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HomeMy WebLinkAbout04-11-2012 Administration Committee Agenda 04/11/12 Administration Committee Agenda Page 1 of 2 Orange County Sanitation District Regular Meeting of the Administration Committee Wednesday, April 11, 2012 5:30 P.M. Administration Building Board Room 10844 Ellis Avenue Fountain Valley, CA (714) 593-7130 AGENDA PLEDGE OF ALLEGIANCE: DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to speak, please complete a Speaker’s Form and give it to the Clerk of the Board. Speakers are requested to limit comments to three minutes. REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Committee Members. These reports are for information only and require no action by the Committee. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: · Capital Improvement Project (CIP) Update CONSENT CALENDAR: 1. Approve Minutes of the March 14, 2012 Administration Committee Meeting. ACTION ITEMS: 2. Recommend to the Board of Directors to: A. Approve purchase contracts with AMX International, Denovo Ventures, LLC, Xyon Business Solutions, Inc. for JDEdwards Enterprise One Upgrade Support, Specification No. CS-2011-516BD, for an aggregate amount not to exceed $200,000; and B. Approve a contingency in the amount of $20,000 (10%). 04/11/12 Administration Committee Agenda Page 2 of 2 INFORMATION ITEMS: 3. OCSD FY 2012-13 and 2013-14 Budget OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: The next Administration Committee meeting is scheduled for Wednesday, May 9, 2012, at 5:30 p.m. Accommodations for the Disabled: Meeting Rooms are 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. Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted outside the main gate of the Sanitation District’s Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, 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 the Board of Directors, are available for public inspection in the office of the Clerk of the Board. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Maria E. Ayala Clerk of the Board (714) 593-7130 mayala@ocsd.com For any questions on the agenda, Committee members may contact staff at: General Manager Jim Ruth (714) 593-7110 jruth@ocsd.com Assistant General Manager Bob Ghirelli (714) 593-7400 rghirelli@ocsd.com Assistant General Manager Jim Herberg (714) 593-7300 jherberg@ocsd.com Director of Finance and Administrative Services Lorenzo Tyner (714) 593-7550 ltyner@ocsd.com Director of Human Resources Jeff Reed (714) 593-7144 jreed@ocsd.com Page 1 of 2 ADMINISTRATION COMMITTEE Meeting Date 04/11/12 To Bd. of Dir. 04/25/12 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: JDEDWARDS ENTERPRISE ONE UPGRADE SUPPORT GENERAL MANAGER'S RECOMMENDATION A. Approve purchase contracts with AMX International, Denovo Ventures, LLC, Xyon Business Solutions, Inc. for JDEdwards Enterprise One Upgrade Support, Specification No. CS-2011-516BD, for an aggregate amount not to exceed of $200,000; B. Approve a contingency in the amount of $20,000 (10%). SUMMARY Orange County Sanitation District (OCSD) is presently upgrading its ERP system from JD Edwards (JDE) EnterpriseOne version Xe (on an AS400) to the latest 9.1 version (on Windows/SQL Server). The project approach we have chosen is to augment internal resources with temporary JD Edwards EnterpriseOne expert resources on an as needed basis. Based on the overall qualifications and expertise, staff recommends awarding a purchase contract to AMX International, Denovo Ventures, LLC, Xyon Business Solutions, Inc. for an aggregate amount not to exceed $200,000 with a contingency amount of $20,000. These top scoring firms identified during the RFP process will be qualified to provide services until the upgrade and post go-live support is complete. PRIOR COMMITTEE/BOARD ACTIONS None. ADDITIONAL INFORMATION On January 23, 2012, OCSD issued a Request for Proposal (RFP) and on February 22, 2012, 4 proposals were received from the following vendors: · AMX International · Denovo Ventures LLC · Global Systems Integration, Inc. · Xyon Business Solutions, Inc. Page 2 of 2 A panel consisting of 5 OCSD staff reviewed and ranked each of the proposals in accordance with Resolution No. OCSD 07-04, Section 5.07. After preliminary assessment and following the technical proposal evaluations, the selection was narrowed down to 3 vendors. The proposal review panel ranked AMX International, Denovo Ventures, LLC, Xyon Business Solutions, Inc. as the most qualified firms. Consultants with specializations in Human Capital Management and/or Procurement were not provided in the Global Systems Integration, Inc. (GSI) proposal as was done by the other proposers. GSI was not selected. Staff recommends awarding the professional agreements to AMX International, Denovo Ventures, LLC, Xyon Business Solutions, Inc. in a not-to-exceed an aggregate amount of $200,000. PROPOSAL EVALUATION TABLE EVALUATORS PROPOSERS & SCORE Xyon AMX Denovo GSI Reviewer A 775 776 773 573 Reviewer B 515 521 513 493 Reviewer C 900 891 828 583 Reviewer D 855 806 773 818 Reviewer E 700 696 688 658 Overall Score 749 738 715 625 Ranking 1 2 3 4 Hourly Fees* $125-160 $130-160 $150-$160 $140-175 * Hourly fees are exclusive of travel. Some proposer consultants are local and will not incur travel expenses. Internet conferencing will be used to avoid most travel expenses. CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Orange County Sanitation District’s Delegation of Authority. This item has been budgeted under 250.53252. Date of Approval Contract Amount Contingency 04/25/12 $200,000 $20,000 (10%) Page 1 ADMINISTRATION COMMITTEE Meeting Date 04/11/12 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 GENERAL MANAGER'S RECOMMENDATION INFORMATIONAL ITEM RE OCSD FY 2012-13 AND 2013-14 BUDGET. SUMMARY Discussion of the OCSD FY 2012-13 and 2013-14 Budget was initiated at the February 8,2012, Administration Committee meeting. Additional materials are now being provided to further this discussion (attached). Included in the materials being provided are line-item expense details for the Operating Budget. The Budget will be presented for adoption at the June 27, 2012 Board meeting. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A ATTACHMENTS 1. FY 2012-13 and 2013-14 Budget Summary 2. FY 2012-13 and 2013-14 Budget Development-Additional Detail JDR:LT:MW/jmf 2011-12 2012-13 2013-14 Description Projected Proposed Proposed 1 Salaries, Wages, & Benefits 65.3 64.4 65.5 2 Benefits 28.5 29.9 30.8 3 Operating Materials & Supplies 18.9 19.3 19.8 4 Contractual Services 23.9 26.1 27.9 5 Repairs & Maintenance 10.7 11.2 11.9 6 Utilities 7.8 8.2 8.8 7 Professional Services 2.0 3.1 2.4 8 Other Operating Supplies 2.1 2.3 2.3 9 Administrative Expenses 1.2 1.4 1.2 10 Research & Monitoring 0.7 0.8 0.9 11 Other Non-Operating Expenses 0.1 0.8 0.8 12 Training & Meetings 0.8 1.4 1.2 13 Printing & Publication 0.5 0.5 0.4 14 Cost Allocation (18.3) (17.8) (18.2) Net Operating Requirements $144.2 $151.6 $155.7 2012-13 and 2013-14 Budget Development - Expenditure Summary 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 1 1) SALARIES AND WAGES $65.3 $64.4 $65.4 1a) Regular Salaries $51.7 $50.7 $51.5 Salaries for 633.5 full-time equivalent (FTE) positions in FY 2012-13 and FY 2013-14 are included in this line item. This is a reduction of 3.5 FTE’s approved in the FY 2011-12 budget. Salary increases have only been included per existing bargaining agreements. The Vacancy Factor was raised from the past trend of 3 percent to 5 percent based on the high volume of recent and near-future retirements, and the time it will take to become fully staffed. 1b) Leave Payoffs $ 3.5 $ 3.4 $ 3.5 Leave Payoffs for retirements are anticipated to remain constant for the next two years. 1c) Overtime $ 1.8 $ 1.8 $ 1.9 Overtime has remained constant at $1.8 million over the last several years. Of this total, approximately $1.5 million is budgeted in Operations and Maintenance primarily for required overtime as the plants are in operation 24/7 (vacation, sick, shift overlap), emergencies, unscheduled maintenance, backlog and off-shift construction support. The remaining $300,000 is budgeted in other divisions and also has remained essentially flat. 2) BENEFITS $28.5 $29.9 $30.8 2a) Orange County Emp. Ret. System $17.6 $17.9 $18.2 District employees are members of the Orange County Employees’ Retirement System (OCERS). The employer’s required contribution rate has been increased by OCERS from 25.68 percent (FY 2011-12) to 27.47 percent (FY2012-13). 2b) Group Insurance $ 8.4 $ 9.1 $ 9.9 Includes Medical, Dental, Vision, Life Insurance, Medicare, Disability. In FY 2010-11, the proposed group insurance budget includes approximately $14,300 per employee (633.5 approved positions), an estimated 8.2 percent increase from the prior year. 2c) Benefits, Other $ 1.1 $ 1.5 $ 1.3 Includes Workers’ Compensation, Tuition Reimbursement, Development Pay and Uniform Rental. Workers’ Compensation ($0.94 million in FY 2012-13 and $0.75 million in FY 2013-14) is used to maintain the level of accumulated reserves within the Workers’ Compensation self-insurance funds. The Development Pay Program ($300,000) is intended to promote employee efforts that increase job knowledge, skills, and abilities. 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 2 3) OPERATING MAT’LS & SUPPLIES $18.9 $19.3 $19.8 3a) Chemical Coagulants $ 6.8 $ 6.9 $ 7.4 Anionic Polymer – Anionic polymer is added to the primary clarifiers in combination with ferric chloride to enhance primary clarifier performance. The projected usage increased recently at Plant 2 because anionic polymer had not been used during bleach dosing in the primaries. When the trickling filters began operating, primary bleach dosing stopped, anionic polymer addition restarted, and the usage should remain constant. The budget for FY 2012-13 is $381,000 with FY2013-14 increasing to $400,050 because of a 5% anticipated unit rate increase. 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. Usage at both plants will increase because of additional secondary sludge production as Plant No. 1 operates two activated sludge facilities, and the new trickling filters at Plant 2 are fully operational. The anionic polymer budgets are $1,630,000 for FY 2012-13 and $1,711,500 in FY 2013-14. 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 amounts of ferric chloride are added to the digesters to control hydrogen sulfide. The projected ferric chloride budget for FY 2012-13 is $4,900.000 and $5,239,500 in FY2013-1, a 7% increase due to anticipated changes in unit rates. 3b) Odor Control $ 8.3 $ 8.4 $ 8.7 Hydrogen Peroxide – Hydrogen peroxide is used in the trunk sewers for control of sulfides and in the foul air scrubbers to control hydrogen sulfide. The projected budget in the treatment plants for FY 2012-13 is $1,103,000 and is estimated to be $1,186,500 in FY 2013-14. In the Collection System, there will be limited usage of hydrogen peroxide during the next two fiscal years with budgets of $80,300 each year. Sodium Hydroxide (Caustic Soda) – Caustic soda is used in the foul air scrubbers and in the District’s main trunk lines tributary to the treatment plants. The projected total cost of caustic soda for FY 2012-13 is $493,000 and $527,650 in FY2013-14, a 7% increase due to unit rates. 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 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 3 hard water, sulfides from the reaction with the foul air, and caustic soda used in the scrubbing process. The projected budget for FY 2012-13 is $86,000. 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. In FY 2012-13 and FY 2013-14, the projected budgets are $5,130 and $5,380 respectively. Magnesium Hydroxide, Trunklines – Magnesium hydroxide reduces the formation of hydrogen sulfide which causes odor and corrosion. Contract services include supply, operational monitoring, sampling, reporting and on-going maintenance services for odor control chemical dosing systems within the wastewater collection and conveyance system. The projected expense for FY 2012-13 is $2,268,000. In FY 2013-14, the proposed usage is the same at a proposed cost of $2,313,360, assuming a 2% unit cost increase. Ferrous Chloride, Trunklines – Ferrous Chloride is used in the trunks to reduce hydrogen sulfide generation. This contract provides supply, operational monitoring, sampling, reporting and on-going maintenance services for odor control chemical dosing systems within the wastewater collection and conveyance system. In FY 2012-13, the projected expense is $3,200,000. In FY 2013-14, the proposed budget increases to $3,300,000 because of an estimated rate increase of 3%. Calcium Nitrate, Trunklines – Calcium nitrate is a biological approach to controlling odors in wastewater. It provides the naturally occurring bacteria with an alternate source of oxygen which, when metabolized, produces nitrogen gas as a byproduct rather than the sulfides produced by the naturally occurring sources of oxygen. The budget projected usage for FY 2012-13 is $750,460. The FY 2013-14 proposed use is the same with, an increase in budgeted cost of $765,470 due to an estimated 2% unit rate increase. Bleach, Treatment Plant Odor Control – The projected total cost of odor control bleach for FY 2012-13 is $361,000. For FY 2013-14, staff proposes an estimated budget of $381,350, a 6% increase. Project P2-66, the new Plant 2 headworks, will increase the usage of scrubber bleach. 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 4 3c) Disinfection $ 1.3 $ 1.2 $ 1.3 Sodium Hypochlorite (Bleach) – Approximately 79% of all bleach will be used for effluent disinfection in FY 2012-13, a 22% decrease, because primary bleach dosing stopped at Plant 2 when the new trickling filters were operational. In 2011-12, the operation of the Plant No. 1 activated sludge process in a nitrification/de-nitrification mode required more plant process bleach for disinfection than anticipated because of filamentous Nocardia growth. When the new activated sludge facilities at Plant 1 are operating, this plant bleach usage will increase for the same reason. The remaining treatment plant bleach usage is disinfection of plant water and odor control. It is anticipated that the District treatment plant bleach budgets will be $1,001,000 in FY 2012-13 and $1,053,250 in FY 2013-14. Sodium Bisulfite – Sodium bisulfite is used for dechlorination of outfall effluent at Plant 2 to ensure that no residual chlorine is discharged into the ocean. Sodium bisulfite usage decreased with the decrease in effluent disinfection bleach during FY 2011-12. That is anticipated to remain the same during fiscal years 2012-13 and 2013-14 because there will continue to be no primary bleach dosing. The sodium bisulfite costs are expected to be $195,000 and $204,750 in FY 2012-13 and FY 2013-14 respectively. 3d) Tools and Safety Equipment / Tools $ 1.0 $ 1.0 $ 1.0 O&M, FSSD, and Safety use 98% of these budgets. There has been an increase in these budgets since the definition of capital equipment has changed; tools and equipment that cost less than $5,000 have a minimum useful life of three years and are not considered to be capital. Personal Protective Equipment requirements have increased, and there are different tools needed to maintain the new facilities. 3e) Laboratory Chemicals and Supplies $ 0.7 $ 0.6 $ 0.6 Over 90% of this budget supports the Environmental Sciences Laboratory purchases of glassware, filtration supplies, solvents used for organic extractions, acids and bases used in metals digestion and glassware cleaning, reagents, a variety of standards used in quality assurance of the tests, specialty gases, microbiology supplies and growth media, chromatography columns, test organisms for bioassay, toxicity, and various other laboratory supplies. 3f) Gas, Diesel and Oil $ 0.6 $ 0.6 $ 0.6 Vehicle and vessel gasoline and diesel fuel, compressed natural gas, diesel and oil used in the operation of the mobile equipment, within generators and other operating equipment are included in these budgets. The future price of gasoline and natural gas are the major impacts to these budgets. 3g) Other $ 0.3 $ 0.3 $ 0.3 Other smaller operating expenses collectively reported within this one line item such as janitorial supplies and miscellaneous operating supplies. 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 5 4) CONTRACTUAL SERVICES $23.9 $26.1 $27.9 4a) Solids Removal $19.1 $20.4 $21.4 Biosolids – Solids production for FY 2012-13 and 2013-14 is expected to increase with the operation of new secondary facilities at both treatment plants. The total cost for FY 2012-13 is projected to be $20,370,000 as budgeted, and $21,388,500 in FY 2013-14. The total estimated budgets for biosolids have increased from projections that the EnerTech facility will operate as expected. 4b) Other Residual Solids and Waste $ 1.3 $ 1.0 $ 1.4 The other residual 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’s crews and other city crews in the District’s service area. The proposed budgets for disposal of grit, screenings and other waste is $958,500 in FY 2012-13 and $1,396,430 in FY 2013-14. The increase in FY 2013-14 is due to a $400,000 digester cleaning expense. 4c) Grounds keeping/Janitorial/Security $ 1.0 $ 1.1 $ 1.1 Security Services budgets will remain the same for the next two fiscal years. Completion of large capital projects will decrease security needs. There are increases in the Grounds-keeping budget and in Janitorial Services anticipated for the next two years. 4d) County Service Fee $ 0.6 $ 0.6 $ 0.6 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. 4e) Oxygen Plant Operations $ 0.4 $ 0.6 $ 0.7 The District has had a maintenance service contract for 25 years. The budget has also included the purchase of oxygen when the plant was not operating due to shutdowns or mechanical failures. The current contract will end in FY 2011-12 because the oxygen plant will be decommissioned and the oxygen will be provided by a new vapor technology. The costs for purchased oxygen are included in the budget. 4f) Temporary Services $ 0.2 $ 0.3 $ 0.2 Since FY 2009-10, District staff has greatly decreased the use of temporary services by eliminating long-term temporary help and finding alternative solutions in-house (reallocation of labor and work as required, essential overtime). The requested temporary services are for long-term leaves, vacancies, and special studies. 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 6 4g) Outside Lab Services $ 0.1 $ 0.1 $ 0.1 The District contracts out certain laboratory services that are not cost-efficient to perform in-house. Examples include air quality analyses, oil analyses for transformers and internal combustion engines, contaminants of potential concern, and hi-resolution mass spectroscopy. Contracted biosolids testing meets the State of Arizona requirement for analyses to be performed in an Arizona certified laboratory. 4h) Contracted Services, Other $ 1.2 $ 2.1 $ 2.4 Over 95% of contracted services are in support of operating and maintaining the collection system and the treatment plants. These services include line cleaning ($405K), closed circuit television of lines ($450K), manhole frame and cover rehabilitation and replacement ($250K), manhole structural repair and coating ($350K), sewer repair and relining ($230K), tunnel cleaning, root and pest control ($80K), and traffic control ($105K). 5) REPAIRS AND MAINTENANCE $ 10.7 $ 11.2 $ 11.9 5a) Materials & Services $ 9.0 $ 9.1 $ 9.8 Over 98% of these budgets support the maintenance of the collection system and the treatment plants. O&M contracted materials and services for FY 2012-13 include: process area painting preventive maintenance ($725K); flooring and window cleaning ($14K); Dig Alert and street overlays/manhole raising ($150K); manhole cover purchases ($220K); easement improvements ($150K); secondary clarifier and cross-collector maintenance ($275K); various valve replacements ($108K); and other maintenance services and operating materials, including warehouse stock. The budget for basic scheduled, predictive, and preventive maintenance and emergency maintenance are included in these budgets which are proposed based on historical experience and cost trends. 5b) Service Agreements $ 1.7 $ 2.1 $ 2.1 Approximately 57% and 32% of service contracts are computer-related or O&M/FSSD maintenance-related respectively. Major contracts for Information Technology include IBM Software Maintenance for Maximo and FileNet-AS ($215K); Microsoft License Agreements ($225K); JDE-Primavera-Oracle support ($142K); Reprographics ($400K); copy center services ($275K); and various smaller service agreements. FSSD manages O&M/FSSD service contracts including polymer tank cleaning ($90K); crane certification ($46K); fire extinguisher and fire sprinkler certification ($30K); Uninterruptible Power Supply electrical maintenance ($59K); and various other plant maintenance agreements. Additional service maintenance agreements covering various equipment items are budgeted throughout the District. 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 7 6) UTILITIES $ 7.8 $ 8.2 $ 8.8 6a) Power $ 5.8 $ 6.2 $ 6.5 Electricity – The treatment plants and support buildings estimated consumption and resulting costs for electrical energy purchased from Southern California Edison for the 2012-13 fiscal year are $5,427,000 and the pump stations budget for the same period is $602,200. Other support buildings power costs are $522,000, completing the total estimated power costs for FY 2012-13. 6b) Water $ 1.3 $ 1.3 $ 1.3 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 budgets for FY 2012-13 and FY 2013-14 are $820,000. A project allowing the use of strained plant water at Plant 1 has significantly reduced the costs. GAP water is used when available; for most of the year, Ground Water Replenishment System water is used at both treatment plants. 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 percent 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. The proposed total potable water cost for FY 2012-13 is $472,750, a 5% increase. 6c) Natural Gas $ 0.4 $ 0.4 $0.6 Natural Gas – The total FY 2012-13 natural gas estimate is $419,000, approximately the same as last fiscal year; there were no new air quality permit requirements. The total FY 2012-13 gas estimate is slightly lower than last year. The Plant 1 Central Generation actual usage was considerably less than previously estimated even with operation of Engine 1 for peak shaving during last summer. Engine 2 is down for major overhaul until September which will greatly reduce our ability to peak shave this summer. The natural gas used for Central Generation is purchased from a gas marketer, Constellation Energy, and transported through The Gas Company conveyance system at stipulated cost of $0.11/therm. The “core subscription” is natural gas purchased directly from The Gas Company and used mainly for building heating and supplemental process heating. The Core gas at Plant 2 has decreased considerably with the return of the auxiliary boilers from natural gas to digester gas. The previous switch to natural gas had been made to provide more digester gas to CenGen to support two engines and still comply with the AQMD limits for use of natural gas. 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 8 7) PROFESSIONAL SERVICES $ 2.0 $ 3.1 $ 2.4 7a) Legal Services ($500K) Legal services are services primarily provided by General Counsel including hours at the District, hours attending committee and board meetings, and general legal support. Other specialized firms are also included in this budgeted amount. 7b) Engineering Services ($300K-$400K) These services provide technical support that in-house staff cannot provide or do not have the time to provide. In FY 2012-13 requested engineering services include a Maintenance Management Audit ($100K); pump station electrical system arc flash OSHA-required study ($75K); an On-Call Architect and Engineering Consultant for facility rehabilitation projects ($175K); and miscellaneous studies and evaluations ($120K). 7c) Advocacy Efforts ($200K) These are consultant services for promoting the District’s interests in Sacramento and Washington D.C concerning legislation and funding. 7d) Audit and Accounting ($150K-$300K) These services represent the cost for the District’s independent annual financial audit and contracted internal auditing services. 7e) Software Program Consultant ($400K-$500K) These support costs are required to supplement programming staff as new software versions and new programs are implemented and revised; they are also in support of the SCADA/ (supervisory control and data acquisition) system for process monitoring and controlling. 7f) Other ($300K-$1.1M) Professional services also includes: a strategic outsourcing initiative ($200K); LOTO procedure consultant ($150K); succession planning, pre-employment testing, staffing and performance consulting, and a salary survey ($105K); an environmental science consultant ($110K); and industrial hygiene services ($50K). Collectively reported within the one line item “Other” are various smaller services including: Dig Alert tickets; a sewer airflow study; website support; photography; coaching and other small professional service expenses. 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 9 8) OTHER OPERATING SUPPLIES $ 2.1 $ 2.3 $ 2.3 8a) Prop. and General Liability Insurance ($1.0M-$1.3M) 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 perils other than flood and $300 million for flood is subject to a self-insurance retention of $250,000. The District is self-insured for all property damage from the perils of earthquake. The proposed appropriation of $1.0 million is needed to maintain the recommended level of reserve within the general liability and property self-insurance fund. 8b) Regulatory Operating Fees ($700K) Payments to the Regional Water Quality Control Board for the NPDES Permit and to the South Coast Air Quality Management District for permit fees. 8c) Other ($300K) Other material, supplies, and services collectively reported within this one line item. 9) ADMINISTRATIVE EXPENSE $ 1.2 $ 1.4 $ 1.2 9a) Small Computer Items ($500K) New Computers/Notebooks/Tablets, printers, monitors, Networking equipment, Computer peripherals, Digital equipment, PDAs, Digital Cameras, etc. 9b) Memberships ($500K) 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 Association of California Water Agencies, and the Center for Demographic Research. A minor portion of these expenses is for staff memberships in professional associations. 9c) Office Supplies ($100K) Office supplies include such items as envelopes, letterhead, notebooks, calendars, etc. 9d) Other ($400K) Other smaller administrative expenses collectively reported within this one line item. 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 10 10) RESEARCH AND MONITORING $ 0.7 $ 0.8 $ 0.9 10a) Environmental Monitoring ($300K) 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. 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 and insurance fees for the District’s ocean monitoring vessel, the M/V Nerissa. 10b) Air Quality Monitoring ($100K) 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. 10c) Other Research ($300K) OCSD contributes annually to research organizations such as the Southern California Coastal Water Research Project and the Water Environmental Research Foundation. 11) OTHER NON-OPERATING EXPENSE $ 0.8 $ 0.8 $ 0.8 11a) General Manager Contingency ($400K) These funds are centrally budgeted and expended through the direct discretion and specific approval of the General Manager to support unanticipated District needs or requests of the Board. 11b) Prior year Appropriations ($400K) 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 in the prior year but goods or services have not been delivered until after June 30 in the new budget year. (Revised FY 2009-10 budget reflects application of these funds.) 2012-13 AND 2013-14 BUDGET DEVELOPMENT – ADDITIONAL DETAIL Projected Proposed Proposed 2011-12 2012-13 2013-14 11 12) TRAINING AND MEETINGS $ 0.8 $ 1.4 $ 1.2 12a) Training ($700K - $1.4M) An amount equal to approximately 1.5 percent of the Regular Salaries budget is allocated to Training. Training activities are coordinated though the Human Resources Division. This category includes ongoing technical and safety training and materials for staff; expansion of the Leadership Academy training program, required training for computerized plant monitoring and control systems and training to allow for a more adaptive and flexible work force. 12b) Meetings ($200K) The General Manager has reviewed all meeting request budgets for necessity, duplication, and redundancy and has limited this amount to a responsible level. 13) PRINTING AND PUBLISHING $ 0.5 $ 0.5 $ 0.4 13a) In-House Publishing ($400K) Although the budget provides for some outside reproduction, the majority of OCSD printing activities are completed In-house, reflecting an expanded management information system and administrative requirements. As well as 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. 13b) Other ($100K) Other printing and publishing expenses collectively reported within this one line item. 14) COST ALLOCATION ($18.3) ($17.8) ($18.2) This represents direct and indirect labor, benefits, materials, and services charged to the Capital Improvement Program (CIP) where the related work was performed.