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HomeMy WebLinkAbout06-09-2010 Administration Committee Agenda AGENDA REGULAR MEETING OF THE ADMINISTRATION COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JUNE 9, 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. Approve minutes of the May 12, 2010, meeting of the Administration Committee. ACTION ITEMS 2. Recommend to the Board of Directors to adopt Resolution No. OCSD 10-XX, Establishing Use Charges for the FY 2010-11 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. June 9, 2010 Page 2 3. Recommend to the Board of Directors to: a) Renew the District’s Excess General Liability for the period July 1, 2010 through June 30, 2011, in an amount not to exceed $351,450; b) Renew the District’s Excess Workers’ Compensation Insurance for the period July 1, 2010 through June 30, 2011, at a rate not to exceed .002853 of payroll (approximately $185,429); c) Renew the District’s All-Risk Property and Flood for the period July 1, 2010 through June 30, 2011, in an amount not to exceed $436,740; and, d) Renew the District’s Boiler & Machinery Insurance Program for the period July 1, 2010 through June 30, 2011, in an amount not to exceed $16,578. 4. Recommend to the Board of Directors to approve proposed Operating, Capital, Debt/COP Service and Self-Insurance Budgets for FY 2010-11 and 2011-12 as follows: 2010-11 2011-12 Net Operations, Maintenance & Working Capital Worker's Compensation Self Insurance General Liability and Property Self-Insurance Net Capital Improvement Program Debt/COP Service Intra-District Joint Equity Purchase/Sale(1) Joint Equity Payment to IRWD(2) TOTAL $150,021,700 1,005,000 1,506,200 180,136,000 89,735,040 36,612,400 36,612,400 $495,628,740 $156,090,770 550,000 1,606,200 122,423,000 97,052,940 29,690,000 29,690,000 $437,102,910 (1)Cash to Revenue Area 14 (RA14) in exchange for capital assets to Consolidated Revenue Area 15 (RA15). (2)Payment from RA 14 to the Irvine Ranch Water District, the agency responsible for funding the capital requirements of RA14, and entitled to the equity sale back proceeds noted in footnote (1). INFORMATIONAL ITEMS 5. FY 2010-11 Benefits Program Renewal Costs. June 9, 2010 Page 3 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, July 14, 2010, at 5:00 p.m. June 9, 2010 Page 4 http://sharepoint/gm/board/Agenda Report Form Library/03 060910 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 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 06/09/10 To Bd. of Dir. 06/23/10 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 GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 10-XX, Establishing Use Charges for the FY 2010-11 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. SUMMARY Currently, OCSD invoices Santa Ana Watershed Project Authority on a quarterly basis for the wastewater discharge we receive from the SARI line. Annually, the rates for flow, biochemical oxygen demand (BOD), and total suspended solids (TSS) are calculated based upon the fiscal year budget for treatment and disposal costs and the 1996 Wastewater Treatment and Disposal agreement. The rates calculated for each constituent for FY 2010-11 for wastewater discharge are: FLOW $160.09 BOD $245.56 TSS $364.49 The FY 2010-11 rates are a 4.86% decrease over the FY 2009-10 rates, due to a 4.86% decrease in the treatment and disposal costs in the proposed FY 2010-11 Budget. These rates are separate from the rates charged for additional capacity purchases by SAWPA. PRIOR COMMITTEE/BOARD ACTIONS June 25, 2009 - Adopted Resolution No OCSD 09-08 Establishing Use Charges for the FY 2009-10 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. June 25, 2008 - Adopted Resolution No OCSD 08-09 Establishing Use Charges for the FY 2008-09 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. June 27, 2007 - Adopted Resolution No OCSD 07-15 Establishing Use Charges for the FY 2007-08 Pursuant to the Wastewater Treatment and Disposal Agreement with the Santa Ana Watershed Project Authority. Page 2 ADDITIONAL INFORMATION None. CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A Date of Approval Contract Amount Contingency N/A N/A N/A JDR:LT:MW:AB Page 1 ADMINISTRATION COMMITTEE Meeting Date 06/09/10 To Bd. of Dir. 06/23/10 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 GENERAL MANAGER'S RECOMMENDATION 1) Renew the District’s Excess General Liability for the period July 1, 2010 through June 30, 2011, in an amount not to exceed $351,450; 2) Renew the District’s Excess Workers’ Compensation Insurance for the period July 1, 2010 through June 30, 2011, at a rate not to exceed .002853 of payroll (approximately $185,429); 3) Renew the District’s All-Risk Property and Flood Insurance for the period July 1, 2010 through June 30, 2011, in an amount not to exceed $436,740; and 4) Renew the District’s Boiler & Machinery Insurance Program for the period July 1, 2010 through June 30, 2011, in an amount not to exceed $16,578. SUMMARY The District budget provides funds for the renewal of the following four major insurances for the District’s operations: 1) Excess General Liability Insurance 2) Excess Workers’ Compensation 3) All-Risk Property and Flood insurance 4) Boiler & Machinery insurance In total, the recommended renewals are a decrease of 2.7 percent from the prior year. The District’s broker will be present at the Committee meeting to give us the final pricing, with the recommendations above based on “not to exceed” numbers which may be improved upon by the time of the meeting. PRIOR COMMITTEE/BOARD ACTIONS June 2009 - The Board approved renewal of the above four policies for the period July 1, 2009 through June 30, 2010. Page 2 ADDITIONAL INFORMATION 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 new sister program, the Alliant National Municipal Liability Program (ANMAL). 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 and property damage, and personal injury. The program was structured to also include Employment Practices, and Public Officials Errors & Omissions coverage. The $30 million coverage is per occurrence, with a self-insured deductible of $250,000 per occurrence and $500,000 deductible for employment practices claims. Since 1997, the Employment Practices portion of coverage was 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 with self-insured retention of $250,000. The second layer consists of $20 million of coverage in excess of the first layer of $10 million. The proposed renewal of the District’s Excess Liability insurance for the period July 1, 2010 through June 30, 2011, in an amount not to exceed $ 351,450, is a decrease of 2.5 percent from the prior year. 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 District has participated in this program or its predecessor since 2003. The coverage expires on June 30, 2010. The District’s Excess Workers’ Compensation Program currently provides so-called “Statutory” (unlimited) coverage with a self-insured retention (SIR), or deductible of $500,000. Since the premium itself is based on final payroll, the District will not know the exact final premium until the year is over. The District’s use of Excess Workers’ Compensation insurance dates back to the late 1980’s. At that time, 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 self-insured retention (SIR), or deductible of $500,000. Some additional risk may be associated with the CSAC EIA joint powers authority in that a premium surcharge can be assessed to individual members if an unusually large number of losses were to occur outside of the actuarial evaluation estimates. However, Page 3 historically the CSAC EIA premiums for excess workers compensation have been so much less than competing quotes available to the District that if even there were a surcharge, the cost might still continue to be cheaper. The proposed renewal of the District’s Excess Workers’ Compensation Insurance for the period July 1, 2010 through June 30, 2011, at a rate not to exceed .002853, is an increase from the prior year of 7.3 percent. This premium rate would generate an estimated premium of $185,429 based on the estimated 2010-11 payroll. 3) All-Risk Property and Flood Insurance The District’s All-Risk Property and Flood Insurance Program (Property Insurance) expires June 30, 2010. The All-Risk insurance program provides for comprehensive coverage for most of 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 $175 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 nearly a dozen different layers of insurers. The SIR is $250,000 per occurrence for most types of losses. Since the late 1990’s, 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 coverage or losses. The proposed renewal of the District’s All-Risk Property and Flood Insurance for the period July 1, 2010 through June 30, 2011, in an amount not to exceed $436,740, is a decrease of 5.8 percent from last year. 4) Boiler & Machinery Insurance Staff recommends 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, digesters, co-gen engines). Damages to the equipment, as well as damages to other Page 4 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 proposed renewal of the District’s Boiler & Machinery Insurance Program for the period July 1, 2010 through June 30, 2011, in an amount not to exceed $16,578, is a decrease of 5.6 percent from the prior year. 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 Contract Amount Contingency N/A N/A N/A JDR:LT:MW:RK Page 1 ADMINISTRATION COMMITTEE Meeting Date 06/09/10 To Bd. of Dir. 06/23/10 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 Approve proposed Operating, Capital, Debt/COP Service and Self-Insurance Budgets for FY 2010-11 and 2011-12 as follows 2010-11 2011-12 Net Operations, Maintenance & Working Capital Worker's Compensation Self Insurance General Liability and Property Self-Insurance Net Capital Improvement Program Debt/COP Service Intra-District Joint Equity Purchase/Sale(1) Joint Equity Payment to IRWD(2) TOTAL $150,021,700 1,005,000 1,506,200 180,136,000 89,735,040 36,612,400 36,612,400 $495,628,740 $156,090,770 550,000 1,606,200 122,423,000 97,052,940 29,690,000 29,690,000 $437,102,910 (1)Cash to Revenue Area 14 (RA14) in exchange for capital assets to Consolidated Revenue Area 15 (RA15). (2)Payment from RA 14 to the Irvine Ranch Water District, the agency responsible for funding the capital requirements of RA14, and entitled to the equity sale back proceeds noted in footnote (1). SUMMARY The FY 2010-11 and 2011-12 Proposed Budget is enclosed for the Committee's consideration. The Budget has been presented to the Operations Committee at the regular June meeting in order to allow each Standing Committee an opportunity to review the proposal prior to the June Board meeting. Although each Committee has had an opportunity to review the proposal, it remains the responsibility of the Administration Committee to recommend approval. The Administration Committee is requested to recommend that the Board of Directors approve this budget. Page 2 PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A Date of Approval Contract Amount Contingency N/A N/A N/A ATTACHMENTS 1. Proposed FY 2010-11 and 2011-12 Budget JDR:LT:MW:lc Page 1 ADMINISTRATION COMMITTEE Meeting Date 06/08/10 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 benefits program renewal costs. SUMMARY The total cost of insurance coverage will increase 6.7% or $614,053 for the forthcoming fiscal year (FY 2010-11). Premium increases are as follows: Insurance Provider Δ% Comments Medical HMO-A Anthem Blue Cross 12.8 Medical HMO-B Anthem Blue Cross 12.8 Medical POS Anthem Blue Cross 1.5 Medical PPO Anthem Blue Cross 1.8 Retiree Only Plan Medical HMO Kaiser Permanente 13.6 Dental Delta Dental 14.8 Joined CSAC Purchasing Pool Vision EyeMed -18.7 New Provider Rate guarantee through 7/1/12 EAP ComPsych 0.0 Rate guarantee through 7/1/14 Life/AD&D Prudential 0.0 Rate guarantee through 7/1/12 Short-Term Disability Prudential 0.0 Rate guarantee through 7/1/11* Long-Term Disability Prudential 0.0 Rate guarantee through 7/1/12 *The third year of the rate guarantee is contingent on the short-term disability plan running at an 80% incurred loss ratio or better at the end of two years. The total cost for FY2010-11 is $9,809,533, which is proportionally shared as follows: · OCSD cost: $8,085,870 · Employee cost: $1,723,663 Historical Summary: Rate Change Insurance FY 10/11 FY 09/10 FY 08/09 FY 07/08 Medical: Anthem Blue Cross Medical 7.2 4.2 9.4 17.5 Medical: Kaiser Permanente 13.6 3.6 11.7 21.9 Dental 14.8 0.0 0.0 9.8 Vision -18.7 0.0 0.0 -4.7 EAP 0.0 -21.2 5.8 10.0 Life/AD&D 0.0 -2.6 0.0 6.3 Short-Term Disability 0.0 -5.4 0.0 6.3 Long-Term Disability 0.0 -9.6 0.0 6.3 Page 2 PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION None. CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A Date of Approval Contract Amount Contingency N/A N/A N/A JDR:LT:JR:KE