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HomeMy WebLinkAbout04-08-2009 Administration Committee AgendaAGENDA REGULAR MEETING OF THE ADMINISTRATION COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, APRIL 8, 2009, AT 5:00 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California 92708 www.ocsd.com PLEDGE OF ALLEGIANCE DECLARATION OF QUORUM PUBLIC COMMENTS REPORT OF COMMITTEE CHAIR REPORT OF GENERAL MANAGER REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES CONSENT CALENDAR ITEMS (1 - 2) 1. Approve minutes of the March 11, 2009, meeting of the Administration Committee. 2. Recommend to the Board of Directors to: (a) Approve the discharge of uncollectible debt owed by Pacific Ocean Dyeing & Finishing in the amount of $163,164.08; and, b) Approve the discharge of uncollectible debt owed by Hawk Industrial Uniforms in the amount of $98,278.24. ACTION ITEMS No items. April 8, 2009 Page 2 INFORMATIONAL ITEMS (3) 3. 2009-10 District Budget Update. CLOSED SESSION During the course of conducting the business set forth on this agenda as a regular meeting of the Committee, the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employee actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Committee during a permitted closed session and are not available for public inspection. At such time as final actions are taken by the Committee on any of these subjects, the minutes will reflect all required disclosures of information. Convene in closed session. Reconvene in regular session. Consideration of action, if any, on matters considered in closed session. Other business and communications or supplemental agenda items, if any. Adjournment: The next regular Administration Committee meeting is scheduled for Wednesday, May 13, 2009, at 5 p.m. April 8, 2009 Page 3 H:\dept\agenda\Admin Committee\2009\0409\03.040809 Admin Agenda.docx Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the District’s Administrative offices 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 all, of the members of District’s Board, are available for public inspection in the office of the Clerk of the Board, located at 10844 Ellis Avenue, Fountain Valley, California. Items Not Posted: In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency item or because there is a need to take immediate action, which need came to the attention of the Committee subsequent to the posting of agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. Public Comments: Any member of the public may address the Administration Committee on specific agenda items or matters of general interest. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to three minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Committee except as authorized by Section 54954.2(b). Consent Calendar: All matters placed on the consent calendar are considered as not requiring discussion or further explanation, and unless a particular item is requested to be removed from the consent calendar by a Director of staff member, there will be no separate discussion of these items. All items on the consent calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All items removed from the consent calendar shall be considered in the regular order of business. The Committee Chair will determine if any items are to be deleted from the consent calendar. Items Continued: Items may be continued from this meeting without further notice to a Committee meeting held within five (5) days of this meeting per Government Code Section 54954.2(b)(3). Meeting Adjournment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955 (posted within 24 hours). Accommodations for the Disabled: The Board of Directors Meeting Room is 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) 593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Notice to Committee Members: For any questions on the agenda or to place any items on the agenda, Committee members should contact the Committee Chair or Clerk of the Board ten days in advance of the Committee meeting. Committee Chair: Mark Waldman (714) 827-1969 Committee Secretary: Lilia Kovac (714) 593-7124 lkovac@ocsd.com General Manager: Jim Ruth (714) 593-7110 jruth@ocsd.com Assistant General Manager Bob Ghirelli (714) 593-7400 rghirelli@ocsd.com Director of Finance and Lorenzo Tyner (714) 593-7550 ltyner@ocsd.com Administrative Services Human Resources and Employee Jeff Reed (714) 593-7144 jreed@ocsd.com Relations Manager Page 1 ADMINISTRATION COMMITTEE Meeting Date 04/08/09 To Bd. of Dir. 04/22/09 AGENDA REPORT Item Number 2 Item Number Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: DISPOSITION OF UNCOLLECTIBLE DEBT – PACIFIC OCEAN DYEING AND FINISHING & HAWK INDUSTRIAL UNIFORMS GENERAL MANAGER'S RECOMMENDATION 1) Approve the discharge of uncollectible debt owed by Pacific Ocean Dyeing & Finishing in the amount of $163,164.08; and, 2) Approve the discharge of uncollectible debt owed by Hawk Industrial Uniforms in the amount of $98,278.24. SUMMARY · Pacific Ocean Dyeing & Finishing was an industrial discharge permittee who went out of business effective March 2008. The delinquent amount owed on this customer’s account is currently $163,164.08. Penalties and interest comprise $19,687.14 of the total amount. In February of 2007, the permittee was delinquent on their obligations totaling $224,981.99. The Sanitation District received a letter in June 2007 requesting a two-year deferred payment agreement on the delinquent obligation. In September 2007, the Board of Directors approved a deferred payment agreement for this permittee. The owner did not execute the payment agreement. The owners vacated the premises and all staff attempts to contact the owners have been unsuccessful. · Hawk Industrial Uniform was an industrial discharge permittee who was placed out of business effective December 2007. The company was in receivership and all operations had ceased. The delinquent amount owed on this customer’s account is currently $98,278.24. A judgment against the permittee that includes monetary amounts to cover delinquencies as well as discharge violations was entered by the court in April 2007. Current information shows that the owner is incarcerated on unrelated charges. Staff is recommending that the Board approve the discharges in the amounts of $163,164.08 and $98,278.24 in accordance with Resolution No. OCSD 98-23. Page 2 Staff will continue to pursue collection of the amounts owed. PRIOR COMMITTEE/BOARD ACTIONS Hawk Industrial Uniform · January 24, 2007: Steering Committee upheld the determination of the General Manager and authorized General Counsel to proceed immediately with filing a court order with contempt power (or a writ) enforcing immediate shutdown of Hawk’s facilities. · November 2, 2006: OCSD forwarded, via certified mail, the General Manager’s decision and permit suspension order, in conjunction with the appeal process. Hawk Industrial Uniform filed an appeal to the Steering Committee on November 17, 2006. On December 20, 2006, the Steering Committee scheduled Hawk Industrial Uniform's appeal hearing for January 24, 2007. Pacific Ocean Dyeing & Finishing · September 2007: Board approved a deferred payment agreement with Pacific Ocean Dyeing & Finishing in the amount of $224,981.99 plus interest and administrative charges for delinquent obligations. ADDITIONAL INFORMATION N/A LT:MW:AB:lc H:\dept\agenda\Admin Committee\2009\0409\06.Budget Update.docx Revised: 01/04/06 Page 1 ADMINISTRATION COMMITTEE Meeting Date 04/08/09 To Bd. of Dir. AGENDA REPORT Item Number 3 Item Number Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: 2009-10 DISTRICT BUDGET UPDATE GENERAL MANAGER'S RECOMMENDATION Informational item. SUMMARY For continued discussion of the update to the second year of the OCSD 2008-09 and 2009-10 Approved Budget. The line item detail for the proposed operating budget update is shown in the attachment. The proposed updated budget will be presented for adoption at the June 24, 2009, Board meeting. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Representatives from Engineering, Operations and Maintenance, and Technical Services will be in attendance to provide presentations regarding their operations and budgeted resources. ATTACHMENTS 1. 2009-10 Budget Development Operating Budget Detail JDR:LT:lc FY 2009-10 BUDGET UPDATE - OPERATING BUDGET DETAIL Adopted Proposed Change $ Change % Salaries, Wages,& Benefits a Salary and Wages 64,531,100 65,630,500 1,099,400 2% b Retirement Costs 16,206,000 17,642,938 1,436,938 9% c Group Insurance 8,136,160 8,151,660 15,500 0% d Other 1,134,900 1,136,800 1,900 0% 1) TOTAL SALARIES, WAGES AND BENEFITS 90,008,160 92,561,898 2,553,738 3% Chemicals a Disinfection 7,062,700 7,500,200 437,500 6% b Coagulants 7,063,500 7,594,300 530,800 8% c Odor Control 7,184,500 8,248,730 1,064,230 15% d Other Supplies and Tools 2,421,140 2,320,410 (100,730) -4% 2) TOTAL CHEMICALS AND OTHER SUPPLIES 23,731,840 25,663,640 1,931,800 8% Solids and Waste Disposal a Solids Removal 21,840,000 20,580,000 (1,260,000) -6% b Other Residual Solids and Waste 2,854,800 2,387,900 (466,900) -16% Total Solids and Waste Disposal 24,694,800 22,967,900 (1,726,900) -7% Other Contractual Services c Groundskeeping, Janitorial and Security 1,327,100 1,193,000 (134,100) -10% d Outside Lab Services & Oxygen Plant Ops 595,100 587,100 (8,000) -1% e County Service Fee 394,000 394,000 0 0% f Temporary Services 412,800 851,600 438,800 106% g Other 1,465,900 2,489,674 1,023,774 70% Total Other Contractual Services 4,194,900 5,515,374 1,320,474 31% Professional Services h Legal, Audit and Accounting Services 716,840 657,440 (59,400) -8% i Engineering and Environmental Consulting 1,061,000 737,460 (323,540) -30% j Technology Support and Software Consulting 363,000 313,000 (50,000) -14% k Advocacy Efforts 275,250 212,000 (63,250) -23% l Other 539,330 696,130 156,800 29% Total Professional Services 2,955,420 2,616,030 (339,390) -11% 3) TOTAL CONTRACTUAL AND PROFESSIONAL 31,845,120 31,099,304 (745,816) -2% Repairs and Maintenance a Repairs and Maintenance - Services 3,729,680 3,907,700 178,020 5% b Repairs and Maintenance - Materials 4,645,680 4,698,490 52,810 1% c Service Maintenance Agreements 1,717,170 1,588,150 (129,020) -8% 4) TOTAL REPAIRS AND MAINTENANCE 10,092,530 10,194,340 101,810 1% Utilities a Electricity 6,280,000 6,891,000 611,000 10% b Natural Gas 2,042,000 1,042,000 (1,000,000) -49% c Water 1,622,920 1,556,100 (66,820) -4% d Telephone 267,340 266,000 (1,340) -1% 5) TOTAL UTILITIES 10,212,260 9,755,100 (457,160) -4% 1 FY 2009-10 BUDGET UPDATE - OPERATING BUDGET DETAIL Adopted Proposed Change $ Change % Research and Monitoring a Environmental Monitoring 478,600 385,200 (93,400) -20% b Air Quality Monitoring 250,000 165,000 (85,000) -34% c Research 681,260 628,260 (53,000) -8% 6) TOTAL RESEARCH AND MONITORING 1,409,860 1,178,460 (231,400) -16% Other Expenses a Capital Grants to Member Agencies 2,064,530 1,655,530 (409,000) -20% b Property and General Liability Insurance 1,082,100 902,100 (180,000) -17% c Operating Contingency Funds 847,200 783,660 (63,540) -8% d Administrative Expenses 1,293,520 1,161,032 (132,488) -10% e Training and Meetings 1,440,370 1,397,712 (42,658) -3% f Printing and Publication 654,610 621,040 (33,570) -5% g Regulatory Operating Fees 471,500 511,400 39,900 8% h Other Operating Supplies 415,140 486,480 71,340 17% 7) TOTAL OTHER EXPENSES 8,268,970 7,518,954 (750,016) -9% SUB-TOTAL - OPERATING BUDGET 175,568,740 177,971,696 2,402,956 1% Cost Allocation Salaries (8,116,600) (8,252,800) (136,200) 2% Expenses (13,414,110) (13,587,400) (173,290) 1% 8) TOTAL COST ALLOCATION (21,530,710) (21,840,200) (309,490) 1% TOTAL OPERATING BUDGET 154,038,030 156,131,496 2,093,466 1% 2 FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 3 Adopted Proposed 1) SALARIES, WAGES AND BENEFITS $90.0 $92.6 1a) Salary and Wages $64.5 $65.7 This category includes salaries for 648 FTE as well as Director’s pay. Vacancy factor has been reduced to 3% based on trend information. 1b) Retirement Costs $16.2 $17.6 District employees are members of the Orange County Employees’ Retirement System (OCERS). Preliminary information from OCERS indicates that an increase in rates is expected. The employer’s required contribution rate has been increased from 21.34% to 21.95%. In addition, the District pays 3.5% on behalf of each employee. The retirement costs category has also increased due to inclusion of $846,000 for net pension and other post employment benefit costs in accordance with requirements set by the Governmental Accounting Standards Board. 1c) Group Insurance $ 8.2 $ 8.2 Includes Medical, Dental, Vision, Life Insurance, Medicare, Disability. 1d) Other $ 1.1 $ 1.1 This category includes Workers’ Compensation, Tuition Reimbursement, Development Pay and Uniform Rental. The proposed appropriation of $535,000 for workers’ compensation is needed to maintain the recommended level of reserves within the workers’ compensation self-insurance fund. Adopted Proposed 2) CHEMICALS AND OTHER SUPPLIES $23.7 $25.7 2a) Disinfection $ 7.0 $ 7.5 The largest cost related to Disinfection is for chemicals, specifically bleach. Sodium Hypochlorite (Bleach) – Over 95% of the bleach is used for effluent disinfection. The remaining bleach usage is for odor control, disinfection of plant water, and the control of filamentous organisms in activated sludge in the secondary treatment process. It is anticipated that the District will use 11.4 million gallons of bleach in FY 2009-10. The proposed disinfection budget for bleach of $7.2 million is more than what was adopted due to a higher than expected unit cost. Sodium Bisulfite – Sodium bisulfite is used for dechlorination of outfall effluent to meet the California Ocean Plan (COP) chlorine residuals requirements. It is anticipated that the District will use 490,000 gallons of sodium bisulfite in FY 2009-10, for a proposed budget of $452,000. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 4 Adopted Proposed 2b) Chemical Coagulants $7.1 $7.6 Anionic Polymer – Anionic polymer is added to the primary clarifiers in combination with ferric chloride to enhance primary clarifier performance. The proposed budget for anionic polymer is $347,800. Cationic Polymer – Cationic polymer is added to digested sludge prior to dewatering in order to improve the sludge and water separation process. Cationic polymer is also added to the waste activated sludge dissolved air flotation thickeners (DAFTs) to improve solid(s) coagulation. The total proposed budget in FY 2009-10 for cationic polymer is $2.5 million. Ferric Chloride – Ferric chloride is an iron salt which is currently used to increase the solids removal efficiencies in the primary treatment process and to control digester hydrogen sulfide. As the amount of ferric chloride is optimized in primary treatment an additional amount of ferric chloride will be added to the digesters to control hydrogen sulfide. The projected ferric chloride usage for FY 2009-10 is 7,000 dry tons, similar to the estimated usage from the FY 2008-09 budget. The proposed budget for ferric chloride is $4.8 million. 2c) Odor Control $7.2 $8.3 Hydrogen Peroxide – Hydrogen peroxide is principally used in the trunk sewers for control of sulfides, and some is used in the foul air scrubbers to control hydrogen sulfide. Sulfide and odor control is dependent upon several factors including water temperature, pH of the water and level of upstream treatment and maintenance. Assuming FY 2008-09 environmental conditions with unchanged levels of upstream chemical treatment, hydrogen peroxide usage for FY 2009-10 is estimated at .9 million gallons at a cost of $1.8 million. Sodium Hydroxide (Caustic Soda) – Sodium hydroxide (caustic soda) is used in the foul air scrubbers and in the District’s main trunk lines tributary to the treatment plants. For FY 2009-10, staff projects the usage for the treatment plant to be 550 dry tons and the usage for the collection system to be 420 dry tons for a total caustic budget of $808,500. Muriatic Acid – Muriatic Acid (hydrochloric acid) is used to backwash the media in the foul air scrubbers, associated piping, and pumps. This cleans deposits caused by hard water, sulfides from the reaction with the foul air, and caustic soda used in the scrubbing process. The projected usage for FY 2009- 10 is 20,500 gallons at a cost of $41,900. Odor Neutralizers – Odor neutralizers are used in the solids processing facilities of both plants to mask the odors from the processed biosolids as they are loaded into the trucks for reuse. Over 63% of the chemical neutralizer is used at Plant No. 2. The product is mixed with water in a fine mist spray. During FY 2009-10, the anticipated usage is 67 gallons at a cost of $16,300. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 5 Ferrous Chloride – This chemical is planned for two trunklines and serves to precipitate dissolved sulfides and prevent odorous emissions. This cost includes chemicals, tanks, pumps and servicing. Estimated usage for FY 2009- 10 is .95 million gallons for a total projected cost of $2.2 million. Magnesium Hydroxide – This chemical is planned for use in the Knott and Euclid trunk lines. It is a common chemical treatment for wastewater, used for the prevention of hydrogen sulfide formation in the wastewater. The total projected cost is $2.3 million, which includes chemical, tanks, monitoring, pumps, and servicing. Calcium Nitrate – This is also a common chemical treatment for wastewater, used for the prevention of sulfide formation in wastewater. Calcium nitrate is tentatively planned for the Newport Beach trunk line for dosing at Bay Bridge. The budget for FY 2009-10 is $987,000, which includes chemical, tanks, monitoring, pumps, and servicing. 2d) Other Supplies and Tools $2.4 $2.3 Gas, diesel and oil, lab chemicals and supplies, safety equipment and tools are collectively reported within this line item. _____________________________________________________________________ Adopted Proposed 3) CONTRACTUAL/PROFESSIONAL SERVICES $31.8 $31.1 3a) Solids Removal $21.8 $20.6 Biosolids production increased at Plant No. 1 and Plant No. 2 when secondary facility rehabilitation projects were completed and secondary flow increased. Plant No. 1 biosolids production will increase further when the Steve Anderson Lift Station (SALS) begins operation diverting more flow to Plant No. 1. Total estimated biosolids production for FY 2009-10 is 294,000 wet tons. The FY2009-10 proposed budget reflects a decrease of $1.2 million, however, because rate increases were less than expected. 3b) Other Residual Solids and Waste $2.9 $2.4 The other residuals solids and waste category includes disposal costs for grit and screening waste, digester cleaning waste, and hazardous materials. The Grit and Screening budget includes supplying bins to collect then haul and dispose of grit, screenings, and drying bed material to a landfill. The grit is generated from the grit chambers, and the screenings is the material collected off the bar screens. Drying bed material is typically made up of the material cleaned out of pipes in the collection system by District crews and other city crews in the District’s service area. The proposed budget reduction of $0.5 million is primarily related to a reduction in planned digester cleanings from 4 to 3 digesters during FY 2009-10. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 6 Adopted Proposed 3c) Grounds keeping/Janitorial/Security $1.3 $1.2 This line item represents the total of the District’s contracted service accounts for grounds keeping, janitorial, and security services. 3d) Outside Lab Services & Oxygen Plant Operations $0.6 $0.6 The District contracts out certain laboratory services that are not cost efficient to perform in-house. Examples include bio-solids testing and hi-resolution mass spectroscopy. The first requires registration and certification which is cheaper to contract out as opposed to hiring and obtaining the skills required to do in- house. The second would require over $1 million in equipment and facilities to complete in-house as opposed to the $20,000 to $30,000 required to complete through an outside laboratory. The District is required to purchase oxygen for plant operations during plant facility shutdowns which result from construction activity. 3e) County Service Fee $0.4 $0.4 The County Service Fee is the fee charged by the County of Orange for the inclusion of the District’s sanitation fees on the County of Orange Property Tax Bill and for the collection of these fees by the County on behalf of the District. 3f) Temporary Services $0.4 $0.8 Temporary services are used agency-wide as a stop gap measure for unplanned terminations of essential staff members as well as for short-term projects that require additional staffing resources. The $400,000 proposed increase is largely offset by proposed decreases in engineering consulting services. 3g) Other $1.5 $2.5 Other smaller contractual services are collectively reported within this line item. Of the $1 million proposed increase, $900,000 is for costs related to pipe and manhole rehabilitation or replacement, and $100,000 is a rebudgeted item delayed from FY 2008-09 for Thomas Bros. Map production. 3h) Legal, Audit and Accounting $0.7 $0.7 Legal services are the services provided by General Counsel. Audit and accounting services represent the cost for the District’s independent annual financial audit and contracted internal auditing services as well as required program audits. 3i) Engineering & Environmental Consulting Services $1.1 $0.7 Engineering services are generally required to support the District’s regional assets and services. Environmental consulting services support the ocean monitoring program, the fats, oil, and grease inspection and monitoring program, and watershed management initiatives. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 7 Adopted Proposed 3j) Technology Support and Software Consulting $0.4 $0.3 These support costs are needed in order to maintain the District’s software applications that include human resources, payroll, general ledger and financial reporting, budgeting, fixed assets, accounts payable, accounts receivable, purchasing, inventory, and contract administration processes. 3k) Advocacy Efforts $0.3 $0.2 These costs are for promoting the District’s interests at the state and federal levels. 3l) Other $0.5 $0.7 Other smaller professional services are collectively reported within this line. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 8 Adopted Proposed 4) REPAIRS AND MAINTENANCE $10.1 $10.2 4a) Repairs and Maintenance – Services $ 3.7 $ 3.9 This category includes cleaning of subsurface 96” line at Plant No. 2 budgeted at $125,000 and rehabilitation of three cake transfer HPUs budgeted at $100,000. Additionally, $900,000 is budgeted for planned overhaul, repair, or rehabilitation of major facilities as part of a proactive program to maintain mechanical reliability. Another $450,000 is budgeted for services related to repairs and maintenance for instrumentation and electrical reliability. There is $800,000 budgeted for collection facilities repairs and maintenance. This total includes $200,000 for easement/right-of-way access improvements and $150,000 for raising manholes in conjunction with city/county street overlays. The plant process painting program has a proposed budget of $750,000. The additional $800,000 of proposed budget for this category is to cover a wide variety of unscheduled repairs and maintenance as needs arise. Budgets proposed for this work are based on historical experience and cost trends. 4b) Repairs and Maintenance – Materials $ 4.6 $ 4.7 Other 2009-10 scheduled maintenance includes: Amount Mechanical maintenance base budget $1,730,000 Electrical maintenance base budget $1,200,000 SALS odor station carbon replacement $50,000 Rehabilitation of 3 digesters $150,000 Overhaul 3 belt filter presses $300,000 Alhambra Foundry manhole frames and covers $150,000 Total Other Maintenance $3,580,000 4c) Service Maintenance Agreements $ 1.7 $ 1.6 All computer related hardware / software maintenance and licensing agreements are included within this line item for the following categories: Service Agreements Amount General/Enterprise Support $325,000 Computing Management Support $195,000 Financial Support $150,000 Process Support $100,000 Microsoft Enterprise License $ 100,000 Engineering Tools $ 70,000 Software Development $ 70,000 GIS Support $ 45,000 Safety/Security Support $ 45,000 Total Computer Related Agreements $1,100,000 Additional service maintenance agreements covering various equipment items are budgeted throughout the District. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 9 Adopted Proposed 5) UTILITIES $10.2 $ 9.8 5a) Electricity $ 6.3 $ 6.9 The estimated consumption and resulting costs for electrical energy purchased from Southern California Edison for FY 2009-10 are shown below and total $5,858,000. This budgetary number contains no contingency and excludes the electricity requirements of all pump stations. The FY 2009-10 proposed budget is 10% higher than the FY 2008-09 budget. The budget reflects a projected 6% increase in Edison energy rates, an increase in process demand for secondary treatment, and a decrease in electrical power production at the District’s Central Generation Facilities (CenGen) to reduce emissions. Estimated consumption values are based on the actual values experienced in previous years. FY 2009-10 Item Estimated Consumption (kWh/year) Cost per kWh Proposed Budget Value Plant No. 1 Energy Charges 21,930,000 @$0.084 $1,842,000 Plant No. 2 Energy Charges 21,000,000 @$0.084 $1,764,000 Plant No. 1 Demand Charges $ 600,000 Plant No. 2 Demand Charges $ 200,000 Plant No. 1 Fixed Charges $ 500,000 Plant No. 2 Fixed Charges $ 400,000 Plant No. 1 Control Center 0 @$0.13 $ 10,000 Total Plants $5,316,000 Laboratory 3,000,000 @$0.125 $ 410,000 Administration Building 920,000 @$0.135 $ 132,000 Total $5,858,000 The proposed budget for electricity also includes $400,000 for additional electricity costs associated with P1-82 Activated Sludge Plant process verification testing and approximately $600,000 for Collections and pump stations for a total electricity budget of $6,891,000. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 10 Adopted Proposed 5b) Natural Gas $ 2.0 $ 1.0 The District’s budget for natural gas is $1,042,000 for FY 2009-10, based on projected use at the predicted natural gas commodity prices. The estimated natural gas to be purchased from SoCalGas and a gas marketer for Treatment Plant Nos. 1 and 2 for FY 2009-10 is shown below. The “core subscription” is natural gas purchased directly from the Gas Company and used mainly for building heating. The natural gas used for central generation is purchased from a gas marketer, Occidental Energy, and transported through the Gas Company conveyance system at an average cost of $0.11/therm. FY 2009-10 User Estimated Consumption Cost Per Therm Total Cost Plant No. 1 Core Subscription 95,000 therms $0.81/therm $ 77,000 Plant No. 1 Central Generation 70,000 therms $0.94/therm $ 66,000 Plant No. 2 Core Subscription 18,000 therms $1.06/therm $ 19,000 Plant No. 2 Central Generation 936,000 therms $0.94/therm $ 880,000 Total 1,119,000 therms $1,042,000 5c) Water $ 1.6 $ 1.6 Green Acres Project (Gap) Water – GAP water is made up of secondary treated effluent from the District that is further treated by the Orange County Water District. GAP water is significantly less expensive than potable water and is used in the process wherever possible. The major uses of GAP water include cooling water, solids handling, and landscaping. The proposed budget for FY 2009-10 is $1,078,900 and includes a 10 percent increase in usage and a 2.5 percent increase in the rate compared with the current year. Potable Water – The potable water budget includes the water supplied by the City of Fountain Valley for Plant No. 1 and the City of Huntington Beach for Plant No. 2. Approximately 5% of the potable water at Plant No. 1 is used for domestic uses and less than 1% is used for irrigation. The majority of the irrigation at both plants uses reclaimed water. Less than 1% of the potable water used at Plant No. 2 is for domestic uses due to the relatively small number of employees at Plant No. 2. Plant 1 usage is estimated to increase by 5% and Plant 2 usage is estimated to increase by 3%; there is an anticipated increase in rates of 5% for each plant. The proposed total potable water cost for FY 2009-10 is $466,000. 5d) Telephone $ 0.3 $ 0.3 The telephone expense is essentially unchanged. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 11 Adopted Proposed 6) RESEARCH AND MONITORING $1.4 $1.2 6a) Environmental Monitoring $0.5 $0.4 The budget line item for “Environmental Monitoring” includes costs associated with the District’s National Pollution Discharge Elimination System (or NPDES) permit-required ocean monitoring program. This program consists of three elements: Core Monitoring represents routine, long-term sampling that is used to determine compliance with permit criteria and to determine changes in the coastal ocean over time. Strategic Process Studies are non-routine studies that address specific ocean processes or emerging issues that are not readily answered by the Core Monitoring program element. These studies are developed by District staff and approved and incorporated into our permit by the US Environmental Protection Agency, Region IX and Regional Water Quality Control Board, Region 8. Regional Monitoring occurs every 4-5 years and samples the coastal ocean from Point Conception in the north to the US-Mexico Border in the south. This is a cooperative, multi-agency effort; most recently, it included 65 other agencies and organizations. In addition to the funds needed to conduct the permit-required ocean monitoring program, Environmental Monitoring also includes operating funds for the District’s ocean monitoring vessel, the M/V Nerissa.” 6b) Air Quality Monitoring $0.2 $0.2 Periodic monitoring and analysis of air emissions requires testing from various sources including the central generation facilities, validation of emissions from continuous monitoring equipment, source testing after CIP installation/ modification (i.e. P1 trickling filters, P1 primary basin install and modifications, etc.). Periodically, there is a requirement to test the waste gas flares. 6c) Other Research $0.7 $0.6 OCSD contributes annually to research organizations such as the Southern California Coastal Water Research Project and the Water Environmental Research Foundation. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 12 Adopted Proposed 7) Other District Expense $8.3 $7.5 7a) Cooperative Projects $2.1 $1.6 The Cooperative Projects Grants Program co-funds projects sponsored by a member agency to eliminate or reduce inflow and/or infiltration of storm water and groundwater from local wastewater collection lines and to repair or replace poor performing, aging local wastewater collection system infrastructure. The District will fund projects by contributing up to fifty percent matching funds against a member agency’s contribution to an eligible project. All member agencies of the District are eligible to participate in this program. Proposed budget is in accordance with program contracts currently in place. 7b) Property and General Liability Insurance $1.1 $0.9 The District’s outside excess general liability insurance coverage is $30 million with a self- insurance retention of $250,000. The District’s property insurance coverage of $1 billion for fire and perils other than flood and $300 million for flood is subject to a self-insurance retention of 5 percent per unit of insurance up to $25,000 for fire and $100,000 for flood. The District is fully self-insured for earthquake. The proposed appropriation of $0.9 million is needed to maintain the recommended level of reserve within the general liability and property self- insurance fund. 7c) Operating Contingency $0.8 $0.8 These funds are centrally budgeted and expended at the discretion of and by specific approval of the General Manager. These funds are used to support unanticipated District needs or requests of the Board. Since the operating budget lapses at the end of each fiscal year, funds need to be set aside for contacts, purchases, commitments, and other legal obligations that have been incurred prior to June 30 but the goods or services have not been delivered until after June 30 in the new budget year. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 13 Adopted Proposed 7d) Administrative Expenses $1.3 $1.2 Administrative expenses include small, non-operating expenses collectively reported within this one line item. Small Computer Items $0.6 $0.5 In 1999, OCSD consolidated the budget for all non-CIP Office Automation and Small Computer items into a single line item. The proposed budget reduction is due to extension of the District’s computer obsolescence program cycle from 4 to 5 years. Memberships $0.3 $0.3 The General Manager has reviewed all membership requests for necessity and redundancy and has limited this amount to a responsible level. OCSD’s largest membership costs are for district-wide participation in groups such as the National Association of Clean Water, the Orange County Business Council, the California Association of Sanitation Agencies, the Southern California Alliance of Publicly Owned Treatment Works, the Water Emergency Response Organization of Orange County, and the Center for Demographic Research. Office Supplies $0.1 $0.1 Office supplies include such items as envelopes, letterhead, notebooks, calendars, business cards, pens, and pencils, etc. Postage $0.1 $0.1 This line item is for postage costs associated with all District mailings and required notices. Other $0.2 $0.2 Other smaller expenses collectively reported within this one line item. 7e) Training and Meetings $1.4 $1.4 Training $1.1 $1.2 An amount equal to approximately 2% of the Regular Salaries budget is allocated to Training. Training activities are coordinated though the Human Resources Division. This category includes ongoing technical training and materials for staff; expansion of the supervisory training program, required training for computerized plant monitoring and control systems and training to allow for a more adaptive and flexible work force. Meetings $0.3 $0.2 The General Manager has reviewed all meeting request budgets for necessity, duplication, and redundancy and has limited this amount to a responsible level. FY 2009-10 BUDGET UPDATE – OPERATING BUDGET DETAIL 14 Adopted Proposed 7f) Printing and Publishing $0.7 $0.6 In-House Publishing $0.5 $0.5 Although the budget provides for some outside printing costs, the majority of OCSD printing activities are completed In-house, reflecting an expanded management information system, administrative requirements, and a continuing demand by the public and regulatory agencies for information. These activities including printing of District’s maps, brochures, Board reports and agenda items, budget materials, etc. 7g) Regulatory Fees $0.5 $0.5 This item is for payments to the South Coast Air Quality Management District, the County of Orange, and the State Water Resources Control Board for permit and operating fees. 7h) Other $0.4 $0.5 Other smaller expenses collectively reported within this one line item, including freight charges and miscellaneous equipment rentals. Adopted Proposed 8) COST ALLOCATION ($21.5) ($21.8) This represents direct and indirect labor, benefits, materials, and services charged to the Capital Improvement Program (CIP) for which the related work was performed.