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HomeMy WebLinkAbout05-12-2010 Administration Committee AgendaAGENDA REGULAR MEETING OF THE ADMINISTRATION COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, MAY 12, 2010, 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) 1. Approve minutes of the April 14, 2010, meeting of the Administration Committee. ACTION ITEMS (2) 2. a) Reject apparent low bid submitted by T3 systems, Inc., as deemed non- responsible in accordance with specification requirements for Purchase of Cisco Parts, Specification No. E-2010-453BD; b) Approve a purchase order agreement with Global Connect, LLC, for Purchase of Cisco Parts, Specification No. E-2010-453BD, for an amount not to exceed $169,320; and, c) Approve a contingency of $16,932 (10%). May 12, 2010 Page 2 INFORMATIONAL ITEMS (3 - 5) 3. Workers’ Compensation Claims Overview 4. 2010-11 Renewal Quotes for the District’s Major Operational Insurance Programs 5. FY 2010-11 and 2011-12 Budget 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. A. Convene in closed session. CONFER WITH DISTRICT LABOR NEGOTIATORS (Government Code Section 54954.5(f)) 1. Agency Designated Representatives: James D. Ruth, General Manager; Robert Ghirelli, Assistant General Manager; Lorenzo Tyner, Director of Finance and Administrative Services; Jeff Reed, Human Resources and Employee Relations Manager; and Paul Loehr, Human Resources Supervisor. 2. Employee Organization: a) Peace Officers Council of California representing employees in the Professional Group and Supervisor Group. B. Reconvene in regular session. C. 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, June 9, 2010, at 5 p.m. May 12, 2010 Page 3 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 or 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: Phil Luebben (714) 686-1426 pluebben@ci.cypress.ca.us 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 05/12/10 To Bd. of Dir. AGENDA REPORT Item Number 2 Item Number Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director, Finance and Administrative Services GENERAL MANAGER'S RECOMMENDATION 1) Reject apparent low bid submitted by T3 Systems, Inc., as deemed non- responsible in accordance with specification requirements for Purchase of Cisco Parts, Specification No. E-2010-453BD; 2) Approve a purchase order agreement with Global Connect LLC, for Purchase of Cisco Parts, Specification No. E-2010-453BD, for an amount not to exceed $169,320; and, 3) Approve a contingency of $16,932 (10%). SUMMARY This procurement provides equipment to replace obsolete networking equipment necessary to maintain OCSD’s computer network. The apparent low bidder did not provide Original Equipment Manufacturer (OEM) parts as required in the specification, thus the rejection of their bid. PRIOR COMMITTEE/BOARD ACTIONS 04/24/1992: Established Cisco Equipment as the District’s standard networking equipment. ADDITIONAL INFORMATION Below is the tabulated bid results. Global Connect LLC was the lowest responsive and responsible bidder. Page 2 Purchase of Cisco Parts Bid Date – 04/20/2010 @ 2:00 P.M. E-2010-453 Bidder Amount of Bid T3 Systems Inc $148,464.41 Global Connect LLC $169,319.65 CDW-G $182,677.89 SIGMAnet, Inc $183,950.92 AT&T Datacomm $184,523.28 OM Office Supply Inc. $190,648.04 Better Direct $190,674.08 TekWorks $192,380.04 PC Mall Gov $202,400.14 Golden Star Technology $222,839.34 CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Sanitation District’s Delegation of Authority. This item has been budgeted. Date of Approval Purchase Order Amount Contingency 05/26/2010 $169,320.00 $16,932.00 (10%) JDR:LT:RC:lc Page 1 ADMINISTRATION COMMITTEE Meeting Date 05/12/10 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 & Administrative Services GENERAL MANAGER'S RECOMMENDATION Informational item re workers’ compensation claims. SUMMARY Workers’ Compensation Claims Overview Intercare, OCSD’s workers’ compensation third party administrator, will be in attendance to present and to provide a general update on the status of current workers’ compensation claims. Information to be provided includes: 1. A general introduction overview of the company. 2. A general claims review. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION To be provided by Intercare. CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A JDR:LT:JR:lc Form No. DW-102.3 Revised: 04/21/10 Page 1 ADMINISTRATION COMMITTEE Meeting Date 05/12/10 To Bd. of Dir. AGENDA REPORT Item Number 4 Item Number Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services GENERAL MANAGER'S RECOMMENDATION Informational item re 2010-11 renewal quotes for the District’s major operational insurance programs. SUMMARY Current insurance renewal estimates are as follows: 1) Excess General Liability Insurance Decrease 0% - 5% ($0 - $18,000) 2) Excess Workers’ Compensation Increase 5% - 10% ($9,000 - $17,000) 3) All-Risk Property and Flood insurance Increase 0% - 10% ($0 - $46,000) 4) Boiler & Machinery insurance Increase 0% - 10% ($0 - $1,500) The District tends to have relatively few claims and as a result, the general trend in the last few years has been toward lower rates. The District also carries other types of insurance: pollution liability insurance, crime insurance, travel accident insurance, watercraft insurance and construction insurance, but those items are either very inexpensive or not up for renewal this year, and so will not be discussed as part of the renewal of the major insurances. PRIOR COMMITTEE/BOARD ACTIONS • In June 2009, the Board approved renewals of the major insurance coverages for FY 2009-10. ADDITIONAL INFORMATION Each winter and spring, the District’s Risk Manager works with the District’s Broker (Alliant Insurance Services) to prepare a strategy for renewal of the District’s operational insurance. In previous years, the Administration Committee had asked for a status report as to how the renewals were developing. Here are details about the four major types of insurance: Form No. DW-102.3 Revised: 04/21/10 Page 2 1) Excess General Liability Insurance Program The District’s Excess General Liability Insurance Program is currently provided through the California Municipal Excess Liability Program (CAMEL) and its sister program, the Alliant National Municipal Liability Program (ANIMAL). The District has participated in the CAMEL program since FY 1996-97. This program currently provides the District with a $30 million policy of comprehensive coverage for municipal liability, bodily injury, property damage, and personal injury. The program was structured to also include Employment Practices Liability and Public Officials Errors & Omissions coverage. The $30 million coverage is per occurrence, with a self-insured deductible of $250,000 per occurrence ($500,000 deductible for Employment Practices Liability). Since 1997, the Employment Practices portion of coverage has enhanced from a $2 million sub-limit to the full $30 million policy limit. The actual insurance coverage currently consists of two separate layers. The first layer is the “Basic” $10 million program. The second layer consists of $20 million of coverage in excess of the first layer of $10 million. The premium for 2009-10 was $360,456. 2) Excess Workers’ Compensation Insurance The District’s Excess Workers’ Compensation insurance coverage is with the California State Association of Counties Excess Insurance Authority (CSAC EIA), the country’s largest risk pool for this type of insurance. This is the seventh year the District has participated in this program or its predecessor. The coverage expires on June 30, 2010. The District’s Excess Workers’ Compensation Program currently provides “statutory” (unlimited) coverage with a self-insured retention (SIR), or deductible, of $500,000. The District’s use of Excess Workers’ Compensation insurance dates back more than twenty years. In 1988, the Fiscal Policy Committee approved a SIR, or deductible, of $250,000, for such coverage. Due to the hardening of the workers’ compensation market, this deductible was raised to $500,000 beginning in FY 2002- 03 through a policy with Employers Reinsurance Corporation (ERC) that provided coverage to $25 million with a SIR, or deductible of $500,000. Staff has reviewed the District’s most recent five-year workers’ compensation loss history with Intercare, the District’s third-party workers’ compensation administrator (TPA) and in 2009 had the self-insurance program reviewed by actuary Bickmore. For 2010-11 staff is seeking workers’ compensation insurance renewal with coverages and deductibles at statutory limits. Some additional risk is associated with the CSAC EIA joint powers authority in that a premium surcharge can be assessed to individual members based on an unusually large number of losses occurring outside of the actuarial evaluation estimates. However, historically the CSAC EIA premiums for excess workers compensation Form No. DW-102.3 Revised: 04/21/10 Page 3 have been so much less than competing quotes that even if there were a surcharge, the cost might still continue to be cheaper. The premium for 2009-10 was $171,374 (based on estimated payroll for the year). 3) All-Risk Property and Flood Insurance The District’s All-Risk Property and Flood Insurance Program (Property Insurance) expires June 30, 2010, and is now up for renewal for FY 2010-11. The All-Risk insurance program provides for comprehensive coverage for the District’s real and personal property regarding virtually all perils including fire, flood, and business interruption. The District previously carried earthquake insurance as part of its Property Insurance, but in the last few years earthquake insurance has been impossible to obtain or not cost-effective. Currently, the District has earthquake insurance only in connection with some of its buildings under construction. The District’s current Property Insurance limits are $1 billion for most perils other than flood and earthquakes, and $300 million for flood, with many sub-limits for various situations. In order to reach $1 billion in limits, the District’s broker had to arrange for more than a dozen different layers of insurers. The SIR is $250,000 per occurrence for most types of losses. For eleven years, the District’s Property Insurance has been with a nationwide joint purchase property insurance program called Public Entity Property Insurance Program (PEPIP); one of the world’s largest property programs. It is important to note that this joint purchase property insurance program offers the purchasing power of numerous large public entities without the pooling or sharing of coverages or losses. The District’s broker, Alliant Insurance Services, is also acquiring quotes for Earthquake Insurance, and will know by the May meeting if the quotes are cost-effective. The premium for 2009-10 was $463,630. 4) Boiler & Machinery insurance It is also time for the annual renewal of Boiler & Machinery insurance coverage for the District covering the period from July 1, 2010 through June 30, 2011. The Boiler & Machinery insurance program provides comprehensive coverage for loss caused by machinery breakdown and explosion of steam boilers or other covered process equipment, including damage to the equipment itself and damage to other property caused by covered accident. The District’s current Boiler & Machinery insurance program provides coverage ($100 million per occurrence with deductibles ranging from $25,000 to $350,000) for losses caused by covered machinery breakdown (e.g., motors, steam turbines, Form No. DW-102.3 Revised: 04/21/10 Page 4 digesters, co-gen engines). Damages to the equipment, as well as damages to other property and improvements caused by the machinery breakdown, are covered by the Boiler & Machinery insurance. This program augments the District’s all-risk property insurance that covers perils such as fire and flood. The premium for 2009-10 was $15,551. CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A JDR:LT:MW:RK:lc Page 1 ADMINISTRATION COMMITTEE Meeting Date 05/12/10 To Bd. of Dir. AGENDA REPORT Item Number 5 Item Number Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services GENERAL MANAGER'S RECOMMENDATION Informational item re FY 2010-11 and 2011-12 Budget. SUMMARY Discussion of the OCSD FY 2010-11 and 2011-12 Budget was initiated at the March 10, 2010, Administration Committee meeting. The Budget will be presented for adoption at the June 23, 2010, Board meeting. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION During the past year, the District has implemented several organizational changes to increase efficiency and effectiveness. These organizational changes do not increase the total authorized staffing, only the reallocation of existing staff. Following is a summary of those changes: Development of the new Asset Management Team Recognizing our major shift in the near future from expansion to upgrades and rehabilitation of aging facilities, an asset management team within the Engineering Department has been established. By 2012, we will have completed our major upgrades to full secondary treatment and will be shifting our focus to maintaining what we have, as opposed to building new capacity. The new Asset Management Group act as co-owners with Operations & Maintenance Supervisors, and understand the current condition of our facilities to sequence future work and optimize lifecycle costs. In order to achieve this goal, this facility-focused Asset Management Group will assign engineers to own specific areas of the treatment plants and collection system. These engineers will work with Operations & Maintenance Supervisors to understand the current performance and condition of all the facilities in their defined area. These Page 2 engineers will create complete and comprehensive asset management plans for their area that sequences future work. This future work may be major capital projects, small projects, or specifications for maintenance to replace individual items or small systems between major capital projects. The Asset Management Engineer will approve all scopes of work for completeness before they are turned over to the Project Management Office (PMO) for execution. The Asset Management Engineering Group will also be heavily involved in project commissioning to assure that the project has achieved its original purpose for the facility. This approach will facilitate the District’s move toward a unified Project Management Office. This means that all facility projects, whether major capital projects, small projects, fast track projects, or maintenance projects are uniformly delivered to the PMO for execution. There should be fewer projects with clearer scopes of work with less unknown conditions to be discovered in project execution with fewer scheduling conflicts. The current system of fragmented project generation and prioritization sometimes leads to projects with competing purposes or schedules. There are some opportunities for further consolidation to explore with the function of the planner and schedule’s roles in maintenance. This fundamental shift will also help to limit the need for additional O&M staff to operate and maintain the expanded treatment plant facilities. Executing fewer, more completely scoped, and better sequenced projects will free up operators and Maintenance staff. A significant effort is required to support contractors in the execution of their work for coordination, testing, and safety related tasks. In addition, Maintenance Supervisors will have ready access to Asset Management Engineers to help them make repair vs. replacement decisions, and to write scopes of work or specifications for tasks that may be contracted. Odor and Corrosion Control In concert with the formation of the new Asset Management Group in Engineering, the Operations & Maintenance Department is modifying functions of its O&M Process Engineering Group to focus primarily on odor and corrosion control. The Odor and Corrosion Division will bring greater focus to these areas to meet our strategic initiatives of minimizing odors, being more responsive to our neighbors and meeting air permit compliance requirements. The group will also stay ahead of the numerous collection system and plant corrosion concerns. As part of these changes, some staff will be reassigned to Plant Operations for plant process support. The movement of staff will strengthen process controls and enable the Engineers and Scientists to work more closely with operators and Operations supervision. These staff will have a greater role in the day-to-day operations of the treatment plants and have more opportunity to directly influence operation of the processes, especially as we move towards full secondary treatment. Page 3 Creation of the Management Services Team In support of District-wide financial and operational activities, a small Management Services Team has been created within the Administrative Services Department. Under the guidance of Director of Finance and Administrative Services, four staff members allocated from other departments will provide District-wide support in the areas of business efficiency, budgeting, strategic planning, auditing, and special projects. Additionally, each will serve as the key business analyst for each of the District’s departments. CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A JDR:LT:MW