HomeMy WebLinkAboutItem 15 PPP 8-28-19 Board - Strategic PlanStrategic Plan Development
Tonight's Policy Discussions
•Budget Control & Fiscal Discipline
•Energy Independence
•Chemical Sustainability
•Asset Management
•Climate and Catastrophic Event Resiliency
Budget Control & Fiscal Discipline
Presented by Lorenzo Tyner
Assistant General Manager and
Director of Administrative Services
Governing Principles
1.Stable
2.Conservative
3.Responsible
4.Generational Equity
Stability = Rates
Ten Year Cash Flow Projection
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
2.Moderate (and low) Increases
Increase between 1%-2% over the next 10 years
Avoids rate spikes or additional debt
Conservative = Portfolio Management
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.
Responsible = Debt Management
1.Capital Focus
Debt initiatives and proceeds will be used only to support our
Capital Improvement Program (CIP).
2.Established Time Horizons
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.
Generational Equity
Financing and Pay As You Go –Finding the Balance
Major Elements
a)Rates
b)Portfolio Management
c)Debt Management
Proposed Policy Statement
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 setting program, prudent reserves and pay as you go philosophy for
operating and replacement of capital expenses.
Initiatives
•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 InitiativesEnergy Independence, Asset Management, Chemical Sustainability
Questions?
OCSD Energy Policy Update
Presented by Rob ThompsonAssistant General Manager and Director of Operations and Maintenance
Why is Energy a Core Function?
Air Water
Land
Energy
Energy is integral to the treatment process that converts
impurities to benign components that must go somewhere. For
example, solids from water are converted to gas and biosolids.
Energy Demand
•OCSD is very efficient in its utilization
•Premium efficiency motors
•Variable speed pumping systems
•Turbo air blowers
•Fine bubble diffusers
•Lighting Systems
•Energy Audits
Energy Recovery—
Bio Gas Creation
Secondary Treatment
Primary Treatment Digester
Bio Gas
65% Methane (CH4)
34% Carbon Dioxide (CO2)
-640 BTU/CuFt
96°F
57% Solids
Destruction
Recirculation/Mixing Pump
Hot Water
Hot Water Return
Biosolids
2.8% of Input
Energy
9% of Input
Energy
36% of Input
Energy
In case of
emergency or
Central
Generation
shutdown
Captures:
•Siloxane
•Hydrogen
Sulfide
Energy Recovery—
Bio Gas to Electricity and
Heat
Bio Gas Cooler Gas Compressor
Activated Carbon Central Generation
Hot water/Steam to Process
Electricity
18 MW Capacity
Chilled Water to HVAC
FlareCondensed
Water
OCSD Energy Picture
(Average month: July 2018 –June 2019)
•What we make
•Bio Gas 24,618,600 kWhr
Electrical Gen. 8,175,225 kWhr
Thermal 2,952,750 kWhr
•What we import
•Natural Gas 2,328,900 kWhr
•*SCE Electricity 3,962,500 kWhr
•Diesel Emergency Power
•Electricity 12,137,725 kWhr
•Thermal 3,245,200 kWhr
•Process 2,700,100 kWhr
•HVAC 545,000 kWhr
Supply Demand
* OCSD needs to produce 50% more bio gas to be energy independent.
Proposed Policy Statement
The Sanitation District will strive to be a net energy exporter. Electrical, thermal, and methane gas generation will be maximized. Energy utilization will be minimized using sound engineering and
financial principals.
Initiatives
•Initiative:Maximize the anaerobic digestion conversion of organics to methane through receipt of food waste and operational techniques.
•Initiative:Investigate and install energy storage and photovoltaic systems where practical to achieve energy independence/resilience.
•Initiative:Continue to support the conversion of biomethane into electricity and heat for process use. Improve systems as necessary to comply with air regulations.
Questions?
Chemical Sustainability
Presented by Rob ThompsonAssistant General Manager and Director of Operations and Maintenance
Need for Chemicals at the Sanitation District
Chemicals are used to speed up or inhibit natural processes to make facilities smaller or less energy intensive.
•Prevent formation of odorants
•Coagulation of organic compounds
•Disinfection or biocide
The Sanitation District spends more than $13 million on chemicals.
Regional Odor Control
Collection Liquid -Phase
•Ferrous chloride –oxidize and/or precipitate dissolved sulfide.
•Calcium nitrate –prevent the formation of sulfides
•Magnesium hydroxide –adjustment of pH, suppress odors
•Sodium hydroxide –deactivating/inhibiting the slime layer.
Coagulant Chemicals
Coagulant chemicals are designed to bind organic compounds together to form clumps or flocculant.
•In water treatment: Ferric Chloride/Anionic Polymer
•In solids treatment: Cationic Polymer
These chemicals are specialty chemicals for the water/wastewater industry and are most subject to pricing and availability volatility.
Wastewater to Primary Treatment
Ferric Chloride
Ferric Chloride and Polymer
Ferric Chloride
•Coagulant of choice for wastewater treatment applications due to its
high efficiency and effectiveness in clarifying and reducing suspended
solids
•Reacts with sulfates to prevent the formation hydrogen sulfide odors
•78,000 gallons of storage at each plant.
•Plant No. 1 uses 5,280 gallons/day or about 14 days of storage
•Plant No. 2 uses 2,100 gallons/day or about 37 days of storage
Alternatives –None as effective, some create additional sludge
•Aluminum Sulfate, Aluminum Chloride and Sodium Aluminate
•Ferrous Chloride, Ferric/Ferrous Sulfate
Ferric Chloride Commercial Considerations
•Ferric is a specialty chemical with a limited number of suppliers
•In the past there have been industry consolidations (single supplier)
and price spikes.
•Vendors require a significant supply chain/infrastructure to
make/purchase and transport the product. This is also why the
Sanitation District doesn’t make the product in house.
•The Sanitation District has adopted a policy to support multiple
vendors to maintain competition in the market. This is the basis for
recommending two contracts to supply the same chemical.
Anionic Polymer
•Synthetic coagulant, in conjunction with Ferric Chloride, helps
bridge, bind, and strengthen the floc, add weight, and increase
settling rate, forming macroflocs. Once floc has reached it
optimum size and strength, solids drop out readily.
•Many proprietary choices in the market. Decisions are based on
best cost performance in trials and $/pound bidding.
Alternatives –Only effective at very high dosages, more expensive
•Natural polysaccharides such as starch, guar gum, alginate,
glycogen or dextran
Cationic Polymer
•Cationic Polymers are necessary for proper operations of
Centrifuges, Belt Presses and Dissolved Air Floatation Thickeners.
•Many proprietary choices in the market. Decisions are based on
best cost performance in trials and $/pound bidding.
Alternatives –Only effective at very high dosages, more expensive
•Natural cationic flocculants such as starch, chitosan or tannin
Sodium hypochlorite
(Bleach)
•Bleach is a commodity chemical used in many industries.
•Bleach is used for odor control and water disinfection.
•60,000 gallons of storage at Plant No.1
•Plant No. 1 uses 1,500 gallons/day or about 40 days of storage
•121,000 gallons of storage at Plant No. 2
•Plant No. 2 uses 1,400 gallons/day or about 86 days of storage
•Alternatives:
•Hydrogen Peroxide can be used for odor control but is less effective and more costly.
•Water disinfection: Ozone and UV light can be utilized for disinfection process; however require expensive capital expenditures, more energy and are subject to re-growth of bacteria.
High Purity Liquid Oxygen (LOX)
•LOX is a commodity chemical used in many industries.
•LOX helps the biological secondary treatment process by removing organic matter and suspended solids to increase solids settling in the secondary clarifiers.
•Alternatives: No alternatives since P2 secondary system was designed for using pure oxygen only.
•400 tons of storage
•13 tons/day average use or 30 days storage
Proposed Policy Statement
The Sanitation District has a need to use chemicals in its treatment process to improve plant performance, reduce odor potential, and meet its regulatory requirements. These commodity chemicals are provided by outside vendors through the purchasing process. Some of these chemicals are subject to price swings due to market condition changes such as energy cost impacts, raw material cost changes, commercial competition changes, and transportation cost changes. The Sanitation District will identify chemicals key to its operation, investigate the market risks for those chemicals and devise strategies to mitigate identified risks to availability and pricing.
Initiatives
•Initiative: Reduce reliance on any particular chemical or vendor and establish flexibility to utilize other chemicals/processes to accomplish the same operational objectives.
•Initiative:Update the Sanitation District’s Chemical Sustainability Study and incorporate the results in future procurement recommendations.
Questions?
Asset Management
Presented by Kathy Millea
Director of Engineering
What is Asset Management?
What is Asset Management?
What is Asset Management?
Asset Life Cycle
Plan and Budget
Design and
Construct
Operate and
Maintain
Asset
Monitoring
Rehabilitate or Replace
OCSD Assets Valued at $10.8 Billion
$30,000 $10,800,000,000
OCSD’s Vision for Asset Management
OCSD will know what we own, what condition our
assets are in, and will have a plan to operate and
maintain those assets to deliver the required level of
service at the lowest lifecycle cost with an acceptable
level of risk.
Efforts from all departments and divisions will be well
planned, clearly communicated and closely
coordinated.
Condition Assessment Identifies Maintenance, Rehabilitation and Replacement Needs
A-Side B-Side C-Side
PC
-D
PC
-E
PC
-F
PC
-G
PC
-H
PC
-I
PC
-J
PC
-K
PC
-L
PC
-M
PC
-N
PC
-O
PC
-P
PC
-Q
Structural –Clarifier Wall 4 3 4 3 4 3 3 3 3 3 2 2 2 2
Structural –Dome 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Structural –Building 2 2 2 2 2 2 2
Mechanical -Internal
Mechanicals 4 5 3 3 5 3 3 3 3 4 5 3 4 4
Mechanical -Sludge/scum
pumping system 3 3 3 3 3 3 3
HVAC & Ventilation 2 2 2 2 2 2 2
Influent piping 2 2 1 3 3 3 2 3 3 2 2 3 2 2
Effluent piping 3 3 3 2 2 3 3 3 3 3 3 3 3 3
Electrical MCC & VFD 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Electrical Distribution –
Switchgear 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Instrumentation –PLC,
Flow Meters 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Condition of Assets
Sewer System is Evaluated by CCTV & Inspection
Adaptive Operations
Be clear on how to operate for full benefit and to extend equipment life
•Using systems incorrectly can reduce equipment life and limit availability
•Train operators with Standard Operating Procedures and Emergency Operating Procedures
•Process teams share information across
Operations, Maintenance and Engineering
Proactive Maintenance
Maintain assets in a ready state
•Clearinghouse Committee coordinates decision making
•Individual repair/refurbish/replace decisions are
made understanding the greater unit process life-cycle.
•Keep the assets working and available
Annual Asset Management Plan
2017
Asset
Management
Plan
2019
Asset
Management
Plan
2020
Asset
Management
Plan
2021
Asset
Management
Plan
2022
2019 2020 2021 2022
OCSD is a Leader in Asset Management
•Known replacement cost of assets ($10.8 B)
•20-year CIP plan for all $10.8 B assets
•Rate structure that supports the 20-year CIP plan
•An aligned Operations, Maintenance and Engineering agency
•A designated Asset Management Team
•Comprehensive condition assessment
•Proactive maintenance of our assets
•Turn our strategic asset management plan into a work process (Boots on the ground)
OCSD is a Leader in Asset Management
•Known replacement cost of assets ($10.8 B)
•20-year CIP plan for all $10.8 B assets
•Rate structure that supports the 20-year CIP plan
•An aligned Operations, Maintenance and Engineering agency
•A designated Asset Management Team
•Comprehensive condition assessment
•Proactive maintenance of our assets
•Turn our strategic asset management plan into a work process (Boots on the ground)
Utility of the Future
“…the sanitation district was
faced with a need to upgrade
existing infrastructure. But
instead of doubling down on
what they already had, they
built something completely
different.”
“…the leaders of Orange
County had to let go of the
past to reach for the future.”
Proposed Policy Statement
The Sanitation District will assess and manage the collection system and treatment plant systems and assets to improve resilience and reliability while lowering lifecycle costs. This will be accomplished through adaptive operation, coordinated maintenance and condition assessment, and planned capital investment. Staff will balance maintenance, refurbishment, and replacement strategies to maximize useful life, system availability and efficiency.
Initiatives
•Initiative:Create an annual Asset Management Plan documenting
the condition of the collection system and treatment plants, and
upcoming maintenance or capital projects
•Initiative: Coordinate the efforts of operations, collections, mechanical
maintenance, electrical maintenance, instrument maintenance and
engineering through process teams to assure the Sanitation District’s
resources are focused on the high priority work functions.
•Initiative: Maintain a 20-year forecast of all CIP projects needed to
maintain or upgrade the Sanitation District’s nearly $11 billion in
assets on a prioritized risk basis to establish rate structures.
Questions?
OCSD Climate and Catastrophic Event Resilience Policy
Presented by Kathy Millea
Director of Engineering
OCSD Assets Valued at $10.8 Billion
Collections System
15 pumpstations
regionaltrunk sewer389MILES
OCSD Risk Events
Heavy Rains
King Tides
Floods
Sea Level Rise
Wildfires
Earthquakes
Tsunamis
Heavy Rains
266 (1990)184
(2018)
475 485
550
521
494
459
501
411
563
100
150
200
250
300
350
400
450
500
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600
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Fl
o
w
(
M
G
D
)
Year
Average Monthly Flow (MGD) vs. Peak High Flow Events
Total average flow Peak Flow
King Tides
8th St, Newport Beach, King Tide 2012
Huntington Beach, King Tide 2014
Newport Beach Pump Stations
A Street Pump Station
Floods
1983, Flooded streets in Newport Beach
Dec 2010, Balboa Island
January 2010, Flooding at Plant No. 2
7 feet of storm surge + high tide (January 2005)
8 feet of storm surge + high tide (December 2012)
(Natural Hazards Mitigation, City of Newport Beach)
FEMA Flood Map
FEMA 100 Year Flood Map, 2019
Plant No. 2
FEMA Flood Map
•
Lido
Pump Station
15 St
Pump Station
Slater Ave
Pump Station
A St
Pump Station
FEMA 100 Year Flood Map, 2019
Sea Level Rise
Observation: 1mm/year
Current projections for Newport Beach: 2.2 mm per year
(http://tidesandcurrents.noaa.gov/sltrends/sltrends.shtml)
20
1
8
100 year Flood and Sea Level Rise Projection for 2070
Wildfire
The Cocos Fire burns in San Marcos, California, in 2014.
(theatlantic.com)
Ventura Fire, California, Dec 2017. (@aghakouchak)
Seismic/Earthquakes
Plant No. 1
Plant No. 2
Seismic/Earthquakes
Plant No. 1
Plant No. 2
San Andreas Fault
Plant No. 2 Fault Zones
Example of Lateral Spreading
East Tomokomai Port near a coal plant, lateral spread extends 200 ft. inland
Hokkaido, Japan, Mag. 6.6, 2018
ASCE Tsunami Design Zones
ASCE 7-16 Tsunami Design Zone Maps for Selected Locations
ASCE Tsunami Design Zone for Plant No. 2
ASCE 7-16 Tsunami Design Zone Maps for Selected Locations
Plant No. 2
Example of Tsunami
2011 Quake Tsunami in Tohoku, Japan
Energy Supply Resiliency
Southern California Edison Digester Gas Powered Generators
Diesel Powered Backup Generators Tesla Batteries
High Flows/Flooding Planning
Biosolids portfolio diversified High flow and bypass exercises
Plant 2 Storm Retention Pond Flow Monitoring Storm Events
Seismic Preparedness
Locating New Facilities Off Fault Zones Seismic Hazard Evaluation
Construct to latest building codes Integrated Emergency Response Plan
Proposed Policy Statement
The Sanitation District will design systems and operations to withstand or adapt to adverse conditions that can reasonably be expected.
These adverse events include heavy rains, sea level rise, flooding, earthquakes, wildfires, tsunamis or electrical grid collapse.
Initiatives
•Initiative:Complete an engineering study of the seismic vulnerabilities of the treatment plants. Incorporate necessary upgrades into future capital improvement projects.
•Initiative:Complete the biannual high flow exercise to assure readiness for a high flow event. Maintain a higher level of readiness October 15 through March 15 and in advance of predicted significant rain events.
•Initiative:Study the potential impact of tsunami and changing climate conditions, including flooding due to high tides and heavy rain events.
Questions?