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