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Home My WebLink About1995-01-18Fi LED ~ :n the Office of the Secretmy County Sanitstlon District(s) No(s) /,:)>3 ~-le ,?. II n tit/ f ., • FEBO 81995 County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: {714) 962-2411 jJ_ ):'. DRAFT By . . MINUlES OF FINANCE AND PERSONNEL COMMITTEE Wednesday. January 18. 1995. 5:30 P.M. A meeting of the Finance and Personnel Committee of the County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California was held on January 18, 1995, at 5:30 p.m., at the Districts' Administrative offices. The roll was called and a quorum declared present, as follows: Committee Directors Present: George Brown, Chainnan John C, Cox, Jr., Joint Chainnan Jan Debay Burnie Dunlap James H. Flora John M. Gullixson Wally Linn Thomas Saltarelli William G. Steiner Peer Swan, Vice Joint Chainnan Committee Directors Absent: Roger R. Stanton, Vice Chainnan Other Directors Present: John Collins (4) VERBAL REPORTS Staff Present: Blake Anderson, General Manager Gary G. Streed, Director of Finance Gary E. Hasenstab, Director of Personnel Ed Hodges, Asst. Director of Operations Bob Ooten, Asst. Director of Maintenance Michael D. White, Controller Steve Kozak, Financial Manager Others Present Tom Woodruff, General Counsel Patti Gorczyca, Public Financial Management (a) Report of Director of Finance Gary Streed, Director of Finance, reported that Solomon Brothers had issued a "month-end" summary of the new County Portfolio as of January 11, 1995. The report stated that $3.2 billion was invested for a four-day weighted average maturity and was earning 5.47%. The longest maturity was two weeks. The Districts had $21 million on deposit with the Treasurer at that time and $3.9 million in a separate bank account. (The current bank account balance is $4.2 million). Minutes of Finance & ... · rsonnel Committee Page2 January 18, 1995 The Committee discussed the role of a special subcommittee to review the Deloitte & Touche RFP for a new FIS and agreed to wait until the Ernst & Young evaluation and recommendations for the Finance Department were available. (b) Report of the Joint Chairman The Joint Chairman reported the search for a General Manager is on schedule and that the Special Committee had meetings planned. (5) APPROVAL OF MINUTES The draft minutes of the December 21, 1994 meeting of the Finance and Personnel Committee were approved. (6) NEW BUSINESS FPC95-01 Status Report on County Bankruptcy Proceedings and Impacts on the Districts General Manager Blake Anderson gave the Committee members an oral update on the County bankruptcy proceedings and apprised them of any changes since the report at the Board meeting, including the January 18th meeting of the Pool Investors Committee. He noted that current estimates of the total loss have been reduced to $1.7 billion or 22%. The County's workout plan is expected within a week. FPC95-02 Overview of Asset and Liability Management Functions In an effort to better define the functions and expectations of the asset and liability management function, PFM and staff gave an overview presentation and followed with a question and answer period. With the appointment of a Districts' Treasurer, we have moved into an area of financial management that is relatively new for the Directors and staff. This area is the management of assets in addition to their safekeeping. Asset and liability management (A/LM) establishes a framework for managing the financial risks inherent in the assets and liabilities of the balance sheet. A/LM includes decision making as a part of an integrated program rather than as a series of separate actions, recognizing the interrelationships of both sides of the balance sheet. Minutes of Finance & Pe"-)>nnel Committee Page 3 _, January 18, 1995 ) ) Recommendation The report was received and filed and the Committee recommended that staff prepare a special informational session for the Directors. FPC95-03 Review Recommended Short List fo.r Investment Advisor and Establish a Selection Committee At the last Committee meeting, the Directors reviewed a draft request for proposals (RFP) for an independent Investment Advisor and a list of potential firms. The RFP was mailed on January 4, 1995, and responses received January 13, 1995. The initial scope of this investment advisory engagement will be the development of a Districts'. investment policy. The investment advisor will be responsible for developing the Districts' investment policies and procedures. The advisor will review the timing of the Districts' cash needs so they can recommend the appropriate maturities of the portfolio. The advisor will also set up procedures for selection of investment manager(s) and participate in the selection process, and may be required to develop quarterly reviews of the investment manager(s) performance as needed. Prior to the Committee meeting, staff, Public Financial Management and General Counsel reviewed and ranked the proposals. A short list of firms recommended by the review committee was presented at the meeting. Recommendation A motion was made, seconded and unanimously approved to form a Selection Committee including Directors Burnie Dunlap and Peer Swan, PFM and staff. The Selection Committee will meet January 24, 1995, to interview the firms on the short list and to prepare a recommendation to the Boards. PC95-04 Consideration of Interim Investment Policy At the Finance and Personnel Committee Meeting of December 21, 1994, the Committee members approved the release of a Request for Proposals for investment advisor services. The final selection of an investment advisor is scheduled to be approved by the Joint Boards on February 8, 1995. Mike White, Controller, reported that the balance in the Districts' Money Market Account with Bank of America was $4.2 million as of January 18, 1995. The bank, by law, must provide collateralization at 110% of the Districts' total deposit with government securities. The Districts have now reached the maximum deposit amount that Bank of America is willing to collateralize. Minutes of Finance & r-rsonnel Committee Page4 January 18, 1995 The Districts are expecting to receive $15 million of the property tax apportionment that was deposited within the County Treasurer's Investment Pool soon. In addition, the Districts are expecting to receive $8.1 million from the next property tax installment on January 24, 1995. Therefore, the Districts need to be providing for our own cash management functions until an outside investment advisor can be selected, have an opportunity to review the Districts' finances, and provide treasury management recommendations. The Directors reviewed the proposed Interim Investment Policy which identified U.S. Treasury Notes or Bills, the State LAIF and Obligations of Federal Agencies for idle cash funds until an outside investment advisor can recommend an investment program. Third-party custody of all investments is a requirement of the policy, and no payments are to be made prior to such custody. Recommendation A motion was made, seconded and unanimously approved to adopt the Interim Investment Policy on behalf of the Districts. The Districts' Treasurer was directed to carry out the duties of investing idle cash using Bank of America as a Trustee/Custodian, until the recommendations of an outside investment advisor can be obtained, approved, and implemented by the Districts. FPC95-05 Internal Controls for Accounts Payable, Payroll and Treasury At the December 21, 1994 Finance and Personnel Committee meeting, Committee Members approved staffs recommendation to bring all cash disbursement functions relating to Accounts Payable and Payroll in-house providing that the Accounting Division first develop the adequate internal controls over these functions. Mike White, Controller, reviewed the internal accounting controls over Accounts Payable and Payroll for the Committee which were included in the agenda packet. New controls need to be implemented now that the County of Orange will no longer be providing auditing, check signing, and bank reconciliation services. An overview of the internal controls for the new Treasury Management function was also given. It was further noted that these controls are an extension of our existing daily cashiering controls. Recommendation The procedures were received, approved and filed. • Minutes of Finance & Peynnel Committee Page 5 January 18, 1995 FPC95-06 Reguest For Proposals For Professional Auditing Services A three-year independent auditing service agreement with KPMG Peat Marwick expired with the completion of the 1992-93 audit. Because of the anticipated staff time that would be required in selecting a new financial information system, the Fiscal Policy Committee decided to extend KPMG's service agreement through the 1993-94 audit at the February 10, 1994 meeting, but directed staff to solicit proposals for a multi-year engagement from other qualified public accounting firms beginning in 1994-95. Although the Districts have yet to complete the process of acquiring and installing a new financial information system, staff reported that there is now sufficient staff to select and install a new financial information system and also to orient a new auditing firm unfamiliar with the Districts now that the Controller position is filled. The Committee discussed the draft Request For Proposal For Professional Auditing Services and a listing of qualified audit firms which had been included in the agenda packet. Since KPMG has performed the Districts' audit for the last 19 years, the Districts would benefit by the selection of a new audit firm with a fresh perspective and possibly different audit approach. Therefore, KPMG is not on the preliminary listing of potential audit firms. Recommendation A motion was made, seconded and unanimously approved to release the Request For Proposals For Professional Auditing Services for fiscal year 1994-95, with the option of auditing the following three years, to the firms on the distribution list. Potential services for a CAFR, future financings and the Single Audit Act will be requested on a time and materials basis. All other services will be included in a not-to-exceed cost proposal. FPC95-07 Review Alternative Capital Improvement Plans Operations and Maintenance Department and Engineering Department staff have reviewed the Joint Works and individual Districts' capital improvement programs. All projects were ranked according to several criteria including: impact on public health, safety, compliance with permits, and economics. Using these rankings, the projects were then prioritized and potential design and construction cash draws were prepared. Two alternative capital improvement plans were prepared for the joint works and for the Districts' facilities. The Priority Capital Improvement Plans include only those projects ranked as high priority by Operations and Maintenance. The Desired Capital Improvement Plans include the continuation of all projects currently under design or construction. The Committee reviewed copies of these four plans and their report on cash flow projections. Minutes of Finance & r isonnel Committee Page6 January 18, 1995 Although the Operations, Maintenance and Technical Services Committee and the Planning, Design and Construction Committee have not yet finalized their recommendations for a Capital Improvement Plan in light of the County Investment Pool crisis, the alternatives have been used to prepare preliminary cash flow projects and are enclosed for the Committee's information. Recommendation These plans were received and filed. FPC95-08 Overview of 1~95 Financing Plan The Districts' budget adopted for the year ending June 30, 1995, included a potential new Certificate of Participation (COP) issue of $84,500,000 to finance the budgeted capital improvements. In July 1994, the Joint Boards adopted a Resolution declaring their intent to fund current capital improvements from reserves and to reimburse those reserves from a future financing. Staff and Public Financial Management (PFM) recommended the Districts begin the process of selecting a financing team including an underwriter, special counsel and underwriter's counsel, by issuing a Request for Proposals (RFP). The financing team will then prepare the 1995 financing plan alternatives for the Committee's review. A draft RFP for underwriter and special counsel services and a list of potential providers Were distributed at the meeting. Underwriter's counsel will be determined from the special counsel selection process. The Committee agreed that the need for a future financing depends upon the Capital Improvement Plan ultimately selected, the release of reserves from the County Pool and the Districts' need for adequate reserves. Recommendation A motion was made, seconded and unanimously approved to consider the RFP process, including conflict screening, for a financing team at the March Committee meeting. FPC95-09 Status Report on 1990-92 Capital Improvement Program COP Interest Rate Monitoring Steve Kozak, Financial Manager, presented an information-only report covering the current status of Interest Rate Monitoring for the Districts' COP Program. Between the December 1990 issuance of the Series "A" COPs and September 1993, the Committee reviewed detailed spreadsheets of interest costs and interest earnings for the 1990-92 Capital Improvement Program COP issues. A revised summary form has been used since January 1994. Mr. Kozak summarized the program to date which is summarized in the following table: Minutes of Finance & PE'~ ~nnel Committee Page? I January 18, 1995 Series A 12190 $100,000,000 2.78% 5.22% Series 8 (Net)* 04/91 39,465,000 6.86%-1.35% 1992 Refunding-11192 41,081,000 5.55% 1.79% 1993 Refunding 09/93 46,000,000 4.56% 2.30% Series C 09/92 98,500,000 2.42% 5.05% 4.15% 3.70% *Original issue size was $117,555,000. -Excludes $119,519,000 allocated to 1986 COPs of Districts 1, 2 & 3. -*$6,900,000 earnings from SWAP would reduce fixed rate by 1.96% for the first three years to 4.9%. The construction reserves have earned an average of 7.85% since the inception of the 1990-92 COP program. Thus, the Directors' decision to borrow rather than to spend down our reserves has resulted in net interest earnings of $39. 7 million on the reserves over this time period. Bond proceeds from all three COP issues have been expended in compliance with the two-year spending test. None of the Construction and Acquisition Funds for the 1990-92 series COPs has sustained arbitrage rebate penalties. Recommendation This report continues the practice of COP program updates for the Committee on a quarterly basis. No action being necessary, this item was received and filed. FPC95-1 O Status Report on Taxabf e Commercial Paper Program Steve Kozak, Financial Manager, presented an information-only report covering the Districts' Taxable Commercial Paper Program. With payment of the note maturing on January 10, 1995, the Taxable Commercial Paper Program has been retired. Future borrowing alternatives will be considered after the financing team has been formed. Recommendation This item was received and filed. Minutes of Finance & r )SOnnel Committee Page 8 January 18, 1995 FPC95-11 Consideration of a motion to renew Boiler & Machinery Insurance for the period March 1. 1995 to March 1. 1996. with the American Manufacturers Mutual Insurance (Kemper Insurance Group). Steve Kozak, Financial Manager presented a report regarding the renewal of Boiler & Machinery Insurance for the period March 1, 1995 to March 1, 1996. Parts of the Districts' insurance program renew at different times of the year. The Property Insurance including all risk, earthquake and flood protection, will renew in June; the Excess Workers' Compensation Insurance will renew in May; and the Boiler & Machinery Insurance will renew on March 1, 1995. It is necessary to review the Boiler & Machinery Insurance renewal at the January Committee meeting in order to obtain Joint Boards' authority in February, prior to the March 1, 1995, renewal date. Robert F. Driver Company, the Districts' Broker of Record, submitted the Districts' Boiler & Machinery Insurance program to six insurance companies over the past few months and prepared the enclosed Summary of Proposals Report which includes the current program and the three proposals received for Boiler & Machinery Insurance renewal for the period March 1, 1995 to March 1, 1996. Recommendation A motion was made, seconded and unanimously approved to renew Boiler & Machinery Insurance for the Districts for the period March 1, 1995 to March 1, 1996, with the American Manufacturers Mutual Insurance (Kemper Insurance Group), based on their overall superior policy terms, their knowledge of the Districts' programs, their record of prior service to the Districts and their lowest policy premium of $77 ,376. 78 FPC95-12 Consideration of a motion recommending a Board Resolution adopting the provisions of Government Code Section 31641.04 authorizing two years additional service credit for retirement purposes. Gary Hasenstab, Director of Personnel, presented a report proposing adoption of provisions of Government Code 31641.04, authorizing Districts employees to receive two years additional service credit for retirement purposes. The County Employees Retirement Law of 1937 allows the Districts' Boards to determine that it would be in the best economic interests of the Districts for employees who are otherwise eligible to retire to receive an additional service credit of two years as an incentive to retire within a specified period. Minutes of Finance & Pe,-innel Committee Page9 January 18, 1995 The Committee reviewed the pros and cons of promoting early retirement and the expected cost benefits. They noted that there was really no overriding need for the Districts to downsize. Ed Hodges, Assistant Director of Maintenance, and Blake Anderson reminded the Committee that Ernst & Young has recommend a reorganization of the Operations and Maintenance Department and that early retirement could assist with that process. Recommendation A motion was made, seconded and unanimously approved to table consideration of an early retirement program pending more information on the reorganization costs. FPC95-13 Status Report on Districts' Deferred Compensation Plan in Response to Director Swan's Request In response to Director Swan's request, Gary Streed reported that the Districts have an IRS-approved deferred compensation plan. All employees and Directors are eligible to participate in the plan. There are approximately 300 active participants in the plan, which is an "unqualified plan." There are approximately 300 active participants in the plan and 159 non-active accounts. Two options are provided for plan deposits: the County Commingled Investment Pool, and the Lincoln National Insurance Plans. Prior to the County's bankruptcy, 67% of the participants were making deposits to the Commingled Investment Pool. Several employees have changed plans in the past month and now 30% of the participants are in the Commingled Investment Pool. The Old Age, Survivors and Disability (OASDI) contributions of 7.5% for each Director are also deposited here. At December 6, 1994, the total Districts' deferred comp deposits into the Commingled Investment Pool were $4,666,680. Deductions from payrolls and Directors' compensation since December 6, 1994 have been held in the Districts' safe and not deposited into the Commingled Investment Pool. Deposits have been made into the Lincoln National Plan as deductions were made. During the past month, staff has had several discussions with the County Treasurer's Office regarding our deferred compensation plan. As of January 12, 1995, the County Treasurer's Office has indicated that all participants in the Pool will be subject to the limits adopted by the Board of Supervisors on January 5, 1995, as reported in the Situation Update from County Administrator Ernie Schneider, including a loss of 10% of their balances. Minutes of Finance & r ;sonnel Committee Page 10 January 18, 1995 The Directors discussed the nature of the 457 Plan and the creditor status of the depositors. They declared their intent to limit or eliminate any loss to participants in the Con:imingled Investment Pool deferred compensation plan. Recommendation The Committee directed staff to prepare a report for consideration at their February meeting. (11) CONSIDERATION OF UPCOMING MEETING DATES AND ITEMS TO BE DISCUSSED AT THOSE MEETINGS. Committee Chairman George Brown reported that the calendar of future meetings is on the back of the Notice of Meeting each month. The next Finance and Personnel Committee meeting is scheduled for Wednesday, February 15, 1995. He urged the Committee members to make special note of the 1995-96 budget calendar included in the following list of future meeting topics: Deferred Compensation Balance Proposals Six-Month Joint Works Budget Reviews Training and Travel Expenses Independent Financial Auditor Personnel Policies Manual Treasurer's Report Underwriter and Special Counsel Services All-Risk Property Insurance Joint Works Capital Improvement Budget for 1995-96 User Fees and Connection Fees for 1995-96 Investment Policy Investment Manager Services Joint Works Operating Budget for 1995-96 COP Monitoring Report Personnel Budget for 1995-96 Complete Joint Works Operating and Capital Budget Nine-Month 1994-95 Joint Works Budget Review Training and Travel Expenses Excess Workers' Compensation Insurance Debt Financing Strategy for 1995-2000 (12) ADJOURNMENT The meeting was adjourned at 8:25 p.m. GGS:lc J:\WPOOC\FINICRANE\FPCMTGIFPC95'MINUTESIMFPC1 .95 Enclosures ) STATE OF CALIFORNIA ) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Notice and the Agenda for the Finance and Personnel Committee meeting held on January 18, 1995, was duly posted for public inspection in the main lobby of the Districts' offices on January 13, 1995. IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of January, 1995. t ry · each of the Boards of Directors of County Sanitati Dist · ts Nos. 1, 2, 3, 5, 6, 7, 11 , 13 & 14 of Orange County, California Posted: By: J:IWPDOC\FINICRANBFPC.MTGIFPC95\CERTOF.POS\CERTPOS1.95 ) January 13, 1995 MEMORANDUM TO: FINANCE AND PERSONNEL COMMITTEE FROM: GARY G. STREED, DIRECTOR OF FINAN SUBJECT: AGENDA ITEM FPC9510 COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA 10844 ELLIS AVENUE P.O BOX 8127 FOUNTAIN VALLEY. CALIFORNIA 92728-8127 !7141962-2411 Please replace the entire package behind tab FPC951 O in the Finance and Personnel Committee agenda with the enclosed. The staff report has been revised to provide additional information and clarification. GGS:lc J:IWPOOC\FINICRANEIFPC.MTGIMGS1-13.95 cc: General Manager Department Heads \ •.' FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-10: Status Report on Taxable Commercial Paper Program Summary Steve Kozak, Financial Manager, will present an information-only report covering the current status of the Districts' Taxable Commercial Paper Program. With payment of the note maturing on January 10, 1995, the Taxable Commercial Paper Program has been retired. Future borrowing alternatives will be recommended after the financing team has been formed. Staff Recommendation Information item only. J:\WPOOC\FIN\CRANE\FPC.MTG\FPC95\ITEMS.AGO\FPC85.10 Revised _,..-~'. ) January 18, 1995 STAFF REPORT FPC95-10: Status Report on Taxable Commercial Paper Program The Fiscal Policy Committee approved a $50 million Taxable Commercial Paper Program (TCPP) for the Districts which started in January 1994. The TCPP allowed the Districts to borrow for working capital and maintenance and operations (M&O) funding requirements, while operating reserves remained on deposit earning interest in excess of program costs. The TCPP presented no tax consequences to the Districts, although investors are subject to federal taxation. Program Results The attached Maturity Schedule reports on all of the TCPP transactions from inception through January 10, 1995. The weighted average coupon rate over the twelve months of the program is 4.30%. During this same period of time (Jan.-Dec.), the Districts' Commercial Paper Fund earned an average interest rate of 5.56% while on deposit in the County Bond Pool. The net interest earnings after deducting interest costs, remarking costs and standby withdrawal agreement costs are approximately $625,000. Final Maturities The following table summarizes the results of the TCPP maturities in December 1994, and January 1995. December 6, 1994 $4M Treasurer honors Districts' withdrawal request. Notes paid. December 7, 1994 $26M Treasurer denies Districts' withdrawal request. TCPP in technical default due to non-payment. Lehman Brothers, Inc., holds note at cost of funds rather than statutory default rate. December 13, 1994 $26M Rating Agencies downgrade TCPP rating from "A1+/P1" to "C/Not Prime." December 29, 1994 $46M Bankruptcy Creditors' Committee approves Districts' request for emergency withdrawal of funds from the Treasurer's Pool. January 4, 1995 $26M Funds transferred from Treasurer's Pool to pay notes. January 5, 1995 $20M Bankruptcy Creditors' Committee approves Districts' request for emergency withdrawal of funds from the Treasurer's Pool. January 10, 1995 $20M Funds transferred from Treasurer's Pool to pay notes. Staff Report -FPC95-10 Page2 January 18, 1995 The Rating Agencies were informed about the foregoing developments as they occurred. With the close of the TCPP, the Rating Agencies have indicated they will withdraw their rating downgrades very soon. Also, General Counsel is drafting a market. disclosure for release to the municipal securities markets to inform them that the Districts have successfully resolved the difficulties with the TCPP. Additional Review Staff continues to evaluate the advantages and disadvantages of alternative borrowing structures to meet the Districts' needs for future capital project financing. Recommendations will be forthcoming after the formation of a financing team. As noted above, the TCPP proceeds were deposited into the County Bond Pool. Our intent for the program was originally for the proceeds to be deposited to the Commingled Investment Pool. Based upon most recent information, the TCPP would have yielded higher earnings in the Commingled Investment Pool. Staff, General Counsel and Bankruptcy Counsel will continue our review of this issue. SK:lc J:\WPDOC\F1NICRANE\FPC.MTGIFPC85\STAFFRPT.FPC\SR115.10 FPC95-1 .~ County Sanitation Districts Nos. l,2,3',.,,.,_..,.7,11,13 and 14 of Orange County, CA ....../ $50 Million Taxable Commercial Paper Program Maturity Schedule as of 1/11/95 $ Days to 30-Day Investor Par Amount Issue Date Maturity Date Maturity Rate FedAA AIM Cash Fund of CT 4,000,000 1/19/94 2/24/94 36 3.10% 3.14% LB/Bell South 5,000,000 1/19/94 2/16/94 28 3.10% 3.14% LB/ Atlantic Richfield Corp. 21,000,000 1/19/94 2/16/94 28 3.10% 3.14% LB/J.W. Connor 10,000,000 1/19/94 2/16/94 28 3.10% 3.14% LB/ Atlantic Richfield 10,000,000 1/19/94 2/16/94 28 3.10% 3.14% Std Oil of Indiana -AMOCO 7,000,000 2/16/94 2/28/94 12 3.45% 3.48% AIM Cash Fund of CT 1,000,000 2/16/94 3/21/94 33 3.45% 3.48% ..) J.W.Connor 10,000,000 2/16/94 3/21/94 33 3.40% 3.48% Bank of Boston 3,000,000 2/16/94 4/21/94 64 3.40% 3.48% Koch Industries 10,000,000 2/16/94 4/21/94 64 3.40% 3.48% EDF Corp. 14,000,000 2/16/94 4/21/94 64 3.40% 3.48% AIM Cash Fund of CT 1,000,000 2/16/94 4/21/94 64 3.40% 3.48% AIM Cash Fund of CT 4,000,000 2/24/94 3/25/94 29 3.45% 3.48% Lehman Brothers 7,000,000 2/28/94 3/7/94 7 3.45% 3.52% Bank of Boston 7,000,000 3/7/94 4/4/94 28 3.60% 3.62% AIM Cash Fund of CT 800,000 3/21/94 4/18/94 28 3.55% 3.64% J.W. Connor 10,200,000 3/21/94 4/21/94 31 3.50% 3.64% AIM Cash Fund of CT 4,000,000 3/25/94 4/22/94 28 3.60% 3.67% Bank of Boston 7,000,000 4/4/94 5/3/94 29 3.68% 3.82% AIM Cash Fund of CT 800,000 4/18/94 5/18/94 30 3.77% 3.88% Bank of Boston 8,000,000 4/21/94 6/1/94 41 3.95% 3.88% Lehman Brothers 30,200,000 4/21/94 4/22/94 1 3.85% 3.88% J Bell South 10,200,000 4/22/94 5/11/94 19 3.90% 3.87% Bell South 20,000,000 4/22/94 5/11/94 19 3.90% 3.87% Lehman Brothers 4,000,000 4/22/94 4/25/94 3 3.85% 3.87% Bell South 4,000,000 4/25/94 5/11/94 16 3.87% 3.89% Lehman Brothers 7,000,000 5/3/94 5/4/94 1 3.85% 3.99% Lehman Brothers 7,000,000 5/4/94 5/5/94 1 3.90% 4.02% Lehman Brothers 7,000,000 5/5/94 5/6/94 1 3.80% 4.08% Koch Industries 7,000,000 516194 6/2/94 27 4.30% 4.23% Lehman Brothers 34,200,000 5/11/94 5/12/94 1 3.70% 4.37% • next maturity Shaded entries are outstanding maturities Prepared by Lehman Brothers 1/11/95 FPC95-10 County Sanitation Districts Nos. 1,2,J,5,6,7,11,13 and 14 of Orange County, CA $50 Million Taxable Commercial Paper Program Maturity Schedule as of 1/11/95 $ Days to 30-Day Investor Par Amount Issue Date Maturity Date Maturity Rate Fed AA J.W. Connor 5,000,000 5/12/94 6/9/94 28 4.33% 4.37% Banlc of Boston 17,500,000 5/12/94 612194 21 4.38% 4.37% Lehman Brothers 11,700,000 5/12/94 5/13/94 1 3.70% 4.37% ADP 11,700,000 5/13/94 5/18/94 5 3.90% 4.36% Southern California Edison 10,000,000 5/18/94 6/1/94 14 4.37% 4.35% Lehman Brothers 2,500,000 5/18/94 5/19/94 1 4.29% 4.35% Lehman Brothers 2,500,000 5/19/94 5/23/94 4 4.20% 4.34% Lehman Brothers 2,500,000 5/23/94 5/24/94 1 4.20% 4.32% Lehman Brothers 2,500,000 5/24/94 5/25/94 1 4.20% 4.33% Lehman Brothers 2,500,000 5125194 6/1/94 7 4.28% 4.32% Banlc of Boston 4,000,000 6/1/94 8/1/94 61 4.45% 4.37% Southern California Edison 16,500,000 6/1/94 6/2/94 1 4.35% 4.37% Banlc of Boston 4,000,000 6/2/94 8/1/94 60 4.45% 4.37% Banlc of Boston 10,000,000 6/2/94 7/6/94 34 4.35% 4.37% Bell South 7,000,000 6/2/94 8/1/94 60 4.50% 4.37% Southwest Bell 10,000,000 6/2/94 8/1/94 60 4.50% 4.37% P&G 10,000,000 6/2/94 6/23/94 21 4.25% 4.37% Bell South 5,000,000 6/9/94 717/94 28 4.32% 4.30% Bell South 10,000,000 6/23/94 8/9/94 47 4.43% 4.36% Banlc of Boston 10,000,000 7/6/94 8/2/94 27 4.50% 4.54% Bell South 5,000,000 7/7/94 8/4/94 28 4.52% 4.51% Banlc of Boston 4,000,000 8/1/94 9/7/94 37 4.40% 4.44% Lehman Brothers 21,000,000 8/1/94 8/2/94 1 4.35% 4.44% Lehman Brothers 31,000,000 8/2/94 8/3/94 1 4.25% 4.43% Lehman Brothers 21,000,000 8/3/94 8/4/94 1 4.30% 4.44% Southwest Bell 10,000,000 8/3/94 11/1/94 90 4.75% 4.44% Lehman Brothers 16,000,000 8/4/94 8/5/94 1 4.35% 4.43% Southwest Bell 10,000,000 8/4/94 11/1/94 89 4.72% 4.43% Lehman Brothers 16,000,000 8/5/94 8/9/94 4 4.30% 4.49% Bell South 10,000,000 8/9/94 8/16/94 7 4.50% 4.52% Bell South 5,000,000 8/9/94 8/16/94 7 4.50% 4.52% Koch Industries 10,000,000 8/9/94 8/16/94 7 4.50% 4.52% • next maturity Shaded entries are outstanding maturities Prepared by Lelunan Brothers 2 1111/95 :.. FPC95-10 County Sanitation Districts Nos. 1,2,3., ___ .:7,11,13 and 14 of Orange County, CA Investor AIM Lehman Brothers Lehman Brothers Lehman Brothers Lehman Brothers Alliance Alliance Lehman Brothers Alliance Bank of Boston Alliance Bank of Boston Bank of Boston Southwest Bell Alliance Lehman Brothers Weighted Average: Days 20.5 Rate 4.30% • next maturity Shaded entries are outstanding maturities Prepared by Lehman Brothers $50 Million Taxable Commercial Paper Program Maturity Schedule as of 1/11/95 $ Par Amount Issue Date Maturity Date 1,000,000 8/9/94 9/6/94 25,000,000 8/16/94 8/17/94 25,000,000 8/17/94 8/18/94 15,000,000 8/18/94 8/19/94 10,000,000 8/18/94 8/19/94 15,000,000 8/19/94 9/6/94 10,000,000 8/19/94 9/6/94 26,000,000 9/6/94 9/7/94 26,000,000 9/7/94 10/6/94 4,000,000 9/7/94 10/6/94 26,000,000 10/6/94 11/2/94 4,000,000 10/6/94 11/1/94 4,000,000 11/1/94 12/6/94 20,000,000 11/1/94 1/10/95 26,000,000 11/2/94 12/7/94 26,000,000 12/7/94 1/3/95 3 Days to Maturity Rate 28 4.55% 1 4.60% 1 4.65% 1 4.70% 1 4.70% 18 4.80% 18 4.80% 1 4.75% 29 4.80% 29 4.80% 27 5.07% 26 5.07% 35 5.00% 70 5.55% 35 5.05% 27 5.96% 30-Day FedAA 4.52% 4.69% 4.79% 4.79% 4.79% 4.80% 4.80% 4.81% 4.81% 4.81% 5.11% 5.11% 5.25% 5.25% 5.26% ) 1111195 January 12, 1995 '"} ~ LOUNTY SANIT A TICJN DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY, CALIFORNIA 92728-8127 10844 ELLIS, FOUNTAIN VALLEY, CALIFORNIA 92708-7018 (714) 962-2411 NOTICE OF MEETING FINANCE AND PERSONNEL COMMITTEE COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA WEDNESDAY. JANUARY 18. 1995 -5:30 P.M. DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 A regular meeting of the Finance and Personnel Committee of the Joint Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, will be held at the above location, time and date. J:\WPOOC\RN\CRANE\FPC.MTG\FPC86\NOTICE\NOTICE1 .86 January 12, 1995 COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA 10844 ELLIS AVENUE P.O. BOX 8127 FOUNTAIN VALLEY. CALIFORNIA 92728· (7141 962-2411 FINANCE AND PERSONNEL COMMITTEE MEETING DATES Finance and Action Items to Action Items to Joint Personnel Committee Executive Committee Board Meeting Meetings Meeting January January 18, 1995 January 25, 1995 February 8, 1995 February February 15, 1995 February 22, 1995 March 8, 1995 March March 15, 1995 March 22, 1995 April 12, 1995 April April 19, 1995 April 26, 1995 May 10, 1995 May May 17, 1995 May 24, 1995 June 14, 1995 June June 21, 1995 June 28, 1995 July 12, 1995 July July 19, 1995 July 26, 1995 August9, 1995 August None Scheduled None Scheduled September 13, 1995 September September 20, 1995 September 27, 1995 October 11 , 1995 October October 18, 1995 October 25, 1995 November 8, 1995 November November 15, 1995 None Scheduled December 13, 1995 December None Scheduled None Scheduled January 10, 1996 J:\l/llPOOC\FIN\CRANEIFPC.MTG\FPC86\NOTICEINOTICE1 .86 1i _, ; 1/18/95 ~NOA FINANCE AND PERSON'NEL COMMITTEE COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 REGULAR MEETING WEDNESDAY, JANUARY 18, 1995 -5:30 P.M. :···· .. ················ .. ··············· ... ························-···-··-······· .. ··•'••·-········-·············-·······-·· ..... ,,.._ ...................... ,. ............................................................ : I In accordance with the requirements of California Government Code Section 54954.2, this I 1 agenda has been posted in the main lobby of the Districts' Administrative Offices not less than 72 ! :'~::::::==:.·=. hours prior to the meeting date and time above. All written materials relating to each agenda item are ~:=:======::::. available for public Inspection in the Office of the Board Secretary. 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 that there is a need to take immediate action which need came to the attention of l::=. the Committee subsequent to the posting of the agenda, or as set forth on a supplemental agenda i===. posted in the manner as above, not less than 72 hours prior to the meeting date . •... .................. ............ ··-··· ··-····· ........... ·-· .. ·-···-· ........................ , . .,. .. _ •.... _ .. _ ......... _ ........................................................ _ ...... ., ..... -~ ........................ ···":-: ...... ~······· .... ,.. , (1) Roll Call (2) Appointment of Chairman pro tern, if necessary. (3) Public Comments: All. persons wishing to address the Committee on specific agenda items or matters of general interest should do so at this time. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to five 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 ). 1/18/95 (4) The Committee Chairman, General Manager, Director of Finance, Director of Personnel and General Counsel 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 Members. (a) Report of Committee Chairman (b) Report of General Manager (c) Report of Director of Finance ( d) Report of Director of Personnel ( e) Report of General Counsel (5) Approval of draft Finance and Personnel Committee Minutes for Meeting of December 21, 1994. (6) New Business. FPC95-01 Status report on County bankruptcy proceedings and impacts on the Districts. FPC95-02 Overview of asset and liability management functions. FPC95-03 Review recommended short list for Investment Advisor and establish a Selection Committee. FPC95-04 Consideration of Interim Investment Policy. FPC95-05 Internal Controls for Accounts Payable, Payroll and Treasury. FPC95-06 Request for Proposals for Professional Auditing Services. FPC95-07 Review alternative Capital Improvement Plans. FPC95-08 Overview of 1995 Financing Plan. FPC95-09 Status report on 1990-92 Capital Improvement Program COP Interest Rate Monitoring. FPC95-10 Status report on Taxable Commercial Paper Program. -2- 1/18/95 (6) New Business (Continued) FPC95-11 Consideration of a motion to renew Boiler & Machinery Insurance for the period March 1, 1995 to March 1, 1996, with the American Manufacturers Mutual Insurance (Kemper Insurance Group). FPC95-12 Consideration of a motion recommending a Board Resolution adopting the provisions of Government Code Section 31641.04 authorizing two years additional service credit for retirement purposes. FPC95-13 Status Report on Districts' Deferred Compensation Plan in Response to Director Swan's Request (7) Closed Session. j ... ~ ..................................................................................................................................... ., ... ,._., .. .,,. ............... :r. •••• _ ....... ~ •. .:. ......................... _._ •••••• .,. ......................... , ••.•. i ;:===··: Clesed Session: During the course of conducting the business set forth on this .!==:. agenda as a regular meeting of the Committee, the Chairman may convene the Committee in closed session to consider matters of pending or potential litigation, or personnel matters, 1 pursuant to Government Code Sections 54956.9, 54957 or 54957 .6. l ~ E : !;==:=====:=:· 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. l.•.s:••..,•••·•--•---••-•••••• •• • •••••-·•r.m••••"' • •·•••-•--·•'"'••-t-••-·•-iro••--•••·•&10:••••·•• •••••·•'9••••••-••••-•·•-.-...,••••cw••"" '""' ••••••• ,..,._.. • •• ••• •••• • • •• 10.11•••••••• .. ••• ••-••••·•• • • • • •'9 _ .... I (a) Convene in closed session, if necessary (b) Reconvene in regular session. (c) Consideration of action, if any, on matters considered in closed session. ( d) Report on discussion taken in closed session, as required. (8) Other business, if any. (9) Matters which a Director would like staff to report on at a subsequent meeting. (10) Matters which a Director may wish to place on a future agenda for action and a staff report. -3- 1/18/95 11) Consideration of upcoming meeting dates and items to be discussed at those meetings. (12) Adjourn. i"'••-•'"'-••-•-•••-••:••••••••--•••••••••-••••••••••-•-••••-•--••••·•••••••••·••••••••••-•••• .. --•--·--••••••-•----••-••.ce••••·•••••••••••••••••-•-•••-••-tu1.•sc••·•••••-•••••-•••••••••1 : i l Notice to Committee Members: : i : 1.·· If you have any quesJjons regarding ~e Agenda, or wish to place items on the Finance and !. 1 Personnel Committee Agenda, Committee members should contact the Committee Chair or 1 l Secretary ten days in advance of the Committee meeting. ! : i : : i Committee Chair: George Brown (310} 431-2185 ! ! Secretary: Lenora Crane (714} 962-2411, Ext. 2500 : L ........................... ·-········~·· .. ······-····-······-···············--···················~-~~-.~~~~~.~.~:~ ......................... .J J:\WPDOCIFINICRANEIFPC.MTGIFF'C96'NiEHO.t..FPC\AGEN°'-1.95 -4- FINANCE & PERSONNEL COMMITTEE DATE 1 -18-95 COMMITTEE MEMBERS BROWN (Chair) ••••••••••••••••••••••••••••••• STANTON (Vice Chair) •.••••••••••••••••••••••• DEBAY ...................................... . DUNLAP .................................... . FLORA ...................................... . GULLIXSON ...............................••. LINN ......................................... . SALTARELLI •••••••••••••••••••••••••••••••••• STEINER •••••••••••••••••••••••••••••••••••.• SWAN (VJC) •••••••••••••••••••••••••••••••••• COX (JC) ••••••••••••••••••••••••.••••••.••••• OTHER DIRECTORS ---------·.II .... -. II .. II II ...... lo II _________ ...................... . STAFF ANDERSON STREED ••••••••• __ _ HASENSTAB •••••• --- HODGES·········--- OOTEN •••••••••• __ _ UNDER •••••••••• __ _ NELLOR ••••••••• __ _ KOZAK •••••••••• __ _ WHITE ••••••••••• __ _ ROU.1.115 TIME _____ _ ADJOURN ___ _ OTHERS TOM WOODRUFF, GEN'L. COUNSEL PATTI GORCZYCA ................ __ _ -------· ............ --- FINANCE AND PERSONNEL COMMITTEE Agenda Item (5): Summary AGENDA FOR JANUARY 18, 1995 Approval of the Finance and Personnel Committee Minutes of December 21, 1994 Attached is a draft of the Finance and Personnel Committee Minutes of December 21, 1994, for approval by the Committee. This draft includes the additions discussed at the January Board meeting. Staff Recommendation After approval by the Finance and Personnel Committee, the approved minutes will be presented to the Executive Committee for their information. No further action will be required. J:IWPOOC\FINICRANEIFPC.MTGIFPC95\ITEMS.AGDIMFPC1.95 II County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 MINUTES OF FINANCE AND PERSONNEL COMMITTEE MEETING DATE December 21, 1994, 5:30 P.M. A meeting of the Finance and Personnel Committee of the County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California was held on December 21, 1994, at 5:30 p.m., at the Districts' Administrative offices. The roll was called and a quorum declared present, as follows: Committee Directors Present: Peer A. Swan; Chairman Roger R. Stanton, Vice Chairman George Brown John C. Cox, Jr., Joint Chairman Jan Debay Burnie Dunlap James H. Flora John M. Gullixson Glenn Park.er Wally Linn Thomas Saltarelli William G. Steiner Other Directors Present: John Collins Don Griffin Staff Present: Blake Anderson, General Manager Gary G. Streed, Director of Finance Gary E. Hasenstab, Director of Personnel Ed Hodges, Asst. Director of Operations Bob Ooten, Asst. Director of Maintenance Michael D. White, Controller Steve Kozak, Financial Manager Others Present Tom Woodruff, General Counsel Patti Gorczyca, Public Financial Management 4. Report of the Committee Chairman. Finance and Personnel Committee Chairman Peer Swan announced that he was resigning from the Chairmanship. Joint Chairman Cox then appointed Director George Brown to serve as Finance and Personnel Committee Chairman. Chairman Brown presided over the rest of the meeting. 5. Approval of Minutes. The draft minutes of the Finance and Personnel Committee meeting of November 16, 1994, were approved as submitted. Minutes of Finance & P -.,onnel Committee Page2 December 21, 1994 6. Update by staff and consultants on actions concerning developments of the County's Commingled Investment Pool. Staff and the team assembled to work out issues related to the County's Commingled Investment Pool updated the Committee on activities since the December 14th Board meeting and planned for the future. The Committee was briefed on the actions of the Orange County Investment Pool Committee and the emergency withdrawals of pre-petition funds approved and to be approved for the Districts. Property tax and user fee appropriations for December 23rd and 28th were reported to be segregated for the Districts. A revised cash flow projection indicating receipt of all post-petition property taxes and user fees, and 30% of the pre-petition cash balances, showed that all obligations could be met. The Committee also reviewed the immediate actions staff would be taking, as well as actions required prior to June 1, 1995. 7. Consideration of selection of an independent investment advisor. At the Special December Board meeting, the Directors appointed a Districts' Treasurer and established specific short-term investment guidelines. Staff presented a Request for Proposals to provide professional investment advisory services for the Committee's review. Staff believes it is very important to conduct a thorough selection process in order to select a professional who shares the investment philosophy of the Directors. Staff requested that the Committee consider a motion directing staff to solicit proposals for professional investment advisory services. Recommendation A motion was made, seconded and unanimously approved to solicit proposals from independent investment advisors for review by staff, with final selection to be made by the Joint Boards. 8. Consideration of selection of professional legal services of Bond Counsel. The Fiscal Policy Committee has, in the past, selected special bond counsel for each of the Districts' borrowing transactions. Currently, no special counsel has been officially retained, although staff has been utilizing the services of Orrick, Herrington & Sutcliffe, the counsel on our most recent issue. At the December 7th Special Board meeting, the Directors took an action to retain Brown & Wood as Orrick was perceived to have a conflict. Minutes of Finance & Per""'rnel Committee Page3 December 21, 1994 General Counsel reported on changes since the special Board meeting and ciarified that the Orrick conflict was only related to participation in any actions that might be adversarial to the County. Following additional discussions regarding the need for new financing, the relationships of various financing firms and the Districts' need for special bond counsel services, the Committee decided to defer selection of special bond counsel. Recommendation A motion was made, seconded and unanimously approved to select special bond counsel through the Request for Proposals process as a part of the formation of a team for the next financing. 9. Consideration of cash management options. Staff and General Counsel reported to the Committee on some of the options for managing the Districts' cash receipts and balances. Options included managing all cash in-house including payroll, accounts payable check processing and investments, and continuing to utilize the County Treasurer and Auditor- Controller to provide some of these services. Staff distributed a brief report on the functions of the Auditor-Controller, Treasurer-Tax Collector, and Districts' staff regarding cash receipts, accounts payable and payroll. Most of the functions are already being performed by staff, with treasury functions being absorbed in accordance with the Boards' December action. Recommendation A motion was made, seconded and unanimously approved to bring the balance of the cash management functions in-house as soon as procedures, internal controls and check stock could be developed. In the meantime, staff was directed to work with the County agencies to ensure timely payments and asset control. 10. Review and discussion of Committee actions relative to Orange County Commingled Investment Pool and impact on Districts during 1994. At the regular December 14, 1994, Joint Board meeting Director Gullixson initiated a discussion of the role of the Fiscal Policy/Finance and Personnel Committee relative to the County Commingled Investment Pool and asked that the Committee consider additional discussion at its next meeting. Minutes of Finance & P 1onnel Committee Page4 December 21, 1994 Director Gullixson and the Committee members continued the discussion of reports to the Committee, Committee actions regarding the reverse repurchase program, and the Districts' financing program in general. After the Committee discussed alleged conflicts of interest reported in the media regarding the County's financings, Director Gullixson and General Counsel were directed to review various legal firm relationships and to report to the Committee. 11. ADJOURNMENT The meeting was adjourned at approximately 7:45 p.m. GGS:lc J:\WPDOC\FIN\CRANE\FPCMTGIFPC92-941MFPC12.94 Enclosures FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-01: Status Report on County Bankruptcy Proceedings and Impacts on the Districts Summary Staff will give the Committee members an update on the County bankruptcy proceedings and any changes since the report at the Board meeting of January 11, 1995. Staff Recommendation No action items are expected to be reported at this time. J:\WPDOC\FIN\CRANE\FPC.MTGIFPC95\ITEMS.AGOIFPCll5.01 FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-02: Overview of Asset and Liability Management Functions Summary With the appointment of a Districts' Treasurer, we have moved into an area of financial management that is relatively new for the Directors and staff. This area is the management of assets in addition to their safekeeping. Asset and liability management (A/LM) establishes a framework for managing the financial risks inherent in the assets and liabilities of the balance sheet. A/LM includes decision making as a part of an integrated program rather than as a series of separate actions, recognizing the interrelationships of both sides of the balance sheet. In an effort to better define the functions and expectations of the asset and liability management function, PFM and staff have put together the attached presentation overview. A brief presentation and question and answer period has been scheduled. Staff Recommendation Information only item. J:IWPDOCIFINICRANEIFPC.MTGIFPC95\JTEMS.AGDIFPC95.02 County Sanitation Districts of Orange County Districts 1995 Asset/Liability Management Program Presentation to the Finance and Personnel Committee January 18, 1995 ) . ... Report Contents Page • Asset/Liability Management Defined 1 • Asset/Liability Management Illustrated 2 • Asset/Liability Management: An Overview 3 • Asset/Liability Management Objectives 4 • Asset Management and Liability Management Relationship 5 • Asset Management Defined 6 • Asset Management Team Participants 7 • Asset Management Short-Term Tasks 8 • Liability Management Defined 9 • Liability Management Team Participants 10 '· _j • Liability Management Short-Term Tasks 11 • 1995 Asset Liability Management Calendar of Activities 12 • Summary of Districts' Assets and Liabilities (Assets) 13 • Summary of Districts' Assets and Liabilities (Liabilities) 14 .? Asset/Liability Managelllent Defined + The Management of Interest Rate Risk Through the Active Management of Both Financial Elements of Our Balance Sheet: Assets and Liabilities. .. 'mi a e 1 .. ·-.;,,..-.-,--(....,....-. >'"". ' .,. ' .. ' . -.--. Asset/Liability Managentent Illustrated Balance Sheet ASSETS + Cash + Investments + Land/Capital Facilities + Accounts Receivable . ~--·-· . -------· · .. ==:=:===:lt~.;=:===~~~~!llm~rm~t~%t&J.~]ii~1~~~trnfi[m~;~m=ttt1f®tW1:~~tt%~tE!~ ~~ LIABILITIES + Long-Term Debt (such as Certificates of Participation (COPs)) + Short-Term Debt (such as Notes, Loans, Commercial Paper) + Accounts Payable ;~;;:::;::_ -·~~:~ Asset/Liability Managetnent : An Overview- What is Asset/Liability Management? + Establishes a Framework for Managing the Financial Risks Inherent in the Assets and Liabilities of an Organization's Balance Sheet. + Views Decision-Making as Part of an Integrated Program Rather Than a Series of Separate Decisions. + Recognizes the Interrelationships of the Asset and ·Liability Sides of the Balance Sheet. ~.' -·-· -----------~ l--1 ~%tW&S~~~. w.~~. iiWiS~m'!bm:: ::m: :m:::::sm:i!mmr&~-~~>~w .. ~~~&Sf: :~;:oow_ rnfm_w,u~;Mil§&Sii<@~IMM@&S. ~~&S. ~-·~&S. ~~M®&SU~M&S&&~~~-m~&S: ~. &S: m~~ITT.:mu_ fm;w:&S~fm. ~~<;)~~~- " ,,,,,'·t,·r.,' i ' 'U::::::%urn:1rn:::::;::;w1m1mw::m:m:::::::J:•:rnz•m•;::&i:t>:~~ :h.%%W&ttWM.\immnrn~t:m:•&Wrt£iwwn:rn:•:::::~i::::::i::::::::::r:·'''· __ ,/?-··WJ/.' · ) ~~mmrnm~~~~~~~~·m··· ·m····m··m· m·····rnm;····-.. m···-··mit· ·m· -----------~----~~~~~mmrnm~~-._ ... ~ ........... Asset/Liability Managetnent Objectives + Provides a technique for the management of potential interest rate risk (losses) and opportunities (gains) on both sides of the balance sheet. + Enhances earnings by creating positive, retainable spread between borrowing and investment rates and to protect the balance sheet from rate movements. + Provides the opportunity to diversify asset and liability structure. ~ a e4 • ;: Relationship of Asset and Liability Managentent + Mutual Relationship ) + Credit Rating Implications + Districts' Cashflow Implications .. . -·.-------' ~----~.,---~----·----...._ __ _.....__ ___ ~---"'----'--..........,~~---· Asset Managelllent Defined + The management of cash and other financial resources to achieve optimal interest earnings while minimizing interest rate risk, maintaining sufficient liquidity (immediately accessible cash) and ensuring safety . . ; .. '1i;;;r m:ei::i;;i;ffi:":eie; --, ; f ' =·;i 'ii; ;;;;;: . -.. ;;i#h;;;siif . T;:W " "'""' ::::;;;;;;;;::: ""' 'i''5!ii!W1~~ · Asset Managetnent Teatn Participants __ ) Districts' Treasurer, Controller and Finance Staff + Investment Advisor + Portfolio Manager + Possible Investment Fund (such as Mutual Funds) ') ...-/ + Trustee •·•··•··•· .. ·:::-... Asset Managelllent Short-Tenn Tasks + Develop Districts Investment Policy + Develop and Approve of Districts' Treasury Function and Supporting Procedures + Establish Districts' Investment Alternatives Ranging From: + Staff Directed Investments per Districts' Investment Policy via Investment Advisor; + Portfolio Manager-Directed Investment Requiring Districts Staff Approval within Districts Investment Policy; + Portfolio Manager-Directed Investment Not Requiring Districts Staff Approval within Districts Investment Policy; + Districts Deposit of Funds into One or Multiple Investment Funds Such as Mutual Funds; + Districts Deposit of Funds into New County Investment Pool; + Districts Deposit of Funds into State Local Agency Investment Pool (LAIF); or Any Combination of the Above. Liability Manageltlent Defined + The Management of Debt in Order to Achieve the Lowest Possible Net Interest Costs While Minimizing Interest Rate Risk and Maintaining Highest Possible Credit Rating. Debt Transactions include: + Long-Term Debt (such as Certificates of Participation (COPs), General Obligation Bonds or Revenue Bonds) + Short-Term or Interim Debt (such as Tax and Revenue Anticipation Notes (TRANS), Bridge Loans, Notes, Commercial Paper) .. ..;y_• ... . 'Iii . Liability Managentent Teant Participants + Districts' Finance Director, Controller and Finance Staff + Financial Advisor -Public Financial Management, Inc. (PFM) + Underwriter(s) -To be Determined (Previously Merrill Lynch and Paine Webber) + Bond Counsel -To be Determined (Previously Mudge Rose and Orrick Herrington & Sutcliffe) + Underwriters Counsel -To be Determined (Previously Orrick Herrington & Sutcliffe and Jones, Hall, Hill and White) + Trustee -To be Determined (Existing Trustees are Texas Commerce Bank and State Street Bank) + Liquidity Providers -Need to be Determined (Existing Liquidity Providers are National Westminster Bank, FGIC and Societe Generale + Credit Enhancement -Need to be Determined (Existing AMBAC, FGIC and National Westminster Bank) + Swap Provider -Need to be Determined (Existing Swap Providers are AIG and Societe Generate) a e 10 Liability Managentent Short-Ternt Tasks + Review Existing Districts Debt Transactions for Restructuring Opportunities + Identify and Evaluate Short-Term Debt Opportunities (e.g., Bridge Loans, TRANs, Notes, Commercial Paper) + Identify and Evaluate Long-Term Debt Opportunities to Address Joint Boards Approved 1995-96 Capital Improvement Program + Develop 1995 Debt Financing Strategy for Joint Boards Approval + Implement Necessary Debt Transactions + Update Districts Five-Year Financial Plan \ _ _) Jan '95 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan '96 1995 Asset/Liability Management Calendar of Activities · ASSET Select Investment Advisor Develop Investment Policy & Procedure Approve Investment Policy & Procedure Selection Process for Portfolio Manager(s) Selection of Portofolio Manager(s) Implement Districts' Investment Program Establish Investment Monitoring Reports for Approval Prepare Status Report on Districts' Assets (Aug-Sept) Approve Districts' First Investment Quarterly Report Review Status Report on Districts' Assets Develop Districts 1996 Asset/Liability Management Strategy (Nov-Dec) Approve Investment Quarterly Report Approve Districts' 1996 Asset/Liability Management Strategy LIABILITY Status Report on Districts' Debt Transactions Selection Process for Underwriter and Bond Counsel Approve Underwriter and Bond Counsel Prepare a 1995 Debt Strategy/Debt Workshops Approve Short-and/or Long-Term Debt Transaction(s), if any Implement Short-and Long-Term Transaction(s). if any Review and Approve Short-Term Debt Transaction(s), if any Review Long-Term Debt Transaction(s), if any Approve Long-Term Debt Transaction(s), if any Review Status Report on Districts' Debt Transactions Develop Districts' 1996 Asset/Liability Management Strategy (Nov-Dec) Approve First Liability Quarterly Report Approve Districts' 1996 Asset/Liability Management Strategy :~-::::...: :~ ! - ""' . Summary of Districts' Assets and Liabilities Assets as of July 1, 1994 The Districts have $1,418,538,000 in Net Assets as follows: Other Assets 15% Reserves & Carry-over 32% Total Assets Net Property, Plant & Equipment 53% Assets as of July 1, 1994: Net Property, Plant & Equipment Land Collection Facilities Treatment Facilities Disposal Facilities General Plant & Admin Facilities Construction In Progress Less Accum Depreciation Net Property, Plant & Equipment 7,111,000 293, 181,000 481,427,000 80,128,000 79,568,000 75,005,000 252,526,000 763,894,000 Reserves & Carry-over Operating Reserves 183,345,000 Capital Facilities Reserves 263,800,000 Reserves & Carry-over 447,145,000 Other Assets Debt Service Reserves Current Assets Other Assets Other Assets Total Assets Total Assets 43,543,000 146,457,000 17,499,000 207,499,000 1,418,538,000 .) ~ I ·····---···---····t;.~J~~~ ... '. .. '.1:.M.1:1[[[[[[i~~~j~ ... : ....... . Summary of Districts' Assets and Liabilities Liabilities as of July 1, 1994 The Districts have $1,418,538,000 In Liabilities and Equity as follows: Total Llabllltles & Equity Other Financial Instruments 10% Certificates of Participation 30% """ Current Liabilities 2% Long-Term Liabilities and Equity 58% ;;;;::: Liabilities & Equity of July 1, 1994: Certificates of Participation Current Year Portion 9,655,000 Long Term Portion 417,377,000 Certificates of Participation 427,032,000 Other Financial Instruments Taxable Commercial Paper 50,000,000 Reverse Repurchase Agrmts 91,813,000 General Obligation Bonds 75,000 Other Financial Instruments Current Liabilities Current Payables Deposits Other Current Liabilities Current Liabilities 141,888,000 11,799,000 2,529,000 14,488,000 28,816,000 Long-Term Liabilities and Equity Other Long-Term Liabilities 9, 187,000 Contribted Capital 188,898,000 Retained Earnings 622, 717,000 Long-Term Liabilities and Equity 820,802,000 Total Liabilities and Equity Total Liabilities and Equity 1,418,538,000 ) J _. FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-03: Review Recommended Short List for Investment Advisor and Establish a Selection Committee Summary At the last Committee meeting, the Directors reviewed a draft request for proposals (RFP) for an independent Investment Advisor and a list of potential firms. The enclosed RFP was mailed on January 4, 1995, and responses are due January 13, 1995. The initial scope of this investment advisory engagement will be the development of a Districts' investment policy. The investment advisor will be responsible for developing the Districts' investment policies and procedures. The advisor will review the timing of the Districts' cash needs so they can recommend the appropriate maturities of the portfolio. The advisor will also set up procedures for selection of investment manager(s) and participate in the selection process, and may be required to develop quarterly reviews of the investment manager(s) performance as needed. Prior to the Committee meeting, staff, Public Financial Management and General Counsel will review and rank the proposals using the enclosed Evaluation Ranking Form. A short list of firms recommended by the review committee will be presented at the meeting. Staff Recommendation Staff recommends formation of a Selection Committee including FPC members, PFM and staff. The Selection Committee is scheduled to meet January 24, 1995, to interview the firms on the short list and to prepare a recommendation to the Boards. J:IWPOOC\FINICRANEIFPC.MTGIFPC95\ITEMS.AGDIFPC95.03 January 4, 1995 REQUEST FOR PROPOSALS INVESTMENT ADVISOR SERVICES COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CA (DISTRICTS) The Districts are soliciting proposals from interested firms for the provision of investment advisor services for the Districts' cash and reserve funds. The average daily balance of the invested assets has been approximately $435,000,000 for the past six months. The Districts have deposited all cash and reserve funds to date in the Orange County Investment Pool for purposes of investment by the Orange County Treasurer. In light of recent filings for bankruptcy by the County and the County Investment Pool, the Districts' Joint Boards of Directors took action on December 8, 1994, designating the Districts' Director of Finance, Gary Streed, to serve as Districts' Treasurer. The County Sanitation Districts of Orange County is a joint powers authority comprised of nine separate districts which jointly provide wastewater collection and treatment services to approximately 2.1 million of Orange County's 2.4 million population. The Districts need to develop an investment policy for Joint Boards' approval. Presently the Districts' Joint Boards have authorized the Districts' Treasurer to deposit funds into bank accounts established at Bank of America. Such funds (as they become available) are restricted to money market funds only until an investment policy and procedures are approved by the Joint Boards of Directors. SCOPE OF SERVICES The initial scope of this investment advisory engagement will be the development of a Districts' investment policy. The investment advisor will be responsible for developing the Districts' in.vestment policies and procedure. The advisor will review the timing of the Districts' cash needs so they can recommend the appropriate maturities of the portfolio. The advisor will also set up procedures for selection of investment manager(s) and participate in the selection process, and may be required to develop quarterly reviews of the investment manager(s) performance as needed. The investment advisor (selected by the Districts) will not be precluded from serving as an investment manager for some or all of the Districts' cash and reserve funds in the future. CRITERIA FOR SELECTION 1. Understanding of scope of assignment, including the Districts' immediate and longer-term objectives. 2. Experience and qualifications of firm and key individuals assigned on similar engagements. 3. Recommended approach to management of the Districts' portfolio. 4. Familiarity with Federal arbitrage restrictions and state investment and reporting requirements. 5. Reasonableness of fees. SELECTION TIMETABLE January 13, 1995 Proposals due by 12:00 p.m. \ January 16-18, 1995 Evaluation of Proposals by Review Committee. January 24, 1995 Selection Committee interviews short list of qualified firms. February 8, 1995 Joint Boards approve selection of Investment Advisor. FORMAT FOR PROPOSALS Please format your response to this RFP in the following manner: I. Organization A Describe your organization, date founded, ownership and other business affiliations (please provide number and location of affiliated offices). B. Describe your firm's revenue sources (e.g., investment management, institutional research, etc.). C. Describe any regulatory or disciplinary actions, pending regarding your organization and staff. D. Describe client agencies. II. Personnel A Identify the number of professionals employed by your firm, by classification. B. Provide detailed resumes on professionals that will be involved in the decision-making process for the Districts' portfolio. 2 Ill. Fees Please include a copy of your firm's fee schedule. IV. References Please provide three references for similar engagements, including length of time managing their assets, magnitude of client assets, client name, address and phone number. Please send 5 copies of your proposal to: Gary Streed Director of Finance County Sanitation Districts of Orange County 10844 Ellis Avenue P.O. Box 8127 Fountain Valley, CA 92728-8127 by 12:00 p.m., January 13, 1995. The Districts reserve the right to reject any and all proposals, and to make more than one appointment. NOTE: Facsimile copies will not be accepted. If you have any questions or need additional information, please contact Gary Streed, Director of Finance, at (714) 962-2411 or Patti Gorczyca, at Public Financial Management, at (714) 921-9422. j:wpdoc\gmlreports\010495.rfp 3 01/04/95 INVESTMENT ADVISOR SERVICES RFP DISTRIBUTION LIST Mike Hughes First Interstate Company FIB of California 707 Wilshire Blvd., W11-I Los Angeles, CA 90017 (213) 614-2131 Kay Chandler Chandler Liquid Asset Management 9255 Towne Center Drive #625 San Diego, CA 92121 (619) 546-3737 Peter Simmons Public Investment Services, Inc. 16133 Ventura Blvd. Encino, CA 91436 (818) 789-5674 James O'Connor Fund Services Associates, Inc. 11835 W. Olympic Blvd., Suite 205 Los Angeles, CA 90064 (310) 996-2626 William Lester Bank of America 333 Beaudry Avenue, 25th Floor Los Angeles, CA 90017 (213) 229-2850 Deborah Hicks Midanek Solon Asset Management, LP. 1981 N. Broadway, Suite 325 Walnut Creek, CA 94596 (510) 988-7110 James W. Martling Kirschner Securities, Inc. 44 Montgomery Street, Suite 4205 San Francisco, CA 94104 ( 415) 398-6900 Steve Dworkin, Managing Director Bear, Stearns 1899 Avenue of the Stars, 33rd Floor Los Angeles, CA 90067-6100 (310) 201-2791 Bill Cvengro, President Pacific Investment Management Company P.O. Box 9000 Newport Beach, CA 92658-9030 (714) 640-3031 Nathan D. Petri, Vice President Fidelity Investments 455 Market Street, Suite 850 San Francisco, CA 94105 ( 415)227-8235 Mark W. Bloss, Sr. V.P. National Director Federated Investors Federal Securities Corporation Federated Investors T ewers Pittsburgh, PA 15222-3779 (800) 245-5000 Elliot R. Detchon Ill, Chief Executive Investments Nakagama & Wallace Investment Management LP 7 4 Trinity Place New York, NY 10006 (212) 962-4100 Ron Teyton, President Callen Associates 71 Stevenson Street, Suite 1300 San Francisco, CA 94105 (415) 974-5060 j:\wpdoc~mldist.rfp 2 Tim O'Grady Evaluation Associates 200 Connecticut Avenue, Ste. 700 Norwalk, CT 06854 (203) 855-2210 Michael O'Keefe Wilshire Associates 1299 Ocean Avenue Santa Monica, CA 90401 (310) 451-3051 DRAFT DISTRICTS' INVESTMENT ADVISOR SELECTION SCHEDULE January 4, 1995 January 13, 1995 January 16-18, 1995 January 18, 1995 January 24, 1995 February 8, 1995 j:\wpdoc\gm\schedule.inv Request for Proposals are mailed via Certified Mail to Distribution List Proposals are due at the Districts by 12:00 p.m. (noon) Districts' Treasurer, Financial Advisor (PFM) and General Counsel (Review Committee) review proposals and develop short list of firms to be interviewed for consideration by Districts' Finance and Personnel Committee Districts' Finance and Personnel Committee reviews Review Committee recommendation and determines short list of firms to be interviewed as well as composition of Selection Committee. Districts' Selection Committee interviews short list of firms, makes selection of firms(s), determines initial scope of services and fees. Joint Boards approve selection of Investment Advisor, initiate scope of services and fees. 01/05/95 INVESTMENT ADVISOR SERVICES RFP DISTRIBUTION LIST Mike Hughes First Interstate Company FIB of California 707 Wilshire Blvd., W11-I Los Angeles, CA 90017 (213) 614-2131 Kay Chandler Chandler Liquid Asset Management 9255 Towne Center Drive #625 San Diego, CA 92121 (619) 546-3737 Peter Simmons Public Investment Services, Inc. 16133 Ventura Blvd. Encino, CA 91436 (818) 789-5674 James O'Connor Fund Services Associates, Inc. 11835 W. Olympic Blvd., Suite 205 Los Angeles, CA 90064 (310) 996-2626 William Lester Bank of America 333 Beaudry Avenue, 25th Floor Los Angeles, CA 90017 (213) 229-2850 Deborah Hicks Midanek Solon Asset Management, L. P. 1981 N. Broadway, Suite 325 Walnut Creek, CA 94596 (510) 988-7110 James W. Martling Kirschner Securities, Inc. 44 Montgomery Street, Suite 4205 San Francisco, CA 94104 (415) 398-6900 Steve Dworkin, Managing Director Bear, Stearns 1899 Avenue of the Stars, 33rd Floor Los Angeles, CA 90067-6100 (310) 201-2791 Bill Cvengro, President Pacific Investment Management Company P.O. Box 9000 Newport Beach, CA 92658-9030 (714) 640-3031 Nathan D. Petri, Vice President Fidelity Investments 455 Market Street, Suite 850 San Francisco, CA 94105 ( 415 )227 -8235 Mark W. Bloss, Sr. V. P. National Director Federated Investors Federal Securities Corporation Federated Investors Towers Pittsburgh, PA 15222-3779 (800) 245-5000 Elliot R. Detchon Ill, Chief Executive Investments Nakagama & Wallace Investment Management LP 7 4 Trinity Place New York, NY 10006 (212) 962-4100 Ron Teyton, President Callen Associates 71 Stevenson Street, Suite 1300 San Francisco, CA 94105 (415) 974-5060 j:\wpdoc\gmldist.rfp 2 Tim O'Grady Evaluation Associates 200 Connecticut Avenue, Ste. 700 Norwalk, CT 06854 (203) 855-2210 Michael O'Keefe Wilshire Associates 1299 Ocean Avenue Santa Monica, CA 90401 (310) 451-3051 Skip Fish Fish & Lederer Investment Counsel 3111 N. Tustin #270 Orange, CA 92665 (714) 283-0300 Firm: I CRITERIA General Criteria Understanding Districts' needs Experience and Qualifications INVESTMENT AD .. ,SOR PROPOSAL EVALUATION RANKING I MAXIMUM I SCORE SCORE 10 25 Knowledge of Investments and Reporting 15 Firm Organization Years in operation, number of offices, disciplinary actions, client agencies 10 Personnel Number and level of professionals, resumes 20 Fees Fee Method and reasonableness 10 References (short list only) j:\wpdoc\gmlranking Overall Score/Ranking __ _ I COMMENTS I ) 01/11/95 1 I J FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-04: Consideration of Interim Investment Policy Summary At the Finance and Personnel Committee Meeting of December 21, 1994, the committee members approved the release of a Request for Proposals for investment advisor services. The final selection of an investment advisor is scheduled to be approved by the Joint Boards on February 8, 1995. The balance in the Districts' Money Market Account with Bank of America was $3.9 million as of January 10, 1995. The Bank, by law, must provide collateralization at 110% of the Districts' total deposit with government securities. The Districts' have now reached the maximum deposit amount that Bank of America is willing to collateralize. Any day now, the Districts' are expecting to receive $15 million of the property tax apportionment that was deposited within the County Treasurer's investment pool. In addition, the Districts are expecting to receive $8.1 million from the next property tax installment in late January. Therefore, in the interim, the Districts' need to be providing for our own cash management functions until an outside investment advisor can be selected, have an opportunity to review the Districts' finances, and provide treasury management recommendations. Within the attached proposed Interim Investment Policy, three conservative investment vehicles have been identified to invest idle cash funds until an outside investment advisor can recommend an investment program. Staff Recommendation Staff recommends that the Committee members approve the attached Interim Investment Policy on behalf of the Districts and direct the Districts' Treasurer to carry out the duties of investing idle cash until the recommendations of an outside investment advisor can be obtained, approved, and implemented by the Districts. J:IWPDOC\FINICRANEIFPC.MTGIFPC95\ITEMS.AGO\FPCll5.04 FPC 95-04 County Sanitation Districts of Orange County Investment Policy 1. Purpose The Districts' ultimate investment goal is to enhance the economic condition of the Districts while providing for the safety of funds invested and assuring that money is always available when needed. 2. Objectives The Districts strive to maintain the level of investment of all idle funds as near 100% as possible, through the optimum operation of its cash management system which is designed to accurately monitor and forecast expenditures and revenues. The Districts attempt to obtain the highest yield on its' investments consistent with the preservation of principal and liquidity. 3. Delegation and Authority The Districts have the authority to invest in the spectrum of instruments allowable under the Government Code Section 53600 et. seq. of the State of California. The Districts' Board of Directors has delegated, by resolution, the authority to invest to the Districts' Treasurer, subject to the limitation set forth in this investment policy. 4. Investment Instruments The Districts' Treasurer is currently limited to the following investment instruments as approved by the California Government Code: • U.S. Treasury Bills or Notes • State of California Local Agency Investment Fund • Obligations of Federal Agencies 5. Policy Criteria For Selectina Investments (In Order of Priority) A Safety Safety and the minimizing of risk associated with investing refers to attempts to reduce the potential for loss of principal, interest or a combination of the two. The first level of risk control is found in State law which restricts the particular type of investments permissible for local governments. The second level of risk control is reduction of default risk in investing in instruments that appear upon examination to be the most credit worthy. The third level of risk control is reduction of market risk by investing in instruments that have maturities coinciding with dates of disbursement, thereby eliminating risk of loss from a forced sale. The Districts only invest in those instruments that are considered very safe. B. Liguidity Liquidity refers to the ability to easily sell at any time with minimal risk of losing some portion of principal or interest. Liquidity is an important quality for an investment to have, for at any time the Districts may have unexpected or unusual circumstances that result in larger disbursements then expected, and some investments may need to be sold to meet the contingency. Most investments of the Districts are highly liquid, with the exception of Time Certificates of Deposits issued by banks and savings and loan companies, whose maturities are selected in anticipation of disbursement needs, thereby obviating the need for forced liquidation or lost interest penalties. C. Yield Yield is the potential dollar earnings an investment can provide, and also is sometimes described as the rate of return. The Districts attempt to obtain the highest yield possible when selecting an investment, provided that the criteria stated in this Investment Policy are met. 6. Policy Constraints The Districts operate an investment program with many State and self-imposed constraints. It does not speculate; it does not buy stocks or corporate bonds; it does not deal in futures or options; it does not purchase on margin through Reverse Repurchase Agreements. Investment maturities are currently restricted to less than one year. The Districts diversifies its investments to reduce potential default on market risks. The portfolio is carefully monitored to assure the prudent management of the portfolio. All purchases are made only after three bids or bid comparisons are obtained. 7. Safekeeping Securities purchased from brokers/dealers shall be held in third party safekeeping by the trust department of the Districts' bank or other designated third party trust, in the Districts' name and control. 8. Investment Reports A. The Treasurer annually renders a Statement of Investment Policy to the Districts' Board of Directors for their approval. 8. The Treasurer renders a monthly investment report to the Districts' Finance and Personnel Committee showing the type of investment, institution, date of maturity, amount of deposit, rate of interest, market value and such other data as may be required by the Districts. C. The monthly investment report states its relationship to the Statement of Investment Policy by indicating each and every instance that there is a divergence from or violation of policy or stating that the monthly report is in compliance with the approved Statement of Investment Policy. J 1....., j FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-05: Internal Controls for Accounts Payable, Payroll and Treasury Summary At the December 21, 1994 Finance and Personnel Committee meeting, Committee Members approved staff's recommendation to bring all cash disbursement functions relating to Accounts Payable and Payroll in-house providing that the Accounting Division first develop the adequate internal controls over these functions. Attached are the Districts' internal accounting controls over Accounts Payable and Payroll. Please note that the italicized comments are the new controls to be implemented now that the County of Orange will no longer be providing auditing, check signing, and bank reconciliation services. Also attached is an overview of the internal controls for the new Treasury Management function. Those controls begin after our existing daily cashiering controls. Mike White, Controller, will review the internal controls for the Committee. Staff Recommendation Information item only. J:\WPDOC\FIN\CRANEIFPC.MTGIFPC95VTEMS.AGCN=PC95.05 --· ) January 18, 1995 FPC 95-05 County Sanitation Districts of Orange County Internal Accounting Controls Over Accounts Payable Disbursements I. Accounts Payable Processing Procedures A. The first Accounts Payable Clerk processes accounts payable for vendors "A" through "L" and the second Accounts Payable Clerk processes accounts payable for vendors "M" through "Z". Duties performed by these two clerks include: 1. Verifying that all of the following applicable documents have been received, are in order, and that proper authorization for payment has been obtained and then batching them together into warrant packages: a. Original invoice from vendor. b. Payment Request Voucher (if applicable). c. Accounts Payable copy of purchase order (if applicable). d. Receiving copy of purchase order (if applicable). e. Packing slip or receiving report (if applicable). 2. Checking all invoice data to approved copies of the purchase order and receiving report. 3. Checking all extensions, footings, discounts, and freight terms for accuracy. 4. Reviewing the general ledger account coding and work order number for accuracy. 5. Entering the pay information into the computer system. 6. Running a trial warrant register and reconciling register totals against adding machine tape totals of the individual invoices. 7. The clerks then exchange their trial warrant registers and warrant packages and verify the accuracy of work performed by the other. B. The Accounts Payable Clerks then computer generate the final warrant registers and warrants. Each file warrant copy is then reconciled and batched with the individual B. The Accounts Payable Clerks then computer generate the final warrant registers and warrants. Each file warrant copy is then reconciled and batched with the individual warrant packages which is then machine perforated to prevent reuse. C. The Final Warrant Register and warrant packages are reviewed by the Controller who signs off on the Final Warrant Register. D. The Final Warrant Register is then reviewed and approved by the Director of Finance/Treasurer. II. Signature Authority A. Authorized signers are limited to the General Manger, Director of Finance/Treasurer, and the Controller. B. All checks under $25,000 will be stamped by a facsimile signature plate bearing the signature of the Treasurer. C. All checks for $25,000 or over will require the additional handwritten signature of either the General Manager, Director of Finance/Treasurer or Controller. III. Safeguards Over Check Stock A. The check stock is kept in a locked cabinet within the Accounting Division computer room. B. Keys to the cabinet are kept locked in the desk drawer's of both the Principal Accountant over Accounts Payable and the Principal Accountant over Accounts Receivables/Cash receipts. C. All checks are prenumbered and a blank check log is maintained by the Fixed Asset Accounting Clerk and kept locked up along with the blank check stock. This position is responsible for the issuance and control of the blank check stock. Any discrepancies will be immediately reported to the Controller and Director of Finance/Treasurer for proper action. D. The two Accounts Payable Clerks request blank check stock from the Fixed Asset Accounting Clerk for the purpose of printing checks. IV. Safeguard Over the Signature Plate A. The signature plate is to be kept in the Accounting Division safe separate from the check stock The combination to this safe is known only by the three safe custodians; the Accounting Manager, the Principal Accountant over Timekeeping, and the General Ledger Senior Accountant. ) B. The Timekeeping Clerk will obtain the signature plate from one of the custodians and the printed checks from one of the Accounts Payable Clerks and run the checks through the check signing machine. The Timekeeping Clerk will than return the signature stamp to the custodian and prepare the checks for mailing. V. Bank Reconciliations A. The General Ledger Senior Accountant, independent of the Accounts Payable processingfanctions, will perform the monthly bank reconciliations. Internal Control Strengths 1. All invoice data is checked to approved copies of the purchase order and receiving report and all extensions and footings and other terms are checked for accuracy. The completion of these procedural steps are clearly marked on the face of the invoice. 2. All payments are properly reviewed and approved by the Controller and Director of Finance/Treasurer. 3. Check stock is prenumbered and used in sequence. 4. Blank check stock is adequately secured against unauthorized use. 5. Checks are prepared by specified employees who are independent of payment voucher/invoice approval. 6. All supporting documents are properly canceled at time of signature to prevent duplicate payment. 7. Authorized check signers are independent of voucher preparation and approval for payment, check preparation, cash receiving, and petty cash, purchasing and receiving. 8. Custody of checks after signature and before mailing is handled by an employee independent of all payable, disbursing, cash, receiving, and general ledger functions. 9. The facsimile signature plates are adequately safeguarded against unauthorized use. 10. The bank account is reconciled monthly by someone other than persons who participated in the receipt or disbursement of cash. Note: Sections in italics indicate new procedures that were implemented as a result of the discontinuance of auditing and check processing services by the County of Orange effective February 1, 1995. January 18, 1995 County Sanitation Districts of Orange County Internal Accounting Controls Over Payroll I. Hiring of New Employees- Human Resources maintains an applicant tracking computer module (Spectrum AM2000) which contains the personal data (name, address, phone number, social security number, etc.) of all applicants applying for employment positions currently open for recruitment. Once a candidate has been selected for employment from the pool of applicants, the personal data of the selected candidate is downloaded from the applicant tracking module into the Human Resource module (HR2000). II. Payroll Maintenance- The HR2000 computer module maintains the current personal data, pay history, and employee benefit information on all District employees. Only the personal data and current pay information is downloaded into the ADP interface at the end of each payroll period following the completion of the payroll process (see ADP below). ADP's system does not accept the transfer of employee benefit information from the HR2000 system. ADP therefore must maintain its own data base on the benefits of each employee of the Districts. III. Timekeeping- A. The time sheets are filled out and signed by employees, reviewed and signed by their supervisors and then turned into the Timekeeping Unit for processing. B. The Timekeeping Unit accumulates employee time sheets for each pay period and; 1. reviews time sheets for computations of payroll period hours, signatures of employees and supervisors, and for possible unapproved erasures or alterations. 2. enters the reported hours by pay code into the Data General Payroll Module, (the Districts' computer system that had been used to perform the entire payroll process prior to May 1992). 3. reconciles each computer batch total against an adding machine total. 4. generates a labor distribution report that indicates total hours, which is reconciled to the individual batch totals, and total payroll dollar amount. 5. downloads the data on employee hours onto a floppy disk and delivers it to the Payroll unit. IV. Payroll Processing- A. Procedures Performed By Districts' Payroll Unit: 1. prepares bi-weekly adjustments on the individual employee benefit changes occurring during the past payroll period (i.e., employee benefits on new employees and any changes to the deferred compensation, medical benefits, etc. on existing employees). 2. manually prepares retroactive pays, compensation payoffs, and management option plan pay adjustments. 3. transfers the bi-weekly adjustments, the most current update of the HR2000's data base (employee data and pay information), and the bi-weekly time keeping information generated by Accounting to ADP through a computer interface program. B. Procedures Performed By ADP: 1. maintains the data base for all employee benefits. 2. receives the current employee pay information and personal data from HR2000, the employee pay and benefit adjustments made by Payroll, and the bi-weekly time sheet information through a computer interface from payroll. 3. downloads this information into their computer systems and generates the payroll register along with the payroll checks and delivers them to the Accounting Division for review. C. Payroll Verification by Accounting: The Timekeeper reviews the final payroll register and pay checks generated by ADP. 1. The total hours and payroll amounts per the payroll register is reconciled against the Labor Distribution Report generated by the Timekeeping Unit. 2. Individual employee payroll information per the Payroll Register is spot checked against the Labor Distribution Report. 3. If any errors are subsequently detected by Accounting, the related checks are ) voided and replaced with manual checks prepared by the Payroll Unit. A new final register covering the changes made is prepared by ADP. 4. The payroll register and pay checks are reviewed by the Controller who signs off on the payroll register. 5. The payroll register is reviewed and approved by the Director of Finance/Treasurer. D. Payroll Posting to General Ledger: E. After payroll is generated, ADP sends the Timekeeping Unit a diskette and hard copy printout on the summary of salary and wage and employee benefit expenditures by division. This information is: 1. Reconciled against the Payroll Register and Labor Distribution Reports. 2. Down loaded into the Accounting Division's Data General "General Ledger Module" for the purpose of updating the Districts' Accounting records. Processing Accounts Payable Deduction Warrants: 1. The Payroll Unit prepares vendor payment requisitions for the payroll deduction liability amounts per the payroll register and forwards them onto Accounting. 2. The Senior Accountant reconciles the hard copy printout of the summary of salary and wage and employee benefit expenditures from ADP against the vendor payment requisitions for the payroll deduction liabilities prepared by Payroll. 3. After verifying the accuracy of the requisitions, the Senior Accountant forwards them onto the Accounts Payable Unit for processing (see accounts payable internal control procedures). V. Signature Authority A. Authorized signers are limited to the General Manger, Director of Finance/Treasurer, and the Controller. B. All checks will be stamped by a facsimile signature plate bearing the signature of the Treasurer. C. Manual replacement checks will require the additional original signature of either the General Manager, Director of Finance/Treasurer, or Controller. VI. Safeguards Over Check Stock A. Check stock is ordered and maintained by ADP. B. Check stock for manual checks is provided to the Payroll Unit by ADP. The Payroll Unit stores these manual prenumbered checks within their safe and maintains a blank check log on these checks. The combination to the safe is known only by the two clerks who work within the Payroll Unit C. All payroll checks are prenumbered, used in numerical sequence and the number sequence is accounted for and reconciled to the payroll check register by the Accounting Division. VIL Safeguard Over the Signature Plate A. The signature plate is to be kept in the Accounting Division safe. The combination to this safe is known only by the three safe custodians; the Accounting Manager, a Principal Accountant, and the General Ledger Senior Accountant. B. An accounts payable clerk will obtain the signature plate from one of the custodians and the printed checks from the timekeeper and run the checks through the check signing machine. C. The accounts payable clerk will then return the signature stamp to the custodian and releases the payroll checks to Personnel for distribution. VIII. Bank Reconciliations A. The General Ledger Senior Accountant, independent of the Payroll processing functions, will perform the monthly bank reconciliations. Internal Control Strengths 1. Time keeping- a. Time keeping is separated from payroll preparation. b. Formal time sheet attendance records are utilized. c.. Time sheet signature approval by supervisors is required. ..., I d. Time sheets are scrutinized for appropriateness and reasonableness. 2. Payroll Preparation- Note: a. Payroll preparation is segregated from employee wage and benefit data input and time keeping and check distribution duties. b. Overtime hours, rates, and computer computations are checked. c. The Payroll is subject to final approval before payment by someone independent of payroll preparation and time keeping. d. Payroll checks are drawn on a separate account operated on an imprest basis. e. Controls are in place over the signature plates. ) Sections in italics indicate new procedures that were implemented as a result of the discontinuance of auditing and check processing services by the County of Orange effective February 1, 1995. \ I January 18, 1995 County Sanitation Districts of Orange County Internal Accounting Controls Over Treasury Management 1. Authorization of Investment Transaction: a. Formal Investment Policy- 1. is prepared by the Treasurer. u. submitted to and approved by the Finance and Personnel Committee. b. Investment Transactions are approved by the Treasurer. 2. Execution of Investment Transaction is done by the Treasurer or Financial Manager. 3. Recording of the investment transaction- a. within the Treasurer's records is done by the Treasurer's clerk. b. within the accounting records is done by a Senior Accounting Clerk. 4. Verification of investment (i.e., match broker confirmation to Treasurer's record) is done by the Controller. 5. Safeguarding of Assets and Records: a. Reconciliation of Treasurer's records to the accounting records is done by a Principal Accountant. b. Reconciliation of Treasurer's records to bank statements and safekeeping records is done by the Senior Accountant. C. Review of financial institution's financial condition, safety, liquidity, and potential yields of investment instruments and reputation and financial condition of investment brokers is done by the Controller. D. All investment securities will be held in safekeeping in the Trust Department of the Districts' bank. E. Periodic reviews of collateral will be performed by the Controller. 6. The periodic review of the investment portfolio, including investment types, purchase price, market values, maturity dates, and investment yields as well as conformance to the stated investment policy will be performed by the Districts' external independent auditors. Internal Control Strengths 1. The specific responsibility for the performance of duties is assigned and lines of authority and reporting are clearly identified. 2. Responsibilities are commensurate with the capabilities of the personnel assigned. 3. Incompatible functions have been properly segregated to prevent errors or fraud. 4. All transactions are authorized by an appropriate responsible individual. 5. Safeguards over assets and records are in place to ensure that recorded assets exist and are properly recorded. 6. Management controls are in place to ensure that significant transactions are properly performed and recorded. ' . .J .I I~ • I .. ,,,-..,, I FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-06: Request For Proposals For Professional Auditing Services Summary A three-year independent auditing service agreement with KPMG Peat Marwick expired with the completion of the 1992-93 audit. Because of the anticipated staff time that would be required in selecting a new financial information system, the Fiscal Policy Committee decided to extend KPMG's service agreement through the 1993-94 audit at the February 10, 1994 meeting, but directed staff to solicit proposals for a multi-year engagement from other qualified public accounting firms beginning in 1994-95. Although the Districts have yet to complete the process of acquiring and installing a new financial information system, staff believes there is now sufficient staff to select and install a new financial information system and also to orient a new auditing firm unfamiliar with the Districts now that the Controller position is filled. Attached is a Request For Proposal For Professional Auditing Services along with a listing of qualified audit firms. Since KPMG has performed the Districts' audit for the last 19 years, staff believes that the Districts would benefit by the selection of a new audit firm with a fresh perspective and possibly different audit approach. Therefore, staff has not included KPMG on the preliminary listing of qualified audit firms. Staff Recommendation Staff recommends that the Committee approve the release of the Request For Proposals For Professional Auditing Services for fiscal year 1994-95, with the option of auditing the following three years, to the firms on the distribution list. J:\WPOOCIFINICRANEIFPC.MTGIFPC95\ITEMS.AGD\FPC95.06 FPC95-06 COUNTY SANITATION DISTRICTS OF ORANGE COUNTY REQUEST FOR PROPOSALS FOR PROFESSIONAL AUDITING SERVICES January 18, 1995 P.O. BOX 8127 10844 ELLIS AVENUE FOUNTAIN VALLEY, CA 92728-8127 ) COUNTY SANITATION DISTRICTS OF ORANGE COUNTY REQUEST FOR PROPOSALS TABLE OF CONTENTS I. INTRODUCTION A. General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 B. Term of Engagement .................................. 4 II. NATURE OF SERVICES REQUIRED A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 B. Scope of Work to be Performed . . . . . . . . . . . . . . . . . . . . . . . . . . 4 C. Auditing Standards to be Followed ........................ 5 D. Reports to be Issued .................................. 5 E. Special Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 F. Working Paper Retention and Access to Working Papers ............................................. 7 Ill. DESCRIPTION OF THE GOVERNMENT A. B. C. D. E. F. G. H. Name and Telephone Number of Contact Person/Organizational Chart ............................................... 8 Background Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Fund Structure ....................................... 9 Federal and State Financial Assistance . . . . . . . . . . . . . . . . . . . . 9 Pension Plans ....................................... 9 Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Magnitude of Finance Operations . . . . . . . . . . . . . . . . . . . . . . . . 9 Computer Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 IV. TIME REQUIREMENTS A. Proposal Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 B. Notification and Contract Dates . . . . . . . . . . . . . . . . . . . . . . . . . 11 C. Schedule for the 1994-95 Fiscal Year Audit . . . . . . . . . . . . . . . . 11 D. Entrance Conference, Progress Reporting and Exit Conference 12 E. Date Final Report is Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1 V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Accounting Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 B. Report Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 VI. PROPOSAL REQUIREMENTS A. General Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 B. Technical Proposal ................................... 15 C. Sealed Dollar Cost Bid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 VII. EVALUATION PROCEDURES A. Audit Selection Committee ............................. 21 B. Review of Proposals .................................. 21 C. Evaluation Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 D. Oral Presentations ................................... 23 E. Final Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 F. Right to Reject Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 APPENDICES A. Organizational Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 B. Proposer Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 C. Proposer Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 D. Format for Schedule of Professional Fees and Expenses to Support the Total All-Inclusive Maximum Price . . . . . . . . . . . . . . . 27 2 COUNTY SANITATION DISTRICTS OF ORANGE COUNTY REQUEST FOR PROPOSALS I. INTRODUCTION A. General Information The County Sanitation Districts of Orange County (Districts) are requesting proposals from qualified firms of certified public accountants to audit their financial statements for the fiscal year ending June 30, 1995, with the option of auditing their financial statements for each of the three subsequent fiscal years. There is no expressed or implied obligation for the Districts to reimburse responding firms for any expenses incurred in preparing proposals in response to this request. Any inquiries concerning the request for proposals should be addressed to: Michael D. White, Controller County Sanitation Districts of Orange County P.O. Box 8127 10844 Ellis Avenue Fountain Valley, CA 92728-8127 To be considered, five copies of a proposal must be sealed and received before 5:00 p.m., February 10, 1995 by: Penny Kyle, Board Secretary County Sanitation Districts of Orange County P.O. Box 8127 10844 Ellis Avenue Fountain Valley, CA 92728-8127 The Districts reserve the right to reject any or all proposals submitted. Proposals submitted will be evaluated by an Audit Selection Committee with the contract being awarded by the Districts' Board of Directors. During the evaluation process, the Districts reserve the right, where it may serve the Districts' best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the Districts, firms submitting proposals may be requested to make oral presentations as part of the evaluation process. 3 The Districts reserve the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the Districts and the firm selected. It is anticipated the selection of a firm will be completed by March 15, 1995. Following the notification of the selected firm it is expected a contract will be executed between both parties by April 12. B. Term of Engagement A four-year contract is contemplated, subject to the annual review and recommendation of Districts' staff. II. NATURE OF SERVICES REQUIRED A. General The Districts are soliciting the services of qualified firms of certified public accountants to audit their financial statements for the fiscal year ending June 30, 1995, with the option to audit the Districts' financial statements for each of the three subsequent fiscal years. These audits are to be performed in accordance with the provisions contained in this request for proposals. B. Scope of Work to be Performed The Districts' desire the auditor to express an opinion on the fair presentation of their general purpose financial statements in conformity with generally accepted accounting principles. The auditor is not required to audit the combining and individual fund and account group financial statements and supporting schedules. However, the auditor is to provide an "in-relation-to" report on the combining and individual fund financial statements and supporting schedules based on the auditing procedures applied during the audit of the general purpose financial statements. The auditor is not required to audit the statistical section of the report. 4 C. Auditing Standards To Be Followed To meet the requirements of this request for proposals, the audit shall be performed in accordance with: ( 1) generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants; (2) the standards for financial audits set forth in the U.S. General Accounting Office's Government Auditing Standards (1988) (3) the provisions of the Single Audit Act of 1984 and the provisions of U.S. Office of Management and Budget (OMB) Circular A-128, Audits of State and Local Governments. D. Reports to be Issued Following the completion of the audit of the fiscal year's financial statements, the auditor shall issue: 1. A report on the fair presentation of the financial statements in conformity with generally accepted accounting principles. 2. A report on the procedures applied and the results on the application of these procedures in determining as to whether the Districts' appropriation limitation calculation was computed in accordance with Article XlllB of the Constitution of The State of California. 3. If the Districts' receive any federal financial assistance over the next four years and an audit is required to be performed under the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and Budget (OMB) Circular A-128, then the auditor shall issue the following additional reports for each year required: a) A report on the internal control structure based on the auditors' understanding of the control structure and assessment of control risk. b) A report on compliance with applicable laws and regulations. c) An "in-relation-to" report on the schedule of federal financial assistance. 5 d) A report on the internal control structure used in administering federal financial assistance programs (this report may be combined with report "a"). e) A report on compliance with specific requirements applicable to major federal financial assistance programs. f) A report on compliance with specific requirements applicable to nonmajor federal financial assistance programs (this report may be combined with report "e"). g) A report on compliance with general requirements for both major and nonmajor federal financial assistance programs. 4. The auditor shall communicate in a letter to management any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions that are also material weaknesses shall be identified as such in the report. Nonreportable conditions discovered by the auditors shall be reported in a separate letter to management, which should be referred to in the report on internal controls if required as part of a single audit. If required, the report on compliance (3g above) shall include all material instances of noncompliance. All nonmaterial instances of noncompliance shall be reported in a separate management letter, which shall be referred to in the report on compliance. 5. Irregularities and illegal acts. Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties: • Districts' Joint Chairman • Districts' Finance and Personnel Committee Chairman 6 • Districts' General Manager • Districts' Director of Finance E. Special Considerations 1. The Districts will send their comprehensive annual financial report to the Government Finance Officers Association of the United States and Canada for review in their Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will provide assistance to the Districts to meet the requirements of that program. 3. The Districts currently anticipate preparing one or more official statements in connection with the sale of debt securities which will contain the general purpose financial statements and the auditor's report thereon. The auditor shall be required, if requested by the fiscal advisor and/or the underwriter, to issue a "consent and citation of expertise" as the auditor and any necessary "comfort letters." 4. The Districts have determined that the State Controller of the State of California will function as the cognizant agency in accordance with the provisions of the Single Audit Act of 1984 and U.S. Office of Management and Budget (OMB) Circular A-128, Audits of State and Local Governments. 5. If applicable, the schedule of federal financial assistance and related auditor's report, as well as the reports on the internal controls and compliance are not to be included in the comprehensive annual financial report, but are to be issued separately. 6. The partners in charge of the audit shall be available to attend meetings of the Districts Directors at which the audit progress, reports, and findings will be discussed. F. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of three (3) years, unless the firm is notified in writing by the Districts of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to the following parties or their designees: 7 • County Sanitation Districts of Orange County • State Controller of the State of California • U.S. General Accounting Office (GAO) • Parties designated by the federal or state governments or by the Districts as part of an audit quality review process • Auditors of entities of which the Districts is a subrecipient of grant funds • Auditors of entities of which the Districts is a component unit In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance. Ill. DESCRIPTION OF THE GOVERNMENT A. Name and Telephone Number of ContacUOrganizational Chart The auditor's principal contact with the Districts will be Michael D. White, Controller ((714) 962-2411, ext. 2520), who will coordinate with the Auditor the assistance to be provided by the Districts. An organizational chart (Appendix B) is attached. B. Background Information The Districts provide wastewater collection, treatment , and disposal services to a population of 2.2 million covering an area of 470 square miles. The Districts' fiscal year begins on July 1 and ends on June 30. The Districts have a total payroll, including benefits, of $30 million covering 600 employees. The Districts are comprised of nine separate special districts that function under a joint operating agreement. The Districts organization consists of five separate departments; Administration, Finance, Operations and Maintenance, Engineering, and Technical Services. The accounting and financial reporting functions of the Districts are centralized within the Finance Department's Accounting Division. 8 C. More detailed infonnation on the Districts and their finances can be found in the Districts' 1993-94 Comprehensive Annual Financial Report and the adopted budget for fiscal year 1994-95. These documents are available within the Accounting Division through the contact person indicated above under Section A. Fund Structure The Districts currently use the Enterprise fund type for the nine individual district funds and are considering in the future to report the joint operations of the Districts within a Internal Service Fund. Although the Districts' Board of Directors approve an annual budgetary operating plan each year, the Districts, in complying with general accepted accounting principles, do not integrate budgetary accounts into the proprietary fund accounting system for financial statement presentation. D. Federal and State Financial Assistance During the fiscal year to be audited, the Districts are not expected to receive any federal or state financial assistance. In previous years, the Districts had received federal grants from the Environmental Protection Agency. However, there is currently no available federal financial assistance under the Clean Water Act. E. Pension Plan The Districts participate in the Orange County Employees Retirement System, a cost-sharing multiple-employer defined benefit pension plan. All District full-time employees participate in this plan. F. Joint Ventures The Districts do not participate in any joint ventures with other governments. G. Magnitude of Finance Operations The Districts' Finance Department is headed by Gary G. Streed, Director of Finance and consists of 66 employees. The divisions within the Finance Department include Accounting, Purchasing, and Information Services. The Accounting Division is headed by Michael D. White, Controller and currently consists of 17 employees. The principal functions perfonned and the number assigned to each are as follows: 9 Division Number of Employees Revenues and Receivables 4 Accounts Payable and Fixed Assets 5 Timekeeping 1 General Ledger 4 Districts' Receptionist 1 H. Computer Systems Hardware -The Accounting Division is currently running a custom financial information system on a 486 file server which is using the sea UNIX operating system. There are currently 30 users with 32 ports in the accounting, purchasing, and warehousing functions. Software -The present financial system software operates on a proprietary operating system developed by the International Technology Group and is a one-of-a-kind system. The application software is a custom written package developed by Delphi Systems in 1977 and was written in Extended Basic. The inventory and Purchasing systems were also written in Extended Basic by Paragon, Inc. in 1986. Major applications include: • General Ledger • Accounts Payable • Accounts Receivable • Inventory • Fixed Assets • Purchasing The system also includes a payroll module. However, the processing of payroll was contracted out to Advanced Data Processing because of the ever increasing functionality requirements the existing software could not provide. 10 ) The Districts are in the process of issuing a "request for proposals" on a new financial information system due to deficiencies within the current system. The conversion to the new system is not expected to take place until the second year of this agreement. IV. TIME REQUIREMENTS A Proposal Calendar The following is a list of key dates up to and including the date proposals are due to be submitted: Request for proposal issued Due date for proposals B. Notification and Contract Dates Selected firm notified Contract date Date Audit May Commence January 19, 1995 February 1 O, 1995 March 15, 1995 April 12, 1995 The Districts will have records ready for interim audit work and all management personnel available to meet with the firm's personnel as of May 1, 1995. C. Schedule for the 1994-95 Fiscal Year Audit (A similar time schedule will be developed for audits of future fiscal years if the Districts exercise their option for additional audits). Each of the following should be completed by the auditor no later than the dates indicated. 1. Detailed Audit Plan The auditor shall provide the Districts with a detailed audit plan by June 1, 1995. 2. Fieldwork The auditor shall complete all fieldwork by September 15, 1995. 11 3. Draft Reports The auditor shall have drafts of the audit report and recommendations to management available for review by the Districts' Finance and Personnel Committee, the Director of Finance and Controller by September 29, 1995. D. Entrance Conferences, Progress Reporting and Exit Conferences (A similar time schedule will be developed for audits of future fiscal years if the Districts exercise their option for additional audits). At a minimum, the following conferences should be held by the time frames indicated on the schedule: Conferences Entrance conference with key finance department personnel. The purpose of this meeting will be to discuss prior audit problems and the interim work to be performed. This meeting will also be used to establish overall liaison for the audit and to make arrangements for work space and other needs of the auditor. Progress conference with Director of Finance Controller. The purpose of this meeting will be to summarize the results of the preliminary review and to identify the key internal controls or other matters to be tested. 12 Time Frame Prior to the start of interim audit work. Following the auditor's initial review of the Districts' internal accounting controls and prior to the completion of the interim audit work. Progress conference key finance department personnel. The purpose of this meeting will be to discuss the year- end work to be performed. Exit conference with Director of Finance and Controller. The purpose of this meeting will be to summarize the results of the field work and to review significant findings. E. Date Final Report is Due Prior to the beginning of the year-end audit work. At the conclusion of the year-end audit work. The Controller shall prepare draft financial statements, notes and all required supplementary schedules and statistical data by September 15, 1995. The auditor shall provide all recommendations, revisions and suggestions for improvement to the Controller by September 22, 1995. The final Comprehensive Annual Financial Report, including auditor's report shall be delivered to the Districts' Finance and Personnel Committee by October 11, 1995. The Director of Finance and Controller will complete their review of the draft report as expeditiously as possible. It is not expected that this process should exceed one week. During that period, the auditor should be available for any meetings that may be necessary to discuss the audit reports. Once all issued for discussion are resolved, the final signed report and 100 signed copies shall be delivered to the Controller by September 29, 1994. V. ASSISTANCE TO BE PROVIDED TO THE AUDITOR AND REPORT PREPARATION A. Accounting Division The Accounting Division staff and responsible management personnel will be available during the audit to assist the firm by providing information, documentation and explanations. The preparation of the requested audit confirmations will be the responsibility of the Districts. 13 The Accounting Division staff will endeavor to assist the audit staff by pulling vouchers, paid warrants, etc. and by providing copies of schedules prepared in the normal course of year end closing of the accounting records. The auditors will coordinate their efforts with the Accounting Division and should endeavor to accomplish the audit on a phased basis throughout the year to reduce the year end work load on the accounting staff. B. Report Preparation The responsibility for preparation, editing, and printing of the Comprehensive Annual Financial Report shall be the responsibility of the Districts. VI. PROPOSAL REQUIREMENTS A. General Requirements 2. Pre-proposal Conference A pre-proposal conference may be scheduled with the Controller at the request of a prospective bidder to answer questions relative to this proposal request. 3. Submission of Proposals The following material is required to be received by February 10, 1995 for a proposing firm to be considered: a. A master copy (so marked) of a Technical Proposal and four copies to include the following: i. Title Page Title page showing the request for proposals subject; the firm's name; the name, address and telephone number of the contact person; and the date of the proposal. ii. Table of Contents iii. Transmittal Letter A signed letter of transmittal briefly stating the proposer's understanding of the work to be done, the commitment to perform the work within the time period, a statement why the 14 firm believes itself to be best qualified to perform the engagement and a statement that the proposal is a firm and irrevocable offer for60 days. iv. Detailed Proposal The detailed proposal should follow the order set forth in Section VI B of this request for proposals. v. Executed copies of Proposer Guarantees and Proposer Warranties. attached to this request for proposal (Appendix B and Appendix C) b. The proposer shall submit a dollar cost bid in a separate sealed envelope marked as follows: SEALED DOLLAR COST BID PROPOSAL FOR COUNTY SANITATION DISTRICTS OF ORANGE COUNTY FOR PROFESSIONAL AUDITING SERVICES FOR THE YEAR ENDED JUNE 30, 1995 WITH AN OPTION FOR EACH OF THE FOLLOWING THREE YEARS c. Proposers should send the completed proposal consisting of the two separate envelopes to the following address: Penny Kyle, Board Secretary County Sanitation Districts of Orange County P.O. Box 8127 10844 Ellis Avenue Fountain Valley, CA 92728-8127 B. Technical Proposal 1. General Requirements The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the Districts in conformity with the 15 requirements of this request for proposals. As such, the substance of proposals will carry more weight than their form or manner of presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposals requirements. THERE SHOULD BE NO DOLLAR UNITS OR TOTAL COSTS INCLUDED IN THE TECHNICAL PROPOSAL DOCUMENT. The Technical Proposal should address all the points outlined in the request for proposals (excluding any cost information which should only be included in the sealed dollar cost bid). The Proposal should be prepared simply and economically, providing a straightforward, concise description of the propose~s capabilities to satisfy the requirements of the request for proposals. While additional data may be presented, the following subjects, items Nos. 2 through 10, must be included. They represent the criteria against which the proposal will be evaluated. 2. Independence The firm should provide an affirmative statement that is independent of the Districts as defined by generally accepted auditing standards. The firm should also list and describe the firm's professional relationships involving the Districts for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit. In addition, the firm shall give the Districts written notice of any professional relationships entered into during the period of this agreement. 3. License to Practice in the State of California An affirmative statement should be included that the firm and all assigned key professional staff are properly licensed to practice in the State of California. 4. Firm Qualifications and Experience The proposer should state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed and the number and nature of 16 5. ) the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be so employed on a part-time basis. The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements. The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations. Partner, Supervisory and Staff Qualifications and Experience Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is licensed to practice as a certified public accountant in the State of California. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit. Provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Indicate how the quality of staff over the term of the agreement will be assured. The proposer should identify the extent to which staff to be assigned to the audit reflect the Districts' commitment to Affirmative Action. The audit staff should remain constant through each year's audit process. Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm, are promoted or are assigned to another office. These personnel may also be changed for other reasons with the express prior written permission of the Districts. However, in either case, the Districts retain the right to approve or reject replacements. 17 Consultants and finn specialists mentioned in response to this request for proposal can only be changed with the express prior written pennission of the Districts, which retains the right to approve or reject replacements. Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience. However, at least one staff member from the prior year's audit is to be a member of the subsequent year's audit team. 6. Prior Engagements with the Districts List separately all engagements within the last five years, ranked on the basis of total staff hours, for the Districts by type of engagement (i.e., audit, management advisory services, other). Indicate the scope of work, date, engagement partners, total hours, the location of the firm's office from which the engagement was performed, and the name and telephone number of the principal client contact. 7. Similar Engagements With Other Government Entities For the finn's office that will be assigned responsibility for the audit, list the most significant engagements (maximum -5) perfonned in the last five years that are similar to the engagement described in this request for proposal. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact. 8. Specific Audit Approach The proposal should set forth a work plan, including an explanation of the audit methodology to be followed, to perfonn the services required in Section II of this request for proposal. In developing the work plan, reference should be made to such sources of information as the Districts' budget and related materials, organizational charts, manuals and programs, and financial and other management information systems. 18 Proposers will be required to provide the following infonnation on their audit approach: a. Proposed segmentation of the engagement b. Level of staff and number of hours to be assigned to each proposed segment of the engagement NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL c. Sample size and the extent to which statistical sampling is to be used in the engagement. d. Extent of use of EDP software in the engagement. e. Type and extent of analytical procedures to be used in the engagement. f. Approach to be taken to gain and document an understanding of the Districts' internal control structure. g. Approach to be taken in detennining laws and regulations that will be subject to audit test work. h. Approach to be taken in drawing audit samples for purposes of tests of compliance. 9. Identification of Anticipated Potential Audit Problems The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problem and any special assistance that will be requested from the Districts. 10. Report Format The proposal should include sample fonnats for required reports. NO DOLLARS SHOULD BE INCLUDED IN THE TECHNICAL PROPOSAL 19 C. Sealed Dollar Cost Bid 1. Total All-Inclusive Maximum Price The sealed dollar cost bid should contain all pricing information relative to performing the audit engagement as described in this request for proposal. The total all-inclusive maximum price to be bid is to contain all direct and indirect costs including all out-of-pocket expenses. The Districts will not be responsible for expenses incurred in preparing and submitting the technical proposal or the sealed dollar cost bid. Such costs should not be included in the proposal. The first page of the sealed dollar cost bid should include the following information: a. Name of Firm b. Certification that the person signing the proposal is entitled to represent the firm, empowered to submit the bid, and authorized to sign a contract with the Districts. c. A Total All-Inclusive Maximum Price for the fiscal year 1994-95 engagement. 2. Rates by Partner, Specialist, Supervisory and Staff Level Times Hours Anticipated for Each The second page of the sealed dollar cost bid should include a schedule of professional fees and expenses, presented in the format provided in the attachment (Appendix D), that supports the total all- inclusive maximum price. The cost of special services described in Section I E of this request for proposal should be disclosed as separate components of the total all-inclusive maximum price. 3. Out-of-pocket Expenses Included in the Total All-inclusive Maximum Price and Reimbursement Rates All estimated out-of-pocket expenses to be reimbursed should be presented on the second page of the sealed dollar cost bid in the format provided in the attachment (Appendix· D). All expense reimbursements will be charged against the total all-inclusive maximum price submitted by the firm. 20 4. Rates for Additional Professional Services If it should become necessary for Districts to request the auditor to render any additional services to either supplement the services requested in this RFP or to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional work shall be performed only if set forth in an addendum to the contract between Districts and the firm. Any such additional work agreed to between Districts and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the sealed dollar cost bid. 5. Manner of Payment Progress payments will be made on the basis of hours of work completed during the course of the engagement and out-of-pocket expenses incurred in accordance with the firm's dollar cost bid proposal. Interim billing shall cover a period of not less than a calendar month. VII. EVALUATION PROCEDURES A Audit Selection Committee Proposals submitted will be evaluated by an Audit Selection Committee comprised of District Directors and Districts' management staff. B. Review of Proposals The Audit Selection Committee will use a point formula during the review process to score proposals. Each member of the Audit Selection Committee will first score each technical proposal by each of the criteria described in Section VII C below. The full Audit Selection Committee will then convene to review and discuss these evaluations and to combine the individual scores to arrive at a composite technical score for each firm. At this point, firms with an unacceptably low technical score will be eliminated from further consideration. After the composite technical score for each firm has been established, the sealed dollar cost bid will be opened and additional points will be added to the technical score based on the price bid. The maximum score for price will be assigned to the firm offering the lowest total all-inclusive maximum price. Appropriate fractional scores will be assigned to other proposers. 21 The Distrids' reserve the right to retain all proposals submitted and use any idea in a proposal regardless of whether that proposal is selected. C. Evaluation Criteria Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated for both technical qualifications and price. The following represent the principal selection criteria which will be considered during the evaluation process. 1. Mandatory Elements a. The audit firm is independent and licensed to practice in State of California. b. The firm has no conflict of interest with regard to any other work performed by the firm for the Districts. c. The firm adheres to the instrudions in this request for proposal on preparing and submitting the proposal. d. The firm submits a copy of its last external quality control review report and the firm has a record of quality audit work. 2. Technical Quality a. Expertise and Experience (1) The firm's past experience and performance on comparable government engagements (2) The quality of the firm's professional personnel to be assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation b. Audit Approach (1) Adequacy of proposed staffing plan for various segments of the engagement (2) Adequacy of sampling techniques 22 ) (3) Adequacy of analytical procedures (4) The degree of anticipated support requirements of Districts' staff. 3. Price COST WILL NOT BE THE PRIMARY FACTOR IN THE SELECTION OF AN AUDIT FIRM D. Oral Presentations During the evaluation process, the Audit Committee may, at its discretion, request any one or all firms to make oral presentations. Such presentations will provide firms with an opportunity to answer any questions the Audit Selection Committee may have on a firm's proposal. Not all firms may be asked to make such oral presentations. E. Final Selection F. The Districts will select a firm based upon the recommendation of the Audit Selection Committee. It is anticipated that a firm will be selected by March 15, 1995. Following notification of the firm selected, it is expected a contract will be executed between both parties by April 12, 1995. Right to Reject Proposals Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the Districts and the firm selected. The Districts reserves the right without prejudice to reject any or all proposals. 23 APPENDICES A. Organizational Chart B. eroposer Guarantees C. Proposer Warranties D. Fonnat for Schedule of Professional Fees and Expenses to Support the Total All-inclusive Maximum Price 24 ERICAL ADMIN SECY AC CTI REV 19 l~m~•"I 60 !NANCE DIRECTOR OF FINANCE 20 INFO SVCS INFO SVCS MANAGER FINANC FINANCIAL MANAGER 18 PUR Kl WH9E PURCH MANAGER 125 OPERATIONS ASST OIROF OPERS 124 PLANT OPER CHIEF OPERATOR 3 COUNTY SANITATION DISTRICTS OF ORANGE COUNTY SUMMARY ORGANIZATIONAL CHART PUBLIC INFO SENIOR ADMIN ASSISTANT 3119 OPERATIONS & MAINtENANCE 57 Pl.AN MTCE FACD..ITIES MANAGER ' MA GE EN OFFICE CHIEF ADMIN ASSIST.O,Nt 31 FACILITIES MANAGER 2 CLERICAL ~ M MANAGEMENT SUPPORT PRINCIPAL ADMIN ASSISTANt 219 FACILITIES MANAGER GENERAL MANAGER FACl.ITIE9 MANAGER SAFETY SAFETY & HEALTH MANAGER 35 STFI FACD..ITIES MANAGER 24 P RSONNEL OFFICE DIRECTOR OF PERSONNEL SECURITY PERSONN PAYROLL SECURfTY PERSONNEL SUPV SUPERVISOR Ct.ERIC AL 12 COMPLIANCE CONSERVATION, RE.CYCLE & REUS MANAGER GENERAL COUNSEl 125 TECHNICAL SERVICES DIRECTOR OF TECHNICAL SERVICES ~ G INTERNS 44 SOURCE AIR CONtROL QUALfTY SOURCE CONTROL MANAGER 72 ENG\NEEfllNG DIRECTOR OF ENGINEERING. ERIC AL 211 ENG MANAGER ' ) INtERNS ~ ~ CONST MGMT CONST MANAGER APPENDIX B PROPOSER GUARANTEES I. The proposer certifies it can and will provide and make available, as a minimum, all services set forth in Section II, Nature of Services Required. Signature of Official: _________ _ Name (typed): ___________ _ Title: _______________ _ Firm: ----------------0 ate: --------------- 25 ) APPENDIX C PROPOSER WARRANTIES A. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing a prudent amount of coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof. B. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the Districts. D. Proposer warrants that all information provided by it in connection with this proposal is true and accurate. Signature of Official: __________ _ Name (typed): __________ _ Title: ________________ _ Firm: _______________ _ 26 APPENDIX D Page 1 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUPIT OF THE FISCAL YEAR 1994-95 FINANCIAL STATEMENTS Partners Managers Supervisory staff Staff Other (specify): __ _ Subtotal Hours Standard Hourly Rates Total for services Described in Section 11 E of the REP (Detail on subsequent pages) Out-of-pocket expenses: Meals and lodging Transportation Other (specify): ___ _ Quoted Hourly Rates Total Total all-inclusive maximum price for fiscal year 1994-95 audit - Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price. Since there is currently no available federal assistance under the Clean Water Ad, assume that a single audit will not be required. If a single audit is subsequently determined to be required, the cost of the audit will be in accordance with Section Vl.B.10.C.4. 27 APPENDIX D Page2 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE FISCAL YEAR 1995-96 FINANCIAL STATEMENTS Partners Managers Supervisory staff Staff Other (specify): __ _ Subtotal Hours Standard Hourly Rates Total for services Described in Section 11 E of the RFP (Detail on subsequent pages) Out-of-pocket expenses: Meals and lodging Transportation Other (specify): ___ _ Quoted Hourly Rates Total Total all-inclusive maximum price for fiscal year 1995-96 audit - Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price. Since there is currently no available federal assistance under the Clean Water Act, assume that a single audit will not be required. If a single audit is subsequently determined to be required, the cost of the audit will be in accordance with Section VI. 8.10. C.4. 28 APPENDIX D Page3 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE FISCAL YEAR 1996-97 FINANCIAL STATEMENTS Partners Managers Supervisory staff Staff Other (specify): __ _ Subtotal Hours Standard Hourly Rates Total for services Described in Section 11 E of the RFP (Detail on subsequent pages) Out-of-pocket expenses: Meals and lodging Transportation Other (specify): ___ _ Quoted Hourly Rates Total Total all-inclusive maximum price for fiscal year 1996-97 audit - Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price. Since there is currently no available federal assistance under the Clean Water Act, assume that a single audit will not be required. If a single audit is subsequently determined to be required, the cost of the audit will be in accordance with Section Vl.B.10.C.4. 29 APPENDIX D Page4 SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE FISCAL YEAR 1997-98 FINANCIAL STATEMENTS Partners Managers Supervisory staff Staff Other (specify): __ _ Subtotal Hours Standard Hourly Rates Total for services Described in Section 11 E of the RFP (Detail on subsequent pages) Out-of-pocket expenses: Meals and lodging Transportation Other (specify): ___ _ Quoted Hourly Rates Total Total all-inclusive maximum price for fiscal year 1997-98 audit Note: The rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price. Since there is currently no available federal assistance under the Clean Water Act, assume that a single audit will not be required. If a single audit is subsequently determined to be required, the cost of the audit will be in accordance with Section VI. 8.10. C.4. J:\WPDOC\FIN\CRJ\NE\FPC.MTG\FPC95\STAFFRPT.FPC\RFPAUD.SRV 30 1/18/95 Request For Proposals For Professional Auditing Services Distribution List Joe Rosenbaum Arthur Andersen & Company 18500 Von Karman, Ste. 1100 Irvine, CA 92715 Steve Roush Coopers Lybrand 4675 MacArthur Court, Ste. 1600 Newport Beach, CA 92660 Craig Spraker Diehl, Evans & Company 18401 Von Karman, Ste. 200 Irvine, CA 92715-1542 Grant Thorton 18300 Von Karman, Ste. 1100 P.O. Box 19585 Irvine, CA 92713-9585 Michael Moreland Moreland & Associates 610 Newport Center Dr., Ste. 840 Newport Beach, CA 92660 Richard Teaman Thomas, Bigbie & Smith 4201 Brockton Ave., Ste. 100 Riverside, CA 92501 J:\WPDOC\FlNICRANE\.MTGIFPC86\ST"AFFRPT.FPC\AUOOISf.RFP Mike Harrison Conrad & Associates 1100 Main St., Ste. C Irvine, CA 92714 Yves Pinkowitz Deloitte Touche 695 Town Center Drive Costa Mesa, CA 92626 Theresia Trevino Ernst & Young 3750 University Ave., Ste. 600 Riverside, CA 92501 Rod LeMond McGladrey & Pullen 222 S. Harbor Blvd., Ste. 800 Anaheim, CA 92800 Chuck Gibson Price Waterhouse 575 Anton Costa Mesa, CA 92626 i I FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-07: Review Alternative Capital Improvement Plans Summary Operation and Maintenance Department and Engineering Department staff have reviewed the Joint Works and individual Districts' capital improvement programs. All projects were ranked according to several criteria including: impact on public health, safety, compliance with permits, and economics. Using these rankings, the projects were then prioritized and potential design and construction cash draws were prepared. Two alternative capital improvement plans were prepared for the joint works and for the Districts' facilities. The Priority Capital Improvement Plans include only those projects ranked as high priority by Operations and Maintenance. The Desired Capital Improvement Plans include the continuation of all projects currently under design or construction. Copies of these four plans are enclosed. Although the Operations, Maintenance and Technical Services Committee and the Planning, Design and Construction Committee have not yet finalized their recommendations for a Capital Improvement Plan in light of the County Investment Pool crisis, the alternatives have been used to prepare preliminary cash flow projects and are enclosed for the Committee's information. Staff Recommendation Information only item. J;\WPOOC\FINICRANE\FPC.MTGIFPC85VTEMS.AGO\FPC95.07 1 /12/9 CAP_ AL T1 .XLS Desired Spending Plan !al Joint Works Treatment Facilities Individual District Facilities Priority Project Spending Plan !bl Joint Works Treatment Facilities Individual District Facilities COUNTY SANITATION DISTRICTS OF ORANGE COUNTY ALTERNATIVE CAPITAL IMPROVEMENT PLANS Dec-94 Jan-95 Feb-95 Mar-95 1,828,500 1,258,000 1,292,635 763,500 420,860 1,519,000 2, 143,300 1,728,000 2,249.360 2.777.000 3,435,935 2.491.500 1, 736,500 1,213,000 1,242,635 738,500 418,860 1,492,000 2,107,300 1,642,000 Apr-95 982,500 1, 101,000 2.083,500 972,500 991 ,000 May-95 Jun-95 915,000 1,750,000 1,036,100 1,615,000 1.951 , 100 3,365,000 905,000 1, 745,000 916, 100 1,510,000 7 Month Estimate 8,790,135 9,563,260 18,353,395 8,553,135 9,077,260 i, 155,360 2,705,000 3,349.935 2,380,500 1.963,500 1,821' 100 3,255.000 17.630,395 (a) Continues all projects under design at December 1 994 to construction (b) Continues only those projects ranked as High Priority by Operations or Maintenance Page 1 ) _) 1:55 PM 1 /12/95 Desired Spending Plan !al Joint Works Treatment Facilities Individual District Facilities Priority Project Spending Plan !bl Joint Works Treatment Facilities Individual District Facilities CAP _Al T1 .XLS Jul-95 Aug-95 Sep-95 Oct-95 2,485,000 3,325,000 3,525,000 3,525,000 1.220.000 961,000 525,500 1.185,500 3,705,000 4,286,000 4,050.500 4.710,500 1,650,000 1,975,000 1,925,000 1,925,000 985,000 880,000 455,000 855,000 2,635,000 2,855,000 2,380,000 2,780.000 COUNTY SANITATION DISTRICTS OF ORANGE COUNTY Al TERNATIVE CAPIT Al IMPROVEMENT PLANS Nov-95 Dec-95 Jan-96 ~ .Mfil:.!!2 3,775,000 4, 175,000 5,650,000 5,655,000 5,155,000 1,689,000 1,683,000 2.425 000 2.735,000 2.680,000 5.464,000 5,858,000 8,075,000 8,390,000 7.835,000 2, 175,000 2,575,000 4,050,000 4,055,000 3,555,000 1,205,000 1,205,000 1,205,000 1,205,000 1,475,000 3,380,000 3,780,000 5,255,000 5,260,000 5,030,000 (a) Continues all projects under design at December 1994 to construction (b) Continues only those projects ranked as High Priority by Operations or Maintenance Page 2 12 Month Total Apr-96 May-96 ~ Total From Dec 94 1995-96 To Jun 96 5,155,000 5,155,000 4,705,000 52,285,000 61,075.1'.35 1,645,000 1,615,000 1.590,000 19,954,000 19,95· ) 6,800,000 6,770,000 6,295,000 7_2,239,000 81 ;029,135 3,555,000 3,555,000 3,105,000 34, 100,000 42,653,135 350,000 330,000 310,.000 10.460,000 10.460,000 3,905,000 3,885,000 3.415.000 44,560,000 53,113,135 1 :55 PM 1 /1 2/S ... ) SUMMARY OF 13 MONTH CASH FLOW SCENARIOS December 1994 Through December 1995 8. I! ~ Q. £ E ~ .!::l 1 13 Mo to 12/95 Initial Pool Subsequent Subsequent Net New Ending Cash Balance @ Districts Reserves @ County Scenario Ca1:1ital Projects Withdrawal Withdrawal Descri1:1 Withdrawal Amt Borrow ing 6/30/95 12/31/95 12/31 /95 1A 35,440,395 46,900,000 None 0 0 12,877,000 (11, 130,000) 393, 100,000 1B 35,440,395 46,900,000 Based on reserves 55,098,000 0 12,877,000 34,528,000 338,002,000 1C 35,440,395 46,900,000 Level to 30% 85,100,000 0 47,105,000 75,014,000 308,000,000 1D 35,440,395 46,900,000 Level to 100% 393, 100,000 0 171, 128,000 388, 195,000 0 2A 46,427,395 46,900,000 None 0 0 12,243,000 (22,031,000) 393, 100,000 2B 46,427,395 46,900,000 Based on reserves 63,917,000 0 12,243,000 23,527,000 329, 183,000 2C 46,427,395 46,900,000 Level to 30% 85, 100,000 0 46,470,000 64,012,000 308,000,000 2D 46,427,395 46,900,000 Level to 100% 393, 100,000 0 170,493,000 377' 192,000 0 3A 46,427,395 46,900,000 None 0 50,000,000 61,990,000 26,716,000 393, 100,000 3B 46,427,395 46,900,000 Based on reserves 15,144,000 50,000,000 61,990,000 72,763,000 377,956,000 3C 46,427,395 46,900,000 Level to 30% 85,100,000 50,000,000 96,218,000 113,247,000 308,000,000 3D 46,427,395 46,900,000 Level to 1 00% 393, 100,000 50,000,000 220,441,000 426,430,000 0 Note: Details for all scenarios are provided in separate tan package included in the Directors' agenda folders. All Scenario 1 projections assume the High Priority Capital Improvement Plan Requested by the Operations & Maintenance Department . All Scenario 2 and 3 projections assume the Desired Capital Improvement Plan which continues work on all projects under design as of December 1994. The difference between the High Priority and the Desired Capital Improvement Plans increases from $10,987,000 at 12/95 to $27,916,000 at 6/96. Subsequent withdrawals for Scenarios 1 C, 2C and 3C are based on ending cash balances or reserves of $20 million. Current Board appoved Reserve Policy is $400 million. CAS SUM.XLS 1 :18 PM " ... 1 /12/9 Page 1 County Sanitation Districts Modified District Capital Improvement Program Priority Project Option 6Month Cortract Description Dec-94 Jan-95 Feb-95 Mar-95 Apr-95 May-95 Jun-95 94-95 Total 2-14-5R SARI Manhole & Access 0 2-34R Euclid Manhole Rehab 0 2-35 Se 1-5 Freeway Projects 0 2-36/9R Cypress trnk/RR Xing 86,860 500,000 486,300 260,000 1,333, 160 2-37 0 2-7A 91 Freeway Projects 0 ' 3-11 R Seal Beach Blvd Rehab 0 __) 3-35R Magnolia Trunk Rehab 0 3-36R Westside F/M 2nd Barrel 2,000 5,000 5,000 12,000 3-37 Se 1-5 Freeway Projects 0 3-38-1 Miller Holder lmprov 0 3-38-2 Miller Holder lmprov 30,000 20,000 10,000 100,000 400,000 560,000 3-38-3 Miller Holder lmprov 10,000 10,000 30,000 50,000 5-36 Crystal Cove Pmp Stn 65,000 104,000 169,000 5-37-3 W Coast Hwy Gravity Tnk 100,000 200,000 380,000 380,000 380,000 380,000 1,820,000 6-12 Fairview Relief 0 6-13 Watson Ave/Calif St 0 7-1-1 Gisler/405 Projects 0 7-14-2 Abandon Pump Stns 1,000 1,000 1,000 3,000 7-17 Repl Orange Prk Ac Swr 0 7-18 Orange Park Acres Sewer 0 7-19 Cowan Hts Sewer Sys 0 7-21 0 7-22 Lemon Hts Sewer 2,000 2,000 1,000 5,000 7-23-1 College Ave PS F/M 0 7-24 Manhole Access Mods 0 7-7-1 Expand Main St Pmp Stn 0 11-17 Slater Pmp Stn & Free Main 300,000 800,000 500,000 500,000 300,000 200,000 2,600,000 14-1-1 A Baker-Gisler Int 300,000 500,000 500,000 500,000 100,000 125,1 00 500,000 2,525, 100 41 8,860 1,492,000 2, 107,300 1,642,000 991,000 916, 100 1,510,000 9,077,260 DISTMIN.XLS 1 :19 PM 1 /12/95 Page 2 County Sanitation Districts Modified District Capital Improvement Program Priority Project Option 12 Month Cortract Description Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 95-96 Total 2-14-5R SARI Manhole & Access 0 2-34R Euclid Manhole Rehab 0 2-35 Se 1-5 Freeway Projects 0 2-36/9R Cypress trnk/RR Xing 0 2-37 0 2-7A 91 Freeway Projects --0 3-11 R Seal Beach Blvd Rehab 0 3-35R Magnolia Trunk Rehab 0 3-36R Westside F/M 2nd Barrel 50,000 50,000 50,000 50,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 50,000 30,000 10,000 5,290,000 3-37 Se 1-5 Freeway Projects 0 3-38-1 Miller Holder lmprov 0 3-38-2 Miller Holder lmprov 500,000 500,000 200,000 300,000 1,500,000 3-38-3 Miller Holder lmprov 25,000 25,000 300,000 300,000 300,000 300,000 1,250,000 5-36 Crystal Cove Pmp Stn 0 5-37-3 W Coast Hwy Gravity Tn 180,000 180,000 6-12 Fairview Relief 0 6-13 Watson Ave/Calif St 0 7-1 -1 Gisler/405 Projects 0 7-14-2 Abandon Pump Stns 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 240,000 7-17 Repl Orange Prk Ac Swr 0 7-18 Orange Park Acres Sewe 0 7-19 Cowan Hts Sewer Sys 0 7-21 0 7-22 Lemon Hts Sewer 175,000 175,000 175,000 175,000 175,000 175,000 175,000 175,000 1,401 ) 7-23-1 College Ave PS F/M 0 7-24 Manhole Access Mods 0 7-7-1 Expand Main St Pmp Stn 0 11-17 Slater Pmp Stn & Free M 200,000 100,000 300,000 600,000 14-1-1 A Baker-Gisler Int 0 985,000 880,000 455,000 855,000 1.205,000 1,205,000 1,205,000 1,205,000 1,475,000 350,000 330,000 310,000 10,460,000 DISTMIN.XLS 1 :19 PM .... 1 /1 2/9\i Page 3 County Sanitation Districts Modified District Capital Improvement Program Priority Project Option 6 Month 24 Month Cortract Description Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 96-97 Total Total 2-14-5R SARI Manhole & Access 0 0 2-34R Euclid Manhole Rehab 0 0 2-35 Se 1-5 Freeway Projects 0 0 2-36/9R Cypress trnk/RR Xing 0 1,333, 160 2-37 0 0 2-7A 91 Freeway Projects 0 0 ) 3-11 R Seal Beach Blvd Rehab 0 0 3-35R Magnolia Trunk Rehab 0 0 3-36R Westside F/M 2nd Barrel 0 5,302,000 3-37 Se 1-5 Freeway Projects 0 0 3-38-1 Miller Holder lmprov 0 0 3-38-2 Miller Holder lmprov 0 2,060,000 3-38-3 Miller Holder lmprov 0 1,300,000 5-36 Crystal Cove Pmp Stn 0 169,000 5-37-3 W Coast Hwy Gravity Tn 0 2,000,000 6-12 Fairview Relief 0 0 6-13 Watson Ave/Calif St 0 0 7-1-1 Gisler/405 Projects 0 0 7-14-2 Abandon Pump Stns 0 243,000 7-17 Repl Orange Prk Ac Swr 0 0 7-18 Orange Park Acres Sewe 0 0 7-19 Cowan Hts Sewer Sys 0 0 7-21 0 0 7-22 Lemon Hts Sewer 0 1,405,000 7-23-1 College Ave PS F/M 0 0 7-24 Manhole Access Mods 0 0 7-7-1 Expand Main St Pmp Stn 0 0 11-17 Slater Pmp Stn & Free M 0 3,200,000 14-1-1 A Baker-Gisler Int 0 2,525, 100 0 0 0 0 0 0 0 19,537,2601 DISTMIN.XLS 1 :19 PM .... • {"'" .... ) 111219t:r~ Page 1 County Sanitation Districts Modified District Capital Improvement Program Desired Project Option 6Month Cortract Description Dec-94 Jan-95 Feb-95 Mar-95 Apr-95 May-95 Jun-95 94-95 Total 2-14-5R SARI Manhole & Access 10,000 20,000 40,000 40,000 30,000 30,000 170,000 2-34R Euclid Manhole Rehab 8,000 8,000 8,000 8,000 8,000 8,000 48,000 2-35 Se 1-5 Freeway Projects 5,000 1,000 1,000 7,000 2-36/9R Cypress Trnk/RR Xing 86,860 500,000 486,300 260,000 1,333, 160 2-37 0 2-7A 91 Freeway Projects 1,000 1,000 1,000 3,000 3-11 R Seal Beach Blvd Rehab 0 3-35R Magnolia Trunk Rehab 5,000 35,000 40,000 40,000 35,000 155,000 3-36R Westside F/M 2nd Barrel 2,000 5,000 5,000 12,000 3-37 Se 1-5 Freeway Projects 1,000 1,000 1,000 3,000 3-38-1 Miller Holder lmprov 10,000 10,000 10,000 30,000 3-38-2 Miller Holder lmprov 30,000 20,000 10,000 100,000 400,000 560,000 3-38-3 Miller Holder lmprov 10,000 10,000 30,000 50,000 5-36 Crystal Cove Pmp Stn 65,000 104,000 169,000 5-37-3 W Coast Hwy Gravity Tnk 100,000 200,000 380,000 380,000 380,000 380,000 1,820,000 6-12 Fairview Relief 0 6-13 Watson Ave/Calif St 15,000 5,000 20,000 7-1-1 Gisler/405 Projects 0 7-14-2 Abandon Pump Stns 1,000 1,000 1,000 3,000 7-17 Repl Orange Prk Ac Swr 2,000 1,000 1,000 4,000 7-18 Orange Park Acres Sewer 1,000 1,000 7-19 Cowan Hts Sewer Sys 1,000 1,000 7-21 0 7-22 Lemon Hts Sewer 2,000 2,000 2,000 1,000 7,000 7-23-1 College Ave PS F/M 6,000 6,000 12,000 7-24 Manhole Access Mods 0 7-7-1 Expand Main St Pmp Stn 10,000 10,000 10,000 30,000 11-17 Slater Pmp Stn & Free Main 300,000 800,000 500,000 500,000 300,000 200,000 2,600,000 14-1-1 A Baker-Gisler Int 300,000 500,000 500,000 500,000 100,000 125, 100 500,000 2,525, 100 420,860 1,5'19,000 2, 143,300 1,728,000 1, 101 ,000 1,036, 100 1,615,000 9,563,260 DISTMAX.XLS 1:20 PM 1/12/95 Page 2 County Sanitation Districts Modified District Capital Improvement Program Desired Project Option 12 Month Cortract Description Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 95-96 Total 2-14-5R SARI Manhole & Access 30,000 30,000 20,000 20,000 20,000 20,000 20,000 330,000 5,000 5,000 5,000 505,000 2-34R Euclid Manhole Rehab 8,000 8,000 8,000 8,000 8,000 8,000 200,000 200,000 200,000 648,000 2-35 Se 1-5 Freeway Projects 1,000 1,000 2-36/9R Cypress Trnk/RR Xing 0 2-37 5,000 10,000 20,000 20,000 20,000 20,000 20,000 20,000 13r 'I) 2-7A 91 Freeway Projects ~o 3-11R Seal Beach Blvd Rehab 60,000 50,000 50,000 160,000 3-35R Magnolia Trunk Rehab 5,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 2,255,000 3-36R Westside F/M 2nd Barrel 50,000 50,000 50,000 50,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 50,000 30,000 10,000 5,290,000 3-37 Se 1-5 Freeway Projects 0 3-38-1 Miller Holder lmprov 10,000 10,000 10,000 20,000 20,000 20,000 10,000 10,000 10,000 , 20,000 3-38-2 Miller Holder lmprov 500,000 500,000 200,000 300,000 1,500,000 3-38-3 Miller Holder lmprov 25,000 25,000 300,000 300,000 300,000 300,000 1,250,000 5-36 Crystal Cove Pmp Stn 0 5-37-3 W Coast Hwy Gravity Tn 330,000 330,000 6-12 Fairview Relief 2,000 2,000 370,000 370,000 370,000 370,000 370,000 370,000 2,224,000 6-13 Watson Ave/Calif St 5,000 5,000 50,000 50,000 50,000 50,000 50,000 50,000 310,000 7-1-1 Gisler/405 Projects 10,000 10,000 10,000 10,000 10,000 50,000 7-14-2 Abandon Pump Stns 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 240,000 7-17 Repl Orange Prk Ac Swr 150,000 150,000 150,000 150,000 150,000 750,000 7-18 Orange Park Acres Sewe 0 7-19 Cowan Hts Sewer Sys 0 7-21 0 7-22 Lemon Hts Sewer 175,000 175,000 175,000 175,000 175,000 175,000 175,000 175,000 1,40( ) 7-23-1 College Ave PS F/M 6,000 6,000 6,000 40,000 40,000 40,000 40,000 40,000 40,000 258,000 7-24 Manhole Access Mods 2,500 2,500 5,000 7-7-1 Expand Main St Pmp Stn 10,000 10,000 10,000 20,000 20,000 20,000 10,000 10,000 10,000 120,000 11-17 Slater Pmp Stn & Free M 200,000 100,000 2,000 300,000 1,000 300,000 300,000 300,000 300,000 300,000 300,000 2,403,000 14-1-1 A Baker-Gisler Int 0 1,220,000 961 ,000 525,500 1, 185,500 , ,689,000 1,683,000 2.425,000 2, 735,000 2,680,000 1,645,000 1,616,000 1,590,000 19,954,000 DISTMAX.XLS 1:20 PM --~ '--) 1 /12/9\ -/ Page 3 County Sanitation Districts Modified District Capital Improvement Program Desired Project Option 6 Month 24 Month Cortract Description Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96 96-97 Total Total 2-14-5R SARI Manhole & Access 0 675,000 2-34R Euclid Manhole Rehab 200,000 200,000 400,000 1,096,000 2-35 Se 1-5 Freeway Projects 0 8,000 2-36/9R Cypress Trnk/RR Xing 0 1,333, 160 2-37 20,000 30,000 30,000 80,000 215,000 2-7A 91 Freeway Projects 0 3,000 3-11 R Seal Beach Blvd Rehab 50,000 50,000 210,000 3-35R Magnolia Trunk Rehab 250,000 250,000 2,660,000 3-36R Westside F/M 2nd Barrel 0 5,302,000 3-37 Se 1-5 Freeway Projects 0 3,000 3-38-1 Miller Holder lmprov 250,000 250,000 250,000 250,000 300,000 300,000 1,600,000 1,750,000 3-38-2 Miller Holder lmprov 0 2,060,000 3-38-3 Miller Holder lmprov 200,000 200,000 200,000 200,000 100,000 50,000 950,000 2,250,000 5-36 Crystal Cove Pmp Stn 0 169,000 5-37-3 W Coast Hwy Gravity Tn 0 2, 150,000 6-12 Fairview Relief 370,000 370,000 370,000 370,000 1,480,000 3,704,000 6-13 Watson Ave/Calif St 50,000 50,000 50,000 50,000 200,000 530,000 7-1-1 Gisler/405 Projects 0 50,000 7-14-2 Abandon Pump Stns 0 243,000 7-17 Repl Orange Prk Ac Swr 0 754,000 7-18 Orange Park Acres Sewe 0 1,000 7-19 Cowan Hts Sewer Sys 0 1,000 7-21 0 0 7-22 Lemon Hts Sewer 0 1.407,000 7-23-1 College Ave PS F/M 40,000 40,000 40,000 40,000 160,000 430,000 ) 7-24 Manhole Access Mods 0 5,000 7-7-1 Expand Main St Pmp Stn 200,000 200,000 200,000 200,000 200,000 200,000 1,200,000 1,350,000 11-17 Slater Pmp Stn & Free M 300,000 300,000 300,000 300,000 200,000 100,000 1,500,000 6,503,000 14-1-1 A Baker-Gisler Int 0 2,525, 100 1,930,000 1.640,000 1,410,000 1,410,000 800,000 680,000 7,870,000 37,387,260 DISTMAX.XLS 1 :20 PM .. \ ,. 1/12/95(_ & A. Reclamation Plant 1 New and Rebudgetcd Major Projects 1. Secondary Trmt Expansion to 80 MGD, Pl-36 2. Electrification of Pump Drives, Pl -36-1 3. Interim Secondary Plant Upgrades, Pl -36-2 4. Primary Treatment 72 MGD Expansion, Pl-37 5. Security & landscaping, Pl-38-1 6. Misc. Mods. Priority Elements Pl -38-2 7. Misc. Improvements to Plant 1 Pl -38-4 8. Fire Protection, Signs & Water Sys Mods Pl -38-5 9. Electl. Fae. Mods. and Safety Upgrades Pl-40-1 10. Facility Mods. and Safety Upgrades Pl-40-2 11 . Primary Clarifier Rehab. Pl -41 12. Seismic Retrofit of Non-Struct Systems Pl-43 13. Seismic Retrofit Structural Pl-44-1,2,3 14. Chemical and Wastehauler Fae Mods, Pl-46 15. 12KV Distribution Sys for Support Fae., Pl-47 1 6. Misc. Arch. and Trtmnt. Pit. Imp, Pl -48 17. Miscellaneous Projects, Pl-49 18. 40 MGD Oxygen Activated Sludge & DAF's 21 • Belt Presses (4 Units) 20. Solids Storage (4 Bins) 21 . Digesters: 2 @ 11 O' Diameter 22. 12kv Electrical Power Distribution 23. Emergency Sewage Bypass System 24. Remove Trickling Filters 1 & 3 25. Miscellaneous Job Plan Projects 26. Other Master Plan Projects a. Headworks No. 1 Rebuild, 2003 b. Headworks No.2 Impeller/Pump Speed, 2016 c. Remove Trickling Filters 2 & 4, 2007 d. 40 Mgd Oxygen Act'd Sludge &OAF, 2017 e. 110 ft Digesters, 2003 & 2012 f. 4 Belt Presses, 2004 g. 12 KV Power Distribution, 2001-2012 h. Standby Power Generation, 2005 & 201 5 i. 72 Mgd Primary Treatment, 2004 & 2012 SUB-TOTAL -RECLAMATION PLANT 1 CORF _MIN.XLS !! £ Q 94-95 BUDGET EST ACCUM ORIGINAL PROJECT EST COSTS TO BUDGET TOTAL 6/30/94 1994-95 3,600,000 3,600,000 1,750,000 420,000 420,000 1,200,000 2,040,000 40,000 400,000 125,000 125,000 1,000,000 650,000 650,000 1,000,000 2,310,000 2,310,000 2,500,000 1,075,000 1,075,000 2,000,000 450,000 450,000 1,000,000 130,000 80,000 500,000 275,000 275,000 500,000 760,000 60,000 500,000 260,000 260,000 2,000,000 850,000 850,000 1,800,000 420,000 420,000 1,000,000 80,000 80,000 2,000,000 170,000 170,000 1,000,000 10,000 10,000 250,000 0 0 0 0 0 0 0 125,000 125,000 1,000,000 0 0 0 D 0 0 0 0 0 13,750,000 11.000.000 21,400,000 County Sanitation Districts Modified Capital Improvement Program December 1994 through June 1996 Priority ProJect Option § E Q. Dec-94 Jan-95 Feb-95 120,000 20,000 20,000 5,000 5,000 1,000 135,000 80,000 70,000 47,500 150,000 200,000 209,000 150,000 150,000 25,000 5,000 45,000 45,000 55,000 10,000 10,000 20,000 45,000 125,000 118,025 Pl-40-1 641 ,500 590.000 634,025 .!:! Mar-95 20,000 1,000 70,000 100,000 118,000 55,000 20,000 10,000 394,000 Page 1 ! ,! f h Apr-95 May-95 Jun-95 7 Month Estimate 210,000 100,000 94,000 584,000 65,000 90,000 1,065,000 1,232,000 0 48,000 10,000 4,000 417,000 87,500 585,000 70,000 47,000 744,000 20,000 20,000 70,000 55,000 55,000 65,000 375,000 20,000 20,000 15,000 115,000 2,000 5,000 2,000 307,025 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 577,500 347 000 1,245 000 4,429,025 1:47 PM 1/12/95 Page 2 Priority Project Option ~ !! f. Q ~ .E Q !:! ! ,!. !S. b 94-95 BUDGET EST ACCUM ORIGINAL Dec-94 Jan-95 Feb-95 Mar-95 Apr-95 May-95 Jun-95 7 Month PROJECT EST COSTS TO BUDGET Estimate TOTAL 6/30194 1994-95 0 B. Plant 2 New and Rebud9eted Major Projects 0 1 . Support Facilities and Site Improvements 0 a. Operations Building, P2-23-5-1 2,600,000 2,600,000 550,000 280,000 105,000 105,000 15,000 228,000 733,000 b. Warehouse Building, P2-35-2 930,000 230,000 2,000,000 5,000 5,000 250,000 260,000 c. Maintenance Building , P2-35-3 240,000 240,000 2,000,000 P2-35-2 0 d. Phase II Site & Security Imp., P2-35-5 150,000 150,000 1,300,000 P2-35-2 0 e. Construction Office, M044 (P2-35-4) 185,000 185,000 250,000 P2-35-2 0 2. Rehabilitate 7 Digesters, P2-39 500,000 500,000 600,000 Pl-40·1 0 3. Primary Treatment 24 MGD Expansion, P2-41 5,000 5,000 0 4. Secondary Treatment Expansion, P2-42-2 11,300,000 10,900,000 5,000,000 650,000 375,000 300,000 250,000 375,000 325,000 250,000 2,525,000 5. Priority Misc. Mod. , P2-43-1 4,600,000 4,600,000 700,000 6,000 30,000 100,610 34,000 170,610 6. Misc. Modifications , P2-43-3 750,000 750,000 1,350,000 158,000 100,000 50,000 31,000 339,000 7. Monitor/Control System, P2-44 & J-31 2,030,000 2,030,000 2,700,000 0 8. Fire Protection, Signs & Water Sys Mods P2-46 280,000 280,000 2,500,000 P1-38-5 0 9. Electl. Fae. Mods. and Safety Upgrades P2-4 7-1 50,000 50,000 1,500,000 P1-40-1 0 10. Facility Mods. and Safety Upgrades P2-4 7-2 310,000 310,000 2,000,000 Pl-40-2 0 11. Primary Clarifier Rehab. P2-48 130,000 130,000 1,500,000 P1-41 0 Misc Improvements, P2-49 (Pascal & Ludwig) 167,000 9,000 28,500 37,500 12. Seismic Retrofit of Non-Struct Systems P2-50 200,000 200,000 2,000,000 0 13. Seismic Retrofit Struct. P2-53-2,3,4,5,6 3,360,000 3,360,000 2,500,000 0 14. Chemical and Plant Water Mods., P2-55 100,000 100,000 2,000,000 0 15. Misc. Seismic Mods and Flare Imp, P2-56 50,000 50,000 150,000 0 16. Miscellaneous Projects, P2-57 10,000 10,000 250,000 0 1 7. Solids Storage: 2 Bins 0 0 18. Additional 105 Foot Digester 0 0 19. Plant Water Pump Station 0 0 20. Miscellaneous Job Plan Projects 250,000 250,000 1,000,000 0 21 . Other Master Plan Projects 0 a. Replace Primary Basins A, B, C, 2006 0 0 b. Standby Power Generation, 2005 & 20 15 0 0 c. Monitoring and Control System, 2005 0 0 SUB-TOTAL -PLANT 2 28,030,000 27,097,000 31 ,850,000 1,094,000 619,000 555,610 343,500 395,000 558,000 500,000 4.065,110 C. Water Reclamation Regional Exeansion 600,000 600.000 400,000 0 CORF_ MIN.XLS 1:47 PM -111219!i Page 3 Priority Project Option !! !! £ Q E f. Q .!:! ! :!. .!S b ' 94-95 BUDGET EST ACCUM ORIGINAL Dec-94 Jan-95 Feb-95 Mar-95 Apr-95 May-95 Jun-95 7 Month PROJECT EST COSTS TO BUDGET Estimate TOTAL 6/30/94 1994-95 D. lnter~lant and Joint Facilities 0 1. Support Facilities and Site Improvements 0 a. Demolition of Old Lab, J-11-1 130,000 130,000 250,000 P2-35-2 0 b. Monitoring & Control System, J-23-2 & J-31 (J-31-1/2) 2,325,000 2,325,000 2,200,000 0 c. Personnel Building at Pit 1, J-26 210,000 210,000 400,000 0 d. 3-Story Admin Annex at Old Lab Site J-30 110,000 110,000 0 e. Demolition of Old Control Center 0 0 f. Demolition of Support Bldg.@P2, J-27 100,000 100,000 50,000 0 g. Central Lab Expansion J-17-2,3 206,000 206,000 100,000 2,000 2,000 1,000 5,000 2. Outfall & Booster Pump Stations 0 50,000 50,000 ) a. Surge Tower Replacement J-34-1 600,000 600,000 2,000,000 0 b. Outfall Reliability & Pumping Annex OOBS "C" J-34 0 0 c. Ext & Repl 78" to Deep Water W/120" Outfall 0 100,000 0 3. Computerized Fae. Records and Dwg. Sys. J-25-1 200,000 200,000 750,000 1,000 2,000 1,000 4,000 4. Electl. Power Systems Rehab. Studies J-25-2 70,000 20,000 300,000 0 5. Collection System Mapping 0 100,000 0 6. Telephone/Telemetry Monitoring Exp. J-28 375,000 375,000 25,000 0 7. Standby Power & Reliability Mods. J-33 390,000 390,000 500,000 0 8. Bushard lnterplant Trunk Replacement 0 0 9. Sludge Disposal Projects 0 0 a. Compost Demonstration Plant 0 0 b. Land Acquisition 0 0 c. Landfill Development Phase I 0 0 d. Compost Facility 0 0 10. District Information Management Network 0 a. Maint. & Oper Mgmnt Computer System 0 250,000 _o b. Lab Information Management System Upgrades 0 275,000 0 c. Financial Information System 200,000 200,000 750,000 0 d. Network System Integration 0 340,000 0 e. CD-Optical Data Archiving 0 50,000 0 11 . In-Plant Sampling System Mod 0 140,000 0 ) CORF_ MIN.XLS 1:47 PM 1/12/95 Page 4 Priority Project Option ~ !! £ Q 5 .E Q .!:! l :! ~ !: 94-95 BUDGET EST ACCUM ORIGINAL Dec-94 Jan-95 Feb-95 Mar-95 Apr-95 May-95 Jun-95 7 Month PROJECT EST COSTS TO BUDGET Estimate TOTAL 6/30/94 1994-95 0 0 12. Other Master Plan Projects 0 a. Sludge Disp. Landfill Phase II 2011 0 0 b. Sludge Disp. Equip Phase I & II 2001 0 0 c. Electrical Power Distribution, 12Kv 0 0 13. Misc Job Plan Projects 525,000 525,000 1 000,000 0 SUB-TOTAL -INTERPLANT & JOINT 5,441,000 5 .• 391 .000 9,580.000 1,000 4,000 53.000 1,000 0 0 0 59,000 SUB-TOTAL -MAJOR PROJECTS 47,821 000 44.088,000 63.230.000 1,736,500 1,213,000 1,242,635 738,500 972,500 905,000 1,745.000 8,553, 135 E. Seecial Projects, Studies & Research 1 . Action Plan: a. NPDES Permit ( Application) 325,000 325,000 50,000 0 b. NPDES Permit (Monitoring Changes) 50,000 50,000 50,000 0 2. Solids Treatment, Disposal and Reuse 250,000 250,000 150,000 0 3. Air Quality Control Program 0 0 a. Toxics and ROG Control: Biofilter R&D 50,000 50,000 250,000 0 b. Air Emissions: Source Control Feasibility Study 0 50,000 0 c. SCAQMD Rule 431.1 :Sulfur Control & CEMS 0 100,000 0 d. SCAQMD Rule 1402: Air Toxics 0 200,000 0 e. Air Quality Management Implementation Plan 0 275,000 0 f. Parameter Monitoring System For Cen Gen 0 300,000 0 g. A.O. Database Development 25,000 25,000 50,000 0 4. 2020 VISION Master Plan Update 3,000 3,000 100,000 0 SUB-TOTAL -SPECIAL PROJECTS 703,000 703,000 1.575.000 0 0 0 0 0 0 0 0 F. Eguiement Items 0 3,000,000 0 G. Master Plan "Alloc For Rehab & Reeairs" $7415651000 Allocated to "a" Projects Above 0 TOTAL JOINT WORKS CAPITAL REQ 48 524 000 44 791 000 67 805 000 1,736 500 1 213 000 1 242 635 738 500 972 500 905 .• 000 1 745 000 B 553 135 CORF _Miiii XLS 1:47 PM t:. A. Reclamation Plant 1 New and Rebudgeted Major Projects 1. Secondary Trmt Expansion to 80 MGD. Pl-36 2. Electrification of Pump Drives, Pl-36-1 3. Interim Secondary Plant Upgrades, Pl -36-2 4. Primary Treatment 72 MGD Expansion, P1-37 5. Security & Landscaping, Pl -38-1 6. Misc. Mods. Priority Elements Pl -38-2 7. Misc. Improvements to Plant 1 Pl -38-4 8. Fire Protection, Signs & Water Sys Mods Pl-38-5 9. Electl. Fae. Mods. and Safety Upgrades Pl-40-1 10. Facility Mods. and Safety Upgrades P1 -40-2 11. Primary Clarifier Rehab. Pl-41 1 2. Seismic Retrofit of Non-Struct Systems Pl -43 13. Seismic Retrofit Structural Pl-44-1,2,3 14. Chemical and Wastehauler Fae Mods, Pl -46 15. 12KV Distribution Sys for Support Fae., Pl-47 16. Misc. Arch. and Trtmnt. Pit. Imp, Pl -48 1 7. Miscellaneous Projects, Pl -49 1 8. 40 MGD Oxygen Activated Sludge & DAF's 21 . Belt Presses (4 Units) 20. Solids Storage (4 Bins) 21 . Digesters: 2 @ 11 O' Diameter 22. 12kv Electrical Power Distribution 23. Emergency Sewage Bypass System 24. Remove Trickling Filters 1 & 3 25. Miscellaneous Job Plan Projects 26. Other Master Plan Projects a. Headworks No. 1 Rebuild, 2003 b. Headworks No.2 Impeller/Pump Speed, 2016 c. Remove Trickling Filters 2 & 4, 2007 d. 40 Mgd Oxygen Act'd Sludge &DAF. 2017 e. 11 O ft Digesters, 2003 & 2012 f. 4 Belt Presses, 2004 g. 12 KV Power Distribution, 2001-2012 h. Standby Power Generation, 2005 & 2015 I. 72 Mgd Primary Treatment, 2004 & 2012 SUB-TOTAL -RECLAMATION PLANT 1 CORF _MIN.XLS M N Jul-95 Aug-95 1,000,000 1,000,000. 25,000 25,000 100,000 300,000 1,125,000 1,325,000 County Sanitation Districts Modified Capital Improvement Program December 1994 through June 1996 Priority Project Option Q !'. Q Sep-95 Oct-95 Nov-95 1,000,000 1,000,000 1,000,000 300,000 25,000 25,000 25,000 300,000 400,000 400,000 1,325 000 1,425,000 1 ,725,000 Page 5 .!! §. ! !:! y ':!:!. 2S x Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Total From Dec 94 To Jun 96 0 584,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 13,232,000 Joo 250,000 250,000 250,000 250,000 250,000 250,000 1,9 0 58 ' 0 744,000 300,000 500,000 500,000 500,000 500,000 500,000 50,000 3,220,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 675,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 2,915,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 4,607,025 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 j 0 0 0 0 0 0 2,125_,000 2,575,000 2,575,000 2,575,000 2,575,000 2,575,000 2, 125,000 28,479,025 1:47 PM 1112/95 Page 6 Priority Project Option !! M !:! Q f .Q fl §. I !:! Y. "':!!. ~ y Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Total From Dec 94 To Jun 96 B. Plant 2 New and Rebudgeted Major Projects 1 . Support Facilities and Site Improvements a. Operations Building, P2-23-5-1 733,000 b. Warehouse Building, P2-35-2 300,000 300,000 300,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 4,760,000 c. Maintenance Building , P2-35-3 0 d. Phase II Site & Security Imp., P2-35-5 0 e. Construction Office, M044 (P2-35-4) lo 2. Rehabilitate 7 Digesters, P2-39 -0 3. Primary Treatment 24 MGD Expansion, P2-41 0 4. Secondary Treatment Expansion, P2-42-2 225,000 350,000 250,000 50,000 3.400,000 5. Priority Misc. Mod. , P2-43-1 170,610 6. Misc. Modifications , P2-43-3 339,000 7. Monitor/Control System, P2-44 & J-31 0 8. Fire Protection, Signs & Water Sys Mods P2-46 0 9. Elect!. Fae. Mods. and Safety Upgrades P2-47-1 0 10. Facility Mods. and Safety Upgrades P2-4 7-2 0 11 . Primary Clarifier Rehab. P2-48 0 Misc Improvements, P2-49 (Pascal & Ludwig) 37,500 12. Seismic Retrofit of Non-Struct Systems P2-50 0 13. Seismic Retrofit Struct. P2-53-2,3,4,5,6 0 14. Chemical and Plant Water Mods., P2-55 0 15. Misc. Seismic Mods and Flare Imp, P2-56 0 16. Miscellaneous Projects, P2-57 0 1 7. Solids Storage: 2 Bins 0 18. Additional 105 Foot Digester 0 1 9. Plant Water Pump Station 0 20. Miscellaneous Job Plan Projects 0 21 . Other Master Plan Projects -0 a. Replace Primary Basins A, B, C, 2006 0 b. Standby Power Generation, 2005 & 2015 'o c. Monitoring and Control System, 2005 -0 SUB-TOTAL -PLANT 2 525,000 650,000 550,000 450,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 9,440. 110 C. Water Reclamation Regional Ex~ansion 0 CORF _MIN.XLS 1:47 PM 1/1 2/95' Page 7 Priority Project Option ~ M !:! Q ~ g !! 2 ! !! Y. '!:!.. 2S. Y.. Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Total From Dec 94 To Jun 96 D. lnter[!lant and Joint Facilities 1 . Support Facilities and Site Improvements ) 0 a. Demolition of Old Lab, J-11-1 0 b. Monitoring & Control System, J-23-2 & J-31 (J-31-1/2) 1,000,000 1,000,000 500,000 500,000 500,000 000.000 4,000,000 c. Personnel Building at Pit 1, J-26 0 d. 3-Story Admin Annex at Old Lab Site J-30 0 e. Demolition of Old Control Center 0 f. Demolition of Support Bldg.@P2, J-27 Jo~ g. Central Lab Expansion J-17-2,3 2. Outfall & Booster Pump Stations 50,000 a. Surge Tower Replacement J-34-1 0 b. Outfall Reliability & Pumping Annex OOBS ·c· J-34 0 c. Ext & Repl 78" to Deep Water W/120" Outfall 0 3. Computerized Fae. Records and Dwg. Sys. J-25-1 25,000 30,000 30,000 30,000 30,000 30,000 179,000 4. Electl. Power Systems Rehab. Studies J-25-2 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 500,000 5. Collection System Mapping 0 6. Telephone!Telemetry Monitoring Exp. J-28 0 7. Standby Power & Reliability Mods. J-33 0 8. Bushard lnterplant Trunk Replacement 0 9. Sludge Disposal Projects 0 a. Compost Demonstration Plant 0 b. Land Acquisition 0 c. Landfill Development Phase I 0 d. Compost Facility 0 1 0. District Information Management Network 0 a. Maint. & Oper Mgmnt Computer System 0 b. Lab Information Management System Upgrades 0 c. Financial Information System 0 d. Network System Integration 0 e. CD-Optical Data Archiving 0 11 . In-Plant Sampling System Mod 0 CORF _MIN.XLS 1:47 PM 1/12/95 Page 8 Priority Project Option h. M !:! Q f Q !! .§ ! !:! ':!. '!:i. ~ y Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Total From Dec 94 To Jun 96 12. Other Master Plan Projects a. Sludge Dlsp. Landfill Phase II 2011 0 b. Sludge Disp. Equip Phase I & II 2001 0 c. Electrical Power Distribution, 12Kv 0 1 3. Misc Job Plan Projects 0 SUB-TOTAL -INTERPLANT & JOINT 0 0 50,000 50,000 50,000 50,000 1,075,000 l.080,000 580 000 580,000 580.000 580.000 4,734,000 SUB-TOTAL -MAJOR PROJECTS l ,650,000 1,975,000 1,925 .• 000 l ,925,000 2, 175,000 2,575,000 4,050,000 4.055,000 3,555,000 3,555.000 3,555,000 3.105,000 42,653, 135 E. S!!ecial Projects, Studies & Research 1 . Action Plan: a. NPDES Permit I Application) 0 b. NPDES Permit !Monitoring Changes) 0 2. Solids Treatment, Disposal and Reuse 0 3. Air Quality Control Program 0 a. Toxics and ROG Control: Biofilter R&D 0 b. Air Emissions: Source Control Feasibility Study 0 c. SCAQMD Rule 431 .1 :Sulfur Control & CEMS 0 d. SCAQMD Rule l 402: Air Toxics 0 e. Air Quality Management Implementation Plan 0 f. Parameter Monitoring System For Cen Gen 0 g. A.O. Database Development 0 4. 2020 VISION Master Plan Update 0 SUB-TOTAL -SPECIAL PROJECTS 0 0 0 0 0 0 0 0 0 0 0 0 0 F. Eguil!ment Items G. Master Plan "Alloc For Rehab & Re!!airs" $7415651000 Allocated to "a" Projects Above TOTAL JOINT WORKS CAPITAL REO , 650 000 1 975 000 1.925 000 1 925 000 2. l 75,000 2 575 000 4 050.000 4.055 000 3 555 000 3.555 000 3 555 000 3 105 000 42 653,-135 CORF_MIN.XLS 1:47 PM ... _.~, --. I; 1/12/95 B c D 94-95 BUDGET EST ACCUM ORIGINAL PROJECT EST COSTS TO BUDGET TOTAL 6/30/94 1994-95 A. Reclamation Plant 1 New and Rebudgeted Major Proiects 1. Secondary Trmt Expansion to 80 MGD, P1 -36 3,600,000 3,600,000 1,750,000 2. Electrification of Pump Drives, P1-36-1 420,000 420,000 1,200,000 3. Interim Secondary Plant Upgrades, P1 -36-2 2,040,000 40,000 400,000 4. Primary Treatment 72 MGD Expansion, P1-37 325,000 125,000 1,000,000 5. Security & Landscaping, P1-38-1 650,000 650,000 1,000,000 6. Misc. Mods. Priority Elements P1-38-2 2,310,000 2,310,000 2,500,000 7. Misc. Improvements to Plant 1 P1-38-4 1,075,000 1,075,000 2,000,000 8. Fire Protection, Signs & Water Sys Mods P1-38-5 450,000 450,000 1,000,000 9. Electl. Fae. Mods. and Safety Upgrades P1-40·1 130,000 80,000 500,000 10. Facility Mods. and Safety Upgrades P1-40-2 275,000 275,000 500,000 11. Primary Clarifier Rehab. P1 -41 760,000 60,000 500,000 12. Seismic Retrofit of Non-Struct Systems P1-43 260,000 260,000 2,000,000 13. Seismic Retrofit Structural P1-44-1 ,2,3 1,600,000 850,000 1,800,000 14. Chemical and Wastehauler Fae Mods, P1 -46 1,020,000 420,000 1,000,000 15. 12KV Distribution Sys for Support Fae., P1-4 7 80,000 80,000 2,000,000 16. Misc. Arch. and Trtmnt. Pit. Imp, P1 -48 1,170,000 170,000 1,000,000 17. Miscellaneous Projects, P1-49 10,000 10,000 250,000 18. 40 MGD Oxygen Activated Sludge & DAF's 0 21. Belt Presses (4 Units) 0 20. Solids Storage (4 Bins) 0 21 • Digesters: 2 @ 11 O' Diameter 0 22. 12kv Electrical Power Distribution 0 23. Emergency Sewage Bypass System 0 24. Remove Trickling Filters 1 & 3 0 25. Miscellaneous Job Plan Projects 125,000 125,000 1,000,000 26. Other Master Plan Projects a. Headworks No. 1 Rebuild, 2003 0 b. Headworks No.2 Impeller/Pump Speed, 2016 0 c. Remove Trickling Filters 2 & 4, 2007 0 d. 40 Mgd Oxygen Act'd Sludge &DAF, 2017 0 e. 11 O ft Digesters, 2003 & 2012 0 f. 4 Belt Presses, 2004 0 g. 12 KV Power Distribution, 2001-2012 0 h. Standby Power Generation, 2005 & 2015 0 i. 72 Mgd Primary Treatment, 2004 & 2012 0 SUB-TOTAL -RECLAMATION PLANT 1 16.300 000 11,000,000 21 400,000 CORF _MAX.XLS County Sanitation Districts Modified Capital Improvement Program December 1994 through June 1996 Desired ProJect Option E F G Dec-94 Jan-95 Feb-95 120,000 20,000 20,000 5,000 5,000 1,000 5,000 135,000 80,000 70,000 47,500 150,000 200,000 209,000 150,000 150,000 25,000 5,000 45,000 45,000 55,000 10,000 10,000 20,000 45,000 125,000 118,025 72,000 30,000 30,000 P1-40-1 713,500 620 000 669,025 H Mar-95 20,000 1,000 70,000 100,000 118,000 55,000 20,000 10,000 10,000 404 000 Page 1 I J K Apr-95 May-95 Jun-95 7 Month Estimate 210,000 100,000 94,000 584,000 65,000 90,000 1,065,000 1,232,000 5,000 5,000 5,000 20,000 48,000 10,000 4,000 417,000 87,500 585,000 70,000 47,000 744,000 20,000 20,000 70,000 55,000 55,000 65,000 375,000 20,000 20,000 15,000 115,000 2,000 5,000 2,000 307,025 0 0 5,000 5,000 152,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 587.500 357.000 1.250.000 4 601,025 1:49 PM 1112195 Page 2 Desired Project Option B c D E F G H I J K 94-95 BUDGET EST ACCUM ORIGINAL Dec-94 Jan-95 Feb-95 Mar-95 Apr-95 May-95 Jun-95 7 Month PROJECT EST COSTS TO BUDGET Estimate TOTAL 6130194 1994-95 0 B. Plant 2 New and Rebudgeted Major Projects 0 1 . Support Facilities and Site Improvements 0 0 a. Operations Building, P2·23-5-1 2,600,000 2,600,000 550,000 280,000 105,000 105,000 15,000 228,000 733,000 b. Warehouse Building, P2-35-2 930,000 230,000 2,000,000 5,000 5,000 250,000 260,000 c. Maintenance Building , P2·35-3 240,000 240,000 2,000,000 P2-35-2 0 d. Phase II Site & Security Imp .. P2-35·5 150,000 150,000 1,300,000 P2-35-2 0 e. Construction Office, M044 (P2-35-4) 185,000 185,000 250,000 P2-35-2 0 2. Rehabilitate 7 Digesters, P2-39 500,000 500,000 600,000 Pl -40·1 0 3. Primary Treatment 24 MGD Expansion, P2-41 5,000 5,000 0 4. Secondary Treatment Expansion, P2-42-2 11 ,300,000 10,900,000 5,000,000 650,000 375,000 300,000 250,000 375,000 325,000 250,000 2,525,000 5. Priority Misc. Mod., P2-43-1 4,600,000 4,600,000 700,000 6,000 30,000 100,610 34,000 170,610 6. Misc. Modifications , P2-43-3 750,000 750,000 1,350,000 158,000 100,000 50,000 31,000 339,000 7. Monitor/Control System, P2-44 & J-31 2,030,000 2,030,000 2,700,000 0 B. Fire Protection, Signs & Water Sys Mods P2-46 280,000 280,000 2,500,000 P1-3B-5 0 9. Electl. Fae. Mods. and Safety Upgrades P2-47-1 50,000 50,000 1,500,000 P1-40·1 0 10. Facility Mods. and Safety Upgrades P2-47-2 310,000 310,000 2,000,000 P1·40·2 0 11 . Primary Clarifier Rehab. P2-48 130,000 130,000 1,500,000 Pl-41 0 Misc Improvements, P2-49 (Pascal & Ludwig! 167,000 9,000 28,500 37,500 12. Seismic Retrofit of Non-Struct Systems P2-50 200,000 200,000 2,000,000 0 13. Seismic Retrofit Struct. P2-53-2,3,4,5,6 3,360,000 3,360,000 2,500,000 P1-4B 0 14. Chemical and Plant Water Mods., P2-55 100,000 100,000 2,000,000 P1-46 0 15. Misc. Seismic Mods and Flare Imp, P2-56 50,000 50,000 150,000 Pl-48 0 16. Miscellaneous Projects, P2-57 10,000 10,000 250,000 0 17. Solids Storage: 2 Bins 0 0 1 B. Additional 105 Foot Digester 0 0 19. Plant Water Pump Station 0 0 20. Miscellaneous Job Plan Projects 250,000 250,000 1,000,000 .o 21 . Other Master Plan Projects 0 a. Replace Primary Basins A, B, C, 2006 0 0 b. Standby Power Generation, 2005 & 201 5 0 0 c. Monitoring end Control System, 2005 0 0 SUB-TOTAL -PLANT 2 28,030,000 27,097.000 31 ,850,000 1,094,000 619.000 555,610 343,500 395,000 558,000 500,000 4,065,110 C. Water Reclamation Regional Exl!ansion 600,000 600,000 400 000 0 CORF _MAX.XLS 1:49 PM 1/12195 Page 3 Desired Project Option B c D E F G H I J K 94-95 BUDGET EST ACCUM ORIGINAL Dec-94 Jan-95 Feb-95 Mar-95 Apr-95 May-95 Jun-95 7 Month PROJECT EST COSTS TO BUDGET Estimate TOTAL 6/30/94 1994-95 D. lnter~lant and Joint Facilities 0 1 . Support Facilities and Site Improvements 0 a. Demolition of Old Lab, J-11-1 130,000 130,000 250,000 P2-35-2 0 b. Monitoring & Control System, J-23-2 & J-31 (J-31-1/21 2,325,000 2,325,000 2,200,000 0 c. Personnel Building at Pit 1, J-26 210,000 210,000 400,000 0 d. 3-Story Admin Annex at Old Lab Site J-30 110,000 110,000 0 e. Demolition of Old Control Center 0 0 f. Demolition of Support Bldg.@P2, J-27 100,000 100,000 50,000 0 g. Central Lab Expansion J-17-2,3 206,000 206,000 100,000 2,000 2,000 1,000 5,000 ) 2. Outfall & Booster Pump Stations 0 50,000 50,000 a. Surge Tower Replacement J-34-1 1,000,000 600,000 2,000,000 20,000 15,000 15,000 15,000 65,000 b. Outfall Reliability & Pumping Annex OOBS "C" J-34 0 0 c. Ext & Repl 78" to Deep Water W/120" Outfall 0 100,000 0 3. Computerized Fae. Records and Dwg. Sys. J-25-1 200,000 200,000 750,000 1,000 2,000 1,000 4,000 4. Electl. Power Systems Rehab. Studies J-25-2 70,000 20,000 300,000 0 5. Collection System Mapping 0 100,000 0 6. Telephone!Telemetry Monitoring Exp. J-28 375,000 375,000 25,000 0 7. Standby Power & Reliability Mods. J-33 390,000 390,000 500,000 0 8. Bushard lnterplant Trunk Replacement 0 0 9. Sludge Disposal Projects 0 0 a. Compost Demonstration Plant 0 0 b. Land Acquisition 0 0 c. Landfill Development Phase I 0 0 d. Compost Facility 0 0 10. District Information Management Network 0 a. Main!. & Oper Mgmnt Computer System 0 250,000 0 b. Lab Information Management System Upgrades 0 275,000 0 c. Financial Information System 200,000 200,000 750,000 0 d. Network System Integration 0 340,000 0 e. CD-Optical Data Archiving 0 50,000 0 11 . In-Plant Sampling System Mod 0 140,000 0 CORF _MAX.XLS 1:49 PM 1/12/95 Page 4 Desired Project Option B c D E F G H I J K 94-95 BUDGET EST ACCUM ORIGINAL Dec-94 Jan-95 Feb-95 Mar-95 Apr-95 May-95 Jun-95 7 Month PROJECT EST COSTS TO BUDGET Estimate TOTAL 6/30194 1994--95 0 0 1 2. Other Master Plan Projects 0 a. Sludge Disp. Landfill Phase II 2011 0 0 b. Sludge Disp. Equip Phase I & II 2001 0 0 c. Electrical Power Distribution, 12Kv 0 0 1 3. Misc Job Plan Projects 525,000 525,000 1.000,000 0 SUB-TOTAL -INTERPLANT & JOINT 5,841,000 5,391,000 9.580,000 21,000 19,000 68.000 16,000 0 0 0 124,000 SUB-TOTAL -MAJOR PROJECTS 50,771,000 44,088,000 63,230,000 1,828.500 1,258,000 1.292 .. 635 763,500 982.500 915,000 1,750 .• 000 8790,135 E. Seecial Projects, Studies & Research 1 . Action Plan: a. NPDES Permit ( Application) 325,000 325,000 50,000 0 b. NPDES Permit (Monitoring Changes) 50,000 50,000 50,000 0 2. Solids Treatment, Disposal and Reuse 250,000 250,000 150,000 0 3. Air Quality Control Program 0 0 a. Toxics and ROG Control: Biofilter R&D 50,000 50,000 250,000 0 b. Air Emissions: Source Control Feasibility Study 0 50,000 0 c. SCAQMD Rule 431 .1 :Sulfur Control & CEMS 0 100,000 0 d. SCAQMD Rule 1402: Air Toxics 0 200,000 0 e. Air Quality Management Implementation Plan 0 275,000 0 f. Parameter Monitoring System For Cen Gen 0 300,000 0 g. A.O. Database Development 25,000 25,000 50,000 0 4. 2020 VISION Master Plan Update 3,000 3,000 100.000 0 SUB-TOTAL -SPECIAL PROJECTS 703,000 703,000 1,575.000 0 0 0 0 0 0 0 0 F. Eguiement Items 0 3 000,000 0 G. Master Plan "Alloc For Rehab & Reeairs" $741565,000 Allocated to "a" Projects Above 0 TOTAL JOINT WORKS CAPITAL REO 51 474 000 44 791 000 67,805 000 1 828 500 1 258 000 1 292,635 763 500 982 500 915 000 1 750000 8 790 135 CORF _MAX.XLS 1:49 PM 111 2/9 L Jul-95 A. Reclamation Plant 1 New and Rebudgeted Maior Projects 1. Secondary Trmt Expansion to BO MGD, P1-36 2. Electrification of Pump Drives, P1 -36-1 3. Interim Secondary Plant Upgrades, P1-36-2 1,000,000 4. Primary Treatment 72 MGD Expansion, P1 -37 100,000 5. Security & Landscaping, P1-3B-1 6. Misc. Mods. Priority Elements P1-3B-2 7. Misc. Improvements to Plant 1 P1-38-4 8. Fire Protection, Signs & Water Sys Mods P1-38-5 9. Electl. Fae. Mods. and Safety Upgrades P1-40-1 25,000 10. Facility Mods. and Safety Upgrades P1 -40-2 11. Primary Clarifier Rehab. P1 -41 100,000 12. Seismic Retrofit of Non-Struct Systems P1 -43 13. Seismic Retrofit Structural P1-44-1 ,2,3 14. Chemical and Wastehauler Fae Mods, P1 -46 235,000 15. 12KV Distribution Sys for Support Fae., Pl-4 7 16. Misc. Arch. and Trtmnt. Pit. Imp, Pl-48 250,000 17. Miscellaneous Projects, P1 -49 18. 40 MGD Oxygen Activated Sludge & DAF's 21 . Belt Presses (4 Units) 20. Solids Storage (4 Bins) 21 . Digesters: 2 @ 11 O' Diameter 22. 12kv Electrical Power Distribution 23. Emergency Sewage Bypass System 24. Remove Trickling Filters 1 & 3 25. Miscellaneous Job Plan Projects 26. Other Master Plan Projects a. Headworks No. 1 Rebuild, 2003 b. Headworks No.2 Impeller/Pump Speed, 2016 c. Remove Trickling Filters 2 & 4, 2007 d. 40 Mgd Oxygen Act'd Sludge &OAF, 2017 e. 11 O ft Digesters, 2003 & 2012 f. 4 Belt Presses, 2004 g. 12 KV Power Distribution, 2001 -2012 h. Standby Power Generation, 2005 & 2015 i. 72 Mgd Primary Treatment, 2004 & 2012 I SUB-TOTAL -RECLAMATION PLANT 1 1,710,000 CORF _MAX.XLS M Aug-95 1,000,000 100,000 25,000 300,000 250,000 300,000 500,000 2,475,000 County Sanitation Districts Modified Capital Improvement Program December 1994 through June 1 996 Desired Project Option N 0 p Sep-95 Oct-95 Nov-95 1,000,000 1,000,000 1,000,000 100,000 100,000 100,000 300,000 25,000 25,000 25,000 300,000 400,000 400,000 500,000 500,000 500,000 300,000 300,000 400,000 500,000 500,000 500,000 2,725,000 2,825 000 3,225,000 Page 5 Q R s T u v w x Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Total From Dec 94 To Jun 96 0 564,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 13,232,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 1,2· 0 250,000 250,000 250,000 250,000 250,000 250,000 1,S 0 58&,000 744,000 300,000 500,000 500,000 500,000 500,000 500,000 50,000 3,220,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 675,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 2,915,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 4,607,025 0 500,000 500,000 500,000 500,000 500,000 500,000 500,000 5,250,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 4,467,000 0 500,000 500,000 500,000 500,000 500,000 500,000 500,000 5,750,000 0 0 0 0 0 0 0 0 0 0 -.Yo 0 0 0 0 0 0 3.625,000 4.075,000 4.075,000 4,075,000 4,075,000 4,075,000 3,625,000 45, 186.025 1:49 PM 1/12/95 Page 6 Desired Project Option L M N 0 p Q R s T u v w x Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Total From Dec 94 To Jun 96 B. Plant 2 New and Rebudgeted Major Projects 1 . Support Facilities and Site Improvements a. Operations Building, P2-23-5-1 733,000 b."Warehouse Building, P2-35-2 300,000 300,000 300,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 4,760,000 c. Maintenance Building , P2-35-3 0 d. Phase II Site & Security Imp., P2-35-5 0 e. Construction Office, M044 IP2-35-4) 10 2. Rehabilitate 7 Digesters, P2-39 0 3. Primary Treatment 24 MGD Expansion, P2-41 0 4. Secondary Treatment Expansion, P2-42-2 225,000 350,000 250,000 50,000 3,400,000 5. Priority Misc. Mod., P2-43-1 170,610 6. Misc. Modifications , P2-43-3 339,000 7. Monitor/Control System, P2-44 & J-31 0 B. Fire Protection, Signs & Water Sys Mods P2-46 0 9. Elect!. Fae. Mods. and Safety Upgrades P2-47-1 0 10. Facility Mods. and Safety Upgrades P2-47-2 0 1 1 . Primary Clarifier Rehab. P2-4B 0 Misc Improvements, P2-49 !Pascal & Ludwig) 37,500 12. Seismic Retrofit of Non-Struct Systems P2-50 0 13. Seismic Retrofit Struct. P2-53-2,3,4,5,6 0 14. Chemical and Plant Water Mods., P2-55 0 15. Misc. Seismic Mods and Flare Imp, P2-56 0 16. Miscellaneous Projects, P2-57 0 1 7. Solids Storage: 2 Bins 0 1 B. Additional 105 Foot Digester 0 19. Plant Water Pump Station 0 20. Miscellaneous Job Plan Projects 0 21 . Other Master Plan Projects 0 a. Replace Primary Basins A, B, C, 2006 0 b. Standby Power Generation, 2005 & 201 5 0 c. Monitoring and Control System, 2005 'o SUB-TOTAL -PLANT 2 525,000 650,000 550,000 450,000 400,000 400.000 400,000 400,000 400,000 400,000 400,000 400,000 9,440,110 C. Water Reclamation Regional Ex~ansion 0 CORF_MAY XLS 1:49 PM 1/12/95 Page 7 Desired Project Option L M N 0 p Q R s T u v w x Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Total From Dec 94 D. lnte!}!lant and Joint Facilities To Jun 96 1 . Support Facilities and Site Improvements 0 a. Demolition of Old Lab, J-11-1 0 b. Monitoring & Control System, J-23-2 & J-31 IJ-31-1/21 1,000,000 1,000,000 500,000 500,000 500,000 500,000 4,000,000 c. Personnel Building at Pit 1, J-26 0 d. 3-Story Admin Annex at Old Lab Site J-30 0 e. Demolition of Old Control Center _j f. Demolition of Support Bldg.@P2, J-27 g. Central Lab Expansion J-17-2,3 2. Outfall & Booster Pump Stations 50,000 a. Surge Tower Replacement J-34-1 250,000 200,000 200,000 200,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 1,715,000 b. Outfall Reliability & Pumping Annex OOBS "C" J-34 0 c. Ext & Repl 78" to Deep Water W/120" Outfall 0 3. Computerized Fae. Records and Dwg. Sys. J-25-1 25,000 30,000 30,000 30,000 30,000 30,000 179,000 4. Electl. Power Systems Rehab. Studies J-25-2 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 500,000 5. Collection System Mapping 0 6. Telephone{Telemetry Monitoring Exp. J-28 0 7. Standby Power & Reliability Mods. J-33 0 8. Bushard lnterplant Trunk Replacement 0 9. Sludge Disposal Projects 0 a. Compost Demonstration Plant 0 b. Land Acquisition 0 c. Landfill Development Phase I 0 d. Compost Facility 0 1 0. District Information Management Network 0 a. Maint. & Oper Mgmnt Computer System 0 b. Lab Information Management System Upgrades 0 c. Financial Information System 0 d. Network System Integration 0 e. CD-Optical Data Archiving 0 11. In-Plant Sampling System Mod 0 CORF_MAX.XLS 1:49 PM 1/12/95 Page 8 Desired Project Option L M N 0 p Q R s T u v w x Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Total From Dec 94 To Jun 96 12. Other Master Plan Projects a. Sludge Disp. Landfill Phase II 2011 0 b. Sludge Disp. Equip Phase I & II 2001 0 c. Electrical Power Distribution, 12Kv 0 13. Misc Job Plan Projects 0 SUB-TOT AL -INTERPLANT & JOINT 250,000 200,000 250.000 250,000 150,000 150.000 1, 175,000 1.180,000 680,000 680,000 680.000 680 000 6,449,000 SUB-TOTAL -MAJOR PROJECTS 2.485.000 3,325,000 3,525,000 3,525,000 3,775,000 4.175,000 5,650,000 5,655.000 5, 155,000 5, 155,000 5, 155,000 4,705,000 61,075, 135 E. Seeclal Projects, Studies & Research 1 . Action Plan: a. NPDES Permit ( Application) 0 b. NPDES Permit (Monitoring Changes) 0 2. Solids Treatment, Disposal and Reuse 0 3. Air Quality Control Program 0 a. Toxics and ROG Control: Biofilter R&D 0 b. Air Emissions: Source Control Feasibility Study 0 c. SCAQMD Rule 431 . 1 :Sulfur Control & CEMS 0 d. SCAQMD Rule 1402: Air Toxics 0 e. Air Quality Management Implementation Plan 0 f. Parameter Monitoring System For Cen Gen 0 g. A.Q. Database Development 0 4. 2020 VISION Master Plan Update 0 SUB-TOTAL -SPECIAL PROJECTS 0 0 0 0 0 0 0 0 0 0 0 0 0 F. Eguiement Items G. Master Plan "Alloc For Rehab & Reeairs" $74,565,000 Allocated to "a" Projects Above ;__ TOTAL JOINT WORKS CAPITAL REG 2 485,000 3 325 000 3 525,00_0 3 525 000 3 775.000 4 175 000 5 650 000 5.655 000 5 155 000 5 155 000 5 155000 4.705 000 61 071'> .... 5 -- CORF_MAX.XLS --;;;9 PM FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-08: Overview of 1995 Financing Plan Summarv The Districts' budget adopted for the year ending June 30, 1995, included a potential new Certificate of Participation (COP) issue of $84,500,000 to finance the budgeted capital improvements. In July 1994, the Joint Boards adopted a Resolution declaring their intent to fund current capital improvements from reserves and to reimburse those reserves from a future financing. Staff and Public Financial Management (PFM) recommend that we begin the process of selecting a financing team including an underwriter, special counsel and underwriter's counsel, by issuing a Request for Proposals (RFP). The financing team will then prepare the 1995 financing plan alternatives for the Committee's review. The urgency of the need for a future financing depends upon the Capital Improvement Plan ultimately selected, the release of reserves from the County Pool and the Districts' need for adequate reserves. The Board has approved a Reserve Policy establishing the following categories and levels: 50% Dry Period Reserve 20% Contingency Reserve Capital Improvement Reserve Property Insurance Reserve Environmental Reserve Staff Recommendation $100 Million 40 Million 100 Million 150 Million 10 Million $400 Million Staff recommends the Committee initiate the selection process for a new financing team. A draft RFP for underwriter and special counsel services will be distributed at the meeting. Underwriter's counsel will be determined from the special counsel selection process. J:\WPDOC\F1NICRANE\FPC.MTG\FPC95VTEMS.AGO\FPC95.08 FINANCE AN.D PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-09: Status Report on 1990-92 Capital Improvement Program COP Interest Rate Monitoring Summary Steve Kozak, Financial Manager, will present an information-only report covering the current status of Interest Rate Monitoring for the Districts' COP Program. Between the December 1990 issuance of the Series "A" COPs and September 1993, the Committee reviewed detailed spreadsheets of interest costs and interest earnings for the 1990-92 Capital Improvement Program COP issues. A revised summary form has been used since January 1994. The enclosed staff report describes the program to date and can be further reduced to the following table: Series A 12/90 $100,000,000 2.78% 8.00% 5.22% Series B (Net)* 04/91 39,465,000 6.86%-8.21% 1.35% 1992 Refunding-11/92 41,081,000 5.55% 7.34% 1.79% 1993 Refunding 09/93 46,000,000 4.56% 6.86% 2.30% Series C 09/92 98,500,000 2.42% 7.47% 5.05% 4.15% 7.85% 3.70% *Original issue size was $117,555,000. -Excludes $119,519,000 allocated to 1986 COPs of Districts 1, 2 & 3. -S6,900,000 earnings from SWAP would reduce fixed rate by 1.96% for the first three years to 4.9%. The construction reserves have earned an average of 7.85% since the inception of the 1990-92 COP program. Thus, the Directors' decision to borrow rather than to spend down our reserves has resulted in net interest earnings of $39. 7 million on the reserves over this time period. Bond proceeds from all three COP issues have been expended in compliance with the two-year spending test. None of the Construction and Acquisition Funds for the 1990-92 series COPs has sustained arbitrage rebate penalties. This report continues the practice of COP program updates for the Committee on a quarterly basis. J:\WPOOCIFINICRANE\FPC.MTGIFPC95VTEMS.AGDIFPC95.09 January 18, 1995 STAFF REPORT COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA 10844 ELLIS AVENUE P_O" BOX 8127 FOUNTAIN VALLEY. CALIFORNIA 92728-8127 !714) 962-2411 FPC95-09 Status Report on 1990-92 Capital Improvement Program COP Interest Rate Monitoring Between the December 1990 issuance of the Series "A" COPs and September 1993, the Committee reviewed detailed spreadsheets of interest costs and interest earnings for the 1990-92 Capital Improvement Program COP issues. A revised summary form has been used since January 1994. The following table summarizes the Districts' COP Program: Series A 12/90 $100,000,000 2.78% 8.00% 5.22% Series B (Net)* 04/91 39,465,000 6.86%*** 8.21% 1.35% 1992 Refunding-11/92 41,081,000 5.55% 7.34% 1.79% 1993 Refunding 09/93 46,000,000 4.56% 6.86% 2.30% SeriesC 09/92 98,500,000 2.42% 7.47% 5.05% 4.15% 7.85% 3.70% *Original issue size was $117,555,000. -Excludes $119,519,000 allocated to 1986 COPs of Districts 1, 2 & 3. -*$6,900,000 earnings from SWAP would reduce fixed rate by 1.96% for the first three years to 4.9%. The construction reserves have earned an average of 7.85% since the inception of the 1990-92 COP program. Thus, the Directors' decision to borrow rather than to spend down our reserves has resulted in net interest earnings of $39. 7 million on the reserves over this time period. A more detailed description of each COP and the status of their rates follows: Series "A" Series "A" is a $100 million variable rate issue completed on December 5, 1990, at an interest rate of 4.50%. This issue is backed by a ten-year letter of credit. The interest rate is reset daily on this issue and the annual rate has ranged from 1 .00% to 9. 75%, with an average through December 31, 1994 of 2. 78%. The daily rate on January 11, 1995, was 3.25% Staff Report -FPC95-09 Page2 January 18, 1995 Series "B" Series "B" is a $117 .555 million fixed rate insured issue completed on April 17, 1991. The all-in true interest rate for this issue was 6.86% to be paid by the Districts. A three-year interest rate SWAP agreement was concurrently entered into to reduce this fixed rate. The SWAP was reversed after 18 months and net earnings of $6.9 million. Amortized over the original three-year life of the SWAP, these earnings would have reduced the Series "B" interest rate by 1.96%, to 4.90%. In December 1992 (Series 1992 Refunding), the $38.35 million term certificates maturing in 2013 were advance refunded along with the Qutstanding certificates from the 1986 issue of Districts 1, 2 and 3. The refunding certificates are a synthetic fixed rate issue involving a fixed rate SWAP, which makes the Districts' cost 5.55%. In September 1993(Series 1993 Refunding), another $39.74 million of the Series "B" issue was advance refunded. Again, a long-term SWAP was utilized to obtain a synthetic fixed rate issue resulting in a fixed interest rate to the Districts of 4.56%. Series "C" Series "C" was a $98.5 million variable rate issue, backed by a standby purchase agreement, completed September 1, 1992, at an initial interest rate of 2. 70%. The interest rate is reset daily and is the same as the rate for Series "A". Between September 1992 and December 31, 1994, the rate has ranged between 1 .00% and 4.00%, for an average of 2.42%. The daily rate on January 11, 1995, was 3.25%. The Series "C" proceeds available for construction projects were expended prior to the September 1, 1994, arbitrage rebate date. Summary The Districts' "2020 VISION" Master Plan forecasts a need to fund $1.5 billion of capital facilities improvements and expansion over the 30-year planning period. It provides for one-half of that requirement to be financed by sewer connection fees and the balance by borrowing in the municipal securities market. One of the reasons the Directors decided to borrow during the first five years or for the first $750 million of capital improvements, was to maintain the Districts' existing construction reserves. The net interest earnings of the COP program have Staff Report -FPC95-09 Page3 January 18, 1995 ranged from 9.46% to 7.12% during the nearly four years of the borrowing program, with an average of 7.85%. Thus, the Board's decision to maintain the reserve levels and take advantage of low municipal interest rate payments, including variable rates, has resulted in $39. 7 million interest earnings on the reserves in excess of the interest payments on the borrowings. Bond proceeds from all three COP issues have been expended in compliance with the federal two-year spending test. None of the Construction and Acquisition Funds for the 1990-92 series COPs has sustained arbitrage rebate penalties. Staff will continue to present COP program updates for the Committee on a quarterly basis. Staff Recommendation Information only item. SK: le J:\WPDOC\FIN\CRANE\FPC.MTG\FPC95\STAFFRPT.FPC\SRFPC95.09 FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-10: Status Report on Taxable Commercial Paper Program Summary Steve Kozak, Financial Manager, will present an information-only report covering the current status of the Districts' Taxable Commercial Paper Program. With payment of the note maturing on January 10, 1995, the Taxable Commercial Paper Program has been retired. Future borrowing alternatives will be recommended after the financing ) team has been formed. Staff Recommendation Information item only. ' ) -J:\WPOOC\FlNICRANE\FPC.MTG\FPC95\ITEMS.AGOIFPQj5.10 \ r January 18, 1995 FPC95-10: STAFF REPORT COUNTY SANITATION DISTRICTS of ORANGE COUNTY. CALIFORNIA 10844 ELLIS AVENUE P.O. BOX 8127 FOUNTAIN VALLEY. CALIFORNIA 92728-8127 (7141 962-241 1 Status Report on Taxable Commercial Paper Program The Fiscal Policy Committee approved a $50 million Taxable Commercial Paper Program (TCPP) for the Districts which started in January 1994. The TCPP allowed the Districts to borrow for working capital and maintenance and operations (M&O) funding requirements, while operating reserves remained on deposit earning interest in excess of program costs. The TCPP presented no tax consequences to the Districts, although investors are subject to federal taxation. Maturity Schedule The attached Maturity Schedule reports on the status of the TCPP as of January 10, 1995. The Maturity Schedule covers program activities since inception of the program in January 1994. The weighted average coupon rate over the twelve months of the program is 4.25%. During this same period of time (Jan.-Dec.), the Districts' Commercial Paper Fund earned approximately $28 million with an average interest rate of 5.56%. Final earnings are not yet available from the County Treasurer. Final Maturities The following table summarizes the results of the TCPP maturities in December 1994, and January 1995. December 6, 1994 $4M Treasurer honors Districts' withdrawal request. Notes paid off. December 7, 1994 $26M Treasurer denies Districts' withdrawal request. TCPP in technical default due to non-payment. Lehman Brothers, Inc., holds note. December 13, 1994 $26M Rating Agencies downgrade TCPP rating from "A1+/P1" to "C/Not Prime." December 29, 1994 $46M Bankruptcy Creditors' Committee approves Districts' request for emergency withdrawal of funds from the Treasurer's Pool. January 4, 1995 $26M Funds transferred from Treasurer's Pool to Lehman Brothers. Notes paid off. January 5, 1995 $20M Bankruptcy Creditors' Committee approves Districts' request for emergency withdrawal of funds from the Treasurer's Pool. January 10, 1995 $20M Funds transferred from Treasurer's Pool to Southwest Bell. Notes paid off. Staff Report-FPC95-10 Page2 January 18, 1995 The Rating Agencies were informed about the foregoing developments as they occurred. With the close of the TCPP, the Rating Agencies have indicated they will withdraw their rating downgrades very soon. Also, General Counsel is drafting a market disclosure for release to the municipal securities markets to inform them that the Districts have successfully resolved the difficulties with the TCPP. Additional Review Staff continues to evaluate the advantages and disadvantages of alternative borrowing structures to meet the Districts' needs for future capital project financing. Recommendations will be forthcoming after the formation of a financing team. SK:lc J:\WPOOC\ANICRANBF.MTGIFPC95\STAFFRPT.FPC\SR95. 10 FPC95-lf County Sanitation Districts Nos. 1,2,l~;7,11,13and14 of Orange County, CA _.) $50 Million Taxable Commercial Paper Program Maturity Schedule as of 1/11/95 $ Days to 30-Day Investor Par Amount Issue Date Maturity Date Maturity Rate FedAA AIM Cash Fund of CT 4,000,000 1/19/94 2/24/94 36 3.10% 3.14% LB/Bell South 5,000,000 1/19/94 2/16/94 28 3.10% 3.14% LB/ Atlantic Richfield Corp. 21,000,000 1/19/94 2/16/94 28 3.10% 3.14% LB/J.W. Connor 10,000,000 1/19/94 2/16/94 28 3.10% 3.14% LB/ Atlantic Richfield 10,000,000 1/19/94 2/16/94 28 3.10% 3.14% Std Oil of Indiana -AMOCO 7,000,000 2/16/94 2/28/94 12 3.45% 3.48% AIM Cash Fund of CT 1,000,000 2/16/94 3/21/94 33 3.45% 3.48% J.W.Connor 10,000,000 2/16/94 3/21/94 33 3.40% 3.48% Bank of Boston 3,000,000 2/16/94 4/21/94 64 3.40% 3.48% Koch Industries 10,000,000 , 2/16/94 4/21/94 64 3.40% 3.48% EDF Corp. 14,000,000 2/16/94 4/21/94 64 3.40% 3.48% AIM Cash Fund of CT 1,000,000 2/16/94 4/21/94 64 3.40% 3.48% AIM Cash Fund of CT 4,000,000 2/24/94 3/25/94 29 3.45% 3.48% Lehman Brothers 7,000,000 2/28/94 3/7/94 7 3.45% 3.52% Bank of Boston 7,000,000 3/7/94 4/4/94 28 3.60% 3.62% AIM Cash Fund of CT 800,000 3/21/94 4/18/94 28 3.55% 3.64% J.W. Connor 10,200,000 3/21/94 4/21/94 31 3.50% 3.64% AIM Cash Fund of CT 4,000,000 3/25/94 4/22/94 28 3.60% 3.67% Bank of Boston 7,000,000 4/4/94 5/3/94 29 3.68% 3.82% AIM Cash Fund of CT 800,000 4/18/94 5/18/94 30 3.77% 3.88% Bank of Boston 8,000,000 4/21/94 6/1/94 41 3.95% 3.88% Lehman Brothers 30,200,000 4/21/94 4/22/94 1 3.85% 3.88% Bell South 10,200,000 4/22/94 5/11/94 19 3.90% 3.87% Bell South 20,000,000 4/22/94 5/11/94 19 3.90% 3.87% Lehman Brothers 4,000,000 4/22/94 4/25/94 3 3.85% 3.87% Bell South 4,000,000 4/25/94 5/11/94 16 3.87% 3.89% Lehman Brothers 7,000,000 5/3/94 5/4/94 1 3.85% 3.99% Lehman Brothers 7,000,000 5/4/94 515194 1 3.90% 4.02% Lehman Brothers 7,000,000 515194 5/6/94 1 3.80% 4.08% Koch Industries 7,000,000 516194 6/2/94 27 4.30% 4.23% Lehman Brothers 34,200,000 5/11/94 5/12/94 1 3.700/o 4.37% • next maturity Shaded entries are outstanding maturities Prepared by Lehman Brothers 1111195 FPC95-10 County Sanitation Districts Nos. 1,2,3,5,6, 7,11,13 and 14 of Orange County, CA $50 Million Taxable Commercial Paper Program Maturity Schedule as of 1/11/95 $ Days to 30-Day Investor Par Amount Issue Date Maturity Date Maturity Rate FedAA J.W. Connor 5,000,000 5/12/94 6/9/94 28 4.33% 4.37% Bank of Boston 17,500,000 5/12/94 6/2/94 21 4.38% 4.37% Lehman Brothers 11,700,000 5/12/94 5/13/94 1 3.70% 4.37% ADP 11,700,000 5/13/94 5/18/94 5 3.90% 4.36% Southern California Edison 10,000,000 5/18/94 6/1/94 14 4.37% 4.35% Lehman Brothers 2,500,000 5/18/94 5/19/94 1 4.29% 4.35% Lehman Brothers 2,500,000 5/19/94 5/23/94 4 4.20% 4.34% Lehman Brothers 2,500,000 5/23/94 5/24/94 1 4.20% 4.32% Lehman Brothers 2,500,000 5/24/94 5125194 1 4.20% 4.33% Lehman Brothers 2,500,000 5125/94 6/1/94 7 4.28% 4.32% Bank of Boston 4,000,000 6/1/94 8/1/94 61 4.45% 4.37% Southern California Edison 16,500,000 6/1/94 6/2/94 1 4.35% 4.37% Bank of Boston 4,000,000 6/2/94 8/1/94 60 4.45% 4.37% Bank of Boston 10,000,000 6/2/94 7/6/94 34 4.35% 4.37% Bell South 7,000,000 6/2/94 8/1/94 60 4.50% 4.37% Southwest Bell 10,000,000 6/2/94 8/1/94 60 4.50% 4.37% P&G 10,000,000 6/2/94 6/23/94 21 4.25% 4.37% Bell South 5,000,000 6/9/94 7/7/94 28 4.32% 4.30% Bell South 10,000,000 6/23/94 8/9/94 47 4.43% 4.36% Bank of Boston 10,000,000 7/6/94 8/2/94 27 4.50% 4.54% Bell South 5,000,000 7/7/94 8/4/94 28 4.52% 4.51% Bank of Boston 4,000,000 8/1/94 9/7/94 37 4.40% 4.44% Lehman Brothers 21,000,000 8/1/94 8/2/94 1 4.35% 4.44% Lehman Brothers 31,000,000 8/2/94 8/3/94 I 4.25% 4.43% Lehman Brothers 21,000,000 8/3/94 8/4/94 1 4.30% 4.44% Southwest Bell 10,000,000 8/3/94 11/1/94 90 4.75% 4.44% Lehman Brothers 16,000,000 8/4/94 8/5/94 I 4.35% 4.43% Southwest Bell 10,000,000 8/4/94 11/1/94 89 4.72% 4.43% Lehman Brothers 16,000,000 8/5/94 8/9/94 4 4.30% 4.49% Bell South 10,000,000 8/9/94 8/16/94 7 4.50% 4.52% Bell South 5,000,000 8/9/94 8/16/94 7 4.50% 4.52% Koch Industries 10,000,000 8/9/94 8/16/94 7 4.50% 4.52% • next maturity Shaded entries are outstanding maturities Prepared by Lehman Brothers 2 1/11/95 FPC95-10( " '· County Sanitation Districts Nos. 1,2,3~,o,7,11,13 and 14 of Orange County, CA Investor AIM Lehman Brothers Lehman Brothers Lehman Brothers Lehman Brothers Alliance Alliance Lehman Brothers Alliance Bank of Boston Alliance Bank of Boston Bank of Boston Southwest Bell Alliance Lehman Brothers Weighted Average: Days 20.5 Rate 4.30% • next maturity Shaded entries are outstanding maturities Prepared by Lelunan Brothers $50 Million Taxable Commercial Paper Program Maturity Schedule as of 1/11/95 $ Days to Par Amount Issue Date Maturity Date Maturity Rate 1,000,000 8/9/94 9/6/94 28 4.55% 25,000,000 8/16/94 8/17/94 1 4.60% 25,000,000 8/17/94 8/18/94 1 4.65% 15,000,000 8/18/94 8/19/94 1 4.70% 10,000,000 8/18/94 8/19/94 1 4.70% 15,000,000 8/19/94 9/6/94 18 4.80% 10,000,000 8/19/94 9/6/94 18 4.80% 26,000,000 9/6/94 917194 1 4.75% 26,000,000 9/7/94 10/6/94 29 4.80% 4,000,000 917194 10/6/94 29 4.80% 26,000,000 10/6/94 1112/94 27 5.07% 4,000,000 10/6/94 11/1/94 26 5.07% 4,000,000 11/1/94 12/6/94 35 5.00% 20,000,000 11/1/94 1/10/95 70 5.55% 26,000,000 11/2/94 12/7/94 35 5.05% 26,000,000 12/7/94 1/3/95 27 5.96% 3 30-Day FedAA 4.52% 4.69% 4.79% 4.79% 4.79% 4.80% 4.800/o 4.81% 4.81% 4.81% 5.11% 5.11% 5.25% 5.25% 5.26% 1/11/95 ~ ) FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-11: Consideration of a motion to renew Boiler & Machinery Insurance for the period March 1, 1995 to March 1, 1996, with the American Manufacturers Mutual Insurance (Kemper Insurance Group). Summary Steve Kozak, Financial Manager, will present a report regarding the renewal of Boiler & Machinery Insurance for the period March 1, 1995 to March 1, 1996. Parts of the Districts' insurance program renew at different times of the year. The Property Insurance including all risk, earthquake and flood protection, will renew in June; the Excess Workers' Compensation Insurance will renew in May; and the Boiler & Machinery Insurance will renew on March 1, 1995. It is necessary to review the Boiler & Machinery Insurance renewal at the January Committee meeting in order to obtain Joint Boards' authority in February, prior to the March 1, 1995, renewal date. Robert F. Driver Company, the Districts' Broker of Record, has submitted the Districts' Boiler & Machinery Insurance program to six insurance companies over the past few months and has prepared the enclosed Summary of Proposals Report which includes the current program and the three proposals received for Boiler & Machinery Insurance renewal for the period March 1, 1995 to March 1, 1996. Staff and Robert F. Driver Company representatives have reviewed the alternatives and have jointly arrived at the recommendation for the March 1, 1995, renewal which is included in the Executive Summary of the Report. Sufficient funds are contained in the current budget to cover the premium costs ($77,376.78). Staff Recommendation Renew Boiler & Machinery Insurance for the Districts for the period March 1, 1995 to March 1, 1996, with the American Manufacturers Mutual Insurance (Kemper Insurance Group), based on their overall superior policy terms, their knowledge of the Districts' programs, their record of prior service to the Districts and their lowest policy premium. J:\WPOOC\FINICRANE\FPC.MTG\FPC95\ITEMS.AGCN'PC85.11 . Li-.SSOCIATES ROBERT F. DRIVER ASSOCIATES • COMPLETE INSURANCE/BOND SERVICE • a Division of Robert F. Driver Co., Inc . BOILER AND MACHINERY INSURANCE RENEW AL FOR COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA JANUARY 18, 1995 Presented By: Robert F. Driver Associates Newport Beach, California 3636 BIRCH STREET, SUITE 230, NEWPORT BEACH, CALIFORNIA 92660-2619 (714) 756-0271 • FAX (714) 756-2713 EXECUTIVE SUMMARY Robert F. Driver & Company, Broker of Record, is pleased to present proposals for annual renewal (for 1995-1996) of Boiler & Machinery Insurance for the Districts. Cur.rent Boiler & Machinery Insurance Program The Districts' current Boiler & Machinery Insurance policy is underwritten by the Kemper Insurance Group. The term of the existing program is March 1, 1994 to March 1, 1995. The program provides a $100 million limit (per occurrence) for Property Damage, with a $100,000 Hazardous Substance sub- limit, and a $25 million sub-limit for Earthquake Resultant Damage. The basic deductible is $25,000. The deductible for larger engines, turbines, digester, and reactors is $100,000. The premium for 1994-1995 was $84,544. Earthquake Resultant Damage Exclusion Today, all Boiler & Machinery insurance does not include Earthquake Resultant Damage coverage. Insurance companies previously offering such coverage began excluding the coverage after the January 17, 1994 Northridge Earthquake, and the substantial property losses resulting from the earthquake. In May, 1994, the Kemper Insurance Group began to conform to the industry practice of excluding Earthquake Resultant Damage coverage from its Boiler & Machinery insurance policies. Review of Proposals Received Pr~posal 1. American Manufacturers Mutual Insurance (Kemper Insurance Group) has offered policy renewal with identical terms as last year, with the exception of Earthquake Reslutant Damage coverage. To compensate for deletion of the earthquake provision, Kemper has decreased the policy premium to $76,900. Also, Kemper has offered a pricing option whereby the premium cost could be reduced to $71,500 by increasing the large equipment deductible from $100,000 to $250,000. Proposal 2. Reliance National has offered a policy quote with reduced coverages ($25 million limit), a higher basic deductible ($100,000), and longer waiting periods for service. The premium cost is $100,000. Proposal 3. Hartford Steam Boiler has offered a policy quote with similar terms to Proposal 1 with two exceptions. First, the Hartford proposal includes Hazardous Substance coverage for an increased sublimit of $250,000. Second, the waiting period for Business Interruption service is 48 hours rather than 24 hours. The premium cost is $77,768. Recommendations Robert F. Driver Associates, Broker of Record, recommends renewal of Boiler & Machinery Insurance for the Districts, for the period March 1, 1995 to March 1, 1996, with the American Manufacturers Mutual Insurance (Kemper Insurance Group), based on their overall superior policy terms, their knowledge of the Districts' programs, their record of prior service to the Districts, and their lowest policy premium. PL\CSDOC\BMEXEC.SUM INSURANCE COMPANY: BEST'S GUIDE RATING: CALIFORNIA STATUS: POLICY TERM: COVERAGE: PROPOSAL REVIEW COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA BOILER AND MACHINERY INSURANCE PROGRAM PRESENT American Manufacturers Mutual Insurance (Kemper Insurance Group) A+, Superior; Class 13, Policyholder's Surplus of $1,250,000,000 to $1,500,000,000 Admitted March 1, 1994 to March 1, 1995 Comprehensive Form: • Direct Damage • Extra Expense • Expediting Expense • Earthquake Resultant Damage • Business Interruption • Demolition/Increased Cost of Construction • Consequential Damage • Water Damage • Ammonia Contamination • Hazardous Substance • Digestors & Reactors RECOMMENDED PROPOSAL 1 American Manufacturers Mutual Insurance (Kemper Insurance Group) A+, Superior; Class 13, Policyholder's Surplus of $1,250,000,000 to $1,500,000,000 Admitted March 1, 1995 to March 1, 1996 Same as Present except: • Earthquake Resultant Damage is excluded Pagel of 4 PROPOSAL 2 Reliance National A-, Excellent; Class 11, Policyholder's Surplus of $750,000,000 to $1,000,000,000 Admitted March 1, 1995 to March 1, 1996 Comprehensive Form: • Direct Damage • Extra Expense • Expediting Expense • Business Interruption • Water Damage • Ammonia Contamination • Hazardous Substance • Earthquake Resultant Damage is excluded ) PROPOSAL 3 Hartford Steam Boiler A+, Superior; Class 9, Policyholder's Surplus of $250,000,000 to $500,000,000 Admitted March 1, 1995 to March 1, 1996 Comprehensive Form: • Direct Damage • Extra Expense • Expediting Expense • Business Interruption • Demolition/ Increased Cost of Construction • Consequential Damage • Water Damage • Ammonia Contamination • Hazardous Substance • Digestors & Reactors • Earthquake Resultant Damage is excluded LIMITS: SUBLIMITS: PRESENT American Manufacturers $100,000,000 Per Occurrence $ 250,000 For: • Increased Cost of Construction/ Demolition • Expediting Expense • Ammonia Contamination • Water Damage • Consequential Damage $25,000,000 Earthquake Resultant Damage $ 100,000 For: • Hazardous Substance RECOMMENDED PROPOSAL 1 PROPOSAL 2 American Manufacturers Same as Present Same as Present except: No limits for Earthquake Resultant Damage will be provided Page2 of 4 Reliance National $ 25,000,000 Per Occurrence $ 100,000 Extra Expense $ 25,000 For: • Expediting Expense • Water Damage • Ammonia Contamination • Hazardous Substance • No limits for Earthquake Resultant Damage will be provided ) PROPOSAL 3 Hartford Steam Boiler $100,000,000 Per Accident $ 5,000,000 Business Interruption and Extra Expense $ 250,000 For: • Increased Cost of Construction/Demo Ii ti on • Expediting Expense • Ammonia Contamination • Water Damage • Consequential Damage • Hazardous Substance • No limits for Earthquake Resultant Damage will be provided PROPERTY EXCLUDED: DEDUCTIBLES: PRESENT RECOMMENDED PROPOSAL 1 PROPOSAL 2 American Manufacturers All other Property other than specifically included above. • Non-metallic vessels not conforming to ASME standards • Live animals, land, tress, shrubs, plants or growing crops • Property covered in whole or in part under any other Insurance policy • Sewer piping, fire protection systems piping, buried vessels or piping (ocean outfall) American Manufacturers Same as Present $ 100,000 Same as Present All Motors, Engines & Turbines Over 500 H.P., Digestors and Reactors $ 25,000 All Other Objects Same as Present Business Interruption: • 30 Days Waiting Period for Motors, Engines & Turbines Over 500 H.P., Digestors and Reactors • 24 Hour Waiting Period for All Other Objects Page 3 of 4 Reliance National Same as Present $ 100,000 Business Interruption and Extra Expense • 45 Day Waiting Period J PROPOSAL 3 Hartford Steam Boiler Same as Present $ 100,000 On Motors, Engines and Turbines over 500 HP $ 25,000 All Other Objects Business Interruption and Extra Expense • 30 Days on Cogens, Turbines, Waste Heat Boilers and ) Transformers • 48 Hours Waiting Period for All Other Objects c TOTAL INSURABLE VALUES: ANNUAL PREMIUM: PRESENT American Manufacturers $ 1,306,322,801 $ 84,544 RECOMMENDED PROPOSAL 1 PROPOSAL 2 American Manufacturers $ $ $ 1,310,088,274 76,900.00 ___ 4~7~6~. 7~8 CIGA* 77,376.78 Reliance National $ $ $ 1,310,088,274 100,000.00 --~62~0~.00~. CIGA* 100,620.00 *Per state mandate as of January 1, 1995, California Insurance Guarantee Association (CIGA) fees of .62% are required on all premiums. PL\CSDOC\BMPROP .95 Page4 of 4 ) PROPOSAL 3 Hartford Steam Boiler $ 1,310,088,274 $ 77,768.00 --~48~2~.1~6 CIGA* $ 78,250.16 J ) ( PRESENT American Manufacturers DEDUCTIBLE: Not Applicable PREMIUM: DEDUCTIBLE AND PREMIUM OPTION RECOMMENDED PROPOSAL 1 PROPOSAL 2 American Manufacturer Reliance National '50,000 All Motors, Engines & Not Applicable Turbines over 500 H.P., '50,000 All Digestors and Reactors $25,000 All other objects Business Interruption: Same as Present $71,500.00 . $ 443.30 CIGA $71,943.30 Page 1of1 PROPOSAL 3 Hartford Stearn Boiler Not Applicable ) ) ADDITIONAL MARKETING RESPONSE We also provided submissions to Zurich American Insurance Company, Chubb Insurance Group and CIGNA. These companies declined to quote due to an inability to provide competitive pricing and/or due to the cogeneration exposure. PL\CSDOC\BMEXEC.SUM ) FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-12: Consideration of a motion recommending a Board Resolution adopting the provisions of Government Code Section 31641.04 authorizing two years additional service credit for retirement purposes. Summary Gary Hasenstab, Director of Finance, will present a report adopting provisions of Government Code 31641.04, authorizing Districts employees to receive two years additional service credit for retirement purposes. The County Employees Retirement Law of 1937 allows the Districts' Boards to determine that it would be in the best economic interests of the Districts for employees who are otherwise eligible to retire to receive an additional service credit of two years as an incentive to retire within a specified period. As a matter of policy, positions vacated through this process may be eliminated or left unfilled for a specified period, thus increasing salary savings potential. The attached staff report describes the potential savings from an early retirement program and the steps needed for implementation. Staff Recommendation Staff recommends that the Finance and Personnel Committee support a Board Resolution adopting the provisions of Government Code Section 31641. 04 authorizing Districts employees to receive two years additional service credit for retirement purposes to be effective March 1, 1995 through April 30, 1995. J:\WPDOC\FINICRANEIFPC.MTGIFPC95\ITEMS.AGDIFPC95.12 FPC95-12 RESOLUTION NO. 95-_ AMENDING RESOLUTION NO. 79-20 (CLASSIFICATION. COMPENSATION AND TERMS OF EMPLOYMENT) A JOINT RESOLUTION OF THE BOARDS OF DIRECTORS OF COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 and 14 OF ORANGE COUNTY, CALIFORNIA, AMENDING CLASSIFICATION AND COMPENSATION RESOLUTION NO. 79-20, AS AMENDED, RELATIVE TO THE IMPLEMENTATION OF GOVERNMENT CODE 31641.04 PROVIDING AN EARLY RETIREMENT INCENTIVE ***************** The Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, DO HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: The provisions of Government Code Section 31641.04 providing for the addition of two years of service credit to those employees otherwise eligible to retire are hereby adopted and made applicable to the Districts. Section 2: This Resolution shall take effect and be in full force during the period March 1, 1995 until April 30, 1995. Section 3: That any other resolution or motion, or portions thereof, that conflicts herewith is hereby repealed and made of no further effect. PASSED AND ADOPTED at a regular meeting held _____ , 1995 J:IWPOOC\FINICRANEIRESOSIRETIRE.RES FPC95-12 § 31641.04. Receipt of additional service credit; Conditions . : · . (a) When the board of supervisors, by resolution, determines that because of an impending curtailment of service or change in the manner ·of performing service, savings of money, or other economic benefit resulting to the county, the best interests of the county would be served, a member shall be eligible to receive additional service credit if the following conditions exist: . . (1) The member is employed in a job classification, county ·department, or other county organizational unit included in the resolution adopted by the board of supervisors: . (2) The member· retires on or between dates specified by the board of supervisors in its resolution. In no event shall the specified period exceed 18Q days. a (3) The county transmits to the retirement fund an amount determined by the board of retirement which is equal to the actuarial equivalent of the difference between the allowance·the member receives after the receipt of service credit under this section .and ·the amount he would have received without such service credit. The transfer to the· retirement fund ·shall be.made in a manner and time period acceptable to the county and the board of retirement. : (b) ·The· am.omit · of service credit shall be that· amount as the board of supervisors ·determines but shall not be more than two years regardless of credited service and .shall not exceed the number of years· intervening betweeli the date of the member's retirement and the date the member would be required to be retired because of age. (c) A county which elects to make the payment prescnbed by subdivision (a) sh.all make such payment with respect to all eligil>le employees who retire during the period specified by the board of supervisors. ' (d) 1bis section shall not be applicable to any member otherwise eligible if such member receives any unemployment insurance payments during the period six months prior to the period specified pursuant to subdivision (a). This section shall not ·be applicable to any member if the member is not eligible to retire without the additional credit available under this section. ~ (c) .This section shall·not be applicable in any county until it is adopted by ordinance of the board of supervisors. A.ny county may adopt or readopt this section ·from time to· time as conditions may warrant. This section shall not be . applicable iii any district· whose employees are members of the system pursuant to Seetion-3.1557· until it is adopted by ordinance by the governing body of the district. Any district whose employees are members of the system pursuant to Section 31557 may adopt or readopt this section from time to time as conditions warrant. (f) Any mem~ who qualifies under this section upon subsequent reentry tf> county employment shall forfeit the service credit acquired under this section, unless the reentry is a result of a temporary callback limited to a maximum of 720 hours ·of service in .a.ny one year. : (g) This -section shall not be subject to the provisions of Chapter 10 (commencing with Section 3500) of Division 4 of Title 1. . ·; Added Stab 1982 ch 971 § I, dfective Sep~~ 13, 1982; Amended Stats 1986. ch 48 § I. Fan.a. SeCuoac Fonner§ lt64t~o4. similar io the present section .• was added by Stats 1976 ch 368 § i. dfcctive July 9! 1976, and rcpcaJcd dfcctive January I, 1979, by it3 own term! . .4 mencbneutl: 1986 Ameed-ent Added .. , unldS the reentry is a result of a temporary callback limited to maximum d 720 boon o( ICtVice in 1111)' ooe year' at the end or subd (f). FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 FPC95-13: Status Report on Districts' Deferred Compensation Plan in Response to Director Swan's Request Summary The Districts have an IRS-approved deferred compensation plan. All employees and Directors are eligible to participate in the plan. There are approximately 300 active participants in the plan. Two options are provided for plan deposits: the County Commingled Investment Pool, and the Lincoln National Insurance Plans. Prior to the County's bankruptcy, 67% of the participants were making deposits to the Commingled Investment Pool. Several employees have changed plans in the past month and now 30% of the participants are in the Commingled Investment Pool. The Old Age, Survivors and Disability (OASDI) contributions of 7.5% for each Director are also deposited here. At December 6, 1994, the total Districts' deferred comp deposits into the Commingled Investment Pool were $4,666,680. Deductions from payrolls and Directors' compensation since December 6, 1994 have been held in the Districts' safe and not deposited into the Commingled Investment Pool. During the past month, staff has had several discussions with the County Treasurer's Office regarding our deferred compensation plan. As of January 12, 1995, the County Treasurer's Office has indicated that all participants in the Pool will be subject to the limits adopted by the Board of Supervisors on January 5, 1995, as reported in the attached Situation Update from County Administrator Ernie Schneider. Staff Recommendation This is an informational item in response to Director Swan's request and no action is recommended pending the Committee's discussion. J:\WPDOC\FINICRANEIFPC.MTGIFPC95\ITEMS.AGO\FPC95.13 . -;;, - Situation Update l/5/95 Deferred Comp Plan Payouts Clarified The Board of Supervisors on Thursday (Jan. 5) acted upon a request of the Operations Management Council to clarify the pay-outs to County employees participating in the County's deferred compensation plan. The Board's action essentially limits the individual loss due to the County's fiscal crisis to ten percent (10%) of funds invested in the County plan. Thursday's action has no effect on employees who invested in the NACo (PEBSCO) deferred compensation plan. More specifically: ~ Retirees currently receiving payments from the County's deferred compensation plan can expect to continue doing so, but at approximately ninety percent (90%) of what they formerly received. ~ current employees can expect to receive their deferred compensation after separation at a rate based on ninety percent (90%) of ~heir plan balance as of De plus contributions made after that date. ~ While employees are free to discontinue using the County def erred comp plan, no lump-sum payouts of existing balances (as of 12/31/94) or transfers of those balances to other retirement accounts will be permitted. ~ In the past, employees could select from a variety of pay-off alternatives. Under Thursday's modification, future pay-outs will be paid out no sooner than ---, 7qual monthly payments over five years. Employees can select a longer pay-out _ c.ion. While it is regretable that County participants in the deferred compensation plan have suffered a loss, Thursday's action does provide participants with concrete details on where they stand with their deferred compensation investments. This information should help employees considering retirement or otherwise leaving County employment to better plan for their future. Ernie Schneider County Administrative Officer FINANCE AND PERSONNEL COMMITTEE AGENDA FOR JANUARY 18, 1995 Agenda Item (11): Consideration of upcoming meetings and items to be discussed at those meeting. Summary The calendar of future meetings is on the back of the Notice of Meeting each month. The next Finance and Personnel Committee meeting is scheduled for Wednesday, February 15, 1995. Some of the potential major non-routine items the Committee will be reviewing, considering and acting on over the next few months follow. Some items will carry forward to future months, but are listed once at the start of a process. Underwriter and Special Counsel Services Six-Month Joint Works Budget Reviews Training and Travel Expenses Independent Financial Auditor Personnel Policies Manual Treasurer's Report All-Risk Property Insurance '::-J·;ji·t~j~liJji'!·\j~j-)ijj~-~[!it·~::~:~l!,-iji-~l;I Joint Works Capital Improvement Budget for 1995-96 User Fees and Connection Fees for 1995-96 Di"'"':'''!:::::''':''' Investment Policy Investment Manager Services Joint Works Operating Budget for 1995-96 COP Monitoring Report Merit Pool for Supervisors, Professional Management Team Personnel Budget for 1995-96 Complete Joint Works Operating and Capital Budget Nine-Month 1994-95 Joint Works Budget Review Training and Travel Expenses Excess Workers' Compensation Insurance Debt Financing Strategy for 1995-2000 Staff Recommendation Information only item. J:IWPDOC\FINICRANEIFPC.MTGIFPC85VTEMS.AGCMGDITM11.115 •• ) JOINT BOARDS OF DIRECTORS REGULAR MEETING AGENDA JANUARY 11, 1995 Agenda Item (14): Receive and file draft Finance and Personnel Committee Minutes for the meeting held on December 21, 1994. Summary See attached draft minutes. Recommendation Receive and file draft minutes. wpdoc\bslag95101-14 J ' ) JOINT BOARDS OF DIRECTORS REGULAR MEETING FEBRUARY 8, 1995 Agenda Item (12)(b)(8): FPC95-04 Consideration of the following actions re adopting Investment Policy: (a) Consideration of Resolution No. 95-14, adopting Districts' Investment Policy. (b) Consideration of Resolution No. 95-15, authorizing Investment of Monies into the Local Agency Investment Fund. Summary At the Finance and Personnel Committee Meeting of December 21, 1994, the committee members approved the release of a Request for Proposals for investment advisor services. The final selection of an investment advisor is scheduled to be approved by the Joint Boards on February 8, 1995. The balance in the Districts' Money Market Account with Bank of America was $4.2 million as of January 18, 1995. The Bank, by law, must provide collateralization at 110% of the Districts' total deposit with government securities. The Districts' have now reached the maximum deposit amount that Bank of America is willing to collateralize. Any day now, the Districts' are expecting to receive $15 million of the property tax apportionment that was deposited within the County Treasurer's investment pool. In addition, the Districts are expecting to receive $8.1 million from the next property tax installment in late January. Therefore, in the interim, the Districts' need to be providing for our own cash management functions until an outside investment advisor can be selected, have an opportunity to review the Districts' finances, and provide treasury management recommendations. Within the attached proposed Interim Investment Policy, three conservative investment vehicles have been identified to invest idle cash funds until an out~ide investment advisor can recommend an investment program. Staff Recommendation Staff recommends that the Committee members approve the attached Interim Investment Policy on behalf of the Districts and direct the Districts' Treasurer to carry out the duties of investing idle cash until the recommendations of an outside investment advisor can be obtained, approved, and implemented by the Districts. wpdoclbs/ag95/02-12b8 RESOLUTION NO. 95-14 ADOPTING THE DISTRICTS' INVESTMENT POLICY A JOINT RESOLUTION OF THE BOARDS OF DIRECTORS OF COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA ADOPTING THE DISTRICTS' INVESTMENT POLICY * * * * * * * * WHEREAS, the Districts have previously used the Office of the Orange County Treasurer as the depository of all Districts' funds and investor of the Districts' surplus funds; and, WHEREAS, the Boards of Directors adopted Resolution No. 94-156 on December 8, 1994, designating a Districts' Treasurer and authorizing the Districts' Treasurer to invest or reinvest Districts' funds; and, WHEREAS, to properly carry out the duties of the office, the Districts' Treasurer should follow an established policy of investments for their surplus funds. NOW, THEREFORE, the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, DO HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: The Boards of Directors hereby adopt the Investment Policy of the County Sanitation Districts of Orange County, California, as set forth on Exhibit "A", attached hereto and incorporated herein by reference. PASSED AND ADOPTED at a regular meeting held February 8, 1995. FPC 95-04 County Sanitation Districts of Orange County Investment Policy 1. Purpose The Districts' ultimate investment goal is to enhance the economic condition of the Districts while providing for the safety of funds invested and assuring that money is always available when needed. 2. Objectives The Districts strive to maintain the level of investment of all idle funds as near 100% as possible, through the optimum operation of its cash management system which is designed to accurately monitor and forecast expenditures and revenues. The Districts attempt to obtain the highest yield on its' investments consistent with the preservation of principal and liquidity. 3. Delegation and Authority The Districts have the authority to invest in the spectrum of instruments allowable under the Government Code Section 53600 et. seq. of the State of California. The Districts' Board of Directors has delegated, by resolution, the authority to invest to the Districts' Treasurer, subject to the limitation set forth in this investment policy. 4. Investment Instruments The Districts' Treasurer is currently limited to the following investment instruments as approved by the California Government Code: • U.S. Treasury Bills or Notes • State of California Local Agency Investment Fund • Obligations of Federal Agencies \· L 5. Policy Criteria For Selecting Investments (In Order of Priority) A. Safety Safety and the minimizing of risk associated with investing refers to attempts to reduce the potential for loss of principal, interest or a combination of the two. The first level of risk control is found in State law which restricts the particular type of investments pennissible for local governments. The second level of risk control is reduction of default risk in investing in instruments that appear upon examination to be the most credit worthy. The third level of risk control is reduction of market risk by investing in instruments that have maturities coinciding with dates of disbursement, thereby eliminating risk of loss from a forced sale. The Districts only invest in those instruments that are considered very safe. B. Liquidity Liquidity refers to the ability to easily sell at any time with minimal risk of losing some portion of principal or interest. Liquidity is an important quality for an investment to have, for at any time the Districts may have unexpected or unusual circumstances that result in larger disbursements then expected, and some investments may need to be sold to meet the contingency. Most investments of the Districts are highly liquid, with the exception of Time Certificates of Deposits issued by banks and savings and loan companies, whose maturities are selected in anticipation of disbursement needs, thereby obviating the need for forced liquidation or lost interest penalties. C. Yield Yield is the potential dollar earnings an investment can provide, and also is sometimes described as the rate of return. The Districts attempt to obtain the highest yield possible when selecting an investment, provided that the criteria stated in this Investment Policy are met. 6. Policy Constraints The Districts operate an investment program with many State and self-imposed constraints. It does not speculate; it does not buy stocks or corporate bonds; it does not deal in futures or options; it does not purchase on margin through Reverse Repurchase Agreements. Investment maturities are currently restricted to less than one year. The Districts diversifies its investments to reduce potential default on market risks. The portfolio is carefully monitored to assure the prudent management of the portfolio. All purchases are made only after three bids or bid comparisons are obtained. 7. Safekeeping Securities purchased from brokers/dealers shall be held in third party safekeeping by the trust department of the Districts' bank or other designated third party trust, in the Districts' name and control. 8. Investment Reports A. The Treasurer annually renders a Statement of Investment Policy to the Districts' Board of Directors for their approval. B. The Treasurer renders a monthly investment report to the Districts' Finance and Personnel Committee showing the type of investment, institution, date of maturity, amount of deposit, rate of interest, market value and such other data as may be required by the Districts. C. The monthly investment report states its relationship to the Statement of Investment Policy by indicating each and every instance that there is a divergence from or violation of policy or stating that the monthly report is in compliance with the approved Statement of Investment Policy. ' i RESOLUTION NO. 95-15 AUTHORIZING INVESTMENT OF MONIES INTO THE LOCAL AGENCY INVESTMENT FUND A JOINT RESOLUTION OF THE BOARDS OF DIRECTORS OF COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13AND 14 OF ORANGE COUNTY, CALIFORNIA, AUTHORIZING INVESTMENT OF MONIES INTO THE LOCAL AGENCY INVESTMENT FUND * * * * * * * * WHEREAS, the Boards of Directors have adopted Resolution No. 94-156, designating a Districts' Treasurer and authorizing deposits and investments, as allowed by law; and, WHEREAS, California Government Code Section 16429.1 creates a Local Agency Investment Fund in the State Treasury for the deposit of money of a local agency for purposes of investment by the State Treasurer; and, WHEREAS, the Boards of Directors do hereby find that the deposit and withdrawal of money in the Local Agency Investment Fund, in accordance with the provisions of Section 16429.1 of the California Government Code, for the purpose of investment, as stated therein, is in the best interests of the County Sanitation Districts of Orange County, California; and NOW, THEREFORE, the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, DO HEREBY RESOLVE, DETERMINE AND ORDER: 1 Section 1: That the Boards of Directors do hereby authorize the Districts' Treasurer to make deposits and withdrawals of Districts' monies in the Local Agency Investment Fund in the State Treasury, in accordance with the provisions of Section 16429.1 of the California Government Code, for the purpose of investment as stated therein. Section 2: That the following Officers of the Districts, or their successors-in- office, shall be authorized to order the deposit or withdrawal of monies in the Local Agency Investment Fund: Name Gary G. Streed Michael D. White Steve Kozak Titl~ Director of Finance Controller Financial Manager Signature PASSED AND ADOPTED at a regular meeting held February 8, 1995. 2