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11-16-2016 Board Meeting Agenda Packet
Orange County Sanitation District Wednesday, November 16, 2016 Regular Meeting of the 6:00 P.M. BOARD OF DIRECTORS Board Room 10844 Ellis Avenue Fountain Valley, CA 92708 ` 8 (714) 593-7433 AGENDA CALL TO ORDER INVOCATION AND PLEDGE OF ALLEGIANCE (Joy Neugebauer, Midway City Sanitary District) ROLL CALL AND 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 Chairman and are requested to limit comments to three minutes. SPECIAL PRESENTATIONS: • Safety Poster Contest Winners • Employee Commendation • Employee Service Awards • Board Member Appreciation REPORTS: The Board Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Directors. These reports are for information only and require no action by the Directors. CONSENT CALENDAR: 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1.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 Board of Directors Meeting held on October 26, 2016. 11/16/2016 OCSD Board of Directors Agenda Page 1 of 11 2. RESOLUTION NO. OCSD 16-24 COMMENDING BOARD CHAIRMAN JOHN NIELSEN (Bob Ghirelli) RECOMMENDATION: Adopt Resolution No. OCSD 16-24, entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District commending John Nielsen for his outstanding contributions and dedication to public service as Chairman of the Orange County Sanitation District Board of Directors." 3. PROPOSED BOARD OF DIRECTORS & COMMITTEE MEETING DATES FOR CALENDAR YEAR 2017 (Clerk of the Board) RECOMMENDATION: Approve the calendar of meeting dates for the 2017 calendar year for meetings of the Board of Directors and the following Committees: Administration, Legislative and Public Affairs, Operations, and Steering. 4. COOPERATIVE PROCUREMENT WITH DOWNTOWN FORD SALES (Ed Torres) RECOMMENDATION: Ratify and approve a purchase order agreement using the State of California's cooperative Contract Number 1-14-23-20A with Downtown Ford Sales for the purchase of six (6) budget approved vehicles for a total cost of $187,444.62 in accordance with Ordinance No. OCSD47, Section 2.03(B) Cooperative Purchases. 5. COOPERATIVE PROCUREMENT WITH XYLEM DEWATERING SOLUTIONS INC. dba GODWIN PUMPS OF AMERICA, INC. (Ed Torres) RECOMMENDATION: Ratify and approve a purchase order agreement using the U.S. General Services Administration's (GSA) Schedule 84 Contract Number GS-07F-9491G with Xylem Dewatering Solutions, Inc. dba Godwin Pumps of America, Inc. for the purchase of three (3) budget approved diesel pumps for a total cost of $362,849.40 plus sales tax in accordance with Ordinance No. OCSD-47, Section 2.03(B) Cooperative Purchases. 6. CONTRACT SECURITY SERVICES (Celia Chandler) RECOMMENDATION: Approve an increase of $139,347 to Purchase Order 105775 OA, a bridge purchase contract issued to Securitas Security Services, U.S.A., for a total amount not to exceed $300,070, with no additional increase to the annual budget. 11/16/2016 OCSD Board of Directors Agenda Page 2 of 11 7. REQUEST FOR FUNDING — WASTEWATER FLOW & LOADING STUDY (Lorenzo Tyner) RECOMMENDATION: Approve the Orange County Sanitation District's participation in the California Association of Sanitation Agencies (CASA) wastewater Flow and loading study and the Participating Agency Contribution Pledge of$82,500. SPECIAL PRESENTATION: . Presentation to Board Chairman John Nielsen RECEIVE AND FILE: These items require no action;and without objection, will be so ordered by the Board Chair. 8. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF OCTOBER 2016 (Lorenzo Tyner) RECOMMENDATION: Receive and file the report of the Investment Transactions for the month of October 2016. 9. COMMITTEE MINUTES (Clerk of the Board) RECOMMENDATION: Receive and file the approved minutes of the following standing committees: A. Operations Committee meeting of October 5, 2016 B. Legislative and Public Affairs Committee meeting of October 10, 2016 C. Administration Committee meeting of October 12, 2016 D. Steering Committee meeting of October 26, 2016 OPERATIONS COMMITTEE: 10. DOIG DRIVE PROPERTY LEASE EXTENSION (Lorenzo Tyner) RECOMMENDATION: Approve the Second Amendment to the Doig Property Lease, to enter into an eight (8) month lease extension of the Orange County Sanitation District's real property at 7311 Doig Drive, Garden Grove, in a form approved by General Counsel. 11/16/2016 OCSD Board of Directors Agenda Page 3 of 11 11. OCEAN OUTFALL SYSTEM REHABILITATION, PROJECT NO. J-117 (Rob Thompson) RECOMMENDATION: A. Approve a budget increase of $28,517,000 for Ocean Outfall System Rehabilitation, Project No. J-117,for a total budget amount of$91,000,000; and B. Approve a contingency increase of $2,372,305 (35%) to the Professional Design Services Agreement with Brown and Caldwell for Ocean Outfall System Rehabilitation, Project No. J-117, for a total contingency of $3,050,106 (45%). ADMINISTRATION COMMITTEE: 12. GENERAL MANAGER APPROVED PURCHASES (Lorenzo Tyner) RECOMMENDATION: Receive and file District purchases made under the General Manager's authority for the period of July 1, 2016— September 30, 2016. 13. IBM MAXIMO EMERGENCY AND LEVEL 3 SUPPORT (Lorenzo Tyner) RECOMMENDATION: A. Authorize a sole source purchase order agreement with Total Resource Management (TRM) for Maximo Emergency and Level 3 Support for one year commencing January 1, 2017 through December 31, 2017 for a total amount not to exceed $160,000. B. Authorize an option for three annual renewals at $160,000 per year for a total amount of$480,000. 14. CONSOLIDATED FINANCIAL REPORT FOR FIRST QUARTER ENDED SEPTEMBER 30, 2016 (Lorenzo Tyner) RECOMMENDATION: Receive and file Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2016. 15. ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FOR THE YEAR END JUNE 30, 2016 (Lorenzo Tyner) RECOMMENDATION: Receive and file the Orange County Sanitation District's Comprehensive Annual Financial Report for the year ended June 30, 2016, 11/16/2016 OCSD Board of Directors Agenda Page 4 of 11 prepared by staff and audited by Macias Gini & O'Connell LLP (MGO), Certified Public Accountants, along with the following reports prepared by MGO: A. Report to the Board of Directors; and B. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets. STEERING COMMITTEE: 16. SALARY RANGE ADJUSTMENTS FOR NON-EXEMPT CONFIDENTIAL EMPLOYEES (Jim Herberg) RECOMMENDATION: Adopt Resolution No. OCSD 16-25, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Approving Salary and Benefit Adjustments for Unrepresented Non-Exempt Confidential Employees for Fiscal Years 201612017, 2017/2018 & 2018/2019." 17. SALARY RANGE ADJUSTMENTS FOR EXEMPT LEVEL CONFIDENTIAL EMPLOYEES (Jim Herberg) RECOMMENDATION: Adopt Resolution No. OCSD 16-26, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Approving Salary and Benefit Adjustments for Unrepresented Exempt Confidential Employees for Fiscal Years 2016/2017, 2017/2018 & 2018/2019." 18. EXECUTIVE MANAGEMENT TEAM COMPENSATION AND BENEFITS AND MANAGER GROUP COMPENSATION (Jim Herberg) RECOMMENDATION: A. Adopt Resolution No. OCSD 16-27 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving changes to the salary schedule, salary increases, performance-based increases, and the distribution of any remaining funds based on changes to scope, duties or responsibilities for At-Will Executive Management Team employees for Fiscal Years 2016-2017, 2017-2018, and 2018-2019," authorizing the General Manager to implement a salary structure adjustment for Fiscal Year 2016 to bring Executive Management Team salary ranges in alignment with the market, 2.5% salary increases and range adjustments in Fiscal Years 2017 and 2018, and increases to benefits. B. Adopt Resolution No. OCSD 16-28 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving changes to the salary schedule, salary increases, performance-based increases, and the distribution of any remaining funds based on changes to scope, duties or responsibilities for unrepresented management employees for Fiscal Years 11/16/2016 OCSD Board of Directors Agenda Page 5 of 11 2016-2017, 2017-2018, 2018-2019," authorizing the General Manager to implement a salary structure adjustment for Fiscal Year 2016 to bring the Manager Group salary ranges in alignment with the market, 2.5% salary increases and range adjustments in Fiscal Years 2017 and 2018, and minor increases to benefits. 19. GENERAL MANAGER COMPENSATION AND BENEFITS (Celia Chandler) RECOMMENDATION: Adopt Resolution No. OCSD 16-29 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving salary increase, salary range adjustment, and changes to the benefits for the General Manager for Fiscal Years 2016 to 2017 and 2017 to 2018," authorizing the Board Chair to implement a base building salary increase of 8% and a salary range adjustment commencing in the first pay period of July 2016 for fiscal year 2016 to 2017 and a base building salary increase of 8% and a salary range adjustment in the first pay period of July 2017 for fiscal year 2017 to 2018 for a total salary cost of $39,429 and an added benefits cost of $24,000 for both fiscal years. Compensation and benefits costs including impact to existing benefits of an amount not to exceed $76,448. NON-CONSENT CALENDAR: 20. DISTRIBUTION OF CLOSED SESSION MATERIALS (Jim Herberg) Review and consider the Orange County Sanitation District's policy regarding the distribution of documents presented in closed session. 21. WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2017A (Lorenzo Tyner) RECOMMENDATION: Authorize the General Manager to issue new fixed rate Certificates of Participation (COP), to be referred to as Wastewater Refunding Revenue Obligations, Series 2017A, in an amount sufficient to refund up to $91,620,000 of COP Series 2007A. 22 TRUCK LOADING BAY ODOR CONTROL AT PLANT NO. 2, CONTRACT NO. 132-92A (Rob Thompson) RECOMMENDATION: A. Receive and file bid tabulation and recommendation; B. Award a Construction Contract to Kiewit Infrastructure West Co. for Truck Loading Bay Odor Control at Plant No. 2, Contract No. P2-92A, for a total amount not to exceed $3,304,000; and 11116/2016 OCSD Board of Directors Agenda Page 6 of 11 C. Approve a contingency of$330,400 (10%). 23. OCSD/OCWD JOINT AGREEMENT FOR GWRS FINAL EXPANSION (Rob Thompson) RECOMMENDATION: A. Adopt Resolution No. OCSD 16-30 entitled: "A Resolution of the Orange County Board of Directors adopting findings with respect to the California Environmental Quality Act in consideration of the Groundwater Replenishment System Final Program EIR/EIS (FEIR) as augmented by Addendum No. 6 to the FEIR and related actions'; B. Adopt Resolution No. OCSD 16-31 entitled: "A Resolution of the Orange County Board of Directors adopting findings with respect to the California Environmental Quality Act in consideration of the Orange County Water District Water Projection Enhancement Project Initial Study/Mitigated Negative Declaration and related actions'; and C. Approve the Second Amended Joint Exercise of Powers Agreement for the Development, Operation, and Maintenance of the Groundwater Replenishment System and Green Acres Project. 24. PROPERTY ACQUISITION FOR 18475 PACIFIC AND 18484 BANDILIER CIRCLE, FOUNTAIN VALLEY, CA (Rob Thompson) RECOMMENDATION: Approve of the following actions relating to the transaction of purchase of certain real property interests at 18475 Pacific Street and 18484 Bandilier Circle from Bender Properties and authorize the General Manager and General Counsel to: A. Approve the Preliminary Title Report and the exceptions set forth therein, as provided in the Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (Purchase Agreement); and B. Execute the following: 1. Title Approval Letter; 2. Preliminary Change of Ownership Report; 3. Deeds and other evidences of title to the parcel of property that are the subject of the Purchase Agreement; 4. Acceptance of the Grant Deed to certain real property from Bender Properties; 5. Approved Estimated Closing Statement; 11/16/2016 OCSD Board of Directors Agenda Page 7 of 11 6. Seller's Mandatory Disclosure Statement acknowledging receipt of this document; 7. Property Information Sheet acknowledging receipt of this document; 8. Natural Hazard Disclosure Report acknowledging receipt of this document; and 9. Any and all other instruments related to the transaction. 25. BIOSOLIDS HAULING AND COMPOSTING SERVICE CONTRACTS — RECOMMENDATION TO AWARD CONTRACTS TO NURSERY PRODUCTS, LLC. AND LIBERTY COMPOSTING, INC. (Bob Ghirelli) RECOMMENDATION: A. Receive and file Bid Tabulation and Recommendation; B. Receive and file Solicitation Phase Protest from Synagro West, LLC. dated August 26, 2016 for Specification No. S-2016-789BD NIB (Step 2 of 2); C. Receive and file Orange County Sanitation District's determination letter dated September 1, 2016; D. Receive and file Orange County Sanitation District's Notice of Intent to Award dated September 14, 2016; E. Receive and file Award Protest Statement from Synagro West, LLC. dated September 20, 2016; F. Receive and file response letter from Nursery Products, LLC. to Award Protest Statement dated September 27, 2016; G. Receive and file Orange County Sanitation District's determination letter dated October 13, 2016; H. Receive and file Appeal of Award Protest Determination from Synagro West, LLC. dated October 20, 2016; I. Receive and file Orange County Sanitation District's Appeal Decision dated November 2, 2016; J. Deny Appeal of Award Protest filed by Synagro West, LLC; K. Award a service contract for an estimated annual amount not to exceed $3,828,400 per year to Nursery Products, LLC. as the Primary Contractor to haul and compost a non-guarantee minimum of 150 wet tons per day (WTPD) of biosolids from Orange County Sanitation District's (OCSD) Reclamation Plant No. 1 and/or Treatment Plant No. 2 for a period of one (1), five-year term, with five (5), one-year optional renewals, for a unit price of $51.00 per wet ton of biosolids coupled with a monthly fuel surcharge 11/16/2016 OCSD Boats of Directors Agenda Page 8 of 11 cost and an annual Consumer Price Index (CPI) adjustment. Should hauling to alternative sites be necessary, unit prices are listed in the bid price form provided in Attachment; L. Award a service contract for an estimated annual amount not to exceed $1,716,261 per year to Liberty Composting Inc. as the Secondary Contractor to haul and compost a non-guarantee minimum of 75 WTPD of biosolids from OCSD's Reclamation Plant No. 1 and/or Treatment Plant No. 2 for a period of one (1), five-year term with five (5), one-year optional renewals, for a unit price of $57.92 per wet ton of biosolids coupled with a monthly fuel surcharge cost and an annual Consumer Price Index (CPI) adjustment. Should hauling to alternative sites be necessary, unit prices are listed in the bid price form provided in Attachment; and M. Approve an aggregate annual unit price contingency of 5% for each contract. INFORMATION ITEMS: None. AB 1234 REPORTS: 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,orpersonnel 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 Cit. 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; 11/16/2016 OCSD Board of Directors Agenda Page 9 of 11 18370 Pacific St. Fountain Valley, CA -APN No.156-165-08; 18429 Pacific St. Fountain Valley, CA -APN No.156-163-09; 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; 18350 Mt. Langley St. Fountain Valley, CA-APN No.156-154-08; 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; Director of Engineering, Rob Thompson; Engineering Managers, Kathy Millea and Jeff Mohr; CIP Project Manager, Wendy Sevenandt; 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; K & A Investments LP, APN No. 156-154-08; 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. RECONVENE IN REGULAR SESSION. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: 11 16i2016 OCSD Board of Directors'Agenda Page 10 of 11 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: Adjourn the Board meeting until the Regular Board of Directors Meeting on December 14, 2016 at 6:00 p.m. in memory of former OCSD employee Barbara Collins. Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at (714)593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Aaenda Posting: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, and on the Sanitation District's website at www.ocsd.com, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors, are available for public inspection in the office of the Clerk of the Board. Agenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for 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(a0ocsd.com For any questions on the agenda, Committee members may contact staff at: General Manager Jim Herberg (714)593-7300 iherberg(clocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 mhirelli0locsd.com Director of Engineering Rob Thompson (714)593-7310 rthompsoneocsd.com Director of Environmental Services Jim Colston (714)593-7450 icolstonrolocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 INner(&ocsd.cem Administrative Services Director of Human Resources Celia Chandler (714)593-7202 cchandler0ocsd.com Director of Operations&Maintenance Ed Torres 714 593-7080 etorres ocsd.com 11/16/2016 OCSD Board of Directors Agenda Page 11 of 11 ITEM NO. 1 Orange County Sanitation District MINUTES BOARD MEETING October 26, 2016 ANITAT� 9 U N 2 ,y t o � ftwowm0i l�NG THE ENV�Q, Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 1 012 612 01 6 Minutes of Board Meeting Page 1 of 14 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was called to order by Chair John Nielsen on October 26, 2016, at 6:12 p.m., in the Administration Building. Director James Ferryman delivered the invocation and led the Pledge of Allegiance. The Clerk of the Board declared a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X John Nielsen, Chair Allan Bernstein X Gregory Seboum, Vice Chair Doug Chaffee X Tom Beamish Tim Shaw X Steven Choi Lynn Schott X Keith Curry Scott Peotter X Ellery Deaton Sandra Massa-Lavitt X Joy Neugebauer Al Krippner X James M. Ferryman Bob Ooten Steven Jones X Kris Beard X Jim Katapodis Erik Peterson X Robert Kiley Michael Beverage X Peter Kim Michele Steggell X Lucille Kring Jordan Brandman X Greg Mills Diana Fascenelli X Richard Murphy Shelley Hasselbrink X Steve Nagel Cheryl Brothers X Glenn Parker Cecilia Hupp X David Shawver Carol Warren X Fred Smith Virginia Vaughn X Teresa Smith Mark Murphy X Michelle Steel Shawn Nelson X Sal Tinajero David Benavides X Chad Wanke Constance Underhill A John Withers Douglas Reinhart X Mariellen Yarc Stacy Berry STAFF MEMBERS PRESENT: Jim Herberg, General Manager, Bob Ghirelli, Assistant General Manager, Rob Thompson, Director of Engineering; Jim Colston, Director of Environmental Services; Lorenzo Tyner, Director of Finance & Administrative Services; Celia Chandler, Director of Human Resources; Ed Torres, Director of Operations and Maintenance; Tina Knapp, Deputy Clerk of the Board; Miriam Angold; Marc Brown; Jennifer Cabral; Mike Dorman; Al Garcia; Dhodia Hemal; Laurie Klinger; Mark Manzo; Kathy Millea; Bea Mitchell; Jeff Mohr; Andrew Nau and Richard Spencer. 10/26/2016 Minutes of Board Meeting Page 2 of 14 OTHERS PRESENT: Brad Hogin (General Counsel); Laura Kalty, Liebert Cassidy Whitmore; Patrick Shields, IRWD; Kimo Cook, Project Partners; James Clark, Black & Veatch; Alternate Director Bob Ooten, CMSD. PUBLIC COMMENTS: None. SPECIAL PRESENTATIONS: Chair Nielsen introduced the video presentation, "Utility of the Future', and announced the success of the recent OCSD State of the District event that took place on October14. Chair Nielsen recognized the distinguished guests that attended the breakfast and stated the 2015-16 Annual Report that had been distributed at the event was being made available tonight for those who did not attend. REPORTS: Chair Nielsen reported that at the last Legislative and Public Affairs Committee meeting, Adam Link from the California Association of Sanitation Agencies presented the agency's legislative focus for 2017. He further stated that Heather Stratman with ACC-OC will be in attendance at the November meeting to present their legislative plan and that OCSD's 2017 Legislative Plan will be presented at the December Board Meeting. General Manager Jim Herberg reported that an Emergency Procedures sheet for Board Members has been included in their blue binders today. The document includes information on building evacuation, earthquakes, suspicious persons/objects, fires, and power outages. he back of the document has evacuation maps and designated assembly areas. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve the minutes of the regular Board of Directors Meeting held on September 28, 2016. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker, Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 10/26/2016 Minutes of Board Meeting Page 3 of 14 3. PREVENTATIVE MAINTENANCE OF PLANT NO. 1 AERATION BLOWER NOS. 2, 4, AND 5 (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a sole source service agreement to Siemens Demag Delaval Turbomachinery, Inc. to perform a Class I mechanical service and variable diffuser arm bushing retrofit and installation on aeration blower Nos. 2, 4, and 5, in the amount of$326,185; and B. Approve a contingency of$65,237 (20%). AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanks; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 4. URGENT REPAIR OF TWO HIDROSTAL PUMPS AND FOR THE PURCHASE OF A HIDROSTAL PUMP FOR STEVE ANDERSON LIFT STATION (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a sole source purchase order agreement to Demaria Electric Motor Services Inc. for the repair of two Hidrostal pumps servicing the Steve Anderson Lift Station in an amount not to exceed of $187,680.16 plus tax and freight; B. Approve a contingency of $18,768.02 (10%) for Demaria Electric Motor Services purchase order agreement; C. Approve a sole source purchase order agreement to Flow Systems Inc. for the purchase of a Hidrostal Totally Enclosed Fan Cooled (TEFC) Motor Close Coupled Pump for the Steve Anderson Lift Station in an amount not to exceed of$184,110 plus tax and freight; and D. Approve a contingency of $18,411 (10%) for Flo-Systems Inc. purchase order agreement. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker, Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 10/26/2016 Minutes of Board Meeting Page 4 of 14 5. OCEAN OUTFALL LEASE AGREEMENT RENEWAL (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Adopt Resolution No. OCSD 16-17, entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District directing the General Manager to negotiate an agreement with the California State Lands Commission for a new lease to ensure continued use and maintenance of the ocean outfall line." AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 2. REHABILITATION OF WESTERN REGIONAL SEWERS, PROJECT NO. 3-64 (Rob Thompson) Item pulled and heard separately. Vice-Chair Sebourn recused himself and left the room during voting. MOVED. SECONDED, AND DULY CARRIED TO: Approve a License Agreement between Forest Lawn Memorial-Park Association and the Orange County Sanitation District for access to conduct field investigative work on the Orange County Sanitation District's Los Alamitos subtrunk sewer line. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Steel; Shawver; F. Smith; T. Smith; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Sebourn and Withers RECEIVE AND FILE: These items require no action;and without objection, will be so ordered by the Board Chair. 6. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF SEPTEMBER 2016 (Lorenzo Tyner) Received and filed the report of the Investment Transactions for the month of September 2016. 7. COMMITTEE MINUTES (Clerk of the Board) Received and filed the approved minutes of the following standing committees: 10/26/2016 Minutes of Board Meeting Page 5 of 14 A. Operations Committee meeting of September 7, 2016 B. Legislative and Public Affairs Committee meeting of September 13, 2016 C. Administration Committee meeting of September 14, 2016 D. Steering Committee meeting of September 28, 2016 OPERATIONS COMMITTEE: 8. PLANT NO. 1 FLEET SERVICES UST LEAK REMEDIATION, PROJECT NO. FE14-05 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Increase the task order limit for Contract FE15-00-01 with Dudek from $86,116 to $160,000 for Task Order FE15- 00-01-01 to authorize the General Manager to negotiate and award additional engineering services related to Plant No. 1 Fleet Services UST Leak Remediation, Project No. FE14-05. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker, Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 9. UPDATE TO 2015 AUDIT REPORT OF OCSD'S SANITARY SEWER SYSTEM MANAGEMENT PLAN (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: Receive and file the Close out Memorandum for the 2015 Orange County Sanitation District's Sewer System Management Plan audit, dated June 30, 2016. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanks; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 10. INDUSTRIAL CLEANING SERVICES, SPECIFICATION NO. 5-2015-714BD (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a contingency increase of$110,565 (21%) to the service contract with Performance Pipeline Technologies for Industrial Cleaning Services, 10/26/2016 Minutes of Board Meeting Page 6 of 14 Specification No. 5-2015-714BD,for the period December 11, 2015 through December 10, 2016, for a new total contingency amount not to exceed $215,865 (41%). B. Approve a contingency of $105,300 (20%) per year for all remaining renewal periods. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 11. SLUDGE DIGESTER REHABILITATION AT PLANT NO. 1, PROJECT NO. P1-100 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a budget increase of$500,000 for Sludge Digester Rehabilitation at Plant No.1, Project No. 131-100,for a total budget amount of$67,150,000; and B. Approve a contingency increase of $837,500 (2.5%) to the construction contract with JR Filanc Construction Company for Sludge Digester Rehabilitation at Plant No. 1, Project No. P1-100, for a total contingency of $9,212,500 (27.5%). AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers ADMINISTRATION COMMITTEE: 12. TEMPORARY EMPLOYMENT SERVICES (Celia Chandler) MOVED, SECONDED, AND DULY CARRIED TO: A. Authorize the General Manager to enter into contracts with various staffing firms for Temporary Employment Services (Specification No.CS-2009- 421 BD); and 10/26/2016 Minutes of Board Meeting Page 7 of 14 B. Authorize the General Manager to add or remove staffing firms from the available pool as needed, to meet work requirements identified by the Human Resources Department, with no change to the approved total budget, at a cost not to exceed $814,400. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanks; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 13. DEFERRED COMPENSATION PROGRAM UPDATE (Celia Chandler) MOVED, SECONDED, AND DULY CARRIED TO: A. Adopt Resolution No. OCSD 16-18, entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District Acknowledging the Change in Title of the Current Deferred Compensation Plan Administrator to Voya Financial Services and Authorizing Voya Financial Services to Continue Serving as Plan Administrator of the Deferred Compensation Plan for Officers and Employees of the Orange County Sanitation District; and, Repealing Resolution No. OCSD 09-02"; and B. Authorize the General Manager, or his designee, to execute all documents necessary to effect said Deferred Compensation Plan, in a form approved by General Counsel. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 14. CONTRACTED INTERNAL AUDIT OF CAPITAL IMPROVEMENT PROJECT CONTRACTS (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Receive and file the Accountants' Report on Agreed-Upon Procedures Review on Capital Improvement Project Contracts. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc 10/26/2016 Minutes of Board Meeting Page 8 of 14 NOES: None ABSTENTIONS: None ABSENT: Withers 15. INVEST AND/OR REINVEST DISTRICT'S FUNDS (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Adopt Resolution No. OCSD 16-19, entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks; and Repealing Resolution No. OCSD 15-25:' AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker, Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 16. ELIMINATION OF UNFUNDED ACTUARIAL ACCRUED LIABILITY WITHIN THE ORANGE COUNTY EMPLOYEES' RETIREMENT SYSTEM (Lorenzo Tyner) Item pulled and heard separately. Director of Finance Lorenzo Tyner responded to questions as to the strategy of the elimination the current UAAL to save the ratepayers additional interest charges. MOVED. SECONDED, AND DULY CARRIED TO: Direct staff to pay off the Orange County Sanitation District's unfunded actuarial accrued pension liability (UAAL) in its defined pension plan administered by the Orange County Employees Retirement System (OCERS) in an amount not to exceed $40 million. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; and Wanke. NOES: Yarc ABSTENTIONS: None ABSENT: Withers STEERING COMMITTEE: 17. STRATEGIC PLAN UPDATE (Robert Ghirelli) MOVED, SECONDED, AND DULY CARRIED TO: Receive and file the Strategic Plan Update. 10/26/2016 Minutes of Board Meeting Page 9 of 14 AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanks; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers NON-CONSENT CALENDAR: 18. NEWHOPE-PLACENTIA TRUNK REPLACEMENT, PROJECT NO. 2-72 (Rob Thompson) Director of Engineering, Rob Thompson, provided a brief overview of the Resolution and Contract regarding Project No. 2-72, and emphasized that the Santa Ana Watershed Project Authority (SAWPA) has worked very closely with our agency in support of obtaining this grant funding. MOVED. SECONDED, AND DULY CARRIED TO: A. Adopt Resolution No. OCSD 16-20 entitled, "A Resolution of the Board of Directors of the Orange Sanitation District Accepting the Proposition 84 Integrated Regional Water Management Program 2015 Implementation Grant Funding Contract for Newhope-Placentia Trunk Sewer Replacement Project 2-72"; and B. Approve the Contract between the Orange County Sanitation District and the Santa Ana Watershed Project Authority (SAWPA) to allow the Newhope-Placentia Trunk Replacement, Project No. 2-72, to receive Proposition 84 related grant funds up to $1,000,000. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanks; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 19. CONTRACT SECURITY SERVICES—ARMED SERVICES (Celia Chandler) Human Resources and Risk Manager, Richard Spencer, provided information regarding the requested Amendment to the Service Agreement with Securitas Security Services U.S.A. MOVED, SECONDED, AND DULY CARRIED TO: 10/26/2016 Minutes of Board Meeting Page 10 of 14 A. Authorize the General Manager to approve Amendment No.1 to increase the Service Agreement with Securitas Security Services U.S.A, Purchase Order 105853 OB, Specification No. S-2016-775BD for the period of November 1, 2016 through October 31, 2017, to include all remaining renewal options, for an additional amount of$802,215, increasing the total annual amount not to exceed $1,578,919; and B. Approve a contingency of $157,891 (10%) AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Nagel; Neugebauer; Nielsen; Parker, Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanks; and Yarc NOES: None ABSTENTIONS: None ABSENT: Withers 20. SUCCESSOR MEMORANDUMS OF UNDERSTANDING FOR THE SUPERVISOR & PROFESSIONAL GROUPS (Celia Chandler) Chief Negotiator, Laura Kalty (Liebert Cassidy Whitmore), stated that the presented MOU represents the direction given by the Board of Directors. MOVED, SECONDED, AND DULY CARRIED TO: A. Adopt Resolution No. OCSD 16-21, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving the Memoranda of Understanding between the Orange County Sanitation District and the Supervisory and Professional Management Group (SPMG), for Fiscal Years 2016/2017, 2017/2018 & 2018/2019"; and B. Direct staff to finalize and sign the Memorandum of Understanding (MOUs) between Orange County Sanitation District and the two (2) SPMG bargaining units. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanks; and Yarc NOES: R. Murphy ABSTENTIONS: None ABSENT: Withers 21. SUCCESSOR MEMORANDUMS OF UNDERSTANDING FOR THE ORANGE COUNTY EMPLOYEES ASSOCIATION (Celia Chandler) Chief Negotiator, Laura Kalty (Liebert Cassidy Whitmore), stated that the presented MOU represents the direction given by the Board of Directors. 10/26/2016 Minutes of Board Meeting Page 11 of 14 MOVED. SECONDED, AND DULY CARRIED TO: A. Adopt Resolution No. OCSD 16-22, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving the Memoranda of Understanding between the Orange County Sanitation District and the Orange County Employees Association for Fiscal Years 2016/2017, 2017/2018 & 2018/2019"; and B. Direct staff to finalize and sign the Memoranda of Understanding (MOUs) between Orange County Sanitation District and the three (3) OCEA bargaining units. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: R. Murphy ABSTENTIONS: None ABSENT: Withers 22. SUCCESSOR MEMORANDUM OF UNDERSTANDING FOR THE INTERNATIONAL UNION OF OPERATING ENGINEERS — LOCAL 501 (Celia Chandler) Chief Negotiator, Laura Kalty (Liebert Cassidy Whitmore), stated that the presented MOU represents the direction given by the Board of Directors. Ms. Kalty also clarified that there is no reopener as to salaries for the OCEA and Si Groups. MOVED, SECONDED, AND DULY CARRIED TO: A. Adopt Resolution No. OCSD 16-23, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving the Memorandum of Understanding between the Orange County Sanitation District and the International Union of Operating Engineers, Local 501 for Fiscal Years 2016/2017, 2017/2018 & 2018/2019; and B. Direct staff to finalize and sign the Memorandum of Understanding (MOUS) between Orange County Sanitation District and the Local 501 bargaining unit. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; Nagel; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: R. Murphy ABSTENTIONS: None ABSENT: Withers 10/26/2016 Minutes of Board Meeting Page 12 of 14 23. PROPERTY ACQUISITION FOR 18475 PACIFIC AND 18480 BANDILIER CIRCLE, FOUNTAIN VALLEY, CA(Rob Thompson) Mr. Thompson provided a brief presentation regarding necessity of the property acquisitions to enhance the future needs of the Orange County Sanitation District. Mr. Thompson responded to questions regarding the possible uses of the site. MOVED. SECONDED, AND DULY CARRIED TO: A. Approve a Standard Offer, Agreement And Escrow Instructions For Purchase Of Real Estate (Purchase Agreement)with Bender Properties for the property at 18475 Pacific Street and 18484 Bandilier Circle for $10,619,180; and B. Approve AIR Commercial Real Estate Association Standard Industrial/Commercial Single-Tenant Lease -- Net (Lease Agreement) with Bender Properties for the property at 18475 Pacific Street and 18484 Bandilier Circle for$35,000 per month as stipulated in the Purchase Agreement. AYES: Beamish; Beard (Alternate); Choi; Curry; Deaton; Ferryman; Katapodis; Kiley; Kim; Kring; Mills; R. Murphy; Neugebauer; Nielsen; Parker; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wanke; and Yarc NOES: None ABSTENTIONS: Nagel (immediately after adjournment of the meeting) ABSENT: Withers INFORMATION ITEMS: None. AB 1234 REPORTS: Director Ferryman provided an update on the ongoing recruitment for the NWRI General Manager position; updates provided at the last Border Committee meeting; and announced the upcoming OCCOG meeting to be held October 27 at the City of Irvine. CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54957.6. 54956.8 & 54956.9(d)(4): The Board convened in closed session at 6:52 p.m. to discuss seven items. Items No. 1; 6 & 7 were not heard. 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. 10/26/2016 Minutes of Board Meeting Page 13 of 14 RECONVENED IN REGULAR SESSION: The Board reconvened in regular session at 7:54 p.m. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: General Counsel, Brad Hogin, did not provide a report. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Director Shawver asked that an item be placed on the next Administration Committee meeting to discuss the rate rebate program. Director Choi announced that this will most likely be his last meeting as an OCSD Director and that it has been his pleasure serving with the Board of Directors. ADJOURNMENT: At 7:57 p.m. Chair Nielsen adjourned the meeting until the Regular Board Meeting on November 16, 2016 at 6:00 p.m. Submitted by: Kelly Lore Clerk of the Board 10/26/2016 Minutes of Board Meeting Page 14 of 14 BOARD OF DIRECTORS Meeting Date TOBd.Of Dir. -- 11/16/16 AGENDA REPORT ItemNumber IemNumber z Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert P. Ghirelli, Assistant General Manager SUBJECT: RESOLUTION NO. OCSD 16-24 COMMENDING BOARD CHAIRMAN JOHN NIELSEN GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 16-24, entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District commending John Nielsen for his outstanding contributions and dedication to public service as Chairman of the Orange County Sanitation District Board of Directors" BACKGROUND The Orange County Sanitation District (Sanitation District) wishes to acknowledge Board Chair John Nielsen (City of Tustin) for his many contributions to the Sanitation District during his tenure as Chairman of the Board of Directors. The resolution is a formal commendation recognizing John Nielsen's term as Chairman of the Board, the different positions he held, and the accomplishments to which he contributed while on the Board. PRIOR COMMITTEE/BOARD ACTIONS N/A ATTACHMENT The following attachment(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: Resolution No. OCSD 16-24 Page 1 of 1 RESOLUTION NO. OCSD 16-24 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT COMMENDING JOHN NIELSEN FOR HIS CONTRIBUTIONS AND DEDICATION TO PUBLIC SERVICE AS CHAIRMAN OF THE ORANGE COUNTY SANITATION DISTRICT'S BOARD OF DIRECTORS WHEREAS, John Nielsen is completing his tenure as Chairman of the Orange County Sanitation District (OCSD) Board of Directors, having served from June 2015 through November 2016; and WHEREAS, he has provided leadership and vision to the OCSD Administration Committee, Steering Committee, Legislative and Public Affairs Committee, Operations Committee, GWRS Joint Cooperative Steering Committee, Audit Ad Hoc Committee, and OCSD/SAWPA Joint Policy Committee; and WHEREAS, the initial expansion of the Groundwater Replenishment System (GWRS) has been established. The Orange County Water District now receives 130 million gallons per day of secondary treated effluent from OCSD, which in turn has increased GWRS water production from 70 million gallons per day to nearly 100 million gallons per day; and WHEREAS, under his leadership and guidance, OCSD Co-Sponsored Assembly Bill 2022 (Gordon) to allow water recycling facilities to bottle advanced purified demonstration water that meets or exceeds all federal and state drinking water standards to be used for educational purposes; and WHEREAS, by way of his leadership, OCSD received a $1,000,000 grant from the California Department of Water Resources: SAWPA's Integrated Regional Water Management Program to expand the capacity of the Newhope-Placentia Sewer Pipeline, assisting in the final expansion of the GWRS; and WHEREAS, John Nielsen led the adoption of FY 2016-17 Operating Budget of approximately $146 million representing a four percent reduction from the previously approved budget; and WHEREAS, John Nielsen guided the Board of Directors prudent decision to eliminate OCSD's unfunded actuarial accrued pension liability (UAAL) by paying it off now, in a lump sum, effectively saving OCSD and its ratepayers tens of millions in future payments; and OCSD 16-24-1 WHEREAS, through his guidance, OCSD successfully transferred 174 miles of local sewers serving parts of Tustin and the unincorporated areas north of Tustin to the East Orange County Water District, allowing OCSD to focus on regional wastewater collection, treatment and recycling; and WHEREAS, John Nielsen has demonstrated determination, vision and leadership to OCSD and its ratepayers through the commitment of his time, professional dignity, and devotion to the residents and businesses of Orange County. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District DOES HEREBY RESOLVE that the Board and staff of the Orange County Sanitation District express to John Nielsen their sincere appreciation for his outstanding public service to the citizens of Orange County and his meritorious efforts on behalf of OCSD and its mission of protecting public health and the environment by providing effective wastewater collection, treatment, and recycling. PASSED AND ADOPTED by unanimous acclamation at the regular meeting of said Board of Directors held on November 16, 2016. Greg Sebourn James D. Herberg Board Vice-Chairman General Manager ATTEST: Kelly A. Lore Clerk of the Board OCSD 16-24-2 BOARD OF DIRECTORS Nee6ng Dare Neeting Date -- 11/16,16 AGENDA REPORT emNumber IemNumber 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Kelly A. Lore, Clerk of the Board SUBJECT: PROPOSED BOARD OF DIRECTORS & COMMITTEE MEETING DATES FOR CALENDAR YEAR 2017 GENERAL MANAGER'S RECOMMENDATION Approve the calendar of meeting dates for the 2017 calendar year for meetings of the Board of Directors and the following Committees: Administration, Legislative and Public Affairs, Operations, and Steering. SUMMARY According to Resolution OCSD 15-27 - Rules of Procedure for the Conduct of Business of the District, Section (1)(a), a regular monthly meeting of the Board of Directors of the District will be held on the fourth Wednesday of every month at 6:00 p.m. The four standing committees also meet regularly as follows: • Operations Committee First Wednesday of every month at 5:00 p.m. • Legislative and Public Second Monday of every month at 8:00 a.m. Affairs Committee (exception applies quarterly-see below) • Administration Committee Second Wednesday of every month at 5:00 p.m. • Steering Committee Fourth Wednesday of every month at 5:00 p.m. Staff is recommending the following dates for the 2017 calendar year. Should the need arise for a change in date or time, advanced notice will be given to the Board of Directors or Committee. The recommended dates for the 2017 calendar year are: OPERATIONS LEGISLATIVE&PUBLIC ADMINISTRATION COMMITTEE AFFAIRS COMMITTEE COMMITTEE BOARD&STEERING January DARK* January DARK* January 11, 2017 January 25, 2017 February 1, 2017 February 6, 2017** February 8, 2017 February 22, 2017 March 1, 2017 March 13, 2017 March 8, 2017 March 22, 2017 April 5, 2017 April 10,2017**** April 12,2017 April 26, 2017 May 3,2017 May 8, 2017 May 10, 2017 May 24, 2017 June 7, 2017 June 12, 2017 June 14, 2017 June 28,2017 July 5, 2017 July 10, 2017**** July 12, 2017 July 26, 2017 Page 1 of 2 OPERATIONS LEGISLATIVE & PUBLIC ADMINISTRATION COMMITTEE AFFAIRS COMMITTEE COMMITTEE BOARD&STEERING August DARK* August DARK* August DARK* August 23, 2017 September 6, 2017 September 11, 2017 September 13, 2017 September 27, 2017 October 4, 2017 October 9, 2017**** October 11, 2017 October 25, 2017 November 1,2017 November 13, 2017 November S,2017 November 15, 2017'** December 6,2017 December 11, 2017 December 13, 2017 December 20, 2017'** 'Committee is dark in this month. Meeting moved to first Monday,due to Presidents Day. Meeting scheduled to take place the third Wednesday of the month due to Thanksgiving&Christmas Holidays. Meeting begins at 3:30 p.m.for attendance at GWRS Steering Committee meeting following adjournment. Page 2 of 2 BOARD OF DIRECTORS Meeting Date TOBd.Of Dir. -- 11/16/16 AGENDA REPORT ItemNumber IemNumber a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations R Maintenance SUBJECT: COOPERATIVE PROCUREMENT WITH DOWNTOWN FORD SALES GENERAL MANAGER'S RECOMMENDATION Ratify and approve a purchase order agreement using the State of California's cooperative Contract Number 1-14-23-20A with Downtown Ford Sales for the purchase of six (6) budget approved vehicles for a total cost of $187,444.62 in accordance with Ordinance No. OCSD47, Section 2.03(B) Cooperative Purchases. BACKGROUND These purchases are in accordance with the State of California's contract with Downtown Ford Sales that Orange County Sanitation District (Sanitation District) is approved to use per the Purchasing Ordinance Section 2.03B. Although currently expired and replaced by a new contract, at the time of this procurement, the Contract Number 1-14-23-20A was in effect through February 2, 2016. The cost includes California state sales tax and freight. The Sanitation District has a fleet of over 200 vehicles, some of which are at the end of their useful life or require excessive maintenance to keep operational. This purchase, included in the FY 2014-15 Budget, was for six replacement light duty service trucks consisting of two %ton and four Y2 ton pickup style trucks. RELEVANT STANDARDS • Ensure the public's money is wisely spent • Comply with transparency and communication requirements PROBLEM The Sanitation District identified several service trucks for replacement in FY 2014-15. These six vehicles had been in service from 10 to 21 years. The total cost exceeds the General Manager's authority of$100,000 and requires Board of Directors approval. This purchase was required in order to provide adequate support for district operations and maintenance. These older vehicles experience increased maintenance costs and increased frequency of maintenance and repair. Although vehicle purchases were made in accordance with Sanitation District's Purchasing Ordinance and under the approved Capital Equipment Budget, the cost and method of procurement for all vehicles require the approval of the Board. Page 1 of 2 PROPOSED SOLUTION Staff is seeking ratification of this purchase of six (6) vehicles. RAMIFICATIONS OF NOT TAKING ACTION If these vehicles were not replaced, we would incur excessive maintenance costs and exposure to safety and reliability issues. These vehicles were bid in conformance with the Sanitation District's Purchasing Ordinance; the purchase exceeds the General Manager's authority of$100,000 and requires ratification by the Board of Directors. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Seeking the lowest price and an efficient procurement method, the Sanitation District utilized the State of California's contract for vehicles and trucks. The State of California Department of General Services agreements are available to all State of California governmental entities (state agencies, cities, counties, special districts, school districts, universities, etc.)that expend public funds for the acquisition of both goods and services. The State of California purchases a wide variety of goods and services ranging from pencils to temporary labor. The State's Procurement Division is the central purchasing authority for all state departments and local governmental agencies. With a massive marketplace and billions of dollars in purchasing power, they are able to offer a lower procurement cost to California's state, county, city, special district, education and other government entities through their agreements. These agreements allow entities/agencies to buy directly from suppliers through existing contracts and agreements and provided the Sanitation District a 2% discount on this purchase. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. These items have been budgeted through the Capital Equipment Budget Summary (Fiscal Year 2014-2015 Equipment Budget Details; Section 8, pg. 146). Date of ADDroyal Contract Amount Continaencv 11/16/16 $187,444.62 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: N/A Page 2 of 2 BOARD OF DIRECTORS Meeting Date TOBd.Of Dir. -- 11/16/16 AGENDA REPORT ItemNumber IemNumber s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations R Maintenance SUBJECT: COOPERATIVE PROCUREMENT WITH XYLEM DEWATERING SOLUTIONS INC. dba GODWIN PUMPS OF AMERICA, INC. GENERAL MANAGER'S RECOMMENDATION Ratify and approve a purchase order agreement using the U.S. General Services Administration's (GSA) Schedule 84 Contract Number GS-07F-9491G with Xylem Dewatering Solutions, Inc. dba Godwin Pumps of America, Inc. for the purchase of three (3) budget approved diesel pumps for a total cost of $362,849.40 plus sales tax in accordance with Ordinance No. OCSD-47, Section 2.03(B) Cooperative Purchases. BACKGROUND These pumps will be used as emergency contingency should there be a large-scale pump station or force main failure at the Orange County Sanitation District (Sanitation District) sewer pump stations. Historically, the Operations and Maintenance department did not own large portable pumps and was reliant on emergency purchases for large scale failure support. The purchase of these portable pumps will minimize risk to the environment and public health associated with failure of Sanitation District facilities. RELEVANT STANDARDS • Ensure the public's money is wisely spent • Comply with transparency and communication requirements • Protection of Orange County Sanitation District assets PROBLEM The Sanitation District is reliant upon contract equipment and services to respond to large scale failure of sewer and pumping facilities. If these equipment and services are not readily available during an emergency, impacts to the public health and/or the environment can occur. Although the purchase of the pumps was made in accordance with Sanitation District's Purchasing Ordinance and under the approved Capital Equipment Budget Summary, the procurement requires Board approval. Page 1 of 2 PROPOSED SOLUTION Staff is seeking ratification of the purchase of three pumps that will enable staff to respond to failure of large-scale assets. RAMIFICATIONS OF NOT TAKING ACTION If these pumps were not purchased, the Sanitation District would potentially be reliant on contracted services, which, in the event of an emergency, might not be available. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The Sanitation District utilized the Schedule 84 contract provided by the U.S. GSA. The contract provided a 19.4% discount on all pumps and an additional 5% quantity discount for orders exceeding $300,000. The Local Preparedness Acquisition Act (Public Law 11-248) authorizes state and local governments access to Federal Supply Schedule 84 (Law Enforcement, Fire, Emergency/Disaster Response, etc.)and Schedule 70 (Information Technology products & services) using the Cooperative Purchasing Program provided by GSA. These purchases are in accordance with the federal government's contract with Xylem Dewatering Inc. that the Sanitation District is approved to use per the Purchasing Ordinance Section 2.03B. The contract remains in effect through March 31, 2017. Schedule 84 contracts allows state and local government agencies to procure equipment and services related to Law Enforcement, Facility Management Systems, Fire, Rescue, and Emergency/Disaster Response at discounted prices. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. These items have been budgeted through the Capital Equipment Budget Summary (Budget Update Fiscal Year 2015-2016, p. A20). Date of ADDroyal Contract Amount Contlnaencv 11/16/16 $362,849.40 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: N/A Page 2 of 2 BOARD OF DIRECTORS Meeting Date TOBd.Of Dir. -- 11/16/16 AGENDA REPORT Item Item fi Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: CONTRACT SECURITY SERVICES GENERAL MANAGER'S RECOMMENDATION Approve an increase of $139,347 to Purchase Order 105775 OA, a bridge purchase contract issued to Securities Security Services, U.S.A., for a total amount not to exceed $300,070, with no additional increase to the annual budget. BACKGROUND Prior to the expiration of the security services contact on June 30, 2016, a bridge contact of $98,042 was established due to unforeseen delays in the procurement process. On September 28, 2016, the Board approved an increase of $62,681 to Purchase Order 105775 OA, a bridge purchase contract issued to Securitas Security Services, U.S.A., for a total amount not to exceed $160,723, for the period October 1, 2016 through October 31, 2016. During the period of the initial bridge contact, the Sanitation District experienced a credible threat that necessitated the expenditure of an additional $45,126 in unanticipated security costs. Furthermore, direction was given during the September Board meeting to reestablish the armed officers in the interim until staff returned with a recommendation in October for a comprehensive armed security services program, which increased the security costs by an additional $92,400 during the bridge period. RELEVANT STANDARDS • Provide a safe and collegial workplace • Protection of Orange County Sanitation District assets RAMIFICATIONS OF NOT TAKING ACTION If these additional security measures had not been taken, the Sanitation District would have been vulnerable to a known security risk. PRIOR COMMITTEE/BOARD ACTIONS October 2016 - Board Approved Amendment No.1 to Specification No. S-2016-775BD for an additional amount of $802,215, increasing the total annual amount not to exceed $1,578,919 with Securitas Security Services, U.S.A. Page 1 of 2 September 2016 - Board Approved Specification No. S-2016-775BD for a five-year facilities security services contact with Securitas Security Services, U.S.A. June 2010 - Board Approved Specification No. S-2010468 for a five-year facilities security services contract with Securitas Security Services, U.S.A. ADDITIONAL INFORMATION On September 26, 2016, the Board of Directors approved a multi-year security services contract with Securitas Security Services, U.S.A. for $776,704 and, subsequently, on October 26, 2016, approved Amendment No. 1 for an additional amount of $802,215, thereby increasing the total annual amount not to exceed $1,578,919 with Securitas Security Services, U.S.A. Though staff is requesting additional funds, the total cost of the security services contract for fiscal year 2016-2017 will not exceed the Board of Directors' authorized amount of $1,578,919. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. The Security Services line item was originally budgeted at$660,000 and will be supplemented with a budget transfer of $670,000 from budgeted line items with expected savings, for a total line item budget of $1,330,000. In total, actual operating costs for FY 2016-17 will not exceed the annual operating budget. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: N/A Page 2 of 2 BOARD OF DIRECTORS Meeting Date TOBd.Of Dir. -- 11/16/16 AGENDA REPORT Item Item Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Administrative Services SUBJECT: REQUEST FOR FUNDING —WASTEWATER FLOW & LOADING STUDY GENERAL MANAGER'S RECOMMENDATION Approve the Orange County Sanitation District's participation in the California Association of Sanitation Agencies (CASA) wastewater flow and loading study and the Participating Agency Contribution Pledge of$82,500. BACKGROUND The Orange County Sanitation District's (Sanitation District)goal has always been to fairly and equitably allocate the cost of wastewater management to all of its customers in a cost effective manner. Agencies throughout the state, including the Sanitation District, use engineering estimates of average loadings (wastewater flowrates and strength data according to use category)to proportionately allocate wastewater management costs and minimize administrative expense. Water suppliers have established more aggressive water conservation measures in response to drought conditions and, therefore, it is prudent to review the wastewater loadings at this time and update them, if necessary, to ensure that they accurately reflect current wastewater characteristics. CASA is coordinating a statewide wastewater flow and loading study to be funded by participating sanitation agencies across the state. The cost of the study will be shared amongst participating agencies in proportion to discharge volume. Estimated total cost of the first phase of the study is $375,000. The Sanitation District would contribute 22%, or approximately $82,500, toward the cost of the study. In return, the Sanitation District would be entitled to participate in structuring the study and access to the results of the study. RELEVANT STANDARDS Ensure the public's money is wisely spent PROBLEM Water suppliers have established more aggressive water conservation measures in response to drought conditions; therefore, it is prudent to review the wastewater loadings at this time and update them, if necessary, to ensure that they accurately reflect current wastewater characteristics. Page 1 of 2 PROPOSED SOLUTION CASA is coordinating a statewide wastewater flow and loadings study to be funded by participating sanitation agencies across the state. TIMING CONCERNS In order to move forward with the wastewater flow and loading study, CASA needs the commitment from our agency no later than December 1a'. RAMIFICATIONS OF NOT TAKING ACTION Without the commitment of our agency, the study will not be able to move forward and maintain the timeline that is needed to collect accurate flow and loading information. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS This contribution pledge of $82,500 has not been budgeted. However, budgeted funds are available from other budgeted line items with expected savings and, upon Board approval,these funds will be transferred to cover this item. In total, actual operating costs for FY 2016-17 will not exceed the annual operating budget. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: Participating Agency Contribution Pledge Form —CASA Flow and Loading Study Page 2 of 2 California Association of Sanitation Agencies Flow and Loading Study Project Participating Agency Contribution Pledge Form Please Respond by December 1, 2016 Agency: Orange County Sanitation District Contact Name: Telephone & Email: My agency is committed to contributing the following amount to the Flow and Loading Study project being managed by CASA. I understand that CASA will be sending an invoice (or series of invoices) for the following total contribution amount in the future: $ 82 500.00 The relative agency contribution levels have been determined per the funding share agreement that was previously distributed to all counsel. Please return Contribution Commitment Form to: Adam D. Link, CASA Director of Government Affairs 1225 8th Street,Suite 595 Sacramento,CA 95814 Telephone:(916)446-0388 E-Mail: alink@casaweb.org You do not need to send a check at this time. You will receive an invoice based upon your pledge. Signature: Date: Thank You! BOARD OF DIRECTORS Meeting Date Toed.Of Dir. -- 11/16/16 AGENDA REPORT ItemNumber IemNumber s 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 OCTOBER2016 GENERAL MANAGER'S RECOMMENDATION Receive and file the report of the Investment Transactions for the month of October 2016. 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 October 31, 2016. RELEVANT STANDARDS • CA Government Code Section 53607 PRIOR COMMITTEE/BOARD ACTIONS N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT 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: • Report of the Investment Transactions for the month ended October 31, 2016 Page 1 of 1 C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 9/30/16 Thru 10/31/16 Transaction Settlement Acq/Disp Interest Type Data CUSIP Q�antity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 10/01/2016 261908107 9,750.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 9,750.00 0.00 9,750.00 0.00 Purchase 10/01/2016 261908107 1,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,000,000.00 0.00 1,000,000.00 0.00 Purchase 10/02/2016 261908107 46,875.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 46,875.00 0.00 46,875.00 0.00 Purchase 10/03/2016 261908107 0.12 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 0.12 0.00 0.12 0.00 Purchase 10/04/2016 261908107 367.82 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 367.82 0.00 367.82 0.00 Purchase 10/04/2016 261908107 437.81 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 437.81 0.00 437.81 0.00 Purchase 10/0SQ016 261908107 700,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 700,000.00 0.00 700,000.00 0.00 Purchase 10/06/2016 261908107 10,839.88 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 10,839.88 0.00 10,839.88 0.00 Purchase 10/07/2016 261908107 5,625.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 5,626.00 0.00 5,626.00 0.00 Purchase 10/07/2016 261908107 1,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,000,000.00 0.00 1,000,000.00 0.00 Purchase 10/11/2016 261908107 5,250.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 5,250.00 0.00 5,250.00 0.00 Purchase 10/11/2016 261908107 4,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 4,000,000.00 0.00 4,000,000.00 0.00 Purchase 10/12/2016 261908107 9,032,970.66 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 9,032,970.66 0.00 9,032,970.66 0.00 Purchase 10/12/2016 261908107 3,239,052.58 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 3,239,052.58 0.00 3,239,052.58 0.00 Purchase 10/12/2016 261908107 11,700,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 11,700,000.00 0.00 11,700,000.00 0.00 Purchase 10/14/2016 261908107 1,009,105.56 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,009,105.56 0.00 1,009,105.56 0.00 Purchase 10/17/2016 261908107 2,096.58 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 2,096.58 0.00 2,096.58 0.00 Purchase 10/17/2016 261908107 1,859.13 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,859.13 0.00 1,859.13 0.00 Purchase 10/17/2016 261908107 2,706.83 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 2,706.83 0.00 2,706.83 0.00 Purchase 10/17/2016 261908107 3,900.80 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 3,900.80 0.00 3,900.80 0.00 Purchase 10/17/2016 261908107 2,742.67 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 2,742.67 0.00 2,742.67 0.00 Purchase 10/17/2016 261908107 2,242.18 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 2,242.18 0.00 2,242.18 0.00 Purchase 10/17/2016 261908107 23.76 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 23.76 0.00 23.76 0.00 Purchase 10/17/2016 261908107 1,132.67 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,132.67 0.00 1,132.67 0.00 Purchase 10/17/2016 261908107 209,325.85 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 209,325.85 0.00 209,325.85 0.00 Purchase 10/17/2016 261908107 221,470.81 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 221,470.81 0.00 221,470.81 0.00 Purchase 10/17/2016 261908107 184,451.62 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 184,451.62 0.00 184,451.62 0.00 Purchase 10/17/2016 261908107 219,027.36 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 219,027.36 0.00 219,027.36 0.00 Purchase 10/17/2016 261908107 2,502,104.17 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 2,502,104.17 0.00 2,502,104.17 0.00 Purchase 10/18Q016 261908107 104,696.84 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 104,696.84 0.00 104,696.84 0.00 Cheadle,Asset Management-CONFIDENTIAL aeoution Time:11aa01611:53:17 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 9/30/16 Thru 10/31/16 Transaction Settlement Acq/Disp Interest Type Data CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 10/18/2016 261908107 46,174.62 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 46,174.62 0.00 46,174.62 0.00 Purchase 10/19/2016 261908107 10,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 10,000,000.00 0.00 10,000,000.00 0.00 Purchase 10/20/2016 261908107 245.19 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 245.19 0.00 245.19 0.00 Purchase 10/20/2016 261908107 309.62 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 309.62 0.00 309.62 0.00 Purchase 10/20/2016 261908107 592.71 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 592.71 0.00 592.71 0.00 Purchase 10/20/2016 261908107 76.65 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 76.65 0.00 76.65 0.00 Purchase 10/20/2016 261908107 2,049.75 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 2,049.75 0.00 2,049.75 0.00 Purchase 10/21/2016 261908107 256,806.05 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 256,806.05 0.00 256,806.05 0.00 Purchase 10/21/2016 313385AVB 2,040,000.00 FHUB Discount Note 99.913 0.35% 2,038,220.95 0.00 2,038,220.95 0.00 0.34%Due 1/20/2017 Purchase 10/21/2016 912828A91 3,000,000.00 US Treasury Note 100.098 0.33% 3,002,939.74 5,991.85 3,008,931.59 0.00 0.75%Due 1/15/2017 Purchase 10/24/2016 261908107 25,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 25,000.00 0.00 25,000.00 0.00 Purchase 10/24/2016 89233GNP7 1,000,000.00 Toyota Mawr Credit Discount CP 99.813 0.75% 998,129.44 0.00 998,129.44 0.00 0.74%Due 1/23/2017 Purchase 10/2SQ016 261908107 3,188.25 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 3,188.25 0.00 3,188.25 0.00 Purchase 10/2SQ016 261908107 157.86 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 157.86 0.00 157.86 0.00 Purchase 10/2SQ016 261908107 315.21 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 315.21 0.00 315.21 0.00 Purchase 10/2SQ016 261908107 6,885.54 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 6,885.54 0.00 6,885.54 0.00 Purchase 10/2SQ016 261908107 1,675.43 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,675.43 0.00 1,675.43 0.00 Purchase 10/2SQ016 261908107 791.96 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 791.96 0.00 791.96 0.00 Purchase 10/2SQ016 261908107 24,844.65 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 24,844.65 0.00 24,844.65 0.00 Purchase 10/2SQ016 261908107 10,146.20 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 10,146.20 0.00 10,146.20 0.00 Purchase 10/2SQ016 261908107 4,972.77 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 4,972.77 0.00 4,972.77 0.00 Purchase 10/2SQ016 261908107 45.99 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 45.99 0.00 45.99 0.00 Purchase 10/2SQ016 261908107 10,631.38 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 10,631.38 0.00 10,631.38 0.00 Purchase 10/2SQ016 261908107 12,477.36 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 12,477.36 0.00 12,477.36 0.00 Purchase 10/2SQ016 261908107 1,673.66 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,673.66 0.00 1,673.66 0.00 Purchase 10/2SQ016 261908107 9,108.46 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 9,108.46 0.00 9,108.46 0.00 Purchase 10/2SQ016 261908107 1,173.44 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,173.44 0.00 1,173.44 0.00 Purchase 10/2SQ016 31371EADU0 1,000,000.00 FHUMC Note 100.032 0.37% 1,000,320.00 1,222.22 1,001,542.22 0.00 0.5%Due 1/27/2017 Cheadle,Asset Management-CONFIDENTIAL Execution Time:11aa01611:53:17 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 9/30/16 Thru 10/31/16 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gaind-oss ACQUISITIONS 1 Purchase 10/25/2016 4581XOBV9 1,000,000.00 Inter-American Dev Bank Note 100.154 0.73% 1,001,540.00 1,250.00 1,002,790.00 0.00 1 A 25%Due 3/15/2017 Purchase 10/26/2016 261908107 6,630,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 6,630,000.00 0.00 6,630,000.00 0.00 Purchase 10/26/2016 261908107 1,290,000.00 Dreyfus Tmy/Agcy Cash Management 521 1.000 0.21 % 1,290,000.00 0.00 1,290,000.00 0.00 Purchase 10/26/2016 261908107 1,952.12 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,952.12 0.00 1,952.12 0.00 Purchase 10/26/2016 912796KEB 2,000,000.00 US Treasury Bill 99.918 0.33% 1,998,356.78 0.00 1,998,356.78 0.00 0.322%Due 1/262017 Purchase 10/272016 06538BO63 5,870,000.00 Bank of Tokyo Mitsubishi NV Discount CP 99.628 1.05% 5,848,166.89 0.00 5,848,166.89 0.00 1.03%Due 3/6/2017 Purchase 10/272016 06538BQ63 1,000,000.00 Bank of Tokyo Mitsubishi NV Discount CP 99.628 1.05% 996,280.56 0.00 996,280.56 0.00 1.03%Due 3/6/2017 Purchase 1027/2016 261908107 5,824.79 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 5,824.79 0.00 5,824.79 0.00 Purchase 1027/2016 30229AL72 1,000,000.00 Exxon Mobil Discount CP 99.988 0.41 % 999,877.78 0.00 999,877.78 0.00 0.4%Due 11O/2016 Purchase 10/272016 313385BA3 1,000,000.00 FHLB Discount Note 99.911 0.36% 999,110.00 0.00 999,110.00 0.00 0.356%Due 1/252017 Purchase 10/282016 4595OKBSB 1,000,000.00 International Finance Corp Note 100.109 0.78% 1,001,090.00 111.11 1,001,201.11 0.00 1%Due 4/24/2017 Purchase 10/31/2016 261908107 54,218.75 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 54,218.75 0.00 54,218.75 0.00 Purchase 10/31/2016 261908107 46,875.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 46,875.00 0.00 46,875.00 0.00 Purchase 10/31/2016 261908107 3,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 3,000,000.00 0.00 3,000,000.00 0.00 Purchase 10/31/2016 313385BC9 3,000,000.00 FHLB Discount Note 99.912 0.37% 2,997,360.00 0.00 2,997,360.00 0.00 0.36%Due 1/27/2017 Subtotal 79,576,269.11 79,547,661.25 8,575.18 79,5515,236.43 0.00 Secudty 10/06/2016 261908107 44,126.80 Dreyfus Trsy/Agcy Cash Management 521 1.000 44,126.80 0.00 44,126.80 0.00 Contribution Security 10/312016 912828WUO 8,112.00 US Treasury Inflation Index Note 100.000 8,112.00 0.00 8,112.00 0.00 Contribution 0A25%Due 7/15/2024 Subtotal 52,238.90 52,238.80 0.00 52,238.80 0.00 TOTAL ACQUISITIONS 79,628,507.91 79,599,900.05 8,575.18 79,608,475.23 0.00 DISPOSITIONS Sale 10/12/2016 3135GOES8 4,000,000.00 FNMA Note 100,098 0.31 % 4,003,904.00 22,458.33 4,026,362.33 1,025,07 1.375%Due 11/15/2016 Chandler Asset Management-CONFIDENTIAL Execution Time:11O201611:53:17 AM C/" Orange County Sanitation District Consolidated Transaction Ledger Account#10283 9/30/16 Thru 10/31/16 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss DISPOSITIONS Sale 10/12/2016 3137EADS5 3,225,000.00 FHLMC Note 100.003 0.32% 3,225,099.98 13,952.60 3,239,052.58 25.13 0875%Due 10/14/2016 Sale 10/12/2016 31371EADU0 5,000,000.00 FHLMC Note 100.028 0.40% 5,001,400.00 5,208.33 5,006,608.33 2,697.63 0.5%Due 1/27/2017 Sale 10/21/2016 261908107 3,008,931.59 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 3,008,931.59 0.00 3,008,931.59 0.00 Sale 10/21/2016 261908107 2,038,220.95 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 2,038,220.95 0.00 2,038,220.95 0.00 Sale 10/24/2016 261908107 998,129.44 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 996,129.44 0.00 998,129.44 0.00 Sale 10/25/2016 261908107 2,004,332.22 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 2,004,332.22 0.00 2,004,332.22 0.00 Sale 10/26/2016 261908107 1,998,356.78 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,998,356.78 0.00 1,998,356.78 0.00 Sale 10/27/2016 261908107 5,848,166.89 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 5,848,166.89 0.00 5,848,166.89 0.00 Sale 10/27/2016 261908107 999,877.78 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 999,877.78 0.00 999,877.78 0.00 Sale 10/27/2016 261908107 996,280.55 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 996,280.56 0.00 996,280.56 0.00 Sale 10/27/2016 261908107 999,110.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 999,110.00 0.00 999,110.00 0.00 Sale 10/28/2016 261908107 1,001,201.11 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 1,001,201.11 0.00 1,001,201.11 0.00 Sale 10/31/2016 261908107 2,997,360.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.21 % 2,997,360.00 0.00 2,997,360.00 0.00 Subtotal 35,114,967.32 35,120,371.30 41,619.26 35,161,990.56 3,747.83 Paydown 10/06/2016 62888UAA8 10,839.88 NCUA Guaranteed Note CM02010-R2Due 100.000 10,839.88 0.00 10,839.88 0.00 11/6/2017 Paydown 10/17/2016 161571GC2 2,500,000.00 Chase CHAIT Pool#2013-A8 100.000 2,500,000.00 2,104.17 2,502,104.17 0.00 1.01%Due 10/15/2018 Paydown 10/17/2016 161571HHO 0.00 Chase CHAIT Pool#2016-A7 100.000 0.00 3,900.80 3,900.80 0.00 1.06%Due 9/16/2019 Paydown 10/17/2016 3133TCE95 2,116.05 FHLMC FSPC E3A 100.000 2,116.05 126.13 2,242.18 0.00 2.892%Due 8/15/2032 Paydown 10/17/2016 31348SWZ3 18.62 FHLMC FH 786064 100.000 18.62 5.14 23.76 0.00 2.262%Due 1/1/2028 Paydown 10/17/2016 3837H4NX9 1,102.42 GNMA Pool#2000-9 100.000 1,102.42 30.25 1,132.67 0.00 9.5%Due 2/16/2030 Paydown 10/17/2016 43814OAC2 0.00 Honda Auto Receivables 2016-2 A3 100.000 0.00 2,096.58 2,096.58 0.00 1.39%Due 4/15/2020 Paydown 10/17/2016 477877AD6 206,690.53 John Deere Owner Trust 2014-B A3 100.000 206,690.53 2,635.32 209,325.85 0.00 1.07%Due 1111 5/2 01 8 Paydown 10/17/2016 47788MAC4 0.00 John Deere Owner Trust 2016-A A3 100.000 0.00 2,742.67 2,742.67 0.00 1.36%Due 4/15/2020 Chandler Asset Management-CONFIDENTIAL Execution Time:1laa01611:53:17 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 9/30/16 Thru 10/31/16 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss DISPOSITIONS Paydown 10/17/2016 47788NAB4 000 John Deere Owner Trust 2016-B A2 100.000 0.00 2,706.83 2,706.83 000 1 09%Due 211 512 01 9 Paydown 10/17/2016 6547BWAB1 0.00 Nissan Auto Receivables Owner 2016-C 100.000 0.00 1,859.13 1,859.13 0.00 A2A 1.07%Due 5/15/2019 Paydown 10/17/2016 89231 MAC9 220,870.72 Toyota Auto Receivables Owner 2014-A 100.000 220,870.72 600.09 221,470.81 0.00 0.67%Due 12115/2017 Paydown 10/17/2016 89231TAB6 183,623.57 Toyota Auto Receivables Owner 2015-C 100.000 183,623.57 828.05 184,451.62 0.00 0.92%Due 2/15/2018 Paydown 10/17/2016 89236WAC2 215,672.03 Toyota Auto Receivables Owner 2015-A 100.000 215,672.03 3,355.33 219,027.36 0.00 1.12%Due 2/15/2019 Paydown 10/18/2016 43814GAC4 104,162.34 Honda Auto Receivables 20142 A3 100.000 104,162.34 534.50 104,696.84 0.00 0.77%Due 3/1912018 Paydown 10/18/2016 43814NAB1 44,015.74 Honda Auto Receivables 2016-1 A2 100.000 44,015.74 2,158.88 46,174.62 0.00 1.01%Due 6/18/2018 Paydown 10/20/2016 36225CAZ9 201.65 GNMA P.I#G280023 100.000 201.65 43.54 245.19 0.00 2.816%Due 12/20/2026 Paydown 10/20/2016 36225CC20 255.71 GNMA P.I#G280068 100.000 255.71 53.91 309.62 0.00 2.817%Due 6/20/2027 Paydown 10/20/2016 36225CN28 442.74 GNMA Pool#G280408 100.000 442.74 149.97 592.71 0.00 2.691%Due 5/20/2030 Paydown 10/20/2016 36225CNM4 57.40 GNMA P.I#G280395 100.000 57.40 19.25 76.65 0.00 2.877%Due 4/20/2030 Paydown 10/20/2016 36225DCB8 1.906.66 GNMA P.I#G280965 100.000 1,906.66 143.09 2,049.75 0.00 2.31%Due 7/2012034 Paydown 10/21/2016 43813JAC9 256,248.32 Honda Auto Receivables 2014-1 A3 100.000 256,248.32 557.73 256,806.05 0.00 0.67%Due 11121/2 0 1 7 Paydown 10/25/2016 03215PFN4 0.00 AMRESCO Residential Securities 1999-1 100.000 0.00 157.86 157.86 0.00 ADue 6125/2029 Paydown 10/25/2016 31371NUC7 217.51 FNMA FN 257179 100.000 217.51 97.70 315.21 0.00 4.5%Due 4/1/2028 Paydown 10/25/2016 31376KT22 6,096.00 FNMA FN 357969 100.000 6,096.00 789.54 6,885.54 0.00 5%Due 9/1/2035 Paydown 10/25/2016 31381 PDA3 650.48 FNMA FN 466397 100.000 650.48 1,024.95 1,675.43 0.00 3.4%Due 11/1Y2020 Paydown 10/25/2016 3138EG6F6 714.48 FNMA FN AL0869 100.000 714.48 77.48 791.96 0.00 4.5%Due 6/1/2029 Paydown 10/25/2016 31394JY35 19,270.38 FHLMC FSPC T582A 100.000 19,270.38 5,574.27 24,844.65 0.00 6.5%Due 9/25/2043 Chandler Asset Management-CONFIDENTIAL Execution Time:1laa01611:53:17 AM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 9/30/16 Thru 10/31/16 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss DISPOSITIONS Paytlown 10/25/2016 31397QREO 9,780.63 FNMA FNR 2011-3 FA 100.000 9,780.63 365.57 10,146.20 0.00 0 832%Due 2/25/2041 Paytlown 10/25/2016 31398VJ98 0.00 FHLMC FHMS K006 A2 100.000 0.00 3,188.25 3,188.25 0.00 4.251%Due 1/25/2020 Paytlown 10/25Q016 31403DJZ3 4,210.30 FNMA PODI#745580 100.000 4,210.30 762.47 4,972.77 0.00 5%Due 6/1/2036 Paytlown 10/2SQ016 31403GXF4 23.03 FNMA PODI#FN 748678 100.000 23.03 22.96 45.99 0.00 5%Due 10/1/2033 Paytlown 10/25/2016 31406PQY8 9,333.95 FNMA Pool#FN 815971 100.000 9,333.95 1,297.43 10,631.38 0.00 5%Due 3/1/2035 Paytlown 10/25Q016 31406XW75 12,091.56 FNMA PODI#FN 823358 100.000 12,091.56 385.80 12,477.36 0.00 2.875%Due 21112035 Paytlown 10/2SQ016 31407BXH7 1,630.28 FNMA PODI#FN 826080 100.000 1,530.28 143.38 1,673.66 0.00 5%Due 7/l/2035 Paytlown 10/25/2016 31410F4V4 7,593.26 FNMA Pool#FN 888336 100.000 7,593.26 1,515.20 9,108.46 0.00 5%Due 7/1/2036 Paytlown 10/25Q016 31417YAY3 1,054.58 FNMA PODI#FN MA0022 100.000 1,054.58 118.86 1,173.44 0.00 4.5%Due 4/1/2029 Paytlown 10/26/2016 78445JAA5 1.737.91 SLMA 2008-9 ADue 4Q5/2023 100.000 1,737.91 214.21 1 952.12 0.00 Paytlown 10/27/2016 31396X3Q5 5,795.84 FNMA FNR 2007-114 A6Due 10/27/2037 100.000 5,795.84 28.95 5.824.79 0.00 Subtotal 3,828,324.57 3,828,324.57 42,416.24 3,870,740.81 0.00 Redemption 10/14/2016 91159HHB9 1,000,000.00 US Bancorp Callable Note Cant 10/1412016 100.000 2.19% 1,000,000.00 9,105.56 1,009,105.56 0.00 2.2%Due 11/15/2016 Subtotal 1,000,000.00 1,000,000.00 9,105.56 1,009,105.56 0.00 Maturity 10/01/2016 458140AH3 1,000,000.00 Intel Corp Note 100.000 1,000,000.00 0.00 1,000,000.00 0.00 1.95%Due 1011/2016 Maturity, 10/05/2016 3133MJ59 700,000.00 FHLB Discount Note 100.000 700,000.00 0.00 700,000.00 0.00 0.25%Due 10/5/2016 Maturity, 10/07/2016 02665WAB7 1,000,000.00 American Honda Finance Note 100.000 1,000,000.00 0.00 1,000,000.00 0.00 I A 25%Due 10/7/2016 Maturity 10/11/2016 24422ESD2 1,000,000.00 John Deere Capital Corp Note 100.000 1,000,000.00 0.00 1,000,000.00 0.00 1.05%Due 1 0111/2 01 6 Maturity, 10/11/2016 3133961<36 3,000,000.00 FHLMC Discount Note 100.000 3,000,000.00 0.00 3,000,000.00 0.00 0.22%Due 1 0111/2 01 6 Maturity, 10/12Q016 3133MK40 10,700,000.00 FHLB Discount Note 100.000 10,700,000.00 0.00 10,700,000.00 0.00 0.258%Due 10/12/2016 Chandler Asset Management-CONFIDENTIM Execution Time:1laa01611:53:17 MA C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 9/30/16 Thru 10/31/16 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss DISPOSITIONS Maturity 10/12/2016 89233GKC9 1,000,000.00 Toyota Motor Credit Discount CP 99.958 1,00,000.00 0.00 1,000,000.00 000 0 43%Due 10/12/2016 Maturity 10/19/2016 313588137 10,000,000.00 FNMA Discount Note 100.000 10,000,000.00 0.00 10,000,000.00 0.00 0.33%Due 1 011 912 01 6 Maturity, 10/26/2016 06538BKS1 6,630,000.00 Bank of Tokyo Mitsubishi NV Discount CP 99.753 6,630,000.00 0.00 6,630,000.00 0.00 0.74%Due 1 012 6/2 01 6 Maturity, 10/26/2016 06538BKS1 1,290,000.00 Bank of Tokyo Mitsubishi NV Discount CP 99.753 1,290,000.00 0.00 1,290,000.00 0.00 0.74%Due 1 012 6/2 01 6 Maturity 10/31/2016 912B28LU2 3,000,000.00 US Treasury Note 100.000 3,000,000.00 0.00 3,000,000.00 0.00 3.125%Due 10/31/2016 Subtotal 39,320,000.00 39,320,000.00 0.00 39,320,000.00 0.00 Security 10/12/2016 261908107 10,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 10,000,000.00 0.00 10,000,000.00 0.00 Withdrawal Security 10/13/2016 261908107 25,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 25,000,000.00 0.00 25,000,000.00 0.00 Withdrawal Subtotal 35,000,000.00 3S,000,000.00 0.00 35,000,000.00 0.00 TOTAL DISPOSITIONS 114,263,291.89 114,268,695.87 93,141.06 114,361,836.93 3,747.83 OTHER TRANSACTIONS Interest 10/01/2016 458140AH3 1,000,000.00 Intel Corp Note 0.000 9,750.00 0.00 9,750.00 000 1.95%Due 1011/2016 Interest 10/02r2016 3137EADM8 7,500,000.00 FHLMC Note 0.000 46,875.00 0.00 46,875.00 0.00 1.25%Due 10/2/2019 Interest 10/07/2016 02665WAB7 1,000,000.00 American Honda Finance Note 0.000 5,625.00 0.00 5,625.00 0.00 1.125%Due 109/2016 Interest 10/11/2016 24422ESD2 1,000,000.00 John Deere Capital Corp Note 0.000 5,250.00 0.00 5,250.00 0.00 1.05%Due 10/11/2016 Interest 10/24/2016 4595OKBS8 5,000,000.00 Intemabonal Finance Corp Note 0.000 25,000.00 0.00 25,000.00 0.00 1%Due 4/24/2017 Interest 10/31/2016 9128281U99 5,500,000.00 US Treasury Note 0.000 37,812.50 0.00 37,812.50 0.00 1.375%Due 10/31/2020 Interest 10/31/2016 912828LU2 3,000,000.00 US Treasury Note 0.000 46,875.00 0.00 46,875.00 0.00 3.125%Due 10/31/2016 Chandler Asset Management-CONFIDENTIAL Execution Time:1laa01611:53:17 AM �'" Orange County Sanitation District Consolidated Transaction Ledger Account#10283 9/30/16 Thru 10/31/16 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss OTHER TRANSACTIONS Interest 10/31/2016 912828SSO 3,750,000.00 US Treasury Note 0.000 16,406.25 0.00 16,406.25 0.00 0875%Due 4/30/2017 Subtotal 27,750,000.00 193,593.75 0.00 193,593.75 0.00 Dividend 10/03/2016 261908107 1,888,158.62 Dreyfus Trsy/Agcy Cash Management 521 0.000 0,12 0,00 0.12 0.00 Dividend 10/04/2016 261908107 1,888,158.74 Dreyfus Trsy/Agcy Cash Management 521 0.000 367.82 0,00 367.82 0.00 Dividend 10/04/2016 261908107 6,275,972.23 Dreyfus Trsy/Agcy Cash Management 521 0.000 437.81 0.00 437.81 0.00 Subtotal 10,052,289.59 805.75 0.00 805.75 0.00 Cash Capital 10/06/2016 525ESCOY6 0.00 Lehman Brothers Note-DefaultedDue 0.000 33,915.89 0.00 33,915.89 0.00 Distribution 10/22/2049 Cash Capital 10/06/2016 525ESCIB7 0.00 Lehman Brothers Note-DefaultedDue 0.000 10,210.91 0.00 10,210.91 0.00 Distribution 1/24/2017 Subtotal 0.00 44,126.80 0.00 44,126.80 0.00 TOTAL OTHER TRANSACTIONS 37,802,289.59 238,526.30 0.00 238,526.30 0.00 Chorus,Asset Management-CONFIDENTIAL Exeation Time:11O201611:53:17 AM ITEM NO. 9 MINUTES OF THE OPERATIONS COMMITTEE Orange County Sanitation District Wednesday, October 5, 2016, 5:00 p.m. A regular meeting of the Operations Committee was called to order by Committee Vice-Chair Shawver on Wednesday, October 5, 2016 at 5:01 p.m. in the Administration Building. Alternate Director Beard led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: David Shawver, Vice-Chair Jim Herberg, General Manager Kris Beard (Alternate) Bob Ghirelli, Assistant General Manager Robert Kiley Celia Chandler, Director of Human Resources Richard Murphy Jim Colston, Director of Environmental Services Steve Nagel Rob Thompson, Director of Engineering Tim Shaw(Alternate) Ed Torres, Director of Operations and Maintenance Michelle Steel Lorenzo Tyner, Director of Finance & Chad Wanke Administrative Services Mariellen Yarc Kelly Lore, Clerk of the Board Greg Sebourn, Board Vice-Chair Jennifer Cabral John Nielsen, Board Chair Mike Dorman Mark Esquer COMMITTEE MEMBERS ABSENT: Dean Fisher Ellery Deaton Damien Frabizio Fred Smith Lisa Frigo John Withers, Chair Alfredo Garcia Mark Manzo Kathy Millea Jeff Mohr Man Nguyen Eileen Sales OTHERS PRESENT: Brad Hogin, General Counsel Michael Beverage, Alternate Director YLWD Bob Ooten, Alternate Director CMSD James Clark, Black&Veatch Rich ten Bosch, Black &Veatch PUBLIC COMMENTS: None. 10N 016 Operations CommiOee Minutes Page 1 of 5 REPORT OF COMMITTEE CHAIR: Committee Vice-Chair Shawver did not provide a report. REPORT OF GENERAL MANAGER: General Manager Jim Herberg announced that the State of the District Breakfastwill take place on October 14, 2016 from 8:00 a.m. — 10:00 a.m. with an optional tour of Plant No. 1 thereafter. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED. SECONDED. and DULY CARRIED TO: Approve Minutes of the September 7, 2016 Operations Committee Meeting. AYES: Kiley, Murphy, Nagel, Sebourn, Shaw (Alternate), Shawver, Steel, and Wanke NOES: None ABSTENTIONS: Beard (Alternate) ABSENT: Deaton, Nielsen, F. Smith, Withers and Yarc 2. PLANT NO. 1 FLEET SERVICES UST LEAK REMEDIATION, PROJECT NO. FIE 4-05 (Rob Thompson) MOVED. SECONDED. and DULY CARRIED T0: Recommend to the Board of Directors to: Increase the task order limit for Contract FE15-00-01 with Dudek from $86,116 to $160,000 for Task Order FE15-00-01-01 to authorize the General Manager to negotiate and award additional engineering services related to Plant No. 1 Fleet Services UST Leak Remediation, Project No. FE14-05. AYES: Beard (Alternate), Kiley, Murphy, Nagel, Sebourn, Shaw (Alternate), Shawver, Steel, and Wanke NOES: None ABSTENTIONS: None ABSENT: Deaton, Nielsen, F. Smith, Withers and Yarc 3. HEADWORKS REHABILITATION AND EXPANSION AT PLANT 1, PROJECT NO. P1-105 (Rob Thompson) MOVED. SECONDED, and DULY CARRIED TO: A. Approve a service contract with Almega Environmental for Plant No. 1 Trunklines Air Sample Collection and Analysis (P1-105) Specification No. S-2016-793 for an amount of$98,150 for odor sampling and analysis of new Bioscrubbers 9 and 10 for Headworks Rehabilitation and Expansion at Plant 1, Project No. P1-105; and 1 010 512 01 6 Operations Committee Minutes Page 2 of 5 B. Approve a contingency of$9,815 (10%). AYES: Beard (Alternate), Kiley, Murphy, Nagel, Sebourn, Shaw (Alternate), Shawver, Steel, and Wanke NOES: None ABSTENTIONS: None ABSENT: Deaton, Nielsen, F. Smith, Withers and Yarc 4. UPDATE TO 2015 AUDIT REPORT OF OCSD'S SANITARY SEWER SYSTEM MANAGEMENT PLAN (Ed Torres) MOVED. SECONDED, and DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Close out Memorandum for the 2015 Orange County Sanitation District's Sewer System Management Plan audit, dated June 30, 2016. AYES: Beard (Alternate), Kiley, Murphy, Nagel, Sebourn, Shaw (Alternate), Shawver, Steel, and Wanks NOES: None ABSTENTIONS: None ABSENT: Deaton, Nielsen, F. Smith, Withers and Yarc 5. INDUSTRIAL CLEANING SERVICES, SPECIFICATION NO. S-2016.714BD (Ed Torres) MOVED, SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a contingency increase of$110,565 (21%) to the service contract with Performance Pipeline Technologies for Industrial Cleaning Services, Specification No. S-2015-714BD, forthe period December 11, 2015 through December 10, 2016, for a new total contingency amount not to exceed $215,865 (41%); and B. Approve a contingency of $105,300 (20%) per year for all remaining renewal periods. AYES: Beard (Alternate), Kiley, Murphy, Nagel, Sebourn, Shaw Alternate), Shawver, Steel, and Wanke NOES: None ABSTENTIONS: None ABSENT: Deaton, Nielsen, F. Smith, Withers and Yarc Board Chair Nielsen and Director Yarc arrived at 5,06 p.m. 10/0W2016 Operations Committee Minutes Page 3 of 6 NON-CONSENT CALENDAR: 6. SLUDGE DIGESTER REHABILITATION AT PLANT NO. 1, PROJECT NO. P1-100 (Rob Thompson) Engineering Manager Dean Fisher provided an informative PowerPoint presentation and an overview of the project challenges, including unknown conditions and extra work which resulted in delays and the additional cost. MOVED, SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a budget increase of$500,000 for Sludge Digester Rehabilitation at Plant No.1, Project No. P1-100,for a total budget amount of$67,150,000; and B. Approve a contingency increase of $837,500 (2.5%) to the construction contract with JR Filanc Construction Company for Sludge Digester Rehabilitation at Plant No. 1, Project No. P1-100, for a total contingency of $9,212,500 (27.5%). AYES: Beard (Alternate), Kiley, Murphy, Nagel, Sebourn, Shaw (Altemate), Shawver, Steel, and Wanke NOES: None ABSTENTIONS: None ABSENT: Deaton, Nielsen, F. Smith, Withers and Yarc INFORMATION ITEMS: 7. ORANGE COUNTY SANITATION DISTRICT BIOSOLIDS PROGRAM (Jim Colston) Director of Environmental Services Jim Colston provided a PowerPoint presentation on the Sanitation District's Biosolids Program, including the history of the program, the production trends and Master Plan overview. The future of the biosolids program was briefly discussed in relation to possible new technologies such as AquaCritox. DEPARTMENT HEAD REPORTS: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Vice-Chair Seboum wished General Manager Herberg a very Happy Birthday. 10/6512616 Operations Committee Minutes Page 4 of 5 ADJOURNMENT Committee Vice-Chair Shawver declared the meeting adjourned at 5:32 p.m. to the next scheduled meeting of Wednesday, November 2, 2016 at 5:00 p.m. Sub itted by, 3 Kell A. re Cler of We Board 10/052016 Operations Committee Minutes Page 5 of 5 MINUTES OF THE LEGISLATIVE AND PUBLIC AFFAIRS COMMITTEE Orange County Sanitation District Monday, October 10, 2016 at 3:30 p.m. A regular meeting of the Legislative and Public Affairs Committee was called to order by Chair Nielsen on Monday, October 10, 2016 at 3:31 p.m. in the Administration Building of the Orange County Sanitation District. Director Kim led the pledge of allegiance. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Tom Beamish, Director Jim Herberg, General Manager Robert Kiley, Director Bob Ghirelli,Assistant General Manager Peter Kim, Director Celia Chandler, Director of Human John Nielsen, Board Chair Resources Greg Sebourn, Board Vice-Chair Jim Colston, Director of Environmental Services COMMITTEE MEMBERS ABSENT: Ed Torres, Director of Operations and Lucille Kring, Director Maintenance John Withers, Director Rob Thompson, Director of Engineering Lorenzo Tyner, Director of Finance & Administrative Services Tina Knapp, Deputy Clerk of the Board Jennifer Cabral Tanya Chong Alfredo Garcia Rebecca Long Man Nguyen Kelly Newell OTHERS PRESENT: Brad Hogin, General Counsel Adam Link, CASA Eric O'Donnell, Townsend Public Affairs Eric Sapirstein, ENS Resources (via Teleconference) PUBLIC COMMENTS: None. 10/1=016 Legislative and Public Attains Committee Minutes Page 1 of 4 REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of general Interest to the Committee Members. These reports are for information only and require no action by the Committee. General Manager Jim Herberg announced that reservations are still being accepted for the State of the District being held on Friday. October 14t1 at 8:00 a.m. CONSENT CALENDAR: Consent Calendar Items are considered to be routine and will be enacted, by the Committee, after one motion, without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED. SECONDED and DULY CARRIED TO: Approve minutes for the regular Legislative and Public Affairs Committee meeting held on September 13, 2016. AYES: Kiley, Kim, Nielsen, and Sebourn NOES: None ABSTENTIONS: Beamish ABSENT: Kring and Withers NON-CONSENT CALENDAR: None. INFORMATION ITEMS: 2. CALIFORNIA ASSOCIATION OF SANITATION AGENCIES PRESENTATION (Rebecca Long) Assistant General Manager Bob Ghirelli indicated that this is the time of the year where we invite our legislative partners to update the Committee on legislative activities achieved over the past year and goals for the coming year. Mr. Ghirelli indicated that the Association of California Cities Orange County (ACC-OC) is scheduled to attend the November 811 meeting of this Committee and that the District's legislative plan would be presented to the Committee in December. Mr. Ghirelli introduced Adam Link, Director of Government Affairs from the California Association of Sanitation Agencies (CASA), who provided a PowerPoint presentation highlighting CASA's legislative activities/platform, significant legislation in 2016, new developments at CASA, upcoming CASA events and initiatives, and CASA's priorities for 2017. Principal Public Affairs Specialist Jennifer Cabral commented that the intent of the recent presentations to the Board by Townsend Public Affairs (TPA) and 1 0/1 01201 6 Legislative and Public Affairs Committee Minutes Page 2 of ENS, in addition to today's presentation by CASA and next month's presentation by ACC-OC, is to provide the resources to engage in a dialogue regarding the legislative plan and the Directors' goals for the District. 3. PUBLIC AFFAIRS UPDATE (Jennifer Cabral) Ms. Cabral reported that the refreshed website should be launched this week. Ms. Cabral also provided a recap of September public affairs activities including community outreach and speaking events and tours. Ms. Cabral introduced Senior Staff Analyst Tanya Chong and indicated that Ms. Chong and Senior Staff Analyst Daisy Covarrubias would alternate attending these Committee meetings should there be specific questions regarding construction. 4. LEGISLATIVE AFFAIRS UPDATE (Rebecca Long) Senior Public Affairs Specialist Rebecca Long recapped the current number of individuals registered for the State of the District on October 14". Eric O'Donnell, TPA, provided an update on end of session legislative activities in Sacramento and reported on a workshop he attended regarding direct potable reuse and the feasibility of same. Mr. O'Donnell indicated that there is support for direct potable reuse and provided an overview of the recommendations made for implementing such a program. Mr. O'Donnell responded to a question from the Committee indicating that SB 163 may be reintroduced by mid-February 2017. Eric Sapirstein, ENS Resources, provided a general update on federal legislative activity including Water Resources Development Act (WRDA) legislation and WIFIA Program implementation advances OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Director of Environmental Services Jim Colston responded to a question from the Committee indicating that there was no update on the pending regulations regarding dental practices and their impact on wastewater, and indicated that the implementation period would be no less than three years. Mr. Colston also responded to a question from the Committee indicating that permitting for organizations performing liquefaction of animal remains is still being reviewed and the proper process being determined. 10/102016 Legislative and Public Affairs Committee Minutes Page 3 of 4 ADJOURNMENT: Chair Nielsen declared the meeting adjourned at 4:16 p.m. to the next Legislative and Public Affairs Committee Meeting, Tuesday, November 8, 2016 at 8:00 a.m. Submitted by: Tina Knapp Deputy Clerk of the Board 10/10/2016 Legislative and Public Affairs Committee Minutes Page 4 of 4 MINUTES OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, October 12, 2016 at 5:00 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Committee Chair Curry on October 12, 2016 at 5:01 p.m. in the Administration Building of the Orange County Sanitation District. Chair Curry led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: KeNh Curry, Chair Jim Herberg, General Manager Lucille Kring, Vice-Chair Bob Ghirelli, Assistant General Manager Steven Choi Celia Chandler, Director of Human Resources Jim Ferryman Jim Colston, Director of Environmental Services Erik Peterson (Alternate) Rob Thompson, Director of Engineering Peter Kim Lorenzo Tyner, Director of Finance & Diana Fascenelli (Alternate) Administrative Services John Nielsen, Board Chair Tina Knapp, Deputy Clerk of the Board Greg Seboum, Board Vice-Chair Jennifer Cabral Al Garcia COMMITTEE MEMBERS ABSENT: Kathy Millea Joy Neugebauer Man Nguyen Glenn Parker Steve Speakman Teresa Smith Mike White Sal Tinajero OTHERS PRESENT: Brad Hogin, General Counsel Bill Morgan, White Nelson Diehl Evans (Winde) PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Committee Chair Curry did not provide a report. REPORT OF GENERAL MANAGER: General Manager Jim Herberg did not provide a report. 10/12/2016 Administration Committee Minutes Page 1 of 5 REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: Director of Finance and Administrative Services Lorenzo Tyner did not provide a report. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED AND DULY CARRIED TO: Approve Minutes of the September 14, 2016 Administration Committee Meeting. AYES: Choi, Curry, Fascenelli (Alternate), Ferryman, Kim, Kring, Nielsen, and Peterson (Alternate) NOES: None ABSTENTIONS: None ABSENT: Neugebauer, Parker, Sebourn, T. Smith, and Tinajero 2. TEMPORARY EMPLOYMENT SERVICES (Celia Chandler) MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Authorize the General Manager to enter into contracts with various staffing firms for Temporary Employment Services (Specification No.CS-2009- 421 BD); and B. Authorize the General Manager to add or remove staffing firms from the available pool as needed, to meet work requirements identified by the Human Resources Department, with no change to the approved total budget, at a cost not to exceed $814,400. AYES: Choi, Curry, Fascenelli (Alternate), Ferryman, Kim, Kring, Nielsen, and Peterson (Alternate) NOES: None ABSTENTIONS: None ABSENT: Neugebauer, Parker, Sebourn, T. Smith, and Tinajero 3. DEFERRED COMPENSATION PROGRAM UPDATE (Celia Chandler) MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Adopt Resolution No. OCSD 16-XX, entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District Acknowledging the Change in Title of the Current Deferred Compensation Plan Administrator to Voya Financial Services and Authorizing Voya Financial Services to 10/1W016 Administration Committee Minutes Page 2 of 5 Continue Serving as Plan Administrator of the Deferred Compensation Plan for Officers and Employees of the Orange County Sanitation District; and, Repealing Resolution No. OCSD 09-02"; and B. Authorize the General Manager, or his designee, to execute all documents necessary to effect said Deferred Compensation Plan, in a form approved by General Counsel. AYES: Choi, Curry, Fascenelli (Alternate), Ferryman, Kim, Kring, Nielsen, and Peterson (Alternate) NOES: None ABSTENTIONS: None ABSENT: Neugebauer, Parker, Sebourn, T. Smith, and Tinajero 4. RENEWAL OF ESRI GIS ENTERPRISE LICENSE AGREEMENT (Lorenzo Tyner) MOVED, SECONDED AND DULY CARRIED TO: Authorize the renewal of the Sole Source ESRI GIB Enterprise License Agreement for a two-year period commencing December 31, 2016 through December 30, 2016 for a total amount not to exceed $191,000. AYES: Choi, Curry, Fascenelli (Alternate), Ferryman, Kim, Kring, Nielsen, and Peterson (Alternate) NOES: None ABSTENTIONS: None ABSENT: Neugebauer, Parker, Sebourn, T. Smith, and Tinajero NON-CONSENT: 5. CONTRACTED INTERNAL AUDIT OF CAPITAL IMPROVEMENT PROJECT CONTRACTS (Lorenzo Tyner) Mr. Tyner introduced Controller Mike White who provided an overview of this item. Mr.White introduced Bill Morgan of White Nelson Diehl Evans who is in attendance tonight and available to answer questions. Mr.White indicated that the Board Audit Ad Hoc Committee reviewed this item and concluded that the Sanitation District is appropriately following the California Public Contract Code and Sanitation District Purchasing Policies and Procedures in administering its capital improvement project contracts. MOVED. SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Accountants' Report on Agreed-Upon Procedures Review on Capital Improvement Project Contracts. AYES: Choi, Curry, Fascenelli (Alternate), Ferryman, Kim, Kring, Nielsen, and Peterson (Alternate) NOES: None 1011212016 Administration Committee Minutes Page 3 of 5 ABSTENTIONS: None ABSENT: Neugebauer, Parker, Sebourn, T. Smith, and Tinajero 6. INVEST AND/OR REINVEST DISTRICT'S FUNDS (Lorenzo Tyner) Mr. Tyner provided a brief introduction of this item and Mr. White provided a recap of this item. Board Vice-Chair Seboum arrived at 5:06 p.m. Mr. White and Mr. Tyner responded to questions from the Committee regarding our consulting firm, return rates on the Sanitation District's investments, and the security of the Sanitation District's investments. Committee Chair Keith Curry and Board Chair John Nielsen also addressed questions regarding the security of investments. MOVED. SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 16-XX, entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks; and Repealing Resolution No. OCSD 15-25." AYES: Choi, Curry, Fascenelli (Alternate), Ferryman, Kim, Kring, Nielsen, Sebourn, and Peterson (Alternate) NOES: None ABSTENTIONS: None ABSENT: Neugebauer, Parker, T. Smith, and Tinajero 7. ELIMINATION OF UNFUNDED ACTUARIAL ACCRUED LIABILITY WITHIN THE ORANGE COUNTY EMPLOYEES' RETIREMENT SYSTEM (Lorenzo Tyner) Mr. Tyner provided an overview of this item and responded to a question from the Committee indicating that payment would be made from reserves. Mr. Tyner also addressed the possibility of creating a stabilization fund. MOVED. SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: Direct staff to pay off the Orange County Sanitation District's unfunded actuarial accrued pension liability (UAAL) in its defined pension plan administered by the Orange County Employees Retirement System (OCERS) in an amount not to exceed $40 million. AYES: Choi, Curry, Fascenelli (Alternate), Ferryman, Kim, Kring, Nielsen, Sebourn, and Peterson (Alternate) NOES: None ABSTENTIONS: None ABSENT: Neugebauer, Parker, T. Smith, and Tinajero 10/122016 Administration Committee Minutes Page 4 of 5 INFORMATION ITEMS: 8. ORANGE COUNTY SANITATION DISTRICT BIOSOLIDS PROGRAM (James Colston) Director of Environmental Services Jim Colston provided a PowerPoint presentation on the Sanitation District's Biosolids Program, which included the history of the program, the production trends, and Master Plan overview. Mr. Colston responded to questions from the Committee regarding how Irvine Ranch Water District will be processing biosolids, payment from haulers for incoming waste, and where the outgoing biosolids are delivered. The future of the biosolids program was briefly discussed in relation to co-composting with Orange County Waste & Recycling and the future of the biosolids program as it relates to possible new technologies such as AquaCritox. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Chair Curry reminded the Committee about the State of the District event being held on Friday, October 14t^ at 8:00 a.m. ADJOURNMENT: Committee Chair Curry declared the meeting adjourned at 5:49 p.m. to the next regularly scheduled meeting of Wednesday, November 9, 2016 at 5:00 p.m. Submitted by: Tina K(/lapp�-o- Deputy Clerk of the Board IW122016 Administration Committee Minutes Page 5 of 5 MINUTES OF THE STEERING COMMITTEE Orange County Sanitation District Wednesday, October 26, 2016 at 5:00 p.m. A regular meeting of the Steering Committee of the Orange County Sanitation District was called to order by Chair Nielsen on Wednesday, September 28, 2016 at 5:05 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: John Nielsen, Chair Jim Herberg, General Manager Greg Sebourn, Vice-Chair Bob Ghirelli, Assistant General Manager Keith Curry, Administration Committee Celia Chandler, Director of Human Chair Resources Tom Beamish, Member-At-Large Jim Colston, Director of Environmental Lucille Kring, Member-At-Large Services David Shawver, Member-At-Large Rob Thompson, Director of Engineering Ed Torres, Director of Operations & COMMITTEE MEMBERS ABSENT: Maintenance John Withers, Operations Committee Lorenzo Tyner, Director of Finance & Chair Administrative Services Kelly Lore, Clerk of the Board Marc Brown Jennifer Cabral Michael Dorman Al Garcia Laurie Klinger Tina Knapp Mark Manzo Kathy Millea Jeff Mohr Andrew Nau OTHERS PRESENT: Brad Hogin, General Counsel Laura Kalty, Liebert Cassidy Whitmore PUBLIC COMMENTS: No public comments were provided. 10/26/2016 Steering Committee Minutes Page 1 of 5 REPORTS: Chair Nielsen did not provide a report. General Manager Jim Herberg did not provide a report. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the September 28, 2016 Regular Steering Committee Meeting. AYES: Beamish; Curry; Kring; Nielsen; Sebourn; and Shawver NOES: None ABSTENTIONS: None ABSENT: Withers 2. STRATEGIC PLAN UPDATE (Robert Ghirelli) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Strategic Plan Update. AYES: Beamish; Curry; Kring; Nielsen; Sebourn; and Shawver NOES: None ABSTENTIONS: None ABSENT: Withers NON-CONSENT CALENDAR: 3. SUCCESSOR MEMORANDUMS OF UNDERSTANDING FOR THE SUPERVISOR & PROFESSIONAL GROUPS (Celia Chandler) Chief Negotiator, Laura Kalty (Liebert Cassidy Whitmore), stated that the presented MOU represents the direction given by the Board of Directors. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Adopt Resolution No. OCSD 16-21, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving the Memoranda of Understanding between the Orange County Sanitation District and the Supervisory and Professional Management Group (SPMG), for Fiscal Years 2016/2017, 2017/2018 & 201812019"; and 10/26/2016 Steering Committee Minutes Page 2 of 5 B. Direct staff to finalize and sign the Memorandum of Understanding (MOUs) between Orange County Sanitation District and the two (2) SPMG bargaining units. AYES: Beamish; Curry; Kring; Nielsen; Sebourn; and Shawver NOES: None ABSTENTIONS: None ABSENT: Withers 4. SUCCESSOR MEMORANDUMS OF UNDERSTANDING FOR THE ORANGE COUNTY EMPLOYEES ASSOCIATION (Celia Chandler) Chief Negotiator, Laura Kalty (Liebert Cassidy Whitmore), stated that the presented MOU represents the direction given by the Board of Directors. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Adopt Resolution No. OCSD 16-22, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving the Memoranda of Understanding between the Orange County Sanitation District and the Orange County Employees Association (OCEA) for Fiscal Years 2016/2017, 2017/2018 & 2018/2019", and B. Direct staff to finalize and sign the Memoranda of Understanding (MOUs) between Orange County Sanitation District and the three (3) OCEA bargaining units. AYES: Beamish; Curry; Kring; Nielsen; Sebourn; and Shawver NOES: None ABSTENTIONS: None ABSENT: Withers 5. SUCCESSOR MEMORANDUM OF UNDERSTANDING FOR THE INTERNATIONAL UNION OF OPERATING ENGINEERS — LOCAL 501 (Celia Chandler) Chief Negotiator, Laura Kalty (Liebert Cassidy Whitmore), stated that the presented MOU represents the direction given by the Board of Directors. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Adopt Resolution No. OCSD 16-23, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving the Memorandum of Understanding between the Orange County Sanitation 10/26/2016 Steering Committee Minutes Page 3 of 5 District and the International Union of Operating Engineers, Local 501 for Fiscal Years 2016/2017, 2017/2018 & 2018/2019"; and B. Direct staff to finalize and sign the Memorandum of Understanding (MOUs) between Orange County Sanitation District and the Local 501 bargaining unit. AYES: Beamish; Curry; Kring; Nielsen; Sebourn; and Shawver NOES: None ABSTENTIONS: None ABSENT: Withers CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54957.6, 54956.8 & 54956.9(d)(1): The Committee convened in closed session at 5:10 p.m. to discuss seven items. Items No. 1; 6 & 7 were not heard. 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 Committee reconvened in regular session at 6:03 p.m. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: The Chair declared the meeting adjourned at 6:04 p.m. to the next Steering Committee meeting to be held on Wednesday, November 16, 2016 at 5:00 p.m. 10/26/2016 Steering Committee Minutes Page 4 of 5 Submitted by: Kelly Lore Clerk of the Board 10/26/2016 Steering Committee Minutes Page 5 of 5 OPERATIONS COMMITTEE Meeting Date TOBE.Or .Dir. 11/02/16 11/16/16 AGENDA REPORT Item Item Number 4 10 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: DOIG DRIVE PROPERTY LEASE EXTENSION GENERAL MANAGER'S RECOMMENDATION Approve the Second Amendment to the Doig Property Lease, to enter into an eight (8) month lease extension of the Orange County Sanitation District's real property at 7311 Doig Drive, Garden Grove, in a form approved by General Counsel. BACKGROUND In 2006, the Sanitation District purchased the property at 7311 Doig Drive in Garden Grove to accommodate the expansion of collection system staffing. However, as a result of the transfer and anticipated transfer of local sewers to local service providers in the Cities of Costa Mesa, Newport Beach, Orange and Tustin and Unincorporated Orange County, it was later determined that this expansion was no longer necessary. Based on the Board's direction and subsequent action declaring the property surplus, staff had negotiated and entering into a five-year agreement to lease the property. The current agreement is set to expire this year. As part of the agreement, the tenant may elect to exercise one five-year option to extend the lease to ten years with annual rate increase of 2%.The tenant has formally requested to exercise the one five-year lease extension. During a review of the property, it was determined that seismic upgrades are required to maintain the property in good order and in compliance with safety codes. Completion of these repairs will be finished after the current lease agreement is set to expire. Therefore, staff and the tenant had mutually agreed to extend the current lease by three months before the tenant elects to exercise their five-year option to extend the agreement. After further investigation of the necessary repairs and time needed for the competitive contracting process, it has been determined that a further extension of the current lease is mutually beneficial to OCSD and the tenant. RELEVANT STANDARDS • Protection of Orange County Sanitation District assets Page 1 of 2 PROBLEM It has been determined that the Doig property requires seismic upgrade work that will not be compete before the current lease expiration date and may compromise some of the tenant's manufacturing operations for a period of time. PROPOSED SOLUTION The lease extension will provide both parties the opportunity to assess the magnitude of the seismic upgrades and work collaboratively on potential lease relief should the work significantly impact the tenant's operations. TIMING CONCERNS Timing is of the essence due to impending repair work and an active lease agreement. RAMIFICATIONS OF NOT TAKING ACTION Current tenant could be adversely affected unless the lease extension is authorized. PRIOR COMMITTEE/BOARD ACTIONS July 2016 - Board of Directors approved First Amendment to extend the lease by three months. December 2011 - Board of Directors authorized the lease at 7311 Doig Drive. November 2010 - Board of Directors declared the property at 7311 Doig Drive as surplus property. ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachments are included in hard copy and may also be viewed on-line at the OCSD websife (www.ocsd.coml with the complete agenda package: • Second Amendment to the Doig Property Lease Page 2 of 2 SECOND AMENDMENT TO THE DOIG PROPERTY LEASE BY AND BETWEEN THE ORANGE COUNTY SANITATION DISTRICT AND APPF INCORPORATED,STERLING SLEEP SYSTEMS This Second Amendment("Amendment")to the Doig Property Lease By And Between the Orange Comity Sanitation District And APPF Incorporated, Sterling Sleep Systems effective February 1, 2012 ("Lease's is entered into this November 16,2016 by and between the Orange County Sanitation District, ("OCSD"and"Lessor')and APPF Incorporated,Sterling Sleep Systems("APPF"and"Lessee'). OCSD and APPF are collectively referred to herein as"The Parties". RECITALS A. WHEREAS, OCSD and APPF entered into the Lease for property located on Doig Drive in the City of Garden Grove effective February 1,2012 for a term of five years;and B. WHEREAS,the Lease contained an option the Lessee may exercise to extend the term of the Lease for an additional five years,however Lessee must provide 180 days or six months'notice of its intent to exercise this option;and C. WHEREAS, Lessee intends to exercise the option to extend the Lease for five years and Lessor intends to honor the terms of the Lease;and D. WHEREAS,it was recently discovered that the building needs significant seismic retrofitting repair work that may take several months to complete and may potentially impact Lessee's manufacturing operations during the time to complete the repairs;and E. WHEREAS,Lessor intends to hire a consultant to evaluate the repairs required and the scope of work necessary to complete the repairs to provide the Parties an understanding of the potential impact to Lessee's manufacturing operations; and F. WHEREAS,the consultant's evaluation will take several months to complete;and a 119V53.1 G. WHEREAS,the Parties initially entered into a First Amendment to the Doig Property Lease on or about July 27, 2016 to extend the current lease, but now believe Lessor will require additional time to perform design work and evaluate potential impacts to Lessee's operations; and H. WHEREAS, the Parties agree it is best to extend the current lease by an additional eight months, through December 31,2017,to allow the evaluation to be completed and the Parties to develop a plan to relieve any impact caused by the necessary repairs. NOW,THEREFORE,THE PARTIES AGREE AS FOLLOWS: 1. Extension of Lease Term. The tern ofthe current Lease shall be extended by eight additional months and the original term of the Lease shall now terminate on December 31,2017. 2. Notice of Option to Extend Lease. Lessee shall have the option to extend the term of the Lease for an additional five years,however Lessee must provide notice of Lessee's intent to exercise this option to extend the Lease at least one hundred and eighty days prior to the termination date of the original Lease,or no later than July 3,2017. 3, Rent. The rent schedule for the remainder of 2016 and all of 2017 shall remain the same during the additional eight month extension of the original Lease. Lessee agrees to pay the current rate of$20,713 per month through December 31, 2017. Should Lessee exercise the option to extend the Lease for an addition five years, Lessee will resume payments in accordance with the Doig Property Rent Schedule attached as Addendum to the OCSD Commercial Lease,Doig Property on January 1,2018. 4. Entire Agreement. The Lease as amended by this Amendment constitutes the entire understanding between the parties and supersedes all prior negotiations or agreements between them pertaining to the subject matter hereof. z 1198053.1 5. Lease Remains in Effect. All other terms and conditions in the Lease not expressly amended by or inconsistent with the purpose of this Amendment as set forth herein remain in full force and effect. - 6. Authorized Signatories. APPF and its signatories herein covenant and represent that each individual executing this Amendment is a person duly authorized to execute this Lease Amendment for APPF. IN WITNESS WHEREOF,the parties have executed this Amendment as ofthe day and year above written. "LESSOR" ORANGE COUNTY SANITATION DISTRICT Date: By: John Nielsen Chairman of the Board ATTEST: Kelly Lore Clerk of the Board APPROVED AS TO FORM: Brad Hogin General Counsel "LESSEE" APPF INCORPORATED,STERLING SLEEP SYSTEMS Date: % ©G% By, President,Board of Directors 3 1199M.1 OPERATIONS COMMITTEE Meeting Date TOBd.of Dir. 11/02/16 11/16/16 AGENDA REPORT tem Number Iem Numbe 6 11 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: OCEAN OUTFALL SYSTEM REHABILITATION, PROJECT NO. J-117 GENERAL MANAGER'S RECOMMENDATION A. Approve a budget increase of $28,517,000 for Ocean Outfall System Rehabilitation, Project No. J-117, for a total budget amount of$91,000,000; and B. Approve a contingency increase of $2,372,305 (35%) to the Professional Design Services Agreement with Brown and Caldwell for Ocean Outfall System Rehabilitation, Project No. J-117, for a total contingency of$3,050,106 (45%). BACKGROUND The Orange County Sanitation District's (Sanitation District) treated effluent is either delivered to the Groundwater Replenishment System (GWRS)for recycling or is pumped to the ocean through our outfall pipeline. As recycling has increased, the Sanitation District's normal outfall flow has decreased below the minimum outfall pump capacity, requiring construction of a new low flow pump station. In addition, the reclamation of Plant No. 2 effluent will require construction of a new Plant Water Pump Station. The cost of the new Plant Water Pump Station will be reimbursed by the Orange County Water District (OCWD). These pump station changes will also require modifications to the Sanitation District's high voltage electrical system at Plant No. 2. Staff is proposing that the design and construction of the modifications described above be added to the existing Ocean Outfall Rehabilitation Project No. J-117 so that the work can be coordinated and more efficiently delivered. RELEVANT STANDARDS • 24/7/365 treatment plant reliability • Support OCWD expansion of GWRS • Use all practical and effective means for recovering wastewater for reuse PROBLEM The current Plant Water Pump Station does not allow for the separation of reclaimable and non-reclaimable flows. To prevent non-reclaimable plant water from mixing with Page 1 of 4 reclaimable flows being fed to OCWD, a new Plant Water Pump Station, drawing only reclaimable effluent, is required. The Plant Water Pump Station will draw electrical power from the ocean outfall electrical system and will add additional load to the existing standby engine generators. These generators could be overloaded during a wet weather event. An additional engine generator is therefore required to provide standby capacity for the ocean outfall electrical system during a power outage. A portion of the existing buried high voltage lines and existing fiber optic lines (duct banks) interfere with the location of the new GW RS Pump Station. A portion of these duct banks will need to be rerouted to make room for the GWRS Pump Station. The existing high voltage power controls (switchgear) for the major process areas is currently located in a single room. In the event of a fire or a catastrophic failure in the switchgear room due to a short circuit, there would not be sufficient power to feed the ocean outfall pumping systems during a peak wet weather event. PROPOSED SOLUTION The Plant Water Pump Station will be replaced and integrated with the proposed Outfall Low Flow Pump Station using reclaimable effluent. Relocation of the Plant Water Pump Station was included in another project. Staff proposes to move that work from Project No. P2-122 to Project No. J-117 in order to combine construction with the Outfall Low Flow Pump Station. This change will allow a more compact construction site, decreased construction risk, and better pricing. To provide sufficient backup power for these new facilities, an additional 2-megawatt standby engine generator and associated appurtenances will be installed. The new engine generator will increase project costs by approximately $900,000. A portion of the existing high voltage power and fiber optic lines will be relocated. The rerouted lines will increase project costs by approximately$2,900,000. The 30-year-old high voltage switchgear will be replaced and split into two rooms in an existing building. This is needed to avoid a single point of failure and to improve safety. These changes will increase the project costs by approximately $5,800,000. Including this work in Project No. J-117 will provide better flexibility and operability, while simplifying the Contractor's coordination and start-up for all new electrical facilities. The addition of these two changes will increase total project costs by $28,517,000 from $62,483,000 to $91,000,000. These proposed changes will also increase the Consultant's cost for preliminary and final design. Based on typical design costs of 10 to 12 percent of construction costs, staff requests an additional contingency of 35% of the original design budget. Page 2 of 4 TIMING CONCERNS The proposed changes would require changes to the Outfall Low Flow Pump Station design and electrical facilities design, which are scheduled to be completed by the end of the year. In order to incorporate proposed changes, Board approval is needed at this time. RAMIFICATIONS OF NOT TAKING ACTION Not incorporating the Plant Water Pump Station into Ocean Outfall System Rehabilitation, Project No. J-117, would require either delaying construction of the Outfall Low Flow Pump Station; delaying construction of the Headworks Modifications at Plant No. 2 for the GWRS Final Expansion, Project No. P2-122; or changing the location of the Plant Water Pump Station on a separate project. Not incorporating high voltage switchgear modifications at this time would extend the period and risks of catastrophic failure. PRIOR COMMITTEE/BOARD ACTIONS February 2015 - Awarded a Professional Design Services Agreement with Brown & Caldwell to provide engineering design services for the Ocean Outfall System Rehabilitation, Project No. J-117,for an amount not to exceed $6,778,015, and approved a contingency of$677,801 (10%). ADDITIONAL INFORMATION N/A CEQA A Notice of Exemption for Ocean Outfall Rehabilitation, Project No. J-117, was filed and recorded with the County of Orange on April 30, 2014. OCWD is the lead agency and is preparing the CEQA documents for all Final Expansion projects, which include relocation of the Plant Water Pump Station. FINANCIAL CONSIDERATIONS The cost of the replacement of the Plant Water Pump Station was included in approved budget Headworks Modifications at Plant No. 2 for GWRS Final Expansion, Project No. P2-122. Furthermore, OCWD will reimburse the Sanitation District for all costs associated with the Plant Water Pump Station part of the project subject to a new agreement. The cost of the switchgear replacement complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (FY2016-17 and 2017-18, Section 8, Page 55), but the budget is insufficient for the recommended action. The funds Page 3 of 4 will be allocated to the project from the Replacement, Rehabilitation, and Refurbishment line item in the cash flow projections, FY2016-17 and 2017-18, Section 4, Page 16. Date of AUDroyal Contract Amount Contingency 02/25/15 $6,778,015 $ 677,801 (10%) 11/16/16 $2,372,305(35%) ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: Presentation from 11/2/2016 Operations Committee meeting VP:dm:gc Page 4 of 4 Project J - 117 Ocean Outfall System Rehabilitation November 2, 2016 Operations Committee 1 1 Ocean Outfall System System Wet Weather Pumping Capacity 720 MGD (assume 1 pump at each station is stand by) Ocean Outfall Booster Station (COBS) Built 1988 Five Pumps 60-120 MGD 120" Long Outfall 480 MGD Max C� C� C� �� Effluent Pump Station Annex (EPSA) 78" Short Outfall 230 MGD Max Built 2007 Three Pumps 60-120 MGD Replace Existing Plant Water Pump Station �!S ss s !++�•.1. �� i t "' 7 Z Z Z ZJ a, 9CE IN O FAIL 1 OCEAN OUTFAL 1 PIPELIIyE "� -' "-- - BOOSTER !' a-• _ a��t ��� I STATION CENTRAL I I l l l l l It l l L l t GENERATION (• i i • s � ff 1 � LI ••• RECLAIMABL WS NON-RECLAIMABLE FLOWS u � ,- �. k rL i i ) , ■ - Central Generation and Ocean Outfall Booster Station Electrical System CENTRAL GENERATION SWITCHGEAR _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Bus A Bus G Bus B L. — • — • — — — • — • — — — • - - - - - - • — — . _ . _ . I 1 2 3 � •6 6 Loads Central Generators Loads OCEAN OUTFALL1 BOOSTER STATION SWITCH•GE_ _ _ _ _ A -- - - - - - - - - - - Bus I A I Bus B L . _ . _ . _ . _ _ I_ _ . _ . _ . _ . I i 2 EPSA STANDBY POWER s a GOBS O O O O OOBS - - - - - - - - - -T- - - - - - - - - - (9) 2MW — . _ . _ . _ . _ . _ . _ . _ . _ . I Bus A I Bus B L . . _ . _ . _ . _ . _ . .. . _ I . _ . _ . _ . .. . _ . _ . _ .I 1 2 O O 3 4 O O LOW FLOW PUMPS PLANTWATERPLIMPS LOW FLOW PUMPS PLANT WATER PUMPS Cen Gen and OOBS Buildings 0 BATT BATTERY D BATT 0 CEN GEN BUS A, B and G ryl BATTERY O 480V SWGR E 9 12KV SWGR GENT 7 77 GENS O 80V SWGR 12KV SWGR [A CENTRAL GENERATION OOBS Cen Gen and OOBS Buildings Mjcc m m MCC BATTERY O CEN GEN BUS A&G1 CEN GEN BUS B&G 2 2 Iryl BATTERY O 480V SWGR E 0 12KV SWGR 177 7 GENS O 80V SWGR 12KV SWGR IIA CENTRAL GENERATION OOBS Central Generation and Ocean Outfall Booster Station Electrical System CENTRAL GENERATION SWITCHGEAR _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I I I I Bus APOCE�A�N us G1 Bus G2 Bus B I. _ . _ . _ . . - . _ . _ .2 3 4 5 6LoadsCentral Generators Loads _ _ _ _ ALL BOOSTER STATION SWITCHGEAR _ 1 — • — • — • — • — — • — • — • - - I Bus A I Bus B L . _ . _ . _ . _ I_ _ . _ . _ . _ . I i 2 EPSA STANDBY POWER 3 a GOBS O O O O GOBS - - - - - - - - - -T- - - - - - - - - - 1 (4) 2MW — • — . _ . _ . _ . _ . _ . _ . _ . I Bus A I Bus B L . . _ . _ . _ . _ . _ . .. . _ I . _ . _ . _ . .. . _ . _ . _ .I 1 2 O O 3 4 O O LOW FLOW PUMPS PLANTWATERPLIMPS LOW FLOW PUMPS PLANT WATER PUMPS Cost Breakdown Plant Water Pump Station $15,200,000 Generator $1,400,000 Relocation of High Voltage Power and Fiber Optic Lines $4,100,000 High Voltage Switchgear $7,817,000 Total Project Cost Impact $28,517,000 Includes: Construction $21,100,000 Design (10-12% of construction, 35% of original cost) $2,372,305 A ( Questions ? ADMINISTRATION COMMITTEE Meeting Dare TOBd.OfDir. 11/09/16 11/16/16 AGENDA REPORT IternNumber I em1umber z 12 Nu Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: GENERAL MANAGER APPROVED PURCHASES GENERAL MANAGER'S RECOMMENDATION Receive and file District purchases made under the General Manager's authority for the period of July 1, 2016— September 30, 2016. BACKGROUND Staff provides the Administration Committee and the Board of Directors quarterly reports of General Manager approved purchases between $50,000 and $100,000. RELEVANT STANDARDS • Quarterly Financial Reporting • Ensure the public's money is wisely spent ADDITIONAL INFORMATION In accordance with Board purchasing policies, Ordinance No. OCSD-47, the General Manager has authority to approve purchases between $50,000 and $100,000. Below is a summary of General Manager approved purchases, in amounts exceeding $50,000, for the first quarter of fiscal year 2016-17: Vendor Name Amount Department Description/Discussion Fire Suppression System 7/1/16 to 3/31117 with Optional Two (2) 1-year Renewal Periods U.S. Communities Contract# 12-JLH-011 C, CINTAS FIRE Operations& in accordance with Ordinance OCSD-47, PROTECTION $90,000.00 Maintenance Section 2.03 B Cooperative Purchases District Wide Fire Protection Safety Training 10/1/16 to 6/30/17 U.S. Communities Contract# 12-JLH-011 C, CINTAS FIRE Human in accordance with Ordinance OCSD-47, PROTECTION $99,000.00 Resources Section 2.03 B Cooperative Purchases Page 1 of 2 Vendor Name Amount Department Description/Discussion PO for the Citibank Travel Account for travel arrangements made through California's State Travel Program, General Agreement#5159906 Manager's 11/1/16 to 10/31/17 CITIBANK, N.A. $60,000.00 Office GM Article 2, Section 2.2 b 1 Microsoft Premier Support for Software, Maintenance and Technical Support EN POINTE Administrative 9117/16 to 9/16/17 TECHNOLOGIES $72,890.00 Services Specification No. CS-2016-792 Occupational Health Suite Software GSA Contract# GS-35F-0032U, in Human accordance with Ordinance OCSD-47, MEDGATE INC. $57,691.30 Resources Section 2.03 B Cooperative Purchases Motorola Services and Products 9/8/16 to 5/20/20 County of Orange Agreement#MA-060- 15011560, in accordance with Ordinance MOTOROLA Administrative OCSD-47, Section 2.03 (B) Cooperative SOLUTIONS $80,000.00 Services Purchases CCTV Inspection of Manholes PROPIPE 9/21/16 to 9/20/17 PROFESSIONAL Operations & Sole Source Justification # 1610 PIPE SERVICES $65,000.00 Maintenance Reason: Unique Product/Service Windrock Engine Analyzer Approved CORF Budget Sole Source Justification # 1611 WINDROCK, Operations& Reason: OEM Parts/Materials Available INC. $53,125.00 Maintenance from Only One Source W INDSONG General Video Production Services for OCSD's PRODUCTIONS, Manager's Public Outreach and Education LLC $85,000.00 Office Specification No. 5-2016-771 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: N/A Page 2 of 2 ADMINISTRATION COMMITTEE Meeting Date TOBE.Of Dir. 11/09/16 11/16/16 AGENDA REPORT Item Item Number 3 13 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: IBM MAXIMO EMERGENCY AND LEVEL 3 SUPPORT GENERAL MANAGER'S RECOMMENDATION A. Authorize a sole source purchase order agreement with Total Resource Management (TRM) for Maximo Emergency and Level 3 Support for one year commencing January 1, 2017 through December 31, 2017 for a total amount not to exceed $160,000. B. Authorize an option for three annual renewals at $160,000 per year for a total amount of$480,000. BACKGROUND IBM Maximo was implemented in January 2015 and is used by the Operations and Maintenance Department (O&M) in the lifecycle management of the Orange County Sanitation District (Sanitation District) treatment plants' physical assets. The product provides real-time visibility into asset performance and enables staff to proactively control and optimize asset performance. This includes improved asset and labor productivity, better optimization of maintenance resources, improved efficiency in inventory management, and prevention of asset failure. To properly maintain and repair the Sanitation District's facilities, the Information Technology (IT) division requires additional IBM Maximo software support from a third party vendor. RELEVANT STANDARDS • Maintain and Support Enterprise Asset and Financial Management Systems • Maintain a proactive asset management program • Protection of Orange County Sanitation District assets • Efficiency efforts reduce the cost to provide the current service level or standard PROBLEM O&M has requested additional functionality and IT support for the IBM Maximo software. The support originates from re-evaluating the business process and interest in additional Page 1 of 3 software modules such as Lock Out Tag Out(LOTO), Calibration, Max Assist, and Safety module. IT requires additional resources to support these O&M initiatives. PROPOSED SOLUTION An agreement with TRM will provide the additional support required. Over the past four years, TRM has provided best practices and Maximo expertise in assisting the Sanitation District in succeeding with the Maximo implementation. TRM has assisted the Sanitation District with the Maximo system architecture, configuration, and implementation, giving them unique knowledge because of their familiarity with the Sanitation District's business processes, personnel, and Maximo infrastructure. TRM is also the developer of Rules Manager, a proprietary software that is used by the Sanitation District to enforce all the business rules within IBM Maximo. Utilizing another vendor would not be a practical solution due to the experience and expertise TRM has gained working with the Sanitation District. TIMING CONCERNS The Maximo 7.6 upgrade will be going live in December 2016. IBM Maximo Emergency and Level 3 Support will be needed to support the post upgrade process and implement additional Maximo functionality as requested by O&M. RAMIFICATIONS OF NOT TAKING ACTION Not contracting with TRM will significantly impact the Maximo service level for O&M and the timeline for implementation of additional functionality. PRIOR COMMITTEE/BOARD ACTIONS July 2013-Approved a Professional Services Agreement(PSA)for CS-2011-499BD with Total Resources Management, Inc. May 2012 - Approved Amendment No. 2 to PSA for Specification No. CS-2011-499BD with Total Resources Management, Inc. October 2011 -Approved a Purchase Contract with Total Resource Management, Inc. for Phase 1 of Implementation of IBM Maximo Enterprise Asset Management System, Specification No. CS-2011-49913D. ADDITIONAL INFORMATION N/A Page 2 of 3 FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: N/A Page 3 of 3 ADMINISTRATION COMMITTEE Meeu•9'16 "V/i6AMr. 11/gg/16 11/16/16 AGENDA REPORT I em Number Item Number 4 14 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: CONSOLIDATED FINANCIAL REPORT FOR FIRST QUARTER ENDED SEPTEMBER 30, 2016 GENERAL MANAGER'S RECOMMENDATION Receive and file Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2016. BACKGROUND Included in this consolidated report are the following quarterly financial reports for the period ended September 30, 2016: • First Quarter Budget Review The Budget Review Summary provides the Directors, staff, and the general public with a comprehensive overview of the financial results of the Orange County Sanitation District (Sanitation District) through the third quarter ended September 30, 2016. • Quarterly Treasurer's Report This section reports on financial portfolio performance with respect to the Sanitation District's funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the U.S. and global economic outlook from the Sanitation District's investment manager, Chandler Asset Management. • Certificates of Participation Quarterly Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. RELEVANT STANDARDS • Quarterly financial reporting ADDITIONAL INFORMATION The quarterly treasurer's report contained within the Consolidated Financial Reports for the First Quarter Ended September 30, 2016 is being submitted in accordance with the Page 1 of 3 Sanitation District's investment policy that requires the report be submitted to the governing body following the end of each quarter and includes the following information: is Performance results in comparison with the 3-month treasury bill index for the liquid operating portfolio; and the Merrill Lynch Corp./Govt. 1-5 Year Bond index for the long term portfolio as identified in the investment policy; and the Time- weighted total rate of return for the portfolio for the prior three months, twelve months, year to date, and since inception compared to the Benchmark returns for the same periods: Portfolio Performance Summary Quarter Ended September 30,2016 Liquid Operating Monies(% Long-Term Operating Monies N Total Rate Total Rate o of Return BenchmaBO" Return Benchmmid') 3 Months 0.10 0.10 0.06 .0.07 6 Months 0.19 0.17 0.78 0.80 9 Months 0.36 0.24 2.33 2.38 12 Months 0.41 0.27 2.00 1.81 Annualized Since Inception 30 Nov 2014 0.32 0.16 1.61 1.70 • A listing of individual securities held at the end of each reporting period (see the detailed listings of each security contained within the report). • Cost and market values of the portfolios: Liquid Oper. Long-Term Cost $57.9 M $322.2 M MV $58.0 M $325.9 M • Modified duration of the portfolio compared to Benchmark: Liquid Oper. Long-Term B.M. 0.15 2.62 Port. 0.10 2.38 is Dollar change in value of the portfolio for a one-percent (1%) change in interest rates: Liquid Oper.- $60,406 Long-Term- $7,758,223 is None of the portfolios are currently invested in reverse repurchase agreements. • The percent of the Liquid Operating Monies portfolio maturing within 90 days: 87.0% Page 2 of 3 • Average portfolio credit quality: Liquid Oper. —AA+/Aa1 Long-Term —AA+/Aa1 • Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities: Liquid Portfolio- no exceptions Long Term Portfolio- Percent of portfolio—3.4% Maturity Cost Date Moody S&P Fitch AMRESCO Residential Securities 1999-1 $ 100,432.85 6/25/2029 Not Rated AA+ BBB Bank of America Corp Note $4,334,014.00 12/1/2017 Baal BBB+ A Goldman Sachs Group Inc. Note $ 692,806.00 1/18/2018 A3 BBB+ A American Express Credit Note $3,377,385.79 3/19/2018 A3 BBB+ A Morgan Stanley Note $ 3,200,848.00 7/28/2021 A3 BBB+ A • All investments are in compliance with this policy and the California Government Code, except for the following Lehman Brothers holdings that the District is pursuing collection through the bankruptcy court: Lehman Brothers Note-Defaulted $ 600,000 par value purchased 9/18/2008 Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008 • Sufficient funds are available for the Sanitation District to meet its operating expenditure requirements for the next six months. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Consolidated Financial Reports for the First Quarter Ended September 30, 2016 (separate document) • Presentation from 11/9/2016 Administration Committee meeting • Information distributed at 11/9/2016 Administration Committee meeting by auditing firm, Macias Gini & O'Connell LLP (MGO) Page 3 of 3 Comprehensive Annual Financial Report For the Year Ended June 30, 2016 OJNjV SANIr 4 oy Q 9 ¢ c� Orange County Sanitation Districl O ti N h THE ENJ\Po� Presenter: Mike White Controller Comprehensive Annual Financial Report (CAFR) • Fully explains financial operations of OCSD • Prepared for the 23rd consecutive year • Meets GFOA's Excellence Award Standard • Important to bond rating agencies and investors iom (in thousands) Percentage Increase Increase 2015 (Decrease) (Decrease) Assets Current & Other Assets $ 609,676 $ 604,005 $ 5,671 0.9% Capital Assets, Net 2,569,440 2,504,980 64,460 2.6% Deferred Outflows 90,762 52,949 37,813 71.4% Total Assets $3,269,878 $3,161,394 $ 107,944 3.4% Liabilities Current Liabilities $ 102,319 $ 105,031 $ (2,712) -2.6% Noncurrent Liabilities 1,225,948 1,269,553 (43,605) -3.4% Deferred Inflows 23,039 25,506 (2,467) -9.7% Total Liabilities $1,351,306 $1,400,090 $ (48,784) Net Assets Net Investment in (metal Assam $1,429,269 $1,327,384 $ 101,885 7.7% Unrestricted 489,303 434,460 54,843 12.6% Total Net Position $1,918,572 $1,761,844 $ 156,728 Net Position Increased $ 156. 7 Million Over the Prior Year 60.5 M Decrease in PY Beginning Net Position + 194.5 M Reverse PY Restatement (GASB 68) 6.8 M Decr. in Restated Beg. Net Pos. (GASB 73) Source of Funds + 13.6 M Increase in Non-operating Revenues + 13.0 M Increase in Service Charges & Fees + 0.3 M Increase in CFCC 4.3 M Increase in Operating Expense Use of Funds + 3.2 M Decrease in Non-operating Expense + 3.7 M Decrease in Depreciation & Amort. $156.7 M Increase in Net Position over the Prior Year Change in Net Assets — Last Five Years +$96.1 M +$103.7 M +$121.6 M $-60.5 M +$156.7 M $1,700.7 M $1,822.2 11-12 12-13 13-14 14-15 15-16 Cash and Investments Decreased $ 12 . 1 Million Cash Provided by: $155.5 M Net Proceeds from Debt Issuance 89.3 M Net Operating Activities 84.5 M Property Tax Revenues 15.6 M CFCC Fees 6.6 M Interest Received 6.3 M SARI Line Project Reimbursements 2.5 M Unrealized Gain on Investments $ 360.3 M Cash Provided Cash and Investments Decreased $ 12. 1 Million (cont'd) Cash Used by: $162.8 M Debt Retirement 123.0 M Net Capital Outlay 51.5 M Debt Interest Payments 29.4 M Debt Principal Payments 4.9 M Pollution Remediation 0.8 M Debt Issuance Costs $ 372.4 M Cash Used $360.3 M Cash Provided - $372.4 M Cash Used = $12.1 M Decr. Collection, Treatment and Disposal Cost — Comparison of Budget to Actual For the Year Ended June 30, 2016 Under (Over) Bud et Actual Budget Personnel Cost $94,802,400 $93,021 ,237 $1 ,781 ,163 1 .9°l° Contr. & Prof. Svc. 27,445,060 26,490,621 954,433 3.5% Materials & Supplies 17,191 ,000 5,864,274 1 ,326,726 7.7% Repairs & Maint. 12,332,440 13,004,095 (671 ,655) -5.5% Utilities 7,787,080 7,245,613 541 ,467 7.0% Other 6,626,460 5, 137, 100 1 ,489,360 22.5% Cost Allocation (16,877,500) (19,361 ,242) 2,483,742 -14.7% Total Oper. Expense $149,306,940 $141 ,401 ,704 $7,905,236 5.3% Collection, Treatment and Disposal Cost — Comparison of Budget to Actual (cont'd) For the Year Ended June 30, 2016 Operating Cost Under Budget Explanation Salaries & Wages $2,963,000 Lower than anticipated staffing levels (572 FTE actuals vs. 624 FTE Budget) Odor Control 1 ,001 ,000 Anticipated increase in quantity to be used for chemical dosing was unrealized. Contingency/PY Reap 775,350 Unexpected events were not realized. Cost Allocation 2,484,000 CIP was greater than anticipated. Total Under Budget $7,223,000 Collection, Treatment & Disposal Costs = $141.4 Million Decrease of $0.1 M or 0.1% from the prior year: • Salaries and Benefits decreased $1.2 M, or 1.3% Salaries increased $0.9 M, or 1.4 percent due to existing bargaining agreements as total authorized staffing levels remained at the same level of 624.0 FTE's in FV 2015-16. Benefit costs decreased $2.1 M primarily consisting of decreased retirement ($3.1 M) offset somewhat by increases in workers' comp. ($0. 7 M) and group insurances ($0.3 M). • Cost allocation increased $2.9 M, or 1. 1% Cost allocation out to the capital improvement program (CIP) increased as a result of the increase in the overall CIP from prior years and the resulting shift of indirect costs used to support Operations. Collection, Treatment & Disposal Costs = $141.4 Million (cont'd) • Repair Materials & Services increased $1.4 M, or 11.7% Increase is due to repairs made to primary clarifier effluent piping, CenGen engine, and blowers at Plant No. 1 and CenGen engine overhaul and digester cleaning at Plant No. 2. • Contractual Services increased $0.9 M, or 3.9% This increase is reflective of the anticipated increases in solids hauling costs and in other contractual services. • Materials and Supplies increased $0.5 M, or 3. 1% The increase is reflective of the anticipated increases in chemicals for cogeneration operations and in safety equipment and tools. Cost Per Million Gallons $2,071 $2,110 $ $1,906 1,937 $1,871 11-12 12-13 13-14 14-15 15-16 Fiscal Year Cost Per Million Gallons has Leveled Out with in Reaching Full Secondary Treatment Standards and Providing the Most Optimum Treated Water for GWRS Auditor's Report ♦ Unmodified opinion on Financial Statements • No report on Internal Controls as no material weaknesses or significant deficiencies were uncovered . Questions ? November 9 , 2016 Administration Committee _ L Orange County Sanitation District h - ,ENIEDBY ` Peter S. George, CPA Client Service Partner T: (949) 296-4303 E: pgeorge@mgocpa.com 4675 MacArthur Court, Suite 600 Newport Beach, CA 92660 j t Agenda A new of professional T�meArmi�ai. servicess firm firm I . Introductions II . Our Audit Responsibilities III . Deliverables IV. Required Communications to the Administration Committee V. Questions? 1 1 i I i 1 i 1 i 1 E 1 i i i 1 1 1 I 1 I I i I 1 I I Our Responsibilities sapl esf,mal T<PE zYPrpl I. Perform an audit of the District's financial statements as of and for the year ended June 30, 2016. II. The objective of an audit of financial statements is to express an opinion that the financial statements are in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP). III. The audit is performed in accordance with auditing standards generally accepted in the United States of America. IV. Those standards require that we plan and perform the audit to obtain reasonable, rather than absolute, assurance about whether the District's financial statements are free of material misstatement whether caused by fraud or error. z Deliverables 1P99 °f°r°e;firal T`(OE A,Hpi�� services firm I. Unmodified opinion on the District's basic financial statements included in the Comprehensive Annual Financial Report - GFOA submission II. U.S. Bank covenant compliance opinion III. Union Bank covenant compliance opinion IV. Southern California Edison tangible net worth calculation agreed- upon procedures report V. GANN Limit Calculation agreed-upon procedures report VI. Communications to the Administration Committee including summary of audit results for the District 3 1 1 1 1 1 1 1 1 I 1 1 1 I I 1 professional withWs¢ lc¢s �m A the Administration Committee I. Auditor's responsibility under professional standards. II. Accounting practices - adoption of or changes in accounting policies, alternative treatments - two new significant accounting pronouncements (GASB No. 72 & No. 73). III. There were no auditor or management proposed adjustments or reclassifications made to the financial statements. IV. There were no uncorrected misstatements related to current year. V. There were no difficulties encountered in performing our audit. VI. There were no disagreements with management. VII. Management representations were provided to us. VIII. There were no consultations with other accountants. IX. There were no major issues encountered during the fiscal year that were a condition to our retention as auditors. X. There were no material weaknesses or significant deficiencies noted for FY 15/16. 4 Questions .? ADMINISTRATION COMMITTEE Meetln11/g9/ 6 g 1 "O11/V/i6/16ofT AGENDA REPORT I em Number Item Number 6 M is Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FOR THE YEAR END JUNE 30, 2016. GENERAL MANAGER'S RECOMMENDATION Receive and file the Orange County Sanitation District's Comprehensive Annual Financial Report for the year ended June 30, 2016, prepared by staff and audited by Macias Gini & O'Connell LLP (MGO), Certified Public Accountants, along with the following reports prepared by MGO: A. Report to the Board of Directors; and B. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets. BACKGROUND The Comprehensive Annual Financial Report for the year ended June 30, 2016 is enclosed for the Committee's consideration. Included within the report are the Orange County Sanitation District's financial statements for the year ended June 30, 2016 along with the Independent Auditor's Report that includes their unmodified opinion. RELEVANT STANDARDS • Annual financial report and audit letter ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Report to the Board of Directors • Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets • Comprehensive Annual Financial Report for the Year Ended June 30, 2016 (Separately bound document) Page 1 of 1 Certified cenrya Public n- Accountants cos Angeles laewpoao each oauand Sacramento October 31,2016 San Diego San Francisco To the Board of Directors wawa Creek Orange County Sanitation District woodland Hill, Fountain Valley,California We have audited the basic financial statements of the Orange County Sanitation District(the District)for the year ended June 30, 2016. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated May 20, 2016. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the District are described in Note 1 to the basic financial statements. As described in Note 1 to the basic financial statements, the District implemented Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application (GASB 72) and GASB Statement No. 73,Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68(GASB 73). As a result of the implementation of GASB 72,Note 2 to the financial statements was revised to include the new definition of fair value and the measurement and application methodology management used to value investments. The implementation of GASB 73 resulted in a restatement of net position as listed in Note 9 to the basic financial statements. The application of existing policies was not changed during 2016. We noted no transactions entered into by the District during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate(s)affecting the District's financial statements were: is Management's estimates of the net pension liability and other postemployment benefit are based on actuarial studies which consider assumptions adopted by the plans. • Management's estimates of workers' compensation and general liability is based on reports prepared by third party actuarial valuations.We evaluated the key factors and assumptions used to develop the estimate liability in determining that they are reasonable in relation to the financial statements taken as a whole. Macias Gin,&O'Connell LLP 0675 MaaMM1ur Court.Sake 600 Newport Bea,r.Cagnia, www.mgocpa.com 1 • Allowances for uncollectible accounts. Management determines the allowance for uncollectible accounts receivable by evaluating individual customer accounts receivable at least one year past due and considering the customer's financial condition, credit history and current economic conditions. • Management's estimate of depreciation is based on the useful-lives of the capital assets. We evaluated the key factors and assumptions used to develop the useful-lives of the capital assets in determining that it is reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users.The most sensitive disclosures affecting the financial statements were: The disclosure of net pension liability and other postemployment benefits in Note 5 and 6 to the financial statements,respectively,are based on actuarial valuations. The financial statement disclosures are neutral,consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit,other than those that are trivial,and communicate them to the appropriate level of management.There were no misstatements detected as a result of audit procedures and corrected by management which were material,either individually or in the aggregate,to the financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated October 31,2016. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters,similar to obtaining a"second opinion"on certain situations.If a consultation involves application of an accounting principle to the District's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. 2 Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the District's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to Management's Discussion and Analysis, Schedule of Proportionate Share of Net Pension Liability,Schedule of District Contributions,Schedule of Net Pension Liability — Additional Retiree Benefit Plan, and Schedules of Funding Progress, which are required supplementary information(RSI)that supplements the basic financial statements.Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the"Combining Area"financial statements,which accompany the financial statements but are not RSI. With respect to this supplementary information,we made certain inquiries of management and evaluated the form, content,and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements.We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections,which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Restriction on Use This information is intended solely for the information and use of the Board of Directors and management of the District and is not intended to be,and should not be,used by anyone other than these specified parties. Very truly yours, i 3 Orange County Sanitation District Independent Accountant's Report on Applying Agreed-Upon Procedures Related to Appropriations Limit Calculation Year Ended June 30,2016 O Certified Public Accountants Certifier cenwrya:y Public Accountants Has Angel,, laewpoao each Callers! Sacramento Independent Accountant's Report on n oleso Applying Agreed-Upon Procedures San Francisco walnut Creek Woodland Hill, To the Honorable Members of the Board Orange County Sanitation District We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet of the Orange County Sanitation District(the District)for the year ended June 30,2016.These procedures,which were agreed to by the District and the League of California Cities (as presented in the publication titled Agreed-Upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution), were performed solely to assist the District in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution.The District's management is responsible for the Appropriations Limit Worksheet. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report.Consequently,we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings me as follows: 1. We obtained the completed worksheets setting forth the calculations necessary to establish the District's appropriations limit and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the District Board of Directors.We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the District Board of Directors. Finding:No exceptions were noted as a result of our procedures. 2. For the accompanying Appropriations Limit Calculation, we added Line A, last year's limit, to Line E,total adjustments,and compared the resulting amount to Line F,current year's limit. Finding:No exceptions were noted as a result of our procedures. 3. We compared the current year information presented in the accompanying Appropriations Limit Calculation to the appropriate supporting calculations described in item 1 above. Finding:No exceptions were noted as a result of our procedures. 4. We compared the prior year Appropriations Limit presented in the accompanying Appropriations Limit Calculation to the prior year Appropriations Limit adopted by the Board of Directors for the prior year. Finding:No exceptions were noted as a result of our procedures. Macias Gin,&O'Connell LLP 0675 MacArthur Court.Suite 600 aeupocr Bearl,.Ca91660 www.mgocpa.com 1 We were not engaged to, and did not, conduct an examination, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit Calculation of the District. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.No procedures have been performed with respect to the determination of the appropriations limit for the base year,as defined by Article XIII-B of the California Constitution. This report is intended solely for the information and use of the Board of Directors and management of the District, and is not intended to be, and should not be, used by anyone other than these specified parties. However,this report is a matter of public record and its distribution is not limited. i / P-'S (,h, C7'Cal�e(! r Newport Beach,California October 31,2016 2 Orange County Sanitation District Appropriations Limit Calculation Year Ended June 30, 2016 Amount Sauce A. Last year's Emit $ 91,303,931 B. Adjustment factors: 1. Population change 1.00940000 State Finance 2. Per capita change 1.03820000 State Finance Total adjustments I(B.1 x B.2)-1.0] 0.04795908 C. Amwaladjustment 4,378,853 (BxA) D. Other adjustments: 1. Lost responsibility(-) - 2. Transfer to private(-) - 3. Transfer to fees (-) - 4. Assumed responsibility(+) Subtotal E. Total adjustments 4,378,853 (C+D) F. This year's limit $ 95,682,784 (A+E) 3 STEERING COMMITTEE Meeting Dare TOBd.OfDir. 11/16/16 11/16/16 AGENDA REPORT emNumber Iem1umber 2 16 Orange County Sanitation District FROM: James D. Herberg, General Manager SUBJECT: SALARY RANGE ADJUSTMENTS FOR NON-EXEMPT CONFIDENTIAL EMPLOYEES GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 16-25, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Approving Salary and Benefit Adjustments for Unrepresented Non-Exempt Confidential Employees for Fiscal Years 2016/2017, 2017/2018 & 2018/2019:' BACKGROUND Confidential employees perform duties and responsibilities that support Orange County Sanitation District (Sanitation District) management with labor relations. Confidential employees are not represented by a bargaining unit and meet directly with the General Manager regarding terms and conditions of employment. The work and duties performed by non-exempt confidential employees aligns with that of employees in the Orange County Employees Association (OCEA) bargaining units; however, due to their job duties in support of the labor relations program, confidential employees are not represented by a bargaining unit. Therefore, though they are in separate groups, unrepresented non-exempt confidential employees' wages and benefits have historically aligned with represented employees' negotiated wages and benefits in the OCEA groups. The General Manager is proposing the following salary adjustments for non-exempt confidential employees that align with represented employee wages and benefits. • Salary Increases (3-Year Cost: $24,000) — 2.5% salary increase in Year 1; 2.5% salary increase in Year 2; and 2.5% salary increase in Year 3. RELEVANT STANDARDS • Ensure the public's money is wisely spent • Competitive compensation and benefits • Highly qualified, well trained, motivated, and diverse workforce • Positive employer, employee relations • Provide professional growth & development Page 1 of 3 PROBLEM The MOUs between the Sanitation District and similarly situated groups in the OCEA bargaining units that became effective on July 1, 2014 expired on June 30, 2016. Successor MOUs were recently approved by the Board for the similarly situated OCEA groups, including salary increases for each of the three years of the agreements. Terms for the similarly situated non-exempt confidential group employees have not yet been approved. PROPOSED SOLUTION Adopt Resolution No. OCSD 16-25, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving Salary and Benefit Adjustments for Unrepresented Non-exempt Confidential Employees for Fiscal Years 2016/2017, 2017/2018 & 2018/2019." TIMING CONCERNS Labor agreements including salary increases for the corresponding represented groups were approved at the October 26, 2016 Board of Directors meeting. RAMIFICATIONS OF NOT TAKING ACTION • Potential labor instability • Possible impacts to morale • Inconsistency in compensation between represented and unrepresented classifications PRIOR COMMITTEE/BOARD ACTIONS October 2016 -Approved Resolution OCSD 16-22, which provided salary adjustments to similarly situated groups in the OCEA bargaining units for Fiscal Years 2016/2017, 2017/2018, and 2018/2019. February 2015 - Approved Resolution OCSD 15-05, which provided salary adjustments to non-exempt confidential employees for Fiscal Years 2014/2015 and 2015/2016 based on similarly situated groups. ADDITIONAL INFORMATION There is currently one (1) non-exempt confidential employee at the Sanitation District in one (1) classification, in addition to one (1) vacant position. Confidential employees are those employees who, with authorized access, assist and act in a confidential capacity to and for persons who formulate, determine, and effectuate management policies with respect to labor relations. Page 2 of 3 Non-exempt confidential employees hold the following classifications: Human Resources Assistant Program Assistant (no current incumbent) Confidential employees are not represented by a bargaining unit; instead, confidential employees represent themselves as a group in informal discussions with the Sanitation District's General Manager regarding wages, hours, and other terms and conditions of employment. The General Manager recommends the following changes: • Salary o Year 1 —2.5% Salary Increase, retroactive to the first pay period of July 2016. o Year 2—2.5% Salary Increase, effective the first pay period of July 2017. o Year 3—2.5% Salary Increase, effective the first pay period of July 2018. CEQA N/A FINANCIAL CONSIDERATIONS The cost of the salary increase for non-exempt confidential employee classifications is approximately $24,000 in salary costs over the three-year term. The total compensation cost is approximately $28,000 over the three-year term. This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. ATTACHMENT The following aftachment(s)are attached in hard copy and may also be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: • Resolution No. OCSD 16-25 • Current (FY 2015-16) Salary Schedule for Confidential Group • Proposed Salary Schedules for Confidential Group for FY 2016-17, FY 2017-18, and FY 2018-19 Page 3 of 3 RESOLUTION NO. OCSD 16-25 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT APPROVING SALARY AND BENEFIT ADJUSTMENTS FOR UNREPRESENTED NON-EXEMPT CONFIDENTIAL EMPLOYEES FOR FISCAL YEARS 2016/2017, 2017/2018 & 2018/2019 WHEREAS, there are fourteen (14) employees in the confidential employees job classifications at the Orange County Sanitation District ("OCSD") who, with authorized access, assist and act in a confidential capacity to and for persons who formulate, determine, and effectuate management policies with respect to labor relations; and WHEREAS, there is one (1) confidential employee holding a non-exempt classification, in addition to one (1) additional position that is currently vacant; and WHEREAS, non-exempt confidential employees are unrepresented and meet directly with the General Manager about terms and conditions of employment; and WHEREAS, the General Manager recently entered into discussions with the non- exempt confidential employees and completed negotiations in October 2016, which resulted in agreed upon proposed changes to wages and benefits that align with those agreed upon for represented employees. NOW, THEREFORE, in consideration thereof, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER THE FOLLOWING: 1. That the Board of Directors hereby authorizes and approves the following changes to wage and benefits for non-exempt confidential employees, which shall become effective as noted: a) Salaries • To align with similarly situated represented employee classifications, non-exempt confidential employees' salaries shall be adjusted per the following: • Year 1 — 2.5% Salary Increase, retroactive to the first pay period of July 2016. • Year 2 — 2.5% Salary Increase, effective the first pay period of July 2017. • Year 3 — 2.5% Salary Increase, effective the first pay period of July 2018. OCSD 16-25-1 PASSED AND ADOPTED at a regular meeting of the Board of Directors held November 16, 2016. John Nielsen Board Chairman ATTEST: Kelly A. Lore Clerk of the Board OCSD 16-25-2 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 16-25 was passed and adopted at a regular meeting of said Board on the 161h day of November 2016, 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 161h day of November 2016. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District OCSD 16-25-3 Orange County Sanitation District Classification and Compensation Plan Rates Effective July 1,2015 CONFIDENTIAL GROUP Pay STEP STEP STEP STEP STEP Classification Grade 1 2 3 4 5 Human Resources Supervisor CON90 $ 57.46 $ 60.34 1 $ 63.351 $ 66.51 $ 69.85 $ 119,516.80 $ 125,507.20 $ 131,768.00 $ 138,340.80 $ 145,288.005 Principal HR Analyst I CON84 1 $ 49.531 $ 52.01 1 $ 54.61 1 $ 57.34 $ 60.21 $ 103,022.40 $ 108,180.80 $ 113,588.80 $ 119,267.20 $ 125,236.801 Clerk of the Board CON80 $ 44.89 $ 47.13 $ 49.48 $ 51.97 $ 54,50 $ 93,371.20 $ 98,030.40 $ 102,918.40 $ 108,097.60 $ 113,484.80 Senior Human Resources Analyst I CON76 $ 40.66 1 $ 42.681 $ 44.821 $ 47.06 $ 49.41 $ 84,572.80 $ 88,774.40 $ 93,225.60 $ 97,884.80 $ 102,772.80 Deputy Clerk of the Board 1 CON73 1 $ 37.751 $ 39.64 1 $ 41.621 $ 43.70 $ 45.88 Secretary to the General Manager I CON73 1 $ 78,520.00 1 $ 82,451.20 1 $ 86,569.60 $ 90,896.00 $ 95,430.40 Human Resources Analyst I CON70 1 $ 35.061 $ 36.821 $ 38.661 $ 40.60 $ 42.63 $ 72,924.80 $ 76,585.60 $ 80,412.80 $ 84,448.00 $ 88,670.40 Human Resources Assistant CON67 $ 33.86 1 $ 35.561 $ 37.341 $ 39.20 $ 41.10 $ 70,428.80 $ 73,964.80 $ 77,667.20 $ 81,536.00 $ 85,612.80 Program Assistant CON56 $ 25.82 1 $ 27.101 $ 28.461 $ 29.87 $ 31.30 $ 53,705.60 $ 56,368.00 $ 59,196.80 $ 62,129.60 $ 65,249.60 Hkde,t 6160-HR\HROpen\Comp8Class\Compensation\Salary Documents2016-201TSalary Scheduler -ConfideMialrev110716 ➢29115 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 8,2016 CONFIDENTIAL GROUP Pay STEP STEP STEP STEP STEP Classification Grade 1 2 3 4 5 Human Resources Supervisor CON90 1 $ 58.90 1 $ 61.851 $ 64.931 $ 68.171 $ 71.60 S 122,512.001 $ 128,648.00 $ 135,054.40 1 $ 141,]93.50 $ 148,928.00 PHucipel HR Analyst I CON84 1 $ 50.77 1 $ 53.311 $ 55.98 $ 58.77 $ 105,601.601 $ 110,884.80 $ 116,438.40 1 $ 122,241.60 $ 128,377.60 Clerk of the Boats CONaO 1 $ 46.011 $ 48.31 1 $ 50.721 $ 53.27 $ 55.92 $ 95,700.801 $ 100,484.80 $ 105,497.60 1 0 $ 116,313.60 Senior Human Resources Analyst I CON76 1 $ 41.681 $ 43.751 $ 45.94 1 $ 48.241 $ 50.65 $ 86,694.40 1 $ 91,000.00 $ 95,555.20 $ 700,339.20 $ 105,352.00 Deputy Clerk of the Board 1 CON73 1 $ 38.691 $ 40.631 $ 42.661 $ 44.791 $ 47.03 Secretary to the General Manager I CON73 1 $ 80,475,201 $ 84.510.401 $ 88,732,801 $ 93,163.201 $ 97,82240 Human Resources Analyst I CON70 1 $ 35.941 $ 37.741 $ 39.631 $ 41.62 $ 4370 $ 74,755.201 $ 78,499.20 $ 82,430.40 $ 86,569.60 $ 90,896.00 Human Resources Assistant I CON67 1 $ 3471 1 $ 36.451 $ 38.271 $ 40.18 $ 42A9 $ 72,196.801 $ 75,816.00 $ 79,601,60 $ 83,5]4.40 $ 87,755.20 Program Assistant I CON56 1 $ 26.471 $ 27.781 $ 29.171 $ 30.62 $ 55,057.601 $ 57,782.40 $ 60.673.601 $ 63,689.601 $ 66,872.00 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective First Pay Period of July 2017 CONFIDENTIAL GROUP Pay STEP STEP STEP STEP STEP Classification Grade 1 2 3 4 5 Human Re sources Supervisor CON90 I S 60.37 $ 63.401 $ 66.55 $ 69.87 $ 73.39 S 125,569.601 $ 131.872.00 1 $ 138,424.00 1 $ 145,329.60 $ 152,651.20 PHncipal HR Analyst I CON89 1 $ 52.041 $ 54.64 1 $ 57.381 $ 60.24 $ 108,243.20 1 $ 113,651.20 $ 119,350.401 $ 125,299.20 1 $ 131,580.80 Clerk of the Board I CON80 1 $ 47.161 $ 49.521 $ 51.991 $ 54.601 $ 57.32 $ 98,092.801 $ 103,001.60 $ 108,139.20 1 $ 113,568.00 $ 119,225.80 Senior Human Resources Analyst I CON76 1 $ 42.721 $ 44.84 1 $ 47.091 $ 49.451 $ 51.92 $ 88,857.60 1 $ 93,267.20 $ 97,947.20 1 $ 702,856.00 $ 10],883.60 Deputy Clerk of the Board 1 CON73 1 $ 39.661 $ 41.651 $ 43.731 $ 45.911 $ 48.21 Secretary to the General Manager I CON73 1 $ 82,492,801 $ 86,632.001 $ 90,958,401 $ 95,492.801 $ 100,276.80 Human Rewurces Analyst I CON70 1 $ 36.841 $ 38.68 1 $ 40.621 $ 42.68 $ 44.79 $ 76,627.201 $ 80,454.40 $ 84,489.60 I $ 88,]32.80 $ 93,163.20 Human Resources Assistant CON67 1 $ 35.58 1 $ 37.361 $ 39.231 $ 41.18 $ 43.24 $ 74,006.401 $ 77,708.80 $ 81,598.40 $ 85,654.40 $ 89,939.20 Program Assistant I CON56 1 $ 27.131 $ 28.471 $ 29,901 $ 31.39 $ 56,430.401 $ 59,217.60 $ 62.192.001 $ 65,291.201 $ 68,536.00 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective First Pay Period of July 2018 CONFIDENTIAL GROUP Pay STEP STEP STEP STEP TE SP Classification Grade 1 2 3 4 5 Human Resources Supemsor I CON90 1 $ 61.881 $ 64.991 $ 68.21 1 $ 71.62 $ 128,710.401 $ 135,179.20 $ 141.876.801 $ 148,969.601 $ 156,457.60 Principal HR Analyst CON84 1 $ 53.34 1 $ 56.011 $ 58.81 $ 61.75 $ 110,947.201 $ 116.500.80 $ 122,324.80 $ 128,440.00 1 $ 134,867.20 Clerk of the Board I CON80 1 $ 48.341 $ 50,761 $ 53.29 $ 55.9] $ 100,547.20 1 $ 105,58080 $ 110,843.201 $ 116,417.601 $ 122,200.00 Senior Human Resources Analyst I CON78 1 $ 43.791 $ 45.961 $ 48.27 $ 50.691 $ 53.22 $ 91,083.201 $ 95.596.80 $ 100401.60 $ 105,435.20 $ 110,897.60 Deputy Clerk of the Board CON73 1 $ 40.651 $ 42.691 $ 44.821 $ 47.06 1 $ 49A2 Secretary to the General Manager I CON73 1 $ 84,552.01 $ 88,795.201 $ 93,225.601 $ 97,884.801 $ 102,793.60 Human Resources Analyst I CON70 1 $ 37.761 $ 39.651 $ 41.641 $ 43.73 $ 78,540,801 $ 82,472.00 $ 86,611.201 $ 90,958.401 $ 95,492.80 Human Resources Assistant CON67 1 $ 36.47 1 $ 38.291 $ 40.21 1 $ 42.21 1 $ 44.32 $ 75,857.601 $ 79,fi43.20 $ 83,636.80 $ 8],796.80 $ 92,i85.fi0 Program Assistant CON56 1 $ 2T81 1 $ 29A8 1 $ 30.651 $ 32.171 $ 33.77 $ 57,M4.801 $ 60,694.40 $ 63,752.00 $ 66,913.60 1 $ 70,241.60 STEERING COMMITTEE Meeting Date TOBE.Or .Dir. 11/16/16 11/16/16 AGENDA REPORT Item Item Number 3 17 Orange County Sanitation District FROM: James D. Herberg, General Manager SUBJECT: SALARY RANGE ADJUSTMENTS FOR EXEMPT LEVEL CONFIDENTIAL EMPLOYEES GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 16-26, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Approving Salary and Benefit Adjustments for Unrepresented Exempt Confidential Employees for Fiscal Years 2016/2017, 2017/2018 & 2018/2019:' BACKGROUND Confidential employees perform duties and responsibilities that support Orange County Sanitation District (Sanitation District) management with labor relations. Confidential employees are not represented by a bargaining unit and meet directly with the General Manager regarding terms and conditions of employment. The work and duties performed by exempt level confidential employees aligns with that of employees in the Supervisor Group and Professional Group bargaining units; however, due to their job duties in support of the labor relations program, confidential employees are not represented by a bargaining unit. Therefore, though they are in separate groups, unrepresented exempt level confidential employees' wages and benefits have historically aligned with represented employees' negotiated wages and benefits in the Supervisor Group and Professional Group. The General Manager is proposing the following adjustments for exempt level confidential employees that align with represented employee wages and benefits. • Salary Increases (3-Year Cost: $249K) — 2.5% in Year 1; 2.5% salary increase in Year 2; and 2.5% salary increase in Year 3. • Development Pay Increases (3-Year Cost: $16K) - $75.00 per pay period for education; $15.24 per pay period for each certification/license. RELEVANT STANDARDS • Ensure the public's money is wisely spent • Competitive compensation and benefits • Highly qualified, well trained, motivated, and diverse workforce • Positive employer, employee relations • Provide professional growth & development Page 1 of 3 PROBLEM The MOUs between the Sanitation District and similarly situated groups in the Supervisory and Professional Management Group (SPMG) bargaining units that became effective on July 1, 2013 expired on June 30, 2016. Successor MOUs were recently approved by the Board for the similarly situated SPMG groups, including salary increases for each of the three years of the agreements. Terms for the similarly situated exempt level confidential group employees have not yet been approved. PROPOSED SOLUTION Adopt Resolution No. OCSD 16-26, entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Approving Salary and Benefit Adjustments for Unrepresented Exempt Confidential Employees for Fiscal Years 2016/2017, 2017/2018 & 2018/2019." TIMING CONCERNS Labor agreements including salary increases for the corresponding represented groups were approved at the October 26, 2016 Board of Directors meeting. RAMIFICATIONS OF NOT TAKING ACTION • Potential labor instability • Possible impacts to morale • Inconsistency in compensation between represented and unrepresented classifications PRIOR COMMITTEE/BOARD ACTIONS October 2016 -Approved Resolution OCSD 16-21, which provided salary adjustments to similarly situated groups in the SPMG bargaining units for Fiscal Years 2016/2017, 2017/2018, and 2018/2019. January 2015 -Approved Resolution OCSD 15-03, which provided salary adjustments to exempt confidential employees for Fiscal Years 2014/2015 and 2015/2016 based on similarly situated groups. ADDITIONAL INFORMATION There are currently thirteen (13) exempt level confidential employees at the Sanitation District in seven (7) classifications. Confidential employees are those employees who, with authorized access, assist and act in a confidential capacity to and for persons who formulate, determine, and effectuate management policies with respect to labor relations. Page 2 of 3 Exempt level confidential employees hold the following classifications: Clerk of the Board Deputy Clerk of the Board Human Resources Analyst Human Resources Supervisor Principal Human Resources Analyst Secretary to the General Manager Senior Human Resources Analyst Confidential employees are not represented by a bargaining unit; instead, confidential employees represent themselves as a group in informal discussions with that Sanitation District's General Manager regarding wages, hours, and other terms and conditions of employment. The General Manager recommends the following changes: • Salary o Year 1 —2.5% Salary Increase, retroactive to the first pay period of July 2016. o Year 2—2.5% Salary Increase, effective the first pay period of July 2017. o Year 3—2.5% Salary Increase, effective the first pay period of July 2018. • Development Pay o Education: $75.00 per pay period, retroactive to the first pay period of July 2016. o Certificates/Licenses: $15.24 per pay period per certificate or license with a maximum of three (3) certificates and/or licenses, retroactive to the first pay period of July 2016. CEQA N/A FINANCIAL CONSIDERATIONS The cost of the salary increase and development pay adjustment is approximately$265K over the three-year term. The total compensation cost is approximately $305K over the three-year term. This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. ATTACHMENT The following attachment(s)are included in have copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Resolution No. OCSD 16-26 • Current (FY 2015-16) Salary Schedule for Confidential Group • Proposed Salary Schedules for Confidential Group for FY 2016-17, FY 2017-18, and FY 2018-19 Page 3 of 3 RESOLUTION NO. OCSD 16-26 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT APPROVING SALARY AND BENEFIT ADJUSTMENTS FOR UNREPRESENTED EXEMPT CONFIDENTIAL EMPLOYEES FOR FISCAL YEARS 201612017, 2017/2018 & 2018/2019 WHEREAS, there are fourteen (14) employees in the confidential employees job classification at the Orange County Sanitation District ("OCSD") who, with authorized access, assist and act in a confidential capacity to and for persons who formulate, determine, and effectuate management policies with respect to labor relations; and WHEREAS, there are thirteen (13) confidential employees holding exempt level classifications; and WHEREAS, exempt level confidential employees are unrepresented and meet directly with the General Manager about terms and conditions of employment; and WHEREAS, the General Manager recently entered into discussions with the exempt level confidential employees and completed negotiations in October 2016, which resulted in agreed upon proposed changes to wages and benefits that align with those agreed upon for represented employees. NOW, THEREFORE, in consideration thereof, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: 1. That the Board of Directors hereby authorizes and approves the following changes to wage and benefits for exempt level confidential employees, which shall become effective as noted: a) Salaries • To align with similarly situated represented employee classifications, exempt level confidential employees' salaries shall be adjusted per the following: • Year 1 — 2.5% Salary Increase, retroactive to the first pay period of July 2016. • Year 2 — 2.5% Salary Increase, effective the first pay period of July 2017. • Year 3 — 2.5% Salary Increase, effective the first pay period of July 2018. OCSD 16-26-1 b) Development Pay To align with similarly situated represented employee classifications, exempt level confidential employees' development pay shall be adjusted per the following: Development Pay: Education — $75.00 per pay period for advanced degree, retroactive to the first pay period of July 2016; Certification/License — $15.24 per pay period per certification/license with a maximum of three (3), retroactive to the first pay period of July 2016. PASSED AND ADOPTED at a regular meeting of the Board of Directors held November 16, 2016. John Nielsen Board Chairman ATTEST: Kelly A. Lore Clerk of the Board OCSD 16-26-2 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 16-26 was passed and adopted at a regular meeting of said Board on the 161h day of November 2016, 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 161h day of November 2016. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District OCSD 16-26-3 Orange County Sanitation District Classification and Compensation Plan Rates Effective July 1,2015 CONFIDENTIAL GROUP Pay STEP STEP STEP STEP STEP Classification Grade 1 2 3 4 5 Human Resources Supervisor CON90 $ 57.46 $ 60.34 1 $ 63.351 $ 66.51 $ 69.85 $ 119,516.80 $ 125,507.20 $ 131,768.00 $ 138,340.80 $ 145,288.005 Principal HR Analyst I CON84 1 $ 49.531 $ 52.01 1 $ 54.61 1 $ 57.34 $ 60.21 $ 103,022.40 $ 108,180.80 $ 113,588.80 $ 119,267.20 $ 125,236.801 Clerk of the Board CON80 $ 44.89 $ 47.13 $ 49.48 $ 51.97 $ 54,50 $ 93,371.20 $ 98,030.40 $ 102,918.40 $ 108,097.60 $ 113,484.80 Senior Human Resources Analyst I CON76 $ 40.66 1 $ 42.681 $ 44.821 $ 47.06 $ 49.41 $ 84,572.80 $ 88,774.40 $ 93,225.60 $ 97,884.80 $ 102,772.80 Deputy Clerk of the Board 1 CON73 1 $ 37.751 $ 39.64 1 $ 41.621 $ 43.70 $ 45.88 Secretary to the General Manager I CON73 1 $ 78,520.00 1 $ 82,451.20 1 $ 86,569.60 $ 90,896.00 $ 95,430.40 Human Resources Analyst I CON70 1 $ 35.061 $ 36.821 $ 38.661 $ 40.60 $ 42.63 $ 72,924.80 $ 76,585.60 $ 80,412.80 $ 84,448.00 $ 88,670.40 Human Resources Assistant CON67 $ 33.86 1 $ 35.561 $ 37.341 $ 39.20 $ 41.10 $ 70,428.80 $ 73,964.80 $ 77,667.20 $ 81,536.00 $ 85,612.80 Program Assistant CON56 $ 25.82 1 $ 27.101 $ 28.461 $ 29.87 $ 31.30 $ 53,705.60 $ 56,368.00 $ 59,196.80 $ 62,129.60 $ 65,249.60 Hkde,t 6160-HR\HROpen\Comp8Class\Compensation\Salary Documents2016-201TSalary Scheduler -ConfideMialrev110716 ➢29115 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 8,2016 CONFIDENTIAL GROUP Pay STEP STEP STEP STEP STEP Classification Grade 1 2 3 4 5 Human Resources Supervisor CON90 1 $ 58.90 1 $ 61.851 $ 64.931 $ 68.171 $ 71.60 S 122,512.001 $ 128,648.00 $ 135,054.40 1 $ 141,]93.50 $ 148,928.00 PHucipel HR Analyst I CON84 1 $ 50.77 1 $ 53.311 $ 55.98 $ 58.77 $ 105,601.601 $ 110,884.80 $ 116,438.40 1 $ 122,241.60 $ 128,377.60 Clerk of the Boats CONaO 1 $ 46.011 $ 48.31 1 $ 50.721 $ 53.27 $ 55.92 $ 95,700.801 $ 100,484.80 $ 105,497.60 1 0 $ 116,313.60 Senior Human Resources Analyst I CON76 1 $ 41.681 $ 43.751 $ 45.94 1 $ 48.241 $ 50.65 $ 86,694.40 1 $ 91,000.00 $ 95,555.20 $ 700,339.20 $ 105,352.00 Deputy Clerk of the Board 1 CON73 1 $ 38.691 $ 40.631 $ 42.661 $ 44.791 $ 47.03 Secretary to the General Manager I CON73 1 $ 80,475,201 $ 84.510.401 $ 88,732,801 $ 93,163.201 $ 97,82240 Human Resources Analyst I CON70 1 $ 35.941 $ 37.741 $ 39.631 $ 41.62 $ 4370 $ 74,755.201 $ 78,499.20 $ 82,430.40 $ 86,569.60 $ 90,896.00 Human Resources Assistant I CON67 1 $ 3471 1 $ 36.451 $ 38.271 $ 40.18 $ 42A9 $ 72,196.801 $ 75,816.00 $ 79,601,60 $ 83,5]4.40 $ 87,755.20 Program Assistant I CON56 1 $ 26.471 $ 27.781 $ 29.171 $ 30.62 $ 55,057.601 $ 57,782.40 $ 60.673.601 $ 63,689.601 $ 66,872.00 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective First Pay Period of July 2017 CONFIDENTIAL GROUP Pay STEP STEP STEP STEP STEP Classification Grade 1 2 3 4 5 Human Re sources Supervisor CON90 I S 60.37 $ 63.401 $ 66.55 $ 69.87 $ 73.39 S 125,569.601 $ 131.872.00 1 $ 138,424.00 1 $ 145,329.60 $ 152,651.20 PHncipal HR Analyst I CON89 1 $ 52.041 $ 54.64 1 $ 57.381 $ 60.24 $ 108,243.20 1 $ 113,651.20 $ 119,350.401 $ 125,299.20 1 $ 131,580.80 Clerk of the Board I CON80 1 $ 47.161 $ 49.521 $ 51.991 $ 54.601 $ 57.32 $ 98,092.801 $ 103,001.60 $ 108,139.20 1 $ 113,568.00 $ 119,225.80 Senior Human Resources Analyst I CON76 1 $ 42.721 $ 44.84 1 $ 47.091 $ 49.451 $ 51.92 $ 88,857.60 1 $ 93,267.20 $ 97,947.20 1 $ 702,856.00 $ 10],883.60 Deputy Clerk of the Board 1 CON73 1 $ 39.661 $ 41.651 $ 43.731 $ 45.911 $ 48.21 Secretary to the General Manager I CON73 1 $ 82,492,801 $ 86,632.001 $ 90,958,401 $ 95,492.801 $ 100,276.80 Human Rewurces Analyst I CON70 1 $ 36.841 $ 38.68 1 $ 40.621 $ 42.68 $ 44.79 $ 76,627.201 $ 80,454.40 $ 84,489.60 I $ 88,]32.80 $ 93,163.20 Human Resources Assistant CON67 1 $ 35.58 1 $ 37.361 $ 39.231 $ 41.18 $ 43.24 $ 74,006.401 $ 77,708.80 $ 81,598.40 $ 85,654.40 $ 89,939.20 Program Assistant I CON56 1 $ 27.131 $ 28.471 $ 29,901 $ 31.39 $ 56,430.401 $ 59,217.60 $ 62.192.001 $ 65,291.201 $ 68,536.00 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective First Pay Period of July 2018 CONFIDENTIAL GROUP Pay STEP STEP STEP STEP TE SP Classification Grade 1 2 3 4 5 Human Resources Supemsor I CON90 1 $ 61.881 $ 64.991 $ 68.21 1 $ 71.62 $ 128,710.401 $ 135,179.20 $ 141.876.801 $ 148,969.601 $ 156,457.60 Principal HR Analyst CON84 1 $ 53.34 1 $ 56.011 $ 58.81 $ 61.75 $ 110,947.201 $ 116.500.80 $ 122,324.80 $ 128,440.00 1 $ 134,867.20 Clerk of the Board I CON80 1 $ 48.341 $ 50,761 $ 53.29 $ 55.9] $ 100,547.20 1 $ 105,58080 $ 110,843.201 $ 116,417.601 $ 122,200.00 Senior Human Resources Analyst I CON78 1 $ 43.791 $ 45.961 $ 48.27 $ 50.691 $ 53.22 $ 91,083.201 $ 95.596.80 $ 100401.60 $ 105,435.20 $ 110,897.60 Deputy Clerk of the Board CON73 1 $ 40.651 $ 42.691 $ 44.821 $ 47.06 1 $ 49A2 Secretary to the General Manager I CON73 1 $ 84,552.01 $ 88,795.201 $ 93,225.601 $ 97,884.801 $ 102,793.60 Human Resources Analyst I CON70 1 $ 37.761 $ 39.651 $ 41.641 $ 43.73 $ 78,540,801 $ 82,472.00 $ 86,611.201 $ 90,958.401 $ 95,492.80 Human Resources Assistant CON67 1 $ 36.47 1 $ 38.291 $ 40.21 1 $ 42.21 1 $ 44.32 $ 75,857.601 $ 79,fi43.20 $ 83,636.80 $ 8],796.80 $ 92,i85.fi0 Program Assistant CON56 1 $ 2T81 1 $ 29A8 1 $ 30.651 $ 32.171 $ 33.77 $ 57,M4.801 $ 60,694.40 $ 63,752.00 $ 66,913.60 1 $ 70,241.60 STEERING COMMITTEE Meeting Dare TOBd.ofDir. 11/16/16 11/16/16 AGENDA REPORT emNumber Iem1umber 4 IB Orange County Sanitation District FROM: James D. Herberg, General Manager SUBJECT: EXECUTIVE MANAGEMENT TEAM COMPENSATION AND BENEFITS AND MANAGER GROUP COMPENSATION CHIEF NEGOTIATOR'S RECOMMENDATION A. Adopt Resolution No. OCSD 16-27 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving changes to the salary schedule, salary increases, performance-based increases, and the distribution of any remaining funds based on changes to scope, duties, or responsibilities for At-Will Executive Management Team employees for Fiscal Years 2016-2017, 2017-2018, and 2018-2019," authorizing the General Manager to implement a salary structure adjustment for Fiscal Year 2016 to bring Executive Management Team salary ranges in alignment with the market, 2.5% salary increases and range adjustments in Fiscal Years 2017 and 2018, and increases to benefits. B. Adopt Resolution No. OCSD 16-28 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving changes to the salary schedule, salary increases, performance-based increases, and the distribution of any remaining funds based on changes to scope, duties, or responsibilities for unrepresented management employees for Fiscal Years 2016-2017, 2017-2018, and 2018-2019," authorizing the General Manager to implement a salary structure adjustment for Fiscal Year 2016 to bring the Manager Group salary ranges in alignment with the market, 2.5% salary increases and range adjustments in Fiscal Years 2017 and 2018, and minor increases to benefits. BACKGROUND Executive Management Team Group There are six (6) Executive Management Team (EMT) employees who provide executive leadership, strategic direction, and department oversight for the Orange County Sanitation District (Sanitation District). EMT employees serve in at-will employment status, which may be terminated at any time, with or without cause, with no liability to the Sanitation District. Currently, the EMT's salary market position is at the 33rd percentile. The General Manager is recommending a one-time structure adjustment to bring the EMT salary ranges in alignment with the market as compared to the Sanitation District's 17 comparison agencies. The structure adjustment will effectively put the top of the EMT salary ranges at the 75th percentile of market. The General Manager is also Page 1 of 6 recommending salary increases of 2.5% and corresponding range increases for Fiscal Year 2017 - 2018, and 2.5% salary increases and corresponding range increases for Fiscal Year 2018 - 2019. A one-time base building performance increase of up to 2.5% for EMT employees with exceptional performance is also being recommended by the General Manager to be applied at his discretion to top performers in 2016. In addition, the General Manager is recommending increases to miscellaneous EMT benefits including an increase in life insurance, a car allowance, and a matching 457(b) contribution for EMT employees who do not currently receive IIS or are assigned to the classic open or PEPRA pension plans. The General Manager is recommending that the Board authorize the General Manager to administer the Board approved EMT pay plan through a pay for performance system with pay range steps. The pay for performance system will only allow for compensation to be paid to EMT employees who meet specific goals assigned by the General Manager related to his District Work Plan and departmental initiatives. Pursuant to the understanding with the EMT members at the beginning of discussions, the salary changes and salary range adjustments would take effect the first pay period in July of the current fiscal year, 2016. Manager Group The 15 manager classifications at the Sanitation District oversee staff within a particular division and align performance with the goals of the agency. Over the past five years, the Sanitation District has reduced the number of managers from 19 to 15, resulting in significant cost savings and increased efficiencies, and broader scopes of responsibilities. Managers are not represented by a bargaining unit and represent themselves as a group in discussions with the General Manager regarding wages, benefits, and other conditions of employment. Currently, the Manager Group's salary market position is at the 55th percentile. The General Manager is recommending a structure adjustment to bring the Manager Group's salary ranges in alignment with the market as compared to the Sanitation District's 17 comparison agencies. The structure adjustment will effectively put the top of the Manager Group salary ranges at the 75th percentile of market. The General Manager is also recommending salary increases of 2.5% and range adjustments for Fiscal Year 2017 - 2018, and 2.5% salary increases and corresponding range increases for Fiscal Year 2018 - 2019. A one-time base building performance increase of up to 2.5% for Manager Group employees with exceptional performance is also being recommended by the General Manager to be applied at his, or his designee's, discretion to top performers in 2016. In addition, the General Manager is recommending minor increases to miscellaneous Manager Group benefits including an increase in life insurance, an increase in Development Pay in alignment with other represented groups, and a matching 457(b) contribution of up to $200 per month for Manager Group employees that do not currently receive IIS or are assigned to the classic open or PEPRA pension plans. Page 2 of 6 The General Manager is recommending that the Board authorize the General Manager to administerthe Board approved Manager Group pay plan through a payfor performance system with pay range steps. The pay for performance system will only allow for compensation to be paid to Manager Group employees who meet specific goals assigned by the Department Heads and that may be related to the General Manager's District Work Plan or departmental initiatives. Pursuant to the understanding with the Manager Group members at the beginning of discussions, the salary changes and salary range adjustments would take effect the first pay period of July in the current fiscal year, 2016. RELEVANT STANDARDS • Ensure the public's money is wisely spent • Competitive compensation and benefits • Highly qualified, well trained, motivated, and diverse workforce • Provide professional growth & development PROBLEM Koff & Associates, an independent Human Resources consulting company, recently evaluated classification and compensation data among the Sanitation District's 17 comparison agencies as part of a comprehensive Classification and Compensation Study (C&C Study). The results of the study indicate that the EMT and Manager Group salaries at the Sanitation District remain well below the 75° percentile. Currently, the EMT are at the 33rd percentile of market, while the Manager Group is at the 55'h percentile as compared to peers in like positions. Data indicates that by the year 2019, 100% of EMT employees and 83% of Management employees will be eligible for retirement, making succession planning, retention, and recruitment high priorities at the Sanitation District. As the District looks to promote employees from the supervisory ranks into Management and EMT positions, these potential internal employees are currently faced with a decision to continue at the Sanitation District or look outside the organization for higher level positions that may be more attractive in the market. In addition, if the Sanitation District seeks to recruit employees from the outside to fill the wave of potential EMT and Manager retirements, concerns loom about the competitiveness of the Sanitation District's pay in the market and its ability to attract and retain top talent. PROPOSED SOLUTION Adopt Resolution No. OCSD 16-27 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving changes to the salary schedule, salary increases, performance-based increases, and the distribution of any remaining funds based on changes to scope, duties or responsibilities for At-Will Executive Management Team employees for Fiscal Year 2016-2017, 2017-2018, and 2018-2019,"and Resolution No. OCSD 16-28 entitled, "A Resolution of the Board of Directors of the Orange County Page 3 of 6 Sanitation District approving changes to the salary schedule, salary increases, performance-based increases, and the distribution of any remaining funds based on changes to scope, duties or responsibilities for unrepresented management employees for Fiscal Year 2016-2017, 2017-2018, and 2018-2019." Based on Board direction, the General Manager entered into discussions with the EMT and Manager Group employees, which resulted in agreed upon proposed changes to the salary structure, proposed changes to wages to include a merit pool, and minor benefit adjustments. RAMIFICATIONS OF NOT TAKING ACTION Risk of losing top talent and of not being able to attract top talent. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Executive Management Team Executive Management Team members are employed on an At-Will basis, and serve at the pleasure of the General Manager. The General Manager is authorized, per the Board's Personnel Policies and Procedures, to periodically adjust the rate of compensation for Executive Management Team members who have signed At-Will agreements so long as no adjustment exceeds the compensation permitted by the applicable salary range. The six (6) At-Will employees of the Sanitation District's EMT are relied upon heavily to provide leadership, strategic direction, and department oversight at the Sanitation District. These individuals serve in key leadership positions that are critical to the success of the agency. These Executive Management Team members hold the following classifications: Executive Management Team Classifications Assistant General Manager Director of Finance &Administrative Services Director of Engineering Director of Operations & Maintenance Director of Human Resources Director of Environmental Services The Sanitation District is committed to maintaining a competitive compensation market position that attracts and retains top employment talent. It is the Sanitation District's Page 4 of 6 philosophy to compensate employees competitively and equitably, and understanding the relative market position assists in that determination. The comprehensive C&C Study recently completed by Koff & Associates revealed that the EMT salaries for all classifications are below the 751h percentile. Over the past five (5) years, the group's aggregate market position has declined from the 601h percentile in 2011 to its current position at the 33rd percentile in 2016. The proposed structure adjustment and 2.5% salary increases in 2017 and 2018 would bring EMT salary ranges in line with the 751h percentile (with the top of the range being at the 7511 percentile) at the end of the three-year period. The ability of employees on the EMT to move through their respective pay ranges will be based on their ability to meet the Sanitation District's goals in a "pay for performance" pay system. Manager Group The 15 classifications that comprise the Sanitation District's Manager Group are relied upon heavily to provide day-to-day leadership to support strategic direction and division management oversight at the Sanitation District. These individuals serve in key leadership positions that are critical to the success of the agency. Manager Group members hold the following classifications: Manager Group Classifications Contracts & Purchasing Manager Controller Engineering Manager (7) Environmental Lab & Ocean Monitoring Manager Human Resources Manager/ Risk Manager Information Technology Manager IT Systems & Operations Manager Maintenance Manager Operations Manager The comprehensive C&C Study recently completed by Koff & Associates revealed that the Manager Group salaries for all classifications are below the 7V percentile. The Manager Group market position has declined from the 70'h percentile in 2011 to its current position at the 55'h percentile in 2016. The proposed structure adjustments and 2.5% salary increases in 2017 and 2018 would bring Manager Group salary ranges in line with the 75th percentile (with the top of the range being at the 75th percentile) at the end of the three-year period. The ability for employees in the Manager Group to move through their respective pay ranges will be based on their ability to meet the Sanitation District's goals in a "pay for performance" pay system. CEQA N/A Page 5 of 6 FINANCIAL CONSIDERATIONS The cost of the structure adjustment, salary increases, and miscellaneous benefit increases are approximately $1.18 million over the three-year term for both EMT and Managers combined. ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (v w .ocsd.com) with the complete agenda package: • Resolution No. OCSD 16-27 (Executive Management Team) • Current Executive Management Team Pay Table • Proposed Executive Management Team Pay Tables, July 2016-July 2018 • Resolution No. OCSD 16-28 (Manager Group) • Current Manager Group Pay Table • Proposed Manager Group Pay Tables, July 2016-July 2018 Page 6 of 6 RESOLUTION NO. OCSD 16-27 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT APPROVING CHANGES TO THE SALARY SCHEDULE, SALARY INCREASES, PERFORMANCE-BASED INCREASES, AND THE DISTRIBUTION OF ANY REMAINING FUNDS BASED ON CHANGES TO SCOPE, DUTIES, OR RESPONSIBILITIES FOR AT-WILL EXECUTIVE MANAGEMENT TEAM EMPLOYEES FOR FISCAL YEARS 2016- 2017, 2017-2018, AND 2018-2019 WHEREAS, there are six (6) Executive Management Team employees who provide executive leadership, strategic direction, and department oversight for OCSD; and WHEREAS, Executive Management Team employees serve in at-will employment status, which may be terminated at any time by either the General Manager or an Executive Management Team employee, with or without cause, with no liability; and WHEREAS, it is OCSD's philosophy to compensate employee classifications competitively, which currently can be achieved through alignment with the salary market; and WHEREAS, salary adjustments for Executive Management Team employees have not kept pace with the market value for their position; and WHEREAS, the General Manager entered into discussions with the Executive Management Team employees, which resulted in agreed upon proposed changes to the salary structure, proposed changes to wages to include a merit pool, and minor benefit adjustments; and WHEREAS, the parties agreed that the salary changes would take effect the first pay period in July 2016 and the start of the new fiscal year in alignment with the other employee unit increases. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: That the Board of Directors hereby authorizes and approves the following changes to salaries and benefits for Executive Management Team employees, which shall become effective the first pay period of July 2016: • Changes to salary ranges for the Executive Management Team group to reduce compaction and bring into market alignment in fiscal year 2016 • 2.5% salary increases and corresponding range adjustments in fiscal years 2017 - 2018 and 2018 - 2019 to maintain market alignment A pay for performance compensation system with pay range steps 1201893.1 OCSD 16-27-1 • A $500 monthly car allowance • A base building performance increase up to 2.5% for Executive Management Team employees with exceptional performance and at the discretion of the General Manager • An increase in life insurance from two times salary to three times salary • A matching 457(b) contribution up to $200 a month for Executive Management Team employees who do not receive IS or are assigned to the classic open or PEPRA plans • The General Manager shall administer the Board approved Executive Management Team pay plan That the General Manager, or his designee, is authorized to implement the changes to salary ranges and structure, salaries, benefits, and performance increases approved herein. PASSED AND ADOPTED at a regular meeting of the Board of Directors held November 16, 2016. John Nielsen Board Chairman ATTEST: Kelly A. Lore Clerk of the Board 1201993.1 OCSD 16-27-2 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 16-27 was passed and adopted at a regular meeting of said Board on the 161h day of November 2016, 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 161h day of November 2016. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District 1201993.1 OCSD 16-27-3 Orange County Sanitation District Classification and Compensation Plan Rates Effective July 10, 2015 EXECUTIVE MANAGEMENT GROUP Classification Pay Grade Minimum I Midpoint [ ControlPointl Maximum Assistant General Manager EMT114 $ 163,748 $ 204,685 $ 221,061 $ 245,623 Director of Engineering EMT109 $ 148,862 $ 186,078 $ 200,964 $ 223,293 Director of Human Resources EMT109 $ 148,862 $ 186,078 $ 200,964 $ 223,293 Director of Finance and Administrative Services EMT109 $ 148,862 $ 186,078 $ 200,964 $ 223,293 Director of Environmental Services EMT108 $ 135,329 $ 169,161 $ 182,694 $ 202,994 Director of Facility Support Services EMT108 $ 135,329 $ 169,161 $ 182,694 $ 202,994 Director of Operations and Maintenance EMT108 $ 135,329 $ 169,161 $ 182,694 $ 202,994 1/19/16 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 8, 2016 EXECUTIVE MANAGEMENT GROUP Classification Pay Grade Step 1 Step 2 j Step 3 1 Step 4 1 Step 5 Assistant General Manager EM32 $ 215,181 $ 226,185 1 $ 237,752 1 $ 249,911 1 $ 262,691 Director of Engineering I EM27 1 $ 190,1881 $ 199,914 1 $ 210,1381 $ 232,181 1 $ 232,181 Director of Operations and Maintenance EM26 $ 185,549 $ 195,039 $ 205,013 1 $ 215,4971 $ 226,518 Director of Human Resources EM25 $ 181,024 $ 190,281 $ 200,012 $ 210,241 1 $ 220,993 Director of Finance and Administrative Services EM25 $ 181,024 $ 190,281 $ 200,012 $ 210,241 1 $ 220,993 Director of Environmental Services EM25 $ 181,024 $ 190,281 $ 200,012 $ 210,241 1 $ 220,993 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 7, 2017 EXECUTIVE MANAGEMENT GROUP Classification Pay Grade Step 1 Step 2 Step 3 1 Step 4 1 Step 5 Assistant General Manager EM32 $ 220,560 $ 231,840 $ 243,696 1 $ 256,158 1 $ 269,258 Director of Engineering EM27 $ 194,943 $ 204,912 $ 215,392 1 $ 226,4071 $ 237,985 Director of Operations and Maintenance EM26 $ 190,188 $ 199,914 $ 210,138 1 $ 220,8851 $ 232,181 Director of Human Resources EM25 $ 185,549 $ 195,039 $ 205,013 1 $ 215,4971 $ 226,518 Director of Finance and Administrative Services I EM25 $ 185,549 $ 195,039 $ 205,013 1 $ 215,4971 $ 226,518 Director of Environmental Services I EM25 $ 185,549 $ 195,039 $ 205,013 1 $ 215,4971 $ 226,518 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 6, 2018 EXECUTIVE MANAGEMENT GROUP Classification Pay Grade Step 1 Step 2 Step 3 1 Step 4 1 Step 5 Assistant General Manager EM32 $ 226,074 $ 237,635 $ 249,788 1 $ 262,562 1 $ 275,990 Director of Engineering EM27 $ 199,817 $ 210,035 $ 220,776 1 $ 232,0671 $ 243,935 Director of Operations and Maintenance EM26 $ 194,943 $ 204,912 $ 215,392 1 $ 226,4071 $ 237,985 Director of Human Resources EM25 $ 190,188 $ 199,914 $ 210,138 1 $ 220,8851 $ 232,181 Director of Finance and Administrative Services I EM25 $ 190,188 $ 199,914 1 $ 210,1381 $ 220,8851 $ 232,181 Director of Environmental Services I EM25 $ 190,1881 $ 199,914 1 $ 210,1381 $ 220,8851 $ 232,181 RESOLUTION NO. OCSD 16-28 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUTY SANITATION DISTRICT APPROVING CHANGES TO THE SALARY SCHEDULE, SALARY INCREASES, PERFORMANCE-BASED INCREASES, AND THE DISTRIBUTION OF ANY REMAINING FUNDS BASED ON CHANGES TO SCOPE, DUTIES, OR RESPONSIBILITIES FOR UNREPRESENTED MANAGEMENT EMPLOYEES FOR FISCAL YEARS 2016-2017, 2017-2018, AND 2018-2019 WHEREAS, there are fifteen (15) employees in the management employees job classification at the Orange County Sanitation District ("OCSD") who serve as organizational leaders and oversee staff within particular divisions and/or workgroups to align performance outcomes with the strategic goals of the agency; and WHEREAS, management employees are unrepresented and meet directly with the General Manager about terms and conditions of employment; and WHEREAS, salary adjustments for management employees have not kept pace with employees they oversee, the market value for their position, or the consumer Price Index; and WHEREAS, management employees' salaries have forgone salary increases since 2009 in all years except a 2% increase in 2011, a 3% increase in 2014, and a 2% increase in 2015; and WHEREAS, the General Manager entered into discussions with the management employees, which resulted in agreed upon proposed changes to the salary structure, proposed changes to wages to include a merit pool, and minor benefit adjustments; and WHEREAS, the parties agreed that the salary changes would take effect the first pay period in July 2016 and the start of the new fiscal year in alignment with the other employee unit increases. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: That the Board of Directors hereby authorizes and approves the following changes to salaries and benefits for management employees, which shall become effective the first pay period of July 2016: • Changes to salary ranges for the Manager Group to reduce compaction and bring into market alignment in fiscal year 2016 • Salary increases of 2.5% and range adjustments for Fiscal Year 2017 - 2018, and 2.5% salary increases and corresponding range increases for Fiscal Year 2018 - 2019 OCSD 16-28-1 • A pay for performance compensation system with pay range steps • An increase in development pay to align with other employee groups • A base building performance increase up to 2.5% for managers with exceptional performance and at the discretion of the General Manager • An increase in life insurance from two times salary to three times salary • A matching 457(b) contribution up to $200 a month for managers who do not receive IIS or are assigned to the classic open or PEPRA plans • The General Manager shall administer the Board approved manager pay plan That the General Manager, or his designee, is authorized to implement the changes to salary ranges and structure, salaries, benefits, and performance increases approved herein. PASSED AND ADOPTED at a regular meeting of the Board of Directors held November 16, 2016. John Nielsen Board Chairman ATTEST: Kelly A. Lore Clerk of the Board OCSD 16-28-2 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 16-28 was passed and adopted at a regular meeting of said Board on the 16'^ day of November 2016, 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 161h day of November 2016. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District OCSD 16-28-3 Orange County Sanitation District Classification and Compensation Plan Rates Effective July 10, 2015 MANAGERS GROUP Classification IPayGradel Minimum I Midpoint Maximum Controller I MGR96 1 $ 112,152 $ 140,190 $ 168,228 Engineering Manager I MGR96 1 $ 112,152 $ 140,190 $ 168,228 IT Systems&Operations Manager MGR96 1 $ 112,152 $ 140,190 $ 168,228 Environmental Compl & Reg Affairs Manager MGR95 1 $ 109,482 $ 136,852 $ 164,223 Contracts&Purchasing Manager MGR94 $ 106,811 $ 133,514 $ 160,217 Environmental Lab&Ocean Monitoring Manager MGR94 $ 106,811 $ 133,514 $ 160,2 77 Human Resources& Risk Manager MGR94 $ 106,811 $ 133,514 $ 160,217 Maintenance Manager I MGR94 1 $ 106,811 $ 133,514 $ 160,2 77 Operations Manager I MGR94 1 $ 106,811 $ 133,514 $ 160,217 Information Technology Manager I MGR 92 1 $ 101,725 $ 127,127 $ 152,588 1 7/10/15 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 8, 2016 MANAGERS GROUP Classification I Pay Gradel Step 1 1 Step 2 1 Step 3 1 Step 4 1 Step 5 Engineering Manager EM17 $ 148,575 $ 156,173 $ 164,160 $ 172,555 $ 181,379 Controller I EM16 I S 144,951 1 $ 152,364 1 $ 160,156 1 $ 168,346 1 $ 176,955 Human Resources&Risk Manager I EM16 I S 144,951 $ 152,364 $ 160,156 $ 168,346 $ 176,955 Maintenance Manager I EM16 I S 144,951 $ 152,364 $ 160,156 $ 168,346 $ 176,955 Operations Manager I EM16 I S 144,951 $ 152,364 $ 160,156 $ 168,346 $ 176,955 Contracts & Purchasing Manager I EM15 I S 141,416 $ 148,648 $ 156,249 $ 164,240 $ 172,639 731 IT Systems&Operations Manager EM15 S 141,416 $ 148,648 $ 156,249 $ 164,240 $ 172,639 Environmental Lab&Ocean Monitoring Manager EM15 S 141,416 $ 148,648 $ 156,249 $ 164,240 $ 172,639 Information Technology Manager EM11 S 128,116 $ 134,667 $ 141,554 $ 148,793 $ 156,403 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 7, 2017 MANAGERS GROUP Classification I Pay Gradel Step 1 1 Step 2 1 Step 3 1 Step 4 1 Step 5 Engineering Manager EM18 I S 156,096 $ 164,079 $ 172,470 1 $ 181,290 $ 190,562 Controller I EM16 I S 148,5751 $ 156,173 1 $ 164,160 1 $ 172,5551 $ 181,379 Human Resources&Risk Manager I EM16 I S 148,5751 $ 156,173 1 $ 164,160 1 $ 172,5551 $ 181,379 Maintenance Manager I EM16 I S 148,575 $ 156,173 $ 164,160 $ 172,555 $ 181,379 Operations Manager I EM16 I S 148,575 $ 156,173 $ 164,160 $ 172,555 $ 181,379 771 Contracts & Purchasing Manager I EM16 I S 148,575 $ 156,173 $ 164,160 $ 172,555 $ 181,379 IT Systems&Operations Manager I EM16 I S 148,5751 $ 156,173 1 $ 164,160 1 $ 172,555 1 $ 181,379 Environmental Lab&Ocean Monitoring Manager EM16 S 148,575 $ 156,173 $ 164,160 $ 172,555 $ 181,379 Information Technology Manager EM12 S 134,601 $ 141,485 $ 148,720 $ 156,326 $ 164,321 Orange County Sanitation District Classification and Compensation Plan PROPOSED Rates Effective July 6, 2018 MANAGERS GROUP Classification I Pay Gradel Step 1 1 Step 2 1 Step 3 1 Step 4 1 Step 5 Engineering Manager EM18 $ 159,999 $ 168,181 $ 176,782 1 $ 185,823 $ 195,326 Controller I EM16 I S 152,2891 $ 160,077 1 $ 168,264 1 $ 176,869 1 $ 185,91 Human Resources&Risk Manager I EM16 I S 152,2891 $ 160,077 1 $ 168,264 1 $ 176,869 1 $ 185,914 Maintenance Manager I EM16 I S 152,289 $ 160,077 $ 168,264 $ 176,869 $ 185,914 Operations Manager I EM16 I S 152,289 $ 160,077 $ 168,264 $ 176,869 $ 185,914 Contracts & Purchasing Manager I EM16 I S 152,289 $ 160,077 $ 168,264 $ 176,869 $ 185,914 IT Systems&Operations Manager EM16 S 152,289 $ 160,077 $ 168,264 $ 176,869 $ 185,914 Environmental Lab&Ocean Monitoring Manager EM16 S 152,289 $ 160,077 $ 168,264 $ 176,869 $ 185,914 Information Technology Manager EM12 S 137,966 $ 145,022 $ 152,438 $ 160,234 $ 168,429 STEERING COMMITTEE Meeting Dare TOBd.ofDir. 11/16/16 11/16/16 AGENDA REPORT emNumber Iem1umber 6 19 Orange County Sanitation District FROM: John Nielsen, Board Chairman SUBJECT: GENERAL MANAGER COMPENSATION AND BENEFITS BOARD CHAIR'S RECOMMENDATION Adopt Resolution No. OCSD 16-29 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving salary increase, salary range adjustment, and changes to the benefits for the General Manager for Fiscal Years 2016 to 2017 and 2017 to 2018," authorizing the Board Chair to implement a base building salary increase of 8% and a salary range adjustment commencing in the first pay period of July 2016 for fiscal year 2016 to 2017 and a base building salary increase of 8% and a salary range adjustment in the first pay period of July 2017 for fiscal year 2017 to 2018 for a total salary cost of $39,429 and an added benefits cost of $24,000 for both fiscal years. Compensation and benefits costs including impact to existing benefits of an amount not to exceed $76,448. BACKGROUND The General Manager is employed on an At-Will basis and serves at the pleasure of the Board of Directors. According to Section 6 of the General Manager's At-Will Agreement the, "District's Steering Committee shall meet with the General Manager in August of each year during the term of this Agreement to review and evaluate his performance over the prior year. The Steering Committee shall make its recommendation(s) to the Board concerning adjustment to the compensation and/or benefits paid or provided to the General Manager, to be effective in July of the year of the review." Since the General Manager was appointed to this position in April 2013, the Board has approved a base building salary increase of 3% and a corresponding salary range adjustment in Fiscal Year 2014-2015 and a base building salary increase and corresponding salary range adjustment of 7% in Fiscal Year 2015-2016. The Orange County Sanitation District (Sanitation District) reviews employee market position as compared to incumbents in like positions with comparison agencies to ensure salaries are competitive. The General Manager's market position based on salary in Fiscal Year 2015-2016 was the 9th percentile as compared to peers in our comparison agencies. The General Manager's market position was to be revisited through a Districtwide classification and compensation study to provide the Board with data for consideration of an organization-wide structural alignment of its pay systems. The compensation study has been completed and in Fiscal Year 2016-2017 the General Manager's market position is at the 7th percentile as compared to peers in comparison agencies. Page 1 of 4 Additionally, there is significant overlapping of salary ranges between the General Manager and the highest paid subordinate range creating compaction and impacting succession planning efforts. RELEVANT STANDARDS • Competitive compensation and benefits • Highly qualified, well trained, motivated, and diverse workforce PROBLEM The General Manager's salary market position of the 71" percentile could put the Sanitation District at risk for retention of executive staff and may not be competitive as compared to peers in like positions. A possible result is highly qualified and experienced staff could be recruited by other agencies inhibiting the Sanitation District's ability to promote from within, impacting succession planning goals, and obstructing attraction and recruitment efforts. Additionally, overlapping ranges of executive management with the General Manager has created compaction and impacts salary structure alignment, which disrupts succession planning. PROPOSED SOLUTION Adopt Resolution No. OCSD 16-29 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District approving salary increase, salary range adjustment, and changes to the benefits for the General Manager for Fiscal Years 2016 to 2017 and 2017 to 2018." The Sanitation District is committed to maintaining a competitive compensation market position that attracts and retains top employment talent. It is the Sanitation District's philosophy to compensate employees competitively and equitably, and understanding the relative market position assists with that determination. The proposed structural range adjustment and base building salary increase is projected to move the General Manager's market position from the 711 percentile to the 201h percentile in salary and the W percentile for total compensation in 2016. For 2017 the projection is the 33'd salary percentile and the 671" total compensation percentile, which will work toward organizational salary alignment, reduce compaction, and provide a more competitive salary market position. TIMING CONCERNS N/A RAMIFICATIONS OF NOT TAKING ACTION Potential retention issue of highly skilled and experienced executive staff. Page 2 of 4 PRIOR COMMITTEE/BOARD ACTIONS October 2016 - Board authorized the Chair and Vice Chair to initiate discussions with the General Manager regarding his compensation and benefits package in closed session and authorized a salary increase of 8% in fiscal year 2016-2017 and 8% in fiscal year 2017-2018. June 2016 - Steering Committee conducted the annual performance evaluation of the General Manager in closed session. October 2015 - Board approved Resolution No. OCSD 15-23, approving a base building salary increase for the General Manager of 7%, along with corresponding salary range adjustment and changes to the benefits package to more closely align with those offered to the represented and unrepresented groups. August 2015 - Board authorized the Chair to initiate discussions with the General Manager regarding his compensation and benefits package in closed session. June 2015 - The Steering Committee conducted the annual performance evaluation of the General Manager in closed session. November 2014 - Board approved Resolution No. OCSD 14-15, approving a base building salary increase for the General Manager of 3% of salary and to adjust the corresponding salary range for FY 2014-2015, effective July 11, 2014. June 2014 - Steering Committee conducted the annual performance evaluation of the General Manager in closed session. February 2013 - Board approved appointment of James D. Herberg to the positon of General Manager and approved the current compensation and benefits package, effective April 1, 2013. ADDITIONAL INFORMATION Among the agency's accomplishments during the past year were: • Transferring local sewers in Service Area 7 • Reaffirming our AAA credit ratings • Increasing flows to GWRS by 30% • Completing the feasibility study for final expansion of the Groundwater Replenishment System • Maintaining 100% compliance with our Ocean Discharge Permit • Taking steps to eliminate our unfunded pension liability • Decreasing the annual operating budget Page 3 of 4 CEQA N/A FINANCIAL CONSIDERATIONS Costs of salary increases over fiscal years 2016-2017 and 2017-2018 is $39,429. Cost of benefits is $24,000. Compensation and benefits costs, including impact to existing benefits, not to exceed $76,448. ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Resolution No. OCSD 16-29 • General Manager's Current Salary Schedule • General Manager's Proposed Salary Schedule • General Manager's At-Will Agreement Page 4 of 4 RESOLUTION NO. OCSD 16-29 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT APPROVING SALARY INCREASE, SALARY RANGE ADJUSTMENT, AND CHANGES TO BENEFITS FOR THE GENERAL MANAGER FOR FISCAL YEARS 2016 TO 2017 AND 2017 TO 2018 WHEREAS, the General Manager provides organizational leadership, strategic direction, and District oversight for Orange County Sanitation District (OCSD); and WHEREAS, the General Manager serves an at-will employment status, which may be terminated at any time by the Board with or without cause with no liability; and WHEREAS, it is OCSD's philosophy to compensate employee classifications competitively, which currently can be achieved through alignment with the salary market; and WHEREAS, the July 1, 2015, At-Will Agreement with the General Manager provides that, "District's Steering Committee shall meet with General Manager in August of each year during the term of this Agreement to review and evaluate his performance over the prior year. The Steering Committee shall make its recommendation(s) to the Board concerning adjustment to the compensation and/or benefits paid or provided to General Manager, to be effective in July of the year of review. After consideration of the recommendation(s) of the Steering Committee, the Board shall determine and approve the compensation, including benefits, payable to General Manager, which generally becomes effective July of the fiscal year of the review"; and WHEREAS, the Steering Committee commenced its review of the General Manager's performance in June 2016, finalized its review and made its recommendation to the Board on October 26, 2016. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: 1. That the Board of Directors hereby authorizes and approves the following changes to General Manager's salary and benefits, which shall become effective retroactively to the first pay period of July 2016: a. At-Will Agreement with the General Manager commencing on July 1, 2016. b. A base building salary increase for the General Manager of eight percent (8%) in the first pay period of July 2016 and eight percent (8%) in the first pay period of July 2017 and a salary range adjustment to the corresponding salary range. 1201993.1 OCSD 16-29-1 c. A benefits package that would include those benefits offered to represented and unrepresented employees, including medical, dental, vision, disability insurance and paid leave. The General Manager's benefits package also will include additional life insurance coverage from two (2) times salary to three (3) times salary, $8,400 automobile allowance, six (6%) investment incentive salary (IIS) plus a flat payment of $1,250, an increase in employer-paid 457(b) deferred compensation contribution from $5000 to $11,000, an additional $6000 employer paid medical expense payment, and leave accruals at 250 hours per year. 2. That the Board Chair, or his designee, is authorized to implement the changes to salary range and salary and benefit items approved herein. PASSED AND ADOPTED at a regular meeting of the Board of Directors held November 16, 2016. John Nielsen Board Chair ATTEST: Kelly A. Lore Clerk of the Board 1201993.1 OCSD 16-29-2 STATE OF CALIFORNIA ) 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 16-29 was passed and adopted at a regular meeting of said Board on the 16th day of November 2016, 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 16th day of November 2016. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District 1201993.1 OCSD 16-29-3 Orange County Sanitation District Classification and Compensation Plan Rates Effective July 1,2015 GENERAL MANAGER Classification Pay Grade Minimum Midpoint Control Point Maximum General Manager EMT120 $ 188,952 $ 236,191 $ 255,087 $ 283,429 Proposed Salary Range for General Manager July 2016 Salary Range Annuall Ste 1 Ste 2 Ste 3 Step 4 SteP 5 EM37 Annual 243,457 255,907 268,995 282,751 297,211 Monthly 20,288 21,326 22,416 23,563 24,768 Hourly117.05 123.03 129.32 135.94 142.89 July 2017 Salary Range Annuall Ste 1 Ste 2 Ste 3 Step 4 Ste 5 EM37 Annual 249,543 262,305 275,719 289,820 304,641 Monthly 20,795 21,859 22,977 24,152 25,387 Hourly119.97 126.11 132.56 139.34 146.46 a n= AT-WILL EMPLOYMENT AGREEMENT James D. Herberg General Manager ORANGE COUNTY SANITATION DISTRICT THIS AT-WILL EMPLOYMENT AGREEMENT ("Agreement") is made and entered into, to be effective the 19 day of July. 2016, by and between: ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "District"; AND JAMES D. HERBERG, sometimes hereinafter referred to as "General Manager". RECITALS WHEREAS, District desires to employ James D. Herberg ("Mr. Herberg"), as General Manager of District,pursuant to the terms and conditions as set forth in this Agreement;and WHEREAS, Mr. Herberg, by virtue of his education, training and experience, is fully qualified to fill the position of General Manager and desires to continue to serve the District as its General Manager, pursuant to the terms and conditions of this Agreement; and WHEREAS, per Resolution No. OCSD 16-29 adopted on November 16, 2016 the District's Board of Directors has approved and authorized the Board Chair to execute this "At-Will Employment Agreement"with Mr. Herberg for General Manager services to include a base building salary increase of 8%of salary in each of fiscal years 2016 and 2017 . WHEREAS,at the beginning of negotiations the parties agreed that the salary changes would take effect retroactively to the first pay period of July 2016 which is the first pay period I20I895.1 in the current fiscal year. NOW,THEREFORE, the Parties hereto agree as follows: Section 7: District hereby employs Mr. Herberg to serve as General Manager of the Orange County Sanitation District, commencing on the effective date hereof, and continuing until termination by either Party, as provided in this Agreement. In that capacity, Mr. Herberg agrees to perform the functions and duties of General Manager, the administrative head of the District, as prescribed by the laws of the State of California, and by the rules, regulations, decisions, and directions of the Board of Directors of the District (hereinafter referred to as "Board"). The General Manager's duties may involve expenditures of time in excess of the regularly established workday or in excess of a forty hour work week and may also include time outside normal office hours (including attendance at Board and Committee meetings). General Manager is classified as an exempt employee under the Fair Labor Standards Act ("FLSA") and shall not be entitled to any additional compensation for hours worked in excess of forty in a work week. Section 2: Mr. Herberg shall be employed in an "at-will" capacity serving at the sole pleasure of the Board. Either party to this Agreement may terminate the Agreement at any time for any reason with or without cause, and without hearing, upon 30 days' notice to the other party. Mr. Herberg is advised and acknowledges that he has none of the termination rights of a Regular employee of the District. Except as expressly provided herein, and as a condition of employment, Mr. Herberg knowingly, willingly and voluntarily gives up, waives, and disclaims any and all rights he may have, express or implied,to any notice and/or hearing before or after termination,and/or to any continued employment with the District after termination. As an "at-will" employee, Mr. Herberg understands that he may be subject to termination with or without cause at the sole discretion of the Board, notwithstanding that the other provisions of the District's Personnel Policies and Procedures Manual (hereinafter referred to as "Manual") apply to Mr.Herberg. f the District terminates employment without cause,Mr. Herberg shall be given a thirty(30)day Notice of Termination and severance pay in an amount equal to six (6) months of his then current annual base salary upon Mr. Herberg's execution of a valid written release of legal claims. f the District terminates this Agreement (thereby terminating Mr. Herberg's employment) without cause, and Mr. Herberg executes a valid written release of legal claims, the severance pay is considered a cash settlement related to the termination of Mr. Herberg and waiver of legal UW875.1 claims and shall be fully reimbursed to the District by Mr. Herberg if Mr. Herberg is convicted of a crime involving an abuse of his office or position. Abuse of office or position shall have the meaning set forth in Government Code 53243.4, as may be amended, of either (1) an abuse of public authority, including, but not limited to, waste, fraud and violation of the law under color of authority or (2) a crime against public justice, including, but, not limited to, a crime described in Title 7 (commencing with Section 92 of Part 1 of the Penal Code). Mr. Herberg shall reimburse such severance pay to the District no later than six (6) months after such conviction. If Mr. Herberg terminates his employment with 30 days' notice,the Board shall have the right to accept his resignation effective the date notice is given. Such decision to accept his resignation earlier shall not be considered a termination without cause and shall not entitle Mr. Herberg to receive the severance pay noted above. Section 3: The term of this Agreement shall commence on the effective date above and continue for an indefinite duration, until terminated by either Party pursuant to Section 2 above, or unless terminated or amended as provided herein. Section 4: As compensation for the services to be performed hereunder, upon the effective date, District agrees to pay General Manager an annual base salary for services rendered of two hundred fifty five, nine hundred seven dollars ($255,907) in fiscal year 2016 and two hundred seventy six,three hundred seventy nine dollar($276,379)in fiscal year 2017, subject to all applicable deductions and withholdings of any and all sums required by then current state, federal or local law, along with deductions of applicable sums the General Manager is obligated to pay because of participation in plans and programs descrbed in this Agreement, and paid biweekly in accordance with the District's established accounting and payroll practices atthe same time and in the same manner as other employees of the District. No increase in salary may exceed the compensation permitted by the applicable salary range for the classification established by duly adopted Resolution of the Board. Section 5: Forthe period of this Agreement, District shall provide Mr. Herberg with a fixed benefit package that includes the following: Personal Leave — accrued based on years of service for all paid hours, including hours actually worked and hours in a paid-leave payroll status, on a biweekly basis in accordance with the Manual. Personal leave accruals shall not exceed four hundred forty (440) hours as of December 31 of each year. Any hours in excess of said limit, will be paid to Mr. Herberg in January in an amount equal to 1201875.1 the hourly rate of compensation. Administrative Leave -40 hours per fiscal year, granted and not eligible for annual cash out. Investment Incentive Salary (IIS)- 6% of base salary applied on a biweekly fiscal year basis, and a flat amount of one thousand two hundred fifty dollars ($1,250) annually. Deferred Compensation - OCSD-paid annual allocation for 2016 and 2017 of $1 1,000 allocated on a biweekly calendar year basis. Car Allowance—OCSD-paid annual allocation of$8,400. Added Medical Allowance—OCSD-paid annual allocation for 2016 and 2017 of six thousand dollars ($6,000). Mr. Herberg's benefit package shall also include benefits consistent with the Manual for: holiday pay; medical, dental, vision and life insurance at three time's base salary; long-tern and short-term disability insurance; and employee assistance program. Additionally, Mr. Herberg's benefit package shall include executive disability insurance benefits, consistent with those provided to OCSD managers. These benefits shall remain in full force and effect unless and until replaced by an amendment to this Agreement, signed by Mr. Herberg and approved by the Board, which amendment shall includethe effective date thereof. Section 6: District's Steering Committee shall meet with General Manager in August of each year during the term of this Agreement to review and evaluate his performance over the prior year.The Steering Committee shall make its recommendation(s) to the Board concerning adjustment to the compensation and/or benefits paid or provided to General Manager, to be effective in July of the year of review. After consideration of the recommendation(s) of the Steering Committee, the Board shall determine and approve the compensation, including benefits, payable to General Manager, which generally becomes effective July of the fiscal year of the review. Failure of the District to review and evaluate the performance of the General Manager pursuant to this section shall not affect the right of the District to terminate the General Manager's employment and shall not be considered a breach of this Agreement. Section 7: Mr. Herberg shall be a Participant Member in the Orange County Employees Retirement System ("OCERS"). District shall pay the required employer's contribution and 0% of Mr. Herberg's required contribution towards membership in OCERS. 1201875.1 Section a: District shall reimburse General Manager for all expenses paid by him and incurred for non-personal,job-related District business that are reasonably necessary to the General Managers service to the District. The District agrees to either pay such expenses in advance or to reimburse the expenses, so long as the expenses are incurred and submitted according to the criteria established by District's budget and/or normal expense reimbursement procedures pursuant to applicable policy Resolutions. To be eligible for reimbursement, all expenses must be supported by documentation meeting the District's policies and requirements and must be submitted within time limits established by the District. Such reimbursement shall not be considered a benefit. Section g: During the period of this Agreement, it is agreed that General Manager shall devote his fulltime, skills, labor and attention to said employment. At no time may General Manager undertake outside activities consisting of consultant work, speaking engagements, writing, lecturing, or other similar professional activities for money or other consideration without prior approval of District's Steering Committee. However, the expenditure of reasonable amount of time for educational, charitable, or professional activities shall not be deemed a breach of this Agreement if those activities do not conflict or materially interfere with the services required under this Agreement, and shall not require the prior written consent of the Steering Committee. This Agreement shall not be interpreted to prohibit General Manager from making passive personal Investments or conducting private business affairs, provided those activities are not deemed to be a conflict of interest by state law nor do they conflict or materially interfere with the services required under this Agreement. Section 10, The Board has the sole discretion to determine whether the District shall pay General Manager pending an investigation into any alleged misconduct by General Manager. In the event that the District's Board determines, in its sole discretion, that it is in the best interest of the District for General Manager to be placed on paid administrative leave pending such an investigation, General Manager shall fully reimburse any salary provided for that purpose if the misconduct for which the General Manager was under investigation results in the General Manager being convicted of a crime involving an abuse of his office or position as defined in Section 2 of this Agreement. General Manager shall reimburse such salary to the District no later than six months after such conviction. Section 11, In the event that the District provides funds for the legal criminal defense of UW875.r General Manager, General Manager shall fully reimburse said funds to the District if the General Manager is convicted of a crime involving an abuse of his/her office or position as defined in Section 2 of this Agreement. General Manager shall reimburse such criminal legal defense fees to the District no later than six months after such conviction. Section 12, The terms and conditions of employment for General Manager, including other employment benefits for the General Manager that are not specifically provided for in this Agreement, shall be governed by the Manual, to the extent that amendments to the Manual made after the effective date of this Agreement are not inconsistent with the provisions of this Agreement. In the event of any such inconsistency or conflict, the provisions of this Agreement shall govern. Section 13, This Agreement supersedes any and all other prior agreements, either oral or in writing, and specifically, but not limited to, Mr. Herberg's At-Will Employment Agreement for Assistant General Manager dated July 1, 2015, between the Parties hereto with respect to the employment of Mr. Herberg by District, and contains all of the covenants and agreements between the Parties with respect to that employment in any manner whatsoever. Each Party to this Agreement acknowledges that no representation, inducement, promise, or agreement, orally or otherwise, has been made by any Party, or anyone acting on behalf of any Party,which is not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement or Employment shall be valid or binding on ether Party. Section 14: Any notices to be given hereunder by either Party to the other shall be in writing and may be transmitted by personal delivery, or by mail, registered or certified, postage prepaid, with return receipt requested. Mailed notices shall be addressed to the Parties at the addresses maintained in the personnel records of District, but each Party may change that address by written notice in accordance with this Section. Notices delivered personally shall be deemed communicated as of the date of actual receipt; mailed notices shall be deemed communicated as of the date of mailing. Section 15, Any modifications of this Agreement will be effective only if set forth in writing and signed by the Parties. Section 16, The failure of either Party to insist on strict compliance with any of the terms,covenants, or conditions of this Agreement by the other Party, shall not be deemed a waiver of that term, covenant,or condition, nor shall any waiver or relinquishment of any right or power at any one time or times be deemed a waiver or relinquishment of that right or power for UW875.1 all or any other times. Section 17, If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way. Section 18, This Agreement shall be governed by and construed in accordance with the laws of the State of California and all applicable ordinances, policies and resolutions. Section 191 General Manager acknowledges that he has had the opportunity and has conducted an independent review of the financial and legal effects of this Agreement. General Manager acknowledges that he has made an independent judgment upon the financial and legal effects of the Agreement and has not relied upon representation of the District, its elected or appointed officers and officials, agents or employees other than those expressly set forth in this Agreement. General Manager acknowledges that he has been advised to obtain, and has availed himself of, legal advice with respect to the terms and provisions of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this At-Will Employment Agreement on the day and year first above written. "DISTRICT" ORANGE COUNTY SANITATION DISTRICT "GENERAL MANAGER" By: James D. Herberg Date APPROVED AS TO FORM: "CHAIR, BOARD OF DIRECTORS" BRADLEY R. HOGIN GENERAL COUNSEL By: Bradley R. Hogin John Nielsen Date 1201875.1 BOARD OF DIRECTORS Meeting Date TOBd.Of Dir. -- 11/16/16 AGENDA REPORT ItemNumber Iem2umber 20 Orange County Sanitation District FROM: James D. Herberg, General Manager SUBJECT: DISTRIBUTION OF CLOSED SESSION MATERIALS GENERAL MANAGER'S RECOMMENDATION Review and consider the Orange County Sanitation District's policy regarding the distribution of documents presented in closed session. BACKGROUND Under state law, the Orange County Sanitation District (Sanitation District) Board of Directors (Board) may meet in closed session to discuss a variety of specified topics including, among others, pending litigation, labor negotiations, and real property negotiations. Meeting in closed session allows the Board to receive candid advice and freely discuss strategy without compromising the District's negotiating position. Directors may not disclose any confidential information obtained in closed session. (Government Code § 54963(a).) General Counsel and staff sometimes distribute reports, memoranda, and other written materials to the Board in closed session. In order to control the dissemination of these materials, the Sanitation District General Counsel and staff do not usually distribute them to the Board in advance. Rather, pursuant to long-standing Sanitation District policy, General Counsel and staff distribute any written materials during each closed session, and then collect the materials at the conclusion of the closed session to comply with Government Code § 54963(a). While many public agencies take a similar approach, some agencies may distribute written closed session materials in advance. State law does not specify any procedure for the distribution of written closed session materials, other than to prohibit their disclosure. Thus, it is up to each agency to decide how best to protect confidentiality while at the same time give the Board members an adequate opportunity to consider the issues. RELEVANT STANDARDS • Government Code Section 54963(a) PROBLEM The willful or inadvertent disclosure of confidential written closed session materials could cause great harm to the Sanitation District by compromising its strategy and negotiating position in adversarial matters. Page 1 of 2 1202081.1 PROPOSED SOLUTION The existing policy addresses the problem. The Board will review and consider the existing policy, and may provide direction to staff. TIMING CONCERNS No specific timing concern. RAMIFICATIONS OF NOT TAKING ACTION The existing policy will continue: generally and as a best-practice, written closed session materials will be distributed and collected during closed session rather than provided to the Board members in advance. PRIOR COMMITTEE/BOARD ACTIONS None. ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(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: N/A Page 2 d 2 1202081.1 ADMINISTRATION COMMITTEE Meeting Date TOBE.Or .Dir. 11/09/16 11/16/16 AGENDA REPORT ItemNumber Item Number s 21 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2017A GENERAL MANAGER'S RECOMMENDATION Authorize the General Managerto issue newfixed rate Certificates of Participation (COP), to be referred to as Wastewater Refunding Revenue Obligations, Series 2017A, in an amount sufficient to refund up to $91,620,000 of COP Series 2007A. BACKGROUND Tax-exempt interest rates have decreased over recent years due to the lack of municipal new issuance volume, in addition to greater bond redemptions, along with the reversal of outflows from (inflows to) municipal bond funds. This drop in interest rates can be seen below in the recent history for the AAA GO Municipal Market Data Index for 11-year tax- exempt maturities (reflecting the average life of the potential refunding candidates described below): 11-Year Maturities AAA MMD January 3, 2014 to Present 3.50% 3.00% 2.50 2.00% 1.50 1.00% — V_ V V Y1 O_ N f0 f0 f0 CJ M CJ (h CJ Cl (1 N1 EJ O O O O O O O O O O O O O O O O O O Since the COP Series 2007A advance refunded previous debt, Federal tax regulations prohibit a second advance refunding with tax-exempt debt. However, since the 2007A COPs are callable on February 1, 2017,the Orange County Sanitation District(Sanitation District) can conduct a current refunding. With the decline in interest rates, there is a potential opportunity to refinance the outstanding 2007A COP maturities to reduce interest costs for the Sanitation District. Page 1 of 4 Under current market conditions, up to $91,620,000 of the 2007A COPS may be current refunded, generating in excess of 3.0% present value savings (the minimum percentage required by the Sanitation District's debt policy). The savings are contingent on market conditions at the time of the refunding sale. RELEVANT STANDARDS • OCSD Debt Policy - Financial Management Policy and Procedures 201.3.1 • Easy access to low cost credit PROBLEM The 2007A COPS are accruing interest at rates ranging from 4.00-4.50%, which are higher than current market yields. PROPOSED SOLUTION The 2007A COPs are subject to optional redemption on February 1, 2017. The Sanitation District can refund up to $91,620,000 of the 2007A COPS for present value debt service savings of approximately$17 million with a matching refunding amortization structure. TIMING CONCERNS The 2007A COPS advance refunded the 2003 COPs; therefore, the 2007A COPS cannot be advance refunded (more than 90 days prior to the optional redemption date) due to Internal Revenue Service limitations. However, the Sanitation District can now conduct a current refunding since the 2007A COPs can be optionally redeemed within 90 days of the February 1, 2017 optional redemption date. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District will continue to pay above market interest costs on the 2007A COPS. PRIOR COMMITTEE/BOARD ACTIONS September 2016 - The Board adopted Resolution No. OCSD 16-16, authorizing the execution and delivery by the District of an Installment Purchase Agreement, a Trust Agreement, and a Continuing Disclosure Agreement in connection with the execution and delivery of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2016B, authorizing the execution and delivery of such Notes, evidencing principal in an aggregate amount of not to exceed $120,000,000, approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in connection with the offering and sale of such Notes and authorizing the execution of other necessary documents and related actions. July 2016 - The Board authorized the General Manager to issue Revenue Refunding Certificate Anticipation Notes, Series 2016B, as two-year fixed-rate obligations, subject Page 2 of 4 to market conditions, in an amount not to exceed $120,000,000 to replace the $120,850,000 Revenue Refunding Certificate Anticipation Notes, Series 2014B maturing on November 15, 2016. ADDITIONAL INFORMATION The Sanitation District currently has twelve series of debt issuances outstanding in the par amount of $1,081,125,000. The following table lists each issuance, the outstanding amount, and the interest rate mode. Outstanding Interest Rate Par Amounti'I Mode eries 2016B CANS $ 109,875,000 Fixed Rate(two-year) eries 2016A Refunding 145,880,000 Fixed Rate eries 2015A Refunding 127,510,000 Fixed Rate eries 2014A Refunding 85,090,000 Fixed Rate eries 2012E Refunding 66,395,000 Fixed Rate eries 2012A Refunding 100,645,000 Fixed Rate eries 2011A Refunding 96,330,000 Fixed Rate eries 2010C 157,000,000 Fixed Rate eries 2010A 80,000,000 Fixed Rate eries 2009A Refunding 13,405,000 Fixed Rate eries 2007E 7,110,000 Fixed Rate eries 2007A Refunding 91,885,000 Fixed Rate otal: $1,081,125,000 (1) Asof Nmemberl,2016 Refunding Strategy Depending on market conditions, staff is proposing to refund up to $91,620,000 of 2007A COPs maturing in years 2018 through 2030 with annual coupon rates ranging between 4.00-4.50%, as shown in the table below. A refunding of these maturities would produce approximately $16.8 million in present value savings (18.3% refunded par) in the current market. Maturity Princi al Amount Coupon Call Date 2/1/2018 $ 275,000 4.000% 2/1/2017 2/1/2019 285,000 4.000% 2/1/2017 2/1/2020 295,000 4.000% 2/1/2017 2/1/2021 4,800,000 4.125% 2/1/2017 2/1/2022 270,000 4.200% 2/1/2017 2/1/2023 280,000 4.250% 2/1/2017 2/1/2024 290,000 4.300% 2/1/2017 2/1/2025 305,000 4.350% 2/1/2017 2/1/2026 320,000 4.375% 2/1/2017 Page 3 of 4 Maturity Principal Amount Coupon Call Date 2/1/2027 19,595,000 4.500% 2/1/2017 2/1/2028 20,435,000 4.500% 2/1/2017 2/1/2029 21,315,000 4.500% 2/1/2017 2/1/2030 23,155,000 4.500% 2/1/2017 Total: $ 91,620,000 Timeline Since the proposed refunding is a fixed-rate debt issuance, staff is proposing to issue the refunding through a competitive sale because it is the most expeditious way to access the market and it is expected to provide the lowest interest cost for this given structure. ➢ Board considers legal and disclosure documents December ➢ Financing Corporation considers legal and disclosure documents ➢ Rating Agency discussions, if any January ➢ Publish Notice of Intention to Sell ➢ Marketing and Sale through a Competitive Sale Process February ➢ Closing ➢ Begin debt administration All costs involved with the refunding, including costs for Public Resources Advisory Group, Financial Advisor, and Norton Rose Fulbright, Special Counsel and Disclosure Counsel, will be paid from the proceeds of the new refunding issue. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: N/A Page 4 at 4 BOARD OF DIRECTORS Meeting Date Toatl.Of Dlr. -- IS/16/16 AGENDA REPORT Item Number Item Number zz Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: TRUCK LOADING BAY ODOR CONTROL AT PLANT NO. 2, CONTRACT NO. P2-92A GENERAL MANAGER'S RECOMMENDATION A. Receive and file bid tabulation and recommendation; B. Award a Construction Contract to Kiewit Infrastructure West Co.for Truck Loading Bay Odor Control at Plant No. 2, Contract No. P2-92A, for a total amount not to exceed $3,304,000; and C. Approve a contingency of$330,400 (10%). BACKGROUND The purpose of this project is to replace the dewaterng facilities that have reached the end of their service life. Based on the long range Biosolids Master Plan, a newer dewatering technology, centrifuges, will be utilized to reduce the amount of water in the biosolids hauled offsite to reduce biosolids management disposal costs. The biosolids produced by the centrifuges, however, will be more odorous than the current biosolids. Odor control for the Truck Loading Bays was intended to be included in the Sludge Dewatering and Odor Control at Plant No. 2, Project No. P2-92, currently under construction. Near the end of that project's design, however, new information regarding the previously-proposed odor control technology suggested that it might not perform well in the application. Rather than delay completion of the larger project and its associated operational cost savings, a decision was made to separately bid construction of the Truck Loading Bay Odor Control. RELEVANT STANDARDS • Zero odor incidents/events under normal operating conditions at Plant Nos. 1 and 2 • Operate and maintain facilities to minimize impacts on surrounding communities, including odor, noise, and lighting • CA Public Contract Code Section 20103.8, award construction contract to lowest responsive, responsible bidder Page 1 of 3 PROBLEM Construction of Truck Loading Bay Odor Control at Plant No. 2, Contract No. P2-92A, is required to control odors from the Truck Loading Bay after completion of the new centrifuge facility. PROPOSED SOLUTION Award contract, Truck Loading Bay Odor Control, Contract No. P2-92A. TIMING CONCERNS The centrifuges will be producing dewatered biosolids by June 2018. If construction of the Truck Loading Bay Odor Control facilities are not completed by then, odor complaints are likely to occur. RAMIFICATIONS OF NOT TAKING ACTION Odor complaints associated with the Truck Loading Bay are likely to occur. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The Orange County Sanitation District(Sanitation District)advertised Project No. P2-92A for bids on August 24, 2016 and seven sealed bids were received on October 11, 2016. The bids were evaluated in accordance with the Sanitation District's policies and procedures. An award recommendation notice was sent to all bidders on October 24, 2016. Staff recommends awarding a Construction Contract to the lowest responsive and responsible bidder, Kiewit Infrastructure West Co., for a total amount not to exceed $3,304,000. Summary information on the bid opening is as follows: Engineer's Estimate $3,816,574 Bidder Amount of Bid Kiewit Infrastructure West Co. $3,304,000 Cora Construction, Inc. $3,552,000 J.F. Shea Construction, Inc. $3,558,000 Metro Builders and Engineers Group, LTD $3,616,278 Irwin Industries $3,645,000 Environmental Construction, Inc. $3,849,000 Shimmick Construction Company, Inc. $4,185,000 Page 2 of 3 CEQA The Final Subsequent Environmental Impact Report for implementation of Sludge Dewatering and Odor Control at Plant No. 2, Project No. P2-92, was certified on March 23, 2013. This report included the Truck Loading Bay Odor Control. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (Budget FY2016-17&2017-18, Section 8, Page 53) and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Construction Contract RB:dm:gc Page 3 of 3 PART A CONTRACT AGREEMENT C-CA-051016 TABLE OF CONTENTS CONTRACT AGREEMENT SECTION - 1 GENERAL CONDITIONS..................................................................1 SECTION -2 MATERIALS AND LABOR.................................................................4 SECTION -3 PROJECT..........................................................................................5 SECTION -4 PLANS AND SPECIFICATONS ........................................................5 SECTION -5 TIME OF COMMENCEMENT AND COMPLETION ..........................5 SECTION -6 TIME IS OF THE ESSENCE .............................................................5 SECTION -7 EXCUSABLE DELAYS......................................................................6 SECTION -8 EXTRA WORK...................................................................................6 SECTION -9 CHANGES IN PROJECT...................................................................7 SECTION - 10 LIQUIDATED DAMAGES FOR DELAY.............................................7 SECTION - 11 CONTRACT PRICE AND METHOD OF PAYMENT.........................8 SECTION - 12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS ............................................................................................10 SECTION - 13 COMPLETION.................................................................................10 SECTION - 14 CONTRACTOR'S EMPLOYEES COMPENSATION.......................10 SECTION - 15 SURETY BONDS ............................................................................13 SECTION - 16 INSURANCE....................................................................................13 SECTION - 17 RISK AND INDEMNIFICATION.......................................................21 SECTION - 18 TERMINATION................................................................................22 SECTION - 19 WARRANTY....................................................................................22 SECTION -20 ASSIGNMENT.................................................................................23 SECTION -21 RESOLUTION OF DISPUTES ........................................................23 SECTION -22 SAFETY& HEALTH ........................................................................23 SECTION -23 NOTICES.........................................................................................24 C-CA-051016 CONTRACT AGREEMENT ORANGE COUNTY SANITATION DISTRICT CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO. 2 PART OF P2-92,SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO.2 THIS AGREEMENT is made and entered into, to be effective, this November 16, 2016, by and between Kiewit Infrastructure West Co., hereinafter referred to as "CONTRACTOR' and the Orange County Sanitation District, hereinafter referred to as "OCSD". WITNESSETH That for and in consideration of the promises and agreements hereinafter made and exchanged, OCSD and CONTRACTOR agree as follows: SECTION-1 GENERAL CONDITIONS CONTRACTOR certifies and agrees that all the terms, conditions and obligations of the Contract Documents as hereinafter defined, the location of the job site, and the conditions under which the Work is to be performed have been thoroughly reviewed, and enters into this Contract based upon CONTRACTOR's investigation of all such matters and is in no way relying upon any opinions or representations of OCSD. It is agreed that this Contract represents the entire agreement. It is further agreed that the Contract Documents are each incorporated into this Contract by reference, with the same force and effect as if the same were set forth at length herein, and that CONTRACTOR and its Subcontractors, if any, will be and are bound by any and all of said Contract Documents insofar as they relate in any part or in any way, directly or indirectly, to the Work covered by this Contract. CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 1 of 25 A. Contract Documents Order of Precedence "Contract Documents" refers to those documents identified in the definition of"Contract Documents" in the General Conditions—Definitions. 1. In the event of a conflict between one Contract Document and any of the other Contract Documents, the provisions in the document highest in precedence shall be controlling. The order of precedence of the Contract Documents is as follows: a. Supplemental Agreements—the last in time being the first in precedence b. Addenda issued prior to opening of Bids—the last in time being the first in precedence c. Contract Agreement d. Permits and other regulatory requirements e. Special Provisions f. General Conditions (GC) g. Notice Inviting Bids and Instruction to Bidders h. Geotechnical Baseline Report(GBR), if attached as a Contract Document I. Plans and Specifications—in these documents the order of precedence shall be: i. Specifications (Divisions 01-17) ii. Plans H. General Requirements (GR) iv. Standard Drawings and Typical Details j. CONTRACTOR's Bid 2. In the event of a conflict between terms within an individual Contract Document, the conflict shall be resolved by applying the following principles as appears applicable: a. Figured dimensions on the Contract Documents shall govern. Dimensions not specified shall be as directed by the ENGINEER. Details not shown or C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 2 of 25 specified shall be the same as similar parts that are shown or specified, or as directed. Full-size details shall take precedence over scale Drawings as to shape and details of construction. Specifications shall govern as to material and workmanship. b. The Contract Documents calling for the higher quality material or workmanship shall prevail. Materials or Work described in words, which so applied, have a well known technical or trade meaning shall be deemed to refer to such recognized standards. In the event of any discrepancy between any Drawings and the figures thereon, the figures shall be taken as correct. C. Scale Drawings, full-size details, and Specifications are intended to be fully complementary and to agree. Should any discrepancy between Contract Documents come to the CONTRACTOR's attention, or should an error occur in the efforts of others, which affect the Work, the CONTRACTOR shall notify the ENGINEER, in writing, at once. In the event any doubts or questions arise with respect to the true meaning of the Contract Documents, reference shall be made to the ENGINEER whose written decision shall be final. If the CONTRACTOR proceeds with the Work affected without written instructions from the ENGINEER, the CONTRACTOR shall be fully responsible for any resultant damage or defect. d. Anything mentioned in the Specifications and not indicated in the Plans, or indicated in the Plans and not mentioned in the Specifications, shall be of like effect as if indicated and mentioned in both. In case of discrepancy in the Plans or Specifications, the matter shall be immediately submitted to OCSD's CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 3 of 25 ENGINEER, without whose decision CONTRACTOR shall not adjust said discrepancy save only at CONTRACTOR's own risk and expense. The decision of the ENGINEER shall be final. In all matters relating to the acceptability of material, machinery or plant equipment; classifications of material or Work; the proper execution, progress or sequence of the Work; and quantities interpretation of the Contract Documents, the decision of the ENGINEER shall be final and binding, and shall be a condition precedent to any payment under the Contract, unless otherwise ordered by the Board of Directors. B. Definitions Capitalized terms used in this Contract are defined in the General Conditions, Definitions. Additional terms may be defined in the Special Provisions. SECTION-2 MATERIALS AND LABOR CONTRACTOR shall furnish, under the conditions expressed in the Plans and Specifications, at CONTRACTOR'S own expense, all labor and materials necessary, except such as are mentioned in the Specifications to be furnished by OCSD, to construct and complete the Project, in good workmanlike and substantial order. If CONTRACTOR fails to pay for labor or materials when due, OCSD may settle such claims by making demand upon the Surety to this Contract. In the event of the failure or refusal of the Surety to satisfy said claims, OCSD may settle them directly and deduct the amount of payments from the Contract Price and any amounts due to CONTRACTOR. In the event OCSD receives a stop payment notice from any laborer or material supplier alleging non-payment by CONTRACTOR, OCSD shall be entitled to deduct all of its costs and expenses incurred relating thereto, including but not limited to administrative and legal fees. C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 4 of 25 SECTION-3 PROJECT The Project is described as: CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO. 2 PART OF P2-92,SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO.2 SECTION-4 PLANS AND SPECIFICATONS The Work to be done is shown in a set of Plans and Specifications entitled: CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO. 2 PART OF P2-92,SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO.2 Said Plans and Specifications and any revision, amendments and addenda thereto are attached hereto and incorporated herein as part of this Contract and referred to by reference. SECTION—5 TIME OF COMMENCEMENT AND COMPLETION CONTRACTOR agrees to commence the Project within 15 calendar days from the date set forth in the "Notice to Proceed" sent by OCSD, unless otherwise specified therein and shall diligently prosecute the Work to completion within 655 calendar days from the date of the "Notice to Proceed" issued by OCSD, excluding delays caused or authorized by OCSD as set forth in Sections 7, 8, and 9 hereof, and applicable provisions in the General Conditions. The time for completion includes 5 calendar days determined by OCSD likely to be inclement weather when CONTRACTOR will be unable to work. In addition, CONTRACTOR shall accomplish such milestones within the periods of performance set forth in Appendix A of the Special Provisions entitled "Work Completion Schedule." SECTION—6 TIME IS OF THE ESSENCE Time is of the essence of this Contract. As required by the Contract Documents, CONTRACTOR shall prepare and obtain approval of all shop drawings, details and samples, CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 5 of 25 and do all other things necessary and incidental to the prosecution of CONTRACTOR's Work in conformance with an approved construction progress schedule. CONTRACTOR shall coordinate the Work covered by this Contract with that of all other contractors, subcontractors and of OCSD, in a manner that will facilitate the efficient completion of the entire Work and accomplish the required milestone(s), if any, by the applicable deadline(s) in accordance with Section 5 herein. OCSD shall have the right to assert complete control of the premises on which the Work is to be performed and shall have the right to decide the time or order in which the various portions of the Work shall be installed or the priority of the work of subcontractors, and, in general, all matters representing the timely and orderly conduct of the Work of CONTRACTOR on the premises. SECTION—7 EXCUSABLE DELAYS CONTRACTOR shall only be excused for any delay in the prosecution or completion of the Project as specifically provided in General Conditions, "Extensions for Delay", and the General Requirements, "By CONTRACTOR or Others— Unknown Utilities during Contract Work". Extensions of time and extra compensation arising from such excusable delays will be determined in accordance with the General Conditions, "Extension of Time for Delay" and "Contract Price Adjustments and Payments", and extensions of time and extra compensation as a result of incurring undisclosed utilities will be determined in accordance with General Requirements, "By CONTRACTOR or Others— Unknown Utilities during Contract Work". OCSD's decision will be conclusive on all parties to this Contract. SECTION—8 EXTRA WORK The Contract Price as set forth in Section 11, includes compensation for all Work performed by CONTRACTOR, unless CONTRACTOR obtains a Change Order signed by a designated representative of OCSD specifying the exact nature of the Extra Work and the amount of extra compensation to be paid all as more particularly set forth in Section 9 hereof and the General C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 6 of 25 Conditions, "Request for Change (Changes at CONTRACTOR's Request)", "OWNER Initiated Changes", and "Contract Price Adjustments and Payments". In the event a Change Order is issued by OCSD pursuant to the Contract Documents, OCSD shall extend the time fixed in Section 5 for completion of the Project by the number of days, if any, reasonably required for CONTRACTOR to perform the Extra Work, as determined by OCSD's ENGINEER. The decision of the ENGINEER shall be final. SECTION-9 CHANGES IN PROJECT OCSD may at any time, without notice to any Surety, by Change Order, make any changes in the Work within the general scope of the Contract Document, including but not limited to changes: 1. In the Specifications (including Drawings and designs); 2. In the time, method or manner of performance of the Work; 3. In OCSD-furnished facilities, equipment, materials, services or site; or 4. Directing acceleration in the performance of the Work. No change of period of performance or Contract Price, or any other change in the Contract Documents, shall be binding until the Contract is modified by a fully executed Change Order. All Change Orders shall be issued in accordance with the requirements set forth in the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)" and "OWNER Initiated Changes'. SECTION — 10 LIQUIDATED DAMAGES FOR DELAY Liquidated Damages shall be payable in the amounts and upon the occurrence of such events or failure to meet such requirements or deadlines as provided in the Special Provisions, "Liquidated Damages and Incentives." CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 7 of 25 SECTION—11 CONTRACT PRICE AND METHOD OF PAYMENT A. OCSD agrees to pay and the CONTRACTOR agrees to accept as full consideration for the faithful performance of this Contract, subject to any additions or deductions as provided in approved Change Orders, the sum of Three Million Three Hundred Four Thousand Dollars ($3,304,000) as itemized on the Attached Exhibit"A". Upon satisfaction of the conditions precedent to payment set forth in the General Requirements, Additional General Requirements and General Conditions (including but not limited to Sections entitled "Mobilization Payment Requirements" and "Payment Itemized Breakdown of Contract Lump Sum Prices"), there shall be paid to the CONTRACTOR an initial Net Progress Payment for mobilization. OCSD shall issue at the commencement of the job a schedule which shows: 1. A minimum of one payment to be made to the CONTRACTOR for each successive four(4)week period as the Work progresses, and 2. The due dates for the CONTRACTOR to submit requests for payment to meet the payment schedule. After the initial Net Progress Payment, and provided the CONTRACTOR submits the request for payment prior to the end of the day required to meet the payment schedule, the CONTRACTOR shall be paid a Net Progress Payment on the corresponding monthly payment date set forth in the schedule. Payments shall be made on demands drawn in the manner required by law, accompanied by a certificate signed by the ENGINEER, stating that the Work for which payment is demanded has been performed in accordance with the terms of the Contract Documents, and that the amount stated in the certificate is due under the terms of the Contract. Payment applications shall also be accompanied with all documentation, records, and C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 8 of 25 releases as required by the Contract, Exhibit A, Schedule of Prices, and General Conditions, "Payment for Work—General". The Total amount of Progress Payments shall not exceed the actual value of the Work completed as certified by OCSD's ENGINEER. The processing of payments shall not be considered as an acceptance of any part of the Work. B. As used in this Section, the following defined terms shall have the following meanings: 1. "Net Progress Payment" means a sum equal to the Progress Payment less the Retention Amount and other qualified deductions (Liquidated Damages, stop payment notices, etc.). 2. "Progress Payment" means a sum equal to: a. the value of the actual Work completed since the commencement of the Work as determined by OCSD; b. plus the value of material suitably stored at the worksite, treatment plant or approved storage yards subject to or under the control of OCSD since the commencement of the Work as determined by OCSD; C. less all previous Net Progress Payments; d. less all amounts of previously qualified deductions; e. less all amounts previously retained as Retention Amounts. 3. "Retention Amount"for each Progress Payment means the percentage of each Progress Payment to be retained by OCSD to assure satisfactory completion of the Contract. The amount to be retained from each Progress Payment shall be determined as provided in the General Conditions—"Retained Funds; Substitution of Securities." CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 9 of 25 SECTION-12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS Pursuant to Public Contract Code Section 22300 at seq., the CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities." SECTION—13 COMPLETION Final Completion and Final Acceptance shall occur at the time and in the manner specified in the General Conditions, "Final Acceptance and Final Completion", "Final Payment" and Exhibit A- Schedule of Prices. Upon receipt of all documentation, records, and releases as required by the Contract from the CONTRACTOR, OCSD shall proceed with the Final Acceptance as specified in General Conditions. SECTION-14 CONTRACTOR'S EMPLOYEES COMPENSATION A. Davis-Bacon Act: CONTRACTOR will pay and will require all Subcontractors to pay all employees on said Project a salary or wage at least equal to the prevailing rate of per diem wages as determined by the Secretary of Labor in accordance with the Davis-Bacon Act for each craft or type of worker needed to perform the Contract. The provisions of the Davis-Bacon Act shall apply only if the Contract is in excess of Two Thousand Dollars ($2,000.00)and when twenty-five percent (25%) or more of the Contract is funded by federal assistance. If the aforesaid conditions are met, a copy of the provisions of the Davis-Bacon Act to be complied with are incorporated herein as a part of this Contract and referred to by reference. C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 10 of 25 B. General Prevailing Rate: OCSD has been advised by the State of California Director of Industrial Relations of its determination of the general prevailing rate of per diem wages and the general prevailing rate for legal holiday and overtime Work in the locality in which the Work is to be performed for each craft or type of Work needed to execute this Contract, and copies of the same are on file in the Office of the ENGINEER of OCSD. The CONTRACTOR agrees that not less than said prevailing rates shall be paid to workers employed on this public works Contract as required by Labor Code Section 1774 of the State of California. Per California Labor Code 1773.2, OCSD will have on file copies of the prevailing rate of per diem wages at its principal office and at each job site, which shall be made available to any interested party upon request. C. Forfeiture for Violation: CONTRACTOR shall, as a penalty to OCSD, forfeit Two Hundred Dollars ($200.00)for each calendar day or portion thereof for each worker paid (either by the CONTRACTOR or any Subcontractor under it) less than the prevailing rate of per diem wages as set by the Director of Industrial Relations, in accordance with Sections 1770-1780 of the California Labor Code for the Work provided for in this Contract, all in accordance with Section 1775 of the Labor Code of the State of California. D. Apprentices: Sections 1777.5, 1777.6, 1777.7 of the Labor Code of the State of California, regarding the employment of apprentices are applicable to this Contract and the CONTRACTOR shall comply therewith if the prime contract involves Thirty Thousand Dollars ($30,000.00) or more. CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 11 of 25 E. Workday: In the performance of this Contract, not more than eight(8) hours shall constitute a day's work, and the CONTRACTOR shall not require more than eight(8) hours of labor in a day from any person employed by him hereunder except as provided in paragraph (B)above. CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Section 1810 et sea.)of the Labor Code of the State of California and shall forfeit to OCSD as a penalty, the sum of Twenty-five Dollars ($25.00)for each worker employed in the execution of this Contract by CONTRACTOR or any Subcontractor for each calendar day during which any worker is required or permitted to labor more than eight(8) hours in any one calendar day and forty (40) hours in any one week in violation of said Article. CONTRACTOR shall keep an accurate record showing the name and actual hours worked each calendar day and each calendar week by each worker employed by CONTRACTOR in connection with the Project. F. Registration: Record of Wages: Inspection: CONTRACTOR shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section 1771.4, the Work is subject to compliance monitoring by the California Department of Industrial Relations. CONTRACTOR shall maintain accurate payroll records and shall submit payroll records to the Labor Commissioner pursuant to Labor Code Section 1771.4(a)(3). Penalties for non-compliance with the requirements of Section 1776 may be deducted from progress payments per Section 1776. CONTRACTOR shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulations Section 16461(a). C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 12 of 25 SECTION — 15 SURETY BONDS CONTRACTOR shall, before entering upon the performance of this Contract, furnish Bonds approved by OCSD's General Counsel—one in the amount of one hundred percent (100%)of the Contract amount, to guarantee the faithful performance of the Work, and the other in the amount of one hundred percent (100%)of the Contract amount to guarantee payment of all claims for labor and materials furnished. As changes to the Contract occur via approved Change Orders, the CONTRACTOR shall assure that the amounts of the Bonds are adjusted to maintain 100% of the Contract Price. This Contract shall not become effective until such Bonds are supplied to and approved by OCSD. Bonds must be issued by a Surety authorized by the State Insurance Commissioner to do business in California. The Performance Bond shall remain in full force and effect through the warranty period, as specified in Section 19 below. All Bonds required to be submitted relating to this Contract must comply with California Code of Civil Procedure Section 995.630. Each Bond shall be executed in the name of the Surety insurer under penalty of perjury, or the fact of execution of each Bond shall be duly acknowledged before an officer authorized to take and certify acknowledgments, and either one of the following conditions shall be satisfied: A. A copy of the transcript or record of the unrevoked appointment, power of attorney, by- laws, or other instrument, duly certified by the proper authority and attested by the seal of the insurer entitling or authorizing the person who executed the Bond to do so for and on behalf of the insurer, is on file in the Office of the County Clerk of the County of Orange; or B. A copy of a valid power of attorney is attached to the Bond. SECTION— 16 INSURANCE CONTRACTOR shall purchase and maintain, for the duration of the Contract, insurance against claims for injuries to persons, or damages to property which may arise from or in connection with the performance of the Work hereunder, and the results of that Work by CONTRACTOR, CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 13 of 25 its agents, representatives, employees, or Subcontractors, in amounts equal to the requirements set forth below. CONTRACTOR shall not commence Work under this Contract until all insurance required under this Section is obtained in a form acceptable to OCSD, nor shall CONTRACTOR allow any Subcontractor to commence Work on a subcontract until all insurance required of the Subcontractor has been obtained. CONTRACTOR shall maintain all of the foregoing insurance coverages in force through the point at which the Work under this Contract is fully completed and accepted by OCSD pursuant to the provisions of the General Conditions, "Final Acceptance and Final Completion". Furthermore, CONTRACTOR shall maintain all of the foregoing insurance coverages in full force and effect throughout the warranty period, commencing on the date of Final Acceptance. The requirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of OCSD by CONTRACTOR under Section 17 of this Contract. Notwithstanding nor diminishing the obligations of CONTRACTOR with respect to the foregoing, CONTRACTOR shall subscribe for and maintain in full force and effect during the life of this Contract, inclusive of all changes to the Contract Documents made in accordance with the provisions of the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)" and/or"OWNER Initiated Changes", the following insurance in amounts not less than the amounts specified. OCSD reserves the right to amend the required limits of insurance commensurate with the CONTRACTOR's risk at any time during the course of the Project. No vehicles may enter OCSD premises/worksite without possessing the required insurance coverage. CONTRACTOR's insurance shall also comply with all insurance requirements prescribed by agencies from whom permits shall be obtained for the Work and any other third parties from whom third party agreements are necessary to perform the Work (collectively, the "Third Parties"), The Special Provisions may list such requirements and sample forms and requirements from such Third Parties may be included in an attachment to the General C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 14 of 25 Requirements. CONTRACTOR bears the responsibility to discover and comply with all requirements of Third Parties, including meeting specific insurance requirements, that are necessary for the complete performance of the Work. To the extent there is a conflict between the Third Parties' insurance requirements and those set forth by OCSD herein, the requirement(s) providing the more protective coverage for both OSCD and the Third Parties shall control and be purchased and maintained by CONTRACTOR. A. Limits of Insurance 1. General Liability: Five Million Dollars ($5,000,000) per occurrence and a general aggregate limit of Five Million Dollars ($5,000,000)for bodily injury, personal injury and property damage. Coverage shall include each of the following: a. Premises-Operations. b. Products and Completed Operations, with limits of at least Five Million Dollars ($5,000,000) per occurrence and a general aggregate limit of Five Million Dollars ($5,000,000)which shall be in effect at all times during the warranty period set forth in the Warranty section herein, and as set forth in the General Conditions, "Warranty(CONTRACTOR's Guarantee)", plus any additional extension or continuation of time to said warranty period that may be required or authorized by said provisions. C. Broad Form Property Damage, expressly including damage arising out of explosion, collapse, or underground damage. d. Contractual Liability, expressly including the indemnity provisions assumed under this Contract. e. Separation of Insured Clause, providing that coverage applies separately to each insured, except with respect to the limits of liability. CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 15 of 25 f. Independent CONTRACTOR's Liability. To the extent first dollar coverage, including defense of any claim, is not available to OCSD or any other additional insured because of any SIR, deductible, or any other form of self insurance, CONTRACTOR is obligated to assume responsibility of insurer until the deductible, SIR or other condition of insurer assuming its defense and/or indemnity has been satisfied. CONTRACTOR shall be responsible to pay any deductible or SIR. g. If a crane will be used, the General Liability insurance will be endorsed to add Riggers Liability coverage or its equivalent to cover the usage of the crane and exposures with regard to the crane operators, riggers and others involved in using the crane. h. If divers will be used, the General Liability insurance will be endorsed to cover marine liability or its equivalent to cover the usage of divers. 2. Automobile Liability: The CONTRACTOR shall maintain a policy of Automobile Liability Insurance on a comprehensive form covering all owned, non-owned, and hired automobiles, trucks, and other vehicles providing the following minimum limits of liability coverage: Either(1)a combined single limit of One Million Dollars ($1,000,000) and a general aggregate limit of One Million Dollars ($1,000,000)for bodily injury, personal injury and property damage; Or alternatively, (2) One Million Dollars ($1,000,000) per person for bodily injury and One Million Dollars ($1,000,000) per accident for property damage. 3. Umbrella Excess Liability: The minimum limits of general liability and automobile liability insurance required, as set forth above, shall be provided for either in a single policy of primary insurance or a combination of policies of primary and umbrella C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 16 of 25 excess coverage. Excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automobile liability. 4. Drone Liability Insurance: If a drone will be used, drone liability insurance must be maintained by CONTRACTOR in the amount of One Million Dollars ($1,000,000) in a form acceptable by OCSD. 5. Worker's Compensation/Employer's Liability: CONTRACTOR shall provide such Worker's Compensation Insurance as required by the Labor Code of the State of California, including employer's liability with a minimum limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease. If an exposure to Jones Act liability may exist, the insurance required herein shall include coverage with regard to Jones Act claims. Where permitted by law, CONTRACTOR hereby waives all rights of recovery by subrogation because of deductible clauses, inadequacy of limits of any insurance policy, limitations or exclusions of coverage, or any other reason against OCSD, its or their officers, agents, or employees, and any other contractor or subcontractor performing Work or rendering services on behalf of OCSD in connection with the planning, development and construction of the Project. In all its insurance coverages related to the Work, CONTRACTOR shall include clauses providing that each insurer shall waive all of its rights of recovery by subrogation against OCSD, its or their officers, agents, or employees, or any other contractor or subcontractor performing Work or rendering services at the Project. Where permitted by law, CONTRACTOR shall require similar written express waivers and insurance clauses from each of its Subcontractors of every tier. A waiver of subrogation shall be effective as to any CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 17 of 25 individual or entity, even if such individual or entity (a)would otherwise have a duty of indemnification, contractual or otherwise, (b)did not pay the insurance premium, directly or indirectly, and (c)whether or not such individual or entity has an insurable interest in the property damaged. 6. Limits are Minimums: If CONTRACTOR maintains higher limits than the minimums shown in this Section, OCSD requires and shall be entitled to coverage for the higher limits maintained by the CONTRACTOR. B. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by OCSD. At the option of OCSD, either: the Insurer shall reduce or eliminate such deductibles or self- insured retentions as respects OCSD, its Directors, officers, agents, CONSULTANTS, and employees; or CONTRACTOR shall provide a financial guarantee satisfactory to OCSD guaranteeing payment of losses and related investigations, claim administration, and defense expenses. C. Other Insurance Provisions 1. Each such policy of General Liability Insurance and Automobile Liability Insurance shall be endorsed to contain, the following provisions: a. OCSD, its Directors, officers, agents, CONSULTANTS, and employees, and all public agencies from whom permits will be obtained, and their Directors, officers, agents, and employees are hereby declared to be additional insureds under the terms of this policy, but only with respect to the operations of CONTRACTOR at or from any of the sites of OCSD in connection with this Contract, or acts and omissions of the additional insured in connection with its general supervision or inspection of said operations related to this Contract. C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 18 of 25 b. Insurance afforded by the additional insured endorsement shall apply as primary insurance, and other insurance maintained by OCSD shall be excess only and not contributing with insurance provided under this policy. 2. Each insurance policy required herein shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30)days prior written notice by certified mail, return receipt requested, and that coverage shall not be cancelled for non-payment of premium except after ten (10)days prior written notice by certified mail, return receipt requested. Should there be changes in coverage or an increase in deductible or SIR amounts, CONTRACTOR undertakes to procure a manuscript endorsement from its insurer giving 30 days prior notice of such an event to OCSD, or to have its insurance broker/agent send to OCSD a certified letter describing the changes in coverage and any increase in deductible or SIR amounts. The certified letter must be sent Attention: Risk Management and shall be received not less than twenty (20) days prior to the effective date of the change(s). The letter must be signed by a Director or Officer of the broker/agent and must be on company letterhead, and may be sent via e-mail in pdf format. 3. Coverage shall not extend to any indemnity coverage for the active negligence of any additional insured in any case where an agreement to indemnify the additional insured would be invalid under California Civil Code Section 2782(b). 4. If required by a public agency from whom permit(s)will be obtained, each policy of General Liability Insurance and Automobile Liability Insurance shall be endorsed to specify by name the public agency and its legislative members, officers, agents, CONSULTANTS, and employees, to be additional insureds. CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 19 of 25 D. Acceptability of Insurers Insurers must have an "A-", or better, Policyholder's Rating, and a Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best Rating Guide. OCSD recognizes that State Compensation Insurance Fund has withdrawn from participation in the A.M. Best Rating Guide process. Nevertheless, OCSD will accept State Compensation Insurance Fund for the required policy of worker's compensation insurance, subject to OCSD's option, at any time during the term of this Contract, to require a change in insurer upon twenty (20)days written notice. Further, OCSD will require CONTRACTOR to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within twenty (20)days of written notice to CONTRACTOR by OCSD or its agent. E. Verification of Coverage CONTRACTOR shall furnish OCSD with original certificates and mandatory endorsements affecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by OCSD before Work commences. OCSD reserves the right to require complete, certified copies of all required insurance policies, including endorsements, affecting the coverage required by these Specifications at any time. F. Subcontractors CONTRACTOR shall be responsible to establish insurance requirements for any Subcontractors hired by CONTRACTOR. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subcontractor's operations and work. OCSD and any public agency issuing permits for the Project must be named as "Additional Insured"on any General Liability or Automobile Liability policy obtained by a Subcontractor. The CONTRACTOR must obtain copies and maintain current versions of C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 20 of 25 all Subcontractors' policies, Certificate of Liability and mandatory endorsements effecting coverage. Upon request, CONTRACTOR must furnish OCSD with the above referenced required documents. G. Required Forms and Endorsements 1. Required ACORD Form a. Certificate of Liability Form 25 2. Required Insurance Services Office, Inc. Endorsements (when alternative forms are shown, they are listed in order of preference) In the event any of the following forms are cancelled by Insurance Services Office, Inc. (ISO), or are updated, the ISO replacement form or equivalent must be supplied. a. Commercial General Liability Form CG-0001 10 01 b. Additional Insured Including Form CG-2010 10 01 and Products-Completed Operations Form CG-2037 10 01 C. Waiver of Transfer of Rights of Form CG-2404 11 85; or Recovery Against Others to Us/ Form CG-2404 10 93 Waiver of Subrogation 3. Required State Compensation Insurance Fund Endorsements a. Waiver of Subrogation Endorsement No. 2570 b. Cancellation Notice Endorsement No. 2065 4. Additional Required Endorsements a. Notice of Policy Termination Manuscript Endorsement SECTION-17 RISK AND INDEMNIFICATION All Work covered by this Contract done at the site of construction or in preparing or delivering materials to the site shall be at the risk of CONTRACTOR alone. CONTRACTOR shall save, indemnify, defend, and keep OCSD and others harmless as more specifically set forth in General Conditions, "General Indemnification". CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 21 of 25 SECTION-18 TERMINATION This Contract may be terminated in whole or in part in writing by OCSD in the event of substantial failure by the CONTRACTOR to fulfill its obligations under this Agreement, or it may be terminated by OCSD for its convenience provided that such termination is effectuated in a manner and upon such conditions set forth more particularly in General Conditions, "Termination for Default" and/or"Termination for Convenience", provided that no termination may be effected unless proper notice is provided to CONTRACTOR at the time and in the manner provided in said General Conditions. If termination for default or convenience is effected by OCSD, an equitable adjustment in the price provided for in this Contract shall be made at the time and in the manner provided in the General Conditions, "Termination for Default" and "Termination for Convenience". SECTION-19 WARRANTY The CONTRACTOR agrees to perform all Work under this Contract in accordance with the Contract Documents, including OCSD's designs, Drawings and Specifications. The CONTRACTOR guarantees for a period of at least one (1) year from the date of Final Acceptance of the Work, pursuant to the General Conditions, "Final Acceptance and Final Completion" that the completed Work is free from all defects due to faulty materials, equipment or workmanship and that it shall promptly make whatever adjustments or corrections which may be necessary to cure any defects, including repairs of any damage to other parts of the system resulting from such defects. OCSD shall promptly give notice to the CONTRACTOR of observed defects. In the event that the CONTRACTOR fails to make adjustments, repairs, corrections or other work made necessary by such defects, OCSD may do so and charge the CONTRACTOR the cost incurred. The CONTRACTOR's warranty shall continue as to any corrected deficiency until the later of(1)the remainder of the original one-year warranty period; C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 22 of 25 or(2)one year after acceptance by OCSD of the corrected Work. The Performance Bond and the Payment Bond shall remain in full force and effect through the guarantee period. The CONTRACTOR's obligations under this clause are in addition to the CONTRACTOR's other express or implied assurances under this Contract, including but not limited to specific manufacturer or other extended warranties specified in the Plans and Specifications, or state law and in no way diminish any other rights that OCSD may have against the CONTRACTOR for faulty materials, equipment or Work. SECTION-20 ASSIGNMENT No assignment by the CONTRACTOR of this Contract or any part hereof, or of funds to be received hereunder, will be recognized by OCSD unless such assignment has had prior written approval and consent of OCSD and the Surety. SECTION—21 RESOLUTION OF DISPUTES OCSD and the CONTRACTOR shall comply with the provisions of California Public Contract Code Section 20104 at. seq., regarding resolution of construction claims for any Claims which arise between the CONTRACTOR and OCSD, as well as all applicable dispute and Claims provisions as set forth in the General Conditions and as otherwise required by law. SECTION—22 SAFETY & HEALTH CONTRACTOR shall comply with all applicable safety and health requirements mandated by federal, state, city and/or public agency codes, permits, ordinances, regulations, and laws, as well as these Contract Documents, including but not limited to the General Requirements, Section entitled "Safety" and Exhibit B OCSD Safety Standards. CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 23 of 25 SECTION-23 NOTICES Any notice required or permitted under this Contract may be given by ordinary mail at the address set forth below. Any party whose address changes shall notify the other party in writing. TO OCSD: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708-7018 Attn: Clerk of the Board Copy to: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708-7018 Attn: Construction Manager Bradley R. Hogin, Esquire Woodruff, Spradlin & Smart 555 Anton Boulevard Suite 1200 Costa Mesa, California 92626 TO CONTRACTOR: Kiewit Infrastructure West Co. 10704 Shoemaker Avenue Santa Fe Springs, CA 90670 Copy to: Eric M. Scott, Senior Vice President Kiewit Infrastructure West Co. 10704 Shoemaker Avenue Santa Fe Springs, CA 90670 C-CA-051016 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 24 of 25 IN WITNESS WHEREOF, the parties hereto have executed this Contract Agreement as the date first hereinabove written. CONTRACTOR: Kiewit Infrastructure West Co. 10704 Shoemaker Avenue Santa Fe Springs, CA 90670 By Printed Name Its CONTRACTOR's State License No. 433176 (Expiration Date—01/3112017) OCSD: Orange County Sanitation District By Chair, Board of Directors By Kelly Lore Clerk of the Board By Marc Dubois Contracts, Purchasing and Materials Management Division Manager CONFORMED C-CA-051016 CONTRACT NO.P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 25 of 25 EXHIBIT A SCHEDULE OF PRICES C-EXA-080414 TABLE OF CONTENTS EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION ..............................................................................1 EXA-2 PROGRESS PAYMENTS....................................................................................1 EXA-3 RETENTION AND ESCROW ACCOUNTS .........................................................1 EXA-4 STOP PAYMENT NOTICE ..................................................................................3 EXA-5 PAYMENT TO SUBCONTRACTORS..................................................................3 EXA-6 PAYMENT OF TAXES.........................................................................................3 EXA-7 FINAL PAYMENT ................................................................................................4 EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT.....6 ATTACHMENT 1 CERTIFICATION FOR REQUEST FOR PAYMENT........................7 ATTACHMENT 2 SCHEDULE OF PRICES ...........................................................8 C-EXA-080414 EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION CONTRACTOR will be paid the Contract Price according to the Schedule of Prices, and all other applicable terms and conditions of the Contract Documents. EXA-2 PROGRESS PAYMENTS Progress payments will be made in accordance with all applicable terms and conditions of the Contract Documents, including, but not limited to: 1. Contract Agreement—Section 11 —"Contract Price and Method of Payment;" 2. General Conditions—"Payment—General"; 3. General Conditions—"Payment—Applications for Payment"; 4. General Conditions—"Payment— Mobilization Payment Requirements;" 5. General Conditions—"Payment— Itemized Breakdown of Contract Lump Sum Prices"; 6. General Conditions—"Contract Price Adjustments and Payments"; 7. General Conditions—"Suspension of Payments"; 8. General Conditions—"OCSD's Right to Withhold Certain Amounts and Make Application Thereof"; and 9. General Conditions—"Final Payment." EXA-3 RETENTION AND ESCROW ACCOUNTS A. Retention: OCSD shall retain a percentage of each progress payment to assure satisfactory completion of the Work. The amount to be retained from each progress payment shall be determined as provided in General Conditions— "Retained Funds; Substitution of Securities". In all contracts between CONTRACTOR and its Subcontractors and/or Suppliers, the retention may not exceed the percentage specified in the Contract Documents. CONFORMED C-EXA-080414 CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 1 of 8 B. Substitution of Securities: CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities." Payment of Escrow Agent: In lieu of substitution of securities as provided above, the CONTRACTOR may request and OCSD shall make payment of retention earned directly to the escrow agent at the expense of the CONTRACTOR. At the expense of the CONTRACTOR, the CONTRACTOR may direct the investment of the payments into securities consistent with Government Code §16430 and the CONTRACTOR shall receive the interest earned on the investments upon the same terms provided for in this article for securities deposited by the CONTRACTOR. Upon satisfactory completion of the Contract, the CONTRACTOR shall receive from the escrow agent all securities, interest and payments received by the escrow agent from OCSD, pursuant to the terms of this article. The CONTRACTOR shall pay to each Subcontractor, not later than twenty (20)calendar days after receipt of the payment, the respective amount of interest earned, net of costs attributed to retention withheld from each Subcontractor, on the amount of retention withheld to ensure the performance of the Subcontractor. The escrow agreement used by the escrow agent pursuant to this article shall be substantially similar to the form set forth in §22300 of the California Public Contract Code. C. Release of Retention: Upon Final Acceptance of the Work, the CONTRACTOR shall submit an invoice for release of retention in accordance with the terms of the Contract. D. Additional Deductibles: In addition to the retentions described above, OCSD may deduct from each progress payment any or all of the following: 1. Liquidated Damages that have occurred as of the date of the application for progress payment; 2. Deductions from previous progress payments already paid, due to OCSD's discovery of deficiencies in the Work or non-compliance with the Specifications or any other requirement of the Contract; 3. Sums expended by OCSD in performing any of the CONTRACTOR'S obligations under the Contract that the CONTRACTOR has failed to perform, and; 4. Other sums that OCSD is entitled to recover from the CONTRACTOR under the terms of the Contract, including without limitation insurance deductibles and assessments. C-EXA-080414 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 2 of 8 The failure of OCSD to deduct any of the above-identified sums from a progress payment shall not constitute a waiver of OCSD's right to such sums or to deduct them from a later progress payment. EXA-4 STOP PAYMENT NOTICE In addition to other amounts properly withheld under this article or under other provisions of the Contract, OCSD shall retain from progress payments otherwise due the CONTRACTOR an amount equal to one hundred twenty-five percent (125%)of the amount claimed under any stop payment notice under Civil Code§9350 at. seq. or other lien filed against the CONTRACTOR for labor, materials, supplies, equipment, and any other thing of value claimed to have been furnished to and/or incorporated into the Work; or for any other alleged contribution thereto. In addition to the foregoing and in accordance with Civil Code§9358 OCSD may also satisfy its duty to withhold funds for stop payment notices by refusing to release funds held in escrow pursuant to public receipt of a release of stop payment notice executed by a stop payment notice claimant, a stop payment notice release bond, an order of a court of competent jurisdiction, or other evidence satisfactory to OCSD that the CONTRACTOR has resolved such claim by settlement. EXA-5 PAYMENT TO SUBCONTRACTORS Requirements 1. The CONTRACTOR shall pay all Subcontractors for and on account of Work performed by such Subcontractors, not later than seven (7) days after receipt of each progress payment as required by the California Business and Professions Code §7108.5. Such payments to Subcontractors shall be based on the measurements and estimates made pursuant to article progress payments provided herein. 2. Except as specifically provided by law, the CONTRACTOR shall pay all Subcontractors any and all retention due and owing for and on account of Work performed by such Subcontractors not later than seven (7)days after CONTRACTOR'S receipt of said retention proceeds from OCSD as required by the California Public Contract Code§7107. EXA-6 PAYMENT OF TAXES Unless otherwise specifically provided in this Contract, the Contract Price includes full compensation to the CONTRACTOR for all taxes. The CONTRACTOR shall pay all federal, state, and local taxes, and duties applicable to and assessable against any Work, including but not limited to retail sales and use, transportation, export, import, business, and special taxes. The CONTRACTOR shall ascertain and pay the taxes when due. The CONTRACTOR will maintain auditable records, subject to OCSD reviews, confirming that tax payments are current at all times. CONFORMED C-EXA-080414 CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 3 of 8 EXA-7 FINAL PAYMENT After Final Acceptance of the Work, as more particularly set forth in the General Conditions, "Final Acceptance and Final Completion", and after Resolution of the Board authorizing final payment and satisfaction of the requirements as more particularly set forth in General Conditions—"Final Payment", a final payment will be made as follows: 1. Prior to Final Acceptance, the CONTRACTOR shall prepare and submit an application for Final Payment to OCSD, including: a. The proposed total amount due the CONTRACTOR, segregated by items on the payment schedule, amendments, Change Orders, and other bases for payment; b. Deductions for prior progress payments; c. Amounts retained; d. A conditional waiver and release on final payment for each Subcontractor(per Civil Code Section 8136); e. A conditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8136); f. List of Claims the CONTRACTOR intends to file at that time or a statement that no Claims will be filed, g. List of pending unsettled claims, stating claimed amounts, and copies of any and all complaints and/or demands for arbitration received by the CONTRACTOR; and h. For each and every claim that resulted in litigation or arbitration which the CONTRACTOR has settled, a conformed copy of the Request for Dismissal with prejudice or other satisfactory evidence the arbitration is resolved. 2. The application for Final Payment shall include complete and legally effective releases or waivers of liens and stop payment notices satisfactory to OCSD, arising out of or fled in connection with the Work. Prior progress payments shall be subject to correction in OCSD's review of the application for Final Payment. Claims filed with the application for Final Payment must be otherwise timely under the Contract and applicable law. 3. Within a reasonable time, OCSD will review the CONTRACTOR'S application for Final Payment. Any recommended changes or corrections will then be forwarded to the CONTRACTOR. Within ten (10) calendar days after receipt of recommended changes from OCSD, the CONTRACTOR will C-EXA-080414 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 4 of 8 make the changes, or list Claims that will be filed as a result of the changes, and shall submit the revised application for Final Payment. Upon acceptance by OCSD, the revised application for Final Payment will become the approved application for Final Payment. 4. If no Claims have been filed with the initial or any revised application for Final Payment, and no Claims remain unsettled within thirty-five (35) calendar days after Final Acceptance of the Work by OCSD, and agreements are reached on all issues regarding the application for Final Payment, OCSD, in exchange for an executed release, satisfactory in form and substance to OCSD, will pay the entire sum found due on the approved application for Final Payment, including the amount, if any, allowed on settled Claims. 5. The release from the CONTRACTOR shall be from any and all Claims arising under the Contract, except for Claims that with the concurrence of OCSD are specifically reserved, and shall release and waive all unreserved Claims against OCSD and its officers, directors, employees and authorized representatives. The release shall be accompanied by a certification by the CONTRACTOR that: a. It has resolved all Subcontractors, Suppliers and other Claims that are related to the settled Claims included in the Final Payment; b. It has no reason to believe that any party has a valid claim against the CONTRACTOR or OCSD which has not been communicated in writing by the CONTRACTOR to OCSD as of the date of the certificate; c. All warranties are in full force and effect, and; d. The releases and the warranties shall survive Final Payment. 6. If any claims remain open, OCSD may make Final Payment subject to resolution of those claims. OCSD may withhold from the Final Payment an amount not to exceed one hundred fifty percent (150%)of the sum of the amounts of the open claims, and one hundred twenty-five percent (125%) of the amounts of open stop payment notices referred to in article entitled stop payment notices herein. 7. The CONTRACTOR shall provide an unconditional waiver and release on final payment from each Subcontractor and Supplier providing Work under the Contract(per Civil Code Section 8138) and an unconditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8138)within thirty (30)days of receipt of Final Payment. CONFORMED C-EXA-080414 CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 5 of 8 EXA-B DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT Notwithstanding OCSD's acceptance of the application for Final Payment and irrespective of whether it is before or after Final Payment has been made, OCSD shall not be precluded from subsequently showing that: 1. The true and correct amount payable for the Work is different from that previously accepted; 2. The previously-accepted Work did not in fact conform to the Contract requirements, or; 3. A previous payment or portion thereof for Work was improperly made. OCSD also shall not be stopped from demanding and recovering damages from the CONTRACTOR, as appropriate, under any of the foregoing circumstances as permitted under the Contract or applicable law. C-EXA-080414 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 6 of 8 ATTACHMENTI CERTIFICATION FOR REQUEST FOR PAYMENT I hereby certify under penalty of perjury as follows: That the claim for payment is in all respects true, correct; that the services mentioned herein were actually rendered and/or supplies delivered to OCSD in accordance with the Contract. I understand that it is a violation of both the federal and California False Claims Acts to knowingly present or cause to be presented to OCSD a false claim for payment or approval. A claim includes a demand or request for money. It is also a violation of the False Claims Acts to knowingly make use of a false record or statement to get a false claim paid. The term "knowingly" includes either actual knowledge of the information, deliberate ignorance of the truth or falsity of the information, or reckless disregard for the truth or falsity of the information. Proof of specific intent to defraud is not necessary under the False Claims Acts. I understand that the penalties under the Federal False Claims Act and State of California False Claims Act are non-exclusive, and are in addition to any other remedies which OCSD may have either under contract or law. I hereby further certify, to the best of my knowledge and belief, that: 1. The amounts requested are only for performance in accordance with the Specifications, terms, and conditions of the Contract; 2. Payments to Subcontractors and Suppliers have been made from previous payments received under the Contract, and timely payments will be made from the proceeds of the payment covered by this certification; 3. This request for progress payments does not include any amounts which the prime CONTRACTOR intends to withhold or retain from a Subcontractor or Supplier in accordance with the terms and conditions of the subcontract; and 4. This certification is not to be construed as Final Acceptance of a Subcontractor's performance. Name Title Date CONFORMED C-EXA-080414 CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 7 of 8 ATTACHMENT SCHEDULE OF PRICES See next pages from the Bid Submittal Forms (Kiewit Infrastructure West CO.): BF-14 Schedule of Prices, Pages 1-3 C-EXA-080414 CONFORMED CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 8 of 8 Bid Submitted By: Kiewit Infrastructure West Co. (Name of Firm) BF-14 SCHEDULE OF PRICES INSTRUCTIONS A. General For Unit Prices, it is understood that the following quantities are approximate only and are solely for the purpose of estimating the comparison of Bids, and that the actual value of Work will be computed based upon the actual quantities in the completed Work,whether they be more or less than those shown. CONTRACTOR's compensation for the Work under the Contract Documents will be computed based upon the lump sum amount of the Contract at time of award, plus any additional or deleted costs approved by OCSD via approved Change Orders, pursuant to the Contract Documents. Bidder shall separately price and accurately reflect costs associated with each line item, leaving no blanks. Any and all modifications to the Bid must be initialed by an authorized representative of the Bidder in accordance with the Instructions to Bidders, Preparation of Bid. Bidders are reminded of Instruction to Bidders, Discrepancy in Bid Items,which, in summary, provides that the total price for each item shall be based on the Unit Price listed for each item multiplied by the quantity; and the correct Total Price for each item shall be totaled to determine the Total Amount of Bid. All applicable costs including overhead and profit shall be reflected in the respective unit costs and the TOTAL AMOUNT OF BID. The Bid price shall include all costs to complete the Work, including profR overhead etc., unless otherwise specified in the Contract Documents. All applicable sales taxes, state and/or federal,and any other special taxes, patent rights or royalties shall be included in the prices quoted in this Bid. B. Basis of Award AWARD OF THE CONTRACT WILL BE MADE ON THE BASIS OF THE LOWEST RESPONSIVE AND RESPONSIBLE BID. THE LOWEST BID IS DEFINED AS THE"TOTAL AMOUNT OF BID"LISTED IN THIS BID, UNLESS OTHERWISE SPECIFIED BELOW. Note 1: Base Bid. Includes all costs necessary to furnish all labor, materials,equipment and services for the construction of the Project per the Contract Documents. BF-14 SCHEDULE OF PRICES C-BF-021115 CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 1 of 3 / ? )} ! ,mz !/| §z \ « & � ) ® _ £ ) \ 2 _ \ XI Is 0 f y 2 a mw \ k | msa \\\ k# |! ( ` ! � ■ f) |2 § k� k# !� � tf\~ M-M t� § -C i2 § ! | Lu ) � to k} \ � k/ \ ] q ! � t k)t ) § !! wtkk J w w a Bid Submitted By: Kiewit Infrastructure West Co. (Name of Firm) This Form Must Be Submitted With Bid Submittals Alternative Equipment or Materials EQUIPMENT Refer to Notes 1 in the Instructions Equipment Description Specification Section Manufacturer Odor Control System 15885 AL4"U /Yt eyij4/i�/f< BF-14 SCHEDULE OF PRICES C-BF-021115 CONTRACT NO. P2-92A TRUCK LOADING BAY ODOR CONTROL AT PLANT NO.2 Page 3 of 3 BOARD OF DIRECTORS Meeting Date TOBE.Or .Dir. -- 11/16/16 AGENDA REPORT ItemNumber Iem2umber zs Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: OCSD/OCWD JOINT AGREEMENT FOR GWRS FINAL EXPANSION GENERAL MANAGER'S RECOMMENDATION A. Adopt Resolution No. OCSD 16-30 entitled: "A Resolution of the Orange County Board of Directors adopting findings with respect to the California Environmental Quality Act in consideration of the Groundwater Replenishment System Final Program EIR/EIS (FEIR) as augmented by Addendum No. 6 to the FEIR and related actions'; B. Adopt Resolution No. OCSD 16-31 entitled: "A Resolution of the Orange County Board of Directors adopting findings with respect to the California Environmental Quality Act in consideration of the Orange County Water District Water Production Enhancement Project Initial Study/Mitigated Negative Declaration and related actions"; and C. Approve the Second Amended Joint Exercise of Powers Agreement for the Development, Operation, and Maintenance of the Groundwater Replenishment System and Green Acres Project. BACKGROUND The Final Expansion of the Groundwater Replenishment System (GWRS) will increase the GWRS's production capacity from 100 million gallons per day (mgd) to 130 mgd. Secondary effluent from both Orange County Sanitation District(Sanitation District)plants is required to support the GWRS Final Expansion. Currently, all the secondary effluent from the Sanitation District's Plant No. 1 is routed to the GWRS. To support the Final Expansion of the GWRS, all reclaimable flow from Plant No. 2 will need to be pumped to the GWRS. Five major construction projects on the Sanitation District property will be necessary to make this possible. Under the Second Amended Agreement, the Orange County Water District(OCWD)will be responsible for funding the design and construction of these five projects. Terms of the Second Amended Agreement are summarized in the Additional Information section below. This Second Amended Agreement is intended to replace most provisions of previous agreements between the two agencies while, at the same time, preserving the necessary rights and obligations for future operations. Page 1 of 5 RELEVANT STANDARDS • Maintain collaborative and cooperative relationships with neighboring agencies • Meet volume and water quality needs to support GWRS • Use all practical and effective means for recovering wastewater for reuse PROBLEM The existing Amended Joint Exercise of Powers Agreement for the Development, Operation, and Maintenance of the Groundwater Replenishment System and Green Acres Project was adopted for the Initial Expansion of the GWRS and does not adequately address the proposed expansion obligations, rights, and property needs. PROPOSED SOLUTION Adopt a second amended agreement to cover new terms needed for the final expansion of the GWRS. TIMING CONCERNS The second amended agreement needs to be adopted prior to the Request for Proposals of the five construction projects are advertised, which is expected to be in early 2017. RAMIFICATIONS OF NOT TAKING ACTION The implementation of the final expansion of the GWRS could be delayed. PRIOR COMMITTEE/BOARD ACTIONS September 2016-Established a project for Headworks Modifications at Plant 2 for GWRS Final Expansion, Project No. P2-122, with a budget of$50,000,000. May 2011: Considered, received, and filed Addendum No. 5 to the Orange County Water District (OCWD) Final Program EIR/EIS Groundwater Replenishment System (GWRS), Modified Phase II Expansion Project, also known and herein referenced as the GWRS Initial Expansion Project; Adopted Resolution No. OCSD 11-06, Adopting Findings with Respect to the California Environmental Quality Act in Consideration of the GWRS Final Program EIR/EIS (FEIR) as Augmented by Addendum No. 5 to the FEIR and Related Actions; Approved Reimbursement Agreement with OCWD entitled 'Reimbursement Agreement between The Orange County Water District and The Orange County Sanitation District For Construction of Portions of GWRS Initial Expansion Under The Secondary Activated Sludge Facility 2 at Plant No. 1, Job No. P1-102," in a form approved by General Counsel, Page 2 of 5 for an estimated amount not to exceed $100,000, to be reimbursed to the Sanitation District; Authorized the General Manager to ratify a change order to the Secondary Activated Sludge Facility 2 at Plant No. 1, Job No. P1-102, to construct portions of the GWRS Initial Expansion Project for an amount not to exceed $100,000; and Approved a Storage Tanks Lease and License Agreement By and Between the Sanitation District and OCWD, for installation of two 7.5 million gallon storage tanks on Sanitation District's Plant No. 1 site for$1 per year. April 2010 - Approved Amended Joint Exercise of Powers Agreement for the Development, Operation, and Maintenance of the Groundwater Replenishment System and Green Acres Project. January 2009 - Adopted Resolution No. 09-01, Supporting the Water District Development of the Initial Expansion of the GWR System. ADDITIONAL INFORMATION Staff has developed a list of terms or guiding points that will set the basis for the Agreement, as follows: In order to maintain the continuity of the working arrangement between the Sanitation District and OCWD, the GWRS Steering Committee and the associated governing body will remain unchanged. The Chair and Vice Chair will alternate between the Sanitation District and OCWD every year. The leases that were entered into in the original 2002 Agreement and 2011 Agreement will remain in place with the addition of new areas on the Sanitation District property at Plant No. 2 that have the potential to be utilized for flow equalization and secondary effluent pumping. The lease will be given to OCWD for a nominal sum ($10) and the property will be given back to the Sanitation District if the need arises. The cost of the GWRS Final Expansion construction projects on Sanitation District property, including: the Plant No. 2 Headworks Modifications project, the Plant No. 2 Effluent Pump Station project, the Plant No. 2 Flow Equalization Tank project, the Plant No. 2 Plant Water Pump Station Relocation, and the 66" Interplant Pipe Rehabilitation project will be incurred entirely by OCWD. The Sanitation District has agreed to plan, design, and construct the Plant No. 2 Headworks Modifications project and Plant No. 2 Plant Water Pump Station Relocation. OCWD shall reimburse the Sanitation District for the costs of planning, designing, and constructing these Projects. The Sanitation District will operate the Plant No. 2 Headworks and Plant Water Pump Station while OCWD will operate the Plant No. 2 Effluent Pump Station, Flow Equalization, and the 66" Interplant Pipe after the completion of construction. Page 3 of 5 OCWD will remain responsible for maintaining peak wet weather flow relief of 100 mgd for the Sanitation District. The Sanitation District will grant OCWD the first right of refusal for up to 180 mgd of wastewater from the Sanitation District Plant No. 1 and Treatment Plant No. 2, provided such flow is available, and has also committed to provide OCWD with the highest amount of high quality water available. Up to 1 mgd of reclaimed water will be provided to the Sanitation District for plant usage free of charge. Staff believes that this agreement will better detail OCWD and Sanitation District responsibilities as we move forward with our respective planned improvements and will be a significant benefit to both agencies and our common rate payers. CEQA To comply with the California Environmental Quality Act (CEQA), OCWD, as lead agency for the GWRS Final Expansion project, prepared an Initial Study and Addendum No. 6 to OCWD's Final Program EIR/EIS ("FEIR") GWRS Final Expansion Project. Addendum No. 6 was considered and reviewed by OCWD's Board of Directors on September 21, 2016. OCWD filed a Notice of Determination on September 22, 2016. For CEQA purposes, the Sanitation District is a responsible agency for the GWRS Final Expansion Project. The Sanitation District's Board of Directors is required to consider Addendum No. 6, along with the FEIR, and to make certain findings prior to acting on the GWRS Final Expansion Project. The Sanitation District's findings are included in the attached Resolution No. OCSD 16-30. OCWD has referred to the Plant No. 2 Flow Equalization Tank Project as the Water Production Enhancement Project. To comply with CEQA, OCWD, as lead agency for the Water Production Enhancement Project, prepared an Initial Study and Mitigated Negative Declaration. The Initial Study and Mitigated Negative Declaration were adopted by OCWD on October 19, 2016. OCWD filed a Notice of Determination on October 20, 2016. For CEQA purposes, the Sanitation District is a responsible agency for the Water Production Enhancement Project. The Sanitation District's Board of Directors is required to consider the Initial Study and Mitigated Negative Declaration and to make certain findings prior to acting on the Water Production Enhancement Project. The Sanitation District's findings are included in the attached Resolution No. OCSD 16-31. FINANCIAL CONSIDERATIONS N/A Page 4 of 5 ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (mm w.ocsd.com) with the complete agenda package: • Resolution No. OCSD 16-30 • Addendum No. 6 Final Program EIR/EIS & CEQA Documents (Separate Document 565 pages) • Resolution No. OCSD 16-31 • Final Initial Study/Mitigated Negative Declaration (Separate Document 471 pages) • Second Amended Joint Exercise of Powers Agreement for the Development, Operation, and Maintenance of the Groundwater Replenishment System and Green Acres Project KM:EY:sa:gc Page 5 of 5 RESOLUTION NO. OCSD 16-30 A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ADOPTING FINDINGS WITH RESPECT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT IN CONSIDERATION OF THE GROUNDWATER REPLENISHMENT SYSTEM FINAL PROGRAM EIR/EIS (FEIR)AS AUGMENTED BY ADDENDUM NO. 6 TO THE FEIR AND RELATED ACTIONS WHEREAS, the Orange County Sanitation District (the "Sanitation District") and the Orange County Water District ("OCWD") certified the Groundwater Replenishment System (the "GWRS" or"Project") Final Program EIR/EIS on March 24, 1999; and WHEREAS, the Sanitation District and OCWD approved minor modifications to the Project, which were approved based upon the Final Program EIR/EIS as augmented by Addendum No. 1 in March 2001, Addendum No. 2 in January 2002, Addendum No. 3 in November 2003, Addendum No. 4 in February 2005, and Addendum No. 5 in May 2011 (the Final Program EIR/EIS, as augmented by Addenda Nos. 1, 2, 3, 4, and 5, is referred to herein as "FEIR"); and WHEREAS, the Sanitation District and OCWD have planned, designed, and constructed the Project. The Project commenced operation on January 10, 2005, and has operated continuously since that date; and WHEREAS, OCWD is planning to expand the Project, at its own expense, by expanding the production capacity of the Advanced Water Treatment Facilities ("AWTF") and related post-treatment facilities to increase the Project's production capacity by 30 mgd from 100 mgd to 130 mgd (the "Final Expansion"). To support the Final Expansion, secondary effluent from the Sanitation District's wastewater treatment facility designated as "Plant No. 2"will need to be made available to the AWTF. Major construction projects on Sanitation District property will be necessary to make this possible, including: (i) the Plant 2 Headworks Modifications project; (ii) the Plant 2 Effluent Pump Station project; (III) the 66" Interplant Pipe Rehabilitation project; and (iv) the Plant Water Pump Station Replacement, which is part of the Ocean Outfall System Rehabilitation Project J-117; and WHEREAS, on September 21, 2016, as lead agency for the Final Expansion, OCWD approved the Final Expansion. In connection with that approval, and in order to comply with the California Environmental Quality Act, Public Resources Code Sections 21000, et seq. ("CEQA'), OCWD considered an initial study prepared by OCWD staff and Addendum No. 6 to the FEIR ("Addendum No. 6") and made CEQA findings. On September 22, 2016, OCWD filed a Notice of Determination under CEQA with respect to its approval of the Final Expansion ("NOD"); and 1201612.1 OCSD 16-30-1 WHEREAS, the Sanitation District and OCWD desire to perform portions of the Final Expansion in a manner that minimizes the impacts to the environment, the public, and the surrounding community. NOW, THEREFORE, in consideration thereof, the Board of Directors of the Orange County Sanitation District DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: Section 1: The Sanitation District has independently reviewed and considered Addendum No. 6 along with the FEIR; Section 2: Based on evidence presented to the Sanitation District, including the FEIR, documents provided by OCWD, and Addendum No. 6, the Sanitation District, as a responsible agency for the Final Expansion, does hereby consider the FEIR and Addendum No. 6 and finds that pursuant to Public Resources Code Section 21166 and California CEQA Guidelines Sections 15162 and 15164: (1) No substantial changes are proposed in the Project covered by the FEIR which will require major revisions in the FEIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. (2) No substantial changes would occur with respect to the circumstances under which the Project covered by the FEIR is undertaken which will require major revisions of the FEIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. (3) No new information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence, at the time the FEIR was certified as complete, shows either that the Final Expansion will have any significant effects not discussed in the FEIR, that the significant effects of the Final Expansion will be substantially more severe than shown in the FEIR, that mitigation measures or alternatives found in the FEIR to be infeasible would in fact be feasible, or that any mitigation measures or alternatives are considerably different than those analyzed in the FEIR. Section 3: Addendum No. 6 is hereby received and filed. Section 4: Sanitation District staff is hereby authorized and directed to file a Notice of Determination. 11016111 OCSD 16-30-2 PASSED AND ADOPTED at a regular meeting of the Board of Directors held November 16, 2016. John Nielsen Board Chairman ATTEST: Kelly A. Lore Clerk of the Board 1I01612.1 OCSD 16-30-3 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 16-30 was passed and adopted at a regular meeting of said Board on the 1611 day of November 2016, 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 161h day of November 2016. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District 1201612.1 OCSD 16-30-4 RESOLUTION NO. OCSD 16-31 A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ADOPTING FINDINGS WITH RESPECT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT IN CONSIDERATION OF THE ORANGE COUNTY WATER DISTRICT WATER PRODUCTION ENHANCEMENT PROJECT INITIAL STUDY/MITIGATED NEGATIVE DECLARATION AND RELATED ACTIONS WHEREAS, the Orange County Sanitation District (the "Sanitation District") and the Orange County Water District ("OCWD") certified the Groundwater Replenishment System (the "GWRS" or"Project") Final Program EIR/EIS on March 24, 1999; and WHEREAS, the Sanitation District and OCWD approved minor modifications to the Project, which were approved based upon the Final Program EIR/EIS as augmented by Addendum No. 1 in March 2001, Addendum No. 2 in January 2002, Addendum No. 3 in November 2003, Addendum No. 4 in February 2005, and Addendum No. 5 in May 2011 (the Final Program EIR/EIS, as augmented by Addenda Nos. 1, 2, 3, 4, and 5, is referred to herein as "FEIR"); and WHEREAS, the Sanitation District and OCWD have planned, designed, and constructed the Project. The Project commenced operation on January 10, 2008, and has operated continuously since that date; and WHEREAS, to increase the amount of wastewater flows generated from the Sanitation District to the Project, OCWD proposed a Water Production Enhancement Project ("Enhancement Project") that involves the construction and operation of an above ground flow equalization storage tank and associated pump station at the Sanitation District's Plant No. 2. The Enhancement Project would produce approximately 6,000 acre feet of new water supplies per year. WHEREAS, on October 19, 2016, as lead agency for the Enhancement Project, OCWD approved the Enhancement Project. In connection with that approval, and in order to comply with the California Environmental Quality Act, Public Resources Code Sections 21000, at seq. ("CEQA"), OCWD considered an Initial Study and Mitigated Negative Declaration prepared by OCWD staff and made CEQA findings. On October 20, 2016, OCWD filed a Notice of Determination under CEQA with respect to its approval of the Enhancement Project ("NOD"); and WHEREAS, the Sanitation District and OCWD desire to perform portions of the Enhancement Project in a manner that minimizes the impacts to the environment, the public, and the surrounding community. 1201611.1 OCSD 16-31-1 NOW, THEREFORE, in consideration thereof, the Board of Directors of the Orange County Sanitation District (the "Board"), DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: Section 1: The Sanitation District has independently reviewed and considered the Initial Study and Mitigated Negative Declaration; Section 2: Based on evidence presented to the Sanitation District, including the Initial Study and Mitigated Negative Declaration, the Sanitation District, as a responsible agency for the Enhancement Project, does hereby consider the Initial Study and Mitigated Negative Declaration and finds that pursuant to Public Resources Code Section 21166 and California CEQA Guidelines Section 15162: (1) No substantial changes are proposed in the Enhancement Project covered by the Initial Study and Mitigated Negative Declaration which will require major revisions in the Initial Study and Mitigated Negative Declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. (2) No substantial changes would occur with respect to the circumstances under which the Enhancement Project covered by the Initial Study and Mitigated Negative Declaration is undertaken which will require major revisions of the Initial Study and Mitigated Negative Declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. (3) No new information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence, at the time the Initial Study and Mitigated Negative Declaration was adopted, shows either that the Enhancement Project will have any significant effects not discussed in the Initial Study and Mitigated Negative Declaration, that the significant effects of the Enhancement Project will be substantially more severe than shown in the Initial Study and Mitigated Negative Declaration, that mitigation measures or alternatives found in the Initial Study and Mitigated Negative Declaration to be infeasible would in fact be feasible, or that any mitigation measures or alternatives are considerably different than those analyzed in the Initial Study and Mitigated Negative Declaration. Section 3: The documents and other materials that constitute the record of proceedings on which the Board's decision is based are located at the District Administration Offices, 10844 Ellis Avenue, Fountain Valley, CA 92708, and the custodian for these documents is the Clerk of the Board. Section 4: Sanitation District staff is hereby authorized and directed to file a Notice of Determination. 1201611.1 OCSD 16-31-2 PASSED AND ADOPTED at a regular meeting of the Board of Directors held November 16, 2016. John Nielsen Board Chairman ATTEST: Kelly A. Lore Clerk of the Board 1201611.1 OCSD 16-31-3 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 16-31 was passed and adopted at a regular meeting of said Board on the 161h day of November 2016, 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 161h day of November 2016. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District 1201611.1 OCSD 16-31-4 SECOND AMENDED AND RESTATED JOINT EXERCISE OF POWERS AGREEMENT FOR THE DEVELOPMENT,OPERATION AND MAINTENANCE OF THE GROUNDWATER REPLENISHMENT SYSTEM AND THE GREEN ACRES PROJECT This Second Amended and Restated Joint Exercise of Powers Agreement for the Development, Operation and Maintenance of the Groundwater Replenishment System and the Green Acres Project("Agreement")is made and entered into between the Orange County Water District(the"Water District") and the Orange County Sanitation District(the"Sanitation District"). The Water District and the Sanitation District are sometimes collectively referred to in this Agreement as the`Parties,"and individually referred to as each "Party."' The Agreement shall be effective as of the day of.2016. RECITALS This Agreement is based on the following facts,mutual understandings and intentions of the Parties: A. The Parties entered into an agreement dated November 12,2002 entitled"Joint Exercise of Powers Agreement for the Development, Operation and Maintenance of the Groundwater Replenishment System and the Green Acres Project" ("Original 2002 Agreement"). The Original 2002 Agreement sets forth (1) certain rights and obligations relating to the planning,design, construction,operation, and maintenance of the Groundwater Replenishment System("System"), and(2) certain rights and obligations relating to the operation of the Green Acres Project and the Water District's sale of Reclaimed Water to the Sanitation District. The Parties amended the 2002 Agreement on October 15, 2003 and April 26, 2006. (The Original 2002 Agreement, as amended on October 15,2003 and April 26, 2006, is hereinafter referred to as the "2002 Agreement"). B. The Parties entered into an agreement dated March 5, 2010 entitled"Amended Joint Exercise of Powers Agreement for the Development, Operation and Maintenance of the Groundwater Replenishment System and the Green Acres Project" ("2010 Agreement"). The 2010 Agreement provided for the Initial Expansion of the System from 70 million gallons per day("mgd")to 100 mgd. C. Pursuant to the 2002 Agreement and the 2010 Agreement,the Parties have planned, designed, and constructed the System. The System commenced operation on January 10, 2008, and has operated continuously since that date. The Parties have received numerous awards from regional,national, and international bodies for their pioneering work in the planning, design, construction, and operation of the System. D. The Water District is planning to further expand the System, at its own expense, by expanding the production capacity of the Advanced Water Treatment Facilities (AWTF) and related post-treatment facilities (the"AWTF Final Expansion"). As currently planned, the AWTF Final Expansion will increase the System's production capacity from 100 mgd to 130 1 Unless otherwise required by the context in which any defined term appears, capitalized terms shall have the meanings specified in Exhibit A hereto. 1 1201758.1 mgd. The AWTF Final Expansion is estimated to cost approximately one hundred and thirty million dollars($130,000,000). E. In order to produce 130 mgd of Product Water after the AWTF Final Expansion is complete, the Water District will require up to 175 mgd of Specification Influent from the Sanitation District. Currently,the Sanitation District provides up to 135 mgd of Specification Influent to the Water District, all of it from the Sanitation District's wastewater treatment facility designated as"Plant 1." Based on current flows and flow projections, specification water from the Sanitation District's wastewater treatment facility designated as`Plant 2"will need to be made available to the AWTF. Five major construction projects on Sanitation District property will be necessary to make this possible: (i)the Plant 2 Headworks Modifications project, at an estimated cost of thirty eight-million dollars ($38,000,000); (ii) the Plant 2 Effluent Pump Station project, at an estimated cost of eighteen million dollars ($18,000,000); (iii) the Plant 2 Flow Equalization Tank project, at an estimated cost of twenty-three million dollars ($23,000,000); (iv) the 66" Interplant Pipe Rehabilitation project, at an estimated cost of thirty- seven million dollars($37,000,000); and (v) the Plant Water Pump Station Replacement,which is part of the Ocean Outfall System Rehabilitation Project J-117, at an estimated cost of twelve million dollars($12,000,000). These projects are described in more detail in Exhibit`B" attached hereto. The Water District is willing to fund the design and construction of these five projects, in addition to the AWTF Final Expansion, under the terms and conditions set forth in this Agreement. F. The Sanitation District shall, at its own expense, (i)construct those portions of the Ocean Outfall System Rehabilitation Project J-117 that will replace portions of the Ocean Outfall Booster Station pumping system with a low flow pump station,and(ii)reconfigure the piping at the Plant 2 primary and secondary facilities to allow segregation of non-reclaimable and less desirable wastewater streams from those streams that will ultimately be treated by the System. These projects are currently in the Sanitation District's Capital Improvement Program and will continue to be funded from that source. G. The Water District uses the System's product water to replenish the Orange County Groundwater Basin,which provides potable water to over 2.4 million people in central and northern Orange County. Portions of the Basin,known as the"North Basin"and"South Basin", are contaminated with volatile organic compounds. The Water District operates extraction wells in the North Basin and South Basin to remove contaminated groundwater. Pursuant to the terms set forth in this Agreement, the Parties desire to increase the amount of wastewater available to the System by transferring contaminated groundwater extracted from the North Basin and South Basin to the Sanitation District for treatment and reuse. H. This Agreement is intended to replace and supersede the 2002 Agreement and the 2010 Agreement, and provide a complete expression of the Parties' respective rights and responsibilities related to the System. At the same time,the Parties acknowledge that(i) the Water District's covenants under this Agreement are supported by, among other consideration, all of the Sanitation District's covenants in the 2002 Agreement, the 2010 Agreement, and herein, (ii) the Sanitation District's covenants under this Agreement are supported by, among other consideration, all of the Water District's covenants in the 2002 Agreement, the 2010 Agreement, and herein. I. The Sanitation District's substantial investment in the System provides the Sanitation District with a reliable outlet to dispose of more than one hundred(100)mgd of 2 1201758.1 secondary treated wastewater for certain periods. This allows the Sanitation District to delay and possibly eliminate a planned second ocean outfall,needed primarily to dispose of peak flows. J. This Agreement, as did the 2002 Agreement and the 2010 Agreement,provides for the planning, design, construction and operation of the System by the joint venture of the Parties. This Agreement is a Joint Powers Agreement within the meaning of Government Code Sections 6500, et seq. Pursuant to this Agreement,the Parties intend to jointly exercise powers common to them. The Parties possess, inter alia,the following common powers and authority: (1) The power and authority to construct, operate and maintain facilities, pipelines, other conduits, machinery, and other works to conserve, reclaim,purify, treat,transport or otherwise manage and put to beneficial use water that was recovered from operation of a sewerage system; (2) The power and authority to discharge water so as to replenish the underground basin and other natural water resources; and (3) The power and authority to acquire real and personal property, within or without the Parties' boundaries, as necessary or convenient for the full exercise of their respective powers. The method by which the Parties intend to jointly exercise these powers is set forth in this Agreement. This Agreement is also intended to set forth the terms and conditions governing (1)the Sanitation District's provision of secondary treated wastewater to the Water District for the Green Acres Project, and(2)the Water District's provision of tertiary treated water to the Sanitation District. AGREEMENT NOW, THEREFORE, in consideration of the foregoing facts recited and the mutual goals and objectives contained herein,the Parties agree as follows: I. Existing Agreements. 1. This Agreement shall replace and supersede the 2002 Agreement and the 2010 Agreement. II. Planning,Design,and Construction. 2. AWTF Final Expansion. The Water District shall, at its own expense,plan, design, and construct the AWTF Final Expansion as described in Exhibit A. 3. Plant 2 Headworks Modifications Proiect. The Sanitation District shall plan, design and construct the Plant 2 Headworks Modifications project as described in Exhibit B. The Sanitation District shall meet and confer with the Water District regarding the design of the Plant 2 Headworks Modifications prior to its finalization and approval by the Sanitation District. The Sanitation District will provide any necessary support and assistance to the Water District in its efforts to obtain loans and grants to fund this project. The Water District shall reimburse the Sanitation District for the costs of planning, designing, and constructing the Project. Without limiting the foregoing,the Water District shall reimburse the Sanitation District for the costs of 3 1201758.1 the design contract(s), the construction contract(s), and Sanitation District staff time spent on the project(total salary and benefits,pro-rated based on hours worked). The Sanitation District shall send an invoice to the Water District quarterly,which the Water District shall pay within 60 days of receipt. 4. Plant 2 Plant Water Prom) Station Relocation Project. The Sanitation District shall plan, design and construct the relocation of the Plant 2 Plant Water Pump Station project as described in Exhibit B. This project shall be constructed as a part of existing project Ocean Outfall System Rehabilitation, Project J-117 for efficiency and coordination purposes. The Sanitation District shall meet and confer with the Water District regarding the design of the Plant 2 Plant Water Pump Station Relocation prior to its finalization and approval by the Sanitation District. The Sanitation District will provide any necessary support and assistance to the Water District in its efforts to obtain loans and grants to fund this project. The Water District shall reimburse the Sanitation District for the costs of planning,designing, and constructing the Project. Without limiting the foregoing,the Water District shall reimburse the Sanitation District for the costs of the design contract(s), the construction contract(s), and Sanitation District staff time spent on the project (total salary and benefits,pro-rated based on hours worked). The Sanitation District shall send an invoice to the Water District quarterly,which the Water District shall pay within 60 days of receipt. 5. Other Projects. The Water District shall plan, design, and construct,at its own expense, the Plant 2 Effluent Pump Station project, the Plant 2 Flow Equalization Tank project, and the 66"Interplant Pipe Rehabilitation project, all as described in Exhibit B. The Water District shall meet and confer with the Sanitation District regarding the design of these facilities prior to the finalization and approval of the design of these facilities. 6. CEQA Review. The Parties acknowledge that the Water District has assumed the role of the lead agency under the California Environmental Quality Act("CEQA")for this Agreement and the construction and operation of the AWTF Final Expansion, the Plant 2 Headworks Modifications project,the Plant 2 Plant Water Pump Station Relocation project, the Plant 2 Effluent Pump Station project, the Plant 2 Flow Equalization Tank project, and the 66" Interplant Pipe Rehabilitation project, and at its expense has taken all actions required by CEQA for the construction and operation of these facilities,and the System. III. Ownership of Interests 7. Water District's Property Ownerships. Except as otherwise set forth herein or by separate instrument executed by the Parties, the Water District shall hold title to and own all System facilities, including the AWTF,the Initial Expansion facilities and the Final Expansion Facilities, that are located within the boundaries of the Water District's property. In addition, the Water District shall hold title to and own the Plant 2 Effluent Pump Station Project,the Plant 2 Flow Equalization Tank Project,and the 66"Interplant Pipe Rehabilitation Project within the boundaries of the Sanitation District's property. In addition, the parties acknowledge that Water District holds title to and owns the previously-constructed GWR Pipeline and ancillary and related facilities, including water percolation facilities, seawater intrusion barrier injection wells, and transmission pipeline facilities to deliver the GWRS water to the Water District's seawater intrusion barrier injection wells. The Water District also holds title to and owns all easements and rights-of-way obtained or to be obtained for the installation, operation and maintenance of all System facilities. 4 1201758.1 8. Sanitation District Property Ownerships. Except as otherwise set forth herein or by separate instrument executed by the Parties, the Sanitation District shall hold title to and own all Sanitation District facilities located within the Sanitation District's property that treat and transmit wastewater to the Water District as Specification Influent. 9. Ownership of Wastewater. The Sanitation District shall hold title to and own all wastewater treated at the Sanitation District's property, including the rights to wastewater generated outside of the boundaries of the Water District,up to the point of delivery of such wastewater as Specification Influent to the Water District. 10. Ownership of GWRS Water. The Water District shall hold title to and own all Specification Influent received from the Sanitation District, and all rights to the GWRS Water produced by the System. Transfer of title to the secondary effluent shall pass from the Sanitation District to the Water District within the Secondary Effluent Junction Box No. 6 (SEJB6), sbown on Exhibit C attached hereto at Plant 1 or at the discharge of the Plant 2 Effluent Pump Station. Any revenues derived from the use or sale of GWRS Water that is not set forth in this Agreement shall be the sole property of the Water District. 11. Lease of Sanitation District Property by the Water District 11.1. Reverse Osmosis Building Property. The Sanitation District shall continue to lease to the Water District the property described on Exhibit"D"attached hereto. During the term of the lease, the Water District shall use the leased property for System-related purposes. As the landlord and property owner, the Sanitation District shall assist the Water District in obtaining any permits or approvals that the Water District may seek from governmental agencies in connection with the construction and operation of the AWT Facilities,the influent screening facilities,the landscaping and associated piping on the leased property. Upon the Water District's request,the Sanitation District shall file or cause to be filed any application, documentation or information necessary to obtain such permits or governmental approvals. 11.2. Specified Plant 2 Property. The Sanitation District shall lease to the Water District two parcels totaling approximately 1.5 acres of property as described on Exhibit"E" attached hereto. During the term of the lease, the Water District shall use the leased property for construction,operation and maintenance of the Plant 2 Effluent Pump Station project and the Plant 2 Flow Equalization Tank project. The Sanitation District may terminate the lease at any time upon five(5)years' notice to the Water District, if the Sanitation District determines that it requires the use of the Plant 2 Property. Upon termination of the lease,the Water District shall be responsible for removing the improvements and restoring the property to the original condition. As the landlord and property owner,the Sanitation District shall assist the Water District in obtaining any permits or approvals that the Water District may seek from governmental agencies in connection with the construction and operation of the Plant 2 Effluent Pump Station project, the Plant 2 Flow Equalization project, and the 66"Interplant Pipe Rehabilitation project. Upon the Water District's request, the Sanitation District shall file or cause to be filed any application,documentation or information necessary to obtain such permits or governmental approvals. 11.3. Lease of Property—Plant 1 Storage Tanks. The Sanitation District shall continue to lease to the Water District the property on which the two 7.5-million-gallon storage tanks are located as shown in Exhibit"D"attached hereto. The Sanitation District may terminate the lease at any time upon five (5) years' notice to the Water District, if the Sanitation District 5 1201758.1 determines that it requires the storage tank property for Sanitation District plant upgrades. The Water District shall be responsible for removal of the tanks and restoring the site to the original condition. 11.4. Rent. The total rent for all property leased to the Water District pursuant to this Section 11 shall be Ten Dollars ($10.00) for the term of this Agreement The Parties acknowledge that the Water District has paid such rent to the Sanitation District concurrently with the execution and delivery of this Agreement. The rent is set at the nominal sum of ten dollars ($10.00) because the Sanitation District has, and will continue to, otherwise receive adequate and substantial consideration from the Water District under this Agreement, the 2002 Agreement, and the 2010 Agreement. 12. Entrance on the Sanitation District's Property. The Sanitation District hereby grants to the Water District, its employees, consultants, contractors, sub-contractors and designated agents and representatives, a license to enter upon,occupy, and use one of the Sanitation District's entrances,to be selected by the Sanitation District in its reasonable judgment, for employee access and deliveries associated with the construction, operation and maintenance of the System, including delivery of chemicals and other materials. In no event, however, shall access for construction workers be permitted at the Sanitation District's main entrance located on Ellis Avenue. The term of the license shall begin upon execution of this Agreement and continue until this Agreement expires or is terminated. 13. Interplant Effluent Line. The Sanitation District hereby grants to the Water District an easement and right of way for the Sanitation District-owned 66"Interplant Pipe from the Effluent Junction Box(EJB)at Plant 1 to the Ocean Outfall Booster Station(GOBS)wetwell at Plant 2 for use as a Specification Influent transfer pipeline only from Plant 2 to the AWTF. The easement and right-of-way is described on Exhibit F attached hereto. The easement and right of way shall terminate upon termination of this Agreement. Notwithstanding the foregoing, however,if the Sanitation District determines that it requires the use of the property, it may notify the Water District of that fact In the event of such notice, the Water District may either (1)relinquish its easement and right-of-way and discontinue using the easement and right-of-way for the 66"Interplant Pipe, or(2)pay fifty percent(50%)of the cost of a new pipeline and right of way to meet the Sanitation District's alternate need for the pipeline or right of way. The Water District shall be responsible for removal of the improvements and restoring the site to the original condition when vacated. IV. Operation and Maintenance. A. The Water District's Operations and Maintenance Obligations. 14. Water District Operation and Maintenance. The Water District shall, at its sole cost and expense,provide, or cause to be provided, all tools, equipment, vehicles,materials, supplies and qualified personnel necessary to operate and maintain the screening facilities located on Sanitation District property, feed pipelines to the AWT Facilities located on Sanitation District property, the AWT Facilities, the GWR Pipeline, the GAP Influent Pump Station, the seawater barrier injection wells, the Plant 2 Effluent Pump Station, the Plant 2 Flow Equalization Tank, the 66"Interplant Pipe Rehabilitation, and all other System facilities constructed within Plant 2 pursuant to this Agreement except the Plant 2 Headworks and Plant Water Pump Station facilities. Notwithstanding the foregoing,the Water District shall not be obligated to operate and maintain the Sanitation District's trickling filters, Steve Anderson Lift 6 1201758.1 Station, or related diversion facilities within Sanitation District property. The Sanitation District hereby transfers ownership,operation and maintenance responsibilities for the Plant 1 trickling filter meter, valves,vault, and appurtenances on the Sanitation District property to the Water District, excluding the underlying property rights, as part of this Agreement. These transferred facilities become subject to the same rights and responsibilities of the other Water District facilities on Sanitation District property. 15. Operation of System Facilities. At its sole cost,the Water District shall own, operate and maintain the AWT Facilities, the Green Acres Project, the Plant 2 Effluent Pump Station, the Plant 2 Flow Equalization Tank, and the 66"Interplant Pipe Rehabilitation project. The Water District shall use its best efforts to operate the AWT Facilities without total plant shutdowns except for scheduled maintenance, suspension or shutdown mandated by a regulatory agency, or conditions outside of the reasonable control of the Water District; and Water District will use its best efforts to provide 48 boom written notice to the Sanitation District and obtain receipt of the Sanitation District's concurrence prior to any shutdown. In the event of a dispute, the Parties shall exercise the procedures described in Section 50. In the event the groundwater basin is unable to receive the Product Water from the treatment of Specification Influent,the Water District shall maintain the permitting necessary to discharge up to 100 mgd into the Santa Ana River as an outlet for Sanitation District flow consistent with Recital I. 16. Acceptance of Non-Specification Influent. The Water District shall use its best efforts to accept secondary treated wastewater from the Sanitation District that does not meet the standards for Specification Influent, in the event the Specification Influent becomes unavailable due to unforeseen circumstances not reasonably anticipated by the Sanitation District. Notwithstanding the foregoing,the Water District may reject and refuse to accept any wastewater not meeting the standards for Specification Influent if the Water District reasonably determines either that such wastewater not meeting the standards for Specification Influent may cause substantial damage to the AWT Facilities or other System facilities, or that the Water District is unable to treat and dispose of such wastewater in compliance with applicable law and the permits and approvals governing the use of System Water. 17. Acceptance of Peak Flows. The Water District shall routinely operate all System components,and otherwise maintain all System components in a state of readiness, so the System will be able to accept Peak Flows of Specification Influent. The Water District shall accept Peak Flows of Specification Influent from the Sanitation District.Notwithstanding the foregoing, if the Sanitation District's General Manager or designee agrees in advance in writing, the Water District may temporarily reduce the System's capability to accept Peak Flows of Specification Influent. The Sanitation District's General Manager or designee must approve in writing both the amount and duration of any such reduction in capability. 18. Electrical Power Sunoly. Throughout the life of the System,the Water District shall ensure a reliable source of electrical power to preclude disruption of System operations by securing and maintaining two independent 66-kV lines from Southern California Edison, or by securing and maintaining an alternative, equally reliable type, system or provider of electrical service. The Sanitation District shall supply electrical power for the operation of the Plant 2 Effluent Pump Station and the Plant 2 Flow Equalization Tank. The Water District shall reimburse the cost of power to the Sanitation District at the Sanitation District's current cost from Southern California Edison. 7 1201758.1 19. Sodium Hypochlorlte Supply. The Sanitation District shall add sodium hypocblorite to its Plant 1 secondary effluent and/or Plant 2 secondary effluent on an as-needed basis as determined by the Water District. The Water District shall reimburse the cost of the chemical used to the Sanitation District at the Sanitation District's current cost from its supplier. 20. Fiber Optic Cables. The Sanitation District shall install up to 12 fibers within an existing fiber optic conduit extending from Sanitation District Plant 1 to Plant 2 for the Water District's facilities to be constructed at the Sanitation District's Plant 2. The Water District shall reimburse the construction cost for this work to the Sanitation District. The Water District shall install fiber optic conduit and fibers at Plant 1 to connect from the existing conduit line to the Microfiltration Screening Building. 21. Reclaimed Water Service to the Sanitation District. The Water District shall continue to deliver to the Sanitation District, at no cost to the Sanitation District,up to 1,120 acre feet per year of reclaimed water from the Green Acres Project. The Water District shall provide the Reclaimed Water at an average flow of 1 MGD and a pressure of no less than 105 pounds per square inch gauge (PSIG). The Water District may suspend deliveries of reclaimed water from the Green Acres Project on 30 minutes advance notice if the secondary treated wastewater received from the Sanitation District does not meet the standards for Specification Influent. The Sanitation District may purchase additional Reclaimed Water from the Water District, in excess of 1,120 acre feet per year. The rate of any additional purchase of water shall be one hundred and seventy-four dollars and twenty cents($174.20)per acre-foot for Reclaimed Water. For all Reclaimed Water delivered, this rate shall be adjusted annually on June 30 by the lower of(i)the change in the U.S. Consumer Price Index for Los Angeles—Riverside—Orange County for the preceding year or(ii) 2.5%. In fulfilling its obligations under this Section 19,the Parties anticipate that the Water District will generally use Reclaimed Water from the Green Acres Project. In the event that Reclaimed Water from the Green Acres Project is not available,the Water District shall provide substitute water from another source. 22. Metering.Measurement of Flows and Invoices. The Sanitation District agrees that at the Sanitation District's locations where Reclaimed Water is used exclusively,the Water District, at its own expense, shall provide a control valve(or valves) and a meter for the purpose of measuring the quantity of Reclaimed Water delivered under the terms of this Agreement. The Sanitation District acknowledges and agrees that the Water District may access and read the Reclaimed Water service meter(s) and record Reclaimed Water usage for the Sanitation District on a monthly basis. The Sanitation District shall provide all necessary assistance to the Water District in gaining access to the service meter(s)to take readings. The Water District shall pay the City of Fountain Valley and/or Huntington Beach any meter reading charges mandated by either City. 23. Water Quality Monitoring. The Water District and the Sanitation District shall establish, implement and maintain a written water quality monitoring program for the following: (a)the wastewater delivered from the Sanitation District to the Water District pursuant to Section 35 of this Agreement; (b)the waste streams discharged from the AWT Facilities and the Green Acres Project and delivered to the Sanitation District pursuant to Section 38 of this Agreement; and (c)the Reclaimed Water that the Water District will deliver to the Sanitation District pursuant to Section 19 of this Agreement. The monitoring program shall include daily turbidity samples for all brine wastes. 8 1201758.1 24. Svstem Staff and Contractors. The Water District shall recruit, select, employ, and supervise all staff employees and/or contractors retained to provide services for the operation and maintenance of the System, including but not limited to any regular fullfime, temporary, part-time or limited term employees. 25. System Modifications. During operation of the System, the Water District shall not modify, either temporarily or permanently,any aspect of the System that would impair the System's ability to accept Specification Influent in the amounts required by this Agreement. 26. Groundwater Cleanup Proiects. The Water District shall construct, operate,and maintain, at its sole expense, gravity-feed pipelines from the Water District's North Basin and South Basin extraction wells to the Sanitation District's trunk sewer collection system. The Sanitation District,in its sole discretion, shall determine the point or points of connection. The Water District may use these pipelines to transfer up to 5 mgd of extracted water from the extraction wells to the Sanitation District for treatment by the Sanitation District. The Sanitation District, in its sole discretion, shall direct the Water District to limit or cease discharge during wet weather events. The discharge shall comply with all applicable regulatory requirements of the Sanitation District's source control program,including but not limited to the Local Limits on contaminant concentrations. Before commencing discharge, the Water District shall apply for and comply with the Sanitation District's Special Purpose Discharge Permit for the discharge. The cost for said discharge shall be accrued per the Sanitation District's fee schedule until such time as the Water District recovers costs from one or more financially responsible parties. The Water District shall notify the Sanitation District when funds are recovered from financially responsible parties. The Sanitation District shall invoice the Water District for all accrued charges when the Water District recovers funds from one or more financially responsible parties. 27. NPDES Permit. The Water District shall maintain a valid National Pollutant Discharge Elimination System("NPDES")permit authorizing the discharge of treated water from the System to the receiving waters of the State of California. The Water District shall,at its sole cost and expense, (a)defend any regulatory or citizen enforcement actions that may arise out of alleged violations of the NPDES permit caused by operation of the System,except to the extent such actions result from the receipt of non-Specification Influent from the Sanitation District and(b)pay any fines or civil penalties levied as a result of any such enforcement actions and/or any amounts tendered in settlement of such enforcement actions. To the extent such actions result from the receipt of non-Specification Influent from the Sanitation District,the Sanitation District shall, at its sole cost and expense, (a) defend such actions, and(b)pay any fines or penalties levied as a result of such actions and/or any amounts tendered in settlement of such actions. 28. Water Reclamation Permit. The Water District shall maintain a valid Water Reclamation Permit from the California Regional Water Quality Control Board—Santa Ana Region, authorizing the treatment and reuse of the System's water. 29. Security—Water District Responsibilities. The Water District shall (i) increase the height of the interior perimeter wall surrounding the GWRS facilities to a consistent height of at least eight(8) feet; (ii)post a BSIS licensed security guard at the Water District's Ward Avenue Security Booth during normal operating hours; (iii) The security guard shall control access to GWRS facility by checking visitors and employee identifications and checking in vehicles entering the facilities. This include daily access control operations for employees and visitors during normal business hours; (iv) The security guard will maintain overall security and 9 1201758.1 protection for personnel,the Water District property and the GWRS facility; and(v)Visitors shall present a valid, government issued photographic identification(e.g., driver's license, military ID card or an agency produced access badge)when checking in with the security officer at the Ward Avenue Security Booth. 30. Stormwater Management. Sanitation District's Plant 2 property leased to the Water District as well as the Plant 1 leased area for the Storage Tanks shall be regulated under Sanitation District's NPDES Ocean Discharge Permit obligations for Stormwater, which require that all water must be collected and treated and not allowed to discharge offsite or into a non- Sanitation District water conveyance system. The Water District shall construct and maintain their facilities in these areas to comply with the requirements of the Sanitation District's then current On-Site Stormwater Management Plan. All other Plant 1 property leased to the Water District that drains to a Municipal Separate Storm Sewer System shall be regulated under the Water District's Industrial Permit obligations and is not regulated by Sanitation District's On- Site Stormwater Management Plan. 31. Remlatory Renortine. The Water District shall have sole responsibility for preparing and filing all reports in connection with the System that may be required by applicable laws and/or regulatory agencies. The Sanitation District shall provide such information as necessary for the preparation of such reports as may be reasonably requested by the Water District. 32. Monthly and Annual Reports. The Water District shall submit to the Sanitation District all monthly and annual reports prepared by the Water District summarizing the System's operation and maintenance activities. The Water District shall also provide all other written reports prepared by the Water District regarding System management, operation,maintenance, asset management, and repair and long-term rehabilitation or replacement as the Sanitation District may reasonably request from time to time. 33. Annual Budeets. The Water District shall prepare and present its annual budgets for the System's operation and maintenance and capital expenditures at the annual GWRS Steering Committee meeting in April. 34. Compliance with Laws. In operating, managing, maintaining and repairing the System's facilities,the Water District shall comply with the requirements of all permits and licenses and all applicable federal, state and local statutes, ordinances, rules and regulations governing the operation and maintenance of the System. B. The Sanitation District's Operations and Maintenance Obligations. 35. Delivery and Ouality of Wastewater. The Sanitation District shall offer to the Water District, and the Water District shall have a right of first refusal for, 175 mgd of Specification Influent from Plant 1 and Plant 2 at no cost to the Water District, for treatment in the System and the Green Acres Project, as long as sufficient wastewater flow is available. The Sanitation District shall use its best efforts to maximize the amount of Specification Influent available for the System. The Sanitation District shall also use its best efforts to bypass lower quality wastewater where possible to the Sanitation's District Plant 2 where a separate treatment train is available to treat wastewater undesirable for the System. The "quality"of wastewater for purposes of this Section 35 is based on those factors that adversely affect the performance of the System or Green Acres Project, such as total dissolved solids,total organic carbon,N- 10 1201758.1 nitrosodimethylamine,turbidity, suspended solids and 1,4-Dioxane. The Parties acknowledge that, during peak weather events (as determined by the Sanitation District in its sole discretion), the Sanitation District may not be able to provide any Specification Influent from Plant 2 to the Water District, as the treatment capacity at Plant 2 will be fully utilized for storm flows. The Sanitation District shall confer with the Water District if the Sanitation District intends to make a major change in the source of wastewater, future planning, operations or chemical use at least thirty(30)days before such a change. 36. Costs of Specification Influent. The Sanitation District shall pay all capital, operations and maintenance costs of providing Specification Influent to the Water District at Plant 1 or Plant 2 pursuant to Section 35. 37. Industrial Pretreatment and Pollution Source Control Program. The Sanitation District shall maintain a comprehensive industrial wastewater pretreatment and pollutant source control program for controlling the discharge of wastes from point sources that could adversely affect the System's water quality or production. The Sanitation District shall comply with all applicable legal requirements with respect to its source water control program. 38. Acceptance of Waste Streams to be Discharged to the Sanitation District. The Sanitation District shall, at no charge to the Water District,accept all waste streams discharged from the AWT Facilities and the Green Acres Project. The discharge shall meet all standards specified in the Sanitation District's Wastewater Discharge Ordinance. 39. Compliance with Laws. In operating, managing, maintaining and repairing the facilities to provide Specification Influent to the Water District,the Sanitation District shall comply with the requirements of all permits and licenses and all applicable federal, state and local statutes,ordinances,roles and regulations governing the operation and maintenance of such facilities. C. Joint Operations and Maintenance Obligations. 40. Ownership of Green Acres Project Reclaimed Water Facilities. The Sanitation District shall own,operate and maintain at its own expense all wastewater treatment facilities that lie within the boundaries of the Sanitation District's two plants, specifically excluding the Water District's pump station at Plant 1 and metering facilities at the Sanitation District's Plant 2. The Water District shall own, operate and maintain at its own expense all other reclaimed water facilities that are part of the Green Acres Project, or in the future are operated by the Water District to produce Reclaimed Water under the Green Acres Project. 41. Costs of Addressing Newly Discovered Contaminants. The Parties acknowledge that the AWT Facilities are designed to remove N-nitrosodimethylamine and 1,4-dioxane from Specification Influent based upon maximum allowable influent concentrations. In the event that, in the future, any Newly Discovered Contaminants are identified in the Specification Influent that require removal to meet System standards, the Water District and the Sanitation District will meet and confer in good faith regarding (a)the appropriate type of source control and/or water treatment needed to address the Newly Discovered Contaminants; (b)the appropriate sharing of costs for the construction and operation of any necessary treatment facilities; and/or(c)the development and implementation of additional source control strategies. 11 1201758.1 42. Further Conditioning or Treatment of Waste Streams to be Discharged to the Sanitation District. If the Sanitation District's outfall NPDES permit requires conditioning or further treatment of waste streams accepted from the Water District by the Sanitation District pursuant to Section 38 before it can be discharged to the Sanitation District's facilities,the Parties shall meet and confer regarding(a) the appropriate type of conditioning or further treatment, and(b)the appropriate arrangement for sharing the capital and operating costs of conditioning or farther treatment. 43. Specification Influent from the two plants. The Sanitation District and the Water District agree to meet and confer regarding the ratio of Specification Influent from the two plants to the AWTF for the GWRS Final Expansion. The Sanitation District's Plant 2 effluent is the most cost efficient treatment system for the Sanitation District. However,the water quality from the Sanitation District's Plant 2 effluent is predicted to increase operational and maintenance costs for the Water District's AWTF system due to the higher concentrations of total dissolved solids, turbidity,ammonia, and suspended solids. The Parties shall therefore meet to ensure a mutually beneficial ratio of Specification Influent from the two plants,when possible, for optimal efficiencies through both facilities. 44. Other Costs. In the event that new quality or quantity discharge requirements are imposed by law or regulation that increase the cost to either Party to perform its obligations under this Agreement, the Parties shall meet to determine the most effective method of addressing such requirements. If the Parties cannot agree, any dispute will be resolved pursuant to Section 50. The cost of addressing such requirements shall be shared equally by the Parties. 45. Security—Joint Obligations. The Sanitation District shall comply with any and all security provisions adopted or instituted by the Water District with respect to access into and across Water District property. Likewise,the Water District shall comply with any and all security provisions adopted or instituted by the Sanitation District,with respect to access into and across Sanitation District property. The Water District agrees to place a security guard at the Water District's gate during normal operating hours; and pay for 20%of the Sanitation District's patrol car surveillance contract that shall include patrol car surveillance of the Water District's facilities. Also,the Sanitation District and the Water District agree to conduct ajoint security vulnembility assessment of the joint campus every five(5) years, or sooner,based on changing circumstances and knowledge of a threat. The main purpose of the assessment is to analyze any security vulnerabilities and recommend cost effective security measures. This includes ensuring that persons at the site (employees,vendors,public, etc.) are made aware of acceptable paths of travels, emergency contact information, and general access provisions and restrictions. 46. Insurance. Each Party shall famish and maintain the following insurance coverage,provided that such coverage is available on commercially reasonable terms: (a)Workers' In accordance with the Compensation Workers' Compensation Act of the State of California—Minimum of$1,000,000 (b)Public Liability,in $2,000,000 Combined Single the form of either Comprehensive Limit per occurrence, with $5,000,000 12 1201758.1 General Liability or Commercial aggregate for bodily injury, death and Liability written on a per- property damage occurrence basis (c)Automobile $1,000,000 combined single Liability, including non-owned and limit per occurrence hired vehicles (d) Casualty,to protect Replacement value against fire, flood, earthquake and other hazards Each Party shall name the other Party as an additional named insured on all of the above listed policies(other than Worker's Compensation and Casualty insurance). Each Party shall furnish certificates of insurance showing coverage to the other Party. Where a Party,by its Board of Directors approval, has elected to partially or fully self-insure any of the above required coverages,it shall provide to the other Party all the relevant written policies and actions to establish said programs. 47. Independent Contractor Status. The Parties agree that, in operating and maintaining the System,the Water District is, and shall be, acting at all times as an independent contractor, and all employees of the Water District are solely employees of the Water District and not the agents or employees of the Sanitation District. The Parties further agree that, in operating and maintaining the facilities to provide Specification Influent to the System,the Sanitation District is,and shall be, acting at all times as an independent contractor, and all employees of the Sanitation District we solely employees of the Sanitation District and not the agents or employees of the Water District. 48. GWRS Steering Committee Review of Operations. The Parties hereby continue the Groundwater Replenishment System Steering Committee established in prior agreements. The Steering Committee shall continue to consist of a total of six(6)directors, including three (3)directors appointed by the Water District and three(3) directors appointed by the Sanitation District. In addition,the Water District and the Sanitation District shall appoint three alternates for each agency. For each Party, an alternate shall serve on the Committee in the event that a director is absent. At its first meeting of each calendar year the members of the Steering Committee shall elect a chair and vice-chair, one from each Party. The chair and vice-chair shall alternate between the Parties every year. The Steering Committee shall establish the time and date for its regular meetings, and shall hold special or adjourned meetings as it deems appropriate. A quorum for the purpose of transacting business shall consist of two members from each of the two boards of directors of the Parties. All actions of the Steering Committee shall require a majority vote of the members present at a meeting. The Steering Committee shall serve as an advisory body for the governing boards of the Water District and the Sanitation District, and shall make any recommendations regarding System operations that it deems appropriate. The Steering Committee shall also attempt to mediate any dispute between the Water District staff and the Sanitation District staff as described in Section 50 of this Agreement. V. Events of Default; Dispute Resolution. 13 1201758.1 49. Event of Default. The failure of a Party to comply with any provision of this Agreement that has a material and adverse effect on the other Party, except to the extent caused by a breach of this Agreement by the other Party, shall constitute an Event of Default under this Agreement;provided,however, that the defaulting Party shall first have a period of thirty(30) days following receipt of notice from the other Party of such failure to comply to cure such failure, or if such cure cannot be effected within such thirty(30) day period, such period shall extend for a total of one hundred eighty(180) days, so long as the defaulting Party is diligently trying to cure such failure throughout such period. 50. Dispute Resolution. Staffs of both Parties shall meet and use their best efforts to settle any dispute, claim, question or disagreement("Dispute") arising from or relating to this Agreement. To that end, staffs of both Parties shall consult and negotiate with each other in good faith and,recognizing their mutual interests, attempt to reach a just and equitable solution satisfactory to both Parties. If the Parties do not reach such a solution within a period of thirty (30) days after the first meeting of the staff regarding a Dispute,then the Parties shall convene a meeting of the Steering Committee within sixty(60) days after the first meeting of the staff regarding a Dispute and attempt to settle the Dispute before the Steering Committee at the meeting. If the Parties do not settle the Dispute within five(5)calendar days after the Steering Committee meeting,either Party may pursue any and all legal and equitable remedies that may be available. VI. Miscellaneous. 51. Notices. All notices to the Sanitation District required or permitted under this Agreement shall be in writing and shall be deemed delivered(i)when delivered in person, (ii) on the third day after mailing,if mailed,postage prepaid,by registered or certified mail (return receipt requested); (iii)on the day after mailing if sent by a nationally recognized overnight delivery service which maintains records of the time,place, and recipient of delivery; (iv)upon receipt of a confirmed transmission, if sent by telex,telecopy or facsimile transmission; or (v)via electronic mail provided the sender's system is capable of creating a written record of such notice and its receipt in each case to the parties at the following addresses or to other such addresses as may be furnished in writing by one party to the other: Orange County Sanitation District 10844 Ellis Street Fountain Valley, CA 92708-7018 Telecopier. 714-962-0356 E-Mail: iherbera(aocsd.com Attention: General Manager With a copy to: District General Counsel,who is presently: Bradley R. Hogin Woodruff, Spradlin& Smart 555 Anton Boulevard, Suite 1200 Costa Mesa, CA 92626 14 1201758.1 Telecopier: 714-415-1006 E-Mail: bhogin(cwss-law.com All notices to the Water District required or permitted under this Agreement shall be in writing and shall be deemed delivered (i)when delivered in person; (ii)on the third day after mailing, if mailed,postage prepaid, by registered or certified mail (return receipt required); (in) on the day after mailing if sent by a nationally recognized overnight delivery service which maintains records of the time,place, and recipient of deliver; (iv)upon receipt of a confirmed transmission, if sent by telex,telecopy or facsimile transmission; or(v)via electronic mail provided the sender's system is capable of creating a written record of such notice and its receipt in each case to the parties at the following addresses or to other such addresses as may be famished in writing by one party to the other: Orange County Water District 18700 Ward Street Fountain Valley, CA 92708-8300 Telecopier: 714-378-3373 E-Mail: mmarkus(&,ocwd.com Attention: General Manager With copy to: District General Counsel,who is presently: Joel D. Kuperberg,Esq. Rutan& Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Telecopier: 714-546-9035 E-Mail: ikuuerberg�&,rutan.com 52. Term. This Agreement shall remain in force and effect for fifty(50)Xems from and after the date first written above. Within thirty(30)days after the forty-fifth (45 ) anniversary of the effective date of this Agreement,the Parties shall meet to decide whether to extend this Agreement. Any extension of this Agreement shall be done on mutually-acceptable terms and conditions. In the event the Parties do not extend the Agreement, the Water District shall,under the direction of the Groundwater Replenishment System Steering Committee, sell off or liquidate those portions of the System,and all facilities and appurtenances thereto, constructed pursuant to the 2002 Agreement. The Water District shall also remove all System facilities constructed on the Sanitation District's property. The proceeds of selling off or liquidating the above-described portions of the System shall be used first to repay the Water District for all reasonable third-party costs incurred in connection with the selling and/or moving the System facilities. The remainder, if any, shall be divided equally between the Parties. 15 1201758.1 53. Force Majeure. Neither Party shall be deemed to be in default where failure or delay in performance of any of its obligations (other than payment obligations)under this Agreement is caused by floods, earthquakes,other Acts of God, fires,was,riots, or similar hostilities, actions of legislative,judicial, executive or regulatory government bodies or other cause,without fault and beyond the reasonable control of such Party. If any such events shall occur, the time for performance by either Party of any of its obligations hereunder shall be extended by the Parties for the period of time that such events prevented such performance. Upon occurrence of an event of Force Majeure,the affected Party shall: (i)promptly notify the other Party of such Force Majeure event, (ii)provide reasonable details relating to such Force Majeure event, and (iii)implement mitigation measures to the extent commercially reasonable. 54. Indemnities. 54.1. The Sanitation District's Indemnity. The Sanitation District shall fully indemnify the Water District and its respective directors, Groundwater Replenishment System Steering Committee members, employees and agents against, and hold them completely free and harmless from, any cost,expense,claim,demand,judgment, loss, injury and/or liability of any kind or nature, including personal or bodily injury, death or property damage ("Losses")that may arise from (i)any grossly negligent act or omission of the Sanitation District related to construction of the System or the construction and operation of the facilities used to provide Specification Influent to the Water District or(ii) any claim made by a Sanitation District employee specifically retained to provide services with respect to the facilities used to provide Specification Influent. 54.2. The Water District's Indemnity. The Water District shall fully indemnify the Sanitation District and its respective directors,Groundwater Replenishment System Steering Committee members, employees and agents against, and hold them completely free and harmless from, any Losses that may arise from(i) any grossly negligent act or omission of the Water District related to the System's construction, management,operation, maintenance or repair, except for costs,expenses,claims, demands,judgments, losses, injuries and/or liability arising from any grossly negligent act or omission of the Sanitation District related to construction of the System or(ii) any claim made by a Water District employee specifically retained to provide services with respect to the System. 54.3. Joint Indemnity. Except as provided in Sections 54.1 and 54.2, each Party shall indemnify the other Party and its respective directors, Groundwater Replenishment System Steering Committee members, employees and agents against, and hold completely free and harmless from, any Losses arising from the design and construction of facilities pursuant to this Agreement; provided,however, that such indemnity shall be made only to the extent necessary to allocate such Loss between the Parties in a proportion equal to the Parties' cost-sharing obligations under this Agreement with respect to the design and construction of the facilities out of which such Loss arose. 55. Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective beirs,representatives, successors and permitted assigns. 56. Further Acts and Assurances. The Parties agree to execute,acknowledge and deliver any and all additional papers,documents and other assurances, and perform any and all 16 1201758.1 acts and things reasonably necessary, in connection with the performance of the obligations hereunder and to carry out the intent of the Parties. 57. Captions. The captions in this Agreement are inserted only as a matter of convenience and reference and in no way define, limit or describe the scope or intent of this Agreement,nor in any way affect this Agreement. Words of any gender in this Agreement shall be held to include any other gender and words in the singular number shall be held to include the plural when the sentence so requires. 58. Severability. Should it be found that any part of this Agreement is illegal or unenforceable, such part or parts of this Agreement shall be of no force or effect and this Agreement shall be treated as if such part or parts have not been inserted. 59. Entire Agreement. All previous negotiations had between the Parties hereto and/or their agents or representatives with respect to this Agreement are merged herein and this Agreement alone fully and completely expresses the Parties' rights and obligations. 60. Modifications in Writing. This Agreement shall not be modified in any manner except by an instrument in writing executed by the Parties or their respective successors in interest. 61. Interpretation. Each of the Parties hereby waives any provisions of law to the effect that an ambiguity in a contract or agreement shall be interpreted against the Party that drafted the contract, agreement or instrument. 62. Governing Law. This contract shall be governed by and construed according to the laws of the State of California. 63. No Third-Party Beneficiaries. Nothing in this Agreement is intended to create any third-party beneficiaries to the Agreement, and no person or entity other than the Parties, and the permitted successors and assigns of either of them, shall be authorized to enforce the provisions of this Agreement. 64. Assignment. Neither Party may assign its interest in this Agreement without the prior written consent of the other Party. 65. Representations and Warranties. No representations or warranties are made or have been relied upon by either Party other than those expressly set forth herein, if any. 17 1201758.1 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first written above. ORANGE COUNTY SANITATION DISTRICT By: Chair, Board of Directors Date: By: Clerk of the Board Date: APPROVED AS TO FORM: Bradley R. Hogin General Counsel Orange County Sanitation District ORANGE COUNTY WATER DISTRICT By: President, Board of Directors Date: By: General Manager Date: APPROVED AS TO FORM: Joel Kuperberg General Counsel Orange County Water District 18 1201758.1 Exhibit A Definitions 1. "AWT Facilities"means the advanced wastewater treatment facilities constructed by the Parties on the Water District's and Sanitation District's property in Fountain Valley as shown in Exhibit C. 2. "Cooperative Agreement"means the Cooperative Agreement for Project Planning for Orange County Reclamation Project, entered into by the Parties in February of 1997. 3. "Effective Date"means the date of this Agreement. 4. "Final Expansion"means an expansion of the System as originally designed to provide an increase in production capacity from 100 mgd to 130 mgd. As of September 2016, the Water District's plan for the Final Expansion included construction of the following major components: (1) facilities to increase the capacity of the System's existing microfiltration processing; (2) facilities to increase the capacity of reverse osmosis processing, (3) facilities to increase the ultraviolet light processing(4) additional chemical storage and post-treatment facilities; (5)additional reverse osmosis transfer pumps; (6) additional decarbonator and cartridge filter; and(7) additional product water and backwash supply pumps." 5. "General Managers"means the general managers of the Water District and the Sanitation District 6. "Governing Boards"means the Board of Directors of the Water District and the Board of Directors of the Sanitation District. 7. "Green Acres Project"means Reclaimed Water processed at the Water District's Green Acres wastewater reclamation facility, or successor facilities used by the Water District. 8. "Groundwater Replenishment System"or"System"consists of four major components: (1)AWT Facilities and pumping stations, (2) a pipeline to recharge facilities, (3)a pipeline and the injection wells for the barrier and(4) Secondary Effluent Flow Equalization Tanks. The AWT Facilities consist ofMicrofiltration (ME),reverse osmosis (RO),Ultraviolet(UV) light disinfection,and Post Treatment using decarbonators and lime addition. 9. "GWR Pipeline"means the pipeline constructed to convey Product Water from Fountain Valley to the Water District's spreading basins. to. "GWRS Water"or"Product Water"means water produced by the AWT Facilities. it. "Initial Expansion"means an expansion of the System as originally designed to provide an increase in production capacity from 70 mgd to 100 mgd, including demolition of the Water District's old laboratory facility and construction of the following major components: (1)upgrades to the System's existing screening facilities; (2) facilities to increase the capacity of the System's existing microfiltration processing; (3) facilities to increase the capacity of reverse osmosis processing, (4) facilities to increase the 19 1201758.1 ultraviolet light processing(5)additional chemical storage and post-treatment facilities; (6) additional reverse osmosis transfer pumps; and(7) additional water and barrier pumps as part of the off-site System facilities." 12. "Ground Water Replenishment System Steering Committee"or"GWRS Steering Committee"or"Steering Committee"means the Ground Water Replenishment Steering Committee previously established under the Cooperative Agreement and continued under this Agreement. 13. "NTU" means nephelometric turbidity unit, as defined in the latest issue of Standard Methods for the Examination of Water&Wastewater as published by the American Public Health Association, the American Water Works Association and the Water Environment Federation. 14. "Newly Discovered Contaminants"is defined as contaminants found in wastewater that are or could be introduced into the Orange County Groundwater Basin through the System,that are not identified in any of the Water District's wells above any federal or state action level as of the effective date of this Agreement, and that either(1) are assigned a new drinking water action level, by federal or state regulators after the effective date of this Agreement, or(2) are newly discovered in the System's wastewater or product water through new testing methods that only become available after the effective date of this Agreement. 15. "Operational"is defined as the condition whereby the System has been installed and tested,and startup activities have been completed, such that the System is ready to process Specification Influent. Following attainment of Operational status, the System general contractor may have ancillary and non-critical construction yet to complete (e.g. landscaping, subsequent demolition). The System became Operational as of January 10, 2008. 16. "Peak Flows"shall mean wet weather flows received by the Sanitation District caused by inflow and infiltration into its system nearing its hydraulic capacity which results in the need for the Water District to accept a minimum of one hundred and four mgd of Specification Influent for reuse or discharge to the Santa Ana River. 17. "Product Water"means water produced by the AWT Facilities. 18. "Reclaimed Water"means water meeting the Reclaimed Water Standards. 19. "Reclaimed Water Standards"means recycled water meeting the latest adopted version of the California Code of Regulations, Title 22, Division 4, Chapter 3 entitled"Water Recycling Criteria"as set forth in Section 60304 with respect to filter effluent. 20. "Specification Influent"means secondary treated sewage that does not exceed(a) an average of 5 NTU over a 30-day period; (b)an average of 10 NTU for a 24-hour period; or(c) an instantaneous turbidity of 50 NTU at any time. 21. "System"means the Groundwater Replenishment System. 20 1201758.1 22. "System Effluent Standards"means the treatment standards to permit Product Water to be discharged into Santa Ana River as set forth in the NPDES Permit for the System. 21 1201758.1 Exhibit B Final Expansion Projects on Sanitation District Property In order to produce 130 mgd of purified water for the GWRS Final Expansion project, OCWD will require up to 175 mgd of secondary effluent from OCSD. Currently,OCSD provides up to 135 mgd of secondary effluent to OCWD, all of it from Plant 1. The balance of secondary effluent needed for the AWTF Final Expansion will come from Plant 2. Five major construction projects on OCSD property will be necessary to make this possible: 1. Plant 2 Headworks Modifications Project Currently, OCSD Plant 2 receives domestic wastewater from the coastal and central Orange County trunk lines. In addition to the domestic wastewater,Plant 2 also receives flows from the Inland Empire Brine Line. The Inland Empire Brine Line,which is also known as the Santa Ana Regional Interceptor(SARI)pipeline, accepts brine wastes from utilities and industries in the Santa Ana Watershed. This water contains brine, concentrated waste streams, and effluent from the Stringfellow site in Riverside County and is currently not allowed to be used as source water for recycling through the AWTF by the Division of Drinking Water permit to operate GWRS. This project will modify the existing OCSD Plant 2 Headworks to dedicate the south half of the Headworks to reclaimable flows and the north half to SARI and sidestream flows. Each half of the Headworks will be isolated from each other by the installation of automated isolation gates at key locations. A new 66-inch pipeline and flow meter vault will be constructed to bypass the SARI and sidestream flows around the existing metering vault and screen influent channel to a location upstream of the existing bar screens. 2. Plant Water Pump Station Replacement The Plant Water Pump Station Replacement, which is part of the Ocean Outfall System Rehabilitation Project J-117, will relocate the existing Plant Water Pump Station, which takes its source water from the Activated Sludge treatment process and 144" SE pipe. After the Final Expansion of the GWRS,the Activated Sludge(AS)treatment process will be dedicated to the treatment of SARI and sidestream flows. Also, the 144"SE pipe will mainly contain brine from the GWRS reverse osmosis process. Therefore, the existing Plant Water Pump Station will be relocated to a location more suitable for receiving secondary effluent from the Trickling Filter-Solids Contact(TF-SC)treatment process,which will be used to treat domestic wastewater. 3. Plant 2 Effluent Pump Station Project This project will construct the Plant 2 Effluent Pump Station to send approximately 50 - 85 MGD of secondary effluent from OCSD Plant 2 TF-SE process to the GWRS facility. The preliminary pump station layout is estimated to be approximately 47-feet by 100- feet with a three duty and one standby pump configuration. The four(4)pumps will be 500 HP vertical turbine pumps. The Plant 2 Effluent Pump Station will take secondary effluent from the 120-inch TF-SE pipeline and boost this flow into a new conveyance pipeline to GWRS. 22 1201758.1 4. Plant 2 Flow Equalization Project A 6 MG above-grade flow equalization tank will be constructed to equalize secondary effluent being pumped from Plant 2 to Plant 1. In addition, two sets of flow regulating stations will be constructed to divert secondary effluent from the Plant 2 to GWRS pipeline. The other station will be used to discharge water from the EQ tank back into the existing buried secondary effluent system. 5. 66'Interplant Pipe Rehabilitation Project OCSD owns an existing unused 66-inch gravity reinforced concrete pipeline(RCP) that connects Plant 2 to Plant 1. This pipeline was constructed prior to 1965 and is no longer in service. The pipeline alignment is approximately 3.6 miles from Plant 2 to Plant 1. OCSD has surveyed the interior of this pipeline and determined that the pipeline is no longer usable with exposed rebar and deteriorating manholes. For the conveyance of secondary effluent from Plant 2 to the GWRS facility, OCSD will allow OCWD to use the 66-inch existing pipeline and construction easement. In order to convert this aging gravity RCP into a pressure pipeline to convey the effluent pump station discharge, it will be rehabilitated with a trenchless pipe repair method. The new pipeline will be connected on the south to the Plant 2 Effluent Pump Station and to the north to the existing 90- inch OCSD Secondary Effluent Junction Box No. 6 (SEJB6) influent pipeline located at Plant 1. 23 1201758.1 w m '1 42" MF BWW t;96"MFF_ _�; _ u L:::j OCWD ; im _ = AWTF . OCSD 0 o SEFE Tanks GWRS e: and Pump I I. Screening °"• i rt Stationio Na Facility Exhibit C3 ' e '^ it ^ Green Acres —uuuuuw ;� Pump Station Exhibit C2 1 t • i 1 LooenC 54"SAR 78"FPW ®OCWD Boundary ---- -- OCWD Pipes(Labeled) L_jCCSD Boundary OCWD Facilities — Land Leasetl from OCSD Exhibit C—Lease of Property—Plant 1 24 1201758.1 OCWD Trickling Filter Meter Vault E io g W i = F OCWD v E Electrical Building � a $ I I I I 96" — 3 Secondary O OCWD CSD s' GWRS Screening Facility SEIB3 I I I I E I E I 6" 'later.. y F c Legend E OCWD OCWD Facility Flow Meter OCWD Piping Vault — — — Abandoned Piping Exhibit C1 Water District Facilities on Sanitation District Property GWRS Screening Facility 25 1201758.1 0 r C W y C � W T � N C A C C C V V O W t W N r— 6" Plant Water `w 66"Secondary Effluent A 2 - 3 a B ,y m 4 . uD CO yc ovd R i q G 0 3 y v s N d -VP N OCWD Green c4 Acres Project Pump Station* Legend OCWD Facility OCWD Piping *OCSD maintains all reclaimed water pipe within the Plant No. 1 boundary. Exhibit C2 Water District Facilities on Sanitation District Property Green Acres Project Pump Station 26 1201758.1 Exhibit D Leased Property Description ORANGE COUNTY SANITATION DISTRICT THAT PORTION OF PARCEL 2 IN THE CITY OF FOUNTAIN VALLEY, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS DESCRIBED IN THE FINAL ORDER OF CONDEMNATION TO ORANGE COUNTY SANITATION DISTRICT NO. I RECORDPD FEBRUARY 23, 1967 IN BOOK 8183.PAGE 28,OF OFFICIAL.RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY AND THAT PORTION OF PARCEL 4 AS DESCRIBED IN THE FINAL JUDGMENT IN CONDEMNATION TO COUNTY SANITATION DISTRICT NO. 1 RECORDED FEBRUARY 7, 1901 IN BOOK.5622. PAGE 146, OF OFFICIAL. RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 2 ALSO BEING THE NORTIVAMST CORNER OF SAID PARCEL 4; THENCE SOUTH W34'21" EAST 50.00 FEET ALONG THE NORTH LINE OF SAID PARCEL 4; THENCE SOUTH 0906'14" WEST 432.04 FEET; THENCE WEST 67051 FRET TO A POINT, SAID POINT BEING ON THE LAST LINE OF THE EASEMENT TO THE CITY OF FOUNTAIN VALLEY, L5.00 FEET IN WIDTH, RECORDED IN JULY 30, 1984 AS INSTRUMENT NO. 94-313034, OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, SAID EAST LINE BEING PARALLEL 2 EL WITH AND 40.00 FEET EAST OF THE CENTERLINE OF WARD STREET; THENCE NORTH 0°O6'27" EAST 437.04 FEET ALONG THE EAST LINE OF SAID EASEMENT TO A POINT, SAID POINT BEING ON THE NORTH LINE OF SAID PARCEL 2; THENCE SOUTH 89"3421" EAST' 620,49 FEET ALONG THE NORTH LINE OF SAID PARCEL 2 TO THE POINT OF BEGINNING. TILE AREA OF THE ABOVE DESCRIBED PARCEL IS 6.69 ACRES,MORE OR LESS. ALL AS SHOWN ON EXHIBIT'B'ATTACHED HERETO AND MADE A PART HEREOF. Q AND SG js Exp,1271-U b I W.7062 y io Q O 27 1201758.1 EXHIBIT D1 j I M A AiY LOX OmlPppl ORANGE OOONIV UWAYMN ORNW PARCEL 1 I P" OF GEGINNIG 1 4 I cv-_ 'R. OF � OME NHDEi:04 HE O4 CHIB3/1fi PCl 7 i O.R. M2 ! M i . G1 R3/ 5> I nA�}xx rn��N;•i Vrd?ER u.;iiRiCi NW34*211Y 11 NW34'21 GAO./9 50.00' I :� V �� � Vim,♦� ' •` � � ,,�. r: 11l � I 'S r•, N 4 ♦ Q y.. Uj f-. I I I Y r FIST LINE OF 15' 9qE �EALLEY E O OF 313D34M I I I VN1EY PER OR Bh31YAi} :{' }sJ•MO�yj w�OFo A �L*4 N.7 z • • •p� a Or CAL AWA = 0.59 AM 9-11-M CSNMIEDNO SHEET 1 OF I 28 1201758.1 EXHIBIT D2 ORANGE COUNTY SANITATION DISTRICT THOSE PORTIONS OF PARCEL 1 AND PARCEL 2 IN THE CITY OF FOUNTAIN VALLEY, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS DESCRIBED IN THE FINAL ORDER OF CONDEMNATION TO ORANGE COUNTY SANITATION DISTRICT NO. 1 RECORDED FEBRUARY 23, 1967 IN BOOK 8183, PAGE 28, OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY TOGETHER WITH THOSE PORTIONS OF PARCEL 4 AND PARCEL 5 AS DESCRIBED IN THE FINAL JUDGEMENT IN CONDEMNATION TO COUNTY SANITATION DISTRICT NO. 1 RECORDED FEBRUARY 7, 1961 IN BOOK 5622, PAGE 146, OF OFFICIAL RECORDS, IN THE OFFICE OF SAID COUNTY RECORDER, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 2 ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 4; THENCE SOUTH 89°34'28" EAST 50.00 FEET ALONG THE NORTH LINE OF SAID PARCEL 4; THENCE SOUTH 0006'07" WEST 432.04 FEET; THENCE SOUTH 89059'53" WEST 5.10 FEET TO A POINT, SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE SOUTH 0029'00" WEST 541.62 FEET TO A POINT AT THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 50.00 FEET; THENCE SOUTHWESTERLY 78.23 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 89039'00"; THENCE NORTH 89°52'00" WEST 73.50 FEET; THENCE NORTH 0°14'00" WEST 85.50 FEET; THENCE SOUTH 89043'00" WEST 179.20 FEET;THENCE NORTH 61045'00" WEST 31.50 FEET; THENCE NORTH 491.47 FEET; THENCE NORTH 89°59'53" EAST 335.48 FEET TO THE TRUE POINT OF BEGINNING. THE AREA OF THE ABOVE DESCRIBED PARCEL IS 4.10 ACRES, MORE OR LESS. ALL AS SHOWN ON EXHIBIT D2 ATTACHED HERETO AND MADE A PART HEREOF. NU. A. ft M2 �� - -\h 29 EXHIBIT D2 SKETCH TO ACCOMPANY LEGAL DESCRIPTION ORANGE COUNTY SANITATION DISTRICT a l 40 I %, U I POINT OF BEGINNING NE CORNER, PCL. 2 i O.R. 8183/28 CHANGECONIRI4S1 WATERoD0O4ROG4 � — — — — - S89'34'28"E N89'34'28"W 620.49' 50.00' N89'59'53"E _ 670.51' S89'59'53'W I I ® N8959'53"E 335.48' 5.10, TRUE POINT OF BEGINNING - z < � I I r a 40. 140' I a N61'45'00"W I3 31.50' S89'43'00"W 179.20' LAND VR`F NO'��1Y pR=50.00' R=50.00' �4, oP, Gsti o I L=78.23' v N8952'00"W * Ezp. 12/31/16 # 73.50' No.7052 1p `P I -V e (� F Al. SCALE: 1" = 100' ® AREA = 4.10i ACRES 11-03-16 AWTF2.DWG SHEET 1 OF 1 30 Exhibit E—Lease of Property— Plant 2 is ri Plant 2 Flow • •4 Tank Project +' � r '; t,� F,ri -a � w, s a' � •'y I . 10 F Banning Ave "A Plant • • _ Station uent Project OCSD Plant No. 2 31 1201758.1 Exhibit F Easement and Right-of-Way 66" Interplant Pipe os OCWD GWRS Facility eP"ay OCSD Plant 1 g r. :IN / 9 k� Exist OCSD 66-inch Interplant Pipe i — / Alignment m` rid s4 OCSD Plant 2 \.. 0 - y T ! 32 1201758.1 BOARD OF DIRECTORS Meeting Date TOBE.Of Dir. -- 11/16/16 AGENDA REPORT Item Item 24 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: PROPERTY ACQUISITION FOR 18475 PACIFIC AND 18484 BANDILIER CIRCLE, FOUNTAIN VALLEY, CA GENERAL MANAGER'S RECOMMENDATION Approve of the following actions relating to the transaction of purchase of certain real property interests at 18475 Pacific Street and 18484 Bandilier Circle from Bender Properties and authorize the General Manager and General Counsel to: A. Approve the Preliminary Title Report and the exceptions set forth therein, as provided in the Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (Purchase Agreement); and B. Execute the following: 1. Title Approval Letter; 2. Preliminary Change of Ownership Report; 3. Deeds and other evidences of title to the parcel of property that are the subject of the Purchase Agreement; 4. Acceptance of the Grant Deed to certain real property from Bender Properties; 5. Approved Estimated Closing Statement; 6. Seller's Mandatory Disclosure Statement acknowledging receipt of this document; 7. Property Information Sheet acknowledging receipt of this document; 8. Natural Hazard Disclosure Report acknowledging receipt of this document; and 9. Any and all other instruments related to the transaction. BACKGROUND In October 2016, the Board of Directors approved a Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (Purchase Agreement) for the property at 18475 Pacific Street and 18484 Bandilier Circle for $10,619,180. Escrow opened on October 27, 2016. Prior to closing escrow, the buyer is required to execute instruments related to this transaction. The Bender property consists of a single parcel with two connected buildings and two street addresses, 18475 Pacific Street and 18484 Bandilier Circle. This parcel is currently occupied by Hobby People, a retail business. Page 1 of 4 The following are the key terms of the agreement: • A purchase price of $10,619,180 for 48,269 square feet of building area, with a cost of$220 per square foot of building area. • The agreement includes a 30-day due diligence period from opening of escrow to review title issues and conduct building inspections, an environmental audit, and seismic evaluation. • Escrow shall close 30-days after Bender Properties has exercised a 'Put" option, but not later than 8 months after expiration of the due diligence period. This provision was negotiated to allow the seller to acquire another property for a tax exchange. • Starting on March 1, 2017, when the lease with Hobby People expires, the Orange County Sanitation (Sanitation District) shall lease the property for $35,000 per month plus $4,276 per month for property taxes and insurance until the close of escrow. This provision was negotiated to provide the seller with an income during the period when the current tenant leaves and escrow closes. RELEVANT STANDARDS • Maintain collaborative and cooperative relationships with neighboring agencies • Protection of Orange County Sanitation District assets PROBLEM The Buyer is required to execute instruments related to purchase of the property at 18475 Pacific Street and 18484 Bandilier Circle. The Board of Directors meetings do not fall on days that correspond to the closing date of escrow. PROPOSED SOLUTION Authorize the General Manager and General Counsel to execute instruments related to this transaction to complete escrow. TIMING CONCERNS The Board of Directors meetings do not fall on days that correspond to the closing date of escrow, thus staff is requesting the Board of Directors authorize the General Manager and General Counsel to execute the instruments related to this transaction to complete escrow. The purchase could terminate if the instruments related to this transaction are not executed in a timely manner. RAMIFICATIONS OF NOT TAKING ACTION Escrow closing could terminate at the default of the Sanitation District, resulting in the assessment of the deposit of up to $500,000 as liquidated damages. Page 2 of 4 PRIOR COMMITTEE/BOARD ACTIONS October 2016 - Approved a Standard Offer, Agreement And Escrow Instructions For Purchase Of Real Estate with Bender Properties for the property at 18475 Pacific Street and 18484 Bandilier Circle for $10,619,180; and approve AIR Commercial Real Estate Association Standard Industrial/Commercial Single-Tenant Lease -- Net with Bender Properties for the property at 18475 Pacific Street and 18484 Bandilier Circle for$35,000 per month as stipulated in the Purchase Agreement. September 2016 - Ratified Letter of Interest to Purchase dated September 2, 2016 and Counter-Offer to Purchase dated September 16, 2016,for 18475 Pacific Street and 18484 Bandilier Circle, Fountain Valley, CA from Bender Properties and Authorize the General Manager to sign Letter of Interest to Sell dated September 21, 2016 for 18475 Pacific Street and 18484 Bandilier Circle, Fountain Valley, CA from Bender Properties. August 2016 - Approved actions to issue Letters of Interest to Purchase and sign confidentiality agreements regarding purchase of real estate. July 2016 -Approved a Broker Representation Agreement with Cushman &Wakefield to give exclusive authority to represent the Sanitation District, at no cost,for the investigation and potential negotiation to acquire existing office building and/or land for a new Administration Building in an area near Plant 1. ADDITIONAL INFORMATION The existing administration building, trailers, and laboratory at Plant 1 are outdated and, in some cases, fail to meet applicable code requirements. Thus, the Sanitation District Sanitation District is planning to demolish these buildings and relocate employees to a new administration building and laboratory. The Board of Directors designated the southwest corner of Plant 1 as the preferred alternative for the new administration and laboratory buildings in October 2015. The Sanitation District is considering various other alternatives, including the following: (1) construction of a new administration building and/or laboratory on the north side of Plant 1, in the area of the existing administration building; (2) construction of a new administration building and/or laboratory across Ellis Avenue from Plant 1, on one or more properties currently owned by Bender Properties; and (3) acquisition or lease of existing buildings in the area for administrative and/or laboratory operations. In order to construct either an administration building or a laboratory on the Bender property, the Sanitation District would need to acquire the property. Even if the Sanitation District pursues other options for the administration building and laboratory, it could potentially use the Bender property as a construction staging area, an automobile repair shop, a warehouse, or any other use that does not involve treatment of wastewater. CECA The Sanitation District is currently preparing an environmental impact report that will consider various onsite and offsite options for a new administration building and/or a new Page 3 of 4 laboratory, including options for the Bender property. As explained above, however, the Sanitation District has other potential uses for the Bender property. The Sanitation District's Board of Directors has not approved any particular use of the Bender property and will not do so unless and until the Sanitation District performs all environmental review required under the California Environmental Quality Act. The Sanitation District's acquisition of the Bender property shall not foreclose any alternatives or mitigation measures that might reduce or avoid any significant impacts associated with any particular use of the Bender property. FINANCIAL CONSIDERATIONS This item was not included in the FY 2016-17 budget. Staff will reallocate funds from the current Capital Improvement Program (CIP). If funds are not available in the current CIP, staff will request that the Board direct staff to allocate funds from Sanitation District reserves in a separate agenda report. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsci.com) with the complete agenda package: (All documents provided in separate attachment.) • Preliminary Change of Ownership Report • Seller's Mandatory Disclosure Statement • Property Information Sheet • Natural Hazard Disclosure Reports • Supplemental Escrow Instructions WS:dm:gc Page 4 of 4 BOARD OF DIRECTORS Meeting Date To Bd.of Dir. -- 11/16/16 AGENDA REPORT em Number Iem Number 2s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert Ghirelli, Assistant General Manager SUBJECT: BIOSOLIDS HAULING AND COMPOSTING SERVICE CONTRACTS — RECOMMENDATION TO AWARD CONTRACTS TO NURSERY PRODUCTS, LLC. AND LIBERTY COMPOSTING, INC. GENERAL MANAGER'S RECOMMENDATION A. Receive and file Bid Tabulation and Recommendation; B. Receive and file Solicitation Phase Protest from Synagro West, LLC. dated August 26, 2016 for Specification No. S-2016-789BD NIB (Step 2 of 2); C. Receive and file Orange County Sanitation District's determination letter dated September 1, 2016; D. Receive and file Orange County Sanitation District's Notice of Intent to Award dated September 14, 2016; E. Receive and file Award Protest Statement from Synagro West, LLC. dated September 20, 2016; F. Receive and file response letter from Nursery Products, LLC. to Award Protest Statement dated September 27, 2016; G. Receive and file Orange County Sanitation District's determination letter dated October 13, 2016; H. Receive and file Appeal of Award Protest Determination from Synagro West, LLC. dated October 20, 2016; I. Receive and file Orange County Sanitation District's Appeal Decision dated November 2, 2016; J. Deny Appeal of Award Protest filed by Synagro West, LLC; K. Award a service contract for an estimated annual amount not to exceed $3,828,400 per year to Nursery Products, LLC. as the Primary Contractor to haul and compost a non-guarantee minimum of 150 wet tons per day (WTPD) of biosolids from Orange County Sanitation District's (OCSD) Reclamation Plant No. 1 and/or Treatment Plant No. 2 for a period of one (1), five-year term, with five (5), one-year optional renewals, for a unit price of $51.00 per wet ton of biosolids coupled with a monthly fuel surcharge cost and an annual Consumer Price Index Page 1 a 9 1201547.1 (CPI) adjustment. Should hauling to alternative sites be necessary, unit prices are listed in the bid price form provided in Attachment; L. Award a service contract for an estimated annual amount not to exceed $1,716,261 per year to Liberty Composting Inc. as the Secondary Contractor to haul and compost a non-guarantee minimum of 75 WTPD of biosolids from OCSD's Reclamation Plant No. 1 and/or Treatment Plant No. 2 for a period of one (1), five-year term with five (5), one-year optional renewals, for a unit price of $57.92 per wet ton of biosolids coupled with a monthly fuel surcharge cost and an annual Consumer Price Index(CPI)adjustment. Should hauling to alternative sites be necessary, unit prices are listed in the bid price form provided in Attachment; and M. Approve an aggregate annual unit price contingency of 5% for each contract. BACKGROUND Biosolids are the solid product of municipal wastewater processing which have been treated so that they may be safely recycled to amend soil directly or create composted soil amendments, and other beneficial uses. Currently, Orange County Sanitation District (Sanitation District) produces approximately 800 WTPD of biosolids. The Sanitation District manages its biosolids by transporting approximately 43% to composting facilities operated by Synagro West, LLC. (Synagro), 4% to Inland Empire Regional Composting Facility, 45% to Tule Ranch for land application, and 8% to the Orange County Waste and Recycling landfill. Presently, Synagro is hauling and composting about 43% of the Sanitation District's daily production. The Sanitation District's biosolids management contract with Synagro expires on December 27, 2016. RELEVANT STANDARDS • Ocean Discharge Permit, NPDES CA0110604 §VI.C.4.b Sludge (Biosolids) Requirements • Resolution No. OCSD 13-03 Biosolids Recycling Policy • Support Biosolids Management Program, low cost management option PROBLEM The Sanitation District's existing biosolids management contract with Synagro expires on December 27, 2016. Presently, Synagro is hauling and composting the Sanitation District's biosolids at their South Kern Manufacturing Facility at a contractual minimum of 250 WTPD at a rate of$76.17 per wet ton including fuel surcharge. In addition, Synagro is hauling and composting additional biosolids from the Sanitation District at its Arizona Soils Compost Facility at a non-guaranteed amount of approximately 90 WTPD at a rate of $61.71 per wet ton including fuel surcharge. Combined, these contracts account for about 43% of the Sanitation District's daily production of biosolids. Page 2 of 9 1201547.1 The Sanitation District must approve a primary and secondary composting contract in November, prior to the expiration date of the Synagro contract, to ensure a fail-safe method of hauling and composting biosolids. Additional lead time is necessary to allow the successful bidders to prepare to accommodate the Sanitation District's needs. PROPOSED SOLUTION Award the primary service contract to Nursery Products, LLC. and Liberty Composting Inc. to haul and compost the Sanitation District's biosolids to maintain biosolids management diversity, flexibility, and sustainability. TIMING CONCERNS The Sanitation District's biosolids management contract with Synagro expires on December 27, 2016. Staff needs time to perform a host of administrative functions after the Board awards the contracts in order to have the new contractors prepared ahead to receive our loads of the expiration date. If the Sanitation District does not award the composting contracts at the November Board meeting,the Sanitation District would need to implement a contingency plan to utilize land application of biosolids, via a contract with Tule Ranch. RAMIFICATIONS OF NOT TAKING ACTION If the Sanitation District does not award service contracts for the hauling and composting of biosolids with sufficient lead time prior to the expiration of the existing contract, the Sanitation District must implement the following contingency plan: The Sanitation District will divert an additional 300 WTPD of biosolids to land application atTule Ranch and an additional50 WTPD to Inland Empire Regional Composting Facility. Contingency Plan if Delay in Contract Adoption Contractor Location Allocation Wet Tons Per Da Tula Ranch Yuma - Farm (normal daily loads) 45.5% 364 Tule Ranch Additional loads diverted from 37.5% 300 composting to Yuma farm via GIC transport IEUA IECRF -will take 2 additional trucks per 9.0% 72 day OCWR I OCLandfill 8.0% 64 Total 100% 800 Page 3 a 9 1201547.1 PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Bid Process • To secure competitive biosolids composting services, the Sanitation District conducted a two-step bid process that involved a (1) Request for Qualifications (RFQ) and (2) Notice Inviting Bid to secure two contracts from competitive, qualified biosolids management firms to provide hauling and composting services. On June 16, 2016, the Sanitation District released RFQs to 25 biosolids management firms. Out of 25 firms, three responded and submitted their qualifications for staff to review. • Three firms, Liberty Composting Inc. (Liberty Composting), Synagro, and Nursery Products, LLC. (Nursery Products) were found to have met the Sanitation District's minimum qualifications in Step 1 of the RFQ. Accordingly, these firms were invited to submit their bids in Step 2, Notice Inviting Bid (NIB). • The three firms submitted the following bids: Bidders Amount of Bid - Price Per Wet Ton of Biosolids Nurse Products $51.00 Liberty Composting $57.92 S na ro $58.77 • The final award of a primary and secondary contract was based on the two lowest responsive and responsible bids from the three qualified biosolids management firms. The first lowest responsive and responsible bid was Nursery Products which is designated as the Primary Contractor. The second lowest responsive and responsible bid was Liberty Composting which is designated as the Secondary Contractor. The bid results are as follows: Cost Evaluation Primary Contractor Secondary Contractor Scenarios at 150 WTPD Nursery Products Liberty Composting Inc. Tipping Fee $25.40 per WT $26.29 per WT Hauling Cost $23.50 per WT $28.50 per WT Fuel Surcharge $2.10 $3.13 Total $51.00 per WT $57.92 per WT Non-Guaranteed Minimum Tonnage of 150 WTPD 75WTPD Biosolids Page 4 M 9 1201547.1 • The Sanitation District's current average cost for composting per wet ton is $72.98 as of October 2016. Under the two new service contracts, including Inland Empire Regional Composting Facility, the average cost per for composting per wet ton will be $54.59, a net savings of $18.39 per wet ton for composting. Assuming the current daily average to composting is approximately 371 wet tons of biosolids generated by the Sanitation District, the annual cost savings is approximately $2.49 million/year. Bid Protest The Sanitation District received two Protest Statements from Synagro during the Bid process (Step 2 Notice Inviting Bid). A Solicitation Phase Protest was received August 26, 2016 and an Award Protest was received September 20, 2016. The following summarizes the protest process and related determinations by the Sanitation District: • Solicitation Phase Protest and Determination: After the Request for Qualifications (RFQ) protest period closed and the Notice of Invitation to Bid (NIB) period opened, on August 26, 2016, Synagro submitted a Solicitation Phase protest and contended that Nursery Products failed to meet the required minimum qualifications. Synagro alleged that Nursery Products did not have "a minimum of five (5) years composting at least 250 wet tons per day (WTPD)of(Class B or Class A) biosolids" (Requirement listed in Specification No. S-2016-789BD RFQ (Step 1), Exhibit H). On September 1, 2016, the Sanitation District denied Synagro's protest for two reasons. First, the protest was untimely since it exceeded the RFQ protest period. Second, the protest subject matter exceeded the scope of the Solicitation Phase of the NIB Process. However, despite the bases for denial, the Sanitation District diligently reviewed the qualifications submitted by Nursery Products to ensure the integrity of the NIB process. The Sanitation District confirmed that Nursery Products met the minimum qualification requirements and denied Synagro's Solicitation Phase Protest. • Award Protest Statement and Determination: The Sanitation District issued a Notice of Intent to Award the contract to Nursery Products and Liberty Composting on September 14, 2016. On September 20, 2016, Synagro submitted an Award Protest in which it reiterated that Nursery Products failed to meet the minimum qualification of five years composting experience and alleged Nursery Products did not have a valid Conditional Use Permit for its composting facility. Nursery Products provided a response letter on September 27, 2016. The Sanitation District reviewed the response letter and clarified and confirmed documentation presented by Nursery Products including but not limited to a valid Conditional Use Permit and certified Environmental Protection Agency Reports, and determined that Nursery Products met the minimum qualification Page 5 d 9 1201W.1 requirements. Following this review, the Sanitation District denied Synagro's Award Protest. • Appeal and Decision: Synagro submitted an appeal of staffs determination of its Award Protest on October 20, 2016. Synagro again contended that Nursery Products did not meet the minimum requirements provided in the RFQ pertaining to the experience requirement of composting 250 WTPD for at least five years. In accordance with the NIB and Ordinance No. OCSD-47 (Purchasing), the Director of Finance and Directorof Engineering reviewed the appeal, confirmed Nursery Products did meet the minimum qualifications, and denied the appeal. The Sanitation District's Response to Appeal was issued November 2, 2016. The Sanitation District has thoroughly reviewed the qualifications for each firm. Three levels of protests, appeals, and determinations confirmed that Nursery Products does meet the minimum experience requirements for qualification. Neither the protests nor appeal merit a change to the Notice of Intent to Award. CEQA The Sanitation District's current contract with Synagro provides a contractual minimum of 250 WTPD of biosolids to be sent to Synagro's South Kern Industrial Center. Synagro also currently hauls and composts additional biosolids from the Sanitation District at Synagro's Arizona Soils Facility at a non-guaranteed amount of approximately 90 WTPD. The proposed service contracts with Nursery Products, LLC ("Nursery Products") and Liberty Composting, Inc. ("Liberty") will replace the Sanitation District's current contract with Synagro. Under the proposed service contracts with Nursery Products and Liberty, the Sanitation District will send a non-guaranteed minimum of 150 WTPD to Nursery Products' Hawes Composting Facility and a non-guaranteed minimum of 75 WTPD to the Liberty facility. The balance of the amount of biosolids currently sent to Synagro will be sent to the Sanitation District's existing biosolids management options, and/or to Nursery Products and Liberty, at the discretion of the Sanitation District. The Sanitation District, as lead agency, prepared a Program Environmental Impact Report entitled "Orange County Sanitation District 1999 Strategic Plan Program Environmental Impact Report," State Clearinghouse No. 97101065 (the "1999 PER"). The Board certified the 1999 PEIR on October 27, 1999 and the Sanitation District filed a Notice of Determination on October 29, 1999. The 1999 Strategic Plan analyzed the wastewater collection, treatment, and disposal facilities needed to accommodate the projected growth in the Sanitation District service area through the year 2020, and recommended expansion of the Sanitation District's facilities. Page 6 a 9 1201547.1 The 1999 Strategic Plan projected an increase in Sanitation District biosolids production from the 1996/1997 baseline level of 180,000 wet tons per year ("WTPY"), and 7,200 annual haul truck trips, to 421,000 WTPY and 16,840 annual haul truck trips. The 1999 PEIR analyzed the environmental effects of the 1999 Strategic Plan. The 1999 PEIR assumed that an additional 38 haul truck trips per day would be required to accommodate the projected increase in biosolids production (from the baseline of 27 truck trips per day to 65 truck trips per day in 2020). The County of San Bernardino, as lead agency, caused an Environmental Impact Report, State Clearinghouse No. 2006051021 (the "2006 EIR"), to be prepared for the Nursery Products Hawes Composting Facility. The County of San Bernardino certified the 2006 EIR on February 27, 2007. The County of San Bernardino subsequently caused a Supplemental Environmental Impact Report to be prepared for the Nursery Products Hawes Composting Facility in 2009 (the "2009 SEIR"). The County of San Bernardino certified the 2009 SEIR and filed a Notice of Determination. The 2006 EIR and the 2009 SEIR evaluated the environmental impacts associated with the Hawes Composting Facility based on receiving a maximum of 2,000 WTPD or 400,000 WTPY. The County of Kern, as lead agency, prepared an Environmental Impact Report, State Clearinghouse No. 2008101091 (the "2010 EIR")for the modification of a conditional use permit held by Liberty. The County of Kern certified the 2010 EIR and filed a Notice of Determination. The 2010 EIR evaluated the environmental impacts associated with the development of a gasification project as part of the existing Liberty composting facility based on Liberty's permitted capacity to accept up to 786,000 tons WTPY of feedstock comprised of biosolids and biomass products. The activities contemplated in the service contracts with Nursery Products and Liberty are subsequent activities within the scope of the 1999 PEIR, the 2006 EIR, the 2009 SEIR, and the 2010 EIR. The Sanitation District's total biosolids production currently results in approximately 32 truck trips per day, which is within the scope of biosolids production analyzed in the 1999 PEIR of up to 65 truck trips per day. The service contracts with Nursery Products and Liberty will not change the Sanitation District's current biosolids production. The 2006 EIR, 2009 SEIR, and 2010 EIR evaluated the respective Nursery Products and Liberty projects while considering the permitted biosolids capacity of the Nursery Products and Liberty facilities. Nursery Products currently has the permitted capacity to receive up to a maximum of 2,000 WTPD (400,000 WTPY) while Liberty currently has the permitted capacity to receive an average of over 2,100 WTPD (786,000 WTPY). The proposed service contracts fall within Nursery Products' and Liberty's permitted biosolids capacity. The service contracts with Nursery Products and Liberty will not increase the truck trips resulting from the management of the Sanitation District's biosolids but rather will replace the truck trips currently going to the Synagro facilities. The Sanitation District currently sends approximately 10 truck trips per day to Synagro's South Kern Industrial Center and approximately 3 truck trips per day to Synagro's Arizona Soils Facility. Under the proposed service contracts with Nursery Products and Liberty, the Sanitation District will send a non-guaranteed minimum of approximately 6 truck trips per day to Nursery Page 7 of 9 IM154].1 Products and a non-guaranteed minimum of approximately 3 truck trips per day to Liberty. The difference in the truck trips currently being sent to the Synagro facilities and the non- guaranteed minimums in the proposed service contracts can be sent to Nursery Products, Liberty, or the Sanitation District's other existing biosolids management options. The service contracts with Nursery Products — the primary contractor, and Liberty — the secondary contractor, will reduce the total vehicle miles traveled when compared with the current vehicle miles traveled to and from the Synagro facilities. The South Kern Industrial Center is located approximately 145 miles from Plant No. 1 and approximately 148 miles from Plant No. 2 while the Arizona Soils Facility is located approximately 264 miles from Plant No. 1 and approximately 266 miles from Plant No. 2. The Nursery Products facility is located approximately 116 miles from Plant No. 1 and approximately 119 miles from Plant No. 2. Accordingly, the 150 non-guaranteed minimum of biosolids to be sent to Nursery Products as the primary contractor will result in a reduction in vehicle miles traveled when compared with the biosolids currently being sent to the Synagro facilities. The Liberty facility is located approximately 189 miles from Plant No. 1 and approximately 192 miles from Plant No. 2. While the distance from the Sanitation District to the Liberty facility is greater than the distance from the Sanitation District to the South Kern Industrial Facility, the distance from the Sanitation District to the Liberty Facility is less than the distance from the Sanitation District to the Arizona Soils Facility. Given that the Nursery Products will bathe Sanitation District's primary contractor for the hauling and composting of the Sanitation District's biosolids while Liberty will be the secondary contractor,the total vehicle miles traveled under these two proposed service contracts will be less than under the existing contract with Synagro. As these service contracts will not expand the Sanitation District's production of biosolids, will not increase the existing truck trips per day, and will not increase the total vehicle miles traveled, the Sanitation District has determined that the service contracts with Nursery Products and Liberty are within the scope of the 1999 PEIR, the 2006 EIR, the 2009 SEIR, and the 2010 EIR, and that no additional documentation is required. (Public Resources Code § 21166; Cal. Code Regs. Tit. 14, §§ 15168, 15162.) Even if the service contracts are not within the scope of the 1999 PEIR, the 2006 EIR, the 2009 SEIR, and the 2010 EIR, the activities contemplated within the service contracts are exempt from CEQA pursuant to: (1)CEQA's Class 1 Exemption (Cal. Code Regs. Tit. 14, § 15301); and (2) CEQA's "Common Sense" Exemption (Cal. Code Regs. Tit. 14, § 15061(b)(3)). The Class 1 exemption applies to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private facilities involving negligible or no expansion of a use beyond the use existing at the time of the lead agency's CEQA determination. (Cal. Code Regs. Tit. 14, § 15301.) The Sanitation District's rate of operation and biosolids production will not change under the proposed service contracts with Nursery Products and Liberty. As a result, the proposed service contracts call for the operation of existing public facilities involving no expansion of use existing at the time that the Sanitation District's Board considers the proposed service agreements and makes its CEQA determination. As explained above, the proposed service contracts fall within Nursery Products' and Liberty's biosolids capacity and therefore call for the Page 8 a 9 120IWA operation of existing private facilities involving no or a negligible expansion of use beyond the use existing at the time that the Sanitation District's Board considers the proposed service agreements. The proposed service agreements are therefore exempt from CEQA review pursuant to CEQA's Class 1 exemption. CEQA's "Common Sense" Exemption applies where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. (Cal. Code Regs. Tit. 14, § 15061(b)(3).) In order to determine whether a project will have a significant environmental effect, a lead agency must first define the baseline environmental conditions. The"project"for CEQA purposes consists of changes in the baseline conditions, if any, that the lead agency's action will cause. The baseline usually consists of the physical conditions that exist when the lead agency commences CEQA review. (Cal. Code Regs. Tit. 14, § 15125(a).) As explained above, the proposed service contracts will not result in any change in the Sanitation District's operation and biosolids production. The truck trips to the Nursery Products and Liberty facilities will take the place of the existing trips to the Synagro facilities, which will result in a reduction in the total vehicle miles traveled. It can be seen with certainty, therefore, that there is no possibility that the proposed service contracts with Nursery Products and Liberty may have a significant effect on the environment and are exempt from CEQA review pursuant to CEQA's Common Sense Exemption. 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). Project contingency funds will not be used for these contracts. Date of ADDroval Contract Amount Contingency 11/16/2016 $ 5,544,661 $277,233 ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Service Contract Biosolids Composting & Hauling Services — Primary Contractor Nursery Products Specification No. S-2016-789BD with Bid Price Form • Service Contract Biosolids Composting & Hauling Services — Secondary Contractor Liberty Composting Inc. Specification No. S-2016-789BD with Bid Price Form • Bid Tabulation Report from Planet Bids • August 26, 2016 Synagro Solicitation Phase Protest • September 1, 2016 Sanitation District Solicitation Phase Protest determination letter • September 14, 2016 Sanitation District Notice of Intent to Award issued • September 20, 2016 Synagro Award Protest • September 27, 2016 Nursery Products Response to Protest Statement • October 13, 2016 Sanitation District Award Protest determination letter • October 20, 2016 Synagro Appeal • November 2, 2016 Sanitation District Response to Appeal Page 9 a 9 1201547.1 Bid Results for BIOSOLIDS COMPOSTING AND HAULING SERVICES(STEP 2)(S-2016-789BD) Issued on 08/12/2016 Bid Due on September 13,2016 2:00 PM (Pacific) Exported on 11/o9/2o16 - -- Line Totals(Umt Pnce Quantity) Item Num :Section '.Item Code Item Type Descrip_tior Unit of Me.Quantity Nursery Products Liberty Composting,Inc. .Synagro West LLC 1 Section 1 TOTAL CO$TON - __ 1 $51.00 ---$57.92 $58.77 .,,. .Subtotal T $51.00 $57.92 $58.77 Total $51.00 $57.92 $58.77 Unit Price _..---. . . . �,. . .... ._. ... ...... Item Num.aSectIon 'Item Code•Item Type �Descriptior!Unit of MeiQuantity .Nursery Products Liberty Composting lnc. Synagro West LLC 1'sectionl TOTAL CO TON 1 $51.00 $57.92 $58.77 Orange County Sanitation District Page 1 BIOSOLIDS COMPOSTING AND HAULING SERVICES(STEP 2)(S-2018-78913D) Primed 11I08I2010 Bid Tabulation Report Type Item Code UOM CRY Nursery Liberty Products Composting, Inc. Section 1 1 TOTAL COST PER TON(HI-LIGHTED IN YELLOW ON BID PRICE FORM),ON EXHIBIT B,BID PRICE FORM,TABLE 1:BIOSOUDS COMPOSTING AND HAULING SERVICES(Total Cost Includes cost for 150 WTPD,Cost Per Ton Tipping Fee,Fuel Surcharge Calculation,and Hauling Cast).THE TOTAL COST PER TON SHOULD BE ENTERED HERE. TON 1 $51,0000 $57.9200 Subtotal $51.0000 $57.9200 Total $51.0000 $37.9200 4141netBldn,ino. A Orange County Sanitation District Pege2 BIOSOLIDS COMPOSTING AND HAULING SERVICES(STEP 2)(5-2016-78913D) Printed 11IOW2016 Bid Tabulation Report Synagro West LLC $58.7700 $58.7700 $58.770O PiaaMBE�s,01c. ® Derrick L.Rogers Senior Counsel 443-489-9015 direct l • ) 443-489-9043 fax drogers@synagro.com e-mail People+Planet->Synchronization Z www.synagro.com 435 Williams Court, Baltimore,MD 21220 . w August 26,2016 V ' Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,CA 92708-7018 e-mail: Purchasing@OCSD.com Attn: Greg Blakely C.P.M.,Contracts, Purchasing&Materials Management Re:Protest Statement:SPECIFICATION NO.5-2016-7898D RFQ(STEP 2) Dear Mr. Blakely: Synagro West,LLC("Synagro"),hereby protests the Notice to Respondents Found Qualified in RFQ(STEPS). The Orange County Sanitation District(OCSD)Protest Procedures for the Notice to Invite Bids(NIB)do not address the current scenario where there is a two-step selection process. We are protesting the Specifications of(STEP 2)because we believe STEP 2 Selectee,Nursery Products,did not meet the minimum requirements of the STEP 1 Spec'Ificationsto qualify for STEP 2. Based upon publicly available information,Synagro understands that Nursery Products does not have the minimum requirements of Exhibit H of the RFQ STEP 1 which requires,in part,that each bidder must have,(1)five years of experience comporting at least 250 wet tons per day(WTPD)of(Class B or Class A)biosolids, and (2)available capacity to compost at least 250 WTPD of OCSD's biosolids. (a) Protestor.Synagro West, LLC,435 Williams Court,Suite 100,Baltimore, Maryland 21220. Telephone:(443)489-9015. (b) Specification: Biosolids Composting and Hauling Services S-2105-7896D (c) Action Protested:Notice To Respondents Found Qualified in RFQ(STEP 1)dated August 9,2016 (d) Affected Parties:Synagro Technologies,Inc. (e) Grounds: 1. Five Years of Biosolids Composting Experience Nursery Products failed to meet the minimum qualification requirement of"a minimum of five (5)years composting at least 250 wet tons per day(WTPD)of(Class B or Class A)biosolids." Nursery _ Products had one previous composting facility operating under the"Nursery Productr' name that operated from 2003,and closed in late 2005 due to nuisance issues. The 40.CFR Part 503 reports (attached)for 2003 through 2005 reveal the following wet tons of biowlids per day(WT/D)were managed by Nursery Products: 2003-112 WT/D(reported as an incoming biosolids average of 40%solids) iY 2004-192 WT/D 2005-234 Wr/D(closed in the 30 quarter of 2005) Nursery Products opened their current compost facility in 2012. The 40 CFR Part 503 reports for 2012 through 2015(attached)are provided in dry tons/year. With the reports tieing made In dry tons in 2012-2015,an extremely conservative estimate on the following wet tons tieing received by Nursery Products were made assuming a conservative average of 25%wilds biosolids were delivered: 2012-5,109.37 DT/Y @ 25%solids=^'20,500 WT/Y=56Wi/D , 2013-20,780.27 DT/Y @ 25%wilds=-83,200 WT/Y=228 WT/D 2014-51,586.78 DT/Y @ 25%wilds=-206,400 WT/Y=565 Wr/D 2015-55,568.06 DT/Y @ 25%wilds=-222,300 WT/Y=609 WT/D In 2005,Nursery Products managed slightly more than 250 WT/D for the first 2 quarters(for 6 months).In the 7 month of that year they managed only 210WT/D before shutting down. The total months of managing a minimum of 250 WT/D is as follows: 2005:6 months 2014:12 months 2015:12 months 2016:(At time of pre-qualification due 8/2)7 full months The 2016 40 CFR Part 503 data will not be sent to EPA Region IX until February 19, 2017. Nevertheless,it an be assumed that Nursery Products only has 37 months experience and cannot meet OCSD's"Minimum Qualification Requirement"of"five years of composting at least 250 wet tons per day(WfPD)of(Class B or Class A)biowlids." 2. Minimum Composting Capachy Nursery Products failed to meet the Minimum Qualification Requirement of having the "available capacity to compost at least 250 wet tons per day of OCSD's biowlids."Biowlids,green waste and amendments are composted when conditions that encourage the growth of the microorganisms are established and maintained.The most important condition is that the feedstocks are blended to provide the nutrients that support microbial activity and gmwth,including a balanced supply of carbon and nitrogen(C:N ratio). I i t f Nursery Products recognized and committed to this practice in their"Fine l Supplemental Environmental Impact Report for the Nursery Products LLC Hawes Composting Facility"(SEIR). In the SEIR, Nursery Products stated in Section 2.1,paragraph 1 that: "The Project is expected to receive on average total of 1,100 wet tons of biosofids and green material(approxrimatey 400,000 wet tons per year(tpy). The maximum quantity that the Project would receive on any given day would be 2,000 wet tons. Clean soil"other inert materials(i.e.,sand,gypsum,sawdust)will be used as abulking agent or amendment as needed and will not exceed 200 tons per day. The composting process will operate using a mixture,of approxlmotelySO%bfosalids to 5o%green material." [emphasis added] Nursery Products has a pennitfrom the lahontan RWQCBWDR(WDR*R6V-2010.0010)that includes the following site material processing flow restrictions: �+ 2,000 wet ton per day max limit for the combination of biosolids,green material,and bulking agents or amendments 400,000 wet ton/yr limit for the combination of biosolids,green material,and bulking �Y agents or amendments(Thus a daily average limit of 1,095/day for all composted materials) If Nursery Products is currently managing 750 WT/D of biosolids,750 tons per day of green waste would be required to be mixed with the biosolids to comply with Nursery Products commitment in the j SEIR. Industry practice allows fora 2:1 ratio of wet tons of biosolids to green waste in a compost i mixture to produce a marketable compost product.375 tons of green waste would be needed on a daily basis.A total site tonnage capacity of 1,125(750 wet tons of biosolids+375 tons of green waste)is required for servicing the existing Nursery Products biosolids customer commitments. Therefore,Nursery Products does not have the available capacity to compost at least 250 wet tons per day of OCSIYs biosolids as required by OCSD's Minimum Qualifications Requirements. (f) Specific References to Parts of the NIB:The specific Minimum Requirements are: (1) EXHIBIT H 1.Biosofids Composting Experience `Biddershall submit in Step 1,Request for Qualifications a Contractor Reference Sheet(Exhibit H-1)providing the names of the public entideslmunidpaifties,contact person,their telephone number, mailing and email addresses,experiences from one ormore public entltfeslmunicipalides in North America, which demonstrates that it has a minimum of five(5)years of experience of composting at least 250wet tons per day(WTPD)of(Class B or Class A)biosolids." (2) EXHIBIT H 4. Biosolids Composting Capacity "Bidder's Composting Fadiftyshall have the available capacity to compost at least 250 wet tons per day of OCSds biosolids.Bidder shall submit a valid regulatory document or permit which must include permitted capacity offacI ty." (3) Relief Requested:Protestor requests that Nursery Products,be disqualified as non- responsive and/or non-responsible for this Bid. (4) Sworn Statement:The undersigned hereby attests under penalty of perjury that the foregoing is,to the best of his knowledge,true and accurate in all material respects. Sincerely, -_ �� DemicX L.Rogers Senior Counsel Cc: Pamela Racey Layne Baroldi Orange County Sanitation District serving 10844 Ellis Avenue,Fountain Valley,CA 92708 Arai 714.962.2411 • www.ocsewes.cam Brea SuenaPark Cypness September 1, 2016 FrobtainValley Firflarbu Bandon Grove Derrick L. Rogers Hurl Beach Senior Counsel Synagro 435 Williams Court La Harm Baltimore MD 21220 Le Pant. SUBJECT: Protest Response: Specification No. S-2016-789BD NIB(Step 2) Newport Beach The Orange County Sanitation District("District') received an official protest from Onarga, Synagro West, LLC ("Synagro")to Specification No. S-2016-789BD Biosolids Composting and Hauling Services on August 26, 2016. The District has reviewed the protest and all necessary facts and written materials submitted and hereby denies Santa Ana the relief requested based on the following: SealBeach By submitting a Qualification response to the Request for Qualifications ("RFQ") in Stamen Step 1 of the Biosolids Composting and Hauling Services 2-Step Bid process, Synagro agreed to comply with the protest procedures provided in Exhibit"D" of the RFQ for filing protests (RFQ General Provisions, Section 2.7 Protests . Synagro's Villa Park protest letter appears to include two separate protests. This response will identify County of Grange and address each protest separately. Costa mesa First, the letter states Synagro"protests the Notice to Respondents Found Qualified Sanitary District in RFQ (STEP 1)" ("Protest 1"). Protest 1 is untimely. The District notified each of the Mid,vay City qualified respondents on August 4, 2016. In accordance with the protest procedures, Sanitary District Synagro had seven days from the date the notice was issued to submit a protest. On Parchwhe August 8, 2016, Synagro submitted an inquiry to determine which other entities were Water District found qualified and what criteria was used to determine that these entities met the minimum qualifications. The District responded by sending additional WaterDestrict ba correspondence naming all three qualified respondents to the same three respondents on August 9, 2016. Synagro sent an additional letter to the District on August 11, 2016 to again request the criteria used to determine which respondents met the minimum qualifications. The District responded the same day that no matrix was used other than the minimum qualification requirements identified on RFQ ,w• (Step 1), Exhibit"H"Any protests to Step 1 of the Bid process were due to the District by 4:00 P.M. PT on August 11, 2016. Synagro did not submit a protest at that time. Since the protest period closed, Protest 1, submitted fifteen days later on August 26, 2016 is untimely. x To protect public health and the environment by providing effective wastewater collection,.treatment,and recycling. avv,sax,rgr e rxE + Derrick L. Rogers, Senior Counsel Page 2 September 1, 2016 Synagro next stated that it protests the"Specifications of(Step 2)" based on allegations that Nursery Products, another qualified respondent, does not meet the minimum qualification requirements ("Protest 2"). Exhibit V' of the NIB governs protest procedures for Step 2 of this Bid process. During the Solicitation Phase, which is open until the bid due date, any interested party"who has reason to believe a free and open competition has not taken place" or that a"specification or requirement is impractical, unduly restrictive, or ambiguous" may file a protest(NIB[Step 21 Exhibit D, Section A Solicitation Phase Protest). While Synagro's Protest 2 to the Notice Inviting Bids ("NIB") (Step 2) is timely, the subject matter of the protest exceeds the scope of the Solicitation Phase. Instead, Protest 2 relies on limited public information to assert only that Nursery Products, whom the District approved as a qualified respondent, is not actually qualified. This concern does not impair the fair and open Bid process nor does it serve to clarify or amend a specification. Additionally, the supporting information presented in Protest 2 is insufficient to justify the relief requested. As such, the relief requested is denied. Despite the above issues with Synagro's protest, to ensure the integrity of the NIB process, the District diligently reviewed the documents and information submitted by Nursery Products in response to the RFQ. Based on this subsequent review and investigation of the facts presented,the District has determined and hereby confirms that the RFQ response from Nursery Products demonstrates it meets the minimum qualification requirements as stated in Exhibit H of the RFQ. For clarification purposes only, please note, the Synagro protest also incorrectly references Exhibit H-4 as the"Biosolids Composting Capacity."This is mislabeled and the requirements for"Biosolids Composting Capacity are included instead in Exhibit H- 6, "Composting Capacity". Please be assured, this was not a factor in preparing a response to the protest. Should Synagro still have concerns regarding any aspect of the NIB once the District issues an award recommendation, all interested parties will have the opportunity to file wa st Statement even days. Mar D. Dubois M ager T Contracts, Purchasing & Materials Management MD:wh a Kendra Camey, OCSD Assistant General Counsel Nursery Products Liberty Composting, Inc. Orange County Sanitation District 10844 Er.kenue.ro.,am Valey,C,92rl8 71496L24U .wnwn¢e cpn September 14, 2016 SUBJECT: Notice of Intent to Award for Specification No. 5-2016-789BD Biosolids Composting and Hauling Services (STEP 2 OF 2 STEP) In conformance with Orange County Sanitation District's (OCSD) Purchasing Ordinance No. OCSD-47, the contracts for Specification No. S-2016-789BD Biosolids Composting and Hauling Services (Step 2 of 2 Step), are being recommended for award to the following bidders. Final awards are subject to approval by OCSD's Board of Directors: Primary Contractor: Nursery Products —*150 Wet Tons Per Day (WTPD) `(Non-Guaranteed Minimum Tonnage) Secondary Contractor. Liberty Composting, Inc.—*75 (WTPD) `(Non-Guaranteed Minimum Tonnage) Thank you for your participation in the procurement process. OCSD regards your firm as an important and valuable goods/services provider. If I can answer any further questions, please feel free to contact me during normal business hours. Greg Blakeley, C.P.M. Contracts, Purchasing & Materials Management Division c: Procurement File To protect public health and the environment by providing effective wastewater collection.treatment and recycling Orange County Sanitation District „ Page 1 BIOSOLIDS COMPOSTING AND HAULING SERVICES(STEP 2)(5-201G789BD),bidding on September 13,2016 Pdnted 11I0s2016 Email History Email-Bidder(custom) Date Sent 09/14/2016 To Nursery Products(brian®numeryproduchoervices.com),Liberty Composting,Inc. (MELODY@LIBERTYRECYC.COM),Synagro West LLC(shammes@synagro.com) Subject NOTICE OF INTENT TO AWARD Message This is a notificatlon pertaining to SIOSOLIDS COMPOSTING AND HAULING SERVICES(STEP 215-2016 73911D),with a bid due date of September 13,2016 2:00 PM(Pactfic).Good Moming:A Notice of Intent to Award has been issued for this procurement. Please see the attached docement.Best mgams,Gmg R.Blakeley Attachments FIIe Title File Name Status Notice of Intent to Award Notice of Intent to Award.pdf On Server Planete(ds,Irrc. ® Derrick L Rogers Senior Counsel ^ 443AS9-9015 direct • ' 443-489-9043 fax Vj drogers@synagro.com e-mail C`1 People+Planet->Synchronization Z www.synagro.com 435 Williams Court, Baltimore, MD 21220 September20,2016 Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,CA 92708-7018 e-mail:Purchasing@OCSD.com Attn: Greg Blakely C.P.M.,Contracts,Purchasing&Materials Management Re:Protest Statement SPECIFICATION NO.5-2016-7 8 9 8 0 RFQ Dear Mr.Blakely: Synagro West,LLC('Synagro"),hereby protests the Orange County Sanitation District(OCSD)Notice of Intent to Award to Nursery Products for Specification Number 5-2016-789BD RFQ. Our protest is based on the grounds that Nursery Products does not meet the minimum requirements to qualify for this Award. Based upon publicly available information,Synagro understands that Nursery Products does not have the minimum requirements listed in Exhibit H of the RFQ STEP 1 which requires,in part,that each bidder must have,(1)five years of experience composting at least 250 wet tons per day(WTPD)of (Class B or Class A)biosolids,and(2)all authorizations and permits to compost biosolids. (a) Protestor.Synagro West,LLC,435 Williams Court,Suite 100,Baltimore, Maryland 21220. Telephone:(443)489-9015. (b) Specification: Biosolids Composting and Hauling Services 5-2106-789BD (c) Action Protested:Notice of Intent to Award to Nursery Products as Qualified in(STEP 2 of 2 STEP)dated September 14,2016. (d) Affected Parties:Synagro Technologies,Inc. (e) Grounds: Synagro Technologies,Inc('Synagro')is the parent company to Synagro West,LLC. Synagro West, LLC is currently the third lowest bidder and thus the next in line to win the secondary contract if this protest is successful.Synagro protests on the following grounds: i i J, I 1. Five Years of Biosolids Composting Experience Nursery Products failed to meet the minimum qualification requirement of"a minimum of five(5) { years composting at least 250 wet tons per day(WTPD)of(Class B or Class A)biosolids."Nursery Products had one previous composting facility operating under the"Nursery Products"name that operated from 2003,and closed in late 2005 due to nuisance issues. The 40 CFR Part 503 reports (attached)for 2003 through 2005 reveal the following wet tons of biosolids per day(wr/D)were managed by Nursery Products: 2003-112 WT/D(reported as an incoming biosolids average of40%solids) 2004—192 WT/D i 2005—234 WT/D(closed in the P quarter of 2005) Nursery Products opened their current compost facility in 2012. The 40 CFR Part 503 reports for 2012 through 2015(attached)are provided in dry tons/year. With the reports being made in dry tons in 2012-2015,an extremely conservative estimate on the following wet tons being received by Nursery Products were made assuming a conservative average of 25%solids biosolids were delivered: 2012—5,109.37 DT/Y @ 25%wilds=`20,500 WT/Y=56WT/D 2013—20,780.27 DT/Y @ 25%solids=-83,200 WT/Y=228 WT/D 2014—51,586.78 DT/Y @ 25%solids=-206,400 WT/Y=565 WT/D 2015-55,568.06 DT/Y @ 25%solids=-222,300 WT/Y=609 WT/D In 2005,Nursery Products managed slightly more than 250 WT/D for the first 2 quarters(for 6 months).In the 7 months of that year they managed only 210 WT/D before shutting down. The total months of managing a minimum of 250 WT/D is as follows: 2005:6 months I)I 2014: 12 months 'r 2015:12 months 2016:(At time of pre-qualification due 8/2)7 full months The 2016 40 CFR Part 503 data will not be sent to EPA Region IX until February 19, 2017. Nevertheless,it can be assumed that Nursery Products only has 37 months experience and cannot meet OCSD's"Minimum Qualification Requirement"of"five years of composting at least 250 ''il wet tons per day(WTPD)of(Class B or Class A)biosolids." t 2. Authorization and Permits 1 (a) OCSD's Biosolids Composting and Hauling Services Specification No.5-2016-789BD states that "(tlhe qualified Contractors shall take the required steps to provide services Including,but not j limited to,profiling,permitting,operating,hauling marketing,biosolldsmanagement, { recordkeeping,and reporting in accordance with federal,state,and local regulations and conformance with OCSD's Biosolids Management System(BMS)." Exhibit C,TERMS AND r CONDITIONS FORBID/PROPOSAL states that(t]hebidder/proposer must meet all licensing and/or other qual(cations described in the NIB/RFP." Exhibit A,SCOPE OF WORK/TECHNICAL SPECIFICATIONS,Section 5,Minimum Qualification Requirements statesthat in order,(t]ucomp/y with Step 1 Minimum Qualification Requirements,all boxes must be checked and at,documents submitted/uploaded.Contractors who cannot comply will not be invited to participate in Step 2—Notice Inviting Bid(NIB).Firms falling to satisfy these Minimum Qualification Requirements as defined in Exhibit H will be eliminated from further consideration." Nursery Products cannot and did not comply with this requirement. Exhibit H,MINIMUM QUALIFICATION REQUIREMENTS requires that the, "Biddershallsubmit in Step 1,Request for Quaiificatlons,at a minimum,espies of valid federal,state,and local permits licenses,and other relevant legal documentation to compost biwolids.A copy of the following applicable regulatory documents need to be provided but are not limited to. • Solids Waste Facility Permit, (if applicable) • National Pollution Discharge Eliminating System.(NPOES)Permit, (if applicable) • Air Board Permit, (If applicable) • Conditional Use,rofappill-ble) • waste Discharge Requirements,(if applicable)" I Nursery Products submitted most of the required documents pursuant to ExhibitH-7,but failed to 7 submit the sites primary enforcement and compliance permit,i.e.,the Conditional Use Permit(CUP) issued by San Bernardino County. Submission of the CUP was a minimum qualification requirement for OCSD's procurement process. (b)Condition No.2-Nursery Products'Conditional Use Permit("CUP")(attached)states that Nursery jryV„p Products"shall use the Best Available Control Technology(BACT),i.e.,modified static windrows,to reduce emissions of Volatile Organic Compounds(VOCs)from the composting process."According to Nursery Products own proposal to OCSD,Nursery Products is not complying with this CUP requirement. k [emphasis added] Nursery Products'proposal to OCSD provides for the use of typical windrow composting. Nursery 1 Products'proposal specifically states that`[t]he windrow-shaped piles are mechankallyformed and turned using heavy equipment throughout each day and are processed through windrow composting methodology in compliance with 40 CFR 503 and 14 CCR regulations.40 CFR 503 regulations state that windrows must maintain a temperature of 131 degrees or higher for a pathogen reduction period of 15 days or longer.During this period,there will be a minimum of five turnings of the windrow." This j composting process used by Nursery Products is not compliant with the CUP Condition No.2 requiring the use of the"modified static windrovP composting process. USEPA defines the tens"modified static pile"to mean the"process developed by Harvest Quest,a bacteria/fungus catalyst is spread over the surface of the piles,and it works its way inside,heating the piles from the outside in. The piles are only turned twice,once after about 4 weeks and a second time after another couple of weeks. The objective is to turn less,and thus have less odor and VOCemissions." ��' [thus the BACf compliance]. EPA has received 40 CFR Part 503 reports from Nursery Products stating _ that"Nursery Products processes its compost pile using traditional windrow composting process(not the I i mod fed static pile Process)with the windrows being turned every 3 days for a total of five turns Ina 15 day." The CUP requires the Applicant to use modified static windrows which is the technology designated In the CUP as the BACT and according to Nursery Products'own proposal to DCSD, Nursery Products is not complying with this CUP requirement tt (f) Specific References to Parts of the NIB:The Specific Minimum Requirements are: 1. (1) EXHIBIT H L Biosolids Composting Experience "Bidder shall submit in Step 1, Requestfor qualifications a Contractor Reference Sheet(Exhibit H-1)proveOng-ne^a.mes a't the p� i%c entitles/municipalities,contactperson,theirtelephone number, mc�iir:g erd emc )oda.resses, experiencesfrom one ormore public entities/municipafides in North AmerRa, b lw, demors rates that R has a minimum of five(5)years of experience of composting at iecsr 250:ve-to^s per day(WTPD)of(Class B or Gass A)biasolids." ### (21 OCSD 2016 Composting RFQ Info and Scope Section 4.1 'Coo tractors need to meet the minimum qualifications to provide management services that ` i avfcrm :a GCSJ's hicsa!ids mm^agement requirementssetforth in the Scope of Work(FxhibitA) 8 and Minimum Cual7/caricn Requirements(Exhibit H).' i3! OCSD 2016 Composing RFQ Info and Scope Section 5(Minimum Queliification Requirements) !! a €, "There are.mend porential risks gssaciated with this service related to a wide range of factors sacn os secur,%n g swEane sites(s),permitting and experience of the Contractor's team.OCSD has ider:b°led Mir�:m;;m Cua6�cction Requirements as referenced in Exhibit H....Firms failing to { sris`v these Qucllfication Requirements as definedin Exhibit H will be eliminated from Por[ner Ccnsioeration".[emphasis added] e Eitherthe minimal qualifications apply orthe process is unfair.Not enforcing stated minimal qualifications makes the process ambiguous as contractors will not be sure which qualifications apply ard rehicn a b=_Ignored. (_=_I 41fected Parties who may b=_ in line for the contractaward:Synagro West,LLC isthe next lowest bidder.No additional Parties are aFected. (h) Relief Requested:Protestor requests that Nursery Products be disqualified as non-responsible for this bid and that the next lowest bidder,Synagro West,LLC is awarded the secondary contract. t i i (1) Sworn Statement:The undersigned hereby attests under penalty of perjury that the foregoing is, to the best of his knowledge,true and accurate in all material respects. Sincerely, nc L.Rogers II', Senior Counsel Cc: Pamela Racey Layne garoldi Nursery Products Planting a 2afier Tca�rra& September 27, 2016 Mr.Greg Blakely,C.P.M. Contracts, Purchasing& Materials Management Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,California 92708-7018 e-mail:Purchasing@OCSD.com Subject Response to Protest Statement Orange County Sanitation District Request for Qualifications(RFQ)S-2016-789BD Dear Mr. Blakely. Nursery Products, LLC(Nursery Products) respectfully submits the following responses to the protest statement dated September 20,2016(Parts 1 through 7) provided to Nursery Products via e-mail by the Orange County Sanitation District (OCSD) on September 22, 2016. We maintain that our team offers OCSD proven experience, necessary authorizations and permits, technical knowledge, and commitment for cost-effective hauling and recycling of biosolids generated at the OCSD wastewater treatment facilities for local composting in accordance with state and federal regulations. We trust that the summary of information provided herein establishes the basis of our response for your consideration, but should you have any questions, please contact us for additional information. (a) Respondent Nursery Products, LLC, 647 Camino de los Mares, #108-174, San Clemente, California 92673, 714-287-7654,ieff.mebere@2mail.com. (b) Specification: Biosolids Composting and Hauling Services Request for Proposal (RFP) S-2016-7896D. (c) Action Protested by Others: Notice of Intent to Award to Nursery Products as Qualified in (STEP 2 of 2 STEP)dated September 14,2016. (d) Affected Parties: Nursery Products,LLC- (e) Response to Protest Grounds: as presented below in the same format as the protest statement dated September 20,2016. Protest Statement(e)(1)Five Years of Biosolids Composting Experience This portion of the protest statement suggests that Nursery Products does not have the composting experience meeting the RFP requirement(a minimum of five (5)years composting at least 250 wet tons per day (WTPD) of (class B or Class A) biosolids). Our experience includes operation at the former Nursery Pmducts Adelanto Facility, which operated between 2003 and 2005, and the Hawes Mr.Greg Blakely,C.P.M. 27 September 2016 Page 2 Composting Facility, which opened in June 2012, and is the site designated for composting OCSD's biosolids.Table 1 below presents a summary of Nursery Products' experience regarding the biosolids received over various periods of operation at these facilities. Table 1.Summary of Operating Periods and Wet Tons Per Day Managed APpromata Approximate Operat ing APproxirt me Approximate Approximate Period of Nursery Products' d Dry Metric uS.wet Tons Days Per Operating Fraction of Wet Tons Per Operation Facility Name Operating Day Tons Per Ysaz per Year Week Days yews refill Jan to Dec 2003 Adelamo 9,07 38,749 5 260 1.0 149 Jon m Dec 2" Adelanro 17S81 70322 5 260 J.0 170 Jan to July 2005 Adelamo 13,384 53,534 5 152 O.fi 353 June W Dec 2012 Hawes 5109 226w 7 213 0.6 105 Jan to Dec 2013 Hawes 2D,7W 91,6W 7 365 1.0 MI. Jan to Dec 2014 He. 51,587 227,400 7 365 SA 623 Jan to Dec 2015 He. 55,568 145,OOD 7 365 SA I lshwJul 2036 I He. I 30,300 1 133,200 i 7 21 0.6 1 Total ie m1260 iXD 53 Notes: 1 Adelanto=Nursery Products Atl lan[o Facility,Howei•Nursery Products Hawai Comporting Faolity. 2 Wet tons are reported quarterly and annually for 2003,2004,and ID a she Nursery Produces Adelanro Facility. 3.The approximate wet tom per year for the Adelanto Facility as reported In Part 3of Protest Statement. 4.Assumed percent wilds for the Adelanto Compton ng Facility(decimal)• Q25 S.Assumed Persian solids fords¢Hawes Composting Fad llry(dedmal)= 0.25 6.Nursery Products disagrees with Synagro's percent solids assumption,as Nursery Pmducv'clients,on average,have a lower percent solids. 7.Conversion between dry ma_mc_tons and U.S.wet tans ind uses multiplying by 1.M and dividing"the percent wilds. ..__.__. - __. _. . Mid" par swe 9.Womanrenz,rtlrote erinceexce pd the nl um RPQmeetreme When. 9.Nursery Products' rmerierrce exceeds Me minimumllFQregmrememof Syears of experience composting act least]5o W1PD. We provide the following clarifications where the tonnage information presented in Table 1 above conflicts with the tonnage Information presented in the protest statement • For 2003 through 2005, the Nursery Products Adelanto Facility was open 5 days per week, not 7 days per week, and when the annual tonnages are divided by the actual number of operating days,the WTPD values increase, which results in 2004 and the operating portion of 2005 demonstrating a volume above the minimum RFP requirement of 250 WTPD. • For 2012, since the Nursery Products Hawes Composting Facility opened mid-year, the WTPD noted in the protest statement is inaccurate because the total volume of biosolids was divided by 365 days rather than the actual number of operating days. • Nursery Products disagrees with Synagro's percent solids assumption,as Nursery Products' clients, on average, have a lower percent solids. However, even with calculations based on the assumption of 25%solids as indicated in the protest statement, Nursery Products meets orexceedsthe minimum RFP requirements. • For 2012 through 2015,the incoming biosolids volumes estimated by Nursery Products are approximately 10 percent higher than those reported in the protest statement because the protest statement calculation from dry metric tons to U.S. tons did not include a unit conversion multiplier of 1.102. This correction results in 2013 demonstrating a volume above the minimum RFP requirement of 250 WTPD. Mr.Greg Blakely, C.-.M. 27 September 201E Page 3 We take exce_o icr to :he -terp,e:ed summary of WTPD of biosolids described in the referenced protest stateme it. ConSdering tre actual facility operating periods, Table 1 demonstrates Nursery ''-dtcts eieso ds ria-age me^t experience in excess of 250 WTPD in 2004, 2005, 2013, 2014, 2015, and to da-e Ir 2C16. Notably, within months of opening our facility in 2012, our staff increased cuslness above 25C .'.7PD, and our ongoing customer service has led to increases in our inco-irg bicso ids. ;:cicr to, -nil:iple years, have been far above the minimum RFP requirement Add:icra , h.,rse Iroducts has rauled and recycled approximately 771 WTPD of biosolids thusfar it 2016. Protest Statement(e)(2)(a)Authorization and Permits K vse�. Prc,.cts has alien the steps required to permit the Hawes Composting Facility in aeorda-se v:it�. `edera. a:e and local regulations. Section 3(e) of our SOQ (PDF page 18 of 380) cc-lines n :ex. arc wit- colareI ogos) multiple agencies which regulate the Hawes Composting Facllit- Including San Be,ra'd tic County(County), CalRecycle,the Lahontan Regional Water Quality Con:rc Board,and the Moja;a D-,art Air Quality Management District(MDAQMD). -re Count'Conditional Lse Perm.: (CUP)for the Hawes Composting Facility is publically available,as i_enced ty Inclusbr that document in the referenced protest statement(Part 3). The County CUP per ? starer, ert for 'ermi: =PT0027393 from the County Department of Public Health En.lrorrtet:a -ealt- Ser. zes .:as provided in ourSOQto OCSD(STEP 1)as partof Appendix K(PDF page 3-2 o`382 . Protest Statement le)(2)(b)BACT and Windrow Composting0perations .:e corsc- tat it-- Cour'._: C-- Icentified in our SOQ includes a provision that Nursery Products sra _sa tre 3es: Aeallab e Cont,ol Technology (BACT), i.e., modified static windrows, to reduce emiss'ons o` Volat e Organic Con-pounds (VOCS) from the composting process." The County views the V.,rsan P'oduc:s Haves Composting Facility to be in complete compliance with the CUP. In adclt on, -,re Coun-, has Dero,rec fifty (50) monthly and five (5) annual inspections of the Hawes Cor 5-,irg Faclli; since ece,atons began in mid-2012, and these County inspection reports -.d l ca:e sat N,,rse� Proc a cts c zonations are in compliance with the CUP,and Nursery Products has -.e;e, received a is aa— `rcr the County.We understand that this issue m our CUP was also raised r. S.ragrc d Ye-T, .: :h Sa rl Pe-a rd i no County,and Synagro has officially withdrawn their complaint `r-r ;re Courc. i- ,=_a d -s t-s subject last week. =r.Crer. tre 1`;1->.pt17 is 7'e primary regulatory and enforcement agency focused on air quality issues `er tre Hares - r-.pos-Jng Facility. The MDAQMD has no requirements regarding emissions from ,i r-dro,. o�,rrposF rg cperatlons .Including the use of modified static windrows as BACT). Nursery PfOdUnS -as --tamed MDAOV D permits for equipment emissions at the Hawes Composting Facility, ..� sr .:er or-.iced In Apoerdk K of our SOQ (PDF pages 281 to 285 of 380 pages). Odor (from er,les ano o, -t-erase`. ties not been a nuisance issue identified during 1310S011da generator sta,J-o.I"s site nsoec:ions or documented in numerous regulatory/ enforcement agency site irspecti_rs. Mr.Greg Blakely,C.P.M. 27 September 2016 Page 4 Closure Nursery Products thanks OCSD staff for your time and your consideration of this response. We look forward to working with your staff and demonstrating our experience and customer service to exceed OCSD's expectations for biosolids composting and hauling services. Sincerely, 'q Jeff Meberg, President Nursery Products 714-287-7654 ieff.meberE�Ema il.comil.com Orange County Sanitation District 10844 Elrs Avenue,Fountain Valley,CA 92708 Ahaheirh October 13,2016 714,9622411 www.ocseaers.c«n Buena Park Derrick L. Rogers Cypress Senior Counsel Synagro Fountain - 436 Williams Court Baltimore MD 21220 Fullerton Garden Gro�e SUBJECT: Protest Response: Specification No. S-2016-789BD NIB(Step 2) Huntington B,..Ch The Orange County Sanitation District("District")received an award protest from Synagro West, LLC ("Synagro')to the Notice of Intent to Award to Nursery Products for La Habra Specification No. S-2016-789BD Biosolids Composting and Hauling Services on September 20, 2016. The District has reviewed the protest and all necessary facts and written materials -a Palma i submitted and hereby denies the relief requested based on the following: Synagro's award protest letter on September 20,2016 appears to include two parts to Ne,port Beach protest.These parts of the protest were described by Synagro as"either the minimum qualifications apply, or the process is unfair." This response will identify and address each part of Orange the protest separately. The first part of the protest questions the qualifications of Nursery _ Products,the successful bidder("Protest Part 1"). Protest Part 1 is untimely. The District notified each of the qualified respondents on August 4, 2016. In accordance with the protest procedures, Santa Ana Synagro had seven days from the date the notice was issued to submit a protest. On August 8, 2016,Synagro submitted an inquiry to determine which other entities were found qualified and - what criteria was used to determine that these entities met the minimum qualifications.The Stanton District responded by sending additional correspondence naming all three qualified respondents to the same three respondents on August 9,2016. Synagro sent an additional letter to the District on August 11, 2016 to again request the criteria used to determine which respondents met the minimum qualifications. The District responded the same day that no matrix was used Villa Park other than the minimum qualification requirements identified on RFQ Exhibit"H."Any protests to County of Orange Step 1 of the bid process were due to the District by close of business on August 11,2016. Synagro did not submit a protest at that time. Unfortunately, since the RFQ protest period closed, Protest Part 1 to the Notice of Intent to Award, submitted forty days later on September 20,2016 CoateSanitorry District is untimely. Sanitary y Diemcc Despite the above issues with Synagro's protest,to ensure the integrity of the NIB process, OCSD again diligently reviewed the documents and information submitted by Nursery rvire Ranch Products in response to the RFQ. First,the District reviewed the information provided by vote'DtsmotSynagro in support of the award protest. Synagro relied on limited public information to assert Yoma Unda only that Nursery Products, whom the District approved as a qualified respondent, is not actually wate'Dil qualified.This information was insufficient tojustify the relief requested. Instead, OCSD independently requested and reviewed Environmental Protection Agency("EPA")reports submitted by Nursery Products to the EPA from 2003 through 2005 and 2012 through 2015 to verify the information provided in response to the RFQ.Additionally, OCSD verified the validity of the current Conditional Use Permit held by Nursery Products with the San Bernardino County s,va Department of Public Health, Environmental Health Services. Based on this subsequent review " and investigation of the facts presented, the District has determined and hereby confirms that both the RFQ response from Nursery Products and the EPA reports submitted by Nursery Products,demonstrate conclusively that Nursery Products meets the minimum qualification requirements as stated in the RFQ. As such, Protest Part 1 is denied. B XE To protect public health and the environment by providing effective wastewater collection, treatment,and recycling. SY SAXIIq IO f x Mr. Derrick L. Rogers, Senior Counsel Page 2 October 13, 2016 The second issue raised in Synagro's award protest on September 20,2016 states essentially that if the contract is awarded to a bidder which did not meet the minimum qualifications,the District's NIB process is inherently unfair and/or ambiguous("Protest Part 2°). As addressed above,the EPA reports reviewed by the District demonstrate that Nursery Products, the successful bidder, unquestionably met the minimum qualifications required for the NIB. Since the NIB was awarded to a qualified bidder, Protest Part 2 is invalid and denied. Should Synagro wish to appeal this notice of determination of Synagro's award protest, Synagro may submit a written appeal to the Director of Administrative Services and the Director of the Department requesting the Procurement. Synagro must also immediately send copies of its appeal to all Affected Parties. The appeal must be submitted via email to PufchasinoCd.)OCSD.com no later than 4:00 p.m. (Pacific Time zone)within seven (7)days after notice. Marc D. Dubois Manager Contracts, Purchasing & Materials Management MD:wh c: Kendra Carney, OCSD Assistant General Counsel Nursery Products Liberty Composting, Inc. ® Derrick L Rogers Senior Counsel 443-489-9015 direct 443-489-9043 fax Q drogers@synagro.com e-mail People+Planet->Synchronization Z www.synagro.com 435 Williams Court,Baltimore,MD 21220 October20,2016 Orange County Sanitation District 108"Ellis Avenue Fountain Valley,CA 92708-7018 e-mail:Purchasing@OCSD.com Attn: Lorenzo Tyner,Director of Finance and Administrative Services and Jim Colston, Director of Environmental Services Re: Protest/Appeal 5tatement:SPEClFICATION NO.S-2016-7896D RFQ Dear Mr.Tyner and Mr.Colston: Synagro West,LLC(`Synagm"),hereby,appeals the decision of the Orange County Sanitation District (OCSD)Purchasing Manager to deny Synagro's Protest dated September 20,2016 to the Notice of Intent to Award to Nursery Products for Specification Number 5-2016-789BD RFQ. Our appeal is based on the same grounds provided in our Solicitation Phase Protest(See Attachment 1)and the Award Phase Protest(See Attachment 2):Nursery Products does not meet the minimum requirements to qualify for this Award. Based upon publicly available information,Synagro provided documentation to the OCSD Purchasing Manager that Nursery Products does not have the minimum requirements listed in Exhibit H of the RFQ STEP 1 which requires,in part,that each bidder must have,(1)five years of experience comporting at least 250 wet tons per day(WTPD)of(Class B or Gass A)biosolids,and(2)all authorizations and permits to compost biosolids. (a) Protestor/Appellant:Synagro West,LLC,435 Williams Court,Suite 100,Baltimore,Maryland 21220.Telephone:(443)489-9015. (b) Specification:Biosolids Composting and Hauling Services S-2106-789BD (c) Action Protested: Notice of Intent to Award to Nursery Products as Qualified in(STEP 2 of 2 STEP)dated September 14,2016. (d) Affected Parties:Synagro Technologies, Inc (e) Grounds: _ Synagro requests that the Directors of Finance and Administrative Services and Environmental Services reject the Purchasing Manager's Decision to deny Synagro's Protests and requests that OCSO not award this Contract to Nursery Products. Synagro also questions the OCSD Protest Review Process and Guidelines for Protests as well as the merits of OCSD's Responses to SynagrG s Solicitation and Award Phase Protests,respectively. Synagro communicated to OCSD staff that the current two-step process for qualifications did not lend itself to an appropriate notice period to Protest the Specifications Phase. Synagro submitted a Solicitation Phase Protest after contacting OCSD with concerns regarding OCSD's First Phase Selection of a potential Awardee that did not have the minimum qualifications.Synagro's Solicitation Protest provided grounds to question whether or not Nursery Products met the minimum standard of five years of experience comporting of at least 250 WTPD and questioned how Nursery Products could be eligible for this Award. Synagro received a Response that stated the Protest was untimely and had no merit, without providing any substantial explanation or support that Nursery Products met the minimum qualifications(See Attachment 3).The Response merely stated,"...the minimum requirements were met" The same result occurred with Synagro s Award Protest(See Attachment 4). Again,Synagro provided documentation that Nursery Products does not meet the five years of experience of composting 250 WTPD minimum requirements,which made them ineligible for the Award and OCSD should have deemed them as Non-Responsible. OCSD's Response to Synagro's Award Protest begins by stating that Synagro's Protest is untimely. According to OCSD's Protest Guidelines(See Attachment 5), Protests must be submitted within seven(7)days. The Notice of Intent to Award was published via planet bids(See Notice of Intent to Award)on September le. OCSD acknowledges Synagro's Protest Letter was submitted on September 20,2016 and within the Protest period. The Response concludes with the same reasoning in the September 1,2016 Response,"...the minimum requirements were met" Synagro has submitted evidence that Nursery Products does not meet the minimum requirements to qualify for this Award(See Attachments 6-18). At no point has OCSD via Responses denied that the evidence provided by Synagro is valid,or provided a scintilla of evidence that Nursery Products meets the five years of experience of 250 WTPD qualifications.Synagro also stated that the current process is unfair because there is no public way to confirm that minimum qualifications are met.Synagro s Award Protest stated that the current guidelines are unfair to the public if minimum standards are not applied, otherwise qualified bidders may not participate. However,Synagro is requesting the review of the RFq requirement of five years of experience composting at least 250 WTPD of(Class a or Class A)biosolids, and all authorizations and permits to compost biosol"xls.If Nursery Products is qualified,the simple answer is to provide the evidence that refutes Synagro's position. Simply stating"the minimum requirements are met,"is not a response and is the opposite oftmnsparency in public procurement. To address this,Synagro is(1)requesting the Director of Financial and Administrative Services and Director of Environmental Services consider Synagro's Appeal and reject the Public Managers decision to uphold this Notice of Award as legally complying with the local and state procurement regulations and(2)requesting the appropriate custodian of records provide Synagro access under California Public Records Act§6250 et seq.to all documentation,including notes and emails,that were used to determine and confirm that Nursery Products meets the minimum qualifications stated in OCSD's Responses to Synagro's Protests.Synagro also requests all Responses submitted to OCSD by Nursery Products to both of the Solicitation and Award Protests.Synagro has provided the necessary 9 documentation to question Nursery Products minimum qualifications. The previous responses have not 1 provided any documentation to refute Synagro's position. (f) Relief Requested:Appellant/Protestor requeststhat Nursery Products be disqualified as Non- Responsible for this Contract and that the next lowest bidder,Synagro West,LLC is awarded the secondary contract. (g) Sworn Statement:The undersigned hereby attests under penalty of perjury that the foregoing is, to the best of his knowledge,true and accurate in all material respects. I� Sincerely, t6errick L Rogers i Senior Counsel Cc: Pamela Racey Layne Baroldi s i i i Orange County Sanitation District ServIV MU ifsh�%Rbn valley.CA M708 Ahzih eim 714.9622411 . wwxsmexelsoan S. November 2, 2016 Valley Via Email and Certified U.S. Mail Derrick L. Rogers Senior Counsel gorc,Beach Synagm _ 1 435 Williams Court La Habra Baltimore MD 21220 SUBJECT: OCSD Protest/Appeal Decision: Specification No. S-2016-789BD NIB (STEP 2) On October 20, 2016, the Orange County Sanitation District('District') received an appeal from Synagro West, LLC ('Synagro') in response to the District's Purchasing _ Managers determination to deny Synagro's Award Protest. The appeal was evaluated by Lorenzo Tyner, Director of Finance and Administrative Services, and Robert Thompson, Director of Engineering, in accordance with the appeal process provided in Exhibit D"Filing of Protests and Protest Procedures for NIB'for the Biosolids Composting and Hauling Services(Step 2 of 2). Based upon their review of the facts and documents provided, both Directors determined to uphold the decision of the Purchasing Manager and deny Synagro's appeal. The District intends to request approval to award contracts for Specification No. S-2016-789BD from the District Board of Directors at the next regular Board meeting on November 16. 2016. Should you have any questions regarding the Board meeting, please jdirect ttthem mtto the Clerk of the Board's Office at(714) 593-7433. `ak Greg R. Blakeley, C.P.M. Buyer GRB:wh Attachments: • OCSD's Protest/Appeal Decision: SPECIFICATION NO. S-2016-78960, November 1, 2016 c: Kendra Carney, OCSD Assistant General Counsel Bob Ghirelli, Assistant General Manager Marc Dubois, Contracts, Purchasing Materials Management Manager Nursery Products Liberty Composting, inc. To protect public health and the ervimnment by previding a`f.1rva wachwaigr mlMetinn traafinenl and mrvNinR November 1, 2016 MEMORANDUM TO: Greg Blakeley Buyer FROM: LorenzoTyner-A-T. Director of Finance Rob Thompson Rcr Director of Engineering SUBJECT: Response to Protest(Appeal Statement: SPECIFICATION NO. S-2016-789BO RFQ The subject appeal dated October 20, 2016, by Derrick Rodgers, Senior Council for Synago, has been reviewed by Lorenzo Tyner, Director of Finance, and Robert Thompson, Director of Engineering. Synagro contends that the lowest bidder, Nursery Products, does not meet the minimum requirements required in the bid process. Specifically, Synagro does not believe Nursery Products has met the experience requirement of composting 250 wet tons per day of biosolids for five years. A review of the bidding requirements and information provided by Nursery Products demonstrate that Nursery Products has more than five years of experience composting 250 wet tons per operating day between their Adelanto Facility and their Hawes Composting Facility based on a five-day per week operation, and partial year credit in 2005 and 2016. The Request for Qualifications, Section 4.2.4. contemplates operating five days per week rather than seven days per week. In addition, Nursery Products is in compliance with their Conditional Use Permit per the County Department of Public Health Environmental Health Services. Based on the information available to the Orange County Sanitation District, the request to reject the Purchasing Manager's Decision to deny Synagro's Protest and the request that OCSD not award this Contract to Nursery Products are denied. oc: Bob Ghirelli Marc Dubois RCT:gc SERVICE CONTRACT Biosolids Composting & Hauling Services— Primary Contractor Specification No. S-2016-789BD THIS CONTRACT 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 92708-7018 (hereinafter referred to as "OCSD") and Nursery Products, LLC with a principal place of business at 647 Camino De Los Mares #108 — 174, San Clemente, CA 92673 (hereinafter referred to as"Primary Contractor") collectively referred to as the "Parties". WITNESSETH WHEREAS, OCSD desires to retain the services of Primary Contractor for Biosolids Composting & Hauling Services"Services"; and WHEREAS, OCSD has chosen Primary Contractor to conduct Services in accordance with Ordinance No. OCSD-47; and WHEREAS, on November 16, 2016, the Board of Directors of OCSD, by minute order, authorized execution of this Contract between OCSD and Primary Contractor; and WHEREAS, Primary Contractor is qualified by virtue of experience, training, and education and expertise to accomplish such Services, NOW THEREFORE, in consideration of the promises and mutual benefits exchanged between the Parties, it is mutually agreed as follows: 1. Introduction 1.1 This Contract and all exhibits hereto (called the "Contract") is made by OCSD and Primary Contractor. The Terms and Conditions herein exclusively govern the purchase of Services as described in the Scope of Work, attached hereto and incorporated herein by reference as Exhibit"A". 1.2 Exhibits to this Contract are incorporated by reference and made a part of this Contract as though fully set forth at length herein. Exhibits to this Contract are as follows in order of precedence: Exhibit A: Scope of Work (Including all Appendices) Exhibit B: Bid Price Form Exhibit C: Terms &Conditions for Request for Bid/Proposal Exhibit D: Filing of Protests and Protest Procedures Exhibit E: Not Used Exhibit F: Non-Collusion Affidavit Exhibit G: Acknowledgement of Insurance Exhibit H: Minimum Qualification Requirements Exhibit H-1: Contractor Reference Sheet Exhibit H-1a: Subcontractor Reference Sheet Exhibit H-2: Biosolids Management Plan Exhibit H-3: Biosolids Hauling Plan Exhibit H-4: Truck/Trailer Tables Bidder's Hauling Equipment Exhibit H4a: Truck/Trailer Tables Subcontractor's Hauling Equipment Exhibit H-5: Biosolids Composting Facility Location (Map) Exhibit H-6: Composting Capacity Exhibit H-7: Authorization and Permits Exhibit H-8: Fail-Safe Backup Biosolids Management Option Table Orange County Sanitation District 1 of 9 Specification No. S-2016-789BD 1163654.1 Primary Contractor 1.3 In the event of any conflict or inconsistency between the provisions of this Contract and any of the provisions of the exhibits hereto, the provisions of this Contract shall in all respects govem and control. 1.4 The provisions of this Contract may be amended or waived only by a writing executed by authorized representatives of both Parties hereto. 1.5 The various headings in this Contract are inserted for convenience only and shall not affect the meaning or interpretation of this Contract or any Paragraph or provision hereof. 1.6 The term "days", when used in the Contract, shall mean calendar days, unless otherwise noted as business days. 1.7 OCSD holidays (non-working days) are as follows: New Year's Day, Lincoln's Birthday, Presidents' Day Monday, Memorial Day Monday, Independence Day, Labor Day Monday, Veterans Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, and Christmas Day. 1.8 The term "hours", when used in this Contract, shall be as defined in Exhibit"A". 1.9 Primary Contractor shall provide OCSD with all required premiums and/or overtime work at no charge beyond the price provided under"Compensation" below. 1.10 Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by Primary Contractor as a result of work performed in anticipation of purchases of said services by OCSD. 2. Compensation 2.1 Compensation for this project shall not exceed the estimated total amount of Three Million Nine Hundred Fourteen Thousand Six Hundred Twenty-Five Dollars ($3,914,625.00) Per Year. 2.2 OCSD will pay the Primary Contractor the unit price of wet tons per day (hereafter"WTPD")of biosolids in accordance with Exhibit"B". The WTPD of biosolids listed in the Exhibit"B"are provided by OCSD, but there will not be a guarantee by OCSD of this WTPD of biosolids. The WTPD of biosolids provided by OCSD may change. 2.3 Primary Contractor shall take into account fuel surcharge and use fuel surcharge calculation in accordance with Exhibit"B". 2.4 Upon request by the Primary Contractor, OCSD may review the unit price of WTPD of biosolids after two(2)years from the effective date of the notice to proceed and each year thereafter, and may consider an adjustment to the unit price of WTPD stated in Exhibit "B" by a percentage no greater than the change in the Urban Consumer Price Index (CPI) based on the Primary Contractors geographic area of operation for the previous year in accordance with the Bureau of Labor Statistics data. Any unit price adjustment shall only take effect upon written approval from OCSD. 2.5 A request for adjustment to the unit price of WTPD of biosolids maybe made through the OCSD Purchase Order Process. 2.6 OCSD shall not guarantee minimum WTPD of biosolids to the Primary Contractor. Orange County Sanitation District 2 of 9 Specification No. S-2016-789BD 1163654.1 Primary Contractor 3. Payments Payments shall be made upon approval by OCSD Project Manager, Tom Meregillano or his designee, of invoices submitted for Services completed as described in Exhibit"A" and Exhibit'B". OCSD,at its sole discretion,shall be the determining party as to whether the Services have been satisfactorily completed. 4. Invoices 4.1 OCSD shall pay within 30 days of completion and receipt and approval by OCSD Project Manager of an itemized invoice, in a form acceptable to OCSD to enable audit of the charges thereon. Primary Contractor shall not pay less than the prevailing wage, if applicable. Invoices shall include the Purchase Order Number. 4.2 Invoices shall be emailed by Primary Contractor to OCSD Accounts Payable at APStaff(rDOCSD.com and reference the following in the subject line: "INVOICE", the Purchase Order number, the Project Manager, Tom Meregillano and S-2016-789BD— Primary Contractor. 5. Audlt Rights Primary Contractor agrees that, during the term of this Contract and for a period of three (3) years after its termination, OCSD shall have access to and the right to examine any directly pertinent books, documents, and records of Primary Contractor relating to the invoices submitted by Primary Contractor pursuant to this Contract. 6. Project Records Primary Contractor shall maintain books of record and accounts in which complete entries shall be made to document all deliveries of biosolids. Said books and records shall, upon written request, be subject to inspection by any duly authorized representative of OCSD within 72 hours of the time of the request. 7. Scone of Work Subject to the terms of this Contract, Primary Contractor shall perform the Services identified in Exhibit "A". Primary Contractor shall perform said Services in accordance with generally accepted industry and professional standards. 8. Modifications to Scope of Work Requests for modifications to the Scope of Work hereunder can be made by any parties to the Contract. For all modifications that result in a unit price adjustment, the Primary Contractor shall provide a detailed cost breakdown itemizing all cost associated with the modification, including material, labor, equipment, etc., and all necessary backup documentation to support the unit price adjustment. All requests for modifications and/or any proposed unit price adjustment by the Primary Contractor shall be reviewed and approved by OCSD which shall promptly advise the Primary Contractor in writing of the final decision. OCSD reserves the right to agree with or reject any requests for modifications and/or any proposed unit price adjustment. This Contract may be modified or changed only by written instrument in the form of an amendment to this Contract signed by both Parties. 9. Contract Term The Services provided under this Contract shall be completed within five (5) years from the effective date of notice to proceed. 10. Renewals 10.1 OCSD may exercise the option to renew the Contract for up to five(5)one-year periods based upon the criteria set forth in Exhibit"A" Scope of Work, if mutually acceptable contract terms can be negotiated. OCSD shall make no obligation to renew nor give reason if it elects not to renew. 10.2 Renewals may be made through the OCSD Purchase Order Process. Orange County Sanitation District 3 of 9 Specification No. S-2016-789BD 1163654.1 Primary Contractor 11. Termination 11.1 OCSD reserves the right to terminate this Contract for its convenience, with or without cause, in whole or in part, at any time, by written notice from OCSD of intent to terminate. Upon receipt of a termination notice, Primary Contractor shall immediately discontinue all work under this Contract (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Primary Contractor for work performed (cost and fee)to the date of termination. Primary Contractor expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Contract. Such notice of termination shall terminate this Contract and release OCSD from any further fee, cost or claim hereunder by Primary Contractor other than for work performed to the date of termination. 11.2 OCSD reserves the right to terminate this Contract immediately upon OCSD's determination that Primary Contractor is not meeting specification requirements, if the level of service is inadequate, or any other default of this Contract. 11.3 OCSD may also immediately cancel for default of this Contract in whole or in part by written notice to Primary Contractor: • if Primary Contractor becomes insolvent or files a petition under the Bankruptcy Act; or • if Primary Contractor sells its business; or • if Primary Contractor breaches any of the terms of this Contract; or • if total amount of compensation exceeds the amount authorized under this Contract. 11.4 All OCSD property in the possession or control of Primary Contractor shall be returned by Primary Contractor to OCSD upon demand, or at the termination of this Contract, whichever occurs first. 11.5 Primary Contractor shall notify OCSD in writing within twenty-four hours of an act or event which prevents the Primary Contractorfrom lawfully performing the services agreed to herein.Primary Contractor shall provide OCSD with immediate written notice should it receive any notice or indication, whether formal or informal, of a legal, governmental, judicial, administrative, or similar proceeding, action or enforcement, pending or threatened, that may affect Primary Contractor's ability to lawfully perform the services required herein. 12. Insurance Primary Contractor and all Subcontractors shall purchase and maintain, throughout the life of this Contract and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements (attached hereto and incorporated herein as Exhibit"G"). Primary Contractor and all Subcontractors shall not commence work under this Contract until all required insurance is obtained in a form acceptable to OCSD, nor shall Primary Contractor allow any Subcontractor to commence service pursuant to a subcontract until all insurance required of the Subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Contract. 13. Indemnification and Hold Harmless Provision Primary Contractor 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 Primary Contractor's services under this Contract, or by its Subcontractor or by anyone directly or indirectly employed by Primary Contractor, and whether such damage or injury shall accrue or be discovered before or after the termination of the Contract. Except as to the sole active negligence of or willful misconduct of OCSD, Primary Contractor 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 Primary Contractor's performance under Orange County Sanitation District 4 of 9 Specification No. S-2016-789BD 1163654.1 Primary Contractor the Contract, and/or(b)on account of use of any copyrighted or uncopyrighted material, composition, or process, or any patented or unpatented invention, article or appliance,furnished or used under the Contract, and/or (c) on account of any goods and services provided under this Contract. This indemnification provision shall apply to any acts or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of Primary Contractor of or anyone employed by or working under Primary Contractor. To the maximum extent permitted by law, Primary Contractor'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. Primary Contractor agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD. 14. Safety Standards and Human Resources(HR)Policies OCSD requires all contractors and service providers to follow and ensure their employees and all subcontractors follow all State and Federal regulations as well as OCSD requirements while working at OCSD locations. If during the course of a contract it is discovered that OCSD policies, safety manuals, or contracts do not comply with State or Federal regulations then the Primary Contractor is required to follow the most stringent regulatory requirement at no additional cost to OCSD. Primary Contractor and all their employees and Subcontractors, shall adhere to all applicable OCSD Safety Standards and Human Resources Policies found at: OCSD.com, "Doc Central" (bottom of page), under "Safety". OCSD's Safety Standards and Human Resource Policies are hereby incorporated by reference as though fully set forth herein. In addition to the requirements stated above, Primary Contractor shall adhere to the following OCSD Safety requirements: SOP-102 PPE, SOP-106 Hearing Conservation Program, SOP-107 Hazard Communication, and Traffic Control. 15. Warranties In addition to the Warranties stated in Exhibit "A", the following shall apply: 15.1 Manufacturer's standard warranty shall apply. All manufacturer warranties will begin at date of completion of this Contract. 15.2 Primary Contractor's warranty: If, within the 12-month period following completion of its Services, OCSD informs Primary Contractor that any part of the Services fails to meet the standards required under this Contract, Primary Contractor shall, within the time agreed to by OCSD and Primary Contractor, take all such actions as are necessary to correct or complete the noted defciency(ies) at Primary Contractor's sole expense. 16. Performance Time is of the essence in the performance of this Contract and the provisions hereof. 17. Force Maieure Neither party shall be liable for delays caused by accident,flood,acts of God, fire, Is trouble, war, acts of government or any other cause beyond its control, but said party shall use reasonable efforts to minimize the extent of the delay. Work affected by a Force Majeure condition may be rescheduled by mutual consent or may be eliminated from the Contract. If, because of Force Majeure,the cost to any party is increased by more than 15%or any party hereto is rendered unable, wholly or in part, to carry out its obligations under this Contract, then such party shall give the other party prompt written notice of the Force Majeure with reasonable details concerning it; thereupon the obligation of the party giving the notice, so far as they are affected by the Force Majeure, shall be suspended during, but no longer than, the continuance of the Force Majeure. The affected party shall use all possible diligence to remove the Force Majeure as quickly as possible, but the party's obligation shall not be deemed to require the settlement of any strike, lockout, or other Orange County Sanitation District 5 of 9 Specification No. S-2016-789BD 1163654.1 Primary Contractor labor difficulty contrary to the wishes of the party involved. If, because of Force Majeure, Primary Contractor's cost is increased, then OCSD agrees to increase the price paid to Primary Contractor to cover those increased costs for the duration of the Force Majeure. However, if because of Force Majeure, Primary Contractor's cost is increased by more than 15% then OCSD may suspend performance for the duration of the Force Majeure. 18. Freiaht (F.O.B. Destination) Primary Contractor assumes full responsibility for all transportation, transportation scheduling, packing, handling, insurance, and other services associated with delivery of all products deemed necessary under this Contract. 19. Familiarity with Work By executing this Contract, Primary Contractor warrants that: 1)it has investigated the work to be performed; 2) it has investigated the site of the work and is aware of all conditions there; and 3) it understands the facilities, difficulties and restrictions of the work under this Contract. Should Primary Contractor 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 Primary Contractor's risk, until written instructions are received from OCSD. 20. Reoulatory Requirements Primary Contractor shall perform all work under this Contract in strict conformance with applicable federal, state, and local regulatory requirements including, but not limited to, 40 CFR 122, 123, 124, 257, 258, 260, 261, and 503, Title 22, 23, and California Water Codes Division 2. 21. Licenses. Permits. Ordinances and Reaulations Primary Contractor represents and warrants to OCSD that it has obtained all licenses, permits, qualification and approvals of whatever nature that are legally required to engage in this work. Any and all fees required by State, County, City and/or municipal laws, codes and/or tariffs that pertain to work performed under the terms of this Contract will be paid by Primary Contractor. 22. Applicable Laws and Regulations Primary Contractor shall comply with all applicable federal, state, and local laws, rules, and regulations. Primary Contractor also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of Primary Contractor's noncompliance therewith. Any permission required by law to be included herein shall be deemed included as a part of this Contract whether or not specifically referenced. 23. South Coast Air Quality Management District's (SCAQMD) Requirements It is Primary Contractor'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 contract 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. 24. Governing Law This Contract 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 Contract or the performance thereof. 25. Breach The waiver of either party of any breach or violation of,or default under, any provision of this Contract, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Contract or default thereunder. Any breach by Primary Contractor to which OCSD does not object shall not operate as a waiver of OCSD's rights to seek remedies available to it for any subsequent breach. Orange County Sanitation District 6 of 9 Specification No. 5-2016-789BD 1163654.1 Primary Contractor 26. Remedies In addition to other remedies available in law or equity, if the Primary Contractor fails to make delivery of the goods or Services or repudiates its obligations under this Contract, or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services, OCSD may (1) cancel the Contract; (2) recover whatever amount of the purchase price OCSD has paid, and/or (3)"cover'by purchasing, or contracting to purchase, substitute goods or Services for those due from Primary Contractor. In the event OCSD elects to "cover" as described in (3), OCSD shall be entitled to recover from Primary Contractor as damages the difference between the cost of the substitute goods or Services and the contract price, together with any incidental or consequential damages. 27. Dispute Resolution 27.1 In the event of a dispute as to the construction or interpretation of this Contract, 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. 27.2 In the event the Parties are unable to timely resolve the dispute through mediation, the issues in dispute shall be submitted to arbitration pursuant to California Code of Civil Procedure, Part 3, Title 9, Sections 1280 at seq. For such purpose, an agreed arbitrator shall be selected, or in the absence of agreement, each party shall select an arbitrator, and those two arbitrators shall select a third. Discovery may be conducted in connection with the arbitration proceeding pursuant to California Code of Civil Procedure Section 1283.05. The arbitrator, or three arbitrators acting as a board, shall take such evidence and make such investigation as deemed appropriate and shall render a written decision on the matter in question. The arbitrator shall decide each and every dispute in accordance with the laws of the State of California. The arbitrators 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. 28. Attorney's Fees If any action at law or inequity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Contract, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 29. Survival The provisions of this Contract dealing with Payment, Warranty, Indemnity, and Forum for Enforcement, shall survive termination or expiration of this Contract. 30. Severability If any section, subsection, or provision of this Contract, or any agreement or instrument contemplated hereby, or the application of such section, subsection, or provision is held invalid, the remainder of this Contract or instrument in the application of such section, subsection or provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby, unless the effect of such invalidity shall be to substantially frustrate the expectations of the Parties. 31. Damage to OCSD's Property Any of OCSD's property damaged by Primary Contractor, any subcontractors or by the personnel of either will be subject to repair or replacement by Primary Contractor at no cost to OCSD. 32. Disclosure Primary Contractor agrees not to disclose, to any third party, data or information generated from this project without the prior written consent from OCSD. Orange County Sanitation District 7 of 9 Specification No. S-2016-789BD 1163654.1 Primary Contractor 33. Independent Contractor The legal relationship between the parties hereto is that of an independent contractor, and nothing herein shall be deemed to make Primary Contractor an OCSD employee. During the performance of this Contract, Primary Contractor and its officers, employees, and agents shall act in an independent capacity and shall not act as OCSD's officers, employees, or agents. Primary Contractor and its officers, employees, and agents shall obtain no rights to any benefits which accrue to OCSD's employees. 34. Limitations upon Subcontractina and Assignment 34.1 Primary Contractor shall not delegate any duties nor assign any rights under this Contract without the prior written consent of OCSD. Any such attempted delegation or assignment shall be void. 34.2 In the event the Primary Contractor obtains written approval from the Project Manager to delegate duties, assign rights, substitute an approved Subcontractor and/or introduce a new Subcontractor, the Primary Contractor shall be as fully responsible to OCSD for the acts, errors and omissions of the Subcontractor(s) and Suppliers and of the person(s) either directly or indirectly employed by the Subcontractor(s)and Suppliers as the Primary Contractor is for the acts, errors and omissions of persons directly employed by the Primary Contractor. Nothing contained in the Contract shall create any contractual relationship between any Subcontractor/Supplier and OCSD. 34.3 Each Subcontract and Supplier agreement shall be approved in writing by OCSD and preserve and protect the rights of OCSD, its directors, officers, agents, and employees under the Contract with respect to the work to be performed by the Subcontractor so that subcontracting thereof will not prejudice such rights, and shall allow to the Subcontractor or Supplier, unless specifically provided otherwise in the subcontract agreement, the benefits of all rights, remedies and redress against the Primary Contractor that the Primary Contractor, by the Contract documents, has against OCSD. The Primary Contractor shall make available to each proposed Subcontractor or Supplier, prior to the execution of the subcontract, copies of the Contract documents. 34.4 This section does not and shall not operate to relieve the Primary Contractor of any duty or liability under the Contract, nor does it create any duty or liability on the part of OCSD. The Primary Contractor shall have sole responsibility for promptly settling any disputes between its Subcontractors. 35. Third Party Rights Nothing in this Contract shall be construed to give any rights or benefits to anyone other than OCSD and Primary Contractor. 36. Non-Liability of OCSD Officers and Employees No officer or employee of OCSD shall be personally liable to Primary Contractor, or any successor-in-interest, in the event of any default or breach by OCSD or for any amount which may become due to Primary Contractor or to its successor, or for breach of any obligation for the terms of this Contract. 37. Read and Understood By signing this Contract, Primary Contractor represents that he has read and understood the terms and conditions of the Contract. 38. Authority to Execute The persons executing this Contract on behalf of the Parties warrant that they are duly authorized to execute this Contract and that by executing this Contract, the Parties are formally bound. 39. Entire Contract This Contract 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 8 of 9 Specification No. 5-2016-789BD 1163654.1 Primary Contractor 40. Notices All notices under this Contract must be in writing. Written notice shall be delivered by personal service or 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. Rejection or other refusal to accept or the inability to deliver because of changed address for which no notice was given as provided hereunder shall be deemed to be receipt of the notice, demand or request sent. All notices shall be effective when first received at the following addresses: OCSD: Ludwig R. Lapus, Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Primary Contractor: Jeff Meberg Nursery Products, LLC 647 Camino De Los Mares#108— 174 San Clemente, CA 92673 Each party shall provide the other party written notice of any change in address as soon as practicable. 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 Division Manager NURSERY PRODUCTS, LLC Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 9 of 9 Specification No. S-2016-789BD 1163654.1 Primary Contractor EXHIBIT B 0 BID PRICE FORM BIOSOLIDS COMPOSTING AND HAULING SERVICES(STEP 2 OF 2 STEP) SPECIFICATION NO. S-2016.789BD Due Date for Bid Submittal: September 13.2018 at 2:00 P.M.,PT. The undersigned does hereby propose to provide services in accordance with all provisions of Step 1 RFQ and Step 2 NIB for the following pricing in Table 1,Table 2 and Table 3 below. Incomplete submittal of requested information may deem the bid as non-responsive. The Bid submittal must be uploaded as a separate cost file. For the purpose of the Bid Evaluation,the Orange County Sanitation District(OCSDI will only evaluate the Total Cost Per Ton provided by the Bidder as referenced below In Table 1: Blosolids Composting and Hauling Services. The Contractor with the lowest responsive and responsible bid is considered the Primary Contractor and the Contractor with the second lowest responsive and responsible bid is considered the Secondary Contractor. Primary and Secondary Contractors shall not be the same Contractor. NOTE: The allocation of biosolids between the Primary Contractor and the Secondary Contractor will be based on Table 1: Non-Guaranteed Minimum Biosolids Amounts which is located in Exhibit A.Scope of Work.Section 4.2.1. Blosolids Amount Allocation. In Table 1: Biosolids Composting and Hauling Services, Bidder shall fill-in the Cost Per Ton Tipping Fee, Fuel Surcharge Calculation(FSC) including Multiplier, Hauling Cost,and Total Cost Per Ton. In Table 2: Fail-Safe Option, Bidder shall fill-in the Fuel Surcharge Multiplier, Cost Per Ton Tipping Fee, Hauling Cost, and Total Cost Per Ton. In Table 3: Compost Delivery, Bidder shall fill-in the Fuel Surcharge Multiplier, Compost Product Cost, Hauling Cost, and Total Cost Per Ton. The term of the contract is an initial five(5)year term followed by five(5)one(1)year optional renewals. The tons listed below are tons provided by OCSD, but there will not be a guarantee by OCSD of this tonnage in the contract. The tons provided by OCSD may change on a week-to-week basis. The Cost Per Ton Tipping Fee and the Hauling Cost quoted by the Bidder will serve as the base price for all tons managed by the Bidder. In addition, Bidder's Fuel Surcharge Multiplier shall be used to calculate fuel surcharge. Table 2: Fail Safe Option and Table 3: Compost Delivery will not be considered in the Bid evaluation process, but shall be used to determine cost for the FaikSafe Option and Compost Delivery Costs. Table 1: Biosolids Composting and Hauling Services Fuel Surcharge Calculation (FSC)' Wet Tons of Total Cost Per Ton Scenario Cost Per Ton FSC = A($3.750-$2.636)(0.9) # Biosolids Per % solids Tipping Fee A=Multiplier Hauling Cos[ (Tipping Fee li Fuel Day Surcharge + Hauling Cos[) Insert Multiplier: 2.09 1. 160 16.30% 25.40 $1ton $ 2.10 23.50 $Iton 51.00 gnon EXHIBIT B Page 1 of 4 Specification No. S-2016-789BD 1. Bidder shall take into account the Fuel Surcharge and use Fuel Surcharge Calculation and provide a"Multiplier"(see example below). For the purpose to determine the lowest responsive and responsible bid,the'Multiplier"is multiplied by the difference in diesel cost from an assumed$3.75 monthly average diesel fuel price per gallon in California(CA) minus$2.636,which was the base diesel fuel price per gallon in California for May 2016(U.S. Energy Information Administration). See below for explanation of FSC and example. Bidder shall fill-in the designated Cost Per Ton Tipping Fee, Fuel Surcharge including Multiplier, and Total Cost Per Ton. Failure to do so may deem the bid as non-responsive. For the purpose of this service contract, Bidder will use the Fuel Surcharge Calculation below. Fuel Surcharge Calculation=A(X—2.636)(0.9) • A is the Bidder's designated Multiplier(see example below). • X is the average monthly diesel fuel price per gallon for California used for the specific month for billing. Average diesel fuel price for California is based on U.S. Energy Information Administration(EIA) (www.eia.00v/petroleum/oasdiesell. • $2.636 is the base price for diesel fuel (CA)for May 2016(www.ela.gov/petroleum/pasdiesel). The base price is used to calculate the difference of the cost of diesel fuel with current value. • (0.9) Is OCSD shall pay 90%of the calculated fuel surcharge because transportation is accounted in the Consumer Price Index adjustment. Please reference Exhibit E, Draft Contract, Section 2.4. • Example: Fuel Surcharge=0.5($3.750-$2.636)(0.9)_$0.501 o A=0.5: This is an example Multiplier that includes variables not limited to Total Miles Round Trip, Fuel Efficiency(mpg), and load (25 tons). Note that this multiplier is an example. Bidder shall provide a multiplier, which may include other variables. o X=$3.750: Monthly average of diesel fuel in CA. Note that this value is an example for the bidding process. The Contractor will use the actual previous month's average for billing purposes. o Fixed Price= $2.636: Base price of diesel fuel in CA for May 2016. o Fixed%_(0.9): OCSD shall pay 90%of the calculated fuel surcharge because transportation is accounted in the Consumer Price Index adjustment. Please reference Exhibit E, Draft Contract, Section 2.4. o The fuel surcharge will only apply tithe result of the calculation is greater than $0.25. Fuel Surcharge Adjustment Billing: The fuel surcharge will only apply if the result of the calculation is greater than$0.25. EXHIBIT B Page 2 of 4 Specification No. 5-2016-789BD Table 2: Fail-Safe Option Total Cast Per Ton .Insert Vendors Fail-safe - (Yipping Fee-+Hauling frtanarlo Raallity Name and % Fuel 9urahargo Multiplier Coot llie oh HMu�lnp port Cost) N sands llgplryp. as Location (W lCalcu atlon(one° Simi Valley Landfill 1. 15-35% Insert Multiplier: 125 5100 $tton 2780 &eon 78.80 Elton Simi Valley, CA Otay Mesa Landfill 2. 15-35% Insert Multlpller:1 80 57.60 .$/Ton 25.20 $Ron 12 Bn Snon Chula Vista CA South Yuma County Landfill Insert Multiplier: 4.23 3' Yuma,AZ 15-35% 30.00 $Ron 5424 d✓ron B4.24 $non 4 La Paz County Landfill 15-35% Insert Multiplier: 4.11 P 37.20 _Mon 43.20 $/ton 8040 $Iron Parker,AZ EXHIBIT B Page 3 of 4 Specification No. 5-2016-789BD Table 3: Compost Delivery Total Cost Per Ton Fuel Surcharge Mulitiplier (Compost Product Cost+ Scenario Name of Delivery Compost Product Hauling Cost) # Location Cos[ Hauling Cos[ (Without Fuel Surcharge Calculation(FSC]) 1 OCSD Plant No.1 Insert Multiplier: We n/a E/Pon nla ,4Kon no charge Elton or Plant No.2 Other OCSD member 2. agencies location within Insert Multiplier:2.09 0 00 Saon 23 6n Mton 23 50 $Iton OCSD service area The following fors Is maulmd submittal and must be uploaded as a separate file online. 1. Bid Price Form(Exhibit B) Nursery Products. LLC n/a n/a Name Fire CA Contractor License(if applicable) E Ian ate .leff MehWg Address Authorized Agent(Printed or Typed) I ure San Clem, te, A 92673 714-287-7654 City,State&Zip Telephone No. Date 949-366-2117 ieff.mebergOgmail.com F. E-Mail EXHIBIT B Page 4 of 4 Specification No. 5-2016-789BD SERVICE CONTRACT Biosolids Composting & Hauling Services—Secondary Contractor Specification No. S-2016-789BD THIS CONTRACT 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 92708-7018 (hereinafter referred to as "OCSD") and Liberty Composting, Inc. with a principal place of business at 12421 Holloway Road, Lost Hills, CA 93249 (hereinafter referred to as "Secondary Contractor")collectively referred to as the"Parties". WITNESSETH WHEREAS, OCSD desires to retain the services of Secondary Contractor for Biosolids Composting & Hauling Services"Services"; and WHEREAS, OCSD has chosen Secondary Contractor to conduct Services in accordance with Ordinance No. OCSD-47; and WHEREAS, on November 16, 2016, the Board of Directors of OCSD, by minute order, authorized execution of this Contract between OCSD and Secondary Contractor; and WHEREAS, Secondary Contractor is qualified by virtue of experience, training, and education and expertise to accomplish such Services, NOW THEREFORE, in consideration of the promises and mutual benefits exchanged between the Parties, it is mutually agreed as follows: 1. Introduction 1.1 This Contract and all exhibits hereto (called the"Contract") is made by OCSD and Secondary Contractor. The Terms and Conditions herein exclusively govern the purchase of Services as described in the Scope of Work, attached hereto and incorporated herein by reference as Exhibit"A". 1.2 Exhibits to this Contract are incorporated by reference and made a part of this Contract as though fully set forth at length herein. Exhibits to this Contract are as follows in order of precedence: Exhibit A: Scope of Work (Including all Appendices) Exhibit B: Bid Price Form Exhibit C: Terms &Conditions for Request for Bid/Proposal Exhibit D: Filing of Protests and Protest Procedures Exhibit E: Not Used Exhibit F: Non-Collusion Affidavit Exhibit G: Acknowledgement of Insurance Exhibit H: Minimum Qualification Requirements Exhibit H-1: Contractor Reference Sheet Exhibit H-1a: Subcontractor Reference Sheet Exhibit H-2: Biosolids Management Plan Exhibit H-3: Biosolids Hauling Plan Exhibit H-4: Truck/Trailer Tables Bidder's Hauling Equipment Exhibit H4a: Truck/Trailer Tables Subcontractor's Hauling Equipment Exhibit H-5: Biosolids Composting Facility Location (Map) Exhibit H-6: Composting Capacity Exhibit H-7: Authorization and Permits Exhibit H-8: Fail-Safe Backup Biosolids Management Option Table Orange County Sanitation District 1 of 9 Specification No. S-2016-789BD 1163654.1 Secondary Contractor 1.3 In the event of any conflict or inconsistency between the provisions of this Contract and any of the provisions of the exhibits hereto, the provisions of this Contract shall in all respects govem and control. 1.4 The provisions of this Contract may be amended or waived only by a writing executed by authorized representatives of both Parties hereto. 1.5 The various headings in this Contract are inserted for convenience only and shall not affect the meaning or interpretation of this Contract or any Paragraph or provision hereof. 1.6 The term "days", when used in the Contract, shall mean calendar days, unless otherwise noted as business days. 1.7 OCSD holidays (non-working days) are as follows: New Year's Day, Lincoln's Birthday, Presidents' Day Monday, Memorial Day Monday, Independence Day, Labor Day Monday, Veterans Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, and Christmas Day. 1.8 The term "hours", when used in this Contract, shall be as defined in Exhibit"A". 1.9 Secondary Contractor shall provide OCSD with all required premiums and/or overtime work at no charge beyond the price provided under"Compensation" below. 1.10 Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by Secondary Contractor as a result of work performed in anticipation of purchases of said services by OCSD. 2. Compensation 2.1 Compensation for this project shall not exceed the estimated total amount of Two Million One Hundred Seven Thousand Eight Hundred Seventy-Five Dollars ($2,107,875.00) Per Year. 2.2 OCSD will pay the Secondary Contractor the unit price of wet tons per day (hereafter"WTPD") of biosolids in accordance with Exhibit"B".The WTPD of biosolids listed in the Exhibit"B"are provided by OCSD, but there will not be a guarantee by OCSD of this WTPD of biosolids. The WTPD of biosolids provided by OCSD may change. 2.3 Secondary Contractor shall take into account fuel surcharge and use fuel surcharge calculation in accordance with Exhibit"B". 2.4 Upon request by the Secondary Contractor, OCSD may review the unit price of WTPD of biosolids after two (2)years from the effective date of the notice to proceed and each year thereafter, and may consider an adjustment to the unit price of WTPD stated in Exhibit "B" by a percentage no greater than the change in the Urban Consumer Price Index (CPI) based on the Secondary Contractor's geographic area of operation for the previous year in accordance with the Bureau of Labor Statistics data. Any unit price adjustment shall only take effect upon written approval from OCSD. 2.5 A request for adjustment to the unit price of WTPD of biosolids maybe made through the OCSD Purchase Order Process. 2.6 OCSD shall not guarantee minimum WTPD of biosolids to the Secondary Contractor. Orange County Sanitation District 2 of 9 Specification No. S-2016-789BD 1163654.1 Secondary Contractor 3. Payments Payments shall be made upon approval by OCSD Project Manager, Tom Meregillano or his designee, of invoices submitted for Services completed as described in Exhibit"A" and Exhibit"B". OCSD,at its sole discretion,shall be the determining party as to whether the Services have been satisfactorily completed. 4. Invoices 4.1 OCSD shall pay within 30 days of completion and receipt and approval by OCSD Project Manager of an itemized invoice, in a form acceptable to OCSD to enable audit of the charges thereon. Secondary Contractor shall not pay less than the prevailing wage, if applicable. Invoices shall include the Purchase Order Number. 4.2 Invoices shall be emailed by Secondary Contractor to OCSD Accounts Payable at APStaffCdOCSD.com and reference the following in the subject line: "INVOICE", the Purchase Order number, the Project Manager, Tom Meregillano and S-2016-789BD—Secondary Contractor. 5. Audit Riahts Secondary Contractor agrees that, during the term of this Contract and for a period of three (3) years after its termination, OCSD shall have access to and the right to examine any directly pertinent books, documents,and records of Secondary Contractor relating to the invoices submitted by Secondary Contractor pursuant to this Contract. 6. Project Records Secondary Contractor shall maintain books of record and accounts in which complete entries shall be made to document all deliveries of biosolids. Said books and records shall, upon written request, be subject to inspection by any duly authorized representative of OCSD within 72 hours of the time of the request. 7. Scone of Work Subject to the terms of this Contract, Secondary Contractor shall perform the Services identified in Exhibit "A". Secondary Contractor shall perform said Services in accordance with generally accepted industry and professional standards. 6. Modifications to Scope of Work Requests for modifications to the Scope of Work hereunder can be made by any parties to the Contract. For all modifications that result in a unit price adjustment, the Secondary Contractor shall provide a detailed cost breakdown itemizing all cost associated with the modification, including material, labor, equipment, etc., and all necessary backup documentation to support the unit price adjustment. All requests for modifications and/or any proposed unit price adjustment by the Secondary Contractor shall be reviewed and approved by OCSD which shall promptly advise the Secondary Contractor in writing of the final decision. OCSD reserves the right to agree with or reject any requests for modifications and/or any proposed unit price adjustment. This Contract may be modified or changed only by written instrument in the form of an amendment to this Contract signed by both Parties. 9. Contract Term The Services provided under this Contract shall be completed within five (5) years from the effective date of notice to proceed. 10. Renewals 10.1 OCSD may exercise the option to renew the Contract for up to five(5)one-year periods based upon the criteria set forth in Exhibit"A" Scope of Work, if mutually acceptable contract terms can be negotiated. OCSD shall make no obligation to renew nor give reason if it elects not to renew. 10.2 Renewals may be made through the OCSD Purchase Order Process. Orange County Sanitation District 3 of 9 Specification No. S-2016-789BD 1163654.1 Secondary Contractor 11. Termination 11.1 OCSD reserves the right to terminate this Contract for its convenience, with or without cause, in whole or in part, at any time, by written notice from OCSD of intent to terminate. Upon receipt of a termination notice, Secondary Contractor shall immediately discontinue all work under this Contract (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Secondary Contractor for work performed (cost and fee) to the date of termination. Secondary Contractor expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Contract. Such notice of termination shall terminate this Contract and release OCSD from any further fee, cost or claim hereunder by Secondary Contractor other than for work performed to the date of termination. 11.2 OCSD reserves the right to terminate this Contract immediately upon OCSD's determination that Secondary Contractor is not meeting specification requirements, if the level of service is inadequate, or any other default of this Contract. 11.3 OCSD may also immediately cancel for default of this Contract in whole or in part by written notice to Secondary Contractor: • if Secondary Contractor becomes insolvent or files a petition under the Bankruptcy Act; or • if Secondary Contractor sells its business; or • if Secondary Contractor breaches any of the terms of this Contract; or • if total amount of compensation exceeds the amount authorized under this Contract. 11.4 All OCSD property in the possession or control of Secondary Contractor shall be returned by Secondary Contractor to OCSD upon demand,or at the termination of this Contract,whichever occurs first. 11.5 Secondary Contractor shall notify OCSD in writing within twenty-four hours of an act or event which prevents the Secondary Contractor from lawfully performing the services agreed to herein. Secondary Contractor shall provide OCSD with immediate written notice should it receive any notice or indication, whether formal or informal, of a legal, governmental, judicial, administrative, or similar proceeding, action or enforcement, pending or threatened, that may affect Secondary Contractor's ability to lawfully perform the services required herein. 12. Insurance Secondary Contractor and all Subcontractors shall purchase and maintain, throughout the life of this Contract and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements (attached hereto and incorporated herein as Exhibit "G"). Secondary Contractor and all Subcontractors shall not commence work under this Contract until all required insurance is obtained in a form acceptable to OCSD, nor shall Secondary Contractor allow any Subcontractorto 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 Contract. 13. Indemnification and Hold Harmless Provision Secondary Contractor 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 Secondary Contractor's services under this Contract, or by its Subcontractor or by anyone directly or indirectly employed by Secondary Contractor, and whether such damage or injury shall accrue or be discovered before or after the termination of the Contract. Except as to the sole active negligence of or willful misconduct of OCSD, Secondary Contractor 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 Orange County Sanitation District 4 of 9 Specification No. S-2016-789BD 1163654.1 Secondary Contractor interference with the use of property, arising out of or in connection with Secondary Contractor's performance under the Contract, and/or (b) on account of use of any copyrighted or uncopyrighted material, composition, or process, or any patented or unpatented invention, article or appliance, furnished or used under the Contract,and/or(c)on account of any goods and services provided under this Contract. This indemnification provision shall apply to any acts or omissions, willful misconduct, or negligent misconduct,whether active or passive, on the part of Secondary Contractor of or anyone employed by or working under Secondary Contractor. To the maximum extent permitted by law, Secondary Contractor'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. Secondary Contractor agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD. 14. Safety Standards and Human Resources(HR)Policies OCSD requires all contractors and service providers to follow and ensure their employees and all subcontractors follow all State and Federal regulations as well as OCSD requirements while working at OCSD locations. If during the course of a contract it is discovered that OCSD policies, safety manuals, or contracts do not comply with State or Federal regulations then the Secondary Contractor is required to follow the most stringent regulatory requirement at no additional cost to OCSD. Secondary Contractor and all their employees and Subcontractors, shall adhere to all applicable OCSD Safety Standards and Human Resources Policies found at: OCSD.com, "Doc Central" (bottom of page), under "Safety'. OCSD's Safety Standards and Human Resource Policies are hereby incorporated by reference as though fully set forth herein. In addition to the requirements stated above, Secondary Contractor shall adhere to the following OCSD Safety requirements: SOP-102 PPE, SOP-106 Hearing Conservation Program, SOP-107 Hazard Communication, and Traffic Control. 15. Warranties In addition to the Warranties stated in Exhibit "A", the following shall apply: 15.1 Manufacturer's standard warranty shall apply. All manufacturer warranties will begin at date of completion of this Contract. 15.2 Secondary Contractor's warranty: If, within the 12-month period following completion of its Services, OCSD informs Secondary Contractor that any part of the Services fails to meet the standards required under this Contract, Secondary Contractor shall, within the time agreed to by OCSD and Secondary Contractor, take all such actions as are necessary to correct or complete the noted deficiency(ies) at Secondary Contractor's sole expense. 16. Performance Time is of the essence in the performance of this Contract and the provisions hereof. 17. Force Maieure Neither party shall be liable for delays caused by accident,flood,acts of God, fire, labor trouble, war, acts of government or any other cause beyond its control, but said party shall use reasonable efforts to minimize the extent of the delay. Work affected by a Force Majeure condition may be rescheduled by mutual consent or may be eliminated from the Contract. If, because of Force Majeure,the cost to any party is increased by more than 15%or any party hereto is rendered unable, wholly or in part, to carry out its obligations under this Contract, then such party shall give the other party prompt written notice of the Force Majeure with reasonable details concerning it; thereupon the obligation of the party giving the notice, so far as they are affected by the Force Majeure, shall be suspended during, but no longer than, the continuance of the Force Majeure. Orange County Sanitation District 5 of 9 Specification No. 5-2016-789BD 1163654.1 Secondary Contractor The affected party shall use all possible diligence to remove the Force Majeure as quickly as possible, but the party's obligation shall not be deemed to require the settlement of any strike, lockout, or other labor difficulty contrary to the wishes of the party involved. If, because of Force Majeure, Secondary Contractor's cost is increased,then OCSD agrees to increase the price paid to Secondary Contractor to cover those increased costs for the duration of the Force Majeure. However, if because of Force Majeure, Secondary Contractor's cost is increased by more than 15% then OCSD may suspend performance for the duration of the Force Majeure. 18. Freiaht (F.O.B. Destination) Secondary Contractor assumes full responsibility for all transportation, transportation scheduling, packing, handling, insurance, and other services associated with delivery of all products deemed necessary under this Contract. 19. Familiarity with Work By executing this Contract, Secondary Contractor warrants that: 1) it has investigated the work to be performed; 2) it has investigated the site of the work and is aware of all conditions there; and 3) it understands the facilities, difficulties and restrictions of the work under this Contract. Should Secondary Contractor 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 Secondary Contractor's risk, until written instructions are received from OCSD. 20. Regulatory Requirements Secondary Contractor shall perform all work under this Contract in strict conformance with applicable federal, state, and local regulatory requirements including, but not limited to, 40 CFR 122, 123, 124, 257, 258, 260, 261, and 503, Title 22, 23, and California Water Codes Division 2. 21. Licenses, Permits. Ordinances and Regulations Secondary Contractor represents and warrants to OCSD that it has obtained all licenses, permits, qualification and approvals of whatever nature that are legally required to engage in this work. Any and all fees required by State, County, City and/or municipal laws, codes and/or tariffs that pertain to work performed under the terms of this Contract will be paid by Secondary Contractor. 22. Applicable Laws and Regulations Secondary Contractor shall comply with all applicable federal, state, and local laws, rules, and regulations. Secondary Contractor also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of Secondary Contractor's noncompliance therewith. Any permission required by law to be included herein shall be deemed included as a part of this Contract whether or not specifically referenced. 23. South Coast Air Quality Management District's (SCAQMD) Requirements It is Secondary Contractors 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 contract 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. 24. Governina Law This Contract 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 Contract or the performance thereof. 25. Breach The waiver of either party of any breach or violation of,or default under, any provision of this Contract, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Contract or default thereunder. Any breach by Secondary Contractor to which OCSD does not object shall not operate as a waiver of OCSD's rights to seek remedies available to it for any subsequent breach. Orange County Sanitation District 6 of 9 Specification No. S-2016-789BD 1163654.1 Secondary Contractor 26. Remedies In addition to other remedies available in law or equity,if the Secondary Contractor fails to make delivery of the goods or Services or repudiates its obligations under this Contract, or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services, OCSD may (1) cancel the Contract; (2) recover whatever amount of the purchase price OCSD has paid, and/or (3)"cover'by purchasing, or contracting to purchase, substitute goods or Services for those due from Secondary Contractor. In the event OCSD elects to "cover' as described in (3), OCSD shall be entitled to recover from Secondary Contractor as damages the difference between the cost of the substitute goods or Services and the contract price, together with any incidental or consequential damages. 27. Dispute Resolution 27.1 In the event of a dispute as to the construction or interpretation of this Contract, 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. 27.2 In the event the Parties are unable to timely resolve the dispute through mediation, the issues in dispute shall be submitted to arbitration pursuant to California Code of Civil Procedure, Part 3, Title 9, Sections 1280 at seq. For such purpose, an agreed arbitrator shall be selected, or in the absence of agreement, each party shall select an arbitrator, and those two arbitrators shall select a third. Discovery may be conducted in connection with the arbitration proceeding pursuant to California Code of Civil Procedure Section 1283.05. The arbitrator, or three arbitrators acting as a board, shall take such evidence and make such investigation as deemed appropriate and shall render a written decision on the matter in question. The arbitrator shall decide each and every dispute in accordance with the laws of the State of California. The arbitrator's decision and award shall be subject to review for errors of fact or law in the Superior Court for the County of Orange, with a right of appeal from any judgment issued therein. 2S. Attorney's Fees If any action at law or inequity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Contract, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 29. Survival The provisions of this Contract dealing with Payment, Warranty, Indemnity, and Forum for Enforcement, shall survive termination or expiration of this Contract. 30. Severability If any section, subsection, or provision of this Contract, or any agreement or instrument contemplated hereby, or the application of such section, subsection, or provision is held invalid, the remainder of this Contract or instrument in the application of such section, subsection or provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby, unless the effect of such invalidity shall be to substantially frustrate the expectations of the Parties. 31. Damage to OCSD's Property Any of OCSD's property damaged by Secondary Contractor, any subcontractors or by the personnel of either will be subject to repair or replacement by Secondary Contractor at no cost to OCSD. 32. Disclosure Secondary Contractor agrees not to disclose, to any third party, data or information generated from this project without the prior written consent from OCSD. Orange County Sanitation District 7 of 9 Specification No. S-2016-789BD 1163654.1 Secondary Contractor 33. Independent Contractor The legal relationship between the parties hereto is that of an independent contractor,and nothing herein shall be deemed to make Secondary Contractor an OCSD employee. During the performance of this Contract, Secondary Contractor and its officers, employees, and agents shall act in an independent capacity and shall not act as OCSD's officers, employees, or agents. Secondary Contractor and its officers, employees, and agents shall obtain no rights to any benefits which accrue to OCSD's employees. 34. Limitations upon Subcontracting and Assignment 34.1 Secondary Contractor shall not delegate any duties nor assign any rights under this Contract without the prior written consent of OCSD. Any such attempted delegation or assignment shall be void. 34.2 In the event the Secondary Contractor obtains written approval from the Project Manager to delegate duties, assign rights, substitute an approved Subcontractor and/or introduce a new Subcontractor, the Secondary Contractor shall be as fully responsible to OCSD for the acts, errors and omissions of the Subcontractor(s)and Suppliers and of the person(s)either directly or indirectly employed by the Subcontractor(s) and Suppliers as the Secondary Contractor is for the acts, errors and omissions of persons directly employed by the Secondary Contractor. Nothing contained in the Contract shall create any contractual relationship between any Subcontractor/Supplier and OCSD. 34.3 Each Subcontract and Supplier agreement shall be approved in writing by OCSD and preserve and protect the rights of OCSD, its directors, officers, agents, and employees under the Contract with respect to the work to be performed by the Subcontractor so that subcontracting thereof will not prejudice such rights, and shall allow to the Subcontractor or Supplier, unless specifically provided otherwise in the subcontract agreement, the benefits of all rights, remedies and redress against the Secondary Contractor that the Secondary Contractor, by the Contract documents, has against OCSD. The Secondary Contractor shall make available to each proposed Subcontractor or Supplier, prior to the execution of the subcontract, copies of the Contract documents. 34.4 This section does not and shall not operate to relieve the Secondary Contractor of any duty or liability under the Contract, nor does it create any duty or liability on the part of OCSD. The Secondary Contractor shall have sole responsibility for promptly settling any disputes between its Subcontractors. 35. Third Party Rights Nothing in this Contract shall be construed to give any rights or benefits to anyone other than OCSD and Secondary Contractor. 36. Non-Liability of OCSD Officers and Employees No officer or employee of OCSD shall be personally liable to Secondary Contractor, or any successor-in-interest, in the event of any default or breach by OCSD or for any amount which may become due to Secondary Contractor or to its successor, or for breach of any obligation for the terms of this Contract. 37. Read and Understood By signing this Contract, Secondary Contractor represents that he has read and understood the terms and conditions of the Contract. 38. Authority to Execute The persons executing this Contract on behalf of the Parties warrant that they are duly authorized to execute this Contract and that by executing this Contract, the Parties are formally bound. 39. Entire Contract This Contract 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 8 of 9 Specification No. S-2016-789BD 1163654.1 Secondary Contractor 40. Notices All notices under this Contract must be in writing. Written notice shall be delivered by personal service or 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. Rejection or other refusal to accept or the inability to deliver because of changed address for which no notice was given as provided hereunder shall be deemed to be receipt of the notice, demand or request sent. All notices shall be effective when first received at the following addresses: OCSD: Ludwig R. Lapus, Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Secondary Contractor: Patrick McCarthy Liberty Composting, Inc. 12421 Holloway Road Lost Hills, CA 93249 Each party shall provide the other party written notice of any change in address as soon as practicable. 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 Division Manager LIBERTY COMPOSTING, INC. Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 9 of 9 Specification No. S-2016-789BD 1163654.1 Secondary Contractor �$$Tp LIBERTY COMPOSTING, INC. September 12,2016 ELECTRONIC SUBMITTAL Greg Blakeley,C.PM Contracts,Purchasing&Materials Management Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,CA 927089 RE: BIOSOLIDS COMPOSTING AND HAULING SERVICES REQUEST FOR QUALIFCATIONS STEP 2,BID SPECIFICATION No.S-2016-789BD Dear Mr.Blakeley Liberty Composting is pleased to electronically submit herewith its Bid for Biosolids Composting and Hauling Services for the District's consideration. Please contact us with any questions and we look forward to working with the District on this and form projects should our bid be deemed first or second lowest responsive by the District Regards, Wilson E.Nolan Chief Executive Officer Liberty Composting 12421 Holloway Rd,P.O.Box 5,Lost Hills,CA 93249•(661)797-2914•www.libertyrecyccom Exhibit B BID PRICE FORM For Biosolids Composting and Hauling Services (Step 2 of 2) NOTE: The Bid Price Form must be submitted/uploaded in PlanetBids at the time of Step 2 of 2 submission as a separate file. EXHIBIT B Specification No. S-2016-789BD E%HIBRB I& BID PRICE FORM 8103lHID.4 CWPOSTING AND HAILING SERVICES(STEP 2 OF 23TEP) SPECIFICATION NO. 5-2016-Ta9BD Due Date for Bid Submittal: September 13,MIS M 2:00 P.M_PT. The undersigned does hereby propose to provide services in accordance with all provisions of Step 1 RFO and Step 2 NIB for the following pricing in Tale 1,Table 2 add Table 3 below. Inromplem submittal of requested information may deem the bid as norl+esponswe. The Bid submidal must be uploatled as a separate nest Se Forthe purpose of the Bid Evaluation,Me Demme County Sanitation District(OCSDI will only evaluate the Total Cost Per Ton provided by Me Bidder as referenced below in Table 1: Biosolids Composting and Hauling Services. The Contractor with the lowest responsive and responsible bid is nensidered Me Primary Contrador and Me Contractor with the second lowest responsive and responsible bid is considered the Secondary Contractor. Primary and Secondary Comractors shall not be the same Contractor. NOTE: The allocation of tomeolids between Me Primary Contractor and Me S ondary Cordl'a<for will be based on Table 1: Non�uamnteed Minimum Biosolids Amounts.which ts located in EzhibN A.Scope a Work.Section 421.Bioso4ds Amour fidk Caton. In Tame 1: Biosolids Composting a1M Hauling Services,Bidder shall filhn the Cost Per Ton Tipping Fee,Fuel Surcharge Calculation(FSC)inducing Multiplier. Hauling Cos[and Total Cost Per Ton. In Table 2: Fdfifl a Option,Bidder shall fi1-in Me Fuel Surcharge MuMplier.Cast Per Ton Tipping Fee,Hauling Cost,and TOb it Coal Per Ton. In Tame 3: Compost Delivery,Bidder shall fill-in Me Fuel Suddh rge Multiplier,Compost Product Cost,Hauling Cost,and Total Cost Per Ton. The term M Me carbacl is an initial this(5)year term followed by five(5)one(1)year optional renewals. The tons listed below are tons provided by OCSD,but there will not be a guarantee by OCSD of Mis tonnage in Me contract. The tons provided by OCSD may change on a week-to�basis. The Cost Per Ton Tipping Fee aM Me Hauling Cost quoted by Me Bdce l serve as t base price farall tons managed by Me Bidder In addition,BiCdefs Fuel SuddhaMe Multiplier shall be used N aloulate fuel sadmarge. Tame 2. Fail Safe Option and Table 3: Canposl Delivery will col be mrisidered in the Bid evaluation process,but shall be used to determine cost for Me Fai4Safe Option and Compost Delivery Costs. Table 1: Smsolids Composting and Haulim Services Fuel Surcharge Cakulation(FSC)' Wet T.of Total Cost Per Ton Scenam Bceolds Per %solids Cost Per Ton FSC=A(S3.T50-S2.636N0.97 au Hling coat (Tipping F •Fuel i Day Tipping Fee A=Multiplier os ce Surcharge♦Hauling Cost) Insert Mulbpiier 312 1. IN 1SYv% SD Lbn S 3.13 'ZB.50 Mbn ST.92 ybn PXHIETT B Page 1 A4 Specification No.53016-789BD 1. Bidder shall Mks into account the Fuel Surcharge and use Fuel Surcharge Calwlation and provide a'Multipller(see example below). Far the purpose to determine the lowest responsive and responsible bid,the'Multiplier is multiplied by the difference in diesel cost from an assumed$3.75 monthly average causal fuel price per gallon in California(CA)minus$2.636,which was the base diesel fuel price per gallon in California for May 2016(U.S.Energy Information Administration). See below for explanation of FSC and example. Bidder shall fill4n the designated Cost Per Ton Tipping Fee,Fuel Surcharge induding Multiplier,and Total Cast Per Ton. Faifum w do w may deem the bid as non-responsive. For the purpose of this service moored,Bidder will use the Fuel Surcharge Calwlation below. Fuel Surcharge Cakulation=A(X-2.636)(0.9) • A is the Bidders designated Multiplier(see example below). • X is the average monthly diesel fuel price per gallon for California used for the specific month for billing. Average diesel fuel tote for California is based on U.S.Energy Infonnation Administration(EIA)(w aiauov/oetroleum/aasdiesem. • $2.636 is the base price for diesel fuel(CA)for May 2016(www.eia.00v/petroleum/oasdiesel). The base price is used to cakulale the difference of the cost of diesel fuel with current value. • (0.9)is OCSD shall pay 90%of the calculated fuel surcharge because transportation is accounted in the Consumer Price Index adjustment. Please reference Exhibit E,D Contras(Section 2.4. • Example: Fuel Sumhar0e=0.5($3.]50-$2.636)(0.9)=$0.501 o A=0.5: This is an example Multiplier Mat includes vanables not limited to Total Miles Round Trip,Fuel Efidenoy(mpg),and load(25 tons). Note that this multiplier is an example. Bidder shall provide a multipliep which may include orervariables. o X=$3.750: Mammlyaverageofdieselfuelin CA. Note Mat this value is an example for the bidding process. The Contrackrwillusethe actual previous months average for billing purposes. o Road Price=$2.636: Base price of diesel fuel in CA for May 2016. o Fixed%_(0.9): OCSD shall pay 90%of the calwlated teal surcharge because 4ansporolu m a accounted in the Consumer Price Index adjustment. Please reference Exhibit E,Draft Conrad,Section 2.4. o The fuel surcharge will only apply if the result ofthe calculation is greater than$0.25. Fuel Surcharge Adjustment Billing: The fuel surcharge will only apply if the result of the calculation is greaterman$0.25. EXHIBIT 6 Page 2 of 4 Specifxalu n No.5-2016789BD Table 21 FailSate Option TOWCaM Too SembIwwi WeaOM FaiSab �% FatlS charge Mufiliplier Lost Per Ton COSO a FmdR, eaaE evitia ''� Tipping Fee Hauling Cost (LMSMatFutl e - CaroWSonJFSCJ)/FSCA H.M.Hoopes lea. 1. 13930Hvaway Rea,[ 1535%,. Imee Multiplier: 313 N1 RR Hon 7A 5r1 Hon aA FA SRon Lae Mt CA 93M9 L I1535% Insert MUltipler. Hen pbn 3p0a & tsa5% Is dMultiplier. Han Hon $11ba A n— 1s 4 Multiplier, Hen pion Mba p WB Page344 Spedtisatim W.B 16-789BD TahEi G®oC OeFlar Towl Coot Per T0n Fuel Surcharge MUMipler (Cornpost Precinct Cost+ Sunab Ilaru:at DeNery Coamppetprgtluet HaIli8 Cast Naming Cost) IF I.ocrtion Cast (Nfifnoof Fpel Sorclvge Calcwa4on/F=J) L OCSD Ptar No.t Irsert Mulgpikr. 3.13 tM 1Aw 2a.50 11am 2950 Slbr or M.Ne.3 DBNrac [)me m 2 apamiasbcaB atvddn Invert MUWm,. 3.13 t.gp yye ]8.56 yyr as.w y� OCSD service am Tefu•P�rylpmha eslaWmlrardmW mmlvEeE asawpslflevia t. &]PIU FXm(FAit BI I IRFRTV COYMSTINC. Mr. Naned Flnn GCoemtiaw(IrpfoOb) /��� PO.ROX5.12421HO O4WYROM RIIRICKNCfiVt1HY bfm 8aapoPna Meats>Tnma) Sputa LAST HILLS.G 93249 661-797-2914 69 =16 oa,,sa eB?•V Te§Ivew Dem Par 1 IBIT B Page 4 of 4 Speoricabon No.8-2016-769BD ORANGE COUNTY SANITATION DISTRICT Agenda Terminology Glossary Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOD Biochemical Oxygen Demand CARB California Air Resources Board CASA California Association of Sanitation Agencies CCTV Closed Circuit Television CEQA California Environmental Quality Act CIP Capital Improvement Program CRWQCB California Regional Water Quality Control Board CWA Clean Water Act CWEA California Water Environment Association EIR Environmental Impact Report EMT Executive Management Team EPA U.S. Environmental Protection Agency FOG Fats, Oils, and Grease gpd Gallons per day GWR System Groundwater Replenishment System (also called GWRS) ICS Incident Command System IERP Integrated Emergency Control Plan LOS Level of Service MGD Million gallons per day NACWA National Association of Clean Water Agencies NPDES National Pollutant Discharge Elimination System NWRI National Water Research Institute O&M Operations and Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District COBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration PCSA Professional Consultant Services Agreement POTW Publicly Owned Treatment Works ppm Parts per million PSA Professional Services Agreement RFP Request For Proposal Glossary of Terms and Abbreviations RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board SAWPA Santa Ana Watershed Project Authority SCADA Supervisory Control and Data Acquisition system SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SRF State Revolving Fund SSMP Sanitary Sewer Management Plan SSO Sanitary Sewer Overflow SWRCB State Water Resources Control Board TDS Total Dissolved Solids TMDL Total Maximum Daily Load TSS Total Suspended Solids WDR Waste Discharge Requirements WEF Water Environment Federation WERF Water Environment Research Foundation WIFIA Water Infrastructure Financing and Innovation Act 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. Blogas — 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 farm land or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria —A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere used as indicators of sewage pollution. E. coil are the most common bacteria in wastewater. Glossary of Terms and Abbreviations 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 (D/T) — the dilution at which the majority of the people detect the odor becomes the D/T for that air sample. Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect"). Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons a day of drinking quality water to replenish the local groundwater supply. Levels of Service(LOS)—Goals to support environmental and public expectations for performance. NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S. Environmental Protection Agency (EPA). NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation in order to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility. Publicly-owned Treatment Works(POTW)— Municipal wastewater treatment plant. Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million gallons per day of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban run-off. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge— Untreated solid material created by the treatment of wastewater. Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater. Glossary of Terms and Abbreviations Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed —A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed.