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HomeMy WebLinkAboutPPP 02-17-2021 Strategic Plan Workshop2/17/2021 1 2021 Strategic Plan Workshop February 17, 2021 Strategic Planning Presenter: John Withers Board Vice‐Chairman Page 2 1 2 2/17/2021 2 The Process  Page 3 Schedule  Page 4 3 4 2/17/2021 3 Today’s Policy Discussions: 1. Budget Control & Fiscal Discipline 2. Cyber Security 3. Property Management 4. Resilient Staffing 5. Safety and Physical Security Strategic Planning Development Page 5 Budget Control & Fiscal Discipline Presented by: Lorenzo Tyner Assistant General  Manager  5 6 2/17/2021 4 The Sanitation District will prudently manage the public funds that it collects. It will take a long-term planning approach to its facilities and rate setting that provides a stable rate program, prudent reserves and pay as you go philosophy for operating and replacement of capital expenses. Policy  Statement Page 7 1. Stable 2. Conservative 3. Responsible 4. Generational Equity Governing Principles Page 8 7 8 2/17/2021 5 Page 9 Ten Year Cash Flow Projections 1. Consistent Revenue Broad-based – Single Family Residential = 75% of revenue. No one business or industry can impact. 2.Low Rates Consistently in the lower third of our comparison agencies. They meet various metrics indicating our rates are low. 3.Moderate (and low) Increases Increase between 1%-2% over the next 10 years. Avoids rate spikes or additional debt. Stability = Rates Page 10 1. Safety The safety and preservation of principal is the foremost objective of the investment program. 2. Liquidity The program will ensure that sufficient funds are always available to meet our capital and operational needs. 3. Return on Investment The investment portfolio will achieve a rate of return commensurate with legal, safety, and liquidity considerations. Conservative = Portfolio Management 9 10 2/17/2021 6 Page 11 1. Capital Focus Debt initiatives and proceeds will be used only to support our Capital Improvement Program (CIP). 2. Established Time Horizon All debt in the portfolio will be issued with the consideration of a set payoff date. 3. Debt Restructuring Debt restructuring will be used to reduce interest rates and/or term with the specific goal principal reduction. Responsible = Debt Management Financing and Pay As You Go – Finding the Balance Major Elements a) Rates b) Portfolio Management c) Debt Management Generational Equity Page 12 11 12 2/17/2021 7 •Initiative:Maintain a stable and fiscally responsible financial plan that is based on long-term planning which supports stable rate setting and a “pay as you go” philosophy for operating and replacement capital expenses. •Initiative:Maintain the current investment policy that prioritizes safety, liquidity and return on investment, in that order. •Initiative:Maintain a long-term debt program that will pay off all existing debt issuances by 2044 and avoid new debt to support existing facilities. •Initiative:Maintain all Post Employment Benefit funding levels between 95% and 105% while minimizing and/or eliminating and Unfunded Actuarially Accrued Liabilities. •Cost Containment Initiatives:Energy Independence, Asset Management, Chemical Sustainability Initiatives Page 13 Page 14 Include status update on GM Work Plan items that tie to this policy statement: UPDATE: Complete.Options were presented to the Administration Committee in September. The Committee directed staff to create and issue a Request for Proposal (RFP) for Section 115 Trust Services. The RFP was issued on January 11, 2021. Steps since the adoption of the plan. Progress 13 14 2/17/2021 8 Questions ? Page 15 Cyber Security Presented by: Lorenzo Tyner Assistant General  Manager  15 16 2/17/2021 9 OC San must maintain adequate cyber security (information technology security) techniques that protect computer assets, networks, programs, data, and industrial control equipment from unauthorized access or attacks that are aimed for exploitation. Policy  Statement Page 17 Confidential Information • Staff will provide a general update to the Audit Ad Hoc Committee • A more detailed briefing will be provided to the Board at an upcoming closed session Board Updates Page 18 17 18 2/17/2021 10 Real Estate and Property  Management Presented by: Lorenzo Tyner Assistant General  Manager  OC San is not in the business of managing property as a revenue enhancement or core activity. However, it does own and operate millions in physical property and property rights. OC San will effectively manage these assets and proactively research and maintain all encroachments, encumbrances and easements. Policy  Statement Page 20 19 20 2/17/2021 11 OC San has more than $11 billion in assets • Most of these assets are directly related to the plant or physical infrastructure. • However, OC San owns considerable real estate, property rights, and easements. • OC San owns and maintains real estate for the specific purpose of supporting its operations. OC San does not purchase for speculation or investment purposes. OC San Assets Page 21 In the last three years, OC San has been very active • In February 2017, OC San purchased two the properties each approximately 25,000 square feet. This will be the location of OC San’s future headquarters building. • In March 2018, OC San purchased a commercial office building that currently houses OC San’s Resource Protection Division with 37 staff, as well as nine commercial tenants. • In August 2018, OC San purchased 3 commercial/industrial properties with a combined total of 66,000 square feet. This will be part of the new Headquarters parking compound. When purchased, the properties were leased to a total of 8 tenants. • In April 2019, OC San sold its Garden Grove commercial/industrial building. This building has been leased to the same tenant since 2011 and had generated more than $1.6 in revenue prior to its sale. Recent Property Activities Page 22 21 22 2/17/2021 12 Continued… • Edinger Pump Station (Huntington Beach) • Bay Bridge Pump Station (Newport Beach) • Slater Pump Station (Huntington Beach) • Western Regional Sewers Project (Denni Street, Cypress) Recent Property Activities Page 23 Upcoming Activities • Yorba Linda Pump Station (Fullerton) • Miller-Holder Trunk Sewer (Huntington Beach) • Mass Annexations in our Service Area Recent Property Activities Page 24 23 24 2/17/2021 13 OC San is often involved with other agencies • OC San has leased two of its vacant buildings to the Fountain Valley Police and Fire Departments for training exercises. • The Fire Department runs nighttime training exercises and has numerous joint sessions scheduled with the City of Huntington Beach Fire Department between October and May. • Before the Doig Drive building was leased, the City of Garden Grove’s K-9 unit utilized that commercial/warehouse for drug sniffing exercises with their elite team of canine officers. Other Property Activities Page 25 OC San has just begun to assess all its property rights •OC San has a vast array of property rights including ownership in fee, easements, permits, perpetual encroachment permits, licenses and leases, as well as shared utility corridor rights, and public rights-of-way. • OC San is working with an outside consultant to map, label, and quantify all property rights and encumbrances inside and outside of the plants. • We hope to complete the project by the end of June 2021. Property Rights and Easements Page 26 25 26 2/17/2021 14 • OC San maintains minimal staff that currently manages its Real Estate or Property Management activities. • Staff is familiar with general issues in this area • OC San utilizes General Counsel as needed • To date, OC San has made a conscious decision to use in-house generalists and general counsel for its day-to- day needs instead of building property management infrastructure and adding staff. • OC San has relied on specialized contracted resources when specialized support is required. OC San Resources Page 27 Initiative: Complete work with an outside consultant to map, label, and quantify all property rights and encumbrances inside and outside of the plants. Initiative: As part of the 2020-22 budget process, add in-house professional real estate and property management staff to ensure comprehensive management of OC San’s significant real estate and property rights. Initiatives to Support Policy Page 28 27 28 2/17/2021 15 Questions ? Page 30 Resilient Staffing Presented by: Celia Chandler Director of Human Resources 29 30 2/17/2021 16 Policy  Statement The Orange County Sanitation District will attract and retain high-quality talent to support its mission and continue to be an industry leader. It will safeguard leadership continuity and support effective performance of the organization by proactively monitoring the changing work environment and requirements to ensure development programs are relevant and build a skilled bench of readily available successors for key leadership and mission-critical positions. Page 32 Background Page 32 31 32 2/17/2021 17 Retirement Eligibility 100% 43%46% 25% 40% 28% 100% 71% 60% 37% 53% 42% 0% 20% 40% 60% 80% 100% EXECUTIVE MANAGER SUPERVISOR PROFESSIONAL PARA‐ PROFESSIONAL TRADES 2021 2024 Page 33 Workforce Vulnerability Assessments Management annually evaluates key and vulnerable positions, based on: • Criticality • Retention • Difficulty to Fill To develop current and future staffing plans. Talent Readiness Assessments Feeder positions are identified, and talent pools are developed to build a talent pipeline for key and vulnerable positions. Workforce Planning Page 34 33 34 2/17/2021 18 Overview of Existing Programs Page 36 Vocational Internship One Year Internship Technical Trades within Operations & Maintenance • Wastewater Operations • Electrical • Instrumentation • Mechanical • Rebuild • Collections Page 37 35 36 2/17/2021 19 Professional Student Internships Page 38 Employee Development Page 39 37 38 2/17/2021 20 Recruitment and Selection Page 40 Partnerships Page 41 39 40 2/17/2021 21 Leadership Development Technology Leadership OC San  Business Systems Communication Partnerships  for the Future Page 41 Initiatives Maintain and enhance current programs to provide the direction to identify, develop, attract and retain the next generation of prepared, capable and engaged leaders. Continue cyclical Classification & Compensation studies to ensure job classifications accurately depict the work and that compensation levels are set accordingly. Page 43 41 42 2/17/2021 22 Questions ? Page 45 Safety and Physical Security Presented by: Celia Chandler Director of Human Resources 43 44 2/17/2021 23 The Orange County Sanitation District will ensure the safety and security of employees, contractors, and visitors through standard practices, policies, and procedures that support a safe and secure environment, provide an appropriate level of security and safeguard OC San’s property and physical assets. Policy Statement Page 47 • Cal OSHA requires a workplace free of recognized hazards • OC San has committed to continuously identify and mitigate all workplace hazards • OC San has robust safety and health programs that are compliant with Cal OSHA safety orders and best industry practices • Additionally, OC San provides physical security of plant infrastructure, as well as emergency preparedness, response, and recovery to ensure continuity of service to the public • Safety of the public and employees is OC San’s top priority, engrained into our culture across all levels Background Page 48 45 46 2/17/2021 24 Overview of Existing Programs SecuritySafety Emergency Management Page 49 • Oversees both operational and construction safety • Develops and implements policies and procedures to ensure a safe work environment • Provides job specific safety training • Conducts audits, inspections, incident investigations, and high hazard work coordination • Regulatory Liaison (i.e., Cal OSHA) • Pursuing safety excellence through coordination and application to Cal OSHA’s Voluntary Protection Program (Cal VPP) Safety Page 50 47 48 2/17/2021 25 • Developed, implemented, and maintains the Integrated Emergency Response Plan (IERP) and Continuity of Operations Plan (COOP) • Collaborations with local agencies and municipalities, such as the Water Emergency Response Organization of Orange County (WEROC) for mutual aid and resources • Conducts emergency response exercises to ensure staff are prepared and ready for responding to workplace emergencies Emergency  Management Page 49 • Manages third-party security vendor who monitors the physical campus, which includes patrols and video surveillance • Assists Engineering with physical security on new projects • Oversees Security Advisory Committee (Physical and Cyber Threats) Security Page 50 49 50 2/17/2021 26 Safety 2019 Initiatives Update Complete outstanding safety projects, improvements, and corrective actions to apply and obtain Cal/OSHA Voluntary Protection Program (VPP) status • J-126 Safety Improvement Project, Completed January 2021 • Annual Third-Party VPP Safety Audit, Completed August 2020, All Corrective Actions Completed • VPP Application Submitted June 30, 2020, Application Under Review Actions Page 53 Support facility and countywide emergency preparedness, response, and recovery efforts by partnering with entities, such as, the Water Emergency Response Organization of Orange County (WEROC), Orange County Sheriff Department, and local fire departments. 2019 Initiatives Update Emergency Management • Partnered with WEROC to develop and submit the Orange County Water and Wastewater Mitigation Plan (Plan) to the State, Completed 2019 • Actively updating OC San’s emergency operating plans (EOPs), which are specific response measures for potential emergencies as identified in the IERP. • Preparing full scale emergency exercise for incident along OC San’s Interplant Digester Gas Pipeline, scheduled for April 2021. Actions Page 54 51 52 2/17/2021 27 Security 2019 Initiatives Update Continually identify and assess vulnerabilities and implement solutions through the Security Committee and third-party assessments. Prevent/mitigate security breaches using physical security systems such as video monitoring, access control and armed security patrols. • New security vendor providing enhanced services and resources, started January 1, 2020. • Replacement of security cameras identified as out of service or with poor visibility. • Development and implementation of Physical Security Plan: a risk assessment tool for new projects or major renovations to identify security hazards and implement appropriate control measures. Actions Page 55 Questions ? Page 56 53 54 2/17/2021 28 Page 55 Virtual Tour   February 18 from 3 to 4 p.m. Page 58 Policy Discussions: 1. Asset Management 2. Energy Independence 3. Climate and Catastrophic Event Resiliency 4. Water Reuse 5. Chemical Sustainability Workshop #2 ‐March 17 @ 2 p.m.  55 56 2/17/2021 29 Page 57 Policy Discussions: 1. Emerging Pollutants (Constituents of Emerging Concern) 2. Biosolids Management 3. Environmental Water Quality, Stormwater Management and Urban Runoff 4. Food Waste Treatment - energy, capital, operations, regulations, policy Workshop #3 – April 21 @ 2 p.m. Rob Thompson Assistant General Manager 714.593.7310 rthompson@ocsd.com Jennifer Cabral Administration Manager 714.593.7581 jcabral@ocsd.com Questions Page 58 57 58