the same. Award Protest Statement shall mean a written objection to the award recommendation prior to final action to award the contract, which shall be submitted after receipt of sealed bids/proposals, but before award of a contract, as specified herein. Best value means the overall combination of quality, price, and other elements of a proposal/bid (or combination of several proposals/bids) that, when considered together, provide the greatest overall benefit in response to the requirements described in the solicitation documents. Chanae Order means a properly executed written agreement entered into and between the District and the Contractor, or unilaterally issued by the District, covering modifications to the original Contract, and which may result in adjustments to the provisions of the Contract, including, but not limited to, terms, scope of work, cost and/or period of performance. Competitive Sealed Bids means a selection process whereby prospective Contractors submit sealed bids and the Contract is awarded to the lowest Responsive and Responsible Bidder. Competitive Sealed Proposals means a selection process whereby prospective Contractors submit sealed proposals and the Contract is awarded to the proposal that best meets the criteria specified in the Request for Proposals. Continaencv means an amount above the original Contract price, as awarded by the delegated authority, established at the time of Contract award, as may be amended thereafter, to be used for Contract changes. OCSD-52-31 Contract means any type of agreement for the purchase of Goods, Services, and/or Public Works Projects. Contracts may be labeled in various different ways, including, but not limited to, "contract," "agreement," "purchase order," and"task order." Contractor means any person or entity that has a Contract with the District. Department means one of the District's designated departments. Design-Bid-Build means a selection process for the award of Public Works Contracts involving three basic steps: (1) the District hires a design professional to prepare detailed plans and specifications or the District prepares detailed plans and specifications; (2) the District solicits bids from construction firms based on the detailed plans and specifications; and (3)the District awards the Contracttothe lowest Responsive and Responsible Bidder. Design-Build means a selection process for the award of Public Works Contracts involving two basic steps: (1) the agency solicits proposals from pre-qualified firms to design and construct a project; and (2) depending on the award criteria set forth in the Requestfor Proposals,the agency awards the Contract to either(a) the lowest Responsive and Responsible Bidder, or (b) the proposal that presents the"best value." Designee means a person selected or authorized to temporarily manage the duty or role of another employee._ Director means a director of one of the District's designated departments, or his or herdesignee(s). Director of Engineering means the District's Director of Engineering or his or her designee(s). District means the Orange County Sanitation District. District Board or Board means the Board of Directors of the Orange County Sanitation District. District Official means any member of the District's Board of Directors, any District employee, and any District consultant that is designated under the District's Conflictof Interest Code. General Manager means the General Manager of the District, or his or her designee(s). Goods means fixed, movable, disposable, and/or reusable products, commodities, equipment, materials, supplies or items used by the District, and excludes land or any interest in real property. 1288720.1 OCSD-52-32 Interested Party shall mean: (1) on solicitation, all bidders or proposers, and prospective bidders or proposers; (2) on award, the unsuccessful bidder or proposer with a direct economic interest in the outcome of their protest. Mailing means transmission by United States Postal Service, electronic mail, or facsimile. Negotiated Procurement means a selection process whereby the Purchasing Manager identifies one or more prospective Contractors of his or her choice, negotiates with one or more of them, and awards the Contract to one of them based on the best interest of the District. Notice Invitina Bids/Invitation for Bids means all documents, whether attached or incorporated by reference, utilized for soliciting bids. Procurement means buying, purchasing, renting, leasing, or otherwise acquiring any goods, services, construction, construction services, or professional services, including professional design services. It also includes all functions that pertain to the obtaining of any goods, services, or construction, including description of requirements, election and solicitation of sources, preparation and award of contract, and all phases of contract administration. Professional Services means (i) services provided by professionals that involve specialized judgment, skill, and expertise, and (ii) incidental services that professionals, and those in their employ, may logically or justifiably perform. Professional Services include, but are not limited to, services provided by accounting, financial, information technology, human resources consultation and advocacy,legislative advocacy,and scientific research/consulting firms. Professional Design Services means architectural, landscape architectural, engineering, environmental, land surveying, construction project management, planning and other miscellaneous engineering related services retained by the District in connection with, but not limited to, construction, alteration, and/or repair projects. Public Works/Public Works Project means a project involving the construction, erection, or alteration of any type of structure, building, or improvement otherthan sewerage maintenance or repair projects. Purchasina Manager means the District's Contracts, Purchasing and Materials Management Manager, or his or her designee(s). Purchasing Manager designee means an employee residing under Contracts, Purchasing and Materials Management Division whose job duties include contracting and procurement execution and administration. Renewal means a mechanism within an approved contract to provide the same goods/services for an additional period of time, at the specified price under the same 1288720.1 OCSD-52-33 terms and conditions. The number of renewals, the price, and any contingencies are approved at the time of award. Renewals may or may not increase the contract price. The contract price per term does not accumulate for purposes of approval thresholds. A Renewal may be exercised fewer times or for a shorter duration than the approved number or term, but any remaining time cannot be transferred to an additional renewal. Renewals cannot be added nor entered into for longer than the approved number or term at the time of award. Reauest for Proposals means all documents, whether attached or incorporated by reference, utilized forsoliciting proposals. Reauest for Qualifications means a request for detailed information concerning the qualifications of prospective Contractors. Requisition means an approved written document making a request for Goods and Services in advance of initiating a procurement process as well as a later request to amend, change, renew, cancel or extend time to a non-public works contract. Responsible Bidder means a bidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity, and a xperience to satisfactorily perform the requested services or project. Responsive Bidder/Proposer means a bidder/proposer who has submitted a bid/proposal which conforms in all material respects to the Notice Inviting Bids/Invitation for Bids/Request for Proposals. Services means the furnishing of materials, labor, time, or effort by a Contractor. Services include both general services janitorial, landscape, repair, maintenance, etc.) professional services, and professional design services, unless otherwise specified. Sealed (Bids or Proposals) means the submittal of bids or proposals, either in paper or electronic format, whereby the bid or proposal documents are opened at specific time and not before. Sole Source Procurement means the acquisition of Goods and/or Services from a single source. Solicitation Protest Statement shall mean a written objection during the solicitation phase of the procurement, which shall be submitted prior to the bid/proposal due date as specified herein. Standing Committee means one of the permanent committees designated by the Board of Directors as"Standing Committees." Task Order means a written document pursuant to a Contract issued by the Purchasing Manager which provides for the issuance of orders, containing a 1288720.1 OCSD-52-34 defined budget, scope of services, and schedule, and authorizes a Contractor to incur a specified amount for the performance of tasks. Time Extension means an increase to the period of performance specified by the original contract only, as may be amended. Article 10. Miscellaneous Section 10.01. Noncompliance Any Contract entered into which fails in any respect to comply with the provisions of this Ordinance may be voided by the Board of Directors in its sole and absolute discretion. Any employee who willfully and knowingly violates any provision of this Ordinance may be subject to disciplinary action. Section 10.02. Effective Date This Ordinance No. OCSD-52 shall take effect June 23, 2018, upon adoption by the Board of Directors. Section 10.03. Repeal of Ordinance No. OCSD-47 Ordinance No. OCSD47, entitled "An Ordinance of the Board of Directors of Orange County Sanitation District Establishing Requirements and Procedures for the Purchase of Goods, Services, and Public Works Projects" is hereby repealed in its entirety. Section 10.04. Certification and Publication. The Clerk of the Board shall certify to the adoption of this Ordinance, and shall cause a summary to be published in a newspaper of general circulation within 15 days as required by law. 1288720.1 OCSD-52-35 PASSED AND ADOPTED by a majority of the Board of Directors of the Orange County Sanitation District at a Regular Meeting held on May 23, 2018. Gregory C. Sebourn, PLS Chairman of the Board of Directors ATTEST: Kelly A. Lore, MMC Clerk of the Board APPROVED AS TO FORM: Bradley R. Hogin General Counsel 1288720.1 OCSD-52-36 STATE OF CALIFORNIA ) )SS COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of Orange County Sanitation District, do hereby certify that the above and foregoing Ordinance No. OCSD-52 was introduced for first reading at a regular meeting of said Board on the 25th day of April, 2018, and passed and adopted at a regular meeting of said Board on the 23rd day of May, 2018, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day of May 2018. Kelly A. Lore, MMC Clerk of the Board Orange County Sanitatoin District 1288720J PURCHASING ORDINANCE -CHANGE MATRIX SECTION REASON FOR CHANGE RECOMMENDED LANGUAGE CURRENT LANGUAGE VER 2.0 VER 1.0 Threshold Changes 2.03 A—Small Increased bidding threshold Procurements of $10,000 or Less. Contracts subject to this Article 2 with an Procurements of$5,000 or Less. Contracts subject to this Article 2 with an Procurements from$5,000 to$10,000. estimated value of$10,000 or less may be awarded without Competitive Sealed estimated value of $5,000 or less may be awarded without Competitive Bids if the Purchasing Manager determines that a Competitive Sealed Bids Sealed Bids if the Purchasing Manager determines that a Competitive process would not result in a lower overall cost to the District. Sealed Bids process would not result in a lower overall cost to the District. 2.03 F—Master Increased Task Order limit The Purchasing Manager may purchase maintenance and repair Services The Purchasing Manager may purchase maintenance and repair Services Contractors for from$100,000 to$300,000 estimated to cost less than or equal to$300,000 through the master contract estimated to cost less than or equal to $100,000 through the master Maintenance& Approved by GM&Board procedures set forth below. contract procedures set forth below. Repair Services(Intro Chair. paragraph& subsection 5—Task Orders). 4.02 A—Master Proposing increase to Master All Professional Design Services estimated to be greater than$300,000 shall be All Professional Design Services estimated to be greater than $200,000 Contracts Contract Total Amount to awarded based on Competitive Sealed Proposals. All Professional Design shall be awarded based on Competitive Sealed Proposals.All Professional Professional Design allow Engineering to process Services with an estimated value of $300,000 or less shall have a separate Design Services with an estimated value of$200,000 or less shall have a Competitive Selection engineering services on selection process based upon a master contract procedure whereby the District separate selection process based upon a master contract procedure behalf of O&M for repairs. shall solicit Competitive Sealed Proposals and award one or more master whereby the District shall solicit Competitive Sealed Proposals and award The increase will ensure contracts not to exceed$600,000 per year. one or more master contracts not to exceed$400,000 per year. Engineering does not *Approved by GM experience a reduction of contract availability. 11 Pa ge 2/21/1a PURCHASING ORDINANCE —CHANGE MATRIX SECTION REASON FOR CHANGE RECOMMENDED LANGUAGE CURRENT LANGUAGE VER 2.0 VER 1.0 Informational Changes 2.03 F(3)—Lists Current Ordinance specifies Based on the recommendations of the evaluation committee,with the Based on the recommendations of the evaluation committee, with the that the Master Contract concurrence of the Department Director,the Purchasing Manager shall concurrence of the Department Director, the Purchasing Manager shall must be awarded to a establish a list of at least 3 prequalified Contractors. If the District uses its best establish a list of at least 3 prequalified Contractors. Each list shall be used minimum of three firms. efforts to outreach to potential Contractors,and cannot obtain the minimum Proposed language offers the of 3 prequalified Contractors,the Purchasing Manager shall document the for a maximum of 3 years. No later than 3 years after establishing a District the ability to award outreach and responses received. The District may then proceed with award prequalified list, the Purchasing Manager may issue a new Request for less than three since a to fewer than 3 prequalified firms. Each list shall be used for a maximum of 3 Qualifications and establish a new list. minimum of 3 may not be years. No later than 3 years after establishing a prequalified list,the Purchasing obtainable. Manager must issue a new Request for Qualifications and establish a new list if such goods and/or services are required. 3.03 E—Exceptions— Allowed for establishment of (4) Master Contract. Master Contracts with firms on the qualified list shall 3.03 D- Master Contracts, Professional Services Less Than or Equal to Master Contracts: lists of qualified contractors be awarded by the Board of Directors in the amount not to exceed the program Professional Services for staff to choose either on a budget approved by the Board of Directors.The original term of such Contracts $300.000—The Purchasing Manager may purchase Professional Services Qualified Lists rotational basis or selection, shall be for 1 year,with an option to renew each Contract for up to 2 additional estimated to cost less than or equal to $100,000 through the master a Contractor to perform the 1-year renewal periods. contract procedures set forth in Section 2.03(H), provided that individual service needed for the task. task orders shall not exceed $100,000 for each project. Ex: Investigative Services or (5) Task Orders.The Department Director shall notify the Purchasing Temporary Employment Manager when Services subject to this subsection 3.03(E).The Purchasing Agency Services Manager shall follow a competitive selection process or cycle through on a rotation basis to one firm at a time.The Request for Qualifications shall specify any competitive process and/or rotation selection process, including selection of a single firm due to a unique qualification or circumstance,subject to the best interests of the District in any particular case. See Ordinance Final Draft for complete section. 21 Page 2/21/1a PURCHASING ORDINANCE-CHANGE MATRIX SECTION REASON FOR CHANGE RECOMMENDED LANGUAGE CURRENT LANGUAGE VER 2.0 VER 1.0 4.02 C(3)—Lists— Identified a mechanism to Based on the recommendations of the evaluation committee,with the Based on the recommendations of the evaluation committee,with the Master Contracts establish maximum number concurrence of the Director of Engineering,the Purchasing Manager shall concurrence of the Director of Engineering,the Purchasing Manager shall Professional Design of firms and Current establish a list of prequalified Contractors within each discipline/category.The establish a list of at least 5 prequalified Contractors within each discipline. Services Less than or Ordinance specifies that the RFQ will identify the number of anticipated firms on the prequalified list. The Each list shall be used for a maximum of 3 years. No later than 3 years Equal to$300,000— Master Contract must be Purchasing Manager in conjunction with the Director of Engineering shall after establishing a prequalified list for each discipline,the Purchasing Lists awarded to a minimum of determine the number of firms needed on the list based on anticipated work. Manager shall issue a new Request for Qualifications and establish a new five firms.The change allows If the District cannot obtain the minimum number of firms specified in the list. for the minimum number of RFQ,the Purchasing Manager shall record the outreach efforts and responses awardees to be determined to the procurement file. The District may proceed with award to fewer firms. based on the District's Each list shall be used for a maximum of 3 years. No later than 3 years after forecast business needs at establishing a prequalified list for each service,the Purchasing Manager shall the time of solicitation. issue a new Request for Qualifications and establish a new list If such services are still required. 31 Pa ge 2/21/1a PURCHASING ORDINANCE—CHANGE MATRIX SECTION REASON FOR CHANGE RECOMMENDED LANGUAGE CURRENT LANGUAGE VER 2.0 VER 1.0 4.02 C(5)—Task Added in language that The Director of Engineering shall notify the Purchasing Manager when The Director of Engineering shall notify the Purchasing Manager when Orders—Master allows Engineering to issue a Professional Design Services subject to this subsection are required for a Professional Design Services subject to this subsection are required for Contracts Task Order to one firm if less project. Proposals shall be solicited, with price proposals submitted in a a project. Proposals shall be solicited,with price proposals submitted in Professional Design than$25,000 for specialized separate sealed envelope, from at least 2 firms on the prequalified list and a separate sealed envelope,from at least 2 firms on the prequalified list Services Less than or qualifications which one of the firms shall be selected pursuant to the process set forth in and one of the firms shall be selected pursuant to the process set forth Equal to$300,000 streamlines the procurement subsection 4.02(B)(6). In determining which firms will be invited to submit in subsection 4.02(B)(6). In determining which firms will be invited to process and creates a more proposals, the Purchasing Manager shall follow the selection or rotation submit proposals,the Purchasing Manager shall follow the selection or cost-effective and efficient process,if any,set forth in the Request for Qualifications,subject to the best rotation process, if any,set forth in the Request for Qualifications, way of doing business for interests of the District in any particular case. For Task Orders estimated to subject to the best interests of the District in any particular case. both parties. cost $25,000 or less, the Director of Engineering,with concurrence of the Individual Task Orders in an amount not to exceed $300,000 will be Purchasing Manager, may solicit a proposal from 1 (one) firm on the awarded for each project.The Director of Engineering shall make a prequalified list. The price proposal shall be submitted in a separate written determination sealed envelope. The Director of Engineering shall issue a written determination that (i) identifies the basis for selection, including but not limited to the specialized qualifications of the 1 (one)firm, and (ii) states that the negotiated price is fair and reasonable. Individual Task Orders in an amount not to exceed $300,000 will be awarded for each project. The Director of Engineering shall make a written determination that the negotiated fee is fair and reasonable for the task. 7.01 A—Delegation Added in specific language A. Delegation by General Manager. A. Delegation by General Manager. by General Manager that states the GM written procedures would delegate The General Manager shall establish written procedures governing the The General Manager shall establish written procedures governing authority to the Purchasing delegation of authority to the Purchasing Manager to award and execute the delegation of authority to award and execute Contracts Manager for award and Contracts,Amendments,Change Orders, Renewals,Time Extensions and consistent with this Ordinance. Upon delegation of authority by the execution of various types of Assignments consistent with this Ordinance. Upon delegation of authority General Manager each Department Director may further delegate procurements.Current by the General Manager each Department Director may further delegate authority to initiate a written Requisition consistentwith the General language is vague on award authority to initiate a written Requisition consistent with the General Manager's written procedures. and execution of Manager's written procedures. procurements. 41 Pa ge 2/21/18 PURCHASING ORDINANCE-CHANGE MATRIX SECTION REASON FOR CHANGE RECOMMENDED LANGUAGE CURRENT LANGUAGE VIER 2.0 VER 1.0 7.01 C—Amendments Changed title and content to General Manager-(1) Authorization to approve and execute Amendments General Manager—(1) Authorization to approve and execute and Change Orders include Renewals,Time and Change Orders as long as the Amendment or Amendments and Change Orders as long as(1) Extensions and Assignments. Change Order is recommended by the applicable the Amendment or Change Order is The Ordinance was silent on Department Director,and (a)the Amendment or recommended by the applicable Department all renewals, all assignments Change Order does not change the contract price or the Director,and (2)the Amendment or Change and time extensions outside new contract price is within the delegated authority,or Order does not change the contract price or the of Public Works. (b)the amendment or change order is within the new contract price is within the approved approved contingency. contingency. (2) Authorization to approve and execute any Renewals (2) Authorization to approve and execute that were originally approved by the General Manager, Amendments to chemical Contracts, unless the Standing Committee and/or Board of Directors. Contract unit price has increased from the unit priced approved by the District's Board of (3) Authorization to approve and execute Amendments Directors. Unit price increases in chemical and Change Orders for Contract Time Extensions(a) Contracts required Board of Directors approval. without any increase in Contract price; (b)with an increase in Contract price within the approved Contingency originally approved by the General Manager,Standing Committee and/or Board of Directors. (4) Authorization to approve and execute all Assignments unless determined by the General Manager that the assignment contains material changes and requires approval of the awarding authority. (5) Authorization to approve and execute Amendments to chemical Contracts unless the Contract unit price has increased beyond the unit price contingency approved by the District's Standing Committee and/or Board of Directors. (6) Authorization to approve and execute chemical contract Renewals including changes to the unit price, increases or decreases to the estimated annual/or 5 Pa ge 2/21/19 PURCHASING ORDINANCE-CHANGE MATRIX SECTION REASON FOR CHANGE RECOMMENDED LANGUAGE CURRENT LANGUAGE VER 2.0 VIER 1.0 specified term amount. Increases that cause the contract amount to exceed the General Manager's delegated authority shall be approved by the Standing Committee and/or Board of Directors. 7.03—Task Orders Clarified award delegation of General Manager- General Manager- Authorization to approve,upon the recommendation authority for all types of Task (1) For Task Orders covered under Article 2. Goods and Services, of the Department Director, and execute Task Orders and/or Amendments Orders mentioned in authorization to approve and execute Task Orders and/or to the Task Orders provided the cumulative total of the Task Order and Ordinance. Amendments to the Task Orders provided the cumulative total Amendment thereto do not exceed$100,000. of the Task Order and Amendments thereto does not exceed $300,000, upon the recommendation of the Department Standing Committees- Authorization to approve, upon the Director recommendation of the General Manager/Assistant General Manager, Task Orders and/or Amendments to the Task Orders and/or Amendment (2) For Task Orders covered under Article 2. Goods and Services,all to the Task Orders over$100,000 provided the cumulative total of the new Task Order procurements between$50,000 and$300,000 Task Order and Amendments do not exceed$200,000. are to be reported to the Board of Directors on a quarterly basis, in arrears. Board of Directors—AIL Task Orders and/or amendments that exceed $200,000 shall be approved by the Board of Directors. (3) For Task Orders covered under Article 3. Professional Services of this Ordinance, authorization to approve and execute Task Orders and/or Amendments to the Task Orders provided the cumulative total of the Task Order and Amendments thereto does not exceed$100,000,upon the recommendation of the Department Director. (4) For Task Orders covered under Article 4. Professional Design Services, authorization to approve and execute Task Orders and/or Amendments to the Task Orders provided the cumulative total of the Task Order and Amendments thereto does not exceed$300,000,upon the recommendation of the Department Director. (5) For Task Orders covered solely under Article 4, Professional Design Services of this Ordinance,the General Manager may delegate authorization to approve and execute Professional Design Service 6 Pa ge 2/21/19 PURCHASING ORDINANCE-CHANGE MATRIX SECTION REASON FOR CHANGE RECOMMENDED LANGUAGE CURRENT LANGUAGE VER 2.0 VER 1.0 Master Contract Task Orders up to or equal to$100,000,which is inclusive of amendments to Task Orders,to the Director of Engineering. This authorization may not be sub delegated further. This authorization does not apply to Master Contracts covered under Article 2 or Article 3 of this Ordinance. Standing Committee— (1) For Task Orders covered under Article 3. Professional Services of this Ordinance, authorization to approve Amendments to the Task Orders where the cumulative value exceeds$100,000 provided the cumulative total of the Task Order and Amendments does not exceed $200,000, upon the recommendation of the General Manager/Assistant General Manager. Board of Directors- (1) For Task Orders covered under Article 2. Goods and Services,all Task Orders and/or amendments where the cumulative value exceeds $300,000 shall be approved by the Board of Directors. (2) For Task Orders covered under Article 3. Professional Services,all Task Orders and/or amendments that exceed$200,000 shall be approved by the Board of Directors. (3) For Task Orders covered under Article 4. Professional Design Services, all Task Orders and/or Amendments that exceed $300,000 shall be approved by the Board of Directors. 7.02—Contingency Adding specific section to The General Manager shall manage the release of all contingency funds for Did not exist in Ordinance.Taken in its entirety from GM P&Ps. Release Ordinance clarifying the GM's use in all amendments and change orders within the approved contingency contingency release amounts. authority. 7 Pa ge 2/21/1a F PURCHASING ORDINANCE UPDATES HIGHLIGHTS OF THE NEW ORDINANCE • Raises thresholds on master contracts to address the high volume and projected increases in repair and engineering projects • Further defines the roles and responsibilities for procurement processes and contract administration • Allows for smart contracting by extending the life of capital assets through smaller, faster repair projects instead of large capital projects BID/AWARD THRESHOLD CHANGE - GOODS AND SERVICES CURRENT • Less than $5,000 — one quote required • Greater than $5,000 — 3 quotes required PROPOSED • Less than $ 10,000 — one quote required • Greater than $ 10,000 — 3 quotes required BENEFITS TO BID/AWARD THRESHOLD CHANGE • Accelerates the procurement process for all departments. • Supports OCSD's planned maintenance environment by accelerating procurements for preventive and corrective maintenance work. • Aligns OCSD with other notable agencies. MASTER CONTRACTS AND TASK ORDERS • Request For Proposal ( RFP) competitive process is conducted for Master Contracts • Board of Directors approves the Master Contracts • Task Orders originating from the Master Contracts are competitively bid or proposed per policy • The General Manager approves the award of the Task Orders up to the amount authorized in the Purchasing Ordinance BID/AWARD THRESHOLD CHANGE - MAINTENANCE & REPAIR TASK ORDERS CURRENT • Task Order award maximum : $100,000 • Includes base award + any change orders PROPOSED • Task Order award maximum : $300,000 • Includes base award + any change orders • Requesting General Manager authority to approve and award task orders, including change orders up to $300,000 • All new Task Order procurements between $50,000 and $300,000 will be reported to the Board of Directors on a quarterly basis 0) -- BENEFITS TO BID/AWARD THRESHOLD CHANGE • Assists OCSD's operating departments by accelerating the completion of planned and future projects, while maintaining competition . • Increases the amount of projects that can be completed using these Task Orders by over 40%. • Allows for bundling of small projects to reduce '. project costs and maximize staff resources. BID/AWARD THRESHOLD CHANGE - PROFESSIONAL DESIGN SERVICES CURRENT • Master Contract(s) maximum = $400,000 per year • Work < $200,000 = Accelerated Task Order Proposal Process • Work > $200,000 = Extensive Proposal Process PROPOSED • Master Contract(s) maximum = $600,000 per year • Work < $300,000 = Accelerated Task Order Proposal Process • Work > $300,000 = Extensive Proposal Process • General Manager authority to approve and award task orders up to $300,000 • Ability to select 1 firm for work < $25,000 BENEFITS TO BID/AWARD THRESHOLD CHANGE • Assists OCSD's Engineering department by accelerating the completion of current, planned, and future projects, while maintaining competition . • Will attract additional needed Engineering consultants. • Master Contract threshold increase ensures availability of qualified firms for the streamlined task order award process versus the extensive formal process. QUESTIONS CLOSED SESSION 1 LVAN WOODRUFF,SPRADUN a SMART 555 ANTON BOULEVARD, SUTTE 1200 COSTA MESA, CA 92626-7670 (714)558-7000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: April 17, 2018 RE: Closed Session Items The Board of Directors will hold a closed session on April 25, 2018 for the purpose of conferring with its negotiators regarding the purchase of real property. The negotiating parties and properties are as follows: Valley Business Park,APN Nos. 156-165-05, 156-165-06, 156-163- 07; DK-USA LLC, APN No.156-165-04; Fountain Valley Industrial Parcel 13, APN No.156-165- 08; Sukut Real Properties LLC, APN Nos. 156-163-09, 156-163-10, 156-163-11; The Ins Trust Shabtai,Nevon,APN No. 156-163-16; The Ins Trust,APN No. 156-154-07; Fountain Valley Star LLC, APN No. 156-154-06; TN Sheet Metal Inc., APN No. 156-163-12; 18401 Bandilier LLC, APN No. 156-163-13; Phone Lilly Lin-Lin TR, APN No. 156-154-05; JDK Partners, APN No. 156-163-14; Chandler Real Properties, APN No. 156-163-15; Ellis Avenue LLC, APN No. 156- 154-04; and SFII Fountain Valley LLC, APN No. 156-151-03. The District's negotiators are Jim Herberg,Bob Ghirelli, Lorenzo Tyner,Rob Thompson, Kathy Millea and Jeff Mohr, Tom Grant, Kevin Turner and John Gallivan, Cushman and Wakefield. Said closed session will be held pursuant to authority of California Government Code Section 54956.8. Respectfully submitted, By 4J Bradley R. Hogin, ejeneral Counsel 1308909.1 kT WOODRUFF,SPRADLINeSMART CLOSED SESSION 2 555 AmTON Bo ULEVARD, 50ITE 1200 COSTA MESA, CA 92626-7670 (714)558-7000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: April 17, 2018 RE: Closed Session Items The Board of Directors desires to hold a closed session on April 25,2018 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a party. The title of the case is Melissa Forman-Woodbridge v. Orange County Sanitation District. Orange County Superior Court Case No. 30-2017-00934699. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully submitted, By Bradlq R. Hogin, eneral Counsel 1308912.1 ,T WOODRUFF,SPRADUN a SMART 555 AmTON Bo ULEVARD, SUITE 1200 COSTA MESA, CA 92626-7670 (714)558-7000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: April 17, 2018 RE: Closed Session Items The Board of Directors desires to hold a closed session on April 25,2018 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a party. The case is Melissa Forman-Woodbridge's Workers Compensation Appeals Board,Case No. ADJ9906373. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully submitted, By Bradley P. Hogin, G neral Counsel 1308918.1 ,T WOODRUFF,SPRADLIN a SMART CLOSED SESSION 3 555 AmTON Bo ULEVARD, SUITE 1200 COSTA MESA, CA 92626-7670 (714)558-9000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: April 18, 2018 RE: Closed Session Items The Board of Directors desires to hold a closed session on April 25, 2018 for the purpose of conferring with its legal counsel regarding anticipated litigation. Existing facts and circumstances reflect a significant exposure to litigation against the District. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(2). The facts and circumstances are as follows: The District received a claim from an employee Carlos Quiroz. Respec 1 submitted, By: Bradley 1 . Hogin, G neral Counsel 1297912.1 ORANGE COUNTY SANITATION DISTRICT COMMON ACRONYMS Association of California Local Agency Formation Santa Ana River Flood ACWA Water Agencies LAFCO Commission SARFPA Protection Agency APWA American Public Works LOS Level Of Service SARI Santa Ana River Association Interceptor AQMD Air Quality Management MGD Million Gallons Per Day SARWQCB Santa Ana Regional Water District Quality Control Board ASCE American Society of Civil MOU Memorandum of SAWPA Santa Ana Watershed Engineers Understanding Project Authority BOD Biochemical Oxygen Demand NACWA National Association of Clean SCADA Supervisory Control And Water Agencies Data Acquisition California Air Resources Non-Governmental Southern California CARB Board NGOs Organizations SCAP Alliance of Publicly Owned Treatment Works CASA California Association of NPDES National Pollutant Discharge SCAQMD South Coast Air Quality Sanitation Agencies Elimination System Management District CCTV Closed Circuit Television NWRI National Water Research SOCWA South Orange County Institute Wastewater Authority CEQA California Environmental O&M Operations&Maintenance SRF Clean Water State Quality Act Revolving Fund Capital Improvement Orange County Council of Sewer System CIP Program OCCOG Governments SSMP Management Plan CRWQCB California Regional Water OCHCA Orange County Health Care SSO Sanitary Sewer Overflow Quality Control Board Agency CWA Clean Water Act OCSD Orange County Sanitation SWRCB State Water Resources District Control Board CWEA California Water Environment OCWD Orange County Water District TDS Total Dissolved Solids Association EIR Environmental Impact Report OOBS Ocean Oulfall Booster Station TMDL Total Maximum Daily Load EMT Executive Management Team OSHA Occupational Safety and TSS Total Suspended Solids Health Administration US Environmental Protection Professional Waste Discharge EPA Agency PCSA Consultant/Construction WDR Requirements Services Agreement FOG Fats,Oils,and Grease PDSA Professional Design Services WEF Water Environment Agreement Federation gpd gallons per day POTW Publicly Owned Treatment WERF Water Environment& Works Reuse Foundation Groundwater Replenishment Water Infrastructure GWRS System PPm parts per million WIFIA Finance and Innovation Act Professional Services Water Infrastructure ICS Incident Command System PSA Agreement WIIN Improvements for the Nation Act IERP Integrated Emergency RFP Request For Proposal WRDA Water Resources Response Plan Development Act JPA Joint Powers Authority RWQCB Regional Water Quality Control Board ORANGE COUNTY SANITATION DISTRICT GLOSSARY OF TERMS ACTIVATED SLUDGE PROCESS—A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen and consume dissolved nutrients in the wastewater. BENTHOS —The community of organisms, such as sea stars, worms, and shrimp, which live on, in, or near the seabed, also known as the benthic zone. BIOCHEMICAL OXYGEN DEMAND (BOD)—The amount of oxygen used when organic matter undergoes decomposition by microorganisms.Testing for BOD is done to assess the amount of organic matter in water. BIOGAS—A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used as a fuel. 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 farmland 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 (Dfr)—The dilution at which the majority of people detect the odor becomes the D/T for that air sample. GREENHOUSE GASES (GHG)— 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 stil . GROUNDWATER REPLENISHMENT SYSTEM(GWRS)—Ajoint 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 per day of drinking quality water to replenish the local groundwater supply. LEVEL OF SERVICE(LOS)—Goals to support environmental and public expectations for performance. N-NITROSODIMETHYLAMINE (NDMA) — A N-nitrosamine 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 and Water Environment Federation, with advisory support from the US Environmental Protection Agency. NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation 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)—A municipal wastewater treatment plant. SANTA ANA RIVER INTERCEPTOR(SARI) LINE—A regional brine line designed to convey 30 million gallons per day 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 runoff. 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.The Orange County Sanitation District's service area is in the Santa Ana River Watershed.