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HomeMy WebLinkAbout12-20-2017 Board Meeting Agenda Packet Orange County Sanitation District Wednesday, December 20, 2017 Regular Meeting of the 6:00 P.M. BOARD OF DIRECTORS Board Room ` 10844 Ellis Avenue Fountain Valley, CA 92708 (714) 593-7433 AGENDA CALL TO ORDER INVOCATION AND PLEDGE OF ALLEGIANCE (Donald P. Wagner, City of Irvine) ROLL CALL (Clerk of the Board) 1. RECEIVE AND FILE MINUTE EXCERPTS OF MEMBER AGENCIES RELATING TO APPOINTMENTS TO THE ORANGE COUNTY SANITATION DISTRICT BOARD OF DIRECTORS (Clerk of the Board) AGENCY DIRECTOR ALT. DIRECTOR Cypress Mariellen Yarc Stacy Berry Midway City Sanitary District Charlie Nguyen Al Krippner (effective 1/1n8) La Habra Tim Shaw Michael Blazey DECLARATION OF QUORUM (Clerk of the Board) PUBLIC COMMENTS: If you wish to address the Board of Directors on any item, please complete a Speaker's Form (located at the table outside of the Board Room) and submit it to the Clerk of the Board or notify the Clerk of the Board the item number on which you wish to speak. Speakers will be recognized by the Chairperson and are requested to limit comments to three minutes. SPECIAL PRESENTATIONS: None. REPORTS: The Board Chairperson and the General Manager may present verbal reports on miscellaneous matters of general interest to the Directors. These reports are for information only and require no action by the Directors. 12/20/2017 OCSD Board of Directors Agenda Page 1 of 9 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 2. APPROVAL OF MINUTES (Clerk of the Board) RECOMMENDATION: Approve the minutes of the Regular Meeting of the Board of Directors Meeting held on November 15, 2017. RECEIVE AND FILE: These items require no action; and without objection, will be so ordered by the Board Chair. 3. COMMITTEE MINUTES (Clerk of the Board) RECOMMENDATION: Receive and file the approved minutes of the following committees: A. Steering Committee Meeting of October 25, 2017 B. Operations Committee Meeting of November 1, 2017 C. Administration Committee Meeting of November 8, 2017 D. Legislative & Public Affairs Committee Meeting of November 13, 2017 4. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF NOVEMBER 2017 (Lorenzo Tyner) RECOMMENDATION: Receive and file the report of the Investment Transactions for the month of November 2017. OPERATIONS COMMITTEE: 5. ANNUAL CCTV CONTRACT WITH FOUR ADDITIONAL RENEWALS TO COMPLY WITH SSMP REQUIREMENTS (Ed Torres) RECOMMENDATION: A. Award Service Contracts for annual CCTV Sewer Inspection Services to two (2) contractors; Hoffman Southwest Corp. (Primary) and Performance Pipeline Technologies (Secondary), for a total amount not to exceed $350,000 for the period February 1, 2018 through January 31, 2019, with four (4) one-year renewal options; and B. Approve a contingency of$35,000 (10%). 12/20/2017 OCSD Board of Directors Agenda Page 2 of 9 6. FLEET VEHICLE PROCUREMENT THROUGH COOPERATIVE PROCUREMENT WITH NATIONAL AUTO FLEET GROUP (Ed Torres) RECOMMENDATION: A. Approve the purchase of ten (10)vehicles as listed below using the National Joint Powers Alliance (NJPA) cooperative Contract Number 120716-NAF with National Auto Fleet Group for a total amount not to exceed $286,809 in accordance with Ordinance No. OCSD-47, Section 2.03(B), Cooperative Purchases: 1. Five (5) new/unused 2018 Ford F-150 (X1C) XL 2WD SuperCab 8' Box$149,813.49; 2. Three (3) new/unused 2018 Ford C-Max Hybrid (P5A) SE FWD $79,040.79; 3. One (1) new/unused 2018 Ford Fusion Energi (POP) SE FWD $32,667.96; 4. One (1) new/unused 2018 Ford Transit Connect Van (S6E) XL SWB with Rear Symmetrical Doors $25,286.82; and B. Approve a contingency of$7,170 (2.5%). 7. PURCHASE OF SIX VAPEX SENTINEL S4 UNITS (Ed Torres) RECOMMENDATION: A. Approve a sole source Purchase Order to VAPEX ENVIRONMENTAL TECHNOLOGIES for six VAPEX Sentinel S4 units (three units for Plant No. 1 and three units for Plant No. 2)for a total amount not to exceed $290,636; and B. Approve a contingency of$14,532 (5%). 8. TIFFANY PUMP STATION ODOR CONTROL FACILITY (Ed Torres) RECOMMENDATION: Approve a Site Access and License Agreement with the Garden Grove Sanitary District (GGSD) to allow utilization of an odor control chemical dosing station and injection of chemicals into the Miller-Holder Interceptor at 12782 Bailey Street in the city of Garden Grove, in a form approved by Special Counsel. 9. SAFETY IMPROVEMENTS PROGRAM, PROJECT NO. J-126 (Rob Thompson) RECOMMENDATION: A. Award a Construction Contract to AMTEK Construction for the Safety 12/20/2017 OCSD Board of Directors Agenda Page 3 of 9 Improvements Program, Contract No. J-126 A and H, for a total amount not to exceed $452,757; and B. Approve a contingency of$45,276 (10%). 10. EDINGER PUMP STATION REHABILITATION STUDY (Rob Thompson) RECOMMENDATION: A. Approve a Professional Services Agreement with Lockwood, Andrews & Newnam, Inc., to provide engineering services for the Edinger Pump Station Rehabilitation Study, Project No. PS15-02, for an amount not to exceed $505,042; and B. Approve a contingency of$50,504 (10%). 11. 2017 FACILITIES MASTER PLAN (Rob Thompson) RECOMMENDATION: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 17-16 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Adopting the 2017 Facilities Master Plan as the Orange County Sanitation District's New Master Plan for Future Capital Planning and Repealing Resolution No. OCSD 09-18." ADMINISTRATION COMMITTEE: 12. 2017 BENEFITS PROGRAM — ONE-TIME FUND REALLOCATION (Celia Chandler) RECOMMENDATION: Approve a one-time reallocation of budgeted funds in the amount of $195,000 to be transferred to group health insurance benefits resulting in a total cost of $12,032,187. The reallocation would not result in an increase to the overall 2017 budget. 13. ENTERPRISE ASSET MANAGEMENT PHASE IV - LOCK OUT TAG OUT (LOTO) (Lorenzo Tyner) RECOMMENDATION: A. Approve a Professional Services Agreement with Total Resource Management, Inc.for IBM-Maximo Enterprise Asset Management Phase IV - Lock Out Tag Out (LOTO) Software, Specification No. S-2017-871 BD, for a total amount not to exceed $188,318; and B. Approve a contingency in the amount of$37,664 (20%). 12/20/2017 OCSD Board of Directors Agenda Page 4 of 9 14. RIGHT OF WAY AND PROPERTY MANAGEMENT SERVICES (Lorenzo Tyner) RECOMMENDATION: A. Approve a Professional Consultant Services Agreement with Paragon Partners Ltd. for Right of Way and Property Management Services, Specification No. CS-2017-879, for the period January 1, 2018 through December 31, 2018, for a total annual amount not to exceed $115,000, with two (2) six-month renewal options; and B. Approve a contingency of$11,500 (10%). 15. INVEST AND/OR REINVEST DISTRICT'S FUNDS (Lorenzo Tyner) RECOMMENDATION: Adopt Resolution No. OCSD 17-17, 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 16-19." 16. ALLIANT INSURANCE SERVICES (Celia Chandler) RECOMMENDATION: A. Approve a Professional Consultant Services Agreement with Alliant Insurance Services, Inc. to act as Broker of Record for the Orange County Sanitation District's assets and operations insurance coverages, Specification No. CS-2017-884-BD, for the period of January 1, 2018 through December 31, 2018 with up to four (4) one-year renewal options; and B. No direct payment from the Sanitation District is provided. The Broker of Record, Alliant Insurance Services, will be compensated through commission that is paid directly by the insurance carriers. 17. ORANGE COUNTY SANITATION DISTRICT WASTEWATER REVENUE PROGRAM RATE STUDY (Lorenzo Tyner) RECOMMENDATION: Receive and file the Orange County Sanitation District's 2017 Wastewater Revenue Program Rate Study completed by Carollo Engineers. 18. PROPOSITION 218 NOTIFICATIONS (Lorenzo Tyner) RECOMMENDATION: Direct staff to prepare and mail Proposition 218 compliant notifications to affected property owners outlining a five-year regional sewer service fee schedule with annual increases of approximately 1.2 percent over the next five fiscal years beginning with Fiscal Year 2018-19. 12/20/2017 OCSD Board of Directors Agenda Page 5 of 9 LEGISLATIVE & PUBLIC AFFAIRS COMMITTEE: 19. LEGISLATIVE/REGULATORY PLAN AND YEAR-END REVIEW (Bob Ghirelli) RECOMMENDATION: Approve the Orange County Sanitation District 2018 Legislative and Regulatory Plan. STEERING COMMITTEE: 20. ADOPTION OF UPDATED RESOLUTION ON RULES OF PROCEDURE (Bob Ghirelli) RECOMMENDATION: Adopt Resolution No. OCSD 17-18, entitled, "A Resolution of the Board of Directors of Orange County Sanitation District Establishing Rules of Procedure for the Conduct of Business of the District, and Repealing Resolution No. OCSD 17-08." 21. DISTRICT 6 TRUNK SEWER RELIEF, PROJECT NO. 6-17 (Rob Thompson) RECOMMENDATION: Approve a contingency increase of $369,930 (10%) to the construction contract with Charles King Co., Inc. for District No. 6 Trunk Sewer Relief, Project No. 6-17, for a total amount not to exceed $739,860 (20%). 22. DEFERRED PAYMENT AGREEMENT REQUEST FOR CHARGES AND FEES OWED BY ONE INDUSTRIAL WASTEWATER DISCHARGE PERMITTEE (Lorenzo Tyner) RECOMMENDATION: Deny the request for a 31d deferred payment agreement for charges and fees owed for sanitary sewer service charges from Aseptic Technology, LLC. NON-CONSENT: None. AB 1234 REPORTS: This is the time of the meeting when Board Members will provide a brief oral report on any conference, meeting, or travel paid by the Sanitation District. 12/20/2017 OCSD Board of Directors Agenda Page 6 of 9 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 potentiallitigation,or personnel matters,pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a)purchase and sale of real property; (b) matters of pending or potential litigation; (c)employment actions or negotiations with employee representatives;or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Board during a permitted closed session and are not available for public inspection. At such time as the Board takes final action on any of these subjects, the minutes will reflect all required disclosures of information. CONVENE IN CLOSED SESSION. (1) CONFERENCE WITH LEGAL COUNSEL RE EXISTING LITIGATION (Government Code Section 54956.9(d)(1)) Number of Cases: 4 Klean Waters, Inc. at al. v. Orange County Sanitation District, at al., United States District Court, Central District of California, Southern Division, Case No. 8:15-cv-00627. Klean Waters, Inc. et al. v. Orange County Sanitation District, et al. United States District Court, Central District of California, Southern Division, Case No. 8:15-cv-01498. Wesley Bauer v. Orange County Sanitation District, Orange County Superior Court, Central Justice Center, Case No. 30-2017-00956252. APP Winddown, LLC et al. v Orange County Sanitation District, United States Bankruptcy Court District of Delaware, Case No. 16-12551, Adversary No. 17-51609. (2) CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section 54956.8) Property: 18350 Mt. Langley St. Fountain Valley, CA APN Nos. 156-154-08 and 156-163-17 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; 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 Cit. Fountain Valley, CA -APN No.156-163-11; 10700 Spencer St. Fountain Valley, CA-APN No.156-163-16; 10700 Spencer Ave. Fountain Valley, CA -APN No.156-154-07; 18386 Mt. Langley St. Fountain Valley, CA-APN No.156-154-06; 12/20/2017 OCSD Board of Directors Agenda Page 7 of 9 18385 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-12; 18401 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-13; 18424 Mt. Langley St. Fountain Valley, CA-APN No.156-154-05; 18435 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-14; 18475 Bandilier .Cir. Fountain Valley, CA -APN No.156-163-15; 10725 Ellis Ave. Fountain Valley, CA -APN No.156-154-04; and 10540 Talbert Ave. Fountain Valley, CA -APN No.156-151-03 Agency negotiators: General Manager, Jim Herberg; Assistant General Manager, Bob Ghirelli; Director of Finance and Administrative Services, Lorenzo Tyner; Director of Engineering, Rob Thompson; Engineering Managers, Kathy Millea and Jeff Mohr; CIP Project Manager, Tom Grant; Kevin Turner and John Gallivan, Cushman and Wakefield. Negotiating parties: K & A Investments LP, APN Nos. 156-154-08 & 156-163-17 Valley Business Park, APN Nos. 156-165-05, 156-165-06, 156-163-07; DK-USA LLC, APN No.156-165-04; Fountain Valley Industrial Parcel 13, APN No.156-165-08; Sukut Real Properties LLC, APN Nos. 156-163-09, 156-163-10, 156-163-11; The Ins Trust Shabtai, Nevon, APN No. 156-163-16; The Ins Trust, APN No. 156-154-07; Fountain Valley Star LLC, APN No. 156-154-06; TN Sheet Metal Inc., APN No. 156-163-12; 18401 Bandilier LLC, APN No. 156-163-13; Phone Lilly Lin-Lin TR, APN No. 156-154-05; JDK Partners, APN No. 156-163-14; Chandler Real Properties, APN No. 156-163-15; Ellis Avenue LLC, APN No. 156-154-04; and SFII Fountain Valley LLC, APN No. 156-151-03 Under negotiation: Instruction to negotiator will concern price and terms of payment. RECONVENE IN REGULAR SESSION. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: 12/20/2017 OCSD Board of Directors Agenda Page 8 of 9 ADJOURNMENT: Adjourn the Board meeting until the Regular Meeting of the Board of Directors on January 24, 2018 at 6:00 p.m. Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations,please contact the Orange County Sanitation District Clerk of the Board's 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. Agenda Postina: 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 once of the Clerk of the Board. Agenda Description: The agenda provides a brief general description of each Rem of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for a Committee or Board Meeting,items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A.Lore Clerk of the Beak (714)593-7433 kloret&,ocsd.com For any questions on the agenda,Committee members may contact staff at: General Manager Jim Hall (714)593-7300 'heibemiR.&d.com Assistant General Manager Bob Ghirelli (714)593-7400 rahirelliaocsid.com Director of Engineering Rob Thompson (714)593-7310 rthomosoneomd.com Director of Environmental Services Jim Colston (714)593-7450 icelstowdlocsd com Director of Finance and Lorenzo Tyner (714)593-7550 Ilvner(alocsd.com Administrative Services Director of Human Resources Celia Chandler (714)593-7202 cchandlendocsd.com Director of Operations 8 Maintenance Ed Torres 714 593-7080 etomes .csd..m 12(20/2017 OCSD Board of Directors Agenda Page 9 of 9 ITEM NO. 2 Orange County Sanitation District MINUTES BOARD MEETING November 15, 2017 �OJNjy SANII'gTjQy Q ? ¢ c, o � FCl/N H E Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 11/15/2017 Minutes of Board Meeting Page 1 of 9 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was called to order by Board Vice-Chairman Dave Shawver on November 15, 2017, at 6:01 p.m., in the Administration Building. Alternate Director Erik Peterson 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 Gregory Seboum, Chair Jesus Silva X Denise Barnes Lucille Kring A Allan Bernstein Chuck Puckett X Robert Collacott Diana Fascenelli X Ellery Deaton Sandra Massa-Lavitt Barbara Delgleize X Erik Peterson X James M. Ferryman Bob Ooten Phil Hawkins X Brooke Jones A Steven Jones Kris Beard X Peter Kim Gerard Goedhart A Al Krippner Charlie Nguyen X Richard Murphy Warren Kusumoto X Steve Nagel Cheryl Brothers A Glenn Parker Cecilia Hupp A Scott Peotter Brad Avery X Tim Shaw Michael Blazey X David Shawver Carol Warren X Fred Smith Virginia Vaughn X Teresa Smith Mark Murphy A Michelle Steel Shawn Nelson A Sal Tinajero David Benavides A Donald Wagner Lynn Schott X Chad Wanke Ward Smith X John Withers Douglas Reinhart X Mariellen Yarc Stacy Berry STAFF MEMBERS PRESENT: Jim Herberg, General Manager; Bob Ghirelli, Assistant General Manager; Celia Chandler, Director of Human Resources; Ed Torres, Director of Operations & Maintenance; Rob Thompson, Director of Engineering; Lorenzo Tyner, Director of Finance & Administrative Services; Kelly Lore, Clerk of the Board; Jennifer Cabral; Pongsakdi Cady; Al Garcia; Tina Knapp; Kathy Millea; Jeff Mohr; Tyler Ramirez; Jim Spears; Paula Zeller. 11/15/2017 Minutes of Board Meeting Page 2 of 9 OTHERS PRESENT: Brad Hogin (General Counsel); Alternate Director Bob Ooten (CMSD); and Dan Bunce, Black & Veatch PUBLIC COMMENTS: No public comments were provided. SPECIAL PRESENTATIONS: None. REPORTS: Mr. Herberg stated that at tonight's Steering Committee meeting, an informational presentation was provided regarding OCSD's proposed rate program. He further stated that the proposed rate program will be presented to the Operations & Administration committees in December with a request for direction to prepare and mail the Proposition 218 notifications at the December Board meeting. Mr. Herberg requested that tonight's Board meeting be adjourned in memory of employee Colleen Blackburn, who was an office assistant in our engineering department since 2004; and retiree Patrick a.k.a "Frenchy" Bourdy, who joined OCSD in 1988, retired in 2010, and who was a recipient of an OCSD Honor Walk brick. Both will be truly missed. Vice-Chair Shawver announced that the State of the District is Friday, November 17 from 8 a.m. to 10 a.m. at Mile Square Golf Course Clubhouse in Fountain Valley and stated that over 110 guests have registered including: Senator Josh Newman and staff from many State and Local dignitaries. Board Chair Seboum arrived at 6:06 p.m. and presided. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve the minutes of the Regular Meeting of the Board of Directors held on October 25, 2017 as corrected. AYES: Barnes; Collacott; Deaton; Ferryman; Kim; R. Murphy; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: Nagel ABSENT: Bernstein; B. Jones (Alternate); S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner 11/15/2017 Minutes of Board Meeting Page 3 of 9 2. PROPOSED BOARD OF DIRECTORS & COMMITTEE MEETING DATES FOR CALENDAR YEAR 2018 (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve the calendar of meeting dates for the 2018 calendar year for meetings of the Board of Directors and the following Committees: Administration, Legislative and Public Affairs, Operations, and Steering. AYES: Barnes; Collacott; Deaton; Ferryman; Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; B. Jones (Alternate); S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner RECEIVE AND FILE: These items require no action; and without objection, will be so ordered by the Board Chair. 3. COMMITTEE MINUTES (Clerk of the Board) Received and filed the approved minutes of the following committees: A. Steering Committee Meeting of September 27, 2017 B. Operations Committee Meeting of October 4, 2017 C. Administration Committee Meeting of October 11, 2017 4. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF OCTOBER 2017 (Lorenzo Tyner) Received and filed the report of the Investment Transactions for the month of October 2017. Alternate Director Brooke Jones arrived at 6:07 p.m. OPERATIONS COMMITTEE: 5. CAPITAL IMPROVEMENT PROGRAM CONTRACT PERFORMANCE REPORT (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Receive and file the Capital Improvement Program Contract Performance Report for the period ending September 30, 2017. AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw; Shawver, F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None 11/15/2017 Minutes of Board Meeting Page 4 of 9 ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner 6. NEWHOPE-PLACENTIA TRUNK REPLACEMENT, PROJECT NO. 2-72 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Approve a Cooperative Agreement between the Orange County Sanitation District and the City of Anaheim for paving, landscaping, and sewer improvements on State College Boulevard along portions of the Newhope-Placentia Trunk Replacement, Segment B, Project No. 2-72B, for an estimated amount of $802,000 to be reimbursed by the City of Anaheim. AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner 7. DIGESTER GAS FACILITIES REHABILITATION, PROJECT NO. J-124 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Professional Design Services Agreement with Brown and Caldwell to provide engineering design services for the Digester Gas Facilities Rehabilitation, Project No. J-124, for an amount not to exceed $11,770,000; and B. Approve a contingency of$1,177,000 (10%). AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw, Shawver, F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner 8. SOLE SOURCE PURCHASE OF A TEFC MOTOR CLOSE COUPLED PUMP #2 FOR STEVE ANDERSON LIFT STATION (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Sole Source Purchase Order Contract to Flo-Systems, Inc. for the purchase of a Totally Enclosed Fan Cooled (TEFC) Motor Close 11/15/2017 Minutes of Board Meeting Page 5 of 9 Coupled Pump from Hidrostal for$211,260, delivered, plus applicable sales tax, for the Steve Anderson Lift Station; and B. Approve a contingency for Flo-Systems, Inc. of$21,126 (10%). AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw; Shawver, F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner 9. LUBRICATION PROGRAM ASSESSMENT (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Purchase Order Contract with Noria Corporation for Lubrication Program Assessment, Spec No. CS-2017-821, for an amount not to exceed $189,584; and B. Approve a contingency of$37,917 (20%). AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Wanks; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner ADMINISTRATION COMMITTEE: 10. GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: A. Receive and file District purchases made under the General Manager's authority and additions to the pre-approved OEM Sole Source List for the period of July 1, 2017 to September 30, 2017; and B. Approve the following ADDITIONS TO PRE-APPROVED Original Equipment Manufacturer (OEM) SOLE SOURCE LIST: • GRAHAM CORPORATION — Liquid Ring Pump • HOWDENROOTS—Aeration Blowers Service (Replaces OEM manufacturer SIEMENS DEMAG DELAVAL TURBOMACHINERY INC. — Name change) 11/15/2017 Minutes of Board Meeting Page 6 of 9 AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw, Shawver, F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner 11. CONSOLIDATED FINANCIAL REPORT FOR FIRST QUARTER ENDED SEPTEMBER 30, 2017 (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Receive and file the Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2017. AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw; Shawver, F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner 12. ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR END JUNE 30, 2017 (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Receive and file the Orange County Sanitation District's Comprehensive Annual Financial Report for the year ended June 30, 2017, 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. AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner 11/15/2017 Minutes of Board Meeting Page 7 of 9 LEGISLATIVE & PUBLIC AFFAIRS COMMITTEE: None. STEERING COMMITTEE: 13. REIMBURSEMENT AGREEMENT WITH ORANGE COUNTY FLOOD CONTROL DISTRICT FOR LANE CHANNEL PROJECT, PROJECT NO. FE16-11 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Approve a Reimbursement Agreement with the Orange County Flood Control District for the protection of the Von Karman Trunk Sewer in the City of Irvine, for an amount not to exceed $414,167. AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw, Shawver, F. Smith; T. Smith; Wanks; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner 14. STRATEGIC PLAN UPDATE (Bob Ghirelli) MOVED, SECONDED, AND DULY CARRIED TO: Approve the 2017 Strategic Plan Update. AYES: Barnes; Collacott; Deaton; Ferryman; B. Jones (Alternate); Kim; R. Murphy; Nagel; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein; S. Jones; Krippner; Peotter; Parker; Steel; Tinajero; and Wagner NON-CONSENT: None. AB 1234 REPORTS: Director Ferryman provided information regarding his recent attendance at meetings of Orange County Council of Governments (OCCOG), Borders Committee, and Santa Ana River Flood Protection Agency (SARFPA.) 11/15/2017 Minutes of Board Meeting Page 8 of 9 CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54956.8 & 54956.9(d)(1): The Board convened in closed session at 6:12 p.m. to discuss one item. Item No. CS-2 was 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. Director Nagel recused himself and left the room during the Closed Session. Directors Brooke Jones and John Withers departed the meeting at 6:13 p.m. RECONVENED IN REGULAR SESSION: The Board reconvened in regular session at 6:20 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: None. ADJOURNMENT: At 6:23 p.m., Chair Sebourn adjourned the meeting until the Regular Meeting of the Board of Directors to be held on December 20, 2017 at 6:00 p.m. in memory of Colleen Blackburn and Patrick Bourdy. Submitted by: Kelly A. Lore Clerk of the Board 11/15/2017 Minutes of Board Meeting Page 9 of 9 ITEM NO. 3 MINUTES OF THE STEERING COMMITTEE Orange County Sanitation District Wednesday, October 25, 2017 at 5:00 p.m. A regular meeting of the Steering Committee of the Orange County Sanitation District was called to order by Chair Sebourn on Wednesday, October 25, 2017 at 5:01 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Greg Sebourn, Board Chair Jim Herberg, General Manager David Shawver, Board Vice-Chair Bob Ghirelli, Assistant General Manager Chad Wanke, Administration Committee Celia Chandler, Director of Human Chair Resources Tim Shaw, Member-At-Large Jim Colston, Director of Environmental Services COMMITTEE MEMBERS ABSENT: Rob Thompson, Director of Engineering John Withers, Operations Committee Ed Torres, Director of Operations & Chair Maintenance Ellery Deaton, Member-At-Large Lorenzo Tyner, Director of Finance & Donald Wagner, Member-At-Large Administrative Services Kelly Lore, Clerk of the Board Jennifer Cabral Mike Dorman AI Garcia Tina Knapp Mark Manzo Kathy Millea Jeff Mohr Tiffany Nguyen Ddaze Phuong Jim Spears OTHERS PRESENT: Brad Hogin, General Counsel Gina Ayala, Orange County Water District Patrick Sheilds, IRWD James Finete, Savage Firsts PUBLIC COMMENTS: No public comments were provided. 10/25/2017 Steering Committee Minutes Page 1 of 4 REPORTS: Chair Sebourn notified the Committee that OCSD has been nominated for OCBC's 7th Annual Turning Red Tape into Red Carpet Award for their Sustainable and Green Development Program. As he and the Vice-Chair are both unable to attend, he extended an invitation to the Steering and Legislative & Public Affairs Committees to attend on behalf of the District. Chair Sebourn reminded the committee that OCSD will be presenting certificates and awards to the winners of the Safety Poster Contest at tonight's Board Meeting. 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 Regular Meeting of the Steering Committee held on September 27, 2017. AYES: Sebourn; Shawver; and Wanke NOES: None ABSTENTIONS: Shaw ABSENT: Deaton Wagner and Withers NON-CONSENT: 2. 10TH ANNIVERSARY OF THE GROUNDWATER REPLENISHMENT SYSTEM (Bob Ghirelli) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve hosting a GWRS 10"' anniversary event in Winter 2018 in cooperation with the Orange County Water District; and B. Approve an additional $20,000,that will be split between Orange County Water District and the Orange County Sanitation District, in the GWRS outreach budget to host a GWRS 1011 anniversary event. AYES: Sebourn; Shaw; Shawver; and Wanke NOES: None ABSTENTIONS: None ABSENT: Deaton Wagner and Withers General Counsel Brad Hogin left the meeting during the discussion and vote of Item No. 3 due to a conflict of interest. 10/25/20117 Steering Committee Minutes Page 2 of 4 3. RATIFY A THREE-PARTY AGREEMENT TO RELOCATE THE FRUIT STREET TRUNK SEWER TO ACCOMMODATE THE OC STREETCAR (Rob Thompson) Director of Engineering Rob Thompson provided an overview of the item. Mr. Herberg and Chair Sebourn responded to questions regarding the terms and conditions of the agreement. MOVED. SECONDED. AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Ratify the Three-Party Agreement (Letter of Intent) between the City of Santa Ana, the Orange County Transportation Authority, and the Orange County Sanitation District which allows for the Orange County Transportation Authority to relocate the existing Fruit Street Trunk Sewer and maintains the existing Agreement with the City of Santa Ana to make new local/lateral connections in exchange for maintaining and cleaning the sewer; and B. Request a legal opinion, if needed, from the Attorney General's Office, AYES: Sebourn; Shaw; Shawver; and Wanke NOES: None ABSTENTIONS: None ABSENT: Deaton Wagner and Withers Chair Sebourn stated that the General Manager has requested that Item No. 4 be pulled from consideration as OCTA has informed him that there is a possible alternative design that is being considered for the 1-405 freeway flyover and, therefore, OCSD anticipates that additional legal services will no longer be required. Hearing no objections, the item was pulled from consideration. ��yy � � pp e LEGAL SERVICES WITH LEWIS BRISAGre eiSGAARD & SMITH, LLP ALB. 6f-BlreetBF6-te:—AUtheriZe-2R-Igef9868-Of� tat sole seurGe Punshase y gfeements Fanspertaten INFORMATION ITEMS: None. CLOSED SESSION: 10/25/2017 Steering Committee Minutes Page 3 of 4 CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54956.9(d)(1): The Committee convened in closed session at 5:26 p.m. to discuss one item. Closed Session Item No. CS-1 was not heard. Confidential minutes of the Closed Session have been prepared in accordance with the above Government Code Section 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 5:37 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: None. ADJOURNMENT: Chair Sebourn declared the meeting adjourned at 5:27 p.m. to the next Steering Committee meeting to be held on Wednesday, November 15, 2017 at 5:00 p.m. Subm itted by: +�� r Board 1 0/2 512 01 7 steering cmanittee Minutes Page 4 d4 MINUTES OF THE OPERATIONS COMMITTEE Orange County Sanitation District Wednesday, November 1, 2017, 5:00 p.m. A regular meeting of the Operations Committee was called to order by Board Chair Sebourn on Wednesday, November 1, 2017 at 5:00 p.m. in the Administration Building. Board Chair Sebourn led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Denise Barnes Jim Herberg, General Manager Allan Bernstein Celia Chandler, Director of Human Resources Robert Collacott Jim Colston, Director of Environmental Services Brooke Jones (Alternate) Rob Thompson, Director of Engineering Steve Jones Ed Torres, Director of Operations & Maintenance Sandra Massa-Lavitt (Alternate) Lorenzo Tyner, Director of Finance & Richard Murphy Administrative Services Tim Shaw Tina Knapp, Deputy Clerk of the Board Fred Smith Cindi Ambrose Mariellen Yarc Jennifer Cabral Greg Sebourn, Board Chair Dean Fisher David Shawver, Board Vice-Chair Alfredo Garcia Kathy Millea COMMITTEE MEMBERS ABSENT: Jeff Mohr John Withers, Chair Man Nguyen Michelle Steel Ddaze Phuong Victoria Pilko Tyler Ramirez Jim Spears Eros Yong OTHERS PRESENT: Brad Hogin, General Counsel Bob Ooten, Alternate Director (CMSD) Dan Bunce, Brown and Caldwell PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Board Chair Sebourn did not provide a report. 1110112017 Operations Committee Minutes Pagel of 6 REPORT OF GENERAL MANAGER: General Manager Jim Herberg did not provide a report. The video regarding the OCSD Capital Improvement Program (CIP) was not shown. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED. SECONDED, and DULY CARRIED TO: Approve Minutes of the October 4, 2017 Operations Committee Meeting. AYES: Barnes, Bernstein, Collacott, B. Jones (Alternate), S. Jones, Murphy, Sebourn, Shawver, F. Smith and Yarc NOES: None ABSTENTIONS: None ABSENT: Massa-Lavitt (Alternate), Shaw, Steel, Withers 2. QUARTERLY ODOR COMPLAINT REPORT (Ed Torres) MOVED. SECONDED, and DULY CARRIED TO: Receive and file the Fiscal Year 2017/18 First Quarter Odor Complaint Summary. AYES: Barnes, Bernstein, Collacott, B. Jones (Alternate), S. Jones, Murphy, Sebourn, Shawver, F. Smith and Yarc NOES: None ABSTENTIONS: None ABSENT: Massa-Lavitt (Alternate), Shaw, Steel, Withers 3. CAPITAL IMPROVEMENT PROGRAM CONTRACT PERFORMANCE REPORT (Rob Thompson) MOVED SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Capital Improvement Program Contract Performance Report for the period ending September 30, 2017. AYES: Barnes, Bernstein, Collacott, B. Jones (Alternate), S. Jones, Murphy, Sebourn, Shawver, F. Smith and Yarc NOES: None ABSTENTIONS: None ABSENT: Massa-Lavitt (Alternate), Shaw, Steel and Withers 11/01/2017 Operations Committee Minutes Page 2 of 6 4. RECTANGULAR PRIMARY CLARIFIER RELIABILITY STUDY AT PLANT NO. 1, PROJECT NO. PS 16.04 (Rob Thompson) MOVED SECONDED. and DULY CARRIED TO: A. Approve a Task Order with RMC Water and Environment, FE15-00-06, to provide engineering design services for the Rectangular Primary Clarifier Reliability Study at Plant No. 1, Project No. PS 16-04, for an amount not to exceed $156,518; and B. Approve a contingency in the amount of$16,000 (10.2%). AYES: Barnes, Bernstein, Collacott, B. Jones (Alternate), S. Jones, Murphy, Sebourn, Shawver, F. Smith and Yarc NOES: None ABSTENTIONS: None ABSENT: Massa-Lavitt (Alternate), Shaw, Steel and Withers 5. NEWHOPE-PLACENTIA TRUNK REPLACEMENT, PROJECT NO. 2-72 (Rob Thompson) MOVED SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: Approve a Cooperative Agreement between the Orange County Sanitation District and the City of Anaheim for paving, landscaping, and sewer improvements on State College Boulevard along portions of the Newhope-Placentia Trunk Replacement, Segment B, Project No. 2-7213, for an estimated amount of$802,000 to be reimbursed by the City of Anaheim. AYES: Barnes, Bernstein, Collacott, B. Jones(Alternate), S. Jones, Murphy, Sebourn, Shawver, F. Smith and Yarc NOES: None ABSTENTIONS: None ABSENT: Massa-Lavitt (Alternate), Shaw, Steel and Withers 5. SLATER PUMP STATION VALVE REPLACEMENTS, PROJECT NO. FE16-14 (Rob Thompson) MOVED SECONDED. and DULY CARRIED TO: A. Delegate authority to the General Manager to approve Task Order FE15- 00-01-03 with Dudek to provide engineering design services for the Slater Pump Station Valve Replacements, Project No. FE16-14,for an amount not to exceed $175,500; and B. Approve a contingency in the amount of$24,500 (14%). AYES: Barnes, Bernstein, Collacott, B. Jones (Alternate), S. Jones, Murphy, Sebourn, Shawver, F. Smith and Yarc 11M1M1] operations Committee Minutes Page 3&6 NOES: None ABSTENTIONS: None ABSENT: Massa-Lavitt (Alternate), Shaw, Steel and Withers Director Shaw arrived at 5:02 p.m. Alternate Director Massa-Lavitt arrived at 5:05 p.m. NON-CONSENT CALENDAR: 7. DIGESTER GAS FACILITIES REHABILITATION, PROJECT NO. J-124 (Rob Thompson) Engineering Manager Jeff Mohr provided a PowerPoint presentation that gave an overview of the project objectives, consultant selection, negotiation approach, and summary of major negotiated changes. MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Professional Design Services Agreement with Brown and Caldwell to provide engineering design services for the Digester Gas Facilities Rehabilitation, Project No. J-124, for an amount not to exceed $11,770,000; and B. Approve a contingency of$1,177,000 (10%). AYES: Barnes, Bernstein, Collacott, B. Jones (Alternate), S. Jones, Massa-Lavitt (Alternate), Murphy, Sebourn, Shaw, Shawver, F. Smith and Yarc NOES: None ABSTENTIONS: None ABSENT: Steel and Withers a. SOLE SOURCE PURCHASE OF A TEFC MOTOR CLOSE COUPLED PUMP #2 FOR STEVE ANDERSON LIFT STATION (Ed Torres) Director of Operations & Maintenance Ed Torres provided background information relative to this item. MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Sole Source Purchase Order Contract to Flo-Systems, Inc. for the purchase of a Totally Enclosed Fan Cooled (TEFC) Motor Close Coupled Pump from Hidrostal for$211,260, delivered, plus applicable sales tax, for the Steve Anderson Lift Station; and B. Approve a contingency for Flo-Systems, Inc. of$21,126 (10%). 11/01/2017 Operations Committee Minutes Page 4 of 6 AYES: Barnes, Bernstein, Collacott, B. Jones (Alternate), S. Jones, Massa-Lavitt (Alternate), Murphy, Sebourn, Shaw, Shawver, F. Smith and Yarc NOES: None ABSTENTIONS: None ABSENT: Steel and Withers Director Shaw left the Board Room at 5:07 p.m. 9. LUBRICATION PROGRAM ASSESSMENT (Ed Torres) Mr. Torres provided background information relative to this item. MOVED, SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Purchase Order Contract with Noria Corporation for Lubrication Program Assessment, Spec No. CS-2017-821, for an amount not to exceed $189,584; and B. Approve a contingency of$37,917 (20%). AYES: Barnes, Bernstein, Collacott, B. Jones (Alternate), S. Jones, Massa-Lavitt (Alternate), Murphy, Sebourn, Shawver, F. Smith and Yarc NOES: None ABSTENTIONS: None ABSENT: Shaw, Steel and Withers Director Shaw returned to the Board Room at 5:08 p.m. 10. PLANT NO. 1 CONTROL CENTER UPS REPLACEMENT, PROJECT NO. MP-234 (Ed Torres) MOVED, SECONDED, and DULY CARRIED TO: A. Approve a Purchase Order contract for the purchase and installation of an uninterruptible power supply (UPS) system for the Plant No. 1 Control Center using the U.S. Communities Master Agreement No. MA-IS- 1340234-4 to Graybar Electric, for an amount not to exceed $104,704; and B. Approve a contingency of$20,941 (20%). AYES: Barnes, Bernstein, Collacott, B. Jones (Alternate), S. Jones, Massa-Lavitt (Alternate), Murphy, Sebourn, Shaw, Shawver, F. Smith and Yarc NOES: None ABSTENTIONS: None ABSENT: Steel and Withers 11/01/2017 Operations Committee Minutes Page 5 of 6 INFORMATION ITEMS: None. DEPARTMENT HEAD REPORTS: Mr. Torres reported that, over the last two years, multiple agencies (including OCSD) have received calls regarding coastal odors from the Long Beach, Seal Beach, and Huntington Beach areas. Reports that are received that may potentially involve OCSD are investigated; however, there seem to be ongoing Issues in certain areas that are unrelated to OCSD Mr. Torres indicated that OCSD has joined a multi-agency taskforce that is researching these odor issues. This month, the City of Huntington Beach City Council created an Ad Hoc Committee to research these odor complaints and OCSD will cooperate with this committee. Mr. Torres confirmed OCSD's continued commitment to researching this issue. Board Chair Sebourn recommended that OCSD continue to be engaged and involved in researching this matter. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None, ADJOURNMENT Board Chair Sebourn declared the meeting adjourned at 5:16 p.m. to the next scheduled meeting of Wednesday, December 6, 2017 at 5:00 p.m. Submitted by, Tina Knapp, CMC Deputy Clerk of the Board 11/012017 Operations Committee Minutes Page 6 of 6 MINUTES OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, November 8, 2017 at 5:00 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was railed to order by Committee Chair Wanke on November 8, 2017 at 5:02 p.m. in the Administration Building of the Orange County Sanitation District. Director Teresa Smith led the Flag Salute. Committee Chair Wanks stated that Board Vice-Chair Shawver was excused from the meeting due to a conflict. A quorum was declared present as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Chad Wanke, Chair Jim Herberg, General Manager Jim Ferryman Bob Ghirelli, Assistant General Manager Peter Kim Celia Chandler, Director of Human Resources Al Krippner Jim Colston, Director of Environmental Steve Nagel Services Scott Peotter Rob Thompson, Director of Engineering Theresa Smith Ed Torres, Director of Operations & Greg Sebourn, Board Chair Maintenance Lorenzo Tyner, Director of Finance & COMMITTEE MEMBERS ABSENT: Administrative Services Donald P. Wagner, Vice-Chair Kelly Lore, Clerk of the Board Barbara Delgleize Jennifer Cabral Glenn Parker Al Garcia Sal Tinajero Man Nguyen David Shawver, Board Vice-Chair Ddaze Phuong Tyler Ramirez Mike White OTHERS PRESENT: Brad Hogin, General Counsel Peter George, MGO Ann Fang, MGO PUBLIC COMMENTS: None. 11/08/2017 Administration CammiRes Minutes Page 1 of REPORTS: General Manager Jim Herberg presented the CIP Video informational video that is part of the new OCSD video library. Committee Chair Wanke did not provide a report. DEPARTMENT HEAD REPORTS: Director of Finance &Administrative Services Lorenzo Tyner informed the committee that OCSD received the Excellence in Information Technology Practices Award presented by the Municipal Information Systems Association of California (MISAC). The OCSD IT Division has won this award each year since 2008. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the October 11, 2017 Administration Committee Meeting. AYES: Ferryman, Kim, Krippner, Nagel, Peotter, Sebourn, and Wanke NOES: None ABSTENTIONS: T. Smith ABSENT: Delgleize, Parker, Shawver, Tinajero and Wagner 2 GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Receive and file District purchases made under the General Manager's authority and additions to the pre-approved OEM Sole Source List for the period of July 1, 2017 to September 30, 2017; and B. Approve the following ADDITIONS TO PRE-APPROVED Original Equipment Manufacturer(OEM) SOLE SOURCE LIST: • GRAHAM CORPORATION — Liquid Ring Pump • HOWDEN ROOTS—Aeration Blowers Service (Replaces OEM manufacturer SIEMENS DEMAG DELAVAL TURBOMACHINERY INC. — Name change) AYES: Ferryman, Kim, Krippner, Nagel, Peotter, Seboum, T. Smith and Wanke NOES: None ABSTENTIONS: None ABSENT: Delgleize, Parker, Shawver, Tinajero and Wagner 11/08/2017 Administration Committee Minutes Page 2 of 4 Item pulled and heard separately. 3. CONSOLIDATED FINANCIAL REPORT FOR FIRST QUARTER ENDED SEPTEMBER 30, 2017 (Lorenzo Tyner) Director Peotter requested that Item No. 3 be pulled from the Consent Calendar so that a presentation as to the comparison of investments and how they are performing compared to the market could be done. Mr Tyner stated that an informational item will be brought to the Administration Committee in February. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2017. AYES: Ferryman, Krippner, Nagel, Peotter, Sebourn, T. Smith and Wanke NOES: None ABSTENTIONS: Kim ABSENT: Delgleize, Parker, Tinajero; Shaviver, and Wagner NON-CONSENT: Committee Vice-Chair Wagner arrived at the meeting at 5:20 p.m. 4. ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR END JUNE 30, 2017 (Lorenzo Tyner) Mr. Tyner introduced Controller Mike White who in turn introduced Accounting Supervisor Una Hsiao. Ms. Hsiao provided an informative PowerPoint presentation which focused on financial measurements, change in net position, cash and investments, and cost. Ms. Hsiao, Mr. White, and Mr. Tyner responded to questions from the Committee. Ms. Hsiao introduced Peter George, CPA from MGO Certified Public Accountants who performed the audit of the District's financial statements. Mr. George distributed a handout describing the objectives, responsibilities, and standards of the audit completed. Mr. George also responded to questions from the Committee. MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District's Comprehensive Annual Financial Report for the year ended June 30, 2017, 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. 11/08/2017 Administration Committee Minutes Page 3 of 4 AYES: Ferryman, Kim, Krippner, Nagel, Peotter, Sebourn, T. Smith Wagner and Wanke NOES: None ABSTENTIONS: None ABSENT: Delgleize, Parker, Shawver, and Tinajero INFORMATION ITEMS: None CLOSED SESSION: None OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: Committee Chair Wanke declared the meeting adjourned at 6:13 p.m.to the next regularly scheduled meeting of Wednesday, December 13, 2017 at 5:00 p.m. Submitted by: Kelly . L re CMC Cler ofUe oard 11/08/2017 Administration Committee Minutes Page 4 of 4 MINUTES OF THE LEGISLATIVE AND PUBLIC AFFAIRS COMMITTEE Orange County Sanitation District Monday, November 13, 2017 at 12:00 p.m. A meeting of the Legislative and Public Affairs Committee was called to order by Chair Sebourn on Monday, November 13, 2017 at 12:03 p.m. in the Administration Building of the Orange County Sanitation District. Director Bernstein led the pledge of allegiance. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Greg Sebourn, Board Chair Bob Ghirelli, Assistant General Manager David Shawver, Board Vice-Chair Jim Colston, Director of Environmental Services Allan Bernstein, Member-At-Large Rob Thompson, Director of Engineering Peter Kim, Member-At-Large Lorenzo Tyner, Director of Finance & Chad Wanks, Member-At-Large Administrative Services John Withers, Member-At-Large Tina Knapp, Deputy Clerk of the Board Jennifer Cabral COMMITTEE MEMBERS ABSENT: Tanya Chong Donald P. Wagner, Member-At-Large Daisy Covarrubias Alfredo Garcia Rebecca Long Kelly Newell Man Nguyen Tyler Ramirez OTHERS PRESENT: Brad Hogin, General Counsel Eric O'Donnell, Townsend Public Affairs Cori Williams, Townsend Public Affairs David French, ENS Resources (via teleconference) Adam Link, California Association of Sanitation Agencies (CASA) PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Chair Sebourn did not provide a report. 11113/2017 Legislative and Public Affairs Committee Minutes Page 1 of 4 REPORT OF GENERAL MANAGER: Assistant General Manager Bob Ghirelli reminded the Committee that the Board of Directors and Steering Committee meetings are a week early this month, on Wednesday, November 15. He also reminded the Committee of the State of the District event being held on Friday, November 17 at Mile Square Park in Fountain Valley. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED. SECONDED and DULY CARRIED TO: Approve minutes for the Committee meeting held on October 9, 2017. AYES: Bernstein, Kim, Seboum, Shawver, Wanke, and Withers NOES: None ABSTENTIONS: None ABSENT: Wagner NON-CONSENT CALENDAR: None. INFORMATION ITEMS: 2. CALIFORNIA ASSOCIATION OF SANITATION AGENCIES (CASA) PRESENTATION (Jim Colston) Jim Colston, Director of Environmental Services, introduced Adam Link, Director of Government Affairs from the California Association of Sanitation Agencies (CASA). Mr. Colston indicated that staff actively participates in CASA in many capacities and on various committees. Mr. Link provided a PowerPoint presentation that reviewed the 2017 legislative year and specific legislation, highlighted upcoming goals for 2018, and provided upcoming meeting and event dates. In response to a question from the Committee, Mr. Link indicated that participation in CASA committees is typically staff oriented due to the technical nature of the matters handled; however, Board Members are always welcome and the conference is a good way to sample what the committees do. Chair Seboum reordered Item No. 3 to follow Item No. 5. 3. CONSTRUCTION COMMUNITY OUTREACH PROGRAM UPDATE (Jennifer Cabral) 4. LEGISLATIVE AFFAIRS UPDATE (Rebecca Long) Rebecca Long, Senior Public Affairs Specialist, introduced David French, ENS Resources, who provided a general update on current tax reform, specifically reporting on the status of municipal bonds. Mr. French also provided an update on 11/13/2017 Legislative au1 Pubic Affairs Committee Minutes Page 2 of 4 the infrastructure policy proposal and changes made to Water Infrastructure Finance and Innovation Act (WIFIA) and the potential that this program be transitioned from a pilot program to permanent program. Ms. Long indicated that 104 individuals have registered for the State of the District event and that the Legislative Plan will be presented to the Committee next month and will include the proposed legislative concepts. Ms. Long indicated that staff will provide the attendance list to the Committee following today's meeting. Eric O'Donnell, Townsend Public Affairs (TPA), provided a PowerPoint presentation pertaining to this item that included a recap of the 2017 legislative session and a recap on major topics of interest (potable reuse, hydrolysis, public records, and parks bond). The presentation also included a preview of the upcoming 2018 legislative session and what might be expected (long term water conservation regulations, tax on water, medical waste, and leadership in the Senate). The presentation also provided information on tours to various legislators. Cori Williams, TPA, continued the presentation, providing an update on the OCSD legislative concepts, as determined by the Committee at the October meeting, that might be developed into proposed legislation: • Legislative Concept 1: Amend Public Contracting Code for Sanitation District to increase the threshold for contracting and/or bidding / Proposed Date to Introduce Legislation: January 2019 • Legislative Concept 2: Amend Public Contracting Code for Sanitation Districts to modify the bid advertising requirement to post construction bid notices in a newspaper/ Proposed Date to Introduce Legislation: January 2019 The Committee indicated that Proposition 218 noticing does not need to dictate the timing of introducing this legislation and requested that staff change the introduction to January 2018, even if initially draft language. • Legislative Concept 3: Design Build Authorization for future OCSD Administration Buildings / Proposed Date to Introduce Legislation: to be determined based on construction timing. The Committee provided a suggestion to monitor this topic to determine the timing of introducing this legislation. 5. PUBLIC AFFAIRS UPDATE (Jennifer Cabral) This item was not discussed. Chair Seboum reordered Item No. 3 to follow Item No. 5. 3. CONSTRUCTION COMMUNITY OUTREACH PROGRAM UPDATE (Jennifer Cabral) Public Affairs Supervisor Jennifer Cabral introduced Senior Staff Analysts Tanya Chong and Daisy Covarrubias, who provided a PowerPoint presentation that 1111312017 Legislative and Public Affairs Committee Minutes Page 3 of 4 included an overview of the construction community outreach program, ways in which outreach is made, and examples of recent construction and the outreach done. Staff indicated that construction outreach is coordinated with odor concerns/incidents. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS. IF ANY: Chair Sebourn reminded the Committee that this month's Steering Committee and Board of Directors meetings are this Wednesday, November 15. It was mentioned that these meetings conflict with an Association of California Cities-Orange County meeting and event. ADJOURNMENT: Chair Sebourn declared the meeting adjourned at 1:22 p.m. to the next Legislative and Public Affairs Committee meeting, Monday, December 11, 2017 at 12:00 p.m. Submitted by: T vv-#Jr-,-, rTp- Tina Knapp, CMC Clerk of the Board 11/132017 Legislative and Public Again Committee Minutes Page 4 of BOARD OF DIRECTORS Meeting Date TOBd.ofDlr. zfzofv AGENDA REPORT IternNamber IemNumber a 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 NOVEMBER 2017 GENERAL MANAGER'S RECOMMENDATION Receive and file the report of the Investment Transactions for the month of November 2017. 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 November 30, 2017. RELEVANT STANDARDS • CA Government Code Section 53607 PRIOR COMMITTEE/BOARD ACTIONS 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 (mm w.ocsd.coml with the complete agenda package: • Report of the Investment Transactions for the month ended November 30, 2017 Page 1 of 1 U.S. Bank Transaction History 11/01/2017 Thru 11/30/2017 Post Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss ACQUISITIONS 11/01/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 28,525.0000 1.000000 -28,525.00 28,525.00 0.00 11/02/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3,524.3000 1.000000 -3,524.30 3,524.30 0.00 11/0212017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,939.9000 1.000000 -1,939.90 1,939.90 0.00 11/06/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 292,123.6300 1.000000 -292,123.63 292,123.63 0.00 11/07/2017 00440EAUl PURCHASED PAR VALUE OF ACE INA HOLDINGS 1,419,000.0000 1.016630 -1,442,597.97 1,442,597.97 0.00 2.875% 11/03/22/W ELLS FARGO SECURITIES,U C/1,419,000 PAR VALUE AT 101.663 11/07/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 417.4800 1.000000 -417.48 417.48 0.00 11/08/2017 06538CCD1 PURCHASED PAR VALUE OF BANK OF TOKYO MITSUBIS C P 1,000.000.0000 0.994965 -994,965.28 994,965.28 0.00 3113/18/MUFG UNION SK NA/MMI/PIMS/IPA11,000,000 PAR VALUE AT 99.496528% 11/08/2017 06538CCD1 PURCHASED PAR VALUE OF BANK OF TOKYO MITSUBIS C P 6,665,000.0000 0.994965 -6,631,443.58 6,631,443.58 0.00 3/13/18/MUFG UNION BK NAIMMI/PIMS/IPA16,665,000 PAR VALUE AT 99.49652783% 11/08/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 250,034.7200 1.000000 -250,034.72 250,034.72 0.00 11/08/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 8,556.4200 1.000000 -8,556.42 8,556.42 0.00 11/09/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,006,720.0000 1.000000 -1,006,720.00 1,006,720.00 0.00 11/09/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 15,800,000.0000 1.000000 -15,800,000.00 15,800,000.00 0.00 11/10/2017 313385QS8 PURCHASED PAR VALUE OF F H L B DISC NTS 5,000,000.0000 0.998863 -4,994,312.50 4,994,312.50 0.00 12/19/17/BONY/rORONTO DOMINION SECURITI/5,000,000 PAR VALUE AT 99.88625% 11/10/2017 89233HAW4 PURCHASED PAR VALUE OF TOYOTA MOTOR CREDIT CO C P 1,300.000.0000 0.997075 -1,296.197.50 1,296,197.50 0.00 1130118/DBTC AMERICAS/COMMERCIAL PAPER/1,300,000 PAR VALUE AT 99.7075% 11/10/2017 91282BP20 PURCHASED PAR VALUE OF U S TREASURY NT 10.000.000.0000 0.998945 -9,989.453.13 9,989,453.13 0.00 0.750%11311181BMO CAPITAL MARKETS CORP/BONDS/10,000,000 PAR VALUE AT 99.8945313% 11/10/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,001,598.3300 1.000000 -1,001,598.33 1,001,598.33 0.00 11/13/2017 00440EAUl PURCHASED PAR VALUE OF ACE INA HOLDINGS 1,620,000.0000 1.016120 -1,646,114.40 1,646,114.40 0.00 2.875%11/03/22/J.P.MORGAN SECURITIES LLC/1,620,000 PAR VALUE AT 101.612% 11/13/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 5,000.000.0000 1.000000 5,000.000.00 5,000,000.00 0.00 11/13/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 28.771.8000 1.000000 -28.771.80 28,771.80 0.00 11/14/2017 313385QC3 PURCHASED PAR VALUE OF F H L B DISC NTS 3,500.000.0000 0.999393 -3,497.876.67 3,497,876.67 0.00 12105/17/NOMURA SECURITIES INTERNATIONA/3,500,000 PAR VALUE AT 99.93933343% 11/15/2017 3137EADP1 PURCHASED PAR VALUE OF F H L M C 500,000,0000 0,998630 499,315.00 499,315.00 0.00 0.875%3/07/18 IMORGAN STANLEY 8 CO.LLC/500,000 PAR VALUE AT 99.863% 11/15/2017 912828P20 PURCHASED PAR VALUE OF U S TREASURY NT 3,000.000.0000 0.998945 -2,996,835.94 2,996,835.94 0.00 0.750%1131/18 ANELLS FARGO SECURITIES,LLC/3,000,000 PAR VALUE AT 11/15/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 705,807.7900 1.000000 -705,807.79 705,807.79 0.00 1 of 8 U.S. Bank Transaction History 11/01/2017 Thru 11/30/2017 PostDate 11/15/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,246,808.7700 1.000000 -2,246,808.77 2,246,808.77 0.00 11/16/2017 00440EAUl PURCHASED PAR VALUE OF ACE INA HOLDINGS 1,130,000.0000 1.012160 -1,143,740.80 1,143,740.80 0.00 2.875% 11/03/22/US BANCORP INVESTMENTS INC./1,130,000 PAR VALUE AT 101.216 11/17/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 5,128.125.0000 1.000000 5,128.125.00 5,128,125.00 0.00 11/20/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 60.633.6000 1.000000 -60.633.60 60,633.60 0.00 11/20/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1.262.5400 1.000000 -1.262.54 1,262.54 0.00 11/21/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 161.322.2500 1.000000 -161.322.25 161,322.25 0.00 11/27/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,000.000.0000 1.000000 -2,000.000.00 2,000,000.00 0.00 11/27/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 52.703.2100 1.000000 -52.703.21 52,703.21 0.00 11/28/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3.188.2500 1.000000 -3.188.25 3,188.25 0.00 11/29/2017 313385SM9 PURCHASED PAR VALUE OF F H L B DISC NTS 2,000.000.0000 0.997830 -1,995.660.00 1,995,660.00 0.00 1131/18/MORGAN STANLEV 8 CO.LLC/2,000,000 PAR VALUE AT 99.783% 11/29/2017 3137EAEK1 PURCHASED PAR VALUE OF F H L M C M T N 1,500.000.0000 0.998890 -1,498.335.00 1,498,335.00 0.00 1.875%11/17120/BMO CAPITAL MARKETS CORPBONDS/1,500,000 PAR VALUE AT 11/30/2017 4581XOCZ9 PURCHASED PAR VALUE OF INTER AMER DEV BK 1,500,000.0000 0,980670 -1,471,005.00 1,471,005.00 0.00 1.750%9/14/22 IRBC CAPITAL MARKETS,LLC/1,500,000 PAR VALUE AT 98.067% 11/30/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 10,000,000.0000 1.000000 -10,000,000.00 10,000,000.00 0.00 11/30/2017 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 10,000,000.0000 1,000000 -10,000,000.00 10,000,00000 0.00 TOTAL ACQUISITIONS 93,916,062.9900 -93,879,915.76 91,115,822.20 0.00 DISPOSITIONS 11/10/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -16,300,751.1700 1.000000 16,300,751.17 -16,300,751,17 0.00 11/14/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -3,497,876.6700 1.000000 3,497,876.67 -3,497,876.67 0.00 11/15/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -3,003,378.0600 1.000000 3,003,378.06 -3,003,378.06 0.00 11/15/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z 500,141.3900 1.000000 500,141.39 -500,141.39 0.00 11/29/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,995,660.0000 1.000000 1,995,660.00 -1,995,660.00 0.00 11/07/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,443,051.2600 1.000000 1,443,051.26 -1,443,051.26 0.00 11/13/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,647,408.1500 1.000000 1,647,408.15 -1,647,408.15 0.00 11/16/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,117,727.2500 1.000000 1,117,727.25 -1,117,727.25 0.00 11/29/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,499,428.7500 1.000000 1,499,428.75 -1,499,428.75 0.00 11/30/2017 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,265,296.6700 1.000000 1,265,296.67 -1,265,296.67 0.00 11/10/2017 3137EADN6 SOLD PAR VALUE OF F H L M C M T N 0.750% 1/12I18/RBC CAPITAL MARKETS, -1,000,000.0000 0.999140 999,140.00 -993,500.00 5,640.00 LLC/1,000,000 PAR VALUE AT 99.914% 11/15/2017 31348SWZ3 PAID DOWN PAR VALUE OF F H L M C#786064 -16.4500 0.000000 16.45 -1605 0.40 2.762%1/01128 OCTOBER FHLMC DUE 11/15/17 2 of U.S. Bank Transaction History 11/01/2017 Thru 11/30/2017 PostDate CUSIPId Explanation Units Price Net Cash Amt Cost Gain/Loss 11/15/2017 3133TCE95 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 3.228% 8/15/32 -1,261.8000 0.000000 1,261.80 -1,263.12 -1.32 11/27/2017 31394JY35 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 6.500% 9/25143 -12,143.1400 7.916535 12,143.14 -13,752.11 -1,608.97 11/27/2017 31371 NUC7 PAID DOWN PAR VALUE OF F N M A#257179 -187.7000 0.000000 187.70 -198.51 -10.81 4.500%4101/28 OCTOBER FNMADUE 11/25/17 11/27/2017 31376KT22 PAID DOWN PAR VALUE OF F N M A#357969 -4,352.7600 0.000000 4,352.76 -4,679.22 -326.46 5.000%9101/35 OCTOBER FNMADUE 11/25/17 11/27/2017 31381PDA3 PAID DOWN PAR VALUE OFF N M A#466397 -636.9800 0.000000 636.98 -623.20 13.78 3.5133%11/01/20 OCTOBER FNMADUE 11/25/17 11/27/2017 31403DJZ3 PAID DOWN PAR VALUE OF F N M A#745580 -2,768.1500 0.000000 2.768.15 -2,975.76 -207.61 5.000%6101/36 OCTOBER FNMADUE 11/25/17 11/27/2017 31403GXF4 PAID DOWN PAR VALUE OF F N M A#748678 -16,9400 0,000000 16.94 -18.21 -1.27 5.000%10/01/33 OCTOBER FNMA DUE 11/25/17 11/27/2017 31406POV8 PAID DOWN PAR VALUE OF F N M A#815971 -9,810.8500 0.000000 9,810.85 -10,546.66 -735.81 5.000%3/01/35 OCTOBER FNMA DUE 11/25/17 11/27/2017 31406XWT5 PAID DOWN PAR VALUE OF F N M A#823358 A83.0000 0.000000 483.00 -479.23 3.77 3.274%2/01135 OCTOBER FNMADUE 11/25/17 11/27/2017 31407BXH7 PAID DOWN PAR VALUE OF F N M A#826080 -756.3600 0.000000 756.36 -813.09 .56.73 5.000%7101/35 OCTOBER FNMADUE 11/25/17 11/27/2017 31410F4V4 PAID DOWN PAR VALUE OF F N M A#888336 4,481,4100 0,000000 4,481.41 4,817.52 -336.11 5.000%7/01/36 OCTOBER FNMA DUE 11/25/17 11/27/2017 3138EG6F6 PAID DOWN PAR VALUE OF F N M A#AL0869 -339.7700 0.000000 339.77 -359.34 -19.57 4.500%6/01/29 OCTOBER FNMADUE 11/25/17 11/27/2017 31417VAV3 PAID DOWN PAR VALUE OF F N M A#MA0022 -733.3900 0.000000 733.39 -775.63 -42.24 4.500%4101129 OCTOBER FNMADUE 11/25/17 11/27/2017 31397QREO PAID DOWN PAR VALUE OF F N M A GTD REMIC 1.113% 2/25/41 -5.436.5800 54.110435 5.436.58 -5,434.88 1.70 11/20/2017 36225CAZ9 PAID DOWN PAR VALUE OF G N M A 11#080023 -191.6000 0.000000 191.60 -194.77 .3.17 2.250%12/20/26 OCTOBER GNMA DUE 11/20/17 11/20/2017 36225CC20 PAID DOWN PAR VALUE OF G N M A 11#080088 -223,7400 0,000000 223.74 -228.63 4.89 2.625% 6/20/27 OCTOBER GNMA DUE 11/20/17 11/20/2017 36225CNM4 PAID DOWN PAR VALUE OF G N M A 1 1#080395 57.8600 0.000000 57.86 -57.34 0.52 2.625% 4/20130 OCTOBER GNMA DUE 11/20/17 11/20/2017 36225CN28 PAID DOWN PAR VALUE OF G N M A 11#080408 -1.529.9500 0.000000 1.529.95 -1,514.41 15.54 2.625% 5120/30 OCTOBER GNMA DUE 11/20/17 11/20/2017 36225DCB8 PAID DOWN PAR VALUE OF G N M A 11#080965 -1.942.7400 0.000000 1.942.74 -1,941.53 1.21 2.750% 7/20/34 OCTOBER GNMA DUE 11/20/17 11/16/2017 3837H4NX9 PAID DOWN PAR VALUE OF G N M A GTD REMIC 1.739% 2/16/30 -905.2700 0.000000 905.27 -905.27 0.00 11/21/2017 43814TAB8 PAID DOWN PAR VALUE OF HONDA AUTO 1,420% 7122/19 -159,446.5500 0.000000 159,446.55 -159,442.74 3.81 3 of U.S. Bank Transaction History 11/01/2017 Thru 11/30/2017 PostDate 11/15/2017 477877AD6 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.070%11/15/18 -175,064.170017.216204 175,064.17 •-175,14623 -82.06 11/15/2017 47786NAB4 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.090% 2/15/19 321,265.8700 0.000000 321,265.87 -321,246.27 19.60 11/15/2017 4778BMAC4 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.360% 4115/20 -35,759.8600 12.574602 35,759.86 35,754.23 5.63 11/15/2017 65476WAB1 PAID DOWN PAR VALUE OF NISSAN AUTO 1.070% 5/15/19 -154,677.8700 0.000000 154,677.87 -154,671.78 6.09 11/15/2017 654747ABO PAID DOWN PAR VALUE OF NISSAN AUTO 1.470% 1/15/20 -6,862.2200 21.876747 6,862.22 -6,862.19 0.03 11/15/2017 89236WAC2 PAID DOWN PAR VALUE OF TOYOTA AUTO 1.120% 2115/19 -165,081.0300 0.000000 165,081.03 -165,056.07 24.96 11/08/2017 06538BY80 MATURED PAR VALUE OF BANK OF TOKYO MITSUBIS C P -1,245,000.0000 1.000000 1,239,296.52 -1,239,296.52 0.00 11/08/17 1,245,000 PAR VALUE AT 100% 11/08/2017 06538BY80 MATURED PAR VALUE OF BANK OF TOKYO MITSUBIS C P -6,640.000.0000 1.000000 6,609.581.42 -6,609,581.42 0.00 11/09/2017 166764BC3 MATURED PAR VALUE OF CHEVRON CORP 1.344%11/09/17 1,000,000 PAR VALUE AT -1,000.000.0000 1.000000 1,000.000.00 -1,000,780.00 -780.00 11/13/2017 313385PEO MATURED PAR VALUE OF F H L B DISC NTS 11/1 311 7 5,000,000 PAR VALUE AT 100% 5,000.000.0000 1.000000 4,993.579.17 -4,993,579.17 0.00 11/27/2017 313385PU4 MATURED PAR VALUE OF F H L B DISC NTS 11/27/17 2,000,000 PAR VALUE AT 100% -2,000.000.0000 1.000000 1,997.393.33 -1,997,393.33 0.00 11/17/2017 3137EABA6 MATURED PAR VALUE OF F H L M C M T N 5.125%11/17/17 5.000,000 PAR VALUE AT 5,000.000.0000 1.000000 5,000.000.00 -5,113,950.00 -113.950.00 11/06/2017 62888UAAB MATURED PAR VALUE OF NCUA GUARANTEED NT 1.81397% -292.123.6300 1.000000 292.123.63 -292,122.31 1.32 11/06/17/DIRECT FROM ISSUER/11/6/17 MATURITY BASED ON ORIGINAL FACE 11/15/2017 912828G20 MATURED PAR VALUE OF U S TREASURY NT 0.875%11/15/172,000,000 PAR VALUE -2,000,000.0000 1.000000 2,000,000.00 -1,989,756.70 10,243.30 TOTAL DISPOSITIONS -57,514,277.0100 57,468,267A5 -34,768,446.91 -102,185.36 OTHER TRANSACTIONS 11/13/2017 912828WUO FED BASIS OF U S TREASURY I P S 0.125% 7/15124 ADJUSTED BY 27560.00 UNITS 0.0000 0.000000 0.00 27,560.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 11/28/2017 912828WUO FED BASIS OF U S TREASURY I P S 0.125% 7/15124 ADJUSTED BY 28496.00 UNITS 0,0000 0,000000 0.00 28,496.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 11/13/2017 912828WUO BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 27560.00 0.0000 0.000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 11/28/2017 912828WUO BOOK VALUE OF U S TREASURY I P S 0.125% 7115124 ADJUSTED BY 28496.00 0.0000 0.000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 11/09/2017 CASH RECEIPT RECD FROM UNION BANK A/C XXXXXX3230 INCOMING WIRES DUE 0.0000 0.000000 15.800.000.00 0.00 0.00 Jul 16 2017 12:WIRE REC'D 1119117 1113 0/201 7 CASH RECEIPT RECD FROM UNION BANK A/C XXXXXX3230 INCOMING WIRES DUE 0,0000 0,000000 10,000,000.00 0.00 0.00 Jul 17 2017 12:WIRE REC'D 11/30/17 11/30/2017 CASH RECEIPT RECD FROM UNION BANK A/C XXXXXX3230 INCOMING WIRES DUE 0.0000 0.000000 10,000,000.00 0.00 0.00 Nov 30 2017 12:WIRE REC'D 11/30/17 11/27/2017 03215PFN4 INTEREST EARNED ON AMRESCO 0.03486% 6/25/29$1 PV ON 267.0000 0.0000 0.000000 267.00 0.00 0.00 SHARES DUE 11/25/2017$0.00003/PV ON 133.743.29 PV DUE 11/25/17 4 of U.S. Bank Transaction History 11/01/2017 Thru 11/30/2017 Post Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 11/08/2017 06538BYBO INTEREST EARNED ON BANK OF TOKYO MITSUBIS C P 11/08/17$1 PV ON 0.0000 0.000000 5,703.48 0.00 0.00 1245000.0000 SHARES DUE 1118120171,245.000 PAR VALUE AT 100% 11/08/2017 06538BY80 INTEREST EARNED ON BANK OF TOKYO MITSUBIS C P 11/08/17$1 PV ON 0.0000 0.000000 30,418.5E 0.00 0.00 6640000.0000 SHARES DUE 11/8/2017 6,640,000 PAR VALUE AT 100% 11/15/2017 084664BT7 INTEREST EARNED ON BERKSHIRE HATHAWAY 3.000% 5/15/22$1 PV ON 0.0000 0.000000 60.000.00 0.00 0.00 4000000.0000 SHARES DUE 11/1 512 01 7 11/09/2017 166764BC3 INTEREST EARNED ON CHEVRON CORP 0,0000 0,000000 6,720.00 0.00 0.00 1.344%11/09/17$1 PV ON 1000000.0000 SHARES DUE 11/9/2017 11/16/2017 166764BG4 INTEREST EARNED ON CHEVRON CORP 2.100% 5/16/21 $1 PV ON 2500000.0000 0.0000 0.000000 26,250.00 0.00 0.00 SHARES DUE 11/16/2017 11/13/2017 313385PEO INTEREST EARNED ON F H L B DISC NITS 11/13/17$1 PV ON 5000000.0000 0.0000 0.000000 6.420.83 0.00 0.00 SHARES DUE 11/13/2017 5,000,000 PAR VALUE AT 100% 11/27/2017 313385PU4 INTEREST EARNED ON F H L B DISC NITS 11/27/17$1 PV ON 2000000.0000 0.0000 0.000000 2.606.67 0.00 0.00 SHARES DUE 11/27/2017 2,000,000 PAR VALUE AT 100% 11/17/2017 3137EABA6 INTEREST EARNED ON F H L M C M T N 5.125%11/17/17$1 PV ON 5000000.0000 0.0000 0,000000 128,125.00 0.00 0.00 SHARES DUE 11/17/2017 11/15/2017 31348SWZ3 INTEREST EARNED ON F H L M C#786064 2.762% 1101/28$1 PV ON 5.1600 SHARES 0.0000 0.000000 5.16 0.00 0.00 DUE 11/15/2017 SEPTEMBER FHLMC DUE 11/15/17 11/15/2017 3133TCE95 INTEREST EARNED ON F H L M C MLTCL MTG 3.228% 8115/32$1 PV ON 75.0600 0.0000 0.000000 75.06 0.00 0.00 SHARES DUE 9/15/2017$0.00269/PV ON 27,903.55 PV DUE 9/15/17 11/28/2017 31398VJ98 INTEREST EARNED ON F H L M C MLTCL MTG 4.251% 1/25/20$1 PV ON 900000.0000 0.0000 0.000000 3.188.25 0.00 0.00 SHARES DUE 11/25/2017 11/27/2017 31394JY35 INTEREST EARNED ON F H L M C MLTCL MTG 6.500% 9125/43$1 PV ON 4854.3300 0,0000 0,000000 4,854.33 0.00 0.00 SHARES DUE 11/25/2017$0.005421PV ON 896,183.5E PV DUE 11/25/17 11/30/2017 3135GOF73 INTEREST EARNED ON F N M A 1.500%11/30/20$1 PV ON 7500000.0000 0.0000 0.000000 56,250.00 0.00 0.00 SHARES DUE 11/30/2017 11/27/2017 31371NUC7 INTEREST EARNED ON F N M A#257179 4.500% 4/01128$1 PV ON 79.6200 0.0000 0.000000 79.62 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 31376KT22 INTEREST EARNED ON F N M A#357969 5.000% 9101135$1 PV ON 589.9600 0.0000 0.000000 589.96 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 31381PDA3 INTEREST EARNED ON F N M A#466397 3.5133%11/01/20$1 PV ON 1034,4600 0,0000 0,000000 1,034.46 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 31403DJZ3 INTEREST EARNED ON F N M A#745580 5.000% 6/01136$1 PV ON 568.4900 0.0000 0.000000 568.49 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 31403GXF4 INTEREST EARNED ON F N M A#748678 5.000%10/01/33$1 PV ON 17.4400 0.0000 0.000000 17.44 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 31406PQY8 INTEREST EARNED ON F N M A#815971 5.000% 3101135$1 PV ON 984.9200 0.0000 0.000000 984.92 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 5 of8 U.S. Bank Transaction History 11/01/2017 Thru 11/30/2017 PostDate 11/27/2017 31406XWT5 INTEREST EARNED ON F N M A#823358 3.274% 2/01135$1 PV ON 362.0600 0.0000 0.000000 362.06 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 31407BXH7 INTEREST EARNED ON F N M A#826080 5.000% 7/01135$1 PV ON 108.6600 0.0000 0.000000 108.66 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 31410F4V4 INTEREST EARNED ON F N M A#888336 5.000% 7101136$1 PV ON 1101.6000 0.0000 0.000000 1.101.60 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 3138EG6F6 INTEREST EARNED ON F N M A#AL0869 4,500% 6/01129$1 PV ON 57.1000 0.0000 0,000000 57.10 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 31417YAY3 INTEREST EARNED ON F N M A#MA0022 4.500% 4/01/29$1 PV ON 94.2100 0.0000 0.000000 94.21 0.00 0.00 SHARES DUE 11/25/2017 OCTOBER FNMA DUE 11/25/17 11/27/2017 31397QREO INTEREST EARNED ON F N M A GTD REMIC 1.113% 2/25/41 $1 PV ON 436.3300 0.0000 0.000000 436.33 0.00 0.00 SHARES DUE 11/25/2017$0.00160/PV ON 273.006.18 PV DUE 11/25/17 11/01/2017 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE 0.0000 0.000000 3.524.30 0.00 0.00 10/31/2017 INTEREST FROM 10/1117 TO 10/31/17 11/01/2017 31846V567 INTEREST EARNED ON FIRST AM GOVT OD FD CL Z UNIT ON 0.0000 SHARES DUE 0,0000 0,000000 1,939.90 0.00 0.00 10/31/2017 INTEREST FROM 10/1/17 TO 10/31/17 11/20/2017 36225CAZ9 INTEREST EARNED ON G N M A I I#080023 2.250%12/20/26$1 PV ON 40.8100 0.0000 0.000000 40.81 0.00 0.00 SHARES DUE 11/20/2017 OCTOBER GNMA DUE 11/20/17 11/20/2017 36225CC20 INTEREST EARNED ON G N M A 11#080088 2.625% 6120127$1 PV ON 55.1400 0.0000 0.000000 55.14 0.00 0.00 SHARES DUE 11/20/2017 OCTOBER GNMA DUE 11/20/17 11/20/2017 36225CNM4 INTEREST EARNED ON G N M A I I40803952.625% 4/20130$1 PV ON 19.7400 0.0000 0.000000 19.74 0.00 0.00 SHARES DUE 11/20/2017 OCTOBER GNMA DUE 11/20/17 11/20/2017 36225CN28 INTEREST EARNED ON G N M A 11#0804082.625% 5/20130$1 PV ON 158.8600 0,0000 0,000000 158.86 0.00 0.00 SHARES DUE 11/20/2017 OCTOBER GNMA DUE 11/20/17 11/20/2017 36225DCB8 INTEREST EARNED ON G N M A I I#0809652.750% 7/20134$1 PV ON 163.1600 0.0000 0.000000 163.16 0.00 0.00 SHARES DUE 11/20/2017 OCTOBER GNMA DUE 11/20/17 11/16/2017 3837H4NX9 INTEREST EARNED ON G N M A GTD REMIC 1.739% 2/16130$1 PV ON 31.4400 0.0000 0.000000 31.44 0.00 0.00 SHARES DUE 11/16/2017$0.00145/PV ON 21.696.49 PV DUE 11/16/17 11/15/2017 43814OAC2 INTEREST EARNED ON HONDA AUTO 1.390% 4115120$1 PV ON 2096.5800 0.0000 0.000000 2,096.58 0.00 0.00 SHARES DUE 11/15/2017$0.00116/PV ON 1,810,000.00 PV DUE 11/15/17 11/21/2017 43814TAB8 INTEREST EARNED ON HONDA AUTO 1.420% 7/22/19$1 PV ON 1875.7000 0,0000 0,000000 1,875.70 0.00 0.00 SHARES DUE 11/21/2017$0.0011 BIPV ON 1,585,099.51 PV DUE 11/21/17 11/20/2017 43814PAB6 INTEREST EARNED ON HONDA AUTO 1.570% 1/21120$1 PV ON 1262.5400 0.0000 0.000000 1,262.54 0.00 0.00 SHARES DUE 11/18/2017$0.00131/PV ON 965,000.00 PV DUE 11/18/17 11/13/2017 4581XOCX4 INTEREST EARNED ON INTER AMER DEV BK 1.625% 5112120$1 PV ON 0.0000 0.000000 28.771.80 0.00 0.00 3035000.0000 SHARES DUE 11/12/2017 11/15/2017 477877AD6 INTEREST EARNED ON JOHN DEERE OWNER 1.070%11/15/18$1 PV ON 245.0500 0.0000 0.000000 245.05 0.00 0.00 SHARES DUE 11/15I2017$0.00089/PV ON 274,819.31 PV DUE 11/15/17 6of8 U.S. Bank Transaction History 11/01/2017 Thru 11/30/2017 Post Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 11/15/2017 47788NAB4 INTEREST EARNED ON JOHN DEERE OWNER 1.090% 2/15/19$1 PV ON 1212.9000 0.0000 0.000000 1,212.90 0.00 0.00 SHARES DUE 11/15/2017$0.000911PV ON 1,335,305.97 PV DUE 11/15/17 11/15/2017 47788MAC4 INTEREST EARNED ON JOHN DEERE OWNER 1.360% 4115/20$1 PV ON 2742.6700 0.0000 0.000000 2.742.67 0.00 0.00 SHARES DUE 11/15/2017$0.001131PV ON 2,420,000.00 PV DUE 11/15/17 11/15/2017 47787XAB3 INTEREST EARNED ON JOHN DEERE OWNER 1.500%10/15/19$1 PV ON 1762.5000 0.0000 0.000000 1,762.50 0.00 0.00 SHARES DUE 11/15/2017$0.00125IPV ON 1,410,000.00 PV DUE 11/15117 11/15/2017 47788BABO INTEREST EARNED ON JOHN DEERE OWNER 1.590% 4/15/20$1 PV ON 0,0000 0,000000 1,272.00 0.00 0.00 960000.0000 SHARES DUE 11/15/2017 11/15/2017 47788BAD6 INTEREST EARNED ON JOHN DEERE OWNER 1.820%10/15/21 $1 PV ON 0.0000 0.000000 1,023.75 0.00 0.00 675000.0000 SHARES DUE 11/15/2017 11/07/2017 6288BUAA8 INTEREST EARNED ON NCUA GUARANTEED NT 1.81397%11/06/17$1 PV ON 0.0000 0.000000 417.48 0.00 0.00 292123.6300 SHARES DUE 11/5/2017 11/01/2017 64971MSE8 INTEREST EARNED ON NEWYORK NY CITY 4.075%11/01/20$1PVON 0.0000 0.000000 28,525.00 0.00 0.00 1400000.0000 SHARES DUE 11/1/2017 11/15/2017 65478WAB1 INTEREST EARNED ON NISSAN AUTO 1.070% 5/15/19$1 PV ON 909.9400 0,0000 0,000000 909.94 0.00 0.00 SHARES DUE 11/15/2017$0.00089IPV ON 1,020,491.92 PV DUE 11/15/17 11/15/2017 654747ABO INTEREST EARNED ON NISSAN AUTO 1.470% 1/15120$1 PV ON 1672.1300 0.0000 0.000000 1,672.13 0.00 0.00 SHARES DUE 11/15/2017$0.001231PV ON 1,365,000.00 PV DUE 11/15/17 11/20/2017 747525AD5 INTEREST EARNED ON OUALCOMM INC 2.250% 5/20120$1 PV ON 5000000.0000 0.0000 0.000000 56.250.00 0.00 0.00 SHARES DUE 11/20/2017 11/15/2017 89236WAC2 INTEREST EARNED ON TOYOTA AUTO 1.120% 2115119$1 PV ON 789.5500 0.0000 0.000000 789.55 0.00 0.00 SHARES DUE 1 1/1 512 01 7$0.00093/PV ON 845,947.39 PV DUE 11/15/17 11/15/2017 912828G20 INTEREST EARNED ON U S TREASURY NT 0,875%11/15117$1 PV ON 0.0000 0,000000 8,750.00 0.00 0.00 2000000.0000 SHARES DUE 11/15/2017 11/30/2017 912828XE5 INTEREST EARNED ON U S TREASURY NT 1.500% 5/31/20$1 PV ON 5000000.0000 0.0000 0.000000 37,500.00 0.00 0.00 SHARES DUE 11/30/2017 11/30/2017 9128281361 INTEREST EARNED ON U S TREASURY NT 1.500%11/30/19$1 PV ON 0.0000 0.000000 56.250.00 0.00 0.00 7500000.0000 SHARES DUE 11/30/2017 11/30/2017 9128281.165 INTEREST EARNED ON U S TREASURY NT 1.750%11/30/21 $1 PV ON 0.0000 0.000000 61.250.00 0.00 0.00 7000000.0000 SHARES DUE 11/30/2017 11/15/2017 91336612,15 INTEREST EARNED ON UNIV OF CALIFORNIA 5.035% 5/15121 $1 PV ON 400000.0000 0.0000 0,000000 10,070.00 0.00 0.00 SHARES DUE 11/15/2017 11/07/2017 00440EAUl PAID ACCRUED INTEREST ON PURCHASE OF ACE INA HOLDINGS 2.875%11/03/22 0.0000 0.000000 453.29 0.00 0.00 11/13/2017 00440EAUl PAID ACCRUED INTEREST ON PURCHASE OF ACE INA HOLDINGS 2.875%11/03/22 0.0000 0.000000 -1,293.75 0.00 0.00 11/16/2017 00440EAUl PAID ACCRUED INTEREST ON PURCHASE OF ACE INA HOLDINGS 2.875%11/03/22 0.0000 0.000000 -1,173.16 0.00 0.00 11/15/2017 3137EADP1 PAID ACCRUED INTEREST ON PURCHASE OF F H L M C 0.875% 3/07/18 0.0000 0.000000 -826.39 0.00 0.00 11/29/2017 3137EAEK1 PAID ACCRUED INTEREST ON PURCHASE OF F H L M C M T N 1.875%11/17/20 0.0000 0.000000 -1,093.75 0.00 0.00 7 of U.S. Bank Transaction History 11/01/2017 Thru 11/30/2017 PostDate 11/30/2017 4581XOCZ9 PAID ACCRUED INTEREST ON PURCHASE OF INTER AMER DEV BK 1.750% 9114/22 0.0000 0.000000 -5,541.67 0.00 0.00 11/10/2017 912828P20 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NIT 0.750% 1/31/18 0.0000 0.000000 -20,788.04 0.00 0.00 11/15/2017 912828P20 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 0.750% 1/31/18 0.0000 0.000000 -6,542.12 0.00 0.00 11/13/2017 912828WUO PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 27560.0000 27,560.0000 0.000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 11/28/2017 912828WUO PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 28496.0000 28.496.0000 0.000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 11/10/2017 3137EADN6 RECEIVED ACCRUED INTEREST ON SALE OF F H L M C M T N 0.750% 1112/18 0.0000 0.000000 2.458.33 0.00 0.00 11/13/2017 912828WUO STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 27560.00 0.0000 0.000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI 11/28/2017 912828WUO STATE COST OF U$TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 28496.00 0,0000 0,000000 0.00 0.00 0.00 UNITS INCREASE TO ADJUST FOR CHANGE IN CPI TOTAL OTHER TRANSACTIONS 56,056.0000 0 36,411,648.31 56,056.00 0.00 80f8 OPERATIONS COMMITTEE Meeting Date TOBd.Of Dir. 12J05/17 12/20/17 AGENDA REPORT IWrnNumber Item Number z s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations and Maintenance SUBJECT: ANNUAL CCTV CONTRACT WITH FOUR ADDITIONAL RENEWALS TO COMPLY WITH SSMP REQUIREMENTS GENERAL MANAGER'S RECOMMENDATION A. Award Service Contracts for annual CCTV Sewer Inspection Services to two (2) contractors; Hoffman Southwest Corp. (Primary) and Performance Pipeline Technologies (Secondary), for a total amount not to exceed $350,000 for the period February 1, 2015 through January 31, 2019, with four(4)one-year renewal options; and B. Approve a contingency of$35,000 (10%). BACKGROUND Sewer inspection and condition assessments are two of the Orange County Sanitation District's (Sanitation District) major preventive maintenance tasks in the approved Sewer System Management Plan (SSMP). The Sanitation District has committed to inspect the entire sewer system per industry (NASSCO) standards every five years. This data is the most critical tool the Sanitation District has in assessing the sewer system condition and preventing catastrophic pipeline failures. The Sanitation District also uses the CCTV data to optimize the cleaning and repairing of the most degraded pipelines,safeguarding public health. RELEVANT STANDARDS • Maintain a proactive asset management program • Maintain a culture of improving efficiency • Protection of Orange County Sanitation District assets PROBLEM The current CCTV contract is on the last renewal cycle and will expire at the end of the 2017 calendar year. Without a new contract in place, the CCTV asset management program will fall behind. Page 1 of 3 PROPOSED SOLUTION The award recommendation is to award to two (2) Contractors (primary & secondary), which will provide continuous service reliability and competitive pricing to the Sanitation District. Staff recommends awarding two CCTV Contracts to the two lowest responsive and responsible bidders, Hoffman Southwest Corp. (Primary) and Performance Pipeline Technologies (Secondary). TIMING CONCERNS A new contract must be in place by January 2018 to avoid program disruptions. RAMIFICATIONS OF NOT TAKING ACTION Without new CCTV contract, the Sanitation District will be out of compliance with the SSMP. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION A Notice Inviting Bids for CCTV Sewer Inspection Services was issued and eight bids were received. The award recommendation is for the two lowest responsive and responsible bidders, Hoffman Southwest Corp. and Performance Pipeline Technologies. Bidders List: Vendor Bid Amount Submit Date Hoffman Southwest Corp. $314,560 11/14/17 10:25 AM Performance Pipeline $352,900 11/14/17 11:18 AM Downstream Services, Inc. $395,960 11/14/17 1:02 PM Innerline Engineering, Inc. $403,540 11/14/17 3:26 PM AIMS/PVIC CA, LLC. $626,350 11/14/17 8:12 AM National Plant Services, Inc. $742,500 11/14/17 11:57 AM Empire Pipe Cleaning $837,290 11/14/17 1:41 PM Pipe and Plant Solutions, Inc. $2,147,500 1 11/14/17 1:35 PM CECA 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 (FY 17-18 Line item: Section 6, Page 76). Project contingency funds will be used for this contract. Date of Approval contract Amount Contingency 12/20/2017 $350,000 $35,000 (10%) ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: • Service Contracts Page 3 of 3 SERVICE CONTRACT CCTV Sewer Inspection Services Specification No. 5-2017-892BD 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 (hereinafter referred to as "OCSD") and Hoffman Southwest Corporation with a principal place of business at 249 South Paseo Tesoro, Walnut, CA 91789 (hereinafter referred to as "Contractor') collectively referred to as the "Parties". WITNESSETH WHEREAS, OCSD desires to temporarily retain the services of Contractor for CCTV Sewer Inspection Services"Services" as described in Exhibit"A"; and WHEREAS, OCSD has chosen Contractor to conduct Services in accordance with Ordinance No. OCSD-47; and WHEREAS, on December 20,2017, the Board of Directors of OCSD, by minute order, authorized execution of this Contract between OCSD and Contractor; and WHEREAS, Contractor is qualified by virtue of experience, training, and expertise to accomplish such Services, NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agree as follows: 1. Introduction 1.1 This Contract and all exhibits hereto (called the "Contract") is made by OCSD and the Contractor. The terms and conditions herein exclusively govern the purchase of Services as described in 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 Exhibit'B" Bid Price Form Exhibit"C" Acknowledgement of Insurance Requirements Exhibit"D" OCSD Safety Standards Exhibit"E" Not Used 1.3 In the event of any conflict or inconsistency between the provisions of this Contract and any of the provisions of the exhibits hereto, the provisions of this Contract shall in all respects govern 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. Orange County Sanitation District 1 of 8 Specification No. 5-2017-892BD Version 052217 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, Memorial Day, Independence Day, Labor Day, 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 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 Contractor as a result of work performed in anticipation of purchases of said services by OCSD. 2. Compensation Compensation to be paid by OCSD to Contractor for the Services provided under this Contract shall be a total amount not exceed Three Hundred Twenty Thousand Dollars ($320,000.00). 3. Payments and Invoicing 3.1 OCSD shall pay, net thirty (30) days, upon receipt and approval, by OCSD's Project Manager or designee, of itemized invoices submitted for Services completed in accordance with Exhibit "A". OCSD, at its sole discretion, shall be the determining party as to whether the Services have been satisfactorily completed. 3.2 Invoices shall be emailed by Contractor to OCSD Accounts Payable at APStaff(&OCSD.com and "INVOICE" with the Purchase Order Number and Specification No. S-2017-892BD shall be referenced in the subject line. 4. Audit Rights 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 Contractor relating to the invoices submitted by Contractor pursuant to this Contract. 5. Scope of Work Subject to the terms of this Contract, Contractor shall perform the Services identified in Exhibit"A". 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 OCSD at any time. All modifications must be made in writing and signed by both Parties. 7. Contract Term The Services provided under this Contract shall be completed within three hundred sixty-five (365)calendar days effective February 1, 2018. 8. Renewals 8.1 OCSD may exercise the option to renew this Contract for up to four (4) one-year periods based upon the criteria set forth in Exhibit W', under the terms and conditions contained herein. OCSD shall make no obligation to renew nor give reason if it elects not to renew. Orange County Sanitation District 2 of 8 Specification No. 5-2017-892BD Version 052217 8.2 This Contract may be renewed by OCSD Purchase Order. 9. Extensions The term of this Contract may be extended only by written instrument signed by both Parties. 10. Performance Time is of the essence in the performance of the provisions hereof. 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,Contractor shall immediately discontinue all work under this Contract (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Contractor for work performed (cost and fee)to the date of termination.Contractor expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Contract. Such notice of termination shall terminate this Contract and release OCSD from any further fee, cost or claim hereunder by 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 Contractor is not complying with the Scope of Work 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 Contractor: • if Contractor becomes insolvent or files a petition under the Bankruptcy Act; or • if Contractor sells its business; or • if Contractor breaches any of the terms of this 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 Contractor shall be returned by Contractor to OCSD upon demand, or at the termination of this Contract, whichever occurs first. 12. Insurance 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 "C"). Contractor shall not commence work under this Contract until all required insurance is obtained in a form acceptable to OCSD, nor shall Contractor allow any subcontractor to commence service pursuant to a subcontract until all insurance required of the subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Contract. 13. Indemnification and Hold Harmless Provision 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 Contractor's services under this Contract, or by its subcontractor(s) or by anyone directly or indirectly employed by 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, 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 interference with the use of property, arising out of or in connection with Contractor's performance under the Contract, and/or (b) on Orange County Sanitation District 3 of 8 Specification No. S-2017-892BD Version 052217 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 Contractor of or anyone employed by or working under Contractor. To the maximum extent permitted by law, Contractors 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. 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. OCSD Safety and Human Resources Policies OCSD requires all Contractor and its subcontractor(s) to follow and ensure their employees follow all Federal, State, and local regulations as well as OCSD Safety Standards while working at OCSD locations. If during the course of the Contract it is discovered that OCSD Safety Standards do not comply with Federal, State, or local regulations, then the Contractor is required to follow the most stringent regulatory requirement at no additional cost to OCSD. Contractor and all of its employees and subcontractors, shall adhere to all applicable OCSD Safety Standards. OCSD's Safety Standards are hereby incorporated by reference as though fully set forth herein in Exhibit"D". 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 shall commence on the date of acceptance by the OCSD Project Manager or designee of the work as complete. 15.2 Contractors Warranty (Guarantee): If within a one (1) year period of completion of all work as specified in Exhibit "A", OCSD informs Contractor that any portion of the Services provided fails to meet the standards required under this Contract, Contractor shall, within the time agreed to by OCSD and Contractor, take all such actions as are necessary to correct or complete the noted deficiency(ies) at Contractors sole expense. 16. Force Majeure 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. 17. Freight(F.O.B. Destination) 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. 18. Familiarity with Work By executing this Contract, Contractor warrants that: 1) it understands the work to be performed; and 2) it understands the facilities, difficulties, and restrictions of the work under this Contract. Should 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 Contractor's risk, until written instructions are received from OCSD. Orange County Sanitation District 4 of 8 Specification No. 5-2017-892BD Version 052217 19. Reaulatony Requirements 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. 20. Licenses, Permits. Ordinances and Reaulations Contractor represents and warrants to OCSD that it has obtained all licenses, permits, qualifications, and approvals of whatever nature that are legally required to engage in this work. Any and all fees required by Federal, State, County, City and/or municipal laws, codes and/or tariffs that pertain to the work performed under the terms of this Contract will be paid by Contractor. 21. Applicable Laws and Reaulations Contractor shall comply with all applicable Federal, State, and local laws, rules, and regulations. Contractor also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of 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. 22. South Coast Air Quality Management District's (SCAQMD) Requirements It is 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. 23. 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 the County of Orange, in the event any action is brought in connection with this Contract or the performance thereof. 24. 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 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. 25. Remedies In addition to other remedies available in law or equity, if the 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 Contractor. In the event OCSD elects to "cover' as described in (3), OCSD shall be entitled to recover from 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. 26. Dispute Resolution 26.1 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 Orange County Sanitation District 5 of 8 Specification No. S-2017-892BD Version 052217 Services of Orange County ("JAMS"), or any similar organization or entity conducting an alternate dispute resolution process. 26.2 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(2)arbitrators shall select a third. Discovery may be conducted in connection with the arbitration proceeding pursuant to California Code of Civil Procedure Section 1283.05. The arbitrator, or three (3) arbitrators acting as a board, shall take such evidence and make such investigation as deemed appropriate and shall render a written decision on the matter in question. The arbitrator shall decide each and every dispute in accordance with the laws of the State of California. The 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. 27. 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. 28. Survival The provisions of this Contract dealing with Payment, Warranty, Indemnity, and Foram for Enforcement, shall survive termination or expiration of this Contract. 29. 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. 30. Damage to OCSD's Propertv Any of OCSD's property damaged by Contractor, any subcontractors or by the personnel of either will be subject to repair or replacement by Contractor at no cost to OCSD. 31. Disclosure Contractor agrees not to disclose, to any third party, data or information generated from this project without the prior written consent from OCSD. 32. Independent Contractor The legal relationship between the parties hereto is that of an independent contractor, and nothing herein shall be deemed to make Contractor an OCSD employee. During the performance of this Contract, Contractor and its officers, employees, and agents shall act in an independent capacity and shall not act as OCSD's officers, employees, or agents. Contractor and its officers, employees, and agents shall obtain no rights to any benefits which accrue to OCSD's employees. 33. Limitations upon Subcontractina and Assignment 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. Third Party Rights Nothing in this Contract shall be construed to give any rights or benefits to anyone other than OCSD and Contractor. Orange County Sanitation District 6 of 8 Specification No. 5-2017-892BD Version 052217 35. Non-Liability of OCSD Officers and Employees No officer or employee of OCSD shall be personally liable to 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 Contractor or to its successor, or for breach of any obligation for the terms of this Contract. 36. Read and Understood By signing this Contract, Contractor represents that he has read and understood the terms and conditions of the Contract. 37. 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. 36. 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 7 of 8 Specification No. S-2017-892BD Version 052217 39. 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: Larry Roberson Senior Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 Contractor: Jason Walborn Manager Hoffman Southwest Corporation 249 South Paseo Tesoro Walnut, CA 91789 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: Gregory C. Seborn, PLS Chair, Board of Directors Dated: By: Kelly Lore Clerk of the Board Dated: By: Contracts, Purchasing and Materials Management Manager HOFFMAN SOUTHWEST CORPORATION Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 8 of 8 Specification No. S-2017-892BD Version 052217 SERVICE CONTRACT CCTV Sewer Inspection Services Specification No. 5-2017-892BD 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 (hereinafter referred to as "OCSD") and Performance Pipeline Technologies with a principal place of business at 5305 Industrial Drive, Huntington Beach, CA 92649 (hereinafter referred to as "Contractor") collectively referred to as the "Parties". WITNESSETH WHEREAS, OCSD desires to temporarily retain the services of Contractor for CCTV Sewer Inspection Services"Services" as described in Exhibit"A"; and WHEREAS, OCSD has chosen Contractor to conduct Services in accordance with Ordinance No. OCSD-47; and WHEREAS, on December 20,2017, the Board of Directors of OCSD, by minute order, authorized execution of this Contract between OCSD and Contractor; and WHEREAS, Contractor is qualified by virtue of experience, training, and expertise to accomplish such Services, NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agree as follows: 1. Introduction 1.1 This Contract and all exhibits hereto (called the "Contract") is made by OCSD and the Contractor. The terms and conditions herein exclusively govern the purchase of Services as described in 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 Exhibit'B" Bid Price Form Exhibit"C" Acknowledgement of Insurance Requirements Exhibit"D" OCSD Safety Standards Exhibit"E" Not Used 1.3 In the event of any conflict or inconsistency between the provisions of this Contract and any of the provisions of the exhibits hereto, the provisions of this Contract shall in all respects govern 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. Orange County Sanitation District 1 of 8 Specification No. 5-2017-892BD Version 052217 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, Memorial Day, Independence Day, Labor Day, 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 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 Contractor as a result of work performed in anticipation of purchases of said services by OCSD. 2. Compensation Compensation to be paid by OCSD to Contractor for the Services provided under this Contract shall be a total amount not exceed Thirty Thousand Dollars ($30.000.00). 3. Payments and Invoicing 3.1 OCSD shall pay, net thirty (30) days, upon receipt and approval, by OCSD's Project Manager or designee, of itemized invoices submitted for Services completed in accordance with Exhibit "A". OCSD, at its sole discretion, shall be the determining party as to whether the Services have been satisfactorily completed. 3.2 Invoices shall be emailed by Contractor to OCSD Accounts Payable at APStaff(&OCSD.com and "INVOICE" with the Purchase Order Number and Specification No. S-2017-892BD shall be referenced in the subject line. 4. Audit Rights 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 Contractor relating to the invoices submitted by Contractor pursuant to this Contract. 5. Scope of Work Subject to the terms of this Contract, Contractor shall perform the Services identified in Exhibit"A". 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 OCSD at any time. All modifications must be made in writing and signed by both Parties. 7. Contract Term The Services provided under this Contract shall be completed within three hundred sixty-five (365)calendar days effective February 1, 2018. 8. Renewals 8.1 OCSD may exercise the option to renew this Contract for up to four (4) one-year periods based upon the criteria set forth in Exhibit W', under the terms and conditions contained herein. OCSD shall make no obligation to renew nor give reason if it elects not to renew. Orange County Sanitation District 2 of 8 Specification No. 5-2017-892BD Version 052217 8.2 This Contract may be renewed by OCSD Purchase Order. 9. Extensions The term of this Contract may be extended only by written instrument signed by both Parties. 10. Performance Time is of the essence in the performance of the provisions hereof. 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,Contractor shall immediately discontinue all work under this Contract (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Contractor for work performed (cost and fee)to the date of termination.Contractor expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Contract. Such notice of termination shall terminate this Contract and release OCSD from any further fee, cost or claim hereunder by 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 Contractor is not complying with the Scope of Work 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 Contractor: • if Contractor becomes insolvent or files a petition under the Bankruptcy Act; or • if Contractor sells its business; or • if Contractor breaches any of the terms of this 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 Contractor shall be returned by Contractor to OCSD upon demand, or at the termination of this Contract, whichever occurs first. 12. Insurance 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 "C"). Contractor shall not commence work under this Contract until all required insurance is obtained in a form acceptable to OCSD, nor shall Contractor allow any subcontractor to commence service pursuant to a subcontract until all insurance required of the subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Contract. 13. Indemnification and Hold Harmless Provision 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 Contractor's services under this Contract, or by its subcontractor(s) or by anyone directly or indirectly employed by 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, 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 interference with the use of property, arising out of or in connection with Contractor's performance under the Contract, and/or (b) on Orange County Sanitation District 3 of 8 Specification No. S-2017-892BD Version 052217 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 Contractor of or anyone employed by or working under Contractor. To the maximum extent permitted by law, Contractors 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. 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. OCSD Safety and Human Resources Policies OCSD requires all Contractor and its subcontractor(s) to follow and ensure their employees follow all Federal, State, and local regulations as well as OCSD Safety Standards while working at OCSD locations. If during the course of the Contract it is discovered that OCSD Safety Standards do not comply with Federal, State, or local regulations, then the Contractor is required to follow the most stringent regulatory requirement at no additional cost to OCSD. Contractor and all of its employees and subcontractors, shall adhere to all applicable OCSD Safety Standards. OCSD's Safety Standards are hereby incorporated by reference as though fully set forth herein in Exhibit"D". 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 shall commence on the date of acceptance by the OCSD Project Manager or designee of the work as complete. 15.2 Contractors Warranty (Guarantee): If within a one (1) year period of completion of all work as specified in Exhibit "A", OCSD informs Contractor that any portion of the Services provided fails to meet the standards required under this Contract, Contractor shall, within the time agreed to by OCSD and Contractor, take all such actions as are necessary to correct or complete the noted deficiency(ies) at Contractors sole expense. 16. Force Majeure 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. 17. Freight(F.O.B. Destination) 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. 18. Familiarity with Work By executing this Contract, Contractor warrants that: 1) it understands the work to be performed; and 2) it understands the facilities, difficulties and restrictions of the work under this Contract. Should 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 Contractor's risk, until written instructions are received from OCSD. Orange County Sanitation District 4 of 8 Specification No. 5-2017-892BD Version 052217 19. Reaulatony Requirements 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. 20. Licenses, Permits. Ordinances and Reaulations Contractor represents and warrants to OCSD that it has obtained all licenses, permits, qualifications, and approvals of whatever nature that are legally required to engage in this work. Any and all fees required by Federal, State, County, City and/or municipal laws, codes and/or tariffs that pertain to the work performed under the terms of this Contract will be paid by Contractor. 21. Applicable Laws and Reaulations Contractor shall comply with all applicable Federal, State, and local laws, rules, and regulations. Contractor also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of 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. 22. South Coast Air Quality Management District's (SCAQMD) Requirements It is 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. 23. 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 the County of Orange, in the event any action is brought in connection with this Contract or the performance thereof. 24. 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 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. 25. Remedies In addition to other remedies available in law or equity, if the 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 Contractor. In the event OCSD elects to "cover' as described in (3), OCSD shall be entitled to recover from 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. 26. Dispute Resolution 26.1 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 Orange County Sanitation District 5 of 8 Specification No. S-2017-892BD Version 052217 Services of Orange County ("JAMS"), or any similar organization or entity conducting an alternate dispute resolution process. 26.2 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(2)arbitrators shall select a third. Discovery may be conducted in connection with the arbitration proceeding pursuant to California Code of Civil Procedure Section 1283.05. The arbitrator, or three (3) arbitrators acting as a board, shall take such evidence and make such investigation as deemed appropriate and shall render a written decision on the matter in question. The arbitrator shall decide each and every dispute in accordance with the laws of the State of California. The 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. 27. 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. 28. Survival The provisions of this Contract dealing with Payment, Warranty, Indemnity, and Foram for Enforcement, shall survive termination or expiration of this Contract. 29. 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. 30. Damage to OCSD's Propertv Any of OCSD's property damaged by Contractor, any subcontractors or by the personnel of either will be subject to repair or replacement by Contractor at no cost to OCSD. 31. Disclosure Contractor agrees not to disclose, to any third party, data or information generated from this project without the prior written consent from OCSD. 32. Independent Contractor The legal relationship between the parties hereto is that of an independent contractor, and nothing herein shall be deemed to make Contractor an OCSD employee. During the performance of this Contract, Contractor and its officers, employees, and agents shall act in an independent capacity and shall not act as OCSD's officers, employees, or agents. Contractor and its officers, employees, and agents shall obtain no rights to any benefits which accrue to OCSD's employees. 33. Limitations upon Subcontractina and Assignment 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. Third Party Rights Nothing in this Contract shall be construed to give any rights or benefits to anyone other than OCSD and Contractor. Orange County Sanitation District 6 of 8 Specification No. 5-2017-892BD Version 052217 35. Non-Liability of OCSD Officers and Employees No officer or employee of OCSD shall be personally liable to 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 Contractor or to its successor, or for breach of any obligation for the terms of this Contract. 36. Read and Understood By signing this Contract, Contractor represents that he has read and understood the terms and conditions of the Contract. 37. 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. 36. 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 7 of 8 Specification No. S-2017-892BD Version 052217 39. 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: Larry Roberson Senior Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 Contractor: Gene Glassburner Owner Performance Pipeline Technologies 5305 Industrial Drive Huntington Beach, CA 92649 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: Gregory C. Seborn, PLS Chair, Board of Directors Dated: By: Kelly Lore Clerk of the Board Dated: By: Contracts, Purchasing and Materials Management Manager PERFORMANCE PIPELINE TECHNOLOGIES Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 8 of 8 Specification No. S-2017-892BD Version 052217 OPERATIONS COMMITTEE Meeting Date TOBd.Ot Dir. 12/0fi/17 12/20/17 AGENDA REPORT emNumber Item Number 3 fi Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations & Maintenance SUBJECT: FLEET VEHICLE PROCUREMENT THROUGH COOPERATIVE PROCUREMENT WITH NATIONAL AUTO FLEET GROUP GENERAL MANAGER'S RECOMMENDATION A. Approve the purchase of ten (10)vehicles as listed below using the National Joint Powers Alliance (NJPA) cooperative Contract Number 120716-NAF with National Auto Fleet Group for a total amount not to exceed $286,809 in accordance with Ordinance No. OCSD47, Section 2.03(B), Cooperative Purchases: 1. Five (5) new/unused 2018 Ford F-150 (X1C) XL 2WD SuperCab 8' Box $149,813.49; 2. Three (3)new/unused 2018 Ford C-Max Hybrid (P5A)SE FWD$79,040.79; 3. One (1) new/unused 2018 Ford Fusion Energi (POP) SE FWD $32,667.96; 4. One (1) new/unused 2018 Ford Transit Connect Van (S6E) XL SWB with Rear Symmetrical Doors $25,286.82; and B. Approve a contingency of$7,170 (2.5%). BACKGROUND The Orange County Sanitation District (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. The average age of the nine vehicles identified for replacement is 18 years. The average purchase cost of these vehicles was $19,398, while the average maintenance and repairs costs for these vehicles is $22,195. In addition to replacing the older vehicles, one new vehicle is being requested to support new staff additions. These purchases are in accordance with cooperative purchasing contracts with National Auto Fleet Group that the Sanitation District is approved to use per the Purchasing Ordinance Section 2.03B. The cost includes California state sales tax and freight. RELEVANT STANDARDS • Participate in National Joint Powers Authority (NJPA) cooperative purchasing program • Consider life-cycle costs in all decisions Page 1 of 3 PROBLEM This purchase is required to provide adequate support for Sanitation District operations and maintenance activities in various departments. The older vehicles experience increased maintenance costs and increased downtime due to the frequency of maintenance and repair. The average cost to maintain these vehicles is $2,800 over the average purchase price. PROPOSED SOLUTION Replace nine aging vehicles and procure one new vehicle for additional staff. RAMIFICATIONS OF NOT TAKING ACTION If these vehicles are not replaced, the Sanitation District will incur excessive maintenance costs and exposure to safety and reliability issues. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Seeking the lowest price, the Sanitation District is utilizing the NJPA agreement. The NJPA is a public agency that serves as a cooperative for over 50,000 member agencies nationally. The Sanitation District is a member of the NJPA at no cost. NJPA offers a multitude of cooperatively contracted products, equipment, and services opportunities to education and government entities throughout the country. As required by SCAQMD Rule 1191, the Sanitation District is required to purchase low emission, zero-emission, and other "green' fleet vehicles whenever possible. These requirements also dictate that the Sanitation District not"back slide"on the ratio of"green" to standard vehicles. This purchase complies with the SCAQMD requirements to maintain the current level of"green"fleet. As information, the Sanitation District has hired a fleet business expert to review our fleet business plans, practices, procedures, policies, and fleet size and composition. The draft report and business plan will be available in early January 2018. 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 2017-2018 Budget Update - Appendix; Line Item: 822-Fleet Services, Pages A20—A21). Date of Approval Contract Amount Contingency 12/20/2017 $286,809 $7,170 (2.5%) Page 2 of 3 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: N/A Page 3 d 3 OPERATIONS COMMITTEE Meeting Date TOBd.Of Dir. S2J05/17 12/20/17 AGENDA REPORT IWrnNumber Item Number a 7 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations and Maintenance SUBJECT: PURCHASE OF SIX VAPEX SENTINEL S4 UNITS GENERAL MANAGER'S RECOMMENDATION A. Approve a sole source Purchase Order to VAPEX ENVIRONMENTAL TECHNOLOGIES for six VAPEX Sentinel S4 units (three units for Plant No. 1 and three units for Plant No. 2)for a total amount not to exceed $290,636; and B. Approve a contingency of $14,532 (5%). BACKGROUND The Orange County Sanitation District (Sanitation District) operates 38 VAPEX units at both plants, including 11 units at Plant No. 1 and 27 units at Plant No. 2. These units monitor and control the scrubbers for foul air treatment and include hydrogen sulfide and chlorine analyzers. RELEVANT STANDARDS • Zero odor incidents/events under normal operating conditions for Plants 1 and 2 • Operate and maintain facilities to minimize impacts on surrounding communities, including odor, noise, and lighting PROBLEM Six VAPEX units have been identified by Operations and Maintenance teams at both plants that are either not operating or they are in poor condition due to unavailability of spare parts. PROPOSED SOLUTION Staff recommends that the Sanitation District purchase six VAPEX Sentinel S4 units to replace the units that are in poor condition. This will prevent any potential odor complaints from the areas surrounding the treatment plants, ensure reliable foul air treatment, and optimize chemical usage at both plants. Page 1 of 2 TIMING CONCERNS Delays in replacing the six VAPEX units could increase the risk of potential odor complaints from the areas surrounding the treatment plants. RAMIFICATIONS OF NOT TAKING ACTION Replacement parts will likely not be available if the units fail, resulting in manual sampling and chemical feeding,which is labor intensive and can result in over and/or under feeding the chemicals. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION VAPEX units have been used for more than 15 years at both plants. The operations team is satisfied with their performance due to effective conditioning and moisture removal of foul air, reliability of performance, and accuracy of readings. So far, the Sanitation District has not been able to identify a reliable alternative analyzer from other manufacturers that would be able to effectively remove moisture from foul air (before introducing to analyzer) and provide stable hydrogen sulfide readings. Staff will continue to evaluate the availability of 1­12S odor sample conditioning and measurement technologies in preparation for the eventual replacement of the remaining 32 VAPEX units. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been carried over to FY17/18 from the FY15/16 budget update, Div. 870 (Line item: 1­12S Wet Gas Analyzers, Section A, Page 21). Date of ADDroval Contract Amount Contlnoencv 12/20/2017 $290,636 $14,532 (5%) 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 OPERATIONS COMMITTEE Meeting Date TOBd.Ot Dir. 12/05/17 12/20/17 AGENDA REPORT emNumber Item Number 6 8 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations and Maintenance SUBJECT: TIFFANY PUMP STATION ODOR CONTROL FACILITY GENERAL MANAGER'S RECOMMENDATION Approve a Site Access and License Agreement with the Garden Grove Sanitary District (GGSD) to allow utilization of an odor control chemical dosing station and injection of chemicals into the Miller-Holder Interceptor at 12782 Bailey Street in the city of Garden Grove, in a form approved by Special Counsel. BACKGROUND The Orange County Sanitation District (Sanitation District) currently treats the Miller-Holder Interceptorfor odor and corrosion with a continuous feed of ferrous chloride from Hager Corporation Yard in the city of Buena Park,on the upper reaches, and Midway City Sanitary District Corporation Yard, on the lower reaches, to control hydrogen sulfide (1-12S) and odor levels within the Miller-Holder System; however, the middle reaches of this trunkline do not receive treatment for odor or corrosion control. RELEVANT STANDARDS • Operate and maintain facilities to minimize impacts on surrounding communities, including odor, noise, and lighting • 12 or fewer odor complaints per year under normal operating conditions in the collections system PROBLEM High levels of vapor hydrogen sulfide (H2S) in the middle part of the Miller-Holder Interceptor has the potential to cause odor nuisances and complaints in the cities of Garden Grove and Westminster. PROPOSED SOLUTION To reduce odor nuisances in the collection system, the Sanitation District implemented an odor and corrosion control program,which includes,among many tools,the application of chemicals in trunk sewers to minimize the hydrogen sulfide production as the wastewater is conveyed from the collection system to the Sanitation District's treatment plants. Staff recommends the addition of a chemical dosing station at the GGSD's Tiffany Pump Station, which is tributary to the middle reach of the Miller-Holder Trunk Sewer. Page 1 d 2 The addition of this application site will address odors along the Miller-Holder Trunk Sewer. RAMIFICATIONS OF NOT TAKING ACTION If not approved, corrosion control cannot be provided at this section of the Miller-Holder Trunk Sewer and there could be a potential for odor complaints in this service area. CEQA The Sanitation District is the lead agency and has determined this project required CEQA documentation for consideration, and filed the Sanitation District's Addendum No. 2 to the Supplemental Environmental Impact Report for the Final Effluent Pump Station Annex and Collection System Odor R Corrosion Control Program, dated September 6, 2017, and Board approved on September 27, 2017 (Item No. 8) to accommodate odor and corrosion control chemical addition at GGSD's Tiffany Pump Station. FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (mm w.ocsd.coml with the complete agenda package: • Site Access and License Agreement Page 2 of 2 SITE ACCESS AND LICENSE AGREEMENT (Tiffany Pump Station Odor/Corrosion Control Facilities) This STTE ACCESS AND LICENSE AGREEMENT (Tiffany Pump Station Odor/Corrosion Control Facilities) (`Agreement") is dated as of and for purposes of reference 2017 ("Effective Date"), and entered into between the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district ("OCSD"), and the GARDEN GROVE SANITARY DISTRICT, a public body corporate and politic ("GGSD"). OCSD and GGSD are sometimes individually referred to as a "Party" and collectively referred to as the "Parties". RECITALS A. OCSD is a duly organized County Sanitation District organized and existing under the County Sanitation District Act, California Health and Safety Code section 4700, et seq., that provides for the ownership, operation, and maintenance of wastewater collection, treatment, and disposal facilities within Orange County, and is responsible for safely collecting, treating, and disposing of wastewater generated by more than 2.5 million people living and working in Orange County. B. GGSD is a special district, duly organized and validly existing under the Constitution and the laws of the State of California,and a sanitary district that collects wastewater and is tributary to OCSD facilities for treatment and disposal. The City Council of the City of Garden Grove acts as the Board of Directors and governing board of the GGSD. C. GGSD owns and operates certain real property commonly referred to as the"Tiffany Pump Station" located at 12782 Bailey Street, Garden Grove, CA 92845, which is depicted on Exhibit A,attached and fully incorporated herein("Property"). D. OCSD previously installed facilities and conducted a demonstration project at the Property to evaluate the effectiveness of utilizing calcium nitrate added to wastewater to reduce odor and corrosion in downstream wastewater facilities. E. Based on the results of the demonstration project, OCSD desires to access the Property to install, operate, and maintain the facilities previously installed at the Property, and additional facilities (collectively, "Facilities"), to reduce odor and corrosion in downstream wastewater facilities("Facilities Use's. F. The Facilities Use will mutually benefit the Parties by reducing odors and corrosion in sewer lines owned or controlled by GGSD and OCSD. As a reflection of thew shared interest in treating sewage in the interest of the public's health, safety, and welfare, the Parties intend by this Agreement for GGSD to grant to OCSD a license for the following specific and limited purposes of (1)right of access to Property for the Facilities Use,and(2)right to use the Property for the Facilities Use(together,"License')for the 10-year Term as defined more fully set forth herein. NOW THEREFORE,GGSD and OCSD agree as follows: Section 1. Grant of License. GGSD hereby grants to OCSD a right of entry and site access onto the Property("Site Access")to install,operate,and maintain the Facilities reasonably necessary 4847-4227-0289.1 1 and convenient for OCSD's wastewater odor control program, as depicted in Exhibit B attached hereto and incorporated by this reference, which together comprise the License hereunder. This License may be used by OCSD, its employees, and authorized agents, including OCSD's duly licensed and insured consultants,contractors and subcontractors under contract with OCSD. (a) The Facilities include: one tank, a chemical dosing enclosure, and a conduit that will carry odor control chemicals from the tank to the existing wet well at the Property. The odor control chemicals may include, but are not limited to: calcium nitrate, ferrous chloride, and magnesium hydroxide. (b) OCSD acknowledges that access to the Property may necessitate access across certain part(s)of the improved real property adjacent to the Property that has a current use of dental offices (the "Adjacent Parcel' . In this regard, OCSD agrees during the Term of the License OCSD is responsible to take any and all steps necessary to access and traverse this Adjacent Parcel and OCSD is and shall remain solely responsible and liable, legally and financially, for such access, traversing or other use of this Adjacent Parcel. (c) In each instance when OCSD consultants, contractors or subcontractors desire to enter onto the Property (including the Adjacent Parcel) for the Facilities Use, OCSD shall provide GGSD prior notice in writing of the names of OCSD's duly authorized, licensed and insured consultants, contractors and subcontractors, and each shall be identified by way of uniforms, or vehicles with signs or logos,or other identifying measures when accessing the Property including the Adjacent Parcel for the Facilities Use. (i) For each and all OCSD consultants, contractors and subcontractors, OCSD shall ensure that each contract between OCSD and consultant, and OCSD and contractor, as applicable (including subcontractor(s)), obtain and maintain insurance policies in the amounts and types of coverage that comply with Section 11 herein. Section 2. Term. This Agreement and the License granted herein shall commence as of the Effective Date and remain in effect for a term of ten(10)years("Term").The Term may be extended at OCSD's option for an additional 10 years, provided OCSD delivers written notice to GGSD exercising said option no less than 90 days prior to the scheduled expiration of the Term. Section 3. Eaoiomeat. OCSD may bring onto the Property and install such equipment or machinery as may be reasonably necessary or convenient to conduct the intended odor control measures, subject to OCSD providing a written notice to GGSD with a description of the type of equipment or machinery prior to installing or bringing onto the Property so that GGSD risk management may evaluate and determine if the scope of required insurance should be modified to cover more particularly the additional equipment or machinery. Section 4. Material Data Handling Sheets. OCSD shall provide OGSD with a copy of each "Safety Data Sheet" in compliance with the requirements of the United Sires Occupational Safety and Health Administration for any chemicals used by OCSD at the Property for the Facilities Use that may pose a hazard to GGSD employees,agents,or other persons who may access the Property or the adjacent property. Section 5. Mutual Non-Interference. The Parties each acknowledge that both GGSD and OCSD will be jointly using the Property, and in doing an intend to avoid interfering with the use, 48474227-0299.1 2 operation, and maintenance of the other Party's facilities, whether related or unrelated to the Facilities Use,except as specifically set forth in this Agreement. (a) Except as detailed on the attached exhibits, OCSD shall not interfere with GGSD's pumping facilities or related operations at the Property presently or in the future, which as of the Effective Date consist of a wastewater pumping plant (b) OCSD shall give GGSD at least two (2) business days' notice prior to entering the Property for regular maintenance or repairs, or provide to GGSD a detailed schedule of regular maintenance that would eliminate the need for separate notices for each Site Access. (i) In the event of an emergency or other urgent circumstances, OCSD shall provide GGSD with as much advance notice as reasonably possible prior to entering the Property for emergency or other urgent repair work,subject to Section 6.1 below. (c) Except upon the express written consent of OCSD, which consent shall not be unreasonably withheld, conditioned or delayed, GGSD shall not, and shall cause its lessees, licensees, or agents to not: (i) tamper with, after, or damage the Facilities, (ii)interfere with or obstruct OCSD's activities related to the Facilities Use; and (iii) cause or permit interference, damage,or obstruction by others. Section 6. Maintenance of Prooerty and Facilities. During the Term of this Agreement, OCSD shall maintain the Facilities, and shall repair any damage caused by OCSD to the Property (and, as applicable, the Adjacent Parcel) in compliance with all applicable federal, state, regional, county and local laws and regulations (or cause such to occur) and shall undertake the following at OCSD's sole cost,expense,liability,and responsibility: (a) Operate,maintain, and repair the Facilities in accordance and in conformity with any and all of the ordinances, resolutions, rules and regulations heretofore or hereafter adopted by the GGSD in the exercise of its Constitutional and statutory powers and not in conflict with the paramount authority of the United States of America, the State of California and subject to all applicable local,state,and federal laws. (i) If not properly and timely repaired or maintained by OCSD, then to pay to GGSD on demand all reasonable costs incurred or to be incurred by GGSD for all reasonable repairs to the Property(including the Adjacent Pamel)caused by OCSD. (b) Remove or relocate, at the request of GGSD and without expense to GGSD, any conduits,pipes or appurtenances installed by OCSD(or its agents)as a part of the Facilities,or used and/or maintained by OCSD under this Agreement if and when such removal or relocation is made necessary by urgent public purposes of GGSD;provided, however, that OCSD shall not be required to bear the expense of any removal or relocation made at the request of GGSD solely on behalf of or for the sole benefit ot;any third patty developer or any other third party unless so directed by a court of competent jurisdiction and provided further that if GGSD requests OCSD remove or relocate any part of the Facilities for any reason,then OCSD may terminate this Agreement in OCSD's sole and absolute discretion.The Parties shall amend this Agreement if necessary to reflect agreed changes as to the Facilities or other provisions of this Agreement. 49474T 89.1 3 (c) In the care of emergency where work on any conduit,pipes or appurtenance must, in the reasonable discretion of OCSD, be performed by OCSD immediately due to risk of danger or public harm, OCSD shall perform such work and obtain appropriate permits therefor as soon as practical thereafter. (d) If any portion of the Property(or the Adjacent Parcel)any improvement thereto shall be damaged by reason of defect in any of the Facilities, or otherwise in implementation of this License, or any other conduit, pipes and appurtenances maintained, repaired or replaced under this Agreement, or by reason of any acts or omissions of OCSD(or any of its consultants,contractors or subcontractors) involving the operation or existence of any of the Facilities maintained, repaired or replaced under this Agreement, OCSD shall, at its own cost and expense, immediately repair such damage and restore such property or improvement to as good a condition as existed immediately prior to the occurrence of such damage unless otherwise agreed in writing with GGSD. Such work is to be done subject to approval of GGSD in consultation with legal counsel and in accordance with any and all rules, regulations, ordinances, resolutions, standards, specifications of the GGSD and applicable state and federal laws and regulations. GGSD shall not unreasonably withhold, condition or delay the approval required by this section. (e) Included within Exhibit B are renderings showing the accurate size, depth and the length of the Facilities on the Property that are the subject matter of this Agreement If there are changes to the location, size,depth and the length of the Facilities during the Term, OCSD agrees to both notify GGSD in writing and within thirty(30)days to submit to GGSD revised renderings to be appended to this Agreement and on file with GGSD. (I) Except as may be specifically provided for elsewhere in this Agreement, if OCSD shall fail,neglect or refuse to comply with any of the provisions or conditions hereof and shall not, within fifteen (15) days after written demand for compliance, begin the work of compliance or initiate communications with GGSD regarding same,or after such commencement of work,shall not prosecute the same with due diligence and continuously to completion, GGSD may declare this Agreement forfeited and terminated, and OCSD shall immediately close and discontinue all operations or uses under this Agreement and the License shall be deemed terminated. (g) GGSD may sue in its own name for(a)the forfeiture of this Agreement in the event of breach by OCSD(if OCSD fails to cure such breach in the time permitted by the prior subsection hereof),or(b)for my other legal cause it may assert in good faith against OCSD. In the event of any such suit or other legal proceeding, the substantially prevailing Party shall be entitled to reimbursement of its reasonable attorneys' fees incurred. Section 7. Oneoine Condition of Provenly. OCSD shall maintain the Facilities in an orderly mamer while they are located on the Property, and shall remove all debris, trash, equipment, and other materials used by OCSD (including its consultants, contractors and subcontractors) immediately upon completion of installation of Facilities and/or regular maintenance and repair work. Additionally, OCSD shall (including its consultants, contractors and subcontractors), to the extent feasible, at the completion of each day's work, maintain the Property (and as applicable the Adjacent Parcel)to as close to the same condition as it existed at the commencement of that day. Section 8. Condition of Proverty at Effective Date. GGSD represents and warrants, to the best of the actual knowledge of the Sanitation Division Supervisor, who is the current lead staff person during preparation of this Agreement, that the Property is free of hazardous materials and 4947d217-Mg.1 4 environmental contamination. Subject to the preceding sentence, OCSD accepts the Property and all conditions thereon as may exist from now and during the Term without any further representation or warranty from GGSD (or any of its elected or appointed officials, employees, agents or representatives), and without any duty of GGSD to wam of any conditions. Accordingly, OCSD (and all of its elected or appointed officials, employees, agents and representatives) knowingly and intentionally assumes all risks associated with the Site Access, Property, the Adjacent Parcel, the Facilities, and the Facilities Use arising out of or related in any manner to the License and/or this Agreement Section 9. Under round Activities. OCSD shall determine the presence or absence of underground utilities and structures prior to conducting subsurface work, if any, at the Properly. During the Term and as and if applicable, OCSD shall make a complete and diligent inquiry with Underground Service Alert of Southern California (aka Dig Alert) to register, identify and mark facilities at the Property affected by this Agreement. In addition, OCSD shall provide appropriate notification to, and obtain all required permits from, applicable regulatory authorities prior to conducting work at the Properly. Section 10. Cost. Any work performed by OCSD at near,beneath, or related to the Facilities or this Agreement shall be and remain at the sale cost and expense of OCSD. During the Term,OCSD shall keep the Property free and clear of all liens or encumbrances, including without limitation mechanics liens,stop notices,judgments, in any way related to the operation of OCSD's Facilities. Section 11. Insurance: Commencement of Work OCSD and each of OCSD's consultants, contractors and subcontractors shall not commence work under this Agreement until all certificates and endorsements have been received and approved by GGSD risk management GGSD shall not unreasonably withhold, condition or delay the approval required by this section or any of the subsections listed below. OCSD shall be responsible to collect and maintain all insurance from each and all consultants and contractors, and each subcontractor shall too obtain and maintain the same insurance as required of OCSD and its consultants and contractors. (a) Workers Compensation In once. For the duration of this Agreement, OCSD shall maintain Workers Compensation Insurance in the amount and type required by California law, if applicable. The insurer shall waive its rights of subrogation against the GGSD, City of Garden Grove,and their respective officers,officials,agents,employees,and volunteers. (b) Additional Coverages and Insurance Amounts. OCSD shall provide and maintain the following insurance for the duration of this Agreement: (i) Commercial general liability, in an amount not less than $2,000,000 per occurrence, $4,000,000 aggregate; (claims made and modified occurrence policies are not acceptable). Insurance companies must be acceptable to GGSD and have an AM Best's Guide Rating of A-,Class VU or better,as approved by the GGSD. (A) An Additional Insured Endorsement, ongoing and products-completed operations, for the policy under Section I1(bxi) shall designate GGSD and the City of Garden Grove as additional msmeds for liability arising out of work or operations performed by or on behalf of the OCSD. OCSD shall provide to GGSD proof of insurance and endorsement forms that conform to GGSD's requirements,as approved by the GGSD. 4847-4 r-Mll 5 (ii) Automobile liability in an amount not less than$1,000,000 combined single limit;(claims made and modified occurrence policies are not acceptable). Insurance companies must be acceptable to GGSD and have an AM Best's Guide Rating of A-,Class VII or better,as approved by the GGSD. (A) An Additional Insured Endorsement for the policy under Section 1l(b)(ii)shall designate GGSD and the City of Garden Grove as additional insureds for automobiles owned, leased, hired, or borrowed by the OCSD and shall provide to GGSD proof of insurance and endorsement forms that conform to GGSD's requirements,as approved by the GGSD. (iii) Excess liability coverage shall be provided for any underlying policy that does not meet the insurance requirements set forth herein (claims made and modified occurrence policies are not acceptable). (A) In the event any of OCSD's underlying policies do not meet policy limits within the insurance requirements, OCSD shall provide the schedule of underlying polices for a follows form excess liability policy under Section 11(b)(vi). The insurance tamer shall state that the excess policy follows form on the insurance certificate and provide an additional insured endorsement for the excess liability policy designating GGSD, City of Garden Grove, and their respective officers, officials, employees, agents, and volunteers as additional insureds. OCSD shall provide to GGSD proof of insurance and endorsement forms that conforn to GGSD's requirements, as approved by the GGSD. (e) Insurance companies must be acceptable to GGSD and have a Best's Guide Rating of A-,Class VII or better,as approved by the GGSD. (d) For any claims related to this Agreement, OCSD's insurance coverage shall be primary insurance as respects GGSD and the City of Garden Grove. Any insurance or self-insurance maintained by the GGSD and the City of Garden Grove shall be excess of the OCSD's insurance and shall not contribute with it OCSD shall provide to GGSD proof of insurance and endorsement forms that conform to GGSD's requirements, as approved by the GGSD. (a) All consultants, contractors and subcontractors shall be required to provide the same insurance as required of OCSD hereinabove. OCSD shall be responsible to collect and maintain all insurance from all contractors and subcontractors. OCSD shall ensure that all insurance received from all contractors, subcontractors, and consultants meets and/or exceeds the requirements of the contract as approved by GGSD. OCSD shall provide all insurance to GGSD upon request, including certified copies of all policies. (1) If OCSD maintains higher insurance limits than the minimums shown above, OCSD shall provide coverage for the higher insurance limits otherwise maintained by OCSD. (g) OCSD may self-insure against any of the risks described in this section, and if it elects to do so shall provide GGSD with a letter of self-insurance within five days after the Effective Date. 4947<227-0289.1 8 Section 12. Indemnity. (a) OCSD Indemnification of GGSD and City. OCSD shall protect,indemnify,defend and hold harmless GGSD, the City and their respective elected and appointed officials, officers, employees, counsels, agents and volunteers (collectively, "Indemnitees") from and against any and all claims, demands, obligations,damages (including consequential and/or punitive damages), costs, liabilities, actions and judgments (collectively, "Claims') including, without limitation, Claims for injury or damage to persons or property, and Claims for penalties, fines and reasonable atromey's fees and costs (including attorneys fees and costs incurred to enforce this indemnity), incurred in connection with or arising from OCSD's acts or omissions related to this License; provided, however,that this indemnity shall not apply to the extent of any negligence or willful misconduct of Indemnitees that occurs after the Effective Date. Further, OCSD shall have no liability to Indemaitees or to any other person or entity by reason of, nor shall OCSD have any duty to indemnify, defend or hold any person harmless against, any claim, demand, damage, loss, action, liability,cause of action or judgment, including,without limitation,any claim for diminution in value of the Property or for environmental remediation or clean-up costs, arising out of or in connection with OCSD having discovered, inadvertently disturbed and/or reported (as may be required by law) any adverse physical condition, existing hazardous materials, or other defect with respect to the Property that may exist on or about the Property as ofthe Effective Date. (b) GGSD Indemnification of OCSD. GGSD shall protect, indemnify,defend and hold harmless OCSD and its respective elected and appointed officials, officers, employees, counsel, agents and volunteers ("OCSD Indemnified Parties") from and against any and all Claims made against any of the OCSD Indemnified Parties arising out GGSD's operations at the Property, or my acts,omissions,negligence,willful misconduct,or breach of this Agreement by GGSD. Section 13. Specific Purpose License Only: No Easement or Other Interest Granted. This Agreement is intended and shall be construed as a license to enter upon the Property for the Site Access and to operate the Facilities at the Property, and is not and shall not be construed,directly or indirectly, as a grant of easement or any other interest in the Property (or the Adjacent Parcel). Except as expressly set forth herein, no other rights are created by the License granted by this Agreement. Section 14. Attorneys' Fees. If either of the Parties is required to engage an attorney or institute an action in order to enforce any of the provisions of this Agreement, the prevailing Party will be entitled to reasonable attorneys' fees and court costs which may be incurred. Section 15. Notices. All notices required or permitted hereunder must be in writing and must be personally delivered or seat by registered or certified mail,postage prepaid, return receipt requested, delivered or sent by recognized overnight courier and will be deemed received upon the earlier of. (i) the date of delivery to the address of the person to receive such notice if delivered personally or by messenger or overnight courier, or(ii)three(3)business days after the date of posting by the United States Post Office if by mail. Notices or other communications shall be addressed as follows: 4a 74W-G2aa.t 7 To OCSD: Orange County Sanitation District Post Office Box 8127 Fountain Valley,CA 92728-8127 Attention:James D.Herberg,General Manager with a copy to: Lewis Brisbois Bisgaard&Smith LLP 633 W.Sth St.,Suite 4000 Los Angeles,CA 90012 Attn:Claire Hervey Collins,Esq. To GGSD: Garden Grove Sanitary District 11222 Acacia Parkway Garden Grove,CA 92840 Attention:William E.Murray,Public Works Director With copy to: Legal Counsel,GGSD Section 16. Jurisdiction.In the event of a dispute regarding performance or interpretation of this Agreement, the venue for any action to enforce or interpret this Agreement shall lie in the Superior Court of California for Orange County. Section 17. No Third Party Beneficiaries. Except as to the insurance and indemnity requirements that intentionally include the City of Garden Grove(and Indemnitees), this Agreement is entered into by and for OCSD and GGSD and is not intended to establish rights or interests in individuals or entities not a party hereto. This Agreement is binding upon the Parties and their respective successors, representatives, heirs, and assigns. OCSD shall not assign this Agreement or any rights hereunder without the prior written consent of GGSD,which may be given or withheld in GGSD's sole,reasonable discretion. Section 18. Force Maienre. Except for the payment of money, neither Party shall be liable for my delays or other non-performance resulting from circumstances or causes beyond its reasonable control,including without limitation,fire or other casualty,Act of God,strike or labor dispute,war or other violence,acts of third-parties, or my law,order, or requirement of my governmental agency or authority. Section 19. Governing Law. This Agreement is governed by the laws of the State of California Section 20. Entire Agreement. This Agreement constitutes the entire understanding and agreement between the Parties and supersedes all previous negotiations and agreements between the Parties pertaining to the subject matter hereof. Section 21. Waiver. A waiver of a breach of the covenants, conditions or obligations under this Agreement by either Party shall not be construed as a waiver of my succeeding breach of the same or other covenants,conditions or obligations of this Agreement Section 22. Amendments. This Agreement may be modified or amended only by a written document executed by both OCSD and GGSD. 48474227-0289.1 a Section 23. Severability.If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. Section 24. Agreement Execution and Authorization. Fach of the undersigned represents and warrants that they are duly authorized to execute and deliver this Agreement and that such execution is binding upon the entity on whose behalf they are executing this Agreement. [signature blocks on next page] 48474227-0289.1 9 [continued from previous page] This Site Access and License Agreement (Pifjany Pump Station Odor/Corrosion Control Facilities)has been executed as of the Effective Date. ORANGE COUNTY SANITATION DISTRICT, a county sanitation district By: Gregory C.Seboum,PLS Board Chair ATTEST: Kelly Lore Clerk of the Board APPROVED AS TO FORM: Lewis Brisbois Bisgaard&Smith,LLP By: �-4VW� Claire Hervey Collins Special Counsel GARDEN GROVE SANITARY DISTRICT, a public body c,orpomte and politic By: lelor L. Aw coS�ea,General Manager ATTEST: �- Wo - l Di1n l [ off_ Teresa Pomeroy,Secretary APPROVED AS TO FORM: Stmdling Yocca Carlson&Rauth By: Cel ekAllrady,Sp of Couni e8e742Z74sm.1 10 -;fit 4, ' -• f i Garden E7¢IIBIT`B" Tiffany Pump Station,Electrical Service Conduit Junction Boa and Existing Chemical Storage and Dosing Equipment located at 12782 Bailey Street Garden Grove,CA 92845 r i Conduit run, electrical se HZ, 30A, terminating in a 10 feet of the dosing mo 48474Mr 289.1 Exhibit B Facilities Page 1 of 5 Tiffany Pump Station,Existing Chemical Storage and Dosing Equipment located at 12782 Bailey Street Garden Grove,CA 92845 4MMn7-0289.1 Exhibit B Facilities Page 2 of 5 Pump and Enclosure Details i�Ai + ram ate. I 1 j i row UP 4M7422M89.1 Exhibit B Facilities Page 3 of 5 Photograph of Existing Pump and Monitor/Controller 8.0 Y ♦� 9&74M4289A Exhibit B Facilities Page 4 of 5 Site Plan of Facilities PAVED LOT {\ BUaOING / yY PAVED LOT e�A i fNSTHG XEf XpL Ddlll WMl LILdM NWN1E SRFNGE ifNN / TEED SISIEM NmmE aunA�u 4M74227-0289.1 Exhibit E Facilities Page 5 of 5 OPERATIONS COMMITTEE Meeting Date TOBd.Of Dir. 12/05/17 12/20/17 AGENDA REPORT emNumber Item Number 7 9 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: SAFETY IMPROVEMENTS PROGRAM, PROJECT NO. J-126 GENERAL MANAGER'S RECOMMENDATION A. Award a Construction Contract to AMTEK Construction for the Safety Improvements Program, Contract No. J-126 A and H, for a total amount not to exceed $452,757; and B. Approve a contingency of$45,276 (10%). BACKGROUND The Orange County Sanitation District (Sanitation District) owns and operates facilities that were designed and constructed from the 1950s to present. In July 2014, the Facility Wide Safety Assessment, Project No. SP-145-1, reviewed safety issues at the Sanitation District Plant Nos. 1 and 2 and pump stations. The study identified approximately 2,000 facility issues impacting worker safety and compliance with Cal/OSHA regulations, including electrical, fall protection, machine guarding, hazardous area classifications, skylights, and walkway hazards. Each item was assigned a high, medium, or low priority rating. Pending resolution of the safety items, the Sanitation District took interim measures to minimize life-safety risks. There was approximately an even distribution between issues that would be addressed using Sanitation District resources and those that would be addressed through the Capital Improvement Program, depending on the nature and complexity. Items that could not be assigned to existing projects have been assigned to the Safety Improvements Program, Project No. J-126. To resolve the deficiencies as quickly as possible, Safety Improvements Program, Project No. J-126, is being executed through multiple construction packages that can be completed in a shorter time than using a single construction contract. Development of multiple construction packages also allows higher priority safety items to be completed more quickly than lower priority items. RELEVANT STANDARDS Provide a safe and collegial workplace Page 1 of 3 PROBLEM Among the various Project No. J-126 deficiencies are 11 roof and other fall protection deficiencies at Bay Bridge and Slater Pump Stations and 31 hot surface deficiencies at Plant Nos. 1 and 2. PROPOSED SOLUTION Award Construction Contract No. J-126 A and H. TIMING CONCERNS Delaying resolution of the safety items poses potential threats to staff, Contractor, and visitor safety. RAMIFICATIONS OF NOT TAKING ACTION • Staff, Contractors, and visitors will continue to be exposed to potential safety hazards. • Certain facilities will continue to not comply with code requirements. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The Sanitation District advertised Contract No. J-126 A and H for bid on June 22, 2017, and three sealed bids were received on August 8, 2017. A summary of the bid opening is as follows: Engineer's Estimate $ 646,159 Bidder Amount of Bid AMTEK Construction $ 452,757 Schuler Constructors, Inc. $ 568,300 PCL Construction, Inc. $ 601,171 The bids were evaluated in accordance with the Sanitation District's policies and procedures. A notice was sent to all bidders on November 9, 2017, informing them of the intent of Sanitation District staff to recommend award of the Construction Contract to AMTEK Construction. Staff recommends awarding a construction contract to the lowest responsive bidder, AMTEK Construction, for Safety Improvements Program, Contract No. J-126 A and H,for a total amount not to exceed $452,757. Page 2 of 3 CEQA A CEQA Notice of Exemption for this project was filed on August 14, 2015. The project is exempt from CEQA pursuant to CEQA's Class 1 Exemption for Existing Facilities (section 15301). The exemption calls for minor alteration of existing public or private structures, facilities, mechanical equipment, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. This project calls for safety related modifications of existing facilities which will have no impact to existing capacity. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (FY2017-18 Budget Update, Appendix, Page A-8, Project No. J-126), and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: Construction Contract TG:dm:gc Page 3 of 3 PART A CONTRACT AGREEMENT C-CA-011317 TABLE OF CONTENTS CONTRACT AGREEMENT SECTION - 1 GENERAL CONDITIONS..................................................................1 SECTION -2 MATERIALS AND LABOR.................................................................4 SECTION -3 PROJECT..........................................................................................4 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.........................7 SECTION - 12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS ..............................................................................................9 SECTION - 13 COMPLETION.................................................................................10 SECTION - 14 CONTRACTOR'S EMPLOYEES COMPENSATION.......................10 SECTION - 15 SURETY BONDS ............................................................................12 SECTION - 16 INSURANCE....................................................................................13 SECTION - 17 RISK AND INDEMNIFICATION.......................................................21 SECTION - 18 TERMINATION................................................................................21 SECTION - 19 WARRANTY....................................................................................21 SECTION -20 ASSIGNMENT.................................................................................22 SECTION -21 RESOLUTION OF DISPUTES ........................................................22 SECTION -22 SAFETY& HEALTH ........................................................................23 SECTION -23 NOTICES.........................................................................................23 C-CA-011317 CONTRACT AGREEMENT ORANGE COUNTY SANITATION DISTRICT CONTRACT NO. J-126 A and H SAFETY IMPROVEMENTS PROGRAM THIS AGREEMENT is made and entered into, to be effective, this December 20, 2017, by and between AMTEK Construction, 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. A. Contract Documents Order of Precedence "Contract Documents" refers to those documents identified in the definition of"Contract Documents" in the General Conditions—Definitions. CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 1 of 24 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 iIL 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 specified shall be the same as similar parts that are shown or specified, or as C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 2 of 24 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 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. CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 3 of 24 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. SECTION-3 PROJECT The Project is described as: CONTRACT NO. J-126 A and H SAFETY IMPROVEMENTS PROGRAM C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 4 of 24 SECTION -4 PLANS AND SPECIFICATONS The Work to be done is shown in a set of Plans and Specifications entitled: CONTRACT NO. J-126 A and H SAFETY IMPROVEMENTS PROGRAM 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 fifteen (15) 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 two hundred seventy (270) Days from the effective date of the "Notice to Proceed" issued by OCSD, excluding delays caused or authorized by OCSD as set forth in Sections 7, 6, and 9 hereof, and applicable provisions in the General Conditions. The time for completion includes five (5) Days determined by OCSD likely to be inclement weather when CONTRACTOR will be unable to work. 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, 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 CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 5 of 24 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 Work 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 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 Work by the number of days, if any, reasonably required for CONTRACTOR to perform the Extra Work, as determined by the ENGINEER. The decision of the ENGINEER shall be final. C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 6 of 24 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 Documents, 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." 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 Four Hundred Fifty-Two Thousand Seven Hundred Fifty-Seven Dollars ($452,757) as itemized on the Attached Exhibit"A". CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 7 of 24 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 Work a schedule which shows: 1. A minimum of one (1) payment to be made to the CONTRACTOR for each successive four-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 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 the ENGINEER. The processing of payments shall not be considered as an acceptance of any part of the Work. C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 8 of 24 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." SECTION-12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS Pursuant to Public Contract Code Section 22300 et seq., the CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities." CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 9 of 24 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. 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 Engineering Department. 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 C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 10 of 24 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 thousand 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. 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 it hereunder except as provided in paragraph (B)above. CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Section 1810 at seg.)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 (1)calendar day and forty (40) hours in any one (1)week in violation of said Article. CONTRACTOR shall keep CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 11 of 24 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: Insoection: 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(e). 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 one hundred percent (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 C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 12 of 24 995.630. 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, 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 CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 13 of 24 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 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. C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 14 of 24 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. 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. CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 15 of 24 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 Five Million Dollars ($5,000,000) and a general aggregate limit of Five Million Dollars ($5,000,000)for bodily injury, personal injury and property damage; Or alternatively, (2) Five Million Dollars ($5,000,000) per person for bodily injury and Five Million Dollars ($5,000,000) 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 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/EmDlover'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 C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 16 of 24 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 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 CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 17 of 24 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. 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 thirty(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 C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 18 of 24 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. D. Acceptability of Insurers Insurers must have an "A-", or better, Policyholder's Rating, and a Financial Rating of at least Class VIII, 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 CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 19 of 24 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 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 C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 20 of 24 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". 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 CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 21 of 24 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; 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. C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 22 of 24 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. 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: AMTEK Construction 12409 Slauson Avenue, Suite"I" Whittier, CA 90606 Copy to: Steven Sayce, President AMTEK Construction 12409 Slauson Avenue, Suite"I" Whittier, CA 90606 CONFORMED C-CA-011317 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 23 of 24 IN WITNESS WHEREOF, the parties hereto have executed this Contract Agreement as the date first hereinabove written. CONTRACTOR: AMTEK Construction 12409 Slauson Avenue, Suite "I" Whittier, CA 90606 By Printed Name Its CONTRACTOR's State License No. 490382 (Expiration Date—4/30/2019) OCSD: Orange County Sanitation District By Gregory C. Sebourn, PLS Chair, Board of Directors By Kelly A. Lore Clerk of the Board By Marc Dubois Contracts, Purchasing and Materials Management Manager C-CA-011317 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 24 of 24 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...5 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 PROGRESSPAYMENTS 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.J-126 A and H SAFETY IMPROVEMENTS PROGRAM 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) 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.J-126 A and H SAFETY IMPROVEMENTS PROGRAM 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.J-126 A and H SAFETY IMPROVEMENTS PROGRAM 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 filed 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) Days after receipt of recommended changes from OCSD, the CONTRACTOR will C-EXA-080414 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM 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) 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. EXA-8 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: CONFORMED C-EXA-080414 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 5 of 8 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.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 6 of 8 ATTACHMENT 1 —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 Ads 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 Ad 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 Subcontractors performance. Name Title Dale CONFORMED C-EXA-080414 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 7 of 8 ATTACHMENT 2—SCHEDULE OF PRICES See next pages from the Bid Submittal Forms (AMTEK Construction) BF-14 Schedule of Prices, Pages 1-2 C-EXA-080414 CONFORMED CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 8 of 8 Bid Submitted By: AMTEK CONSTRUCTION (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. Bidders 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 Profit, overhead, etc., unless otherwise specified in the Contract Documents. All applicable sales taxes. Federal and/or State. and any other special taxes,sales taxes. Federal and/or State. and any other special taxesoatent riahts orriahts or royalties shall be included inroyalties shall be included in theoricesquoted in this Bid. 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 Invitation for Bids. E" BF-14 SCHEDULE OF PRICES C-BF-021115 CONTRACT NO.J-125 A and H SAFETY IMPROVEMENTS PROGRAM Page 1 of 2 l 1 Bid Submitted By: AMTEK CONSTRUCTION (Name of Firm) EXHIBIT A SCHEDULE OF PRICES BASE BID ITEMS (Refer to Note 1 in the Instructions): Item Oescd lion Unitof Appron Ne. P Measurement city Unit Price Extended Price 1. Mobilization, initial progress payment for all fees, labor, materials and equipment required for mobilization, staging area, Bonds, Baseline Lump Sum 1 = $25,000.00 Construction Schedule,and other activities in conformance with the Contract Documents, for the lump sum price of.: 2. Furnish all labor, materials and equipment necessary for the completion of the Contract Work, except for the Work specified for Item No. 1 above, in Lump Sum 1 = $ 427,757.00 conformance with the Contract Documents,for the lump sum price of: TOTAL AMOUNT of BID (BASIS of AWARD) $452,757.00 BF-14 SCHEDULE OF PRICES C-BF-021115 CONTRACT NO.J-126 A and H SAFETY IMPROVEMENTS PROGRAM Page 2 of 2 OPERATIONS COMMITTEE Meeting Date TOBd.Ot Dir. 12J05/17 12/20/17 AGENDA REPORT emNumber Item Number 8 10 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: EDINGER PUMP STATION REHABILITATION STUDY, PROJECT NO. PS15-02 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Services Agreement with Lockwood, Andrews& Newnam, Inc., to provide engineering services for the Edinger Pump Station Rehabilitation Study, Project No. PS15-02, for an amount not to exceed $505,042; and B. Approve a contingency of$50,504 (10%). BACKGROUND Edinger Pump Station was constructed in 1965 and is one of the Orange County Sanitation District's (Sanitation District)smaller pump stations, located in an underground vault below Edinger Avenue in the City of Huntington Beach. This station pumps approximately 2 mgd of sewage from the City of Huntington Beach to the Slater Pump Station, which then flows to Plant No. 1 in Fountain Valley. This project will perform a planning-level study for the Edinger Pump Station to determine if the station should be rehabilitated or abandoned and replaced. This study will develop and evaluate multiple alternatives that will take into account code compliance, safety, and access issues. RELEVANT STANDARDS • Operate and maintain facilities to minimize impacts on surrounding communities, including odor, noise, lighting, and safety • 24/7/365 treatment plant reliability • Less than 2.1 sanitary sewer spills per 100 miles • CA Government Code 4526: Select the "best qualified firm" and "negotiate fair and equitable fees." PROBLEM The Edinger Pump Station has corrosion of its piping, wet well, and drywell, in addition to code compliance, traffic, safety, and access issues. Page 1 or 4 In its current configuration, the pump station has some major risks, including adjacency to a flood control channel that threatened to overflow the banks during a major wet-weather event last winter. The pump station is located in the public right of way and is accessed through a hatch in the sidewalk. This configuration causes traffic, safety, and maintenance vehicle parking issues. PROPOSED SOLUTION This study will conduct detailed investigative assessments to analyze and determine if the pump station should be rehabilitated or abandoned and replaced. TIMING CONCERNS Continuous deterioration of the pump station could lead to failure, spills, fines, and costly repairs. Conducting this study now will provide guidance to the Sanitation District's timely decision-making process in selecting the best solution for its Capital Improvement Project for long-term reliability, operations, maintenance, safety, and compliance. RAMIFICATIONS OF NOT TAKING ACTION Not performing the Edinger Pump Station Rehabilitation Study and providing recommendations for either rehabilitation, reconstruction, or abandonment and replacement of the pump station increases the risk of the Sanitation District not selecting the best capital project for long-term public health and safety. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Consultant Selection: The Sanitation District advertised a Request for Proposal (RFP) for the Edinger Pump Station Rehabilitation Study, Project No. PS15-02, on August 9, 2017. The following evaluation criterion were described in the RFP and used to determine the most qualified Consultant. CRITERION WEIGHT Project Understanding and Approach 35% Related Project Experience 30% Project Team and Staff Qualifications 35% Three proposals were received on September 14, 2017 and evaluated in accordance with the evaluation process set forth in the Sanitation District Purchasing Ordinance No. Page 2 d 4 OCSD47 (Purchasing Ordinance), by a pre-selected Evaluation Team consisting of the following Sanitation District staff. William Cassidy Engineering Supervisor— Civil and Mechanical Engineering Raul Cuellar Engineering Supervisor—Collections Const. Management James Cabral Maintenance Supervisor— Collections Facilities Wendy Smith Project Engineer- Planning Hardat Khublall CIP Project Manager— Project Management Office The Evaluation Team also included one non-voting representative from the Contracts Administration Division. Following scoring by the Evaluation Team, all three Consultants were shortlisted for interviews on October 17, 2017. Following the interviews, each member of the Evaluation Team ranked the Consultants based on both the proposals and interviews using the evaluation criterion and weighting described above. Based on the ranking shown below, Lockwood, Andrews & Newnam, Inc. was selected as the most qualified Consultant. PROPOSAL EVALUATION Lockwood, Andrews & AECOM Tetra Tech Newnem Inc. Evaluator 1st 2nd 3rd Evaluator 1st 2nd 2nd Evaluator C 1st 2nd 3rd Evaluator D 2nd 3rd 1st Evaluator E 1st 2nd 3rd Overall Ranking 1st 2nd 3rd The team from Lockwood, Andrews & Newnam, Inc. demonstrated where they have worked with other agencies and cities to guide them through the process of performing a similar feasibility Study. Review of Fee Proposal and Negotiations: Proposals were accompanied by sealed fee proposals. In accordance with the Purchasing Ordinance, the fee proposal of only the highest-ranked firm was opened after approval by the Director of Engineering of the Evaluation Committee's recommendation. Staff conducted negotiations with Lockwood, Andrews & Newnam, Inc. to clarify the requirements of the Scope of Work, the assumptions used for the estimated level of effort, and the proposed approach to meet the goals and objectives for the project. One negotiation meeting was held that resulted in changes made to the scope of work, fringe percentage, and overhead rate used in calculation of the Consultant's fees. Page 3 of 4 Original Fee Negotiated Fee Proposal Total Hours 2338 2338 Total Fee $513,583 $505,042 The Consultant's fringe and overhead costs, which factor into the billing rate, have been substantiated. The contract profit for the prime consultant is 10%, which is based on an established formula based on the Sanitation District's standard design agreements. Based on the above, staff has determined that the final negotiated fee is fair and reasonable for the level of effort required for this project and recommends award of the Professional Services Agreement to Lockwood, Andrews & Newnam, Inc. CEQA A Notice of Exemption will be filed after the Board of Directors approves the proposed Edinger Pump Station Rehabilitation Study. The study is exempt from CEQA pursuant to CEQA Guidelines Section 15262 [Feasibility and Planning Studies]. This study will be used as a planning tool for possible future action. The proposed Edinger Pump Station Rehabilitation Study will analyze and make recommendations. This will be in regards to potential infrastructure improvements that may be needed to ensure that the Sanitation District continues to meet its critical health and safety mandate. In addition, environmental factors will be taken into account in the study. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. Budget for the project, PS15-02, Edinger Pump Station Rehabilitation Study, is included in the Master Planning Studies budget update for Fiscal Year 2017-18 (Line item: Section A-9). Date of Approval Contract Amount Contingency 12/20/17 $505,042 $50,504 (10%) ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: Professional Services Agreement HK:sa:gc Page 4 of 4 PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT, is made and entered into to be effective the 20' day of December, 2017, by and between the ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "SANITATION DISTRICT', and LOCKWOOD, ANDREWS & NEWNAM, INC. (LAN), for purposes of this AGREEMENT hereinafter referred to as "CONSULTANT". The SANITATION DISTRICT and CONSULTANT are referred to herein collectively as the "Parties" or individually as a "Party." WITNESSETH: WHEREAS, the SANITATION DISTRICT desires to engage a consultant for Edinger Pump Station Rehabilitation Study, Project No. PSIS-02, to provide professional services for the planning study of the Edinger Pump Station; and, WHEREAS, CONSULTANT is qualified to provide the necessary services in connection with these requirements and has agreed to provide the necessary professional services; and, WHEREAS, the SANITATION DISTRICT has adopted procedures for the selection of professional services and has proceeded in accordance with said procedures to select CONSULTANT to perform this work; and, WHEREAS, at its regular meeting on December 20, 2017 the Board of Directors, by Minute Order, accepted the recommendation of the Operations Committee to approve this AGREEMENT between the SANITATION DISTRICT and CONSULTANT. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this AGREEMENT, it is mutually agreed as follows: 1. SCOPE OF WORK CONSULTANT agrees to furnish necessary professional services to accomplish those project elements outlined in the Scope of Work attached hereto as "Attachment A", and by this reference made a part of this AGREEMENT. A. The CONSULTANT shall be responsible for the professional quality, technical accuracy, and completeness and coordination of the work and services furnished by the CONSULTANT under this AGREEMENT, including the work performed by its Subconsultants. Where approval by the SANITATION DISTRICT is indicated, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all applicable laws, regulations, codes, industry standards and liability for damages caused by errors, omissions, noncompliance with industry standards, and/or negligence on the part of the CONSULTANT or its Subconsultants. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 1 of 19 B. CONSULTANT is responsible for the quality of work prepared under this AGREEMENT and shall perform all work in conformance with the skill and care normally performed by other professionals providing similar work in a similar location at a similar time to meet industry standards for clarity, uniformity, and completeness. CONSULTANT shall timely respond to all comments, suggestions, and recommendations from the SANITATION DISTRICT. All comments from the SANITATION DISTRICT, or its agent, shall be incorporated into the work prior to the next review deadline or addressed, in writing, as to why the comment(s) has/have not been incorporated. CONSULTANT shall ensure that each submittal is 100% accurate for the level of work submitted (i.e. correct references, terms, capitalization or equal status, spelling, punctuation, etc.) C. In the event that CONSULTANTS services and/or work product(s) is not to the satisfaction of the SANITATION DISTRICT and/or does not conform to the requirements of this AGREEMENT or the applicable industry standards, the CONSULTANT shall, without additional compensation, promptly correct or revise any errors or deficiencies in its work product(s)within the timeframe specified by the Project Manager. The SANITATION DISTRICT may charge to CONSULTANT all costs, expenses and damages associated with any such corrections or revisions. D. Any CADD drawings, figures, and other work produced by CONSULTANT and Subconsultants using the SANITATION DISTRICT CAD Manual. Conversion of CADD work from any other non-standard CADD format to the SANITATION DISTRICT format shall not be acceptable in lieu of this requirement. Electronic files shall conform to the SANITATION DISTRICT specifications. Any changes to these specifications by the CONSULTANT are subject to review and require advance written approval of the SANITATION DISTRICT. Electronic files shall be subject to an acceptance period of 30 calendar days during which the SANITATION DISTRICT shall perform appropriate reviews and including CAD Manual compliance. CONSULTANT shall correct any discrepancies or errors detected and reported within the acceptance period at no additional cost to the SANTITATION DISTRICT. E. All professional services performed by the CONSULTANT, including, but not limited to, all drafts, data, correspondence, proposals, and reports compiled or composed by the CONSULTANT, pursuant to this AGREEMENT, are for the sole use of the SANITATION DISTRICT, its agents and employees. Neither the documents nor their contents shall be released to any third party without the prior written consent of the SANITATION DISTRICT. This provision does not apply to information that(a)was publicly known, or otherwise known to the CONSULTANT, at the time that it was disclosed to the CONSULTANT by the SANITATION DISTRICT, or(b) subsequently becomes publicly known to the CONSULTANT other than through disclosure by the SANITATION DISTRICT. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 2 of 19 2. COMPENSATION Total compensation shall be paid to CONSULTANT for services in accordance with the following provisions: A. Total Compensation Total compensation shall be in an amount not to exceed Five Hundred Five Thousand and Forty-Two Dollars ($505,042). Total compensation to CONSULTANT including burdened labor(salaries plus benefits), overhead, profit, direct costs, and Subconsultant(s)fees and costs shall not exceed the sum set forth in Attachment"E" - Fee Proposal. B. Labor As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall pay to CONSULTANT a sum equal to the burdened salaries (salaries plus benefits)actually paid by CONSULTANT charged on an hourly-rate basis to this project and paid to the personnel of CONSULTANT. Upon request of the SANITATION DISTRICT, CONSULTANT shall provide the SANITATION DISTRICT with certified payroll records of all employees' work that is charged to this project. C. Overhead As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall compensate CONSULTANT and Subconsultants for overhead at the rate equal to the percentage of burdened labor as specified in Attachment"E"- Fee Proposal. D. Profit Profit for CONSULTANT and Subconsultants shall be a percentage of consulting services fees (Burdened Labor and Overhead). When the consulting or subconsulting services amount is $250,000 or less, the maximum Profit shall be 10%. Between $250,000 and $2,500,000, the maximum Profit shall be limited by a straight declining percentage between 10% and 5%. For consulting or subconsulting services fees with a value greater than $2,500,000, the maximum Profit shall be 5%. Addenda shall be governed by the same maximum Profit percentage after adding consulting services fees. As a portion of the total compensation to be paid to CONSULTANT and Subconsultants, the SANITATION DISTRICT shall pay profit for all services rendered by CONSULTANT and Subconsultants for this project according to Attachment"E"- Fee Proposal. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 3 of 19 E. Subconsultants For any Subconsultant whose fees for services are greater than or equal to $100,000 (excluding out-of-pocket costs), CONSULTANT shall pay to Subconsultant total compensation in accordance with the Subconsultant amount specified in Attachment"E"- Fee Proposal. For any Subconsultant whose fees for services are less than $100,000, CONSULTANT may pay to Subconsultant total compensation on an hourly-rate basis per Attachment"K"— Minor Subconsultants Hourly Rate Schedule and as specified in the Scope of Work. The SANITATION DISTRICT shall pay to CONSULTANT the actual costs of Subconsultant fees and charges in an amount not to exceed the sum set forth in Attachment"E"- Fee Proposal. F. Direct Costs The SANITATION DISTRICT shall pay to CONSULTANT and Subconsultants the actual costs of permits and associated fees, travel and licenses for an amount not to exceed the sum set forth in Attachment"E"- Fee Proposal. The SANITATION DISTRICT shall also pay to CONSULTANT actual costs for equipment rentals, leases or purchases with prior approval of the SANITATION DISTRICT. Upon request, CONSULTANT shall provide to the SANITATION DISTRICT receipts and other documentary records to support CONSULTANT's request for reimbursement of these amounts, see Attachment"D"-Allowable Direct Costs. All incidental expenses shall be included in overhead pursuant to Section 2 -COMPENSATION above. G. Other Direct Costs Other Direct Costs incurred by CONSULTANT and its Contractor due to modifications in scope of work resulting from field investigations and field work required by Contract. These items may include special equipment, test equipment and tooling and other materials and services not previously identified. Refer to attachment"D"Allowable Direct Costs for payment information. H. Reimbursable Direct Costs The SANITATION DISTRICT will reimburse the CONSULTANT for reasonable travel and business expenses as described in this section and further described in Attachment"D"-Allowable Direct Costs to this AGREEMENT. The reimbursement of the above mentioned expenses will be based on an "accountable plan" as considered by Internal Revenue Service (IRS). The plan includes a combination of reimbursements based upon receipts and a "per diem" component approved by IRS. The most recent schedule of the per diem rates utilized by the SANITATION DISTRICT can be found on the U.S. General Service Administration website at http://www.gsa.gov/portal/category/l 04711#. The CONSULTANT shall be responsible for the most economical and practical means of management of reimbursable costs inclusive but not limited to travel, lodging and meals arrangements. The SANITATION DISTRICT shall apply the most economic and practical method of reimbursement which may include PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 4 of 19 reimbursements based upon receipts and/or"per diem' as deemed the most practical. CONSULTANT shall be responsible for returning to the SANITATION DISTRICT any excess reimbursements after the reimbursement has been paid by the SANITATION DISTRICT. Travel and travel arrangements—Any travel involving airfare, overnight stays or multiple day attendance must be approved by the SANITATION DISTRICT in advance. Local Travel is considered travel by the CONSULTANT within the SANITATION DISTRICT geographical area which includes Orange, Los Angeles, Ventura, San Bernardino, Riverside, San Diego, Imperial and Kern Counties. Automobile mileage is reimbursable if CONSULTANT is required to utilize personal vehicle for local travel. Lodging—Overnight stays will not be approved by the SANITATION DISTRICT for local travel. However, under certain circumstances overnight stay may be allowed at the discretion of the SANITATION DISTRICT based on reasonableness of meeting schedules and the amount of time required for travel by the CONSULTANT. Such determination will be made on a case-by-case basis and at the discretion of the SANITATION DISTRICT. Travel Meals— Per-diem rates as approved by IRS shall be utilized for travel meal reimbursements. Per diem rates shall be applied to meals that are appropriate for travel times. Receipts are not required for the approved meals. Additional details related to the reimbursement of the allowable direct costs are provided in the Attachment"D"-Allowable Direct Costs of this AGREEMENT. I. Limitation of Costs If, at any time, CONSULTANT estimates the cost of performing the services described in CONSULTANT's Proposal will exceed seventy-five percent (75%) of the not-to-exceed amount of the AGREEMENT, including approved additional compensation, CONSULTANT shall notify the SANITATION DISTRICT immediately, and in writing. This written notice shall indicate the additional amount necessary to complete the services. Any cost incurred in excess of the approved not-to-exceed amount, without the express written consent of the SANITATION DISTRICT's authorized representative shall be at CONSULTANT's own risk. This written notice shall be provided separately from, and in addition to any notification requirements contained in the CONSULTANT's invoice and monthly progress report. Failure to notify the SANITATION DISTRICT that the services cannot be completed within the authorized not-to-exceed amount is a material breach of this AGREEMENT. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 5 of 19 3. REALLOCATION OF TOTAL COMPENSATION The SANITATION DISTRICT, by its Director of Engineering, shall have the right to approve a reallocation of the incremental amounts constituting the Total Compensation, provided that the Total Compensation is not increased. 4. PAYMENT A. Monthly Invoice: CONSULTANT shall include in its monthly invoice, a detailed breakdown of costs associated with the performance of any corrections or revisions of the work for that invoicing period, in a format acceptable to the SANITATION DISTRICT. CONSULTANT shall warrant and certify the accuracy of these costs and provide all support documentation required by the SANITATION DISTRICT. CONSULTANT understands that submitted costs are subject to Section 12 Audit Provisions. B. CONSULTANT will submit monthly statements covering services and/or work performed for payment for those items included in Section 2 hereof no later than the second Wednesday of the following month and in the format required by the SANITATION DISTRICT. The format must include, as a minimum: 1)current billing period invoicing, 2) current billing period "total percent invoiced to date", 3)future activities, 4) previous billing period "total invoiced to date", 5) potential items that are not included in the Scope of Work, 6) concerns and possible delays, 7) percentage of completion to date, and 8) budget status and amount remaining. Such requests shall be accompanied by such supporting data as may be required by the SANITATION DISTRICT. Upon approval of such payment request by the SANITATION DISTRICT, payment shall be made to CONSULTANT as soon as practicable of one hundred percent(100%)of the invoiced amount. If the SANITATION DISTRICT determines that the work under this AGREEMENT or any specified project element hereunder, is incomplete and that the amount of payment is in excess of: I. The amount considered by the SANITATION DISTRICT's Director of Engineering to be adequate for the protection of the SANITATION DISTRICT; or ii. The percentage of the work accomplished for each project element, The SANITATION DISTRICT may, at the discretion of the Director of Engineering, retain an amount equal to that which insures that the total amount paid to that date does not exceed the percentage of the completed work for the Project in its entirety. C. CONSULTANT may submit periodic payment requests for each 30-day period of this AGREEMENT for the profit as set forth in Section 2 - COMPENSATION above. Said profit payment request shall be proportionate to the work actually accomplished to date on a per-project-element basis. In the event the SANITATION DISTRICT's Director of Engineering determines that no satisfactory PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 6 of 19 progress has been made since the prior payment, or in the event of a delay in the work progress for any reason, the SANITATION DISTRICT shall have the right to withhold any scheduled proportionate profit payment. D. Upon satisfactory completion by CONSULTANT of the work called for under the terms of this AGREEMENT, and upon acceptance of such work by the SANITATION DISTRICT, CONSULTANT will be paid the unpaid balance of any money due for such work based on the monthly statements, including any retained percentages relating to this portion of the work. E. Upon satisfactory completion of the work performed hereunder and prior to final payment under this AGREEMENT for such work, or prior settlement upon termination of this AGREEMENT, and as a condition precedent thereto, CONSULTANT shall execute and deliver to the SANITATION DISTRICT a release of all claims against the SANITATION DISTRICT arising under or by virtue of this AGREEMENT other than such claims, if any, as may be specifically exempted by CONSULTANT from the operation of the release in stated amounts to be set forth therein. F. Pursuant to the California False Claims Act (Government Code sections 12650- 12655), any CONSULTANT that knowingly submits a false claim to the SANITATION DISTRICT for compensation under the terms of this AGREEMENT may be held liable for treble damages and up to a $10,000 civil penalty for each false claim submitted. This section shall also be binding on all Subconsultants. A CONSULTANT or Subconsultant shall be deemed to have submitted a false claim when the CONSULTANT or Subconsultant: (a) knowingly presents or causes to be presented to an officer or employee of the SANITATION DISTRICT a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the SANITATION DISTRICT; (c) conspires to defraud the SANITATION DISTRICT by getting a false claim allowed or paid by the SANITATION DISTRICT; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to the SANITATION DISTRICT; or(a) is a beneficiary of an inadvertent submission of a false claim to the SANITATION DISTRICT, and fails to disclose the false claim to the SANITATION DISTRICT within a reasonable time after discovery of the false claim. S. PREVAILING WAGES To the extent CONSULTANT intends to utilize employees who will perform work during the contract, as more specifically defined under Labor Code Section 1720, CONSULTANT shall be subject to prevailing wage requirements with respect to such employees. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 7 of 19 6. CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS (DIR) REGISTRATION AND RECORD OF WAGES A. To the extent CONSULTANT's employees and/or Subconsultants who will perform Work during the design and preconstruction phases of a construction contract for which Prevailing Wage Determinations have been issued by the DIR and as more specifically defined under Labor Code Section 1720 at seq, CONSULTANT and Subconsultants 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 and enforcement by the DIR. B. The CONSULTANT and Subconsultants shall maintain accurate payroll records and shall comply with all the provisions of Labor Code Section 1776, 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. C. Pursuant to Labor Code Section 1776, the CONSULTANT and Subconsultants shall furnish a copy of all certified payroll records to the SANITATION DISTRICT and/or general public upon request, provided the public request is made through the SANITATION DISTRICT, the Division of Apprenticeship Standards or the Division of Labor Enforcement of the Department of Industrial Relations. D. The CONSULTANT and Subconsultants shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulations Section 16461(e). 7. DOCUMENT OWNERSHIP—CONSULTANT PERFORMANCE A. Ownership of Documents for the Professional Services performed. All documents in all forms (electronic, paper, etc.), including, but not limited to, studies, sketches, drawings, computer printouts, disk files, and electronic copies prepared in connection with or related to the Scope of Work or Professional Services, shall be the property of the SANITATION DISTRICT. The SANITATION DISTRICT's ownership of these documents includes use of, reproduction or reuse of and all incidental rights, whether or not the work for which they were prepared has been performed. The SANITATION DISTRICT ownership entitlement arises upon payment or any partial payment for work performed and includes ownership of any and all work product completed prior to that payment. This Section shall apply whether the CONSULTANT's Professional Services are terminated: a) by the completion of the AGREEMENT, or b) in accordance with other provisions of this AGREEMENT. Notwithstanding any other provision of this paragraph or AGREEMENT, the CONSULTANT shall have the right to make copies of all such plans, studies, sketches, drawings, computer printouts and disk files, and specifications. B. CONSULTANT shall not be responsible or liable for damage caused by subsequent changes to or uses of the study or deliverable on any other project or extension of this project where the subsequent changes or uses are not PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 8 of 19 authorized or approved or adapted for use by CONSULTANT, provided that the service rendered by CONSULTANT was not a proximate cause of the damage. 8. INSURANCE A. General i. Insurance shall be issued and underwritten by insurance companies acceptable to the SANITATION DISTRICT. ii. Insurers must have an "A-' Policyholder's Rating, or better, and Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best's Guide Rating. However, the SANITATION DISTRICT will accept State Compensation Insurance Fund, for the required policy of Worker's Compensation Insurance subject to the SANITATION DISTRICT's option to require a change in insurer in the event the State Fund financial rating is decreased below"B". Further, the SANITATION DISTRICT will require CONSULTANT to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within twenty (20)days of written notice to CONSULTANT, by the SANITATION DISTRICT or its agent. III. Coverage shall be in effect prior to the commencement of any work under this AGREEMENT. B. General Liability The CONSULTANT shall maintain during the life of this AGREEMENT, including the period of warranty, Commercial General Liability Insurance written on an occurrence basis providing the following minimum limits of liability coverage: Two Million Dollars ($2,000,000) per occurrence with Two Million Dollars ($2,000,000)aggregate. Said insurance shall include coverage for the following hazards: Premises-Operations, blanket contractual liability (for this AGREEMENT), products liability/completed operations (including any product manufactured or assembled), broad form property damage, blanket contractual liability, independent contractors liability, personal and advertising injury, mobile equipment, owners and contractors protective liability, and cross liability and severability of interest clauses. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement($). If requested by SANITATION DISTRICT and applicable, XCU coverage (Explosion, Collapse and Underground)and Riggers/On Hook Liability must be included in the General Liability policy and coverage must be reflected on the submitted Certificate of Insurance. C. Umbrella Excess Liability The minimum limits of general liability and Automotive Liability Insurance required, as set forth herein, shall be provided for through either a single policy of primary insurance or a combination of policies of primary and umbrella excess coverage. Umbrella 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 automotive liability. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 9 of 19 D. AutomotiveNehicle Liability Insurance The CONSULTANT shall maintain a policy of Automotive 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: Combined single limit of One Million Dollars ($1,000,000) or alternatively, One Million Dollars ($1,000,000) per person for bodily injury and One Million Dollars ($1,000,000) per accident for property damage. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement. E. Drone Liability Insurance If a drone will be used, drone liability insurance must be maintained by CONSULTANT in the amount of One Million Dollars ($1,000,000) in a form acceptable by the SANITATION DISTRICT. F. Worker's Compensation Insurance The CONSULTANT shall provide such Workers' Compensation Insurance as required by the Labor Code of the State of California in the amount of the statutory limit, including Employer's Liability Insurance with a minimum limit of One Million Dollars ($1,000,000) per occurrence. Such Worker's Compensation Insurance shall be endorsed to provide for a waiver of subrogation in favor of the SANITATION DISTRICT. A statement on an insurance certificate will not be accepted in lieu of the actual endorsements unless the insurance carrier is State of California Insurance Fund and the identifier"SCIF" and endorsement numbers 2570 and 2065 are referenced on the certificate of insurance. If an exposure to Jones Act liability may exist, the insurance required herein shall include coverage for Jones Act claims. G. Errors and Omissions/Professional Liability CONSULTANT shall maintain in full force and effect, throughout the term of this AGREEMENT, standard industry form professional negligence errors and omissions insurance coverage in an amount of not less than Two Million Dollars ($2,000,000)with limits in accordance with the provisions of this Paragraph. If the policy of insurance is written on a "claims made" basis, said policy shall be continued in full force and effect at all times during the term of this AGREEMENT, and for a period of five (5) years from the date of the completion of the services hereunder. In the event of termination of said policy during this period, CONSULTANT shall obtain continuing insurance coverage for the prior acts or omissions of CONSULTANT during the course of performing services under the term of this AGREEMENT. Said coverage shall be evidenced by either a new policy evidencing no gap in coverage or by separate extended "tail" coverage with the present or new carrier. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 10 of 19 In the event the present policy of insurance is written on "per occurrence" basis, said policy shall be continued in full force and effect during the term of this AGREEMENT or until completion of the services provided for in this AGREEMENT, whichever is later. In the event of termination of said policy during this period, new coverage shall be obtained for the required period to insure for the prior acts of CONSULTANT during the course of performing services under the term of this AGREEMENT. CONSULTANT shall provide to the SANITATION DISTRICT a certificate of insurance in a form acceptable to the SANITATION DISTRICT indicating the deductible or self-retention amounts and the expiration date of said policy, and shall provide renewal certificates not less than ten (10)days prior to the expiration of each policy term. H. Proof of Coverage The CONSULTANT shall furnish the SANITATION DISTRICT with original certificates and amendatory endorsements effecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by the SANITATION DISTRICT before work commences. The SANITATION DISTRICT reserves the right to require complete, certified copies of all required insurance policies, including endorsements, effecting the coverage required, at any time. The following are approved forms that must be submitted as proof of coverage: • Certificate of Insurance ACORD Form 25 (5/2010) or equivalent. • Additional Insurance (ISO Form) CG2010 11 85 or (General Liability) The combination of(ISO Forms) CG 2010 10 01 and CG 2037 10 01 All other Additional Insured endorsements must be submitted for approval by the SANITATION DISTRICT, and the SANITATION DISTRICT may reject alternatives that provide different or less coverage to the SANITATION DISTRICT. • Additional Insured Submit endorsement provided by carrier for the (Auto Liability) SANITATION DISTRICT approval. • Waiver of Subrogation State Compensation Insurance Fund Endorsement No. 2570 or equivalent. • Cancellation Notice State Compensation Insurance Fund Endorsement No. 2065 or equivalent. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 11 of 19 I. Cancellation Notice 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. The Cancellation Section of ACORD Form 25 (5/2010) shall state the required thirty (30) days' written notification. The policy shall not terminate, nor shall it be cancelled, nor the coverage reduced until thirty(30) days after written notice is given to the SANITATION DISTRICT except for nonpayment of premium, which shall require not less than ten (10) days written notice to the SANITATION DISTRICT. Should there be changes in coverage or an increase in deductible or SIR amounts, the CONSULTANT and its insurance broker/agent shall send to the SANITATION DISTRICT a certified letter which includes a description of the changes in coverage and/or any increase in deductible or SIR amounts. The certified letter must be sent to the attention of Risk Management, and shall be received by the SANITATION DISTRICT not less than thirty (30) days prior to the effective date of the change(s) if the change would reduce coverage or increase deductibles or SIR amounts or otherwise reduce or limit the scope of insurance coverage provided to the SANITATION DISTRICT. J. Primary Insurance The General and Automobile liability policies shall contain a Primary and Non Contributory Clause. Any other insurance maintained by the SANITATION DISTRICT shall be excess and not contributing with the insurance provided by CONSULTANT. K. Separation of Insured The General and Automobile liability policies shall contain a "Separation of Insureds" clause. L. Non-Limiting (if applicable) Nothing in this document shall be construed as limiting in any way, nor shall it limit the indemnification provision contained in this AGREEMENT, or the extent to which CONSULTANT may be held responsible for payment of damages to persons or property. M. Deductibles and Self-Insured Retentions Any deductible and/or self-insured retention must be declared to the SANITATION DISTRICT on the Certificate of Insurance. All deductibles and/or self-insured retentions require approval by the SANITATION DISTRICT. At the option of the SANITATION DISTRICT, either: the insurer shall reduce or eliminate such deductible or self-insured retention as respects the SANITATION DISTRICT; or the CONSULTANT shall provide a financial guarantee satisfactory to the SANITATION DISTRICT guaranteeing payment of losses and related investigations, claim administration and defense expenses. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 12 of 19 N. Defense Costs Excepting Professional Liability insurance policies shall have a provision that defense costs for all insureds and additional insureds are paid in addition to and do not deplete any policy limits. O. Subronsultants The CONSULTANT shall be responsible to establish insurance requirements for any Subconsultant hired by the CONSULTANT. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subconsultant's operations and work. P. Limits Are Minimums If the CONSULTANT maintains higher limits than any minimums shown above, then SANITATION DISTRICT requires and shall be entitled to coverage for the higher limits maintained by CONSULTANT. 9. SCOPE CHANGES In the event of a change in the Scope of Work or a change in the proposed Project, as requested by the SANITATION DISTRICT, the Parties hereto shall execute an Amendment to this AGREEMENT setting forth with particularity all terms of the new AGREEMENT, including, but not limited to any additional CONSULTANT's fees. 10. PROJECT TEAM AND SUBCONSULTANTS CONSULTANT shall provide to SANITATION DISTRICT, prior to execution of this AGREEMENT, the names and full description of all Subconsultants and CONSULTANT's project team members anticipated to be used on this Project under this AGREEMENT by CONSULTANT. CONSULTANT shall include a description of the work and services to be done by each Subconsultant and each of CONSULTANT's Project team member. CONSULTANT shall include the respective compensation amounts for CONSULTANT and each Subconsultant, broken down as indicated in Section 2- COMPENSATION. There shall be no substitution of the listed Subconsultants and CONSULTANT's project team members without prior written approval by the SANITATION DISTRICT. 11. ENGINEERING REGISTRATION The CONSULTANTS personnel and Subconsultants are comprised of registered engineers and a staff of specialists and draftsmen in each department. The firm itself is not a registered engineer but represents and agrees that wherever, in the performance of this AGREEMENT, the services of a registered engineer is required, such services hereunder will be performed under the direct supervision of registered engineers who are registered in California. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 13 of 19 12. AUDIT PROVISIONS. A. SANITATION DISTRICT retains the reasonable right to access, review, examine, and audit, any and all books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify that the CONSULTANT is in compliance with all requirements under this AGREEMENT. The CONSULTANT shall include the SANITATION DISTRICT's right as described above, in any and all of their subcontracts, and shall ensure that these rights are binding upon all Subconsultants. B. SANITATION DISTRICT retains the right to examine CONSULTANT's books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify all direct and indirect costs, of whatever nature, which are claimed to have been incurred, or anticipated to be incurred or to ensure CONSULTANT's compliance with all requirements under this AGREEMENT during the term of this AGREEMENT and for a period of three (3)years after its termination. C. CONSULTANT shall maintain complete and accurate records in accordance with generally accepted industry standard practices and the SANITATION DISTRICT's policy. The CONSULTANT shall make available to the SANITATION DISTRICT for review and audit, all project related accounting records and documents, and any other financial data within 15 days after receipt of notice from the SANITATION DISTRICT. Upon SANITATION DISTRICT's request, the CONSULTANT shall submit exact duplicates of originals of all requested records to the SANITATION DISTRICT. If an audit is performed, CONSULTANT shall ensure that a qualified employee of the CONSULTANT will be available to assist SANITATION DISTRICT's auditor in obtaining all Project related accounting records and documents, and any other financial data. 13. LEGAL RELATIONSHIP BETWEEN PARTIES The legal relationship between the parties hereto is that of an independent contractor and nothing herein shall be deemed to transform CONSULTANT, its staff, independent contractors, or Subconsultants into employees of the SANITATION DISTRICT. CONSULTANT's staff performing services under the AGREEMENT shall at all times be employees and/or independent contractors of CONSULTANT. CONSULTANT shall monitor and control its staff and pay wages, salaries, and other amounts due directly to its staff in connection with the AGREEMENT. CONSULTANT shall be responsible for hiring, review, and termination of its staff and shall be accountable for all reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation, workers' compensation and similar matters. 14. NOTICES All notices hereunder and communications regarding the interpretation of the terms of this AGREEMENT, or changes thereto, shall be effected by delivery of said notices in person or by depositing said notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 14 of 19 Notice shall be mailed to the SANITATION DISTRICT at: ORANGE COUNTY SANITATION DISTRICT 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Attention: Michelle Hadaway, Senior Contracts Administrator Copy: Hardat Khublall, Project Manager Notice shall be mailed to CONSULTANT at: LOCKWOOD, ANDREWS & NEWNAM, INC. (LAN) 770 The City Drive South Suite 8425 Orange, CA 92868 Attention: M. Cenk Yavas, PE, D.WRE All communication regarding the Scope of Work, will be addressed to the Project Manager. Direction from other SANITATION DISTRICT staff must be approved in writing by the SANITATION DISTRICT's Project Manager prior to action from the CONSULTANT. 15. TERMINATION The SANITATION DISTRICT may terminate this AGREEMENT at any time, without cause, upon giving thirty (30) days written notice to CONSULTANT. In the event of such termination, CONSULTANT shall be entitled to compensation for work performed on a prorated basis through and including the effective date of termination. CONSULTANT shall be permitted to terminate this AGREEMENT upon thirty (30)days written notice only if CONSULTANT is not compensated for billed amounts in accordance with the provisions of this AGREEMENT, when the same are due. Notice of termination shall be mailed to the SANITATION DISTRICT at the address listed in Section 14 - NOTICES. 16. DOCUMENTS AND STUDY MATERIALS The documents and study materials for this Project shall become the property of the SANITATION DISTRICT upon the termination or completion of the work. CONSULTANT agrees to furnish to the SANITATION DISTRICT copies of all memoranda, correspondence, electronic materials, computation and study materials in its files pertaining to the work described in this AGREEMENT, which is requested in writing by the SANITATION DISTRICT. 17. COMPLIANCE CONSULTANT certifies by the execution of this AGREEMENT that it pays employees not less than the minimum wage as defined by law, and that it does not discriminate in its employment with regard to race, color, religion, sex or national origin; that it is in compliance with all federal, state and local directives and executive orders regarding non-discrimination in employment; and that it agrees to demonstrate positively and aggressively the principle of equal opportunity in employment. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 15 of 19 18. AGREEMENT EXECUTION AUTHORIZATION Both the SANITATION DISTRICT and CONSULTANT do covenant that each individual executing this document by and on behalf of each Party is a person duly authorized to execute this AGREEMENT for that Party. 19. DISPUTE RESOLUTION In the event of a dispute arising between the parties regarding performance or interpretation of this AGREEMENT, the dispute shall be resolved by binding arbitration under the auspices of the Judicial Arbitration and Mediation Service ("JAMS"), or similar organization or entity conducting alternate dispute resolution services. 20. ATTORNEY'S FEES, COSTS AND NECESSARY DISBURSEMENTS If any action at law or in equity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this AGREEMENT, the prevailing party shall be entitled to reasonable attorney's fees, costs, and necessary disbursements in addition to any other relief to which he may be entitled. 21. WARRANTY CONSULTANT shall perform its services in accordance with generally accepted industry and professional standards. If, within the 12-month period following completion of its services, the SANITATION DISTRICT informs CONSULTANT that any part of the services fails to meet those standards, CONSULTANT shall, within the time prescribed by the SANITATION DISTRICT, take all such actions as are necessary to correct or complete the noted deficiency(ies). 22. INDEMNIFICATION To the fullest extent permitted by law, CONSULTANT shall indemnify, defend (at CONSULTANT's sole cost and expense and with legal counsel approved by the SANITATION DISTRICT, which approval shall not be unreasonably withheld), protect and hold harmless the SANITATION DISTRICT and all of SANITATION DISTRICT's officers, directors, employees, CONSULTANT's, and agents (collectively the "Indemnified Parties"), from and against any and all claims, damages, liabilities, causes of action, suits, arbitration awards, losses,judgments, fines, penalties, costs and expenses (including, without limitation, attorneys' fees, disbursements and court costs, and all other professional, expert or CONSULTANT's fees and costs and the SANITATION DISTRICT's general and administrative expenses; individually, a "Claim"; collectively, "Claims")which may arise from or are in any manner related, directly or indirectly, to any work performed, or any operations, activities, or services provided by CONSULTANT in carrying out its obligations under this AGREEMENT to the extent of the negligent, recklessness and/or willful misconduct of CONSULTANT, its principals, officers, agents, employees, CONSULTANT's suppliers, CONSULTANT, Subconsultants, subcontractors, and/or anyone employed directly or indirectly by any of them, regardless of any contributing negligence or strict liability of an Indemnified Party. Notwithstanding the foregoing, nothing herein shall be construed to require CONSULTANT to indemnify the Indemnified Parties from any Claim arising solely from: PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 16 of 19 (A)the active negligence or willful misconduct of the Indemnified Parties; or (B)a natural disaster or other act of God, such as an earthquake; or (C)the independent action of a third party who is neither one of the Indemnified Parties nor the CONSULTANT, nor its principal, officer, agent, employee, nor CONSULTANT's supplier, CONSULTANT, Subconsultant, subcontractor, nor anyone employed directly or indirectly by any of them. Exceptions (A)through (B) above shall not apply, and CONSULTANT shall, to the fullest extent permitted by law, indemnify the Indemnified Parties, from Claims arising from more than one cause if any such cause taken alone would otherwise result in the obligation to indemnify hereunder. CONSULTANT's liability for indemnification hereunder is in addition to any liability CONSULTANT may have to the SANITATION DISTRICT for a breach by CONSULTANT of any of the provisions of this AGREEMENT. Under no circumstances shall the insurance requirements and limits set forth in this AGREEMENT be construed to limit CONSULTANT's indemnification obligation or other liability hereunder. The terms of this AGREEMENT are contractual and the result of negotiation between the parties hereto. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this AGREEMENT. 23. DUTY TO DEFEND The duty to defend hereunder is wholly independent of and separate from the duty to indemnify and such duty to defend shall exist regardless of any ultimate liability of CONSULTANT and shall be consistent with Civil Code section 2782.8. Such defense obligation shall arise immediately upon presentation of a Claim by any person if, without regard to the merit of the Claim, such Claim could potentially result in an obligation to indemnify one or more Indemnified Parties, and upon written notice of such Claim being provided to CONSULTANT. Payment to CONSULTANT by any Indemnified Party or the payment or advance of defense costs by any Indemnified Party shall not be a condition precedent to enforcing such Indemnified Party's rights to indemnification hereunder. In the event a final judgment, arbitration, award, order, settlement, or other final resolution expressly determines that the claim did not arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, to any extent, then the SANITATION DISTRICT will reimburse CONSULTANT for the reasonable costs of defending the Indemnified Parties against such claims. CONSULTANT's indemnification obligation hereunder shall survive the expiration or earlier termination of this AGREEMENT until such time as action against the Indemnified Parties for such matter indemnified hereunder is fully and finally barred by the applicable statute of limitations. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 17 of 19 24. COMPLIANCE WITH SANITATION DISTRICT POLICIES AND PROCEDURES CONSULTANT shall be required to comply with all SANITATION DISTRICT policies and procedures including the OCSD Safety Standards, as applicable, all of which may be amended from time to time. 25. CLOSEOUT When the SANITATION DISTRICT determines that all Work authorized under the AGREEMENT is fully complete and that the SANITATION DISTRICT requires no further work from CONSULTANT, or the AGREEMENT is otherwise terminated or expires in accordance with the terms of the AGREEMENT, the SANITATION DISTRICT shall give the Consultant written notice that the AGREEMENT will be closed out. CONSULTANT shall submit all outstanding billings, work submittals, deliverables, reports or similarly related documents as required under the AGREEMENT within thirty(30) days of receipt of notice of AGREEMENT closeout. Upon receipt of CONSULTANT's submittals, the SANITATION DISTRICT shall commence a closeout audit of the AGREEMENT and will either: i. Give the CONSULTANT a final AGREEMENT Acceptance: or ii. Advise the CONSULTANT in writing of any outstanding item or items which must be furnished, completed, or corrected at the CONSULTANT's cost. CONSULTANT shall be required to provide adequate resources to fully support any administrative closeout efforts identified in the AGREEMENT Such support must be provided within the timeframe requested by the SANITATION DISTRICT. Notwithstanding the final AGREEMENT acceptance, the CONSULTANT will not be relieved of its obligations hereunder, nor will the CONSULTANT be relieved of its obligations to complete any portions of the work, the non-completion of which were not disclosed to the SANITATION DISTRICT(regardless of whether such nondisclosures were fraudulent, negligent, or otherwise), and the CONSULTANT shall remain obligated under all those provisions of the AGREEMENT which expressly or by their nature extend beyond and survive final AGREEMENT Acceptance. Any failure by the SANITATION DISTRICT to reject the work or to reject the CONSULTANT's request for final AGREEMENT Acceptance as set forth above shall not be deemed to be acceptance of the work by the SANITATION DISTRICT for any purpose nor imply acceptance of, or agreement with, the CONSULTANT's request for final AGREEMENT Acceptance. 26. ENTIRE AGREEMENT This AGREEMENT constitutes the entire understanding and agreement between the Parties and supersedes all previous negotiations between them pertaining to the subject matter thereof. PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 18 of 19 IN WITNESS WHEREOF, this AGREEMENT has been executed in the name of the SANITATION DISTRICT, by its officers thereunto duly authorized, and CONSULTANT as of the day and year first above written. LOCKWOOD, ANDREWS & NEWNAM, INC. (LAN) By Date Printed Name &Title ORANGE COUNTY SANITATION DISTRICT By Gregory C. Sebourn, PLS Date Chair, Board of Directors By Kelly A. Lore Date Clerk of the Board By Marc Dubois Date Contracts, Purchasing and Materials Management Manager Attachments: Attachment"A"—Scope of Work Attachment'B"—Labor Hour Matrix Attachment"C'—Conflict of Interest Disclaimer Attachment"D"—Allowable Direct Costs Attachment"E"—Fee Proposal Form Attachment"F"— Professional Services Agreement (PSA) Attachment"G"—Acknowledgement of PSA Attachment"H"— Not Used Attachment"I"— Cost Matrix and Summary Attachment"J"—Acknowledgement of Addenda Receipt Attachment"K"—Minor Suboonsultants Hourly Rate Schedule Attachment"L"—OCSD Safety Standards MH:yp PROFESSIONAL SERVICES AGREEMENT PROJECT NO. PS15.02 CONFORMED EDINGER PUMP STATION REHABILITATION STUDY Page 19 of 19 OPERATIONS COMMITTEE Meeting Date TOBd.Ot Dir. 12J05/17 12/20/17 AGENDA REPORT em1amber Item Number 0 11 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: 2017 FACILITIES MASTER PLAN GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 17-16 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District Adopting the 2017 Facilities Master Plan as the Orange County Sanitation District's New Master Plan for Future Capital Planning and Repealing Resolution No. OCSD 09-18." BACKGROUND Since its inception, the Orange County Sanitation District (Sanitation District) has managed its facilities through the preparation and implementation of long-term master plans. Most recent master planning efforts include the 1999 Strategic Plan, 2002 Strategic Plan Update, 2006 Collection System Model and Strategic Plan Update, and 2009 Facilities Master Plan. Since the last master planning effort, the Sanitation District has been working towards creating a more comprehensive Capital Improvement Program (CIP) plan. The Engineering Department has been developing a more detailed 20-year plan for facility rehabilitation, refurbishment, and replacement. Staff has evaluated the condition, capacity, level of service requirements, and technology opportunities in each treatment plant process area and in the collection system. To address these needs and issues, a list of potential projects with scope elements has been developed for the next 20 years. The 2017 Facilities Master Plan (Master Plan)validated the scopes and budgets for these projects, prioritized them based on needs and criticality, and developed a CIP plan for the next 20 years. The 20-year CIP for both the collection system and treatment plants totals $5 billion. • The Master Plan identifies the capital improvement needs of the Sanitation District through 2037, to meet level of service standards identified in the Five-Year Strategic Plan. • The Master Plan recommends a large number of capital improvements for rehabilitation, renewal and replacement, and the supporting studies. • The Master Plan incorporates the results of three recently completed planning projects including the Effluent Reuse Study, the Odor Control Master Plan, and the Biosolids Master Plan. These projects evaluated alternatives and recommended CIP projects needed to address mid-and long-term biosolids needs, and to meet Sanitation District initiatives such as maximizing beneficial reuse of effluent and minimizing odor impacts Page 1 d 3 to neighbors. Three of the eight strategic goals from the Sanitation District's current Five-Year Strategic Plan were addressed by these projects. • The costs of these improvements were previously identified by the Asset Management Plan and incorporated into the Rate Program in the "Rehabilitation, Renewal and Replacement" line item. The Rate Program will be adjusted by transferring the $721 million cost from this line item to the CIP line item. • The completion and adoption of the Master Plan allows the Sanitation District to stay in compliance with the Capacity Assurance Planning requirement of the Statewide Waste Discharge Requirements Order, which was adopted by the State Water Resource Control Board in May 2, 2006. RELEVANT STANDARDS • 1, 5, 20-year planning horizons • Maintain a proactive asset management program PRIOR COMMITTEE/BOARD ACTIONS July 2016 - Approved a Professional Services Agreement with Carollo Engineers, Inc. to provide professional services for 2017 Facilities Master Plan, Project PS15-10, for an amount not to exceed $3,132,052; and approved a contingency of$313,205 (10%). ADDITIONAL INFORMATION A rate study recommending sewer connection fees and user fees was conducted as part of the 2017 Facilities Master Plan. CEQA CEQA Guidelines Section 15262 provides that a project involving only feasibility or planning studies for possible future actions,which the agency has not approved, adopted, or funded, does not require the preparation of an EIR or negative declaration, but does require consideration of environmental factors. This exemption does not apply to the adoption of a plan that will have a legally binding effect on later activities. The 2017 Facilities Master Plan is a feasibility/planning study that will be used to assist in the evaluation and planning of future projects. The Facilities Master Plan will not have a legally binding effect on later activities, but will instead be used to analyze potential future actions, which the Sanitation District has not yet approved, adopted, or funded. Pursuant to CEQA Guidelines Section 15262, the Facilities Master Plan does not require the preparation of an EIR or Negative Declaration. Thus, a Notice of Exemption was filed for this project on July 28, 2016. All projects evaluated under the 2017 Facilities Master Plan must comply with CEQA before they are approved, adopted, or implemented. The Sanitation District may choose to perform a CEQA determination for multiple projects via a Programmatic EIR, or for each individual project. Page 2 of 3 FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OOSD website (www.ocsd.corn with the complete agenda package: Resolution No. OCSD 17-16 (hard copy attached) 2017 Facilities Master Plan Executive Summary (Separate document) 2017 Draft Facilities Master Plan (Separate document) Presentation from 12/06/2017 Operations Committee Meeting KM:EY:gc Page 3 d 3 RESOLUTION NO. OCSD 17-16 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT ADOPTING THE 2017 FACILITIES MASTER PLAN AS THE ORANGE COUNTY SANITATION DISTRICT'S NEW MASTER PLAN FOR FUTURE CAPITAL PLANNING AND REPEALING RESOLUTION NO. OCSD 09-18 WHEREAS, on December 16, 2009, the Board of Directors of the Orange County Sanitation District ("Sanitation District") approved Resolution No. OCSD 09-18, adopting the 2009 Facilities Master Plan, a Master Plan for new facilities through the year 2030; and WHEREAS, on December 20, 2017, the Board of Directors of the Sanitation District reviewed the 2017 Facilities Master Plan, a Master Plan for new facilities through the year 2037; and WHEREAS, the Sanitation District is the lead agency for the 2017 Facilities Master Plan, pursuant to the California Environmental Quality Act of 1970, as amended, ("CEQA") and the State CEQA Guidelines. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS: Section 1: That the Board hereby adopts the 2017 Facilities Master Plan for future capital planning through the year 2037. Section 2: Resolution No. OCSD 09-18, adopted December 16, 2009, adopting the 2009 Facilities Master Plan, a Master Plan for new facilities through the year 2030, is hereby repealed. 1282802.1 OCSD 17-16-1 Section 3: Environmental review is not required under CEQA pursuant to CEQA Guidelines §15262 because the 2017 Facilities Master Plan will not have a legally binding effect on later activities it is only a feasibility/planning study for possible future actions which the Sanitation District has not approved, adopted, or funded and the Sanitation District has considered environmental factors as required. PASSED AND ADOPTED at a regular meeting of the Board of Directors held December 20, 2017 Gregory C. Sebourn, PLS Board Chairman ATTEST: Kelly A. Lore, CMC Clerk of the Board APPROVED AS TO FORM: Bradley R. Hogin General Counsel 1282802.1 OCSD 17-16-2 STATE OF CALIFORNIA ) as 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 17-16 was passed and adopted at a regular meeting of said Board on the 20'h day of December 2017, 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 20'" day of December 2017. Kelly A. Lore, CIVIC Clerk of the Board of Directors Orange County Sanitation District 1282802.1 OCSD 17-16-3 ADMINISTRATION COMMITTEE Meeting Date TOBd.Ot Dir. 12/13/17 12/20/17 AGENDA REPORT emNumber Item Number 2 12 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: 2017 BENEFITS PROGRAM — ONE-TIME FUND REALLOCATION GENERAL MANAGER'S RECOMMENDATION Approve a one-time reallocation of budgeted funds in the amount of $195,000 to be transferred to group health insurance benefits resulting in a total cost of $12,032,187. The reallocation would not result in an increase to the overall 2017 budget. SUMMARY The Orange County Sanitation District (Sanitation District) provides group health insurance benefits as a provision contained in its Memoranda of Understanding (MOUs) and Board-approved policies. Group health insurance benefits costs are estimated during annual budget planning. BACKGROUND Annual renewal quotes are estimates from the Sanitation District's benefits insurance broker, Alliant Insurance Services, and are based on prior year enrollments and negotiated plan pricing. The anticipated costs obtained from the broker were included within the Fiscal Year 2016-17 budget. Actual costs incurred each fiscal year can differ from the quotes as they are based on actual employee numbers and plan selection. In September 2016, the Board approved the estimated cost for 2017 in the amount of $11,837,187 toward group health insurance which includes: medical, dental, vision, employee assistance program, life insurance, and disability coverage. RELEVANT STANDARDS • Competitive compensation and benefits PROBLEM As a result of the increase in the number of new employees hired in 2017 and actual employee plan selections differing from what was anticipated, reallocation of additional funds will be required for FY 2017-18. The Sanitation District is obligated to provide these agreed-to benefits as provided for in the MOUs and personnel policies, as approved by the Board of Directors. Page 1 of 3 PROPOSED SOLUTION Approve the one-time reallocation of funds from the 2017 operating budget toward the cost of group health insurance to ensure continued coverage for employees and eligible dependents. TIMING CONCERNS Board approval is necessary to ensure that the Sanitation District can pay all invoices relative to employee health insurance benefits for December of 2017. Timely payments are required to continue coverage for Sanitation District employees and eligible dependents, in accordance with the MOUs and personnel policies. RAMIFICATIONS OF NOT TAKING ACTION Without Board approval, the Sanitation District cannot make the payments due for all employee health insurance benefits. This will result in the interruption of medical, dental, vision, EAP, life, and disability coverage and services to employees and eligible dependents; and the Sanitation District would not be meeting its obligation to provide these benefits as provided for in the MOUs and personnel policies. PRIOR COMMITTEE/BOARD ACTIONS In June of 2016, the Board of Directors adopted the proposed Sanitation District budget for FY 2016-17 and 2017-18. In September of 2016, the Board of Directors approved the annual estimates for health insurance benefits for the 2017 calendar year. ADDITIONAL INFORMATION Medical Insurance The Sanitation District's medical benefits are designed to help maintain wellness and protect employees and their families from major financial hardship in the event of illness or injury. HMO (Health Maintenance Organization) plans offer comprehensive coverage. Employees have a choice between the Anthem Blue Cross HMO orthe Kaiser HMO plan. The shared cost on HMO plans is 20% employee / 80% employer (10% employee / 90% employer for employee-only coverage). PPO (Preferred Provider Organization) plan offers a network of doctors and healthcare facilities that provide services to plan members at special discounted rates. The PPO plan is with Anthem Blue Cross. The shared cost on PPO plans is 20% employee / 80% employer. Dental Insurance The Sanitation District provides the Delta Dental plan to all benefit eligible employees. The shared cost on the dental plan is 20% employee / 80% employer. Page 2 d 3 Vision Insurance The Sanitation District currently provides vision insurance to all benefit eligible employees through Anthem Blue View Vision. The employer pays the cost of coverage for employees. Basic Life Insurance Life insurance provides protection for an employee's beneficiary in the event of death. All benefit eligible full-time and part-time employees automatically receive Basic Life and Accidental Death & Dismemberment insurance coverage through Prudential Insurance Company of America. The employer pays the cost of coverage for employees. Short-Term Disability Insurance The short-term disability insurance plan protects employees when non-work related illness or injury makes it impossible for them to work for a short period of time. Under the plan, income may be continued for up to 26 weeks. The employer pays the cost of coverage for employees. Long-Term Disability Insurance The long-term disability insurance plan protects employees when an illness or injury makes it impossible for them to work for an extended period of time. The employer pays the cost of coverage for employees with 5+ years of service. Executive Disability The additional long-term disability insurance plan provides increased income protection for executives and managers. The employer pays the cost of coverage for employees. Employee Assistance Program The EAP plan protects employees and family members when they need help with personal problems such as marital and relationship problems; stress, anxiety and depression; grief and loss; or substance abuse. The employer pays the cost of coverage for employees. FINANCIAL CONSIDERATIONS The funds for the 2017 amounts for group health insurance benefits were included in the FY 2016-17 and 2017-18 Sanitation District Operating Budget. No additional budgeted funds are needed due to budgeted savings in other salary and benefit line items. ATTACHMENT The following aftachment(s)may be viewed on-line at the Sanitation District's website(www.ocsd.com)with the complete agenda package: N/A Page 3 of 3 ADMINISTRATION COMMITTEE Meeting Date TOBd.Of Dir. 12/13/17 12/20/17 AGENDA REPORT em Number Item 13Mbar 3 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: ENTERPRISE ASSET MANAGEMENT PHASE IV— LOCK OUT TAG OUT (LOTO) GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Services Agreement with Total Resource Management, Inc. for IBM-Maximo Enterprise Asset Management Phase IV— Lock Out Tag Out (LOTO) Software, Specification No. S-2017-87113D, for a total amount not to exceed $188,318; and B. Approve a contingency in the amount of$37,664 (20%). BACKGROUND The Orange County Sanitation District (Sanitation District) currently owns the IBM-Maximo Enterprise Asset Management software. Total Resource Management, Inc. (TRM) has a specialized LOTO product and an in depth understanding of LOTO concepts and practices. TRM has successfully implemented the first three phases. LOTO application will provide the framework to create and maintain LOTO safety procedures as well as track the application and removal of these procedures on a piece of equipment. The Sanitation District issued a Request for Proposal (RFP) for a LOTO application to supplement Maximo. Only three vendors were solicited per 10/26/11 Board Meeting, Item No. 11 C, which approved the use of the following three vendors for subsequent phases: Total Resource Management, Inc., EMA Group, Inc., and Starboard Consulting, LLC. Only TRM submitted a proposal to Phase IV. There was no response from EMA Group and Starboard Consulting, LLC noted that their Director has been on extended leave and did not have the staffing to provide a proposal. RELEVANT STANDARDS • Provide a safe and collegial workplace • Protection of Orange County Sanitation District assets • Maintain a proactive asset management program • Efficiency efforts reduce the cost to provide the current service level or standard • Meet OSHA training requirements Page 1 of 3 PROBLEM The Sanitation District does not have a centralized system to track LOTO at both Plant No. 1 and Plant No. 2. Operation and Maintenance staff are not aware of all the plant equipment that is currently tagged out of service. Staff does not have a centralized place to view all the LOTO and their statuses. PROPOSED SOLUTION TRM's LOTO module is an integrated application within Maximo. The application will assist staff to seamlessly transition from the work order module to the LOTO module. The LOTO application will also provide a central place to manage all the LOTO throughout the plant that is easily accessible through the Maximo system. TIMING CONCERNS Safety is on the General Manager's work plan and a system that provides a centralized mechanism for tracking LOTO should be implemented as soon as possible to support and accomplish the work plan. RAMIFICATIONS OF NOT TAKING ACTION The centralized LOTO system will provide a method to document the LOTO process and procedures. Not taking this action will hinder the Sanitation District from providing documentation on safety procedures mandated by the OSHA LOTO safety standards. Situations may arise where the Sanitation District may be liable for fines for non-compliance as the current LOTO management process is manual and cumbersome. PRIOR COMMITTEE/BOARD ACTIONS Phases 1-3 were implemented between 2011 and 2013. ADDITIONAL INFORMATION On July 17, 2017, the Sanitation District issued a Request for Proposal (RFP)for a LOTO application to supplement Maximo;the RFP closed on August 17, 2017. Three firms were notified of the RFP and only one company,TRM, provided a response. A panel consisting of seven Sanitation District staff reviewed and ranked the proposal in accordance with Purchasing Ordinance No. OCSD-47. This RFP used the consensus scoring method. During consensus scoring sessions,the evaluation facilitator directed the team's attention to each item in the specifications. The evaluation team considered the proposal, comparing the vendor's proposed offering against the specifications in the underlying RFP. Consensus scoring sessions encouraged open discussions and questions among members of the evaluation team. 1) Operations Supervisor 2) Senior Info Tech Analyst 3) Information Tech Supervisor Page 2 d 3 4) Senior Mechanic 5) Maintenance Specialist 6) Lead Electric Technician 7) Human Resource Manager Evaluators discussed the relative strengths and weaknesses of the vendor's proposal in each area. The following criteria/weights were used to evaluate the proposals: Work Plan (25%), Qualifications of Firm (15%), Proposed Staffing and Project Organization (15%), and Cost Evaluation (20%). The Onsite Presentation (25%) component of the evaluation process was not utilized. The solution proposed by TRM received a score of 640 out of 750. Staff recommends awarding the Professional Services Agreement to Total Resource Management, Inc. for a not-to-exceed amount of$188,318. PROPOSAL EVALUATION TABLE Criteria Weight Weighted TRM EMA GROUP STARBOARD Score CONSULTING Work 25 250 200 No Response No Response Plan/Software Qualifications of 15 150 120 No Response No Response the Firm Staffing and No Response No Response Project 15 150 120 Organization Cost Evaluation 20 200 200 No Response No Response Total 75 750 640 Initial Proposal $191,735 Fee Negotiated Fee $188,318 FINANCIAL CONSIDERATION This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted under SP-100, Asset Management/CMMS System Replacement. ATTACHMENTS The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: Professional Services Agreement Page 3 of 3 PROFESSIONAL SERVICES AGREEMENT IBM-Maximo Enterprise Asset Management System Phase IV-LOTO Specification No. S-2017-871BD THIS AGREEMENT is made and entered into as of the date fully executed below, by and between ORANGE COUNTY SANITATION DISTRICT, with a principal place of business at 10844 Ellis Avenue, Fountain Valley, CA 92708-7018 (hereinafter referred to as "OCSD") and Total Resource Management, Inc. with a principal business at 510 King Street, Suite 200 Alexandria, VA 22314- 3132 (hereinafter referred to as "CONSULTANT")collectively referred to as the"Parties". W/ TNESSETH WHEREAS, based on CONSULTANT's expertise and experience, OCSD desires to temporarily engage CONSULTANT to provide IBM-MAXIMO ENTERPRISE ASSET MANAGEMENT SYSTEM PHASE IV— LOCK OUT TAG OUT (LOTO)Software and Project Management Services Related to as described in Exhibit "A" Scope of Work; and WHEREAS, CONSULTANT submitted its proposal, dated August 17, 2017; and WHEREAS, OCSD has chosen CONSULTANT to conduct Services in accordance with Ordinance No. OCSD-47; and WHEREAS, on December 20, 2017, the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and CONSULTANT; and NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agree as follows: 1. Definitions 1.1. As-Built Documentation. The term "As-Built Documentation" means the Baseline Documentation plus the Documentation for any Configuration Changes and Customization Modifications. All"As-Built Documentation"shall supplement and not conflict with the terms of this Agreement. In the event of a conflict, the terms of this Agreement shall prevail. 1.2. Configuration Changes. The term "Configuration Changes" is defined as any modification or changes other than a Custom Modification. 1.3. CONSULTANT Application Software. The term "CONSULTANT Application Software" is defined as any Software owned or sublicensed, installed and/or configured by CONSULTANT as a component of the Project, whether in machine readable or printed form, including, but not limited to any applications, modules, subsystems, Interfaces, Configuration Changes, Custom Modifications, Updates and Documentation. 1.4. Custom Modification. The term "Custom Modification" is defined as a modification of the CONSULTANT Application Software Source Code or data base structure, which provides new or improved functions or features to address specific requirements of this Agreement. 1.5. Defect. The term "Defect" is defined as any error, failure, deficiency, or any other unacceptable variance or failure of the System or any component thereof to fully conform to the warranties and requirements described in this Agreement. With respect to the CONSULTANT Application Software, the term "Defect" is defined as any error, failure, or Orange County Sanitation District 1 of 20 Specification No. S-2017-871 BD deficiency or any other unacceptable variance from any required, specified, or expected program behaviors as may be required by OCSD or necessary for the CONSULTANT Application Software to operate correctly and in full compliance with the terms of this Agreement.This includes expected program behaviors as described in any CONSULTANT Application Software Documentation. In the event of a conflict between this Agreement and Documentation provided by CONSULTANT to OCSD, the terms and conditions of this Agreement shall prevail. 1.6. Documentation. The term "Documentation"is defined as all written, electronic,or recorded works including all "As-Built Documentation" that describe the uses, features, functional capabilities, performance standards, and reliability standards of the System, or any subsystem, component, or Interface, and that are published or provided to OCSD by CONSULTANT or its subcontractors, including, without limitation, all end user and System administrator manuals, help files, training aids and manuals, training and support guides, program listings, data models,flow charts, logic diagrams, and other materials related to or for use with the System. 1.7. Final System Acceptance. The term "Final System Acceptance" shall be defined as that date on which all Services under Section Titled "Project Scope and Deliverable" of Exhibit "A" Scope of Work have been successfully completed by CONSULTANT and accepted by OCSD. 1.8. Fix Pack. The term "Fix Pack" is defined as a formal release of programming code and Documentation that provides corrections to any CONSULTANT Application Software programs including, but not limited to, bug fixes, error corrections and patches. 1.9. Functional, Performance and Reliability Specifications and Requirements. The term "Functional, Performance and Reliability Specifications and Requirements" is defined as all definitions, descriptions, requirements, criteria, warranties, and performance standards relating to the System set forth in: (a) this Agreement; (b) any mutually agreed upon Change Orders pursuant to Section 4, Modification to Exhibit "A" Scope of Work; and (c) any functional and/or technical specifications which are published or provided by CONSULTANT or its licensors or suppliers from time to time with respect to the System or any Products. 1.10. Interfaces. The term "Interfaces" is defined as one or more of the specialized software applications developed or sublicensed by CONSULTANT and installed as a part of the Project for the purpose of sharing information (data) between CONSULTANT and/or CONSULTANT Application Software and any other software program or device. Functional requirements for each Interface to be included as a part of the System are provided Exhibit "A", Scope of Work. 1.11. Products. The term "Products" is defined as all Software listed in the Proposal Exhibit "B" and the Best and Final Offer listed at Attachment"C" and respectively. 1.12. Project. The term "Project" is defined as the totality of CONSULTANT's obligation under this Agreement to develop, supply, install, configure, test, implement and maintain the System. 1.13. Services. The term "Services" is defined as the implementation, development, training, configuration, loading, testing, project management and other services to be provided by CONSULTANT under this Agreement, including, without limitation, the tasks detailed in Exhibit"A", Scope of Work. Orange County Sanitation District 2 of 20 Specification No. S-2017-871 BD 1.14. Software. The term "Software" includes the following components provided and licensed by CONSULTANT under this Agreement: (a) CONSULTANT Application Software; (b) Third-Party Software; (c) Custom Modifications and (d) Interfaces. 1.15. System. The term "System" is defined as the collective whole of all Products and Services to be purchased, developed, licensed, supplied, installed, configured, tested and implemented by CONSULTANT under this Agreement. 1.16. System Administrator Documentation. Is defined as that portion of the Documentation addressing the operation and maintenance functions of the System. 1.17.Third-Party Software. The term "Third-Party Software" is defined as any Software to be supplied under this Agreement that is purchased or licensed directly from any source external to CONSULTANT for use with or integration into the System. 1.18. Updates. The term "Updates" is defined as modifications, improvements, additions, and corrections to the Products and/or related Documentation, including functional and/or product enhancements, bug fixes, patches, new releases, new versions, and replacement modules or products that CONSULTANT makes generally available to its customers with or without an additional fee. 1.19. Go-Live Support. The term"Go-live Support"is as described in Exhibit"B"Proposal; Exhibit "C" Best and Final Offer; and "Exhibit"A" Scope of Work to this Agreement. 1.20.Work Product. The term "Work Product" is defined as the Products and Services and all other programs, algorithms, reports, information,designs, plans and other items developed by CONSULTANT under this Agreement, including all partial, intermediate or preliminary versions thereof. 2. Miscellaneous 2.1. Access to Premises. OCSD shall provide CONSULTANT with reasonable and timely access to the sites and personnel necessary for CONSULTANT to perform its obligations under this Agreement. OCSD shall allow CONSULTANT personnel reasonable access to OCSD site and facilities (telephone, facsimile, parking, etc.) during normal business hours and at other reasonable times as requested by CONSULTANT and pre-approved by OCSD. The assistance or presence of OCSD's personnel will not relieve CONSULTANT of any responsibilities under this Agreement. 2.2. Amendments. No amendment or modification to this Agreement is valid unless it is contained in a writing signed by both parties. 2.3. Renewals may be made through the OCSD Purchase Order Process. 2.4. Approvals in Writing. All approvals or consents required or contemplated by this Agreement must be in writing to be effective. 2.5. Background Checks and Removal of Personnel. Prior to being allowed to perform any work on this Project, all non-OCSD personnel assigned to the Project may be required to submit to and pass a background check by the Fountain Valley, California Police Department. In addition, OCSD shall have the sole and exclusive right to require Orange County Sanitation District 3 of 20 Specification No. S-2017-871 BD CONSULTANT to immediately remove any individual from the Project for any reason deemed to be in the best interests of OCSD. CONSULTANT shall replace any employee removed from the project within ten (10) business days of said removal. 2.6. Compliance with Work Rules. CONSULTANT will ensure that, while they are on OCSD premises,CONSULTANT's personnel and subcontractors will comply with OCSD's working rules and policies, including OCSD's security and safety procedures. 2.7. Successors and Assigns. This Agreement is binding on and inures to the benefit of the parties and their respective successors and assigns. 2.8. Advertising. CONSULTANT shall not refer to the existence of this Agreement in any press release, advertising or materials distributed to prospective customers without the prior written consent of OCSD. 2.9. This Agreement and all Exhibits hereto (called the "Agreement") is made by OCSD and CONSULTANT. The Terms and Conditions herein exclusively govern the purchase of Services as described in the Scope of Work Exhibit"A". 2.10. Exhibits to this Agreement are incorporated by reference and made a part of this Agreement as though fully set forth at length herein. Exhibits to this Agreement are as follows: Exhibit"A" Scope of Work Exhibit"B" Proposal Dated August 17, 2017 Exhibit"C" Best and Final Offer Updated December 8, 2017 Exhibit"D" Acknowledgment of Insurance Requirements (AOIR) Exhibit"E" Professional Service Agreement Addendum 2.11. Exhibits to this Agreement are as follows in order of precedence. The Exhibits for Proposal and Best and Final Offer,their intended use, purpose,and importance may be synonymous as agreed by both parties until this Agreement is no longer valid.. Order of precedence will be established as negotiated and agreed upon by both parties. The following order of precedence is provided for reference and will be negotiated by both parties. Exhibit"E" Professional Service Agreement Addendum Exhibit"B" Proposal Dated August 17, 2017 Exhibit"C" Best and Final Updated December 8, 2017 Exhibit"A" Scope of Work Exhibit"D" Acknowledgment of Insurance Requirements (AOIR) 2.12. In the event of any conflict or inconsistency between the provisions of this Agreement and any of the provisions of the Exhibits hereto, the provisions of this Agreement shall in all respects govern and control. 2.13.This Agreement may not be modified, changed or supplemented, nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by both Parties. 2.14.The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any Paragraph or provision hereof. 2.15.The term "workday". Workdays are defined as all days that are not Friday, Saturday and Sunday, or legally OCSD observed holidays. Meetings with OCSD staff shall be scheduled Orange County Sanitation District 4 of 20 Specification No. S-2017-871 BD from Monday through Thursday between the hours of 6:30AM and 4PM PST )and shall conform to OCSD work schedules. OCSD review periods shall not include legally OCSD observed holidays. 2.16. 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. 2.17.The term "days",when used in the Agreement, shall mean calendar days, unless otherwise noted as workdays. 2.18.Work Hours: The work required under this Agreement may include normal Business hours, evenings, and weekends. 2.19. CONSULTANT shall provide OCSD with all required premiums and/or overtime work at no charge beyond the price provided under"Compensation" below. 2.20. Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by CONSULTANT as a result of work performed in anticipation of purchases of said services by OCSD. 2.21. Goods and Services, whether stated separately or in conjunction with each other, shall mean IBM-MAXIMO ENTERPRISE ASSET MANAGEMENT SYSTEM PHASE IV—LOCK OUT TAG OUT (LOTO) and the services related to the provision of such as described in Exhibit"A". 2.22. Construction of Agreement. This Agreement is the product of joint discussions and negotiations at arms' length between the parties, both of whom are sophisticated and knowledgeable in business matters and both of whom have relied on the advice of independent legal counsel. Any rule of law which would require interpretation of this Agreement against the party that drafted it shall have no application to this Agreement. 3. Scope of Work: General requirements for the scope of this Project are listed below. A detailed list of tasks and responsibilities are included in Exhibit"A", Scope of Work. 3.1. Scope of Work Subject to the terms of this Agreement, CONSULTANT shall perform the Services identified in Exhibit "A Scope of Work CONSULTANT warrants that all of its Services shall be performed in a competent, professional and satisfactory manner. 3.2. Modifications to Equipment and Facilities. OCSD shall be responsible for making OCSD- approved modifications identified in an OCSD approved, Site Analysis Report. Thereafter, CONSULTANT will be precluded from asserting that it is unable to perform its obligations under this Agreement because of any pre-existing condition. During implementation, any changes to the System or any costs that may be incurred in order to complete the requirements of this Agreement but were not identified in the Site Analysis Report will be the sole and exclusive responsibility of CONSULTANT. In addition, if the System is unable to meet the Functional, Performance and Reliability Specifications and Requirements in this Agreement after the identified upgrades and changes have been made, then CONSULTANT will be responsible, at its own expense, for making any further upgrades or changes necessary to achieve this result. Orange County Sanitation District 5 of 20 Specification No. S-2017-871 BD 3.3. User Qualifications. OCSD shall use its best efforts to ensure that persons operating the System will be qualified, supervised, and trained in the use of personal computers and normal operations. CONSULTANT will ensure that all training on the System or System components will be conducted professionally and effectively so that each operator trained by CONSULTANT is proficient in its use. 3.4. Transition. CONSULTANT will work with OCSD to ensure a smooth and efficient transition from OCSD's current systems to the new System and to minimize disruption to current operations, even if it necessitates working late evening, early morning, or weekend hours. Any required disruptions to OCSD's operations shall be scheduled in advance and approved by OCSD. 4. Modifications to Scope of Work Requests for modifications to the Scope of Work Exhibit"A" hereunder can be made by OCSD at any time. All modifications must be made in writing and signed by both Parties. A review of the time required for the modification will be made by OCSD and CONSULTANT and the Agreement period adjusted accordingly. 5. License 5.1. Grant of License. 5.1.1. CONSULTANT hereby grants to OCSD a limited, nonexclusive, and nontransferable annual license under applicable copyrights and/or trade secrets (either site, node locked or per user as specified in Exhibit "B", Proposal)to use all CONSULTANT Application Software provided under this Agreement for use by OCSD. OCSD shall have the right to use all CONSULTANT Application Software or any portion thereof on any equipment, , as a site license. OCSD shall permit CONSULTANT reasonable, pre-scheduled access(Monday through Friday, 8:00 to 5:00 PM PST)to OCSD facilities for license administration audit purposes. 5.1.2. OCSD shall have the right to use all CONSULTANT Application Software as may be necessary in order to operate the System purchased under this Agreement. In addition, OCSD shall have the right to use the CONSULTANT Application Software as necessary to (a) operate the System (b) conduct internal training and testing, and (c) perform disaster recovery, backup, archive and restoration testing and implementation as may be required in OCSD's judgment. This license shall apply to all commercially available Updates throughout the term of this Agreement. OCSD shall have the right to use all CONSULTANT Application Software licensed under this Agreement on any equipment at any facility and at any location and may make as many copies of the Software as it desires to support its authorized use of the Software, provided the copies include CONSULTANT's or the third-party owner's copyright or other proprietary notices. 5.1.3. All license rights of Third Party Software shall originate from the manufacturer. All Third Party Software licenses shall be provided to OCSD and become effective at the time the product is used by OCSD in a production environment. 5.1.4. The approval of CONSULTANT to use CONSULTANT Application Software and Third Party Software and OCSD's use of it shall not constitute a waiver of OCSD's right to reject the System, in whole or in part, if the requirements for Final System Acceptance are not met. Orange County Sanitation District 6 of 20 Specification No. S-2017-871 BD 5.2. Limitations on License. Except as licensed to OCSD, CONSULTANT retains all of its current rights, title, and interest in the CONSULTANT Application Software, including Derivative Works, Custom Modifications, Configuration Changes and Updates. Unless authorized by CONSULTANT or required by law, OCSD will not: (1) make available or distribute all or part of the Software to any third party by assignment, sublicense or any other means; or (2) disassemble, decompile, or reverse engineer the Software, or allow any third party to do so. 5.3. Security. Certain Software Packages are required to operate in conjunction with a hardware lock device or in conjunction with license administration Software and a license authorization key provided by CONSULTANT or its representative. OCSD shall take no steps to avoid or defeat the purpose of any required lock device or authorization key. Use of any Software Package without a required lock device or authorization key shall be unlicensed under this Agreement. 5.4. Restricted Access. OCSD shall use every reasonable method to restrict access to the CONSULTANT Application Software, or Documentation related thereto, to persons not authorized to use the CONSULTANT Application Software under the terms of this Agreement. OCSD shall not copy the CONSULTANT Application Software or Documentation except as necessary for use under this Agreement. OCSD shall not decrypt, reverse compile or disassemble the CONSULTANT Application Software. OCSD shall not export or re-export the CONSULTANT Application Software or Documentation. Furthermore, OCSD shall abide by all applicable Federal and State Trademark and Copyright laws. 6. Compensation: Compensation to be paid by OCSD to CONSULTANT for the Services and Software provided under this Agreement shall be a total amount not to exceed One Hundred Eighty-Eight Thousand Three Hundred Eighteen Dollars ($188,318.00). Progress Payments for Services provided by CONSULTANT shall be made in accordance with Exhibit"C' Best and Final Offer. 7. CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS (DIR) REGISTRATION AND RECORD OF WAGES (NOT USED) 8. Payment 8.1. CONSULTANT shall be paid by OCSD upon approval of invoices by OCSD Project Manager, or his designee, for completion of milestone tasks and deliverables. Progress payments shall be made per completed Task as stated in Section 1 of Exhibit"C' Best and Final Offer. 8.2. OCSD, at its sole discretion, shall be the determining party as to whether the tasks and deliverables for each milestone have been satisfactorily completed. 9. Invoices 9.1. 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. Orange County Sanitation District 7 of 20 Specification No. S-2017-871 BD 9.2. Invoices shall be emailed by CONSULTANT to OCSD at APStaff@OCSD.com. The Specification and Purchase Order number shall both be referenced in the subject line. 10.Audit Rights: CONSULTANT agrees that, during the term of this Agreement 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 CONSULTANT relating to the invoices submitted by CONSULTANT pursuant to this Agreement. 11. Performance:Time is of the essence in the performance of the provisions hereof. 12. Term 12.1.The Services to be provided by CONSULTANT under this Agreement shall commence on the date of the Notice to Proceed (Effective Date), and be completed within (1) one year from the Notice to Proceed (Effective Date). 12.2. Effect on Project Schedule. The time periods and requirements set forth in Exhibit "C" Proposal, will not excuse CONSULTANT from complying with the completion of Tasks set forth in the Labor Task List contained in Exhibit "B" Proposal. Unless otherwise specified, the duration for the completion of these tasks set forth in the Labor Task List constitute the duration by which CONSULTANT must complete the testing required by this Agreement and achieve Final System Acceptance of the System installed. 12.3. Deadline for Final System Acceptance. Final System Acceptance must occur once the System is accepted by OCSD as fully operational and is in full productive use by OCSD. Final System Acceptance must be achieved by the CONSULTANT within (1)one year from the date of the Notice to Proceed (Effective Date). 12.4.This Agreement and the license granted hereunder shall continue unless terminated in accordance with the terms of this Agreement. The "Go-Live Date" is defined as the date when the Licensed Software has been configured for and accepted for production use by the Licensee and is used to set the Annual Re-licensing term. 13. Termination 13.1. OCSD reserves the right to terminate this Agreement for its convenience, with or without cause, in whole or in part, at any time, by written notice from OCSD. Upon receipt of a termination notice, CONSULTANT shall immediately discontinue all work under this Agreement (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay CONSULTANT for work performed (cost and fee) to the date of termination. CONSULTANT expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Agreement. Such notice of termination shall terminate this Agreement and release OCSD from any further fee, cost or claim hereunder by CONSULTANT other than for work performed to the date of termination. 13.2. OCSD reserves the right to terminate this Agreement immediately upon OCSD's determination that CONSULTANT is not meeting specification requirements, if the level of service is inadequate, or any other default of this Agreement. 13.3. 00SD may also immediately cancel for default of this Agreement in whole or in part by written notice to CONSULTANT: Orange County Sanitation District 8 of 20 Specification No. S-2017-871 BD if CONSULTANT becomes insolvent or files a petition under the Bankruptcy Act; or if CONSULTANT sells its business; or if CONSULTANT breaches any of the terms of this Agreement; or if total amount of compensation exceeds the amount authorized under this Agreement. 13.4.All OCSD property in the possession or control of CONSULTANT shall be returned by CONSULTANT to OCSD on demand, or at the termination of this Agreement, whichever occurs first. In addition, CONSULTANT will deliver to OCSD all Work Product currently in existence and for which payment has been made. 13.5. Upon termination or expiration of this Agreement, CONSULTANT will cooperate with OCSD to assist with the orderly transfer of services, functions, and operations provided by CONSULTANT under this Agreement to another provider or to OCSD as determined by OCSD in its sole discretion. Prior to the termination or expiration of this Agreement, OCSD may require CONSULTANT to perform those transition services described below that OCSD deems necessary to migrate CONSULTANT's work to another provider or to OCSD. Transition services may include, but are not limited to the following: 13.5.1. Pre-Migration Services. 13.5.1.1.Working with OCSD to jointly develop a mutually agreed upon Transition Services Plan to facilitate the termination of the services; 13.5.1.2. Notifying all affected vendors and subcontractors of CONSULTANT; and 13.5.1.3. Freezing all non-critical changes to the System. 13.5.2. Migration and Post-Migration. 13.5.2.1. Performing the Transition Services Plan activities. 13.5.2.2.Answering questions regarding the services performed by CONSULTANT or the System on an as-needed basis; 13.5.2.3. Providing such other reasonable services needed to effectuate an orderly transition to a new System. 13.6. OCSD agrees to pay CONSULTANT for transition services at an hourly rate of $150 per hour, plus reasonable out-of-pocket expenses not to exceed ten percent (10%) of the aggregate hourly compensation paid. 13.7.Termination by Either Party. CONSULTANT may terminate this Agreement 30 days following notice to Licensee if: (i) Licensee fails to pay the license fee within thirty(30)days of when due, or (ii) Licensee fails to comply with any material term or condition of this Agreement and such non-compliance is not corrected to CONSULTANT's satisfaction within thirty (30) days after written notice of the non-compliance; Licensee may terminate this Agreement by written notice to CONSULTANT at any time, for any reason, with disposition of the licensed Software in accordance with Section 13.7 herein. In the event of any termination of this Agreement, any and all undisputed sums owed to CONSULTANT hereunder shall become immediately due and payable without notice or demand. 13.8. Upon termination of this Agreement for any reason, licensee shall immediately cease using the licensed Software and Documentation and shall either return to CONSULTANT or destroy all copies of the licensed Software and Documentation under Licensee's control, including without limitation, all copies of the licensed Software that are running in machines controlled by Licensee. Within ten (10) days after any such termination, Licensee shall provide CONSULTANT with a written statement signed by a duly authorized officer of Licensee certifying that Licensee has complied with this Section. Orange County Sanitation District 9 of 20 Specification No. S-2017-871 BD 14.Indemnification and Hold Harmless Provision: CONSULTANT 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 CONSULTANT's services under this Agreement, or by its subcontractor or by anyone directly or indirectly employed by CONSULTANT, and whether such damage or injury shall accrue or be discovered before or after the termination of the Agreement. Except as to the sole active negligence of or willful misconduct of OCSD, CONSULTANT shall indemnify, protect, defend and hold harmless OCSD, its elected and appointed officials,officers, agents and employees, from and against any and all claims, liabilities, damages or expenses of any nature, including attorneys' fees: (a) for injury to or death of any person or damage to property or interference with the use of property, arising out of or in connection with CONSULTANT's performance under the Agreement, 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 Agreement, and/or (c) on account of any goods and services provided under this Agreement. This indemnification provision shall apply to any acts or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of CONSULTANT of or anyone employed by or working under CONSULTANT. To the maximum extent permitted by law, CONSULTANT'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. CONSULTANT agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD. This section shall survive the expiration or early termination of the Agreement. 15. Warranty 15.1. System Warranty. CONSULTANT warrants that the System will meet the Functional, Performance and Reliability Specifications and Requirements as defined in this Agreement. The System and/or each of its subsystems, components and Interfaces will be capable of operating fully and correctly in conjunction with the System Hardware. CONSULTANT warrants that for the term of this Agreement, the System will perform as described in this Exhibit"C"Best and Final Offer and Exhibit"A"Scope of Work in material and workmanship and will remain in good working order. In the event the System does not meet these warranties, CONSULTANT shall provide, at no charge, the necessary software, hardware, and/or services required to attain the levels or standards contained in these warranties. 15.2. CONSULTANT Application Software Warranties. CONSULTANT warrants that it owns or otherwise has the right to license the CONSULTANT Application Software to OCSD and that it possesses all rights and interests necessary to enter into this Agreement. In addition, CONSULTANT warrants that: 15.2.1.All CONSULTANT Application Software licensed under this Agreement is free of known Defects, viruses, worms and Trojan horses, and any code designed to disable the Software because of the passage of time, alleged failure to make payments due, or otherwise (except for documented security measures such as password expiration functions); 15.2.2. During the term of the Agreement; the CONSULTANT Application Software will meet or exceed the Functional, Performance and Reliability Specifications and Requirements herein; 15.2.3.The CONSULTANT Application Software will: (1) store all date-related information and process all data Interfaces involving dates in a manner that unambiguously Orange County Sanitation District 10 of 20 Specification No. 5-2017-871 BD identifies the century, for all date values before, during and after the Year 2000; (2) calculate, sort, report and otherwise operate correctly and in a consistent manner for all date information processed, whether before, during or after the Year 2000; (3) calculate, sort, report and otherwise operate correctly, in a consistent manner and without interruption regardless of whether the date on which the Software is operated or executed is before,during or after the Year 2000; (4)report and display all dates with a four-digit date so that the century is unambiguously identified; and (5) handle all leap years correctly; 15.2.4. CONSULTANT Application Software is and will be general release versions that have been fully tested at CONSULTANT's site in accordance with best industry practices, and are not beta or pre-release versions (unless agreed to in writing by OCSD); and, 15.2.5. Custom Modifications and Interfaces have been fully tested in accordance with best industry practices and are free of known Defects. CONSULTANT further agrees that during the term of this Agreement, CONSULTANT will provide OCSD, if OCSD so desires, with any Updates at no additional cost (including any and all costs associated with the installation of those Updates) immediately upon their commercial availability to any other entity. 15.3.Work Quality Warranty. CONSULTANT warrants that all work performed by CONSULTANT and/or its subcontractors underthis Agreement will conform to best industry practices and will be performed in a professional and workmanlike manner by staff with the necessary skills, experience and knowledge to do so. 15.4. Regulatory Warranty. CONSULTANT warrants that, for the Term of this Agreement, the System will comply with all processing and reporting requirements for State and Federal laws, and regulations. If the Software requires updating due to a change in a State or Federal law, or regulation, affecting OCSD, CONSULTANT will provide these changes per a mutually agreed to schedule at no additional charge to OCSD. Notwithstanding this provision, in no event shall CONSULTANT provide said update later than the date required by the State or Federal law or regulation affecting OCSD. In the event OCSD is notified of a change in State or Federal law or regulations that requires updating the Software, OCSD will notify CONSULTANT of that change as soon as reasonably possible. 15.5. Documentation Warranty. CONSULTANT warrants that, for the Term of this Agreement, the Documentation for all licensed CONSULTANT Application Software will be complete and accurate in all material respects. The Documentation will be revised to reflect all Updates and Interfaces provided by CONSULTANT under this Agreement. This includes Documentation on any Custom Modification or Configuration Changes made to the System by CONSULTANT during the installation process. 15.6. Service Warranty. During the term of this Agreement, CONSULTANT warrants that it will remedy any failure, malfunction, Defect or nonconformity in the System, as follows: 15.6.1. Priority One (P1) Defects. For purposes of this Warranty, a P1 Defect includes, but is not limited to, loss of data, data corruption, a System or subsystem abort, any condition where productive use of the System or any component thereof is prohibited and no acceptable workaround is available. Examples of P1 Defects include, but are not limited to: 15.6.1.1. System is down 15.6.1.2.Application, module or Interface is down or non-operational Orange County Sanitation District 11 of 20 Specification No. S-2017-871BD 15.6.1.3.An Interface or application critical to System operation is substantially impaired or problematic 15.6.1.4. Loss of data or data corruption after data has been entered 15.6.1.5.A subsystem or component thereof is non-functional 15.6.1.6. Productive use is prohibited 15.6.1.7.a Server or workstation goes down 15.6.1.8.two or more workstations or mobile devices lock up or malfunction intermittently 15.6.1.9.a user cannot log on to the System 15.6.2. Priority Two (P2) Defects. For purposes of this Warranty a P2 Defect includes, but is not limited to, compromise of the primary purpose of the System, subsystem or Interface to an external system. Productive use by the end user is substantially impacted and an acceptable workaround is not available. Examples of P2 Defects include, but are not limited to: 15.6.2.1.a Software function does not work correctly(enteran example, if possible) 15.6.2.2.The user cannot produce a report with correct calculations 15.6.2.3. System, subsystem or an Interface performance is deemed unacceptable per the Functional, Performance, and Reliability Specifications and Requirements. 15.6.2.4. Incorrect cross streets are displayed on a verified address or location 15.6.2.5. Cannot create a scheduled event 15.6.2.6.A single workstation or mobile device locks up or malfunctions intermittently 15.6.3. Priority Three (P3) Defects. For purposes of this Warranty, a P3 Defect includes, but is not limited to, incomplete operation of a System component which impacts productivity of staff but an acceptable workaround is generally available. Examples of P3 Defects include but are not limited to: 15.6.3.1.Single workstation or mobile device locks up intermittently but infrequently 15.6.3.2. Minor deficiencies occur intermittently in any component of the System 15.6.3.3.A mapping function doesn't work but the failure does not interfere with the user's ability to perform required tasks 15.6.3.4.A report does not function or report provides incorrect results 15.6.3.5.An incorrect message is presented in a dialog box 15.6.4. Priority Four(P4) Defects. For purposes of this Warranty, a P4 Defect consists of those problems deemed by OCSD to be mainly cosmetic. Examples of P4 Defects include, but are not limited to: 15.6.4.1.A misspelled word in the header of a report or in a help file 15.6.4.2.A minor error in output that does not interfere with the correct outputting of statistics from the system 15.6.4.3. Minor printing errors in a report that does not impede OCSD's ability to utilize the report for the required purpose. 15.6.4.4. Minor variances in text where the help file does not match the Documentation 15.6.4.5. Minor variances in text where the Documentation doesn't match the functionality but the System works properly 15.6.4.6.A print button doesn't work but the user can still print without opening or closing multiple windows or loosing data or rebooting the System. Orange County Sanitation District 12 of 20 Specification No. S-2017-871BD 15.6.5. Multiple Failures. Any situation involving multiple, contemporaneous failures, regardless of their individual priorities, will be regarded as a Priority One Defect if, in OCSD's determination, the situation results in OCSD having essentially no productive use of the System or a major subsystem. 15.6.6. Permanent Cure. If OCSD accepts a workaround or other temporary cure as the remedy for any reported Defect, CONSULTANT shall provide at no cost to OCSD a permanent correction or cure and installation support within ten (10) days after the permanent cure becomes available. 15.6.7. Third-party Warranty Coverage. Third-party products are provided with a pass-thru- warranty from the original manufacturer. 16.Force Majeure: Neither party shall be liable for delays caused by accident, flood, ads 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 Agreement. 17.Insurance: CONSULTANT and all subcontractors shall purchase and maintain, throughout the life of this Agreement and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements, Exhibit "D". CONSULTANT shall not commence work under this Agreement until all required insurance is obtained in a form acceptable to OCSD, nor shall CONSULTANT allow any subcontractor to commence service pursuant to a subcontract until all insurance required of the subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Agreement. 18. Key Personnel: Personnel,as provided in Exhibit"B" Proposal, are considered"key"to the work under this Agreement and will be available for the term of the Agreement. No person designated as key under this Agreement shall be removed or replaced without prior written consent of OCSD. If OCSD asks CONSULTANT to remove a person designated as key under this Agreement, CONSULTANT agrees to do so immediately regardless of the reason, or the lack of reason, for OCSD's request. CONSULTANT shall assign only competent personnel to perform services pursuant to this Agreement. 19. Confidentiality and Non-Disclosure 19.1. CONSULTANT acknowledges that in performing the Services hereunder, OCSD may have to disclose to CONSULTANT orally and in writing certain confidential information that OCSD considers proprietary and has developed at great expense and effort. 19.2. CONSULTANT agrees to maintain in confidence and not disclose to any person, firm, or corporation, without OCSD's prior written consent, any trade secret or confidential information, knowledge or data relating to the products, process, or operation of OCSD. 19.3. CONSULTANT further agrees to maintain in confidence and not to disclose to any person, firm,or corporation any data, information,technology,or material developed or obtained by CONSULTANT during the term of this Agreement. Orange County Sanitation District 13 of 20 Specification No. 5-2017-871BD 19.4. CONSULTANT agrees as follows: • To use the Confidential Information only for the purposes described herein; to not reproduce the Confidential Information; to hold in confidence and protect the Confidential Information from dissemination to and use by anyone not a party to this Agreement; and to not use the Confidential Information to benefit itself or others. • To restrict access to the Confidential Information to its CONSULTANT or personnel of CONSULTANT who (1) have a need to have such access and (2) have been advised of and have agreed in writing to treat such information in accordance with the terms of this Agreement. • To return all Confidential Information in CONSULTANT's possession upon termination of this Agreement or upon OCSD's request, whichever occurs first. • To hold in confidence information and materials, if any, developed pursuant to the Services hereunder. 19.5.The provisions of this Section shall survive termination or expiration of this Agreement and shall continue for so long as the material remains confidential. 20. Ownership of Documents All drawings, specifications, reports, records, documents, memoranda, correspondence, computations, and other materials prepared by CONSULTANT, its employees, subcontractors, and agents in the performance of this Agreement shall be the property of OCSD and shall be promptly delivered to OCSD upon request of the Project Manager or upon the termination of this Agreement, and CONSULTANT shall have no claim for further employment or additional compensation as a result of the exercise by OCSD of its full rights of ownership of the documents and materials hereunder. Any use of such completed documents for other projects and/or use of incomplete documents without specific written authorization by the CONSULTANT will be at OCSD's sole risk and without liability to CONSULTANT. CONSULTANT shall ensure that all its subcontractors shall provide for assignment to OCSD of any documents or materials prepared by them. 21. Ownership of Intellectual Property 21.1. CONSULTANT agrees that all designs, plans, reports, specifications, drawings, schematics, prototypes, models, inventions, and all other information and items made during the course of this Agreement and arising from the Services (hereinafter referred to as "New Developments") shall be and are assigned to OCSD as its sole and exclusive property. 21.2. CONSULTANT agrees to promptly disclose to OCSD all such New Developments. Upon OCSD's request, CONSULTANT agrees to assist OCSD, at OCSD's expense, to obtain patents or copyrights for such New Developments, including the disclosure of all pertinent information and data with respect thereto, the execution of all applications, specifications, assignments, and all other instruments and papers which OCSD shall deem necessary to apply for and to assign or convey to OCSD, its successors and assigns, the sole and exclusive right, title and interest in such New Developments. CONSULTANT agrees to obtain or has obtained written assurances from its employees and contract personnel of their agreement to the terms hereof with regard to New Developments and Confidential Information. 21.3. CONSULTANT warrants that CONSULTANT has good title to any New Developments, and the right to assign New Developments to OCSD free of any proprietary rights of any other party or any other encumbrance whatever. Orange County Sanitation District 14 of 20 Specification No. S-2017-871 BD 21.4.The originals of all computations, drawings, designs, graphics, studies, reports, manuals, photographs, videotapes, data, computer files, and other documents prepared or caused to be prepared by CONSULTANT or its subcontractors in connection with these Services shall be delivered to and shall become the exclusive property of OCSD. OCSD may utilize these documents for OCSD applications on other projects or extensions of this Project, at its own risk. 22.Infringement Claims: If an infringement claim occurs, CONSULTANT has thirty (30)days after the receipt of OCSD's written notice of the claim or the date on which CONSULTANT first becomes aware of the claim, whichever is sooner, to either: (a) procure for OCSD the right to continue using the affected Product, Service, subsystem, component or Interface and deliver or provide the Product, Service, subsystem, component, or Interface to OCSD; or (b) repair or replace the infringing Product, Service, subsystem, component, or Interface so that it becomes non-infringing, provided the performance of the System or any subsystems, components, or Interfaces is not adversely affected by the replacement or modification. In the event CONSULTANT is unable to comply with either subsection (a)or(b)of this paragraph within thirty (30)days, OCSD may terminate this Agreement without any further obligation to CONSULTANT. In the event of termination, in addition to any other legal remedies available to OCSD, CONSULTANT will refund OCSD within ten (10) days of OCSD's notice of termination, the license fees OCSD paid to CONSULTANT for the Product, Service, subsystem, component or Interface. If the inability to comply with either subsection (a) or(b) of this paragraph causes the System to fail to meet the Functional, Performance and Reliability Specifications and Requirements or to otherwise become ineffective, CONSULTANT will refund OCSD all fees paid to CONSULTANT under this Agreement. 23. No Solicitation of Employees Or Subcontractors 23.1. CONSULTANT and OCSD agree that it shall not, during the term of this Agreement and for a period of one (1) year immediately following termination of this Agreement, or any extension hereof, call on,solicit,or take away any of the employees or subcontractors about whom CONSULTANT and OCSD became aware as a result of CONSULTANTS Services to OCSD. 23.2. CONSULTANT and OCSD acknowledges that employees are critical to its business. CONSULTANT and OCSD agree not to employ or otherwise engage either parties employees or subcontractors during the term of this Agreement and for a period of one (1) year following termination of this Agreement. Should CONSULTANT or OCSD violate this provision, CONSULTANT or OCSD will pay to the party violated fifty percent (50%) of the former employee's annual salary which payment is in addition to OCSD's rights and remedies. 24.Independent Contractor Capacity 24.1.The relationship of CONSULTANT to OCSD is that of an independent contractor and nothing herein shall be construed as creating an employment or agency relationship. 24.2. CONSULTANT shall act independently and not as an officer or employee of OCSD. OCSD assumes no liability for CONSULTANT's action and performance, nor assumes responsibility for taxes, funds, payments or other commitments, implied or expressed, by or for CONSULTANT. Orange County Sanitation District 15 of 20 Specification No. 5-2017-871BD 24.3. CONSULTANT shall not be considered an agent of OCSD for any purpose whatsoever, nor shall CONSULTANT have the right to, and shall not, commit OCSD to any agreement, contract or undertaking. CONSULTANT shall not use OCSD's name in its promotional material or for any advertising or publicity purposes without expressed written consent. 24.4. CONSULTANT shall not be entitled to any benefits accorded to those individuals listed on OCSD's payroll as regular employees including, without limitation, worker's compensation, disability insurance, vacation, holiday or sick pay. CONSULTANT shall be responsible for providing, at CONSULTANT's expense, disability, worker's compensation or other insurance as well as licenses and permits usual or necessary for conducting the Services hereunder. 24.5. CONSULTANT shall be obligated to pay any and all applicable local, state and federal payroll and other taxes incurred as a result of fees hereunder. CONSULTANT hereby indemnifies OCSD for any claims, losses, costs, fees, liabilities, damages or penalties suffered by OCSD arising out of CONSULTANT's breach of this provision. 24.6. CONSULTANT shall not be eligible to join or participate in any benefit plans offered to those individuals listed on OCSD's payroll as regular employees. CONSULTANT shall remain ineligible for such benefits or participation in such benefit plans even if a court later decides that OCSD misclassified CONSULTANT for tax purposes. 25. Licenses and Permits: CONSULTANT represents and warrants to OCSD that it has obtained all licenses, permits, qualifications 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 Agreement will be paid by CONSULTANT. 26. Governing Law: This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. 27.Applicable Laws and Regulations:OCSD and CONSULTANT shall comply with all applicable federal, state, and local laws, rules, and regulations. CONSULTANT also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of CONSULTANT's noncompliance therewith. Any permission required by law to be included herein shall be deemed included as a part of this Agreement whether or not specifically referenced. 28. Consultant's Representations: In the performance of duties under this Agreement, Consultant shall adhere to the highest fiduciary standards, ethical practices and standards of care and competence for their trade/profession. Consultant agrees to comply with all applicable Federal, State and local laws and regulations. 29. Familiarity with Work: By executing this Agreement, CONSULTANT 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 Agreement. Should CONSULTANT 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 CONSULTANT's risk, until written instructions are received from OCSD. Orange County Sanitation District 16 of 20 Specification No. S-2017-871BD 30. Dispute Resolution 30.1. In the event of a dispute as to the construction or interpretation of this Agreement, or any rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the dispute by mediation. The Parties shall mutually select a mediatorto 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. 30.2. 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 et 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. 31.Attorney's Fees:If any action at law or in equity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable, attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 32. Waiver: The waiver of either party of any breach or violation of, or default under, any provision of this Agreement, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. Any breach by either party shall not operate as a waiver of that Party's rights to seek remedies available to it for any subsequent breach. No remedy in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referenced herein or otherwise available by law, in equity or otherwise. 33. Survival.,All provisions of this Agreement that by their nature would reasonably be expected to continue after the termination of this Agreement will survive the termination of this Agreement, including, without limitation, the following Sections and Paragraphs: • Payment • License • Terms Included in Professional Services Agreement Addendum • Audit • Independent Contractor • Warranty • Indemnification • Obligations Upon Expiration or Termination • Transition of Services Orange County Sanitation District 17 of 20 Specification No. 5-2017-871BD • Confidentiality and Nondisclosure • Forum for Enforcement • Term • Termination • Miscellaneous 34. Right to Review Services, Facilities, and Records 34.1. OCSD reserves the right to review any portion of the Services performed by CONSULTANT under this Agreement, and CONSULTANT agrees to cooperate to the fullest extent possible. 34.2. CONSULTANT shall furnish to OCSD such reports, statistical data, and other information pertaining to CONSULTANT's Services as shall be reasonably required by OCSD to carry out its rights and responsibilities under its agreements with its bondholders or noteholders and any other agreement relating to the development of the Project(s) and in connection with the issuance of its official statements and other prospectuses with respect to the offering, sale, and issuance of its bonds and other obligations. 34.3.The right of OCSD to review or approve drawings, specifications, procedures, instructions, reports, test results, calculations, schedules, or other data that are developed by CONSULTANT shall not relieve CONSULTANT of any obligation set forth herein. 35. Severablllty. If any section, subsection, or provision of this Agreement, or any agreement or instrument contemplated hereby, or the application of such section, subsection, or provision is held invalid, the remainder of this Agreement or instrument in the application of such section, subsection or provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby, unless the effect of such invalidity shall be to substantially frustrate the expectations of the Parties. If after one hundred and twenty(120)days,the parties have been unable to reach agreement, this Agreement will be deemed terminated pursuant to Section 13. 36. OCSD Safety and Human Resources Policies: OCSD requires all contractors and consultants 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 CONSULTANT is required to follow the most stringent regulatory requirement at no cost to OCSD. CONSULTANT and all their employees and subcontractors, shall adhere to all applicable OCSD Safety and Human Resources Policies found at: hftps://www.ocsd.com/Home/ShowDocument?id=17591 37. Damage to OCSD's Property.,Any OCSD property damaged by CONSULTANT will be subject to repair or replacement by CONSULTANT at no cost to OCSD. 38.Freight(F.O.B. Destination): CONSULTANT assumes full responsibility for all transportation, transportation scheduling, packing, handling, insurance, and other services associated with delivery of all products deemed necessary under this Agreement. 39.Assignments: CONSULTANT shall not delegate any duties nor assign any rights under this Agreement without the prior written consent of OCSD. Any such attempted delegation or assignment shall be void. Orange County Sanitation District 18 of 20 Specification No. 5-2017-871BD 40. Changes In Control of CONSULTANT 40.1. In the event of a change in Control of CONSULTANT, OCSD shall have the option of terminating this Agreement by written notice to CONSULTANT. CONSULTANT shall notify OCSD within ten (10) days of the occurrence of a change in Control. As used in this Section, 'Control" is defined as the possession, direct or indirect, of either: 40.1.1.the ownership or ability to direct the voting of fifty-one percent(51%)or more of the equity interests, value, or voting power in CONSULTANT; or 40.1.2.the power to direct or cause the direction of the management and policies of CONSULTANT, whether through ownership of voting securities, by contract, or otherwise. 41. Third Party Rights: Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than OCSD and CONSULTANT. 42. Non-Liability of OCSD Officers and Employees: No officer or employee of OCSD shall be personally liable to CONSULTANT, or any successor-in-interest, in the event of any default or breach by OCSD or for any amount which may become due to CONSULTANT or to its successor, or for breach of any obligation of the terms of this Agreement. 43. Conflict of Interest and Reporting 43.1. CONSULTANT shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement. 43.2. CONSULTANT affirms that to the best of its knowledge there exists no actual or potential conflict between CONSULTANT'S families, business or financial interest or its Services under this Agreement, and in the event of change in either its private interests or Services under this Agreement, it will raise with OCSD any question regarding possible conflict of interest which may arise as a result of such change. 44.Authority to Execute: The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement and that by executing this Agreement, the Parties are formally bound. 45.Read and Understood., By signing this Agreement, CONSULTANT represents that he has read and understood the terms and conditions of the Agreement. 46.Entire Agreement: This Agreement constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. Orange County Sanitation District 19 of 20 Specification No. 5-2017-871BD 47. Notices: All notices under this Agreement 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. Any facsimile notice must be followed within three (3) days by written notice. Rejection or other refusal to accept or the inability to deliver because of changed address or 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: Natasha Dubrovski Brandon Garcia Contract Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 CONSULTANT: Garner R. Bennett, President Total Resource Management, Inc. 510 King Street, Suite 200 Alexander, VA 22314-3132 IN WITNESS WHEREOF, the Parties hereto have hereunto set their hands the day and year indicated below. ORANGE COUNTY SANITATION DISTRICT Dated: By: Gregory C. Sebourn, PLS Chair, Board of Directors Dated: By: Kelly Lore Clerk of the Board Dated: By: Contracts and Purchasing and Materials Management Manager TOTAL RESOURCE MANAGEMENT INC. Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 20 of 20 Specification No. 5-2017-871BD EXHIBIT "E" PROFESSIONAL SERVICES AGREEMENT ADDENDUM IBM-Maximo Enterprise Asset Management System Phase IV-LOTO Specification No. 5-2017-871 BD (Software Licensing Additional Terms) THIS ADDENDUM TO PROFESSIONAL SERVICES AGREEMENT ("Addendum') is entered into effective as of the date of Notice to Proceeded, by and between TOTAL RESOURCE MANAGEMENT, INC. ("CONSULTANT'), and ORANGE COUNTY SANITATION DISTRICT ("OCSD"). RECITALS WHEREAS, the parties have entered into a Professional Services Agreement, dated on or about the date of the Notice to Proceeded (Effective Date), pertaining to software procurement, licensing, implementation, and maintenance; WHEREAS, CONSULTANT utilizes terms specific to the software licensing portion of the Agreement and services provided; WHEREAS, the following terms are applicable to software licensing only and to the extent that any provision of this Addendum conflicts with any provision of the Agreement,the Agreement shall control; WHEREAS, the parties desire to adopt terms in addition to those included in the Agreement as set forth in this Addendum to more specifically set forth the terms upon which CONSULTANT will license software for use by OCSD. AGREEMENT NOW THEREFORE, with the intent of being legally bound hereby, in consideration of the mutual covenants and promises hereinafter set forth, and other good and valuable consideration, which the parties acknowledge is sufficient to create a legally binding agreement, the parties agree as follows: 1. PURPOSE. The purpose of this Addendum is to incorporate provisions specific to software licensing into the Agreement. 2. LICENSE AND ANNUAL RE-LICENSING FEES. OCSD shall pay CONSULTANT a non-refundable license fee for the Licensed Software (the"License Fee"), in the amount set forth on Exhibit A of this Addendum, before start of configuration. The first Annual Re-license fee, in the amount set forth on Exhibit A of this Addendum, is due 12 months from the Go Live Date. OCSD shall pay CONSULTANT interest on past-due amounts payable at a rate equal to one and one-half percent (1'/2%) for each month the payment remains delinquent. All fees are accountable and payable in U.S. Dollars. 1278006.1 Annual Re-licensing terms will be provided and invoiced according to TRM's then-current prices for Re-licensing (15 percent of the then-current software selling price). Re-licensing fee shall not be increased by more than 2% of the fee for the previous year. TRM may change or update its Annual Re-license fee terms from time to time, with written notice to Licensee, effective as of the next annual License term. If Licensee does not pay an Annual Re-license fee when due, Licensee shall be considered in breach of the Agreement and TRM shall have no recourse but to terminate the Software License in accordance with provisions of Section 13 of the Professional Services Agreement. 3. DOCUMENTATION. CONSULTANT will provide OCSD with one copy of CONSULTANT's then-current standard documentation for the Licensed Software ( "Documentation"). OCSD may make one copy of the Documentation for each controlling station. 4. OWNERSHIP OF LICENSED SOFTWARE. a. No Copying. Except as required by law, OCSD may not copy the Licensed Software or any other Confidential Information (as defined below) of CONSULTANT in whole or in part, except that OCSD may make one copy of the Licensed Software for back up and archival purposes as needed. OCSD shall not remove any patent, trademark, copyright, restricted rights, limited rights, proprietary rights or confidentiality notice included in or affixed to the Licensed Software or any other Confidential Information of CONSULTANT and shall reproduce all such notices in or on all copies of the Licensed Software or Confidential Information of CONSULTANT made by OCSD in accordance with this Agreement. b. Modification/Reverse Enaineerinc. OCSD shall not alter, modify, enhance, adapt, reverse engineer,disassemble,or make works derived from any version of the Licensed Software or attempt to generate or access the source code for the Licensed Software, whether by converting, translating, decompiling, 7disassembling or merging any part of the Licensed Software with any other software. c. Ownership. OCSD acknowledges and agrees that the Licensed Software is owned by CONSULTANT and embodies a valuable trade secret asset of CONSULTANT. Except as expressly licensed to OCSD herein, OCSD agrees that all right, title, and interest in and to the Licensed Software and Documentation, including without limitation, all copyrights, trade secrets and other intellectual property rights pertaining thereto will remain vested in CONSULTANT; and as between CONSULTANT and OCSD, CONSULTANT shall own and hold all intellectual property rights in and to the Licensed 1278006.1 Software and the Documentation. CONSULTANT retains all rights not expressly granted herein. No implied licenses shall Flow from this Agreement. 5. CONFIDENTIALITY. a. Nondisclosure. OCSD shall retain the Confidential Information belonging to CONSULTANT (as defined below) in the strictest confidence (i.e., a "need-to- know" basis) and shall not disclose the Confidential Information to any third party without CONSULTANT's prior express written consent. OCSD shall not use the Confidential Information for any purpose not related to the use of the Licensed Software in accordance with the terms of this Agreement, and shall limit access to the Confidential Information to those of its employees and agents whose work responsibilities require such access. CONSULTANT acknowledges that OCSD is a Public Entity and must comply with the California Public Records Act ("CPRA"). In the event OCSD receives a CPRA request that would result in disclosure of Confidential Information belonging to CONSULTANT, OCSD will promptly notify CONSULTANT so that CONSULTANT may determine whether to take action to prevent the release of information within the timeframe prescribed by the CPRA. b. Confidential Information belonging to CONSULTANT. "Confidential Information belonging to CONSULTANT" means (1)any data, documentation, software, source code, inventions, know-how, ideas, product pricing information, business methods, and/or any information disclosed by CONSULTANT as a result of this Agreement, including, but not limited to, the Licensed Software and Documentation; and (2) any other information, technical data, or know-how which is designated in writing to be confidential or proprietary or should reasonably be understood to be confidential or proprietary, or if given orally, is designated at the time of disclosure as being disclosed as confidential or proprietary or should reasonably be understood to be confidential or proprietary. Confidential Information does not include information which: (1) is in the public domain at the time of disclosure or becomes available thereafter to the public without restriction and not as a result of the act or omission of OCSD; (2) is rightfully obtained by OCSD from a third party without restriction as to disclosure; (3) is lawfully in the possession of OCSD at the time of disclosure and not otherwise subject to restriction on disclosure; or (4) is approved for release by written authorization of CONSULTANT. c. Return of Information. Upon written request by CONSULTANT, OCSD shall immediately return to CONSULTANT all written or other tangible manifestations of material containing Confidential Information (whether prepared by CONSULTANT, advisors or otherwise) and will not retain any copies, extracts, storage or other reproductions in whole or in part of 1278006.1 Confidential Information. All documents, memoranda, notes, analyses, compilations, studies and other writings and data prepared by or on behalf of OCSD, advisors or otherwise based on the information in Confidential Information shall be destroyed, all storage erased, and that destruction shall be certified in writing to CONSULTANT. 6. AUDIT RIGHTS. Upon thirty (30) days written notice, CONSULTANT may audit OCSD's use of the Licensed Software in accordance with this Addendum. OCSD agrees to cooperate with CONSULTANT's audit and provide reasonable assistance and access to information concerning OCSD's use of Licensed Software. OCSD agrees to pay or contest in good faith, any underpaid License Fees due pursuant to this Agreement within thirty (30) days of CONSULTANT's written notification thereof. 7. ASSIGNMENT OF LICENSE. Without the express written consent of CONSULTANT, this software license is not assignable or otherwise transferable by OCSD, including without limitation any transfer in connection with an acquisition in whole or in part of OCSD (or any of OCSD's assets) or a merger, consolidation, or other reorganization, bankruptcy, or operation of law. Any purported assignment or transfer made without CONSULTANT's consent shall be void. 8. TAXES. The License Fee and any other fees due hereunder are exclusive of all U.S.,foreign,state, municipal and other governmental excise,sales, use,customs, value added or other taxes, fees or duties now in force or enacted in the future, including without limitation, all taxes in connection with the use, ownership and licensing of software, but excluding taxes based on CONSULTANT's income. Unless disputed and actively being contested by OCSD in good faith, OCSD shall pay within fifteen (15) days of the applicable due date all such taxes, fees, duties and charges which arise out of or in connection with this Agreement or any license granted herein. If CONSULTANT is required at any time to pay any such tax, fee, duty or charge, OCSD shall promptly reimburse CONSULTANT, at CONSULTANT's discretion, any such taxes,fees and duties that may be added to the License Fee. At CONSULTANT's discretion, any such taxes, fees and duties may be added to the prices provided hereunder for the Licensed Software and Annual Support Services or may be billed separately. 9. THIRD PARTY HOSTING. In the event OCSD desires to have a third party host the Licensed Software and Documentation, OCSD shall give notice to CONSULTANT and obtain CONSULTANT's prior written approval to any third party hosting arrangement, which approval shall not be unreasonably withheld. 10. REMOTE ACCESS. Any employee of OCSD may access the Licensed Software or Documentation remotely on a mobile computer in a home office, wireless devices or otherwise. This provision is not intended to create any rights in third parties or increase the number of Authorized Sites. 1278006.1 11. EXPORT CONTROLS. OCSD acknowledges that the Licensed Software is of U.S. origin and is subject to the export control restrictions of the U.S. Export Administration Regulations("EAR")and that the Licensed Software may not be re- exported or otherwise retransferred except in accordance with the U.S. EAR. Specifically, OCSD agrees that, unless an appropriate license from the U.S. government is first obtained, the Software shall not be exported or re-exported: (i) into (or to a national or resident of) Cuba, Iran, North Korea, Sudan, Syria, or any other country subject to a U.S. trade embargo; (ii) to any person or entity on the U.S. Treasury Department's Specially Designated Nationals ("SDN") List or the U.S. Department of Commerce's Denied Parties List; or (iii) for any purpose or end-use that is otherwise prohibited by the U.S. EAR. OCSD warrants that: (1) it is not a national or resident of a U.S. embargoed country; (ii) it is not a party prohibited from receiving U.S. exports; and (iii) the Licensed Software is not intended for any weapons proliferation-related end-use prohibited by the U.S. EAR. 12. CONSTRUCTION. This Addendum shall be deemed fully incorporated into the Agreement. Unless expressly provided to the contrary herein, to the extent that any provision of this Addendum conflicts with any provision of the Agreement, the Agreement shall control. 13. SEVERABILITY. If any provision of this Addendum shall be deemed for any reason to be invalid, illegal, or unenforceable,such provision shall be severed from the remainder of this Addendum,and that remainder shall continue in full force and effect. 14. LIMITED LIABILITY a. TRM warrants that it owns all intellectual property rights to the Licensed Software and to the Documentation, and that such does not infringe on the rights of any third party. TRM represents and warrants that, during the thirty (30) day period following first delivery of the Licensed Software to Licensee, the Licensed Software will operate substantially in accordance with applicable Documentation, provided that Licensee operates the Licensed Software in compliance with such Documentation. In the event the Licensed Software fails to satisfy the warranty immediately above, TRM's sole obligation, and Licensee's sole remedy for non-conformance of this warranty shall be, at Licensee's option, to (i) use reasonable efforts to correct the nonconformity, (ii) replace the non-conforming portion of the Licensed Software, or (iii) refund the License Fee paid by Licensee for the non-conforming Licensed Software upon return of the non-conforming copy thereof and terminate the license therefore. b. The limited warranty set forth herein will not apply to nonconformities determined by TRM to have been caused by and to the extent of(1) deletions 1278006.1 or modification to the Licensed Software caused by a party other than TRM, unless under the direction of TRM's customer support and Licensee performs the changes in accordance therewith, (2) accident, misuse or negligence in the operation or use by Licensee of the Licensed Software, (3) use, adjustments, installation, or malfunction of any products or goods other than those authorized by TRM, (4) combination of the Licensed Software with hardware, software or other material not intended (as provided in the Documentation)for combination with the Licensed Software, or(5)failure by Licensee to incorporate any Enhancement or New Release (as such terms are defined in Exhibit B). The limited warranties set forth in this Agreement are made for Licensee's benefit only. The remedies in this Section 15 are the sole and exclusive remedies for breach of these limited warranties c. Limitation on Liability. Except for any liability of TRM for infringement, TRM's liability, whether in contract, tort, otherwise, arising out of or in connection with the Licensed Software shall not exceed the depreciated value (determined using a straight-line method over a three-year life)of the License Fee paid by Licensee to TRM for the copy of the Licensed Software giving rise to the liability. TRM's liability whether in contract, tort, otherwise, arising out of or in connection with Annual Support Services shall not exceed the amount paid by Licensee in the preceding twelve (12) months in respect of the Annual Support Services giving rise to the Iiability.IN NO EVENT SHALL TRM BE LIABLE FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL OR TORT DAMAGES, INCLUDING WITHOUT LIMITATION ANY DAMAGES RESULTING FROM LOSS OF USE, LOSS OF DATA, LOSS OF PROFITS OR LOSS OF BUSINESS ARISING OUT OF OR IN CONNECTION WITH ANY LICENSED SOFTWARE FURNISHED BY TRM, THE PERFORMANCE OF THE LICENSED SOFTWARE OR ANY ANNUAL SUPPORT SERVICES, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. d. No Third Party Liability. TRM shall under no circumstances be liable for any claim or demand by any third party based on or related to Licensee's use of the Licensed Software or errors or alleged errors in the Licensed Software, including, without limitation, persons using the facilities or services of Licensee or their heirs or dependents 15. DISCLAIMER The express warranties set forth in sections 14a and 14b are the only warranties made by TRM with respect to the licensed software and the annual support services provided hereunder. TRM makes no warranty or representation that licensee's use of the licensed software will be uninterrupted or error-free, and specifically disclaims any and all other warranties, whether written or oral, express or implied, with respect to the licensed software, including any implied warranties of merchantability, or fitness for a particular purpose. 1278006.1 IN WITNESS WHEREOF, the parties have executed this Second Addendum as of the date first above written. TOTAL RESOURCE MANAGEMENT, ORANGE COUNTY SANITATION DISTRICT INC. By: Gregory C. Sebourn, PLS By: Garner R. Bennett, President Chair, Board of Directors By: By: Kelly Lore Clerk of the Board By: Contracts and Purchasing and Materials Management Manager 1278006.1 EXHIBIT A TOTAL RESOURCE MANAGEMENT, INC. LOTO MANAGER— SOFTWARE LICENSE AGREEMENT Licensed Software and Fees Licensee: ORANGE COUNTY SANITATION DISTRICT Effective Date: GO LIVE DATE The Licensed Software shall consist of the following: Software ProductsQuantity Unit Cost Total Cost TRM LOTO Manager for MAXIMO 2 Sites $25,000.00 $25,000.00 License TRM LOTO Manager for MAXIMO 2 Sites $3,465.00 Annual Re-license Fee(first year included in Software License fee TOTAL FEES: $25,000.00 Authorized Site(s): 01. Plant#1 02. Plant#2 03. 04. 05. 06. 07, 08. 09. 10. Licensee shall have the right pursuant to Section 1 of this Agreement to install(or have installed)the Licensed Software for use at each site identified above and will not authorize or allow users or entities outside of Licensee's own organization to access the Licensed Software. 1278006.1 EXIIIBIT B TOTAL RESOURCE MANAGEMENT,INC. LOTO MANAGER T'r SOFTWARE LICENSE AGREEMENT Customer Support Services Licensee: ORANGE COUNTY SANITATION DISTRICT Effective Date: For so long as Licensee has paid for Annual Re-license fees for the Licensed Software,TRM will provide the following services: Problem and Reporting Procedure. Licensee may report errors or problems with the Licensed Software to TRM by telephone,email,fax,mail or TRM's Internet web site www.trnmet.com. Software support will be provided to the Licensee during the hours of 8:00 a.m.and 5:00 p.m.U.S.Eastern Time,Monday through Friday,excluding TRM- observed holidays. Inquiries submitted during the time period prescribed above will be responded to within two(2) hours of notification. TRM may change its Customer Support hours from time to time upon notice to Licensee. TRM's support hotline can be currently reached at support(dtametcom(email),(703)548-4285(phone),or(703) 548-3641 (Fax). Licensee shall send written notice of all suspected errors to TRM within five(5)days after discovery,which notice shall include complete documentation of such errors. Software support for the Licensed Software will consist of and be limited to telephone support line service by TRM support engineers for the purpose of addressing product-specific technical difficulties and problems. Upon TRM's request,Licensee shall cooperate with TRM to provide more information concerning any suspected error or problem reported by Licensee. Upon verification by TRM of a reported error,TRM's sole obligation shall be to use reasonable efforts to provide,at TRM's sole discretion,a software update or workaround to correct or address such error. 1278006.1 ADMINISTRATION COMMITTEE Meeting Date TOBd.Of Dir. 17J13/17 12/20/17 AGENDA REPORT emNumber Item Number 4 14 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: RIGHT OF WAY AND PROPERTY MANAGEMENT SERVICES GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Consultant Services Agreement with Paragon Partners Ltd. for Right of Way and Property Management Services, Specification No. CS- 2017-879, for the period January 1, 2018 through December 31, 2018, for a total annual amount not to exceed $115,000, with two (2) six-month renewal options; and B. Approve a contingency of$11,500 (10%). BACKGROUND The Orange County Sanitation District(Sanitation District)owns and manages real estate, rights-of-ways, and various properties. Recently, the Sanitation District purchased additional properties for future use. Many of these newly acquired properties have existing tenants and require property management resources. Additionally, the Sanitation District maintains various rights-of-ways. Currently, the Sanitation District does not have these property management resources on staff. While evaluating the future needs in this area, staff recommends engaging a firm with this expertise on a short-term basis. RELEVANT STANDARDS • Protection of Orange County Sanitation District assets PROBLEM The Sanitation District owns and maintains real estate and properties which require special expertise. At present, the Sanitation District does not employee staff with this expertise. PROPOSED SOLUTION Engage an outside firm with real estate expertise on a short-term basis while evaluating its needs and developing a long-term strategy to manage these assets. Page 1 of 3 TIMING CONCERNS The Sanitation District has obtained additional properties. Currently, the Sanitation District does not have expertise in this area. RAMIFICATIONS OF NOT TAKING ACTION Sanitation District assets will not be maintained properly. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The Sanitation District requested and advertised for proposals for Right of Way and Property Management Services on August 17, 2017. The following evaluation criteria were described in the request for proposals and used to determine the most qualified firm. Cost was original weighted at 15%, but was not considered during the evaluation phase. CRITERION WEIGHT Qualifications of Firm 35% Staffing and Project 15% Organization Work Plan 20% Presentation 15% Three (3) proposals were received on September 21, 2017, and evaluated in accordance with the evaluation process set forth in Ordinance No. OCSD-47, by a pre-selected evaluation team consisting of the following Sanitation District staff. 1) Director of Engineering 2) Accounting Supervisor 3) Engineering Manager Following scoring by the evaluation team, two (2)firms were shortlisted for interviews on October 17, 2017. Following the interview, each member of the evaluation team ranked the firms based on both the proposals and interviews using the evaluation criteria and weighting described above. Paragon Partners Stadia Realty Ltd. Inc. Evaluator 1 697.50 662.50 Evaluator 850.00 720.00 Evaluator 3 675.00 600.00 Total Weighted Score 740.83 660.84 Page 2 of 3 Consultant shall provide a full array of expert property management and right of way services including managing the Sanitation District's real property portfolio and procuring necessary property easements, entitlements, and encroachments. Other services include: Title services including securing preliminary title commitments or title searches, securing title updates and insurances for all necessary parcels. Documentation of Sanitation District real property holdings in fee and easement right. Develop a management strategy for each non-plant and pump station real estate interest and identify opportunities for each interest or site (leasing or public agency cooperation). Assistance with all stages of acquisition and disposition negotiations, including analyzing title reports, identifying potential title problems, proposing methods to cure title deficiencies, and assisting with closing services when necessary by obtaining updated title commitments and certified copies of instruments of conveyance and ensuring recordation of all instruments. Permit and license acquisition services from private parties, federal, state, local, regulatory, and jurisdictional agencies. Evaluation, assessment, and documentation of the Sanitation District's real property management needs, and recommend enhancements to existing policies and procedures. Identification of areas in which the Sanitation District's portfolio management efforts are not comprehensive and/or not sufficiently coordinated to meet industry standards. Identification of areas where the Sanitation District's property rights are not being fully utilized or protected. Options and recommendations for the development of an organizational structure and processes within the Sanitation District which will allow it to manage its property assets. FINANCIAL CONSIDERATIONS This request complies with the 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.coml with the complete agenda package: • Professional Consultant Services Agreement - Right of Way and Property Management Services Page 3 of 3 PROFESSIONAL CONSULTANT SERVICES AGREEMENT Right of Way And Property Management Services Specification No. CS-2017-879 THIS AGREEMENTis 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 Paragon Partners LTD. with a principal place of business at 5660 Katella Ave, Suite 100 Cypress, CA 90630 (hereinafter referred to as "Consultant") collectively referred to as the "Parties". WITNESSETH WHEREAS, based on Consultant's expertise and experience, OCSD wishes to temporarily engage Consultant to provide Right of Way and Property Management Services ("Services") as described in Exhibit"A"; and WHEREAS, Consultant submitted its proposal, dated September 21, 2017 and WHEREAS, on December 20, 2017 the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and Consultant; and WHEREAS, OCSD has chosen Consultant to conduct Services in accordance with Ordinance No. OCSD-47; and NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agree as follows: 1. Introduction 1.1 This Agreement and all exhibits hereto (called the "Agreement") is made by OCSD and Consultant. The Terms and Conditions herein exclusively govern the purchase of Services as described in Exhibit"A" Scope of Work. 1.2 Exhibits to this Agreement are incorporated by reference and made a part of this Agreement as though fully set forth at length herein. Exhibits to this Agreement are as follows in order of precedence: Exhibit"A" Scope of Work Exhibit"B" Final Cost Proposal submitted by Consultant on November 7, 2017 Exhibit"C" Proposal submitted by Consultant Dated September 21, 2017 Exhibit"D" Acknowledgement of Insurance Requirements Exhibit"E" OCSD Safety Standards 1.3 In the event of any conflict or inconsistency between the provisions of this Agreement and any of the provisions of the exhibits hereto, the provisions of this Agreement shall in all respects govern and control. 1.4 This Agreement may not be modified, changed or supplemented, nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by both Parties. Orange County Sanitation District 1 of 11 Specification No. CS-2017-679 1.5 The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any Paragraph or provision hereof. 1.6 The term "days', when used in the Agreement, shall mean calendar days, unless otherwise noted as workdays. 1.7 The term "workday". Workdays are defined as all days that are not Saturday, Sunday, or legally observed holidays. Meetings with OCSD staff shall be scheduled from Monday through Friday between the hours of 8AM and 4PM (exception is operations staff who maintain plant operations 24/7 and work a rotated 12-hour shift) and shall conform to OCSD work schedules. OCSD review periods shall not include legally observed holidays. 1.8 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. 1.9 Work Hours: The work required under this Agreement may include normal Business hours, evenings, and weekends. OCSD will not pay Travel Time. 1.10 Work Hours: All work shall be scheduled Monday through Friday, between 7:30AM and 5:30PM. OCSD will not pay Travel Time. 1.11 Consultant shall provide OCSD with all required premiums and/or overtime work at no charge beyond the prices provided in Exhibit"B". 1.12 Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by Consultant as a result of work performed in anticipation of purchases of said services by OCSD. 2. Scone of Work Subject to the terms of this Agreement, Consultant shall perform the Services identified in Exhibit"A" and Consultant warrants that all of its Services shall be performed in a competent, professional and satisfactory manner. 3. Modifications to Scone of Work Requests for modifications to the Scope of Work hereunder can be made by OCSD at any time. All modifications must be made in writing and signed by both Parties. A review of the time required for the modification will be made by OCSD and Consultant and the Agreement period adjusted accordingly. 4. Compensation Compensation to be paid by OCSD to Consultant for the Services provided under this Agreement shall be a total amount not to exceed One Hundred and Fifteen Thousand Dollars ($115,000.00). 5. California Department of Industrial Relations (DIR)Renislrafion and Record of Wanes (Not Used) Orange County Sanitation District 2 of 11 Specification No. CS-2017-879 6. Payment and Invoicing 6.1 Consultant shall be paid monthly by OCSD upon approval of invoices by OCSD Project Manager, or his designee, for Services rendered as outlined in Exhibit "A" Scope of Work. OCSD, at its sole discretion, shall be the determining party as to whether the Services have been satisfactorily completed. 6.2 Invoices shall be emailed by Consultant to OCSD Accounts Payable at APStaff()OCSD.com and"INVOICE"and the Purchase Order number and Specification No. CS-2017-879"shall be referenced in the subject line. 7. Audit Rights Consultant agrees that, during the term of this Agreement 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 Consultant relating to the invoices submitted by Consultant pursuant to this Agreement. 6. Commencementand Term The Services to be provided by Consultant underthis Agreement shall commence on the date of the Notice to Proceed (Effective Date), and be completed within one (1) year from the Effective Date of the Notice to Proceed. 9. Renewals 9.1 OCSD may exercise the option to renew the Agreement for up to two (2) six (6) month periods based upon the criteria set forth in the Scope of Work, Exhibit"A", under the terms and conditions contained herein. OCSD shall make no obligation to renew nor give reason if it elects not to renew. 9.2 Renewals may be made through the OCSD Purchase Order Process. 10. Extensions The Term of this Agreement may be extended only by written instrument signed by both Parties. 11. Performance Time is of the essence in the performance of the provisions hereof. 12. Termination 12.1 OCSD reserves the right to terminate this Agreement for its convenience,with or without cause, in whole or in part, at any time, by written notice from OCSD. Upon receipt of a termination notice, Consultant shall immediately discontinue all work under this Agreement (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Consultant for work performed (cost and fee)to the date of termination. Consultant expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Agreement. Such notice of termination shall terminate this Agreement and release OCSD from any further fee, cost or claim hereunder by Consultant other than for work performed to the date of termination. 12.2 OCSD reserves the right to terminate this Agreement immediately upon OCSD's determination that Consultant is not meeting specification requirements, if the level of service is inadequate, or any other default of this Agreement. 12.3 OCSD may also immediately cancel for default of this Agreement in whole or in part by written notice to Consultant: Orange County Sanitation District 3 of 11 Specification No. CS-2017-879 • if Consultant becomes insolvent or files a petition under the Bankruptcy Act; or • if Consultant sells its business; or • if Consultant breaches any of the terms of this Agreement; or • if total amount of compensation exceeds the amount authorized under this Agreement. 12.4 All OCSD property in the possession or control of Consultant shall be returned by Consultant to OCSD on demand, or at the termination of this Agreement, whichever occurs first. 13. Indemnification and Hold Harmless Provision Consultant 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 Consultant's services under this Agreement, or by its subcontractor or by anyone directly or indirectly employed by Consultant, and whether such damage or injury shall accrue or be discovered before or after the termination of the Agreement. Except as to the sole active negligence of or willful misconduct of OCSD, Consultant shall indemnify, protect, defend and hold harmless OCSD, its elected and appointed officials, officers, agents and employees, from and against any and all claims, liabilities, damages or expenses of any nature, including attorneys' fees: (a) for injury to or death of any person or damage to property or interference with the use of property, arising out of or in connection with Consultant's performance under the Agreement, 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 Agreement, and/or(c)on account of any goods and services provided under this Agreement. This indemnification provision shall apply to any acts or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of Consultant of or anyone employed by or working under Consultant. To the maximum extent permitted by law, Consultant's duty to defend shall apply whether or not such claims, allegations, lawsuits, or proceedings have merit or are mantissa, 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. Consultant agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD. This section shall survive the expiration or eady termination of the Agreement. 14. Insurance Consultant and all subconsultant shall purchase and maintain, throughout the life of this Agreement and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements, Exhibit V. Consultant shall not commence work under this Agreement until all required insurance is obtained in a form acceptable to OCSD, nor shall Consultant allow any subcontractor/subconsultant to commence service pursuant to a subcontract until all insurance required of the subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Agreement. 15. Key Personnel Key Personnel, as provided in Exhibit"C", are considered "key" to the work under this Agreement and will be available for the term of the Agreement. No person designated as key under this Agreement shall be removed or replaced without prior written consent of OCSD. If OCSD asks Consultant to remove a person designated as key under this Agreement, Consultant agrees to do so immediately regardless of the reason, or the lack of reason, for OCSD's request. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. Orange County Sanitation District 4 of 11 Specification No. CS-2017-979 16. Confidentiality and Non-Disclosure 16.1 Consultant acknowledges that in performing the Services hereunder, OCSD may have to disclose to Consultant orally and in writing certain confidential information that OCSD considers proprietary and has developed at great expense and effort. 16.2 Consultant agrees to maintain in confidence and not disclose to any person, firm, or corporation, without OCSD's prior written consent, any trade secret or confidential information, knowledge or data relating to the products, process, or operation of OCSD. 16.3 Consultant further agrees to maintain in confidence and not to disclose to any person, firm, or corporation any data, information,technology, or material developed or obtained by Consultant during the term of this Agreement. 16.4 Consultant agrees as follows: • To use the Confidential Information only for the purposes described herein; to not reproduce the Confidential Information; to hold in confidence and protect the Confidential Information from dissemination to and use by anyone not a party to this Agreement; and to not use the Confidential Information to benefit itself or others. • To restrict access to the Confidential Information to its Consultant or personnel of Consultant who (1) have a need to have such access and (2) have been advised of and have agreed in writing to treat such information in accordance with the terms of this Agreement. • To return all Confidential Information in Consultant's possession upon termination of this Agreement or upon OCSD's request, whichever occurs first. • To hold in confidence information and materials, if any, developed pursuant to the Services hereunder. 16.5 The provisions of this Section shall survive termination or expiration of this Agreement and shall continue for so long as the material remains confidential. 17. Ownership of Documents All drawings, specifications, reports, records, documents, memoranda, correspondence, computations, and other materials prepared by Consultant, its employees, subconsultants, and agents in the performance of this Agreement shall be the property of OCSD and shall be promptly delivered to OCSD upon request of the Project Manager or upon the termination of this Agreement, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by OCSD of its full rights of ownership of the documents and materials hereunder. Any use of such completed documents for other projects and/or use of incomplete documents without specific written authorization by the Consultant will be at OCSD's sole risk and without liability to Consultant. Consultant shall ensure that all its subconsultants shall provide for assignment to OCSD of any documents or materials prepared by them. 18. Ownership of Intellectual Property 18.1 Consultant agrees that all designs, plans, reports, specifications, drawings, schematics, prototypes, models, inventions, and all other information and items made during the course of this Agreement and arising from the Services (hereinafter referred to as"New Developments") shall be and are assigned to OCSD as its sole and exclusive property. Orange County Sanitation District 5 of 11 Specification No. CS-2017-879 18.2 Consultant agrees to promptly disclose to OCSD all such New Developments. Upon OCSD's request, Consultant agrees to assist OCSD, at OCSD's expense, to obtain patents or copyrights for such New Developments, including the disclosure of all pertinent information and data with respect thereto, the execution of all applications, specifications, assignments, and all other instruments and papers which OCSD shall deem necessary to apply for and to assign or convey to OCSD, its successors and assigns, the sole and exclusive right, title and interest in such New Developments. Consultant agrees to obtain or has obtained written assurances from its employees and contract personnel of their agreement to the terms hereof with regard to New Developments and Confidential Information. 18.3 Consultant warrants that Consultant has good title to any New Developments, and the right to assign New Developments to OCSD free of any proprietary rights of any other party or any other encumbrance whatever. 18.4 The originals of all computations, drawings, designs, graphics, studies, reports, manuals, photographs,videotapes,data, computer files, and other documents prepared or caused to be prepared by Consultant or its subconsultants in connection with these Services shall be delivered to and shall become the exclusive property of OCSD. OCSD may utilize these documents for OCSD applications on other projects or extensions of this project, at its own risk. 19. No Solicitation of Employees Or Subconsultant 19.1 Consultant agrees that it shall not, during the term of this Agreement and for a period of one (1) year immediately following termination of this Agreement, or any extension hereof, call on, solicit, or take away any of the employees or subconsultant about whom Consultant became aware as a result of Consultant's Services to OCSD. 19.2 Consultant acknowledges that OCSD's employees are critical to its business. Consultant agrees not to employ or otherwise engage OCSD's employees or subconsultant during the term of this Agreement and for a period of one (1) year following termination of this Agreement. Should Consultant violate this provision, Consultant will pay OCSD fifty percent (50%) of the former employee's annual salary which payment is in addition to OCSD's rights and remedies. 20. Independent Contractor Capacity 20.1 The relationship of Consultant to OCSD is that of an independent contractor and nothing herein shall be construed as creating an employment or agency relationship. 20.2 Consultant shall act independently and not as an officer or employee of OCSD. OCSD assumes no liability for Consultant's action and performance, nor assumes responsibility for taxes, funds, payments or other commitments, implied or expressed, by or for Consultant. 20.3 Consultant shall not be considered an agent of OCSD for any purpose whatsoever, nor shall Consultant have the right to, and shall not, commit OCSD to any agreement, contract or undertaking. Consultant shall not use OCSD's name in its promotional material or for any advertising or publicity purposes without expressed written consent. Orange County Sanitation District 6 of 11 Specification No. CS-2017-879 20.4 Consultant shall not be entitled to any benefits accorded to those individuals listed on OCSD's payroll as regular employees including, without limitation, worker's compensation, disability insurance, vacation, holiday or sick pay. Consultant shall be responsible for providing, at Consultant's expense, disability, worker's compensation or other insurance as well as licenses and permits usual or necessary for conducting the Services hereunder. 20.5 Consultant shall be obligated to pay any and all applicable local, state and federal payroll and other taxes incurred as a result of fees hereunder. Consultant hereby indemnifies OCSD for any claims, losses, costs, fees, liabilities, damages or penalties suffered by OCSD arising out of Consultant's breach of this provision. 20.6 Consultant shall not be eligible to join or participate in any benefit plans offered to those individuals listed on OCSD's payroll as regular employees. Consultant shall remain ineligible for such benefits or participation in such benefit plans even if a court later decides that OCSD misclassified Consultant for tax purposes. 21. Licenses, Permits Consultant represents and warrants to OCSD that it has obtained and will maintain 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 Agreement will be paid by Consultant. 22. Consultant's Representations In the performance of duties under this Agreement, Consultant shall adhere to the highest fiduciary standards, ethical practices and standards of care and competence for their trade/profession. Consultant agrees to comply with all applicable Federal, State and local laws and regulations. 23. Familiarity with Work By executing this Agreement, Consultant 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 Agreement. Should Consultant 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 Consultant's risk, until written instructions are received from OCSD. 24. Rtpht to Review Services. Facilities. and Records 24.1 OCSD reserves the right to review any portion of the Services performed by Consultant under this Agreement, and Consultant agrees to cooperate to the fullest extent possible. 24.2 Consultant shall furnish to OCSD such reports, statistical data, and other information pertaining to Consultant's Services as shall be reasonably required by OCSD to carry out its rights and responsibilities under its agreements with its bondholders or noteholders and any other agreement relating to the development of the project(s) and in connection with the issuance of its official statements and other prospectuses with respect to the offering, sale, and issuance of its bonds and other obligations. 24.3 The right of OCSD to review or approve drawings, specifications, procedures, instructions, reports, test results, calculations, schedules, or other data that are developed by Consultant shall not relieve Consultant of any obligation set forth herein. Orange County Sanitation District 7 of 11 Specification No. CS-2017-879 25. 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 Agreement. 26. Severability If any section, subsection, or provision of this Agreement, or any agreement or instrument contemplated hereby, or the application of such section, subsection, or provision is held invalid, the remainder of this Agreement or instrument in the application of such section, subsection or provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby, unless the effect of such invalidity shall be to substantially frustrate the expectations of the Parties. 27. WaiverThe waiver of either party of any breach or violation of, or default under, any provision of this Agreement, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. Any breach by Consultant 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. 28. Remedies In addition to other remedies available in law or equity, if the Consultant fails to make delivery of the goods or Services or repudiates its obligations under this Agreement, or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services,OCSD may(1) cancel the Agreement; (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 Consultant. In the event OCSD elects to"cover" as described in (3), OCSD shall be entitled to recover from Consultant as damages the difference between the cost of the substitute goods or Services and the contract price,together with any incidental or consequential damages. 29. Governing Law This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. 30.Attorney's Fees If any action at law or in equity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 31. Dispute Resolution 31.1 In the event of a dispute as to the construction or interpretation of this Agreement, or any rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the dispute by mediation. The Parties shall mutually select a mediator to facilitate the resolution of the dispute. If the Parties are unable to agree on a mediator, the mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Agreement, through the alternate dispute resolution procedures of Judicial Arbitration through Mediation Services of Orange County ("JAMS"),or any similar organization or entity conducting an alternate dispute resolution process. 31.2 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 et seq. For such purpose, an agreed arbitrator Orange County Sanitation District 8 of 11 Specification No. CS-2017-879 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. 32. Damage to OCSD's Property Any OCSD property damaged by Consultant will be subject to repair or replacement by Consultant at no cost to OCSD. 33. OCSD Safety and Human Resources Policies OCSD requires all contractors and Consultants to follow and ensure their employees and all subconsultant 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 Consultant is required to follow the most stringent regulatory requirement at no cost to OCSD. Consultant and all their employees and subconsultant, shall adhere to all applicable OCSD Safety and Human Resources Policies found at https://www.oGsd.com/about-us/transparency/safety-and-human-resources-policy/- folder-631 and Human Resource Policies are hereby incorporated by reference as though fully set forth herein in Exhibit"E". 34. Freight (F.G.B. Destination) Consultant assumes full responsibility for all transportation, transportation scheduling, packing, handling, insurance, and other services associated with delivery of all products deemed necessary under this Agreement. 35.Assignments Consultant shall not delegate any duties nor assign any rights under this Agreement without the prior written consent of OCSD. Any such attempted delegation or assignment shall be void. 36. Conflict of Interest and Reporting 36.1 Consultant shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement. 36.2 Consultant affirms that to the best of its knowledge there exists no actual or potential conflict between Consultant's families, business or financial interest or its Services under this Agreement, and in the event of change in either its private interests or Services under this Agreement, it will raise with OCSD any question regarding possible conflict of interest which may arise as a result of such change. 37. Third Party Rights Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than OCSD and Consultant. 38. Non-Liability of OCSD Officers and Employees No officer or employee of OCSD shall be personally liable to Consultant, or any successor-in-interest, in the event of any default or breach by OCSD or for any amount which may become due to Consultant or to its successor, or for breach of any obligation of the terms of this Agreement. Orange County Sanitation District 9 of 11 Specification No. CS-2017-879 39.Authority to Execute The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement and that by executing this Agreement, the Parties are formally bound. 40. Read and Understood By signing this Agreement, Consultant represents that he has read and understood the terms and conditions of the Agreement. 41. Entire Agreement This Agreement constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. Orange County Sanitation District 10 of 11 Specification No. CS-2017-879 42. Notices All notices under this Agreement 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. Any facsimile notice must be followed within three (3) days by written notice. 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: Brandon Garcia Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Consultant: Nellie LaValle, President& CEO Paragon Partners LTD. 5660 Katella Avenue, Suite 100 Cypress, CA 90630 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: Gregory C. Sebourn, PLS Chair, Board of Directors Dated: By: Kelly Lore Clerk of the Board Dated: By: Contracts and Purchasing and Materials Management Manager PARAGON PARTNERS LTD. Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 11 of 11 Specification No. CS-2017-879 ADMINISTRATION COMMITTEE Meeting Date TOBd.Of Dir. 12J13/17 12/20/17 AGENDA REPORT emNumber Item Number s IS Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: INVEST AND/OR REINVEST DISTRICT'S FUNDS GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 17-17, 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 16-19." BACKGROUND This agenda item presents an update to the Orange County Sanitation District's (Sanitation District) Investment Policy Statement to the Administration Committee for consideration in the Committee's capacity as the oversight committee for the Investment Policy (Section 16.2). With adoption of the Resolution, the Board of Directors would readopt the Sanitation District's current Investment Policy Statement, portfolio performance benchmarks, and monitoring and reporting requirements for calendar year 2018. The Sanitation District's Investment Policy Statement was previously approved by the Administration Committee and Board for calendar year 2017 in October 2016. RELEVANT STANDARDS • Orange County Sanitation District Investment Policy • California Government Code Sections 53607 and 53646 PROBLEM California Government Code Section 53607 allows for the Board of Directors to delegate authority to invest and/or reinvest the Sanitation District's funds to the Treasurer for a one-year period. California Government Code Section 53646 requires the Sanitation District to review its Investment Policy annually and readopt its Policy at a public meeting, which will establish specific performance benchmarks and objectives, and specific monitoring and reports. On October 26, 2016, the Board of Directors adopted 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." Authority delegated by the Board of Page 1 of 4 Directors to the Director of Finance/Treasurer to invest and/or reinvest the Sanitation District's funds expires on December 31, 2017. Pursuant to California Government Code Section 53646, the Sanitation District's Investment Policy must be reviewed and readopted prior to December 31, 2017. PROPOSED SOLUTION With adoption of the Resolution, the Board of Directors would renew its delegation of investment authority to the Director of Finance/Treasurer for a one-year period, January 1, 2018 to December 31, 2018, in compliance with the requirements of California Government Code Section 53607. Each year, the Board of Directors will consider similar actions, along with the annual reconsideration of the Sanitation District's Investment Policy. TIMING CONCERNS The Board of Directors delegation of authority to the Director of Finance/Treasurer to invest and/or reinvest the Sanitation District's funds will expire on December 31, 2017. Pursuant to California Government Code Section 53646, the Sanitation District's Investment Policy must be reviewed and readopted prior to December 31, 2017. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District's Director of Finance/Treasurer will not be able to invest and/or reinvest the Sanitation District's funds and the Sanitation District will not be in compliance with California Government Code Section 53646. PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Board adopted 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. ADDITIONAL INFORMATION The Sanitation District Investment Policy Statement is a comprehensive document describing the policy, authorizations, benchmarks, delegations,and investment limitations contained within these 16 distinct sections. 1.0 Policy 2.0 Scope 3.0 Standard of Prudence 4.0 Investment Objectives 5.0 Delegation of Authority 6.0 Ethics and Conflicts of Interest 7.0 Authorized Financial Dealers and Institutions Page 2 of 4 8.0 Authorized and Suitable Investments 9.0 Collateralization 10.0 Safekeeping and Custody 11.0 Diversification 12.0 Maximum Maturities 13.0 Internal Control 14.0 Performance Objectives and Benchmarks 15.0 Reporting 16.0 Investment Policy Adoption and Revision The Investment Policy will govern the investment activities of Chandler Asset Management, the Sanitation District's external money manager, on behalf of the Sanitation District. On December 11, 2012, the Sanitation District's Investment Policy Statement received the Investment Policy Certification of Excellence Award from the California Municipal Treasurer's Association (CMTA). A copy of the letter of certification is included each year in the annual Investment Policy document. The Sanitation District received its first Award of Excellence for the Investment Policy Statement in December 1996. Annual Review of Investment Policv The Investment Policy includes the requirement that the Sanitation District shall review its Investment Policy annually (Sections 1.2 and 16.1). Chandler Asset Management reviewed the existing policy to ensure that the language remains current with the California Government Code. The proposed Investment Policy is attached with redlined changes from the most recent approved policy in October 2016. These proposed changes include: • Adding Supranational securities to the list of securities that are not subject to the 5% limitation per issuer as requested by the District's Investment Manager, Chandler Asset Management, for the purpose of enhancing returns. • California Government Code Section 53601(q) allows local agencies to invest in securities that are issued by three supranationals: (1)World Bank, (2) International Finance Corporation (IFC), and (3) International American Development Bank (IADB) not to exceed 30% of the agency's investment portfolio. By adding supranational securities to the list of securities that are not subject to the 5% limitation per issuer, the Sanitation District can invest up to 30% of its portfolio in supranational securities. If supranational securities are not added to the list of securities that are not subject to the 5% limitation per issuer, then the Sanitation District would continue to be subject to an investment limit of 15% of its portfolio on supranational securities (5% World Bank, 5% IFC, and 5% IADB). The possible perceived lack of diversification by allowing up to 30% of the portfolio be invested in supranationals is mostly offset by the California Government Code Page 3 of 4 Section 53601(q) requirement that all supranational investments have a rating category of"AA" or better by a nationally recognized statistical rating organization (NRSRO) and the securities must be eligible for purchase and sale within the U.S. • Updating the Sanitation District Treasury Management Procedures to reflect the replacement of Mellon/Boston Trust with U.S. Bank as the Sanitation District's master custodian and safekeeping bank. • Updating the State Treasurer's Local Agency Investment Fund Wiring Instructions Form to include the option of initiating LAW deposits or withdrawals via LAW Online. Annual Delegation of Investment Authority Effective January 1, 1997, California Government Code Section 53607 states that governing boards of local agencies may only delegate authority to invest and/or reinvest agency funds to the agency's Treasurer for a one-year period. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(a)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Exhibit A - OCSD Calendar Year 2017 Investment Policy Statement • Exhibit B - Performance Monitoring and Reporting Schedule and Summary • Proposed Resolution No. OCSD 17-17 • Orange County Sanitation District Treasury Management Procedures Page 4 of 4 ORANGE COUNTY SANITATION DISTRICT INVESTMENT POLICY STATEMENT 1.0 Policy: It is the policy of the Orange County Sanitation District (OCSD) to invest public funds in a manner which ensures the safety and preservation of capital while meeting reasonably anticipated operating expenditure needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the investment of public funds. 1.1. This Investment Policy is set forth by OCSD for the following purposes: 1.1.1. To establish a clear understanding for the Board of Directors, OCSD management, responsible employees and third parties of the objectives, policies and guidelines for the investment of the OCSD's idle and surplus funds. 1.1.2. To offer guidance to investment staff and any external investment advisors on the investment of OCSD funds (see Appendix "A"). 1.1.3. To establish a basis for evaluating investment results. 1.2. OCSD establishes investment policies which meet its current investment goals. OCSD shall review this policy annually, and may change its policies as its investment objectives change. 2.0 Scope: This Investment Policy applies to all financial assets of OCSD; except for the proceeds of OCSD's capital projects financing program, which are invested in accordance with provisions of their specific bond indentures; and such other funds excluded by law or other Board-approved covenant or agreement. These funds are accounted for by OCSD as Enterprise Funds as represented in OCSD's Comprehensive Annual Financial Report. 3.0 Standard of Prudence: The standard of prudence to be used by OCSD internal staff, and any authorized investment advisor(s), shall be as described in Section 53600.3 of the California Government Code as follows: Except as provided in subdivision (a) of Section 27000.3, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing Page 1 public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law. 4.0 Investment Objectives: The primary objectives of OCSD's investment activities, in priority order, and as described in Section 53600.5 of the California Government Code, shall be: 4.1 Safety: The safety and preservation of principal is the foremost objective of the investment program of OCSD. Investments shall be selected in a manner that seeks to ensure the preservation of capital in OCSD's overall portfolio. This will be accomplished through a program of diversification, more fully described in Section 11.0, and maturity limitations, more fully described in Section 12.0, in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. 4.2 Liquidity: The investment program will be administered in a manner that will ensure that sufficient funds are available for OCSD to meet its reasonably anticipated operating expenditure needs. 4.3 Return on Investments: The OCSD investment portfolio will be structured and managed with the objective of achieving a rate of return throughout budgetary and economic cycles, commensurate with legal, safety, and liquidity considerations. 5.0 Delegation of Authority: 5.1 Authority to manage OCSD's investment program is derived from the California Government Code Sections 53600 et seq. and Sections 53635 et seq. The Board of Directors hereby delegates management responsibility for the OCSD investment program to its Director of Finance and Administrative Services/Treasurer, who shall establish written procedures for the operation of the investment program, consistent with this Policy. The Controller/Assistant Treasurer shall be responsible for day-to-day administration, monitoring, and the development of written administrative procedures for the operation of the investment program, consistent with this Policy. The current treasury management procedures are presented in Appendix "B." No person may engage in an investment transaction except as provided under the terms of this Policy and the Page 2 procedures established by the Treasurer. The Treasurer shall be responsible for all transactions undertaken by OCSD internal staff, and shall establish a system of controls to regulate the activities of internal staff and external investment advisors engaged in accordance with Section 5.3. 5.2 The administrative procedures for the operation of OCSD's investment program will provide for, but not be limited to, the following: 5.2.1 Formats for monthly and quarterly reports to the Administration Committee, and the Board of Directors. 5.2.2 Compliance with generally accepted accounting principles of the Government Accounting Standards Board. 5.2.3 Establishment of benchmarks for performance measurement. 5.2.4 Establishment of a system of written internal controls. 5.2.5 Establishment of written procedures for competitive bids and offerings of securities that may be purchased or sold by internal OCSD staff. 5.2.6 Establishment of a Desk Procedures Manual for treasury operations and management. 5.3 The Board of Directors of OCSD may, in its discretion, engage the services of one or more registered investment advisors to assist in the management of OCSD's investment portfolio in a manner consistent with OCSD's objectives. Such external investment advisors, which shall be selected through a competitive process, shall be granted discretion to purchase and sell investment securities in accordance with this Investment Policy. Such advisors must be registered under the Investment Advisers Act of 1940, or be exempt from such registration. 6.0 Ethics and Conflicts of Interest: 6.1 Officers and employees of OCSD involved in the investment process shall refrain from personal business activities that could conflict with proper execution of OCSD's investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the General Manager any material financial interests in financial institutions that conduct business within OCSD's boundaries, and they shall further disclose any large personal financial/investment positions, the performance of which could be related to the performance of positions in OCSD's portfolio. Page 3 7.0 Authorized Financial Dealers and Institutions: 7.1 For investment transactions conducted by OCSD internal staff, the Treasurer will maintain a list of financial institutions authorized to provide investment services to OCSD, including "primary" or regional dealers that qualify under Securities and Exchange Commission Rule 15C3-1 (Uniform Net Capital rule), and Federal or State of California chartered banks. No public deposit shall be made except in a qualified public depository as established by State law. All financial institutions which desire to become qualified bidders for investment transactions with OCSD must supply the following for evaluation by the Treasurer: 7.1.1. Audited financial statements for the institution's three (3) most recent fiscal years. 7.1.2. A statement, in the format prescribed by the Government Finance Officers Association (GFOA), certifying that the institution has reviewed OCSD's Investment Policy and that all securities offered to the Districts shall comply fully and in every instance with all provisions of the California Government Code and with this Investment Policy. The current statement is presented in Appendix "C." 7.1.3. A statement describing the regulatory status of the dealer, and the background and expertise of the dealer's representatives. Selection of financial institutions, broker/dealers, and banks authorized to engage in transactions with OCSD shall be made through a competitive process. An annual review of the financial condition of qualified institutions will be conducted by the Treasurer. 7.2 Selection of broker/dealers used by external investment advisors retained by OCSD, shall be in compliance with contract provisions between OCSD and any external investment advisors, and shall be in substantially the following form: Use of Securities Brokers: Neither the Investment Advisor nor any parent, subsidiary or related firm shall act as a securities broker with respect to any purchases or sales of securities which may be made on behalf of OCSD, provided that this limitation shall not prevent the Investment Advisor from utilizing the services of a securities broker which is a parent, subsidiary or related firm, provided such broker effects transactions on a "cost only" or"nonprofit" basis to itself and provides competitive execution. The Investment Advisor shall provide the Districts with a list of suitable independent brokerage firms (including names and addresses) meeting the requirements of Government Code Section 53601.5, and, unless Page 4 otherwise directed by OCSD, the Investment Advisor may utilize the service of any of such independent securities brokerage firms it deems appropriate to the extent that such firms are competitive with respect to price of services and execution. 8.0 Authorized and Suitable Investments: All investments shall be made in accordance with the California Government Code including Sections 16429.1 et seq., 53600 at seq., and 53684, and as described within this Investment Policy. Permitted investments under this Policy shall include: 8.1 Securities, obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by the US Government, a federal agency, or a US Government-sponsored enterprise pursuant to Section 53601 (f) of the California Government Code. US Treasury securities must make up at least 10% of the portfolio. 8.2 Supranational Obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank. Securities must be eligible for purchase in the United States and be US dollar denominated senior unsecured unsubordinated obligations, with a maximum maturity of five years. Securities eligible for purchase under this section must be rated "AA" or better by a Nationally Recognized Statistical Rating Organization (NRSRO) and shall not exceed 30% of the total portfolio. 8.3 Mortgage pass-through security, collateralized mortgage obligation, mortgage-backed or other pay-through bond, equipment lease- backed certificate, consumer receivable pass-through certificate, or consumer receivable-backed bond of a maximum maturity of five years. Securities eligible for investment under this subdivision shall be issued by an issuer having an "A" or higher rating for the issuer's debt as provided by an NRSRO and rated in a rating category of"AA" or its equivalent or better by an NRSRO. Purchase of securities authorized by this subdivision may not exceed 20 percent of the agency's surplus moneys that may be invested pursuant to this section. Purchase of mortgage derivatives, which include interest-only payments (IOs) and principal-only payments (POs); inverse floaters, and RE-REMICs (Real Estate Mortgage Investment Conduits), is hereby prohibited. 8.4 Commercial paper of"prime" quality of the highest ranking or of the highest letter and number rating as provided by an NRSRO, and issued by a domestic corporation organized and operating in the United States with assets in excess of$500 million and having a rating of"A" or better on its long-term debt as provided by an NRSRO. Purchases of eligible commercial paper may not exceed 270 days to maturity from the date of Page 5 purchase. Purchases of commercial paper shall not exceed 25% of the market value of the portfolio. No more than 5% of the market value of the portfolio, or 10% of the issuer's outstanding paper, may be invested in commercial paper issued by any one (1) eligible corporation. 8.5 Banker's acceptances issued by institutions, the short-term obligations of which are rated of the highest ranking or the highest letter and number rating as provided by an NRSRO provided that: (a) the acceptance is eligible for purchase by the Federal Reserve System; (b)the maturity does not exceed 180 days; (c) no more than 40% of the total portfolio may be invested in banker's acceptances; and (d) no more than 5% of the total portfolio may be invested in the banker's acceptances of any one (1) commercial bank. 8.6 Medium term (or corporate) notes of a maximum of five (5) years maturity issued by corporations organized and operating within the United States, or issued by depository institutions licensed by the United States, or any state, and operating within the United States with assets in excess of$500 million, and which is rated in a rating category of"A" or better on its long-term debt as provided by an NRSRO. If, after purchase, the rating of an eligible note falls below the minimum rating category stipulated above, the external investment advisor shall notify the District of the downgrade, and shall present an analysis and recommendations as to the disposition of the note consistent with the investment objectives of this Investment Policy. No more than 30% of the portfolio may be invested in medium term notes. 8.7 Notes, bonds, or other obligations that are at all times secured by a valid first priority security interest in securities of the types listed by California Government Code Section 53651 as eligible securities for the purpose of securing local agency deposits having a market value at least equal to that required by California Government Code Section 53652 for the purpose of securing local agency deposits. The securities serving as collateral shall be placed by delivery or book entry into the custody of a trust company or the trust department of a bank that is not affiliated with the issuer of the secured obligation, and the security interest shall be perfected in accordance with the requirements of the Uniform Commercial Code or federal regulations applicable to the types of securities in which the security interest is granted. 8.8 Shares of mutual funds investing in securities permitted under this policy and under Section 53601 (1) of the California Government Code. Such funds must either: (1) attain the highest ranking, or the highest letter and numerical rating, provided by not less than two of the three largest nationally recognized rating services; or (2) have an Investment Advisor registered with the Securities and Exchange Commission with not less than five (5) years of experience investing in the securities and obligations authorized under this Policy and under California Government Code Page 6 Section 53601, and with assets under management in excess of$500 million. The purchase price of shares of beneficial interest purchased pursuant to this policy, and the California Government Code may not include any commission that the companies may charge, and shall not exceed 20% of the District's surplus money that may be invested pursuant to this section. No more than 10% of the District's surplus funds may be invested in shares of beneficial interest of any one (1) mutual fund pursuant to this section. Money market mutual funds are limited to 20% per issuer and are not subject to the 10% stipulation. 8.9 Certificates of deposit: 8.9.1 Secured (collateralized) time deposits issued by a nationally or state-chartered bank or state or federal savings and loan association, as defined by Section 5102 of the California Financial Code, and having a net operating profit in the two (2) most recently completed fiscal years. Collateral must comply with Chapter 4, Bank Deposit Law, Section 16500 et seq., and Chapter 4.5, Savings and Loan Association and Credit Union Deposit Law, Section 16600 et seq., of the California Government Code. 8.9.2 Negotiable certificates of deposit (NCDs) issued by a nationally or state-chartered bank or state of federal savings and loan association, as defined by Section 5102 of the California Financial Code; and which shall have a rating of"A" or better on its long-term debt as provided by a NRSRO; or which shall have the highest letter and number rating for deposits as provided by a NRSRO; or as otherwise approved by the District's Board of Directors. No more than 30% of the portfolio may be invested in securities pursuant to this section. 8.9.3 To be eligible to receive local agency money, a bank, savings association, federal association, or federally insured individual loan company shall have received an overall rating of not less than "satisfactory" in its most recent evaluation by the appropriate federal financial supervisorial agency of its record of meeting the credit needs of California's communities, including low and moderate income neighborhoods, pursuant to Section 2906 of Title 12 of the United States Code. 8.10 Taxable or tax-exempt municipal bonds issued by any of the 50 United States. Such securities must be rated `A" or higher by a NRSRO; or as otherwise approved by the Districts' Board of Directors. 8.11 The State of California Local Agency Investment Fund (LAIF). The LAW is an investment alternative for California's local governments and special districts managed by the State Treasurer's Office. LAIF is more fully described in the Glossary (See Appendix "H.") The District shall use LAW as a short-term cash management facility. Investment of District funds in LAIF shall be subject to investigation and due diligence prior to Page 7 investing, and on a continual basis to a level of review pursuant to Section 3.0, Standard of Prudence, of this Policy. See Appendix "D" for investment pool questionnaire. 8.12 The Orange County Treasurer's Money Market Commingled Investment Pool (OCCIP). The OCCIP is a money market investment pool managed by the Orange County Treasurer's Office. OCCIP is more fully described in the Glossary. (See Appendix"H") The District has no funds invested in OCCIP at this time. Investment of District funds in OCCIP would be subject to investigation and due diligence prior to investing, and on a continual basis to a level of review pursuant to Section 3.0, Standard of Prudence, of this Policy. 8.13 Repurchase agreements provided that: 8.13.1 All repurchase agreements shall be collateralized with securities eligible for purchase under this Policy. In order to anticipate market changes and to provide a level of security for all repurchase agreement transactions, collateralization shall be maintained at a level of at least 102% of the market value of the repurchase agreements, and shall be adjusted no less than weekly. 8.13.2 All repurchase agreements must be the subject of a Master Repurchase Agreement between OCSD and the provider of the repurchase agreement. The Master Repurchase Agreement shall be substantially in the form developed by The Bond Market Association. 8.14 Reverse repurchase agreements provided that: 8.14.1 No more than five percent (5%)of OCSD's portfolio shall be invested in reverse repurchase agreements, and there shall be no long- term reverse repurchase agreements unless otherwise authorized by the Districts' Board of Directors. 8.14.2 The maximum maturity of reverse repurchase agreements shall be ninety (90) days. 8.14.3 Reverse repurchase agreements shall mature on the exact date of a known cash Flow which will be unconditionally available to repay the maturing reverse repurchase agreement. 8.14.4 Proceeds of reverse repurchase agreements shall be used solely to supplement portfolio income or to provide portfolio liquidity, and shall not be used to speculate on market movements. 8.14.5 All reverse repurchase agreements must be the subject of a Master Repurchase Agreement between OCSD and the provider of the reverse repurchase agreement. The Master Repurchase Agreement shall Page 8 be substantially in the form developed by The Bond Market Association. 8.15 Sales of OCSD-owned securities in the secondary market may incur losses in order to improve the risk or return characteristics of the portfolio, to prevent anticipated further erosion of principal, or when trading for securities that result in an expected net economic gain to OCSD. 8.16 If securities owned by the OCSD are downgraded below the quality required by this Investment Policy, it shall be OCSD's policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. If a decision is made to retain the downgraded securities in the portfolio, their presence in the portfolio will be monitored and reported monthly to the OCSD General Manager, the Administration Committee and Board of Directors. 9.0 Collateralization: Generally, the value to secure deposits under this Policy shall comply with Section 53652 of the California Government Code. Collateralization will be required for secured time deposits, as more fully described in Section 8.9.1; and repurchase agreements, as more fully described in Section 8.13.1. Collateral will always be held by an independent third-party, as more fully described in Section 10.1. The right of collateral substitution is granted. 10.0 Safekeeping and Custody: 10.1 All securities transactions, including collateral for repurchase agreements, entered into by, or on behalf of OCSD, shall be conducted on a delivery-versus-payment (I)VP) basis. Securities will be held by OCSD's third-party custodian bank, which shall be selected through a competitive process, or that agent's representative, or in the agent's account at the Federal Reserve Bank, or within clearing corporations in the U.S., and evidenced by book entry statements. 11.0 Diversification: OCSD will diversify its investments by security type, issuer, and financial institution in accordance with the following: 11.1 There is no limit on investment in securities issued by or guaranteed by the full faith and credit of the U.S. government. 11.2 No more than 20% of the portfolio may be invested in securities of a single agency of the U.S. government, which does not provide the full faith and credit of the U.S. government. 11.3 No more than 5% of the portfolio may be invested in securities of any one Page 9 issuer, other than Supranationals, the U.S. government or its agencies. Investment in mutual funds is not governed by this Section 11.3. See Section 11.8 for conditions of purchase of mutual funds. 11.4 No individual holding shall constitute more than 5% of the total debt outstanding of any issuer. 11.5 No more than 40% of the portfolio may be invested in banker's acceptances. 11.6 No more than 25% of the portfolio may be invested in commercial paper. 11.7 No more than 30% of the portfolio may be invested in medium-term (corporate) notes. 11.8 No more than 20% of the portfolio may be invested in mutual funds. No more than 10% of the District's portfolio may be invested in shares of beneficial interest of any one (1) mutual fund. Money market mutual funds are limited to 20% per issuer and are not subject to the 10% stipulation. 11.9 No more than 30% of the portfolio may be invested in negotiable certificates of deposit. 11.10 No more than 10% of the portfolio may be invested in eligible municipal bonds. 11.11 No more than 20% of the Long Term Operating Monies portfolio may be invested in a combination of mortgage-backed securities, CMOs and asset-backed securities. 11.12 No more than the lesser of 15% of the portfolio or the statutory maximum may be invested in LAIF. 11.13 No more than 15% of the portfolio may be invested in the Orange County Investment Pool. 11.14 No more than 20% of the portfolio may be invested in repurchase agreements. 11.15 No more than 5% of the portfolio may be invested in reverse repurchase agreements. 12.0 Maximum Maturities: To the extent possible, OCSD will attempt to match its investments with reasonably anticipated cash flow requirements. The Treasurer shall develop a five-year cash flow forecast, which shall be updated quarterly. Based on this forecast, the Treasurer shall designate, from time-to-time, the amounts to be allocated to the investment portfolio. Page 10 OCSD monies invested in accordance with this Policy are divided into two (2) categories: 12.1 Liquid Operating Monies. Funds needed for current operating and capital expenditures are known as Liquid Operating Monies. 12.1.1 The maximum final stated maturity of individual securities in the Liquid Operating Monies account portfolio shall be one (1) year from the date of settlement. 12.1.2 The average duration of the Liquid Operating Monies account portfolio shall be recommended by the Treasurer based on the Districts' cash flow requirements, but may never exceed 180 days. 12.2 Long Term Operating Monies. Funds needed for longer term purposes are known as the Long Term Operating Monies. 12.2.1 The maximum final stated maturity of individual securities in the Long Term Operating Monies account portfolio shall be five (5) years from the date of settlement. 12.2.2 The duration of the Long Term Operating Monies account portfolio shall be recommended by the Treasurer based on the District's five-year cash flow forecast, but may never exceed 60 months. 12.2.3 The duration of the Long Term Operating Monies account portfolio shall never exceed 120% of the duration as established in accordance with Section 12.2.2. 12.2.4 The duration of the Long Term Operating Monies account portfolio shall never be less than 80% of the duration as established in accordance with Section 12.2.2 13.0 Internal Control: 13.1 The Treasurer shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. The current treasury management procedures are presented in Appendix "B." 14.0 Performance Objectives and Benchmarks: 14.1 Overall objective. The investment portfolio of OCSD shall be designed with the overall objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with investment risk constraints and reasonably anticipated cash Flow needs. 14.2 The Liquid Operating Monies. The investment performance objective for the Liquid Operating Monies shall be to earn a total rate of return over Page 11 a market cycle which exceeds the return on a market index approved by the Administration Committee, and by the District's Board of Directors, when the duration of the portfolio is established. This market index is more fully described in Board Resolution No. 0054)-36-1-90CSD 17-XX (see Appendix "E"). 14.3 The Long Term Operating Monies. The investment performance objective for the Long Term Operating Monies shall be to earn a total rate of return over a market cycle which exceeds the return on a market index selected by the Administration Committee and approved by the District's Board of Directors, when the duration of the portfolio is established. This market index is more fully described in Board Resolution No. OSSD-36- 490CSD 17-XX (See Appendix "E"). 15.0 Reporting: 15.1 Monthly transaction reports in accordance with California Government Code Section 53607 shall be submitted by the Treasurer to the District's Board of Directors. 15.2 Quarterly investment reports will be submitted by the Treasurer to the Administration Committee which shall forward the reports to the District's Board of Directors. The quarterly reports shall provide clear and concise status information on the District's portfolios at the end of each reporting period, including performance measures using the benchmarks described in Section 14.0 of this Investment Policy. Sample quarterly reports are presented in Appendix "IF." These reports shall contain listings of individual securities held at the end of each reporting period, and shall disclose, at a minimum, the following information about the risk characteristics of OCSD's portfolio: 15.2.1 Cost and accurate and complete market value of the portfolio. 15.2.2 Modified duration of the portfolio compared to Benchmark. 15.2.3 Dollar change in value of the portfolio for a one-percent (1%) change in interest rates. 15.2.4 Percent of portfolio invested in reverse repurchase agreements, and a schedule which matches the maturity of such reverse repurchase agreements with the cash flows which are available to repay them at maturity. 15.2.5 For the Liquid Operating Monies account only, the percent of portfolio maturing within 90 days. 15.2.6 Average portfolio credit quality. Page 12 15.2.7 Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities. 15.2.8 State that all investments are in compliance with this policy and the California Government Code, or provide a listing of any transactions or holdings which do not comply with this policy or with the California Government Code. 15.2.9 Time-weighted total rate of return for the portfolio for the prior three months, twelve months, year to date, and since inception compared to the Benchmark returns for the same periods. 15.2.10 State that sufficient funds are available for OCSD to meet its operating expenditure requirements for the next six months, or if not, state the reasons for the shortfall. 15.2 OCSD's Treasurer shall meet quarterly with the Administration Committee to review investment performance, proposed strategies and compliance with this Investment Policy. External investment advisors may be required to attend said meetings at the discretion of the Chairman of the Administration Committee. 16.0 Investment Policy Adoption and Revision: 16.1 The Investment Policy of OCSD shall be reviewed by the Administration Committee and shall be adopted by resolution of the Board of Directors of OCSD. The Policy shall be reviewed on an annual basis in accordance with California Government Code Section 53646, and this Investment Policy, by the Administration Committee, which shall recommend revisions, as appropriate, to the Board of Directors. Any modifications made thereto shall be approved by the Board of Directors. 16.2 The Administration Committee shall serve as the oversight committee for the District's Investment program and shall adopt guidelines for the ongoing review of duration, quality and liquidity of the District's portfolio. Page 13 APPENDIX "A" SUMMARY OF INVESTMENT AUTHORIZATION INTERNAL AND EXTERNAL MANAGERS SHORT TERM OPERATING FUND INVESTMENT INTERNAL EXTERNAL U.S. Treasuries OK OK Federal Agencies Fixed coupon, fixed mat. OK Supranationals NO OK Mortgage-backed NO NO Commercial paper OK OK Banker's Accept. OK OK Medium Term Notes Fixed coupon, fixed mat.* OK Mutual Funds Money Market Only** Money Market Only Negotiable CDs Fixed coupon, fixed mat.* OK Municipal Bonds OK* NO LAW OK NO OCIP OK NO CMOs NO OK Asset-backed NO OK Repurchase Agree. OK OK Reverse Repos OK* OK LONG TERM OPERATING PORTFOLIO INVESTMENT INTERNAL EXTERNAL U.S. Treasuries OK OK Federal Agencies Fixed coupon, fixed mat. OK Supranationals NO OK Mortgage-backed NO OK Commercial Paper OK OK Banker's Acceptances OK OK Medium Term Notes Fixed coupon, fixed mat.* OK Mutual Funds Money Market Only** OK Negotiable CDs Fixed coupon, fixed mat.* OK Municipal Bonds OK* OK LAIF OK NO OCIP OK NO CMOs NO OK Asset-backed NO OK Repurchase Agree. OK OK Reverse Repos OK* OK *With prior approval of the Administration Committee. **Using financial institutions approved by the Administration Committee. EXHIBIT "B" Calendar Year 2018 Performance Monitoring & Reporting Schedule For the Administration Committee The Quarterly Investment and Board of Directors meetings of: Management Program Report to be resented for the period of: January 2018 Board Only) February Oct— Dec 2017 March April May Jan — March 2018 June Jul August Board only) Aril —June 2018 September October November Jul —Sept 2018 December Pagel of 2 EXHIBIT "B" ORANGE COUNTY SANTIATION DISTRICT PERFORMANCE MONITORING & REPORTING SUMMARY FOR THE DISTRICT'S INVESTMENT PROGRAM POLICY REFERENCE PERFORMANCE CHARACTERISTIC REPORTING PARTY* Chandler U.S. Bank Callan 15.2.1 Cost and market value of the portfolio(monthly mark-to-market). M, Q M, Q Q 15.2.2 Modified duration of the portfolio compared to benchmark. M, Q Q 15.2.3 Dollar change in value of the portfolio for a 1%change in interest rate. M, Q Q 15.2.4 Percent of portfolio invested in reverse repurchase agreements, and a schedule which M, Q matches the maturity of such reverse repurchase agreements with the cash flows which are available to repay them at maturity. 15.2.5 For the Liquid Operating Monies account only,the percent of portfolio maturing within 90 M, Q Q days. 15.2.6 Average portfolio credit quality. M, Q Q 15.2.7 Percent of portfolio with credit ratings below"A" by any rating agency, and a description M, Q Q of such securities. 15.2.8 Listing of any transaction or holdings which do not comply with this policy orwith the M, Q California Government Code. 15.2.9 Time-weighted total rate of return for the portfolio for the prior three months,twelve M, Q Q months, year-to-date, and since inception compared to the benchmark returns for the same periods. ADDL** Comparison of portfolio performance to market index benchmark. M, Q Q ADDL** Comparison of Manager's performance to peer group benchmark. Q ADDL** Monitoring of organizational and structural changes of investment management firm. Q ADDL** Audit portfolios for compliance with investment policy guidelines. Q 15.2.10 OCSD will report if sufficient funds are available for it to meet operating expenditure requirements for the next six months, or if not, state the reason for the shortfall. Notes *M = Monthly *Q =Quarterly **ADDL= Monitoring of Additional Performance Characteristics Page 2 of 2 RESOLUTION NO. OCSD 17-17 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 16-19 WHEREAS, on October 26, 2016, the Board of Directors adopted Resolution No. 16-19, readopting the District's Investment Policy Statement, and establishing specific performance benchmarks and objectives, together with a schedule of frequency of investment performance reports; and WHEREAS, pursuant to California Government Code Section 53607, the Board of Directors may delegate authority to invest and/or reinvest District's funds to the Treasurer for a one-year period; and WHEREAS, pursuant to California Government Code Section 53646, the District is required to review its Investment Policy annually and readopt its Policy at a public meeting,which Policy will establish specific performance benchmarks and objectives, and specific monitoring and reports. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That the authority of the Board of Directors to invest or reinvest District's surplus funds, or to sell or exchange securities so purchased, or to deposit for safekeeping the funds and investments of the Districts with depositories, as provided for in California Government Code Sections 53608 and 53630, is hereby delegated to the District's Treasurer for a one-year period commencing on the date this Resolution is adopted, as authorized by California Government Code Section 53607. OCSD 17-17-1 Section 2: That the Board of Directors hereby adopts the Investment Policy Statement of the Orange County Sanitation District, as set forth in Exhibit "A", attached hereto and incorporated herein by reference. Section 3: That the Board of Directors hereby adopts the following specific performance benchmarks for their two investment funds in accordance with Section 14.0 of the District's Investment Policy: LIQUID OPERATING MONIES: The Short-Term Operating Fund will be compared to the three-month T-Bill rate, and the Callan Active Cash Flow Income Style Group. The Callan Active Cash Flow Income Style Group represents a peer group of managers who operate with a maximum maturity of one year. LONG-TERM OPERATING MONIES: The Long-Term Operating Fund will be compared to the Merrill Lynch Government and Corporate One-to-Five Year Maturity Index and to the Callan Defensive Fixed Income Style Group. Section 4: That the Board of Directors hereby adopts a performance monitoring and reporting schedule, as required by Section 15.0 of the District's Investment Policy, which schedule is attached hereto as Exhibit"B", and incorporated herein by reference. Section 5: That Resolution No. OCSD 16-19 is hereby repealed. OCSD 17-17-2 PASSED AND ADOPTED at regular meeting of the Board of Directors, Orange County Sanitation District held December 20, 2017. Gregory C. Sebourn, PLS Board Chair ATTEST: Kelly A. Lore, CIVIC Clerk of the Board OCSD 17-17-3 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 17-17 was passed and adopted at a regular meeting of said Board on the 20th day of December 2017, 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 20th day of December 2017. Kelly A. Lore, CIVIC Clerk of the Board of Directors Orange County Sanitation District OCSD 17-17-4 Appendix "B" Revised: lsleye�..o. eF 1 ' January 1. 2018 Orange County Sanitation District Treasury Management Procedures 1.0 Purpose 1.1 The purpose of this policy is to establish uniform guidelines and procedures for use in the administration of the District's Treasury functions consistent with the California Government Code and the District's adopted Investment Policy Statement. 2.0 Authority to Investment and/or Reinvestment of District Funds: 2.1 Is delegated annually to the Director of Finance/Treasurer in accordance with California Government Code Section 53607. 3.0 Formal Investment Policy Statement: 3.1 Is prepared by the Treasurer. 3.2 Is reviewed by the District's Administration Committee (ADM), in its role as the finance oversight committee. 3.3 Is submitted to and adopted by the District's Board of Directors annually at a public meeting in accordance with California Government Code Section 53646. 4.0 Delegation of some or all of the investment portfolio management to one or more registered investment advisors (external money managers): 4.1 Is authorized by the District's Investment Policy; 4.2 Applies to the District's entire investment portfolio except for: 4.2.1 A maximum of $65 million that is maintained within the State Local Agency Investment Fund (LAIF)for managing cash flows (i.e., deposits of large revenues, such as property tax and user fee proceeds, and the bi-weekly disbursements of payroll and accounts payable); 4.2.2 A peg amount of approximately $50,000 is maintained within the District's checking account at Union Bank to serve as compensating balances to offset banking charges (note: the District's Board of Directors has selected Union Bank to serve as the District's commercial bank (the "Bank"); and 4.2.3 Based on a determination by the District's Treasurer on what is most advantageous to the District, the checking account residual amounts may be invested as follows: Orange County Sanitation District Treasury Management Procedures Revised: NovemberJanuary 1, 20186 Page 2 of 7 4.2.3.1 Bank balances exceeding the peg balance (as a result of outstanding accounts payable and payroll warrants) may be invested overnight under a repurchase agreement with the Bank; or 4.2.3.2 The District may elect to receive earnings credit against bank charges on all bank balances including the peg amount equal to the 91 Day T-Bill Average. 5.0 Investment transactions involving the LAIF are approved by the Treasurer prior to their execution by the Controller. The approval function indicates that the transactions are in accordance with the District's Investment Policy. The Accounting MaaaWSupervisor will serve as backup for the approval function upon the absence of any either of these two employees. 5.1 Specific Procedures involving LAIF include (note: all deposits and withdrawals of funds toffrom LAIF may only be processed through the District's checking account with the Bank): 5.1.1 A "State Treasurer's Local Agency Investment Fund Authorization Form" (see Attachment "A") must be completed prior to the execution of the transaction indicating: 5.1.1.1 The effective date of the transaction; 5.1.1.2 The dollar amount to be withdrawn from or deposited into LAIF; 5.1.1.3 The date and signature approval by the Controller authorizing the transaction; and 5.1.1.4 The date and signature approval of the Treasurer approving the transaction. 5.1.2 The execution of the transaction will be done in accordance with the "State Treasurer's Local Agency Investment Fund Wire Transfer Instructions" (see Attachment "B"). Key internal control features include: 5.1.2.1 The requirement of the District's Personnel Identification Number (PIN)for either deposits or withdrawals, known only by the Treasurer and Controller. 5.1.2.2 Secondary confirmation requirement by the Bank for the Orange County Sanitation District Treasury Management Procedures Revised: Noveml)erJanuary 1, 20186 Page 3 of 7 withdrawals/deposits from/to the Bank or LAIF. The confirmation can be made by the Controller or Treasurer(the person that didn't make the original request), the Accounting MaaaWSuoervisor, or the Principal Accountant. 5.1.3 Each transaction is confirmed the next day by the Bank's Previous Day Reporting modem service by the PrincipalSenior Accountant and Controller. 6.0 Investment transactions involving the District's external investment program and performed by the independent investment firms are as follows: 6.1 The District's Board of Directors has selected Chandler Asset Management (Chandler) to manage two portfolios: the Districts' Liquid Operating Monies Fund, and the Long-term Operating Monies Fund. 6.1.1 Chandler has authorization to purchase and sell investment securities in accordance with the strict investment guidelines set forth in the District's Investment Policy (Section 8.0). 6.1.2 Hard copy confirmation reporting to the District is required on all transactions. 6.2 The District's Board of Directors has selected MWIAR'Q '^^ T'••^^ T•••^`U.S. Bank (the "Custodian") to serve as the District's master custodian and safekeeping bank. In their capacity as Custodian, MellealBostea--TrustU.S. Bank shall perform the following duties to settle purchases and sales and engage in other transactions in the administration of the District's accounts: 6.2.1 Upon execution of any transaction by Chandler, all investment securities are recorded in book entry by the Custodian through either the Depository Trust Company or the Federal Reserve Bank; 6.2.2 Hold the property in safekeeping facilities of the Custodian or of other custodian banks or clearing corporations in the U.S.; 6.2.3 Collect all income payable to and all distributions due to the District's account and sign on the District's behalf all declarations, affidavits, and certificates of ownership required to collect income and principal payments; 6.2.4 Collect all proceeds from securities, certificates of deposit or other investments which may mature or be called; Orange County Sanitation District Treasury Management Procedures Revised: Neveml)erJanuary 1, 20186 Page 4 of 7 6.2.5 Submit or cause to be submitted to the District or the external money manager, as designated by the District, on a best effort basis all information received by the Custodian regarding the ownership rights pertaining to property held in the account; 6.2.6 Attend to involuntary corporation actions; 6.2.7 Determine the fair market value of the District's account on a monthly basis as of such dates as the Districts and the Custodian may agree upon, in accordance with methods consistently followed and uniformly applied; 6.2.8 Render to District, with copies to the external money manager, monthly statements for securities held hereunder; and 6.2.9 Provide the District with copies of the Custodian's financial statements filed with the State of California, or any agency thereof, within thirty(30) days after such filing. 6.3 The District's Board of Directors has selected Callan Associates as the District's Independent Investment Advisor (the `Advisor"). In their capacity as Advisor, Callan shall perform the following duties on behalf of the District: 6.3.1 Monitor and report on Chandler's compliance with the investment requirements of the Districts' Investment Policy, using data from transaction reports prepared by MellenlBosten-TsustU.S. Bank, on a quarterly basis; 6.3.2 Review Chandler's investment strategy quarterly; 6.3.3 Monitor and report on the performance of Chandler against the performance benchmark standards established in the District's Investment Policy for both the Liquid Operating Monies Fund and the Long-term Operating Monies Fund on a quarterly basis; and 6.3.4 Review both Liquid and Long-term Operating Funds by asset allocation, asset flow, quarterly factors and cumulative results on a quarterly basis. 6.4 Specific procedures in depositing to or withdrawing funds from the investment portfolio managed by the District's external money manager include: (note: all deposits and withdrawals of funds from the District's investment portfolio managed by Chandler and Me"onlBosten Tru6 U.S. Bank may only be processed through the District's checking account at the Bank): 6.4.1 A"Wire Transfer Form" (see Attachment" C")must be completed by the Orange County Sanitation District Treasury Management Procedures Revised: NovemberJanuary 1, 20186 Page 5 of 7 Controller prior to the execution of the transaction indicating: 6.4.1.1 The dollar amount to be withdrawn/deposited from/to the Bank checking account to/from the Chandler Liquid Operating or Chandler Long-term Operating Monies Funds; 6.4.1.2 The effective date of the transaction; 6.4.1.3 The date and signature or electronic review by the Controller; and 6.4.1.4 The date and signature or electronic approval of the Treasurer approving the transaction. 6.4.2 The execution of the transaction requires a verbal confirmation call from the Custodian to the Controller at the time of the transaction, and a written confirmation the following day. 6.4.3 Each transaction is confirmed the next day by the Bank's Previous Day Reporting modem service by the PrincipalSenior Accountant and Controller. 7.0 Recording of investment transactions: 7.1 For investment transactions conducted by District staff with the LAIF, and with the transfer/withdrawal of funds with the Custodian: 7.1.1 Is done by the Controller who maintains a file of all investment transactions. 7.1.2 Is done within the accounting records by the--PripeipalSenior Accountant, who receives a signed copy of all investment transactions from the Controller. 7.2 For investment transactions conducted by the external money manager: 7.2.1 Is done by the Custodian who posts all investment transactions daily within their record keeping system and provides the District with a monthly report that provides both a summary and detail listing of all investment transactions. 7.2.2 Is done on a monthly basis by the Account:ng "anagefaenior Accountant within the accounting records at a summary level using Monthly Transaction Reports prepared by the Custodian. Orange County Sanitation District Treasury Management Procedures Revised: Noveml a January 1, 20186 Page 6 of 7 8.0 Verification of external money manager transactions is performed by: 8.1 The Custodian within their record keeping system (i.e., matching broker confirmations to custodian records), and is reported to the District and Chandler on a monthly basis. 8.2 Chandler through their internal compliance office and reported monthly to the District as required by the District's Investment Policy. 8.3 The PARGipalSenior Accountant through reconciliation of Chandler's monthly investment transaction report against the monthly transaction report provided by the Custodian. 9.0 Safeguarding of Assets and Records: 9.1 Reconciliation of investment records to the accounting records is done by the PFineipalSenior Accountant, or in 4etheir absence, the Asseuaiing ManagerPrincipal Accountant on a monthly basis. 9.2 Reconciliation of investment records to bank statements is performed by the PFinsipalSenior Accountant (or in their absence, the Asseunting Supery seFPdncioal Accountant) within one week following the receipt of the bank statement. 9.3 Review of financial condition, safety, liquidity, and potential yields of investment instruments and reputation and financial condition of investment brokers is done by the District's external money manager, who is authorized to utilize the services of independent securities brokerage firms as deemed appropriate, and which meets the requirements of Government Code Section 53601.5. 10.0 The periodic review of the investment portfolio, including investment types, purchase price, market values, maturity dates, and investment yields as well as conformance to the stated Investment Policy will be performed monthly by the Controller, quarterly by the Advisor, and annually by the District's external independent auditors. 11.0 The District's Administration Committee will serve as the Oversight Investment Advisory Committee to assist the Board of Directors in monitoring treasury management activities. 11.1 The District's Treasurer submits a Quarterly Investment Program Performance Report which includes, but is not limited to, the following information: 11.1.1 Quarterly interest earnings and rates of return; Orange County Sanitation District Treasury Management Procedures Revised, NevemberJanuary 1, 20186 Page 7 of 7 11.1.2 The market value of the portfolios; 11.1.3 The annualized earnings of the portfolios; 11.1.4 Market recap; 11.1.5 Comparisons with pre-determined benchmarks; 11.1.6 Market forecast; and 11.1.7 Proposed investment strategy for the upcoming quarter. Internal Control Strengths 1. The specific responsibility for the performance of duties is assigned and lines of authority and reporting are clearly identified. 2. Responsibilities are commensurate with the capabilities of the personnel assigned. 3. Incompatible functions have been properly segregated to prevent errors or fraud. 4. All transactions are authorized by an appropriate responsible individual. 5. Safeguards over assets and records are in place to ensure that recorded assets exist and are properly recorded. 6. Management controls are in place to ensure that significant transactions are properly performed and recorded. X1 VM =0 COMMONIINVESMENT RGLIC 17 DECEMBER ATTACHMENT"A" Orange County Sanitation District State Treasurer's Local Agency Investment Fund Transaction Authorization Form LAIF Account No. 70-30-006 Effective Date of Transaction Confirmation Number LAIF Representative UBOC Representative Wire transfer deposit from Union Bank of California Checking Account#2740013230 in the amount of Wire transfer (withdrawal)to Union Bank of California Checking Account#2740013230 in the amount of Prepared by: Authorized by: Approved by: Name Name Name Senior Accountant Controller Director of FinancelTreasurer Position Position Position Date Date Date XME DT2%C0MMCMINVESWEW P CW09 DECEMBER ATTACHMENT "B" State Treasurer's Local Agency Investment Fund Wiring Instructions Form Deposits or withdrawals that are to take place by the end of the banking day must be made between 7:30 a.m. and 9:30 a.m. Deposits or withdrawals that are to take place on a future date can be made between 7:30 a.m. to 9:30 a.m. or 11:00 a.m. to 4:00 p.m. You must be sure to give the effective date of the future transaction. To Deposit Funds: Step 1: 1. Call LAIF at(916)-653-3001 or log in to LAIF Online, and let them know: a. That you would like to make a wire transfer deposit. b. The Districts LAIF account#70-30-006. C. Your PIN number. d. The dollar amount of deposit. e. That the money will be coming from Union Bank Account No. 274-0013-230. 2. LAIF will give you a confirmation number. Step 2: 1. Call Union Bank of California at 1-800-798-6466, and let them know: a. You're making a wire transfer from Account No. 274-0013-230. b. The dollar amount of the wire transfer. C. The transfer is going to the District's LAIF Account No. 70-30-006. d. The LAIF account ABA number at Union Bank is 121000496. 2. The confirmation number of this transaction (see Step 1, Item 2 above). Step 3: 1. Give the above information to the Senior Accountant who will confirm this transaction with Union Bank. To Withdraw Funds: Step 1: 1. Call LAIF at(916)-653-3001 or log in to LAIF Online, and let them know: a. That you would like to make a wire transfer withdrawal. b. The Districts LAIF account#70-30-006. C. Your PIN number. d. The dollar amount of withdrawal. e. The Union Bank account receiving the funds is No. 274-0013-230. 2. LAIF will give you a confirmation number. XME DT2%COMMOMINVESWEW P CW09 DECEMBER ATTACHMENT "C" (Deposit) L' wvv TO: SEE DISTRIBUTION LIST FROM: Michael D. White, Controller DATE: January 4, 2018 SUBJECT: RECEIPT AND INVESTMENT OF WIRE TRANSFER OF FUNDS IN THE AMOUNT OF $XX MILLION, THURSDAY, DAY MONTH 2O18 On Thursday, Day Month 2018, you will receive a wire transfer of funds in the exact sum of $XX million, for Immediate investment in the District's Liquid Operating Monies Portfolio, as follows: FROM: MUFG Union Bank, N.A. ABA No: 122000496 Debit to: General Account Account No: XXXXXXXXXX TO: U.S. Bank IT&C California ABA No: 0910000222 Credit to: OCS Chandler Liquid Operating Port 6745046600 Account No: XXXXXXXXXX DATE: Thursday, Day Month 2018 NOTE: WIRE TRANSFER MUST BE COMPLETED AND CONFIRMED NO LATER THAN 2:00 P.M. ON Day Month 2018. Please confirm transfer completion with Mike White (mwhitena.ocsd.com)& Rhea de Guzman (rdeouzman0.ocsd.com). DISTRIBUTION LIST Amy Marks/Tim Banach, U.S. Bank Operations Team, Chandler Asset Management William Dennehy/Ted Piorkowski, Chandler Asset Management N ODEW\ M22%C0MMON9NVESTMEM Po lCY 17 DEWMBER ATTACHMENT"C" (Withdrawal) CO p C� TO: SEE DISTRIBUTION LIST FROM: Michael D. White, Controller DATE: January 4, 2017 SUBJECT: WIRE TRANSFER WITHDRAWAL OF FUNDS IN THE AMOUNT OF $XX MILLION, THURSDAY, DAYMONTH2O17 On Thursday, Day Month 2018, you are instructed to wire transfer the exact sum of$XX million, from the District's Liquid Operating Monies Portfolio to the District's general bank account with Union Bank of California, as follows: FROM: U.S. Bank IT&C California ABA No: 091000022 Credit to: OCS Chandler Liquid Operating Port 6745046600 Account No: XXXXXXXXXX TO: MUFG Union Bank, N.A. ABA No: 122000496 Debit to: General Account Account No: XXXXXXXXXX DATE: Thursday, Day Month 2018 NOTE: WIRE TRANSFER MUST BE COMPLETED AND CONFIRMED NO LATER THAN 9:00 A.M. ON Day Month 2018. Please confirm transfer completion with Mike White (mwhite(a)ocsd.coml & Rhea de Guzman (rdeouzman(a)ocsd.com). DISTRIBUTION LIST _Amy Marks/Tim Banach, U.S. Bank Operations Team, Chandler Asset Management William Dennehy/Ted Piorkowski, Chandler Asset Management H DEPM501220 MM11 MNVESTMEWPo lCY 17 DEWMBER ADMINISTRATION COMMITTEE Meeting Date TOBd.Ot Dir. 12J13/17 12/20/17 AGENDA REPORT emNumber Item Number 6 Ifi Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: ALLIANT INSURANCE SERVICES A. Approve a Professional Consultant Services Agreement with Alliant Insurance Services, Inc.to act as Brokerof Record forthe Orange County Sanitation District's assets and operations insurance coverages, Specification No. CS-2017-884-BD, for the period of January 1, 2018 through December 31, 2018 with up to four (4) one-year renewal options; and B. No direct payment from the Sanitation District is provided. The Broker of Record, Alliant Insurance Services, will be compensated through commission that is paid directly by the insurance carriers. BACKGROUND Annually, the Orange County Sanitation District (Sanitation District) works with the insurance Broker of Record to purchase five major insurance coverages for its assets and operations, which include: 1. Excess General Liability Insurance 2. Excess Workers' Compensation 3. All-Risk Property and Flood Insurance 4. Boiler& Machinery Insurance 5. Earthquake Insurance The insurance broker also assists with smaller coverages such as crime insurance and watercraft insurance. The broker surveys the insurance market to find coverage that meets the Sanitation District's specific needs at the lowest possible premiums. This ensures the Sanitation District receives the best possible premiums and coverage. Alliant is highly experienced with California governmental agencies, as it insures the vast majority of California counties, along with hundreds of California cities and special districts. Alliant also has experience with many California sanitation districts. Alliant's Public Entity Property Insurance Program is considered one of the largest programs available. Alliant also provides access to workers compensation insurance provided by the California State Association of Counties (CSAC) Excess Insurance Authority which includes multiple agencies and serves as a risk pool. Page 1 d 3 The Sanitation District does not pay the broker directly for these services; rather, the broker is paid by the individual insurance carrier through a commission. The commission is included in the premiums the insurance carrier quotes. RELEVANT STANDARDS • Ensure the public's money is wisely spent • Protection of Orange County Sanitation District assets PROBLEM Annually, through the expert services of an insurance broker, the Sanitation District purchases a variety of insurances designed to protect its assets and operations. PROPOSED SOLUTION Authorize the selected firm to act as the Sanitation District's Insurance Broker of Record. TIMING CONCERNS The Sanitation District has a five-year agreement for insurance brokerage services that expires on December 31, 2017. The Sanitation District will be without a Broker of Record to approach and negotiate with insurance carriers until a new professional services agreement is approved by the Board. RAMIFICATIONS OF NOT TAKING ACTION Most commercial insurance is arranged through brokers and the Sanitation District will be unable to purchase insurance to protect its assets and operations until a new Broker of Record is selected. PRIOR COMMITTEE/BOARD ACTIONS December 2012 - Competitive RFP involving large insurance brokerage firms, the Board selected Alliant Insurance Services as the operational insurance broker of record. ADDITIONAL INFORMATION The Sanitation District requested and advertised for proposals for Insurance Broker Services on August 31, 2017. The following evaluation criteria were described in the request for proposals and used to determine the most qualified firm. Page 2 of 3 CRITERION WEIGHT Qualifications of Firm 40% Staffing and Project Organization 20% Work Plan 10% Interview 30% Three (3)proposals were received on September 28, 2017, and all three(3)were evaluated in accordance with the evaluation process set forth in Ordinance No. OCSD47, by a pre-selected evaluation team consisting of the following Sanitation District staff. Human Resources / Risk Manager Principal Staff Analyst Principal Staff Analyst Each member of the evaluation team ranked the fines based on the proposals using the evaluation criteria and weighting described above. The following table reflects the ranking outcome for the three (3) evaluated firms. This process is different from the professional design services contract where cost is not included. Alliant AON Gallagher Evaluator 1 1at 2nd 2nd Evaluator tat 3rd 2nd Evaluator tat 2nd 3rd Ranking 1st 3rd 2nd Based on the results of the public bid process, staff recommends retaining Alliant Insurance Services. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation DistricPs Purchasing Ordinance. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: • Professional Consultant Services Agreement Page 3 of 3 PROFESSIONAL CONSULTANT SERVICES AGREEMENT Insurance Broker of Record Services Specification No. CS-2017-884BD THIS AGREEMENTis 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 Alliance Insurance Services, Inc. with a principal place of business at 1301 Dove Street Suite 200 Newport Beach, CA 92660 (hereinafter referred to as "Consultant") collectively referred to as the "Parties". WITNESSETH WHEREAS, based on Consultant's expertise and experience, OCSD wishes to temporarily engage Consultant to provide Insurance Broker of Record Services ("Services") as described in Exhibit"A"; and WHEREAS, Consultant submitted its proposal, dated September 28, 2017; and WHEREAS, on December 20,2017, the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and Consultant; and WHEREAS, OCSD has chosen Consultant to conduct Services in accordance with Ordinance No. OCSD-47; and NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agree as follows: 1. Introduction 1.1 This Agreement, all exhibits and appendix hereto (called the "Agreement") is made by OCSD and Consultant. The Terms and Conditions herein exclusively govern the purchase of Services as described in the Scope of Work. 1.2 Exhibits and appendix to this Agreement are incorporated by reference and made a part of this Agreement as though fully set forth at length herein. Exhibits and appendix to this Agreement are as follows in order of precedence: Exhibit"A" Scope of Work Appendix 1 Addendum 1 Dated September 11, 2017 Exhibit"B" Proposal Submitted by Consultant Dated September 28, 2017 Exhibit"C" Acknowledgement of Insurance Requirements Exhibit"D" OCSD Safety Standards 1.3 In the event of any conflict or inconsistency between the provisions of this Agreement and any of the provisions of the exhibits and appendix hereto, the provisions of this Agreement shall in all respects govern and control. 1.4 This Agreement may not be modified, changed or supplemented, nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by both Parties. Orange County Sanitation District 1 of 10 Specification No. CS-2017-884BD 1.5 The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any Paragraph or provision hereof. 1.6 The term "days", when used in the Agreement, shall mean calendar days, unless otherwise noted as workdays. 1.7 The term "workday". Workdays are defined as all days that are not Saturday, Sunday, or legally observed holidays. Meetings with OCSD staff shall be scheduled from Monday through Thursday between the hours of 8AM and 4PM (exception is operations staff who maintain plant operations 24/7 and work a rotated 12-hour shift) and shall conform to OCSD work schedules. OCSD review periods shall not include legally observed holidays. 1.8 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. 1.9 Work Hours: The work required under this Agreement may include normal Business hours, evenings, and weekends. OCSD will not pay Travel Time. 1.10 Consultant shall provide OCSD with all required premiums and/or overtime work at no charge. 1.11 Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by Consultant as a result of work performed in anticipation of purchases of said services by OCSD. 2. Scone of Work Subject to the terms of this Agreement, Consultant shall perform the Services identified in Exhibit "A". Consultant warrants that all of its Services shall be performed in a competent, professional and satisfactory manner. 3. Modifications to Scone of Work Requests for modifications to the Scope of Work Exhibit "A" hereunder can be made by OCSD at any time. All modifications must be made in writing and signed by both Parties. A review of the time required for the modification will be made by OCSD and Consultant and the Agreement period adjusted accordingly. 4. Compensation Consultant's sole compensation will be a reasonable commission as determined by OCSD at the time OCSD purchases an Insurance Premium. At the time of presenting an Insurance Premium to OCSD, Consultant shall fully disclose to OCSD all commission to be received as a result of OCSD's purchase of the Insurance Premium the Consultant brokered. OCSD shall determine a reasonable commission percentage based on industry standards 5. California Department of Industrial Relations (DIR)Registration and Record of Wages (Not Used) 6. Audit Rights Consultant agrees that, during the term of this Agreement 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 Consultant relating to the invoices submitted by Consultant pursuant to this Agreement. Orange County Sanitation District 2 of 10 Specification No. CS-2017-884BD 7. Commencement and Term The Services to be provided by Consultant under this Agreement shall commence on the Effective Date January 1, 2018, and be completed in accordance with this Agreement. 8. Renewals 8.1 OCSD may exercise the option to renew the Agreement for up to four (4) one-year periods based upon the criteria set forth in the specifications, Exhibit"A", under the terms and conditions contained herein. OCSD shall make no obligation to renew nor give reason if it elects not to renew. 8.2 Renewals may be made through the OCSD Purchase Order Process. 9. Extensions The Term of this Agreement may be extended only by written instrument signed by both Parties. 10. Performance Time is of the essence in the performance of the provisions hereof. 11. Termination 11.1 OCSD reserves the right to terminate this Agreement for its convenience,with or without cause, in whole or in part, at any time, by written notice from OCSD. Upon receipt of a termination notice, Consultant shall immediately discontinue all work under this Agreement (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay Consultant for work performed (cost and fee)to the date of termination. Consultant expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Agreement. Such notice of termination shall terminate this Agreement and release OCSD from any further fee, cost or claim hereunder by Consultant other than for work performed to the date of termination. 11.2 OCSD reserves the right to terminate this Agreement immediately upon OCSD's determination that Consultant is not meeting specification requirements, if the level of service is inadequate, or any other default of this Agreement. 11.3 OCSD may also immediately cancel for default of this Agreement in whole or in part by written notice to Consultant: • if Consultant becomes insolvent or files a petition under the Bankruptcy Act; or • if Consultant sells its business; or • if Consultant breaches any of the terms of this Agreement; or • if total amount of compensation exceeds the amount authorized under this Agreement. 11.4 All OCSD property in the possession or control of Consultant shall be returned by Consultant to OCSD on demand, or at the termination of this Agreement, whichever occurs first. 12. Indemnification and Hold Harmless Provision Consultant 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 Consultant's services under this Agreement, or by its subcontractor or by anyone directly or indirectly employed by Consultant, and whether such Orange County Sanitation District 3 of 10 Specification No. CS-2017-884BD damage or injury shall accrue or be discovered before or after the termination of the Agreement. Except as to the sole active negligence of or willful misconduct of OCSD, Consultant shall indemnify, protect, defend and hold harmless OCSD, its elected and appointed officials, officers, agents and employees, from and against any and all claims, liabilities, damages or expenses of any nature, including attorneys' fees: (a) for injury to or death of any person or damage to property or interference with the use of property, arising out of or in connection with Consultant's performance under the Agreement, 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 Agreement, and/or(c)on account of any goods and services provided under this Agreement. This indemnification provision shall apply to any acts or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of Consultant of or anyone employed by or working under Consultant. To the maximum extent permitted by law, Consultant'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. Consultant agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD. This section shall survive the expiration or early termination of the Agreement. 13. Insurance Consultant and all subcontractors shall purchase and maintain, throughout the life of this Agreement and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements, Exhibit V. Consultant shall not commence work under this Agreement until all required insurance is obtained in a form acceptable to OCSD, nor shall Consultant allow any subcontractor to commence service pursuant to a subcontract until all insurance required of the subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Agreement. 14. Key Personnel Personnel, as provided in Exhibit"B", are considered "key'to the work under this Agreement and will be available for the term of the Agreement. No person designated as key underthis Agreement shall be removed or replaced without prior written consent of OCSD. If OCSD asks Service Provider to remove a person designated as key under this Agreement, Service Provider agrees to do so immediately regardless of the reason, or the lack of reason, for OCSD's request. Service Provider shall assign only competent personnel to perform services pursuant to this Agreement. 15. Confidentiality and Non-Disclosure 15.1 Consultant acknowledges that in performing the Services hereunder, OCSD may have to disclose to Consultant orally and in writing certain confidential information that OCSD considers proprietary and has developed at great expense and effort. 15.2 Consultant agrees to maintain in confidence and not disclose to any person, firm, or corporation, without OCSD's prior written consent, any trade secret or confidential information, knowledge or data relating to the products, process, or operation of OCSD. 15.3 Consultant further agrees to maintain in confidence and not to disclose to any person, firm, or corporation any data, information,technology, or material developed or obtained by Consultant during the term of this Agreement. Orange County Sanitation District 4 of 10 Specification No. CS-2017-884BD 15.4 Consultant agrees as follows: • To use the Confidential Information only for the purposes described herein; to not reproduce the Confidential Information; to hold in confidence and protect the Confidential Information from dissemination to and use by anyone not a party to this Agreement; and to not use the Confidential Information to benefit itself or others. • To restrict access to the Confidential Information to its Consultant or personnel of Consultant who (1) have a need to have such access and (2) have been advised of and have agreed in writing to treat such information in accordance with the terms of this Agreement. • To return all Confidential Information in Consultant's possession upon termination of this Agreement or upon OCSD's request, whichever occurs first. • To hold in confidence information and materials, if any, developed pursuant to the Services hereunder. 15.5 The provisions of this Section shall survive termination or expiration of this Agreement and shall continue for so long as the material remains confidential. 16. Ownership of Documents All drawings, specifications, reports, records, documents, memoranda, correspondence, computations, and other materials prepared by Service Provider, its employees, subcontractors, and agents in the performance of this Agreement shall be the property of OCSD and shall be promptly delivered to OCSD upon request of the Project Manager or upon the termination of this Agreement, and Service Provider shall have no claim for further employment or additional compensation as a result of the exercise by OCSD of its full rights of ownership of the documents and materials hereunder. Any use of such completed documents for other projects and/or use of incomplete documents without specific written authorization by the Service Provider will be at OCSD's sole risk and without liability to Service Provider. Service Provider shall ensure that all its subcontractors shall provide for assignment to OCSD of any documents or materials prepared by them. 17. Ownership of Intellectual Property 17.1 Consultant agrees that all designs, plans, reports, specifications, drawings, schematics, prototypes, models, inventions, and all other information and items made during the course of this Agreement and arising from the Services (hereinafter referred to as"New Developments") shall be and are assigned to OCSD as its sole and exclusive property. 17.2 Consultant agrees to promptly disclose to OCSD all such New Developments. Upon OCSD's request, Consultant agrees to assist OCSD, at OCSD's expense, to obtain patents or copyrights for such New Developments, including the disclosure of all pertinent information and data with respect thereto, the execution of all applications, specifications, assignments, and all other instruments and papers which OCSD shall deem necessary to apply for and to assign or convey to OCSD, its successors and assigns, the sole and exclusive right, title and interest in such New Developments. Consultant agrees to obtain or has obtained written assurances from its employees and contract personnel of their agreement to the terms hereof with regard to New Developments and Confidential Information. 17.3 Consultant warrants that Consultant has good title to any New Developments, and the right to assign New Developments to OCSD free of any proprietary rights of any other party or any other encumbrance whatever. Orange County Sanitation District 5 of 10 Specification No. CS-2017-884BD 17.4 The originals of all computations, drawings, designs, graphics, studies, reports, manuals, photographs,videotapes, data, computer files, and other documents prepared or caused to be prepared by Consultant or its subcontractors in connection with these Services shall be delivered to and shall become the exclusive property of OCSD. OCSD may utilize these documents for OCSD applications on other projects or extensions of this project, at its own risk. 1 tt. No Solicitation of Employees Or Subcontractors 18.1 Consultant agrees that it shall not, during the term of this Agreement and for a period of one (1) year immediately following termination of this Agreement, or any extension hereof, call on, solicit, or take away any of the employees or subcontractors about whom Consultant became aware as a result of Consultant's Services to OCSD. 18.2 Consultant acknowledges that OCSD's employees are critical to its business. Consultant agrees not to employ or otherwise engage OCSD's employees or subcontractors during the term of this Agreement and for a period of one (1) year following termination of this Agreement. Should Consultant violate this provision, Consultant will pay OCSD fifty percent (50%) of the former employee's annual salary which payment is in addition to OCSD's rights and remedies. 19. Independent Contractor Capacity 19.1 The relationship of Consultant to OCSD is that of an independent contractor and nothing herein shall be construed as creating an employment or agency relationship. 19.2 Consultant shall act independently and not as an officer or employee of OCSD. OCSD assumes no liability for Consultant's action and performance, nor assumes responsibility for taxes, funds, payments or other commitments, implied or expressed, by or for Consultant. 19.3 Consultant shall not be considered an agent of OCSD for any purpose whatsoever, nor shall Consultant have the right to, and shall not, commit OCSD to any agreement, contract or undertaking. Consultant shall not use OCSD's name in its promotional material or for any advertising or publicity purposes without expressed written consent. 19.4 Consultant shall not be entitled to any benefits accorded to those individuals listed on OCSD's payroll as regular employees including, without limitation, worker's compensation, disability insurance, vacation, holiday or sick pay. Consultant shall be responsible for providing, at Consultant's expense, disability, worker's compensation or other insurance as well as licenses and permits usual or necessary for conducting the Services hereunder. 19.5 Consultant shall be obligated to pay any and all applicable local, state and federal payroll and other taxes incurred as a result of fees hereunder. Consultant hereby indemnifies OCSD for any claims, losses, costs, fees, liabilities, damages or penalties suffered by OCSD arising out of Consultant's breach of this provision. 19.6 Consultant shall not be eligible to join or participate in any benefit plans offered to those individuals listed on OCSD's payroll as regular employees. Consultant shall remain ineligible for such benefits or participation in such benefit plans even if a court later decides that OCSD misclassified Consultant for tax purposes. Orange County Sanitation District 6 of 10 Specification No. CS-2017-884BD 20. Licenses, Permits Consultant represents and warrants to OCSD that it has obtained and will maintain 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 Agreement will be paid by Consultant. 21. Consultant's Representations In the performance of duties under this Agreement, Consultant shall adhere to the highest fiduciary standards, ethical practices and standards of care and competence for their trade/profession. Consultant agrees to comply with all applicable Federal, State and local laws and regulations. 22. Familiarity with Work By executing this Agreement, Consultant 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 Agreement. Should Consultant 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 Consultant's risk, until written instructions are received from OCSD. 23. Riaht to Review Services. Facilities. and Records 23.1 OCSD reserves the right to review any portion of the Services performed by Consultant under this Agreement, and Consultant agrees to cooperate to the fullest extent possible. 23.2 Consultant shall furnish to OCSD such reports, statistical data, and other information pertaining to Consultant's Services as shall be reasonably required by OCSD to carry out its rights and responsibilities under its agreements with its bondholders or noteholders and any other agreement relating to the development of the project(s) and in connection with the issuance of its official statements and other prospectuses with respect to the offering, sale, and issuance of its bonds and other obligations. 23.3 The right of OCSD to review or approve drawings, specifications, procedures, instructions, reports, test results, calculations, schedules, or other data that are developed by Consultant shall not relieve Consultant of any obligation set forth herein. 24. Force Maleure Neither party shall be liable for delays caused by accident,flood, acts of God, fire, labor trouble, war, ads 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 Agreement. 25. Severability If any section, subsection, or provision of this Agreement, or any agreement or instrument contemplated hereby, or the application of such section, subsection, or provision is held invalid, the remainder of this Agreement or instrument in the application of such section, subsection or provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby, unless the effect of such invalidity shall be to substantially frustrate the expectations of the Parties. 26. Waiver The waiver of either party of any breach or violation of, or default under, any provision of this Agreement, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. Any breach by Consultant 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 7 of 10 Specification No. CS-2017-884BD 27. Remedies In addition to other remedies available in law or equity, if the Consultant fails to make delivery of the goods or Services or repudiates its obligations under this Agreement, or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services,OCSD may(1)cancel the Agreement; (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 Consultant. In the event OCSD elects to"cover as described in (3), OCSD shall be entitled to recover from Consultant as damages the difference between the cost of the substitute goods or Services and the contract price,together with any incidental or consequential damages. 28. Governing Law This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. 29.Attorney's Fees If any action at law or inequity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 30. Dispute Resolution 30.1 In the event of a dispute as to the construction or interpretation of this Agreement, or any rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the dispute by mediation. The Parties shall mutually select a mediator to facilitate the resolution of the dispute. If the Parties are unable to agree on a mediator, the mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Agreement, through the alternate dispute resolution procedures of Judicial Arbitration through Mediation Services of Orange County ("JAMS"),or any similar organization or entity conducting an alternate dispute resolution process. 30.2 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. 31. Damage to OCSD's Property Any OCSD property damaged by Consultant will be subject to repair or replacement by Consultant at no cost to OCSD. 32. 00SD Safety and Human Resources Policies OCSD requires all contractors and Consultants 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 Consultant is required to follow the most Orange County Sanitation District 8 of 10 Specification No. CS-2017-884BD stringent regulatory requirement at no cost to OCSD. Consultant and all their employees and subcontractors, shall adhere to all applicable OCSD Safety and Human Resources Policies found at: https://www.ocsd.com/about-us/transparency/safety-and-human-resources-policy/- folder-631 and Human Resource Policies are hereby incorporated by reference as though fully set forth herein in Exhibit"D". 33. Freight (F.O.B. Destination) Consultant assumes full responsibility for all transportation, transportation scheduling, packing, handling, insurance, and other services associated with delivery of all products deemed necessary under this Agreement. 34.Assianments Consultant shall not delegate any duties nor assign any rights under this Agreement without the prior written consent of OCSD. Any such attempted delegation or assignment shall be void. 35. Conflict of Interest and Reporting 35.1 Consultant shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement. 35.2 Consultant affirms that to the best of its knowledge there exists no actual or potential conflict between Consultant's families, business or financial interest or its Services under this Agreement, and in the event of change in either its private interests or Services under this Agreement, it will raise with OCSD any question regarding possible conflict of interest which may arise as a result of such change. 36. Third Party Rights Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than OCSD and Consultant. 37. Non-Liability of OCSD Officers and Employees No officer or employee of OCSD shall be personally liable to Service Provider, or any successor-in-interest, in the event of any default or breach by OCSD or for any amount which may become due to Service Provider or to its successor, or for breach of any obligation of the terms of this Agreement. 36.Authority to Execute The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement and that by executing this Agreement, the Parties are formally bound. 39. Read and Understood By signing this Agreement, Consultant represents that he has read and understood the terms and conditions of the Agreement. 40. Entire Agreement This Agreement constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. Orange County Sanitation District 9 of 10 Specification No. CS-2017-884BD 41. Notices All notices under this Agreement 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. Any facsimile notice must be followed within three (3) days by written notice. 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: Brandon Garcia Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Consultant: Dennis Mulqueeney, Senior Vice President Alliant Insurance Services, Inc. 1301 Dove Street, Suite 200 Newport Beach, CA 92660 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: Gregory C. Seborn, PLS Chair, Board of Directors Dated: By: Kelly Lore Clerk of the Board Dated: By: Contracts/Purchasing and Materials Management Manager Alliant Insurance Services, Inc. Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation District 10 of 10 Specification No. CS-2017-884BD ADMINISTRATION COMMITTEE Meeting Date TOBd.Ot Dir. 12J13/17 12/20/17 AGENDA REPORT IWmNumber Item Number B 17 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: ORANGE COUNTY SANITATION DISTRICT WASTEWATER REVENUE PROGRAM RATE STUDY GENERAL MANAGER'S RECOMMENDATION Receive and file the Orange County Sanitation District's 2017 Wastewater Revenue Program Rate Study completed by Carollo Engineers. BACKGROUND To ensure the appropriate allocation of costs and fees, the Orange County Sanitation District (Sanitation District) has engaged an engineering consulting firm, Carollo Engineers, to provide an independent analysis of the Sanitation District's cash flow modeling and a cost of service study. The study demonstrates that the Sanitation District's proposed fees are appropriate and reasonable and will support its projected capital and operating requirements. Carollo Engineers has just completed the facilities master plan update. In conjunction with this update, Carollo was tasked with performing an updated sewer rate study to determine the appropriate rates going forward to support the facilities master plan update. RELEVANT STANDARDS • Stable rates, no large unforeseen rate increases PROBLEM The Sanitation District's Board of Directors approved a five-year rate schedule which expires at the end of the current fiscal year. PROPOSED SOLUTION Develop a new proposed five-year rate schedule based on the 2017 rate study completed by Carollo Engineers. TIMING CONCERNS Based on the 2017 rate study, staff will be developing a proposed five-year rate schedule, beginning in July 2018, for Administration and Board consideration in February 2018. Page 1 d 2 RAMIFICATIONS OF NOT TAKING ACTION Sewer service fees will be insufficient to support the facilities master plan update. PRIOR COMMITTEE/BOARD ACTIONS January 2013-Approval of the previous Sanitation District Wastewater Revenue Program Rate Study. ADDITIONAL INFORMATION Based on the results of the rate study completed by Carollo Engineers, Sanitation District staff is in the process of recommending a five-year revenue program which includes an increase of approximately 1.2 percent annually for the next five years. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Orange County Sanitation District Wastewater Revenue Program Rate Study (Separate Document) • PowerPoint Presentation from Administration Committee Meeting of 12/13/17 Page 2 of 2 Rate Program Summary 2018 - 2023 o iv SAN,,. i P 9� �2 t�NC THE SMd\Q Preparation and Analysis Rate increase assumptions of 1 %-2% were included in each of the last five budgets 2) Cashflow estimates are updated annually looking forward for a ten year period 3) Facilities Master Plan has been completed 4) Staff engaged an engineering consultant to develop an Independent Rate Study to validate financial assumptions .4 Rate Study Scope , Allocation of Unit Cost Expenditures 2) Single Family Residential Rates s) Capital Facility Capacity Charge (CFCC) Calculation Rebate process review 5) Miscellaneous Fees and Charges 6) Five-Year Financial Projections s� Allocation of Unit Cost Expenditures 1 ) Treatment Constituents Flow, Strength (BOD) , Solids (TSS ) 2) Cost Categories O&M , CIP , Debt Service , In Plant Service d. Majority of OCSD Revenue comes from the Single Family User Fee 1) General User Fees $ 300 M 63% 2) Property Taxes $ 100 M 21% 3) Interest/Assessments $ 50 M 11% 4) Other Fees/Charges $ 25M 5% Total Fees & Charges $475 M 100% Comparison of Single Family Residential Rates (July 2017) $900 93 $800 $700 t $600 L d a $500 L o $400 $331 $300 $200 $163 . $100 $0 Efficiency Measures 1 ) Debt Refunding - $67 Million 2) Unfunded Actuarial Accrued Liability (UAAL) s) Efficiencies in Chemical Purchases 4) Dewatering Projects s� General User Fees (63% of total revenue) Staff recommends 1 % annual increases Half of Anticipated Inflation Year 2013 2017 Proposed 2017 $339 $331 $331 2018 $347 $337 $335 2019 $355 $344 $339 2020 $364 $351 $343 2021 $372 $358 $347 2022 $382 $365 $351 .4 Industrial User O&M Fee High Strength Dischargers Represents $13M million (3% of total Revenue) Increase Rationale Full Secondary Treatment component costs were not incorporated after the 2013 Rate Study Rates increases were tied to the Single Family Rate and were not adjusted for these individual cost changes Staff recommends annual increases of 1 %-4% over a five year period to minimize impacts to the users Capital Facilities Capacity Charge One-Time Connection Charge Represents $8M (2% of total revenue) Charges are calculated based on the projected funding needs for the next two decades. "Growth pay for Growth" vs. "Buy In" Methodologies However, there is much less expansion today Returning to a Buy In Methodology is now appropriate .4 Capital Facilities Capacity Charge Increase Rationale OCSD's Current Single Family Charge is $3855 The Current State Average is $6000 The OCSD charge will move to $5719 using a five-year phase-in approach, minimizing the impacts to the users: 2017 2018 2019 2020 2021 2022 $3855 $4228 $4601 $4973 $5346 $5719 The OCSD charge in five years will be lower than the current State Average 4 s� Supplemental Capital Facilities Capacity Charge (SCFCC) Annual charge for exceeding established baselines Represents $2M (1 % of total revenue) Currently, there are 36 users Users would see increases of approximately 1 %-3% .4 Five-Year Financial Projection Year Reserves Policy Variance 2018 $586 $523 $ 63 2019 $629 $521 $ 108 2020 $675 $527 $ 148 2021 $649 $529 $120 2022 $584 $534 $ 50 2023 $503 $537 $(34) .4 Rebates and Refunds Staff recommends the Flow-only Approach Examples with a 10% flow reduction Current Methodology 10,000 Flow 1,000 BOD 100 TSS (1,000) 100 10 9,000 Flow 900 BOD 9 TSS Proposed Methodology 10,000 Flow 11000 BOD 100 TSS (1,000) (0) (0) 9,000 Flow 11000 BOD 10 TSS �5 Customers can provide sampling data if they believe the calculation is not representative of their system impact Schedule 1 ) November Steering Committee — Rate Plan Overview 2) December Operations Committee: Facilities Master Plan and Rate Plan Overview 3) December Administration Committee: Facilities Master Plan and Rate Plan Overview 4) December Board : Facilities Master Plan , Rate Study, Prop. 218 Notices 5) February 2018 — Mail Prop. 218 Notices 6) February Board — First Reading of the Ordinance 7) March Board — Second Reading and Adoption 8) July 1 , 2018 — New Rates go into effect .4 QUESTIONS d. ADMINISTRATION COMMITTEE Meeting Date TOBd.Ot Dir. 17J13/17 12/20/17 AGENDA REPORT emNumber Item Number 9 IB Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: PROPOSITION 218 NOTIFICATIONS GENERAL MANAGER'S RECOMMENDATION Direct staff to prepare and mail Proposition 218 compliant notifications to affected property owners outlining a five-year regional sewer service fee schedule with annual increases of approximately 1.2 percent over the next five fiscal years beginning with Fiscal Year 2018-19. BACKGROUND The Orange County Sanitation District's (Sanitation District) current five-year sewer fee rate schedule expires at the end of the current fiscal year. The Sanitation District engaged Carollo Engineers, an engineering consulting firm, to provide an independent analysis of the Sanitation District's cash flow modeling and a cost of service study to ensure the appropriate allocation of costs and fees. This study has been completed and presented to the Administration Committee at this meeting as a separate agenda item. Based on this information, the Facilities Master Plan,forecasted operating expenses, and cash flow modeling, staff recommends annual increases of approximately 1.2%. RELEVANT STANDARDS • Stable rates, no large unforeseen rate increases PROBLEM Proposition 218 requires that the Sanitation District notify the affected property owners within the Sanitation District service area of proposed rate increases and to conduct a public hearing that coincides with the second reading of the ordinance. Notices must be mailed to property owners 45 days prior to the public hearing. PROPOSED SOLUTION With Board approval, a notice of rate changes will be mailed to every affected property owner within the Sanitation District service area. These rates will be scheduled for adoption through the ordinance process that requires a public hearing, two Board meetings, and a 2/3 majority approval of the Board. The estimated cost of mailing is approximately $300,000. Page 1 d 2 TIMING CONCERNS Rate approval schedule: • December 2017: Administration & Operations Committees— Rate Structure presentation • December 2017: Board Meeting —Approval of Proposition 218 Notices • February 2018: Proposition 218 45-day notices mailed for Sanitary Sewer Fees • February 2018: Board Meeting — let Reading of the Ordinance • March 2018: Board Meeting —2"d Reading of the Ordinance, Public Hearing & Adoption • July 1, 2018: New rates go into effect RAMIFICATIONS OF NOT TAKING ACTION Existing sewer service fees will be insufficient to support the Sanitation District's operating expenses and new facilities included in the Facilities Master Plan update. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The Proposed Annual Single Family Residential Fee Schedule: Current $331 FY 2018-19 $335 FY 2019-20 $339 FY 2020-21 $343 FY 2021-22 $347 FY 2022-23 $351 FINANCIAL CONSIDERATION This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted in the FY 2017-18 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 LEGISLATIVE AND PUBLIC AFFAIRS COMMITTEE rez 11117 TO12/20/17r AGENDA REPORT emNumber Item Number 2 19 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert P. Ghirelli, Assistant General Manager SUBJECT: LEGISLATIVE/REGULATORY PLAN AND YEAR-END REVIEW GENERAL MANAGER'S RECOMMENDATION Approve the Orange County Sanitation District 2018 Legislative and Regulatory Plan. BACKGROUND Annually, staff provides a legislative and regulatory year-end review. Additionally, the Orange County Sanitation District (Sanitation District) Board of Directors consider approval of the annual Legislative and Regulatory Plan (Plan)which provides a list of key issues for staff, management, Board of Directors and legislative advocates to follow during the legislative year. The Plan provides direction to staff and management on how to coordinate advocacy efforts with wastewater associations and state and federal legislative bodies. RELEVANT STANDARDS • Unified legislative advocacy and public outreach program Build brand, trust, and support with policy makers and community leaders PROBLEM Without a strong advocacy program, elected officials may not be aware that the Sanitation District is more than a wastewater treatment plant — treating and sending water to the ocean. The Sanitation District is an environmentally engaged organization which recycles more than 50 percent of the wastewater. Additionally, to help meet the goal of 100 percent recycling, the Sanitation District uses the byproducts from the wastewater treatment process to produce biosolids and energy used to help run the two plants in Fountain Valley and Huntington Beach. PROPOSED SOLUTION Approve the 2018 Legislative and Regulatory Plan. Advise staff to work with Local, State and Federal officials to advocate the Sanitation District's legislative interests and help to pursue grants and create/monitor legislation that would benefit the Sanitation District, the wastewater industry and the community as a whole. To assist in our relationship building Page 1 of 2 activities, we will continue to reach out to our elected officials providing facility tours, one- on-one meetings and trips to D.C. and Sacramento. RAMIFICATIONS OF NOT TAKING ACTION If we do not work with the Local, State and Federal elected officials, legislation could be passed that negatively affects the Sanitation District and the wastewater industry as a whole. Additionally, this could affect our chances of receiving grant funding. ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • OCSD 2018 Legislative & Regulatory Plan • Presentation from 12/11/2017 Legislative & Public Affairs Committee Meeting Page 2 of 2 ORANGE COUNTY SANITATION DISTRICT 2018 Legislative and Regulatory Plan 0 � oaa HE Mi Orange County Sanitation District 2018 Legislative&Regulatory Plan Legislative & Regulatory Affairs Team OCSD Staff Rebecca Long (714)593-7444 rlong@ocsd.com Senior Public Affairs Specialist Jennifer Cabral (714)593-7581 jcabral@ocsd.com Public Affairs Supervisor Robert Ghirelli (714)593-7400 rghirelli@ocsd.com Assistant General Manager Jim Herberg (714)593-7110 jherberg@ocsd.com General Manager Federal Lobbying Team Eric Sapirstein (202)466-3755 esap@ensresources.com ENS Resources State Lobbying Team Cori Williams (949)399-9050 cwilliams@TownsendPA.com Townsend Public Affairs Eric O'Donnell (949)399-9050 eodonnell@TownsendPA.com Townsend Public Affairs Christopher Townsend (949)399-9050 ctownsend@TownsendPA.com Townsend Public Affairs Regulatory Advocacy Team James Colston,Director of Environmental (714)593-7450 jcolston@ocsd.com Services Tom Meregillano,Senior Regulatory Specialist (714)593-7457 tmeregillano@ocsd.com 2 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan Introduction The Orange County Sanitation District(OCSD) recognizes the need for an active local,state and federal legislative and regulatory advocacy program to ensure that the interests of the ratepayers and the Board of Directors (Board)are protected and supported.Towards that end,the legislative and regulatory team actively engages, pursues,and monitors activities in California and Washington, D.C. and takes appropriate action in support of or opposition to legislative and regulatory initiatives. Each year,the Board of Directors adopts a legislative and regulatory plan,which is a summary of OCSD's goals, key issues, and policy positions. The legislative and regulatory policies in this document were developed taking into consideration OCSD's priorities, the wastewater industry, and OCSD's member agencies and policy needs. These Board-approved policies serve as OCSD's official positions of support or opposition on issues of importance to the agency.The legislative and regulatory plan is a dynamic document, adopted annually and is modified to meet the needs of OCSD as federal,state,and local policymaking agendas change throughout the year. The legislative and regulatory team,in conjunction with the Board,may take appropriate action consistent with the legislative and regulatory plan, including, but not limited to, drafting letters, lobbying legislators, regulators, staff, and crafting bills and proposing legislation and regulations. Procedure for Taking Positions on Bills and Proposed Regulations 1. Staff will track bills and proposed regulations of greatest interest to OCSD,particularly those that fall within the goals and objectives identified by the Board and included in this plan. Staff will monitor bills and proposed regulations being watched by similar agencies in Orange County (Irvine Ranch Water District, South Orange County Water Authority, Orange County Water District, Municipal Water District of Orange County,etc.)as well as state,federal and national associations such as California Association of Sanitation Agencies (CASA), The Southern California Alliance of Publicly Owned Treatment Works (SCAP), California Special Districts Association (CSDA),Association of California Water Agencies (ACWA),National Association of California Water Agencies (NACWA), Association of California Cities Orange County (ACC-OC), and the League of California Cities(LOCC). 2. For those bills and proposed regulations that are being tracked,where there is clear policy direction stated in the Board-adopted legislative and regulatory plan or adopted goals, staff can send letters to legislators and regulators and give direction to the lobbyists to advocate that position. 3. Where a particular issue is not urgent, all legislative letters will be hand-signed by the Board Chair or Vice Chair. If a matter is urgent,staff may use the electronic signature, so long as a clear policy direction exists and the General Manager or Designee approves the letter. 4. When a bill does not fall within the scope of the legislative and regulatory plan or is a controversial issue, staff will seek direction from the Legislative and Public Affairs Committee. 5. If a bill does not fall within the scope of the legislative plan, but the Association of California Cities Orange County (ACCOC), California Association of Sanitation Agencies (CASA), the California Special Districts Association(CSDA)or the National Association of Clean Water Agencies(NACWA)has an adopted position, staff may follow this position but must inform the Legislative and Public Affairs Committee of such action at the next regularly scheduled meeting. 3 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan Guiding Priorities • Seek funds for OCSD projects through grants, appropriations,or other means; • Maintain local control over governance of special districts and other local entities; • Oppose redundant regulatory requirements; • Support regulatory streamlining that promotes public health and the environment. Federal Priorities • Advocate for funding of the Water Infrastructure Improvements for the Nation (WIIN)Act including water infrastructure provisions. • Identify and work to secure general federal grants assistance,Water Infrastructure Finance and Innovation (W IFIA)Act assistance,green infrastructure, renewable energy, and water recycling project assistance. • Work with Congress and United States EPA to advance implementation of the Watersense Program to increase the use of energy efficient technologies at the Sanitation District while protecting against OCSD treatment cost increases. • Monitor federal agency grants for funding of alternative renewable energy, bioenergy, water recycling, biosolids beneficial use, and beach protection. • Work with Administration and Congress to advance commonsense permitting processes including ten year National Pollutant Discharge Elimination System (NPDES) permits and programmatic permits issued by United States EPA and the U.S.Army Corps of Engineers to promote reduced costs to ratepayers. • Work with OCSD's congressional delegation and administration officials to advance resiliency and infrastructure policies that promote the funding of OCSD's water recycling and other conservation projects. Seek to secure adequate funding of programs authorized in drought relief legislation to facilitate funding of OCSD's project priorities. • Support legislation, policies and regulations that offer to provide below market bonding rate assistance to construct treatment facilities, including credit assistance and infrastructure banks. Focus should be on energy recovery technologies,core infrastructure assistance related wastewater treatment,funding of final stage of water recycling needs, and related demonstration of evolving technologies to address brine line needs. • During the fiscal year 2019 appropriations, identify opportunities to secure federal support of Sanitation District project needs as part of any budget decision making process for the coming fiscal year. • Oppose federal tax reform initiatives that would eliminate state and local tax payment deductibility and/or elimination or restriction on the use or availability of tax-exempt financing for public infrastructure. • Support at least$3 billion in annual federal appropriations for the Clean Water Act State Revolving Fund (CWSRF). Work with Congress and the United States Environmental Protection Agency to streamline the Clean Water Act permitting processes. Provide assurances that CWSRF appropriations are not transferred to State Drinking Water State Revolving Fund(SRF)needs.Additionally,support legislation to revise the SRF allocation formula to allow for appropriate and fair share of funding to California consistent with United States EPA study(20%increase in share). • Support removal of private activity Bond State Volume Cap on water and wastewater facilities to allow for innovative financing options such as public private partnerships. • Work with the EPA on emerging regulatory issues of concern including integrated plans and monitoring effluent limitations and guidelines including but not limited to the dental amalgam program. 4 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan • OCSD will continue to advocate for federal policies that minimize regulatory burdens imposed upon communities and public agencies that seek to adopt programs for the giveback of pharmaceuticals that will result in the reduction of disposal of pharmaceuticals through wastewater treatment facilities. Additionally, OCSD will advocate for federal funding of programs currently authorized that support the development of pharmaceutical management programs including education. • Support development of infrastructure assistance legislation and policies that support projects and programs addressing resiliency needs that protect OCSD investments. • Work with U.S. Department of Energy and U.S. Environmental Protection Agency (EPA) to identify and support efforts to secure funding assistance for OCSD energy water nexus project demonstrations. • Oppose EPA's reform to change the cellulosic biofuel value of the co-digestion of organics,which will lower Renewable Identification Number(RIN)credit. State Priorities • Secure funding through grants and legislation for the final expansion of the Groundwater Replenishment System as well as infrastructure, collection improvements and alternative renewable energy at the Fountain Valley, Plant No. 1 and Huntington Beach, Plant No.2. • Promote a regional distribution/statewide equity approach to the disbursement of State Revolving Fund monies. • Oppose legislation or any regulations that would mandate volumetric pricing of wastewater. • Continue to monitor the state budget process and actively protect local property taxes. • Work with legislators who introduce legislation such as SB 163(Hertzberg,2015) in order to ensure that no unrealistic regulations are placed on wastewater treatment facilities, including OCSD. • Oppose state mandates,regulations,or legislation such as AS 1217(Daly,2015)that set,alter,or otherwise modify the governance structure of special districts,joint powers authorities, or other local government entities. • Support efforts to competitively seek funding for projects that meet the State's goals of expanded water supply and energy reduction. • Where appropriate, pursue State funding for critical aging infrastructure, through funding sources made available through any agency including but not limited to the State Water Resources Control Board and the Department of Water Resources. • Support and participate in Integrated Regional Water Management planning efforts in the Santa Ana River watershed. • Oppose additional and redundant regulatory requirements for biosolids. • Support the creation of a Statewide Organics Management Plan that includes the beneficial uses of biosolids. • Support funding through grants and legislation for a Food Waste/Organic Co-Digestion facility at OCSD. • Support legislation or regulations that would prevent the disposing of drugs down the drain and would provide for alternative safe disposal of unwanted/unused medications. • Monitor pension reform legislation for clean-up bills and relevant proposed regulations. • Support the State's efforts to increase the effectiveness and efficiencies of Local Agency Formation Commissions. • Support efforts to reform the California Environmental quality Act(CEQA)to streamline current procedures and regulations for projects to refurbish or replace existing infrastructure facilities. 5 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan • Actively monitor the Little Hoover Commission hearings and reports related to climate change adaptation, special districts and other topics as it relates to OCSD. • Support the inclusion of recycled water credits during the development of long-term water conservation legislation and regulations. • Support legislation or regulations that restrict the use of microplastics in any product that is disposed of through the sewer system. • Support legislation or regulations that discourage the flushing of wipes through the sewer system. Appendix A. Federal Tactics B. State Tactics C. Legislative and Regulatory Policies 6 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan Appendices January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan ' rr � Federal Tactics Initiative Action 1. Identify and advise on federal • Schedule meetings with federal agency stakeholders and senior funding opportunities for OCSD officials in Washington D.C.and district offices to build support for infrastructure projects OCSD priority projects • Develop white papers etc.tojustify requested assistance 2. Seek funding assistance to • Meet with federal agency officials to discuss funding opportunities advance recovery of energy and and options related to the energy water nexus other resources from biosolids 9 Workwith U.S. Environmental Protection Agency and other agencies to advance energy and water efficient technologies related to WaterSense 3. Seek Infrastructure assistance • Develop priorities and disseminate to OCSD congressional delegation A. Robustfundingof State 9 Advocate before Congressional Infrastructure Committees and RevolvinglyingFuandd (SRF)and applicable Executive Branch officials to provide enhanced revise SRF Allocation Formula alternative water infrastructure financing including credit, loans, B. Innovative Financing public-private-partnerships and grants C. Project Streamlining • Work to secure legislation and policies that expedite the National Environmental Policy Act and related reviews and approvals • Work with Washington-based stakeholders to support policies • Work with Congress and U.S. Bureau of Reclamation on proposals to provide enhanced alternative water infrastructure financing 4. Support tax reform that • Work with NACWA and CASA in support of continued use of tax- protects public agencies exempt financing and feasible innovative financing approaches such as infrastructure banks to supplement traditional funding approaches • Work with state and local government stakeholders to preserve state and local tax deductibility and advocate before congressional delegation • Submit testimony and transmit communications on tax-exempt financing and where possible present testimony S. Support resiliency legislation • Work with delegation and regulators to ensure incorporation of and policies that support new programs for water recycling assistance protection of OCSD investments and promote water recycling Work with NACWA,CASA and ACWAto advance priority assistance • Work with congressional infrastructure committees to secure assistance for resiliency projects 8 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan 6. Work with federal agencies on • Work with U.S. Department of Energy on alternative energy permitting issues permitting issues • Work with U.S. Fish and Wildlife Service on environmental site assessment issues • Advocate to extend the term of National Pollutant Discharge Elimination System (NPDES) permits from 5-years to at least 10- years • Seek introduction of amendment to Clean Water Act to address conflict language to allow qualified candidates to serve on California Water Boards 9 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan State Tactics Initiative Action 1. Develop a proactive legislative • Identify legislation that has potential to benefit or impact OCSD, as and regulatory advocacy legislation is introduced and amended agenda • Identify proposed federal,state,and local regulations that are introduced that have potential to benefit or impact OCSD • Recommend positions on identified legislation and proposed regulation in alignment with OCSD's legislative and regulatory plan • Create and continually update a legislative and regulatory matrix to track identified pieces of priority legislation and proposed regulations • Schedule advocacy days in Sacramento with legislators and committee staff and regulators • Continue an active letter writing campaign in support or opposition of priority legislation and proposed regulations • Schedule meetings with legislators, regulators,stakeholders and senior officials in Sacramento and district offices to build support for OCSD priority projects • Participate in CASA's legislative committees and Regulatory Workgroup and SCAP's water and biosolids committees 2. Compile a comprehensive list • Meet with EMT to discuss future capital projects and priorities of Capital Improvement • Match capital improvements with funding opportunities based on projects project eligibility 3. Monitor and advise on possible • Proactively engage in the drafting of grant funding guidelines and funding opportunities, provide input to drafting agency or committee to ensure eligibility including but not limited to and competitiveness of OCSD projects and priorities funding through Statewide bonds Proactively engage on proposed legislation and regulations that would have an impact on the implementation of funding programs • Identify funding opportunities and provide recommendations for eligible projects. Create an advocacy and outreach schedule on the planning and execution of efforts to seek funds 4. Monitor and advise on funding • Monitor the rollout of the$40 million included in the 2017 Cap and available through Cap and Trade Expenditure Plan for waste diversion projects. Continue to Trade advocate for additional funding in future Cap and Trade Expenditure Plans that OCSD is eligible for • Identify eligible and competitive projects and programs 10 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan • Create a schedule on planning and execution of efforts to seek funds, including outreach and advocacy strategy 5. Monitor and advise on energy • Track energy related grant opportunities or other resource recovery • Identify potential projects for funding, including, but not limited to: related funding opportunities alternative renewable energy, biosolids to energy conversion, organic waste(high strength food waste and fats, oils,and grease) to energy conversion,and greenhouse gas reduction projects • Ensure wastewater interests are protected as significant decisions are made related to renewable energy production financing, mandates, climate change goals, programs and continued efforts to extend the state's emissions reduction target • Schedule meetings with local delegation as well as key members to discuss project benefits and funding opportunity • Support initiatives that helps OCSD strive for energy independence by minimizing energy utilization and maximizing useful energy recovery from the sewage it receives • Support renewable energy initiatives that are reasonable and fair 6. Schedule and attend advocacy • Educate current administration, key staff and agencies on priority and outreach meetings to projects and advocate for funding allocations that align with OCSD provide OCSD project updates priorities • Schedule stakeholder meetings to build support for projects • Hold advocacy meetings in coordination with funding opportunities and project timelines • Work with relevant budget committees, budget sub-committees, policy committees and their staff to advocate for funding allocations that align with OCSD priorities • Provide full briefings and updates to Orange County legislative delegation and relevant members on OCSD priority projects 7. Regulatory relief to allow for • Outreach with the California Environmental Protection Agency, water recycling and expansion Department of Toxic Substances,State Water Resources Control of GWRS Board, Regional Water Quality Control Board,the governor's office, legislative leadership and other appropriate stakeholders 8. Development and advocacy for • Support and advocate for legislation that will expand the approved design-build legislation uses of design-build for OCSD specific projects targeted at OCSD projects Schedule briefings and updates with Orange County legislative delegation to discuss potential design build legislation 9. Development and • Work in conjunction with CASA and SCAP to outreach,educate and implementation of a statewide develop an advocacy strategy for regulatory framework that will biosolids land application support statewide objectives to manage biosolids land application management policy 11 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan 10. Development and • Work with relevant legislators and committees to draft legislation implementation of a strategy to that will lessen the cost burden on OCSD of complying with relieve OCSD of cumbersome outdated bid advertising requirements and outdated bid advertising 0 Conduct outreach with various other Sanitation Districts across the costs State to form a coalition to support any efforts 11. Development and advocacy for • Meet with local labor groups to initially present the issue legislation to raise the • Brainstorm proposed solutions that will give OCSD and other contracting and bid threshold Sanitation District's more flexibility to complete small scale public for Sanitation Districts works projects in house • Work in conjunction with CASA to outreach,educate,and develop an advocacy strategy that will target all Sanitation Districts affected by the current threshold limitations • Develop and advocate for legislation that will raise the threshold for work that can be performed in house as well as work that is required to be bid 12 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan Legislative and Regulatory Policies 1. Air Quality:OCSD is committed to complying with federal,state,and local air quality laws, rules, regulations,and policies. a. Support air quality legislations, regulations,rules,and policies that emphasize the use of advanced technologies and promote greater flexibility and financial incentives to reduce air emission. b. Support measures that maintain and enhance local decision-making authority,where appropriate, in the development and implementation of air quality attainment strategies. c. Support legislation and regulations to ensure greater consistency between the California and Federal Clean Air Acts. d. Support strategies that clearly demonstrate and provide for the most cost-effective means for meeting air quality goals. e. Continue to commit to adhere to OCSD's odor policy to assure that OCSD is a good neighbor to the surrounding communities. f. Monitor legislation and regulations that would mandate OCSD to act as an air quality regulator and enforcer 2. Biosolids:OCSD strives to beneficially use biosolids through multiple management options performed at reasonable costs that are protective of public health and the environment and offer cost-effective alternatives to land application. a. Support legislation, regulations and policies that support the beneficial use of biosolids on agricultural lands, landscape, horticulture,California Healthy Soils Initiatives, mine reclamation, fire ravaged lands,superfund sites, brownfields, overgrazed lands,carbon sequestration and wetland restoration. b. Supportthe promotion and funding of local pilot programs,studies and research forthe beneficial use of biosolids. c. Oppose legislation, regulations,and policies that imposes bans or restrictions on use of biosolids for land application in any region,county,or state. d. Support alternative energy legislation, regulation and policies that encourage use of biosolids as a renewable energy resource. 3. Grant Funding:OCSD is committed to advancing the state of knowledge in the treatment and management of wastewater through the application of innovative and alternative technologies. To this end,OCSD supports grants assistance to offset its research, special projects and capital improvement projects. 13 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan a. Support legislation, bonds,programs and projects that provide funding for: infrastructure construction and rehabilitation,special studies and research or projects relating to security, environmental education,water quality,wastewater processing, urban runoff,wastewater recycling, biosolids and organics management,water quality improvement, resource recovery,or alternative energy. b. Support projects that provide for public benefit over projects that are primarily intended for private benefit or gain. c. Oppose proposals placing further requirements on grant recipients that return low value for high administrative costs. 4. Innovative Funding: OCSD is committed to supporting programs that provide the highest quality services to its ratepayers. a. Support programs to leverage federal assistance such as credit assistance and highly subsidized loan assistance. b. Support Public-Private-Partnerships, Public to Public and other financing approaches that can reduce costs. c. Support the fully funding of the Clean Water Act-State Revolving Fund Program at$3 billion annually. d. Seek federal assistance to support water conservation projects such as water recycling,green infrastructure through the Water Infrastructure Finance and Innovation Act(WIFIA)and direct grants to reduce project costs. S. Labor Relations:OCSD is committed to employer-employee relations including, but not limited to: meeting and conferring in good faith with recognized employee organizations regarding the wages, hours of work and other terms and conditions of employment. As Congress considers reforming the federal tax code,many of the provisions subject to reform may impact labor relations. a. Support measures to reform current workers compensation formulas that rely on a proportionate exposure formula. b. Support health insurance reform that does not create additional financial burdens on special districts. c. Support measures to ease applicability of the Fair Labor Standards Act(FLSA)on public agencies. d. Oppose any measure imposing compulsory and binding arbitration with respect to public employees. e. Oppose any measure that imposes upon local government mandated employee benefits that are more properly decided at the local bargaining table. f. Oppose efforts reducing local control over public employee disputes and imposing regulations on an outside agency. g. Oppose any measure granting public employees the right to strike. It. Oppose a new mandatory Social Security tax for public employers and public employees. 14 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan 6. Planning:OCSD ensures the long-range planning of capital improvement programs in order to deliver the highest quality facilities. a. Support reform of existing state, regional and local planning processes only if directly linked to reforms in the current revenue and tax structure of state and local governments. b. Support measures that provide new revenues for growth management and the public facilities necessary to support expected growth. c. Support proposals encouraging regional, sub-regional or countywide cooperation in planning urban development strategies,especially those that provide funding for effective implementation of agreed upon goals. d. Oppose legislation consolidating special districts that fail to address the concerns of cities affected by the proposed consolidation. e. Oppose measures that prevent or restrict the ability of cities or special districts to participate in the Southern California Association of Governments' (SCAG)sub-regional process. 7. Public Health: Protection of public health is OCSD's core mission. OCSD will work cooperatively with county and state health officers to assure local health protection. a. Support hazard mitigation,emergency response,planning,and recovery through direct legislation, policy directives,and funding toward floodplain security within the Santa Ana River watershed. b. Support(generally)measures that provide for improved public health through regulation. c. Support the protection of public health and environment through the construction and implementation of advanced wastewater treatment technology. d. Support sharing critical information and data from state and county agencies in the interest of protecting the public health and saving taxpayer dollars. 8. Public Works:OCSD is committed to the achievement of effective and efficient projects that provide wastewater treatment services that benefit its ratepayers. a. Support measures that provide funding and support to publicly owned treatment works and sewage collection systems. b. Support legislation and regulation that allow public agencies to procure goods and services in manners similar to private industry,thereby reducing overall costs of delivery. c. Support legislation and regulation that improve the Utility Underground Service Alert Program in order to improve coordination, identification, minimize damage, minimize environmental risks, and minimize cost exposure to publicly owned facilities when contractors are performing sub- surface work. 15 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan d. Support a comprehensive response to the state's electricity and natural gas shortages that provide a stable energy supply, respects the ability of municipalities to provide power,recognizes that infrastructure (i.e.emergency and standby generators)exists that could be employed temporarily during periods with minimal air quality impact and protects ratepayers(including cities and special districts)against dramatic rate increases and statewide power outages. e. Support legislation and regulation that allow OCSD to utilize the Best Value Design/Build option for the construction of public works projects. f. Oppose Buy American mandates legislation that would increase project costs or prevent the use of the most innovative technologies. g. Monitor legislation that would require the inspection and possible repair of sewer laterals at the time of sale in residential,commercial,and industrial areas 9. Tax Reform/Revenue and Taxation:Track pending legislation to ensure OCSD remains in compliance with the government code as it pertains to wastewater system user fees and property tax revenues and the investment of public funds. a. Support measures leading to a greater financial independence from the state that would result in greater stability and predictability in local government budgeting. b. Oppose measures that impose mandated costs for which there is no guarantee of local reimbursement or offsetting benefits. c. Oppose legislation that shifts tax revenues away from local governments without the adequate provision of a constitutionally guaranteed backfill to offset the lost revenues of those local governments. d. Oppose measures that shift existing local revenue sources back to the state,including the special district share of property tax,sales tax,vehicle license fees,and rate payer fees. e. Oppose the use of revenues traditionally used to fund the delivery of municipal services to fund programs for which the state is responsible, particularly the courts, health,and welfare programs. f. Oppose elimination or restriction of state and local tax deduction from federal tax liability of local taxpayers. g. Oppose elimination or restriction on the availability of municipal tax-exempt financing for public infrastructure projects. 10. Special Districts:OCSD supports the maintenance of special districts to provide specific services, in response to citizen's demands, in a cost effective manner. a. Support outreach to local, regional,and state elected officials to foster a greater understanding regarding the critical relationship between adequate reserves and the successful short-and-long- term operation of water and wastewater agencies. b. Support the work of the Association of California Water Agencies(ACWA), California Association of Sanitation Agencies(CASA), and California Special Districts Association(CSDA)in any future discussions or negotiations pertaining to the legislative and budget issues relative to preserving control of members' reserves. c. Oppose further state regulations that adversely impact special district financing and operations. 16 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan d. Oppose measures that create or grant powers to sub-regional or regional bodies that would result in an infringement on clearly local concerns. e. Oppose any administrative or legislative efforts to access or transfer any reserve funds held by water and wastewater districts. f. Oppose the imposition of unfunded, mandated programs on local governments. g. Oppose efforts that diminish OCSD's ability to govern efficiently and effectively, including expanding the size of the Board of Directors. 11. Water Quality and Supply:OCSD is committed to participating collaboratively in the protection of regional water resources for the benefit of the people we serve. a. Support(generally)measures to increase water supply and improve water quality in the region, including drought relief legislations and regulations. b. Support measures that would increase funding for water reuse technologies,including support for the Groundwater Replenishment System project by the Orange County Water District and OCSD to create new water supplies through wastewater recycling. c. Support measures that promote and provide for the use of reclaimed water. d. Support policy development,funding, and research for addressing urban runoff,stormwater, and beach closures, including funding for studies that identify the sources of bacterial,viral and other microbial contaminants and human pathogens. e. Support measures to evaluate water quality standards,as needed,to ensure the objectives are appropriately protecting the designated use. f. Support legislation and regulation that would direct U.S. EPA levied fines to remain in the region. g. Support legislation and regulation that clarifies the use of Clean Water Act citizen suits that are frivolous and/or abusive of congressional intent. h. Support measures addressing non-point source pollution in order to protect our ocean water quality and provide funding to mitigate its effects,including integrated permitting approaches that can reduce costs and achieve water quality improvements while allowing permits to be tailored to the needs of Orange County and its watershed. i. Support national aspirational goal through legislation that promotes improved water use efficiency in construction of water efficient buildings and communities. j. Support legislation and regulation that promote improved water use efficiency through state and federal assistance in evaluating and implementing new programs and technologies and increasing public awareness of water use efficiency. k. Support legislation and regulation that provide for the development of the watershed approach, including watershed management plans and watershed-based permitting. I. Support legislation and regulation that necessitate the responsible use of water in residential, commercial,and industrial areas. m. Support environmental guidelines on government agencies that would safeguard the region while providing increased protections. 17 January 2018 Orange County Sanitation District 2018 Legislative 8 Regulatory Plan n. Oppose the imposition of statewide/nationwide fees for environmental cleanup that is privately caused or regional in nature(e.g.,when the nexus between those responsible for environmental abuse and those required to pay for cleanup or mitigation is absent). o. Support approaches to reduce compliance costs associated with stormwater controls including the use of integrated plans. 18 January 2018 V :dill ti L7 2018 Legislative Year •. _ Af� lrY� �� r 2017 Highrights AB 574 (Quirk) — Potable Reuse Support Signed by the Governor AB 967 (Gloria) — Hydrolysate Watch Signed by the Governor SB 231 (Hertzberg) — Sewer Watch Signed by the Governor Definition SB 5 (De Leon) — Parks Bond Support Signed by the Governor �I Advocacy and Grants ORANGE COUNTY SANITATION DISTRICT 2018 Legislative and Regulatory Plan Potential Legislation ORANGE COUNTY REGISTER OIL6CGF.COUNTY REGISTER 11a11 J cagrd� C�NTY n`irf Raw IIUNiq HlS q��wS S Cohn nil AkIV CIIDIArI I Questions l ; STEERING COMMITTEE Meeting Date TOBd.Ot Dir. z/zo/v tz/zo/v AGENDA REPORT IWmNumber Item Number z zo Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert P. Ghirelli, Assistant General Manager SUBJECT: ADOPTION OF UPDATED RESOLUTION ON RULES OF PROCEDURE GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 17-18, entitled, "A Resolution of the Board of Directors of Orange County Sanitation District Establishing Rules of Procedure for the Conduct of Business of the District, and Repealing Resolution No. OCSD 17-08." BACKGROUND At this time, the procedures are being updated to add language regarding teleconferencing of meetings and minor clerical revisions. RELEVANT STANDARDS • CA Government Code Section 54950 at seq. • Comply with transparency and communication requirements, including the Brown Act PRIOR COMMITTEE/BOARD ACTIONS May 2017-Adopted Resolution No. OCSD 17-08, "A Resolution of the Board of Directors of Orange County Sanitation District Establishing Rules of Procedure for the Conduct of Business of the District, and Repealing Resolution No. OCSD 15-27." ADDITIONAL INFORMATION N/A ATTACHMENT The following attachment(s)is attached in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Resolution No. OCSD 17-18 Page 1 of 1 RESOLUTION NO. OCSD 17-0818 A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ESTABLISHING RULES OF PROCEDURE FOR THE CONDUCT OF BUSINESS OF THE DISTRICT, AND REPEALING RESOLUTION NO. OCSD 45 2717-08 WHEREAS it is necessary to establish rules of procedure to facilitate the orderly handling of business to come before the Orange County Sanitation District Board of Directors and Standing, Steering, Special and Ad Hoc Committees. NOW THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: Rules of Procedure. That the following rules of procedure be adopted for the conduct of business of the District: A. Regular Meetings. There shall be a regular monthly meeting of the Board of Directors of the District on the fourth Wednesday of every month at 6:00 p.m., in the Administrative Offices of the District, located at 10844 Ellis Avenue, Fountain Valley, California; provided, however, if the fourth Wednesday of the month falls upon a legal holiday, said monthly meeting shall be held on the next day thereafter, at the same time and place, unless the Board adjourns to a different date and time. The Board of Directors may adjourn any regular, special or adjourned special meeting to a time and place certain, as specified in the order of adjournment. B. Special Meetings. A special meeting of the Board of Directors may be called in either one of the following ways: (1) By the Chairperson of the Board of Directors; or (2) By the written request of a majority of the Steering Committee delivered to the Clerk of the Board. The call or notice for special meeting shall be in writing and delivered personally or by mail at least twenty-four (24) hours before the time of such meeting, as specified in the notice. Any notice deposited in the regular mail addressed to a Director at the address he or she has on file with the Clerk of the Board postage prepaid, sixty (60) hours in advance of any such meeting as specified in the notice, shall be presumed to have been delivered. The call or notice shall specify the time and place of the special meeting, a description of the business to be transacted,and copies of all pertinent written materials. OCSD 17-1888-1 Such written notice may be dispensed with as to any Director or Alternate Director who, at or prior to the time the meeting convenes, files with the Clerk of the Board a written waiver of notice. Such waiver may be given by facsimile or electronic mail. Such written notice may also be dispensed with as to any member who is actually present at the meeting at the time it convenes. The Clerk of the Board shall diligently attempt to notify each Director personally of the time, place and purpose of said meeting, not less than twenty-four(24) hours before the time of said meeting. The call or notice shall be posted in the administrative offices' public lobby and in a location freely accessible to the public at least twenty-four(24) hours prior to the special meeting. C. Meetings Adjourned by Clerk of the Board. If at any regular, adjourned regular, special or adjourned special meeting,there is not a quorum of Directors present, the Clerk of the Board may declare the meeting adjourned to a stated time and place and shall cause written notice of the adjournment to be given in the same manner as for a special meeting, unless such notice is waived as provided for in special meetings. Within twenty-four (24) hours after the time of the adjournment, a copy of the order or notice of adjournment shall be conspicuously posted on or near the door of the place where the meeting was held and in a location freely accessible to the public. D. Notices to News Media. When any local newspaper of general circulation, radio or television station requests, in writing, notices of meetings of the Board of Directors, the Clerk of the Board shall thereafter, until receipt of a notice terminating said request, deliver notices of regular, regular adjourned and special adjourned meetings to such newspapers, radio or television stations. Delivery shall be made in the same manner as delivery is made to the Directors. E. Conduct of Meetings. (1) Procedural Rules. The procedural rules for debate and action shall be as set forth in Table 1, attached hereto and adopted herein by reference. Robert's Rules of Order shall not be applicable or govern the procedures for the conduct of Sanitation District business. (2) Legal Officer. In any case of ambiguity or uncertainty in the interpretation or application of these Rules to any procedure, the presiding officer may direct such question for a ruling to the Board's General Counsel, who shall be the parliamentarian of the Board. (3) Obtaining the Floor and Making Motions. Any member of the Board wishing to speak, or any member of the public wishing to address the Board, must first be recognized by the Chairperson. The Chairperson must recognize any member of the Board who seeks the floor when appropriately entitled to address the Board. OCSD 17-1808-2 Any member of the Board, including the Chairperson, may bring a matter of business properly before the Board by making a motion. Any member, including the Chairperson, except the member making the motion, may second the motion. Once a motion is seconded, it may be opened for discussion and debate, in accordance with the procedures in Subsection (4) below. (4) Rules for Discussion. Debate and Deliberation by the Board. The procedures for consideration and action on all matters to come before the Board shall be in compliance with the terms of this Section, as follows: (a) Each item on the Agenda will be introduced in a form of a report by either Staffthe General Manager, a member of -the Executive Management Teem or Counsel. (b) Upon completion of the report, the Chairperson will allow for direct questions regarding the item, by Directors, each in turn, and in the order as selected by the Chairperson. (c) Upon completion of the question period, the Chairperson will entertain a motion and second for consideration by the Board. (d) Discussion among the Directors will follow. Each Director will be recognized to address the Board in the order selected by the Chairperson, with a five (5) minute time limit for each Member wishing to speak on the Agenda item, unless the time limit is waived by the Chairperson. There will be no interruptions of the Director who has been recognized. Attempted interruptions will be declared out-of-order, and the Board Member attempting to interrupt will be asked to remain silent until recognized. (a) As an additional courtesy to everyone, repetition of comments will be discouraged in the interest of timer and, at the discretion of the Chairperson, can be declared out-of-order. (f) After each Member who wishes to speak has been recognized and completed his/her remarks, a single three (3)minute period of rebuttal will be allowed any Director, unless the time limit is waived by the Chairperson. (g) If it appears to the Chairperson that any Director is pursuing a line of questioning or commentary due to lack of preparation or prior review with the District's Staff, the Director's time will be declared to have been used up, and no further inquiry will be allowed. (h) Upon adoption of a motion on an Agenda item, there will be no further discussion of that item. OCSD 17-1808-3 (5) Decorum in Debate. All Members shall address their remarks to the Chairperson and confine them to the business then pending and subject to discussion before the Board, avoiding personalities and reflections upon anyone's motives. (6) Closing or Limiting Debate. At all times,the Board shall endeavor to allow free and open debate among Members of the Board. However, in the discretion of the Chairperson, it may become necessary to close or limit debate, so that action can be taken by the Board. An order by the Chairperson closing or limiting the debate can only be set aside by a majority vote of the Board. F. Quorum. A majority of the Directors shall constitute a quorum of the Board. G. Chairperson and Vice Chairperson of the Board. A Chairperson and Vice Chairperson of the Board shall be elected by a majority vote of Directors at the regular meeting in June of each year, and will assume office July 1st. The nominations for Chairperson and Vice Chairperson shall be made at the regular Board meeting in May of each year. Any person nominated for Chairperson shall be deemed to be nominated for Vice Chairperson in the event the person is not elected as Chairperson. Thereafter, the nominees shall prepare a statement setting forth their qualifications for the office sought. The statements should be forwarded to the Clerk of the Board who will in turnshall-be mailedmail teto the members of the Board of Directors with the Agenda and other meeting material for the June regular meeting. If only one individual is nominated for Chairperson at the regular Board meeting in May, that individual shall be deemed elected as Chairperson, no election shall be held in June, and the individual shall assume office July 1s'. If only one individual is nominated for Vice Chairperson at the regular Board meeting in May, that individual shall be deemed elected as Vice Chairperson, no election shall be held in June, and the individual shall assume office July 1s'. The Chairperson and Vice Chairperson shall serve at the pleasure of a majority of the Directors. In the event the office of Chairperson becomes vacant due to resignation or retirement of the incumbent prior to the expiration of the regular term, the Vice Chairperson shall automatically succeed to the office of the Chairperson and shall continue to serve through the remainder of the regular term unless sooner removed by action of a majority of the Directors. In the event the office of Vice Chairperson becomes vacant prior to the expiration of the regular term, nominations and the election of a Director to serve in that capacity shall be conducted at the next regular Board meeting. The person so elected shall serve the balance of the regularly-scheduled term unless sooner removed as a result of action by a majority of the Directors. The Chairperson shall not serve more than two consecutive one-year terms for which he/she has been elected to the office of Chairperson. The Vice Chairperson shall not serve more than two consecutive one-year terms for which he/she has been elected to the office of Vice Chairperson. OCSD 17-1808-4 H. Presiding Officer. The Chairperson of the Board shall preside during meetings of the Directors. In the absence of the Chairperson, the Vice Chairperson shall preside. I. Clerk of the Board and Minutes. The Board of Directors shall have a person designated to serve as Clerk of the Board. The Clerk of the Board will be appointed to the position by the General Manager and shall report to the General Manager or a Department Head as designated by the General Manager, The Clerk of the Board will be a regular#u44h;+efull-time employee, subject to all the rules and policies applicable to all regular full—time employees. The Clerk of the Board shall attend all meetings of the Board of Directors, unless excused by the Chairperson, and shall prepare an accurate record of each meeting for submission to the Directors and subsequent approval at the following meeting; provided, however, that when an adjourned, special or special adjourned meeting of the Board of Directors immediately precedes a regular meeting, Minutes of said meeting shall be submitted for approval at the next meeting of the Board following said regular meeting. In the preparation of Official Minutes of a meeting of the Board of Directors, the Clerk of the Board will not record the name of the Director who moves or who seconds the adoption of a motion or Resolution, except the vote of any ind v due' Director`hall-be but will reflect the votes by name of each Director on each item brought before the Board. heR •^^6 i Fed by^•^•^^'^^^ ^f^tot^ law: In the absence of the Clerk of the Board, a Deputy Clerk of the Board shall be appointed to exercise the duties of the Clerk of the Board. J. Regular Business to Come Before the Board of Directors. Insofar as practicable, all items of business to be taken up at a regular meeting of the Board shall be submitted to the Clerk of the Board, who shall include on the Agenda all such items submitted by Directors, the General Manager and General Counsel, and all formal communications. The Clerk of the Board shall mail to each Director a notice of such regular meetings, together with a proposed Agenda, not later than the Friday immediately preceding such regular meetings. Said Agenda, insofar as possible, shall include copies of Resolutions, except as hereafter provided, and a description of all matters to be considered, together with any pertinent written materials. Agendas shall be posted in a location freely accessible to the public not less than seventy-two (72) hours in advance of the meeting. Resolutions designated as "standard" and adopted by the Board of Directors from time to time, and approved as to form and content, need not be included with said Agenda; provided, however, that the information completing said standard Resolutions shall be set OCSD 17-18N-5 forth on the Agenda listing, and copies of said standard Resolutions shall be on file with the Clerk of the Board at the meeting time and place. Items of business not known at the time the regular Agenda is mailed as herein provided, may be considered as supplemental Agenda items; provided that all requirements of the Ralph M. Brown Act (California Government Code Sections 54950 et sec.) are satisfied. No business, except with consent of two-thirds of the Directors present (a majority of Directors present for emergency actions), and only if permitted by the Ralph M. Brown Act, not appearing on the regular or supplemental Agendas may be brought before the Board of Directors. The meeting Agenda shall provide for an opportunity for members of the public to address the Board on items on the Agenda and non-Agenda items of public interest. As determined by the Chairperson, speakers may be deferred until the specific Agenda item is taken for discussion, and remarks may be limited to three (3) minutes. Speakers on non-Agenda items may address only items that are within the subject matter jurisdiction of the Board of Directors. Time allotted for such presentations is limited to three (3) minutes or less. Total time allotted for all public input on each non-Agenda item is limited to thirty (30) minutes to one (1) hour, taking into consideration the number of persons filing a request to address the Board. However, time allotments may be waived by a majority vote of the Board. K. Handling of Business and Voting. During the course of a Board meeting, routine matters listed on the Agenda for consideration will be referred to by Agenda Item Number only. Voting on all Resolutions shall be by roll call, except if waived by unanimous voice vote, in which event, the Chairperson may order a unanimous ballot cast in favor of the motion or Resolution under discussion. The name of each Director shall be called only once. On matters of considerable interest or on which there appears to be a controversy, the motion or Resolution shall be read by title or repeated by the Chairperson. The Chairperson shall thereafter call for discussion of the motion or Resolution, at which time any member may discuss the pending matter. Any person other than a Director present at the meeting may speak on the motion if recognized by the Chairperson. Sole discretion as to the extent of discussion outside of the membership of the Board shall rest with the Chairperson. At the close of discussion, the Chairperson may, at the Chairperson's discretion, repeat the motion or Resolution pending, and thereafter, call for a vote. The Clerk of the Board shall determine and state whether or not a motion or Resolution is adopted by roll call vote. On all other matters, the Chairperson shall determine the outcome of the voting. OCSD 17-18e9-6 L. Committees. (1) Standing Committees. (a) Steering Committee: There shall be a permanent Committee designated as the Steering Committee, comprised of the Chairperson of the Board, the Vice Chairperson of the Board, the Chairperson of each of the Standing Committees;and three at-large members selected by the Chairperson of the Board. The Vice Chairperson of each of the two Standing Committees shall serve as the designated Alternate, in the absence or inability to serve by any Chairperson. In the absence or inability of any designated member of the Steering Committee to serve, his/her city/agency appointed Alternate Director may not serve in that member's absence. The Committee shall conduct an annual performance evaluation of the General Manager and submit recommendations on his/her compensation to the Board of Directors. The Committee shall also review the General Manager's evaluation and compensation of the executive management employees, based on established criteria, and executive management's goals and objectives for the following year. The Committee shall also conduct an annual performance evaluation of General Counsel and submit recommendations to the Board of Directors as provided by Resolution No. OCSD 12-03. The Committee shall make recommendations to the Board of Directors on labor negotiations and other related activities as may be needed or appropriate. The Committee shall also be authorized to assign new subjects of significant importance to the appropriate Standing Committee for study, evaluation and recommendation. The Steering Committee shall meet on the fourth Wednesday of each month at 5:00 p.m. preceding the Board's meeting, or at the call of the Chairperson of the Board of Directors. (b) Administration Committee: There shall be a permanent Administration Committee (Finance & Administrative Services-and Human Resources to advise the Staff and make recommendations on matters related to the financial, budgeting, administrative and personnel policies and programs of the District. The Committee shall review with the Staff the procedures for development, preparation and format of the annual budget and recommend appropriate change, and counsel the Staff during the budget process to assure the proper interpretation and implementation of the Board's policies and that the desired procedures have been followed. ocsD 17-1 se9-7 The responsibility for consideration and adoption of the District budget rests with the Board of Directors. The Committee shall periodically interviewand recommend the selection of outside auditors. The Committee shall review the result of the annual audit of the District's accounts with representatives of the outside audit firm, including any comments received recommending improvements. The Committee shall review management's response to these comments and make appropriate recommendations for implementation. Periodically, the Committee shall recommend employment of an outside firm to audit internal control procedures to safeguard the assets of the District. The Committee shall interview and make recommendations on the employment of investment-banking firms, bond counsel and, if necessary or desired, financial advisors, to be used in connection with the District's financing programs. The Committee shall periodically coordinate recommendations on personnel audits of the District's operations or segments of the operations on an as-needed basis. The Committee shall make recommendations on personnel policies and procedures, insurers and coverage, procurement procedures and such other related activities as may be needed or appropriate. The Chairperson of the Board of Directors shall appoint a Committee Chairperson and a Committee Vice Chairperson for the Administration Committee. The Committee Chairperson and Committee Vice Chairperson shall serve at the pleasure of the Chairperson of the Board of Directors. The Administration Committee shall consist of thirteen members, as follows: (1)The Chairperson of the Board of Directors; (2)The Vice Chairperson of the Board of Directors; (3)The Committee Chair of the Administration Committee; (4)The Committee Vice Chair of the Administration Committee; and (5) Nine additional Board members appointed by the Chairperson of the Board of Directors. Other than the Board Chairperson and the Board Vice Chairperson, no Director who serves on the Operations Committee shall be eligible to serve on the Administration Committee. In the absence of the Board Chairperson, his or her alternate Director may attend meetings of the Administration Committee. OCSD 17-1888-8 The Administration Committee shall meet on the second Wednesday of each month at 5:00 p.m., or at the call of its Chairperson. (c) Operations Committee: There shall be a permanent Committee designated the Operations Committee (Engineering, Operations & Maintenance and Environmental Services). With the goal of compliance with all public health and environmental laws and regulations, the Operations Committee shall review and submit appropriate recommendations on the matters pertaining to the operation of the District Treatment Works, including such matters as current and projected service/flow needs, level and quality of treatment, conservation, recycling and reuse activities and air quality issues. The Committee shall also review issues pertaining to the District's NPDES Ocean Outfall Discharge Permit, including annual review of the contractor(s) performing the ocean monitoring and research programs required as a condition of said permit, and related issues regarding protection of the marine waters off metropolitan Orange County's coastline from impacts resulting from the District's operations and discharge of treated wastewater. The Committee shall also review matters pertaining to contractual arrangements by the District to provide sewerage services to areas outside the District's boundaries or approved spheres of influence. The Committee shall review plans for the future needs of the District, explore alternatives and make recommendations to the Board of Directors. The Operations Committee shall also review and submit appropriate recommendations on matters pertaining to capital projects which address operational needs, including the selection of professional consulting services to assist in studying, planning and designing needed District Treatment Works and support facilities, including computerized systems, in accordance with the Board's established policies and procedures for procuring such services; the Committee shall further review construction projects for said facilities in accordance with applicable public works laws and Board policies. Said oversight shall include the contracts for professional services and public works construction projects and addenda or change orders thereto. In carrying out its responsibilities, the Committee shall receive advance notice and regular status reports on the projects from Staff, and monitor, visit and observe the District Treatment Works' operational functions and major capital construction projects. The Chairperson of the Board of Directors shall appoint a Committee Chairperson and a Committee Vice Chairperson of the Operations Committee. The Committee Chairperson and Committee Vice Chairperson shall serve at the pleasure of the Chairperson of the Board of Directors. The Operations Committee shall consist of fourteen members, as follows: OCSD 17-1898-9 (1)The Chairperson of the Board of Directors; (2)The Vice Chairperson of the Board of Directors; (3)The Committee Chair of the Operations Committee; (4)The Committee Vice Chair of the Operations Committee; and (5)Ten (10)additional Board members appointed by the Chairperson of the Board of Directors. Other than the Board Chairperson and the Board Vice Chairperson, no Director who serves on the Administration Committee shall be eligible to serve on the Operations Committee. In the absence of the Board Vice-Chairperson, his or her Alternate Director may attend meetings of the Operations Committee. The Operations Committee shall meet on the first Wednesday of each month at 5:00 p.m., or at the call of its Chairperson. (d) Legislative and Public Affairs Committee: There shall be a permanent Committee designated as the Legislative and Public Affairs Committee, comprised of the Chairperson of the Board, the Vice Chairperson of the Board, and five at-large members selected by the Chairperson of the Board. The Committee shall advise the-Staff and make recommendations on matters related to the legislative and public affairs programs of the District. The Legislative and Public Affairs Committee shall meet on the second Monday of each month at 12:00 p.m. or at the call of the Board Chairperson. (2) Special and Ad Hoc Committees. In addition to the Standing Committees, the Chairperson of the Board of Directors, or-the Chairperson of a Standing Committee; or a majority of the Directors, may appoint from time to time, Special or Ad Hoc Committees to study and report on specific matters. Such Committees shall be temporary in nature, and their assignments shall pertain to a current, specific issue. Upon completion of the assigned task, the Ad Hoc or Special Committee will be dissolved. The Chairperson and Vice Chairperson of Special and Ad Hoc Committees shall be appointed by the Chairperson of the appointing authority. Each Special and Ad Hoc Committee shall meet at the call of its Chairperson. (e k Alternate Directorss: If a regular Director cannot attend a meeting of the Operations Committee, the Administration Committee or the full Board of Directors, the Directors alternate may attend in place of his or her regular Director. An alternate Director may not, however, attend a meeting of any other Committee in the absence of OCSD 17-1808-10 his or her regular Director. - If the regular Director and the Alternate Director are both unable to attend the meeting, the regular Director may request that the meeting be teleconferenced. The request may be approved, at the Board Chairperson's discretion, provided that all requirements of the Ralph M. Brown Act (California Government Code Sections 54950 at sea.) are able to be satisfied. MN. Motion to Refer to a Standing Committee. Any Director at a Board meeting may move to have a policy or any other activity affecting the Sanitation District, or any one of the member Agencies, referred to a Standing Committee for study and report. This motion shall be a privileged motion, and when duly seconded, discussion thereof shall be limited to Directors only. Said motion shall receive an affirmative vote of a majority of the Directors for adoption. Section 2: Procedure for Consideration of Demands for Corrective Action. A. Requirement of Written Demand. Prior to any person commencing ajudicial action for injunction or mandamus to declare any action taken by the Board void because of failure to observe Brown Act requirements, such person must first serve upon the Clerk of the Board a written demand describing the alleged violation and demanding corrective action. Such demand must be served upon the Clerk of the Board within thirty (30) days of the complained of action. Failure to serve any such demand within this thirty (30) day period shall result in the loss of any right to challenge any action to have been taken in violation of Sections 54953, 54954.2 or 54956 of the California Government Code. B. Consideration of Corrective Action. Upon receipt of such a demand, consideration of the demand shall immediately be placed on the Agenda for the next meeting of the Board of Directors. If the demand is received less than seventy-two (72) hours prior to the time set for the next meeting, the Board may determine that the notice constitutes the initiation of litigation, and that the need to take action on the threatened litigation arose subsequent to the posting of the Agenda, and may consider it at that meeting pursuant to Section 1(J) above. A description of any item so placed on the Agenda shall include both consideration of the demand, and the possibility of corrective action, by the Board. In considering such demands, the Board shall first determine, by motion, whether corrective action should be taken. If no motion to take corrective action is carried, the Clerk of the Board shall inform the demanding party in writing of the Board's decision not to cure or correct the challenged action. C. Implementing Corrective Action. If a motion to take corrective action passes, the Chairperson may entertain a motion implementing corrective action. Any motion implementing corrective action shall address the concerns raised in the consideration of corrective action. The motion implementing corrective action may include a motion to rescind prior action taken, as appropriate. Passage of a motion to rescind invalidates prior action only as of the time of the passage of the motion, and not from the date of the initial action. A motion implementing corrective action resulting from OCSD 17-1808-11 a written demand is out-of-order if the action complained of(a)was in connection with the sale or issuance of notes, bonds, or other evidences of indebtedness, or any contract, agreement, or incident thereto; or (b) gave rise to a contractual obligation upon which a party has, in good faith, detrimentally relied. In any event, the Board shall notify the party making the demand in writing of its decision to take corrective action, and shall describe any corrective action taken. This notice shall be given to the demanding party as soon as possible after the meeting, but in no event more than thirty (30) days after receipt of the demand. Section 3: Resolution No. OCSD 15 2717=08 is hereby repealed. Section 4: This Resolution shall become effective immediately. PASSED AND ADOPTED at a regular meeting of the Board of Directors held May-24December 20, 2017. Gregory C. Sebourn PLS Board Chairman ATTEST: Kelly A. Lore Clerk of the Board APPROVED AS TO FORM: Bradley R. Hogin General Counsel OCSD 17-1808-12 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 17-08-18 was passed and adopted at a regular meeting of said Board on the 24-20th day of May-December 2017, by the following vote, to wit: AYES: Barnes; Bernste n; rnuacott; Delgle z ; Hawkins; h.. es; vim; DnnHn.; Sebo ; Shaw; Chnwye ; F. Cm'th� T. Smith. Sleek Wagner; Wanke; Withers; and Yarc; NOES: Neae ABSTENTIONS: Neae ABSENT: Deat^^-and-T^ajere IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 24th 20th day of MayDecember, 2017. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District OCSD 17-1808-13 TABLE 1 BOARD PROCEDURES AND ORGANIZATION SUMMARY OF MOTIONS A. PRIVILEGED MOTIONS Kind of Second Vote Motion Required Debatable Amendable Required Purpose Adjourn Yes No No Majority To end the meeting To Take a Yes No No Majority To interrupt a Recess meeting for a short time or to provide an intermission Raise a No No No None To obtain action Question of immediately in an Privilege emergency B. MAIN MOTION AND RELATED SUBSIDIARY MOTIONS Kind of Second Vote Motion Required Debatable Amendable Required Purpose Main Yes Yes Yes Majority To introduce new Motion business Amend Yes Yes Yes Majority To modify or alter a Main motion Motion Substitute Yes Yes Yes Majority To replace the main Motion motion entirely OCSD 17-1808-14 Previous Yes No No Majority To close debate on Question the main or amended motion immediately Continue to Yes Yes Yes Majority To defer action a Certain Time To Table Yes No No Majority To discontinue consideration until brought back by vote of the Board Take a Yes No No Majority To bring before the Motion group a motion from the previously tabled Table Limit or Yes No Yes Majority To limit or extend Extend limits of debate Limits of Debate Refer to a Yes Yes Yes Majority To place business in Committee hands of a Committee Withdraw a No No No None To withdraw a Motion motion before it is voted on Reconsider Yes Yes No Majority To secure a new must be vote on a motion by a previously voted Director upon who voted for the prevailing side on the original motion OCSD 17-1808-15 C. INCIDENTAL RULES NON-RANKING Kind of Second Vote Motion Required Debatable Amendable Required Purpose Request to Yes No No Two- To facilitate business Suspend Thirds ordinarily contrary to the Rules the rules of the organization Override Yes No No Majority To have Board Order of majority rule on the the Chair order Point of No No No None To enforce the rules Order of the organization OCSD 17-1808-16 STEERING COMMITTEE Meeting Date TOBd.Of Dir. 1JJ2o/17 12/20/17 AGENDA REPORT emNumber Item Number 3 zl Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: DISTRICT 6 TRUNK SEWER RELIEF, PROJECT NO. 6-17 GENERAL MANAGER'S RECOMMENDATION Approve a contingency increase of $369,930 (10%) to the construction contract with Charles King Co., Inc. for District 6 Trunk Sewer Relief, Project No. 6-17, for a total contingency of$739,860 (20%). BACKGROUND The purpose of this project is to increase the wet weather capacity of the District 6 Trunk, extend the life of the sewer by 30 years, and to provide safe access to the manholes. The District 6 Trunk Sewer was built by the Orange County Sanitation District (Sanitation District) in the early 1950s and serves the cities of Costa Mesa and Newport Beach. The existing 3,700-foot long sewer ranges from 12 to 18 inches in diameter and extends along Pomona Avenue in Costa Mesa, and along Newport Boulevard to Pacific Coast Highway in Newport Beach. Four manhole stretches within this sewer reach require up-sizing to reduce the risk of wet weather sewer spills. The selected technique used is called pipe bursting, which uses a hydraulic bursting hammer that expands the existing sewer pipe and pulls a new pipe behind it. The benefit of pipe bursting is that it minimizes open-cut excavations. The construction for this project is 30% complete. During the first pipe bursting attempt, the bursting hammer stopped 70 feet short of its destination and required rescue via an excavated pit. Within this pit, it was discovered that the existing pipe was surrounded on the top and sides by 2-inch thick redwood boards. These boards were confined by the outside soil and did not allow the bursting hammer to expand the pipe and soil around it, and it could not pass. RELEVANT STANDARDS • Meet or exceed sanitary sewer overflow regulations • Ensure the public's money is wisely spent PROBLEM Change orders and construction delays have resulted in cost impacts to the project. The recent pipe bursting failure is estimated to use at least 50%of the authorized contingency. There are two pipe bursting sections remaining. If further pipe bursting failures occur, the Page 1 of 3 approved construction contract contingency might not be sufficient for construction completion, resulting in further potential delay. PROPOSED SOLUTION The Contractor, the Sanitation District, and the Design Engineer of record are cooperatively working to identify other areas where a pipe bursting failure might occur so future cost impacts can be mitigated. Staff requests an increase in the construction contract contingency of $369,930 (10%) from $369,930 (10%) for a total contingency of $739,860 (20%). The project budget is sufficient for this change and no additional funding is needed. TIMING CONCERNS The contingency increase will allow any required changes to be addressed without causing additional project delays. RAMIFICATIONS OF NOT TAKING ACTION If the construction contract contingency is insufficient to cover the costs for potential unknown conditions, critical path change order work would be delayed further and completion of the project in a timely fashion would not be possible. PRIOR COMMITTEE/BOARD ACTIONS September 2016 -Awarded a Construction Contract to Charles King Co., Inc. for District 6 Trunk Sewer Relief, Project No. 6-17, for a total amount not to exceed $3,699,301 and approve a contingency of$369,930 (10%). ADDITIONAL INFORMATION N/A CEQA The Sanitation District, as lead agency, prepared a Program Environmental Impact Report (PEIR) entitled Collection System Improvement Plan. The Board certified the PEIR on August 22, 2007 and the Sanitation District filed a Notice of Determination on August 23, 2007. The Sanitation District has determined that the project is within the scope of the PEIR. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation DistricPs Purchasing Ordinance. This item has been budgeted (Budget FY2016-17&2017-18, Section 8, Page 32) and the budget is sufficient for the recommended action. Page 2 d 3 Date of Approval Contract Amount Contingency 09/28/2016 $3,699,301 $369,930 (10%) 12/20/2017 $369,930 (10%) $739,860 (20%) ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.Ocsd.com) with the complete agenda package.: N/A AN:dm:gc Page 3 of 3 STEERING COMMITTEE Meeting Date TOBd.01Dir. iz/zo1v iz/zo1v AGENDA REPORT IWmNumber Item Number a zz Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: DEFERRED PAYMENT AGREEMENT REQUEST FOR CHARGES AND FEES OWED BY ONE INDUSTRIAL WASTEWATER DISCHARGE PERMITTEE GENERAL MANAGER'S RECOMMENDATION Deny the request for a 3'd deferred payment agreement for charges and fees owed for sanitary sewer service charges from Aseptic Technology, LLC. BACKGROUND Aseptic Technology, LLC (Aseptic Technology) is the holder of an industrial wastewater discharge permit issued by the Orange County Sanitation District (Sanitation District)that requires payment of sanitary sewer service charges for the cost of conveying, treating, and disposing of wastewater discharged. Based on the terms of the permit, the permittee is required to pay estimated, quarterly sewer service charges that are reconciled annually with actual discharge flows and strength. The permittee currently owes $252,315.72 that comprises the 2016-17 Annual Reconciliation Invoice, the 2016-17 Supplemental Capital Facilities Capacity Charge Invoice, and the 2017-18 First Quarter Invoice. The 2017-18 Second Quarter Invoice in the amount of $112,091.76 will be issued on December 31, 2017 and the 2017-18 Third Quarter Invoice in the amount of$112,091.76 will be issued on March 31, 2018. If all past due amounts remain unpaid, the total monies due through March 31, 2018 will accumulate to $476,499.24. Aseptic Technology was first issued a permit in November 2014. They paid their first two quarterly invoices for March and June of 2015. However, subsequently they were delinquent on their: (1) FY 2014-15 annual reconciliation invoice; (2) FY 2014-15 supplemental capital facilities capacity charge; and (3) FY 2015-16 first and second quarterly invoices. In 2016, The Board of Directors approved a 12-month payment agreement for Aseptic Technology that Aseptic Technology made timely payments against and paid off as of January 2017. However, Aseptic Technology failed to make payments against their current quarterly invoices for services rendered after January 2016, thus necessitating the second payment agreement request in July 2017. The second payment agreement required Aseptic Technology to remit timely payments against new obligations occurring during the term of the agreement. Page 1 of 3 In July 2017, the Board of Directors approved the second payment agreement for six (6) months of which Aseptic Technology currently has one payment remaining. This payment agreement requires that the account balance be paid in full by December 31,2017 to allow their industrial discharge permit to be renewed on January 1, 2018. Although they made their past obligations, in accordance with this payment agreement, they failed to make the payments against their current quarterly invoices for services rendered after January 2016,which was in violation of the agreement. Aseptic Technology has not been current with their Sanitation District obligations since January 2016 when they requested and received a second deferred payment in agreement in July 2017 (for six months). Following the first six months, after they were first issued their permit in November 2014., Aseptic Technology has never been current with their outstanding obligations Aseptic Technology has requested an administrative extension on their industrial discharge permit through March 31, 2018 along with a deferred payment agreement through March 31, 2018 to pay the charges that will accumulate to a total of$476,499.24. The request is to make three payments of $158,833.08 by January 8' , by February 27tn and March 31e'. At that time, the account balance would be paid in full and the permit could be renewed. RELEVANT STANDARDS Resolution No. OCSD 11-04 PROBLEM Aseptic Technology currently owes the Sanitation District $252,315.72 on their account that, if unpaid, will accumulate to $476,499.24 through March 31, 2018. PROPOSED SOLUTION Deny Aseptic Technology's request for a new deferred payment agreement and enforce the existing deferred payment agreement which states that the account balance must be current by December 31, 2017, or their permit will not be renewed. TIMING CONCERNS Aseptic Technology's industrial discharge permit expires December 31, 2017. RAMIFICATIONS OF NOT TAKING ACTION Aseptic Technology's industrial discharge permit expires December and will only be renewed if the account balance is zero. Page 2 af3 PRIOR COMMITTEE/BOARD ACTIONS July 2017- Board of Directors approved 6-month Deferred Payment Agreement with Aseptic Technology for outstanding invoices totaling $451,161.54. January 2016 — Board of Directors approved Deferred Payment Agreement with Aseptic Technology for prior outstanding invoices. ATTACHMENT The following attachments)are included in hard copy and may also be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: • July 2017 Deferred Payment Agreement—Aseptic Technology, LLC • November 28, 2017 Letter received from Aseptic Technology, LLC Page 3 d 3 A DEFERRED PAYMENT AGREEMENT 0R/GjNq� THIS AGREEMENT, is entered into, to be effective July 26, 2017, by and between Orange County Sanitation District ("District"), a county sanitation district duly organized and existing pursuant to Section 4700 at. seq. of the Health & Safety Code of the State of California and Aseptic Technology, LLC ("Permitee"). RECITALS A. District is a wastewater treatment agency which awns and operates wastewater treatment facilities which receive, treat and discharge, through an ocean outfall, wastewater received from dischargers within its jurisdictional boundaries. In the course of its wastewater treatment operations, and pursuant to Ordinance No. OCSD- 48 Wastewater Discharge Regulations ("District's Ordinance"), District issues industrial wastewater discharge permits to certain persons/entities which discharge wastewater into the District's sewerage system. B. As part of the District's wastewater treatment operations, District imposes user fees on permittees, requiring such permittees to pay their share of the District's costs of conveying, treating and disposing of wastewater discharged by such permittees. C. Permittee is the holder of an industrial wastewater discharge permit issued by District and is responsible for paying user fees for the cost of conveying, treating and disposing of wastewater discharged from Permittee's facility located at 24855 Corbit Place, Yorba Linda, California. D. District has issued to Permittee Invoice Nos. 52996, 909924, 910080, 530302, 530620, 53274, 53273, 53272, 530942, 53796 and 53875 in the amount of $451,161.54 for user fees and penalties then due and owing to the District. E. Permitee has failed to pay the presently owing sum of$451,161.54 and has requested additional time to pay this outstanding obligation. F. Pursuant to Resolution 11-04, District is authorized to enter into deferred 1 payment agreements for limited sums and of limited duration, pursuant to approval by the District's Board of Directors. G. The District intends to provide additional time for Permitee to pay to District the amounts presently due on Invoice Nos. 52996, 909924, 910080, 530302, 530620, 53274, 53273, 53272, 530942, 53796 and 53875 in accordance with the requirements of District Resolution 11-04. NOW, THEREFORE, in consideration of the facts recited above and the conditions, covenants and promises set forth below, District and Aseptic Technology LLC agree as follows: AGREEMENT 1. Permittee shall make payments (including principal and interest)to the District, pursuant to the following payment schedule: Admin Installment Due Date Principal Interest Charaes Total Date 1 8/15/2017 $74 259.14 $2 255.81 $25.00 $76 539.95 2" 8/15/2017 $74 830.43 $1 884.52 $25.00 $76 539.95 3 9/15/2017 $75 003.59 $1 511.36 $25.00 $76 539.95 4 10115/2017 $75 378.61 $1136.34 $25.00 $76 539.95 5 11/15/2017 $75 755.50 $759.45 $25.00 $76 539.95 6 12/15/2017 $76,134.28 $380.67 $25.00 $76,539.95 Following approval by the Board of Directors, the first and second installment payments will be due on August 15, 2017. Permittee acknowledges Permitee will be required to submit a total payment of$153,079.90 on or before August 15, 2017. 2. Permittee shall pay to District all other invoices issued by the District during the term of this Agreement in accordance with the provisions of District's Ordinance. 3. If any payment described in Paragraph 1 herein is not received by the District on or before the due date specified, or if any payment described in Paragraph 2 2 herein is not received by District in accordance with the provisions of District's Ordinance, the entire balance then owing shall become immediately due and payable and interest at the rate of ten percent (10%) per annum shall accrue on any such unpaid balance from the date of acceleration until the date that the balance due is fully paid to the District. 4. Permitee acknowledges that the failure to pay current invoices, or failure to pay any installment in accordance with the schedule set forth in Paragraph 1 herein, may be grounds for suspension of any industrial wastewater discharge permit issued to Permitee by District, and shall additionally be deemed a breach of this Agreement, thereby giving rise to all legal remedies available to District. Permitee agrees that by executing this Settlement Agreement, Permitee waives the right to an administrative hearing for non-payment of invoices or any other means to challenge the amount owed, and further agrees that failure to pay District in accordance with the terms of this Agreement will result in immediate permit suspension until such time as the all outstanding amounts owed are current. 5. In consideration of the foregoing, District agrees to refrain from instituting collection or permit suspension or revocation proceedings, which remedies are presently available to the District as a result of Permitee's current failure to pay Invoice Nos. 52996, 909924, 910080, 530302, 530620, 53274, 53273, 53272, 530942, 53796 and 53875. This provision to refrain from instituting such proceedings shall be effective with regard only to Invoice Nos. 52996, 909924, 910080, 530302, 530620, 53274, 53273, 53272, 530942, 53796, and 53875 only for so long as Permitee remains in compliance with the terms of this Agreement. 6. Should any litigation be commenced between the District and Permitee regarding enforcement of this Agreement, or the rights and any duties of the parties in relation thereto, the prevailing party in such litigation shall be entitled, in addition to such other relief as may be granted, to a reasonable sum as and for its 3 attorney fees and costs in the litigation which shall be determined by the court in such litigation or in a separate action brought for that purpose. 7. Nothing in this Agreement shall affect Permitee's obligation to pay current and/or future charges for use of District's sewerage system or Permitee's obligation to comply with all other conditions and requirements of its industrial wastewater discharge permit and the District's Ordinance. 8. Nothing herein shall affect the District's right to enforce all requirements and conditions of the District's Ordinance. 9. This Agreement is made only for the benefit of the parties hereto. It is not intended that any right under this Agreement shall accrue to any third person. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first written above. Orange County Sanitation District BY: Wgorylt. Abourn, PLS Board Chair *Clek Aseptic Technology LLC BY: low Co Board Alee46epne �OSek+..rr C4-l� 4 Aseptic Technology November 28, 2017 Angela Brandt OCSD 10844 Ellis Avenue Fountain Valley, CA 92708 RE: Aseptic Technology, LLC Dear Ms. Brandt: I am writing to you on behalf of Aseptic Technology, LLC in reference to the Deferred Payment Agreement entered into on July 26, 2017. As you know,the Agreement required Aseptic to make six payments of$76,539.95 between August 15,2017 and December 15, 2017. To date,the first five of the payments have been made and the sixth and final payment will be paid in a timely manner within the next two weeks. The purpose of this letter is to request another payment plan to allow Aseptic to catch up on its current invoices which I believe total approximately$252,000.00. My client and I are aware that this request is extraordinary in nature,as this will be the third such request. I have been working with Aseptic Technology since mid-2014 and have assisted in resolving several unfortunate financial situations that have plagued the organization. I have known Mr. Cua for over 20 years and in all that time he has never backed away from an obligation. Unfortunately the past 24 months have proven to be more challenging than anyone could imagine. The silver lining in this situation is that Aseptic Technology has plenty of customers and the business model is sound. Revenue has Increased from $12M in 2016 to$14.5M in 2017 and forecast for 2018 is estimated at$17M. Three of our largest existing customers have entered into multi-year contracts extending to 2020. All of the financial difficulties experienced are a result of a few unexpected equipment breakdowns, and some untimely and meritless legal disputes. While it is hard to imagine at the present time,the future of Aseptic Technology looks bright once the last few challenges are resolved. 24855 Corbit Place . Yorba Linda , CA . 92887 P: (714) 694-0168 . F: (714) 694-0179 In addition to the boiler issue and the January 2017 lawsuit resolution which led to the current payment plan being required,Aseptic has been brought Into two additional lawsuits, both of which are scheduled to commence trial in 2018. In previous matters I have been successful in representing the company at minimal expense. However,the two new actions are outside of my area of practice with one being filed in Federal Court and the other being commenced in Colorado. This has caused the company to incur legal fees and expenses it otherwise could have avoided by my representation of the company. The out of pocket legal expenses for 2017 amount to $599,215.67 to date. [See attached spreadsheet] The most troubling of the two currently pending lawsuits involves one of Aseptic's former major customers White Wave Foods. Since approximately 2014,Aseptic had been manufacturing several almond milk based products for WWF and had entered into a multi-year contract to produce their products through 2017. In June 2016 WWF offered Aseptic a contract extension along with promises of additional business beyond Aseptic's current capacity. Relying upon the additional volume of products to be produced for WWF,Aseptic ordered additional equipment(totaling approximately$15M) and began construction of a second manufacturing facility located in Anaheim, California. In October 2016,WWF decided their product was not profitable and abruptly cancelled all of its orders and refused to extend the contract. These actions by WWF not only caused loss of Immediate business revenue, but also caused a significant delay in completion of the Anaheim facility that was estimated to be completed by April 2017. Since May of this year, Aseptic has incurred direct out of pocket expenses of$620,076.68 relating to delay in completing the Anaheim facility, plus the loss of business revenue that was anticipated from the Anaheim production facility. While Aseptic may have been able to absorb one of the significant events and still generate sufficient cash flow to meet Its financial obligations,the combination of the above events has made it Impossible to keep current on all of its payable obligations. Notwithstanding these setbacks,Aseptic is still optimistic it will be able to fulfill its obligations and meet the terms of a payment plan as it has previously done. Aseptic and Mr. Cua have taken significant steps to cut expenses beginning 2018 including divestiture of all interest in the Anaheim facility thereby concentrating all efforts in keeping the Yorba Linda plant profitable. Aseptic has absorbed the loss of WWF business, as well as the aforementioned legal expenses and those associated with the Anaheim facility. In addition, Mr. Cua has personally taken out mortgages on his home to help with cash flow evidencing his personal commitment to the Company's recovery efforts. Mr. Cua and I are willing to meet with representatives of the District and provide any additional documentation that may be requested to consider our request. The past year has been a struggle and it is not our desire to utilize the District as our personal bank. The sole intention of our request for another payment plan is to keep the company operational while we work through the remaining obstacles. While we were able to meet the terms of the payment plan for past due amounts, we acknowledge we fell short with respect to current charges. We need our discharge 24855 Corbit Place . Yorba Linda . CA . 92887 P: (714) 694-0168 . F: (714) 694-0179 permit to remain in effect next year and have done everything we could think of to keep the business operating. It is our hope that the District can make an extraordinary exception to its policy and grant us this additional request. We area small company, but to the 60 employees that are employed by Aseptic and their families, a shutdown of the business would be a life-changing event. I sincerely hope those in the decision making role can see their way clear to assisting our company through this predicament. The management of Aseptic is committed to seeing the company continue and succeed and will cooperate in any way possible. Sincere , o J. Dan o General Counsel 24855 Corbit Place Yorba Linda . CA . 92887 P: (714) 694-0168 . F: (714) 694-0179 2:37 PN Aseptic Technology LLC 11WMT Account QulckReport Acu1rN Baste January 1 through November 27.2017 TyPe Dale Num Name YkN1p At11eHg Legal lgrn..a Check O110W2017 USA Robert J Danko 3.076.92 Check 0111=017 11017D3 Craig's Courthouse Cale Wanu Case 20.63 Check 01/11/2017 11117M OC Parking Civic Center Wanu 20.00 Check 011192017 11917W Craig's Courthouse Cale 32.36 Check 01=017 2803 Robert J Danko 3.076.92 Check 01202017 12017M OC Parking Civic Center 20.00 Check 0124/2017 12417N Craig's Courthouse Cale 29.11 Check 01252017 1251702 OC Parking Civic Center 16.50 Check 012b/2017 12517N Central Justice Center 394.63 Check 01252017 12517M Craig's Courthouse Cale 10.59 Check 0121I 1251707 Craig's Courthouse Cab 11.28 Check 01QBQ017 12617N OC Parking CNic Center 20.00 Check 01282017 12617M Central Justice Center 269.63 Check 01262017 1261709 Craig's CouMOuw Cale 25.67 Check 01272017 12717N OC Parking CNic Center 20.00 Check 0151a017 1311701 Central Justice Canter 222.51) Check 01I312017 13117D2 Craig's CouMwse Cale 22.14 Check 02/012017 M117N OC Parking Civic Center 20.00 Check O2 017 W21702 Central Justice Caner 251189 Check 02N32017 2845 Robsrt J Danko 3,076.92 Check 02Po 017 2846 Robert J Danko 189.42 Check 02J0312017 W317W OC Parking CNic Center 12W Check 021072017 2859 Robert J Danko 1,15 00 Check 02W74!017 Xlr1701 Central Justice Center 2W.89 Check O2J0812017 208/701 OC Parking Civic Center 20.00 Check 02/OBQ017 W817M Central Justice Center 501.78 Check 02N92017 M1703 OC Parking Civic Center 10.50 Check 02/OB2017 2091704 Central Justice Center 626.78 Check DVIOQO17 M91708 OC Parking CNic Center im Check OV1712017 2892 Robert J Danko 3,076.92 Check O2 QO17 2897 Robert J Danko 1,154.00 Check 03/0212017 2816 %%can J Danko 3,076.92 Check 03/02Q017 2917 Robert J Danko 1,154.00 Check OW1612017 2974 Robert J Danko 4,230.77 Check 03282017 3021 Lew Cllces of Kateb A.Honey,P.C. Legal Expense 5,0DO.00 Check 03/W12017 3D28 RObart J Danko 4,230.77 Check 03/3012017 W29 Robert J Danko 239.65 Check mmt2o/7 W72 Robert J Danko 4,230.77 Check 042812017 3111 Patricia S BNlac Law Fkm,LLC 5,000.00 Check 04282017 3115 Robert J Danko 4,230.77 Gerwral Journal 05/012017 804 Wanu Water,Inc. Wanu Legal Caw 400,000.00 Check 05 62017 3159 Patricia S Be lac Law Flom,LLC 5,000.00 Check OS/122017 3177 Robert J Danko 4,230.77 Check 05282017 3226 Robert J Danko 2,3D7.69 Check 06/09/2017 3284 Robert J Danko 2,3D7.69 Check MIW017 mm Robert R.ReaMt S Co. 5.284.50 Cheek OB/162017 3288 Law Offices of Kelab A.Honey,P.C. 7.500.00 Check 08120/2017 M98 Patricia S Bali Law Finn,LLC 5,OW.W Check 0823Q017 3314 Robert J Danko 2,307.69 Check 07M7Q017 11W0 Robert J Danko 2,307.69 Check 07/072017 WIN Patriote S BNlac Law Finn,LLC 5,000.00 Check 07/12Q017 7121701 OC Parking CNic Center 4118 8.01) Check 07212017 3392 Robert J Danko 2.307.69 Check 07Q12017 3387 Law Offices of"lab A.Honey,P.C. 7,SW.W Check 08/01Q017 M20 Patricia S BNlac Law Firm,LLC 5,OW.W Check OSAMP2017 3428 Robert J Danko 2,307.69 Check OB/16QO17 M72 JAMS,Inc 2,10000 Check OWIW017 M81 Roben J Danko 2,307.69 Check 09/012017 3618 Robert J Danko 2,307.69 Check M112017 3522 Patricia S Bellac Law Firm,LLC 8,500.00 Check W15/2017 3564 Robert J Danko 2,307.69 Check OW15QO17 3W6 JAMS,Inc Invatce DOD4118636-200 300.00 Check N/15Q017 3567 Patrick,S Seltec Lew Firm,LLC 14.765.00 Check O9/18Q017 9181701 Lwslo 8 Associates LLD-COLTAF W W F 10.000.00 Check 09Q1/2017 3683 Paul Hachigian 1.401.00 Page t 2:37 M Aseptic Technology LLC 1127n7 Account QulckReport Aee11W 9rh January 1 through November 27,2017 TT9a Deb Num Name Nano Amount Check 09WI2047 3593 Ruben J Danko 2,307.59 Check 1&1312017 3555 Robed J Danko 2,207.59 Check 10/1512017 3551 Lew Omcee of Raab A.Honey,PC 13.276.11 Check 102712017 3710 Robes J Danko 2.307.69 Check 11/102017 3751 Robed J Danko 2,307.59 &II 11/1&A 17 1224217 Robed R.ReEwih A Co. 13,000.00 Check 11222017 11221702 Laszlo A Aeeodetes LLC-COLTAF W WF 10,000.00 Check 11242017 3792 Robes J Danko 2,307.69 Total Legal Expenses 599.215.67 TOTAL NUILU pgp2 2:01 PM Aseptic Technology LLC 11mR0v Account QuickReport M.1 eleb All Transactions TYq D. 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Chid IN16201] 3888 Cralenin 811MINDON, Papnenl 61,415M Chid VW% 011 37M 0.L.,Fu6YC UMNM IM10M18Ws tA1553 Chid 1IM72017 Pb Oe ..Lenten Fnm®IServba,lnc. 25JJM Chid 110)R01) 11O Dwred M AnmlEmaNi Epupmen Pm CN 8188786 74 Chid 11074017 11011)Ot OxedG C T1 PexanBeM Pm CNC Pmw&Me 1,58T55 Chid 11NBRUIT 137UIM cu.PetlNC LammunkNlone T1 2A76AB CMch 1111QR01] 11201]W Luslem LeekeM WY AILmh Rehey i]6A8 TOM Laen gNFNWe-N 6204I855 TOTN. 620.071,60 Ppe 101 •T WOODRUFF,.spRADLIN&SMART 555 ANTON BOULEVARD, BUITC1200 C.sIA MNsA, CA 92626-7670 (714)556-0000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: December 13,2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on December 20, 2017 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a parry. The title of the case is Kiean Waters, Inc. v. Orange County Sanitation District, United States District Court, Central District of California, Southern Division, Case No. 8:15-cv-00627. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully submitted, By Bradle . Hogin, Qeneral Counsel 1284868.1 •T WOODRUFF,.spRADLIN&SMART 555 ANTON BOULEVARD, BUTTE 1200 COSTA MAsA, CA 92626-7670 (714)556-0000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: December 13,2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on December 20, 2017 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a parry. The title of the case is Klean Waters, Inc. v. Orange County Sanitation District, United States District Court, Central District of California, Southern Division, Case No. 8:15-cv-01498. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully submitted, By Bradle . Hogin, Qeneral Counsel 1284866.1 •T WoDDRDFF,.spRADLIN&SMART 555 ANTON BOULEVARD, BUTTE 1200 C09TA MAsA, CA 92626-7670 (714)556-0000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: December 13,2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on December 20,2017 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a parry. The title of the case is Wesley Bauer v. Orange County Sanitation District, Orange County Superior Court, Central Justice Center, Court Case No. 30-2017-00956252. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully submitted, By &-�' e& Bradley R.Hogin, general Counsel 1284871.1 •T WooDRUFF,.SFRADLIN&SMART 555 ANTON BOULEVARD, BUTTE 1200 C09TA MAsA, CA 92626-7670 (714)556-0000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: December 13,2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on December 20,2017 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a parry. The title of the case is APP Winddown, LLC et al. v. Orange County Sanitation District, United States Bankruptcy Court District of Delaware, Case No. 16-12551, Adversary No. 17- 51609. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully subbmmmiitted, By , Bradle R.Hogin, eneral Counsel 1284863.1 WOODRUFF SPRADLW&SMART ♦ A P . . . . , . . 555 ANTON BOULEVARD, SUITE 1200 COSTA MESA, CA 92626-7670 (714)556-7000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: December 13,2017 RE: Closed Session Items The Board of Directors will hold a closed session on December 20, 2017 for the purpose of conferring with its negotiators regarding the purchase of real property. The negotiating parties and properties are as follows: K&A Investments LP,APN Nos. 156-154-08 & 156-163-17;Valley Business Park,APN Nos. 156-165-05, 156-165-06, 156-163-07; DK-USA LLC,APN No.156-165- 04; Fountain Valley Industrial Parcel 13, APN No.156-165-08; Sukut Real Properties LLC, APN Nos. 156-163-09, 156-163-10, 156-163-11; The Ins Trust Shabtai,Nevon, APN No. 156-163-16; The Ins Trust, APN No. 156-154-07; Fountain Valley Star LLC,APN No. 156-154-06; TN Sheet Metal Inc., APN No. 156-163-12; 18401 Bandilier LLC, APN No. 156-163-13; Phone Lilly Lin- Lin TR, APN No. 156-154-05; JDK Partners, APN No. 156-163-14; Chandler Real Properties, APN No. 156-163-15; Ellis Avenue LLC, APN No. 156-154-04; and SFII Fountain Valley LLC, APN No. 156-151-03. The District's negotiators are Jim Heiberg, Bob Ghirelli, Lorenzo Tyner, Rob Thompson, Kathy Millea and Jeff Mohr, Tom Grant, Kevin Turner and John Gallivan, Cushman and Wakefield. Said closed session will be held pursuant to authority of California Government Code Section 54956.8. Respectfully submitted, By 4J BradleY R. Hogin, Vieneral Counsel 1284875.1 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 CARS 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 US Environmental Protection Agency FOG Fats, Oils, and Grease gpd gallons per day GWRS Groundwater Replenishment System ICS Incident Command System IERP Integrated Emergency Response 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 & Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District OOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration PCSA Professional Consultant/Construction Services Agreement PDSA Professional Design Services Agreement POTW Publicly Owned Treatment Works ppm parts per million PSA Professional Services Agreement RFP Request For Proposal RWQCB Regional Water Quality Control Board Glossary of Terms and Abbreviations SARFPA Santa Ana River Flood Protection Agency SARI Santa Ana River Interceptor SARWQCB Santa Ana Regional Water Quality Control Board SAW PA Santa Ana Watershed Project Authority SCADA Supervisory Control And Data Acquisition SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SRF Clean Water State Revolving Fund SSMP Sewer System 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 W ERF Water Environment & Reuse Foundation WIFIA Water Infrastructure Finance and Innovation Act WIIN Water Infrastructure Improvements for the Nation Act W RDA Water Resources Development 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. Biogas—A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used as a fuel. Biosolids—Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farmland or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Glossary of Terms and Abbreviations Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere, used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. Collections system— In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. Certificate of Participation (COP)—A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (DIT) — The dilution at which the majority of people detect the odor becomes the D/T for that air sample. Greenhouse Gases (GHG) — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect'). Groundwater Replenishment System (GWRS) — 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 per day of drinking quality water to replenish the local groundwater supply. Levels Of Service (LOS) — Goals to support environmental and public expectations for performance. N-Nitrosodimethylamine (NDMA) — A N-nitrosamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP)—An alliance of the National Association of Clean Water Agencies and Water Environment Federation, with advisory support from the US Environmental Protection Agency. NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume — A visible or measurable concentration of discharge from a stationary source or fixed facility. Glossary of Terms and Abbreviations Publicly Owned Treatment Works (POTW) —A municipal wastewater treatment plant. Santa Ana River Interceptor(SARI) Line —A regional brine line designed to convey 30 million gallons per day of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer—Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban runoff. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge—Untreated solid material created by the treatment of wastewater. Total Suspended Solids (TSS)—The amount of solids floating and in suspension in wastewater. Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Urban runoff—Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed—A land area from which water drains to a particular water body. The Orange County Sanitation District's service area is in the Santa Ana River Watershed.